W&T OFFSHORE INC (WTI) Business

ITEM 1. BUSINESS

W&T Offshore, Inc. (“we,” “our” or “us”) is a publicly held Texas corporation. We are an independent oil and natural gas producer with substantially all our operations offshore in the Gulf of America. We are active in the acquisition, exploration and development of oil and natural gas properties. We operate in one reportable segment.

Since our founding in 1983 by our Chairman and Chief Executive Officer, Tracy Krohn, we have developed significant technical expertise in finding and developing properties in the Gulf of America with existing production which provide the best opportunity to achieve a return on our invested capital. We have successfully discovered and produced properties on the conventional shelf and in the deepwater across the Gulf of America.

We have continually grown our footprint in the Gulf of America through acquisitions, exploration and development. As of December 31, 2025, we held working interests in 49 offshore producing fields in federal and state waters. Our producing fields are located in federal and state waters in the Gulf of America in water depths ranging from less than 10 feet to up to 7,300 feet. The reservoirs in our offshore fields are generally characterized as having high porosity and permeability, with higher initial production rates relative to other domestic reservoirs.

Our acreage, well, production and reserves information are described in more detail under Part I, Item 2. Properties, in this Form 10-K.

Business Strategy

The Gulf of America offers unique advantages, and we are uniquely positioned to create value with a diverse portfolio in valuable shelf, deep shelf and deepwater projects. Our diverse portfolio of operations in the Gulf of America enables stacked pay development, attractive primary production, and recompletion opportunities. We use advanced seismic and geoscience tools to execute successful drilling projects.

In managing our business, we are focused on optimizing production and increasing reserves in a profitable and prudent manner, while managing cash flows to meet our obligations and investment needs. Our goal is to pursue lower risk, high rate of return projects and develop oil and natural gas resources that allow us to grow our production, reserves and cash flow in a capital efficient manner, and organically enhance the value of our assets helping to ensure the long-term sustainability of our business.

We follow a proven and consistent business strategy:

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We intend to execute the following elements of our business strategy in order to achieve our strategic goals:

We continually monitor current and forecasted commodity prices to assess if changes to our plans are needed. Our significant inside ownership ensures that executive management’s interests are highly aligned with those of our shareholders, thus incentivizing executive management to maximize value and mitigate risk in executing our business strategy, generating shareholder value.

Competition

The oil and natural gas industry is highly competitive. We encounter strong competition from numerous entities, including major domestic and foreign oil companies, other independent oil and natural gas companies and individual producers and operators, in acquiring oil and natural gas properties, contracting for drilling equipment and securing trained personnel. Many of these competitors are large, well-established companies that have financial and other resources substantially greater than ours. As a result, our competitors may be better able to withstand the financial pressures of significant declines in oil and natural gas prices, unsuccessful drill attempts, delays, sustained periods of volatility in financial markets and generally adverse global and industry-wide economic conditions, and may have a greater ability to provide the extensive regulatory financial assurances required for offshore properties and to absorb the burdens from changes in applicable laws and regulations. As a smaller oil and natural gas company, however, we have greater flexibility in decision making, can adapt quicker to market changes, have the potential for higher profit margins on smaller projects and have the opportunity to develop innovative strategies without the constraints of large-scale operations.

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Oil and Natural Gas Marketing and Delivery Commitments

The market for our oil, NGL and natural gas production depends on factors beyond our control, including the extent of domestic production and imports of oil, NGLs and natural gas; the proximity and capacity of natural gas pipelines and other transportation facilities; the demand for oil, NGLs and natural gas; the marketing of competitive fuels; and the effect of state and federal regulation. The oil and natural gas industry also competes with other industries in supplying the energy and fuel requirements of industrial, commercial and individual consumers.

We sell our oil, NGLs and natural gas to third-party customers. The terms of sale under the majority of existing contracts are short-term, usually one year or less in duration. The prices received for oil, NGL and natural gas sales are generally tied to monthly or daily indices as quoted in industry publications.

