Unocal announces results of Sequoia deepwater well
Sugar Land, Texas, Dec, 15, 2004 - Unocal Corporation (NYSE: UCL) today said it has concluded drilling operations at its Sequoia prospect in the Gulf of Mexico deepwater.
The well was completed as a dry hole. Located in Mississippi Canyon block 941, the well was drilled to a total depth of 29,100 feet to test the deeper Miocene intervals of the 1999 discovery called Mirage. The Mirage drilling program included an initial well drilled to 16,600 feet and a sidetrack that reached a depth of 22,400 feet. Unocal had hoped that a successful test of the deeper intervals with the Sequoia well would lead to development, but the hydrocarbons encountered in the deeper interval were deemed to be noncommercial.
Unocal operated the well; other working interest holders in the well include TOTAL E&P USA, INC. (NYSE: TOT), Marathon Oil Corporation (NYSE: MRO), and Spinnaker Exploration Company (NYSE:SKE).
The development of the Mirage discovery is now unlikely given the results of the Sequoia well.
Unocal expects to take a $29 million pretax write-down in the fourth quarter 2004 to cover its share of costs associated with the Sequoia well and the earlier Mirage exploration well.
Unocal estimates that fourth quarter 2004 dry hole expense will be between $75 and $85 million. This compares with an estimate of $50 to $75 million that the company announced on Oct. 28, 2004.
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 oil and gas activities are in Asia and North America.
This news release contains forward-looking statements about matters such as Unocal's assessment of hydrocarbon formations, expected dry hole expenses and development plans. 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, the results of any additional exploratory drilling operations in the fourth quarter of 2004 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: December 2004