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June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp.

Unit Corp. · Jun 6, 2018 · 34 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 1
    Bank of America Merrill Lynch Energy Credit Conference June 6, 2018
  2. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 2
    A Diversified Energy Company 10 10 Tulsa based, Casper incorporated in 1963 Marcellus Pittsburgh Integrated approach to Mississippian Basin business allows Unit to capture margin Anadarko Tulsa Headquarters from each…
  3. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 3
    Investment Highlights Opportunity-rich upstream portfolio with compelling economics provides optionality Upstream capital allocated to areas generating highest rates of return in the Companys portfolio Contract drilling segment…
  4. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 4
    Core Upstream Producing Areas Average Production (MBoe/d) Net Wells Drilled: 91 121 35 10 26 34 60 55 Oil 46 50 47 47-48 18% 50 44 40 Gas 30 NGLs 54% 28% 20 10 0 2013 2014 2015 2016 2017 2018 est Q1 2018 Daily Production:…
  5. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 5
    Track Record of Reserve Growth Proved Reserves (MMBoe) 179 180 160 150 150 150 135 120 116 118 104 95 96 90 86 79 69 60 58 42 45 48 30 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011…
  6. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 6
    Core Area Cash Margins 10.00 Adjusted Base 9.01 9.00 0.42 8.00 1.56 Adjusted Base 7.00 6.75 Adjusted Base 0.70 5.86 6.00 1.17 0.81 Adjusted Base /Mcfe Adjusted Base Differential - Adjusted * 5.00 4.76 4.59 LOE &…
  7. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 7
    SOHOT Low Cost, High ROR Oil Play Spud IP-30 Lateral Lease Operator Date Boe/d % Oil Length 1 Schmidt 1-10H Unit 9/17 687 80 5,000 1 2 Nina 1-22H Unit 8/17 1,124 76 4,855 4 3 McConnell 1-11H Unit 10/17 1,091 63 4,943 7 2 4 Schenk…
  8. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 8
    SOHOT Growing Oil Production and Improving Capital Efficiency Quarterly Net BOE Geology 600,000 Marchand stacked lenses provide multiple oil drilling targets Medrano proved gas potential 500,000 Land 23,000 contiguous net acres…
  9. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 9
    Granite Wash Low Risk Wet Gas Condensate Play with NGL Price Upside Spud IP-30 Gas Lateral Well Operator Date MMcfe/d % Length 1 Dixon 5554 XL 1H Unit 2/16 12.5 47% 7,503 2 Dixon 5554 EXL 4H Unit 2/17 7.5 47% 7,474 3 Carr 1357 EXL…
  10. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 10
    Granite Wash Competitive Advantages Drive Differentiated Value Buffalo Wallow Quarterly Net MMcfe Geology 4,000 11 Stacked Granite Wash lenses significantly improves capital efficiency 3,500 Sands present across acreage Land 3,000…
  11. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 11
    STACK Core - Provides High ROR Oil/Wet Gas with Dry Gas Optionality IP-30 Gas Lateral Oil Lease Operator Spud Date MMcfe/d % Length Condensate 12 1 Anderson Half Continental 2/2016 17.1 99% 9,676 2 Edith Mae Continental 6/2016…
  12. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 12
    STACK West Successful Extension of Meramec and Potential for Osage Development IP-30 Liquids Lateral Lease Operator Spud Date Boe/d % Length 1 Cox Tapstone 9/2017 1,583 20% 10,009 2 Rebecca Tapstone 11/2017 788 50% 10,130 3 Randi…
  13. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 13
    STACK Growing into Core Area for Unit Petroleum Geology Quarterly Net BOE Stacked drilling targets in Osage, Meramec and Woodford 140,000 Red Fork Potential in some areas Sands consistently present across play 120,000 Land 17,000…
  14. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 14
    Wilcox Conventional Stacked Over-Pressured Intervals Provide Low Cost Homerun Potential Overall Wilcox Drilling Program Results Drilled 170 operated wells since 2003 POLK TYLER (160 vertical, 10 horizontal) Program ROR 80% Operated…
  15. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 15
    Wilcox Exceptional Recompletion & Workover Results 2017 Composite Gross Production from Recompletions and Workovers 28 Recompletions & 13 Workovers Total Cost: 15MM End of Year 34.0 MMcfd 2016 recompletion/workover 900 bopd…
  16. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 16
    Wilcox Trend Provides an Extensive Play Area Wilcox Strategy for Future Growth Continue development of Gilly Field area with vertical and horizontal drilling and over 80 stacked pay recompletion/workover opportunities in existing…
  17. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 17
