While Tulsa’s Unit Corporation’s BOSS drilling rigs are at 100 percent contracted, the company still reported a loss of nearly $207 million or $3.91 a diluted share in the third quarter of 2019.
Like other energy companies, the reason is the drop in commodity prices.
“The loss is primarily attributable to the deterioration in realized natural gas liquids prices and natural gas prices experienced during the quarter,” stated the company in its earnings report.
Total revenues for the quarter were $155.4 million (50% oil and natural gas, 24% contract drilling, and 26% mid-stream), compared to $220.1 million (51% oil and natural gas, 23% contract drilling, and 26% mid-stream) for the third quarter of 2018. Adjusted EBITDA attributable to Unit was $58.8 million, or $1.11 per diluted share.
A year ago, the company had net income of $18.9 million and 36 cents a share. But the adjusted net loss for the current quarter was $15.7 million or 30 cents a share compared to adjusted net income of $15.7 million and 30 cents a share in the third quarter of 2018.
Unit saw a 28 percent increase in oil production from the second to the third quarter.The company stated that all of its BOSS drilling rigs are contracted and the 14th rig, as recently reported by OK Energy Today will begin working in the fourth quarter.
Larry Pinkston, CEO and President stated, “We substantially completed the construction of our 14th BOSS drilling rig during the later part of the quarter, and the rig is scheduled to start work late in the fourth quarter. Our BOSS drilling rigs continue to maintain 100% utilization. Term contracts (contracts with original terms ranging from six months to three years in length) are in place for 15 of our drilling rigs at the end of the quarter. Of the 15 contracts, three are up for renewal in the fourth quarter, eight in 2020, and four after 2020.”
Looking back over the first nine months of 2019, the company saw a net loss of $218.9 million or $4.14 per diluted share compared to net income of $32.6 million and 62 cents a share in the first nine months of 2018. Adjusted net loss so far this year is $24.1 million or 46 cents a share compared to net income of $38 million and 72 cents a share.
Total revenues for the year were down too—$510.3 million compared to $628.5 million a year ago. Unit saw a 6 percent increase in total equivalent production of 4.4 million barrels of oil equivalent. Oil production was 10,074 barrels a day, a 26 percent increase over the second quarter. NGL production was 13,480 barrels a day, a one percent increase compared to the second quarter 2019. Natural gas production was 145.2 million cubic fee a day, a one percent drop from the second quarter.
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