D E E P R O O T S F O R S U S T A I N E D G R O W T H

U N I T C O R P O R A T I O NA n n u a l R e p o r t 2 0 0 8

C O M P E N S A T I O N C O M M I T T E E

J. Michael Adcock Chairman

William B. Morgan

John H. Williams

B O A R D O F D I R E C T O R S

John G. NikkelChairman of the Board

J. Michael AdcockChairman of the Board of Arvest Bank

Trustee, Don Bodard TrustShawnee, Oklahoma

Gary R. ChristopherInvestments

Tulsa, Oklahoma

Steven B. HildebrandInvestments

Tulsa, Oklahoma

King P. KirchnerCo-founder, Unit Corporation

Tulsa, Oklahoma

William B. MorganAttorney and Investments

Chandler, Arizona

Larry D. PinkstonPresident and Chief Executive Officer

Robert J. Sullivan, Jr.Manager of Sullivan and Company LLC

Tulsa, Oklahoma

John H. WilliamsInvestments

Tulsa, Oklahoma

A U D I T C O M M I T T E E

Steven B. HildebrandChairman

Gary R. Christopher

William B. Morgan

J. Michael Adcock

N O M I N A T I N G & G O V E R N A N C E C O M M I T T E E

William B. MorganChairman

J. Michael Adcock

Robert J. Sullivan, Jr.

John H. Williams

A N N U A L S H A R E H O L D E R S M E E T I N G

As we highlight the people who make us strong, we also thank our shareholders whom we are honored to serve. Our annual meeting of stockholders will be held at 11:00 a.m. Central Time on May 6, 2009, in the Tulsa

Room, in the Bank of Oklahoma Tower, 9th floor, in Tulsa, Oklahoma.

O F F I C E R S

John G. NikkelChairman of the Board

Larry D. PinkstonPresident and Chief Executive Officer

Mark E. SchellSenior Vice President, General Counsel

and Secretary

David T. MerrillChief Financial Officer and Treasurer

U N I T C O R P O R A T I O N

T H E F A C E S B E H I N D O U R S U C C E S S

D i v e r s e S k i l l s f o r a

D I V E R S I F I E DE n e r g y C o m p a n y .

From our large drilling fleet and extensive exploration and production operations, to our

growing mid-stream presence, we cover the petroleum energy spectrum. Our people, with

their diverse skills and specializations, are as multifaceted as our company.

But there’s one thing that unifies us all under the Unit name: experience.

Experience to plan. Experience to persevere. Experience to prevail.

We’re the people of Unit Corporation. And we’re proud to be a diversified energy company.

Where our roots, like our drill bits, run deep.

MIKE FANKHOUSER, 20 YEARS JACKI DILLMAN, 13 YEARS KEITH ROWEKAMP, 11 YEARS

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LYLE L ANDSBERGER, 33 YEARS L AVITA HILL, 23 YEARS MIKE EARNEST, 19 YEARS

For us, 2008 was a year of changes. It started slowly, then became fast-paced with commodity prices rising significantly, and then ended in a free fall as part of the much larger collapse of the world economies. For the year, the results exceeded most everyone’s expectations, including our own, and made for some impressive highlights despite the fourth quarter downturn.

•Ourrevenuesreachedanall-timerecordof$1.4billion,a17%increaseover2007. •Netincomefortheyearwas$143.6million,or$3.06perdilutedshare.Excludingthe effectoftheceilingtestimpairmentwrite-downof$175.5millionnetofincometax,net incomefor2008wouldhavebeen$319.1million,or$6.80perdilutedshare. •Weendedtheyearwithworkingcapitalof$90.2million,long-termdebtof$199.5million, andadebttocapitalizationratioof11%.

When the economy and liquidity meltdown hit, we moved into action. What our folks could control, they did – and did a good job of it. Most notably, we put three main protective strategies into action.

1.Minimized capital expenditures to preserve cash. Example:Wecutourdrillingprogramby8%duringthefourthquarterof2008.Weoriginally planned300+wellsandendedwith278.Comparedto2008,excludingacquisitions,we reducedour2009operatingsegmentcapitalexpenditurebudgetby60%to$290million. 2. Greatly increased levels of hedging. Example:For2009,wemovedourhedgedpositionfromapproximately30%hedgedto approximately70%hedgedonnaturalgasandoilproduction. 3. Greatly increased borrowing capacity. Example:Weincreasedourborrowingcapacityby$50millionforatotalof$325million– with the intention of using it for potential acquisition opportunities, not day-to-day operations.

