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Capital One Securities 14th Annual Energy Conference – Unit Corp.

Unit Corp. · Dec 11, 2019 · 37 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. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 1
    Capital One Securities 14th Annual Energy Conference December 11, 2019
  2. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 2
    A Diversified Energy Company 11 8 Casper Marcellus Pittsburgh Mississippian Basin Anadarko Tulsa Headquarters Basin 23 Oklahoma Arkoma Basin City Permian North LA/ Basin East Texas Basin Tulsa based, Drilling Rigs (57)…
  3. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 3
    Business Segment Overview Upstream Contract Drilling Midstream Currently running 0 rigs 57 rig fleet; 18 rigs contracted Conducted through Superior Pipeline Q3 2019 Production: 47.8 Mboe/d Company L.L.C., a JV with SP Investor 32%…
  4. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 4
    Investment Highlights Unit offers a unique opportunity to invest in an integrated oil & gas company, capturing margin across the value chain 1 Diversified and integrated asset base across upstream, midstream, and drilling services…
  5. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 5
    Upstream Segment Overview Proved Reserves Mid Continent Region YE 2018 Proved PDP Reserves (Mboe): 58% Hoxbar/STACK PDP: 91,743 PUD Granite Wash PDNP: 19,833 30% PUD: 48,105 PDNP Upper Gulf Coast Region 12% Q3 2019 Daily…
  6. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 6
    Track Record of Disciplined Growth (Mboe/d) 60 55 60% 50 46 47 47 44 45 39 45% 33 History of Production 29 28 30 25 27 30% Growth with Increased 24 19 Liquids Content 11 15 15 10 10 15% 0 0% 2001 2002 2003 2004 2005…
  7. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 7
    Track Record of Reserve Growth 179 180 160 160 150 150 150 135 116 118 120 104 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 2012 2013 2014 2015…
  8. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 8
    Core Area Cash Margins per Mcfe (Mcfe) 5.00 4.50 4.00 3.50 3.00 2.50 4.59 2.00 3.52 1.50 3.10 2.78 1.00 1.95 1.35 0.50 1.05 0.00 SOHOT STACK Oil Red Fork STACK Wilcox Granite Wash STACK Dry Gas Condensate…
  9. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 9
    Red Fork Adds Oily Drilling Inventory Red Fork Summary 19,100 net acres 86% HBP 64% average WI 9 horizontal wells drilled 20-30 operated locations 15-25 non-op locations Well costs: 4,500 5.7 MM 7,500 7.1 MM Unit…
  10. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 10
    Red Fork Production Performance 70,000 60,000 Cumulative Production per 1,000 of Lateral (boe) 50,000 40,000 30,000 20,000 10,000 0 0 50 100 150 200 250 300 350 400 450 500 Days Online Red Fork Type Curve…
  11. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 11
    SOHOT Low Cost, High ROR Oil Play Unit Petroleum 11 5D A 18/7 1HXL IP30: 497 Boe/d 98% Oil Kaiser Francis 10 Amanda 21-6-8 1H IP30: 540 Boe/d 71% Oil Kaiser Francis 9 Torralba 10-5-8 1H IP30: 578 Boe/d 70% Oil Unit…
  12. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 12
    SOHOT Low Cost, High ROR Oil Play Marchand Marchand Type Curve 5,000 7,500 IP - 30 (Boe/d) 720 1,006 ROR (1) 73% 108% EUR (Mboe) 568 812 % Liquids 76% 76% Well Cost (mm) 4.7 5.9 Single Well Economics 350% 300% 250% ROR…
  13. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 13
    SOHOT Predictable Oil Production and Improving Capital Efficiency SOHOT Daily Net BOE by Type Geology 6,000 Marchand stacked lenses provide multiple oil drilling targets Medrano proved gas potential 5,000 Land 31,500 net acres…
  14. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 14
    STACK Core Provides Good ROR Oil/Wet Gas with Dry Gas Optionality Continental Resources 10 Privott 17_20-16N-9 1HX 10 IP30: 4,308 Boe/d 30% Oil Unit Petroleum Contl Resources Devon Energy Devon Energy 9 9 Tiger Swallowtail 1HX…
  15. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 15
    STACK Core Provides Good ROR Oil/Wet Gas with Dry Gas Optionality Oil Condensate Dry Gas* Type Curve Window Window Window IP - 30 (Boe/d, Mcfe/d*) 1,671 1,727 12,212* ROR (1) 104% 36% 0% EUR (Mboe/Bcfe*) 1,890 1,914 13.2* %…
  16. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 16
    STACK Growing into Core Production Growth Area for Unit Petroleum STACK Daily BOE by Type Geology 3,000 Stacked drilling targets in Osage, Meramec, and Woodford Red Fork Potential in some areas 2,500 Sands consistently present…
  17. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 17
    Granite Wash Low Risk Wet Gas Condensate Play with NGL Price Upside Francis 5713 EXL 3H 1 IP30: 9.5 MMcfe/d (78% Gas) Carr 1357 WXL 4H Francis 5859 EXL 5H 2 5 IP30: 10.0 MMcfe/d (84% Gas) IP30: 5.5 Mmcfe/d (63% Gas) Meek 6836H…
  18. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 18
