|   | [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) |
|--------|------------------------------------------------------|

|   | OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|----------------------------------------|

|   | OR |
|--------|----|

|   | [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) |
|--------|------------------------------------------------------------------|

|   | OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|----------------------------------------|

|   | Delaware                                       | 73-1283193                           |
|--------|------------------------------------------------|--------------------------------------|
|   | (State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |

|   | 7130 South Lewis, Suite 1000, Tulsa, Oklahoma | 74136      |
|--------|-----------------------------------------------|------------|
|   | (Address of principal executive offices)      | (Zip Code) |

|   | (918) 493-7700                                             |
|--------|------------------------------------------------------------|
|   | (Registrant’s telephone number, including area code) |

|   | None                                                 |
|--------|------------------------------------------------------|
|   | (Former name, former address and former fiscal year, |
|   | if changed since last report)                        |

|   | Yes [x] | No [  ] |
|--------|---------|-------------------|

|   | Yes [  ] | No [  ] |
|--------|--------------------|-------------------|

| Large accelerated filer [x] | Accelerated filer [  ] | Non-accelerated filer [  ] | Smaller reporting company [  ] |
|-----------------------------|----------------------------------|--------------------------------------|------------------------------------------|

|   | Yes [  ] | No [x] |
|--------|--------------------|--------|

|   |       |                                                             | Page   |
|--------|------------|------------------------------------------------------------------|--------|
|   |       |                                                             | Number |
|   |       | PART I. Financial Information                                    |   |
|   | Item 1.    | Financial Statements (Unaudited)                                 |   |
|   |       |                                                             |   |
|   |       | Condensed Consolidated Balance Sheets                            |   |
|   |       | March 31, 2010 and December 31, 2009                             | 3      |
|   |       |                                                             |   |
|   |       | Condensed Consolidated Statements of Operations                  |   |
|   |       | Three Months Ended March 31, 2010 and 2009                       | 5      |
|   |       |                                                             |   |
|   |       | Condensed Consolidated Statements of Cash Flows                  |   |
|   |       | Three Months Ended March 31, 2010 and 2009                       | 6      |
|   |       |                                                             |   |
|   |       | Condensed Consolidated Statements of Comprehensive Income (Loss) |   |
|   |       | Three Months Ended March 31, 2010 and 2009                       | 7      |
|   |       |                                                             |   |
|   |       | Notes to Condensed Consolidated Financial Statements             | 8      |
|   |       |                                                             |   |
|   |       | Report of Independent Registered Public Accounting Firm          | 21     |
|   |       |                                                             |   |
|   | Item 2.    | Management’s Discussion and Analysis of Financial          |   |
|   |       | Condition and Results of Operations                              | 22     |
|   |       |                                                             |   |
|   | Item 3.    | Quantitative and Qualitative Disclosure About Market Risk        | 40     |
|   |       |                                                             |   |
|   | Item 4.    | Controls and Procedures                                          | 41     |
|   |       |                                                             |   |
|   |       | PART II. Other Information                                       |   |
|   | Item 1.    | Legal Proceedings                                                | 42     |
|   |       |                                                             |   |
|   | Item 1A.   | Risk Factors                                                     | 42     |
|   |       |                                                             |   |
|   | Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds      | 42     |
|   |       |                                                             |   |
|   | Item 3.    | Defaults Upon Senior Securities                                  | 42     |
|   |       |                                                             |   |
|   | Item 4.    | Reserved and Removed                                             | 42     |
|   |       |                                                             |   |
|   | Item 5.    | Other Information                                                | 42     |
|   |       |                                                             |   |
|   | Item 6.    | Exhibits                                                         | 43     |
|   |       |                                                             |   |
|   | Signatures |                                                             | 44     |

|                                                                                                          |   | March 31,                           |      |   |   | December 31, |   |
|---------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|-----------|--------|--------|--------------|--------|
|                                                                                                          |   | 2010                                |      |   |   | 2009         |   |
|                                                                                                          |   | (In thousands except share amounts) |      |
| ASSETS                                                                                                        |   |                                |      |   |   |         |   |   |   |
| Current assets:                                                                                               |   |                                |      |   |   |         |   |   |   |
| Cash and cash equivalents                                                                                     |   | $                                   | 1,039     |   |   |         | $      | 1,140 |   |
| Restricted cash                                                                                               |   |                                | 20        |   |   |         |   | 20 |   |
| Accounts receivable, net of allowance for doubtful accounts of $5,186 at March 31, 2010 and December 31, 2009 |   |                                | 87,686    |   |   |         |   | 74,382 |   |
| Materials and supplies                                                                                        |   |                                | 6,669     |   |   |         |   | 6,914 |   |
| Current derivative assets (Note 9)                                                                            |   |                                | 40,210    |   |   |         |   | 9,945 |   |
| Current income tax receivable                                                                                 |   |                                | 15,894    |   |   |         |   | 15,236 |   |
| Current deferred tax asset                                                                                    |   |                                | 14,423    |   |   |         |   | 14,423 |   |
| Prepaid expenses and other                                                                                    |   |                                | 4,780     |   |   |         |   | 6,035 |   |
| Total current assets                                                                                          |   |                                | 170,721   |   |   |         |   | 128,095 |   |
|                                                                                                          |   |                                |      |   |   |         |   |   |   |
| Property and equipment:                                                                                       |   |                                |      |   |   |         |   |   |   |
| Drilling equipment                                                                                            |   |                                | 1,224,646 |   |   |         |   | 1,217,361 |   |
| Oil and natural gas properties on the full cost                                                               |   |                                |      |   |   |         |   |   |   |
| method:                                                                                                       |   |                                |      |   |   |         |   |   |   |
| Proved properties                                                                                             |   |                                | 2,360,943 |   |   |         |   | 2,309,193 |   |
| Undeveloped leasehold not being amortized                                                                     |   |                                | 146,940   |   |   |         |   | 140,129 |   |
| Gas gathering and processing equipment                                                                        |   |                                | 179,440   |   |   |         |   | 172,549 |   |
| Transportation equipment                                                                                      |   |                                | 30,718    |   |   |         |   | 30,726 |   |
| Other                                                                                                         |   |                                | 22,856    |   |   |         |   | 22,747 |   |
|                                                                                                          |   |                                | 3,965,543 |   |   |         |   | 3,892,705 |   |
| Less accumulated depreciation, depletion, amortization                                                        |   |                                |      |   |   |         |   |   |   |
| and impairment                                                                                                |   |                                | 1,901,659 |   |   |         |   | 1,879,112 |   |
| Net property and equipment                                                                                    |   |                                | 2,063,884 |   |   |         |   | 2,013,593 |   |
|                                                                                                          |   |                                |      |   |   |         |   |   |   |
| Goodwill                                                                                                      |   |                                | 62,808    |   |   |         |   | 62,808 |   |
| Other intangible assets, net                                                                                  |   |                                | 4,795     |   |   |         |   | 5,633 |   |
| Non-current derivative assets (Note 9)                                                                        |   |                                | 1,511     |   |   |         |   | — |   |
| Other assets                                                                                                  |   |                                | 17,451    |   |   |         |   | 18,270 |   |
| Total assets                                                                                                  |   | $                                   | 2,321,170 |   |   |         | $      | 2,228,399 |   |

|                                               |   | March 31,                           |      |   |   | December 31, |   |
|----------------------------------------------------|--------|-------------------------------------|-----------|--------|--------|--------------|--------|
|                                               |   | 2010                                |      |   |   | 2009         |   |
|                                               |   | (In thousands except share amounts) |      |
| LIABILITIES AND SHAREHOLDERS’ EQUITY         |   |                                |      |   |   |         |   |   |   |
| Current liabilities:                               |   |                                |      |   |   |         |   |   |   |
| Accounts payable                                   |   | $                                   | 63,219    |   |   |         | $      | 55,880 |   |
| Accrued liabilities (Note 4)                       |   |                                | 38,758    |   |   |         |   | 34,571 |   |
| Contract advances                                  |   |                                | 1,587     |   |   |         |   | 3,124 |   |
| Current portion of derivative liabilities (Note 9) |   |                                | 932       |   |   |         |   | 2,230 |   |
| Current portion of other liabilities (Note 5)      |   |                                | 10,155    |   |   |         |   | 9,342 |   |
| Total current liabilities                          |   |                                | 114,651   |   |   |         |   | 105,147 |   |
|                                               |   |                                |      |   |   |         |   |   |   |
| Long-term debt (Note 5)                            |   |                                | 30,000    |   |   |         |   | 30,000 |   |
| Long-term derivative liabilities (Note 9)          |   |                                | 1,087     |   |   |         |   | 1,142 |   |
| Other long-term liabilities (Note 5)               |   |                                | 80,252    |   |   |         |   | 79,984 |   |
| Deferred income taxes                              |   |                                | 466,697   |   |   |         |   | 446,316 |   |
|                                               |   |                                |      |   |   |         |   |   |   |
| 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, 47,841,710 and 47,530,669 shares       |   |                                |      |   |   |         |   |   |   |
| issued, respectively                               |   |                                | 9,430     |   |   |         |   | 9,405 |   |
| Capital in excess of par value                     |   |                                | 390,706   |   |   |         |   | 383,957 |   |
| Accumulated other comprehensive income             |   |                                | 24,204    |   |   |         |   | 4,458 |   |
| Retained earnings                                  |   |                                | 1,204,143 |   |   |         |   | 1,167,990 |   |
| Total shareholders’ equity                   |   |                                | 1,628,483 |   |   |         |   | 1,565,810 |   |
| Total liabilities and shareholders’ equity   |   | $                                   | 2,321,170 |   |   |         | $      | 2,228,399 |   |

