press release

Unocal earnings rise 16% on higher gas production, improved oil and gas prices

EL SEGUNDO, Calif., April 24, 1997 -- Unocal Corporation today reported first quarter 1997 net earnings of $144 million, or 57 cents per common share, up 16 percent from $124 million, or 47 cents per common share, in the same period a year ago.

Earnings from operations, excluding special items (detailed in the attached tables), were $190 million, or 76 cents per common share, up 58 percent from $120 million, or 45 cents per common share, in the first quarter 1996.

"We continued to show increased natural gas production in the first quarter, reflecting the success of our focus on key strategic projects in Southeast Asia," said Roger C. Beach, Unocal chairman and chief executive officer. Natural gas production in the Far East was up 35 percent, or 208 million cubic feet (mmcf) per day, over the first quarter 1996.

In Thailand, net natural gas production averaged 623 mmcf per day in the first quarter, up 42 percent from a year ago, following the start-up of a new pipeline system. In Indonesia, net natural gas production (including host country share) rose 22 mmcf per day to 182 mmcf per day, primarily because of increases from the Santan and Sepinggan fields.

Unocal also reported a 15 percent increase in crude oil and condensate production from its Thailand and Indonesia operations.

Beach noted that the first quarter operating results reflect significantly higher average sales prices for crude oil and natural gas. Worldwide, Unocal's average sales price for crude and condensate was $20.81 per barrel, compared with $16.93 in 1996, while the sales price for natural gas averaged $2.51 per thousand cubic feet, compared with $2.27 for the same period last year.

"We completed the sale of our West Coast downstream operations at the end of the first quarter," Beach said. "This sale transformed Unocal into the world's largest publicly traded independent energy resource company -- first in production and reserves -- with a strong focus on international project development."

Unocal's balance sheet at the end of the first quarter 1997 showed cash and cash equivalents of more than $1.7 billion, including the proceeds received from the sale of its West Coast downstream assets. Earlier this month, Duff & Phelps Credit Rating Co. raised the company's senior unsecured debt rating to "A-" (Single-A-Minus), and the commercial paper rating to "D-1-" (D-One-Minus), reflecting Unocal's strong financial condition.

Beach also noted that the company was moving ahead with its announced $400 million common stock buyback program. By the end of the first quarter, Unocal had repurchased approximately 1.2 million shares for $46 million.

Unocal Corporation is the world's largest independent exploration and production company with hydrocarbon reserves of more than 9.8 trillion cubic feet of natural-gas-equivalent (1.6 billion barrels-of-oil-equivalent) and major oil and gas production activities in Asia and the U.S. Gulf of Mexico.

    CONDENSED CONSOLIDATED EARNINGS STATEMENT
    (UNAUDITED)

                                                        For the Three Months
                                                            Ended March 31
    Dollars in millions except                          1997            1996
    per share amounts

    Total revenues                                     $1,456          $1,201
    Costs and other deductions                          1,119             976
    Earnings from continuing operations
      before income taxes                                 337             225
    Income taxes                                          149              94
    Earnings from continuing operations                   188             131
    Loss from discontinued operations                     ---              (7)
    Loss on disposal                                      (44)             ---
    Loss from discontinued operations                    $(44)            $(7)
    Net earnings                                         $144            $124
    Dividends on preferred stock                          ---               9
    Net earnings applicable to common shares             $144            $115

    Earnings/(loss) per common share
      assuming no dilution (a)
         Continuing operations                           $0.75          $0.50
         Discontinued operations                         (0.18)         (0.03)
    Net earnings per share                               $0.57           $.47

    (a) Based on weighted average common shares
          outstanding (in millions)                        251            247


    CONDENSED CONSOLIDATED BALANCE SHEET
    (UNAUDITED)                                          March 31    Dec. 31
    Millions of dollars                                    1997        1996

    Assets
    Cash and cash equivalents                             $1,749       $217
    Net assets of discontinued operations  (c)               ---      1,774
    Other current assets                                   1,747      1,237
    Investments and long-term receivables                  1,232      1,206
    Properties - net                                       4,577      4,590
    Other assets                                             125         99
        Total assets                                      $9,430     $9,123
    Liabilities and Equity
    Current portion of long-term debt
      and capital lease obligations                         $406       $118
    Other current liabilities                              1,607      1,504
    Long-term debt and capital lease obligations           2,814      2,940
    Deferred income taxes                                    286        348
    Other deferred credits and liabilities                 1,465      1,416
    Convertible preferred securities                         522        522
    Stockholders' equity                                   2,330      2,275
         Total liabilities and equity                     $9,430     $9,123

    (c) Excludes retained working capital.


