Unit Corp.’s (NYSE: UNT) 2014 capex budget is $928 million, a 26% increase over estimated 2013 capex, the company said Jan. 13. The current capex budget is split between Unit’s oil and natural gas, contract drilling and midstream segments, and excludes acquisitions, the company added.
The oil and gas segment has $718 million, contract drilling has $132 million and midstream has $78 million, the company said.
This budget is based on realized prices for the year that average $90.08 per barrel of oil, $29.45 per barrel of natural gas liquids (NGL) and $3.77 per thousand cubic feet (Mcf) of natural gas, Unit said.
For this year, Unit has hedged about 62% of its anticipated oil production and 51% of its anticipated natural gas production, the company said. Oil production was hedged under swap contracts averaging $92.40 per barrel, the company said. Oil production also had collar contracts averaging $90 and $96.08, floor and ceiling prices respectively, the company added.
Natural gas production is hedged under swap contracts with an average NYMEX price of $4.24, and collar contracts with an average NYMEX floor price of $3.75 and ceiling price of $4.37, the company said.
This year’s capex is funded through Unit’s internal cash flow and proceeds from additional, non-core asset divestitures, the company said.
“During 2013, we continued to focus our exploration efforts in oil and NGLs rich areas like the Granite Wash, Wilcox, and Marmaton plays. In conjunction with the oil and natural gas segment capital expenditures budget, we anticipate our 2014 production growth to increase between 15% and 18% over 2013,” said Larry Pinkston, CEO.
He added, “For the contract drilling segment, the capital expenditure budget includes the completion of our first BOSS drilling rig, scheduled to be placed into service for our oil and natural gas segment during the first quarter, and three additional BOSS rigs, for which we have received commitments from third party operators. Our midstream segment’s capital expenditure budget includes expansion projects in the Granite Wash and Marcellus plays. Our focus on capital efficiency will be integral in continuing to deliver strong shareholder performance.”
Unit Corp. is a Tulsa-based, publicly held energy company that explores and produces oil and natural gas through its subsidiaries. It also drills, and processes natural gas.
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