Unit Corp. bottom line hit with $167.7 million impact from low commodity prices
BY ROD WALTON World Staff Writer
Tuesday, February 19, 2013
Falling natural gas prices forced Unit Corp. to take a $56.5 million net loss in the fourth quarter and significantly reduced the Tulsa energy firm’s annual profits compared to the previous year.
Unit reported Tuesday that it took a $167.7 million writedown on the carrying value of oil and natural gas properties. Otherwise, the company’s net income would have totaled $47.9 million for the three months ending Dec. 31.
“Weaker commodity prices created headwinds for all business segments in 2012,” Unit CEO Larry Pinkston said in a statment. “In spite of this, we experienced robust growth in reserves and production.”
Overall, Unit replaced 337 percent of its 2012 production with new reserve additions. Overall production totaled 14.2 million barrels of oil equivalent, including a 28-percent in oil and natural gas liquids output.
Annual net income was $23.2 million, compared with $195.9 million in 2011. The total revenue was nearly $1.32 billion for 2012, almost $110 million higher than one year earlier.
Unit’s average natural gas price for the fourth quarter fell 11 percent to $3.63 per thousand cubic feet. The average oil and NGL prices also dropped by 4 and 22 percent, respectively, compared to the same time in 2011.
Unit’s contract drilling segment averaged 64 rigs used per day in the fourth quarter, a 22-percent downturn from the previous year. Daily rates countered that by increasing 3 percent or gaining an additional $498 per day.
The midstream segment processed an average 163 billion British thermal units per day while gathering volumes increased 26 percent to 325 billion BTUs per day. The new Bellmon gathering and processing system in Noble and Kay counties, Oklahoma, was completed and currently is in operation.
Unit owns and operates contract drilling, exploration and production and midstream assest through its subsidiaries, including Unit Drilling Co., Unit Petroleum Co. and Superior Pipeline Co.