press release

Unocal, Mobil discover second new deepwater oil and gas field offshore Indonesia; additional drilling planned

Balikapapan, Indonesia, Aug. 17, 1998 - Unocal Corporation and Mobil Corporation today announced the discovery of a potentially significant new oil field in the deepwater Kutei Basin area offshore East Kalimantan, Indonesia, that opens up a new hydrocarbon province.

The first exploration well drilled on the Seno prospect, West Seno #2, is located on the Makassar Strait production-sharing contract (PSC) area. The West Seno #2 well was drilled to a true vertical depth subsea (TVDS) of 8,770 feet in 2,800 feet of water.

The well encountered 172 feet of vertical oil pay in two zones between 7,300 feet and 8,600 feet TVDS. The first of two planned drillstem tests (DST) flowed 2,900 barrels of 37-degree API gravity oil per day and 3.1 million cubic feet of gas per day on a 28/64-inch choke from an interval between 8,275 feet and 8,395 feet TVDS. Flowing tubing pressure was 2,170 pounds per square inch. Mechanical conditions prevented a high rate test to measure the full potential of the well.

The second DST will be performed this week before preparing to drill the West Seno #1 sidetrack well from the current location to further appraise the reservoir. Following completion of that well, additional delineation drilling is planned for the Seno area. The extent and commerciality of the Seno resource will be determined after sufficient appraisal drilling is completed.

Unocal Indonesia Company is operator of the Makassar Strait PSC and has a 50-percent working interest. Mobil Makassar, Inc., holds the remaining 50-percent.

"We are excited about these well results because they confirm the presence of high quality, thick, porous submarine fan Miocene sands with significant hydrocarbons in the deepwater area of the Mahakam Delta," said Timothy C. Lauer, president and managing director of Unocal Indonesia. "The excellent Tertiary sand reservoirs on the Seno prospect give us the expectation of further exploration successes on additional deepwater prospects in the area."

Lauer said that Unocal and Mobil will focus now on confirming the commerciality of the discovery and begin planning for rapid development utilizing a tension-leg platform concept.

"The West Seno #2 well results are very encouraging because they increase the probability of success for our ongoing drilling program, which will test additional prospects in the northern area of the Makassar PSC and the Rapak PSC, which is located to the east," said R.I. Wilson, president of Mobil Oil Indonesia. "We continue to be encouraged by our early exploration successes offshore East Kalimantan."

The Seno prospect is approximately 13 miles northeast of the Merah Besar field where Unocal and Mobil recorded the first deepwater Indonesia oil and gas discovery last year. Unocal and Mobil are presently preparing a development plan for that field. The Merah Besar field is located on the East Kalimantan PSC (Unocal, 100% working interest) and the Makassar Strait PSC.

Forward-looking statements about future exploration activities and projected results in this news release are based on assumptions concerning geology, regulatory actions, economic, market conditions, operational concerns and other considerations. Actual results could differ materially.

Note: Under the terms of the PSCs, Unocal and Mobil, as contractors to Pertamina, the Indonesian national oil company, are entitled to varying shares of the oil and gas produced from commercial discoveries.

Updated: August 1998