A fourth protective measure I’d like to highlight isn’t new at all. It’s the cornerstone of our company – diversification. It enables us to channel cash across our three segments as needed. Case in point? Overthelastthreeyearsofgrowth,we’veutilizedabout$470millionoutofdrillingoperationsforour midstream and E&P segments, before income taxes. Now the reverse is true, with growth in our E&P segment buffering the economy’s impact on our drilling segment. This balance is what drives our distinct ability to not just ride out the downturns, but to instead capitalize on them.

Oursisacyclicalbusiness.In45years,we’veseennumeroushighsandlows.Wedon’tgetcarriedaway in the good times. And, in fact, we’ve typically experienced our biggest growth opportunities during the tough times.

Asanothercyclerunsitscourse,weanticipate2009tobeachallengingyear.Tostayflexibleandwell-positioned, you’ve got to have capital and you’ve got to have people. The right people. We’ve gotboth.Ourofficershaveacumulative130yearsexperience.Andmanyofthesmart,dedicatedpeople you’ll see throughout this report have grown with us for more than one, two and even three decades. Bottom line: our people have experienced our industry’s challenging cycles. And they have the know-how to take advantage of the opportunities they bring.

Sincerely,

Larry D. PinkstonPresident and Chief Executive Officer

FEbruAry 24, 20 09

R O O T E D I N E X P E R I E N C E

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A L e t t e r t o O u r

S H A R E H O L D E R S

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T H E F A C E S B E H I N D T H E P R O G R E S S

For45 years, thehard-working individuals inour contractdrillingoperationshavebuilt a strong

reputation for putting customers first and meeting their unique needs with responsive, outstanding

service. Our can-do culture has kept our company on a steady track, growing from our initial 3

drillingrigstoarecord132drillingrigsin2008.Asourrigcounthasexpanded,sohasourreach.

Withoperationsin10states,68ofourdrillingrigsarelocatedintheAnadarkobasin,15areinthe

Arkomabasin,23arelocatedwithinourGulfCoastoperations,and26areintherockyMountain

region. Our drilling field offices include Oklahoma City, Oklahoma; Humble, Texas; Borger, Texas;

and Casper, Wyoming.

Ourcapabilitiesmeettoday’sdemands.Ourdrillingfleetrangesindepthcapacitiesfrom5,000to

40,000feet,averagingapproximately16,208feet,andcanprovideverticalandhorizontalservices

using both air and mud as drilling mediums.

Ouraveragedrillingrigutilizationfortheyearwas103.1drillingrigs,a4%increaseover2007.The

year’s softening in the drilling rig market and the economy downturn in the fourth quarter, however,

U N I T C O R P O R A T I O N

Our Contract Drilling Operations.

PHIL LIVINGSTON, 18 YEARS KATHY HATFIELD, 23 YEARS DEE MORRIS, 35 YEARS

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T H E F A C E S B E H I N D T H E P R O G R E S S

A N N U A L R E P O R T 2 0 0 8

impactedouroperatingresults.Drillingrevenuesfortheyeardecreased1%to$622.7million,while

averagedayratesfortheyeardecreased1%to$18,458perday.Contractdrillingoperatingmargins

decreasedto50%fortheyear,comparedto51%for2007.

Due to the significant drop in commodity prices and decline in demand for our drilling rigs, we

storeda1,500horsepowerdiesel-electricdrillingriginourOklahomaCityyardthatwasscheduled

tobeplacedintoserviceinNorthDakotaduringthefirstquarterof2009.Themobilizationofthisrig

has been delayed pending final negotiation with our customer. In addition, after discussions with our

customers, we determined to postpone the construction of five drilling rigs and have cancelled three

additional drilling rigs we had anticipated building and, instead, substituted under the contracts

drilling rigs we already owned. As a result of existing contractual obligations, we expect to take

deliveryofanewdrillingrigduringthefourthquarterof2009.Lookingforward,ourcurrentcapital

expenditurebudgetfor2009is$77million.

