Unit Corp. is focused on reducing debt, cutting leverage down to 1x

By Devika Patel

Knoxville, Tenn., April 9 – Unit Corp. plans to keep paying down debt with an eye on getting its leverage ratio to 1x from its current level of 1.7x.

The company has lowered its leverage from 4.6x over the course of the year.

“We have a very attuned focus on liquidity and improving debt metrics,” president and chief executive officer Larry D. Pinkston said at the 25th Annual Oil & Gas Investment Symposium hosted by the Independent Petroleum Association of America in New York on Tuesday.

“We are focusing our capital now to continue to pay down debt.

“We have been working [to get our] debt lower while maintaining significant liquidity and most importantly we’ve been improving our debt metrics.

“We are running this business focusing on a 1x to 2x debt leverage metric on a go-forward basis.

“We’re under that 2x now and we’re going to continue to try and work that closer to 1x over the long-term.

“Over the course of the year, [we lowered our leverage] from 4.6x down to 1.7x, and we think that we will be able to continue to work that lower even if prices go back to sub $50 a barrel,” he said.

The company plans to call its second-lien facility between now and May 2020.

“Both our second-lien facility as well as our line of credit are due in 2023 and [our second-lien facility] is callable in May of 2020,” Pinkston said.

“We plan to hopefully call that somewhere between now and then, dependent upon what the high-yield market looks like,” he said.

Unit Corp. is a Tulsa, Okla.-based energy company engaged through its subsidiaries in oil and natural gas exploration, production, contract drilling and natural gas gathering and processing.

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