Greetings and welcome to the W&T Offshore Second Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Lisa Elliott. Thank you, you may begin.

Thank you, Matt, and good morning, everyone. We appreciate you joining us for W&T Offshore’s conference call to review the second quarter of 2016 financial results and for an operational update. Before I turn the call over to the Company, I’d like to remind you that information reported on this call speaks only as today August 5, 2016 and therefore time sensitive information may no longer be accurate as of the date of any replay. Also please refer to the second quarter 2016 financial results announcement W&T released yesterday for disclosure on forward-looking statements and reconciliations of non-GAAP measures. At this time, I’d like to turn the call over to Mr. Tracy Krohn, W&T’s Chairman and CEO.

Thanks Lisa. Good morning, everyone. Joining me this morning are Jamie Vazquez, our President; Danny Gibbons, our Chief Financial Officer; Tom Murphy, our Chief Operations Officer, and Steve Schroeder, our Chief Technical Officer. So yesterday we released our financial and operations results for the second quarter and we also provided guidance for the third quarter and full-year of 2016. Also, we expect to file our second quarter Form 10-Q with the SEC today. This morning, I’ll briefly review some key items from the release and then we’ll take your questions. In the second quarter, we produced approximately 3.9 million barrels of oil equivalent or 42,864 barrels of oil equivalent per day about 59% nearly 60% was oil and liquids. Our production held steady compared to the first quarter of 2016 and we also produced 3.9 million barrels of oil equivalent. Our total production volume in the quarter was in the midrange of our guidance although our oil production was higher and our natural gas production was lower than our anticipated mix of production. During the second quarter we experienced production deferrals and downtime attributable to third-party pipeline outages, some operational issues, and maintenance, which we estimate resulted in production deferrals of approximately 0.5 million barrels of oil equivalent during the second quarter. Majority of those outages were attributable to equipment and facilities operated by others, unfortunately which we did not have any control. One of our third-party pipeline outages was rectified during Q2 with the installation of a new W&T owned export pipeline that allowed us to more than double production from our import in the East Cameron 321 oilfield. Pipeline was installed in May of this year and was executed slightly ahead of scheduling about 30% under budget cost, fuels production has exceeded our initial estimates so we’re pleased…

Thank you. [Operator Instructions] Our first question comes from Neal Dingmann from SunTrust Robinson Humphrey. Please go ahead.

Hi, Tracy.

Hey, Neal, good morning.

Just two quick ones here for you, first Tracy you certainly have looking at your portfolio out there I mean I think you’d agree a number of really exciting potential deepwater projects I mean additional wells Ewing Bank 910 among other things as well as a number of things on the shelf, just kind of wondering generally what do you need to see to return, is it more to get the balance sheet showed up higher prices are all kind of all the above?

Well, it is - certainly pricing has a huge impact on us. I think that I talk about this a lot in - really what we need to see is more normal margins, our normal margins range between 60% and 70%, first quarter we were down around [27%], last quarter we were at 41%. So to really stimulate our actively, Neal it takes around 60%-ish.

Got it.

So it makes it feel comfortable about setting forth and future expenditures.

Okay. And then just lastly, infrastructure system you look like kind of you are going through a more kind of temporary nature like that enterprise and different things that happen, is that how you see that Tracy or how do you see just around your existing wells that you have there that most of those seen more just temporary in nature. How should we think about just short of the infrastructure the issues that we saw?

Yes. You should think about it is temporary just exactly that - and sometimes during the summer there will be planned outages because the weather is better and that’s when a lot of work gets done to different pipelines, infrastructure on platforms and whatnot, but generally like the thing that happened in the Pascagoula that’s pretty random. Our guys did a really good job of getting everything else around there and we are back to normal production there, so while it was - we are certainly [an aggravation fortunately nobody get heard to plant]. So I’m glad to hear that, but they are working on it and we’ve managed to rater round it, so I’ll recommend everybody was involved in that process.

Very good. Thanks, Tracy. And good luck on the exchange.

Thank you, sir.

Our next question comes from John Aschenbeck from Seaport Global. Please go ahead.

Hey, good morning. Thanks for taking my question.

Hi, John.

Tracy, obviously got a near-term in place with the balance sheet with exchange offer, congrats on that? Assuming a place out to get some leverage release, some liquidity reaching agreement with the BOEM and once we return to a higher commodity price environment you work on the margins you were talking about, what do you see is the next operational steps for the Company? Neal touched on a few of the projects you have, but I was curious to understand which one of those you would like to get to first. You mentioned Mahogany in your prepared remarks, but just curious to get an idea what else you are looking at next?

