SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

We have no significant assets or operations other than our investments in our subsidiaries. Our wholly owned subsidiaries are the guarantors of our Notes. On April 3, 2018, we sold 50% of the ownership interest in our mid-stream segment, Superior and that company and its subsidiaries are no longer guarantors of the Notes. Instead of providing separate financial statements for each subsidiary issuer and guarantor, we have included the accompanying unaudited condensed consolidating financial statements based on Rule 3-10 of the SEC's Regulation S-X.

For purposes of the following footnote:


•	we are referred to as "Parent",


•	the direct subsidiaries are 100% owned by the Parent and the guarantee is full and unconditional and joint and several and referred to as "Combined Guarantor Subsidiaries", and


•	Superior and its subsidiaries and the Operator are referred to as "Non-Guarantor Subsidiaries."

The following unaudited supplemental condensed consolidating financial information reflects the Parent's separate accounts, the combined accounts of the Combined Guarantor Subsidiaries', the combined accounts of the Non-Guarantor Subsidiaries', the combined consolidating adjustments and eliminations, and the Parent's consolidated amounts for the periods indicated.

Condensed Consolidating Balance Sheets (Unaudited)



	June 30, 2018
	Parent		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	97,052	$	254	$	7,002	$	—		$	104,308
Accounts receivable, net of allowance for doubtful accounts of $2,450	885		84,851		27,641		—			113,377
Materials and supplies	—		501		—		—			501
Current derivative asset	127		—		—		—			127
Prepaid expenses and other	2,643		3,079		3,009		—			8,731
Total current assets	100,707		88,685		37,652		—			227,044
Property and equipment:
Oil and natural gas properties on the full cost method:
Proved properties	—		5,809,850		—		—			5,809,850
Unproved properties not being amortized	—		325,595		—		—			325,595
Drilling equipment	—		1,612,817		—		—			1,612,817
Gas gathering and processing equipment	—		—		736,488		—			736,488
Saltwater disposal systems	—		65,218		—		—			65,218
Corporate land and building	—		59,081		—		—			59,081
Transportation equipment	9,244		17,572		3,102		—			29,918
Other	28,246		28,135		—		—			56,381
	37,490		7,918,268		739,590		—			8,695,348
Less accumulated depreciation, depletion, amortization, and impairment	24,335		5,896,900		342,269		—			6,263,504
Net property and equipment	13,155		2,021,368		397,321		—			2,431,844
Intercompany receivable	877,823		—		—		(877,823		)	—
Goodwill	—		62,808		—		—			62,808
Investments	1,216,959		1,500		—		(1,216,959		)	1,500
Other assets	5,472		6,225		14,916		—			26,613
Total assets	$	2,214,116	$	2,180,586	$	449,889	$	(2,094,782	)	$	2,749,809



	June 30, 2018
	Parent		Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
	(In thousands)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,669	$	81,827		$	22,915	$	—		$	114,411
Accrued liabilities	21,618		24,880			2,566		—			49,064
Income taxes payable	4,648		—			—		—			4,648
Current derivative liability	18,555		—			—		—			18,555
Current portion of other long-term liabilities	615		6,625			6,796		—			14,036
Total current liabilities	55,105		113,332			32,277		—			200,714
Intercompany debt	—		876,277			1,546		(877,823		)	—
Bonds payable less debt issuance costs	643,371		—			—		—			643,371
Non-current derivative liabilities	910		—			—		—			910
Other long-term liabilities	12,613		72,459			17,856		—			102,928
Deferred income taxes	57,802		100,430			—		—			158,232
Shareholders’ equity:
Preferred stock, $1.00 par value, 5,000,000 shares authorized, none issued	—		—			—		—			—
Common stock, $.20 par value, 175,000,000 shares authorized, 54,089,366 shares issued	10,414		—			—		—			10,414
Capital in excess of par value	622,120		45,921			197,042		(242,963		)	622,120
Accumulated other comprehensive loss	—		(65		)	—		—			(65		)
Retained earnings	811,781		972,232			1,764		(973,996		)	811,781
Total shareholders’ equity attributable to Unit Corporation	1,444,315		1,018,088			198,806		(1,216,959		)	1,444,250
Non-controlling interests in consolidated subsidiaries	—		—			199,404		—			199,404
Total shareholders' equity	1,444,315		1,018,088			398,210		(1,216,959		)	1,643,654
Total liabilities and shareholders’ equity	$	2,214,116	$	2,180,586		$	449,889	$	(2,094,782	)	$	2,749,809



