Unit Corporation (NYSE: UNT) (the “Company”) announced today that its
wholly owned subsidiary, Unit Petroleum Company (“Unit Petroleum”), has
acquired from an undisclosed seller certain oil and natural gas assets
primarily in Grady and Caddo Counties in western Oklahoma. The purchase
price is approximately $57 million in cash plus 180 net acres in McClain
County, Oklahoma, subject to possible adjustments.
The effective date of this acquisition is January 1, 2017. The
acquisition adds approximately 8,300 net acres to Unit Petroleum’s
Hoxbar core area in southwestern Oklahoma as well as 47 Proved Developed
Producing wells of which 23 are operated by the seller and 20 by Unit.
As of the effective date, the estimated proved reserves of the
properties totaled 3.2 million barrels of oil equivalent (MMBoe). The
estimated average daily net production was approximately 1,367 barrels
of oil equivalent (Boe) (73% liquids). The acreage is complementary to
Unit’s Hoxbar core area with a large overlap with Unit’s existing
operations. This acquisition provides the company with significant
future resource potential, including 65 gross potential horizontal
drilling locations of which 13 are new locations. The remaining
locations are already included in Unit’s planned development but this
acquisition will increase Unit’s working interests in those locations.
Of the acreage acquired, approximately 71% is held by production. Unit
will also obtain a small gathering system.
Unit’s core Hoxbar acreage position lies adjacent to the Norge Marchand
Waterflood Unit. Unit’s Marchand wells have an average estimated
ultimate recovery of over 500 MBoe and have proven to be economic even
in a low commodity price environment. This acquisition provides
operational control to key areas of the Marchand zone of the Hoxbar
reservoir for secondary recovery efforts, which has the potential to
significantly increase the production from the existing wells. It is
anticipated that the initial secondary recovery phase will increase the
reserve potential from the Marchand interval by at least 500 MBoe per
well.
“We are pleased to announce this strategic acquisition,” commented Larry
D. Pinkston, Unit’s President and Chief Executive Officer. “This is an
important growth step for Unit and represents an advantageous addition
in one of our core areas that we have been working to expand. For our
upstream business segment, it 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. Coupled with the waterflood
potential, we believe the value of this core holding will be
significantly enhanced.”
On April 4, 2017, the Company entered into a Distribution Agreement (
“Distribution Agreement”) with Raymond James & Associates, Inc. as the
Agent, under which the Company may occasionally offer, issue, and sell
to the public, through the Agent, shares of the Company’s common stock
(the “Shares”) up to an aggregate offering price of $100,000,000. The
Agent will be entitled to compensation for its services of 2.0% of the
gross sales price of Shares sold. The Company has no obligation to sell
the Shares, and may suspend solicitation and offers under the
Distribution Agreement.
The sales of the Shares will be made with ordinary brokers’ transactions
at market prices prevailing during the sale, or at negotiated prices.
Actual sales will depend on many factors to be determined by the Company.
The Company intends to use any net proceeds from the offering to fund
(or offset costs of) acquisitions, future capital expenditures, repay
amounts outstanding under its revolving credit facility, and general
corporate purposes.
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 are forward-looking statements. Several
risks and uncertainties could cause actual results to differ materially
from these statements, including the possibility that the ultimate
quantity and value of the estimated oil and natural gas reserves
associated with the acquisition actually differ from those contained in
this release, the estimates used in the valuation of the acquisition,
including prices used in calculating reserve values, may vary
significantly from actual results, the current productive capabilities
of the oil and natural gas wells included in the acquisition varies from
that disclosed, and that the acquisition described in this release may
not close. Forward looking statements also include the impact that the
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, and 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 occasionally in the
Company’s publicly available SEC reports. The Company assumes no
obligation to update publicly such forward-looking statements, whether
because of new information, future events or otherwise.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170404005426/en/
Unit Corporation
Michael D. Earl, 918-493-7700
Vice President,
Investor Relations
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