|                                     | Three Months Ended |    |
|------------------------------------------|--------------------|---------|
|                                     | March 31,          |    |
|                                     | 2010               |    | 2009 |   |
|                                     | (In thousands)     |    |
| Revenues:                                |               |    |   |   |   |   |
| Contract drilling                        | $                  | 60,854  |   | $ | 88,699 |   |
| Oil and natural gas                      |               | 99,053  |   |   | 88,904 |   |
| Gas gathering and processing             |               | 41,135  |   |   | 22,143 |   |
| Other                                    |               | 5,508   |   |   | 1,316 |   |
| Total revenues                           |               | 206,550 |   |   | 201,062 |   |
|                                     |               |    |   |   |   |   |
| Expenses:                                |               |    |   |   |   |   |
| Contract drilling:                       |               |    |   |   |   |   |
| Operating costs                          |               | 40,900  |   |   | 50,330 |   |
| Depreciation                             |               | 13,786  |   |   | 12,619 |   |
| Oil and natural gas:                     |               |    |   |   |   |   |
| Operating costs                          |               | 25,034  |   |   | 24,816 |   |
| Depreciation, depletion and amortization |               | 25,336  |   |   | 38,006 |   |
| Impairment of oil and natural            |               |    |   |   |   |   |
| gas properties (Note 2)                  |               | — |   |   | 281,241 |   |
| Gas gathering and processing:            |               |    |   |   |   |   |
| Operating costs                          |               | 32,726  |   |   | 20,677 |   |
| Depreciation and amortization            |               | 3,941   |   |   | 4,061 |   |
| General and administrative               |               | 6,279   |   |   | 6,089 |   |
| Interest, net                            |               | — |   |   | 477 |   |
| Total operating expenses                 |               | 148,002 |   |   | 438,316 |   |
| Income (loss) before income taxes        |               | 58,548  |   |   | (237,254 | ) |
|                                     |               |    |   |   |   |   |
| Income tax expense (benefit):            |               |    |   |   |   |   |
| Current                                  |               | 2,240   |   |   | — |   |
| Deferred                                 |               | 20,155  |   |   | (89,761 | ) |
| Total income taxes                       |               | 22,395  |   |   | (89,761 | ) |
|                                     |               |    |   |   |   |   |
| Net income (loss)                        | $                  | 36,153  |   | $ | (147,493 | ) |
|                                     |               |    |   |   |   |   |
| Net income (loss) per common share:      |               |    |   |   |   |   |
| Basic                                    | $                  | 0.77    |   | $ | (3.14 | ) |
|                                     |               |    |   |   |   |   |
| Diluted                                  | $                  | 0.76    |   | $ | (3.14 | ) |

|                                                  |   | Three Months Ended |     |
|-------------------------------------------------------|--------|--------------------|----------|
|                                                  |   | March 31,          |     |
|                                                  |   | 2010               |     |   |   | 2009 |   |
|                                                  |   | (In thousands)     |     |
| OPERATING ACTIVITIES:                                 |   |               |     |   |   |   |   |   |   |
| Net income (loss)                                     |   | $                  | 36,153   |   |   |   | $ | (147,493 | ) |
| Adjustments to reconcile net income to net cash       |   |               |     |   |   |   |   |   |   |
| provided by operating activities:                     |   |               |     |   |   |   |   |   |   |
| Depreciation, depletion and amortization              |   |               | 43,313   |   |   |   |   | 54,958 |   |
| Impairment of oil and natural gas properties (Note 2) |   |               | —  |   |   |   |   | 281,241 |   |
| Unrealized (gain) loss on derivatives                 |   |               | (1,148   | ) |   |   |   | 1,968 |   |
| Deferred tax expense (benefit)                        |   |               | 20,155   |   |   |   |   | (89,761 | ) |
| (Gain) loss on disposition of assets                  |   |               | (5,435   | ) |   |   |   | (1,304 | ) |
| Stock compensation plans                              |   |               | 3,316    |   |   |   |   | 3,134 |   |
| Other                                                 |   |               | 676      |   |   |   |   | 639 |   |
| Changes in operating assets and liabilities           |   |               |     |   |   |   |   |   |   |
| increasing (decreasing) cash:                         |   |               |     |   |   |   |   |   |   |
| Accounts receivable                                   |   |               | (13,304  | ) |   |   |   | 61,832 |   |
| Accounts payable                                      |   |               | 966      |   |   |   |   | 1,204 |   |
| Material and supplies inventory                       |   |               | 245      |   |   |   |   | (513 | ) |
| Accrued liabilities                                   |   |               | (4,269   | ) |   |   |   | (2,423 | ) |
| Contract advances                                     |   |               | (1,537   | ) |   |   |   | (327 | ) |
| Other – net                                     |   |               | 536      |   |   |   |   | 9,735 |   |
| Net cash provided by operating activities             |   |               | 79,667   |   |   |   |   | 172,890 |   |
|                                                  |   |               |     |   |   |   |   |   |   |
| INVESTING ACTIVITIES:                                 |   |               |     |   |   |   |   |   |   |
| Capital expenditures                                  |   |               | (105,563 | ) |   |   |   | (115,904 | ) |
| Proceeds from disposition of assets                   |   |               | 18,313   |   |   |   |   | 3,870 |   |
| Other - net                                           |   |               | 324      |   |   |   |   | — |   |
| Net cash used in investing activities                 |   |               | (86,926  | ) |   |   |   | (112,034 | ) |
|                                                  |   |               |     |   |   |   |   |   |   |
| FINANCING ACTIVITIES:                                 |   |               |     |   |   |   |   |   |   |
| Borrowings under line of credit                       |   |               | 19,100   |   |   |   |   | 50,800 |   |
| Payments under line of credit                         |   |               | (19,100  | ) |   |   |   | (86,800 | ) |
| Proceeds from exercise of stock options               |   |               | 246      |   |   |   |   | 17 |   |
| Book overdrafts                                       |   |               | 6,912    |   |   |   |   | (24,445 | ) |
| Net cash provided by (used in) financing activities   |   |               | 7,158    |   |   |   |   | (60,428 | ) |
|                                                  |   |               |     |   |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents  |   |               | (101     | ) |   |   |   | 428 |   |
|                                                  |   |               |     |   |   |   |   |   |   |
| Cash and cash equivalents, beginning of period        |   |               | 1,140    |   |   |   |   | 584 |   |
| Cash and cash equivalents, end of period              |   | $                  | 1,039    |   |   |   | $ | 1,012 |   |

|                                                         |   | Three Months Ended |   |
|--------------------------------------------------------------|--------|--------------------|--------|
|                                                         |   | March 31,          |   |
|                                                         |   | 2010               |   | 2009 |   |
|                                                         |   | (In thousands)     |   |
| Net income (loss)                                            |   | $                  | 36,153 |   | $ | (147,493 | ) |
| Other comprehensive income (loss), net of taxes:             |   |               |   |   |   |   |   |
|     Change in value of derivative instruments |   |               |   |   |   |   |   |
| used as cash flow hedges, net of tax of                      |   |               |   |   |   |   |   |
| $14,667 and $29,406                                          |   |               | 23,672 |   |   | 49,005 |   |
| Reclassification - derivative settlements,                   |   |               |   |   |   |   |   |
| Net of tax of ($2,014) and ($9,847)                          |   |               | (3,252 | ) |   | (16,554 | ) |
| Ineffective portion of derivatives,                          |   |               |   |   |   |   |   |
| net of tax of ($417) and $16                                 |   |               | (674   | ) |   | 28 |   |
| Comprehensive income (loss)                                  |   | $                  | 55,899 |   | $ | (115,014 | ) |

| · |   Balance Sheets at March 31, 2010 and December 31, 2009; |
|--------|----------------------------------------------------------------|

| · |   Statements of Operations for the three months ended March 31, 2010 and 2009; and |
|--------|-----------------------------------------------------------------------------------------|

| · |   Cash Flows for the three months ended March 31, 2010 and 2009. |
|--------|-----------------------------------------------------------------------|

| · |   Statements of Comprehensive Income (Loss) for the three months ended March 31, 2010 and 2009. |
|--------|------------------------------------------------------------------------------------------------------|

