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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

Form 10-K

For the fiscal year ended December 31, 2004

OR

For the transition period from                      to                     

Commission File Number 1-32414

W&T OFFSHORE, INC.

(Exact name of registrant as specified in its charter)

(713) 626-8525

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No þ

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is an accelerated filer. Yes ¨ No þ

The aggregate market value of the registrant’s common stock held by non-affiliates was approximately $310,027,000 based on the closing sale price of $20.42 per share as reported by the New York Stock Exchange on March 29, 2005.

The number of shares of the registrant’s common stock outstanding on March 30, 2005 was 65,969,024.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement relating to the Annual Meeting of Shareholders to be held May 26, 2005 are incorporated by reference into Part III of this Form 10-K.

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W&T OFFSHORE, INC.

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Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Litigation Securities Reform Act of 1995 that involve risks, uncertainties and assumptions. If the risks or uncertainties materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, such as those statements that address activities, events or developments that we expect, believe or anticipate will or may occur in the future. These statements are based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. Certain factors that may affect our financial condition and results of operations are discussed in “Factors That Could Affect Future Results” in Item 7A of this Annual Report and may be discussed from time to time in our reports filed with the Securities and Exchange Commission subsequent to this report. We assume no obligation, nor do we intend, to update these forward-looking statements.

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PART I

Items 1. and 2. Business and Properties

Unless the context requires otherwise, references in this Annual Report to “W&T,” “we,” “us” and “our” refer to W&T Offshore, Inc. and its consolidated subsidiaries. We are an independent oil and natural gas acquisition, exploitation and exploration company. We are focused primarily in the Gulf of Mexico area, where we have developed significant technical expertise and where the high production rates associated with hydrocarbon deposits have historically provided us the best opportunity to achieve a rapid payback on our invested capital. We have leveraged our historic experience to focus on higher impact capital projects in the Gulf of Mexico, including the deepwater (water depths in excess of 500 feet) and the deep shelf (well depths in excess of 15,000 feet).

Based on a reserve report prepared by Netherland, Sewell & Associates, Inc., our independent petroleum consultants, our proved reserves at December 31, 2004 were 467.5 Bcfe. We calculate that our proved reserves had a PV-10 of $1.5 billion and a standardized measure of after-tax discounted cash flows of $974.8 million as of December 31, 2004. Of those reserves, 62% were proved developed reserves and 49% were natural gas reserves.

We grow our reserves through drilling programs and acquisitions. Some of our acquisitions are made through the exercise of preferential rights in properties in which we already own an interest. During 2004, we exercised preferential rights to purchase on five such properties. The costs of exercising our preferential rights totaled $32.5 million and added approximately 19.2 Bcfe of proved reserves. We have focused on acquiring properties where we can develop an inventory of drilling prospects that enable us to continue to add reserves post-acquisition. During 2003 and 2002, we made significant acquisitions from ConocoPhillips and Burlington Resources, Inc., respectively. During 2004, we did not complete any significant acquisition. In spite of the extremely competitive nature of the current acquisition landscape, our acquisition team is working diligently to find properties that fit our historical profile and will add strategic and financial value to the Company.

For the year ended December 31, 2004, capital expenditures of $284.8 million included $90.7 million for development activities, $150.4 million for exploration and $43.7 million for other capital items including acquisitions. These expenditures do not include any amount of allocated general and administrative expenses or interest. Our capital expenditures for the year ended December 31, 2004 were primarily financed by net cash flow provided by operating activities. We participated in the drilling of 32 exploratory wells and seven development wells of which 26 were on the conventional shelf and land, four were deep shelf wells and nine were in the deepwater. All of the development wells were successful. Of the 32 exploration wells, 21 were successful and five of the successful wells are in the deepwater. We operate a total of 16 of the 21 successful exploratory wells, including four wells that we operate in the deepwater. During the three-year period ended December 31, 2004, we drilled 52 exploratory wells, of which 37 were successful (which we define as completed or planned for completion).

During 2005, we expect to spend $266 million on capital projects and $42 million on plug and abandonments, major maintenance and expense workovers. During 2005, we anticipate drilling 30 exploratory wells and five or more development wells.

We have become more active in bidding for Gulf of Mexico leases on the outer continental shelf (“OCS”) at lease sales conducted by the U.S. government through the Minerals Management Service (“MMS”). At the March 2004 OCS lease sale, the MMS awarded us leases for a 100% working interest in seven OCS blocks located in the central Gulf of Mexico, three of which are in the deepwater. At the August 2004 OCS lease sale, the MMS has awarded us leases for a 100% working interest in six OCS blocks located in the western Gulf of Mexico, four of which are in the deepwater. We were high bidder on nine of the 15 bids that we submitted at the March 2005 OCS lease sale. High bids are subject to MMS evaluation, which will occur within 90 days of the sale.

