Unit Corporation (NYSE: UNT) today reported its financial and
operational results for the second quarter of 2019. Operational
highlights include:
Oil and natural gas segment:
- Exploration efforts continue to focus on increasing oil
production with second quarter 2019 oil production increasing 6%
over first quarter 2019.
- In the Red Fork play, the Wingard Farms 2128 well's peak
24-hour IP was 2,850 barrels of oil equivalent (Boe) (80%
oil).
- In the Red Fork play, the Schrock 2215 well, which started
production in October 2018, is producing 600 Boe per day (52% oil)
and has cumulatively produced 420 thousand barrels of oil
equivalent (MBoe) as of June 30, 2019.
- Approximately 2,100 net acres were added to the Penn Sands
prospect area inclusive of both Marchand and Red Fork
prospects.
Contract drilling segment:
- BOSS drilling rigs continue to be 100% contracted.
- Obtained a long-term contract with an operator to build the
14th BOSS drilling rig. The operator for this new rig also agreed
to long-term extensions on two existing BOSS drilling rigs.
Mid-stream segment:
- Completed the installation of the new 60 million cubic feet
(MMcf) per day Reeding processing plant on the Cashion system.
- The Cashion system throughput volumes increased by 27% over the
second quarter of 2018.
- During the first half of 2019, a new well pad was added to the
Pittsburgh Mills gathering system resulting in an 82% increase in
throughput volume over the second quarter of 2018.
MANAGEMENT COMMENTS
Larry Pinkston, Chief Executive Officer and President, said: “We
begin each year setting our capital expenditures budget based on
what we then anticipate our cash flow for the year will be. For
2019, we projected a budget range of $336 million to $422 million
for the year, consistent with our projected cash flow. At this
point in the year and given current commodity prices, we anticipate
that both our cash flow and our capital expenditures will end up at
the low end of our budget range.
"We concentrated our oil and natural gas segment capital
expenditures during the first half of the year so we would have the
time needed to allow the new wells to be completed and producing by
year-end. Consequently (and by design), borrowings under our bank
credit agreement increased during the first and second quarters.
Having, for the most part, completed our intended exploration
operations, our plans are to now substantially reduce those
borrowings by year-end.”
SECOND QUARTER 2019 FINANCIAL RESULTS
Net loss attributable to Unit for the quarter was $8.5 million,
or $0.16 per diluted share, compared to net income attributable to
Unit of $5.8 million, or $0.11 per diluted share, for the second
quarter of 2018. Adjusted net loss attributable to Unit (which
excludes the effect of non-cash commodity derivatives) for the
quarter was $12.9 million, or $0.24 per diluted share, as compared
to adjusted net income attributable to Unit of $11.3 million, or
$0.21 per diluted share, for the same quarter for 2018 (see
non-GAAP financial measures below). The loss is primarily
attributable to the deterioration in realized natural gas liquids
(NGLs) prices and natural gas prices experienced during the
quarter. Total revenues for the quarter were $165.1 million (47%
oil and natural gas, 26% contract drilling, and 27% mid-stream),
compared to $203.3 million (50% oil and natural gas, 23% contract
drilling, and 27% mid-stream) for the second quarter of 2018.
Adjusted EBITDA attributable to Unit was $59.3 million, or $1.12
per diluted share (see non-GAAP financial measures below).
For the first six months of 2019, net loss attributable to Unit
was $12.0 million, or $0.23 per diluted share, compared to net
income attributable to Unit of $13.7 million, or $0.26 per diluted
share, for the first six months of 2018. Adjusted net loss
attributable to Unit (which excludes the effect of non-cash
commodity derivatives) was $8.4 million, or $0.16 per diluted
share, as compared to adjusted net income attributable to Unit of
$22.4 million, or $0.43 per diluted share, for the same period for
2018 (see non-GAAP financial measures below). Total revenues for
the first six months were $354.8 million (46% oil and natural gas,
27% contract drilling, and 27% mid-stream), compared to $408.4
million (50% oil and natural gas, 23% contract drilling, and 27%
mid-stream) for the first six months of 2018. Adjusted EBITDA
attributable to Unit for the first six months was $136.4 million,
or $2.59 per diluted share (see non-GAAP financial measures
below).
