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Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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Equity Bottom-Up

<ul><li>Successful low-risk workovers completed during 2Q25, coupled with the production restart at the West Delta 73 and Main Pass 108/98 fields are expected to drive production through year-end.</li><li>W&amp;T executed nine workovers during 2Q25 that performed better than expected.</li><li>The midpoint of 3Q25 total production guidance is 34.9 MBoe/d, which would equate to 3.9% Q/Q growth and 12.3% Y/Y growth.</li></ul>

Successful low-risk workovers completed during 2Q25, coupled with the production restart at the West Delta 73 and Main Pass 108/98 fields are expected to drive production through year-end.W&amp;T executed nine workovers during 2Q25 that performed better than expected.The midpoint of 3Q25 total production guidance is 34.9 MBoe/d, which would equate to 3.9% Q/Q growth and 12.3% Y/Y growth.

WTI: 2H25 Production Growth Supported by Asset Performance and Exploitation Activity

Thematic (Sector/Industry)

<ul><li>Replenishing oil reserves likely to set higher near-term oil price floor. </li><li>Regardless of when the latest Iran war military escalation hopefully ends in another ceasefire and resumption of peace negotiations, we expect crude oil demand to refill global oil inventories and strategic petroleum reserves will provide upward pressure on oil prices, resulting in a higher floor price than would otherwise be expected. </li><li>As Figure 1 highlights, the additional crude oil demand associated with replenishing global stockpiles could exceed 500 thousand barrels per day and continue at least throughout 2027. </li></ul>

Replenishing oil reserves likely to set higher near-term oil price floor. Regardless of when the latest Iran war military escalation hopefully ends in another ceasefire and resumption of peace negotiations, we expect crude oil demand to refill global oil inventories and strategic petroleum reserves will provide upward pressure on oil prices, resulting in a higher floor price than would otherwise be expected. As Figure 1 highlights, the additional crude oil demand associated with replenishing global stockpiles could exceed 500 thousand barrels per day and continue at least throughout 2027. 

Energy Roundup : Restocking Global Oil Storage Should Pressure Oil Prices...

Cross Asset Strategy

<ul><li>That’s a lot of volatility – continued Strait of Hormuz shutdown sends shockwaves through energy complex only to see prices substantially decline less than 24 hours later. </li><li>As the Iran war continued into week two with the Israeli military striking several Iranian fuel sites, oil prices began trading this week with the one of the largest one-day price moves on record.</li><li> After climbing ~30% last week to just under $93/bbl, Brent oil spot prices spiked as high as $117/bbl (+26%) when trading opened Sunday evening.</li></ul>

That’s a lot of volatility – continued Strait of Hormuz shutdown sends shockwaves through energy complex only to see prices substantially decline less than 24 hours later. As the Iran war continued into week two with the Israeli military striking several Iranian fuel sites, oil prices began trading this week with the one of the largest one-day price moves on record. After climbing ~30% last week to just under $93/bbl, Brent oil spot prices spiked as high as $117/bbl (+26%) when trading opened Sunday evening.

Energy Roundup : Oil Prices Swing Wildly...

<ul><li>W&amp;T’s total production is expected to rise in 2H25 with the resumption of output from two fields that had remained shut in since they were acquired in the January 2024 Cox acquisition.</li><li>The West Delta 73 and Main Pass 108/109 fields returned to production in late March/early April and are expected to ramp up during 2Q25.</li><li>2Q25 total production guidance is 32.7-36.2 Mboe/d, compared with 1Q25 total production of 30.5 Mboe/d. t.</li></ul>

W&amp;T’s total production is expected to rise in 2H25 with the resumption of output from two fields that had remained shut in since they were acquired in the January 2024 Cox acquisition.The West Delta 73 and Main Pass 108/109 fields returned to production in late March/early April and are expected to ramp up during 2Q25.2Q25 total production guidance is 32.7-36.2 Mboe/d, compared with 1Q25 total production of 30.5 Mboe/d. t.

<ul><li>We are adjusting our 3Q24 production estimates to reflect the expectation that volumes were negatively affected by Hurricane Francine.</li><li>Francine made landfall on September 11, 2024, as a Category 2 storm in Terrebonne Parish, Louisiana, about 30 miles south-southwest of Morgan City.</li><li>The storm’s path through the central Gulf of Mexico resulted in industry-wide temporary production shut-ins.</li></ul>

We are adjusting our 3Q24 production estimates to reflect the expectation that volumes were negatively affected by Hurricane Francine.Francine made landfall on September 11, 2024, as a Category 2 storm in Terrebonne Parish, Louisiana, about 30 miles south-southwest of Morgan City.The storm’s path through the central Gulf of Mexico resulted in industry-wide temporary production shut-ins.

W&T Offshore, Inc. - Adjusting 3Q24 for Hurricane Impact

United States

W&T Offshore, Inc. is an independent oil and natural gas company focused primarily on the Gulf of Mexico area in the United States.

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W&T Offshore (WTI US)

WTI: 2H25 Production Growth Supported by Asset Performance and Exploitation Activity

Successful low-risk workovers completed during 2Q25, coupled with the production restart at the West Delta 73 and Main Pass 108/98 fields are...

Water Tower Research

Energy Roundup : Restocking Global Oil Storage Should Pressure Oil Prices...

Regardless of when the latest Iran war military escalation hopefully ends in another ceasefire and resumption of peace negotiations, we expect...

Water Tower Research

Energy Roundup : Oil Prices Swing Wildly...

That’s a lot of volatility – continued Strait of Hormuz shutdown sends shockwaves through energy complex only to see prices substantially decline...

Water Tower Research

W&T Offshore, Inc: Estimate Update

W&T’s total production is expected to rise in 2H25 with the resumption of output from two fields that had remained shut in since they were acquired...

Water Tower Research

W&T Offshore, Inc. - Adjusting 3Q24 for Hurricane Impact

We are adjusting our 3Q24 production estimates to reflect the expectation that volumes were negatively affected by Hurricane Francine.

Water Tower Research

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