W&t Offshore (WTI) risk factors, FY2025 10-K

Market and Competitive Risks

1. 01If oil, NGL and natural gas prices decrease from their current levels, we may be required to further reduce the estimated volumes and future value associated with our total proved reserves or record impairments to the carrying values of our oil and natural gas properties
2. 02Commodity derivative positions may limit our potential gains
3. 03Competition for oil and natural gas properties and prospects is intense; some of our competitors have larger financial, technical and personnel resources that may give them an advantage in evaluating and obtaining properties and prospects56% rewritten
4. 04If we are forced to shut-in production, we will likely incur greater costs to bring the associated production back online, and will be unable to predict the production levels of such wells once brought back online41% rewritten
5. 05Production periods and relatively short reserve lives for our Gulf of America properties may subject us to higher reserve replacement needs and may impair our ability to reduce production during periods of low oil, NGL and natural gas prices
6. 06We are not insured against all of the operating risks to which our business is exposed
7. 07Such events as noted above may also cause a significant interruption to our business, which might also severely impact our financial position. We may experience production interruptions for which we do not have business interruption insurance
8. 08We conduct exploration, development and production operations on the deep shelf and in the deepwater of the Gulf of America, which presents unique operating risks
9. 09We may not be in a position to control the timing of development efforts, associated costs or the rate of production of the reserves from our non-operated properties60% rewritten
10. 10We are subject to numerous risks inherent to the exploration and production of oil and natural gas
11. 11We are subject to drilling and other operational hazards
12. 12The geographic concentration of our properties in the Gulf of America subjects us to an increased risk of loss of revenues or curtailment of production from factors specifically affecting the Gulf of America, including hurricanes
13. 13A significant portion of our production, revenue and cash flow is concentrated in our Mobile Bay Properties. Because of this concentration, any production problems, impacts of adverse weather or inaccuracies in reserve estimates could have a material adverse impact on our business23% rewritten
14. 14New technologies may cause our current exploration and drilling methods to become obsolete, and we may not be able to keep pace with technological developments in our industry
15. 15Prospects that we decide to drill may not yield oil or natural gas in commercial quantities or quantities sufficient to meet our targeted rates of return
16. 16We may not realize all of the anticipated benefits from our future acquisitions
17. 17Our future acquisitions and divestitures could expose us to potentially significant liabilities, including plugging and abandonment and decommissioning liabilities
18. 18Our operations could be adversely impacted by security breaches, including cybersecurity breaches, which could affect the systems, processes and data needed to run our business25% rewritten
19. 19Acquisitions and emerging technologies may increase our cybersecurity riskNew
20. 20The loss of members of our senior management could adversely affect us
21. 21There may be circumstances in which the interests of significant stockholders could conflict with the interests of our other stockholders
22. 22Our debt level could negatively affect our financial condition, results of operations and business prospects
23. 23Our debt agreements contain restrictions that limit our abilities to incur certain additional debt or liens or engage in other transactions, which could limit growth and our ability to respond to changing conditions
24. 24We have significant capital needs to conduct our operations and replace our production, and our ability to access the capital and credit markets to raise capital or refinance our existing indebtedness on favorable terms may be limited by industry conditions and financial markets
25. 25If we default on our secured debt, the value of the collateral securing our secured debt may not be sufficient to ensure repayment of all of such debt68% rewritten
26. 26We may not be able to repurchase the 10.75% Notes upon a change of control
27. 27We may be required to post cash collateral pursuant to our agreements with sureties under our existing or future bonding arrangements, which could have a material adverse effect on our liquidity and our ability to execute our capital expenditure plan, our ARO plan and comply with our existing debt instruments76% rewritten

Legal, Government and Regulatory Risks

1. 28We are subject to numerous environmental, health and safety regulations which are subject to change and may also result in material liabilities and costs57% rewritten
2. 29failure could impede our operations, which could have a material adverse effect on our results of operations and our financial conditionNew
3. 30We may be unable to provide financial assurances in the amounts and under the time periods required by the BOEM if the BOEM submits future demands to cover our decommissioning obligations84% rewritten
4. 31alternative financing. To the extent we are unable to secure adequate financing, we may be forced to reduce our capital expendituresNew
5. 32Additional deepwater drilling laws, regulations and other restrictions, delays and other offshore-related developments in the Gulf of America may have a material adverse effect on our business, financial condition, or results of operations
6. 33Our estimates of future ARO may vary significantly from period to period, and unanticipated decommissioning costs could materially adversely affect our future financial position and results of operations
7. 34We are subject to numerous laws, rules, regulations and policies that can adversely affect the cost, manner or feasibility of doing business
8. 35We are subject to laws, rules, regulations and policies regarding data privacy and security. Many of these laws and regulations are subject to change and reinterpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of operations or other harm to our business
9. 36The Inflation Reduction Act of 2022 could accelerate the transition to a low carbon economy and could impose new costs on our operations94% rewritten
10. 37Changes in U.S. trade policy and the impact of tariffs may have a negative effect on our business, financial condition and results of operationsNew
11. 38A prolonged government shutdown or lapse in federal appropriations could disrupt our offshore operations and delay required regulatory approvalsNew
12. 39In addition, a government shutdown could affect supply-chain timing and create macroeconomic uncertainty that affects commodity markets and project financing which could materially adversely affect our financial condition, liquidity and results of operationsNew
13. 40disclose those impacts. We are not currently a defendant in any of these lawsuits but could be named in actions making similar allegationsNew
14. 41Attention to ESG matters may impact our business
15. 42Certain U.S. federal income tax deductions currently available with respect to oil and natural gas exploration and development may be eliminated as a result of future legislation
16. 43Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations
17. 44Our articles of incorporation and bylaws, as well as Texas law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our common stock
18. 45While we paid quarterly dividends during 2025, there can be no assurance that we will pay dividends in the future