In the first quarter of 2024, Unit Corporation reported a significant decrease in net income compared to the same period in 2023, primarily due to lower total revenues.
The company emphasized its focus on optimizing production in core properties after selling non-core assets in the Texas Panhandle. Operational highlights showed declines in oil, natural gas liquids (NGLs), and natural gas production, with mixed trends in prices. Despite challenges, Unit Corporation maintained dividends, paying a special dividend in 2023 and a quarterly dividend in 2024, while also displaying stable financial metrics with modest increases in cash and total assets.
Contract Drilling
The report indicates that Unit Corporation’s contract drilling segment remained relatively stable during the first quarter of 2024 compared to the same period in 2023. The company’s BOSS rigs availability remained unchanged, with 14 rigs available at the end of both periods. The average utilization of BOSS rigs slightly decreased from 13.8 in 2023 to 13.7 in 2024. Additionally, the average dayrate for BOSS rigs showed negligible change, remaining at $30,891 per day.
Natural Gas
The report highlights a significant decrease in the average price of natural gas during the first quarter of 2024 compared to the same period in 2023. Specifically, the average natural gas price decreased from $4.04 per Mcf in 2023 to $1.79 per Mcf in 2024, representing a 56% decline. This decrease was also reflected in the average natural gas price excluding derivatives, which dropped from $3.11 per Mcf in 2023 to $1.79 per Mcf in 2024, indicating a 42% decrease. Despite the decrease in natural gas prices, the report does not provide specific details about the production or sales volumes of natural gas.
Conclusion
In conclusion, Unit Corporation’s financial report for the first quarter of 2024 reflects a challenging operating environment characterized by a significant decrease in net income compared to the same period in 2023. This decline can be attributed to lower total revenues and operational challenges, particularly in the oil and natural gas segment. Despite these challenges, the company remains focused on optimizing production in core properties and maintaining stability in its contract drilling segment. The report underscores the importance of strategic asset management and cost control measures to navigate the evolving market conditions effectively.
