Unit Corporation (UNTC)

[Timothy Smith]

With a manageable level of debt and what appear to be economical (if not attractive) assets in Oklahoma and Texas even at today's lower oil and gas prices, I think Unit is a survivor.

I would really like to see the drilling and midstream businesses sold, but I don't expect that to happen.

Consequently, while I'd probably value Unit closer to the mid-$30's as a pure play E&P company (assuming they could sell the drilling and midstream businesses at 5x EBITDA, which may be aggressive for the rigs), a low $30's price seems fair today, but with upside from further drilling success, a rebound in oil/gas prices, and better performance in the drilling business.