Ladies and gentlemen, thank you for standing by. Welcome to the W&T Offshore Second Quarter 2025 Conference Call. [Operator Instructions] This conference call is being recorded, and a replay will be available on the company's website following the call. I would now like to turn the conference over to Al Petrie, Investor Relations coordinator.

Thank you, Gaylene. And on behalf of the management team, I would like to welcome all of you to today's conference call to review W&T Offshore's Second Quarter 2025 financial and operational results. Before we begin, I would like to remind you that our comments may include forward-looking statements. It should be noted that a variety of factors could cause W&T's actual results to differ materially from the anticipated results or expectations expressed in these forward-looking statements. Today's call may also contain certain non-GAAP financial measures. Please refer to the earnings release that we issued yesterday for disclosures on forward-looking statements and reconciliations of non-GAAP measures. With that, I'd like to turn the call over to Tracy Krohn, our Chairman and CEO.

Thanks, Al. Morning, everyone, and welcome to our second quarter conference call for 2025. With me today are William Williford, our Executive Vice President and Chief Operating Officer; Sameer Parasnis, our Executive Vice President and Chief Financial Officer; and Trey Hartman, our Vice President and Chief Accounting Officer. We're all available to answer questions later during the call. So before we discuss the second quarter results, I would like to say how proud I am with all the people who've helped make W&T a success since we founded the company in 1983. We've been an active operator in the Gulf of America and a staunch advocate for the offshore industry for over 40 years. Yesterday, I was honored to celebrate the 20th anniversary of W&T going public by ringing the closing bell at the New York Stock Exchange. We're conducting today's earnings call from the New York Stock Exchange, where I have several media interviews scheduled that will give us a chance to discuss the company. As you will hear throughout the call today, we're continuing to enhance shareholder value through operational excellence and maximizing production across our impressive portfolio of assets. Across the first half of 2025, we've delivered strong operational and financial results. Quite simply, we're executing on our proven and successful strategy that's committed to profitability, operational execution, returning value to our stockholders and ensuring the safety of our employees and contractors. Our ability to deliver production and EBITDA growth while seamlessly integrating accretive producing property acquisitions has helped W&T growth during our 40-year history. Some of our second quarter highlights include: we increased production by 10% quarter-over-quarter to 33,500 barrels of oil equivalent per day, that's within our guidance range. Also, we form 9 low-cost, low-risk workovers that exceeded expectations and positively impacted production and revenue…

[Operator Instructions] Our first question is from Nate Pendleton with Texas Capital.

For my first question, I wanted to start on policy. With the administration looking for ways to support the industry further, can you share your thoughts on what actions the administration may be looking at in order to incentivize production in the Gulf of America?

Thanks, Nate. Yes, there's a lot of things that the Department of Interior is looking at. They've already weighed in with regard to lower royalties, and I expect -- and I hope that they will weigh in on further reductions on those royalties. There is the so-called Idle Iron act, which is kind of nonsensical to me and our company. Why do you need to prematurely abandon these wells when none of the rest of the wells on the platform have been abandoned. This was a policy brought on by the Obama administration to create havoc and essentially make it cost more deliberately. And the idea was, of course, to get rid of oil and gas companies in the Gulf of America. We've looked at some other things that we discussed with them. I think it's important to recognize that this administration has taken a very strong position in the fact that, yes, we want to maximize and utilize our abilities to conserve the natural resource in the Gulf of America. President Trump and DOI have made that pledge that they're going to do. We're already seeing some of the regulations getting rolled back. There will hopefully be another decision with regard to surety here, put solidly into writing, and we're looking forward to that. Of course, you're aware that we're suing surety providers. Those are just a few. We're very hopeful that this administration gets back to the idea that oil and gas from this very important basin, by the way, the second largest producing basin and the largest by area in the United States.

Tracy, that's really encouraging. I'm shifting over to your operations. I implied 4Q production guidance seems very strong at the midpoint. In your prepared remarks, you talked about the increase you expected in Q3. Can you share maybe what's driving that further production ramp that you're expecting at the back half of the year?

Yes, I'm going to turn that over to our Chief Operating Officer, William Williford. He's got responsibility for that basin.

Yes, Nate. As Tracy mentioned in the call this morning, that we have a lot of low-cost workovers that we're continually doing in the third quarter as well as a couple of recompletions to add to that production. So we also plan on ramping up one of the Cox fields we acquired last year as well to see significant production through the last part of the year.