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Business Strategy

We plan to continue to acquire and exploit reserves on the OCS of the Gulf of Mexico, the area of our historical success, or in other areas outside of the Gulf of Mexico that are compatible with our technical expertise and could yield rates of return comparable to those we have historically achieved. We believe attractive acquisition opportunities will continue to arise in the Gulf of Mexico as the major integrated oil companies and other large independent oil and gas exploration and production companies continue to divest properties to focus on larger and more capital-intensive projects that better match their long-term strategic goals.

We believe our opportunities for deepwater exploration have been enhanced by technological advances in recent years that enable the connection of subsea wells to existing infrastructure over longer distances, eliminating the requirement for new, dedicated production facilities, the installation of which requires long lead times and large capital investments. We also believe asset divestitures and resource constraints of major integrated oil companies and other large upstream companies may allow us to acquire attractive deepwater prospects at favorable prices with a significant portion of the up-front development expenses, such as infrastructure and seismic, already invested.

We believe a significant portion of our acreage has exploration potential below currently producing zones, including deep shelf reserves. We consider deep shelf targets to be hydrocarbon-bearing horizons located in shallow water areas of the Gulf of Mexico at subsurface depths greater than 15,000 feet. Although the cost to drill deep shelf wells can be significantly higher than shallower wells, the reserve targets are typically larger and the use of existing infrastructure and recent royalty suspension incentives from the MMS should partially offset higher drilling costs.

We believe our conservative financial approach has contributed to our success and has positioned us to capitalize on new opportunities as they develop. We have typically relied solely on net cash provided by operating activities and traditional commercial bank credit facilities to fund our growth. We have historically limited annual capital spending for exploration, exploitation and development activities to net cash provided by operating activities and typically used our bank credit facility for acquisitions and to balance working capital fluctuations.

In the future, as we further expand our operations into the higher impact deepwater and deep shelf areas of the Gulf of Mexico, our capital spending may exceed net cash provided by operating activities, in which event we may issue debt or equity securities to fund such future expenditures.

Proved Reserves

Of our 467.5 Bcfe of proved reserves at December 31, 2004, 62% were proved developed and 49% were natural gas. Our estimates of proved reserves were based on a reserve report prepared by Netherland, Sewell & Associates, Inc., our independent petroleum consultants, and the reserve amounts are consistent with filings we make with federal agencies.

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Our proved reserves as of December 31, 2004 are summarized in the table below.

Production

During 2004, our net production averaged approximately 225 MMcfe per day with approximately 4 MMcfe per day temporarily shut in as a result of Hurricane Ivan. See “Factors That Affect Future Results”—Our business involves many uncertainties and operating risks that can prevent us from realizing profits and can cause substantial losses beginning at page 33 for a further discussion of the effect of Hurricane Ivan on our business.

Properties

The majority of our fields are in the Gulf of Mexico. These fields are found in water depths ranging from less than ten feet up to 4,200 feet. The reservoirs in our fields are generally characterized as having high porosity and permeability, which typically result in high production rates. The following table describes our ten largest fields as of December 31, 2004. At December 31, 2004, these fields accounted for approximately 60% of our PV-10 value, or $942.5 million (before plug and abandonment cost), and had proved reserves totaling 281 Bcfe.

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The following table describes our successful exploratory wells that were drilled in 2004, and their estimated cost as of December 31, 2004 (dollars in millions).

Acreage

The following table summarizes gross and net developed and undeveloped acreage at December 31, 2004. Net acreage is our percentage ownership of gross acreage. Deepwater refers to acreage in over 500 feet of water.

Approximately 81% of our total gross acreage is held-by-production, which permits us to maintain all of our exploration, exploitation and development rights (including deep rights below currently producing zones) to the leased area as long as production continues. We have the right to propose future exploration and development projects, including deep exploration projects, on approximately the same amount of our acreage as is held-by-production.

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Production History

The following table presents the historical information about our produced oil and natural gas volumes.

Productive Wells

The following table presents our ownership at December 31, 2004 of our productive oil and natural gas wells. A net well is our percentage working interest of a gross well.

Drilling Activity

Development and Exploration Drilling

The following table sets forth the results of our total drilling activities for the last three years.

Exploration Drilling

The following table sets forth information relating to our exploration drilling over the past three fiscal years.