Unocal expects higher earnings, improved downstream margins in 1996, Beach tells analysts
El Segundo, Calif., March 5, 1996 -- "We expect that 1996 will be a breakthrough year for Unocal's operations, resulting in improved company earnings driven by our operating groups," Roger C. Beach, Unocal chairman and chief executive officer, said today at a company-sponsored conference for security analysts.
Beach told analysts that the company's downstream earnings performance began to turn around in the fourth quarter 1995, and the company expects this improvement to gain momentum in 1996. "We've already met -- and exceeded -- our 1996 target for increased light product output from our refineries," he said.
On the retail marketing side, Beach said the company foresees improved margins on the California reformulated gasolines that will go on sale later this year. "In addition, the increased gasoline throughput and returns from our reformatted service stations is meeting or exceeding our forecasts."
Beach went on to say that the company anticipates a 14 percent increase in foreign natural gas production in 1996. This increase is due mainly to a significant boost in the company's Gulf of Thailand production in the second quarter when the Petroleum Authority of Thailand's new pipeline comes on stream. "We'll also see oil and gas production continue to improve in Indonesia -- the result of a highly successful exploration and development program that has revitalized operations there," he added.
On a worldwide basis, daily natural gas production should average nearly 1.8 billion cubic feet, up slightly from 1995. Crude oil and condensate production should average 212,000 barrels per day (b/d), down from 240,000 b/d last year.
The company also issued a revised capital investment forecast, calling for expenditures of $1.3 billion in 1996 (detailed in attached table). The capital spending forecast focuses on foreign petroleum exploration and production and geothermal and power projects.
"We are in the process of retaining an advisor to assist us in the disposal of our oil and gas interests in The Netherlands sector of the North Sea as we continue to shift our strategic focus to Southeast Asia and other areas that offer greater opportunities for growth," Beach said.
Unocal Netherlands B.V. operations include oil production and related facilities from the Q/1 block (Helm, Helder, Hoorn and Haven fields) and from the P/9 block (Horizon field), as well as gas production and related facilities from L11/B and Q/1-Q/2 (Halfweg field) blocks. Unocal's net daily production from its Netherlands operations in 1995 was 11,000 barrels of crude oil and condensate and 9 million cubic feet of gas.
Unocal Corporation Capital Investment Forecast (millions of dollars)
|1995 Actual||1996 Forecast|
|Petroleum Exploration and Production||850||885|
|Geothermal and Power Operations||51||110|
|76 Products Company||422||220|
|Total Capital Spending||1,459||1,300|
Unocal Oil and Gas Production ForecastNet Daily Production
|1995 Actual||1996 Projected|
Natural Gas: million cubic feet per day. Crude/Condensate: thousand barrels per day
Updated: March 1996