Ladies and gentlemen, thank you for standing by. Welcome to the W&T Offshore, Inc.'s fourth quarter and full year 2025 conference call. During today's call, all parties will be in a listen-only mode. Following the company's prepared remarks, the call will be opened for questions and answers. During the question and answer session, we will ask that you limit yourself to one question and one follow-up. 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. Please go ahead.

Thank you, Dave. 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, Inc.'s fourth quarter and full year 2025 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 Offshore, Inc.'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 W. Krohn, our Chairman and CEO.

Thanks, Al. Good morning, everyone, and welcome to our year-end 2025 conference call. With me today are William J. 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 are all available to answer questions later during the call. We delivered solid operations and financial results in 2025 by remaining focused on our strategic vision. Our proven strategy is simple and effective: we focus on cash flow generation, maintaining and optimizing our high-quality conventional assets, and opportunistically capitalizing on accretive opportunities to build shareholder value. We are successfully executing our strategy and remain committed to operational performance, returning value to our stakeholders, and ensuring the safety of our employees and contractors. Our ability to deliver consistent production and EBITDA results while integrating producing property acquisitions has helped W&T Offshore, Inc. grow during our 40+ year history. In 2025, we accomplished many things, so here are the bullet points. One, we increased production every quarter in 2025 from 30,500 barrels of oil equivalent per day in the first quarter to 36,200 barrels of oil equivalent per day in the fourth quarter by focusing on production enhancement projects. Two, while we did not drill any new wells, we invested $55,000,000 in 2025 CapEx and performed 34 workovers and four recompletions. Three, we generated adjusted EBITDA of $130,000,000 for full year 2025. Four, we continued to focus on enhancing our liquidity and reducing debt, and at year-end 2025 we grew cash by $31,000,000 year over year to almost $141,000,000 and reduced our net debt $74,000,000 to $210,000,000, further strengthening the balance sheet. And five, we reported year-end 2025 proved reserves of 121,000,000 barrels of oil equivalent with a PV-10 of $1,100,000,000. Obviously, those…

We will now open for questions. Please pick up your handset before pressing the keys. Our first question comes from Derrick Whitfield with Texas Capital. Please go ahead.

Good morning, all, and great update. Starting with your guide, it is clear that you are prioritizing capital discipline and preservation in the current macro environment, not overly focusing on the front part of the curve. With that said, could you speak to where you see the greatest opportunity in the market for cash-on-cash returns, and if there is a sustained price scenario where you would be more inclined to engage the drill bit?

Thanks, Derrick. Sure. We still think that there will be acquisitions available, and we are confident that we will have our fair share over the next one to two years. We have maintained a record over 40 years of being able to replace and replenish those reserves. Short term and long term, we still see those as possibilities for growth. Organically, we do have prospect inventory, but we feel that our efforts are better placed in making acquisitions as opposed to trying to drill right now. All those prospects, with the exception of a couple of them, are actually held by production.

Great. And for my follow-up, I wanted to focus on the regulatory policy updates you referenced in your prepared remarks. As you see it today, could you speak to what it means for W&T Offshore, Inc. from an insurance cost perspective? And if there could also be potential impacts to your cost of capital as you start to reduce the financial burdens?

Sure. To us, that means that the insurance premium costs will be going down in the future. We have made a lot of those payments already this year. What that means is that, because of the change in the regulations with regard to financial assurance—which was a term that was, or supplemental financial insurance rather, is a term that was coined in the Obama administration and further exasperated in the Biden administration—that provided so-called financial assurance for decommissioning costs. Most of these leases have, in the chain of title—and that is referenced in the actual lease that operators signed as lessees—you are required, as a lessee on any lease, to be jointly and severally liable for all the due decommissioning liabilities on the lease. So if Exxon owned a property or Shell or Chevron or anybody owned the property 20 years ago and had a lease interest, sold it, it lapsed, whatever, and the lease comes up having remaining decommissioning liabilities, those responsible in that queue are liable jointly and severally for all of those assets being removed from the ocean floor and decommissioning of all the wells. So the government never really needed these financial assurances. This was something that was done by this administration to be punitive. Unfortunately, it sucked a few companies out of The Gulf. A few of our competitors are gone and are not there anymore. A few producers that were contributing to the overall energy output of The United States are no longer there. Clearly, those premiums could have been used better as actual capital to get rid of some of those decommissioning issues that companies had. We feel like this is a proper and fitting action that the government has taken, and we applaud them greatly.

Terrific. Great update, guys.

Thank you, sir.

Our next question comes from Jeffrey Robertson with Water Tower Research. Please go ahead.

Thank you. Good morning. Tracy, can you talk about the depth of inventory W&T Offshore, Inc. has for recompletions and workovers that help you maintain or offset natural declines?

I will do better than that. I will defer that question to William J. Williford, who is our Chief Operating Officer.

