UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported): February 13,
2007
(Exact
name of registrant as specified in its charter)
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Oklahoma
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1-9260
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73-1283193
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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7130
South Lewis, Suite 1000, Tulsa, Oklahoma
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74136
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (918)
493-7700
Not
Applicable
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
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Section
8 - Other Events.
Item
8.01 Other Events.
On
February 13, 2007, Unit Corporation issued a press release announcing its
2006
year end reserves. Unit Petroleum Company had record reserves of 475.9 Bcfe
which includes 11.6 million barrels of oil and natural gas liquids and 406.4
Bcf
of natural gas. Total proved reserves, annual production and wells drilled
were
all records. The company replaced 221% of its 2006 oil and natural gas
production, meeting its goal of replacing more than 150% of its annual
production with new oil and natural gas reserves for the 23rd
consecutive year.
Unit
Drilling Company's fourth quarter rig utilization was 106.7 rigs, which was
relatively flat compared to the fourth quarter of 2005, and rig utilization
for
the year averaged 109.0 rigs, an increase of 7% compared to the average
utilization in 2005. Fourth quarter dayrates averaged $19,767 per day, which
is
$208 per day or 1% higher than the company's third quarter 2006 dayrate average.
Current dayrates average $19,555 per day or $212 per day lower than the fourth
quarter average.
Superior
Pipeline Company's fourth quarter 2006 gathering volumes were 253,776 MMBtu
per
day, a 41% increase over the fourth quarter of 2005. Processing volumes for
the
fourth quarter of 2006 were 45,504 MMBtu per day, an 87% increase from the
comparable quarter of 2005. Gathering volumes for the year were 247,537 MMBtu
per day, a 74% increase from 2005, while processing volumes for the year
were
31,833 MMBtu per day, a 4% increase over 2005.
A
copy of
the press release is filed as Exhibit 99.1 to this Current Report on Form
8-K and is incorporated herein by reference.
Section
9 - Financial Statements and Exhibits
Item
9.01 Financial
Statements and Exhibits.
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(a)
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Financial
Statements of Businesses Acquired.
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Not
Applicable.
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(b)
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Pro
Forma Financial Information.
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Not
Applicable.
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(c)
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Shell
Company Transactions.
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Not
Applicable
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(d)
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Exhibits.
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Exhibit
No.
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Description
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99.1
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Press
release announcing Unit Corporation's 2006 year end reserves
and
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contract
drilling and natural gas gathering operations
update.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Unit
Corporation
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Date:
February 13, 2007
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By:/s/
Mark E. Schell
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Name:
Mark E. Schell
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Title:
Senior Vice President
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1
EXHIBIT
INDEX
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Description
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99.1
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Press
release announcing Unit Corporation's 2006 year end reserves
and
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contract
drilling and natural gas gathering operations
update.
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news
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UNIT CORPORATION
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7130
South Lewis Avenue, Tulsa, Oklahoma 74136
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Telephone
918 493-7700, Fax 918 493-7714
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Contact:
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David
T. Merrill
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Chief
Financial Officer & Treasurer
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(918)
493-7700
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For
Immediate Release…
February
13, 2007
UNIT
CORPORATION’S TOTAL PROVED RESERVES
REACH
A COMPANY-RECORD 475.9 BCFE;
COMPANY
RECORDS 23RD
CONSECUTIVE YEAR
OF
REPLACING MORE THAN 150% OF PRODUCTION
Tulsa,
Oklahoma….Unit Corporation (NYSE - UNT) today announced the following
information regarding the results of the operations of its wholly owned
subsidiaries.
Unit
Petroleum Company
Unit
Petroleum Company set new company-records for nearly ever major category:
total
proved reserves, annual production, and wells drilled and achieved its stated
annual goal to replace more than 150% of its production.
At
December 31, 2006, Unit’s net proved oil and natural gas reserves, as reviewed
by its independent petroleum engineers, Ryder Scott Company, were 475.9 Bcfe
of
natural gas, which includes 11.6 million barrels of oil and natural gas liquids
and 406.4 Bcf of natural gas.
This
increase in total proved reserves resulted from the company’s participation in
the drilling of 244 gross wells, with an 88% success rate, and certain
acquisitions made during the year. Seventy-seven percent of the company’s oil
and natural gas reserves are proved developed of which 85% are natural gas.
The
remaining 23% comprising total proved undeveloped reserves, reflects the
company’s conservative approach to adding reserves each year.
The
company replaced 221% of its 2006 oil and natural gas production despite
a
reduction of 11.2 Bcfe of reserves as a result of adjustments due to lower
commodity prices at the end of 2006 as compared to 2005. This is the
23rd
consecutive year that Unit has met its goal of replacing more than 150% of
its
annual production with new oil and natural gas reserves, a measurement that
is
unmatched within the U.S. independent exploration and production industry.
Over
the 23-year period, Unit’s average annual reserve replacement percentage is
228%.
The
net
present value of Unit’s total proved reserve base as of December 31, 2006,
discounted at 10%, is approximately $984.1 million. Future net revenue from
these properties, before income taxes, is estimated to be $2.8 billion. This
value is based on unescalated prices of $61.05 per barrel of oil and $5.27
per
Mcf of natural gas for the life of the properties per SEC regulations.