OIL AND NATURAL GAS SEGMENT INFORMATION
For the quarter, total equivalent production was 4.2 million
barrels of oil equivalent (MMBoe), a 1% increase over the first
quarter of 2019. Oil and NGLs production represented 47% of total
equivalent production. Oil production was 7,979 barrels per day, an
increase of 4% over the first quarter of 2019. NGLs production was
13,298 barrels per day, a 1% decrease from the first quarter of
2019. Natural gas production was 146.0 MMcf per day, a 2% decrease
from the first quarter of 2019. Total equivalent production for the
first six months of 2019 was 8.3 MMBoe.
Unit’s average realized per barrel equivalent price for the
quarter was $18.75, a 10% decrease from the first quarter of 2019.
Unit’s average natural gas price was $1.86 per Mcf, a decrease of
26% from the first quarter of 2019. Unit’s average oil price was
$59.94 per barrel, an increase of 6% over the first quarter of
2019. Unit’s average NGLs price was $12.52 per barrel, a decrease
of 22% from the first quarter of 2019. All prices in this paragraph
include the effects of derivative contracts.
Unit continued to focus on increasing oil production for the
quarter. At year-end 2018, oil represented slightly over 17% of
Unit's production stream. Unit's expectation is to increase oil
production to approximately 19% to 20% by year-end. As such,
capital has been deployed in a fashion to provide the best
opportunity to achieve this objective.
In the Penn Sands prospect in western Oklahoma, during the
quarter, Unit completed the Wingard 1522 #2HX, a Red Fork well that
had been drilled to a 7,500-foot lateral length. Following
completion, during the drill out, it was determined that the casing
had collapsed. The well was brought on-line with an open lateral of
only about 1,500 feet and had an IP30 of 413 Boe per day from
approximately 20% of the intended lateral length. At the end of the
quarter, Unit completed and brought on-line the Wingard Farms 2128
1HX, a Red Fork well in the same play. The Wingard Farms had a peak
24-hour IP rate of approximately 2,850 Boe with an oil cut of
approximately 80%. Unit currently has three additional Red Fork
wells in various stages of completion.
In the Gulf Coast area, Unit continued delineation of its Shoal
Creek prospect with the drilling of its successful Blackstone G #3
well currently flowing at 3.0 MMcf of natural gas per day and 175
barrels of oil per day. Also, the Blackstone G #3 has three up-hole
intervals that have not been completed yet. During the quarter,
Unit continued drilling in this prospect with two additional
delineation wells, the Sentinel #1 and the Guardian #1, which are
currently in the early stages of completion.
Pinkston said: “Our oil and natural gas segment's focus remains
on expanding on our favorable results in western Oklahoma in both
our Red Fork and SOHOT prospect areas. This allows us to increase
our oil production and our footprint in a very cost-effective
manner.
"As previously stated, it is our objective to maintain a capital
budget in-line with anticipated cash flows. As a result, the oil
and natural gas segment currently has no rigs operating, which is
down from a peak of six during the first half of the year. By
design, our acreage positions in our various prospect areas are
over 80% held by production. This allows us to govern our drilling
pace by our cash flow and not lease expiration.
"We expect year-over-year production for 2019 to be 17.0 MMBoe
to 17.2 MMBoe, which is consistent with our capital expenditures
being at the low end of our guidance coupled with the first quarter
third-party plant shut-down impact of our Wilcox play
production."