BRENT KEYS, 11 YEARS THERESA TURNER, 22 YEARS SCOT T GORDON, 29 YEARS

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T H E F A C E S B E H I N D T H E I N N O V A T I O N

U N I T C O R P O R A T I O N

MIKE SELLERS, 19 YEARS JULIE BEHLING, 20 YEARS JIM KAHLDEN, 14 YEARS KEVIN TENNISON, 17 YEARS

Our Oil and Natural Gas Operations.

Despite the tumultuous economic environment, our seasoned geological, land and engineering

staffhelpedmake2008ayearofrecordsandmilestones.Wemarkedour25thconsecutiveyear

ofreplacingatleast150%oftheyear’sproductionwithnewoilandnaturalgasreserves,replacing

186%ofour2008production.

At theyear’send,our total reserveshita record569.4bcfe,consistingof9.7millionbarrelsof

oil, 10.2millionbarrelsof natural gas liquidsand450.1bcfof natural gas – an11%equivalent

Bcf increase. The results include negative revisions of about 23 Bcfe resulting from significantly

lowercommoditypricesatyear-end2008.Totalequivalentproductionincreased16%to63.4bcfe,

anothercompanyrecord.Of thetotal,weproduced47.5bcfofnaturalgas,a9% increase;1.3

millionbarrelsofoil,a16%increase;and1.4millionbarrelsofNGLs,a77%increaseover2007.

Although commodity prices decreased dramatically with the economic turndown in the fourth

quarter, prior months saw strong prices and results. Our oil and natural gas revenues increased

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T H E F A C E S B E H I N D T H E I N N O V A T I O N

A N N U A L R E P O R T 2 0 0 8

42%to$554.0millionin2008.Thepricewereceivedforournaturalgasaveraged$7.62perMcf,a

21%increaseover2007,whileouraverageoilpriceincreased33%to$93.87perbarrel.OurNGL

priceaveraged$47.42perbarrel,up5%from2007.

Following our strategy of combining our solid acquisition program with a successful development

drillingprogram,wecommenceddrillingoperationson276newwellsin2008,257ofwhichwere

completedbyyearend.Anadditional21wellsoriginallystartedin2007werealsofinishedforatotal

of278wellsin2008.Ofthese,245werecompletedasproducingforasuccessrateof88%.

Our current capital expenditure budget for 2009 is $200million,with $164million planned for

exploration and development drilling. The three areas we plan to spend the majority of our capital

in2009istheGranite-WashplayintheTexasPanhandle,theSegnoprospectinSoutheastTexas,

and the Haynesville Shale prospect in East Texas. Both the Granite Wash and the Segno prospects

have favorable economics due to the expertise we have developed in these areas along with the

high BTU gas that nets a better overall price. The Haynesville Shale is a new area for us and we

initially plan to drill primarily vertical wells to hold our leasehold and then drill one to two horizontal

wells in the second half of this year.

DENNIS MOORE, 36 YEARS LESLIE NAUGHTON, 18 YEARS DANA EDDY, 30 YEARS BERNARD BOECKMAN, 33 YEARS

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T H E F A C E S B E H I N D T H E G R O W T H

U N I T C O R P O R A T I O N

Our Mid-Stream Operations.Rounding out our diverse operations is our mid-stream segment. Our dedicated people have grown

these operations through grass roots construction projects and acquisitions of equipment and plants

into a sustaining presence in the Mid-Continent region and a growing presence in the North East.

Serving a strong customer base of mostly independent producers, our mid-stream operations

are located in Oklahoma, Texas, Louisiana, Kansas and, most recently, Pennsylvania. In July, we

opened a new Pittsburgh business development office to provide pipeline infrastructure for natural

gas supplies being produced from the Marcellus shale formations within the Appalachian Basin.

Careful planning brought several expansions in 2008. We added two new gathering systems and

connectedanadditional99wellstoourgatheringsystems.Wealsoadded94milesofpipeline–an

approximate14%increaseintotalpipelinemiles.Inadditionin2008,wecompletedtheinstallation

of a new natural gas processing plant, increasing processing capacity by approximately 20 MMcf

KEN BLONDEAU, 14 YEARS LINDA SMITH, 20 YEARS ED PHELPS, 36 YEARS

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per day. This brings our current asset base to three natural gas treatment plants, nine operated

naturalgasprocessingplants,37gatheringsystemsandapproximately770milesofpipeline.

revenues forourmid-streamoperationsalso increased31% in2008 to$181.7million,up from

$138.6million in2007.Duringtheyear,ournaturalgas liquidssold increased51%over2007to

195,837gallonsperday,whileournaturalgasvolumesprocessedincreased35%to67,796MMbtu

perday.Ournaturalgasvolumesgathereddecreased10%from2007to197,367MMbtuperday.