|                                                        |   |                                    |     | Weighted      |   |      |   |
|-------------------------------------------------------------|--------|-----------------------------------------|----------|---------------|--------|-----------|--------|
|                                                        |   | Income                                  |     | Shares        |   | Per-Share |   |
|                                                        |   | (Numerator)                             |     | (Denominator) |   | Amount    |   |
|                                                        |   | (In thousands except per share amounts) |     |
| For the three months ended                                  |   |                                    |     |          |   |      |   |   |   |   |
| March 31, 2010:                                             |   |                                    |     |          |   |      |   |   |   |   |
| Basic earnings per common share                             |   | $                                       | 36,153   |          |   | 47,121    |   | $ | 0.77 |   |
| Effect of dilutive stock options, restricted                |   |                                    |     |          |   |      |   |   |   |   |
| stock and stock appreciation rights (SARs)                  |   |                                    | —  |          |   | 565       |   |   | (0.01 | ) |
| Diluted earnings per common share                           |   | $                                       | 36,153   |          |   | 47,686    |   | $ | 0.76 |   |
|                                                        |   |                                    |     |          |   |      |   |   |   |   |
| For the three months ended                                  |   |                                    |     |          |   |      |   |   |   |   |
| March 31, 2009:                                             |   |                                    |     |          |   |      |   |   |   |   |
| Basic earnings (loss) per common share                      |   | $                                       | (147,493 | )             |   | 46,921    |   | $ | (3.14 | ) |
| Effect of dilutive stock options, restricted                |   |                                    |     |          |   |      |   |   |   |   |
|     stock and stock appreciation rights |   |                                    | —  |          |   | —   |   |   | — |   |
| Diluted earnings (loss) per common share                    |   | $                                       | (147,493 | )             |   | 46,921    |   | $ | (3.14 | ) |

|                   |   | Three Months Ended |
|------------------------|--------|--------------------|
|                   |   | March 31,          |
|                   |   | 2010               |   |   |   | 2009 |
|                   |   |               |   |   |   |   |   |   |
| Stock options and SARs |   |               | 132,165 |   |   |   |   | 374,921 |
|                   |   |               |   |   |   |   |   |   |
| Average Exercise Price |   | $                  | 59.87 |   |   |   | $ | 47.09 |

|                            |   | March 31,      |         | December 31, |   |
|---------------------------------|--------|----------------|--------------|--------------|--------|
|                            |   | 2010           |         | 2009         |   |
|                            |   | (In thousands) |         |
| Employee costs                  |   | $         |   7,278 |         | $      |   13,307 |   |
| Lease operating expense accrual |   |           |   5,506 |         |   |   6,244 |   |
| Taxes                           |   |           |  18,006 |         |   |  5,085 |   |
| Other                           |   |           | 7,968        |         |   | 9,935 |   |
| Total accrued liabilities       |   | $              | 38,758       |         | $      | 34,571 |   |

|                                                     |   | March 31,      |    | December 31, |   |
|----------------------------------------------------------|--------|----------------|---------|--------------|--------|
|                                                     |   | 2010           |    | 2009         |   |
|                                                     |   | (In thousands) |    |
| Revolving credit facility with interest,                 |   |           |    |         |   |   |   |
|   including the effect of hedging, of 6.1% at  |   |           |    |         |   |   |   |
|   March 31, 2010 and 4.3% at December 31, 2009 |   | $              | 30,000  |         | $      | 30,000 |   |
| Less current portion                                     |   |           | — |         |   | — |   |
| Total long-term debt                                     |   | $              | 30,000  |         | $      | 30,000 |   |
|                                                     |   |           |    |         |   |   |   |

| ·   | the payment of dividends (other than stock dividends) during any fiscal year in excess of 25% of our consolidated net income for the preceding fiscal year; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the incurrence of additional debt with certain limited exceptions; and |
|--------------------|------------------------------------------------------------------------|

| ·   | the creation or existence of mortgages or liens, other than those in the ordinary course of business, on any of our properties, except in favor of our lenders. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | consolidated net worth of at least $900 million; |
|--------------------|--------------------------------------------------|

| ·   | a current ratio (as defined in the Credit Facility) of not less than 1 to 1; and |
|--------------------|----------------------------------------------------------------------------------|

| ·   | a leverage ratio of long-term debt to consolidated EBITDA (as defined in the Credit Facility) for the most recently ended rolling four fiscal quarters of no greater than 3.50 to 1.0. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                         |   | March 31,      |   | December 31, |   |
|----------------------------------------------|--------|----------------|--------|--------------|--------|
|                                         |   | 2010           |   | 2009         |   |
|                                         |   | (In thousands) |
|                                         |   |           |   |         |   |   |   |
| Asset retirement obligations (ARO) liability |   | $              | 57,342 |         | $      | 56,404 |   |
| Workers’ compensation                  |   |           | 22,979 |         |   | 22,974 |   |
| Separation benefit plans                     |   |           | 4,757  |         |   | 4,681 |   |
| Gas balancing liability                      |   |           | 3,263  |         |   | 3,263 |   |
| Deferred compensation plan                   |   |           | 2,066  |         |   | 2,004 |   |
|                                         |   |           | 90,407 |         |   | 89,326 |   |
| Less current portion                         |   |           | 10,155 |         |   | 9,342 |   |
| Total other long-term liabilities            |   | $              | 80,252 |         | $      | 79,984 |   |

|                               |   | Three Months EndedMarch 31, |   |
|------------------------------------|--------|-----------------------------|--------|
|                               |   | 2010                        |   | 2009 |   |
|                               |   | (In thousands)              |   |
|                               |   |                        |   |   |   |   |   |
| ARO liability, January 1:          |   | $                           | 56,404 |   | $ | 49,230 |   |
| Accretion of discount              |   |                        | 687    |   |   | 632 |   |
| Liability incurred                 |   |                        | 472    |   |   | 898 |   |
| Liability settled                  |   |                        | (270   | ) |   | (202 | ) |
| Revision of estimates              |   |                        | 49     |   |   | 40 |   |
| ARO liability, March 31:           |   |                        | 57,342 |   |   | 50,598 |   |
| Less current portion               |   |                        | 1,632  |   |   | 1,135 |   |
| Total long-term plugging liability |   | $                           | 55,710 |   | $ | 49,463 |   |

|                               |   | Three Months Ended |
|------------------------------------|--------|--------------------|
|                               |   | March 31,          |
|                               |   | 2010               |   | 2009 |
|                               |   |               |   |   |   |   |   |   |
| Shares granted                     |   |               | 248,383 |   |   |   | — |   |
|                               |   |               |   |   |   |   |   |   |
| Estimated fair value (in millions) |   | $                  | 10.6 |   |   | $ | — |   |
|                               |   |               |   |   |   |   |   |   |
| Percentage of shares granted       |   |               |   |   |   |   |   |   |
| Expected to be distributed         |   |               | 93 | % |   |   | — | % |
|                               |   |               |   |   |   |   |   |   |

| Term                        |   | Amount                                    |   | Fixed Rate |   | Floating Rate |
|-----------------------------|--------|-------------------------------------------|--------|------------|--------|---------------|
| April 2010 – May 2012 |   | $     15,000,000 |   | 4.53%      |   | 3 month LIBOR |
| April 2010 – May 2012 |   | $     15,000,000 |   | 4.16%      |   | 3 month LIBOR |
|                        |   |                                      |   |       |   |          |

| ·   | Swaps.  We receive or pay a fixed price for the hedged commodity and pay or receive a floating market price to or from the counterparty.  The fixed-price payment and the floating-price payment are netted, resulting in a net amount due to or from the counterparty. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Collars.  A collar contains a fixed floor price (put) and a ceiling price (call).  If the market price exceeds the call strike price or falls below the put strike price, we receive the fixed price and pay the market price.  If the market price is between the call and the put strike price, no payments are due from either party. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Basis Swaps. We receive or pay the NYMEX settlement value plus or minus a fixed delivery point price for the hedged commodity and pay or receive the published index price at the specified delivery point. We use basis swaps to hedge the price risk between NYMEX and its physical delivery points. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Term                              |   | Commodity                                   |   | Hedged Volume    |   | Weighted Average Fixed Price for Swaps |   | Hedged Market             |
|-----------------------------------|--------|---------------------------------------------|--------|------------------|--------|----------------------------------------|--------|---------------------------|
| Apr’10 – Dec’10 |   | Crude oil - collar                          |   | 1,000 Bbl/day    |   | $67.50 put & $81.53 call           |   | WTI – NYMEX         |
| Apr’10 – Dec’10 |   | Crude oil – swap                      |   | 1,500 Bbl/day    |   | $61.36                                 |   | WTI – NYMEX         |
| Apr’10 – Dec’10 |   | Natural gas – swap                    |   | 15,000 MMBtu/day |   | $ 7.20                                 |   | IF – NYMEX (HH)     |
| Apr’10 – Dec’10 |   | Natural gas – swap                    |   | 20,000 MMBtu/day |   | $ 6.89                                 |   | IF – Tenn Zone 0    |
| Apr’10 – Dec’10 |   | Natural gas – swap                    |   | 30,000 MMBtu/day |   | $ 6.12                                 |   | IF – CEGT           |
| Apr’10 – Dec’10 |   | Natural gas – swap                    |   | 20,000 MMBtu/day |   | $ 5.67                                 |   | IF – PEPL           |
| Apr’10 – Dec’10 |   | Natural gas – basis differential swap |   | 10,000 MMBtu/day |   | ($0.79)                                |   | PEPL – NYMEX        |
|                              |   |                                        |   |             |   |                                   |   |                      |
| Jan’11 – Dec’11 |   | Natural gas – swap                    |   | 15,000 MMBtu/day |   | $ 5.56                                 |   | IF – NYMEX (HH)     |
| Jan’11 – Dec’11 |   | Natural gas – basis differential swap |   | 15,000 MMBtu/day |   | ($0.14)                                |   | Tenn Zone 0 – NYMEX |
|                              |   |                                        |   |             |   |                                   |   |                      |
| Jan’12 – Dec’12 |   | Natural gas – swap                    |   | 15,000 MMBtu/day |   | $ 5.62                                 |   | IF – PEPL           |