We are not dependent upon, or contractually limited to, any one customer or small group of customers. In 2025, BP Products North America and Shell Trading (US) Company accounted for 33% and 17%, respectively, of our revenues from sales of oil, NGLs and natural gas. Given the commoditized nature of the products we produce and market and the location of our production in the Gulf of America, we believe the loss of any of the customers above would not result in a material adverse effect on our ability to market future oil and natural gas production, as we believe that replacement customers could be obtained in a relatively short period of time on terms, conditions, and pricing substantially similar to those currently existing.

Seasonal Nature of Our Business

Generally, the demand for and price of natural gas increases during the winter months and decreases during the summer months. However, these seasonal fluctuations are somewhat reduced because during the summer, pipeline companies, utilities, local distribution companies and industrial users purchase and place a portion of their anticipated winter requirements of natural gas into storage facilities. As utilities continue to switch from coal to natural gas, some of this seasonality has been reduced as natural gas is used for both heating and cooling. In addition, the demand for oil is higher in the winter months but does not fluctuate seasonally as much as natural gas.

Seasonal weather changes affect our operations. Tropical storms and hurricanes occur in the Gulf of America during the summer and fall, which can require us to evacuate personnel and shut in production until a storm subsides. Also, periodic storms during the winter often impede our ability to safely load, unload and transport personnel and equipment, which can delay production and sales of our oil and natural gas.

Insurance Coverage

In accordance with industry practice, we maintain insurance coverage against some, but not all, of the operating risks to which our business is exposed. In general, our current insurance policies cover risks incident to the operation of oil and natural gas wells, including, but not limited to, personal injury or loss of life, severe damage to and destruction of property and equipment, pollution or other environmental damage and the suspension of operations. We do not carry business interruption insurance.

Our general and excess liability policies currently provide for $300.0 million of coverage for bodily injury and property damage liability, including coverage for liability claims resulting from seepage, pollution or contamination. Our Energy Package (defined as certain insurance policies relating to our oil and natural gas properties, which include named windstorm coverage) contains multiple layers of insurance coverage for our operating activities, with higher limits of coverage for higher valued properties and wells. Under the Energy Package, the limits for well control range from $30.0 million to $500.0 million depending on the risk profile and contractual requirements. With respect to coverage for named windstorms, we have a $162.5 million aggregate limit covering one of our higher valued properties, and $150.0 million for all other properties subject to four regional retentions ranging from $1.0 million to $15.0 million on the conventional shelf properties and $7.5 million on the deepwater properties.

We believe that our coverage limits are sufficient and are consistent with our exposure; however, we cannot insure against all possible losses. As a result, any damage or loss not covered by insurance could have a material adverse effect on our financial condition, results of operations and cash flow.

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We annually re-evaluate the purchase of insurance, coverage limits and deductibles. Future insurance coverage for the oil and natural gas industry could increase in cost and may include higher deductibles or retentions. In addition, some forms of insurance may become unavailable in the future or unavailable on terms that are economically acceptable. No assurance can be given that we will be able to insure our business activities at the levels we desire because of either limited market availability or unfavorable economics (limited coverage for the underlying cost).

Environmental, Health and Safety Matters and Government Regulations

Our operations are subject to complex and stringent federal, state and local laws and regulations that, among other things, govern the issuance of permits to conduct exploration, drilling and production operations, the amounts and types of materials that may be released into the environment and the discharge and disposal of waste materials and, to the extent waste materials are transported and disposed of in onshore facilities, remediation of any releases of those waste materials from such facilities. The federal environmental laws and regulations applicable to us and our operations include, among others, the following:

In addition to the federal laws and regulations above, we are also subject to the requirements of the Occupational Safety and Health Administration (“OSHA”) and comparable state statutes, where applicable. These laws and the implementing regulations strictly govern the protection of the health and safety of employees. The OSHA hazard communication standard, the EPA community right-to-know regulations under Title III of CERCLA and similar state statutes, where applicable, require that we organize and/or disclose information about hazardous materials used or produced in our operations. Such laws and regulations also require us to ensure our workplaces meet minimum safety standards and provide for compensation to employees injured as a result of our failure to meet these standards as well as civil and/or criminal penalties in certain circumstances. We believe that we are in substantial compliance with all such existing laws and regulations applicable to our current operations and that our continued compliance with existing requirements will not have a material adverse impact on our financial condition and results of operations.

