Welcome to the W&T Offshore Second Quarter Earnings Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. This conference call is being recorded today, Tuesday, August 5 of 2008. I would now like to turn the conference over to Mr. Manny Mondragon, VP of Finance.

Thank you. We appreciate you joining us for W&T Offshore's conference call to review the second quarter 2008 results. Before I turn the call over, I have a few items to go over. If you would like to be on the company's e-mail distribution list to receive future news releases or you are experiencing technical problems and didn't receive yours, please call DRG&E's office at 713-529-6600, and someone will be glad to help you. If you wish to listen to a replay of today's call, it will be available in a few hours via webcast, by going to the Investor Relations section of the company's website at www.wtoffshore.com or via recorded replay until August 12, 2008. To use the replay feature, call 303-590-3000, and dial the passcode 11117572. Information recorded on this call is for today only, and therefore, time-sensitive information may no longer be accurate as of the date of any replay. Today management is going to discuss certain topics that contain forward-looking information, which is based on management's beliefs as well as assumptions made by and information currently available to management. Forward-looking information includes statements regarding expected production expenses for 2008. Although the management believes that the expectations reflected in such forward-looking statements are reasonable, they can give no assurance that such expectations will prove to be correct. Such statements are subject to certain risks, uncertainties and assumptions including, among other things, market conditions; oil and gas price volatility; uncertainties inherent in oil and gas production operations and estimated reserves; unexpected future capital expenditures; competition; the success of risk management activities; governmental regulations; and other factors described in the company’s most recent annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Should one or more of these risks materialize or should underlying assumptions prove incorrect, actual results may vary materially from those expected. Please also note that this conference call contains references to non-GAAP financial measures. You can find reconciliations of those non-GAAP financial measures to GAAP financial measures in the Form 8-K filed by the company earlier today, as well as in this morning’s press release. Now, over to Mr. Tracy Krohn.

I would like to thank you for joining us for our second quarter 2008 conference call. I’m Tracy Krohn, CEO of W&T, with a review of the key events that took place in the second quarter of 2008. With me today are Danny Gibbons, our Chief Financial Officer, and he is going to review financial results for the second quarter of 2008; Steve Schroeder, our Chief Operating Officer is going to talk about our 2008 operations; Jeff Durrant, our Senior VP of Exploration/Geoscience will update you on our 2008 drilling successes and preview our next quarter's drilling plans. Following that we are going to have a Q&A session. Talk about earnings per [share versus]. W&T had another record quarter financially, another good quarter with drilling bit. As this morning's press release stated, we had record earnings per share of $1.77, adjusted earnings per share were a $1.86, which is also a record. As I have always stated, W&T is focused on generating cash and increasing our cash flow. And the Gulf of Mexico is proving yet again that it'll be a great place to do that. For example in the second quarter 2008 we made as much adjusted EBITDA as we did in the first six months of 2007. Obviously higher commodity prices significantly helped us to achieve those goals, but having the right mix of oil and gas also helped. Our oil production mix for the second quarter increased from 43% last quarter to 45% just as the oil prices spiked. The majority of this increase in both oil production and overall production is due to increasing our interest to a 100% and 59% in Mahogany and the additional work being done out in that field. The Gulf of Mexico basin just keeps on producing. Exploration success rates remain…

Thank you, Tracy. Let me run through a few income statement items and then we'll move on to cash flow and the balance sheet. Beginning with the revenue, revenue for the second quarter of 2008 was $461 million that's a $188 million increase over the same period in 2007. Our average realized price was $11.53 per Mcfe for natural gas and $113.74 per barrel for crude oil and natural gas liquids. These are increases of 48% and 88% respectively over 2007 prices. This resulted in an all-in price of $14.89 per Mcfe, this is over $6 per Mcfe higher than second quarter 2007 and over $3.30 per Mcfe sequentially from first quarter 2008. Lease operating expenses were essentially unchanged quarter-over-quarter. For the second quarter 2008 LOE was $54.3 million and that compares to $53.9 million in the second quarter 2007, LOE per Mcfe was $1.75 in the second quarter of 2008 versus $1.73 in the second quarter of 2007. Depreciation, depletion, amortization and accretion which we refer to as DD&A is $153.8 million or $4.97 per Mcfe in the second quarter of 2008, an increase of $27.8 million over the comparable period of 2007. The factors leading to the DD&A increase were capital expenditures, an increase in future development costs, and an increase in our estimated asset retirement obligations; partially offset by the addition of reserves from increasing our interest in Ship Shoal 349 Mahogany from 59% to a 100%, and reserves added as a result of our successful drilling efforts. Moving on to G&A, for the second quarter 2008 G&A was $11 million compared to $7.4 million in the second quarter of last year. On a per Mcfe basis the quarter-over-quarter comparison is $0.36 in 2008 compared to $0.24 in 2007. General administrative expenses increased due to an increase…

