W&T (WTI) To Drill Several Well Locations In Gulf Of Mexico

W&T Offshore, Inc. (NYSE:WTI) has recently signed a deal with a group of investors for upstream operations across the Gulf of Mexico.

Accordingly, next three years, both W&T Offshore and the investor group will likely drill several well locations of roughly 14 developments in the Gulf of Mexico.

In the preliminary stage, both the investor group and W&T Offshore agreed upon a capital budget of $230.5 million. If the drilling program could attract more investors, the initially committed capital spending could then jump to a maximum limit of $275.9 million. W&T Offshore added that the earlier budget will be adequate to finance the drilling programs of mutiple wells.

The program’s total capital expenditure is projected at $419.6 million by the upstream firm. The amount could increase once the company includes more drilling sites in its project portfolio.

For bearing almost 80% expenses of the drilling program, 70% of net revenues will be allotted to the investor group. Eventually, W&T Offshore could get the remaining 30% revenues. It is to be noted that W&T Offshore will be entitled to 38.4% of net revenues after the investor group could manage a specific return from the wells.

Headquartered in Houston, TX, W&T Offshore is primarily an exploration and production player with focus on prospective resources, located off the coast of Gulf of Mexico. The company’s earnings surprise history is impressive with the bottom line surpassing the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 542.8%.

Moreover, shares of W&T Offshore have outperformed the industry in the past year. The stock has surged 44.2% against the industry’s 9.4% decline.

W&T Offshore carries a Zacks Rank #2 (Buy). A few other top-ranked stocks in the energy space are ConocoPhillips (NYSE:COP) , Pioneer Natural Resources Company (NYSE:PXD) and Concho Resources Inc. (NYSE:CXO) , each sporting a Zacks Rank #1 (Strong Buy).

Headquartered in Houston, TX, ConocoPhillips is a major upstream energy player. The company is expected to witness year-over-year earnings growth of 380% in 2018.

Headquartered at Irving, TX, Pioneer Natural Resources is an upstream energy firm. The company has an average positive earnings surprise of 66.9% for the last four quarters.

Headquartered in Midland, TX, Concho is also an upstream energy company. The firm will likely see year-over-year earnings growth of 73.2% in 2018.

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