Ladies and gentlemen, thank you for standing by. Welcome to the W&T Offshore Third 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 opened 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, Megan. And on behalf of the management team, I would like to welcome all of you to today's conference call to review W&T Offshore's third 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 would like to turn the call over to Tracy Krohn, our Chairman and CEO.

Thanks, Al. Good day to everyone, and thank you for joining us on our conference call. So with me today are William Williford, 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're all available to answer questions later during the call. So we continue to report solid operational and financial results while continuing to execute our strategic vision. Our focus is always on generating free cash flow while maintaining and optimizing our assets, including the assets that we acquired in the first quarter of this year. Through September 30, 2024, we've generated free cash flow of $54.9 million on a year-to-date basis. For the past seven years, we've generated positive free cash flow, and it's because we operate very efficiently and know that cash is paramount to our success. Our balance sheet continues to improve as we're delivering meaningful adjusted EBITDA, which year-to-date totaled $122 million. So I'd like to begin our operational discussion by focusing on production. In the third quarter, production was 31,000 barrels of oil equivalent per day. Our production was impacted by an active hurricane season in the Gulf of Mexico seems that continues as we speak. Thus, we saw about 3,500 barrels of oil equivalent per day shut-in associated with hurricanes and other downtime. Despite this, our production was within our guidance range. And the majority of this production has been restored with our October production rate at around 34,000 barrels of oil equivalent per day. In addition, we continue to optimize production that we acquired in Q1 2024. However, only four of the six fields are currently online. We're working diligently to return the remaining two fields to production, which should provide a boost…

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from John White with ROTH Capital. Please go ahead.

Good morning, and congratulations on following your plan. You're generating free cash flow, integrating your recent acquisitions and reducing debt. With not a lot of drilling activity going on, you want to offer some generalized comments on what you're seeing in the acquisition market?

Sure, John. Thanks, and good morning to you too. Yeah. Things are in a bit of flux. I think people were standing down a little bit, trying to figure out what was going on with the elections. And we think that, that's a positive for our industry. Drilling has been a challenge in the Gulf of Mexico, primarily due to regulatory requirements. So there's more than one lawsuit out there dealing with regulations that seem to be a penalty to our industry. So hopefully, that will get sorted out a bit more and make it easier to have line of sight on additional drilling. And we certainly will take that into consideration. We're working on our budget as we speak, and we'll be able to address that in a more concise manner going forward. We do have wells that we want to get drilled, and this will help us with trying to estimate economics going forward.

And you said the acquisition market has been in flux, waiting on the outcome of the election.

You bet. People are trying to figure out what pricing is and what their properties are worth. We are faced with the same responsibility. So I think that you'll see an uptick in acquisitions certainly through the first and second quarters of next year. And we see some things that are attractive. We also see some drilling opportunities that are attractive, and we'll be working on some other things as well.

Okay. Thanks for that and good luck on making some deals and getting your wells drilled. I’ll turn the call back to the operator.

Thanks, John.

[Operator Instructions] The next question comes from Jeff Robertson with Water Tower Research. Please go ahead.

Thank you. Good morning. Tracy, the two fields that are still shut-in from the Cox acquisition, can you talk about the production mix and what kind of production contribution you would expect when those deals come back on?

Yeah. It will be several thousand barrels a day. One of them is more technically oriented with equipment at all, and the other one is more of a legal challenge. And I'm not going to address the legal challenge part of it. The operational issues aren't too hard to overcome, and I think we'll -- one of them will be back online in the near future, probably within the next week or two.

And the mix between oil and gas?

Yes, it's mostly oil.

Okay. For -- just to follow up to, I guess, John's question, does the election resolve some issues that help further your -- the potential formation of a drilling partnership?

Again, well, hope so. Yeah. I think we're getting a lot of resistance mainly because of -- I shouldn't say a lot. We're getting some concern with regard to regulatory issues. There's an issue out there with the Rice's whale that caused the government to draw a large band between Florida and Texas to which we weren't allowed to run our boats at night. And we weren't allowed to run during the day more than 6 miles per hour, and it would have affected our production quite a bit. There is a challenge to that lawsuit. Now those orders are in abeyance at this point. But yes, I mean, there is a big concern that this is going to affect our operations. And incidentally, it was only germane to oil and gas companies. So apparently, cruise ships and commercial fishing vessels and recreational vessels don't hit whales. It's only oil and gas companies that hit Wales. So we thought that was a little absurd and still do. So we're -- clearly, this was an attempt to stymie production in the Gulf of Mexico as the previous administration, seemingly would want to do, why else would be restricted it to just the oil and gas business. So hopefully, that will get straight down in the court, and reasonably, you would think it would. As far as the other lawsuit with regard to financial assurance, the governments or the tax payer never come out of pocket to abandon any field in the Gulf of Mexico. So the government has -- and I say the government, it's the regulatory arm that deals with the Gulf of Mexico, that have required financial assurance the Gulf of Mexico really since the Obama administration. And it's created a problem, in getting that capacity. There have been some bankruptcies in the Gulf of Mexico that have affected the surety market. And surety markets are a little bit muddled right now as to what to do. So we, by the way, have done over $1 billion of abandonment in the Gulf of Mexico since inception, and we've never failed to meet all of our obligations. We feel like financial assurance in the Gulf of Mexico since we have -- as an industry, we're joint and separately liable on all of these leases for the abandonment -- of same. And that's part of -- that's the biggest reason why there hasn't been an issue with regard to plugging and abandoning all of these wells. That's the point of the financial assurance. But since it never has happened, there's no reason to have this financial assurance, we think. We see this as punitive to the industry. We see it as a solution to a problem that doesn't exist.

Thank you.

That's a kind of long-winded explanation, but...

That’s good.

This concludes our question-and-answer session. I would like to turn the conference back over to Tracy Krohn, Chairman and CEO, for any closing remarks.

Thank you, operator. Yeah. We'll be back with you in the not-too-distant future. We've got a lot of things going on, and we are encouraged. Production is down a bit, but some of that stuff we can't control. Hopefully, this next little storm out in the Gulf of Mexico is going to fizzle out, and although the weather reports have it going in different directions, so we want to make sure that we don't put our personnel in harm's way. But anyway, we'll be back with you shortly, and thank you so much for your attention.

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