Tuesday, contract drilling company Unit Corp. (UNT) reported a sharp fall in second quarter earnings, as revenues more than halved from a year ago.
Larry Pinkston, Unit's chief executive officer and president, said, "Contract drilling industry and our rig fleet utilization rates continued to be negatively impacted by low commodity prices and minimal capital spending by exploration and production companies during the second quarter."
Tulsa, Oklahoma-based Unit Corp.'s second quarter net income plunged to $32.0 million or $0.68 per share from $94.1 million or $2.00 per share in the prior-year period.
On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.47 per share. Analysts' estimates typicaly exclude special items.
Quarterly revenues fell to $164.1 million from $370.15 million in the previous year quarter, while analysts were looking for revenues of $164.91 million.
Contract drilling revenue plummeted to $49.88 million from $151.23 million a year ago, while oil and natural gas revenue dipped to $89.6 million from $164.3 million a year ago. Gathering and processing generated revenues of $23.23 million, down from $54.80 million in the prior year period.
Oil production in the second quarter of 2009 increased 4% to 348,000 barrels of oil from 335,000 barrels of oil a year ago, and natural gas liquids production rose 12% to 391,000 barrels from 350,000 barrels in the second quarter of 2008. However, natural gas production decreased 7% to 11.0 billion cubic feet from 11.8 Bcf during the comparable quarter of 2008.
Average drilling rig utilization for the quarter was 31.6 drilling rigs or 24%, a decrease of 70% from the year ago period.
For the first six months of 2009, Unit posted a net loss of $115.5 million or $2.46 per share, compared to net income of $171.2 million or $3.65 per share in the corresponding period. Excluding the ceiling test write down of $175.1 million or $3.72 per share, net income for the first six months of 2009 would have been $59.6 million or $1.26 per share.
Total revenues declined to $365.1 million in the first six months from $691.5 million generated in the comparable period last year.
UNT is trading at $33.72, up $0.19 or 0.57%, on a volume of about 180 thousand shares.
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