Unit Corporation (UNT) announced that its wholly owned subsidiary, Unit Petroleum Company (Unit Petroleum), has closed on the previously announced agreement to acquire certain oil and natural gas assets from Noble Energy, Inc. (NBL). The acquisition includes approximately 84,000 net acres primarily in the Granite Wash, Cleveland, and Marmaton plays in western Oklahoma and the Texas Panhandle. The amount paid at closing was $594.5 million.
As of the effective date of April 1, 2012, the estimated proved reserves of the acquired properties were 44 million barrels of oil equivalent (MMBoe), a 38% increase to Unit Petroleum's proved reserves at December 31, 2011. The acquisition adds approximately 25,000 net acres to Unit Petroleum's Granite Wash core area in the Texas Panhandle with significant resource potential including approximately 600 potential horizontal drilling locations. The acreage is characterized by high working interest and operatorship, 95% of which is held by production. Current plans are to begin drilling Granite Wash horizontal wells with one to two Unit rigs in January 2013 increasing to six to seven Unit rigs by year end 2013. Unit also received two gathering systems as part of the transaction.
"This acquisition is transformational for Unit in that the assets benefit all three of our business segments," commented Larry D. Pinkston, Unit's President and Chief Executive Officer. "The assets are synergistic with our existing profile in the Granite Wash play, enabling us to leverage our operational knowledge and experience to economically develop the assets and deliver growth to our shareholders for many years to come."
The acquisition was funded with net proceeds from a $400 million senior subordinated notes offering that was closed in mid-July and the remainder initially through bank debt. Unit anticipates approximately $268.0 million of proceeds from sales of non-core oil and natural gas properties to be applied against bank debt by the end of the third quarter.