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Numerous governmental agencies issue rules and regulations to implement and enforce such laws, which are often costly to comply with, and a failure to comply may result in substantial administrative, civil and criminal penalties; the imposition of investigatory, remedial and corrective action obligations or the incurrence of capital expenditures; the occurrence of restrictions, delays or cancellations in the permitting, or development or expansion of projects; and the issuance of orders enjoining some or all of our operations in affected areas. We consider the costs of environmental compliance to be a necessary and manageable part of our business. However, based on policy and regulatory trends and increasingly stringent laws, our capital expenditures and operating expenses related to compliance with the protection of the environment have increased over the years and may continue to increase. We cannot predict with any reasonable degree of certainty our future exposure concerning such matters. See Item 1A. Risk Factors contained herein for further discussion of governmental regulation and ongoing regulatory changes, including with respect to environmental matters.

The change of Presidential administration in the early part of 2025 saw promising developments in the oil and natural gas regulatory environment. On January 20, 2025, President Trump issued Executive Order 14154, Unleashing American Energy. Section 3 of that Order directed heads of agencies to review existing regulations to identify agency actions that impose an undue burden on the identification, development, or use of domestic energy resources. The Trump administration also issued Executive Order 14156, Declaring a National Energy Emergency, stating that the United States’ insufficient energy production, transportation, refining and generation constituted an unusual and extraordinary threat to the nation’s economy, national security, and foreign policy. Furthermore, on February 3, 2025, Secretary Burgum issued Secretarial Order 3418, Unleashing American Energy. Section 4(b) of that Order directed agency officials to prepare an action plan that will include steps to suspend, revise, or rescind certain regulations.

Other Regulation of the Oil and Natural Gas Industry

The oil and natural gas industry is extensively regulated by numerous federal, state and local authorities. Rules and regulations affecting the oil and natural gas industry are under consistent review for amendment or expansion, which could increase the regulatory burden and the potential sanctions for noncompliance. Relatedly, numerous federal and state departments and agencies are authorized to issue rules and regulations binding on the oil and natural gas industry and its individual members, some of which carry substantial penalties for failure to comply. Historically, our compliance with existing requirements has not had a material adverse effect on our financial position, results of operations or cash flows. Because such laws and regulations are frequently amended or reinterpreted, we are unable to predict the future cost or impact of complying with such laws. Although the regulatory burden on the oil and natural gas industry may increase our cost of doing business, these burdens generally do not affect us any differently or to any greater or lesser extent than they affect other companies in the industry with similar types, quantities and locations of production.

Exploration and Production

Statutes, rules and regulations affecting exploration and production are subject to extensive and continually changing regulations as legislation affecting the oil and natural gas industry is under constant review for amendment or expansion. The regulatory burden on the oil and natural gas industry increases the cost of doing business and, consequently, affects its profitability. Our exploration and production are subject to various types of regulation at the federal, state and local levels. These types of regulation include, but are not limited to, requiring permits for the drilling of wells, drilling bonds and reports concerning operations. Most jurisdictions in which we operate also regulate one of more of the following:

Our operations on federal oil and natural gas leases in the OCS waters of the Gulf of America are subject to regulation by the BSEE, the BOEM and the ONRR, all of which are agencies of the DOI. The BSEE and the BOEM work to ensure the development of energy and mineral resources on the OCS is done in a safe and environmentally and economically responsible way. The ONRR performs the offshore royalty and revenue management functions of the former Minerals Management Service.

