Unit Corporation Successfully Completes Financial Restructuring, Emerges from Chapter 11 and Appoints New Board of Directors

Unit Corporation (Company) today announced that it has emerged from Chapter 11 bankruptcy protection. This marks the successful completion of the Company's financial restructuring process along with implementing the Company's Plan of Reorganization (Plan), which was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division on August 6, 2020.

"Our successful financial restructuring positions us to handle current challenges in the oil and gas industry and realize the potential of our Company," said David T. Merrill, President and Chief Executive Officer. "We look forward to continuing to enhance our financial strength and using our strengths, teamwork, and focus to improve our performance as a Company. On behalf of the Company and newly appointed Board of Directors, I would like to express our gratitude to our employees for their continued hard work and dedication during this process."

New Capital Structure

Under the Plan, the Company will complete a debt-for-equity exchange with the holders of the Company's previous 6.625% senior subordinated notes (Subordinated Notes) and will exchange its prior common stock (old common stock) for warrants to purchase its new common stock. As part of the Plan, the Company converted its existing credit facility agented by BOKF, NA into a $140 million reserve-based lending revolving loan and $40 million term loan, which remains agented by Tulsa headquartered BOKF, NA and committed by all lenders under the previous facility (the lenders). Additionally, the Company will have significantly reduced its unsecured debt liabilities, further bolstering its balance sheet.

Credit Facility

Under the terms of the Plan, the Company and certain subsidiaries (Borrowers) entered into an amended and restated credit agreement with the lenders and BOKF, NA, as administrative agent (Exit Credit Agreement) providing for a $140 million senior secured revolving credit facility (RBL Facility) and a $40 million senior secured term loan facility (Term Loan Facility). The maturity date of borrowings under the Exit Credit Agreement is March 1, 2024. As of September 3, 2020, the Borrowers had (i) $40 million in principal amount of Term Loans outstanding under the Term Loan Facility, (ii) approximately $92 million in principal amount of revolving loans outstanding under the RBL Facility and (iii) approximately $6.7 million of outstanding letters of credit.

New Common Stock

The Company will issue a total of 12 million shares of new common stock, par value $0.01 per share. Of the total outstanding shares, 95% will be issued to holders of the Subordinated Notes and holders of certain allowed general unsecured claims, and 5% has been issued to the lenders under the Exit Credit Agreement.

Warrants

Under the Plan, warrants to purchase up to an aggregate of approximately 1.8 million shares of the Company’s new common stock will be issued to holders of old common stock. The exercise price of the warrants will be determined and the warrants will become exercisable once all general unsecured claims are resolved. The Company will calculate the initial exercise price per share for the warrants, which will be set at an amount that implies a recovery by holders of the Subordinated Notes of the $650 million principal amount of the Subordinated Notes plus interest thereon to the May 15, 2021 maturity date of the Subordinated Notes.

New Board of Directors

A new Board of Directors was appointed upon the Company's emergence, providing valuable expertise and experience to the Company as it moves forward post-restructuring. The new Board of Directors consists of seven members, including Robert Anderson, Alan Carr, Phil Frohlich, Steven Hildebrand, David Merrill, Philip Smith, and Andrei Verona.

Trading on an OTC Market

The Company is seeking to facilitate trading of the new common stock on one of the OTC markets. Such market will be determined by the Board of Directors. The Company expects to complete this process during the 2020 fourth quarter and will publicly disclose the results once completed.

The Company expects the debt for equity exchange and the common stock for warrant exchange under the Plan to be completed during the 2020 fourth quarter. More information about these Chapter 11 cases can be accessed via PACER at https://www.pacer.gov and https://cases.primeclerk.com/UnitCorporation or by calling (877) 720-6581 (Toll-Free) or (646) 979-4412 (Local).

Vinson & Elkins L.L.P. served as legal advisor, Evercore Group L.L.C. served as investment banker, and Opportune LLP served as restructuring advisor to the Company.

Weil, Gotshal & Manges LLP served as legal advisor and Greenhill & Co., LLC served as financial advisor to an ad hoc group of holders of Subordinated Notes.

About the Company

Unit Corporation is a Tulsa-based energy company engaged through its subsidiaries in oil and gas exploration, production, contract drilling and natural gas gathering and processing. For more information about Unit Corporation, visit its website at http://www.unitcorp.com.

Contacts

Michael D. Earl
Vice President, Investor Relations
(918) 493-7700