Ladies and gentlemen, thank you for standing by. Welcome to the W&T Offshore second quarter 2026 conference call. During today's call, all parties will be in a listen-only mode. Following the company's prepared remarks, the call will be open for questions- and- answers. During the question-and-answer session, we ask that you limit your question to one and follow-up. You can always rejoin the queue. This conference is being recorded and a replay will be made available on the company's website following the call. I would now like to turn the conference over to Al Petrie, Investor Relations Coordinator. Please go ahead. Thank you, Danielle, 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 2026 financial and operational results. Before we begin, I'd 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 would like to turn the call over to Tracy Krohn, our Chairman and CEO. Thanks, Al. Good morning, everyone, and welcome to our conference call. With me today are William Williford, our Executive VP and Chief Operating Officer, Sameer Parasnis, our Executive VP and Chief Financial Officer, and Trey Hartman, our Vice President and Chief Accounting Officer. We're all available to answer questions after our prepared remarks. We've delivered consistently strong operational and financial results over the past 43 years. I'm very pleased to report that our Q2 results continue this positive trend, and we are in a much stronger financial position heading into the second half of 2026. The second quarter delivered net income of $12.6 million or $0.08 per share, and over $54 million in adjusted EBITDA. That's in line with the first quarter. In the first half of 2026, we generated almost $110 million. In the second quarter, we also increased our free cash flow by 50% compared to Q1 2026, to $31 million. We've now amassed over $52 million in free cash flow in the first half of 2026. This has enabled us to increase our cash on hand to over $150 million, driving our net debt down to $200 million. On a 12-month trading basis, our net debt to adjusted EBITDA is down to 1.2 times. Assuming sustained margin levels into the second half of 2026, this should continue to go down and potentially be under one times at year-end 2026. These strong financial results are driven by our operational focus, with a particular emphasis on optimizing and maintaining solid production while continuing to manage costs prudently. In quarter two, our production was 34,700 barrels oil equivalent per day at the midpoint of guidance and up 3% from the same period in 2025. Despite no new drilling and no new acquisitions, the solid quarter results start with our ability to maintain strong production, extract value through well optimization projects, and they are enhanced by our low decline rate fields in the Gulf of America. We do a commendable job of consistently offsetting our production decline by spending only a fraction of the capital that other E&P companies spend with no new drilling. This is a testament to our experienced technical staff, our vast resource base, and the strong geological properties of the Gulf. We choose to spend more dollars on low risk, high rate of return workovers and facility work rather than drilling new wells. We believe that this is a more economic way to invest our operational cash flow back into our business, and it's a lower risk option. We can then build cash flow and make accretive acquisitions of producing properties. Over the years, we've consistently created significant value by methodically integrating producing property acquisitions. We look for strong producing assets with meaningful reserves and an attractive price that we can integrate into our vast infrastructure. We spend primarily LOE dollars to maintain our vast infrastructure and maximize the extraction on our footprint. This is complemented by workovers, recompletes, and upgrades that result in additional production uplift from our acquisitions above the rates they were producing when purchased. This strategy makes W&T unique, but it's our ability to execute over and over throughout the years that allows us to add value. Now turning to costs. Our LOE for the second quarter was $72 million, and that's below the lower end of guidance. Reductions in our LOE costs were mainly driven by timing of facility and workover expense projects, but we've also made strides to lower our base LOE spend through cost-saving initiatives in late 2025 that we have seen materialize in the first half of 2026. In the second quarter, we also saw gathering, transportation, and production taxes below the low end of our guidance range. Capital expenditure in the second quarter of 2026 was $10.4 million, and asset retirement settlement costs totaled $3.4 million. In the current strong pricing environment, we are accelerating certain projects, which is potentially driving our capital spending toward the higher end of our full-year guidance. Our 2026 capital guidance is between $20 million and $25 million, which excludes potential acquisition opportunities, and for ARO, it is between $34 million and $42 million. I'd like to point out again that this is a fraction of what others spend to maintain their production base, providing W&T with a competitive advantage. Our ability to execute our strategy