press release

Unocal drills first horizontal well in Gulf of Thailand; enhances cost-effective development of resources

Bangkok, Thailand, Feb. 1, 1999 - Unocal Thailand, Ltd., today said it had successfully completed its first horizontal natural gas well in the Gulf of Thailand.

The Trat A-07 well was drilled into a gas-bearing reservoir at 6,530 feet (1,990 meters). The horizontal section of the well penetrated approximately 1,500 feet (450 meters) of net gas-bearing reservoir that averaged 60-feet (18 meters) thick.

"One successful horizontal well could have the productivity of as many as eight conventional wells, enabling us to develop 'marginal' gas reserves in a more cost-effective way," said Brian W. G. Marcotte, president of Unocal Thailand.

Marcotte said horizontal drilling could be applied in cases with appropriate geologic structures, citing certain condensate-rich reservoirs and untapped zones in previously developed reservoirs.

"Our approach is to blend state-of-the-art geophysical prospecting techniques with low-cost development technologies in the Gulf of Thailand," Marcotte said.

The Trat A-07 well is expected to begin production later this quarter at a rate of 30 to 50 million cubic feet of gas per day. The gas will be processed at the Satun field gas processing facility. The horizontal well has added an estimated 15 to 20 billion cubic feet of gas to the gross recoverable resource. Unocal Thailand (71.25-percent working interest) is the operator of the Trat field.

Forward-looking statements about future production rates, recoverable resource and costs in this news release are based on assumptions concerning geological, market, competitive, regulatory, environmental, operational and other considerations. Actual results could differ materially.

Updated: February 1999