Unit Corporation Reports 2012 Fourth Quarter And Year End Results

Unit Corporation (NYSE: UNT) today reported results for the fourth quarter of 2012. Those results included a previously announced non-cash ceiling test write down of $167.7 million ($104.5 million after tax, or $2.17 per diluted share). Because of the ceiling test write down, Unit incurred a net loss of $56.5 million, or $1.18 per diluted share, for the fourth quarter of 2012, compared to net income of $51.7 million, or $1.08 per diluted share for the fourth quarter of 2011. The ceiling test write down, which reduced the carrying value of the company’s oil and natural gas properties, resulted from significantly lower commodity prices during the fourth quarter of 2012. Without the ceiling test write down, net income for the fourth quarter of 2012 would have been $47.9 million, or $0.99 per diluted share (see Non-GAAP Financial Measures below). Total revenues for the fourth quarter of 2012 were $331.6 million (50% oil and natural gas, 33% contract drilling, and 17% mid-stream), compared to $347.3 million (41% oil and natural gas, 41% contract drilling, and 18% mid-stream) for the fourth quarter of 2011.

For 2012, Unit reported net income of $23.2 million, or $0.48 per diluted share. For 2011, net income was $195.9 million, or $4.08 per diluted share. Included in the 2012 results were ceiling test write downs totaling $283.6 million ($176.6 million after tax, or $3.67 per diluted share). Excluding these ceiling test write downs, net income for 2012 would have been $199.8 million, or $4.15 per diluted share, a 2% increase over 2011 (see Non-GAAP Financial Measures below). Total revenues for 2012 were $1,315.1 million (43% oil and natural gas, 40% contract drilling, and 17% mid-stream), compared to $1,207.5 million (43% oil and natural gas, 40% contract drilling, and 17% mid-stream) for 2011.

OIL AND NATURAL GAS SEGMENT INFORMATION
  • During 2012, Unit’s oil and natural gas liquids (NGLs) reserves increased 9% and 59%, respectively.
  • Replaced 337% of 2012 production with new reserve additions.
  • Total production for 2012 was 14.2 MMBoe, an increase of 18% over 2011, and included an increase in oil and NGLs production of 28%.
  • Production guidance for 2013 is 16.0 to 16.5 MMBoe, an increase of 13% to 16% over 2012.

The fourth quarter of 2012 marks the 12th consecutive quarter that liquids (oil and NGLs) production has increased. Unit’s strategy of drilling oil or NGLs rich wells is evident in its production results. Liquids production represented 41% of total equivalent production during the fourth quarter of 2012. Fourth quarter of 2012 total equivalent production increased 26% over the fourth quarter of 2011 to 4.1 MMBoe, while total liquids production for the fourth quarter of 2012 increased 25% over the comparable quarter of 2011. Liquids production for the fourth quarter of 2012 has increased 130% since the first quarter of 2009 when Unit began focusing almost entirely on increasing its liquids production. Fourth quarter 2012 oil production was 912,000 barrels, in comparison to 744,000 barrels for the same period of 2011, an increase of 23%. NGLs production during the fourth quarter of 2012 was 782,000 barrels, an increase of 27% when compared to 616,000 barrels for the same period of 2011. Fourth quarter 2012 natural gas production increased 28% to 14.5 billion cubic feet (Bcf) compared to 11.4 Bcf for the comparable quarter of 2011. Total production for all of 2012 was 14.2 MMBoe, an increase of 18% over the 12.1 MMBoe produced during 2011.

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