Unit Corp. · OTC:UNTC

Unit — Investor Presentation (September 2017)

38 slides from Unit's investor presentation, Sep 26, 2017

1. Slide 1: Unit Corporation Corporate Presentation

   Unit Corporation Corporate Presentation September 26, 2017

2. 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

3. Slide 3: Unit Corporation: A Diversified Energy Company

   Unit Corporation: A Diversified Energy Company 10 • Tulsa based, incorporated in 1963 10 Casper Marcellus Pittsburgh • Integrated approach to business allows Unit to capture margin from each business segment Anadarko Tulsa Headquarters Basin 55 Arkoma Basin Oklahoma Permian City North La/ 95 Unit Ri

4. Slide 4: Company Highlights

   Company Highlights • Highly economic • Midstream segment opportunities for our E&P EBITDA poised for growth segment • Fiscally conservative • Contract drilling segment • Capital spending in line growing with industry with cash flow rebound 4

5. Slide 5: Core Upstream Producing Areas

   Core Upstream Producing Areas Key focus areas include: Mid Continent Region Gulf Coast:  Wilcox (Southeast Texas) Hoxbar/STACK Mid‐Continent: Granite Wash  Granite Wash (Texas Panhandle) Upper Gulf Coast Region  Hoxbar (Western Oklahoma)  STACK (Western Oklahoma) Wilcox 2016 year end total prove

6. Slide 6: Unit's STACK and STACK Extension Positions

   Unit’s STACK and STACK Extension Positions STACK STACK Extension  10,000+ acres  100% HBP  80% in Over Pressured Window  Upper, Middle and Lower Meramec also Woodford and Oil Osage targets Condensate  Operators are testing 15‐20 wells per section in Meramec Dry Gas  * 90‐130 operated locations

7. Slide 7: STACK Acreage Proven Across Multiple Targets

   STACK Acreage Proven Across Multiple Targets ML 6‐14N‐9W 1H (DVN) Angus Trust 1‐4‐33XH (CLR) Privott 17_20‐16N‐9W 1H (CLR) 12 Wehmuller 1307 2‐19MH (MRO) Bone 32‐12‐6 1H (Jones) 11 13 14 IP30: 1,766 Boepd (48% Oil) 10 IP30: 4,642 Boepd (45% Oil) IP30: 4,308 Boepd (57% Oil) (2.2% WI) IP30: 1,086 Boep

8. Slide 8: STACK Extension Pushing Boundary of STACK

   STACK Extension Pushing Boundary of STACK Ward 21‐1H (Commanche) McConnell 19‐1H (Comanche) Moss 30‐1H (Corlena) Schoeppel 16‐20‐12 (CHK) Medrill 2015 1‐27H (SD) 10 12 13 14 IP30: 627 Boepd (75% Oil) IP30: 532 Boepd (46% Oil) 11 IP30: 491 Boepd (9% Oil) IP30: 865 Boepd (54%Oil) IP30: 1,164 Boepd (85

9. Slide 9: Wilcox (Southeast Texas)

   Wilcox (Southeast Texas) Wilcox Strategy for Future Growth POLK TYLER  Over 100 stacked pay recompletion and workover opportunities in existing wells (e.g. Gilly Field)  Drill exploratory prospects with large upside (e.g. Cherry Creek prospect) 3D AREA  Build horizontal well inventory in existing

10. Slide 10: Wilcox Activity Map for 2017

    Wilcox Activity Map for 2017 TYLER SEGNO NE POLK GILLY VILLAGE MILLS WING CHERRY CREEK HARDIN LIBERTY Drilled and completed 10 Scheduled for 2017

11. Slide 11: 2016 Wilcox Recompletions & Workover Results

    2016 Wilcox Recompletions & Workover Results Composite Gross Production from Recompletions and Workovers 20 Recompletions & 7 Workovers Total Cost: $10MM Start of Year End of Year 3,360 mcfd 40,000 mcfd 80 bopd 1,100 bopd 11

12. Slide 12: 2017 (YTD) Wilcox Recompletions & Workover Results

    2017 (YTD) Wilcox Recompletions & Workover Results Composite Gross Production from Recompletions and Workovers 13 Recompletions & 10 Workovers Total Cost: $6.6MM Start of Year End of Q2 6,230 mcfd 14,520 mcfd 220 bopd 370 bopd 12

13. Slide 13: Wilcox Horizontal Upper Dempsey Test – Village Mills Field

    Wilcox Horizontal Upper Dempsey Test – Village Mills Field West Univ. #1H 5,800’ Lateral 1.03 BCFG IP60: 8 MMCF/D, 180 BO/D 2.6 MMCF/D IP 2,000# Flowing Pressure 214,000# Frac 22 Stage, 5,300,000# Frac 1.45 BCFG 1.8 MMCF/D IP 72,000# Frac 0.23 BCFG 2.3 MMCF/D IP 48,000# Frac Depth Map on Dempsey Sd

