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

Unit Corp. · Jun 5, 2019 · 36 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. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 1
    Bank of America Merrill Lynch Energy Credit Conference June 5, 2019
  2. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 2
    A Diversified Energy Company 11 8 Casper Marcellus Pittsburgh Mississippian Basin Anadarko Tulsa Headquarters 24 Basin Oklahoma Arkoma Basin City Permian North La/ Basin East Texas Basin Tulsa based, 57 Unit Rigs 10 4…
  3. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 3
    Investment Highlights Diversified energy company with upstream, midstream, and drilling rig segments and track record of growing with a capital budget in- line with anticipated cash flow Upstream portfolio of high return drilling…
  4. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 4
    Core Upstream Producing Areas Average Production (MBoe/d) Net Wells Drilled: 35 10 26 33 30-40 60 55 50 47 47 48-49 Mid Continent Region 44 40 Hoxbar/STACK 30 Granite Wash 20 Upper Gulf Coast Region 10 0 Wilcox 2015 2016…
  5. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 5
    Reserve Detail Reserve summary, as of 12/31/2018, audited by Ryder Scott Company, L.P. Reserves up 7% Y/Y PDP up 2% Y/Y PV-10 up 23% Y/Y Oil (Mbbls) Nat Gas (MMcf) NGL (Mbbls) Total (Mboe) PV-10 (MM) PDP 13,248 301,948 28,171…
  6. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 6
    Track Record of Reserve Growth 179 180 160 160 150 150 150 135 120 116 118 104 95 96 86 Proved Reserves 90 79 69 (MMBoe) 60 58 42 45 48 30 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011…
  7. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 7
    Core Area Cash Margins 8.00 Adjusted Base 7.53 0.53 7.00 Adjusted Base Adjusted Base 1.37 5.90 6.02 6.00 0.70 0.86 Adjusted Base 4.95 5.00 1.16 0.79 1.43 Adjusted Base Adjusted Base Differential - Adjusted* 4.00 3.79 3.75…
  8. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 8
    SOHOT Low Cost, High ROR Oil Play Kaiser Francis 10 Amanda 21-6-8 1H IP: 540 Boe/d 71% Oil Kaiser Francis 9 Torralba 10-5-8 1H IP: 578 Boe/d 70% Oil Unit Petroleum Unit Petroleum 8 5D 13/12 1HXL Camino IP: 520 Boe/d 88%…
  9. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 9
    SOHOT Low Cost, High ROR Oil Play Marchand Marchand Type Curve 5,000 7,500 IP - 30 (Boe/d) 699 979 ROR (1) 101% 146% EUR (Mboe) 619 881 % Liquids 77% 77% Well Cost (mm) 5.3 6.6 Single Well Economics 350% 300% 250% IRR…
  10. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 10
    SOHOT Growing Oil Production and Improving Capital Efficiency Geology Marchand stacked lenses provide multiple oil drilling targets Yearly Net BOE 2,000,000 Medrano proved gas potential 1,800,000 Land 31,000 net acres 1,600,000…
  11. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 11
    Red Fork Adds Oily Drilling Inventory Red Fork Summary 15,100 Net Acres 86% HBP 64% Average WI 30-40 Horizontal Locations Well costs: 4,500 6 MM 9,500 7.5 MM Unit Petroleum Unit Petroleum Unit Petroleum Unit…
  12. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 12
    Red Fork Production Performance 60,000 50,000 Cumulative Production per 1,000 of Lateral (boe) 40,000 30,000 20,000 10,000 0 0 50 100 150 200 250 300 350 400 450 500 Days Online SCHROCK 2215 1HX HAMAR 3H-17…
  13. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 13
    STACK Core Provides High ROR Oil/Wet Gas with Dry Gas Optionality Continental Resources 10 Privott 17_20-16N-9 1HX 10 IP: 4,308 Boe/d 30% Oil Unit Petroleum Continental Resources Devon Energy Devon Energy 9 9 Tiger Swallowtail…
  14. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 14
    STACK Core Provides High ROR Oil/Wet Gas with Dry Gas Optionality Oil Condensate Dry Gas* Type Curve Window Window Window IP - 30 (Boe/d, Mcfe/d*) 1,703 1,768 12,224* ROR (1) 75% 43% 5% EUR (Mboe/Bcfe*) 1,930 1,961 13.2* %…
  15. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 15
    STACK Growing into Core Area for Unit Petroleum Geology Stacked drilling targets in Osage, Yearly Net BOE Meramec and Woodford 800,000 Red Fork Potential in some areas Sands consistently present across 700,000 play 600,000…
  16. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 16
    Granite Wash Low Risk Wet Gas Condensate Play with NGL Price Upside Francis 5713 EXL 3H Meek 5453 CXL 2H 1 4 IP30: 9.5 MMcfe/d (78% Gas) IP30: 3.8 MMcfe/d (80% Gas) Carr 1357 WXL 4H Francis 5859 EXL 5H 2 5 IP30: 10.0 MMcfe/d (84%…
  17. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 17
    Granite Wash Competitive Advantages Drive Differentiated Value Geology 11 Stacked Granite Wash sands Buffalo Wallow Yearly Net MMcfe significantly improves capital efficiency Sands present across acreage 25,000 Land 9,000 net…
  18. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 18
