Unit Announces Total Proved Reserves, 2008 Capital Expenditure Budget, Hedging Activity...

Unit Announces Total Proved Reserves, 2008 Capital Expenditure Budget, Hedging
Activity and Operations Update

TULSA, Okla., Jan. 22 /PRNewswire-FirstCall/ -- Unit Corporation
(NYSE: UNT), today announced the following information regarding its
wholly-owned subsidiaries:

Unit Petroleum Company

Reserves
At December 31, 2007, Unit's net proved oil and natural gas reserves, as
reviewed by its independent petroleum engineers, were 514.6 Bcfe of natural
gas, consisting of 9.7 million barrels of oil, 6.1 million barrels of natural
gas liquids and 419.6 Bcf of natural gas. This represents an 8% increase over
the company's 2006 year-end total proved reserves.
During 2007, the company participated in the drilling of 253 gross wells,
with an 87% success rate. Seventy-eight percent of the company's oil and
natural gas reserves are proved developed, with the remaining 22% comprising
total proved undeveloped reserves. Natural gas comprises 82% of the company's
total proved reserves.
The company replaced approximately 171% of its 2007 oil and natural gas
production, almost all through the drill bit. The year ended 2007 is the 24th
consecutive year that the company has replaced more than 150% of its annual
production with new oil and natural gas reserves. Over this 24-year period,
the company's average annual reserve replacement percentage is 226%, of which
144% was through the drill bit.
Future net cash flow from the company's total proved reserve base as of
December 31, 2007, before income taxes, is estimated to be $2.65 billion. The
net present value of the company's total proved reserve base (discounted at
10%) is approximately $1.48 billion. These calculations are based on
unescalated prices of $95.98 per barrel of oil, $66.89 per barrel of natural
gas liquids and $6.22 per Mcf of natural gas for the estimated life of the
respective properties.
2008 Budget
The company's 2008 budget for capital expenditures is $360 million,
excluding acquisitions, of which $297 million is planned for exploration and
development drilling. This budget represents a 23% increase over the
company's estimated 2007 capital expenditures. During 2007 the company
commenced drilling operations on 254 new wells, 235 of which were completed by
year end. In addition, 18 wells which were started but not completed in 2006
were completed in 2007 for a total of 253 wells completed during 2007. Of the
253 completed wells, 220 were completed as producing for a success rate of
87%.
The company currently plans to participate in the drilling of
approximately 280 wells during 2008, an increase of 11% over 2007. Unit's
preliminary 2008 annual production guidance is approximately 59.0 to 61.0
Bcfe.
Hedging Positions
The company has approximately 40% of its current daily natural gas
production hedged through NYMEX plus basis at several delivery points for
2008. Of the natural gas hedges, 16% are swaps at a comparable NYMEX average
price of $8.46 and 24% are collars with a comparable NYMEX average floor of
$7.76 and a comparable NYMEX average ceiling of $9.17. The average basis
differentials for the swaps are ($0.94) and for the collars ($0.54).
Approximately 77% of the company's current daily crude production is hedged
for 2008 with 31% under a swap contract at $91.32 and 46% under collar
contracts with an average floor of $86.67 and an average ceiling of $100.00.
Additionally, the company has approximately 75% of its monthly ethane and
propane liquids production hedged through swaps at its delivery points for the
period January through April 2008 at an average ethane price of $0.97 per
gallon and a propane price of $1.54 per gallon.
Acquisition and New Wells
During January 2008, the company completed its purchase from a private
company of the 50% interest in a 6,800 gross-acre leasehold in the company's
Segno area located in Hardin County, Texas that the company did not already
own. Included in the purchase were five producing wells with 4.9 Bcfe of
estimated proved reserves and current production of 2.8 million cubic feet
(MMcf) of natural gas per day and 88.2 barrels of condensate. The purchase
price was $16.8 million which consisted of $15.8 million allocated to the
reserves of the wells and $1.0 million allocated to the leasehold acreage.
The production and reserves acquired in this purchase will be included in the
company's 2008 results.
The Panola Field in Latimer County, Oklahoma continues to yield prolific
natural gas wells. The Cox # 7 (63.47% Working Interest) was testing natural
gas from a Lower Atoka sand at a post fracture rate of 12.9 MMcf per day with
5,500 PSI flowing tubing pressure. The well's current production is limited
to 2.0 MMcf per day until additional pipeline capacity is added in early
February. The company currently plans to drill approximately 10 additional
wells in this field during 2008. In Unit's Yoakum Field, located in Lavaca
County, Texas, the Freude # 2H (100% Working Interest) tested natural gas at a
rate of 7.3 MMcf per day with 5,733 PSI flowing casing pressure from a
horizontal section of the Edwards formation. Initial natural gas sales from
this well are expected to occur in early March 2008. The company's leasehold
covers four potential offset well locations to the Freude # 1 with the first
offset well planned to start drilling in the second quarter of 2008.

