W&T OFFSHORE INC

NOTE 1** — NATURE OF OPERATIONS AND**BASIS OF PRESENTATION

Nature of Operations

W&T Offshore, Inc. (with subsidiaries referred to herein as the “Company”) is an independent oil and natural gas producer with substantially all of its operations offshore in the Gulf of America. The Company is active in the exploration, development and acquisition of oil and natural gas properties. The Company operates inone reportable segment.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and an interest in Monza Energy LLC (“Monza”), which is accounted for under the proportional consolidation method. All intercompany accounts and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for interim periods are not necessarily indicative of the results that may be expected for the entire year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in Part II, Item 8.Financial Statements and Supplementary Data of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”).

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

NOTE 2**—** FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities, derivative instruments and debt. Except for derivative instruments and debt, the carrying amount of the Company’s financial instruments approximates fair value due to the short-term, highly liquid nature of these instruments.

Derivative Instruments

The following table reflects the contracted volumes and weighted average prices under the terms of the Company’s open oil derivative contracts as of September 30, 2026:

The fair value of the Company’s derivative financial instruments was recorded in the Condensed Consolidated Balance Sheets as follows (in thousands):

The Company measures the fair value of its derivative instruments on a recurring basis by applying the income approach, using models with inputs that are classified within Level 2 of the valuation hierarchy. The income approach converts expected future cash flows to a present value amount based on market expectations. The inputs used for the fair value measurement of derivative financial instruments are the exercise price, the expiration date, the settlement date, notional quantities, the implied volatility, the discount curve with spreads and published commodity future prices.

The impact of commodity derivative contracts on the Condensed Consolidated Statements of Operations was as follows (in thousands):

Debt

The following table presents the net values and estimated fair values of the Company’s debt (in thousands):

The fair value of the 10.75% Senior Second Lien Notes due 2029 (the “10.75% Notes”) was measured using quoted prices, although the market is inactive. The fair values of the New TVPX and the TVPX Loan were measured using a discounted cash flows model and current market rates. The fair value of debt was classified as Level 2 within the valuation hierarchy.

NOTE 3**—** ASSET RETIREMENT OBLIGATIONS

Asset retirement obligations (“AROs”) represent the estimated present value of the amount incurred to plug, abandon and remediate the Company’s properties at the end of their productive lives. A summary of the changes to ARO is as follows (in thousands):

NOTE 4**—** DEBT

The components comprising the Company’s debt are presented in the following table (in thousands):

In September 2026, the promissory note evidencing the TVPX Loan was amended and restated pursuant to the Second Amended and Restated Promissory Note (as so amended and restated, the “New TVPX Loan”), and the $8.0 million of proceeds from the New TVPX Loan were used to repay the $8.0 million of balloon payment that was due at the maturity date of the TVPX Loan. The New TVPX Loan bears a fixed interest rate of 6.18% per annum and requires monthly amortization payments of $83.3 thousand plus accrued interest, and a balloon payment of $5.0 million at the end of the loan term in September 2029. The New TVPX Loan is secured by the aircraft financed and is guaranteed by the Company on an unsecured basis.

As of September 30, 2026, there wereno borrowings outstanding under the Credit Agreement, dated as of January 28, 2025, by and among the Company, Texas Capital Bank, as administrative agent, and the lenders party thereto (the “Credit Agreement”) and letters of credit outstanding were $6.6 million. There was $43.4 million available for the

issuance of letters of credit and borrowings under the Credit Agreement as of September 30, 2026, based on a borrowing base of $50.0 million and $6.6 million of letters of credit outstanding. On October 1, 2026, the Company amended the Credit Agreement to convert its revolving credit facility into a reserve-based revolving credit facility. SeeNote 13 – Subsequent Event for additional information.

As of September 30, 2026, the Company was in compliance with all applicable covenants.

NOTE 5**—** COMMITMENTS AND CONTINGENCIES

ONRR Audit of Historical Refund Claims

In 2023, the Company received notification from the Office of Natural Resources Revenue (the “ONRR”) regarding results of an audit performed on the Company’s historical refund claims taken on various properties for alleged royalties owed to the ONRR. In September 2026, the Company finalized a settlement with ONRR resolving this matter. The settlement provides for a net ONRR royalty credit of approximately $8.5 million that is expected to be realized through reduced royalty payments beginning in the fourth quarter of 2026.

