Ladies and gentlemen, thank you for standing by, and welcome to the W&T Offshore's Third Quarter Earnings Conference Call. [Operator Instructions] Today's conference is being recorded, October 31, 2012. I would now like to turn the conference over to our host, Mark Brewer of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. We appreciate you joining us for W&T Offshore's conference call to review the results of the third quarter of 2012. Before I turn the call over to management, I have a few items to point out. 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 November 7, 2012. To use the replay feature, call (303) 590-3030 and dial the passcode 4568692. Information recorded on this call speaks only as of today, October 31, 2012, and therefore, time-sensitive information may no longer be accurate as of the date of any replay. Please refer to our third quarter 2012 earnings release for a disclosure on forward-looking statements. Now I'd like to turn the call over to Mr. Tracy Krohn, W&T's Chairman and CEO.

Thanks, Mark. Good morning, everyone. We do appreciate your interest in W&T, and we thank you for joining us on our third quarter 2012 earnings conference call. I have with me today several members of management, including Jamie Vazquez, our President; Danny Gibbons, our Chief Financial Officer; Tom Murphy, our Chief Operations Officer; and Steve Schroeder, our Chief Technical Officer. Last quarter, when we reported our second quarter results and operations update, we presented a lot of information in the earnings release and focused our conference call primarily on recent operational highlights. Forward-looking information was included in that and we responded to your questions. Since the feedback was positive, I'm again going to just make a few opening remarks, and then we'll turn it over for your questions. And before I talk about the third quarter activities, I should mention we did declare a regular quarterly dividend of $0.08 per share and a special dividend of $0.47 per share effective to shareholders of record on November 16, 2012, and payable on December 3, 2012. So to follow that, I'll talk about the third quarter. Third quarter was active and we were highlighted by several important events that further enhanced our platform for growth. We announced the acquisition of Newfield's Gulf of Mexico assets. We acquired a total of about 480,000 gross acres in the Gulf of Mexico. That includes several leases that we were awarded as well. We've increased our exploration activity both onshore and offshore, and we've continued to have excellent result for our drilling and key development projects. Our strategy is to continue to employ a balanced approach between exploration, exploitation, development and acquisitions. So let's talk a little bit about the Newfield Gulf of Mexico property acquisition. We closed on that acquisition on October 5th. For the…

[Operator Instructions] And our first question comes from the line of Michael Glick with Johnson Rice. Michael A. Glick - Johnson Rice & Company, L.L.C., Research Division: Just had a question for you guys on deepwater exploration specifically. Between the Newfield transaction and some of the things you're doing in-house, expanding your exploration capabilities, I was wondering if you could talk a little bit about your appetite for risk in the context of the deepwater exploration program. Would you look to bring in partners? Would you look to keep majority operating interest or 100% interest, maybe just expand on that a little bit?

Sure. Particularly, as you think about the deepwater, we like what we see in our exploration portfolio. I always tell people and temper it a little bit. But you've got to be careful in the deepwater because you might screw up and find something and then you have to go develop it. So we do have that in mind. We are not looking at 100% deals, literally. We're looking at -- well, particularly this last well with Noble, we've taken 20% interest, which we feel -- we think is the right number. So we didn't jump out and take a real large interest in it. So I think that's a fairly conservative approach, and I think that, that will work very well whether we're operator or non-operator.

Our next question comes from the line Noel Parks of Ladenburg Thalmann. Noel A. Parks - Ladenburg Thalmann & Co. Inc., Research Division: Just a couple of things. Wanted to talk about the cost guidance that you provided. I realize that with the annual guidance, adding the Newfield properties doesn't really move the needle that much. But as we look forward into next year, can you give us any sense directionally of where we might see changes in the cost mix?

I'm not quite ready to address guidance for 2013, but I think it's reasonable to assume that our budget's going to go up. So that should be an indicator for you. We expect production to be up and that should be an indicator for you. So -- and we're seeing -- we're continuing to see a lot of different acquisitions that have interest for us. Noel A. Parks - Ladenburg Thalmann & Co. Inc., Research Division: Okay, I guess I was just trying to get a sense of with this sort of decent sized lot of new properties coming in, on a unit cost basis, is there any movement or do they blend in pretty well with the overall company portfolio?

