W&T Offshore, Inc. (WTI) Earnings Call Transcript & Summary

Joining us today for a fireside chat with Tracy Krohn, Chairman, Chief Executive Officer and President of W&T Offshore. Tracy founded W&T or was one of the founders of W&T about 40 years ago. I am Jeff Robertson, Managing Director for Natural Resources at Water Tower Research. Before we begin, I would like to remind participants that our discussion today could include forward-looking statements as of today, April 7, 2025. W&T's disclosures regarding such statements can be found under the Investor Relations tab of its corporate home page. We may refer to some slides in W&T's March investor deck, which are also available under the Investor Relations tab of the company's home page. W&T is an independent exploration production company focused on maximizing cash flow from its asset base, which is concentrated offshore in the Gulf of America where management has more than 40 years of experience acquiring, operating, exploring and developing assets. In 2024, W&T acquired 6 shallow water fields for approximately $77 million, which added nearly 22 million BOE of proved reserves in its year-end 2024 reserve report. The company generated $154 million of adjusted EBITDA and about $45 million of free cash flow in 2024. On average total production of about 33,000 BOEs per day. The guidance for fiscal year, full year 2025 production is roughly 34,900 to 38,600 BOEs a day. So with that intro, we're out of the way, Tracy, I'd like to thank you for taking the time to join us today.

Thanks, Jeff. It's good to be here. I really appreciate the opportunity to have a little discussion with you.

As I mentioned, producing property acquisitions have played a key role in building W&T's asset base over the years. The acquisition or the acquisition in January last year, as I said, added 6 deals. Two of those are still scheduled to come online in the second quarter of 2025 after having been offline since before the acquisition. Tracy, can you give us an update on where you stand with the remediation work on the assets that you've undertaken to bring them up to W&T standards?

Yes. Thanks for the question. First of all, I do want to compliment you. I noticed you did call it the Gulf of America. There was only a very slight hesitation, well done. I'm still working on it myself.

So am I.

So anyway, yes, I will give you an update. We've certainly got 1 of the fields back up. It's not back running to full capacity, but it is online and is producing. And that's West Delta 73. We've had some start-up issues to deal with. So it's kind of up and down a little bit, but it's gradually coming on. So that's a good thing. Production is up in fact, right now, and I'll go into that a little bit later on. Main Pass 108 is another field that we've had offline, but looks like it's getting very close to being on production again. So -- and I think that will be done. I'm fairly confident it will get done before the end of this month. So production is going up and will continue to rise some more.

Are most of the LOE issues that you dealt with on these assets, are those behind you? And then secondly on that, I think part of the issues you all have been dealing with have been renegotiating some of the transportation agreements because these assets were tied up in a bankruptcy proceeding. Have you been able to improve the margins on the assets with some of the renegotiated transportation terms?

Yes, we have. 1 of them has been renegotiated, slightly down. And then we will have another alternative with that line as well, to take it to a different market, which would also have a pretty dramatic effect on that transportation expense.

If we just think about the history of W&T in the acquisition market, can you just describe for us what are some of the key attributes that are critical in the way you think about evaluating asset packages?

Yes. There's a lot that goes into making asset acquisitions. One of the things that we look at first is, of course, cash flow. And cash flow portends a reserve base. So obviously, we look at what we think the reserves are. We're pretty adept at doing that. We've been doing it for many decades now. I don't recall very many times when we've been off on the reserve base. And if it's off, it's been because we've been off on the upside, not the downside. So we're very adept at that. We're very cautious about it. We like to see cash flow. We'd like to see a solid reserve base. Then we go into it, and we look at what are the -- what's the low-hanging fruit, what workovers can we do, what recompletions can we do? What can we do with the facilities to upgrade those to increase the throughput and increase cash flow. So those are all the low-hanging fruit things that we look at. And that's always proven to be very beneficial to us at first. We're used to doing on a very quick basis. Sometimes we miss a little bit because it goes real fast in these acquisitions. Often, there's an emphasis on getting things done quickly. And I understand that. I've been both a buyer and a seller of assets over the last 4 decades. So -- and then one of the things that we look at that's very important to us is the upside on those leases. So we acquired these leases. We evaluate the low-hanging fruit. We evaluate the reserve base. And of course, we go out and inspect the platforms as well. We want to do that to get an idea of 2 things. One, what kind of condition are they in? What are we going to have to do in the way of spending to get them up to what we think is our minimum acceptable conditions. And very often, when people most often, in fact, when companies make the decision they're going to sell an asset the maintenance slips. And that's a natural reaction. We understand it. But it takes us a little time to get it back up running and make sure that we'll have it not only safely, but also on a more consistent basis, have the production ups and downs, ironed out and have it running in a smoother fashion. So those are all things we look at. And then we evaluate the plug and abandonment.

