press release

Unocal completes Lower 48 property exchange with Apache

Sugar Land, Texas, Oct. 23, 2003 - Unocal Corporation (NYSE: UCL) today said that its Gulf Region USA business unit has completed a property exchange with Apache Corp. (NYSE: APA) that consolidates both companies' interests in two oil and gas fields in the Gulf of Mexico region.

Under the terms of the exchange, Unocal receives Apache's 13-percent working interest in the Unocal-operated Ship Shoal 208 field and an undisclosed amount of cash in exchange for Unocal's majority interest in the Lake Pagie field in Terrebone Parish, La.

With the completion of today's transaction, Unocal now holds 100 percent of the Ship Shoal 208 field, which covers three Gulf of Mexico blocks. Apache now operates and holds substantially all of the net revenue interest in the Lake Pagie field.

The current net production increase to Unocal at Ship Shoal 208 field is about 800 barrels of oil equivalent per day (BOEPD), and net proven reserves added equal approximately 1.4 million barrels of oil equivalent (MMBOE). The current Lake Pagie net production received by Apache is 1,200 BOEPD plus net proven reserves of approximately 2.5 MMBOE.

Unocal expects to record a pretax gain of approximately $21 million from the transaction in the fourth quarter 2003.

This consolidation of interests is part of the restructuring program Unocal began earlier this year to improve the profitability and sustainability of its Lower-48 exploration and production businesses. In an earlier step, the company agreed to sell about 70 Gulf of Mexico fields to Forest Oil Corporation (NYSE: FST) and expects to close that transaction later this month. Efforts are under way to sell the estimated 20 remaining properties earmarked for divestment under the restructuring program.

"We anticipate that by the end of this year we will have sold our working interest in about 90 fields in the Gulf of Mexico area," said Ken Butler, Unocal vice president for Gulf Region USA. "These properties represent a current net average daily production of approximately 20,000 BOE and proved reserves of 40 MMBOE."

In addition, 11 fields representing approximately 3,500 BOEPD of production were divested earlier in 2003 as part of the business unit's routine portfolio program.

Butler said that as these smaller fields are divested, the company is able to reduce associated direct and indirect costs. In order to sustain its future profitability, Unocal also has a goal of reducing finding and development (F&D) costs to below $8.00 per BOE in the Lower 48.

The company is retaining its interest in 25 producing fields in the Gulf of Mexico region. These fields currently account for about 61,000 BOE per day of production and 105 MMBOE in reserves.

The restructured portfolio of larger fields will offer more capital-efficient investments, which combined with continued program success in the deep shelf, is expected to result in a sustainable, more predictable, and more profitable GOM shelf business, Butler said.

This news release contains certain forward-looking statements about future business transactions, production, and reserves. 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 2002 Form 10-K and other reports filed with the U.S. Securities and Exchange Commission. Unocal undertakes no obligation to update the information in this news release.

U.S. investors are urged to consider closely the disclosure in Unocal's 2002 Form 10-K (SEC File No. 1-8483). Copies of the Unocal'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: October 2003