press release

Unocal posts 3Q 2000 earnings of $190 million

El Segundo, Calif., Oct 25, 2000 -- Unocal Corporation (NYSE: UCL) today reported net earnings of $190 million, or 77 cents per share (diluted), for the third quarter 2000.

Earnings from continuing operations were $176 million, or 71 cents per share (diluted). Adjusted aftertax earnings from continuing operations for the quarter (excluding special items) were $228 million, or 92 cents per share (diluted).

CONSOLIDATED RESULTS (unaudited) Unocal Corporation
Millions of dollars except per share amounts 3Q 2000 2Q 2000 3Q 1999

Adjusted after-tax earnings from continuing operations $ 228 $ 170 $ 44
Special items (52) 80 (12)

Earnings from continuing operations $ 176 $ 250 $ 32
Earnings from discontinued operations 14 14 (8)

Net earnings $ 190 $ 264 $ 24

DILUTED EARNINGS PER SHARE DATA (unaudited)
Adjusted after-tax earnings per share from continuing operations $ 0.92 $ 0.69 $ 0.19

Net earnings per share:
Continuing operations $ 0.71 $ 1.00 $ 0.13
Discontinued operations 0.06 0.05 (0.03)

Total net earnings per share $ 0.77 $ 1.05 $ 0.10

CASH FLOW DATA (unaudited)
Adjusted discretionary cash flow $ 596 $ 495 $ 285
Adjusted discretionary cash flow per share (diluted) $ 2.33 $ 1.93 $ 1.17

REVENUES FROM CONTINUING OPERATIONS (unaudited) $ 2,391 $ 2,248 $ 1,520

The third quarter 2000 results compare with net earnings of $24 million, or 10 cents per share (diluted), in the same period a year ago. Adjusted aftertax earnings from continuing operations for the third quarter 1999 were $44 million, or 19 cents per share (diluted).

"Oil and gas commodity prices remained strong throughout the quarter," said Roger C. Beach, Unocal chairman and chief executive officer. "We continued to improve production, particularly in the Lower 48, to take advantage of these higher prices."

The company noted that it took a $15 million (aftertax) charge in the quarter for the Sumatra prospect deepwater well that was drilled in 1999. "We have a particularly robust deepwater Gulf of Mexico drilling program planned for our new drillship," Beach said. "Because it will be some time before we can conduct any further evaluation of this prospect, accounting rules required the company to take the charge at this time."

Commodity prices and production

Unocal's worldwide average realized natural gas price rose 50 percent to $3.11 per thousand cubic feet (mcf), compared with the third quarter 1999. The average worldwide price for crude oil was $28.44 per barrel, up 71 percent.

Worldwide consolidated net daily production (including host country share in Indonesia) averaged 511,000 barrels-of-oil equivalent (BOE), compared with 491,000 BOE for the same period last year. The higher third quarter Lower 48 natural gas production continued an upward trend that began with the fourth quarter 1999.

Financial measures

Unocal's adjusted discretionary cash flow for the third quarter was $596 million, or $2.33 per share (diluted). This compares with $285 million, or $1.17 per share (diluted), in the same period of 1999.

Capital spending for the third quarter was $314 million, up from $293 million for the same period a year ago.

The company's long-term debt (including current maturities) was $2.74 billion (47% debt-to-total capitalization ratio) at the end of the third quarter, compared with $2.85 billion (51% debt-to-total capitalization ratio) at the end of 1999. The debt-to-total capitalization ratio should continue to decline over the remainder of 2000 on the strength of Unocal's forecasted earnings.

Third quarter revenues from continuing operations were $2.39 billion, up 57 percent from $1.52 billion in the same period a year ago.

Discontinued operations/special items

The company completed the sale of its agricultural products business (a discontinued operation) in September. An aftertax gain of $14 million, or 6 cents per share (diluted), was recorded in the third quarter from the sale.

Special items included net aftertax provisions of $38 million for environmental and litigation matters and an aftertax loss of $40 million related to mark-to-market commodity derivative positions held by the company's Northrock subsidiary that were not accounted for as hedges. These negative factors were partially offset by $26 million in net benefits related to adjustments to provisions covering prior-year foreign and U.S. income tax matters.

Earnings/production forecast

"We are projecting 4Q 2000 adjusted earnings from continuing operations of 90 to 95 cents per share, depending on the outcome of our deepwater GOM results, and other factors," Beach said.

The company's fourth quarter forecast assumes average NYMEX benchmark commodity prices of $31 per barrel for West Texas Intermediate (WTI) crude oil and $5 per mmBtus for Henry Hub natural gas. For the full-year 2000, Unocal currently estimates earnings of between $3.08 and $3.13 per share. The full-year forecast assumes average benchmark commodity prices of $30 per barrel for West Texas Intermediate (WTI) crude oil and $3.90 per mmBtu for Henry Hub natural gas.

The company expects that net daily worldwide production for the fourth quarter 2000 will average about 520,000 BOE, up 2 percent from the third quarter level. The 4Q increase is driven principally by new natural gas production from the Muni field on the Gulf of Mexico shelf.

Nine-months results

For the first nine months of 2000, Unocal recorded net earnings of $587 million, or $2.37 per share (diluted), on revenues of $6.52 billion. This compares with net earnings of $40 million, or 17 cents per share (diluted), on revenues from continuing operations of $4.13 billion last year.