You mentioned facilities, Tracy. And I know they're critical to doing business in the Gulf of Mexico. When you look at acquisitions and the facilities that are involved, do you frequently find opportunities to lower the operating costs from assets over that you're taking on from sellers? You mentioned maintenance costs, but -- do you see some relatively easy efficiency gains that help lower cost and improved margins.

Yes. We normally do, Jeff. One of the things that we're also able to draw on is our infrastructure in the Gulf of Mexico that already exists. So we can cut transportation costs, add them into our normal supply line so we can reduce the amount of boat and helicopter usage we have to have. And as you know, transportation is a large part of the expense base that we have out in the Gulf. And it's a large part of your fixed LOE as well. So we can do very good work in managing that part of it. I think that in the past, we've also found more reserves just immediately looking at what's being produced and how it's being produced and in what fashion that we think we can do it more efficiently.

When you think about upside, do you find that you are able to buy assets on mostly PDP valuations and therefore, you don't really have to pay much for the upside that may come with an asset over time?

Yes. Generally, there's not a whole lot of value you can assign to exploration. It's hard to -- even though we have a lot of data, and we've accumulated a lot of database over a long period of time. So we are able to draw on that very often. We'll look at the data initially. And after we've acquired it, we'll go in and do some reprocessing as well to help us with that effort. We found that to be particularly helpful in our exploration success. So you're already in a field that has production and how can you take that to a more advantageous position with additional spend on seismic reprocessing. So that's a big part of what we do after we've acquired properties. We generally have a pretty good idea of what the reserve base is by the time we're ready to close. So making sure that we have upside is a real plus. It's not necessarily the case in every field where we feel like, well, we're going to go out and drill a bunch more reserves. A lot of times, we can take advantage of the existing infrastructure and the existing cost, the previous operator had to make them a bit more efficient and a bit more profitable. But certainly, the home run comes when we can go out and find more reserves with the drill bit.

You mentioned the reserves or the reserve profile in the production for the company you've grown or you've added to the asset base primarily through acquisitions. How do acquisitions help you manage the company's overall production base and decline curve? And how would that -- how does that compare to drilling opportunities that you see?

Yes. Well, anytime I can take the situation where we can make acquisitions as opposed to drilling them. That's what we're going to do. So if they're anywhere close to being the same, then you eliminate a lot of risk out of exploration. It doesn't mean we don't do exploration. We do. We generally do it in the fields that we bought. We have done some greenfield exploration, and we've been very successful at it. But clearly, having production in existing fields increases our probability of success. Our success rate is still over 90% on exploration in the Gulf of Mexico over a long period of time. So that's been over the last 15 years now. So we don't drill a whole lot of wells, but we're pretty good at finding it when we do. And we take the risk out by buying reserves as opposed to drilling for it, of course. So one of the things that I wanted to point out also when we look at making asset acquisitions, and I think shareholders and would be shareholders should understand this, W&T has done more decommissioning plug and abandonment work than any other operator in the Gulf of Mexico. And this is -- one of the reasons is the longevity of the corporation. But we also -- we're not looking at it as a profit scenario. I don't -- we don't own any drilling -- excuse me, any P&A spreads. We're not trying to put it in my pocket or anybody else's pocket that's an employee in the company. We don't own the spreads. We don't own the equipment. We get it on a fair market basis and we found that to be a better scenario for us. And nobody does it any cheaper than we do. We're the industry leader in plug and abandonment evaluation. And the reason is because we do it on our own nickel.

We know in the Gulf, sellers are sometimes careful, need to be careful who they sell to, to make sure that the next company is able to handle all those liabilities. So having that reputation, I think, would probably bodes well when you're talking to companies about deals?

Yes, it is. And we've had a lot of discussions around how we do abandonments with our clients, and most of our clients are larger oil companies. So that's always a concern. And we've sold properties as well. And so we always think of that as something that we want to examine too. And I'd like to tell you that we've sold properties 100% successfully and that those abandonment liabilities have never come back to us, but they have in certain cases, and we've had to deal with that, too.

