Unit Corp. (NYSE:UNT) acquired 8,300 net acres in its Hoxbar Field core in Western Oklahoma in exchange for $57 million in cash and land, the company said April 4.

Unit, based in Tulsa, Okla., acquired 47 proved developed producing wells in Grady and Caddo counties, Okla., with estimated average volumes of 1,367 barrels of oil equivalent per day (boe/d). The seller was not disclosed.

Brian Velie, an analyst at Capital One Securities, said the acreage’s production alone is valued at $62 million at prices of $60,000 per flowing barrel of oil; $4,000 per thousand cubic feet of gas; and $24 per flowing barrel of NGL.

Unit will also convey 180 net acres in McClain County, Okla., to the seller.

“The asset adds 65 gross potential horizontal drilling locations, of which 13 were not previously defined,” Velie said in an April 4 analyst note. “Of the acquired acreage, 71% is HPB. The deal also includes a small gathering system.”

The acreage features a large overlap with Unit’s existing operations and the company will increase its working interest in other well locations it already operates on the acreage. Of the 47 wells acquired, Unit operates 20.

Unit president and CEO Larry D. Pinkston said the bolt-on is an important step for Unit to grow and “represents an advantageous addition in one of our core areas that we have been working to expand.”

The deal increases Unit’s Hoxbar core area position to about 28,000 net acres.

“We plan to pick up a rig in the second quarter to continue developing the area,” Pinkston said. “Coupled with the waterflood potential, we believe the value of this core holding will be significantly enhanced.”

Unit’s core Hoxbar acreage position lies adjacent to the Norge Marchand Waterflood Unit. Unit’s Marchand wells have an average estimated ultimate recovery of more than 500,000 boe, the company said.

The acquisition provides operational control to key areas of the Marchand zone of the Hoxbar reservoir for secondary recovery efforts, which have the potential to significantly increase existing well production.

Unit anticipates that the “initial secondary recovery phase will increase the reserve potential from the Marchand interval by at least 500,000 boe per well,” according to a press release.

Unit also entered into a distribution agreement with Raymond James & Associates Inc to sell up to $100 million in shares and Unit’s discretion.

“UNT has no obligation to issue the shares, but this option may be used to help fund the $57 million in cash,” Velie said.

The acquisition has an effective date Jan. 1.

Darren Barbee can be reached at dbarbee@hartenergy.com.