Unit Corporation (OTCQX: UNTC) has completed the sale of its wholly-owned contract drilling subsidiary, Unit Drilling Company, to Cactus Drilling Company, L.L.C. in an all-cash transaction valued at $120 million. The agreement was signed and closed simultaneously.
Wells Drilled Permian Last 12 Months – $10
Includes: Operator Name, Well Name, Location, Type, Substance……
Board & Advisory Process
The deal received unanimous approval from the company’s strategic transactions committee, made up of independent directors tasked with reviewing alternatives. Piper Sandler & Co. acted as financial advisor to the committee.
Strategic Rationale
CEO Phil Frohlich highlighted that divesting the contract drilling segment will allow Unit Corporation to focus more sharply on upstream oil and gas operations. The company plans to pursue opportunities in drilling prospects while maintaining its commitment to disciplined capital allocation and shareholder returns through dividends.
Proceeds & Tax Position
The board will decide on the specific uses of the sale proceeds. Unit expects its available tax attributes will largely offset gains from the transaction, minimizing tax obligations.
Going Forward
- Continue operations in upstream oil & gas.
- Evaluate new drilling projects for future growth.
- Maintain the regular dividend program, subject to board discretion.