When people think about onshore companies, especially in the unconventional resource type plays, they think about inventory and numbers of drilling locations and the length -- or how that might support a production profile. And I think the perception in the Gulf of Mexico is short reserve lives. People wonder where the inventory is going to come from. On Slide 10 of your deck, you all show or W&T shows that you've got a significant amount of value related to probables attributable to the existing proved developed reserve base. Can you just walk us through how the current reserve base supports the inventory of opportunities to support the production profile over the next number of years?

Yes, that's a really good question. I will tell you that we see -- unfortunately, in the Gulf of Mexico, unlike other civilized countries on the planet. We're not -- we're not judged on our 2P. We're only judged on our 1P. I think that's very invalid. We have a very good success rate even when we have to drill for probables in situations where we have one fault block over to make another well that's very similar in the geophysical aspects of what you're already producing. But yes, probable reserves that come to the wellbore without any additional CapEx is a very important part of our cash flow stream and it sustains us in some of the harder periods where you have pricing that drops precipitously, not unlike what we've seen in the last couple of weeks, right? So we do take advantage of that. It allows us to extend our reserve life. We eventually get those reserves over time, but we get it in the form of cash flow and then eventually more reserve bookings. . So we see this time and time again. And again, that is -- it's because of the nature of the production of the Gulf of Mexico. We have some of these fields that are good, strong water drive or really good depletion drive for gas. Where we're going to retrieve more reserves via compression. I wish I could put it more delicately, but we suck pretty hard to get that gas out of the ground, whereas with the oil coming out of the ground mother nature helps us a good bit and drives it to the wellbore. And we eventually get those, again, as cash flow and additional bookings on reserves. But it's a very important part of our story. I generally go into it pretty heavily and have some illustrations that I show people. And we've had that in our presentations for years and years and years because it's really important and the SEC doesn't allow us to book those reserves.

I think it's pretty telling on Slide 11, some of the experience you all have had on look backs at Mahogany and Mississippi Canyon 698, and Mobile Bay some of the success at adding value to the acquisitions over time through just owning good rock, but also the exploitation development and also, importantly, operational things that you do to lower the economic threshold to recover more of what's in the ground.

Yes, you're right. I mean in the Gulf of America, we don't call it -- we don't use the efforts. We don't frac and we don't flare. We've never been allowed to flare except very limited cases. We will always have to hook it up to a pipeline. So we're not out there adding to additional gas in the atmosphere or anything or methane rather. What we do think about is the fact that we have great rock in the Gulf of Mexico, and I go to pretty good lengths to explain it. It's the Gulf of Mexico, rock properties, porosity and permeability are superior and to most parts of not only the Continental U.S., but a lot of other production in the world. We have these big fat juicy Miocene sands with porosities that range up to around 30% and permeabilities that are measured in Darcys. And in, for instance, in West Texas, they're measuring permeability in nan-Darcys and it's just -- it's incredibly how much better we are. We're about 1 billion times better permeability in the Gulf than you see in West Texas.

Your reserve life on proved reserves was a little over 10% at the end of 2024, and that's about doubled from what it was 8 or 9 years ago. Can you talk about what has contributed to the lengthening of the reserve life? And then how do your probable reserves maybe further extend that?

Yes. We picked up some longer live reserves, particularly in Mobile Bay, a really large gas field, in fact, probably the largest 1 in the last 20 years, for sure. Well, actually, I guess, Mobile discovered it in 1979. I remember because I was working for him at that time. I actually worked on that well, not for very long, but I remember being on the discovery well at Mobile Bay for a short period of time. So -- and then 40 years later, we were able to buy it, literally 40 years later. So a great production of gas there and good production of natural gas liquids as well. We sell that gas to the Florida market predominantly. So we also get an uptick on the value of that gas because it's Transco Zone 3 going to Florida. And we're not dedicated on that gas. We also have a treating facility there in Mobile Bay that treats the sulfur. This gas has a good bit of H2S in it. We're able to sweeten the gas and then take that sulfur and sell it. We sell that sulfur for anywhere from $200,000 to about $1 million a month. So it was an unexpected revenue stream. The treating facility is -- not only goes to -- eventually to another plant for removal of the NGLs, but also that treating facility we have can be used as cogeneration. So we're hooked up to the grid there. Big long life gas reserves hooked up to the grid, natural gas-powered gee, I wonder what that could potentially lead to.

