Unit Corporation Reports 2016 Third Quarter Results

Unit Corporation (NYSE: UNT) today reported its financial and operational results for the third quarter 2016. Third quarter and recent highlights include:
  • To date, the contract drilling segment increased the number of drilling rigs in service from a low of 13 to 20, a 54% increase. Average drilling rig utilization increased 19% quarter over quarter.
  • Unit also was awarded a term contract for its ninth BOSS drilling rig, with completion expected in January 2017.
  • After the quarter, the oil and natural gas segment put one drilling rig back into service in the Southern Oklahoma Hoxbar Oil Trend (SOHOT) play and is planning to put into service a second drilling rig in the Granite Wash play later in the fourth quarter.
  • Midstream segment connected six new wells to its Pittsburgh Mills gathering system in Butler County, Pennsylvania, increasing the average daily throughput volume to approximately 151 million cubic feet (MMcf) per day, a 6% increase over the second quarter of 2016.
  • Reduced long-term debt by $21 million from the end of the second quarter, bringing the total year-to-date reduction to $64 million.
  • October redetermination of Unit's borrowing base amount was maintained at $475 million.

THIRD QUARTER AND FIRST NINE MONTHS 2016 FINANCIAL RESULTS

Unit recorded a net loss of $24.0 million for the quarter, or $0.48 per share, compared to a net loss of $205.3 million, or $4.18 per share, for the third quarter of 2015. For the third quarter of 2016 and 2015, Unit incurred pre-tax non-cash ceiling test write-downs of $49.4 million and $329.9 million, respectively, in the carrying value of its oil and natural gas properties. These non-cash ceiling test write-downs resulted from continued lower commodity prices. Adjusted net income (which excludes the effect of non-cash commodity derivatives and the effect of the non-cash write-down) for the quarter was $1.7 million, or $0.04 per share (see Non-GAAP financial measures below). Total revenues were $153.4 million (51% oil and natural gas, 17% contract drilling, and 32% midstream), compared to $212.4 million (45% oil and natural gas, 31% contract drilling, and 24% midstream) for the third quarter of 2015. Adjusted EBITDA for the quarter was $67.3 million, or $1.33 per diluted share (see Non-GAAP financial measures below).

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