Unit Corp. Announces Agreements to Acquire Oil & Gas Assets in Its Hoxbar Core Area in Western Oklahoma & to Sell Common Stoc...
04 April 2017 - 9:00PM
Business Wire
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.
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version on businesswire.com: http://www.businesswire.com/news/home/20170404005426/en/
Unit CorporationMichael D. Earl, 918-493-7700Vice President,
Investor Relations
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