News Column

Unit Corporation Reports 2014 First Quarter Results

May 23, 2014



By a News Reporter-Staff News Editor at Energy Weekly News -- Unit Corporation (NYSE:UNT) reported its financial and operational results for the first quarter 2014.

Larry Pinkston, Unit's Chief Executive Officer and President, stated, "For the quarter, Unit reported net income of $56.9 million, or $1.17 per diluted share, and adjusted net income of $62.8 million, or $1.29 per diluted share (see Non-GAAP Financial Measures below). We continue to make progress on our key initiatives within each business segment.

"For the oil and natural gas segment, production for the quarter increased 5% over the first quarter of 2013 with oil and natural gas liquids (NGLs) production increasing from 40% to 45% of total equivalent production. Compared to the fourth quarter of 2013, production decreased 4%, or 1,745 barrels of oil equivalent (Boe) per day. The decrease was due primarily to weather related factors. The combination of weather related issues and mechanical issues reduced anticipated 2014 production by approximately 2.2 billion cubic feet equivalent (Bcfe), representing approximately 2% of our original production guidance for 2014. Fortunately, the weather related issues appear to be behind us and the mechanical issues are mostly resolved. Going forward, we plan to accelerate our development operations in the Granite Wash and our SOHOT (Southern Oklahoma Hoxbar Oil Trend) emerging play while slowing our drilling schedule in the Mississippian play. Our original capital budget of $718 million for this segment remains unchanged. We remain confident in our prospect inventory and our ability to continue to provide solid growth in production throughout the balance of 2014 and beyond.

"Rig utilization in our contract drilling segment improved through the first quarter. Average utilization increased 4% to 68 drilling rigs working compared to 65 drilling rigs working in the fourth quarter of 2013. The improvement is continuing into the second quarter. We sold four idle 3,000 horsepower drilling rigs to an international contractor during the quarter. Our first BOSS drilling rig was placed into service in late March, bringing our total rig fleet to 118 drilling rigs. We have contracts for three additional BOSS drilling rigs. Those drilling rigs are currently being built and scheduled to go into service in the second and third quarters of this year.

"Our midstream segment continues to benefit from our previous capital investments in several of its projects including the Bellmon facility in the Mississippian play in Oklahoma and the Pittsburgh Mills facility in the Appalachian area. Operating profit for the quarter benefitted from strong NGLs pricing, particularly propane, and we are now operating in full ethane recovery mode at all of our processing facilities. Our goal is to position this segment for sustainable growth with less exposure to commodity price volatility. As appropriate, we continue to restructure expiring commodity price based contracts to fee based contracts."

Keywords for this news article include: Energy, Oil & Gas, Natural Gas, Unit Corporation.

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Source: Energy Weekly News


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