Tracy, when you think about the -- just to maybe wrap up on the notion of probable reserves, can you help us understand what the risk profile on those reserves as they get converted and approved?

Sure. Normally, we see a large uptick in reserves and again, it comes out of cash flow. As I think about all of our fields that have water drive in them, we're generally seeing an uptick on the probable reserves. So that's important to us. We understand that, that in conjunction with the seismic that we have helps us determine. And in fact, that's not just seismic that we already own. That's the reprocessing that we do. That helps us determine the size of those reservoirs. So it's not necessarily immediately apparent. We do a lot of work with reprocessing. But generally, the reserve curves themselves, the bookings on reserves going forward tends to go up with time based on what we initially evaluate.

So really, it's an increased recovery from existing reservoirs as opposed to having -- as you said earlier, there's not a lot of capital associated with bringing those assets into production. So it shows up in revisions -- performance revisions.

It does and it shows up in cash flow because it takes time to make the revisions based on the SEC definitions for 1P and 2P. And unfortunately, again, in the U.S., we don't get credit for the 2P like we do over in Europe and the rest of the civilized world.

In -- let's just touch on the acquisition market in the Gulf of America. We've seen, obviously, a lot of consolidation in the industry over the last several years, including among some of the companies that still have operations in the Gulf. You all have bought over the years from all different kinds of companies in all different scenarios. Can you give us a little bit of color or at least your perspective on how much portfolio rationalization you might expect in the Gulf over the next couple of years?

Thanks for that question, Jeff. I always find it amusing that -- because I've heard it in my entire career. The companies are running out of properties to sell and deals to do, and the Gulf is dead, the Gulf is dead, long live the Gulf. I mean this is a big playground for us. It's the second largest producing field in the country, it's the largest by area of any basin in the U.S. So I got to tell you that the possibilities going forward are to my way of thinking, endless. There's always another well to drill. There's always another acquisition to be made. There's always another workover or recompletion to do. We have stack pay in the Gulf with very good rock properties. I found it to be a very compelling asset story, one of the best in the world, and you have rule of law. And nobody is going to come out and say, "Oh, by the way, in 48 hours, we're going to increase the windfall profit tax by 78%." And we see that in so-called civilized countries like the U.K., so that it's almost laughable. I don't really understand it. I know that years ago, we looked at an acquisition in the North Sea. We're almost -- we -- we had a handshake agreement on it, and I woke up in London the next morning and the X checker and the Prime Minister had increased the tax rate 12.5% overnight. It actually takes some 48 hours. So I wonder where they were working on it. But the next day, I found out, they'd already completed it in 48 hours, right? And that's just -- that's not possible in the U.S. So a lot of political risk in places with regard to how they manage their reserves, too. So the Gulf of Mexico has always been compelling to us.

How do you assess the level of competition for the types of deals that you're looking at? And are you seeing interest in -- or new entrants into the Gulf?

Sure. And we always do. That's always been a characteristic in the Gulf of Mexico. Companies go in, they buy something, they get out, they sell it. Very few of them remain over a long period of time. We're not seeing anything different in trends that we haven't seen before. They'll come in, they'll spend a little while. They'll sell it. We've seen a lot of interest from private equity companies in the Gulf in the last 15 years -- yes, 15 to 20 years actually. And we've seen that as a little bit problematic. The PE companies come in, they'll buy things and they'll pay a lot more for it because they never have the intent that they're ever going to abandon it. And that's why you've seen some of these bankruptcies in the Gulf of Mexico because they just don't give credence to the plug and abandonment values.

What -- you mentioned political risk in the U.K. and we've seen that change over time with their -- how they treat windfall profits and tax regimes in the North Sea. Can you -- with the new -- with the Trump administration, can you talk about, if anything you've seen so far regulatory-wise that has an impact on how you do business in the Gulf?

