press release

Spirit Energy 76 is high bidder for interests in 73 Gulf of Mexico blocks

Sugar Land, Texas, March 6 -- Spirit Energy 76, Unocal Corporation's recently formed U.S. exploration and production business unit, announced today that it is the apparent high bidder for interests in 55 deep-water and 18 continental shelf blocks. The blocks were offered at the OCS Central Gulf of Mexico Lease Sale No. 166, conducted on March 5 by the U.S. Minerals Management Service.

"Given the intense competition, we are very pleased to be high bidder, in whole or in part, on nine of our top 12 prospects in deep water," said Jack Schanck, president of Spirit Energy 76. "Successfully competing for new Gulf of Mexico blocks, particularly in the deep water, is a key element of our long-term strategy to grow our domestic reserves and production. Once these new blocks are awarded, we plan to start exploration activity very quickly. We hope to begin drilling some prospects in early 1998."

The continental shelf also remains a major focus area, Schanck added. "Our high bids on 18 of 22 blocks on the shelf will allow us, upon award, to build on our existing infrastructure and successful operating expertise in the areas of East Cameron, Eugene Island and West Cameron."

Spirit Energy 76 was second in the overall number of bids submitted at 129, with 107 for deep-water blocks and 22 for continental shelf blocks. It ranked fifth in the total amount of high bids and the total amount of dollars exposed at $42 million. Spirit Energy 76's net exposure is $33.6 million ($21 million in net expenditures) for deep-water and $9 million ($8.3 million in net expenditures) for continental shelf blocks.

Spirit Energy 76 has a 100-percent interest on all bids for blocks on the continental shelf, and on 36 of the 55 deep-water blocks. Nineteen of the unit's successful deep-water bids were acquired with partners, which include Fina and Petrobras. Spirit Energy 76's interest in these 19 blocks ranges from 50 percent to 75 percent.

"Our investment in these lease blocks, and the projects that will follow, are an indication of how Unocal will invest some of the expected proceeds from the sale of our downstream petroleum business," said Roger C. Beach, chairman and CEO of Unocal.

In December, Unocal announced an agreement to sell the assets of its 76 Products Company unit to TOSCO Corporation for close to $2 billion.

Updated: March 1997