On March 14, 2024, Unit Corporation (OTCQX: UNTC) (Company) filed consolidated financial statements for the twelve months ended December 31, 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/.
Fourth Quarter and Year End Results
Net income attributable to Unit Corporation for the three months ended December 31, 2023 was $57.4 million, or $5.79 per diluted share, compared to $59.3 million, or $6.07 per diluted share, for the three months ended December 31, 2022. Total revenues for the three months ended December 31, 2023 was $74.6 million, compared to $102.3 million for the three months ended December 31, 2022.
For the twelve months ended December 31, 2023, net income attributable to Unit Corporation was $248.9 million, or $25.32 per diluted share, compared to $148.4 million, or $14.78 per diluted share, for the twelve months ended December 31, 2022. Total revenues for the twelve months ended December 31, 2023 was $327.3 million, compared to $545.5 million for the twelve months ended December 31, 2022.
“This was an important year for Unit as we paid a total of $37.50 per share in cash dividends during 2023, returning cash to shareholders that had been generated from our past operations as well as from divestitures of certain non-core assets,” stated Phil Frohlich, the Company’s Chief Executive Officer. “Looking forward, we expect to continue to return value to shareholders through future quarterly cash dividends, as well as through additional future special cash dividends if deemed appropriate based on future results and circumstances.”
The Company announced on March 7, 2024 that a quarterly cash dividend of $1.25 per share had been declared for the first quarter of 2024, to be paid on March 28, 2024 to shareholders of record as of the close of business on March 18, 2024. The Company also announced that it plans on approving a quarterly cash dividend of $1.25 per share for the second, third, and fourth quarters of 2024.
Operational highlights for the oil and natural gas and contract drilling segments during the twelve months ended December 31, 2023 and 2022 include:
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||
| 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||
| Oil and Natural Gas: | |||||||||||||||||
| Avg. oil price ($/Bbl) | $ | 57.12 | $ | 56.31 | 1 | % | $ | 60.61 | $ | 57.48 | 5 | % | |||||
| Avg. oil price excl. derivatives ($/Bbl) | $ | 76.98 | $ | 82.48 | (7 | )% | $ | 75.57 | $ | 94.28 | (20 | )% | |||||
| Avg. NGLs price ($/Bbl) | $ | 18.25 | $ | 18.07 | 1 | % | $ | 18.02 | $ | 30.00 | (40 | )% | |||||
| Avg. NGLs price excl. derivatives ($/Bbl) | $ | 18.25 | $ | 18.07 | 1 | % | $ | 18.02 | $ | 30.00 | (40 | )% | |||||
| Avg. natural gas price ($/Mcf) | $ | 1.72 | $ | 3.42 | (50 | )% | $ | 2.28 | $ | 3.65 | (38 | )% | |||||
| Avg. natural gas price excl. derivatives ($/Mcf) | $ | 2.04 | $ | 4.98 | (59 | )% | $ | 2.07 | $ | 5.79 | (64 | )% | |||||
| Oil production (MBbls) | 209 | 290 | (28 | )% | 984 | 1,281 | (23 | )% | |||||||||
| NGL production (MBbls) | 360 | 368 | (2 | )% | 1,636 | 2,148 | (24 | )% | |||||||||
| Natural gas production (MMcf) | 4,453 | 5,424 | (18 | )% | 20,195 | 24,211 | (17 | )% | |||||||||
| Total production (Mboe) | 1,310 | 1,562 | (16 | )% | 5,986 | 7,464 | (20 | )% | |||||||||
| Contract Drilling: | |||||||||||||||||
| Drilling rigs available (end of the period) | 14 | 18 | (22 | )% | 14 | 18 | (22 | )% | |||||||||
| Average drilling rigs in use | 13.9 | 17.0 | (18 | )% | 15.1 | 16.4 | (8 | )% | |||||||||
| Average dayrate on daywork contracts ($/day) | $ | 31,245 | $ | 27,579 | 13 | % | $ | 31,225 | $ | 23,132 | 35 | % | |||||
| BOSS rigs average dayrate ($/day) | $ | 31,245 | $ | 28,385 | 10 | % | $ | 31,690 | $ | 23,963 | 32 | % | |||||
| SCR rigs average dayrate ($/day) | $ | — | $ | 23,861 | (100 | )% | $ | 22,944 | $ | 19,422 | 18 | % | |||||
Common Stock Dividends
The table below presents information about the dividends paid during the periods indicated:
| Type | Dividendper share | TotalAmount | Record Date | Payment Date | |||
| 2023 | (In thousands) | ||||||
| First quarter | Special | $ | 10.00 | $ | 96,179 | 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 |
