HOUSTON, Sept. 30, 2013 /PRNewswire/ -- W&T Offshore, Inc. (NYSE: WTI) announced that it has increased its 2013 capital budget to $550 million, excluding potential acquisitions. The revised budget includes increased deepwater activity, completion costs on our successful exploration wells, additional onshore drilling at our Yellow Rose field, along with additional seismic and leasehold cost. The revised budget is split 60% for exploration and 40% for development and allocated 65% to offshore and 35% to onshore.
As part of the expanded deepwater activity, we have acquired a 20% working interest in the "Dantzler" prospect in the Gulf of Mexico at Mississippi Canyon 738/782 blocks, operated by Noble Energy, Inc. The operator has estimated a prospect resource potential of 50-220 million barrels of oil equivalent ("Boe")[1]. The well is currently drilling and we expect to reach total depth and evaluate the well by year end.
Tracy W. Krohn, W&T Offshore's Chairman and Chief Executive Officer, stated, "Of the 39 wells we have drilled thus far in 2013, only one well was non-commercial for a 97% overall success rate. The increase in this year's capital budget is a result of our 2013 drilling success and our commitment to pursue additional opportunities in the deepwater Gulf of Mexico and onshore in our Yellow Rose field."
Operations Update
Third quarter production through August averaged 44,600 Boe per day with a production mix that is 42% crude oil, 11% natural gas liquids and 47% natural gas. We estimate that September production has averaged approximately 47,000 Boe per day through the first 15 days of the month.
Offshore, our Main Pass 108 B-1 discovery well is producing at approximately 950 Boe per day net to W&T after royalties. At our High Island 21 A-1 well, completion operations have concluded and production is expected to commence in early October. The target initial production rate is approximately 1,500 Boe per day net to W&T after royalties. This successful well also encountered additional up-hole completion targets anticipated to add additional reserves and future value at this field. At our Mississippi Canyon 243 "Matterhorn" field we expect to mobilize a rig in early October and commence completion operations on the A-5 well. First production from this well is now expected to be in the middle of November. At our Ship Shoal 349 "Mahogany" field, we have recompleted the A-4 well to within the "P" sand and increased this well's production to 1,000 Boe, up 400% from its pre-recompletion rate. The A-14 well at Mahogany that began producing on July 20th is currently producing 3,330 Boe per day net to W&T after royalties and has had cumulative production of 204,100 Boe thus far. Also at Mahogany, we commenced drilling the A-15, a sub-salt, deep shelf exploratory well. After setting surface casing, we skidded the rig to the A-12 well to conduct a workover which should take approximately one month. The A-15 well is now expected to reach total depth during the first quarter of 2014. The rig for the East Cameron 321 A-2 exploration well is mobilizing to the field and is expected to commence drilling during the first half of October.
Onshore, at our Yellow Rose field in the Permian Basin, we recently spud our first Wolfcamp "B" horizontal well and expect results before year end. In our vertical program, we are continuing to see improving results, with initial production rates from our last three wells averaging approximately 165 Boe per day net to W&T after royalties. The increased budget will add approximately six additional vertical wells and one horizontal well to the existing rig schedule in 2013.
About W&T Offshore
W&T Offshore, Inc. is an independent oil and natural gas producer with operations offshore in the Gulf of Mexico and onshore in both the Permian Basin of West Texas and in East Texas. We have grown through acquisitions, exploration and development and currently hold working interests in approximately 71 offshore fields in federal and state waters (65 producing and six fields capable of producing). W&T currently has under lease over 1.4 million gross acres including over 710,000 gross acres on the Gulf of Mexico Shelf, over 480,000 gross acres in the deepwater and over 220,000 gross acres onshore in Texas. A substantial majority of our daily production is derived from wells we operate offshore. For more information on W&T Offshore, please visit our website at www.wtoffshore.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements reflect our current views with respect to future events, based on what we believe are reasonable assumptions. No assurance can be given, however, that these events will occur. These statements are subject to risks and uncertainties that could cause actual results to differ materially including, among other things, market conditions, oil and gas price volatility, uncertainties inherent in oil and gas production operations and estimating reserves, unexpected future capital expenditures, competition, the success of our risk management activities, governmental regulations, uncertainties and other factors discussed in W&T Offshore's Annual Report on Form 10-K for the year ended December 31, 2012 and subsequent Form 10-Q reports found at www.sec.gov or at our website at www.wtoffshore.com under the Investor Relations section.
[1] Range of resource estimate is based upon 75th and 25th percentiles as determined by the operator, Noble Energy, Inc.
SOURCE W&T Offshore, Inc.