This table illustrates certain comparative production, realized
prices, and operating profit for the periods indicated:
Three Months Ended
Three Months Ended
Six Months Ended
Jun 30, 2019
Jun 30, 2018
Change
Jun 30, 2019
Mar 31, 2019
Change
Jun 30, 2019
Jun 30, 2018
Change
Oil Production, MBbl
726
693
5%
726
688
6%
1,414
1,429
(1)%
NGLs Production, MBbl
1,210
1,230
(2)%
1,210
1,207
—%
2,417
2,425
—%
Natural Gas Production, Bcf
13.3
13.7
(3)%
13.3
13.4
(1)%
26.7
27.2
(2)%
Production, MBoe
4,151
4,212
(1)%
4,151
4,123
1%
8,274
8,393
(1)%
Production, MBoe/day
45.6
46.3
(1)%
45.6
45.8
—%
45.7
46.4
(1)%
Avg. Realized Natural Gas Price, Mcf
(1)
$
1.86
$
2.18
(15)%
$
1.86
$
2.52
(26)%
$
2.18
$
2.40
(9)%
Avg. Realized NGL Price, Bbl (1)
$
12.52
$
22.18
(44)%
$
12.52
$
16.06
(22)%
$
14.11
$
21.65
(35)%
Avg. Realized Oil Price, Bbl (1)
$
59.94
$
56.46
6%
$
59.94
$
56.29
6%
$
58.16
$
55.76
4%
Avg. Price / Boe for Revenue
Recognition
$
(1.17)
$
(0.89)
(31)%
$
(1.17)
$
(1.36)
14%
$
(1.26)
$
(0.82)
(54)%
Realized Price / Boe (1)
$
18.75
$
21.98
(15)%
$
18.75
$
20.92
(10)%
$
19.83
$
22.70
(13)%
Operating Profit Before Depreciation,
Depletion, & Amortization (MM) (2)
$
41.6
$
69.9
(41)%
$
41.6
$
53.4
(22)%
$
95.0
$
137.0
(31)%
(1)
Realized price includes oil, NGLs, natural
gas, and associated derivatives.
(2)
Operating profit before depreciation is
calculated by taking operating revenues for this segment less
operating expenses excluding depreciation, depletion, amortization,
and impairment. (See non-GAAP financial measures below.)
CONTRACT DRILLING SEGMENT INFORMATION
Unit’s average number of drilling rigs working during the
quarter was 28.6, a decrease of 9% from the first quarter of 2019.
Per day drilling rig rates averaged $18,491, a 1% increase over the
first quarter of 2019. For the first six months of 2019, per day
drilling rig rates averaged $18,412, a 7% increase over the first
six months of 2018. Average per day operating margin for the
quarter was $5,526 (before elimination of intercompany drilling rig
profit of $0.7 million). This compares to first quarter 2019
average operating margin of $7,376 (before elimination of
intercompany drilling rig profit of $1.1 million), a decrease of
25%, or $1,850. Average operating margins for the first quarter
included early termination fees of approximately $4.8 million, or
$1,684 per day, from the cancellation of certain third-party
long-term contracts. Average per day operating margin for the first
six months of 2019 was $6,488 (before elimination of intercompany
drilling rig profit of $1.7 million). This compares to the first
six months of 2018 average operating margin of $5,298 (before
elimination of intercompany drilling rig profit of $1.2 million),
an increase of 22%, or $1,190 (in each case regarding eliminating
intercompany drilling rig profit - see non-GAAP financial measures
below). Average operating margins for the first six months included
early termination fees of approximately $4.8 million, or $875 per
day, from the cancellation of certain third-party long-term
contracts.
Pinkston said: “Our BOSS drilling rigs continue to maintain 100%
utilization. We obtained a long-term contract for our 14th BOSS
drilling rig, which is currently under construction. The operator
that contracted the drilling rig also agreed to long-term
extensions of the contracts for two other BOSS drilling rigs that
they are currently operating. Term contracts (contracts with
original terms ranging from six months to three years in length)
are in place for 14 of our drilling rigs at the end of the quarter.
Of the 14 contracts, two are up for renewal in the third quarter of
2019, four in the fourth quarter, five in 2020, and three after
2020.”