Thanks Danny. W&T continued to have a high activity level in the second quarter, and we currently have nine rigs running. We have four mat cantilever, one independent leg jack-up, two platform rigs and one semi-submersible under contract and operated by W&T, relative to non operated activity one rig is running an independent leg jack-up. As Tracy alluded to earlier, we project to have drilled or to be drilling between 30 and 35 wells by the end of the year. The reduction in the number of wells in this year's budget can roughly be attributed to equipment availability and timing, opportunities in non-operated leases not coming to fruition and to a lesser extent further technical evaluation including the review of seismic information. Relative to equipment availability, certain specific rigs that we needed were not available at the time we needed them. As this year has progressed, the platform rig market has tightened. Even though some publications indicate that platform rigs are available, some of those rigs have been out of service for years and are in poor condition and are not immediately available. Also, a number of platform rigs have been stacked on location at a number of deepwater spars and TLPs. Nevertheless, we have contracted another platform rig for a drilling program at one of our South Timbalier properties and anticipate mobilizing to location in November. However, we have two or three programs at non-operated properties and are waiting on a platform rig to become available. Also, rigs being delivered by other operators are being delivered later than anticipated due to success or longer than anticipated operations due to weather or technical difficulties. With respected to outside operated properties, some of the opportunities have not proceeded at the pace projected at the beginning of the year. Green Canyon 646,…

In the second quarter, we completed the drilling on 10 wells, eight of which were successful, and when the four discovery wells from the first quarter are included, we have now been successful in 12 of 14 wells in the first half of 2008. But perhaps more importantly, of these 12, we are currently producing from 10 for a combined net rate of 25 million cubic feet of gas per day, 3350 barrels of oil per day and 4500 million cubic feet equivalent per day which is net to W&T. The two remaining successful wells, one is already been completed with production expected soon. Our other 2008 success not currently online is at High Island A-376, where first production is expected in early 2009 following construction of a platform and facilities. Because the majority of our drilling programs come from existing shelf infrastructure, we are seeing an immediate financial benefit from these successful wells. In our last conference call, I discussed some of our early second quarter success including the Ship Shoal 224-E18, Ship Shoal 300-A2, High Island A-376 #7 and the Eugene Island 175 H-5. Other second quarter successes included the 67% working interest in E-19 development well and the Ship Shoal 224 where we found 92 feet of oil and gas in 5 sands. This well is now being completed and should be online and producing shortly. Another highly successful infield exploration well was the 62% working interest A-11 well in High Island 111. Similar to the Ship Shoal well, this well used newly acquired 3D seismic integrated with the field's production history to locate a large un drained fault block in the middle of the field that has already produced over 360 Bcf of gas. This well is online producing at a gross rate of 9.1 million…

The question you might be asking is what will be the impact on our proven reserve replacement for 2008 as a result of the revised well count. Current numbers indicate that we may not replace reserves organically with drill bit. Even with the Mahogany acquisition and in the absence of any other acquisitions, we may only replace production issue. However, we still have several high end back well for many (inaudible) budget that could change that outcome, but these will also come with higher risk. That said, don't lose sight of the fact we've had record income in the second quarter and so far this year. I'll also remind you that we have and have had one of the lowest hedge exposures of most of the major independent oil and gas producers. As a result, we continue to benefit from high commodity prices, and we continue to generate enormous free cash flow. Regarding acquisitions, as you know, we don't budget for acquisitions. The market is extremely active and our R&D team is as active as ever. We have really good liquidity that allows us flexibility when an opportunity presents itself. We have several hundred million dollars cash on hand, and we recently announced the extension of $0.5 billion credit line that is currently ongoing. In conclusion, we've been very busy this year, and we are enthusiastic about projects and opportunities that we are pursuing for the rest of this year and in the next year. We still have several high potential wells left in the program and many wells that we'll bring on production full year in. Our focus is still on generating cash and reinvesting it in the projects that will continue to produce cash and exceptional returns in the years to come. Again, bear in mind that we have had record income in the second quarter and so far in 2008. That concludes our prepared remarks and we continue with your questions.