| Term                              |   | Commodity                                   |   | Hedged Volume    |   | Basis Differential |   | Hedged Market             |
|-----------------------------------|--------|---------------------------------------------|--------|------------------|--------|--------------------|--------|---------------------------|
| Jan’11 – Dec’11 |   | Natural gas – basis differential swap |   | 15,000 MMBtu/day |   | ($0.14)            |   | Tenn Zone 0 – NYMEX |
| Jan’11 – Dec’11 |   | Natural gas – basis differential swap |   | 15,000 MMBtu/day |   | ($0.21)            |   | CEGT – NYMEX        |
| Jan’11 – Dec’11 |   | Natural gas – basis differential swap |   | 10,000 MMBtu/day |   | ($0.225)           |   | PEPL – NYMEX        |

| Term                            |   | Commodity                |   | Hedged Volume  |   | Weighted Average Fixed Price |   | Hedged Market       |
|---------------------------------|--------|--------------------------|--------|----------------|--------|------------------------------|--------|---------------------|
| May’10–Dec’11 |   | Liquids – swap (1) |   | 644,406 Gal/mo |   | $0.97                        |   | OPIS – Conway |

|                                        |   |                          |   | Derivative Assets |
|---------------------------------------------|--------|-------------------------------|--------|-------------------|
|                                        |   |                          |   | Fair Value        |
|                                        |   |                          |   | March 31,         |   | December 31, |
|                                        |   | Balance Sheet Location        |   | 2010              |   | 2009 |
| Derivatives designated as hedging           |   | (In thousands)                |
|     instruments         |   |                          |   |              |   |   |   |   |
|                                        |   |                          |   |              |   |   |   |   |
| Commodity derivatives:                      |   |                          |   |              |   |   |   |   |
| Current                                     |   | Current derivative assets     |   | $                 | 40,196 |   | $ | 9,945 |
| Long-term                                   |   | Non-current derivative assets |   |              | 1,468 |   |   | — |
| Total derivatives designated as hedging     |   |                          |   |              |   |   |
|     instruments         |   |                          | 41,664 |              |   | 9,945 |
|                                        |   |                          |   |              |   |   |
| Derivatives not designated as hedging       |   |                          |   |              |   |   |
|     instruments         |   |                          |   |              |   |   |
|                                        |   |                          |   |              |   |   |
| Commodity derivatives (basis swaps):        |   |                          |   |              |   |   |   |   |
| Current                                     |   | Current derivative assets     |   |              | 14 |   |   | — |
| Long-term                                   |   | Non-current derivative assets |   |              | 43 |   |   | — |
| Total derivatives not designated as         |   |                          |   |              |   |   |
|     hedging instruments |   |                          | 57     |              |   | — |
|                                        |   |                          |   |              |   |   |
| Total derivative assets                     |   | $                             | 41,721 |              | $ | 9,945 |

|                                        |   |                                      |    | Derivative Liabilities |
|---------------------------------------------|--------|-------------------------------------------|---------|------------------------|
|                                        |   |                                      |    | Fair Value             |
|                                        |   |                                      |    | March 31,              |   | December 31, |
|                                        |   | Balance Sheet Location                    |    | 2010                   |   | 2009 |
| Derivatives designated as hedging           |   | (In thousands)                            |
|     instruments         |   |                                      |    |                   |   |   |   |   |
|                                        |   |                                      |    |                   |   |   |   |   |
| Interest rate swaps:                        |   |                                      |    |                   |   |   |   |   |
| Current                                     |   | Current portion of derivative liabilities |    | $                      | 932 |   | $ | 806 |
| Long-term                                   |   | Other long-term derivative liabilities    |    |                   | 1,087 |   |   | 1,142 |
| Commodity derivatives:                      |   |                                      |    |                   |   |   |   |   |
| Current                                     |   | Current portion of derivative liabilities |    |                   | — |   |   | 1,424 |
| Total derivatives designated as hedging     |   |                                      |    |                   |   |   |
|     instruments         |   |                                      | 2,019   |                   |   | 3,372 |
|                                        |   |                                      |    |                   |   |   |   |   |
| Total derivatives not designated as         |   |                                      |    |                   |   |   |
|     hedging instruments |   |                                      | — |                   |   | — |
|                                        |   |                                      |    |                   |   |   |   |   |
| Total derivative liabilities                |   |                                      |    | $                      | 2,019 |   | $ | 3,372 |

| Derivatives in Cash Flow Hedging Relationships |   |   | Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion) (1) |   |
|------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------|--------|
|                                           |   | 2010   |                                                                                         |   | 2009 |   |
|                                           |   |   | (In thousands)                                                                               |   |
| Interest rate swaps                            |   | $      | (1,247                                                                                       | )      |   | $ | (1,555 | ) |
| Commodity derivatives                          |   |   | 25,451                                                                                       |   |   |   | 67,318 |   |
| Total                                          |   | $      | 24,204                                                                                       |   |   | $ | 65,763 |   |

|   | (1)  Net of taxes. |
|--------|------------------------------|

| Derivative Instrument | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income & Location of Gain or (Loss) Recognized in Income |   | Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (1) |   | Amount of Gain or (Loss) Recognized in Income  (2) |   |
|-----------------------|--------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|--------|--------------------------------------------------------------|--------|
|                  |                                                                                                                           |   | 2010                                                                       |   | 2009                                                         |   |   | 2010 |   |   | 2009 |   |
|                  |                                                                                                                           |   | (In thousands)                                                             |   |
| Commodity derivatives | Oil and natural gas revenue                                                                                                    |   | $                                                                          | 5,573  |                                                         | $      | 26,589 |   | $ | 1,091 |   | $ | (44 | )  |
| Interest rate swaps   | Interest, net                                                                                                                  |   |                                                                       | (307   | )                                                            |   | (188 | ) |   | — |   |   | — |   |
|                  | Total                                                                                                                          |   | $                                                                          | 5,266  |                                                         | $      | 26,401 |   | $ | 1,091 |   | $ | (44 | )  |

|   | (1)  Effective portion of gain (loss). |
|--------|--------------------------------------------------|

|   | (2)  Ineffective portion of gain (loss). |
|--------|----------------------------------------------------|

| Derivatives Not Designated as Hedging Instruments |   | Location of Gain or (Loss) Recognized in Income on Derivative |   | Amount of Gain or (Loss) Recognized in Income on Derivative |   |
|---------------------------------------------------|--------|---------------------------------------------------------------|--------|-------------------------------------------------------------|--------|
|                                              |   |                                                          |   | 2010                                                        |   | 2009 |   |
|                                              |   |                                                          |   | (In thousands)                                              |   |
|                                              |   |                                                          |   |                                                        |   |   |   |   |   |
| Commodity derivatives (basis swaps)               |   | Oil and natural gas revenue                                   |   | $                                                           | 57     |   | $ | (1,108 | ) |
| Total                                             |   |                                                          |   | $                                                           | 57     |   | $ | (1,108 | ) |

| ·   | Level 1 - unadjusted quoted prices in active markets for identical assets and liabilities. |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | Level 2 - significant observable pricing inputs other than quoted prices included within level 1 that are either directly or indirectly observable as of the reporting date.  Essentially, inputs (variables used in the pricing models) that are derived principally from or corroborated by observable market data. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 3 - generally unobservable inputs which are developed based on the best information available and may include our own internal data. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

|                            |    March 31, 2010 |   |
|---------------------------------|----------------------------------|--------|
|                            |                             |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|                            | (In thousands)                   |
| Financial assets (liabilities): |                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swaps             |                             | $      | — |   | $ | — |   | $ | (2,019 | ) | $ | (2,019 | ) |
| Commodity derivatives           |                             | $      | — |   | $ | (9,718 | ) | $ | 51,439 |   | $ | 41,721 |   |

|                            |    December 31, 2009 |   |
|---------------------------------|-------------------------------------|--------|
|                            |                                |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|                            | (In thousands)                      |
| Financial assets (liabilities): |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swaps             |                                | $      | — |   | $ | — |   | $ | (1,948 | ) | $ | (1,948 | ) |
| Commodity derivatives           |                                | $      | — |   | $ | (11,427 | ) | $ | 19,948 |   | $ | 8,521 |   |

