TULSA — It took a team effort to propel Unit Corp. into the top tier of Oklahoma companies this year.
CEO Larry Pinkston said all three segments of Unit's business contributed to its success.
Fueled by its contract drilling, oil and natural gas and midstream businesses, Unit ranked No. 7 on this year's Oklahoma Inc. list, with revenues up 33.6 percent.
Pinkston said most of the heavy lifting this year was done by Unit's contract drilling segment, which currently boasts a fleet of 126 land rigs. The company has built five new rigs this year, with plans to add two more in the fourth quarter.
He said 82 rigs were running Tuesday, with demand varying due to the type of wells being drilled by producers who contract with Unit.
Usage of Unit's rigs is driven by oil and natural gas liquids prices.
“It's pretty profitable right now to drill for those products,” Pinkston said.
He said seven of Unit's rigs are being used by the company's oil and gas segment in Oklahoma and Texas.
Unit traditionally has focused on finding natural gas in the Oklahoma Panhandle and East Texas, but Pinkston said the company turned its attention to liquids production due to lower gas prices, like many other producers.
The recession that killed natural gas prices basically shut down a lot of exploration activities, so he said it took Unit some time to build up momentum on the production side.
Pinkston said natural gas and liquids are plentiful in the areas where Unit operates, so the company didn't have to acquire any new acreage when it shifted its efforts away from gas.
“We had a lot of acreage that had liquids potential,” he said.
Unit produced nearly 11,000 barrels of oil equivalent between July 2010 and June 2011, with liquids accounting for 40 percent of that figure.
Pinkston said Unit's production is up about 15 percent, but he expects that figure to go higher over the next 12 months.
The performance of Unit's midstream business, its third segment, tends to follow the health of the oil and gas industry as a whole, he said. The majority of its operations involve third-party operators.
Pinkston said Unit is building gas processing plants at unprecedented rates, mostly to serve producers in the growing Mississippian play in northern Oklahoma and southern Kansas.
“We're seeing opportunities right in our back door that we've never seen before,” he said.
Pinkston said he looks forward to increased domestic oil and gas production as the United States tries to become less dependent on foreign oil. He doesn't expect natural gas prices to rebound soon, but eventually prices will rise enough to spur additional drilling for the commodity he views as the best available alternative to oil.
“The country will wake up to it sooner or later,” Pinkston said.