press release

Unocal posts 1Q 2002 adjusted operating earnings of 17 cents per share

El Segundo, Calif., April 25, 2002 - Unocal Corporation (NYSE: UCL) today reported adjusted aftertax earnings from continuing operations (excluding special items) in the first quarter were $43 million, or 17 cents per share (diluted). This compares with the Thompson/First Call consensus (Published April 20, 2002) of 16 cents per share.

In the first quarter 2001, Unocal had adjusted aftertax earnings from continuing operations of $340 million, or $1.35 per share (diluted).

Including special items, Unocal reported net earnings of $22 million, or 9 cents per share (diluted), for the first quarter. This compares with net earnings in the same period a year ago of $295 million, or $1.18 per share (diluted).

CONSOLIDATED RESULTS (unaudited) 1Q 2002 4Q 2001 1Q 2001
Millions of dollars except per share amounts

Adjusted after-tax earnings from continuing operations $ 43 $ 58 $ 340
Special items (21) (88) (48)

Earnings from continuing operations $ 22 $ (30) $ 292
Earnings from discontinued operations - 1 4
Cumulative effect of accounting change - - (1)

Net earnings $ 22 $ (29) $ 295
DILUTED EARNINGS PER SHARE DATA (unaudited)
Adjusted after-tax earnings per share from continuing operations $ 0.17 $ 0.24 $ 1.35

Net earnings per share:
Continuing operations $ 0.09 $ (0.13) $ 1.16
Discontinued operations - 0.01 0.02

Total net earnings per share $ 0.09 $ (0.12) $ 1.18

CASH FLOW DATA (unaudited)
Adjusted discretionary cash flow $ 335 $ 439 $ 714
Adjusted discretionary cash flow per share (diluted) $ 1.37 $ 1.79 $ 2.79

REVENUES FROM CONTINUING OPERATIONS (unaudited) $ 1,038 $ 1,263 $ 2,214

1Q 2002 prices and production

Unocal's first quarter 2002 earnings reflected declines in natural gas and crude oil prices and production, compared with the same period a year ago.

The company's average worldwide price for natural gas was $2.39 per thousand cubic feet (mcf), which includes a 9 cents per mcf benefit from hedging activities. This compares with $4.41 per mcf a year ago. Its worldwide average liquids price was $18.28 per barrel, down from $24.63 in the first quarter 2001.

Worldwide, Unocal's consolidated net daily production in the first quarter 2002 averaged 477,000 barrels-of-oil equivalent (BOE) per day, compared with 495,000 BOE a year ago. The majority of the decline was in Unocal's North America operations, which reflected depletion of the Muni field in the Gulf of Mexico and low second-half 2001 drilling activity in response to soft commodity prices.

Financial measures

Unocal's adjusted discretionary cash flow for the first quarter was $335 million, or $1.37 per share (diluted). This compares with $714 million, or $2.79 per share (diluted), a year ago.

Capital spending in the first quarter was $390 million, up from $360 million, excluding major acquisitions, in the first quarter 2001.

The company's total consolidated long-term debt (including current maturities) was $3.18 billion (47% debt-to-total capitalization ratio) at the end of the first quarter. This compares with $2.91 billion (44% debt-to-total capitalization ratio) at year-end 2001.

First quarter revenues from continuing operations were $1.04 billion, compared with $2.21 billion in the first quarter 2001. The lower 2002 revenues primarily reflected lower commodity prices and lower crude oil marketing activities by the company's Trade segment. Revenues, net of purchases, from exploration and production operations were $653 million, compared with $1.12 billion in the first quarter 2001.

Special items

First quarter 2002 special items included $21 million in non-cash aftertax provisions for environmental and litigation matters (all related to formerly operated sites, sites previously sold with retained responsibilities, and other inactive sites).

Earnings outlook

Unocal is forecasting adjusted earnings from continuing operations of 45 to 55 cents per share in the second quarter 2002, reflecting an anticipated increase in realized commodity prices over the first quarter and hedging activities. The second quarter earnings forecast assumes average NYMEX benchmark prices of $26.35 per barrel of crude oil and $3.55 per million British thermal units (mmBtus) for North America natural gas.