We are cognizant of cash flow first, right? And then what we can do to enhance the value of those properties, be it exploitation or exploration. We're just a little time away from determining what our budget is going to be. This thing with Newfield came up fairly quick. We're incorporating that. It is a lot of acreage so we want to give that the proper amount of time. We think that it really does move the needle at -- with some focus on the exploratory side of it. So we're pretty excited about that. We continue to see things in the deepwater, in the shelf and onshore. It is coming at us from a bunch of different directions so we do have to take some time and mind that as a function of our overall budget. Noel A. Parks - Ladenburg Thalmann & Co. Inc., Research Division: Okay, great. And just my last one, a bit of housekeeping, in the cash flow statement, I guess this would be for Danny, the asset retirement item was a negative, I think, $63 million. That's having a little bit of trouble following, I doubt the 9-month number of course, having a little bit of trouble following how much of that applies to the quarter and what sort of the normal accretion that we would generally add back to cash flow, and then what's I guess an adjustment from the acquisition maybe?

Noel, the $63 million is actually the cash out the door relative to ARO for the first 9 months. Now if you pooled June and then subtract the 2 numbers, you'll get the cash for the quarter. Noel A. Parks - Ladenburg Thalmann & Co. Inc., Research Division: Okay. It's a pretty big number though, just in the one quarter then, right?

I don't remember what June was. It seems like it was $36 million? I'm guessing at what the number is.

Let me add a little bit to that, Noel, because normally in the summer times is when we do most of the work because that's when we have the best weather. So that's not unusual. It is usually a little lumpy throughout the year, but normally, you'll see bigger numbers on, not just P&A but also on platform maintenance and that sort of thing.

Our next question comes from the line of Jeb Bachmann with Howard Weil.

Just a few questions, Tracy. First on infrastructure in the Permian, there's a few guys out there who've had some issues with third-party processing facilities. Just wondering kind of what your situation is there now and how much running room you have over the next couple of years to handle your program.

Pretty good, actually, particularly Yellow Rose, which is the majority of where our acreage is located and our production. Most of that is hooked up in pipelines. It's not just individual tanks that are sitting out in the middle of nowhere. We do have it hooked up to pipelines and processing plants. So our infrastructure is actually very good there.

Okay, and then looking to offshore, I noticed that you mentioned that the oil mix on the Newfield property is now at 44%. I guess that was up from 37% when the deal was announced. I'm wondering, is that basically just because some of the gas production has come off versus the oil production there? Is that what's moving that mix oilier?

It's just a matter of the kind of the instantaneous productions from each of the fields. Like a couple of the fields have been doing some different operational aspects. For instance, we've just brought on a specific zone at power play and that yielded quite a bit more oil in the relative short-term. But it's going to float around that approximate number. And, as Tracy alluded, we're making some specific operational changes at fields, which we do on all of our fields. So I would expect that general number, but it's going to float in the high 30s to mid 40s.

Okay, great. And one last quick one for me, on the NGL mix going forward, what should we look for as a percent of total production?

[indiscernible] deepwell versus gas exploration, as far as NGLs go, I can't imagine it errs too much from what we know. I don't foresee any real significant changes from our recent past history. We'll continue to do -- well, we're drilling in every sector. I mean, we're drilling more in West Texas. That brings a lot of NGLs. And we've got a lot of NGLs in our other areas. As Tracy said, we're bringing -- we're drilling some pretty high chance factor success wells in Main Pass. They also bring a lot of NGLs but I think over the long haul, at least in the next 6 months or so, our NGL mix will probably be fairly static to what it is now.

Well, yes, that's assuming no acquisitions or anything like that. And I wouldn't make the assumption that we won't have any acquisitions in the next 12 months, likely will. So that's a tough question, but it's got to be somewhat lumpy.

[Operator Instructions] And our next question comes from the line of Richard Tullis with Capital One Southcoast.

Tracy, looking at that Mississippi Canyon 243 well that's sanded up that was in a prior press release, what's the status on that well?