    CONDENSED CONSOLIDATED CASH FLOWS
    (INCLUDES DISCONTINUED OPERATIONS)
    (UNAUDITED)                                      For the Three Months
                                                         Ended March 31
    Millions of dollars                                1997        1996

    Cash flows from operating activities
        Cash flow from operations                      $394        $386
        Working capital and other changes
          related to operations                         (60)       (128)
             Net cash provided by
               operating activities                     334         258

    Cash flows from investing activities
        Capital expenditures
          (includes dry hole costs)                    (286)       (222)
        Proceeds from sale of discontinued
          operations                                  1,390         ---
        Proceeds from asset sales                        16          51
             Net cash provided by/(used in)
               investing activities                   1,120        (171)

    Cash flows from financing activities
        Net increase in long-term debt
          and capital lease obligations                 175         152
        Dividends paid                                  (50)        (59)
        Repurchase of common stock                      (46)        ---
        Other                                            (1)         12
             Net cash provided by
               financing activities                      78         105

    Increase in cash and cash equivalents             1,532         192
    Cash and cash equivalents at
      beginning of period                               217          94
    Cash and cash equivalents at end of period       $1,749        $286


    CONDENSED CAPITAL EXPENDITURES
    (UNAUDITED)

    Millions of dollars
    United States Exploration & Production              $33     $68
    International Exploration & Production              163      86
    Geothermal Operations                                20      14
    Diversified Business Group                            9       6
    New Ventures                                          5      11
    Corporate & Unallocated                               7       5
    Discontinued Operations                              49      32
         Total                                         $286    $222


    DEPRECIATION, DEPLETION & AMORTIZATION
    (UNAUDITED)

    Millions of dollars
    Depreciation, Depletion & Amortization
         Continuing operations                         $211    $212


    RESULTS OF OPERATIONS FOR
    EXPLORATION AND PRODUCTION ACTIVITIES
    (UNAUDITED)

                                 For the Three Months Ended March 31, 1997

    Millions of dollars         Spirit   Other
                              Energy 76  U.S.  Far East  International   Total
     Sales (includes intercompany sales)

        Crude oil and
          condensate           $98     $56    $117        $45        $316
        Natural gas            228      18     165         14         425
        Natural gas
          liquids               16       1       9          1          27
        Other                  ---     ---     ---        ---           0
            Total              342      75     291         60         768

     Other revenue               3     ---       3         10          16
     Gain/(loss) on
       asset sales               3     ---     ---          1           4
            Total revenues     348      75     294         71         788

     Production costs           48      24      30         19         121
     Exploration expenses       10     ---       8          9          27
     Dry hole costs              6     ---       9          1          16
     Depreciation, depletion
       & amortization          102      15      61         17         195
     Other operating expenses   21       2      11          8          42
          Results of operations
            before income tax  $161    $34    $175        $17        $387


                              For the Three Months  Ended March 31, 1996
                              Spirit   Other                Other
                            Energy 76   U.S.  Far East  International  Total

     Sales (includes intercompany sales)
        Crude oil and
          condensate          $87     $94    $79        $44         $304
        Natural gas           200      26    113         14          353
        Natural gas
          liquids              13       2      5          1           21
        Other                   1     ---    ---        ---            1
           Total              301     122    197         59          679

     Other revenue              2       1    ---          6            9
     Gain on asset sales        4     ---    ---          6           10
           Total
             revenues         307     123    197         71          698

     Production costs          45      48     30         21          144
     Exploration expenses       4     ---      6         11           21
     Dry hole costs            10     ---    ---          3           13
     Depreciation, depletion &
       amortization            90      37     47         15          189
     Other operating expenses  36       5      7          1           49

          Results of operations
            before income
            tax              $122     $33   $107        $20         $282



    RESULTS OF OPERATIONS FOR
    EXPLORATION AND PRODUCTION ACTIVITIES
    (UNAUDITED)

                                             For the Three Months
                                             Ended June 30, 1996

                              Spirit   Other              Other
    Millions of dollars      Energy 76  U.S.  Far East   International   Total

