Unocal announces results of recent drilling activities on Alaska's Kenai Peninsula
Anchorage, Alaska, April 25, 2002 -- Unocal Corporation (NYSE: UCL) today announced the successful completion and testing of two additional exploration wells in the Ninilchik Unit on Alaska's Kenai Peninsula. Unocal holds a 40-percent working interest in the 25,000-acre Ninilchik Exploration Unit. Marathon Oil Company (NYSE: MRO) is operator and holds the remaining interest. The Ninilchik Unit is located about 35 miles south of Kenai, Alaska.
The Grassim Oskolkoff #2 well tested at a combined flow rate of 11.9 million cubic feet per day (mmcfd) from three zones between 8,048 and 9,440 feet. The Falls Creek #1RD was also recently tested from a single zone at a rate of 6.8 mmcfd from a depth of 8,714 feet.
In January 2002, Unocal-Marathon said they had discovered a new gas reservoir in the Ninilchik Exploration Unit on the Kenai Peninsula with the Grassim Oskolkoff #1 well, which tested 11.2 mmcfd from one zone.
Southern Kenai drilling
Unocal also said today that a related drilling program on the southern Kenai Peninsula failed to encounter commercial quantities of natural gas. Unocal has recently completed a three-well program that included the NNA #1 and Pearl #1 wells near Ninilchik and the Griner #1 in Anchor Point. Activities have been suspended on all three wells with no plans for further evaluation. Unocal has a 100-percent working interest in the three wells.
Chuck Pierce, vice president of Unocal Alaska said, "We are obviously disappointed in the results of the three most recent wells. However, results from the Ninilchik Exploration Unit are very encouraging. Our overall Kenai drilling program has met our initial range of projections. We intend to follow through with a Ninilchik Unit development program and to aggressively pursue other exploration opportunities in the Cook Inlet area."
Unocal has two key customers -- a long-term relationship with Agrium and a new gas sales agreement with ENSTAR. The ENSTAR agreement was designed to provide an incentive to explore. Unocal will continue to pursue exploration and development opportunities to supply gas to its customers.
Unocal and Marathon have formed Kenai Kachemak Pipeline LLC to develop a natural gas pipeline that would connect new natural gas supplies with the existing south central Alaska pipeline system. Upon completion of the pipeline, newly discovered resources would serve commercial and utility markets in Southcentral Alaska. Design work and permitting are currently under way, first production is anticipated to occur in late 2003.
About Unocal Corporation
Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. The company's oil and gas activities are in North America, Asia, Latin America, the North Sea, and West Africa. Unocal is one of the world's largest producers of geothermal energy with operations in the Philippines and Indonesia.
Unocal Alaska operates 10 platforms in the Cook Inlet off the southern Alaska coast and 5 of 11 producing gas fields. Unocal Alaska's average net daily production during 2001 was 105 mmcf of gas and 25,000 barrels of oil.
This news release contains certain forward-looking statements about Unocal's future drilling and development plans and capital spending expectations. These statements are not guarantees of future performance. The statements are based upon Unocal's current expectations and beliefs and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements. Actual results could differ materially as a result of factors discussed in Unocal's 2001 Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission.
U.S. investors are urged to consider closely the disclosure in Unocal's 2001 Annual Report on Form 10-K (SEC File No. 1-8483). Copies of the company's SEC filings are available from the company by calling 800-252-2233. The reports are also available on the Unocal web site. You can also obtain this form from the SEC by calling 800-SEC-0330.
Updated: April 2002