Unit Corporation (NYSE: UNT) announced its initial 2010 capital
expenditures budget for all of its business segments of $467 million, an
increase of 57% over estimated 2009 capital expenditures. Of this
amount, $365 million is budgeted for its oil and natural gas segment,
which includes $319 million for drilling and completion activities and
is a 66% increase over estimated 2009 capital expenditures, $49 million
for its contract drilling segment, a 27% decrease over estimated 2009
capital expenditures, and $53 million for its mid-stream segment, a 446%
increase over estimated 2009 capital expenditures.
The company’s 2010 operating budget is based on oil and natural gas
prices averaging $72.00 per barrel and $5.30 per million cubic feet
(Mcf), respectively, and, in addition to other items, may be adjusted
based on changes in commodity prices and industry conditions. The 2010
capital expenditures program is anticipated to be funded mainly through
internally generated cash flow and to a lesser extent from borrowings
under the company’s bank credit facility.
Management Comments
Larry Pinkston, President and Chief Executive Officer of Unit
Corporation, said: “Our increased drilling activity in the oil and
natural gas segment will be concentrated in the areas that provide the
highest economic returns, which currently are concentrated in our
Granite Wash and Segno plays. With the reduction in well costs that
occurred during 2009, we are entering 2010 drilling aggressively with a
significant portion of the wells we drill in 2010 being horizontal.
“While our overall capital spending in the contract drilling segment for
2010 will be less than in 2009, the focus will be on refurbishing and
upgrading drilling rigs in our fleet. We will be converting mechanical
drilling rigs to electric drilling rigs, adding top drives and larger
mud pumps, to ensure our drilling fleet will meet our customers’
drilling requirements.
“Our increase in capital spending in the mid-stream segment is
attributable to increased drilling activity we anticipate by operators
in the areas of our existing gathering systems resulting in new well
connections. Additionally, we will be adding a second processing
facility in the Granite Wash play to accommodate the increased drilling
activity of our oil and natural gas segment as well as that of other
operators.”
Fourth Quarter and Year-End 2009 Webcast
Unit will release its fourth quarter and year-end 2009 earnings and host
a conference call on Tuesday, February 23, 2010. The webcast will be
broadcast live over the Internet at 11:00 a.m. Eastern time at http://www.unitcorp.com.
Unit Corporation is a Tulsa-based, publicly held energy company engaged
through its subsidiaries in oil and natural gas exploration, production,
contract drilling and natural gas gathering and processing. Unit’s
Common Stock is listed on the New York Stock Exchange under the symbol
UNT. For more information about Unit Corporation, visit its website at http://www.unitcorp.com.
This news release contains forward-looking statements within the meaning
of the private Securities Litigation Reform Act. All statements, other
than statements of historical facts, included in this release that
address activities, events or developments that the Company expects or
anticipates will or may occur in the future are forward-looking
statements. A number of risks and uncertainties could cause actual
results to differ materially from these statements, including the impact
that the current decline in wells being drilled will have on production
and drilling rig utilization, productive capabilities of the Company’s
wells, future demand for oil and natural gas, future drilling rig
utilization and dayrates, projected growth of the Company’s oil and
natural gas production, oil and gas reserve information, as well as the
ability to meet its future reserve replacement goals, anticipated gas
gathering and processing rates and throughput volumes, the prospective
capabilities of the reserves associated with the Company’s inventory of
future drilling sites, anticipated oil and natural gas prices, the
number of wells to be drilled by the Company’s oil and natural gas
segment, development, operational, implementation and opportunity risks,
possibility of future growth opportunities, and other factors described
from time to time in the Company’s publicly available SEC reports. The
Company assumes no obligation to update publicly such forward-looking
statements, whether as a result of new information, future events or
otherwise.
Unit Corporation
David T. Merrill, 918-493-7700
Chief
Financial Officer & Treasurer
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