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The federal government cannot conduct offshore lease sales without the development and approval of a National Outer Continental Shelf Oil and Gas Leasing Program (the “OCS Program”). The Outer Continental Shelf Lands Act (the “OCSLA”) authorizes the Secretary of the Interior to establish a schedule of lease sales for a five-year period. There is no requirement under the OCSLA that mandates any sales in any locations, nor does the law prescribe any specific timing for the development of the OCS Program. These leases are awarded by the BOEM based on competitive bidding and contain relatively standardized terms. Prior to commencement of offshore operations, lessees must obtain the BOEM’s approval for exploration, development and production plans. In addition to permits required from other agencies such as the U.S. Environmental Protection Agency (the “EPA”), lessees must obtain a permit from the BSEE prior to the commencement of drilling and comply with regulations governing, among other things, engineering and construction specifications for production facilities, safety procedures, plugging and abandonment of wells on the OCS, calculation of royalty payments and the valuation of production for this purpose, and decommissioning of facilities, structures and pipelines.

Pursuant to OCSLA, the President may withdraw from disposition any of the unleased lands of the OCS. On January 6, 2025, former President Biden issued two memoranda (“Withdrawal Memoranda”) under OCSLA that withdrew approximately 625 million acres of the U.S. OCS, including the Eastern Planning Area of the Gulf of America, from being considered for new oil or natural gas leases, including for exploration, development and production. However, the Western and Central Planning Areas in the Gulf of America were not included in President Biden’s withdrawal.

On January 20, 2025, President Trump issued an Executive Order revoking President Biden’s Withdrawal Memoranda and the U.S. Secretary of the Interior subsequently issued an order directing the DOI to “take all actions available to expedite the leasing of the OCS for oil and gas exploration and production.” Both President Biden’s and President Trump’s actions described above with respect to OCSLA have been challenged in federal district courts. On October 2, 2025, the U.S. District Court for the Western District of Louisiana granted in part a motion for summary judgment filed by plaintiffs challenging the Withdrawal Memoranda, including the States of Louisiana, Alaska, Georgia and Mississippi, the Gulf Energy Alliance and the American Petroleum Institute, declaring that the Withdrawal Memoranda are unlawful because they exceed the authority granted to the President under section 12(a) of the OCSLA. The challenge to President Trump’s revocation of the Withdrawal Memoranda remains ongoing. Earlier in 2025, the Secretary of the Interior directed BOEM to initiate steps to develop a new schedule for offshore oil and natural gas lease sales in the OCS, which, once finalized, will be the 11th National OCS Program replacing the current 2024-2029 National OCS Program that includes just three lease sales in the Gulf of America. In June 2025, the public comment period on BOEM’s request for information and comments on the preparation of the 11th National OCS Program closed.

In November 2025, the DOI announced the first proposal for the 2026 - 2031 OCS Program. This proposed OCS Program includes sales of five oil and natural gas leases in the western and central Gulf of America, where existing leasing is concentrated. It also includes two lease sales (one in 2029 and one in 2030) in the eastern Gulf of America that is currently withdrawn from leasing. Most of the eastern Gulf of America has not previously been leased, and no commercial production has occurred there to date. The Gulf of Mexico Energy Security Act of 2006 (the “GOMESA”) had prohibited oil and natural gas leasing in a defined area of the eastern Gulf of America. Although the GOMESA moratorium expired on June 30, 2022, President Trump effectively extended this moratorium for another decade by withdrawing this area from leasing consideration through June 2032. Some Members of Congress and other stakeholders wish to make the Eastern Gulf leasing moratorium permanent. By contrast, oil and natural gas industry groups and some others have advocated for shrinking the area covered by the ban, or eliminating the ban before its scheduled expiration date. Although the public comment period on the proposed OCS Program (1st Analysis and Proposal) ended on January 23, 2026, the proposed OCS Program remains subject to further analysis, comment, revision, approval and additional comments.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law. The OBBBA requires two oil and natural gas lease sales each year through 2040 in the Gulf of America region. These would be in addition to offshore oil and natural gas lease sales mandated under the 2026 – 2031 OCS Program. The first sale was held in December 2025 and generated over $300 million in high bids for 181 blocks across 80 million acres. A second sale is proposed for March 2026. The OBBBA also rolled back the Inflation Reduction Act’s royalty rate increase for offshore leases, returning the minimum royalty rate to 12.5% and eliminating royalty payments on natural gas produced from federal land and consumed or lost through venting, flaring or negligent release during upstream operations.