(Operator Instructions) Our first question comes from the line of Neal Dingmann with Dahlman Rose. Please go ahead.

Good morning, a solid quarter!

Thanks.

Tracy, regarding your comments about the new CapEx with the rig market, is the rig market becoming tighter or are you seeing rates going up? Also, in regard to equipment delays, is that mostly just on the rig side or is that also on the completion and some of the other equipment?

I think we see it more on the rig side. Our rigs becoming tighter, we are not really seeing a substantial tightening in that market, what we are seeing, which is normal in the boom period, is that it becomes more difficult for the contractors to track clues to work on the rigs and you get some lesser experienced people and you have some delays in getting new equipment for the rigs or equipment repaired, and that is what we are seeing more than anything else. We have had some difficulties with platform rigs more than anything else getting them on location and rigged up but that does not matter, this is fairly normal in a boom period. I have been through several of these boom periods now and it always seems to repeat itself.

With the market conditions, we have seen gas come down a bit here recently and oil coming down a bit also. Tracy with your comments regarding the acquisition market and hedging, from what we have seen in the last few weeks, does this cause any near term changes or '08 changes?

You have to put it in perspective a little bit Neal. When we talk about prices coming down, my personal predictions for last year going into 2008 was about $78 barrel and about 750 gas. It went up from 146 or 147 to 127. It is hard to think of it as really coming down. I still view it is having gone well up. yes, I mean it is amazing to think that we can see slow downs as a result of the price of crude going from 140 to 120, or even possibly lower than that. I am not sure what the bias is on volatility, but in any cases I think that it is still going to be a very active year. I have not seen any real shortages as-far-as rigs and things like that are concerned.

Any comment or color on the Green Canyon 82, the Healey?

We are still doing the resource analysis on that. We have not finished reviewing that with the staff. I have still got a few more questions we need to ask before we come up with a firm production plan out. We are still proceeding in that direction.

Thank you.

Thank you, Neal.

Thank you. Our next question comes from the line of Philip McPherson of Global Hunter Securities. Please go ahead.

Good morning, great quarter!

Thanks, Phil.

You already answered the majority of my questions. The real issue is in regard to 15 wells being dropped. You put a press release out in June that everything was great and good. Forty days later, we had this huge delay or disappointment. On the planning cycle, is it that quick that something like this big can happen or am I missing something?

No, I do not think you are missing anything. I think that when we look at our program in its entirety and things that fall out as a result of moving equipment around, it is a dynamic process. We do not get the pleasure of having just a static photograph of what is going to happen at any one time. If we did, it should it make planning a lot easier. As we change our inventory around and we defer things because we have a high lease access, meaning we have good leasing vis-à-vis held by production leases, it affords us the opportunity to move things out that perhaps other operators would not ordinarily be able to do and defer. We are not dropping projects; we are simply deferring some of them. That is one of the luxuries you get with HBP acreage. Most of these wells that are dropped are being replaced into the program with wells that we know we can get drilled on in a fairly timely basis. The equipment availability issue ,is an issue particularly with regard to the platform rigs. We did have some issues with actually getting started once we got the rig up there. During 9/10, we had some casing issues, getting outside of the drive pipe once we got down there. We actually ran into one of the other wellbores with the bit ,which caused a little bit of a problem and concern for us and some delays. Once you delay one well, then there is a domino effect with the others.

Could you just give us a little color on these four deep shelf wells? It appears like a second half gain changer. How long do these wells take to drill, and are these like third quarter conference call result timing or...?

Yes and no. Probably third, fourth quarter, that is what we are looking at. I can not really forecast that we will be able to come up and tell you that all those wells will be drilled in five quarters. Certainly, Viaskino was one of the wells that will get drilled right now. (Multiple Speakers)

Are they 60-day drilling time?

It is either 90 or slightly longer than that. We are getting started now to finish up for the end of the year, assuming no trouble time. Part of the issues we have had in just equipment availability has also been non-operators. We have a certain number of wells that non-operators are drilling, and they are experiencing some of the same issues that we are.

Great! Well, good luck in the second half.

Thank you, sir.

Thank you. Our next question comes from the line of Gary Nuschler with Jefferies & Company. Please go ahead. Gary Nuschler - Jefferies & Company: Good morning. If you are talking about deferring some wells into 2009, do you think we can get back on to a 50-well drilling program next year?

