Unit Corporation (NYSE:UNT) Q3 2019 Earnings Conference Call - Final Transcript
Nov 08, 2019 • 11:00 am ET
David T. Merrill
of our oil production has began to come to fruition during the quarter. Also, due to completion activities for wells drilled in the second quarter, we saw a nice uptick in quarterly production. Frank will have more on those details in a minute.
Our operated rig count has fallen, however, for the contract drilling segment, 100% of our BOSS rigs had remained fully contracted since inception and construction of our 14th BOSS rig is substantially complete. The rig is expected to begin work later in the fourth quarter. Our mid-stream segment, with contracts largely structured on fee-based contracts, has held its own despite lower revenue due to lower commodity pricing and operating largely in ethane rejection.
I'll now turn it over to Les Austin.
George Les Austin
Thanks, David. We reported a net loss attributable to Unit for the third quarter of $206.9 million or $3.91 per diluted share. Adjusted net loss attributable to Unit for the quarter, which excludes the effect of non-cash derivatives and impairment charges, was $15.7 million or $0.30 per diluted share versus an adjusted net loss of $12.9 million or $0.24 per diluted share in the second quarter of 2019.
Although we experienced an improvement of 28% higher oil production, this was more than offset by 32% lower natural gas liquids prices and 8.2 fewer rigs operating. Our non-GAAP financial measure reconciliation is included in our press release. For the oil and natural gas segment, revenues for the third quarter was relatively unchanged from the second quarter of this year with higher oil, natural gas liquids and natural gas volumes being offset by lower oil, natural gas liquids and natural gas prices. Equivalent production was 6% higher compared to the second quarter of this year, primarily driven by the higher oil production discussed previously. Operating costs for the third quarter decreased 2% from the second quarter of this year, primarily due to lower lease operating expenses, somewhat offset by higher production taxes.
For the contract drilling segment, revenue for the third quarter decreased 13% from the second quarter of this year due to 8.2 fewer rigs operating in the quarter, somewhat offset by increased day rates. Operating costs for the third quarter were 2% lower compared to the second quarter of this year, primarily due to fewer rigs operating.
For the mid-stream segment, revenues for the third quarter decreased 10% from the second quarter of this year, primarily due to decreased condensate prices and gas liquids volume. Operating costs for the third quarter decreased 12% from the second quarter of last year because of the decreased purchase prices.
We ended the third quarter of 2019 with total cash and cash equivalents of $600,000 and long-term debt of $784.4 million. Long-term debt consists of $646.2 million in senior subordinated notes, net of unamortized discounts and debt issuance costs, and $134.1 million outstanding on the Unit Corporation revolving credit agreement, and $4.1 million outstanding on the Superior revolving credit agreement, which is non-recourse to Unit Corporation.
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