For2009,wehavebudgetedcapitalexpendituresof$13million.

DON HAYES, 24 YEARS BILLIE LENHART, 18 YEARS JOHN FEAMSTER, 17 YEARS

Year Ended December 31, 2008 2007 2006 2005 2004 (Dollars and shares in thousands except per share and average price amounts)

Statement of Income Data:Revenues:Contractdrilling $ 622,727 $ 627,642 $ 699,396 $ 462,141 $298,204Oilandnaturalgas 553,998 391,480 357,599 318,208 185,017Gasgatheringandprocessing 181,730 138,595 101,863 100,464 29,717Otherrevenues (362) 1,037 3,527 4,795 6,265

Totalrevenues $ 1,358,093 $ 1,158,754 $ 1,162,385 $ 885,608 $ 519,203

Netincome $ 143,625 $ 266,258 $ 312,177 $ 212,442 $ 90,275

Net income per common share:basic $ 3.08 $ 5.74 $ 6.75 $ 4.62 $ 1.97Diluted $ 3.06 $ 5.71 $ 6.72 $ 4.60 $ 1.97

Shares outstanding:basic 46,586 46,366 46,228 45,940 45,717 Diluted 46,909 46,653 46,451 46,189 45,934 Balance Sheet Data:Totalassets $ 2,581,866 $ 2,199,819 $ 1,874,096 $ 1,456,195 $1,023,136 Otherlong-termliabilities $ 75,807 $ 59,115 $ 55,741 $ 41,981 $ 37,725 Long-termdebt $ 199,500 $ 120,600 $ 174,300 $ 145,000 $ 95,500Totaldebt-to-bookcapitalratio 11% 8% 13% 15% 14%Shareholders’equity $ 1,633,099 $ 1,434,817 $ 1,158,036 $ 836,962 $608,269

Statement of Cash Flows Data:Netcashprovidedbyoperatingactivities $ 689,913 $ 577,571 $ 506,702 $ 317,771 $203,210Capital expenditures, includingacquisitions(cashbasis) $ 808,161 $ 517,450 $ 546,343 $ 390,863 $ 314,026

Comparison of Cumulative Five Year Total Return

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Year Ended December 31, 2008 2007 2006 2005 2004(Dollars in thousands except per share and average price amounts)

Contract Drilling Operations Data:Numberofrigsatyearend 132 129 117 112 100Wellsdrilled 1,028 996 1,033 980 832Totalfootagedrilled(feetin1,000’s) 11,734 10,453 11,461 10,815 9,261Averagenumberofrigsutilized 103.1 99.4 109.0 102.1 88.1Averageutilization 79% 80% 96% 97% 95%

Oil and Natural Gas Operations Data: Proved oil and natural gas reserves discountedat10%(beforeincometaxes) $ 892,559 $ 1,481,604 $ 984,123 $1,312,962 $ 787,067 Proved oil and natural gas reserves discountedat10%(afterincometaxes) $ 624,471 $ 990,331 $ 684,895 $ 863,683 $ 521,612Total estimated proved reserves: Naturalgas(MMcf) 450,135 419,616 406,400 352,841 295,406 Oil(Mbbl) 9,699 9,676 9,357 8,052 7,487 NaturalGasLiquids(Mbbl) 10,171 6,149 2,226 1,819 1,074 Equivalent(MMcfe) 569,353 514,569 475,899 412,066 346,775 Production: Naturalgas(MMcf) 47,473 43,464 44,169 34,058 27,149 Oil(Mbbl) 1,261 1,091 1,012 847 829 NaturalGasLiquids(Mbbl) 1,388 785 441 237 219 Equivalent(MMcfe) 63,368 54,720 52,889 40,565 33,438Average price: Naturalgas(perMcf) $ 7.62 $ 6.30 $ 6.17 $ 7.64 $ 5.42 Oil(perbbl) $ 93.87 $ 70.61 $ 63.39 $ 54.47 $ 35.45 NaturalGasLiquids(perbbl) $ 47.42 $ 45.03 $ 36.08 $ 34.69 $ 24.67 Equivalent(Mcfe) $ 8.62 $ 7.06 $ 6.66 $ 7.75 $ 5.44Grossoperatedwells 1,523 1,409 1,369 1,208 1,019Wellsdrilled 278 253 244 192 168Wellscompleted 245 220 216 179 144Successrate 88% 87% 89% 93% 86%

