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                                                                    EXHIBIT 10.7

                               W&T OFFSHORE, INC.

                                 March 26, 2004


Toronto Dominion (Texas), Inc., as Agent (the "Agent")

Lenders to the Revolving Credit Agreement referred to below (the "Lenders")

         Re:  Waiver Letter Relating to Conversion of W&T Offshore, Inc. into
              Texas corporation (the "Borrower")

Gentlemen:

     Reference is hereby made to that certain Amended and Restated Credit
Agreement, dated as of February 24, 2000, among the Borrower, the Lenders, the
Agent and the other parties named therein, as amended pursuant to that certain
First Amendment to Amended and Restated Credit Agreement as of December 5, 2000,
among the Borrower, the Lenders, the Issuer and the Agent, as further amended
pursuant to that certain Second Amendment to Amended and Restated Credit
Agreement (Revolving Credit Agreement) dated effective as of May 31, 2002, among
the Borrower, the Lenders, the Issuer and the Agent, as further amended pursuant
to that certain Third Amendment to Amended and Restated Credit Agreement
(Revolving Credit Agreement) dated effective as of December 2, 2002, among the
Borrower, the Lenders, the Issuer and the Agent, as further amended pursuant to
that certain Fourth Amendment to Amended and Restated Credit Agreement
(Revolving Credit Agreement) dated effective as of May 22, 2003, among the
Borrower, the Lenders, the Issuer and the Agent, as further amended pursuant to
that certain Fifth Amendment to Amended and Restated Credit Agreement (Revolving
Credit Agreement) dated effective as of December 12, 2003, among the Borrower,
the Lenders, the Issuer and the Agent (as so amended, and as from time to time
further amended, supplemented, restated or otherwise modified, the "Revolving
Credit Agreement"). Capitalized terms not defined herein shall have the meanings
ascribed to such terms in the Revolving Credit Agreement.

     Reference is hereby also made to Section 6.6 of the Revolving Credit
Agreement which, among other things, limits the Borrower from undertaking
certain corporate structural changes, except that pursuant to the terms thereof
the Borrower is permitted to merge itself into a Delaware corporation named W&T
Offshore, Inc. so long as the Borrower complies with the requirements of the
further proviso set forth in Section 6.6 of the Revolving Credit Agreement.

     The Borrower hereby informs the Agent, Issuer and Lenders that it intends
to become a Texas corporation through re-incorporation (instead of becoming a
Delaware corporation through merger) and hereby requests that the Agent, Issuer
and Lenders waive the prohibitions of Sections 6.6 of the Revolving Credit
Agreement solely for the purpose of permitting the Borrower to re-incorporate
itself as a Texas corporation, subject to the terms of this waiver letter.

     By their signatures below, the Agent, Issuer and Lenders hereby agree that
the Borrower may re-incorporate itself as a Texas corporation, so long as (i)
within thirty (30) days of such re-incorporation the Borrower shall have filed
or caused to be filed a copy of the evidence of such

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re-incorporation in the appropriate governmental offices of all jurisdictions in
which the Borrower owns real property constituting Collateral and (ii) the
Borrower shall have taken such other actions as are necessary and appropriate or
as otherwise requested by the Agent to ensure that the liens and security
interests granted pursuant to the Security Documents in and to all Collateral
remain valid perfected first priority liens and security interests in favor of
the Agent for the benefit of the Lender Parties and, in the case of mortgages or
deeds of trust referenced in Schedule 2 to the Revolving Credit Agreement,
including, without limitation, taking such other actions as may be required by
the Minerals Management Service.

     This letter shall become effective as of the date first above written upon
the receipt of this letter by the Agent, duly executed by the Borrower, the
Agent, the Issuer and the Required Lenders.

     This letter may be executed in any number of counterparts, all of which
together shall constitute a single instrument, and it shall not be necessary
that any counterpart be signed by all the parties hereto. A facsimile copy of
this letter and signatures thereon shall be considered for all purposes as
originals.

     The Borrower hereby represents that as of the date hereof, no Default or
Event of Default has occurred and is continuing. The Borrower acknowledges that,
except as expressly set forth herein, no portion of this letter shall be deemed
or interpreted in any way to be a waiver of any provision of the Revolving
Credit Agreement or any other Loan Document or of any Default or Event of
Default under the Revolving Credit Agreement or any other Loan Document or of
any right, power or remedy of the Agent, the Issuer or the Lenders under the
Revolving Credit Agreement or any other Loan Document or applicable law.

     Please indicate your approval of the terms and provisions hereof by
executing this consent letter in the space provided below.

                                       2

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     IN WITNESS WHEREOF, the parties have caused this letter to be duly executed
as of the day and year first above written.

                                        BORROWER:

                                        W&T OFFSHORE, INC.,
                                        a Nevada corporation

                                        By: /s/ W. Reid Lea
                                          --------------------------------------
                                        Name:  W. Reid Lea
                                        Title: Chief Financial Officer

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                                        AGENT:

                                        TORONTO DOMINION (TEXAS), INC.,
                                        as Agent

                                        By: /s/ Rachel Suiter
                                            ------------------------------------
                                        Name:  Rachel Suiter
                                        Title: Vice President

                                        ISSUER:

                                        THE TORONTO-DOMINION BANK,
                                        as Issuer

                                        By: /s/ Rachel Suiter
                                            ------------------------------------
                                        Name:  Rachel Suiter
                                        Title: Mgr. Cr. Admin.

                                        LENDERS:

                                        TORONTO DOMINION (TEXAS), INC.,
                                        as Lender

                                        By: /s/ Rachel Suiter
                                            ------------------------------------
                                        Name:  Rachel Suiter
                                        Title: Vice President

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                                        BANK ONE, NA (Main Office - Chicago),
                                        as Lender

                                        By: /s/ Charles Kingswell-Smith
                                            ------------------------------------
                                        Name:  Charles Kingswell-Smith
                                        Title: Managing Director

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                                        FORTIS CAPITAL CORP.,
                                        as Lender

                                        By: /s/ Christopher S. Parada
                                            ------------------------------------
                                        Name:  Christopher S. Parada
                                        Title: Vice President

                                        By: /s/ Darrell W. Holley
                                            ------------------------------------
                                        Name:  Darrell W. Holley
                                        Title: Managing Director

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                                        BANK OF SCOTLAND, as Lender

                                        By: /s/ Joseph Fratus
                                            ------------------------------------
                                        Name:  Joseph Fratus
                                        Title: First Vice President

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                                        HARRISS NESBITT FINANCING, INC.,
                                        FORMERLY KNOWN AS BMO NESBITT
                                        BURNS FINANCING, INC., as Lender


                                        By: /s/ James V. Ducote
                                            ------------------------------------
                                        Name:  James V. Ducote
                                        Title: Vice President

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                                        WASHINGTON MUTUAL BANK, FA
                                        as Lender

                                        By: /s/ Russell R. Otts
                                            ------------------------------------
                                        Name:  Russell R. Otts
                                        Title: Vice President

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                                        NATEXIS BANQUES POPULAIRES,
                                        as Lender

                                        By: /s/ Donovan C. Broussard
                                            ------------------------------------
                                        Name:  Donovan C. Broussard
                                        Title: Vice President & Manager

                                        By: /s/ Louis P. Laville, III
                                            ------------------------------------
                                        Name:  Louis P. Laville, III
                                               ---------------------------------
                                        Title: Vice President & Manager

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                                        ROYAL BANK OF CANADA,
                                        as Lender

                                        By: /s/ Jason S. York
                                            ------------------------------------
                                        Name:  Jason S. York
                                        Title: Authorized Signatory