That is certainly my intent. I would like to see the program expand. Again, that is some of the same issues that we have, considering we will continue to have higher or about the same commodity prices, letting things stabilize and level out, and that we are not reaching so far in the future to get equipment availability. The short answer is yes. I mean I would like to see us do another 500-well program for 2009. Gary Nuschler - Jefferies & Company: Given the foresight that you have, do you think you will able to get the rigs under contract and then probably try to avoid the issues we are having right now?

It is not just one issue. It is a couple of issues. I think part of what we need to resolve is what our outside operators are going to do as well as what we think our rig contract is capable of doing. We have got several platform rigs on location with wells to drill. The rigs are up now. We have them on location. We had some delays in getting them on locations and getting rigged up. In any event, the short answer is still yes. I think so, given the set of facts that I have right now and assuming that we will not have further delays from equipment availability and our other outside operators. They have similar experience to what we would expect. Gary Nuschler - Jefferies & Company: Okay. Then last question what is the reserve estimate for Daniel Boone?

I am sure. It was around 263 feet or so. Daniel Boone? Not sure if we are able to publish the reserve estimate at Daniel Boone. I just do not recall. Do not ask why. Gary Nuschler - Jefferies & Company: Okay.

I do not recall the exact number right now. Gary Nuschler - Jefferies & Company: Okay. I will find them on my own. Thanks a lot.

Maybe by the time we finish the conference call, we will get that information for you. Gary Nuschler - Jefferies & Company: That'd be great. Thanks.

Thank you.

Thank you. Our next question comes from the line of Chris Gault with Lehman Brothers. Please go ahead.

Hi. Obviously, you have a lot of excess liquidity right now. Is there any thoughts on potential debt repayment on that term loan or are you all still targeting any cap levels?

I mean there is always that thought. The reality is that our debt level is pretty manageable right now. Even at 8-and-something percent for our paper, it just seems to me that a better place to put it is back in the ground. That would be our first priority or potentially doing some reserves or so. I mean some reserve acquisition, that thing.

Okay. Are there any thoughts on share buybacks or increasing the dividend?

I mean that is always the thought. Yes, we did a special dividend last year. Share buyback is probably furthest down on the list, but I do not move it out, but that is probably last on the list at this point.

Okay.

I do have an answer for your question earlier regarding Daniel Boone. I am sorry, not your question. That is 18 to 20 Bcf equivalent proved.

That was it for my questions. Thank you.

Hi, thanks. Thanks, sir.

Thank you. Next question comes from the line Nicholas Pope with JPMorgan. Please go ahead

Good morning.

Good morning, sir.

I was wondering if you could gives us a little more details on the two high rate wells that you talked about being offline, where are they? Additionally, is there potential for a reserve write-downs and how much reserves are actually attributed to those wells?

Yes, that is a lot of questions. The Garden Banks 208 well appears to have warded out. The Pluto well, which is out in Mississippi Canyon 718, I believe, is awaiting compression. We hope we will get that well back online. Exact reserve write-down from those, I can not tell you right off hand. It is not significant in the overall program, but it is right oriented.

I appreciate it. I was wondering, with the reduction in the number of wells being drilled, is there any way you could give a ballpark, how much is attributed to the non-op partners versus rig and equipment availability and seismic reductions, the review of the seismic data?

Yes, let me see if I can clarify that for you. We had about, I do not know, 9 or 10 non-op stuff that we were looking at. Steve is going to answer that question for us. I think he has got better data than I do. He is has got that at his fingertips.

Yes, on the equipment, it was probably about half of the wells, and about a quarter of them were outside operated, and then about a quarter of them were additional technical evaluation.

That is all very helpful. Thank you.

Thank you.

(Operator Instructions) Our next question comes from the line of Noel Parks with Ladenburg Thalmann. Please go ahead.

Good morning.

Hello, Noel.

A few questions. This year, I recall you saying at the start of the year that how you came up with the drilling program you did was to seek to be as efficient as possible in terms of (inaudible) and so forth and that some of those decisions came out of the study you did last year. Your revised plan now, does that change your thinking around how feasible it really is to try to manage so closely exactly geographically in what order you got to drill things or do you feel strongly as you had before about that?

