W&T Offshore announces settlement agreement with majority of surety providers

W&T Offshore has come to a settlement agreement with two of its largest surety providers which calls for the dismissal of a previously filed lawsuit. The settlement agreement requires the surety providers to withdraw their current collateral demands, and further provides that the surety providers may not make additional collateral demands or increase premiums through December 31, 2026. Key highlights for the settlement agreement include: dismissal of all claims by the applicable party in the lawsuit, without prejudice; two participating surety providers, together with W&T’s other major surety provider who did not attempt to increase premiums or call for collateral, represent nearly 70% of W&T’s surety bond portfolio; premium rates for all existing bonds provided by the two surety providers will be locked in at W&T’s historical rates without increase through December 31, 2026, representing a prolonged rate lock in excess of “ordinary course” rate negotiations, thereby providing consistency and predictability in W&T’s premium expense; W&T is not required to provide any collateral to the applicable sureties, and the applicable surety providers will immediately withdraw all demands for collateral; surety providers may not make demands for collateral through December 31, 2026, outside certain limited circumstances involving unlikely events of default; and parties retain the right to negotiate and establish new surety bonds at rates to be determined in the ordinary course.