Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Unit Oil Announces $600M Buy of Noble Energy Assets

Early Wednesday morning in Tulsa, Okla., Unit Oil (UNT) announced that its subsidiary, Unit Petroleum Company, has reached an agreement with Noble Energy, Inc. (NBL) to acquire about 84,000 acres as well as other oil and natural gas assets in western Oklahoma and the Texas Panhandle for about $617 million cash. The deal is expected to be finalized in September.

Unit Corporation (NYSE:UNT)

The land in this acquisition is expected to have about 44 million barrels in reserve, with an anticipated net production of about 10,000 barrels, according to a press release. The transaction is expected to be financed with long-term debt, though Unit is considering the sale of about $200 to $300 million in assets to help offset that.

Early market trading Wednesday lifted Unit’s stock by nearly 3 percent, while Noble has gained about 2 percent.

In the release, Unit president and CEO Larry D. Pinkston said, “This is an important growth step for Unit and represents a unique opportunity that benefits all three of our business segments. For our upstream business segment, it will more than double our acreage in the Granite Wash Texas Panhandle core area, a highly prolific liquids-rich fairway in the Anadarko Basin. We plan to accelerate the drilling activity in the acquired properties over the next 12 to 18 months using seven rigs from our contract drilling segment, and we plan to operate the acquired gathering systems and, as appropriate, replace existing third party processing contracts beginning in 2015. We anticipate that this acquisition will immediately be accretive to cash flow and to earnings beginning in 2013. It will also provide us with additional inventory of drilling opportunities that will allow us to significantly grow our production in the Anadarko Basin focused on oil- and liquids-rich gas targets. We look forward to accelerating development of these assets and delivering growth to our shareholders over the next several years.”

In addition to the purchase, Unit gave its second-quarter production estimate of 3.4 million barrels, which would be a 2 percent increase over the first quarter of 2012 and 12 percent over the second quarter of 2011.

This looks to be welcome news for stockholders in Unit, including hedge funds like Chuck Royce’s Royce and Associates and Dmitry Balyasny’s Balyasny Asset Management. Royce is a large player in Unit ($309 million invested at the end of March), and Balyasny jumped in during the first quarter of 2012 with a nearly $7 million play. While the long-term debt idea of financing may not be easy for some, the opportunity long-term with this deal may be a boon for stockholders over the next couple of years as Unit brings its rigs online in these new land purchases.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!