W&T Offshore, Inc. (NYSE: WTI) converted its $50.0 million revolving credit facility into a conventional reserve-based lending facility on October 1, 2026. The company entered into the Second Amendment to its Credit Agreement with Texas Capital Bank, acting as administrative agent, and its bank group to implement the structural change.
The amended facility features an initial borrowing base of $50.0 million, which fully supports $50.0 million of elected commitments. The structure allows for an aggregate maximum credit amount of $100.0 million, providing capacity to increase commitments subject to borrowing base availability and lender consent. The borrowing base will be redetermined semi-annually on May 1 and November 1, beginning November 1, 2026.
The conversion eliminates several restrictive features from the previous agreement. Specifically, the amendment removes the 75% excess cash flow sweep, the requirement to repay outstanding revolving credit balances every three months known as a clean-down, and the $100.0 million minimum PDP PV-10 asset coverage covenant. These changes are intended to give the company greater control over cash flow and liquidity.
| Feature | Previous Structure | Amended RBL Facility |
|---|---|---|
| Annual Restricted Payments | $10.0 million | $15.0 million |
| Excess Cash Flow Sweep | 75% | Eliminated |
| Clean-Down Requirement | Quarterly | Eliminated |
| Asset Coverage Covenant | $100.0 million PDP PV-10 | Eliminated |
The annual restricted payments basket was increased by 50%, rising from $10.0 million to $15.0 million. Pricing and financial covenants remain unchanged under the new structure. Interest rate margins, the Term SOFR floor, maturity dates, collateral requirements, and financial covenants are identical to the prior agreement. The company remains subject to a maximum net leverage ratio of 2.50x and a minimum current ratio of 1.00x.
No amendment fees were charged by the lenders, other than the reimbursement of customary fees and expenses for the administrative agent. The continuing lenders maintained their full commitments, while CIBC rejoined the bank group with a $10.0 million commitment to replace an exiting lender.
Tracy W. Krohn, Chairman of the Board and Chief Executive Officer of W&T Offshore, stated that the amendment is an important step in the evolution of the company's capital structure. Krohn noted that moving to a conventional reserve-based facility removes constraints on liquidity management and provides potential to expand borrowing capacity up to $100 million as the reserve base grows.
As of October 7, 2026, W&T Offshore reported total liquidity of approximately $234 million entering the fourth quarter of 2026. The company is an independent oil and natural gas producer with operations offshore in the Gulf of America. As of June 30, 2026, W&T Offshore held working interests in 48 fields in federal and state waters, including 41 fields in federal waters and seven in state waters.
The company has under lease approximately 591,000 gross acres, comprising 457,000 net acres across the outer continental shelf off the coasts of Louisiana, Texas, Mississippi, and Alabama. This acreage includes approximately 450,000 gross acres on the conventional shelf, 136,000 gross acres in deepwater areas, and 5,000 gross acres in Alabama state waters. Most of the company's daily output comes from wells it manages directly.
The company filed a Current Report on Form 8-K with the Securities and Exchange Commission on October 7, 2026, containing additional information regarding the amendment.