Unit Corporation (NYSE:UNT) Q3 2019 Earnings Conference Call - Final Transcript

Welcome to the Unit Corporation's Third Quarter 2019 Earnings Call. My name is Rebecca, and I will be your operator for today's call. The Company is currently in registration with the SEC with regards to an exchange offer and can only discuss what is publicly available. As such, Unit will not be taking questions and refers you to the registration statement and soon-to-be-filled 10-Q for the most recently completed quarter. Please note that this conference is being recorded.

During the course of the conference call today, the speakers may make statements that constitute projections, expectations, beliefs or similar forward-looking statements. The Company's actual results may differ materially from the results anticipated or projected in any such forward-looking statements. Additional detailed information concerning the important factors that could cause actual results to differ materially from the information given today is readily available in today's press release under the heading, "Forward-Looking Statements."

Additionally, during the conference, the Company will be discussing certain non-GAAP financial measures. The reconciliation of those non-GAAP measures to GAAP measures may also be found in today's press release. This document may be available on the Company's website.

I will now turn the call over to Larry Pinkston, President and CEO. Larry Pinkston, you may begin.

Thank you, Rebecca. Good morning, everyone. Thank you for joining us this morning. With me today are David Merrill, Les Austin, Frank Young, John Cromling and Bob Parks, each will be providing you with updates about their areas of responsibility. During the third quarter, as we have earlier, we continue to navigate a very challenged commodity price backdrop for both natural gas liquids and natural gas. Despite pricing disconnects and the general industry upheaval, we remain focused on balance sheet preservation. As such, our Oil and natural gas segment deployed capital toward our more oil-prone prospects earlier in the year as oil pricing has been stronger comparatively.

As we discussed during the second quarter call, our E&P segment capital expenditure plan was first half of the year focused and we have since released all rigs that we were operating. The reduction of our operated rigs, coupled with the continued weekly decline in working US land rigs, has adversely affected our contract drilling fleet utilization. In the current environment, we are focusing on controlling the [Indecipherable] that we are, that are within our ability to control. As a result of actions taken, our reduction in capital expenditures are anticipated to generate free cash flow during the fourth quarter that will be used to reduce debt.

I will now like to turn the call over to David Merrill.

Thank you, Larry. As you are probably aware, earlier this week, we filed a preliminary registration statement offering to exchange our existing 6.625% senior subordinated notes maturing in 2021 for new notes. The purpose of the exchange is to extend the maturity profile of our existing indebtedness and eliminate short- to medium-term refinancing and related risks associated with our capital structure. As Larry mentioned, our focus on growth