Unit Corporation (UNT) swung to a net profit for the quarter ended Mar. 31, 2017. The company has made a net profit of $15.93 million, or $ 0.31 a share in the quarter, against a net loss of $41.15 million, or $0.83 a share in the last year period. On an adjusted basis, net profit for the quarter stood at $7.52 million, or $0.15 a share compared with a net loss of $20.34 million, or $0.41 a share in the last year period. Revenue during the quarter grew 29.03 percent to $175.72 million from $136.18 million in the previous year period. Gross margin for the quarter expanded 1322 basis points over the previous year period to 45.29 percent. Operating margin for the quarter period stood at positive 13.96 percent as compared to a negative 42.71 percent for the previous year period.
Operating income for the quarter was $24.53 million, compared with an operating loss of $58.16 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $74.50 million compared with $48.39 million in the prior year period. At the same time, adjusted EBITDA margin improved 686 basis points in the quarter to 42.40 percent from 35.53 percent in the last year period.
Larry Pinkston, Unit’s Chief Executive Officer and President, said: "We recently announced the completion of an acquisition of certain oil and natural gas assets including approximately 8,300 net acres primarily in Grady and Caddo Counties in western Oklahoma. The purchase price was approximately $57.0 million in cash plus 180 net acres in McClain County, Oklahoma. As of the effective date of January 1, 2017, the estimated proved reserves of the properties totaled 3.2 MMBoe, and the estimated average daily net production was approximately 1,367 Boe. This acquisition will increase our Hoxbar total core area position to approximately 28,000 net acres and increase our working interest in many sections. We plan to pick up a rig in the second quarter to continue developing the area."
Operating cash flow declines
Unit Corp has generated cash of $65.65 million from operating activities during the quarter, down 7.16 percent or $ 5.06 million, when compared with the last year period. The company has spent $29.03 million cash to meet investing activities during the quarter as against cash outgo of $37.49 million in the last year period.
The company has spent $29.05 million cash to carry out financing activities during the quarter as against cash outgo of $33.32 million in the last year period.
Working capital remains negative
Working capital of Unit Corp was negative $41.30 million on Mar. 31, 2017 compared with negative $15.32 million on Mar. 31, 2016. Current ratio was at 0.71 as on Mar. 31, 2017, down from 0.89 on Mar. 31, 2016.
Debt comes down
Unit Corp has recorded a decline in total debt over the last one year. It stood at $790.65 million as on Mar. 31, 2017, down 12.02 percent or $108.07 million from $898.72 million on Mar. 31, 2016. Unit Corp has recorded a decline in long-term debt over the last one year. It stood at $790.65 million as on Mar. 31, 2017, down 12.02 percent or $108.07 million from $898.72 million on Mar. 31, 2016. Total debt was 32.24 percent of total assets as on Mar. 31, 2017, compared with 33.52 percent on Mar. 31, 2016. Debt to equity ratio was at 0.65 as on Mar. 31, 2017, down from 0.70 as on Mar. 31, 2016.
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