Bonding Disputes

Since October 2024, the Company has been involved in litigation with certain providers of private and government-required surety bonds, including Endurance Assurance Corporation, Lexon Insurance Company, U.S. Specialty Insurance Company (“USSIC”), Pennsylvania Insurance Company a/k/a Applied Surety Underwriters and United States Fire Insurance Company (collectively, the “Sureties”), that secure decommissioning obligations or ONRR disputed matters the Company may have with respect to certain oil and natural gas assets of the Company (the “Sureties Litigation”). The Company contends that (1) the Sureties may not enforce their indemnity agreements such that their actions constitute an abuse of right; (2) the Sureties’ interpretation of the indemnity agreements renders the agreements illusory; (3) the Sureties may not make unreasonable demands for collateral; (4) the Sureties must accept reasonable collateral as offered by the Company; (5) no additional collateral is required of the Company; (6) the Sureties may not make joint demands for collateral that are inconsistent with those of each other such that the Company cannot comply with each demand; and (7) the Sureties’ changed business model is not legitimate grounds to demand further collateral beyond that offered by the Company. The Company has also filed counterclaims against the Sureties claiming: (1) violations of the Sherman Antitrust Act; (2) violations of the Texas Free Enterprise and Antitrust Act; (3) violations of the Texas Insurance Code Section 541; (4) tortious interference with existing contracts and prospective business relationships; and (5) conspiracy.

In June 2025, the Company entered into Settlement and Release Agreements (the “Settlement Agreements”), by and between the Company and USSIC and Philadelphia Indemnity Insurance Company (“PIIC”) to dismiss all of such sureties’ claims related to the Sureties Litigation without prejudice. Pursuant to the applicable Settlement Agreement, USSIC and PIIC agreed that: (i) there will be no change to the 2024 premium rates paid by the Company or any of its affiliates, subsidiaries or joint venture entities, for any currently existing surety bond executed by USSIC or PIIC until after December 31, 2026, at the earliest, (ii) USSIC and PIIC withdraw all demands for collateral and agree not to request, demand, or otherwise insist on collateral, whether related to a surety bond or pursuant to the indemnity agreements, until after December 31, 2026, at the earliest; provided that such restriction shall not apply if (a) the Company does not pay premiums owed to USSIC or PIIC when due; (b) a claim is made by a third party against any bond issued by USSIC or PIIC to the Company or its affiliates or subsidiaries; (c) there is an initiation of an insolvency proceeding for the Company or any of its affiliates, subsidiaries or joint venture entities, whether voluntary or involuntary; (d) there is an uncured event of default under the indenture governing the 10.75% Notes that results in an acceleration, in whole or in part, of the indebtedness thereunder; or (e) the Company or its affiliates or subsidiaries initiate a lawsuit against USSIC or PIIC. Each of the Settlement Agreements also provides that, in the event that the Company enters into an agreement to provide collateral to another party in settlement of the Sureties Litigation on bonds existing as of the date of the Settlement Agreement, the Company shall, on a pro rata basis, provide substantially similar collateral to USSIC or PIIC as it does to such other party.

In June 2025, the presiding judge in the Sureties Litigation recommended denying the requests for preliminary injunction submitted bytwo surety providers. The preliminary injunction would have required the Company to immediately post $105 million of collateral. The recommendation effectively nullified all current collateral requests by the surety providers and provided that the Company did not need to post collateral until a determination is made on the merits of the Sureties Litigation with the remaining surety providers.

The Sureties Litigation with respect to the Sureties other than USSIC and PIIC remains ongoing. To the extent that the Company is required to fulfill the collateral demands made by the remaining surety entities, or in the event that other surety entities make additional collateral demands, the fulfillment of such demands could be significant and could impact the Company’s liquidity.

Contingent Decommissioning Obligations

Certain counterparties in past divestiture transactions or third parties in existing leases that have filed for bankruptcy protection or undergone associated reorganizations may not be able to perform required abandonment obligations. Due to operation of law, the Company may be required to assume decommissioning obligations for those interests. The Company may be held jointly and severally liable for the decommissioning of various facilities and related wells. The Company no longer owns these assets, nor are they related to current operations.

The changes in the contingent decommissioning obligations were as follows (in thousands):

Although it is reasonably possible that the Company could receive state or federal decommissioning orders in the future or be notified of defaulting third parties in existing leases, the Company cannot predict with certainty if, how or when such orders or notices will be resolved or estimate a possible loss or range of loss that may result from such orders. However, the Company could incur judgments, enter into settlements or revise the Company’s opinion regarding the outcome of certain notices or matters, and such developments could have a material adverse effect on the Company’s results of operations in the period in which the amounts are accrued and the Company’s cash flows in the period in which the amounts are paid. To the extent the Company does incur costs associated with these properties in future periods, the Company intends to seek contribution from other parties that owned an interest in the facilities.