Unit Drilling Company

2007 Fourth Quarter Information
Unit Drilling Company's drilling rig utilization for the fourth quarter of
2007 averaged 80%, a 2% increase over its 78% rate for the third quarter of
2007. Dayrates for the fourth quarter averaged $18,114 per day, which is $356
per day or 2% lower than the 2007 third quarter average. The company ended
2007 with a record 129 drilling rigs, 12 of which were added to its fleet in
2007. Of the 129 drilling rigs, 107 are currently under contract.
2008 Budget and Rig Additions
The company's capital expenditures budget for 2008 is $119 million,
excluding acquisitions, a 32% decrease over estimated 2007 capital
expenditures, excluding acquisitions. The company is constructing two new
drilling rigs which it plans to place into service in its Rocky Mountain
division during May 2008. Both of these rigs will be 1500 horsepower, diesel
electric drilling rigs. When these rigs are completed, the company will own
131 drilling rigs.

Superior Pipeline Company

2007 Operational Highlights and 2008 Budget
During 2007, the company completed the installation of three natural gas
processing plants, increasing processing capacity by approximately 90%, from
50 MMcf per day to 95 MMcf per day. In addition, the company also completed
the construction of three new gathering systems in 2007, including one system
with a 5 MMcf per day processing plant. The company added an additional 78
miles of pipeline in 2007, which is an approximate 13% increase in total miles
of pipeline, and connected an additional 56 wells to its gathering systems.
Currently, the company's asset base consists of four natural gas treatment
plants, eight operated natural gas processing plants, 36 active gathering
systems and approximately 676 miles of pipeline. The company also
consolidated several small gathering systems into larger systems in 2007
resulting in reduced operating costs and expanding its competitive presence in
those operational areas.
The company's capital expenditures budget for 2008 is $32 million.
Hedging Positions
A portion of the company's operating profit is derived from the difference
between natural gas purchases and natural gas liquid sales which is referred
to as the frac spread. Approximately 45% of the company's total anticipated
natural gas liquids volumes for 2008 is subject to frac spreads. The company
has locked in frac spreads for 32% (71% of frac spread volumes) of its
anticipated monthly processing volumes for the period January through April
2008 at $9.27 per MMBtu. The comparative frac spread for 2007 averaged $7.21.
For the period May through July 2008, approximately 20% of its monthly ethane
gallons and 35% of monthly propane gallons, along with the associated natural
gas purchases, are swapped at $5.47 and $8.00 per MMBtu frac spreads,
respectively. In 2007, ethane and propane frac spreads averaged $5.01 and
$6.97, respectively. For the period August through December 2008,
approximately 11% of monthly propane gallons, along with the associated
natural gas purchases, are swapped at $8.75 per MMBtu frac spreads.
Management Comments
Larry Pinkston, President and Chief Executive Officer of Unit Corporation,
said: "We are pleased with the 2007 operating results for each of our
segments. We are particularly pleased that the company's exploration and
production segment achieved its longstanding objective of replacing at least
150% of the year's production with new reserves. Meeting our production
replacement objective for the 24th consecutive year is a testament to the
quality of our prospect inventory and the ability of our exploration and
production personnel to continue to generate new and exciting prospects.
"Our recently completed acquisition involving our Segno area is
significant to us as that area represents one of our key development areas.
We plan to begin drilling operations on a new well in the acreage block in
approximately two months.
"Our drilling segment's current 80% utilization rate is a positive
reflection of the quality of our drilling rig fleet and the relationships we
have with our customers. Superior Pipeline continues to aggressively grow and
establish itself as a significant Mid-Continent pipeline company."
Fourth Quarter and Year-End 2007 Webcast
Unit will release its fourth quarter and year-end 2007 earnings and host a
conference call on Tuesday, February 26, 2008. The webcast will be broadcast
live over the Internet at 11:30 a.m. Eastern time at http://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 and value of the company's oil and natural gas reserves,
the number of future wells the company's exploration and production segment
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, anticipated operational dates
for drilling rigs under construction, 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.
SOURCE Unit Corporation

David T. Merrill, Chief Financial Officer & Treasurer of Unit Corporation,
+1-918-493-7700