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CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp.

Unit Corp. · Dec 11, 2013 · 25 slides

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Slides

  1. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 1
    Capital One Securities, Inc. Energy Conference December 11, 2013
  2. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 2
    Overview of Operations Tulsa based diversified energy company incorporated in 1963 Integrated approach to business allows Unit to balance its capital deployment through the various stages of the energy cycle 16 17 Casper…
  3. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 3
    Key Growth Points Exploration & Production 212% average production replacement since 2003 130% increase in liquids production since Q1 2009, when Unit began focusing almost entirely on increasing liquids production Proved reserves:…
  4. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 4
    Capital Allocation Criteria Oil and Natural Gas Segment Minimum 15% risk-adjusted ROR for new well proposals Contract Drilling Segment New build rigs minimum contract term of 2 to 3 years at a day rate sufficient to provide a 100%…
  5. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 5
    Core Upstream Producing Areas Beginning in late 2008, implemented strategy of increasing focus on liquids-rich and oil prospects Forecast 43% liquids production for 2013 Mississippian Key focus areas include: Marmaton Granite Wash…
  6. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 6
    Track Record of Reserve Growth Proved Reserves (MMBoe) 160 150 Stable and consistent economic growth of oil 2003 2012 CAGR: 15% and natural gas reserves of at least 150% of 140 120 116 each years production 104 100 95 96 86 79 222%…
  7. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 7
    Increasing Production while Improving Commodity Mix Annual Production (MBoe/d) 50 46 45 40 39 33 29 28 30 27 20 10 28% 55% 0 2008 2009 2010 2011 2012 2013E Net Wells Drilled: 134 43 88 82 80 8 Oil / NGLs…
  8. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 8
    Granite Wash Play Noble acquisition strategic fit with existing UPC leasehold Total 48,000 net acres in the Texas Panhandle Core Area (81% HBP) Approximately 800 potential drilling locations HIGHLIGHTS Completed 72 operated…
  9. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 9
    Marmaton Oil Play Total 118,000 net acres in focus area (55% HBP) 150 potential locations on 640 acre spacing HIGHLIGHTS Completed 117 operated horizontal wells since 2010 Production up 38% in nine mos. 2013 over 2012 Calculated…
  10. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 10
    Wilcox Liquids Play WILCOX HIGHLIGHTS Initial UPC discovery 2003 Gilly Field Discovery 2003 - 2012 Completed 120 wells Gross cumulative production: 143 Bcfe (43% oil & NGLs) 2013 ACTIVITY Q3 2013 = average net 40 MMcfe per…
  11. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 11
    Mississippian Play Total 133,000 net acres in focus area (6% HBP) at end of Q3 Approximately 300 potential locations (320 acre spacing) HIGHLIGHTS Central Kansas Uplift Seven horizontal Miss wells completed 30 day average IP 238…
  12. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 12
    Significant Drilling Presence in Attractive Producing Regions 122 rig fleet 16 Fleet average 1,200 HP rating; 97% of contracted rigs drilling horizontal wells 51% utilization rate for Q3 2013 68% of 45 1,200-1,700 HP rigs under…
  13. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 13
    Average Dayrates and Margins (1) 20,000 90 Average Number of Rigs Utilized 15,000 Margins / DayRates () 60 10,000 30 5,000 0 0 2009 2010 2011 2012 9 mos. '13 Margins Day Rates Rigs Utilized 14 (1) Margins…
  14. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 14
    Rig Fleet Snap Shot 400700 HP 7501,000 HP 1,2001,700HP 2,000 HP 2,000 HP 31% 41% 32% 33% 80% 69% 20% 59% 67% 68% Sale Pending: 4 29 41 44 3 5 70% of Total Fleet % Utilized % Unutilized 15 86 rigs equipped with…
  15. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 15
    Introducing the New BOSS Drilling Rig Optimized for Pad Drilling Multi-direction walking system Faster Between Locations Quick assembly substructure 32 truck loads More Hydraulic Horsepower (2) 2,200 horsepower mud pumps 1,500…
  16. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 16
    Mid-Stream Core Operations Granite Wash Mississippi Lime 32,000 dedicated acres 1,000,000+ dedicated acres 1 processing facility 6 processing facilities Pittsburgh Mills 135 MMcf/d processing capacity 223 MMcf/d processing capacity*…
  17. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 17
    Historical Performance Historical Daily Gathering Volumes (MMBtu / d) NGLs Volumes (Bbl / d) 400,000 15,000 300,000 10,000 200,000 5,000 100,000 0 0 2009 2010 2011 2012 9 mos. '12 9 mos. '13 2009 2010 2011 2012 9 mos. '12 9…
  18. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 18
    Midstream Segment 2013 Outlook Mississippian Reno County, KS: 25 MMcf/d Total Processing Capacity 5 MMcf/d refrigeration plant completed and operational 20 MMcf/d cryogenic plant completed and operational Currently processing 2.8…
  19. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 19
    Balance Sheet Summary 9/30/13 12/31/12 (In Millions) Total Assets 3,924.7 3,761.1 Long-Term Debt Senior Subordinated Notes 645.6 645.3 Bank Facility 71.1 Total Long-Term Debt 645.6 716.4 Shareholders Equity 2,116.9 1,974.3…
  20. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 20
    Debt Structure (1) Senior Subordinated Notes 650 million, 6.625% 10-year, NC5; maturity 2021 Ratings S&P Moodys Fitch Corporate BB Ba3 BB Senior Subordinated Notes BB- B1 BB- Unsecured Bank Facility Borrowing Base 800…
  21. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 21
    Hedges Target 5070% of current year projected oil and natural gas production Natural Gas Crude Oil MMBtu/d Bbls/d 3.67 100,000 10, 000 97.94 80, 000 93.26 8,000 4.23 60, 000 6,000 40, 000 4,000 20, 000…
  22. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 22
    Segment Contribution Revenues ( millions) Adjusted EBITDA ( millions)(1) 1,400 800 1,315 1,208 657 1,200 602 993 600 1,000 871 474 441 800 707 373 400 600 400 200 200 0 0 2009 2010 2011 2012 9 mos. '13 2009 2010…
  23. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 23
    Capital Expenditures (In Millions) 1,500 1,000 500 0 2008 2009 2010 2011 2012 2013 Budget Oil and Natural Gas Contract Drilling Midstream Acquisitions 24
  24. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 24
    Non-GAAP Financial Measures Adjusted EBITDA Nine months ended Sept. 30, Years ended December 31, ( in Millions) 2012 2013 2009 2010 2011 2012 Net Income 80 133 (56) 146 196 23 Income Taxes 51 84 (32) 91 123 16 Depreciation,…
  25. CAPITAL ONE SECURITIES INC ENERGY CONFERENCE – Unit Corp. – slide 25

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