Good day, ladies and gentlemen. Thank you for standing by. Welcome to the W&T Offshore's Fourth Quarter Earnings Conference Call. [Operator Instructions] This conference is being recorded today, Wednesday, February 27, 2013. I would now like to turn the conference over to Mark Brewer, Manager, Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. We appreciate you joining us for the W&T Offshore's conference call to review the results of the fourth quarter and full year 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 a recorded replay until March 6, 2013. To use the replay feature call (303)590-3030 and dial passcode 4590116#. Information recorded on this call speaks only as of today, February 27, 2013, and therefore, time-sensitive information may no longer be accurate as of the date of any replay. Please refer to our fourth quarter and full year 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 appreciate you joining us on our Fourth Quarter 2012 Earnings Conference call. This morning, I have with me several members of management, including Jamie Vazquez, our President; Danny Gibbons, our Chief Financial Officer; and Tom Murphy, Chief Operations Officer. As you can see from yesterday's press release, we had another solid year as we focused on expanding our opportunities, growing our assets and creating long-term shareholder value. During the year 2012, we grew our production, increased our reserves and expanded our operations. Our successful development program allowed us to convert 50% of our undeveloped reserves to the proved developed category, and we grew our proved developed crude oil reserves by 51% over the past year. As we outlined in yesterday's news release, we achieved strong results financially in 2012 and maintained good liquidity and robust cash flow. We were also pleased that we ended the year with a generous cushion in our year-end ceiling test calculation, thus no impairments due to lower natural gas prices. That's kind of a byproduct of drilling within cash flow. In 2013, our goal is to replace reserves organically. I'm going to repeat that. In 2013, our goal is to replace reserves organically. Over the past few years, we've been expanding our exploration projects to support the company's goal to achieve organic growth and be less dependent on acquisitions to accomplish our strategic objectives. Our 2013 capital expenditure budget of $450 million is currently allocated 63% to exploration and 37% to development projects. It's designed to drive production and reserve growth organically through our focus on exploration. However, we do have the flexibility to modify the plan as necessary should we choose to complete a strategic acquisition or acquisitions. The budget's expected to be funded by internally generated cash…

[Operator Instructions] Our first question is from the line of Noel Parks with Ladenburg Thalmann. Noel A. Parks - Ladenburg Thalmann & Co. Inc., Research Division: I had a couple of questions. When you were talking about or actually on the press release, there was the mention at Yellow Rose that you have a lot of the acreage held by production and that, that would help you take advantage of the best opportunities in the field. Can you talk a little bit about just the variability you're aware of across the field? And I mean, should we think of Yellow Rose as being more like a statistical play?

It is. The variability that we referred to is more along lines of vertical wells and horizontal wells. Some of the acreage isn't geographically shaped so that we can do the -- what we think would be a more optimal horizontal well as opposed to a vertical well. If you -- for instance, if you got a horizontal well going one direction and another direction, you've got that space in between that may need to be taken of -- advantage of vertical. Noel A. Parks - Ladenburg Thalmann & Co. Inc., Research Division: Got you. And with the new field acquisition, I was wondering just if they had made any contribution to proved reserves above what you had specified at the acquisition, and I wonder if anything also got moved up from callables in the proved from the new field properties.

With regard to new field, the properties are actually performing slightly better than we had expected. What we've done is we've begun acquiring additional seismic. We're very encouraged by what we see. We think we see more opportunity than we originally did. It's opened up the possibilities of partnerships with other companies as well. We've had a good bit of inquiry on that. So yes, I mean, I expect that we'll be doing something to those properties later on this year.

The next question is from the line of Michael Glick with Johnson Rice. Michael A. Glick - Johnson Rice & Company, L.L.C., Research Division: Just a couple of questions on Mahogany. I was wondering if you could provide some more color just on the upside associated with extending the known P Sand reservoir, as well as the deeper potential in that P Sand that you talked about.

