Slide 1: Investor Presentation
Investor Presentation March 2023
Slide 2: Forward Looking Statement
Forward Looking Statement This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this presentation that addres
Slide 3: Investment Highlights
Investment Highlights • Reserves as of December 31, 20221: • $785 million based on the SEC standardized measure • PDP PV-10: • $957 million based on SEC pricing • $585 million based on forward strip pricing • All 14 BOSS rigs are contracted and operating • Strong balance sheet as of December 31, 202
Slide 4: 2022 Consolidated Financial Highlights
2022 Consolidated Financial Highlights 1Q22 1 2Q22 3Q22 4Q22 FY2022 (in thousands, except per share amounts) Revenues: Oil and natural gas $ 76,810 $ 100,912 $ 80,026 $ 57,734 $ 315,482 Contract drilling $ 28,882 $ 33,642 $ 40,256 $ 44,590 $ 147,370 Gas gathering and processing $ 82,673 $ - $ - $ -
Slide 5: Unit Petroleum Company (UPC) Summary
Unit Petroleum Company (UPC) Summary • Efficient, low-cost production and modest decline in PDP reserves • Substantial developed acreage position of ~202,000 net acres in the Anadarko Basin • Development strategies: • Converting non-producing reserves to producing reserves • Evaluating acquisitions
Slide 6: Unit Production Company Operations Footprint
Unit Production Company Operations Footprint Anadarko Basin Tulsa Headquarters E&P Operations Office Location 6
Slide 7: Unit Production Company 2022 Operating and Financial Highlights
Unit Production Company 2022 Operating and Financial Highlights 1Q22 2Q22 3Q22 4Q22 YTD (In thousands unless otherwise specified) Oil and Natural Gas: Revenue, before inter-segment eliminations 1 $ 87,582 $ 100,896 $ 80,026 $ 57,734 $ 326,238 1 Operating costs, before inter-segment eliminations $ 24
Slide 8: Unit Production Company Reserves Update
Unit Production Company Reserves Update The following table presents the components of the standardized measure of discounted future net cash flows: 2022 (In thousands) Future cash inflows $ 2,918,116 Future production costs $ (1,142,754) Future development costs $ (1,724) Future income tax expenses
Slide 9: Unit Production Company Producing Properties
Unit Production Company Producing Properties BOEPD excluding sold wells 25,000 • ~202,000 net developed acres 20,000 in Anadarko Basin 15,000 • Modest production decline rate 10,000 5,000 • 4,248 wells (1,347 net wells) - Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov • Low water production
Slide 10: Unit Production Company Development Potential
Unit Production Company Development Potential • Potential locations in Red Fork, Marchand, Medrano, Meramec, Woodford and Granite Wash • Drill or farm-out high-graded drilling locations • Monetize non-core drilling locations • Anticipate drilling or participating in 1 to 2 net wells per year, with d
Slide 11: Unit Production Company Divestiture Update
Unit Production Company Divestiture Update • Sold interests in 727 wells for $57 million during 2022 • Sold wells in Gulf Coast area, Oklahoma Panhandle, and other non-core assets • Will continue to sell minor interests in outlying areas and concentrate remaining properties in core fields and plays
Slide 12: Unit Production Company Commodity Hedging
Unit Production Company Commodity Hedging • Net commodity derivative liability of $24 million as of December 31, 2022 • Emergence hedges terminate at the end of 2023 Weighted Commodity Average Fixed Contracted Term (instrument) Contracted Volume Price Market Jan’23 - Feb’23 Natural gas (swap) 27,627
Slide 13: Unit Drilling Company (UDC) Summary
Unit Drilling Company (UDC) Summary • All 14 BOSS rigs contracted in high demand areas • Average Q4 2022 day rate for BOSS rigs of $28,385 • BOSS rigs are expected to re-contract over next 6 to 12 months • On-going sales of excess equipment, with $13 million in proceeds received during 2022 13
Slide 14: Unit Drilling Company Operations Footprint
Unit Drilling Company Operations Footprint Williston Basin: (1) BAKKEN Powder River Basin: (2) ROCKIES Anadarko Basin: (4) MID-CON PERMIAN ARKLATEX Permian Basin: (10) GULF COAST OFFICE/YARD: EAGLEFORD STACKED RIG: WORKING RIG: 14
Slide 15: Unit Drilling Company BOSS Drilling Rig
Unit Drilling Company BOSS Drilling Rig Estimate approx. $35 million to build a new BOSS rig in today’s market Optimized for Pad Drilling • Multi-direction walking system • Racking & setback capacity for additional tubulars, extended lateral length drilling capabilities Faster Between Locations • Qu
Slide 16: Unit Drilling Company 2022 Operating and Financial Highlights
Unit Drilling Company 2022 Operating and Financial Highlights 1Q22 2Q22 3Q22 4Q22 YTD (In thousands except rig and day amounts, and as otherwise specified) Contract Drilling: Revenue, before inter-segment eliminations 1 $ 28,882 $ 33,642 $ 40,256 $ 44,960 $ 147,740 1 Operating costs, before inter-se
Slide 17: Environmental & Safety
Environmental & Safety • Committed to a culture of safe and environmentally friendly operations • UPC actively reducing methane emissions • UPC also using recycled produced water for stimulation work thereby reducing use of fresh water • Strong UDC health & safety track record 17
Slide 18: Superior Pipeline Company, LLC
Superior Pipeline Company, LLC • Recently announced future sale of Unit’s ownership interest in Superior to joint-venture partners • $20 million total proceeds • $12 million to be paid at closing • $8 million to be paid at the earlier of 12 months from closing or the satisfaction of certain ongoing
Slide 19: Returning Value to Shareholders
Returning Value to Shareholders • Special dividend of $10 per share paid in January 2023 • Quarterly variable dividend policy going forward: • $2.50 per share announced for Q2 2023 • Subsequent variable dividends to be determined based on future operating cash flows, available cash, working capital,
Slide 20: Contact
Contact Investor Relations, Unit Corporation https://unitcorp.com/investor-relations ir@unitcorp.com 918-493-7700 Rene Punch - 918-477-4404 rene.punch@unitcorp.com 20
Slide 21: Appendix 1
Appendix 1 Reconciliation of Net Income to Adjusted EBITDA 1Q22 2Q22 3Q22 4Q22 FY2022 (in thousands) Net income attributable to Unit Corporation $ (46,877) $ 80,093 $ 55,818 $ 59,335 $ 148,369 Add: (Gain)/loss on derivatives $ 64,076 $ (2,609) $ 12,381 $ (10,238) $ 63,610 Less: Cash payments on deri
Slide 22: Appendix 2
Appendix 2 Description Amount Standardized Measure 1 $785 million Discounted effect of future income tax expenses $172 million Pre-tax PV-10 value under SEC pricing 2 $957 million Impact of adjusting SEC pricing to forward strip pricing ($372) million Pre-tax PV-10 value under forward strip pricing