Yes. No it was a breath of fresh year under the Obama and Biden administrations. The predominant theory was not all of the above, it was anything but oil and gas. So both of those regimes were intent on getting rid of oil and gas fuels in the United -- in the United States and particularly in the Gulf of America. They made a real concentrated effort by doing that, and imposing lots of different rules. We're still fighting some of the Biden stuff now. The Rice's whale thing is a great example. See, we've got the species of whale that's been there for a long time. We think it's about 50. Nobody's ever seen one. . But we're going to put an area in the Gulf of Mexico, extending from the Gulf -- excuse me, in the Gulf of America, extending from Florida to Texas. And by the way, if you're an oil and gas company, and you have a supply vessel, you can't go more than 6 knots during the day, and you can't run at night at all. But it's only apparently oilfield service vessels that run into these whales. This does not apply to commercial shipping, it doesn't apply to pleasure vessels. It doesn't apply to any other vessel other than oilfield service vessel. So if you're a fisherman, you hit a whale, no problem, you go as fast as you want. If you're a cruise ship and you hit a whale, no problem, you can go as fast as you want. But oil and gas companies, you must be the culprits. So again, very selective and designed deliberately to harm oil and gas companies in the Gulf of America.

I guess one of the things that is expected to change is a more regular lease sale schedule. How do you think that has an impact on your business in the Gulf?

To us, it's not that big of an impact on W&T. Most of the leases that we drill on are things that we already own because we do the acquisition side of it. Occasionally, we'll see something that we want. We have some things that we'd like to bid on. Obviously, I'm not going to tell you where they are, but we have seen some. And yes, we'd like to see another lease sale. I think that we should have a lease sale from the entire Gulf of Mexico and not exclude anything, and that includes Florida.

Do you see -- obviously, tariffs are all over the news in the last week. How do you anticipate or do you anticipate much of an impact from tariffs on your business and your cost structure?

Well, yes, clearly, I mean, price of oil is just plummeted here in the last couple of weeks. But we've seen this before. We've certainly seen COVID, we adjusted during COVID. We -- I talk to people about not just the price of oil and gas, but I talk to them about margins. Margins are what we look at. So when prices drop, yes, we're on the phone. We're pounding on our vendors and our suppliers to lower their cost because we know that that's what has to happen. And they know it, too. But if you don't ask, you don't get. So that's one of the things we definitely do. We certainly ask. And then when we think about what happens to production will, of course, production is going to drop if you drop the price of oil. And as you well know, when that happens, well, that's what causes it to go up again, right?

That's right.

So it's an inevitable circle. We don't worry too much about pricing. We worry about margins.

One of the keys to longevity, especially in whether it's in the Gulf of Mexico or anywhere else is managing the balance sheet to be in the industry for more than 4 decades. W&T issued $350 million of tenant 3/4 senior second lien notes in -- due 2029 in January of 2025. Proceeds from that issuance plus cash on hand was used to redeem $275 million of 11.75% senior second lien notes that were to come due in 2026 and to repay a $114 million term loan. But Tracy, apart from extending the maturities and lowering your borrowing costs, importantly, how does the streamlined capital structure provide flexibility as you think about the acquisition opportunities you see in the market?

Well, the biggest factor there, Jeff, is that now we're going to be able to grow the company again. I no longer have to be concerned about how we're going to refinance. We've got several years of high-yield certainty. And then at the end of that time, we presume we'll be able to do it again, maybe lower -- maybe increase it by virtue of the fact that we're doing accretive acquisitions, but it takes out a lot of the uncertainty. Clearly, at one point in time, we had an at-the-market offering for about $100 million. We sold about $17 million of it. And then prices started to dance downward. So we withheld on that, and we don't have any ATMs out there right now. So the biggest thing that we think about is the opportunity side of it. Tariffs are certainly having an effect on worldwide economics at this point in time. The world doesn't -- the markets don't really like change a whole lot. And they react to them. They do like volatility. So we're going to have this volatility. We've seen it before. W&T has been through every major hurricane, every major pricing collapse every financial calamity in the last 40 years and survived just 5. We got a little overzealous in West Texas at 1 point in time, spent a bunch of money out there and had success, we just didn't time it right. And it costs us about $1 billion. So we had to repay that debt, which we did.

I mentioned earlier that your 2025 production guidance is 32,800 to 36,300 BOEs per day. And we talked about the 2 fields, and you mentioned them coming back on to production. How should we think about the production profile over the back half of 2025 as now we're progressing through the second quarter. And then can you just talk about -- since you mentioned with surviving hurricanes in the Gulf, how -- can you remind us how you think about weather risking during the hurricane season?