Unocal's second-quarter forecasted earnings are expected to change 4 cents per share for every $1 change in its average worldwide realized price for crude oil and 2 cents per share for every 10-cent change in the company's average realized North America natural gas price.

The forecast also assumes pretax dry hole costs in the second quarter of $20 to $30 million.

For the full-year 2002, Unocal is forecasting adjusted earnings from continuing operations $1.70 to $1.90 per share.

The full-year earnings forecast assumes average NYMEX benchmark prices of $24.80 per barrel of crude oil and $3.35 per mmBtus for North America natural gas and hedging activities.

Unocal's full-year forecasted earnings are expected to change 16 cents per share for every $1 change in its average worldwide realized price for crude oil and 8 cents per share for every 10-cent change in the company's average realized North America natural gas price.

The 2002 forecast also assumes pretax dry hole costs of $120 to $130 million.

Production outlook

Unocal said it expects worldwide net production to increase through the remainder of the 2002, driven mainly by new projects in Thailand and North America. In Thailand, the Pailin 2 gas project will go on-line in the second half of the year, and the company expects to ramp-up oil production from the Yala and Plamuk fields now that the Yala production license has been signed.

In the Gulf of Mexico, Unocal expects production gains from several drilling projects on properties jointly held with Forest Oil Corporation (NYSE: FST) and new discoveries made earlier this year. In addition, Unocal expects new production from the successful winter drilling program by its Northrock Resources, Ltd., subsidiary in Canada.

The company expects that net daily worldwide production for the second quarter 2002 will average between 480,000 and 490,000 BOE. Unocal's current production is 490,000 BOE per day.

The company expects that net daily worldwide production for the full-year 2002 will average between 490,000 and 500,000 BOE.

The production outlook reflects a reduction of about 4,000 BOE per day resulting from a reduction in production volumes received under Indonesia's production-sharing contract cost-recovery provisions due to higher oil prices and some small divestitures in the U.S.

At this time, Unocal does not expect to increase capital spending over previously announced ranges.

About Unocal Corporation

Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. The company's oil and gas activities are in North America, Asia, Latin America, the North Sea, and West Africa. Unocal is one of the world's largest producers of geothermal energy with operations in the Philippines and Indonesia.

Conference call/financial database

Unocal will broadcast its quarterly earnings conference call today at 1 p.m. PDT (4 p.m. EDT) over the Internet. To listen to the live webcast, go to the Investor Information section of the Unocal web site. Replays of the conference call, including questions and answers, will be available until May 31, 2002.

In addition, complete detailed financial tables for the first quarter 2002 and the comparable prior periods are available in the "Quarterly Fact Book," which is posted in the Unocal Investor Data Warehouse.

This news release contains certain forward-looking statements about expected earnings, production, commodity prices, capital spending, and dry hole costs. 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 inUnocal's 2001 Annual Report on Form 10-K and subsequent reports filed with the U.S. Securities and Exchange Commission. Unocal undertakes no obligation to update the information in this news release.

Investors are urged to consider closely the disclosure in Unocal's 2001 Annual Report on Form 10-K and other reports filed with the SEC (SEC File No. 1-8483). Copies of the company's SEC filings are available from the company by calling 800-252-2233 or from the SEC by calling 800-SEC-0330. The reports are also available on the Unocal web site.

ADJUSTED AFTER-TAX EARNINGS BY BUSINESS SEGMENT (unaudited) 1Q 2002 4Q 2001 1Q 2001
Millions of dollars

Exploration & Production
North America
Lower 48 (a) (b) 1 10 241
Alaska (6) 6 19
Canada (5) (12) 14
International
Far East 90 88 106
Other 12 (2) 22
Trade 1 (4) 3
Midstream 19 14 9
Geothermal and Power Operations 6 6 1
Corporate and Other
Administrative and General (24) (17) (23)
Interest Expense - Net (a) (37) (35) (33)
Environmental and Litigation (1) (4) (3)
Other (13) 8 (16)

