Analyst Summary:
T Offshore, Inc. released their year-end 2022 reserve report, revealing positive well performance and technical revisions, and showcasing the strength of their assets. The company reported a net income of $563.4 million or $1.59 per diluted share in 2022, compared to $511 million in 2021. For 2023, the company plans to implement organic drilling, recompletion, and workover opportunities to increase rates of return. Furthermore, T Offshore is considering opportunities to enter the carbon capture market. The company has shown a successful track record of executing its strategic vision and is committed to growing shareholder value.
CEO, Tracy W., stated, "We believe we have built a sustainable group of high performing GOM assets that will continue to provide meaningful cash flow to our shareholders for many years." Also, the company is implementing a conservative financial strength program by using cash on hand to pay $234.9 million of the outstanding 2023 Senior Second Lien Notes, reducing its interest payments, preserving financial flexibility, and improving overall balance sheet moving forward.
For the fourth quarter of 2022, the production was comprised of 14.6 MMBoe, averaging 38.5 MBoe/d, resulting in higher commodity pricing and higher production that led to $266.1 million in revenue compared to $189 million in the fourth quarter of 2021. The company recorded a realized loss of $28.3 million related to forward commodity derivative activities on oil and gas. In contrast, LOE increased compared to the fourth quarter of 2021 due to inflationary spikes in base operating expenses and higher facilities and workover costs.
T Offshore's year-end 2022 SEC proved reserves grew to 165.0 MMBoe, acquisitions of reserves of 6.0 MMBoe, along with positive performance and pricing revisions, was partially offset by 14.6 MMBoe of production for the year.
In conclusion, T Offshore, Inc. continues to progress its ESG journey and remains committed to growing shareholder value by executing strategic vision, driving sustainable growth, and maintaining conservative financial strength programs. Investors cautiously await the company's upcoming organic drilling and workover opportunities as well as possible opportunities to enter the carbon capture market.