Hey. Good morning, Jeff. Thanks for that. Thank you for the question. We have been spending a lot of time at our Mobile Bay asset, and that is a gas asset. We have been doing a lot of asset stimulations, and we have ongoing asset stimulations set up and approved to do in 2026. That is going to help maintain our production decline in Mobile Bay. Also, we have recompletes associated with some of our deepwater fields that are already set up and already on our reserve books, and we are just executing them based on where the production is in the current well. With that, we have several other opportunities, both on workovers and recompletes similar to that, that allow us to not only maintain the current production decline, flatten it out, but also increase it. That is why you see an increase year over year of our production based on 2026 guidance versus what you see in 2025.

With respect to the regulatory environment that Derrick asked about, Tracy, do any of the proposed changes have an effect on what is attractive to W&T Offshore, Inc. in the acquisition market and the valuations of assets?

I am sorry. I did not hear all of that question. Would you repeat it again, please?

With respect to the regulatory changes that you see on the horizon, how does that affect, if any, the type of acquisitions that make sense for W&T Offshore, Inc. to look at, and potentially the valuations of properties in The Gulf?

Yes. One of the things that I think you will see as a result of the change in regulatory requirements is fields will be allowed to produce longer, because you will not have to have these massive cash outlays or insurance outlays from a market that has shrunk and has shrunk a great deal. You will not have these massive cash and collateral requirements required by these companies to attempt to extort money from companies for their own purposes. We are involved in a lawsuit right now with some of the surety providers on an antitrust basis. That is one of the things that we have had to deal with as an industry. That takes away from the capital that is available to do actual work and drill wells and make improvements to leases.

Thank you. And if I could ask just one more, Tracy, when you think about the types of acquisitions that you want to look at, if you focus primarily on exploitation and development, are you able to find properties that you can acquire without paying for what the seller might think is drilling upside?

Drilling upside is nebulous. Of course, that is always the highest-risk asset class, or potential asset class. You never really know what you are going to find until you put a hole in the ground to investigate it. No, I do not think that that changes the outlook. Most people do not think about additional drilling assets as primary in the consideration, unless you have already made a discovery and you are drilling on the fringes of that discovery. I think that you know this well. I know this is the largest basin by area in The U.S., and it is the second-largest by producing assets. We have been able to make a pretty good living over the last 40 years and increase values for shareholders and for our contractors and everybody else. It is a lovely little food chain that exists in the Gulf Of Mexico. This will help continue that trend that the Obama and Biden administrations helped to, or tried to, get rid of.

Thank you. The next question comes from Derrick Whitfield with Texas Capital. Please go ahead.

Hey guys, thanks for allowing me to ask additional questions. Before the follow-up, I wanted to ask about the facility and production enhancements you pursued with Cox and the new marketing agreement for Mobile Bay. More specifically, could you help quantify or provide color on the uplift you expect in realizations and volumes by product?

That is a pretty comprehensive question, Derrick. I am not sure I have all the answers for your questions there right now as a sum total. What we do not do in The U.S. is we do not provide for a methodology of giving value to 2P reserves. We have to go to great lengths to explain that. In Europe, you are allowed to include 2P reserves in your reserve base. In The United States, via the SEC, we are not allowed to do that. That is the bigger difference that is hard to quantify. We do see that as value, and we have seen that year over year over year as an increase to our reserves by virtue of the type of reservoirs that we have—mainly water-drive reservoirs—that will actually provide a pressure mechanism by which Mother Nature actually helps us to drive that oil to the producing perforations. We are fortunate in this basin to have Mother Nature giving us a helping hand, so to speak.

And, Tracy, maybe on that point, if I am looking at slide 16 of your new presentation, the way that I am reading that is that in your 2P bookings, you effectively do not need to drill any new wells, and you have the probable outcome of receiving additional recovery, thereby, again, increasing longevity of the asset base without new development capital being spent. Is that a fair prediction?

That is very fair. Derrick, I get a little bit nervous about quantifying some of these results because, in past administrations, that has been frowned on as an expression of 2P. But clearly, we book more cash and reserves over time as we realize that 2P part of our production stream. Traditionally, think about 1P reserves as proved producing and proved undeveloped and proved behind pipe, and then 2P is probable producing and probable behind pipe, probable undeveloped. We get a large portion—in fact, in that presentation that you referred to, it is about $750,000,000—of additional cash flow without any CapEx, hence no drilling, that comes to the wellbore in the form of cash and additional reserve bookings over time. It is a very effective tool that we find in the Gulf Of Mexico to add value without having to make capital expenditures.

Great update. Thanks for your time.

Thanks. You too.

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

Thank you, Operator. These are really unbelievable times right now. We are involved in a war in The Middle East that clearly demonstrates the point that things which affect us that we cannot control are always geopolitical. Other than that, we have pretty good control over our destiny. Even with existing or former administrations, the oil and gas business is not going to go away, fortunately. Thinking about political challenges, our business has always been challenging as a regulatory function, and I do not try to belie that truth in anything other than, yes, the regulatory bodies—generally, the people that work at these agencies—have good intentions. Some of their political masters do not, and we recognize that. I feel like with the current administration, some of those barriers are coming down, and rightfully so. We have been persecuted as an industry and even as individuals by certain administrations. I will leave it with that and tell you that I think we will have better news next quarter as well. Thank you very much, and we will talk to you again soon.

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