Adjusted after-tax earnings $ 43 58 $ 340

(a) Includes amounts attributable to minority interests of:
Lower 48 (3) (5) (17)
Corporate and Other 2 2 1
(b) Includes earnings (loss) from:
Onshore / Shelf 10 19 264
Deep water (9) (9) (23)

ADJUSTED DISCRETIONARY CASH FLOW (unaudited) 1Q 2002 4Q 2001 1Q 2001
Millions except per share amounts

Adjusted after-tax earnings $ 43 $ 58 $ 340
Adjustments to earnings, excluding special items:
Depreciation, depletion and amortization 224 253 223
Dry hole costs 28 35 40
Amortization of exploratory leasehold costs 22 26 22
Deferred income taxes (10) 21 60
Exploration expenses 37 54 34
Capitalized interest (9) (8) (5)

Total adjusted discretionary cash flow $ 335 $ 439 $ 714

Diluted weighted average shares 245 245 256
Adjusted discretionary cash flow per share (diluted) 1.37 1.79 2.79

The preceding table of discretionary cash flow, excluding special items and all asset sales, is provided for analysts and others in the investment community as a supplement to conventional financial data prepared in accordance with generally accepted accounting principles. Discretionary cash flow assumes certain income taxes related to special items are deferred and does not give effect to significant uses of cash, including those for capital projects, debt reduction and regular dividends, some of which result from previous commitments, and should only be considered in conjunction with the full presentation of condensed consolidated cash flows in the company's quarterly fact book.

OPERATING HIGHLIGHTS (unaudited) 1Q 2002 4Q 2001 1Q 2001

North America Net Daily Production
Liquids (thousand barrels)
Lower 48 (a) (b) 56 59 53
Alaska 25 26 24
Canada 18 19 15

Total liquids 99 104 92
Natural gas - dry basis (million cubic feet)
Lower 48 (a) (b) 746 860 874
Alaska 101 101 138
Canada 90 89 140

Total natural gas 937 1,050 1,152
North America Average Prices (c)
Liquids (per barrel)
Lower 48 $ 18.48 $ 18.69 $ 26.75
Alaska $ 14.54 $ 16.80 $ 22.76
Canada $ 16.52 $ 13.49 $ 20.46
Average $ 17.19 $ 17.21 $ 24.60
Natural gas (per mcf)
Lower 48 $ 2.47 $ 2.50 $ 6.93
Alaska $ 1.57 $ 1.57 $ 1.20
Canada $ 2.25 $ 2.37 $ 4.22
Average $ 2.35 $ 2.40 $ 5.87

International Net Daily Production (d)
Liquids (thousand barrels)
Far East 53 57 50
Other (a) 20 19 19

Total liquids 73 76 69
Natural gas - dry basis (million cubic feet)
Far East 822 782 793
Other (a) 75 69 57

Total natural gas 897 851 850
International Average Prices (c)
Liquids (per barrel)
Far East $ 19.28 $ 18.68 $ 24.25
Other $ 21.96 $ 19.11 $ 25.55
Average $ 19.86 $ 18.80 $ 24.67
Natural gas (per mcf)
Far East $ 2.44 $ 2.45 $ 2.48
Other $ 2.48 $ 2.43 $ 2.89
Average $ 2.44 $ 2.45 $ 2.50

Worldwide Net Daily Production (a) (b) (d)
Liquids (thousand barrels) 172 180 161
Natural gas - dry basis (million cubic feet) 1,834 1,901 2,002
Barrels oil equivalent (thousands) 477 497 495
Worldwide Average Prices (c)
Liquids (per barrel) $ 18.28 $ 17.90 $ 24.63
Natural gas (per mcf) $ 2.39 $ 2.42 $ 4.41

(a) Includes proportional shares of production of equity investees.
(b) Includes amounts attributable to minority interests of :
Liquids 9 9 8
Natural gas 98 104 89
Barrels oil equivalent 25 26 23
(c) Average prices include hedging gains and losses but exclude gains or losses on derivative positions not accounted for as hedges, the ineffective portion of hedges and other Trade margins.
(d) International production is presented utilizing the economic interest method.

Updated: April 2002