Okay. Let me break your question down here. First of all is talking about logistics and trying to manage the logistical moves on rigs. I mean we always try to do that. As wells fall out of the program or we change the lineup in the program, obviously those logistics change. Similarly, as rigs have availability issues coming from other operators, their timing changes. So, it is a very dynamic situation. We work very hard on trying to manage that logistics portion of it, but there are certain things that we do not get to control. I also said that when we proposed this program earlier in the year, we had a very different pricing regime. We were doing our budget for this year. Again, my own opinion was that we certainly were not going to have these prices. I think I told everyone that had listened to it and that this is very subject to price sensitivity. That as price of commodities went up; we would experience some equipment problems as well. I think that is really more of what we are seeing here. It is just availability and other operators experiencing similar issues that we have. Bear in mind the good news there is that we have made a hell of a lot of money from the commodities. So, our cash flow is way, way up, as many other peoples as well. This is very similar to things we have seen in the past. I mean I certainly wish I could sit here and tell you that if I had enough foresight to predict $130, $140 oil or even $120, we are not even close. Similarly with gas; the good news is it is huge cash and we have got huge amount of liquidity to work with for this year and beyond. So, the good news is that yes, I mean we are hunting for other things and ways to constructively utilize that cash.

Okay. Also thinking about, looking back over the past year, there was some mention again of additional technical review on some of the wells being a factor. Do you have any greater sense of how the former Kerr-McGee properties that you pretty much digested? Any sense as to whether you are seeing any pattern as far as those properties turning out to be better or worse than expected as you have gotten another half year further down the road?

My opinion is very distinct. They are better than what we thought they were going to be. We are continuing to drill up that program. We are finding new opportunities all the time. Things that change as a result of technical review are being replaced and it is not like, the world comes to an end or we decrease our inventory. We are finding more opportunities on our own properties and others as well. So, now the Kerr-McGee thing has been an enormous success. We are very happy with it. We still have a lot to digest there, by the way, in the way of things we can do with the drill bit.

Has that been primarily in the deep shelf that you feel like your expectations have been exceeded on those properties?

We have a number of prospects in the deep shelf. You may have noticed there some other operators out there drilling ultra deep. One of the things we are looking at very hard is our own properties at Mahogany which we think has some very big potential. We are studying that right now. This is our secret. I mean I have been telling this in different comfitures, investor meetings and what not. There is still a lot of structure underneath this that has not been tapped. We have have not been in the (inaudible) there yet. So, we are investigating that, and I expect to have more news on that pretty surely about exactly what we are going to do in the way of further drilling out there.

Okay. Is it safe to assume that there will be a 2009 event or this kicking off in 2009?

Looks like we would probably start the well in the 2009.

Okay. Thanks.

Thank you, sir.

(Operator Instructions) Our next question comes from the line of Richard Tullis with Capital One Southcoast. Please go ahead.

Hi, good morning.

Hello, Richard.

Just going back to the four high impact wells that you are looking at for the rest of this year, what are the gross reserves associated with those wells?

That is how we test the Bcfe unrisked.

Okay. So that was the gross number?

Yes, sir. I am sorry that is not a gross number. That is a net number, excuse me. Yes, that is right, net number.

Okay. What is your average working interest in those?

Most of them were pretty high. I think Ship Shoal is 90%, Eugene Island is 100%, Viaskino was 90%, another element...

91% at Vermilion 226.

91% of Vermilion 226. So, between 90 and 100%.

Okay, okay. What is the cost expectation on those wells.

I think we have given that out. I mean can not tell you right off hand.

Okay. What drilling pace you are looking at, like one well at a time drilling complete?

I think we are on Viaskino right now, and we are also at Eugene Island 186 #1 right now, and also with Ship Shoal 232. So, we are drilling three out there as we speak.

Okay. How quickly can you bring on a successful well there? Is there existing infrastructure in place that is available?

Well, the short answer is most of them, yes. Viaskino, we made a discovery there. We will take probably a little bit longer.

Okay. Well, thanks so much, Tracy. I appreciate it.

Then also Ship Shoal 232 is on platform. So, that one would come on pretty quick. Thanks.

Thank you. Mr. Krohn, there are no further questions. I will turn it back to you for closing comments.

I think I have had my say today. We are battening down the hatches here for the rainy day. Other than that, I think we are done. I really appreciate your participation. Thanks so much.

Thank you, sir. Ladies and gentlemen, that will conclude today's teleconference. Again, if you would like to listen to a replay of today's conference, please dial in 2303-590-3000 and enter the access code of 11117572 followed by the pound sign. We thank you again for your participation. At this time, you may disconnect. Have a nice day.