Unocal makes gas discovery on Alaska's Kenai Peninsula
Anchorage, Nov. 20, 2003 - Unocal Corporation (NYSE: UCL) today said that it has made a natural gas discovery at its Happy Valley prospect located approximately seven miles southeast of Ninilchik on Alaska's Kenai Peninsula. The discovery well found 110 feet of natural gas pay and was followed by a successful appraisal well.
Unocal has approved development of the Happy Valley Field and will likely drill three development wells in 2004.
First production from Happy Valley is planned for fourth quarter 2004. Average production from the field is expected to be 20-25 million cubic feet per day during 2005 at Henry Hub pricing. The field is estimated to contain approximately 75-100 bcf of recoverable natural gas with finding and development costs averaging around 50 cents per mcf. Unocal holds a 100-percent working interest.
Gas sales will be under the ENSTAR Gas Sales Agreement, which was signed in 2000. This contract covers the first 450 bcf of gas that the company can deliver. The gas price is based on a 36-month trailing average of Henry Hub prices.
This is the second discovery for Unocal in its current exploration program on the southern Kenai Peninsula. Unocal participated with Marathon Oil Company in the discovery of the Ninilchik Unit in 2000, which is currently on production. Unocal has a growing inventory of exploration prospects in this emerging gas play and plans to drill 2-3 additional exploration prospects in 2004.
"This is an important discovery for us and for our customer," said Charles Pierce, vice president of the Unocal Alaska business unit. "We now have the basis for growth in this play as we have developed an attractive inventory of on-trend prospects. Having this kind of exploration leverage is a key element of our business unit's and the company's exploration strategy."
About Unocal Corporation
Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. Unocal's principal oil and gas operations are located in North American and Asia.
This news release contains certain forward-looking statements about Unocal's future drilling plans, production levels, and recoverable resources. Recoverable resources is a speculative estimate of ultimate recovery (including non-proved resource) based on engineering, geophysical, and geological studies and may include market risk. 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 2002 Form 10-K and subsequent reports filed with the Securities and Exchange Commission.
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 "recoverable natural gas," that the SEC's guidelines strictly prohibit Unocal from including its filings with the SEC. U.S. investors are urged to consider closely the disclosure in Unocal's 2002 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, www.unocal.com. You can also obtain this form from the SEC by calling 800-SEC-0330.
Updated: November 2003