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UPDATE: Unit Corp. to Acquire Oil and Gas Assets From Noble Energy For $617.1 Million

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By Saabira Chaudhuri  Unit Corp. (UNT) has agreed to acquire oil and natural gas assets from Noble Energy Inc. (NBL) for $617.1 million in cash, significantly increasing its acreage and allowing it to grow its production in the oil and natural gas liquids-rich Anadarko Basin

Unit will acquire about 84,000 net acres primarily in the Granite Wash, Cleveland, and Marmaton plays in western Oklahoma and the Texas Panhandle. The acquisition will add about 25,000 net acres to Unit Petroleum’s Granite Wash core area in the Texas Panhandle and includes 617 potential horizontal drilling locations.

Noble said that the sale was part of a previously announced plan to shed non-core assets to focus capital spending on higher-return areas, such as horizontal drilling in the U.S. and offshore projects in the deepwater U.S. Gulf of Mexico, the Eastern Mediterranean and offshore West Africa. The assets bought by Unit produce about 60 million cubic feet per day of natural gas equivalent, Noble said.

The company said it will accelerate drilling activity in the acquired properties over the next 12 months to 18 months and will replace existing third-party processing contracts beginning in 2015, where necessary.

Unit will finance the acquisition with long-term debt and is considering selling $200 million to $300 million of its oil and gas assets. The company expects the acquisition to close in September and says it will add to earnings and cash flow beginning in 2013.

The company also said Wednesday that it estimates its second-quarter production will increase 12% over last year and 2% over the previous quarter. It anticipates a pretax write-down of about $118 million, propelled by significantly lower commodity prices.

In May, the company reported its profit was up 28% from last year on increased revenue.

Noble shares are up 1.70% at $84.47. Unit shares are up 2.83% at $37.12. The stock is down about 39% over the past 12 months.

Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com

–Angel Gonzalez in Houston contributed to this article

http://online.wsj.com/article/BT-CO-20120711-709807.html

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