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)



	September 30, 2018
	Parent		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	82,267	$	251	$	9,039	$	—		$	91,557
Accounts receivable, net of allowance for doubtful accounts of $2,450 (Guarantor of $1,245 and Non-Guarantor of $1,205)	1,374		92,078		28,671		—			122,123
Materials and supplies	—		505		—		—			505
Current derivative asset	—		—		—		—			—
Prepaid expenses and other	3,125		3,538		2,756		—			9,419
Total current assets	86,766		96,372		40,466		—			223,604
Property and equipment:
Oil and natural gas properties on the full cost method:
Proved properties	—		5,901,661		—		—			5,901,661
Unproved properties not being amortized	—		332,886		—		—			332,886
Drilling equipment	—		1,632,540		—		—			1,632,540
Gas gathering and processing equipment	—		—		751,715		—			751,715
Saltwater disposal systems	—		67,074		—		—			67,074
Corporate land and building	—		59,081		—		—			59,081
Transportation equipment	9,273		16,766		3,064		—			29,103
Other	28,506		28,244		—		—			56,750
	37,779		8,038,252		754,779		—			8,830,810
Less accumulated depreciation, depletion, amortization, and impairment	25,922		5,945,762		353,476		—			6,325,160
Net property and equipment	11,857		2,092,490		401,303		—			2,505,650
Intercompany receivable	907,907		—		—		(907,907		)	—
Goodwill	—		62,808		—		—			62,808
Investments	1,248,309		1,500		—		(1,248,309		)	1,500
Other assets	5,605		6,186		15,412		—			27,203
Total assets	$	2,260,444	$	2,259,356	$	457,181	$	(2,156,216	)	$	2,820,765



	September 30, 2018
	Parent		Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
	(In thousands)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	28,116	$	90,543		$	24,893	$	—		$	143,552
Accrued liabilities	36,444		26,583			4,716		—			67,743
Income taxes payable	1,051		—			—		—			1,051
Current derivative liability	13,067		—			—		—			13,067
Current portion of other long-term liabilities	966		6,348			6,836		—			14,150
Total current liabilities	79,644		123,474			36,445		—			239,563
Intercompany debt	—		906,296			1,086		(907,382		)	—
Bonds payable less debt issuance costs	643,921		—			—		—			643,921
Non-current derivative liabilities	1,542		—			—		—			1,542
Other long-term liabilities	12,790		72,494			16,126		—			101,410
Deferred income taxes	54,707		110,257			—		—			164,964
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, 54,063,705 shares issued	10,414		—			—		—			10,414
Capital in excess of par value	626,746		45,921			197,042		(242,963		)	626,746
Contributions from Unit	—		—			525		(525		)	—
Accumulated other comprehensive loss	—		(103		)	—		—			(103		)
Retained earnings	830,680		1,001,017			4,329		(1,005,346		)	830,680
Total shareholders’ equity attributable to Unit Corporation	1,467,840		1,046,835			201,896		(1,248,834		)	1,467,737
Non-controlling interests in consolidated subsidiaries	—		—			201,628		—			201,628
Total shareholders' equity	1,467,840		1,046,835			403,524		(1,248,834		)	1,669,365
Total liabilities and shareholders’ equity	$	2,260,444	$	2,259,356		$	457,181	$	(2,156,216	)	$	2,820,765



	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 (Guarantor of $1,245 and Non-Guarantor of $1,205)	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 September 30, 2018
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Revenues	$	—		$	169,635		$	82,882		$	(32,459	)	$	220,058
Expenses:
Operating costs	—			71,646			66,932			(31,273		)	107,305
Depreciation, depletion, and amortization	1,923			50,349			11,265			—			63,537
General and administrative	—			9,252			26			—			9,278
Gain on disposition of assets	—			(237		)	(16		)	—			(253		)
Total operating costs	1,923			131,010			78,207			(31,273		)	179,867
Income from operations	(1,923		)	38,625			4,675			(1,186		)	40,191
Interest, net	(7,564		)	—			(381		)	—			(7,945		)
Loss on derivatives	(4,385		)	—			—			—			(4,385		)
Other, net	6			(1		)	1			—			6
Income (loss) before income taxes	(13,866		)	38,624			4,295			(1,186		)	27,867
Income tax expense (benefit)	(3,688		)	9,839			593			—			6,744
Equity in net earnings from investment in subsidiaries, net of taxes	29,077			—			—			(29,077		)	—
Net income	18,899			28,785			3,702			(30,263		)	21,123
Less: net income attributable to non-controlling interest	—			—			2,224			—			2,224
Net income attributable to Unit Corporation	$	18,899		$	28,785		$	1,478		$	(30,263	)	$	18,899