[Operator Instructions] The next question is from Jeff Robertson with Water Tower Research.

Tracy, does resolution of some of the surety and bonding issues for W&T have an impact on how you approach acquisitions? And then secondly, do they have an impact on anywhere on the balance sheet with respect to liquidity?

Absolutely. Jeff, I mean, the sureties were in collusion with one another to artificially suppress the company by virtue of demanding full collateral. It's kind of like your car insurance. If you have a car, your agent calls you up and says, gee, Jeff, you have a $50,000 insurance policy on your car. Would you please send me $15,000. In fact, I demand that you send me $50,000 so we can cash collateralize your account. And by the way, I'm going to increase your premiums as a result. That was the alternative that was given to us, except it was a lot better -- a lot bigger nominal dollars. For us, it was around $250 million of collateral demands. And we had to sign this indemnity agreement with these companies. They all read virtually identically that you had to provide cash demand within a very, very short period of time, maybe 10 days to 2 weeks. And that if you didn't do so, that you were in violation of their policy. Well, several of them got together and they all called it at about the same time for $250 million, which, by the way, just happened to be the market cap of the company at the time. I thought that, that was pretty unfair. Obviously, they're all doing it at the same time. It seemed collusional to me, so we sued them. And as a result, it threw the surety market into quite a bit of disarray. The idea -- the very idea that you need surety is kind of for postures to us. The government, in spite of all the bankruptcies that have taken place in the Gulf of Mexico, the government has never ever called a bond, even though they demand it. They demand that surety, but they've never called it. Well, the reason that they've never called it is because the lease form itself calls for joint and several liability. That means that anybody who has ever on the -- that ever held a record title interest is jointly and severally liable up to 100% of the obligations. So the government never had that situation. They would just go back to the predecessor entitled and demand that they take care of those obligations. We've had to do that ourselves. Others have had to do that. It's always been the case. That is what the lease form says. So the government's idea that, we need more surety is obviously preposterous because they've never called on single damn surety -- demand, not once. So it's got to be a force. It was put in by the Obama administration, further exasperated by Biden administration, it was wholly designed to put oil and gas companies out of business.

Tracy, do you think that resolving those issues will have an impact on M&A activity in the Gulf?

Oh, you bet. Yes. People will have to figure out a different way to do that assurance for other companies. It will be part of the sales price. People aren't going -- companies aren't going to stop selling properties. They use those proceeds to put into different projects that will, in fact, create more value for them. We will take those properties or the ones that we get, and make them more valuable because we're lightening focus on that. So yes, the surety part of it will definitely undergo a great deal of change. But I think it's for the better. The obligation -- the joint and several obligations are never going to go away. Even though there's been a lot of talk about that, that needs to be the case. The reality is the government has no obligation to do that, and it's highly unlikely that they would ever change that. Why should that? There's no reason to change it. But it will have an effect on companies like W&T and others, and we'll just have to figure out different ways to do things.

A question on your reserves of the 1.8 million BOE of positive revisions. Can you provide some color as to which properties contributed there? And was any of that related to performance on the Cox acquisitions versus how those properties had originally been booked?

Yes. Go ahead, Will.

Yes. So thanks, Tracy. Yes, it was some of the additional increase in the reserves was based on better performance of some of the Cox assets as well as some of our own assets. We did some optimization projects to further increase and increase the life of our Mobile Bay asset as well. So that added a significant value as far as from a reserve standpoint.

Yes. Jeff, I'll add to that a little bit. I mean we're still working some of these properties and finding different things that we can do, not only with the facilities themselves, young Mr. Cox left them in terrible shape when we acquired them, they weren't doing the maintenance, they weren't maintaining properties in what we would have considered to be a safe manner. So we've had to spend a bit more money to bring them up to our standards. And I think that's certainly affected some of the cash flow near term. But long term, I have a lot of high expectations of these properties, and we're getting there. Production at West Delta 73 and Main Pass 108 are all coming up as we speak.

As there are no more further questions, this concludes the question-and-answer session. I'd like to turn the conference back over to Tracy Krohn, Chairman and CEO, for any closing remarks.

Thanks, operator. Again, we celebrated 20 years as an NYSE-listed company yesterday. I'm expecting another 20 years. I would certainly like to be around for that. So with that, just all of our shareholders watch what happens next. It's going to be fun, it's going to be exciting, and it's going to be profitable. Thanks so much.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.