Yes. We keep drilling wells out there, and we keep finding new locations to drill the P Sand. We've added more seismic. We've found that our maps weren't -- were okay. They weren't accurate to the extent that we wanted. Every time we get a new generation of seismic or seismic processing out there, the field gets bigger. We're able to drill better wells and more of them. The size the field expands in that sand, the other thing that we noticed is deeper that we see some potential. In fact, one of the wells that we drilled out there -- I can't remember which number it was, Michael, but it had an additional completion in what we call the N sand. And I think that was the A-9. Yes, that was the A-9 -- had additional reserves in what we called the N sand. I'm sorry, that was not the A-9. It was A-2 well. They're writing me notes over here, "No, not the A-9, the A-2." Okay. So it was the A-2 well. Yes. We perforated a pretty thin sand that we didn't really expect a whole bunch out of. The damn thing was making 800 to 900 barrels a day and has maintained good production since. So we're excited with that. And then we've got a deeper frontier and what we call the T sand. Michael A. Glick - Johnson Rice & Company, L.L.C., Research Division: And is the T sand is that an oil or a gas target?

We think it's going to be oil. We haven't gotten to the bottom of the oil column in this field ever. Michael A. Glick - Johnson Rice & Company, L.L.C., Research Division: And I guess just one follow-up. I mean, given the success you've had out there, how are you in terms of running or in terms of well slots?

In -- I'm sorry, in terms of slots? Michael A. Glick - Johnson Rice & Company, L.L.C., Research Division: Yes, yes.

We got plenty of slots. This is a big platform. If we ran out of slots, we'd do some recovery and be able to drill some more wells.

The next question is from the line of Biju Perincheril with Jefferies. Biju Z. Perincheril - Jefferies & Company, Inc., Research Division: Just in East Texas, can you talk about the data points that you're looking for next before getting into development there? Is it getting more comfortable with decline rates? Or are you looking to delineate more of the acreage?

Well, yes, I think it's an acreage issue for us, but also, it takes a few wells to get the right formula on the completion. So we're getting better and better at it, and we're seeing what we think is very encouraging signs of wanting to make a large commitment out there. Biju Z. Perincheril - Jefferies & Company, Inc., Research Division: Okay. And then on the acquisition markets, you mentioned, looking robust. Where do you see more opportunities? Is it still in the Gulf? Or are you equal -- seeing new equal opportunities onshore as well?

Yes, we see them in both areas. For us, since we went onshore, we're seeing a lot more opportunity onshore than we did before. We think that there's some opportunities in different states other than Texas that we've looked at, and we will continue to pursue that. I still like what we've seen in East and West Texas of course. And we are seeing opportunities out in the Gulf in the deepwater as well. Biju Z. Perincheril - Jefferies & Company, Inc., Research Division: Okay. And then just following up on your comments on new field properties. When -- any color on timing when we can see you guys getting more active in the deepwater front once you bring in some partners?

Yes, I think later on this year. Biju Z. Perincheril - Jefferies & Company, Inc., Research Division: Okay. Is that in the current CapEx numbers? Or is that something that will be incremental?

I don't see that in the CapEx numbers at this time.

The next question is from the line of Patrick Rigamer with Iberia Capital Partners.

A couple of questions have been answered already, but I just wanted to ask, with the exploration budget, is that -- should we think of that as similarly 63% offshore? Or is it 80% offshore versus onshore?

That's about 63%, Pat [ph] .

Well, 63% of the total budget, but is it also 63% offshore versus onshore?

I'll get Danny to confirm that. He's still working on the 10-K.

[indiscernible] offshore and 37% for onshore, and 63% of the budget is exploration and 37% is development. So the question is, what's the exact split.

The exploration dollars, so they're just kind of following a similar pro rata offshore versus onshore split.

Hold on. We're getting that answer. Go ahead. We'll have that answer for you here momentarily.

The next question is from the line of Richard Tullis with Capital One Southcoast.

Just a couple of quick questions I don't think have been touched on yet. Going back to the 2012 reserves, what were the total adds from acquisitions and then subtractions for divestitures for the year?