During
2006, Unit produced a company-record 1,453,000 barrels of oil and 44.2 Bcf
of
natural gas, or an equivalent Bcf of 52.9. This is an increase of 30% from
the
equivalent production for 2005 when Unit produced 1,084,000 barrels of oil
and
34.1 Bcf of natural gas for an equivalent Bcf of 40.6. In a news release
dated
January 9, 2007, Unit announced that it estimated its production for the
year
2007 to be approximately 60 Bcfe.
The
following table shows the company’s five-year growth trend for its total
reserves and total production. Total proved reserves during this period
increased an average of 15.5% each year, while production increased an average
25.4% per annum.
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2002
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2003
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2004
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2005
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2006
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2007E
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Total
Reserves (Bcfe)
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269.4
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285.0
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346.8
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412.1
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475.9
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---
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Total
Production (Bcfe)
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21.8
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23.7
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33.4
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40.6
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52.9
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60.0
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Larry
D.
Pinkston, Unit Corporation Chief Executive Officer and President said: "We are
pleased that the company has been able to grow its E&P operating asset base
as it has over the past five years and even more impressed that we have met
the
company’s longstanding objective of replacing 150% of the year’s production with
new reserves this year. We believe replacing more than 150% of our reserves
each
year since 1983 is an outstanding accomplishment, especially considering
the
amount of risk and price volatility that we experience as an industry.
On
a
per-share basis, adjusted for increases in the company’s long-term bank debt,
which was approximately $175 million as of December 31,
Unit
Drilling Company
Unit
Drilling Company’s dayrates for the fourth quarter averaged a company-record
$19,767 per day, which is $208 per day or 1% higher than the company’s third
quarter 2006 dayrate average. Current dayrates average $19,555 per day, or
$212
per day lower than the fourth quarter average.
Fourth
quarter drilling rig utilization averaged 106.7 drilling rigs, which was
relatively flat compared to the fourth quarter of 2005, and drilling rig
utilization for the year averaged 109.0, an increase of 7%, compared to our
2005
average utilization rate. The company’s drilling rig quality, service and labor
force are reflected in its utilization rate, which continues to be one of
the
highest in the deeper land drilling industry. At present, Unit has 117 drilling
rigs, of which 90% are under contract.
Pinkston
said: "Our contract drilling operations are delivering excellent results for our
customers who are operating in some of America’s fastest growing basins.
Although some demand for drilling rigs can be determined by commodity prices,
Wall Street’s demand that producers keep growing production helps maintain
Unit’s 750 to 1,500 horsepower drilling rigs, which are capable of reaching
depths between 15,000 feet and 20,000 feet, at a high utilization rate. Although
we are seeing some utilization weakness with some of our smaller rigs and
in
demand from privately-held customers, we are still the largest operating
land
driller in Oklahoma, and we are keeping our deep rigs working at near capacity
in the Rockies and are finding new customers in southeast Texas and in southwest
Louisiana. Having been a drilling contractor of choice for more than 40 years,
we believe we have a unique perspective about our business and remain optimistic
about the outlook for the remainder of the year.”
Superior
Pipeline Company
Fourth
quarter 2006 gathering volumes for Superior’s gas gathering and processing
operations were 253,776 MMBtu per day, a 41% increase from the fourth quarter
of
2005. Processing volumes for the fourth quarter of 2006 were 45,504 MMBtu
per
day, an 87% increase from the comparable quarter of 2005. Gathering volumes
for
the year were 247,537 MMBtu per day, a 74% increase from 2005, while processing
volumes for the year were 31,833 MMBtu per day, a 4% increase over
2005.
Pinkston
said, "The company’s subsidiary, Superior,
plans to spend approximately $25 million in 2007 carrying out its grassroots
growth plans. We are actively reviewing larger opportunities to grow this
part
of the Unit story. It is exciting to see just how well all three of our segments
- E&P, drilling and gas gathering - work together for the benefit of our
shareholders.”
Fourth
Quarter and Year-End 2006 Webcast
Unit
will
release its fourth quarter and year-end 2006 earnings and host a conference
call
on Thursday, February 22, 2007. The webcast will be broadcast live over the
Internet at 11:30 a.m. Eastern Time at www.unitcorp.com.
__________________________________________________
Unit
Corporation is a Tulsa-based, publicly held energy company engaged through
its
subsidiaries in oil and gas exploration, production, contract drilling and
natural gas gathering and processing. Unit’s Common Stock is listed on the New
York Stock Exchange under the symbol UNT. For more information about Unit
Corporation, visit our website at http://www.unitcorp.com.
This
news
release contains forward-looking statements within the meaning of the Securities
Litigation Reform Act that involve risks and uncertainties, including the
amount
of the company’s oil and natural gas reserves, the value of the company’s oil
and natural gas reserves, the number of future wells the company plans to
drill,
productive capabilities of the wells, future demand for oil and natural gas,
oil
and natural gas reserve information, anticipated production rates from company
wells, the prospective capabilities of offset acreage, anticipated oil and
natural gas prices, future rates to be paid for the company’s drilling rigs as
well as other development, operational, implementation and opportunity risks,
and other factors described from time to time in the company’s publicly
available SEC reports, which could cause actual results to differ materially
from those expected.