Other Claims

In the ordinary course of business, the Company is a party to various pending or threatened claims and complaints seeking damages or other remedies concerning commercial operations and other matters. In addition, claims or contingencies may arise related to matters occurring prior to the Company’s acquisition of properties or related to matters occurring subsequent to the Company’s sale of properties. In certain cases, the Company has indemnified the sellers of properties acquired, and in other cases, has indemnified the buyers of properties sold. The Company is also subject to federal and state administrative proceedings conducted in the ordinary course of business including matters related to alleged royalty underpayments on certain federal-owned properties. Although the Company can give no assurance about the outcome of pending legal and federal or state administrative proceedings and the effect such an outcome may have, the Company believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided for or covered by insurance, will not have a material adverse effect on the consolidated financial position, results of operations or liquidity of the Company.

NOTE 6**—** STOCKHOLDERS’ EQUITY

At-the-Market Equity Offering

During the three months ended September 30, 2026, the Company sold an aggregate of 3.6 million shares of common stock for an average price of$4.16 per share in connection with the Company’s “at-the-market” equity offering program and received proceeds, net of commissions and expenses, of$14.7 million. As of September 30, 2026, the Company has$68.1 million of remaining availability under this program.

Dividends

During the nine months ended September 30, 2026, the Company declared cash dividends of $4.9 million.

On October 29, 2026, the Company’s board of directors declared a regular quarterly dividend of $0.01 per share of common stock for the fourth quarter of 2026. The dividend is to be paid on November 19, 2026 to stockholders of record at the close of business on November 12, 2026.

NOTE 7**—** SHARE-BASED COMPENSATION

2026 Grants

In May 2026, the Company granted share-based compensation to its employees. The grants consisted of 2.8 million restricted stock units (“RSUs”) and 2.6 million performance stock units (“PSUs”).

The RSUs were valued as of the grant date and vest 1/3 each year on May 29, 2027, 2028 and 2029. The grant date fair value of the RSUs was $10.2 million.

The PSUs are subject to performance criteria of (i) total shareholder return and relative shareholder return (collectively, the “TSR PSUs”), (ii) cash return on capital employed (the “CROCE PSUs”) and (iii) reserve performance (the “Reserve PSUs”). The performance period for the measurement of the performance goals began on January 1, 2026 and ends on December 31, 2028. To be eligible to receive the earned PSUs, employees must be employed from the grant date through December 31, 2028. Different levels of achievement across these metrics will affect the percentage of PSUs that the employee receives upon the satisfaction of the service requirement. The percentage of PSUs received upon vesting ranges from 0% to 200%.

The TSR PSUs will account for 50% of the target PSUs granted to employees. The TSR PSUs contain both a service condition and a market condition. The grant date fair value of the TSR PSUs was $8.5 million and was calculated using a Monte Carlo simulation.

The CROCE PSUs and Reserve PSUs will account for 40% and 10%, respectively, of the target PSUs granted to employees. The CROCE PSUs and Reserve PSUs contain both a service condition and a performance condition. The grant date fair value of the CROCE PSUs and Reserve PSUs, which was determined using the closing price of the Company’s common stock on the date of grant, was $3.8 million and $1.0 million, respectively. The cumulative compensation cost that will be recognized will be equal to the fair value of the awards deemed probable of vesting multiplied by the percentage of the requisite service period that has been rendered. Unlike the TSR PSUs, if the performance condition is not satisfied, any previously recognized compensation expense is reversed.

As of the grant date, the Company did not have enough shares of common stock available under its long-term incentive plan to satisfy its commitments to deliver shares upon vesting. Accordingly, the Company will account for these awards as liability awards, and the fair value of these awards will be remeasured at the end of each reporting period based on either the current market price of the Company’s common stock (for RSUs and PSUs with both a service condition and a performance condition) or through the use of the Monte Carlo simulation method (for the PSUs with both a service condition and a market condition).

Modification of Awards

In June 2026, the Company’s long-term incentive plan was amended to increase the shares available for issuance from 10.0 million to 22.0 million. As a result of this increase, the Company reclassified the RSUs and PSUs that were granted in 2025 from liability awards to equity awards. The modification resulted in the remeasurement of the TSR PSUs at $7.44 per share and the remaining PSUs and RSUs at $4.01 per share on the modification date. The liability balance as of the modification date of $11.0 million was reclassified to additional paid in capital.

