2013 Capital Expenditure Budget
The 2013 capital expenditures budget for all three of Unit’s business segments is $789 million, a 6% increase over 2012 capital expenditures, excluding, in both cases, acquisitions. This amount includes $586 million for its oil and natural gas segment, $98 million for its contract drilling segment, and $105 million for its midstream segment.
Unit’s 2013 capital expenditures budget is based on realized prices for the year of $93.05 per barrel of oil, $32.05 per barrel of NGLs, and $3.56 per Mcf. For 2013, Unit has hedged approximately 80% of its anticipated oil production and 71% of its anticipated natural gas production under swap contracts at average prices of $97.94 and $3.63, respectively. This budget is subject to possible periodic adjustments for various reasons including changes in commodity prices and industry conditions. Funding for the budget will come primarily from internally generated cash flow and, if necessary, borrowings under Unit’s bank credit facility.
Larry Pinkston, President and Chief Executive Officer of Unit Corporation, said: “Despite commodity price headwinds, 2012 was a very good year for Unit. We continued to focus our exploration efforts in oil and NGLs rich areas like the Granite Wash, Wilcox, and Marmaton plays. In line with this focus, we completed our acquisition of oil and gas properties from Noble Energy in the Granite Wash in western Oklahoma. This acquisition has provided us not only with new production, but also a substantial drilling inventory for years to come. The acquisition was particularly beneficial in that it will provide growth opportunity for all three of our business segments. We were also successful during the year in beginning a divestiture program of some of our non-core or non-operated oil and natural gas properties resulting in proceeds of approximately $270 million. As a result, we were able to complete our acquisition from Noble Energy for approximately $600 million while continuing to maintain a very conservative debt profile. Our focus on capital efficiency will be integral in continuing to deliver strong shareholder performance.”