Unit Corporation (NYSE: UNT) announced today the following information
regarding its oil and natural gas segment.
Unit Corporation’s wholly owned subsidiary, Unit Petroleum Company,
completed in June the acquisition of certain oil and natural gas
properties from a privately owned company for approximately $75.0
million in cash, subject to post-closing adjustments. The acquisition
includes approximately 45,000 net acres and 11 producing oil wells and
is focused on the Marmaton horizontal oil play located primarily in
Beaver County, Oklahoma. This acquisition, along with Unit’s existing
leasehold position in the Marmaton play area, provides Unit with more
than 56,000 net undeveloped leasehold acres in this play. Proved
developed producing (PDP) net reserves associated with the 11 acquired
producing wells is approximately 900,000 barrels of oil equivalent (Boe)
– consisting of 600 barrels of oil, 200,000 barrels of natural gas
liquids (NGLs), and 700 million cubic feet (MMcf) of natural gas. Net
production from these wells in April 2010 averaged approximately 850
barrels of oil per day and 1.0 MMcf of natural gas per day.
Larry Pinkston, President and Chief Executive Officer, said, ‘This
acquisition complements the presence that we already have in the
Anadarko Basin, one of our core areas of operations. We anticipate
working two to three drilling rigs in this play in which we have
identified approximately 300 potential well locations with expected
average reserves per well of 120,000 barrels of oil equivalent.
Projected average completed well costs for wells in this play are
approximately $2.0 million.’
Unit Petroleum Company’s activity during the second quarter of 2010
included several well completions in various plays.
Granite Wash and Cleveland Plays:
In its Granite Wash play located primarily in the Texas Panhandle, the
Issacs B-5H well (35.0% working interest) was completed in May 2010 in
the Granite Wash ‘B’ interval with a production rate of approximately
5.6 MMcf per day, 250 barrels of oil per day, and 750 barrels of NGLs
per day for a combined equivalent production rate of 11.6 MMcf per day.
Through completion the total cost for this well was approximately $5.6
million which included 11 stages of fracture stimulation. The Webb #2
(83.0% working interest), a vertical Granite Wash well, was completed in
June 2010 with flow rates of 2.0 MMcf per day, 100 barrels of oil per
day, and 230 barrels of NGLs per day for an equivalent rate of 4.0 MMcf
per day at a cost of approximately $1.6 million. Two other Granite Wash
horizontal wells, the Brown B-13H (50.0% working interest) and the
Temple A-1H (50.0% working interest) have finished drilling operations
and are scheduled to be fracture stimulated in mid-August.
There are currently three Unit Drilling Company rigs drilling Granite
Wash horizontal wells on Unit Petroleum Company’s leasehold and a fourth
Unit drilling rig is to be added during mid-August.
Also located in the Texas Panhandle, the Laubhan B-3H (100% working
interest) was completed in the Cleveland formation in June 2010, flowing
2.9 MMcf per day and 120 barrels of oil per day.
In the Segno area, located in the Texas Gulf Coast, the Sugarberry #1
well (100% working interest) was completed in June 2010. The well was
completed in the Wilcox interval with flow rates of approximately 375
barrels of oil per day and 700 Mcf per day with 2,100 pounds of flowing
tubing pressure. The BP BS Gas Unit #1 well was recently fracture
stimulated and is currently flowing approximately 4.3 MMcf per day and
22 barrels of oil per day with approximately 6,000 pounds flowing tubing
pressure from the Lower Wilcox formation. Five additional wells have
been drilled and are currently in the completion phase or waiting on
pipeline connection. Unit expects to keep two Unit Drilling Company rigs
working in the Segno area for the remainder of 2010.
In its North Dakota Bakken play, Unit owns a 25% working interest in the
Grasser #1H well that had first production in mid-May 2010 flowing at
initial rates as high as 2,000 barrels of oil per day and 1.4 MMcf per
day post fracture stimulation. The well was drilled with a 5,700′
lateral that was fracture stimulated in 20 stages. The well has produced
approximately 43,000 Boe during the first 45 days of production. A
second horizontal well has been drilled and will be fracture stimulated
in late July and a third horizontal well is currently drilling. Unit has
approximately 11,500 gross (2,700 net) acres in this play and
anticipates one drilling rig operating for the remainder of 2010
drilling four to five additional wells.
In the Haynesville Shale play, located in Shelby County Texas, the Smith
#1H well (55% working interest) was recently fracture stimulated in
eight stages from a 3,300′ lateral. Production facilities are being
installed and the well is anticipated to have first gas sales by August 1st.
Second Quarter 2010 Webcast
Unit will release its second quarter 2010 earnings and host a conference
call on Tuesday, August 3, 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 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 Securities Litigation Reform Act that involve risks and
uncertainties, 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, and that the current productive capabilities of the oil and
natural gas wells included in the acquisition varies from that
disclosed. In addition, forward-looking statements also include the
anticipated production rates associated with the various wells discussed
in this release, the number of anticipated wells to be drilled during
the remainder of the year, the potential reserves to be obtained from
those wells, and other factors described from time to time in the
company’s publicly available SEC reports, any or all of which could
cause actual results to differ materially from those expected.
David T. Merrill, 918-493-7700
Financial Officer and Treasurer