|                                                     |   | Net Derivatives                           |    |
|----------------------------------------------------------|--------|-------------------------------------------|---------|
|                                                     |   | For the Three Months Ended March 31, 2010 |    |   | For the Three Months Ended March 31, 2009 |   |
|                                                     |   | Interest Rate Swaps                       |    |   | Commodity Swaps and Collars |   |   | Interest Rate Swaps |   |   | Commodity Swaps and Collars |   |
|                                                     |   |                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                     |   | (In thousands)                            |    |
| Beginning of period                                      |   | $                                         | (1,948  | ) |   | $ | 19,948 |   |   | $ | (2,516 |   ) |   | $ | 58,508 |   |
| Total gains or losses (realized and unrealized):         |   |                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Included in earnings (loss) (1)                          |   |                                      | (307    | ) |   |   | 9,074 |   |   |   | (188 | ) |   |   | 23,878 |   |
| Included in other comprehensive income (loss)            |   |                                      | (71     | ) |   |   | 30,343 |   |   |   | 37 |   |   |   | 52,873 |   |
| Purchases, issuance and settlements                      |   |                                      | 307     |   |   |   | (7,926 | ) |   |   | 188 |   |   |   | (25,846 | ) |
| End of period                                            |   | $                                         | (2,019  | ) |   | $ | 51,439 |   |   | $ | (2,479 | ) |   | $ | 109,413 |   |
|                                                     |   |                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total gains (losses) for the period included in earnings |   |                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| attributable to the change in unrealized gain (loss)     |   |                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| relating to assets still held at end of period           |   | $                                         | — |   |   | $ | 1,148 |   |   | $ | — |   |   | $ | (1,968 | ) |

|   | (1) Interest rate swaps and commodity swaps and collars are reported in the condensed consolidated statements of operations in interest, net and revenues, respectively. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                 |   | Three Months Ended |    |
|--------------------------------------|--------|--------------------|---------|
|                                 |   | March 31,          |    |
|                                 |   | 2010               |    | 2009 |   |
|                                 |   |               |    |   |   |   |   |
|                                 |   | (In thousands)     |    |
| Revenues:                            |   |               |    |   |   |   |   |
| Contract drilling                    |   | $                  | 67,501  |   | $ | 91,324 |   |
| Elimination of inter-segment revenue |   |               | (6,647  | ) |   | (2,625 | ) |
| Contract drilling net of             |   |               |    |   |   |   |   |
| inter-segment revenue                |   |               | 60,854  |   |   | 88,699 |   |
|                                 |   |               |    |   |   |   |   |
| Oil and natural gas                  |   |               | 99,053  |   |   | 88,904 |   |
|                                 |   |               |    |   |   |   |   |
| Gas gathering and processing         |   |               | 53,734  |   |   | 30,656 |   |
| Elimination of inter-segment revenue |   |               | (12,599 | ) |   | (8,513 | ) |
| Gas gathering and processing         |   |               |    |   |   |   |   |
| net of inter-segment revenue         |   |               | 41,135  |   |   | 22,143 |   |
|                                 |   |               |    |   |   |   |   |
| Other                                |   |               | 5,508   |   |   | 1,316 |   |
| Total revenues                       |   | $                  | 206,550 |   | $ | 201,062 |   |
|                                 |   |               |    |   |   |   |   |
| Operating income (loss) (1):         |   |               |    |   |   |   |   |
| Contract drilling                    |   | $                  | 6,168   |   | $ | 25,750 |   |
| Oil and natural gas (2)              |   |               | 48,683  |   |   | (255,159 | ) |
| Gas gathering and processing         |   |               | 4,468   |   |   | (2,595 | ) |
| Total operating income (loss)        |   |               | 59,319  |   |   | (232,004 | ) |
| General and administrative expense   |   |               | (6,279  | ) |   | (6,089 | ) |
| Interest expense, net                |   |               | — |   |   |  (477 | ) |
| Other                                |   |               | 5,508   |   |   | 1,316 |   |
| Income (loss) before income taxes    |   | $                  | 58,548  |   | $ | (237,254 | ) |

| (1)   | Operating income (loss) is total operating revenues less operating expenses, depreciation, depletion, amortization and impairment and does not include non-operating revenues, general corporate expenses, interest expense or income taxes. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | In March 2009, we incurred a $281.2 million pre-tax ($175.1 million net of tax) non-cash write down of our oil and natural gas properties due to low commodity prices existing at the end of the first quarter 2009. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · General                           |
|-----------------------------------------------|
| · Business Outlook                  |
| · Executive Summary                 |
| · Financial Condition and Liquidity |
| · New Accounting Pronouncements     |
| · Results of Operations             |

| · Contract Drilling – carried out by our subsidiary Unit Drilling Company and its subsidiaries. This segment contracts to drill onshore oil and natural gas wells for others and for our own account.                                              |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · Oil and Natural Gas – carried out by our subsidiary Unit Petroleum Company. This segment explores, develops, acquires and produces oil and natural gas properties for our own account.                                                           |
| · Gas Gathering and Processing (Mid-Stream) – carried out by our subsidiary Superior Pipeline Company, L.L.C. and its subsidiaries. This segment buys, sells, gathers, processes and treats natural gas for third parties and for our own account. |

| Date              |   | Gas Spot Price Henry Hub ($ per MMBtu) |   | Crude Oil WTI-Cushing, OK       ($ per Bbl) |
|-------------------|--------|---------------------------------------------|--------|---------------------------------------------------------------------------|
| July 1, 2008      |   | $                                           | 13.19  |                                                                      | $ | 140.99 |
| August 1, 2008    |   | $                                           | 9.26   |                                                                      | $ | 125.10 |
| September 1, 2008 |   | $                                           | 8.24   |                                                                      | $ | 115.48 |
| October 1, 2008   |   | $                                           | 7.17   |                                                                      | $ | 98.55 |
| November 1, 2008  |   | $                                           | 6.20   |                                                                      | $ | 67.81 |
| December 1, 2008  |   | $                                           | 6.44   |                                                                      | $ | 49.28 |
| January 1, 2009   |   | $                                           | 5.63   |                                                                      | $ | 44.61 |
| February 1, 2009  |   | $                                           | 4.77   |                                                                      | $ | 41.70 |
| March 1, 2009     |   | $                                           | 4.04   |                                                                      | $ | 44.76 |
| April 1, 2009     |   | $                                           | 3.58   |                                                                      | $ | 48.39 |
| May 1, 2009       |   | $                                           | 3.25   |                                                                      | $ | 53.20 |
| June 1, 2009      |   | $                                           | 3.93   |                                                                      | $ | 68.58 |
| July 1, 2009      |   | $                                           | 3.72   |                                                                      | $ | 69.31 |
| August 1, 2009    |   | $                                           | 3.34   |                                                                      | $ | 69.45 |
| September 1, 2009 |   | $                                           | 2.41   |                                                                      | $ | 68.05 |
| October 1, 2009   |   | $                                           | 3.24   |                                                                      | $ | 70.82 |
| November 1, 2009  |   | $                                           | 4.10   |                                                                      | $ | 77.00 |
| December 1, 2009  |   | $                                           | 4.40   |                                                                      | $ | 78.37 |
| January 1, 2010   |   | $                                           | 5.79   |                                                                      | $ | 79.36 |
| February 1, 2010  |   | $                                           | 5.26   |                                                                      | $ | 74.43 |
| March 1, 2010     |   | $                                           | 4.77   |                                                                      | $ | 78.70 |
| April 1, 2010     |   | $                                           | 3.93   |                                                                      | $ | 84.47 |

| Period         |   | Average Rigs in Use |   | Average Dayrates | (1) |
|----------------|--------|---------------------|--------|------------------|-----|
| July 2008      |   | 108.8               |   |             | $   | 18,276 |   |
| August 2008    |   | 111.2               |   |             | $   | 18,624 |   |
| September 2008 |   | 112.1               |   |             | $   | 19,044 |   |
| October 2008   |   | 111.5               |   |             | $   | 19,229 |   |
| November 2008  |   | 97.8                |   |             | $   | 19,426 |   |
| December 2008  |   | 81.0                |   |             | $   | 19,352 |   |
| January 2009   |   | 63.8                |   |             | $   | 18,993 |   |
| February 2009  |   | 52.2                |   |             | $   | 18,414 |   |
| March 2009     |   | 42.2                |   |             | $   | 18,356 |   |
| April 2009     |   | 37.3                |   |             | $   | 17,749 |   |
| May 2009       |   | 30.2                |   |             | $   | 17,429 |   |
| June 2009      |   | 27.5                |   |             | $   | 16,616 |   |
| July 2009      |   | 31.4                |   |             | $   | 15,460 |   |
| August 2009    |   | 35.3                |   |             | $   | 15,357 |   |
| September 2009 |   | 37.1                |   |             | $   | 15,275 |   |
| October 2009   |   | 36.5                |   |             | $   | 14,942 |   |
| November 2009  |   | 35.9                |   |             | $   | 14,996 |   |
| December 2009  |   | 37.7                |   |             | $   | 14,234 |   |
| January 2010   |   | 46.5                |   |             | $   | 14,004 |   |
| February 2010  |   | 51.6                |   |             | $   | 14,066 |   |
| March 2010     |   | 54.7                |   |             | $   | 14,278 |   |

