Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of oil and gas producer W&T Offshore (NYSE:WTI) dropped 12% today after the company released earnings and 2014 guidance.

So what: First-quarter performance was solid, with revenue down 2% from a year ago to $254.5 million but ahead of the $250.3 million estimate from Wall Street. Earnings of $0.21 per share were also two cents ahead of estimates.  

The reason for the sell-off was a huge drop in 2014 production guidance. Management now expects 8.7 million to 8.9 million barrels equivalent, or MMBoe, of oil and natural gas liquid production from a previous range of 9.0 MMBoe to 9.9 MMBoe. Overall, production is expected to be 16.5 MMBoe to 17.0 MMBoe versus a previous estimate of 17.1 MMBoe to 18.0 MMBoe.  

Now what: Considering that the previous guidance was given on March 6, the drop expected this year is massive. Investors were expecting production to increase substantially as the year went on, and that was a major driver of the company's value. I'd take a wait-and-see approach, because W&T Offshore hasn't proved the ability to live up to even its own estimates.

Travis Hoium and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.