has delivered very positive results to start off 2026, including a healthy balance sheet and enhanced liquidity. At the end of the second quarter of 2026, our total debt and net debt were $351 million and $200 million respectively, and our liquidity was $194 million. Our balance sheet and growing cash position allow us to evaluate and potentially quickly execute accretive acquisitions in line with our strategy. Very pleased with our debt-to-EBITDA ratio of 1.2 times, which we believe compares very well with our peer group. As everyone knows, we're in a very volatile pricing environment due to multiple global factors. Thus far in 2026, we have seen rising prices, and our realized prices of $50.23 per barrel oil equivalent in the second quarter was an increase of 11% from the first quarter and up about 40% from year-end 2025. We have consistently replaced and expanded our reserve base through operational spend, uplift projects, and acquisitions. Pricing also benefits our reserves, especially our oil reserves, enhancing economic viability, increasing field lives, and driving higher PV-10 valuation. I believe that with our growing cash position, strong PDP reserve valuation, and a rising price environment, that our stock price remains undervalued. Our enterprise value is below our PDP PV-10, and we are consistently delivering a dividend to our shareholders. It's important to note that over the period of time, in the last 10- 15 years, our produced reserves, according to SEC reserve reports, have actually been more than double what was predicted in our reserve reports for proved reserves. That's 1P reserves. Yesterday, we provided our detailed guidance for third quarter 2026 and reiterated our unchanged full-year production and cost guidance. We are forecasting the midpoint of Q3 2026 production to be in excess of 35,000 barrels of oil equivalent per day, which is an increase from second quarter. Third quarter LOEs are expected to be $73 million- $81 million, up from the second quarter amount of $72 million, due to the higher planned workover and facility maintenance work that was deferred from the second quarter, and that's expected to benefit production in the second half of 2026. Third quarter transportation and production taxes are expected to be between $8.8 million and $9.7 million. Third quarter cash G&A costs are expected to be between $17.2 million- $19 million. That's modestly above the second quarter. Before closing, I'd like to address surety and regulatory updates. In June 2025, we were pleased with a settlement agreement that we reached with two of our largest surety providers, which called for the dismissal of a previously filed lawsuit. This outcome is very positive for W&T overall, as we will not acquiesce to unjustified collateral demands made by the applicable sureties, and we have locked in our historical premium rates through the end of 2026. We believe that entry into this settlement agreement vindicates our resolve to stand up to surety providers' unjustified demands on independent oil and gas operators such as W&T. As the surety lawsuits continue to progress, we're working with damages experts to quantify W&T's claims. While the results of the surety lawsuits remain uncertain and there can be no assurance of the end result, management believes, based in part on the preliminary report of the damages expert, that W&T, assuming we prevail on the litigation, would possibly have claims against the sureties that could reach hundreds of millions of dollars. Additionally, assuming W&T wins on its antitrust claims, those damages would be statutorily trebled. These estimates reflect management's current assessment and may change as the damages analysis and litigation proceed. In closing, I'd like to thank our team at W&T for all their efforts. We have delivered positive results in the first half of the year, and we are ready and able to add significant value in the second half of 2026. W&T has been an active, responsible, and profitable operator in the Gulf of Mexico since 1983. We have a long track record of successfully integrating assets into our portfolio, and we continue to believe that the Gulf of America is a world-class basin that supports value creation. We have a solid cash position and strong liquidity that enables us to continue to evaluate growth opportunities while continuing to generate strong free cash flow and adjusted EBITDA. With consistent production, increased realized pricing, and continued cost control, we believe that we are well-positioned operationally and financially to deliver robust results in 2026 and beyond. We will maintain our focus on operational excellence and maximizing the cash flow potential of our asset base to continue to add and return value to our shareholders. With that, operator, we can now open the lines for questions. