In its Granite Wash (GW) play located in the Texas Panhandle, Unit Corp. had first oil and gas sales on 11 horizontal wells with an average working interest of 84%. The higher than normal number of completed wells during the quarter was due to a number of wells that were drilled in the fourth quarter 2011 but were not completed until the first quarter 2012 because of pipeline hookup delays.

The 30-day average production rate for the 11 wells ranged from 1.3 MMcfe per day to 10.0 MMcfe per day with an average rate of 4.8 MMcfe per day. The net production from Unit's GW operated wells for the first quarter 2012 averaged 1,363 barrels of oil per day, 3,115 barrels of NGLs per day and 25.7 MMcf per day, or an equivalent rate of 52.6 MMcfe per day, an increase of 8% over the fourth quarter 2011 and a 19% increase over the first quarter 2011. The first quarter production stream was comprised of 16% oil, 35% NGLs and 49% natural gas.

The average ultimate recovery for a GW horizontal well is estimated to be 4.2 to 4.6 Bcfe with an average completed well cost of approximately $5.5 million. Unit expects to run three to four Unit drilling rigs drilling horizontal wells in 2012 resulting in approximately 20 to 25 new operated GW wells at an approximate net cost of $90 to $100 million.

First quarter 2012 oil production was 720,000 barrels, in comparison to 556,000 barrels for the same period of 2011, an increase of 30%. NGLs production during the first quarter of 2012 was 656,000 barrels, an increase of 37% when compared to 478,000 barrels for the same period of 2011. First quarter 2012 natural gas production increased 11% to 11.4 billion cubic feet (Bcf) compared to 10.2 Bcf for the comparable quarter of 2011. First quarter 2012 production averaged 35,992 Boe per day, an increase of 18% over the first quarter of 2011 and an increase of 2% over the fourth quarter of 2011. Total production for the first quarter of 2012 was 3.3 MMBoe.