press release

Spirit Energy 76 is high bidder for interests in 45 Gulf of Mexico blocks

Sugar Land, Texas, August 28, 1997 -- Spirit Energy 76, Unocal Corporation's U.S. exploration and production business unit, announced today that it is the apparent high bidder for interests in 36 deepwater and nine continental shelf blocks. The blocks were offered at the OCS Central Gulf of Mexico Lease Sale No. 168, conducted on August 27 by the U.S. Minerals Management Service.

"Our successful effort in this lease sale further demonstrates we are moving aggressively into deepwater exploration while building on our significant shelf position in the Gulf of Mexico," said Jack Schanck, president of Spirit Energy 76. "While this was a very competitive sale, we are very pleased we won positions on six of our top nine prospects. We are establishing Spirit Energy 76 as the largest, most successful independent-style exploration and production company in the United States. These successful bids are a key step in that direction."

Spirit Energy 76 was fourth in the overall number of bids submitted at 92, with 77 for deepwater blocks and 15 for continental shelf blocks. Spirit Energy 76 exposed $47.2 million in the lease sale and ranked seventh in the total amount of high bids at $21 million.

Spirit Energy 76 exposed $43.2 million in deepwater and is the apparent high bidder on tracts totaling an anticipated expenditure of $17.7 million. On the continental shelf, it exposed $4 million with successful bids totaling $2.3 million on nine blocks.

Spirit Energy 76 has a 100% percent interest on all bids for blocks on the continental shelf, and a 100% interest in all 36 of the deepwater blocks.

"These blocks, together with the addition of 55 deepwater and 18 continental shelf blocks purchased earlier this year, bring the total inventory of exploratory blocks to 123 deepwater tracts and 47 shelf tracts," said Dave Johnson, vice-president of Exploration. "Spirit Energy 76's aggressive lease acquisition program is part of a deepwater campaign targeted at finding 400 million barrels of oil equivalent in reserves by 2002."

Spirit Energy 76 is the third largest producer in the U.S. Gulf of Mexico, with 300 platforms and 2,700 active wells in 355 fields. In 1996, it produced an average of 912 mmcf of gas and about 52,000 barrels of oil per day.

Forward-looking statements and estimates of future financial and operating results in this News Release are based on assumptions concerning market, competitive, regulatory, environmental, operational and other considerations. Actual results could differ materially.

Updated: August 1997