This table illustrates certain comparative results for the
periods indicated:
Three Months Ended
Three Months Ended
Six Months Ended
Jun 30, 2019
Jun 30, 2018
Change
Jun 30, 2019
Mar 31, 2019
Change
Jun 30, 2019
Jun 30, 2018
Change
Rigs Utilized
28.6
32.2
(11)%
28.6
31.4
(9)%
30.0
31.9
(6)%
Operating Profit Before Depreciation
(MM)(1)
$
13.7
$
15.0
(9)%
$
13.7
$
19.8
(31)%
$
33.5
$
29.4
14%
(1)
Operating profit before depreciation is
calculated by taking operating revenues for this segment less
operating expenses excluding depreciation and impairment. (See
non-GAAP financial measures below.)
MID-STREAM SEGMENT INFORMATION
For the quarter, gas processed, gas gathered, and liquids sold
volumes per day increased by 2%, 4%, and 9%, respectively, as
compared to the first quarter of 2019. Operating profit (as defined
in the footnote below) for the quarter was $11.8 million, a 10%
decrease from the first quarter of 2019.
For the first six months of 2019, gas processed, gas gathered,
and liquids sold volumes per day increased 5%, 20%, and 9%,
respectively, as compared to the first six months of 2018.
Operating profit (as defined in the footnote below) for the first
six months of 2019 was $24.9 million, a decrease of 14% from the
first six months of 2018.
This table illustrates certain comparative results for the
periods indicated:
Three Months Ended
Three Months Ended
Six Months Ended
Jun 30, 2019
Jun 30, 2018
Change
Jun 30, 2019
Mar 31, 2019
Change
Jun 30, 2019
Jun 30, 2018
Change
Gas Gathering, Mcf/day
465,714
391,047
19%
465,714
449,916
4%
457,859
382,005
20%
Gas Processing, Mcf/day
165,682
160,506
3%
165,682
161,748
2%
163,725
155,799
5%
Liquids Sold, Gallons/day
711,192
676,503
5%
711,192
650,614
9%
681,070
627,305
9%
Operating Profit Before Depreciation &
Amortization (MM) (1)
$
11.8
$
14.4
(18)%
$
11.8
$
13.1
(10)%
$
24.9
$
28.8
(14)%
(1)
Operating profit before depreciation is
calculated by taking operating revenues for this segment less
operating expenses excluding depreciation, amortization, and
impairment. (See non-GAAP financial measures below.)
Pinkston said: “The mid-stream segment completed the
installation of the new 60 MMcf per day Reeding processing plant,
which was added to the Cashion system. This system has seen a
strong increase in throughput volume on a year-over-year basis,
having enjoyed the benefit of the activity levels of three
third-party operators in the area. Our Pittsburgh Mills gathering
system has also realized a strong increase in throughput volumes
because of a third-party operator's addition of the Miller
pad.”
FINANCIAL INFORMATION
Unit ended the quarter with long-term debt of $756.6 million,
consisting of $645.6 million in senior subordinated notes (net of
unamortized discount and debt issuance costs), $103.5 million in
borrowings under the Unit credit agreement, and $7.5 million in
borrowings under the Superior credit facility. The Unit credit
agreement was re-determined in April and is subject to an elected
commitment and borrowing base of $425 million. The Superior credit
agreement has a facility size of $200 million.
WEBCAST
Unit uses its website to disclose material nonpublic information
and for complying with its disclosure obligations under Regulation
FD. The website includes those disclosures in the 'Investor
Information' sections. So, investors should monitor that portion of
the website, besides following the press releases, SEC filings, and
public conference calls and webcasts.
Unit will webcast its second quarter earnings conference call
live over the Internet on August 6, 2019, at 10:00 a.m. Central
Time (11:00 a.m. Eastern). To listen to the live call, please go to
http://www.unitcorp.com/investor/calendar.htm at
least fifteen minutes before the start of the call to download and
install any necessary audio software. For those who are not
available to listen to the live webcast, a replay will be available
shortly after the call and will remain on the site for 90 days.
_____________________________________________________
Unit Corporation is a Tulsa-based, publicly held energy company
engaged through its subsidiaries in oil and gas exploration,
production, contract drilling, and gas gathering and processing.
