Le Lézard
Classified in: Business
Subjects: EARNINGS, Dividend, Divestiture

Unit Corporation Reports Third Quarter Results


On November 10, 2023, Unit Corporation (OTCQX: UNTC) (Company) filed unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2023 with OTC Markets Group Inc. (OTC). The Company's current, quarterly, and annual reports may be accessed on the OTC's website at https://www.otcmarkets.com/stock/UNTC/disclosure, as well as the Company's website at https://unitcorp.com/investor-relations/otc-sec-filings/.

Third Quarter Results

Net income attributable to Unit Corporation for the three months ended September 30, 2023 was $28.8 million, or $2.94 per diluted share, compared to $55.8 million, or $5.60 per diluted share, for the three months ended September 30, 2022. Total revenues for the three months ended September 30, 2023 was $80.2 million, compared to $120.3 million for the three months ended September 30, 2022.

For the nine months ended September 30, 2023, net income attributable to Unit Corporation was $191.5 million, or $19.55 per diluted share, compared to $89.0 million, or $8.79 per diluted share, for the nine months ended September 30, 2022. Total revenues for the nine months ended September 30, 2023 was $252.7 million, compared to $443.2 million for the nine months ended September 30, 2022.

Phil Frohlich, the Company's Chief Executive Officer, commented, "We continue to return value to our shareholders with a dividend paid during the quarter of $2.50 per share while also maintaining a strong cash position of $206.6 million. We believe our recently announced agreement to sell certain properties in the Texas Panhandle furthers our approach of streamlining our operations and maximizing the value of our assets."

Operational highlights for the oil and natural gas and contract drilling segments during the three and nine months ended September 30, 2023 and 2022 include:

 

Three Months Ended
September 30,

 

 

 

Nine Months Ended
September 30,

 

 

 

 

2023

 

 

2022

 

% Change

 

 

2023

 

 

2022

 

% Change

Oil and Natural Gas:

 

 

 

 

 

 

 

 

 

 

 

Avg. oil price ($/Bbl)

$

60.33

 

$

56.75

 

6

%

 

$

61.55

 

$

57.82

 

6

%

Avg. oil price excl. derivatives ($/Bbl)

$

80.83

 

$

91.81

 

(12

)%

 

$

75.19

 

$

97.74

 

(23

)%

Avg. NGLs price ($/Bbl)

$

17.79

 

$

29.39

 

(39

)%

 

$

17.95

 

$

32.46

 

(45

)%

Avg. NGLs price excl. derivatives ($/Bbl)

$

17.79

 

$

29.39

 

(39

)%

 

$

17.95

 

$

32.46

 

(45

)%

Avg. natural gas price ($/Mcf)

$

1.75

 

$

3.57

 

(51

)%

 

$

2.44

 

$

3.72

 

(34

)%

Avg. natural gas price excl. derivatives ($/Mcf)

$

1.78

 

$

7.04

 

(75

)%

 

$

2.08

 

$

6.02

 

(65

)%

Oil production (MBbls)

 

225

 

 

276

 

(18

)%

 

 

775

 

 

991

 

(22

)%

NGL production (MBbls)

 

429

 

 

547

 

(22

)%

 

 

1,277

 

 

1,781

 

(28

)%

Natural gas production (MMcf)

 

5,185

 

 

5,452

 

(5

)%

 

 

15,741

 

 

18,788

 

(16

)%

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
September 30,

Nine Months Ended
September 30,

 

 

2023

 

 

2022

 

% Change

 

 

2023

 

 

2022

 

% Change

Contract Drilling:

 

 

 

 

 

 

 

 

 

 

 

Drilling rigs available (end of the period)

 

14

 

 

21

 

(33

)%

 

 

14

 

 

21

 

(33

)%

Average drilling rigs in use

 

14.1

 

 

17.0

 

(17

)%

 

 

15.5

 

 

16.3

 

(5

)%

Average dayrate on daywork contracts ($/day)

$

32,572

 

$

23,371

 

39

%

 

$

31,220

 

$

21,550

 

45

%

BOSS rigs average dayrate ($/day)

$

32,642

 

$

24,258

 

35

%

 

$

32,210

 

$

22,378

 

44

%

SCR rigs average dayrate ($/day)

$

20,724

 

$

19,370

 

7

%

 

$

22,944

 

$

17,900

 

28

%

Common Stock Dividends

The table below presents information about the dividends paid during the periods indicated:

 

Type

Dividend
per share

Total
Amount

Record Date

Payment Date

2023

 

 

(In thousands)

 

 

First quarter

Special

$

10.00

$

96,131

January 20, 2023

January 31, 2023

Second quarter

Quarterly

$

2.50

$

24,071

June 16, 2023

June 26, 2023

Third quarter

Quarterly

$

2.50

$

24,113

September 15, 2023

September 26, 2023

On August 10, 2023, the Company announced approval of a quarterly dividend of $2.50 per share for the fourth quarter of 2023. The record and payment date for the fourth quarter dividend will be determined at a later date.

The declaration and payment of any future dividend, whether fixed, special, or variable, will remain at the full discretion of the Company's Board of Directors and will depend upon the Company's financial position, results of operations, cash flows, capital requirements, business conditions, future expectations, the requirements of applicable law, and other factors that the Company's Board of Directors finds relevant at the time of considering any potential dividend declaration. Future dividends are expected to be funded by cash on the Company's balance sheet.

Oil and Natural Gas Divestiture

On October 24, 2023, the Company entered into an agreement to sell certain wells and related leases in the Texas Panhandle for a purchase price of $55.0 million, subject to customary closing and post-closing adjustments based on an effective date of October 1, 2023. The sale is expected to close during the fourth quarter of 2023.

