Unocal announces results of Sardinia deepwater GOM well
Sugar Land, Texas, Aug. 31, 2004 - Unocal Corporation (NYSE:UCL) today said it has concluded drilling operations on the Sardinia prospect in Keathley Canyon block 681 in the Gulf of Mexico.
The well was completed as a dry hole. Although the well reached its objectives and penetrated more than 1,100 feet of porous sandstones, some of which contained hydrocarbons, the company said the well did not find commercial quantities of hydrocarbons. The well was plugged and abandoned. Evaluation of data from the Sardinia well is continuing.
"While the results of Sardinia are disappointing, we are encouraged by the thickness of the potential reservoir encountered in the lower Tertiary in this rank wildcat," said Mike Bell, vice president for Gulf of Mexico Exploration. "We believe that the presence of this potential reservoir over 100 miles away from discoveries in Walker Ridge is a positive development for Unocal's deepwater program in the Gulf of Mexico."
The Sardinia well was drilled in 6,345 feet of water to a total depth of 27,575 feet in 60 days at an estimated gross cost of $37 million. Unocal expects to take a charge to expense in the third quarter 2004 of less than $1 million for the costs of the well. Unocal is operator and holds a 40-percent working interest in Keathley Canyon 681. Other working interest owners include Devon Energy Company (35%) (AMEX: DVN), TOTAL E&P USA, INC. (12.5%) (NYSE: TOT), and Spinnaker Exploration Company (NYSE: SKE) (12.5%).
Unocal plans to move the Discoverer Spirit drillship to the Sequoia prospect, located in Mississippi Canyon block 941. Unocal is operator of the Sequoia well and holds a 20-percent working interest.
About Unocal Corporation
Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. The company's principal operations are in North America and Asia.
This news release contains forward-looking statements about matters such as Unocal's assessment of hydrocarbon formations and potential resources, evaluation of well test results, expected dry hole expenses and drilling and development plans and operations. Although these statements are based upon Unocal's current expectations and beliefs, they are subject to known and unknown risks and uncertainties that could cause actual results and outcomes to differ materially from those described in, or implied by, the forward-looking statements, including volatility in commodity prices and the effectiveness of Unocal's hedging program; the accuracy of Unocal's estimates and judgments regarding hydrocarbon resources and formations; decline rates of producing properties; adverse geological and other operational factors; the extent of Unocal's operating cash flow and other capital resources available to fund its capital expenditures; international and domestic regulatory, political, and economic factors; performance by foreign government entities, joint venture partners, independent contractors, equipment suppliers and other third parties; competition within Unocal's highly competitive industry; and other risks and uncertainties discussed in Unocal's 2003 Annual Report on Form 10-K, as amended, and subsequent reports filed by Unocal with the Securities and Exchange Commission (SEC File No. 1-8483). Copies of Unocal's SEC filings are available from Unocal by calling 800-252-2233 or from the SEC by calling 800-SEC-0330. The reports are also available on the Unocal web site. Unocal undertakes no obligation to update the forward-looking statements in this news release to reflect future events or circumstances. All such statements are expressly qualified by this cautionary statement.
Updated: August 2004