Yes. Mahogany would be a priority for us, once we get the work done there then we’ve got some work to do at potentially over the Virgo, potentially at Ewing Bank’s as well. We are looking at some of our deepwater portfolio for production enhancement and exploratory opportunity as well.

Got it. Appreciated. Thanks, Tracy.

Sir, thank you.

Our next question comes from Richard Tullis from Capital One Securities. Please go ahead.

Hey, thanks. Good morning, everyone.

Good morning, Richard.

Tracy, going back to the BOEM issue, is the main focus of the current discussions on the amount of bonding that would be required by W&T or is that kind of a settled issue and now it’s a matter of how - what timeline to provide the additional bonding?

It’s even little more intricate, it’s more structural in nature as to some of the controls over the agreements that we have in place going forward. This new NTL is pretty recent. We don’t think it really changes anything that we are already going to do. I think it has more of an effect on them with regard to timing on how many other companies they have to deal with. And it’s a daunting task for them. They have received - I mean it’s a big job before we get everything done on a timely basis. So I think it really has more to do with personal and getting things in place for over the next few years to get all this accomplished on a timely basis.

Given where we are now is there adequate bonding capacity out there to handle the ARO bonding requirements?

On the facing that you would probably say no, but on the other hand as you create a need then markets come in. However, right now I wouldn’t say that there is a substantial market for bonds. No. That does not mean it won’t change in the future, but right now it’s pretty tight.

What’s been the recent cost estimates for securing, say some level of bonding, say 10 million is an example?

I can’t give you that information sir.

Okay. And then moving away from the BOEM issues, what level of spending - CapEx spending do you think would be required in 2017 to keep production flat say with second quarter 2016 production 44,000 barrels a day?

Quite frankly, I’m just not quite there yet. I don’t really have that answer yet. It’s a function of margins not just with pricing, but the margins that you would need to have to keep it flat. I mean we are not spending the whole bunch of money. We are keeping it pretty flat right now. So we do have some work that we would like to get done for the end of the year. So that will be a function of kind of what we have on our plate to finish before the end of the year. So I don’t really have an answer for you for flat for 2017 or beyond that other than what kind of treading water right now.

Okay. That’s all for me. Thank you, Tracy.

Yes, sir.

[Operator Instructions] And our next question comes from Jeff Robertson from Barclays. Please go ahead.

Thanks. Tracy just a question on capital, some of this I guess is already been asked, if you all have any capital projects planned for the rest of this year?

Yes. We are working on that right now Jeff, but as I mentioned in the call, we are looking at Mahogany and restarting operations there. We have the rig on location. So we are working toward that goal. So we would have one well to drill there for sure, the one that we started to drill and shutdown. And then we’ve got another potential workover. And depending upon the results of the first well, we would have to see what happens. Now a little word of caution, obviously it’s price-sensitive, so if prices jumped downward than that would affect that decision.

Okay. And I know that you are sensitive around what you could say in the context of the exchange offer, but can you talk at all about the borrowing base redetermination?

Now I think that that is something that I prefer not to talk about just at this time.

Okay. Thank you.

It is a consideration, but I would just not talk about it right now.

Okay.

I don’t consider it to be an issue.

Our next question comes from Gail Nicholson from KLR Group. Please go ahead.

Good morning. I was just curious in your thoughts about potential hedges in 2017 and looking [indiscernible].

Yes. That’s a possibility Gail. We’ll look a little bit further. Right now, I think we are okay, and protecting the amounts that we’ve projected to spend for this year. So I don’t really know how to look at 2017 yet price is moving up and down and there is lot of different options about what it might be. We know kind of what the worst case scenario is that we’ve already experienced that this year, so 40 would seem like an acceptable place to start putting in hedges. However, the way we are structured right now, pretty wouldn’t make much of a difference if we hedged it 40. Our product realizations are slightly less than that, so I think we are good where we are right now.

And then just looking at kind of where deepwater costs are right now, the onshore guys have seen deflation in service cost. And I think the offshore service guys are a little bit slower to catch up on that. Do you think you plateaued on those service cost reductions or do you think there is more room to go?

I think there is more room. I like that as we get further into this cycle with prices remaining where they are or moving slightly up or down that you will continue to see reductions in OpEx and in CapEx.

Okay, great. Thank you.

Thank you.

Thank you. I’d now like to turn the floor back over to management for any closing comments.

We appreciate your attention. And we’ll talk to you next quarter if not soon. Thanks so much. Bye-bye.

This concludes today’s teleconference. Thank you for your participation. You may disconnect your lines at this time.