    Wilcox Conventional Stacked Over-Pressured Intervals Provide Low Cost High Potential Overall Wilcox Drilling Program Results Drilled 177 operated wells since 2003 TYLER POLK (166 vertical, 11 horizontal) Program ROR 80% Operated…
  19. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 19
    Wilcox Trend Provides an Extensive Play Area Wilcox Strategy for Future Growth Continue development of Gilly Texas Gulf Coast Field area with vertical and Wilcox Trend horizontal drilling and stacked pay recompletion/workover…
  20. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 20
    Rig Fleet Presence in Key Regions 11 57 rig fleet 47% total fleet utilization 52 rigs pad capable 8 SCR rigs modified to meet customer requirements All 13 BOSS rigs contracted 14th BOSS rig being constructed and under long-term…
  21. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 21
    SCR Rigs Continue to Make an Important Contribution 40 35 At industry trough 13 21 30 drilling rigs operating 21 25 15 Currently, 27 drilling rigs 18 operating 20 12 15 All BOSS rigs operating or under contract 10 12 11…
  22. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 22
    Average Dayrates and Margins (1) 20,000 100% 15,000 75% Average dayrates increased Average Rig Utilization Margins and Dayrates 2% quarter-over-quarter * 10,000 50% Average utilization has increased from low in Q2…
  23. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 23
    The BOSS Drilling Rig Optimized for Pad Drilling Multi-direction walking system Racking & setback capacity for additional tubulars Faster Between Locations Quick assembly substructure 32-34 truck loads More Hydraulic Horsepower…
  24. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 24
    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…
  25. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 25
    Midstream Core Operations Key Metrics Northern Oklahoma and Kansas Tulsa Approx. 1,900,000 dedicated acres Bellmon Headquarters 22 active systems 176 MMcf/d processing capacity Hemphill 635 miles of gathering pipeline Cashion 12…
  26. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 26
    Midstream Segment Contract Mix 2010 Q1 2019 Contract Mix Based on Volume 24% 49% 51% Fee Based 76% Commodity Based Contract Mix Based on Margin 15% 28% 85% Fee Based 72% Commodity Based Unit vs. 3rd Party Margin…
  27. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 27
    Debt Structure No Near-Term Maturities Senior Subordinated Notes Ratings S&P Moodys Fitch 650 million, 6.625% coupon Corporate B+ B2 B+ Senior Subordinated Notes BB- B3 BB- Maturity of May 15, 2021 Standard high yield incurrence…
  28. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 28
    Segment Contribution Revenues ( millions) Adjusted EBITDA ( millions)(1) 1,000 500 854 843 407 800 400 740 371 602 313 600 300 250 400 200 190 200 100 84 0 0 2015 2016 2017 2018 Q1'19 2015 2016 2017 2018 Q1'19…
  29. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 29
    Operating Segment Capital Expenditures (1) (In Millions) 500 400 336 MM - 422 MM Range 300 200 100 0 2015 2016 2017 2018 2019 forecast Oil and Natural Gas Contract Drilling Midstream (1) Net of acquisitions…
  30. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 30
    Investment Highlights Diversified energy company with upstream, midstream, and drilling rig segments and track record of growing with a capital budget in- line with anticipated cash flow Upstream portfolio of high return drilling…
  31. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 31
    Appendix NYSE: UNT 32
  32. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 32
    Non-GAAP Financial Measures - Corporate Adjusted EBITDA Three months ended March 31, Years ended December 31, (In millions) 2018 2019 2015 2016 2017 2018* Net Income (Loss) 8 (2) (1,037) (136) 118 (40) Income Taxes 3 (1) (627)…
  33. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 33
    Non-GAAP Financial Measures - Segments Segment Adjusted EBITDA (with G&A allocated) ( In millions) Three months ended March 31, Years ended December 31, 2018 2019 2015 2016 2017 2018 Unit Petroleum Income (Loss) Before Income Taxes…
  34. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 34
    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…
  35. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 35
    Derivative Summary 2019 2020 Q2 Q3 Q4 CRUDE: Collars Volume (Bbl) -- -- -- -- Weighted Avg Floor -- -- -- -- Weighted Avg Ceiling -- -- -- -- 3-Way Collars Volume (Bbl) 364,000 368,000 368,000 -- Weighted Avg Floor 61.25 61.25 61.25 --…
  36. Bank of America Merrill Lynch Energy Credit Conference – Unit Corp. – slide 36
    Q2 2019 Economic Prices Strip Case* NGPL- MB C3 Natural PEPL Midcon per Crude Gas Basis Basis MB C2 MB C3 barrel MB NC4 MB iC4 MB C5+ CW C2 CW C3 CW NC4 CW iC4 CW C5+ 2019 63.170 2.732 (0.525) (0.530) 0.237 0.575 24.154 0.595…

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