| (1)   | As of March 2010, the average dayrates include 32 term contracts, of which 13 are up for renewal during 2010, 18 are up for renewal in 2011 and the remaining one in 2012. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · the demand for and the dayrates we receive for our drilling rigs;                                                                       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| · the quantity of natural gas, oil and NGLs we produce;                                                                                   |
| · the prices we receive for our natural gas production and, to a lesser extent, the prices we receive for our oil and NGL production; and |
| · the margins we obtain from our natural gas gathering and processing contracts.                                                          |

|   |   |
|--------|--------|

|                                                |   | March 31,                         |      |   | %      |      |
|-----------------------------------------------------|--------|-----------------------------------|-----------|--------|--------|-----------|
|                                                |   |                              | 2010      |   |   | 2009      |   |   | Change |   |
|                                                |   | (In thousands except percentages) |      |
| Working capital                                     |   | $                                 | 56,070    |   | $      | 103,001   |   |   | (46 | )% |
| Long-term debt                                      |   | $                                 | 30,000    |   | $      | 163,500   |   |   | (82 | )% |
| Shareholders’ equity (1)                      |   | $                                 | 1,628,483 |   | $      | 1,528,917 |   |   | 7 | % |
| Ratio of long-term debt to total capitalization (1) |   |                              | 2         | %      |   | 10        | % |   | (81 | )% |
| Net income (loss) (1)                               |   | $                                 | 36,153    |   | $      | (147,493  | )  |   | 125 | % |
| Net cash provided by operating activities           |   | $                                 | 79,667    |   | $      | 172,890   |   |   | (54 | )% |
| Net cash used in investing activities               |   | $                                 | (86,926   | )      | $      | (112,034  | ) |   | (22 | )% |
| Net cash provided by (used in) financing activities |   | $                                 | 7,158     |   | $      | (60,428   | )  |   | 112 | % |

| (1)   | In March 2009, we incurred a $281.2 million pre-tax ($175.1 million net of tax) non-cash ceiling test write down of our oil and natural gas properties due to low commodity prices at quarter-end. The write down impacted our 2009 shareholders’ equity, ratio of long-term debt to total capitalization and net income.  The write down did not impact our compliance with the covenants contained in our Credit Facility. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                        |   | Three Months Ended March 31, |    |   | %      |    |
|-------------------------------------------------------------|--------|------------------------------|---------|--------|--------|---------|
|                                                        |   |                         | 2010    |   |   | 2009    |   |   | Change |   |
| Contract Drilling:                                          |   |                         |    |   |   |    |   |   |   |   |
| Average number of our drilling rigs in use during           |   |                         |    |   |   |    |   |   |   |   |
| the period                                                  |   |                         | 50.9    |   |   | 52.8    |   |   | (4 | )% |
| Total number of drilling rigs owned at the end              |   |                         |    |   |   |    |   |   |   |   |
| of the period                                               |   |                         | 125     |   |   | 131     |   |   | (5 | )% |
| Average dayrate                                             |   | $                            | 14,127  |   | $      | 18,638  |   |   | (24 | )% |
| Oil and Natural Gas:                                        |   |                         |    |   |   |    |   |   |   |   |
| Oil production (MBbls)                                      |   |                         | 303     |   |   | 343     |   |   | (12 | )% |
| Natural gas liquids production (MBbls)                      |   |                         | 377     |   |   | 393     |   |   | (4 | )% |
| Natural gas production (MMcf)                               |   |                         | 10,034  |   |   | 11,862  |   |   | (15 | )% |
| Average oil price per barrel received                       |   | $                            | 67.33   |   | $      | 50.51   |   |   | 33 | % |
| Average oil price per barrel received excluding hedges      |   | $                            | 75.70   |   | $      | 38.52   |   |   | 97 | % |
| Average NGL price per barrel received                       |   | $                            | 42.76   |   | $      | 18.69   |   |   | 129 | % |
| Average NGL price per barrel received excluding hedges      |   | $                            | 42.76   |   | $      | 18.69   |   |   | 129 | % |
| Average natural gas price per mcf received                  |   | $                            | 5.95    |   | $      | 5.44    |   |   | 9 | % |
| Average natural gas price per mcf received excluding hedges |   | $                            | 5.14    |   | $      | 3.48    |   |   | 48 | % |
| Mid-Stream:                                                 |   |                         |    |   |   |    |   |   |   |   |
| Gas gathered—MMBtu/day                                |   |                         | 180,117 |   |   | 192,320 |   |   | (6 | )% |
| Gas processed—MMBtu/day                               |   |                         | 76,513  |   |   | 72,650  |   |   | 5 | % |
| Gas liquids sold — gallons/day                        |   |                         | 253,707 |   |   | 218,762 |   |   | 16 | % |
| Number of natural gas gathering systems                     |   |                         | 33      |   |   | 37      |   |   | (11 | )% |
| Number of processing plants                                 |   |                         | 8       |   |   | 9       |   |   | (11 | )% |

| Lender                                             |   | Participation Interest |
|----------------------------------------------------|--------|------------------------|
| Bank of Oklahoma, N.A.                             |   | 18.75%                 |
| Bank of America, N.A.                              |   | 18.75%                 |
| BMO Capital Markets Financing, Inc.                |   | 18.75%                 |
| BBVA Compass Bank                                  |   | 17.50%                 |
| Comerica Bank                                      |   | 08.75%                 |
| BNP Paribas                                        |   | 08.75%                 |
| Crédit Agricole Corporate and Investment Bank |   | 08.75%                 |
|                                               |   | 100.00%                |

|   |   |
|--------|--------|

| · the payment of dividends (other than stock dividends) during any fiscal year in excess of 25% of our consolidated net income for the preceding fiscal year;     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · the incurrence of additional debt with certain very limited exceptions; and                                                                                     |
| · the creation or existence of mortgages or liens, other than those in the ordinary course of business, on any of our properties, except in favor of our lenders. |

|   |   |
|--------|--------|

| · a consolidated net worth of at least $900.0 million;                                                                                                                                   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · a current ratio (as defined in the Credit Facility) of not less than 1 to 1; and                                                                                                       |
| · a leverage ratio of long-term debt to consolidated EBITDA (as defined in the Credit Facility) for the most recently ended rolling four fiscal quarters of no greater than 3.50 to 1.0. |

| Term                        |   | Amount                                    |   | Fixed Rate |   | Floating Rate |
|-----------------------------|--------|-------------------------------------------|--------|------------|--------|---------------|
|                        |   |                                      |   |       |   |          |
| April 2010 – May 2012 |   | $     15,000,000 |   | 4.53%      |   | 3 month LIBOR |
| April 2010 – May 2012 |   | $     15,000,000 |   | 4.16%      |   | 3 month LIBOR |

|                                |   | Payments Due by Period |   |
|-------------------------------------|--------|------------------------|--------|
|                                |   |                   |   |   |   | Less Than |   |   | 2-3 |   |   | 4-5 |   |   | After |   |
|                                |   |                   | Total  |   |   | 1 Year |   |   | Years |   |   | Years |   |   | 5 Years |   |
|                                |   |                   |   |   |   |   |   (In thousands) |   |   |   |   |   |
| Bank debt (1)                       |   | $                      | 33,928 |   | $ | 1,828 |   | $ | 32,100 |   | $ | — |   | $ | — |   |
| Operating leases (2)                |   |                   | 6,904  |   |   | 1,690 |   |   | 2,909 |   |   | 2,305 |   |   | — |   |
| Drill pipe, drilling components and |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| equipment purchases (3)             |   |                   | 17,512 |   |   | 17,512 |   |   | — |   |   | — |   |   | — |   |
| Total contractual obligations       |   | $                      | 58,344 |   | $ | 21,030 |   | $ | 35,009 |   | $ | 2,305 |   | $ | — |   |

| (1) | See previous discussion in MD&A regarding our Credit Facility. This obligation is presented in accordance with the terms of the Credit Facility and includes interest calculated using our March 31, 2010 interest rate of 6.1% which includes the effect of the interest rate swaps. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | We lease office space or yards in Tulsa, Oklahoma; Houston, Texas; Englewood and Denver, Colorado; Pinedale, Wyoming; and Pittsburgh, Pennsylvania under the terms of operating leases expiring through January, 2015. Additionally, we have several equipment leases and lease space on short-term commitments to stack excess drilling rig equipment and production inventory. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | For the next twelve months, we have committed to purchase approximately $14.6 million of new drilling rig components, drill pipe, drill collars and related equipment and $1.1 million of casing.  Also in 2010, we will pay the remaining $1.8 million towards the purchase of a 50mmcf/d gas plant. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                               |   | Estimated Amount of Commitment Expiration Per Period |    |
|----------------------------------------------------|--------|------------------------------------------------------|---------|
|                                               |   |                                                 |    |   |   | Less |   |   |   |   |   |   |   |   |   |   |
|                                               |   |                                                 | Total   |   |   | Than 1 |   |   | 2-3 |   |   | 4-5 |   |   | After 5 |   |
| Other Commitments                                  |   |                                                 | Accrued |   |   | Year |   |   | Years |   |   | Years |   |   | Years |   |
|                                               |   |  (In thousands)                                 |    |
| Deferred compensation plan (1)                     |   | $                                                    | 2,066   |   |   | Unknown |   |   | Unknown |   |   | Unknown |   |   | Unknown |   |
| Separation benefit plans (2)                       |   | $                                                    | 4,757   |   | $ | 140 |   |   | Unknown |   |   | Unknown |   |   | Unknown |   |
| Derivative liabilities – interest rate swaps |   | $                                                    | 2,019   |   | $ | 932 |   | $ | 1,087 |   | $ | — |   | $ | — |   |
| Asset retirement liability (3)                     |   | $                                                    | 57,342  |   | $ | 1,632 |   | $ | 17,429 |   | $ | 4,152 |   | $ | 34,129 |   |
| Gas balancing liability (4)                        |   | $                                                    | 3,263   |   |   | Unknown |   |   | Unknown |   |   | Unknown |   |   | Unknown |   |
| Repurchase obligations (5)                         |   | $                                                    | — |   |   | Unknown |   |   | Unknown |   |   | Unknown |   |   | Unknown |   |
| Workers’ compensation liability (6)          |   | $                                                    | 22,979  |   | $ | 8,383 |   | $ | 3,185 |   | $ | 1,141 |   | $ | 10,270 |   |