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Decommissioning and Financial Assurance Requirements

The BOEM requires that lessees demonstrate financial strength and reliability according to its regulations and provide acceptable financial assurances to assure satisfaction of lease obligations, including decommissioning activities in the OCS. In April 2024, BOEM released a final rule that changed the way BOEM evaluates the financial health of companies and offshore assets in setting financial assurance requirements. Under the new rule, BOEM revised the criteria for determining whether OCS oil and natural gas lessees and grant holders are required to provide supplemental financial assurance to backstop their decommissioning obligations. On April 8, 2025, pursuant to the directives described in Business – Environmental, Health and Safety Matters and Government Regulations under Part I, Item I contained herein, the DOI, through a joint filing in the U.S. District Court for the Western District of Louisiana (Case no. 2:24-cv-00820), indicated that it will not seek supplemental financial assurance in the Gulf of America except in the case of (a) sole liability properties and (b) certain non-sole liability properties that do not have a financially strong co-owner or predecessor in title and meet other conditions. In May 2025, the DOI announced its intent to revise this rule, and in March 2026, BOEM published a proposed rule setting forth amendments to the existing financial assurance regulatory framework. The proposed rule would, among other things, (i) permit BOEM to consider the financial strength of predecessors with joint and several liability when determining whether supplemental financial assurance is required, (ii) revise the level of BSEE probabilistic estimates of decommissioning cost used for determining the amount of supplemental financial assurance required from P70 to P50, (iii) provide BOEM with discretion, in circumstances where decommissioning is scheduled to occur within one year of a supplemental financial assurance demand, to accept third-party decommissioning contracts or decommissioning schedules in lieu of requiring new supplemental financial assurance, (iv) eliminate the requirement that a lessee challenging a supplemental financial assurance demand post an appeal bond equal to the amount of the demand in order to obtain a stay pending appeal, and (v) explicitly recognize dual-obligee bonds (which identify multiple obligees) as an acceptable form of financial assurance. The proposed rule is subject to a 60-day public comment period, which is expected to end on May 8, 2026.

While we view this as a positive development, the substance and timing of future legal and regulatory actions cannot be predicted at this time. Additionally, regardless of any changes that may come as a result of the Secretarial Order, the BOEM has the right to issue liability orders in the future, including if it determines there is a substantial risk of nonperformance of the interest holder’s decommissioning liabilities.

Regulation of Sales and Transportation of Oil, NGLs and Natural Gas

Our sales of oil, NGLs and natural gas are affected by the availability, terms and cost of transportation. The price and terms for access to pipeline transportation are subject to extensive federal and state regulation. The interstate transportation and sale for resale of oil, NGLs and natural gas is subject to federal regulation, including regulation of the terms, conditions and rates for interstate transportation, storage and various other matters.

The OCSLA, which is administered by the BOEM and the Federal Energy Regulatory Commission (the “FERC”), requires that all pipelines operating on or across the OCS provide open access, non-discriminatory transportation service. One of the FERC’s principal goals in carrying out the OCSLA’s mandate is to increase transparency in the OCS market, to provide producers and shippers assurance of open access service on pipelines located on the OCS, and to provide non-discriminatory rates and conditions of service on such pipelines. Interstate transportation rates for oil, NGLs and natural gas are regulated by the FERC. In general, interstate oil, condensate, NGL and natural gas pipeline rates must be cost-based, although settlement rates agreed to by all shippers are permitted and market-based rates may be permitted in certain circumstances. The FERC has established an indexing system for such transportation, which generally allows such pipelines to take an annual inflation-based rate increase. In certain limited circumstances, intrastate transmission of natural gas may also be affected directly or indirectly by the FERC’s regulations.