     Sales (includes
       intercompany sales)
       Crude oil and condensate $96   $58     $104        $46          $304
       Natural gas              184    17      117         11           329
       Natural gas liquids       17     1        4          1            23
       Other                      1   ---      ---        ---             1
         Total                  298    76      225         58           657
     Other revenue                1     1      (1)          5             6
     Gain/(loss) on asset sales   1   110      ---        ---           111
         Total revenues         300   187      224         63           774
     Production costs            43    29       33         16           121
     Exploration expenses         7   ---       11          9            27
     Dry hole costs               1   ---        2          1             4
     Depreciation, depletion
       & amortization            84    19       69         15           187
     Other operating expenses    30     4       10          3            47
         Results of operations
           before income tax   $135  $135      $99        $19          $388

                                               For the Three Months
                                             Ended September 30, 1996

                              Spirit   Other              Other
                             Energy 76  U.S.  Far East   International   Total
     Sales (includes
       intercompany sales)
       Crude oil and condensate$104   $57      $95        $47          $303
       Natural gas              178    18      132         10           338
       Natural gas liquids       17     1        3          1            22
       Other                      1   ---      ---        ---             1
         Total                  300    76      230         58           664
     Other revenue                5   ---        1          6            12
     Gain on asset sales          3    --        1         17            21
         Total revenues         308    76      232         81           697
     Production costs            46    19       31         20           116
     Exploration expenses         8   ---       14          8            30
     Dry hole costs              38   ---       11          1            50
     Depreciation, depletion
       & amortization            94    18       47         14           173
     Other operating expenses    34     4       13        ---            51
         Results of operations
         before income tax      $88   $35     $116        $38          $277


                                               For the Three Months
                                             Ended December 31, 1996

                              Spirit   Other              Other
                             Energy 76  U.S.  Far East   International   Total
     Sales (includes
       intercompany sales)
       Crude oil and condensate$113   $63     $117        $45          $338
       Natural gas              212    23      167         13           415
       Natural gas liquids       23     2        7          1            33
       Other                      1   ---      ---        ---             1
         Total                  349    88      291         59           787
     Other revenue               15     1        1         10            27
     Gain/(loss) on asset sales (7)   (4)      (1)          1          (11)
         Total revenues         357    85      291         70           803
     Production costs            44    26       33         24           127
     Exploration expenses         7   ---       10         16            33
     Dry hole costs              13     5       37          9            64
     Depreciation, depletion
       & amortization           130    54       45         25           254
     Other operating expenses    37     5       16        (1)            57
         Results of operations
           before income tax   $126  $(5)     $150       $(3)          $268


     OPERATING HIGHLIGHTS
     (UNAUDITED)
                                                  For the Three Months
                                                     Ended March 31
                                                   1997          1996
     Net daily production
        Crude oil and condensate
          (thousand barrels daily):
             United States
               Spirit Energy 76                 48.3          52.2
               Other  (a)                       33.7          69.1
                   Total United States          82.0         121.3
             International
               Far East  (b)                    93.2          80.9
               Other                            26.7          28.4
                   Total International         119.9         109.3
                   Total Worldwide             201.9         230.6

        Natural gas (million cubic feet daily):
             United States
               Spirit Energy 76                909.7         903.9
               Other  (a)                      155.9         205.9
                   Total United States       1,065.6       1,109.8
             International
               Far East  (b)                   805.1         597.6
               Other                            67.6          81.9
                   Total International         872.7         679.5
                   Total Worldwide           1,938.3       1,789.3

        Natural gas liquids
         (thousand barrels daily)  (a)          19.4          19.7
        Geothermal (million kilowatt-hours daily)  15.9       13.8

     Average sales prices
        Crude oil and condensate (per barrel):
             United States
               Spirit Energy 76               $22.52        $18.59
               Other                           18.51         15.08
                   Total United States         20.88         16.55
             International
               Far East                       $21.03        $17.86
               Other                           20.07         16.93
                   Total International         20.75         17.52
                   Total Worldwide            $20.81        $16.93

        Natural gas (per mcf):
             United States
               Spirit Energy 76                $2.83         $2.56
               Other                            1.35          1.78
                   Total United States          2.61          2.35
             International
               Far East                        $2.40         $2.18
               Other                            2.22          1.76
                   Total International          2.38          2.13
                   Total Worldwide             $2.51         $2.27

     (a)  Includes production from
           California upstream properties of:
              Crude oil and condensate           ---          30.2
              Natural gas                        ---          51.7
              Natural gas liquids                ---           0.5

     (b)  Includes host country share in Indonesia of:
              Crude oil and condensate          30.0          29.8

              Natural gas                       32.6          25.6

     Agricultural products production volumes  (thousand tons)
          Ammonia                                391           351
          Urea                                   275           293
          Other products                         177           163
              Total                              843           807