14. Slide 14: Wilcox Horizontal Targets – Village Mills Field

    Wilcox Horizontal Targets – Village Mills Field Potential for 30 horizontal wells OUTPOST SERIES– Target in West University #2H – 8‐12 Laterals Possible (contingent upon reservoir and frac analysis) 10600’ Sd – 4‐6 Laterals Possible UPPER DEMPSEY SAND – Target in West University #1H – 4‐6 Additional

15. Slide 15: Buffalo Wallow Field – Economic Advantages

    Buffalo Wallow Field – Economic Advantages Geology  11 Granite Wash lenses  Sands present across acreage Land  ~9,000 net acres  Operated and ~90% HBP  Average working interest ~ 90%  220 ‐ 270 potential XL locations  Working to expand position Operations  Running one rig  Will test 9,500’

16. Slide 16: Granite Wash Extended Lateral Cumulative Production

    Granite Wash Extended Lateral (~7,500’) Potential Reserve Range 2,000 1,800 ROR assumes well cost of $6.3MM 1st C1 1,600 Cumulative Production (MMCFE) 11 BCFE 1,400 ROR: 104% 1,200 8 BCFE 1,000 ROR: 47% 800 2nd C1 4th C1 5 BCFE 600 ROR: 13% 1st A2 400 200 3rd C1 0 0 20 40 60 80 100 120 140 160 180 2

17. Slide 17: Hoxbar (Marchand Sand)

    Hoxbar (Marchand Sand) Hoxbar Marchand Core Area  EUR ~ 540 MBoe  Well cost $5.2 MM  80% liquids (63% oil)  ~24,000 net acres (64% HBP)  50 ‐ 60 locations HOXBAR 3,000’  Working interest of 50‐60%  ROR1 ~ 79%  Running one rig Future Growth  Extended laterals in both Marchand and Medrano  S

18. Slide 18: Rig Fleet Presence in Key Regions

    Rig Fleet Presence in Key Regions  95 rig fleet 20 ≤800 HP: 21% 10 71 1,000‐1,700 HP: 75% 4 ≥2,000 HP: 4%  69% electric 10  54% 1,500 HP or greater  34 equipped with skidding or walking systems  27 additional can be skidded  35% total fleet utilization at present  All ten BOSS rigs operating

19. Slide 19: SCR Rigs Continue to Make an Important Contribution

    SCR Rigs Continue to Make an Important Contribution 40 • At industry trough – 13 35 drilling rigs operating 30 23 • Currently, 33 drilling rigs 25 operating 20 12 • All BOSS rigs operating 15 9 7 10 • 23 SCR rigs operating 10 9 ̶ 16 SCR rigs required 5 6 7 no modifications 0 ̶ 7 SCR rigs required Ma

20. Slide 20: Average Rig Utilization

    Average Dayrates and Margins (1) $20,000 100% $15,000 75% Average Rig Utilization Margins and Dayrates $10,000 50% $5,000 25% $0 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 6 mos. '17 Margins Dayrates Average Rig Utilization (1) See Reconciliation of Average Daily Operating Margin Before Elimina

21. Slide 21: The BOSS Drilling Rig

    The BOSS Drilling Rig Optimized for Pad Drilling  Multi‐direction walking system Faster Between Locations  Quick assembly substructure  32‐34 truck loads More Hydraulic Horsepower  (2) 2,200 horsepower mud pumps  1,500 gpm available with one pump Environmentally Conscious  Dual‐fuel capable en

22. Slide 22: Midstream Core Operations

    Midstream Core Operations Brook Field Pittsburgh Mills Snow Shoe Texas Panhandle Northern Oklahoma and Kansas  52,000 dedicated acres  2,064,000+ dedicated acres Pittsburgh  135 MMcf/d processing capacity  193 MMcf/d processing capacity Regional office  345 miles of gathering pipeline  579 mil

23. Slide 23: Midstream Segment Contract Mix

    Midstream Segment Contract Mix 2010 Q2 2017 Contract Mix Based on Volume 28% 49% 51% 72% Fee Based Commodity Based Contract Mix Based on Margin 15% 35% 85% Fee Based 65% Commodity Based Unit vs. 3rd Party Margin Contribution 41% 33% 59% 3rd Party 67% Unit 23

24. Slide 24: Midstream Historical Volumes: Gathered & Processed

    Midstream Historical Volumes 200,000,000 180,000,000 160,000,000 Gathered & Processed 140,000,000 120,000,000 MMBtu 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 ‐ 2009 2010 2011 2012 2013 2014 2015 2016 Gas Gathered (MMbtu) Gas Processed (MMbtu) 24

25. Slide 25: Midstream Segment Commodity Price Sensitivity

    Midstream Segment Commodity Price Sensitivity (1) $70,000,000 Segment EBITDA Before Intercompany Eliminations 2016 Adjustments $60,000,000 • Utilized 2016 volumes $50,000,000 • Assumed $40,000,000 $55.00/Bbl oil price $30,000,000 • Adjusted for average NGL price $20,000,000 of $21.07/Bbl • Adjusted