The price we receive from the sale of oil and NGLs is affected by the cost of transporting those products to market. We do not believe that the regulatory decisions or activities relating to interstate or intrastate oil or NGL pipelines will affect us in a way that materially differs from the way they affect other oil and NGL producers or marketers. Other than as described above, our sales of liquids, which include oil, condensate and NGLs, are not currently regulated and are transacted at market prices.

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Although natural gas prices are currently unregulated, Congress has historically been active in the area of natural gas regulation. We cannot predict whether new legislation to regulate natural gas may be proposed, what proposals, if any, might actually be enacted by Congress or the various state legislatures, and what effect, if any, the proposals might have on the operations of the underlying properties.

Climate Change

The return of President Trump to the White House in January 2025 triggered a sweeping rollback of United States climate policy, reversing many of the initiatives introduced under former President Biden. In January 2025, President Trump announced that the United States was withdrawing from the United Nations-sponsored “Paris Agreement.” He also issued additional executive orders aimed at boosting fossil fuels and undoing Biden-era initiatives to limit GHG emissions. He declared a national energy emergency and revoked many of President Biden’s executive orders on climate change. New orders instruct agencies to roll back restrictions on offshore drilling and reconsider protections for Alaska’s Arctic National Wildlife Refuge. President Trump also issued a moratorium on new wind power projects on federal lands, pausing new leases and permits for both onshore and offshore wind farms. He revoked an executive order that compelled government regulators to assess the risks of climate change to the financial system and he instructed agencies to review any regulations that might “burden the development of domestic energy resources.” These executive orders and the subsequent changes to regulations have had a tangible impact on the regulatory environment as it relates to climate change. Additionally, on February 12, 2026, EPS Administrator Lee Zeldin signed a final rule repealing the EPS’s 2009 finding that emissions of carbon dioxide, methane and other GHGs present an endangerment to public health and the environment. We anticipate that the final rule, one published in the Federal Register, will be the subject of widespread litigation.

In March 2024, the EPA published its final rule establishing more stringent methane rules for new, modified, and reconstructed facilities, known as Quad Ob, as well as standards for existing sources for the first time ever, known as Quad Qc. Under the final rules, states have two years to prepare and submit their plans to impose methane emission controls on existing sources. The presumptive standards established under the final rule are generally the same for both new and existing sources and include enhanced leak detection survey requirements using optical gas imaging and other advanced monitoring to encourage the deployment of innovative technologies to detect and reduce methane emissions, reduction of emissions by 95% through capture and control systems, zero-emission requirements for certain devices, and the establishment of a “super emitter” response program that would allow third parties to make reports to EPA of large methane emission events, triggering certain investigation and repair requirements. Fines and penalties for violations of these rules can be substantial. In July 2025, the EPA published its interim final rule extending certain compliance deadlines by 18 months. We are unable to predict the expected cost to comply with such requirements.

The Inflation Reduction Act of 2022 (the “IRA”) imposed the first ever federal fee on GHG emissions through a methane emissions charge. Under this rule, the methane emissions charge for 2024 was established at $900 per ton emitted over annual methane emissions thresholds, and would increase to $1,200 in 2025, and $1,500 in 2026. However, in February 2025, Congress voted to overturn the EPAs’ waste emissions charge rule, which was signed into law on March 14, 2025. On May 12, 2025, the EPA issued a final rule to remove the waste emissions charge regulations from the Code of Federal Regulations, rendering the rule null and void. Although the rule has been overturned, the implementation of revised air emission standards could result in stricter permitting requirements, which could delay, limit or prohibit our ability to obtain such permits and result in increased compliance costs on our operations, including expenditures for pollution control equipment, the costs of which could be significant.