	Three Months Ended September 30, 2017
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Revenues	$	—		$	141,058		$	69,057		$	(21,627	)	$	188,488
Expenses:
Operating costs	—			73,197			54,603			(21,026		)	106,774
Depreciation, depletion, and amortization	1,913			41,740			10,880			—			54,533
General and administrative	—			7,083			2,152			—			9,235
Gain on disposition of assets	—			(67		)	(14		)	—			(81		)
Total operating costs	1,913			121,953			67,621			(21,026		)	170,461
Income (loss) from operations	(1,913		)	19,105			1,436			(601		)	18,027
Interest, net	(9,776		)	—			(168		)	—			(9,944		)
Loss on derivatives	(2,614		)	—			—			—			(2,614		)
Other, net	5			—			—			—			5
Income (loss) before income taxes	(14,298		)	19,105			1,268			(601		)	5,474
Income tax expense (benefit)	(5,626		)	7,003			392			—			1,769
Equity in net earnings from investment in subsidiaries, net of taxes	12,377			—			—			(12,377		)	—
Net income	3,705			12,102			876			(12,978		)	3,705
Less: net income attributable to non-controlling interest	—			—			—			—			—
Net income attributable to Unit Corporation	$	3,705		$	12,102		$	876		$	(12,978	)	$	3,705



	Nine Months Ended September 30, 2018
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Revenues	$	—		$	478,529		$	232,938		$	(82,974	)	$	628,493
Expenses:
Operating costs	—			215,355			185,738			(80,540		)	320,553
Depreciation, depletion, and amortization	5,759			139,724			33,493			—			178,976
General and administrative	—			26,136			2,616			—			28,752
Gain on disposition of assets	(30		)	(450		)	(95		)	—			(575		)
Total operating costs	5,729			380,765			221,752			(80,540		)	527,706
Income (loss) from operations	(5,729		)	97,764			11,186			(2,434		)	100,787
Interest, net	(24,844		)	—			(834		)	—			(25,678		)
Loss on derivatives	(25,608		)	—			—			—			(25,608		)
Other, net	17			—			—			—			17
Income (loss) before income taxes	(56,164		)	97,764			10,352			(2,434		)	49,518
Income tax expense (benefit)	(14,356		)	25,299			1,437			—			12,380
Equity in net earnings from investment in subsidiaries, net of tax	74,360			—			—			(74,360		)	—
Net income	32,552			72,465			8,915			(76,794		)	37,138
Less: net income attributable to non-controlling interest	—			—			4,586			—			4,586
Net income attributable to Unit Corporation	$	32,552		$	72,465		$	4,329		$	(76,794	)	$	32,552



	Nine Months Ended September 30, 2017
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Revenues	$	—		$	393,858		$	198,632		$	(57,697	)	$	534,793
Expenses:
Operating costs	—			199,143			156,525			(56,720		)	298,948
Depreciation, depletion, and amortization	5,558			113,440			32,547			—			151,545
General and administrative	—			20,880			6,022			—			26,902
Gain on disposition of assets	(813		)	(282		)	(58		)	—			(1,153		)
Total operating costs	4,745			333,181			195,036			(56,720		)	476,242
Income (loss) from operations	(4,745		)	60,677			3,596			(977		)	58,551
Interest, net	(28,276		)	—			(531		)	—			(28,807		)
Gain on derivatives	21,019			—			—			—			21,019
Other, net	14			—			—			—			14
Income (loss) before income taxes	(11,988		)	60,677			3,065			(977		)	50,777
Income tax expense (benefit)	(4,895		)	25,357			1,622			—			22,084
Equity in net earnings from investment in subsidiaries, net of tax	35,786			—			—			(35,786		)	—
Net income	28,693			35,320			1,443			(36,763		)	28,693
Less: net income attributable to non-controlling interest	—			—			—			—			—
Net income attributable to Unit Corporation	$	28,693		$	35,320		$	1,443		$	(36,763	)	$	28,693

Condensed Consolidating Statements of Comprehensive Income (Unaudited)



	Three Months Ended September 30, 2018
	Parent		Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
	(In thousands)
Net income	$	18,899	$	28,785		$	3,702	$	(30,263	)	$	21,123
Other comprehensive income, net of taxes:
Unrealized loss on securities, net of tax ($13)	—		(38		)	—		—			(38		)
Comprehensive income	18,899		28,747			3,702		(30,263		)	21,085
Less: Comprehensive income attributable to non-controlling interests	—		—			2,224		—			2,224
Comprehensive income attributable to Unit Corporation	$	18,899	$	28,747		$	1,478	$	(30,263	)	$	18,861