Oil and natural gas wells producing or capable of producing at end of year: 2008 2007 2006 2005 2004

Gross Net Gross Net Gross Net Gross Net Gross Net Naturalgas 5,015 1,151.84 4,8551077.38 4,6591,007.8 3,719 830.0 3,169 672.6 Oil 2,665 418.27 2,612 392.99 2,784 492.9 2,746 428.9 2,716 418.6

Total 7,680 1,570.11 7,4671,470.37 7,4431,500.7 6,4651,258.9 5,8851,091.2

Mid-Stream Operations Data:Naturalgasgathered(MMbtu/day) 197,367 219,635 247,537 142,444 33,147Naturalgasprocessed(MMbtu/day) 67,796 50,350 31,833 30,613 13,412Liquidssold(gallons/day) 195,837 129,421 66,902 61,665 22,626

CertificationsThe Chief Executive Officer and Chief Financial Officer have certified in writing to the Securities Exchange Commission (SEC)astotheintegrityofthecompany’sAnnualreportonForm10-KforthefiscalyearendedDecember31,2008asfiledwith the SEC, and the effectiveness of the company’s disclosure controls and procedures and internal control over financial reporting.ThecertificationsarefiledasExhibitstotheForm10-K.OnMay15,2008theChiefExecutiveOfficeralsocertifiedto the New York Stock Exchange the company’s corporate governance listing standards.

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T H E E X P E R I E N C E t o Tu r n C h a l l e n g i n g Ye a r s I n t o

O P P O R T U N I T I E S f o r G r o w t h .

U N I T C O R P O R A T I O N

U N I T C O R P O R A T I O N R E m E m b E R s w I T h g R A T I T U D E

D O N C O O KPassed away October 18, 2008

Served as a director and Audit Committee Chairman since the company’s inception in 1963.

P H I L I P K E E L E YPassed away December 7, 2008

Joined Unit Corporation in 1983 and retired in 2004 as Senior Vice President of Exploration & Production.

T R A N S F E R A G E N T & R E G I S T R A R

Communications concerning the transfer of shares, lost certificates and changes of address should be directed to:

American Stock Transfer & Trust Co.59 Maiden Lane, Plaza Level

New York, NY 10038800.710.0929amstock.com

S T O C K L I S T I N G

Our common stock trades on the New York Stock Exchange under the symbol: “UNT.”During 2008, Unit’s average daily trading volume on the NYSE was 441,677 shares.

Approximately 47.3 million shares were outstanding at the end of 2008.

S H A R E H O L D E R P R O F I L E

We had 1,231 shareholders of record at year-end 2008.

I N V E S T O R R E L A T I O N S

The Form 10-Q reports are available in May, August and November. The Form 10-K andForm 10-Q are available for viewing on our web site at www.unitcorp.com. Copies of

the Forms 10-K, 10-Q and Annual Report, filed with the Securities and Exchange Commission, are available without charge on written request to:

Linda BaugherInvestor Relations Department

7130 South Lewis Avenue, Suite 1000Tulsa, Oklahoma 74136

918.493.7700

I N D E P E N D E N T R E G I S T E R E DP U B L I C A C C O U N T I N G F I R M

PricewaterhouseCoopers LLPTulsa, Oklahoma

I N D E P E N D E N T P E T R O L E U M E N G I N E E R S

Ryder Scott Company, L.P.Houston, Texas

A N N U A L R E P O R T 2 0 0 8

U N I T C O R P O R A T I O NCorporate Headquar ter s

7130 South Lewis Avenue, Suite 1000 | Tulsa, Oklahoma 74136 | 918.493.7700

www.unitcorp.com