| Fourth quarter | Quarterly | $ | 2.50 | $ | 24,226 | December 18, 2023 | December 27, 2023 |
| Fourth quarter | Special | $ | 15.00 | $ | 145,353 | December 18, 2023 | December 27, 2023 |
| Fourth quarter | Special | $ | 5.00 | $ | 48,451 | December 18, 2023 | December 27, 2023 |
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 December 13, 2023, the Company closed on the sale of certain non-core wells and related leases in the Texas Panhandle for cash proceeds of $50.0 million, subject to customary post-closing adjustments based on an effective date of October 1, 2023. The sale represented a significant alteration to the full cost pool as reserves in excess of 25% were divested. To determine the gain, the Company allocated the net book value of the full cost pool based on the relative fair value of the properties retained versus those divested. A gain of $37.2 million was recognized within gain on disposition of assets in the consolidated statements of operations. Proceeds from the sale were used to fund the special dividend of $5.00 per share paid December 27, 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 | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (In thousands except per share amounts) | |||||||||||||||
| Revenues: | |||||||||||||||
| Oil and natural gas | $ | 31,830 | $ | 57,734 | $ | 146,237 | $ | 315,482 | |||||||
| Contract drilling | 42,797 | 44,590 | 181,056 | 147,370 | |||||||||||
| Gas gathering and processing | — | — | — | 82,673 | |||||||||||
| Total revenues | 74,627 | 102,324 | 327,293 | 545,525 | |||||||||||
| Expenses: | |||||||||||||||
| Operating costs: | |||||||||||||||
| Oil and natural gas | 16,528 | 21,021 | 65,739 | 93,350 | |||||||||||
| Contract drilling | 26,652 | 27,564 | 108,035 | 105,387 | |||||||||||
| Gas gathering and processing | — | — | — | 62,388 | |||||||||||
| Total operating costs | 43,180 | 48,585 | 173,774 | 261,125 | |||||||||||
| Depreciation, depletion, and amortization | 5,231 | 3,691 | 17,724 | 24,143 | |||||||||||
| General and administrative | 7,726 | 5,096 | 22,577 | 24,644 | |||||||||||
| Gain on disposition of assets | (36,372 | ) | (1,968 | ) | (49,950 | ) | (8,367 | ) | |||||||
| Total operating expenses | 19,765 | 55,404 | 164,125 | 301,545 | |||||||||||
| Income from operations | 54,862 | 46,920 | 163,168 | 243,980 | |||||||||||
| Other income (expense): | |||||||||||||||
| Interest income | 2,679 | — | 9,734 | 2,642 | |||||||||||
| Interest expense | (43 | ) | — | (164 | ) | (447 | ) | ||||||||
| Gain (loss) on derivatives, net | 1,119 | 10,238 | 12,975 | (63,610 | ) | ||||||||||
| 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 | (136 | ) | (37 | ) | (299 | ) | (127 | ) | |||||||
| Other, net | 190 | (56 | ) | 203 | 2,900 | ||||||||||
| Total other income (expense) | 3,809 | 12,748 | 40,261 | (101,106 | ) | ||||||||||
| Income before income taxes | 58,671 | 59,668 | 203,429 | 142,874 | |||||||||||
| Income tax expense (benefit), net: | |||||||||||||||
| Current | 694 | 333 | 1,575 | 333 | |||||||||||
| Deferred | 540 | — | (47,085 | ) | — | ||||||||||
| Total income tax expense (benefit), net | 1,234 | 333 | (45,510 | ) | 333 | ||||||||||
| Net income | 57,437 | 59,335 | 248,939 | 142,541 | |||||||||||
| Net loss attributable to non-controlling interests | — | — | — | (5,828 | ) | ||||||||||
| Net income attributable to Unit Corporation | $ | 57,437 | $ | 59,335 | $ | 248,939 | $ | 148,369 | |||||||
| Net income attributable to Unit Corporation per common share: | |||||||||||||||
| Basic | $ | 5.89 | $ | 6.16 | $ | 25.68 | $ | 15.03 | |||||||
| Diluted | $ | 5.79 | $ | 6.07 | $ | 25.32 | $ | 14.78 | |||||||
| Unit Corporation | |||||
| Selected Financial Highlights – Continued | |||||
| December 31, 2023 | December 31, 2022 | ||||
| Balance Sheet Data: | (In thousands) | ||||
| Cash and cash equivalents | $ | 60,779 | $ | 213,975 | |
| Current assets | $ | 118,296 | $ | 275,469 | |
| Total assets | $ | 322,720 | $ | 469,255 | |
| Current liabilities | $ | 42,399 | $ | 68,232 | |
| Long-term debt | $ | — | $ | — | |
| Other long-term liabilities | $ | 22,803 | $ | 33,362 | |
| Total shareholders’ equity attributable to Unit Corporation | $ | 254,126 | $ | 362,626 | |
