press release

First Rapak Discovery Bolsters Unocal's Deepwater Exploration in Indonesia

El Segundo, Calif., June 1, 1999 - Unocal Corporation today said that its first discovery in the Rapak Production Sharing Contract (PSC) area adds further promise to its deepwater exploration program offshore East Kalimantan, Indonesia. The Janaka North #1 well encountered 50 feet of high quality reservoir with porosities greater than 35% and low water saturations, and 77 feet of associated thin-bedded reservoir between 7,797 feet and 8,600 feet TVDS. The well was drilled to a true vertical depth subsea (TVDS) of 9,625 feet in 4,319 feet of water, the deepest water depth drilled to date in Indonesia.

"Janaka North is some of the best quality reservoir we have drilled to date," said Timothy C. Lauer, president and managing director of Unocal Indonesia. "Coming on the heels of our success at the nearby West Seno field, Janaka North points the way to drilling additional Rapak prospects later this year as part of our planned deepwater drilling program." The Janaka North discovery is approximately 3.5 miles (5.6 kilometers) northeast and southeast, respectively, of the Merah Besar and West Seno fields, the two largest deepwater discoveries that Unocal has made in the area.

Delineation work on the West Seno field has now been completed. Unocal's estimate of gross discovery volumes ranges between 210 and 320 million barrels of oil equivalent (MMBOE), including 150 million barrels of oil. In addition, there is significant untested resource potential on the greater Seno structure. In the development phase, Unocal plans to drill deeper targets within the field, which could significantly increase ultimate recovery from the Seno structure.

Unocal has drilled ten deepwater wells in the Kutei Basin since the February 10 announcement of the West Seno #4 well that tested 19,344 barrels of oil per day from three zones. Those ten wells were drilled for an average cost of $4.3 million, with an average drilling time of less than 12 days. Details of the individual well results are shown in the attached table.

After drilling three Ganal PSC prospects, Unocal plans to return to the Rapak PSC to drill additional prospects. "These prospects will move us into deeper water and will further expand our deepwater exploration capability," said Lauer. "We plan to be drilling in water depths of over 6,000 feet by the end of 1999, allowing us to test the highly prospective portion of our Indonesia exploration portfolio that lies in the deeper water."

Unocal, through various subsidiaries, is operator of the East Kalimantan, Ganal, Sesulu, Rapak and Makassar Strait PSCs. The company holds working interests of 100% in East Kalimantan, Ganal and Sesulu, 70% in Rapak (Mobil 30%) and 50% in Makassar Strait (Mobil 50%).

On May 1, Unocal entered into an agreement to farm out portions of its exploration acreage to LASMO plc. If finalized, LASMO would earn 20% interests in the Ganal and Sesulu PSCs and a 10% interest in the Rapak PSC. The agreement is subject to government and, in relation to the Rapak PSC, to existing partner approvals.

Forward-looking statements regarding exploration activities, discovery barrels, resource potential, and capital spending in this news release are based on assumptions concerning market, competitive, regulatory, environmental, operational and other considerations. Actual results could differ materially as a result of factors discussed in Unocal Corporation's 1998 Form 10-K report filed with the Securities and Exchange Commission.

Under the terms of the PSCs, Unocal Indonesia and its affiliates, as contractors to Pertamina, the Indonesia national oil company, are entitled to varying shares of the oil and gas produced from commercial discoveries.

East Kalimantan Deepwater Drilling Update 1999 Year to Date Activity

well name, PSC rig days water depth well depth pay remarks
West Seno #4 Makassar Strait 45 3,101 ft. 9,800 ft. 398 ft. 3 DSTs combined rate 19,344 BOPD, oil appraisal
South Seno #1 Makassar Strait 14 4,052 ft. 11,574 ft. 80 ft. Oil and gas discovery
Astina #1 Makassar Strait 7 2,805 ft. 9,129 ft. 49 ft. Gas shows
Glam #1 East Kalimantan 14 1,731 ft. 10,208 ft. n/a Dry hole
West Seno #7 Makassar Strait 18 3,903 ft. 11,435 ft. 160 ft. Oil appraisal
West Seno #8 Makassar Strait 7 3,057 ft. 9,843 ft. 212 ft. Oil and gas appraisal
Central Seno #2 Makassar Strait 8 3,364 ft. 8,538 ft. 125 ft. Gas discovery
Central Seno #3 Makassar Strait 11 3,369 ft. 9,569 ft. 12 ft. Oil shows
Bangka #1 Rapak 13 3,155 ft. 9,535 ft. 20 ft. Gas shows
East Seno #2 Makassar Strait 13 3,070 ft. 12,669 ft. n/a Dry hole
North Janaka #1 Rapak 11 4,319 ft. 9,625 ft. 127 ft. Oil discovery
Total, last 10 wells 116 $42.9 million
Average per well 11.6 $4.3 million

Updated: June 1999