	Three Months Ended September 30, 2017
	Parent		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
	(In thousands)
Net income	$	3,705	$	12,102	$	876	$	(12,978	)	$	3,705
Other comprehensive income, net of taxes:
Unrealized gain on securities, net of tax of $20	—		33		—		—			33
Comprehensive income	3,705		12,135		876		(12,978		)	3,738
Less: Comprehensive income attributable to non-controlling interests	—		—		—		—			—
Comprehensive income attributable to Unit Corporation	$	3,705	$	12,135	$	876	$	(12,978	)	$	3,738



	Nine Months Ended September 30, 2018
	Parent		Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
	(In thousands)
Net income	$	32,552	$	72,465		$	8,915	$	(76,794	)	$	37,138
Other comprehensive income, net of taxes:
Unrealized loss on securities, net of tax of ($60)	—		(179		)	—		—			(179		)
Comprehensive income	32,552		72,286			8,915		(76,794		)	36,959
Less: Comprehensive income attributable to non-controlling interests	—		—			4,586		—			4,586
Comprehensive income attributable to Unit Corporation	$	32,552	$	72,286		$	4,329	$	(76,794	)	$	32,373



	Nine Months Ended September 30, 2017
	Parent		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Consolidating Adjustments			Total Consolidated
	(In thousands)
Net income	$	28,693	$	35,320	$	1,443	$	(36,763	)	$	28,693
Other comprehensive income, net of taxes:
Unrealized gain on securities, net of tax of $32	—		53		—		—			53
Comprehensive income	28,693		35,373		1,443		(36,763		)	28,746
Less: Comprehensive income attributable to non-controlling interests	—		—		—		—			—
Comprehensive income attributable to Unit Corporation	$	28,693	$	35,373	$	1,443	$	(36,763	)	$	28,746

Condensed Consolidating Statements of Cash Flows (Unaudited)



	Nine Months Ended September 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	(103,436		)	215,350			(3,984		)	128,605			236,535
INVESTING ACTIVITIES:
Capital expenditures	22			(275,434		)	(28,642		)	—			(304,054		)
Producing properties and other acquisitions	—			(769		)	—			—			(769		)
Proceeds from disposition of assets	30			25,199			87			—			25,316
Net cash provided by (used in) investing activities	52			(251,004		)	(28,555		)	—			(279,507		)
FINANCING ACTIVITIES:
Borrowings under credit agreement	69,200			—			2,000			—			71,200
Payments under credit agreement	(247,200		)	—			(2,000		)	—			(249,200		)
Intercompany borrowings (advances), net	248,343			35,714			(155,977		)	(128,080		)	—
Payments on capitalized leases	—			—			(2,869		)	—			(2,869		)
Proceeds from investments of non-controlling interest	102,958			—			197,042			—			300,000
Contributions from Unit	—			—			525			(525		)	—
Transaction costs associated with sale of non-controlling interest	(2,303		)	—			—			—			(2,303		)
Book overdrafts	14,143			—			2,857			—			17,000
Net cash provided by financing activities	185,141			35,714			41,578			(128,605		)	133,828
Net increase in cash and cash equivalents	81,757			60			9,039			—			90,856
Cash and cash equivalents, beginning of period	510			191			—			—			701
Cash and cash equivalents, end of period	$	82,267		$	251		$	9,039		$	—		$	91,557



	Nine Months Ended September 30, 2017
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Consolidating Adjustments		Total Consolidated
	(In thousands)
OPERATING ACTIVITIES:
Net cash provided by operating activities	822			149,963			34,007			—		184,792
INVESTING ACTIVITIES:
Capital expenditures	(3,595		)	(152,055		)	(11,742		)	—		(167,392		)
Producing properties and other acquisitions	—			(55,429		)	—			—		(55,429		)
Proceeds from disposition of assets	955			19,124			58			—		20,137
Other	—			(1,500		)	—			—		(1,500		)
Net cash used in investing activities	(2,640		)	(189,860		)	(11,684		)	—		(204,184		)
FINANCING ACTIVITIES:
Borrowings under credit agreement	251,401			—			—			—		251,401
Payments under credit agreement	(250,100		)	—			—			—		(250,100		)
Intercompany borrowings (advances), net	(20,483		)	39,839			(19,356		)	—		—
Payments on capitalized leases	—			—			(2,967		)	—		(2,967		)
Proceeds from common stock issued, net of issue costs	18,623			—			—			—		18,623
Book overdrafts	2,364			—			—			—		2,364
Net cash provided by (used in) financing activities	1,805			39,839			(22,323		)	—		19,321
Net decrease in cash and cash equivalents	(13		)	(58		)	—			—		(71		)
Cash and cash equivalents, beginning of period	517			376			—			—		893
Cash and cash equivalents, end of period	$	504		$	318		$	—		$	—	$	822