Ladies and gentlemen, thank you for standing by. Welcome to the W&T Offshore Second Quarter 2024 Conference Call. During today’s call, all parties will be in a listen-only mode. Following the company’s prepared comments, the call will be open for questions and answers. [Operator Instructions] This conference is being recorded, and a replay will be made available on the company’s website following the call. I would now like to turn the conference over to Al Petrie, Investor Relations Coordinator.

Thank you, Operator. And on behalf of the management team, I’d like to welcome all of you to today’s conference call to review W&T Offshore’s Second Quarter 2024 financial and operational results. Before we begin, I would like to remind you that our comments may include forward-looking statements. It should be noted that a variety of factors could cause W&T’s actual results to differ materially from the anticipated results or expectations expressed in these forward-looking statements. Today’s call may also contain certain non-GAAP financial measures. Please refer to the earnings release that we issued yesterday for disclosures on forward-looking statements and reconciliations of non-GAAP measures. With that, I’d like to turn the call over to Tracy Krohn, our Chairman and CEO.

Thanks, Al. Good day to everyone, and thanks for joining us on our conference call today. So with me are William Wilford, our Executive Vice President and Chief Operating Officer; Sameer Parasnis, our Executive Vice President and Chief Financial Officer; and Trey Hartman, our Vice President and Chief Accounting Officer. They’ll be available to answer questions later during the call. So in the second quarter, we continued to report very solid operational and financial results. Our focus on generating free cash flow while maintaining and optimizing our assets, including the assets we acquired in Q1 allow us to generate free cash flow of $18.7 million. For the past 6.5 years, every quarter, we’ve generated positive free cash flow because we operate very efficiently and know that cash is paramount to our success. Our balance sheet continues to reflect this as we deliver strong production and meaningful adjusted EBITDA. So in the second quarter, we had a number of accomplishments that demonstrated how successfully we are doing on our strategy. First, we reported production of 34,900 barrels of oil equivalent per day, so at the midpoint of our guidance range and virtually flat to Q1. Next, we generated solid adjusted EBITDA of $45.9 million. We remain focused on cost control with the absorption of recent acquisitions, thus in the second quarter. We recorded lease operating expenses below the low end of our guidance. So we continue to realize synergies from our January 2024 property acquisition and deferred some workovers and facilities maintenance expenses as well. Also, we generated strong free cash flow, allowing us to increase our cash and cash equivalents at the end of the second quarter by 30%, totaled $123 million and decreased our net debt by 9% to $268.5 million. We continued returning cash to our shareholders, paying…

[Operator Instructions] Our first question will come from John White with Roth Capital. You may now go ahead.

Good morning.

Good morning, John.

Congratulations on a good quarter and getting the Cox acquisition, further integrated. You addressed my question during your prepared remarks, but I just want to make sure I’m not missing anything. While you’ve adjusted production and LOE guidance, there’s no change to CapEx or asset retirement obligations, correct?

That is correct. Yes. We still got a little bit to best for the rest of the year.

Okay. And on the drilling joint venture, good to hear progress on that. Will that be composed of industry partners and institutional investors?

Yes. The point is we haven’t completely embedded all the wells that we want to drill and the exact timing on it. We’re still hunting rigs and timing on lifting equipment and whatnot that move platform rig around. We’re rolling out this joint venture for not just industry partners, but also financial investors as well. As you know, we’ve done this in the past. It looks like six or seven wells for sure, and I’ll be able to give you more information on the -- that dollar amount of expected -- expenditures going forward in pretty short order here.

That’s great to hear. Congratulations on that also, and I’ll turn the call back to the operator.

Thank you.

Our next question will come from Jeff Robertson with Water Tower Research. You may now go ahead.

Good morning. Tracy, on production, did I hear you right that you all -- that some part of the adjustment is related to some unplanned downtime issues with third-party pipelines.

Yes. We’re having some sales route difficulties with a couple of the pipeline companies that we’re trying to resolve. And we have alternatives. So it’s just more of a negotiation than anything at this point in time.

And you mentioned on the reserves that the Cox reserves were higher than your original estimates? Is that because of data that you had at the time those original estimates were made? Or are you seeing some outperformance that’s leading to performance-related revisions?

Yes. We are seeing some better performance. Also, we’re spending a little time making sure that we have all of our transportation routes streamlined with regard to some of our other fields and areas. We’re adding people and equipment in some places and reducing people and equipment in others. So we’re just smoothing out that curve a little bit so that we’ll have something that’s more reliable and won’t have all the spiky type of production that you normally have when we first take something over.

Are some of those changes you’re making also have a beneficial cost impact?

Oh, you bet. Yes. We’re going to reduce LOE. That’s the intent. And we can deal with some of the more tangible transportation issues, one of our biggest costs in the office transportation, boats and helicopters. So getting that lined out and optimize is important in reducing those costs.

Thank you.

Thank you

[Operator Instructions]

Okay. Well, look, everyone, thank you for listening today. We appreciate. We’ll be talking to you very soon, hopefully, with some more good news. Thanks so much. Bye-bye.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.