NOTE 8**—** INCOME TAXES

The Company records income taxes for interim periods based on an estimated annual effective tax rate. The estimated annual effective rate is recomputed on a quarterly basis and may fluctuate due to changes in forecasted annual operating income, positive or negative changes to the valuation allowance for net deferred tax assets and changes to actual or forecasted permanent book to tax differences.

The Company’s effective tax rates for the three and nine months ended September 30, 2026 were (3.8)% and (8.1)%, respectively. These effective tax rates differ from the federal statutory rate primarily due to the impact of losses with no tax benefit, nondeductible compensation and adjustments to the Company’s valuation allowance. The Company’s effective tax rates for the three and nine months ended September 30, 2025 were not meaningful due to the Company recording a valuation allowance against its net deferred tax assets during that quarter.

At each reporting date, the Company considers all available positive and negative evidence to evaluate whether its deferred tax assets are more likely than not to be realized. During 2025, the amount of the Company’s deferred tax assets considered realizable was reduced due to negative evidence that outweighed positive evidence supporting its ability to realize its deferred tax assets. The Company was able to support that a portion of its deferred tax assets would be realizable through the generation of income from future reversals of existing taxable temporary differences and recorded a valuation allowance against the remaining unsupported deferred tax assets. As of September 30, 2026 and December 31, 2025, the Company had a valuation allowance of $103.8 million and $100.3 million, respectively.

NOTE 9 — NET LOSS PER COMMON SHARE

The following table presents the calculation of basic and diluted net loss per common share (in thousands, except per share amounts):

NOTE 10**— INVESTMENT IN MONZA**

Monza is considered to be a variable interest entity. As the Company is not considered to be the primary beneficiary of Monza, the Company does not fully consolidate Monza but instead consolidates Monza based on its ownership interest.

The following table presents the amounts recorded by the Company on the Condensed Consolidated Balance Sheets related to the consolidation of the proportional interest in Monza’s operations (in thousands):

The following table presents the amounts recorded by the Company in the Condensed Consolidated Statements of Operations related to the consolidation of the proportional interest in Monza’s operations(in thousands):

As required, the Company may call on Monza to provide cash to fund its portion of certain projects in advance of capital expenditure spending. As of September 30, 2026 and December 31, 2025, the unused advances were $2.1 million and $2.4 million, respectively, which are included inAdvances from joint interest partners in the Condensed Consolidated Balance Sheets*.*

During the nine months ended September 30, 2026, Monza paid cash distributions of $13.6 million, of which $2.8 million was paid to the Company.

NOTE 11**—**SEGMENT INFORMATION

The Company reports its operations inone reportable segment which is engaged in the acquisition, development and production of oil, NGLs and natural gas offshore in the Gulf of America. The segment derives revenue from the sale of produced oil, NGLs and natural gas.

The measure of profit or loss that the Chief Operating Decision Maker (the “CODM”) uses to assess performance and allocate resources for the operating segment is consolidated net loss. The CODM uses consolidated net loss in deciding whether to reinvest profits into the operating segment or into other activities, such as for acquisitions or to return capital to shareholders through a combination of dividends and/or share repurchases.

As the Company discloses a single reportable segment, total operating net revenues for the Company’s operating segment are reported in its Condensed Consolidated Statements of Operations and segment assets are reported in its Condensed Consolidated Balance Sheets.

The CODM is regularly provided with only the consolidated expenses as noted on the face of the Condensed Consolidated Statements of Operations and, accordingly, these expenses are considered to be significant expenses.

NOTE 12**— OTHER SUPPLEMENTAL INFORMATION**

Condensed Consolidated Balance Sheet Details

Prepaid expenses and other current assets consisted of the following (in thousands):

Accrued liabilities consisted of the following (in thousands):

Condensed Consolidated Statements of Cash Flows Information

Supplemental statements of cash flows information consisted of the following (in thousands):

NOTE 13**— SUBSEQUENT EVENT**

On October 1, 2026, the Company entered into the Second Amendment to the Credit Agreement (the “Amendment”) which amends the Credit Agreement (as amended, the “Amended Credit Agreement”). Pursuant to the Amendment, the Company’s revolving credit facility was converted into a reserve-based revolving credit facility (the “RBL Facility”), maturing on the earlier of July 28, 2028 and the date that issix months prior to the stated maturity date

of the 10.75% Notes, with an aggregate maximum credit amount of$100.0 million and an aggregate elected commitment amount initially set at$50.0 million.

The key highlights of the Amended Credit Agreement are as follows:

There were no changes to interest rate margins, the Term SOFR floor, maturity, collateral or the Company’s financial covenants, including a maximum net leverage ratio of 2.50 to 1.00 and a minimum current ratio of 1.00 to 1.00.