     Agricultural products sales volumes  (thousand tons)
          Ammonia                                156            94
          Urea                                   210           245
          Other products                         252           231
              Total                              618           570


    EARNINGS BY BUSINESS SEGMENT
    (Unaudited)

                                 1st Quarter of 1997     1st Quarter of 1996
                               Before-tax   After-tax   Before-tax  After-tax

    Millions of dollars
     Exploration and Production
       United States
         Spirit Energy 76       $161        $100        $122          $76

         Other                    34          21          33           20
       International             192         103         127           70

     Geothermal Operations        10           6           9            5

     Diversified Business Group
       Agricultural Products      30          20          25           16
       Carbon and Minerals        12          10          26           18

       Pipelines                  17          14          30           23
       Other                       2           1           1            1

     Corporate and Unallocated
       Administrative and
         general expense        (20)        (13)        (29)         (18)
       Net interest expense     (54)        (42)        (72)         (50)

       Environmental and
         litigation expense     (18)        (11)        (23)         (14)
       New Ventures             (11)         (7)         (4)          (2)
       Other                    (18)        (14)        (20)         (14)
     Earnings from continuing
       operations                337         188         225          131

     Loss from discontinued
       Operations               (71)        (44)        (11)          (7)

              Total             $266        $144        $214          124


     EXPLORATION AND  PRODUCTION - this segment  explores  for,  produces and
markets crude oil, condensate, natural gas and natural gas liquids.
     GEOTHERMAL OPERATIONS - this segment explores for, produces and sells
geothermal resources used to generate electricity.
     DIVERSIFIED BUSINESS GROUP:
       AGRICULTURAL PRODUCTS - this business unit manufactures and markets
nitrogen-based products for wholesale agricultural and industrial markets
supplying the western United States and the Pacific Rim.
       CARBON AND MINERALS - this business unit produces and markets petroleum
coke, graphites, solvents and specialty minerals.
       PIPELINES - this business unit principally includes the company's
equity interests in affiliated pipeline companies.
       OTHER - principally includes the company's equity interest in The UNO-
VEN Company.


    SPECIAL ADJUSTMENTS
    (Unaudited)

                                 1st Quarter of 1997    1st Quarter of 1996
                               Before-tax  After-tax   Before-tax  After-tax

    Dollars in millions except
      per share amounts

     Reported earnings          $266      $144        $214        $124
     Less: Special items
       Exploration and Production
         United States
           Spirit Energy
             Asset Sales           3         2           4           2

         International
             Asset Sales           1         1           6           4
       Diversified Business Group
         Pipelines
             Asset Sales         ---       ---          12           7
Corporate and Unallocated
             Asset Sales           6         4           1           1
             Environmental
               provision        (14)       (9)        (10)         (6)
             Litigation
               provision         ---       ---         (6)         (4)
       Discontinued Operations
             Net loss on
               disposal         (71)      (44)         ---         ---
       Total special items      (75)      (46)           7           4

     Adjusted earnings          $341      $190        $207        $120
     Less: Dividends on
       preferred stock           ---       ---         ---           9
     Adjusted net earnings applicable
       to common shares          ---      $190         ---        $111
     Adjusted net earnings
       per common share          ---     $0.76         ---       $0.45


    EARNINGS BY BUSINESS SEGMENT
    EXCLUDING SPECIAL ADJUSTMENTS
   (Unaudited)

                               1st Quarter of 1997     1st Quarter of 1996
                             Before-tax   After-tax   Before-tax  After-tax

    Millions of dollars

     Exploration and Production
       United States
         Spirit Energy 76      $158        $98       $118          $74
         Other                   34         21         33           20
       International            191        102        121           66
     Geothermal Operations       10          6          9            5

     Diversified Business Group
       Agricultural Products     30         20         25           16

       Carbon and Minerals       12         10         26           18

       Pipelines                 17         14         18           16

       Other                      2          1          1            1

     Corporate and Unallocated
       Administrative and
         general expense       (20)       (13)       (29)         (18)

       Net interest expense    (54)       (42)       (72)         (50)

       Environmental and
         litigation expense     (4)        (2)        (7)          (4)

       New Ventures            (11)        (7)        (4)          (2)

       Other                   (24)       (18)       (21)         (15)

     Earnings from continuing
       operations               341        190        218          127

     Loss from discontinued
       operations               ---        ---       (11)          (7)
              Total            $341       $190       $207         $120

Updated: April 1997