W&T Offshore, Inc. (WTI) Cash Flow Statement

The ratio of operating cash flow to net income swings between roughly -2.7 and 2.65 across recent quarters, which signals that the net income line is not a reliable proxy for cash earnings in this business. Reported D&A of $35M to $46M per quarter is the dominant reconciling item, consistent with a capital-intensive producer carrying heavy depletion charges. Investors should monitor whether operating cash flow remains positive once commodity prices normalize, as the current gap may warrant further investigation into impairment and tax items.

Free cash flow margins ranged from -8.0% to 33.4% across the ten-quarter window, indicating that the company's cash generation is highly cyclical rather than trending. The 2026Q3 spike to a 33.4% margin appears to be driven by modest capital spending of $19.0M against $36.8M of operating cash flow, which may not be repeatable. Based on these figures, cash generation appears dependent on sustained favorable pricing.

Capex intensity appears to follow the cycle, with the highest outlays clustering in 2025Q3 when capex reached 17.1% of revenue. Because D&A consistently exceeds capex, the business appears to be running down its asset base in several quarters, which may limit long-term production capacity if sustained. Investors should monitor whether maintenance-level spending is sufficient to offset depletion.

The consistent $1.5M quarterly dividend is small relative to operating cash flow in profitable quarters, suggesting the payout is not constrained by cash availability. The absence of buybacks and the minimal acquisition activity imply that free cash flow has been directed toward balance sheet priorities, though the filings alone do not confirm debt paydown levels. Based on these numbers, capital allocation appears defensive.