press release

Unocal discovers oil, gas and condensate in Gulf of Thailand

El Segundo, Calif., Oct. 1, 1999 -- Unocal Corporation today said that its Unocal Thailand, Ltd., subsidiary made an important oil discovery and a natural gas and condensate discovery in the Gulf of Thailand.

The discoveries came as Unocal Thailand drilled its first exploration wells on blocks 10A and 11A, located in the prolific Pattani Basin, which were awarded to Unocal and its co-venturers in 1997 after a boundary resolution between Thailand and its neighboring countries.

"We are excited about the successes of our continuing exploration program, particularly the discovery of a potentially commercial oil reservoir with the Yala-3 well," said Randy Howard, president of Unocal Thailand. "These successes provide further evidence that the Gulf of Thailand contains additional oil and gas resources that can serve the needs of Thailand's economy."

Block 10A exploration

The 10A-1 discovery well, located a few kilometers south of the Tantawan field, was drilled to a total depth of 12,280 feet (3,743 meters), and encountered 134 net feet (41 meters) of gas and condensate pay. The well tested 14.8 million cubic feet per day (mmcfd) of gas and 250 barrels per day (b/d) of condensate on a 52/64-inch choke.

A follow-up well, Yala-3, was drilled on adjacent block 10 to a depth of 11,391 feet (3,472 meters) and encountered 487 net feet (148 meters) of oil and gas pay. Two tests were conducted on the well; one flowed at a rate of 3,152 b/d of oil, and the second test flowed at a rate of more than 18 mmcfd of gas and 485 b/d of condensate.

"The Yala-3 well is significant because it tested oil in a region where we have typically found natural gas and condensate," Howard said. "We plan to conduct further delineation drilling. If the resource is commercial, we will look at tying into existing oil pipelines to bring this oil and gas to market."

Block 11A exploration

The 11A-1 discovery was the first well drilled in the previously unexplored North Trat Graben trend, 12 miles (20 kilometers) north of the Trat field, which came on production recently. The well was drilled to 10,960 feet (3,340 meters) and encountered 180 net feet (55 meters) of gas pay from two zones. The well flowed at a combined rate of 18 mmcfd of gas and 675 b/d of condensate on a 56/64-inch choke.

Two additional wells were successfully completed on the adjacent block 11 to confirm the potential of the new trend. Trat-14, drilled to a depth of 11,563 feet (3,524 meters) and encountered 94 net feet of gas pay. Trat-15 was drilled to 11,382 feet (3,469 meters) and found 104 net feet (32 meters) of gas pay. No tests were performed on the Trat wells.

Howard noted that while the present market for gas in Thailand may be limited, the additional gas resources developed through the exploration program will add to the inventory of domestic energy supplies available as the Thai economy recovers.

Daily gross production from the 13 fields that Unocal Thailand operates in the Gulf of Thailand is currently averaging more than one billion cubic feet of natural gas and 38,000 barrels of condensate.

Concession Blocks 10A and 11A are operated by Unocal Thailand (60% working interest), with Mitsui Oil Exploration Co., Ltd. (MOECO) holding the remaining 40 percent. Blocks 10 and 11 are held under separate concessions, in which Unocal Thailand has 71.25 percent working interest, MOECO 23.75 percent, and PTT Exploration and Production Public Company Limited, 5 percent.

Unocal is one of the world's largest independent oil and gas exploration and production companies, with resource development, power plant and pipeline projects in Asia, the U.S. Gulf of Mexico region and Latin America.

Natural gas is used mainly to produce electricity in Thailand. The gas produced by Unocal Thailand and its co-venturers provides electricity to one of three homes and buildings in the Kingdom. It is also used in the transportation sector, as petrochemical feedstock, and as an industrial fuel.

Forward looking statements and estimates regarding future exploration and production activities in this news release are based on assumptions about market, competitive, regulatory, environmental, operational and other considerations. Actual results could differ materially as a result of factors discussed in Unocal's 1998 Form 10-K report filed with the U.S. Securities and Exchange Commission.

Updated: October 1999