Yes, we're preparing to drill another sidetrack there.

Okay. What was that production prior to the shut in?

Well, as I recall, it was making about 1,500 barrels a day.

On Big Ben, what's the pre-drill on risk reserve estimate on that one?

We never gave that out. I'm not sure if Noble did, but I would defer to them for any kind of numbers. We generally don't try to add any color to on-risk reserves before we go drill these wells.

Okay. And jumping to onshore, what's the timing at this point for, I guess your valuation results at the Star Project and Terry County exploration work? Do you think you'll wait until the next quarterly update, January, February next year? Put something out sooner than that?

It could be sooner than that but that's kind of a range, yes.

I know you talked about M&A little bit thus far in the call. Are you more likely to stay in the Gulf of Mexico and Permian or start looking into some other areas outside that -- those two?

We've been looking at other areas all along. Again, this is just -- this is opportunistic and as far as I'm concerned, it's value driven. We've been fairly agnostic as to what we've looked at. And clearly, when we jumped off of -- out of the Gulf of Mexico to West Texas, that was a profound variation from our normal theme of the last 3 decades. So I don't have any -- I don't have any philosophical issues with going into different areas. I mean clearly, East Texas and West Texas are different from the Gulf of Mexico as far as we're concerned, although the ratings agencies don't look at it this way. When you are in the deepwater, I think that's a profound difference from being on the shelf.

And then just last for me, with the Newfield acquisition, have you been able to retain most of the employees that you wanted to hold, to bring into the new organization?

Yes, on the operations side of it, we certainly have.

[Operator Instructions] And our next question comes from the line of Curtis Trimble with Global Hunter Securities.

Just trying to get a little idea here on what's driving end-of-year fourth quarter guidance and looking at second quarter rate and obviously, you had deferrals for maybe the hurricanes as you've documented and referred to before. But was hoping I could get a little bit of idea, maybe onshore, offshore mix of would you expect to contribute to fourth quarter production. Obviously, if I look at the second quarter average of 48.6 [ph] give or take, and layer on the 7.5 million, excuse me, 7,500 barrels a day you're looking at from the Newfield, you get a higher number for the fourth quarter. I'm just trying to get a little bit of context as to potential deferrals or what's composing fourth quarter numbers in the context of your year-end guidance.

Well, there's several things. One of them is that the pipeline outages that we had earlier simply aren't going to be there. The -- we're out of hurricane season now. We don't expect any more downtime from hurricanes. Although certainly, we wouldn't say that hurricane season was over judging from what happened in New York over the last couple of days. And certainly, we do see some upside in production from West Texas. We're starting to ramp up a little bit over there, particularly in the last 30 to 60 days, and we're starting to flowback a couple of these flats and everything onshore in West Texas and East Texas. So we're cautiously optimistic.

Yes, but it doesn't necessarily include the 2 operations you've got going on the development side of Mahogany, that you expect to bring on for year end. You still got some other levers, if you will, to pull on that side?

I think so. We're in the midst of a work over at Mahogany right now. I mean we'll jump on the other well we were drilling as a sidetrack function, too. So yes, Mahogany is -- continues to remain the focal point for us and we'll -- originally, we had only figured we were going to drill 3 or 4 wells there, and it just continues to get better. And we've said this before, just about every time that we get new data and we drill more wells, then we find better opportunities and the field gets a little bigger.

Yes, but it's it safe to say that the likelihood of those wells being more impactful on the first quarter of next year and of course, the other sidetrack with the Matterhorn, that likely the first quarter impact in addition to the Yellow Rose horizontal. So perspectively, you're looking for some bigger numbers first quarter probably more likely than fourth quarter?

I think that's a reasonable assumption.

I'm showing no further questions in the queue at this time. I'd like to turn the call back to you, Mr. Krohn for any closing remarks.

I'm done. We appreciate your attention, and we look forward to talking to you again soon.

Ladies and gentlemen, this does conclude our conference for today. If you'd like to listen to a replay of today's conference, you may do so by dialing (303) 590-3030 and entering the access code of 4518692 followed by the pound sign. Thank you for your participation. You may now disconnect.