| (1) | We provide a salary deferral plan which allows participants to defer the recognition of salary for income tax purposes until actual distribution of benefits, which occurs at either termination of employment, death or certain defined unforeseeable emergency hardships. We recognize payroll expense and record a liability, included in other long-term liabilities in our Condensed Consolidated Balance Sheet, at the time of deferral. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Effective January 1, 1997, we adopted a separation benefit plan (“Separation Plan”). The Separation Plan allows eligible employees whose employment with us is involuntarily terminated or, in the case of an employee who has completed 20 years of service, voluntarily or involuntarily terminated, to receive benefits equivalent to four weeks salary for every whole year of service completed with the company up to a maximum of 104 weeks. To receive payments the recipient must waive any claims against us in exchange for receiving the separation benefits. On October 28, 1997, we adopted a Separation Benefit Plan for Senior Management (“Senior Plan”). The Senior Plan provides certain officers and key executives of the company with benefits generally equivalent to the Separation Plan. The Compensation Committee of the Board of Directors has absolute discretion in the selection of the individuals covered in this plan. On May 5, 2004 we also adopted the Special Separation Benefit Plan (“Special Plan”). This plan is identical to the Separation Benefit Plan with the exception that the benefits under the plan vest on the earliest of a participant’s reaching the age of 65 or serving 20 years with the company. On December 31, 2008, all these plans were amended to bring the plans into compliance with Section 409A of the Internal Revenue Code of 1986, as amended. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | When a well is drilled or acquired, under “Accounting for Asset Retirement Obligations,” we have recorded the fair value of liabilities associated with the retirement of long-lived assets (mainly plugging and abandonment costs for our depleted wells). |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | We have recorded a liability for those properties we believe do not have sufficient oil, NGLs and natural gas reserves to allow the under-produced owners to recover their under-production from future production volumes. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | We formed The Unit 1984 Oil and Gas Limited Partnership and the 1986 Energy Income Limited Partnership along with private limited partnerships (the “Partnerships”) with certain qualified employees, officers and directors from 1984 through 2008, with a subsidiary of ours serving as general partner. The Partnerships were formed for the purpose of conducting oil and natural gas acquisition, drilling and development operations and serving as co-general partner with us in any additional limited partnerships formed during that year. The Partnerships participated on a proportionate basis with us in most drilling operations and most producing property acquisitions commenced by us for our own account during the period from the formation of the Partnership through December 31 of that year. These partnership agreements require, on the election of a limited partner, that we repurchase the limited partner’s interest at amounts to be determined by appraisal in the future. Such repurchases in any one year are limited to 20% of the units outstanding. We made repurchases of $1,000 in 2009, $241,000 in 2008 and did not have any repurchases for the first quarter of 2010. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6)   | We have recorded a liability for future estimated payments related to workers’ compensation claims primarily associated with our contract drilling segment. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Term                        |   | Amount                                |   | Fixed Rate |   | Floating Rate |   | Fair Value Asset (Liability)                                                                                                                                                                                                           |
|-----------------------------|--------|---------------------------------------|--------|------------|--------|---------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ($ in thousands)            |
| April 2010 – May 2012 |   | $     15,000 |   | 4.53%      |   | 3 month LIBOR |   | $                                     (1,070)      |
| April 2010 – May 2012 |   | $     15,000 |   | 4.16%      |   | 3 month LIBOR |   | (949)                                                                                                                                                                                                                                  |
|                        |   |                                  |   |       |   |          |   | $                                     (2,019) |

|                         |   |   | April – December 2010 |   | January – December 2011 |    | January – December 2012 |
|------------------------------|--------|--------|-----------------------------|--------|-------------------------------|---------|-------------------------------|
| Daily oil production         |   |   | 74                          | %      |                          | — | %                             |   | — | % |
| Daily natural gas production |   |   | 74                          | %      |                          | 13      | %                             |   | 13 | % |

|                                                                        | 2010                       |   |   | 2009   |   |
|-----------------------------------------------------------------------------|----------------------------|--------|--------|--------|--------|
|                                                                        |   (In thousands) |   |
| Increases (decreases) in:                                                   |                       |   |   |   |   |   |   |
| Oil and natural gas revenue:                                                |                       |   |   |   |   |   |   |
| Realized gains (losses) on oil and natural gas derivatives                  | $                          | 5,573  |   |   | $      | 27,405 |   |
| Unrealized gains (losses) on ineffectiveness of cash flow hedges            |                       | 1,091  |   |   |   | (44 | ) |
| Unrealized gains (losses) on non-qualifying oil and natural gas derivatives |                       | 57     |   |   |   | (1,924 | ) |
|  Total increase on oil and natural gas revenues due to derivatives     | $                          | 6,721  |   |   | $      | 25,437 |   |

|                                                       |   |  Quarter Ended March 31, |        |   | Percent |         |
|------------------------------------------------------------|--------|-------------------------------|-------------|--------|---------|--------------|
|                                                       |   |                          | 2010        |   |    | 2009         |   |   | Change |   |
|                                                       |   |                          |        |   |    |         |   |   |   |   |
| Total revenue                                              |   | $                             | 206,550,000 |   | $       | 201,062,000  |   |   | 3 | % |
| Net income (loss)                                          |   | $                             | 36,153,000  |   | $       | (147,493,000 | ) |   | 125 | % |
| Contract Drilling:                                         |   |                          |        |   |    |         |   |   |   |   |
| Revenue                                                    |   | $                             | 60,854,000  |   | $       | 88,699,000   |   |   | (31 | )% |
| Operating costs excluding depreciation                     |   | $                             | 40,900,000  |   | $       | 50,330,000   |   |   | (19 | )% |
| Percentage of revenue from daywork contracts               |   |                          | 98          | %      |    | 100          | % |   | (2 | )% |
| Average number of drilling rigs in use                     |   |                          | 50.9        |   |    | 52.8         |   |   | (4 | )% |
| Average dayrate on daywork contracts                       |   | $                             | 14,127      |   | $       | 18,638       |   |   | (24 | )% |
| Depreciation                                               |   | $                             | 13,786,000  |   | $       | 12,619,000   |   |   | 9 | % |
| Oil and Natural Gas:                                       |   |                          |        |   |    |         |   |   |   |   |
| Revenue                                                    |   | $                             | 99,053,000  |   | $       | 88,904,000   |   |   | 11 | % |
| Operating costs excluding depreciation, depletion,         |   |                          |        |   |    |         |   |   |   |   |
| amortization and impairment                                |   | $                             | 25,034,000  |   | $       | 24,816,000   |   |   | 1 | % |
| Average oil price (Bbl)                                    |   | $                             | 67.33       |   | $       | 50.51        |   |   | 33 | % |
| Average NGL price (Bbl)                                    |   | $                             | 42.76       |   | $       | 18.69        |   |   | 129 | % |
| Average natural gas price (Mcf)                            |   | $                             | 5.95        |   | $       | 5.44         |   |   | 9 | % |
| Oil production (Bbl)                                       |   |                          | 303,000     |   |    | 343,000      |   |   | (12 | )% |
| NGL production (Bbl)                                       |   |                          | 377,000     |   |    | 393,000      |   |   | (4 | )% |
| Natural gas production (Mcf)                               |   |                          | 10,034,000  |   |    | 11,862,000   |   |   | (15 | )% |
| Depreciation, depletion and amortization                   |   |                          |        |   |    |         |   |   |   |   |
| rate (Mcfe)                                                |   | $                             | 1.78        |   | $       | 2.32         |   |   | (23 | )% |
| Depreciation, depletion and amortization                   |   | $                             | 25,336,000  |   | $       | 38,006,000   |   |   | (33 | )% |
| Impairment of oil and natural gas properties               |   | $                             | —     |   | $       | 281,241,000  |   |   | NM |   |
| Mid-Stream Operations:                                     |   |                          |        |   |    |         |   |   |   |   |
| Revenue                                                    |   | $                             | 41,135,000  |   | $       | 22,143,000   |   |   | 86 | % |
| Operating costs excluding depreciation                     |   |                          |        |   |    |         |   |   |   |   |
| and amortization                                           |   | $                             | 32,726,000  |   | $       | 20,677,000   |   |   | 58 | % |
| Depreciation and amortization                              |   | $                             | 3,941,000   |   | $       | 4,061,000    |   |   | (3 | )% |
| Gas gathered—MMBtu/day                               |   |                          | 180,117     |   |    | 192,320      |   |   | (6 | )% |
| Gas processed—MMBtu/day                              |   |                          | 76,513      |   |    | 72,650       |   |   | 5 | % |
|     Gas liquids sold—gallons/day |   |                          | 253,707     |   |    | 218,762      |   |   | 16 | % |
|                                                       |   |                          |        |   |    |         |   |   |   |   |
| General and administrative expense                         |   | $                             | 6,279,000   |   | $       | 6,089,000    |   |   | 3 | % |
| Interest expense, net                                      |   | $                             | —     |   | $       | 477,000      |   |   | NM |   |
| Income tax expense (benefit)                               |   | $                             | 22,395,000  |   | $       | (89,761,000  | ) |   | 125 | % |
| Average interest rate                                      |   |                          | 6.1         | %      |    | 4.0          | % |   | 53 | % |
| Average long-term debt outstanding                         |   | $                             | 31,081,000  |   | $       | 195,774,000  |   |   | (84 | )% |