We added 40-something Bcf.

42.

For acquisitions and I can't remember what we sold.

Yes. 42 on the add and about 3 on the divestment of the small South Bend property [ph] .

We'll have those exact numbers in the 10-K, which will come out in a few days.

Okay. And then just on Yellow Rose, anything to update there on 2 recent horizontal wells, the Chamblis, [ph] ? Do you have a 30-day rate there yet? And then that UL well that was flowing back, do you have initial rate there?

We haven't given that information out yet, Richard.

So nothing to update yet at this point?

We're -- we don't have an update for you on that. I'm -- I will tell you that the field production just about doubled from this time last year on a peak rate, and every trade is just slightly off of that. So rate in the field is climbing at a nice little pace right now.

[Operator Instructions] The next question is from the line of Jeff Robertson with Barclays Capital.

Tracy, a question on capital. If you all do find an acquisition in 2013, did I hear it right that you would consider deferring some of the exploration activity?

No, I didn't explain that right. What we would be willing to do is spend more money to do the acquisition, which means that we would borrow money to make acquisitions. Okay?

It would be an addition to the capital budget you're talking about.

I wouldn't be able to sit here and claim that we were doing our CapEx within cash flow. I would go outside of cash flow to make acquisitions.

And what would you be comfortable with in terms of debt metrics for the company? Can you just remind us where you'll -- what your criteria are?

That's always a really good question, Jeff, and I don't have a stock answer for that. The reason is every deal is a little bit of a hybrid. So it's a function of how fast it pays down and how much concentration risk you might have to take in one different field and what the bank advance rate is and what -- of course, if we chose to do a larger acquisition and put some of it off in longer-term debt, what those metrics would be that would make it make sense. What I don't want to do is lower our credit ratings.

In keeping with what you all have done, Tracy, so a preferred acquisition would be one that brings a reasonable amount of cash flow in addition to drilling opportunities? As opposed to just going out and buying drilling opportunities?

Yes, we're always interested in more cash flow. That's kind of have been our mantra for the last 3 decades. So yes that's more appealing to us.

The next question is from the line of Curtis Trimble with Global Hunter Securities.

I was hoping to have -- might be able to get a little bit detail on Big Bend internal reserve estimates, expectation for timing on development. I'm guessing it's still waiting on Troubadour results, but if you guys had any preliminary discussions with Noble on possible development options, whether or not Troubadour is successful, etc.?

Yes. No. Troubadour is scheduled to spud this year. I don't want to take the lead away from the operator. In this case, Noble as to what they're announcing in the way of reserve and that sort of thing. I think they printed that out there. I think their gross resource has been made known in what they consider their economic cases. So rather than have differing or potential for any kind of differences in numbers or anything like that, I'd follow their lead. We haven't really sat down and talk about sanctioning yet but we will. They're in that process now. They'll have to the FEED study and get it or I'd say we -- I mean the group, meaning Noble, will lead that as operator. I know we have a meeting this week with them. So there's nothing that we want to do to slow it down. That's for sure.

There are no further questions at this time. I will turn it back over to Mr. Krohn for any closing comments.

Okay, I think we had a follow-up answer on the percentage of our exploration budget going to onshore versus offshore. And so I think that was Patrick that asked that question, so if he's still available, I'll cover that. If not, we'll put it out in the 10-K anyway.

Patrick, the answer to the exploration question, about 80% of the exploration is dedicated offshore. Again, if you think about the onshore, the question about -- we're talking about drilling quite a few wells onshore but most of that's development dollars. So the exploration side is offshore. So anyway, that's the question you've asked.

With that, I'll shut it down. We appreciate your attendance and look forward to talking to you again soon. Thanks very much.

Ladies and gentlemen, this does conclude the conference call. If you'd like to listen to a replay of today's conference please dial (303)590-3030 and enter in the access code of 4590116#. Thank you for your participation. You may now disconnect.