    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 35 equipped with skidding or walking systems 26 additional can be skidded 35% total…
  18. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 18
    SCR Rigs Continue to Make an Important Contribution 40 35 26 At industry trough 13 30 22 drilling rigs operating 21 25 Currently, 33 drilling rigs operating 20 12 15 All BOSS rigs operating 7 10 23 SCR rigs operating 10…
  19. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 19
    Average Dayrates and Margins (1) 20,000 100% Decline in dayrates lagged 15,000 75% utilization decrease due to Average Rig Utilization Margins and Dayrates long-term contract roll-off 10,000 50% Utilization increased…
  20. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 20
    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…
  21. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 21
    Superior Joint Venture Overview SP Investor Holdings LLC 50% 50% Retains 50% equity interest Acquired 50% equity interest Received 300 million 300 million consideration Retains operational control of Non-managing member…
  22. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 22
    Unit Corporation Pro-Forma Superior Transaction (in thousands except leverage ratios) 3/31/2018 ProForma Long term debt Bank 147,700 0 Bonds (net of discount & issuance cost) 642,822 642,822 Total 790,522 642,822 Cash 752…
  23. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 23
    Midstream Core Operations Key Metrics Northern Oklahoma and Kansas 2,000,000+ dedicated acres 22 active systems 193 MMcf/d processing capacity 609 miles of gathering pipeline Three natural gas treatment Texas Panhandle plants Reno…
  24. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 24
    Midstream Segment Contract Mix 2010 Q1 2018 Contract Mix Based on Volume 35% 49% 51% Fee Based 65% Commodity Based Contract Mix Based on Margin 15% 41% 85% Fee Based 59% Commodity Based Unit vs. 3rd Party Margin…
  25. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 25
    Debt Structure No Near-Term Maturities Senior Subordinated Notes Ratings S&P Moodys Fitch Corporate B+ B2 B+ 650 million, 6.625% Senior Subordinated Notes BB- B3 BB- 10-year, NC5; maturity 2021 3/31/2018 Key Covenants Interest…
  26. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 26
    Segment Contribution Revenues ( millions) Adjusted EBITDA ( millions)(1) 1,573 800 1,600 787 1,400 1,200 600 1,000 854 410 800 740 400 313 602 600 252 400 200 205 89 200 0 0 2014 2015 2016 2017 Q1'18 2014 2015 2016 2017…
  27. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 27
    Operating Segment Capital Expenditures (1) (In Millions) 1,500 1,000 500 0 2013 2014 2015 2016 2017 2018 Forecast Oil and Natural Gas Contract Drilling Midstream (1) Net of acquisitions and plugging liability…
  28. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 28
    APPENDIX 29
  29. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 29
    Non-GAAP Financial Measures - Corporate Adjusted EBITDA Three months ended Years ended March 31, December 31, ( In Millions) 2017 2018 2014 2015 2016 2017 Net Income (Loss) 16 8 136 (1,037) (136) 118 Income Taxes 14 3 87 (627)…
  30. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 30
    Non-GAAP Financial Measures - Segments Segment Cash Operating Margin Three months ended Years ended March 31, December 31, ( In Millions) 2017 2018 2014 2015 2016 2017 Unit Petroleum Income (Loss) Before Income Taxes (1) 36 36 199…
  31. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 31
    Non-GAAP Financial Measures Reconciliation of Average Contract Drilling Daily Operating Margin Before Elimination of Intercompany Rig Profit and Bad Debt Expense Three months ended Years ended (In thousands except for operating days…
  32. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 32
    Pro-forma Reconciliation Pro-forma Reconciliation of First Quarter 2018 Results as if Superior Transaction Occurred 1-1-2018 (In millions) Oil and Contract Total Natural Gas Drilling Midstream Other Consolidated Income (loss)…
  33. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 33
    Derivative Summary 2018 2019 2020 Q2 Q3 Q4 CRUDE: Collars Volume (Bbl) -- -- -- -- -- Weighted Avg Floor -- -- -- -- -- Weighted Avg Ceiling -- -- -- -- -- 3-Way Collars Volume (Bbl) 182,000 184,000 184,000 730,000 -- Weighted…
  34. June 2018 Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 34
    Q2 2018 Economic Prices Strip Case* Natural MB C3 Crude Gas MB C2 MB C3 per barrel MB NC4 MB iC4 MB C5+ CW C2 CW C3 CW NC4 CW iC4 CW C5+ 2018 66.545 2.851 0.282 0.876 36.786 0.973 1.089 1.524 0.101 0.764 0.789 1.038 1.485 2019…

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