26. Slide 26: Debt Structure – No Near-Term Maturities

    Debt Structure – No Near‐Term Maturities Senior Subordinated Notes Ratings S&P Moody’s Fitch Corporate B+ B2 B+  $650 million, 6.625% Senior Subordinated Notes BB‐ B3 BB‐  10‐year, NC5; maturity 2021 6/30/2017  Key Covenants Interest coverage ratio ≥ 2.25x(1) 5.43x(1,2) Secured Bank Facility (Red

27. Slide 27: Segment Contribution

    Segment Contribution Revenues ($ millions) Adjusted EBITDA ($ millions)(1) $1,573 $800 $1,600 $787 $1,352 $1,400 $667 $1,200 $600 $1,000 $854 $410 $800 $400 $602 $600 $252 $346 $200 $400 $145 $200 $0 $0 2013 2014 2015 2016 6 mos. '17 2013 2014 2015 2016 6 mos. '17 Oil and Natural Gas Contract Drilli

28. Slide 28: Operating Segment Capital Expenditures

    Operating Segment Capital Expenditures (In Millions) $1,500 $1,000 $500 $0 2013 2014 2015 2016 2017 Forecast Oil and Natural Gas Contract Drilling Midstream 28

29. Slide 29: Investment Considerations

    Investment Considerations • E&P segment three core areas provide compelling economics • Contract drilling segment resuming pattern of growth • Midstream segment positioned to benefit from increased activity levels and liquids price improvement • We maintain fiscal discipline • Solid balance sheet wi

30. Slide 30: Appendix

    AU) APPENDIX

31. Slide 31: Non-GAAP Financial Measures - Corporate

    Non‐GAAP Financial Measures ‐ Corporate Adjusted EBITDA Six months ended Years ended June 30, December 31, ($ In Millions) 2016 2017 2013 2014 2015 2016 Net Income (Loss) ($113) $25 $185 $136 ($1,037) ($136) Income Taxes (59) 20 117 87 (627) (71) Depreciation, Depletion and 110 98 334 405 355 210 Am

32. Slide 32: Non-GAAP Financial Measures - Segments

    Non‐GAAP Financial Measures ‐ Segments Adjusted EBITDA Six months ended Years ended June 30, December 31, ($ In Millions) 2016 2017 2013 2014 2015 2016 Unit Petroleum Income (Loss) Before Income Taxes (1) $ (113) $ 64 $ 239 $ 199 $ (1,631) $ (102) Depreciation, Depletion and Amortization 62 45 226 2

33. Slide 33: Non-GAAP Financial Measures

    Non‐GAAP Financial Measures Reconciliation of Average Daily Operating Margin Before Elimination of Intercompany Rig Profit and Bad Debt Expense Six months ended Years ended (In thousands except for operating days June 30, December 31, and operating margins) 2016 2017 2013 2014 2015 2016 Contract dri

34. Slide 34: Non-GAAP Financial Measures

    Non‐GAAP Financial Measures Reconciliation of Average Daily Operating Margin Before Elimination of Intercompany Rig Profit and Bad Debt Expense Years ended December 31, (In thousands except for operating days and operating margins) 2008 2009 2010 2011 2012 Contract drilling revenue $622,727 $236,315

35. Slide 35: Midstream Reconciliation of EBITDA

    Midstream Reconciliation of EBITDA (Before Intercompany Eliminations) Segment EBITDA Before Intercompany Eliminations Years ended December 31, ($ In Millions) 2009 2010 2011 2012 2013 2014 2015 2016 Total Midstream Income (Loss) Before Intercompany Eliminations $ 7,126 $ 19,267 $ 19,555 $ 8,237 $ 15

36. Slide 36: Derivative Summary

    Derivative Summary Crude 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Collars Volume (Bbl) ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ Weighted Avg Floor ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ Weighted Avg Ceiling ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ 3‐Way Collars Volume (Bbl) 337,500 341,250 345,000 345,000 180,000 182,000 184,000 184,000 Weighted Avg Floo

37. Slide 37: Q3 2017 Economic Prices

    Q3 2017 Economic Prices Strip Case* Natural BBL MB Crude Gas MB C2 MB C3 C3 MB NC4 MB iC4 MB C5+ CW C2 CW C3 CW NC4 CW iC4 CW C5+ 2017 $49.816 $3.168 $0.277 $0.878 $27.168 $1.013 $1.008 $1.155 $0.191 $0.851 $1.026 $1.044 $1.123 2018 $50.980 $3.101 $0.271 $0.899 $27.544 $1.037 $1.032 $1.182 $0.187 $0

38. Slide 38: Unit Corporation

    Unit Corporation Corporate Presentation September 26, 2017

Unit — Investor Presentation (September 2017) on 6ix