Unit Corporation Reports Year End and Fourth Quarter Results

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:

 TypeDividendper shareTotalAmountRecord DatePayment Date
2023  (In thousands)  
First quarterSpecial$10.00$96,179January 20, 2023January 31, 2023
Second quarterQuarterly$2.50$24,071June 16, 2023June 26, 2023
Third quarterQuarterly$2.50$24,113September 15, 2023September 26, 2023
Fourth quarterQuarterly$2.50$24,226December 18, 2023December 27, 2023
Fourth quarterSpecial$15.00$145,353December 18, 2023December 27, 2023
Fourth quarterSpecial$5.00$48,451December 18, 2023December 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