Unit’s Common Stock is listed on the New York Stock Exchange under
the symbol UNT. For more information about Unit Corporation, visit
its website at http://www.unitcorp.com.
FORWARD-LOOKING STATEMENT
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 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
(In thousands except per share
amounts)
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Statement of Operations:
Revenues:
Oil and natural gas
77,815
102,318
163,910
205,417
Contract drilling
43,037
46,926
94,192
92,915
Gas gathering and processing
44,294
54,059
96,735
110,103
Total revenues
165,146
203,303
354,837
408,435
Expenses:
Operating costs:
Oil and natural gas
36,242
32,418
68,956
68,380
Contract drilling
29,308
31,894
60,709
63,561
Gas gathering and processing
32,491
39,703
71,846
81,307
Total operating costs
98,041
104,015
201,511
213,248
Depreciation, depletion, and
amortization
66,292
58,373
128,418
115,439
General and administrative
10,064
8,712
19,805
19,474
(Gain) loss on disposition of assets
(422)
(161)
1,193
(322)
Total operating expenses
173,975
170,939
350,927
347,839
Income (loss) from operations
(8,829)
32,364
3,910
60,596
Other income (expense):
Interest, net
(8,995)
(7,729)
(17,533)
(17,733)
Gain (loss) on derivatives
7,927
(14,461)
995
(21,223)
Other
6
5
11
11
Total other income (expense)
(1,062)
(22,185)
(16,527)
(38,945)
Income (loss) before income taxes
(9,891)
10,179
(12,617)
21,651
Income tax expense (benefit):
Deferred
(1,874)
2,029
(2,318)
5,636
Total income taxes
(1,874)
2,029
(2,318)
5,636
Net income (loss)
(8,017)
8,150
(10,299)
16,015
Net income attributable to non-controlling
interest
492
2,362
1,714
2,362
Net income (loss) attributable to Unit
Corporation
$
(8,509)
$
5,788
$
(12,013)
$
13,653
Net income (loss) attributable to Unit
Corporation per common share:
Basic
$
(0.16)
$
0.11
$
(0.23)
$
0.26
Diluted
$
(0.16)
$
0.11
$
(0.23)
$
0.26
Weighted average shares outstanding:
Basic
52,930
52,050
52,744
51,891
Diluted
52,930
52,781
52,744
52,542
Unit Corporation
Selected Financial
Highlights-continued
(In thousands)
June 30,
December 31,
2019
2018
Balance Sheet Data:
Current assets
$
130,585
$
170,359
Total assets
$
2,793,529
$
2,698,053
Current liabilities
$
194,710
$
213,859
Long-term debt
$
756,590
$
644,475
Other long-term liabilities and
non-current derivative liability
$
106,512
$
101,527
Deferred income taxes
$
142,485
$
144,748
Total shareholders’ equity attributable to
Unit Corporation
$
1,593,232
$
1,593,444
Six Months Ended June
30,
2019
2018
Statement of Cash Flows Data:
Cash flow from operations before changes
in operating assets and liabilities
$
133,449
$
161,858
Net change in operating assets and
liabilities
(5,948)
(2,218)
Net cash provided by operating
activities
$
127,501
$
159,640
Net cash used in investing activities
$
(242,611)
$
(167,350)
Net cash provided by financing
activities
$
109,327
$
111,317
Non-GAAP Financial Measures
Unit Corporation reports its financial results under generally
accepted accounting principles (“GAAP”). The company believes
certain non-GAAP measures provide users of its financial
information and its management additional meaningful information to
evaluate the performance of the company.
This press release includes net income (loss) and earnings
(loss) per share excluding the effect of the cash-settled commodity
derivatives, its reconciliation of segment operating profit, its
drilling segment’s average daily operating margin before
elimination of intercompany drilling rig profit and bad debt
expense, its cash flow from operations before changes in operating
assets and liabilities, and its reconciliation of net income to
adjusted EBITDA.