	December 31, 2017
	Parent		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	510	$	191	$	—	$	—		$	701
Accounts receivable, net of allowance for doubtful accounts of $2,450	154		83,442		27,916		—			111,512
Materials and supplies	—		505		—		—			505
Current derivative asset	721		—		—		—			721
Prepaid expenses and other	2,986		2,370		877		—			6,233
Total current assets	4,371		86,508		28,793		—			119,672
Property and equipment:
Oil and natural gas properties on the full cost method:
Proved properties	—		5,712,813		—		—			5,712,813
Unproved properties not being amortized	—		296,764		—		—			296,764
Drilling equipment	—		1,593,611		—		—			1,593,611
Gas gathering and processing equipment	—		—		726,236		—			726,236
Saltwater disposal systems	—		62,618		—		—			62,618
Corporate land and building	—		59,080		—		—			59,080
Transportation equipment	9,270		17,423		2,938		—			29,631
Other	28,039		25,400		—		—			53,439
	37,309		7,767,709		729,174		—			8,534,192
Less accumulated depreciation, depletion, amortization, and impairment	21,268		5,807,757		322,425		—			6,151,450
Net property and equipment	16,041		1,959,952		406,749		—			2,382,742
Intercompany receivable	1,155,725		—		—		(1,155,725		)	—
Goodwill	—		62,808		—		—			62,808
Investments	1,044,709		1,500		—		(1,044,709		)	1,500
Other assets	5,373		6,328		3,029		—			14,730
Total assets	$	2,226,219	$	2,117,096	$	438,571	$	(2,200,434	)	$	2,581,452



	December 31, 2017
	Parent		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
	(In thousands)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	13,124	$	81,334	$	18,190	$	—		$	112,648
Accrued liabilities	26,165		19,134		3,224		—			48,523
Current derivative liability	7,763		—		—		—			7,763
Current portion of other long-term liabilities	657		8,501		3,844		—			13,002
Total current liabilities	47,709		108,969		25,258		—			181,936
Intercompany debt	—		870,582		285,143		(1,155,725		)	—
Long-term debt	178,000		—		—		—			178,000
Bonds payable less debt issuance costs	642,276		—		—		—			642,276
Other long-term liabilities	11,257		77,566		11,380		—			100,203
Deferred income taxes	1,480		85,443		46,554		—			133,477
Shareholders’ equity:
Preferred stock, $1.00 par value, 5,000,000 shares authorized, none issued	—		—		—		—			—
Common stock, $.20 par value, 175,000,000 shares authorized, 52,880,134 shares issued	10,280		—		—		—			10,280
Capital in excess of par value	535,815		45,921		15,549		(61,470		)	535,815
Accumulated other comprehensive income	—		63		—		—			63
Retained earnings	799,402		928,552		54,687		(983,239		)	799,402
Total shareholders’ equity attributable to Unit Corporation	1,345,497		974,536		70,236		(1,044,709		)	1,345,560
Non-controlling interests in consolidated subsidiaries	—		—		—		—			—
Total shareholders' equity	1,345,497		974,536		70,236		(1,044,709		)	1,345,560
Total liabilities and shareholders’ equity	$	2,226,219	$	2,117,096	$	438,571	$	(2,200,434	)	$	2,581,452

Condensed Consolidating Statements of Income (Unaudited)



	Three Months Ended June 30, 2018
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Revenues	$	—		$	155,085		$	75,406		$	(27,188	)	$	203,303
Expenses:
Operating costs	—			70,603			59,786			(26,374		)	104,015
Depreciation, depletion, and amortization	1,918			45,280			11,175			—			58,373
General and administrative	—			8,655			57			—			8,712
Gain on disposition of assets	—			(116		)	(45		)	—			(161		)
Total operating costs	1,918			124,422			70,973			(26,374		)	170,939
Income from operations	(1,918		)	30,663			4,433			(814		)	32,364
Interest, net	(7,425		)	—			(304		)	—			(7,729		)
Loss on derivatives	(14,461		)	—			—			—			(14,461		)
Other, net	5			—			—			—			5
Income before income taxes	(23,799		)	30,663			4,129			(814		)	10,179
Income tax expense (benefit)	(6,029		)	7,803			255			—			2,029
Equity in net earnings from investment in subsidiaries, net of taxes	23,558			—			—			(23,558		)	—
Net income	5,788			22,860			3,874			(24,372		)	8,150
Less: net income attributable to non-controlling interest	—			—			2,362			—			2,362
Net income attributable to Unit Corporation	$	5,788		$	22,860		$	1,512		$	(24,372	)	$	5,788