About Unit Corporation

Unit Corporation is a Tulsa-based, publicly held energy company engaged through its wholly-owned subsidiaries in oil and gas production and contract drilling. For more information about Unit Corporation, visit its website at http://www.unitcorp.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act. All statements, other than statements of historical facts, included in this release that address activities, events, or developments that the Company expects, believes, or anticipates will or may occur are forward-looking statements. Several risks and uncertainties could cause actual results to differ materially from these statements, including changes in commodity prices, the productive capabilities of the Company's wells, future demand for oil and natural gas, future drilling rig utilization and dayrates, projected rate of the Company's oil and natural gas production, the amount available to the Company for borrowings, its anticipated borrowing needs under its credit agreements, the number of wells to be drilled by the Company's oil and natural gas segment, the potential productive capability of its prospective plays, and other factors described occasionally in the Company's publicly available OTC and SEC reports. The Company assumes no obligation to update publicly such forward-looking statements, whether because of new information, future events, or otherwise.

Unit Corporation

Selected Financial Highlights (Unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

(In thousands except per share amounts)

Revenues:

 

 

 

 

 

 

 

Oil and natural gas

$

35,205

 

 

$

80,026

 

 

$

114,407

 

 

$

257,748

 

Contract drilling

 

44,951

 

 

 

40,256

 

 

 

138,259

 

 

 

102,780

 

Gas gathering and processing

 

?

 

 

 

?

 

 

 

?

 

 

 

82,673

 

Total revenues

 

80,156

 

 

 

120,282

 

 

 

252,666

 

 

 

443,201

 

Expenses:

 

 

 

 

 

 

 

Operating costs:

 

 

 

 

 

 

 

Oil and natural gas

 

16,823

 

 

 

21,235

 

 

 

49,211

 

 

 

72,329

 

Contract drilling

 

27,629

 

 

 

25,823

 

 

 

81,383

 

 

 

77,823

 

Gas gathering and processing

 

?

 

 

 

?

 

 

 

?

 

 

 

62,388

 

Total operating costs

 

44,452

 

 

 

47,058

 

 

 

130,594

 

 

 

212,540

 

Depreciation, depletion, and amortization

 

4,778

 

 

 

3,521

 

 

 

12,493

 

 

 

20,452

 

General and administrative

 

4,952

 

 

 

5,601

 

 

 

14,851

 

 

 

19,548

 

Gain on disposition of assets

 

(4,149

)

 

 

(2,158

)

 

 

(13,578

)

 

 

(6,399

)

Total operating expenses

 

50,033

 

 

 

54,022

 

 

 

144,360

 

 

 

246,141

 

Income from operations

 

30,123

 

 

 

66,260

 

 

 

108,306

 

 

 

197,060

 

Other income (expense):

 

 

 

 

 

 

 

Interest income

 

2,872

 

 

 

811

 

 

 

7,055

 

 

 

973

 

Interest expense

 

(41

)

 

 

(37

)

 

 

(121

)

 

 

(408

)

Gain (loss) on derivatives, net

 

(3,239

)

 

 

(12,381

)

 

 

11,856

 

 

 

(73,848

)

Gain (loss) on change in fair value of warrants

 

?

 

 

 

?

 

 

 

?

 

 

 

(29,323

)

Loss on deconsolidation of Superior

 

?

 

 

 

?

 

 

 

?

 

 

 

(13,141

)

Gain on sale of Superior investment

 

?

 

 

 

?

 

 

 

17,812

 

 

 

?

 

Reorganization items, net

 

(12

)

 

 

(48

)

 

 

(163

)

 

 

(90

)

Other, net

 

(146

)

 

 

1,213

 

 

 

13

 

 

 

1,983

 

Total other income (expense)

 

(566

)

 

 

(10,442

)

 

 

36,452

 

 

 

(113,854

)

Income before income taxes

 

29,557

 

 

 

55,818

 

 

 

144,758

 

 

 

83,206

 

Income tax expense (benefit), net:

 

 

 

 

 

 

 

Current

 

532

 

 

 

?

 

 

 

881

 

 

 

?

 

Deferred

 

190

 

 

 

?

 

 

 

(47,625

)

 

 

?

 

Total income tax expense (benefit), net

 

722

 

 

 

?

 

 

 

(46,744

)

 

 

?

 

Net income

 

28,835

 

 

 

55,818

 

 

 

191,502

 

 

 

83,206

 

Net loss attributable to non-controlling interests

 

?

 

 

 

?

 

 

 

?

 

 

 

(5,828

)

Net income attributable to Unit Corporation

$

28,835

 

 

$

55,818

 

 

$

191,502

 

 

$

89,034

 

Net income attributable to Unit Corporation per common share:

 

 

 

 

 

 

 

Basic

$

2.98

 

 

$

5.70

 

 

$

19.81

 

 

$

8.94

 

Diluted

$

2.94

 

 

$

5.60

 

 

$

19.55

 

 

$

8.79

 

Unit Corporation

Selected Financial Highlights (Unaudited) - Continued

 

 

September 30,
2023

 

December 31,
2022

Balance Sheet Data:

(In thousands)

Cash and cash equivalents

$

206,645

 

$

213,975

Current assets

$

265,331

 

$

275,469

Total assets

$

501,060

 

$

469,255

Current liabilities

$

51,111

 

$

68,232

Long-term debt

$

?

 

$

?

Other long-term liabilities

$

34,866

 

$

33,362

Total shareholders' equity attributable to Unit Corporation

$

410,743

 

$

362,626

 


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