press release

Unocal expects 2001 earnings of $2.90 - $3.15 per share; crude oil, natural gas production to rise by 5 percent

El Segundo, Calif., Jan. 25, 2001 -- Unocal Corporation (NYSE: UCL) today said it expects adjusted (excluding any special items) per share earnings of $2.90 to $3.15 for 2001, while the company's net crude oil and natural gas production is expected to increase by 5 percent.

"Our financial goals are to leverage our existing production assets to take advantage of the current high commodity prices, while identifying and capturing large development and exploration projects that can provide a revenue stream in the future," said Charles R. Williamson, Unocal chief executive officer.

The forecast for full-year 2001 earnings assumes average NYMEX benchmark commodity prices of $25.00 per barrel for West Texas Intermediate (WTI) crude oil and $4.75 per million Btus for Henry Hub natural gas.

Unocal's adjusted earnings will change 13 cents per share for every $1 change in its average worldwide realized price for crude oil and 7 cents per share for every 10-cent change in the company's average realized Lower 48 natural gas price.

The forecast also assumes dry hole costs of $200 to $280 million (63% to 48% success rate). Unocal's earnings will change 13 cents per share for 10-percent change in the overall success rate of the company's exploration drilling program.

1Q 2001 earnings forecast

The company said it expects adjusted per share earnings of $1.25 to $1.35 for the first quarter 2001. The forecast for 1Q earnings assumes average NYMEX benchmark commodity prices of $28.00 per barrel for WTI crude oil and $7.50 per million Btus for Henry Hub natural gas.

Production forecast

The company expects that net worldwide daily production for 2001 will average about 530,000 to 540,000 barrels-of-oil equivalent (BOE), up from 509,000 BOE for 2000. First quarter 2001 daily production is expected to average between 525,000 and 530,000 BOE, compared with 512,000 BOE in the fourth quarter 2000.

Capital spending and acquisitions

In 2000, Unocal spent about $120 million for five acquisitions in the Gulf of Mexico region that added nearly 72 million cubic-feet-of-gas-equivalent (CFGE) per day of production and 90 billion CFGE to the company's reserve base. The properties were acquired at an average cost of $1.34 per thousand CFGE of proved reserves.

The company also spent $157 million to acquire the interests of ExxonMobil affiliates in the Makassar Strait and Rapak production-sharing contract areas in Indonesia and $161 million to purchase the publicly held stock of Northrock Resources, Inc., in Canada.

Unocal has projected capital spending for 2001 of $1.5 to $1.6 billion (excluding significant acquisitions), up slightly from $1.3 billion last year.

About Unocal Corporation

Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. The company's principle production operations are located in North America (Gulf of Mexico region, Alaska and Canada) and in Asia (Thailand, Indonesia, and Bangladesh). The company is also pursuing exploration programs in West Africa and Brazil.

The details of the earnings and operating forecast are available in the Unocal Investor Data Warehouse.

This news release contains certain forward-looking statements about projected earnings, capital expenditures, acquisitions, and commodity prices. 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 1999 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.

Production amounts include estimated minority interest and equity investee shares in the U.S. and host-country shares in Indonesia.

U.S. investors are urged to consider closely the disclosure in Unocal's 1999 Form 10-K and other reports. 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: January 2001