Unocal 5-year forecast sees 44-percent growth in oil, gas production
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El Segundo, Calif., Jan. 11, 2000 -- Unocal Corporation today said it expects the company's worldwide average net crude oil and natural gas production to rise 44 percent to nearly 700,000 barrels of oil equivalent per day (BOEPD) by 2004.
The updated outlook reflects a 7.6-percent annual growth in net worldwide production from an estimated 485,000 BOEPD in 1999.
Earlier, the company's forecast profile was for 2004 production of 918,000 BOEPD. This earlier forecast was heavily weighted toward increases in the years 2002 to 2004.
"We have revised our production forecast as a result of a change in our philosophy, especially with respect to the later year projections, as well as to reflect factors that may delay certain projects," said Roger C. Beach, Unocal chairman and chief executive officer.
Beach explained that the company has taken a more conservative approach to its production forecasting and included only anticipated production that is associated with established discoveries. Expected production from discoveries in the deepwater or other frontier areas that require additional drilling, approvals or sales contracts, has been excluded from the latest forecast.
"We have focused on an operating plan to increase our worldwide production to about 540,000 BOEPD in 2001, 11-percent above the estimated 1999 average daily production level," Beach said. "Over the longer term, we still foresee strong production growth, with upside potential above this forecast contingent upon additional exploration drilling successes or more favorable market conditions."
In addition to adopting a more conservative approach, Unocal said factors affecting the outlook, particularly in the later years, include longer lead times for new gas production in Bangladesh and a delay of the main export route for increased oil production in Azerbaijan beyond the current forecast.
Net Lower 48 U.S. production is expected to rise 44 percent to an estimated 237,000 BOEPD in 2004.
Net production from the Indonesia, Thailand, Myanmar and Bangladesh is expected to average 346,000 BOEPD in 2004, up 57 percent from an estimated 220,000 BOEPD in 1999.
The consolidated forecast includes all of the expected production by Unocal's consolidated subsidiaries -- Northrock Resources Ltd. (Unocal, 47.8%), and Pure Energy Resources (Unocal, expected 65%). The formation of Pure Energy, which merges Unocal's Permian and San Juan basin assets with Titan Exploration, Inc., is subject to approval by regulators and Titan stockholders. The merger is expected to become effective in the first quarter 2000.
The detailed production forecast and explanation of individual country variances from the prior forecast is available in the Investor Data Warehouse on Unocal's web site.
Forward-looking statements regarding future production rates in this news release are based on assumptions concerning operational, market, competitive, regulatory, environmental, and other considerations. Actual results could differ materially as a result of factors discussed in Unocal's 1998 Form 10-K report filed with the Securities and Exchange Commission.
Under the terms of the PSCs, Unocal Indonesia Company 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.
Updated: January 2000