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Unit Corp (UNT) Inks Agreement to Increase Oklahoma Acreage

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Diversified energy company Unit Corporation has signed a deal with an undisclosed seller to acquire assets in Western Oklahoma for $57 million in cash and land. Apart from the cash component, Unit Corporation will be transferring 180 acres in McClain County to the seller for the acquisition of the assets. The company will raise the purchase amount through equity offering. The effective date of the acquisition was Jan 1.

Per the terms of the deal, Unit Corporation will acquire 8,300 net acres in the Grady and Caddo Counties, in Hoxbar, OK. The acquisition will also add 47 proved developed producing wells with an estimated average daily production of 1,367 barrels of oil equivalent to the company’s portfolio. The estimated proved reserves of the properties amount to 3.2 million barrels of oil equivalent. The acquisition will add 65 gross potential horizontal drilling locations.

The transaction is in line with the company’s strategy to expand in one of its core areas. The move increases the company’s Hoxbar holdings by 42% to a total of 28,000 net acres and is likely to result in value addition for the stakeholders.

Zacks Rank & Key Picks

Headquartered in Tulsa, Unit Corporation is engaged through its subsidiaries in oil and natural gas exploration, production, contract drilling and natural gas gathering and processing. The company currently carries a Zacks Rank #3 (Hold).

The company outperformed the Zacks categorized Oil and Gas Field Services industry over the prior three months. During the said time frame, while shares of Unit Corporation rallied 29%, the broader industry declined 3%. 

Better-ranked players in the broader industry include Antero Resources Corporation (AR - Free Report) , Pioneer Natural Resources Company (PXD - Free Report) and Penn Virginia Corporation (PVAC - Free Report) . All the three companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Antero Resources reported positive earnings surprise in each of the preceding four quarters, the average being 239.10%.

Pioneer Natural Resources is expected to deliver year-over-year growth of 1118.6% in its earnings in 2017.

Penn Virginia Corporation posted positive average earnings surprise of 36.7% in the trailing four quarters.

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