| (1)   | NM – A percentage calculation is not meaningful due to a zero-value denominator or a percentage change greater than 200. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------|

| · the amount and nature of our future capital expenditures and how we expect to fund our capital expenditures; |
|--------------------------------------------------------------------------------------------------------------------------|
| · the amount of wells to be drilled or reworked;                                                               |
| · prices for oil and natural gas;                                                                              |
| · demand for oil and natural gas;                                                                              |
| · our exploration prospects;                                                                                   |
| · estimates of our proved oil and natural gas reserves;                                                        |
| · oil and natural gas reserve potential;                                                                       |
| · development and infill drilling potential;                                                                   |
| · our drilling prospects;                                                                                      |
| · expansion and other development trends of the oil and natural gas industry;                                  |
| · our business strategy;                                                                                       |
| · production of oil and natural gas reserves;                                                                  |
| · growth potential for our mid-stream operations;                                                              |
| · gathering systems and processing plants we plan to construct or acquire;                                     |
| · volumes and prices for natural gas gathered and processed;                                                   |
| · expansion and growth of our business and operations;                                                         |
| · demand for our drilling rigs and drilling rig rates; and                                                     |
| · our belief that the final outcome of our legal proceedings will not materially affect our financial results. |

| · the risk factors discussed in this report and in the documents we incorporate by reference; |
|---------------------------------------------------------------------------------------------------------|
| · general economic, market or business conditions;                                            |
| · the nature or lack of business opportunities that we pursue;                                |
| · demand for our land drilling services;                                                      |
| · changes in laws or regulations;                                                             |
| · the time period associated with the current decrease in commodity prices; and               |
| · other factors, most of which are beyond our control.                                        |

| Term                              |   | Commodity                                   |   | Hedged Volume    |   | Weighted Average Fixed Price for Swaps |   | Hedged Market             |
|-----------------------------------|--------|---------------------------------------------|--------|------------------|--------|----------------------------------------|--------|---------------------------|
| Apr’10 – Dec’10 |   | Crude oil - collar                          |   | 1,000 Bbl/day    |   | $67.50 put & $81.53 call           |   | WTI – NYMEX         |
| Apr’10 – Dec’10 |   | Crude oil – swap                      |   | 1,500 Bbl/day    |   | $61.36                                 |   | WTI – NYMEX         |
| Apr’10 – Dec’10 |   | Natural gas – swap                    |   | 15,000 MMBtu/day |   | $ 7.20                                 |   | IF – NYMEX (HH)     |
| Apr’10 – Dec’10 |   | Natural gas – swap                    |   | 20,000 MMBtu/day |   | $ 6.89                                 |   | IF – Tenn Zone 0    |
| Apr’10 – Dec’10 |   | Natural gas – swap                    |   | 30,000 MMBtu/day |   | $ 6.12                                 |   | IF – CEGT           |
| Apr’10 – Dec’10 |   | Natural gas – swap                    |   | 20,000 MMBtu/day |   | $ 5.67                                 |   | IF – PEPL           |
| Apr’10 – Dec’10 |   | Natural gas – basis differential swap |   | 10,000 MMBtu/day |   | ($0.79)                                |   | PEPL – NYMEX        |
|                              |   |                                        |   |             |   |                                   |   |                      |
| Jan’11 – Dec’11 |   | Natural gas – swap                    |   | 15,000 MMBtu/day |   | $ 5.56                                 |   | IF – NYMEX (HH)     |
| Jan’11 – Dec’11 |   | Natural gas – basis differential swap |   | 15,000 MMBtu/day |   | ($0.14)                                |   | Tenn Zone 0 – NYMEX |
|                              |   |                                        |   |             |   |                                   |   |                      |
| Jan’12 – Dec’12 |   | Natural gas – swap                    |   | 15,000 MMBtu/day |   | $ 5.62                                 |   | IF – PEPL           |

| Term                              |   | Commodity                                   |   | Hedged Volume    |   | Basis Differential |   | Hedged Market             |
|-----------------------------------|--------|---------------------------------------------|--------|------------------|--------|--------------------|--------|---------------------------|
| Jan’11 – Dec’11 |   | Natural gas – basis differential swap |   | 15,000 MMBtu/day |   | ($0.14)            |   | Tenn Zone 0 – NYMEX |
| Jan’11 – Dec’11 |   | Natural gas – basis differential swap |   | 15,000 MMBtu/day |   | ($0.21)            |   | CEGT – NYMEX        |
| Jan’11 – Dec’11 |   | Natural gas – basis differential swap |   | 10,000 MMBtu/day |   | ($0.225)           |   | PEPL – NYMEX        |

| Term                            |   | Commodity                |   | Hedged Volume  |   | Weighted Average Fixed Price |   | Hedged Market       |
|---------------------------------|--------|--------------------------|--------|----------------|--------|------------------------------|--------|---------------------|
| May’10–Dec’11 |   | Liquids – swap (1) |   | 644,406 Gal/mo |   | $0.97                        |   | OPIS – Conway |

| Period                                        |         | (a)TotalNumber ofSharesPurchased (1) |         | (b) Average Price Paid Per Share(2) |    | (c)TotalNumberof SharesPurchasedAs Part ofPubliclyAnnouncedPlans orPrograms (1) |    | (d)MaximumNumber (orApproximateDollar Value)of SharesThat MayYet BePurchasedUnder thePlans orPrograms |
|-----------------------------------------------|--------------|--------------------------------------|--------------|--------------------------------------------------------------|---------|---------------------------------------------------------------------------------|---------|------------------------------------------------------------------------------------------------------------|
| January 1, 2010 to January 31, 2010 |    | 21,054                               |    | $                                                            | 45.01   |                                                                       | 21,054  |                                                                                                  | — |
| February 1, 2010 to February 28, 2010    |    | —                              |    |                                                         | — |                                                                       | — |                                                                                                  | — |
| March 1, 2010 to March 31, 2010          |    | —                              |    |                                                         | — |                                                                       | — |                                                                                                  | — |
|                                          |    |                                 |    |                                                         |    |                                                                       |    |                                                                                                  |   |
| Total                                         |    | 21,054                               |    | $                                                            | 45.01   |                                                                       | 21,054  |                                                                                                  | — |

----

| (1)    | The shares were repurchased to remit withholding of taxes on the value of stock distributed with the January 2010 vesting distribution for grants previously made from our “Unit Corporation Stock and Incentive Compensation Plan” adopted May 3, 2006. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                 |
| (2)    | The price paid per common share represents the closing sales price of a share of our common stock as reported by the NYSE on the day that the stock was acquired by us.                                                                                              |

|   | 15     | Letter re:  Unaudited Interim Financial Information.                    |
|--------|--------|-----------------------------------------------------------------------------------|
|   |   |                                                                              |
|   | 31.1   | Certification of Chief Executive Officer under Rule 13a – 14(a) of the      |
|   |   | Exchange Act.                                                                     |
|   |   |                                                                              |
|   | 31.2   | Certification of Chief Financial Officer under Rule 13a – 14(a) of the      |
|   |   | Exchange Act.                                                                     |
|   |   |                                                                              |
|   | 32     | Certification of Chief Executive Officer and Chief Financial Officer under        |
|   |   | Rule 13a – 14(a) of the Exchange Act and 18 U.S.C. Section 1350, as adopted |
|   |   | under Section 906 of the Sarbanes-Oxley Act of 2002.                              |

|                         |                                 | Unit Corporation |
|------------------------------|--------------------------------------|------------------|
|                         |                                 |
| Date:  May 4, 2010 | By:  /s/ Larry D. Pinkston |
|                         | LARRY D. PINKSTON                    |
|                         | Chief Executive Officer and Director |
|                         |                                 |
| Date:  May 4, 2010 | By:  /s/ David T. Merrill  |
|                         | DAVID T. MERRILL                     |
|                         | Chief Financial Officer and          |
|                         | Treasurer                            |