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Blog Coverage Unit Corp. Acquires Acreage in Grady and Caddo Counties in Western Oklahoma

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LONDON, UK / ACCESSWIRE / April 5, 2017 / Active Wall St. blog coverage looks at the headline from Tulsa, Oklahoma based Unit Corp. (NYSE: UNT) as the Company announced on April 04, 2017, that it had acquired oil and natural gas assets located predominantly in the Grady and Caddo Counties in western Oklahoma, via its wholly-owned subsidiary Unit Petroleum Company. The Company also announced the appointment of an agent to sell its common stock shares to the public. Register with us now for your free membership and blog access at:


One of Unit Corp.'s competitors within the Diversified Utilities space, NextEra Energy Partners, L.P. (NYSE: NEP), is estimated to report earnings on April 27, 2017. AWS will be initiating a research report on NextEra Energy Partners following the release of its next earnings results.

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Sharing his views on the matter, Larry D. Pinkston, President and CEO of Unit Corp. said:

"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."

The acquisition of oil and natural gas assets

The assets were purchased from undisclosed sellers and the acquisition date is effective January 01, 2017. The Company will pay $57 million in cash plus 180 net acres in McClain County, Oklahoma to acquire these assets and is subject to adjustments. Unit will add 8,300 net acres in its Hoxbar Field core in Western Oklahoma. The new acreage is close to Unit's existing acreage at Hoxbar core area and many areas overlap Unit's current operations. With this acquisition Unit's total core area position in Hoxbar will be approximately 28,000 net acres and increase its working interest in many sectors.

The Hoxbar acreage is adjacent to the Norge Marchand Waterflood Unit, where Unit's wells have average estimated ultimate recovery of more than 500 Mboe (Thousand Barrels of Oil Equivalent). The current acquisition will give Unit operational control to key areas of the Marchand zone of the Hoxbar reservoir for secondary recovery efforts. This area has the potential to significantly increase Unit's production from the existing wells. The initial secondary recovery phase is expected to increase the reserve potential from the Marchand interval by "at least" 500 Mboe per well.

The acreage has great future resource potential which includes 65 gross potential horizontal drilling locations. Out of these 65 locations, 13 are completely new locations. The new acreage has 47 proved developed producing wells of which 23 are operated by the seller and 20 wells are being operated by Unit.

The new acreage has estimated proven reserves of 3.2 million barrels of oil equivalent (MMBoe) and estimated average volumes of 1,367 barrels of oil equivalent per day (boe/d) as of January 01, 2017. Approximately 71% of the new acreage is held by production.

Unit disclosed that it had plans to further develop the area and install a rig in Q2 2017.

Unit Appoints an Agent to sell the Company's Shares

Unit has retained the services of Raymond James & Associates, Inc. to act as an agent and signed a Distribution Agreement. Under the agreement, the Agent will help in the offer, issue, and sale of Unit's common stock shares to the public up to an aggregate offering price of $100 million. For the services offered Unit will pay the Agent a commission of 2% of the gross sales price of shares sold. The sale of shares will be conducted via ordinary brokers' transactions at actual market prices at the time of the sale or at negotiated prices. The Company is not obliged to sell any shares and has the final say in the matter.

The Company plans to use the funds raised from the sale of shares to offset the cost of acquisitions, future capital expenditures, reduce debt and other corporate outlays.

Stock Performance

On Tuesday, April 04, 2017, the stock closed the trading session at $23.95, rising 2.83% from its previous closing price of $23.29. A total volume of 698.28 thousand shares have exchanged hands, which was higher than the 3-month average volume of 637.94 million shares. Unit Corp.'s stock price advanced 25.00% in the past six months, and 173.40% in the previous twelve months. The stock has a market capital of $1.24 billion.

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SOURCE: Active Wall Street