In addition, in October 2023, the Federal Reserve, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation (the “FDIC”) released a finalized set of principles guiding financial institutions with $100 billion or more in assets on the management of physical and transition risks associated with climate change. These principles to limit funding to companies in fossil fuel-related industries could have adversely affected our liquidity or access to capital. In October 2025, the FDIC formally rescinded these principles.

Separately, the U. S. Securities and Exchange Commission (“SEC”) issued a final rule in March 2024 that established a framework for the reporting of climate risks, targets and metrics. In April 2024, less than a month after the issuance of the final rule, the SEC issued an order staying the rules in April 2024. In March 2025, the SEC voted to end its defense of this rule, effectively withdrawing its support for the regulation. However, the rule remains on hold pending

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such legal challenges, which are currently held in abeyance by the Eighth Circuit Court of Appeals until such time as the SEC determines whether the rule will be rescinded, repealed, modified or defended in litigation. Although the rule has been stayed, any new laws or regulations imposing more stringent requirements on our business related to the disclosure of climate related risks may result in reputation harms among certain stakeholders if they disagree with our approach to mitigating climate-related risks, increased compliance costs resulting from the development of any disclosures, and increased costs of and restrictions on access to capital to the extent we do not meet any climate-related expectations or requirements of financial institutions.

Although the Trump Administration has signaled a rollback of the climate regulatory environment, continuing political and social attention to the issue of climate change has resulted in both existing and proposed international agreements and national, regional, and local legislation and regulatory measures to limit GHG emissions and mitigate the effects of climate change. These efforts have included consideration of cap-and-trade programs, carbon taxes, GHG emissions reporting and tracking programs and regulations that directly limit GHG emissions from certain sources. Compliance with these rules or others could result in increased compliance costs on our operations.

Litigation risks are also increasing, as a number of cities, local governments and other plaintiffs have sought to bring suit against oil and natural gas companies in state or federal court, alleging, among other things, that such companies created public nuisances by producing fuels that contributed to global warming effects, such as rising sea levels and therefore are responsible for roadway and infrastructure damages as a result, or alleging that the companies have been aware of the adverse effects of climate change for some time but defrauded their investors or customers by failing to adequately disclose those impacts. We are not currently a defendant in any of these lawsuits but could be named in actions making similar allegations. An unfavorable ruling in any such case could significantly impact our operations and could have an adverse impact on our financial condition.

Additionally, our access to capital may be impacted by climate change policies. Stockholders and bondholders currently invested in fossil fuel energy companies such as ours, but concerned about the potential effects of climate change, may elect in the future to shift some or all of their investments into non-fossil fuel energy related sectors. Institutional lenders who provide financing to fossil-fuel energy companies also have become more attentive to sustainable lending practices that favor “clean” power sources, such as wind and solar, making those sources more attractive, and these lenders may elect not to provide funding for fossil fuel energy companies. Many of the largest U.S. banks have made “net zero” carbon emission commitments and have announced that they will be assessing financed emissions across their portfolios and taking steps to quantify and reduce those emissions. These and other developments in the financial sector could lead to some lenders restricting access to capital for or divesting from certain industries or companies, including the oil and natural gas sector, or requiring that borrowers take additional steps to reduce their GHG emissions. Additionally, there is the possibility that financial institutions will be required to adopt additional policies that limit funding to fossil fuel energy companies.

Finally, some scientists have concluded that increasing concentrations of GHG emissions in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, floods and other extreme climatic events, as well as chronic shifts in temperature and precipitation patterns. Our offshore operations are particularly at risk from severe climatic events, which have the potential to cause physical damage to our assets and thus could have an adverse effect on our exploration and production operations. Additionally, changing meteorological conditions, particularly temperature, may result in changes to the amount, timing, or location of demand for energy or the products we produce. While our consideration of changing weather conditions and inclusion of safety factors in design is intended to reduce the uncertainties that climate change and other events may potentially introduce, our ability to mitigate the adverse impacts of these events depends in part on the effectiveness of our facilities and our disaster preparedness and response and business continuity planning, which may not have considered or be prepared for every eventuality.