	Three Months Ended June 30, 2017
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Revenues	$	—		$	128,017		$	63,111		$	(20,547	)	$	170,581
Expenses:
Operating costs	—			66,393			49,817			(20,171		)	96,039
Depreciation, depletion, and amortization	1,904			37,327			10,849			—			50,080
General and administrative	—			6,899			1,814			—			8,713
Gain on disposition of assets	(5		)	(199		)	(44		)	—			(248		)
Total operating costs	1,899			110,420			62,436			(20,171		)	154,584
Income from operations	(1,899		)	17,597			675			(376		)	15,997
Interest, net	(9,290		)	—			(177		)	—			(9,467		)
Gain on derivatives	8,902			—			—			—			8,902
Other, net	6			(1		)	1			—			6
Income (loss) before income taxes	(2,281		)	17,596			499			(376		)	15,438
Income tax expense (benefit)	(1,002		)	7,054			327			—			6,379
Equity in net earnings from investment in subsidiaries, net of taxes	10,338			—			—			(10,338		)	—
Net income	9,059			10,542			172			(10,714		)	9,059
Less: net income attributable to non-controlling interest	—			—			—			—			—
Net income attributable to Unit Corporation	$	9,059		$	10,542		$	172		$	(10,714	)	$	9,059



	Six Months Ended June 30, 2018
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Revenues	$	—		$	308,894		$	150,056		$	(50,515	)	$	408,435
Expenses:
Operating costs	—			143,709			118,806			(49,267		)	213,248
Depreciation, depletion, and amortization	3,836			89,375			22,228			—			115,439
General and administrative	—			16,884			2,590			—			19,474
Gain on disposition of assets	(30		)	(213		)	(79		)	—			(322		)
Total operating costs	3,806			249,755			143,545			(49,267		)	347,839
Income from operations	(3,806		)	59,139			6,511			(1,248		)	60,596
Interest, net	(17,280		)	—			(453		)	—			(17,733		)
Loss on derivatives	(21,223		)	—			—			—			(21,223		)
Other, net	11			1			(1		)	—			11
Income (loss) before income taxes	(42,298		)	59,140			6,057			(1,248		)	21,651
Income tax expense (benefit)	(10,668		)	15,460			844			—			5,636
Equity in net earnings from investment in subsidiaries, net of tax	45,283			—			—			(45,283		)	—
Net income	13,653			43,680			5,213			(46,531		)	16,015
Less: net income attributable to non-controlling interest	—			—			2,362			—			2,362
Net income attributable to Unit Corporation	$	13,653		$	43,680		$	2,851		$	(46,531	)	$	13,653



	Six Months Ended June 30, 2017
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Revenues	$	—		$	252,800		$	129,575		$	(36,070	)	$	346,305
Expenses:
Operating costs	—			125,946			101,922			(35,694		)	192,174
Depreciation, depletion, and amortization	3,645			71,700			21,667			—			97,012
General and administrative	—			13,797			3,870			—			17,667
Gain on disposition of assets	(813		)	(215		)	(44		)	—			(1,072		)
Total operating costs	2,832			211,228			127,415			(35,694		)	305,781
Income (loss) from operations	(2,832		)	41,572			2,160			(376		)	40,524
Interest, net	(18,500		)	—			(363		)	—			(18,863		)
Gain on derivatives	23,633			—			—			—			23,633
Other, net	9			—			—			—			9
Income (loss) before income taxes	2,310			41,572			1,797			(376		)	45,303
Income tax expense (benefit)	731			18,354			1,230			—			20,315
Equity in net earnings from investment in subsidiaries, net of tax	23,409			—			—			(23,409		)	—
Net income	24,988			23,218			567			(23,785		)	24,988
Less: net income attributable to non-controlling interest	—			—			—			—			—
Net income attributable to Unit Corporation	$	24,988		$	23,218		$	567		$	(23,785	)	$	24,988

Condensed Consolidating Statements of Comprehensive Income (Unaudited)



	Three Months Ended June 30, 2018
	Parent		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
	(In thousands)
Net income	$	5,788	$	22,860	$	3,874	$	(24,372	)	$	8,150
Other comprehensive income, net of taxes:
Unrealized gain on securities, net of tax $11	—		35		—		—			35
Comprehensive income	5,788		22,895		3,874		(24,372		)	8,185
Less: Comprehensive income attributable to non-controlling interests	—		—		2,362		—			2,362
Comprehensive income attributable to Unit Corporation	$	5,788	$	22,895	$	1,512	$	(24,372	)	$	5,823