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your hands up before pressing the keys. To withdraw your question, please press star then two. The first question comes from Nate Pendleton with Private Investor. Please go ahead. Hey, good morning. Nate Pendleton, Texas Capital. Thanks for taking my questions, guys. Thanks, Nate. I wanted to start on the surety lawsuits. Now that you've quantified the potential damages in the hundreds of millions, what is the potential timeline and path forward from here? Perhaps, how do you think about capital allocation from a potential recovery of this magnitude for W&T Offshore? Well, we've estimated that it's a number that's going to be sizable according to our damage experts. When we talk about that, we're talking about hundreds of millions of dollars. Assuming we're successful, that judgment is automatically trebled in a case like this, which is focusing on the collusion of surety providers. I see it as very positive. I think that the evidence that we've seen so far has been very comforting in seeing some of the things that we've seen, and we continue to march forward with getting additional data from these companies, which has been difficult. We're getting there. Understood. Just a quick clarification, is there any timeline that you expect as far as how this plays out? Yeah, I expect within the next two years. Got it. I appreciate that. Sure. Shifting gears a bit, with the strong cash flow in your view on the valuation that you laid on your prepared remarks, could there be a situation where you look at starting a buyback to take advantage of some of that disconnect while you guys await the right deal? Yes, we've done that before. We've also endeavored to pay out dividends. I think that in current situation, we're more likely to pay out dividends. This is subject to some of the things that we do along with acquisitions and drilling. Got it. Thanks, Tracy. Thank you, sir. The next question comes from Neal Dingmann from William Blair. Please go ahead. Hey, this is Bert filling in. First question is around M&A. Specifically, are you going to continue to look at offshore packages, or do you prefer shallow water or any other areas? Then how has the recent oil price volatility impacted the bid-ask spread in those areas? Hey, Bert. The first thing that we focus on is whether it's going to make money. I don't care whether it's in shallow water or deep water, makes no difference. We're in operations in all of those categories. As far as path forward, we look at the reserves, we look at the cash flow, we look at what the P&A obligations are, and then we make our determinations of what those values are. Got it. Did the bid-ask spread, has it widened or moved recently? Yeah, it really hasn't moved very much. I think we have a pretty good idea of what it is. We're looking at a lot of things on our plate right now. Nothing has really changed with regard to company procedure on making acquisitions. We have a number of wells that we want to drill as well. Right now, I think we prefer to focus more on acquisitions. Perfect. The second question on the surety lawsuit, that's a great disclosure this morning. I know you can't comment on specifics, but I just wanted to make sure I understood the framing of the lawsuit outcomes. Is the discussion mainly on the dollar amount that would potentially come back to W&T, or is there an equally prominent discussion, maybe appeals or whether or not it would, a binary would it happen or wouldn't happen? I just want to make sure both were on the table. I think it's more important for us to get data. We've been working very hard to get data from the sureties, and they've been working very hard to not provide it. Great point. Thank you. Thank you. The next question comes from Nicholas Pope from ROTH Capital Partners. Please go ahead. Good morning, everyone. Morning, Nicholas. How are you doing? Good. Curious, talking a little more on the fun stuff, the production side. You highlighted a slight uptick in workovers, recompletions in the second half of the year. I was just curious, kind of the inventory that you all have in hand and how, I guess, that's replenished over time. Just curious what you're looking at the current rate of activity, and it's been a focus of kind of production optimization. Just curious what that inventory looks like and how it might progress over the near term. Sure. Let me make that perfectly clear for you with regard to our inventory. What we have had estimated as 1P reserves over the last 10- 15 years has approximated half of what we've actually produced. What I'm telling you is we're vastly undervalued. Our actual reserves are far greater than what are being estimated. I've been telling people this for 40 years it's not new, but the results we've been keeping have been pretty accurate, in adding up what was actually predicted as 1P reserves, and what we actually produced from that 1P reserve schedule. It's about 50%, in fact, it's less than 50% of what we've actually produced. If you, I guess year-to-date, 1Q, 2Q, y'all highlighted four workovers. What does that look like in the second half of the year? Well, what I told you is we would be in excess of 35,000 barrels oil equivalent per day. Got it. Great. Looking at the retirement obligations, I know you included a slide in the past about the book value of the ARO. Looks like it creeped up a little bit. I'm curious if there's any progress on maybe how you're booking your retirement obligations and what that might look like over the next year, because I think it was at $548 million this quarter. Just curious if you'll expect things to go up, down, or if there's any changes to how that's regulated and accounted for going forward. Yeah. We