Below are reconciliations of GAAP financial measures to non-GAAP
financial measures for the periods below. Non-GAAP financial
measures should not be considered by themselves or a substitute for
results reported under GAAP. This non-GAAP information should be
considered by the reader in addition to, but not instead of, the
financial statements prepared under GAAP. The non-GAAP financial
information presented may be determined or calculated differently
by other companies and may not be comparable to similarly titled
measures.
Unit Corporation
Reconciliation of Adjusted Net
Income (Loss) and Adjusted Diluted Earnings per Share
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
(In thousands except earnings
per share)
Adjusted net income (loss) attributable to
Unit Corporation:
Net income (loss) attributable to Unit
Corporation
$
(8,509)
$
5,788
$
(12,013)
$
13,653
(Gain) loss on derivatives (net of income
tax)
(6,638)
10,386
(836)
15,022
Settlements during the period of matured
derivative contracts (net of income tax)
2,232
(4,898)
4,456
(6,319)
Adjusted net income (loss) attributable to
Unit Corporation
$
(12,915)
$
11,276
$
(8,393)
$
22,356
Adjusted diluted earnings (loss)
attributable to Unit Corporation per share:
Diluted earnings (loss) per share
$
(0.16)
$
0.11
$
(0.23)
$
0.26
Diluted earnings (loss) per share from
(gain) loss on derivatives
(0.12)
0.19
(0.02)
0.29
Diluted earnings (loss) per share from
settlements of matured derivative contracts
0.04
(0.09)
0.09
(0.12)
Adjusted diluted income (loss) per share
attributable to Unit
$
(0.24)
$
0.21
$
(0.16)
$
0.43
Weighted shares (denominator)
52,930
52,781
52,744
52,542
________________
The company has included the net income and diluted earnings per
share including only the cash-settled commodity derivatives
because:
- It uses the adjusted net income to evaluate the operational
performance of the company.
- The adjusted net income is more comparable to earnings
estimates provided by securities analysts.
Unit Corporation
Reconciliation of Segment
Operating Profit
Three Months Ended
Six Months Ended
March 31,
June 30,
June 30,
2019
2019
2018
2019
2018
(In thousands)
Oil and natural gas
$
53,381
$
41,573
$
69,900
$
94,954
$
137,037
Contract drilling
19,754
13,729
15,032
33,483
29,354
Gas gathering and processing
13,086
11,803
14,356
24,889
28,796
Total operating profit
86,221
67,105
99,288
153,326
195,187
Depreciation, depletion and
amortization
(62,126)
(66,292)
(58,373)
(128,418)
(115,439)
Total operating income
24,095
813
40,915
24,908
79,748
General and administrative
(9,741)
(10,064)
(8,712)
(19,805)
(19,474)
Gain (loss) on disposition of assets
(1,615)
422
161
(1,193)
322
Interest, net
(8,538)
(8,995)
(7,729)
(17,533)
(17,733)
Gain (loss) on derivatives
(6,932)
7,927
(14,461)
995
(21,223)
Other
5
6
5
11
11
Income (loss) before income taxes
$
(2,726)
$
(9,891)
$
10,179
$
(12,617)
$
21,651
_________________
The company has included segment operating profit because:
- It considers segment operating profit to be an important
supplemental measure of operating performance for presenting trends
in its core businesses.
- Segment operating profit is useful to investors because it
provides a means to evaluate the operating performance of the
segments and company using the criteria used by management.
Unit Corporation
Reconciliation of Average
Daily Operating Margin Before Elimination of Intercompany Rig
Profit
Three Months Ended
Six Months Ended
March 31,
June 30,
June 30,
2019
2019
2018
2019
2018
(In thousands except for
operating days and operating margins)
Contract drilling revenue
$
51,155
$
43,037
$
46,926
$
94,192
$
92,915
Contract drilling operating cost
31,401
29,308
31,894
60,709
63,561
Operating profit from contract
drilling
19,754
13,729
15,032
33,483
29,354
Add:
Elimination of intercompany rig profit
1,060
654
814
1,714
1,248
Operating profit from contract drilling
before elimination of intercompany rig profit
20,814
14,383
15,846
35,197
30,602
Contract drilling operating days
2,822
2,603
2,928
5,425
5,778
Average daily operating margin before
elimination of intercompany rig profit
$
7,376
$
5,526
$
5,412
$
6,488
$
5,296
________________
The company has included the average daily operating margin
before elimination of intercompany rig profit because:
- Its management uses the measurement to evaluate the cash flow
performance of its contract drilling segment and to evaluate the
performance of contract drilling management.
