Unit Corporation Announces Sale of Its Contract Drilling Business

TULSA, Okla.--(BUSINESS WIRE)--Unit Corporation (OTCQX: UNTC) (Company) today announced that it signed and simultaneously closed a definitive agreement to sell its wholly-owned contract drilling subsidiary, Unit Drilling Company, to Cactus Drilling Company, L.L.C. in an all-cash deal for $120 million.

The board of directors of the Company (Board) approved the transaction upon the unanimous recommendation of the strategic transactions committee (Committee), which was comprised of independent directors and established to evaluate the transaction and potential alternatives thereto on behalf of the Company. Piper Sandler & Co. served as financial advisor to the Committee.

“Divesting our contract drilling business allows us to sharpen our strategic focus on our upstream operations, where we see significant opportunities to create long-term value,” said Phil Frohlich, the Company’s CEO. “We remain committed to disciplined capital allocation, returning cash to shareholders through our dividend program, and pursuing attractive drilling prospects that complement our existing portfolio.”

Specific uses of the proceeds from the transaction will be determined by the Board in the future. The Company currently expects that its available tax attributes will substantially offset the gains from this transaction. The Company will continue to operate its upstream oil and gas segment and will evaluate opportunities to invest in new drilling projects to drive future growth. The Company also intends to continue its regular dividend program subject to the Board’s discretion.

About Unit Corporation

Unit Corporation is a Tulsa-based, publicly held energy company engaged through its subsidiary, Unit Petroleum Company, in oil and gas production. For more information about Unit Corporation, visit its website at http://www.unitcorp.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act. All statements, other than statements of historical facts, included in this release that address activities, events, or developments that the Company expects, believes, or anticipates will or may occur are forward-looking statements. Several risks and uncertainties could cause actual results to differ materially from these statements, including changes in commodity prices, the productive capabilities of the Company’s wells, future demand for oil and natural gas, projected rate of the Company’s oil and natural gas production, the amount available to the Company for borrowings, its anticipated borrowing needs under its credit agreement, the number of wells to be drilled by the Company’s oil and natural gas segment, the potential productive capability of its prospective plays, and other factors described occasionally in the Company’s publicly available OTC reports. The Company assumes no obligation to update publicly such forward-looking statements, whether because of new information, future events, or otherwise.