press release

Unocal forms 50-50 venture on GOM shelf with Forest Oil

El Segundo, Calif., Dec. 4, 2001 - Unocal Corporation (NYSE: UCL) today said it has completed the previously announced transaction to form a 50-50 venture with Forest Oil Corporation (NYSE: FST) related to oil and gas properties located in the central Gulf of Mexico. The transaction was effective Oct. 1 and closed on Nov. 30.

Under the terms of the transaction, Unocal acquired half of Forest Oil's interests in South Marsh Island and a portion of the Vermilion areas offshore central Louisiana for $117 million in cash. Unocal will operate the jointly owned properties and intends to fully exploit and explore these properties and other leases in the Gulf of Mexico.

"This unique venture provides us an expanded set of field upside and exploratory opportunities that we will quickly address with our extensive 3D data base and existing subsurface teams," said Ken Butler, vice president of Unocal's Gulf Region USA business unit. "Additionally, we will be able to leverage our low operating and drilling costs in the Gulf of Mexico and benefit both Forest Oil and Unocal."

Butler said the company's evaluation of the properties involved in the transaction resulted in an identified gross resource base of 44 million barrels-of-oil equivalent (264 billion cubic feet of natural-gas-equivalent) with considerable upside potential. Based on its strong operating cost efficiency, Unocal forecasts $8 million to $12 million in savings to the venture next year.

"We continue to pursue similar deals, allowing us to expand our profitable exploration and production program on the Shelf," Butler said.

This news release contains certain forward-looking statements about future business transactions and agreements. Resource base is a speculative estimate of ultimate recovery (including non-proved resource) based on engineering, geophysical, and geological studies and may include market risk. 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 2000 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.

Cautionary Note to U.S. Investors: The U.S. Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. Unocal uses certain terms in this news release, such as "resource base," that the SEC's guidelines strictly prohibit Unocal from including in its filings with the SEC. U.S. investors are urged to consider closely the disclosures in Unocal's 2000 Form 10-K (SEC File No. 1-8483). 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, You can also obtain this form from the SEC by calling 800-SEC-0330.

Updated: December 2001