- It is used by investors and financial analysts to evaluate the
performance of the company.
- Average operating margins for the first quarter and six months
of 2019 included early termination fees of approximately $4.8
million, or $1,684 per day and $875 per day, respectively, from the
cancellation of certain third-party long-term contracts.
Unit Corporation
Reconciliation of Cash Flow
From Operations Before Changes in Operating Assets and
Liabilities
Six Months Ended June
30,
2019
2018
(In thousands)
Net cash provided by operating
activities
$
127,501
$
159,640
Net change in operating assets and
liabilities
(5,948)
(2,218)
Cash flow from operations before changes
in operating assets and liabilities
$
133,449
$
161,858
________________
The company has included the cash flow from operations before
changes in operating assets and liabilities because:
- It is an accepted financial indicator used by its management
and companies in the industry to measure the company’s ability to
generate cash used to internally fund its business activities.
- It is used by investors and financial analysts to evaluate the
performance of the company.
Unit Corporation
Reconciliation of Adjusted
EBITDA
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
(In thousands except earnings
per share)
Net income (loss)
$
(8,017)
$
8,150
$
(10,299)
$
16,015
Income taxes
(1,874)
2,029
(2,318)
5,636
Depreciation, depletion and
amortization
66,292
58,373
128,418
115,439
Interest, net
8,995
7,729
17,533
17,733
(Gain) loss on derivatives
(7,927)
14,461
(995)
21,223
Settlements during the period of matured
derivative contracts
2,658
(6,855)
5,314
(8,928)
Stock compensation plans
6,053
5,464
11,187
12,073
Other non-cash items
(33)
(592)
(171)
(1,124)
(Gain) loss on disposition of assets
(422)
(161)
1,193
(322)
Adjusted EBITDA
65,725
88,598
149,862
177,745
Adjusted EBITDA attributable to
non-controlling interest
6,474
7,019
13,497
7,019
Adjusted EBITDA attributable to Unit
Corporation
$
59,251
$
81,579
$
136,365
$
170,726
Diluted earnings (loss) per share
attributable to Unit
$
(0.16)
$
0.11
$
(0.23)
$
0.26
Diluted earnings per share from income
taxes
(0.04)
0.04
(0.04)
0.11
Diluted earnings per share from
depreciation, depletion and amortization
1.14
1.00
2.21
2.09
Diluted earnings per share from interest,
net
0.18
0.15
0.33
0.34
Diluted earnings per share from (gain)
loss on derivatives
(0.15)
0.27
(0.02)
0.40
Diluted earnings per share from
settlements during the period of matured derivative contracts
0.05
(0.13)
0.10
(0.17)
Diluted earnings per share from stock
compensation plans
0.11
0.10
0.21
0.23
Diluted earnings per share from other
non-cash items
—
0.01
0.01
—
Diluted earnings per share from (gain)
loss on disposition of assets
(0.01)
—
0.02
(0.01)
Adjusted EBITDA per diluted share
$
1.12
$
1.55
$
2.59
$
3.25
Weighted shares (denominator)
52,930
52,781
52,744
52,542
________________
The company has included the adjusted EBITDA, which excludes
gain or loss on disposition of assets and includes only the
cash-settled commodity derivatives because:
- It uses adjusted EBITDA to evaluate the operational performance
of the company.
- Adjusted EBITDA is more comparable to estimates provided by
securities analysts.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190806005190/en/
Michael D. Earl Vice President, Investor Relations (918)
493-7700 www.unitcorp.com
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