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Unit Corporation Announces 2012 Reserve Growth Of 29%, Production Replacement Of 337% And 2013 Guidance

The present value of the estimated future net cash flows from the 2012 estimated proved reserves (before income taxes and using a 10% discount rate (PV-10)), was approximately $1.5 billion. The present value was determined using the 12 month 2012 average price received. The aggregate price used for all future reserves was $91.57 per barrel of oil, $30.57 per barrel of NGLs, and $2.58 per thousand cubic feet (Mcf) of natural gas. Unit’s 2012 year-end proved reserves were independently audited by Ryder Scott Company, L.P. Their audit covered properties which accounted for 82% of the discounted future net cash flow (PV-10). See below for the reconciliation of PV-10 to the standardized measure of discounted future net cash flows as defined by GAAP.

2012 Production Information and 2013 Production Guidance

Production during the fourth quarter 2012 was 912,000 barrels of oil, 782,000 barrels of NGLs, and 14.5 Bcf of natural gas, or 4.1 MMBoe, an increase of 18% and 26% over the third quarter 2012 and the fourth quarter 2011, respectively. Production for 2012 was 14.2 MMBoe, an increase of 18% from 12.1 MMBoe produced in 2011. 2012 production included a 28% increase in oil and NGLs.

For 2013, Unit’s preliminary annual production guidance is 16.0 MMBoe to 16.5 MMBoe, an increase of 13% to 16% over 2012.

Non-Cash Ceiling Test Write Down

Unit anticipates it will incur a non-cash ceiling test write down between $165 million to $180 million ($103 million to $112 million, after tax) in the fourth quarter of 2012. The ceiling test write down is required to reduce the carrying value of the company’s oil and natural gas properties because of the impact of significantly lower net 12-month commodity prices. From December 31, 2011 to December 31, 2012, the net 12-month average prices received decreased $0.43 per barrel of oil (1%), $15.58 per barrel of NGLs (34%), and $1.25 per Mcf of natural gas (33%). The depreciation, depletion and amortization rate for the fourth quarter of 2012 is estimated to be $13.80 per Boe, a 10% increase over the third quarter of 2012 and a 12% reduction over the fourth quarter of 2011.

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