Yes. Weather risking is always something that we do. We do approach that on a -- as a reduction in what we think the production will be. Obviously, that's subject to mother nature. I do note that this is a La Niña year. Generally, that means fewer hurricanes in the Gulf of Mexico because it would indicate that water temperatures will be a little bit lower. So we're a little bit encouraged by that. We also have noted that over the years, generally, where we have issues are with really big storms that go east to west across the Gulf of Mexico. We haven't seen much of that. We've seen some hurricanes that come in mainly from the Southeast towards the northwest and some of them have come in the Gulf. And then curled over and gone over into Florida, I had to work on my a little bit to move them over to Florida. But generally, they're point-centric. So they're coming at one area, one specific point in the Gulf of Mexico. The rest of the production will stay up, we'll shut it in, not because we can't produce during some of these storms, we can, but the pipelines get shut down. Mobile Bay is fully automated. We can operate during a hurricane there and -- but sometimes the pipeline shut down, we can't go forward there. But -- and we have other fields that are automated enough that we can keep them online as long as the pipelines don't shut down.

Tracy, I'd like to bring us back as we start to wrap up. We've talked about the probable reserve base and the nature of the conventional assets that W&T owns and operates. Can you -- when you think about maintaining and growing production, and you mentioned the balance sheet allows to grow again, how do you think about from where you stand today and in today's market, the ability to add value through acquisitions and subsequent drilling.

Now we see a really good market right now. We believe that assets are coming on the markets that will be substantial. And part of it is because there's a little pent-up desire there. Some of these older fields, particularly in the deepwater, have gotten to maturity. And so you -- when you're a seller of those assets, you want to look at the company that has longevity, you want to look at the company that's got experience with doing. You want to look at their safety records, you want to look at their ability to actually do the decommissioning. There's not a whole lot of companies out there that can check all those boxes. There are some, of course, but that -- the ranks have diminished a great deal. I remember when we went public, we had 10 comps as public companies. And none of them exist anymore except us. So we -- we've done a lot of good just by hanging around the hoop and staying here. So I see that as an advantage going forward. I'm very happy to see that we have a different administration that thinks about us differently. And a lot of that has been regulatory aggravation. And it was intentional that the Obama and Biden administration certainly wanted to harm not just us in the Gulf of America, but the entire oil and gas business itself.

Tracy, you own nearly 35% of W&T, and I think that's by far the highest manager or insider ownership of any publicly traded E&P company out there. So you're clearly aligned and want to see value created on in the stock and for shareholders. When you think about growing the company through acquisitions, the dividend you have in place, which is annualized $0.04 a share. How do you think about W&T's position to grow the company? And then I guess as a follow-on, just given the volatility in the market, is there a scenario where you'd ever consider a share repurchase plan?

Oh, sure. Yes. I mean, if it gets more difficult to make acquisitions, then we have the ability to make some purchase of shares. We recently got a new RBL. So it limits it somewhat, but we can purchase some. I purchased shares in the future personally -- excuse me, in the past, and I wouldn't count out -- I wouldn't count that out personally going forward as well. The share prices are way disproportionate to the net asset value right now, even at $60 a barrel.

I think if people want to look at kind of a net asset value walk up, they can look at Slide 10 that we referenced earlier on the slide deck to look at the SEC values of the proved, which is about $800 million -- or nearly $900 million at the upside from the existing asset base, which is a couple of multiples of that. So I'm just maybe in closing, can you summarize how you think about that value and how it affects your decisions on acquisitions and the share price?

Yes. Again, we do think about that as upside value. We're very cognizant of margins. So margins are very important to us in how we think about the company going forward. In COVID, we were profitable at $30 a barrel. We were cash flow positive for all that time. And part of that is a result of managing those margins, part of it is because of the -- what we've referenced already, the probable reserve base that we have that we don't get any credit for. So those are all important things in thinking about how we balance the portfolio and how we think about making additional acquisitions and whether we're going to drill or not drill, whether we're going to buy reserves on Wall Street vis-a-vis our share purchases. So those are all things that are active. Generally, we find that we're able to make better decisions through acquisition than we are to purchase shares. And we have purchased shares in the past.

Tracy, I think we'll leave it there today. I'd like to thank you for taking the time to join us and talk about W&T's asset base in the future.

Well, it's always a pleasure, Jeff, and we look forward to talking to you more about the Gulf of America in the future.

Thank you.

Thanks again.