	Three Months Ended June 30, 2017
	Parent		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
	(In thousands)
Net income (loss)	$	9,059	$	10,542	$	172	$	(10,714	)	$	9,059
Other comprehensive income, net of taxes:
Unrealized gain on securities, net of tax of $12	—		20		—		—			20
Comprehensive income (loss)	9,059		10,562		172		(10,714		)	9,079
Less: Comprehensive income attributable to non-controlling interests	—		—		—		—			—
Comprehensive income (loss) attributable to Unit Corporation	$	9,059	$	10,562	$	172	$	(10,714	)	$	9,079



	Six Months Ended June 30, 2018
	Parent		Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
	(In thousands)
Net income	$	13,653	$	43,680		$	5,213	$	(46,531	)	$	16,015
Other comprehensive income, net of taxes:
Unrealized loss on securities, net of tax of ($47)	—		(141		)	—		—			(141		)
Comprehensive income	13,653		43,539			5,213		(46,531		)	15,874
Less: Comprehensive income attributable to non-controlling interests	—		—			2,362		—			2,362
Comprehensive income attributable to Unit Corporation	$	13,653	$	43,539		$	2,851	$	(46,531	)	$	13,512



	Six Months Ended June 30, 2017
	Parent		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
	(In thousands)
Net income (loss)	$	24,988	$	23,218	$	567	$	(23,785	)	$	24,988
Other comprehensive income, net of taxes:
Unrealized gain on securities, net of tax of $12	—		20		—		—			20
Comprehensive income (loss)	24,988		23,238		567		(23,785		)	25,008
Less: Comprehensive income attributable to non-controlling interests	—		—		—		—			—
Comprehensive income (loss) attributable to Unit Corporation	$	24,988	$	23,238	$	567	$	(23,785	)	$	25,008

Condensed Consolidating Statements of Cash Flows (Unaudited)



	Six Months Ended June 30, 2018
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	(102,500		)	145,000			(14,800		)	126,993			154,693
INVESTING ACTIVITIES:
Capital expenditures	(13		)	(173,097		)	(16,806		)	—			(189,916		)
Producing properties and other acquisitions	—			(962		)	—			—			(962		)
Proceeds from disposition of assets	30			23,427			71			—			23,528
Net cash provided by (used in) investing activities	17			(150,632		)	(16,735		)	—			(167,350		)
FINANCING ACTIVITIES:
Borrowings under credit agreement	71,200			—			—			—			71,200
Payments under credit agreement	(249,200		)	—			—			—			(249,200		)
Intercompany borrowings (advances), net	277,902			5,695			(156,604		)	(126,993		)	—
Payments on capitalized leases	—			—			(1,901		)	—			(1,901		)
Proceeds from investments of non-controlling interest	102,958			—			197,042			—			300,000
Transaction costs associated with sale of non-controlling interest	(2,254		)	—			—			—			(2,254		)
Book overdrafts	(1,581		)	—			—			—			(1,581		)
Net cash provided by (used in) financing activities	199,025			5,695			38,537			(126,993		)	116,264
Net increase in cash and cash equivalents	96,542			63			7,002			—			103,607
Cash and cash equivalents, beginning of period	510			191			—			—			701
Cash and cash equivalents, end of period	$	97,052		$	254		$	7,002		$	—		$	104,308



	Six Months Ended June 30, 2017
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Consolidating Adjustments		Total Consolidated
	(In thousands)
OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	(13,497		)	106,718			23,834			—		117,055
INVESTING ACTIVITIES:
Capital expenditures	(3,380		)	(97,337		)	(7,216		)	—		(107,933		)
Producing properties and other acquisitions	—			(52,956		)	—			—		(52,956		)
Proceeds from disposition of assets	955			18,557			44			—		19,556
Other	—			(1,500		)	—			—		(1,500		)
Net cash provided by (used in) investing activities	(2,425		)	(133,236		)	(7,172		)	—		(142,833		)
FINANCING ACTIVITIES:
Borrowings under credit agreement	160,600			—			—			—		160,600
Payments under credit agreement	(156,500		)	—			—			—		(156,500		)
Intercompany borrowings (advances), net	(11,708		)	26,469			(14,761		)	—		—
Payments on capitalized leases	—			—			(1,901		)	—		(1,901		)
Proceeds from common stock issued, net of issue costs	18,623			—			—			—		18,623
Book overdrafts	4,912			—			—			—		4,912
Net cash provided by (used in) financing activities	15,927			26,469			(16,662		)	—		25,734
Net increase (decrease) in cash and cash equivalents	5			(49		)	—			—		(44		)
Cash and cash equivalents, beginning of period	517			376			—			—		893
Cash and cash equivalents, end of period	$	522		$	327		$	—		$	—	$	849