Financial Information

We operate our business as a single segment. See Financial Statements and Supplementary Data under Part II, Item 8 in this Form 10-K for our financial information.

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Human Capital Resources

As of December 31, 2025, we had approximately 370 employees who conduct our business in Texas, Alabama, Louisiana and the Gulf of America. Our workforce in Texas is primarily composed of our corporate employees, including our executive officers, drilling and production managers, technical engineers and administrative and support staff. Our employees in Alabama, Louisiana and the Gulf of America are primarily composed of skilled labor who conduct our field operations and manage third-party personnel used in support of our field operations.

We consider our employees to be our most valuable asset and believe that our success depends on our ability to attract, develop and retain our employees. We strive to provide a work environment that attracts and retains the top talent in the industry, reflects our core values and demonstrates these values to the communities in which we operate.

Diversity and Inclusion

We recognize that a diverse workforce provides the best opportunity to obtain unique perspectives, experiences and ideas to help our business succeed, and we are committed to providing a diverse and inclusive workplace to attract and retain talented employees. From recent graduates to experienced hires, we seek to attract and develop top talent to continue building a unique blend of cultures, backgrounds, skills and beliefs that mirror the world we live in.

The key to our past and future successes is promoting a workforce culture that embraces integrity, honesty and transparency to those with whom we interact, and fosters a trusting and respectful work environment that embraces changes and moves us forward in an innovative and positive way. Our Code of Business Conduct and Ethics prohibits illegal discrimination or harassment of any kind.

Safety, Health and Wellness

The success of our business is fundamentally connected to the well-being of our people. We are committed to the safety, health and wellness of our employees.

Our highest priorities are the safety of all personnel and protection of the environment. We actively promote the highest standards of safety behavior and environmental awareness and strive to meet or exceed all applicable local and natural regulations. To drive a culture of personnel safety in our operations, we operate under a comprehensive Safety and Environmental Management System (“SEMS”). Our 2025 total recordable incident rate for employees was 0.24, which is far below the industry average for the Gulf of America from 2024 of 0.58. Although incident reporting practices are subject to some subjectivity and vary by operator, we have historically had below average incident rates compared to the industry average for the Gulf of America, and we strive to continue to excel at protecting our personnel. Our Health, Safety, Environmental and Regulatory (“HSE&R”) group is comprised of a Vice President, HSE&R and 15 staff personnel, including managers. The group works with field personnel to create and regularly review safety policies and procedures, in an effort to support continuous improvement of our SEMS. Our board of directors reviews our material safety metrics on a quarterly basis. Safety and Environmental metrics are incorporated into employee evaluations when determining compensation.

Benefits and Compensation

We pride ourselves on providing an attractive compensation and benefits program that allows our employees to view working at W&T as more than where they work, but a place where they may grow and develop. Our ability to succeed depends on recruiting and retaining top talent in the industry. We believe employees choose W&T in part due to our professional advancement opportunities, on the job training, engaging culture and competitive compensation and benefits.

As part of our compensation philosophy, we believe we must offer and maintain market competitive total rewards programs in order to attract and retain superior talent. These programs not only include base wages and incentives in support of our pay for performance culture, but also health and retirement benefits. We focus many programs on employee wellness. We believe these solutions help the overall health and wellness of our employees and help us successfully manage healthcare and prescription drug costs for our employee population.

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Website Access to Company Reports

We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports and amendments to those reports with the SEC. Our reports filed with the SEC are available free of charge to the general public through our website at www.wtoffshore.com. These reports are accessible on our website as soon as reasonably practicable after being filed with, or furnished to, the SEC. This Form 10-K and our other filings can also be obtained by contacting: Investor Relations, W&T Offshore, Inc., 5718 Westheimer Road, Suite 700, Houston, Texas 77057 or by calling (713) 297-8024. Information on our website is not a part of this Form 10-K.