Unit Corp. buying Tulsa gas producer PetroCorp for $182 million cash

Allen Baker

Petroleum News contributing writer

Unit Corp. is shelling out $182 million in cash to buy fellow Tulsa-based company PetroCorp Inc.

With the purchase, Unit gets total reserves of 38.8 billion cubic feet of natural gas and 2.7 million barrels of oil, based on Dec. 31 figures. PetroCorp production in the second quarter amounted to the equivalent of 1,797 million cubic feet of gas.

The companies’ managements announced the merger agreement Aug. 14 after signing a letter of intent in July. Originally, the price was set at about $190 million and was to include 2 million shares of Unit stock as well as cash.

The deal is expected to close if two-thirds of PetroCorp. stockholders endorse it. Based on 12.7 million shares, Unit would pay $14.33 for each share of PetroCorp., which has been trading for around $13.50 to $14 since the deal was announced.

PetroCorp., which sold its Canadian operations for $109 million earlier this year, had second-quarter profits of $4.9 million on revenues of $9.3 million. The company had disposed of its Alabama operations late in 2002, and most of the remaining properties are in Texas and Oklahoma. It has no debt on the balance sheet.

Unit reported second-quarter profits of $11.7 million on revenues of about $73 million. Unit, listed on the New York Stock Exchange as UNT, has subsidiaries involved in contract drilling, as well as exploration and production.