indicate to folks that we're normally between about $35 million and $45 million a year on decommissioning. We look at that as a function of our total decommissioning, what we think those costs are. We manage through that judiciously by arranging supply routes, personnel, equipment, all at the same time. We've looked at this also in terms of when we do the work. We always prefer to do as much work as we can at one point in time, as opposed to breaking up into what BSEE and BOEM, now MMA, referred to as decommissioning costs, and, "Gee, what are you going to do to accelerate that via their so-called idle iron program?" We vehemently object to this term, idle iron. There's no idle iron. We have leases with more than one platform on it. What we found out through the years is that as we go through time with better data and more understanding of the area, we generally find more reserves. That plays into our catalog of the longevity of the company as we've proceeded through the decades. Got it. Specifically looking at some of these deepwater facilities, maybe like Matterhorn, I think seems to be reaching a point where maybe it could be decommissioned at some point, just looking at where production is or maybe I'm incorrect in that. Curious, as you look at that, maybe the more expensive facilities in the deepwater, if that's something that could be reaching the end of its life and when that kind of spend might show up. Well, first of all, you're incorrect about your term of its end of life. We have more work to do at Matterhorn. We have more things to do in that area. This is not unusual for us. Again, that's a floating facility, but yeah, we have more work to do there. Our methodology for disposing of these things in the future may be a little bit different than other people's methodology. We've also done more abandonment work as a company than anybody in the Gulf, and that's well in excess of $1 billion. Got it. That's all I have. I appreciate the time, Tracy. Thank you. Sure. Thanks. As a reminder, if you have a question, please press star one. The next question comes from Richard Tullis from Water Tower Research. Please go ahead. Hey, good morning, everyone. I'm sitting in for Jeff Robertson. All good. Tracy, just continuing. Good to hear you, Tracy. Continuing with the acquisition theme there. I know that's been a long time focus of the company. Tracy, how do you look at funding future acquisitions, kind of where we sit now with the cash on hand that you've built up versus debt, versus equity that you feel is undervalued? Yeah, that's a great question, Richard. What we think about first is what is the value of the properties that we're going to acquire, and how we're going to segregate that within the company. We've done this in the past. We've formed companies that apply to specific assets where we're drilling wells and that sort of thing. That's one of the things that we think about. Then, of course, we segregate that also by the value of the property that we're trying to purchase. What we are seeing is more money coming into this basin from different providers. There were a lot of people, hell, 10 years ago that wouldn't dare get into this basin. Over time, they start to realize, "Oh, well, there is good cash flow out there." It does pay out, and maybe we want to do business with people that have been there for a while. We're enjoying some of that opportunity, mainly because we have been there for a while. We've been there through various different things, various administrations who either liked us or hated us. We've succeeded in all cases, so I don't see that changing. I certainly continue to see bigger opportunity in this basin. This is the largest basin in the U.S. It is the second-largest producing basin. Obviously, higher degree of operating costs and things that you have to do in this basin that you wouldn't have to do anywhere else. Thank you for that. Just last from me, looking at hedges, I know everyone has seen the volatility in the oil prices. Are you inclined to layer in any more hedges into 2027 and maybe beyond, say, the first quarter of 2027? I don't really have any desires to do that at the moment. We'll see what pricing does and what we need to do and what we need to finance. We'll make short order concerns on that. Fortunately, we do have the ability to go ahead and do that with our production base. As I told everyone before, we've produced about, actually less than half of, excuse me. We've produced almost double what we predicted to have in 1P reserves. A little bit more than that. That's very encouraging to us, and it's what I've been telling people for decades. This basin is very rock property positive, meaning that we have great permeability, we have great porosity, we have great advantage of Mother Nature helping us move that oil to the wellbore. Well, thanks, Tracy. I appreciate it. Thank you, sir. Appreciate it. This concludes our question-and-answer session. I would like to turn the conference back over to Tracy Krohn for closing remarks. Thanks, everybody. Good quarter for us. We're looking forward to a better year, going from this point through 2026, and forward after that. Thanks for listening. We'll be back with you again soon. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.