Unocal Gulf Region business unit restructures to improve profitability
Sugar Land, Texas, June 20, 2001 - Unocal Corporation (NYSE: UCL) today said that its Gulf Region business unit has taken a major step in a comprehensive restructuring program to improve its overall cost structure and profitability and better position the unit for ongoing exploratory success.
The actions taken today are expected to reduce pretax costs by approximately $20 million per year. The lower costs stem from making broad organizational changes to eliminate unnecessary work processes and reconfiguring Unocal's Gulf Region unit to meet current and future business needs.
The restructuring measures will involve about 200 layoffs from the Gulf Region workforce in its Sugar Land office and field locations. The cuts represent about 7 percent of Unocal's total U.S. workforce.
"The difficult steps we took today are part of a restructuring that will have a long-term positive impact for our business unit, its employees and for Unocal overall by equipping us to succeed in a new and challenging business environment," said Ken Butler, Gulf Region vice president.
"It's unfortunate when restructuring affects people's jobs," he said. "We are committed to handling this situation with dignity and respect for everyone affected."
The part of the restructuring program to generate improved exploratory results has been under way since late last year. The focus of the exploration program has been redirected from the Gulf of Mexico's mature shallow depths to the emerging "deep shelf" play, which represents a new frontier for the industry.
Butler said the restructuring also would involve the divestment of properties by year-end that are marginal to Unocal. The divestments will allow Gulf Region to concentrate its efforts on more profitable fields and high impact exploration prospects. The impact of the asset sales on production and reserves is expected to be minimal.
Unocal expects to record a non-cash special item charge of approximately $12 million aftertax for the restructuring program in the second quarter 2002.
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 exploration and production operations are located in North America (Gulf of Mexico region, Alaska and Canada) and in Asia (Thailand, Indonesia, Myanmar and Bangladesh). The company is also pursuing exploration programs in West Africa and Brazil.
This news release contains certain forward-looking statements about Unocal's future earnings, operational performance, cost savings, charges and asset sales. 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.
Updated: June 2002