    Granite Wash Competitive Advantages Drive Differentiated Value Geology Daily Net MMcfe 11 stacked Granite Wash sands significantly improves capital efficiency 60 Sands present across acreage 50 Land 9,000 net largely contiguous…
  19. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 19
    Wilcox Conventional Stacked Over-Pressured Intervals Provide Low Cost High Potential Overall Wilcox Drilling Program Results Drilled 177 operated wells since 2003 (166 vertical, 11 horizontal) Program ROR 81% Operated with working…
  20. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 20
    Rig Fleet Presence in Key Regions 11 57 rig fleet 32% total fleet utilization 54 rigs pad capable 8 SCR rigs modified to meet customer requirements All 13 BOSS rigs operating 14th BOSS rig moving to first location under…
  21. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 21
    Average Dayrates and Margins (1) 20,000 40 15,000 30 Average dayrates increased Average Rigs Utilized Margins and Dayrates 4% quarter-over-quarter 10,000 20 5,000 10 0 0 2015 2016 2017 2018 Q3'19 Margins…
  22. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 22
    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…
  23. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 23
    Midstream Core Operations Key Metrics Northern Oklahoma and Kansas Tulsa Approx. 1.9 million dedicated acres Bellmon Headquarters 21 active gathering systems 176 MMcf/d processing capacity Hemphill 658 miles of gathering pipeline…
  24. Capital One Securities 14th Annual Energy 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. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 25
    Midstream Segment Contract Mix 2010 Q3 2019 Contract Mix Based on Volume 25% 49% 51% Fee Based 75% Commodity Based Contract Mix Based on Margin 15% 29% 85% Fee Based 71% Commodity Based Unit vs. 3rd Party Margin…
  26. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 26
    Debt Structure Senior Subordinated Notes 650 million, 6.625% coupon Maturity of May 15, 2021 Standard high yield incurrence covenants only, no financial maintenance tests Unit Secured Credit Facility (Re-determined September 26,…
  27. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 27
    Operating Segment Capital Expenditures (1) (In Millions) 500 400 300 200 100 0 2015 2016 2017 2018 2019 forecast Oil and Natural Gas Contract Drilling Midstream (1) Net of acquisitions and plugging liability…
  28. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 28
    Investment Highlights Unit offers a unique opportunity to invest in an integrated oil & gas company, capturing margin across the value chain 1 Diversified and integrated asset base across upstream, midstream, and drilling services…
  29. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 29
    Appendix NYSE: UNT 30
  30. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 30
    Reconciliation of Free Cash Flow ( in thousands) 2001 2002 2003 2004 2005 2006 2007 2008 2009 Net cash provided by operating activities: 133,021 70,547 121,712 203,210 317,771 506,702 577,571 689,913 490,475 Proceeds from disposition…
  31. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 31
    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…
  32. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 32
    Core Area Cash Margins (Mcfe) 8.00 7.00 Adjusted Base 6.28 6.00 0.33 Adjusted Base Adjusted Base 5.03 5.14 1.37 5.00 Adjusted Base 0.38 0.55 4.25 Differential - Adjusted* 4.00 1.12 0.40 Adjusted Base Adjusted Base LOE &…
  33. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 33
    Non-GAAP Financial Measures - Corporate Adjusted EBITDA Nine months ended September 30, Years ended December 31, ( In millions) 2018 2019 2015 2016 2017 2018* Net Income (Loss) 37 (218) (1,037) (136) 118 (40) Income Taxes 12…
  34. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 34
    Non-GAAP Financial Measures - Segments Segment Adjusted EBITDA (with G&A allocated) ( In millions) Nine months ended Sept. 30, Years ended December 31, Unit Petroleum 2018 2019 2015 2016 2017 2018 LTM Q319 Income (Loss) Before…
  35. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 35
    Non-GAAP Financial Measures Reconciliation of Average Contract Drilling Daily Operating Margin Before Elimination of Intercompany Rig Profit and Bad Debt Expense Nine months ended Years ended (In thousands except for operating days…
  36. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 36
    Derivative Summary 2019 2020 2021 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Crude Collars Volume (Bbl) -- -- -- -- -- -- -- -- -- Weighted Avg Floor -- -- -- -- -- -- -- -- -- Weighted Avg Ceiling -- -- -- -- -- -- -- -- -- 3-Way Collars Volume…
  37. Capital One Securities 14th Annual Energy Conference – Unit Corp. – slide 37
    Q4 2019 Economic Prices Strip Case* NGPL- Natural PEPL Midcon MB C3 Crude Gas Basis Basis MB C2 MB C3 per barrel MB NC4 MB iC4 MB C5+ CW C2 CW C3 CW NC4 CW iC4 CW C5+ 2019 54.857 2.640 (0.390) (0.320) 0.199 0.505 21.213 0.644…

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