Earnings from continuing operations for the nine months were $550 million, or $2.23 per share (diluted), up from $42 million, or 18 cents per share (diluted), last year. Adjusted aftertax earnings from continuing operations for the nine months (excluding special items) were $537 million, or $2.18 per share, compared with $77 million, or 32 cents per share, reported in the same period of 1999.

CONSOLIDATED RESULTS (unaudited) FOR THE 9 MONTHS ENDED SEPTEMBER 30
Millions of dollars except per share amounts 2000 1999

Adjusted after-tax earnings from continuing operations $ 537 $ 77
Special items 13 (35)

Earnings from continuing operations $ 550 $ 42
Earnings from discontinued operations 37 (2)

Net earnings $ 587 $ 40

DILUTED EARNINGS PER SHARE DATA (unaudited)
Adjusted after-tax earnings per share from continuing operations $ 2.18 $ 0.32

Net earnings per share:
Continuing operations $ 2.23 $ 0.18
Discontinued operations 0.14 (0.01)

Total net earnings per share $ 2.37 $ 0.17

CASH FLOW DATA (unaudited)
Adjusted discretionary cash flow $ 1,503 $ 849
Adjusted discretionary cash flow per share (diluted) $ 5.87 $ 3.49

REVENUES FROM CONTINUING OPERATIONS (unaudited) $ 6,520 $ 4,129

About Unocal Corporation

Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. At year-end 1999, Unocal had worldwide natural gas reserves of 6.6 trillion cubic feet, representing two-thirds of the company's overall hydrocarbon reserves. Unocal's net worldwide natural gas production currently averages 2 billion cubic feet per day. This includes about 1 billion cubic feet per day in North America, where Unocal is one of the largest independent natural gas producers.

Conference call/financial database

Complete detailed financial tables for the 3Q 2000 are available on the Unocal web site in the Investor Data Warehouse.

This news release contains certain forward-looking statements about production rates, earnings and commodity prices. 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 1999 Form 10-K report filed with the U.S. Securities and Exchange Commission. Unocal undertakes no obligation to update the information in this news release.

U.S. investors are urged to consider closely the disclosure in Unocal's 1999 Form 10-K.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.

ADJUSTED DISCRETIONARY CASH FLOW               3rd       2nd       3rd
    (UNAUDITED)                                  Quarter   Quarter   Quarter
    Millions except per share amounts              2000      2000      1999
    Adjusted after-tax earnings                    $228      $170       $42
    Adjustments to earnings, excluding special
     items:
      Depreciation, depletion and amortization      239       224       205
      Dry hole costs                                 47        37        33
      Deferred income taxes                          38        30       (34)
      Exploration expenses                           48        37        44
      Capitalized interest                           (4)       (3)       (5)
        Total adjusted discretionary cash flow     $596      $495      $285

    Diluted weighted average shares                 256       256       244
    Adjusted discretionary cash flow per share
     (diluted)                                     2.33      1.93      1.17

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.

ADJUSTED AFTER-TAX EARNINGS
     BY BUSINESS SEGMENT                            3rd       2nd       3rd
    (UNAUDITED)                                  Quarter   Quarter   Quarter
    Millions of dollars                            2000      2000      1999
    Exploration & Production
      North America
        Lower 48 (a) (b)                            104        92        17
        Alaska                                       22        23         8
        Canada (a)                                   10       (11)        -
      International
        Far East                                    120        88        78
        Other                                        15        19        (7)
    Global Trade                                     (1)        6        (5)
    Pipelines                                        16        15        13
    Geothermal and Power Operations                   4         5         2
    Carbon & Minerals (a)                            10         6         6
    Corporate and Unallocated
        Administrative & General                    (19)      (21)      (23)
        Interest Expense - Net (a)                  (36)      (37)      (36)
        Environmental & Litigation                   (5)       (3)       (2)
        Other                                       (12)      (12)       (7)
    Adjusted after-tax earnings from
     continuing operations                          228      $170       $44
    Adjusted after-tax earnings from
     discontinued operations                          -         -        (2)
    Adjusted after-tax earnings                    $228      $170       $42
    (a) Includes minority interests of:
        Lower 48                                    (14)       (6)       (4)
        Canada                                       (1)       12        (1)
        Carbon & Minerals                             1        (1)       (1)
        Corporate and Unallocated                     1         1         2

    (b) Includes earnings (loss) from:
        Onshore / Shelf                             137       105        35
        Deepwater                                   (33)      (13)      (18)


    OPERATING HIGHLIGHTS                           3rd       2nd       3rd
    (UNAUDITED)                                  Quarter   Quarter   Quarter
                                                   2000      2000      1999
    North America Net Daily Production
      Crude oil (thousand barrels)
        Lower 48 (a)                                 46        44        40
        Alaska                                       25        26        27
        Canada (a)                                   15        15        15
          Total North America crude oil              86        85        82
      Natural gas - wet basis (million cubic feet)
        Lower 48 (a)                                793       756       729
        Alaska                                      131       138       106
        Canada (a)                                   98        94       110
          Total North America natural gas         1,022       988       945
    North America Average Prices (c)
      Crude oil (per barrel)
        Lower 48                                 $29.93    $27.12    $18.32
        Alaska                                   $25.72    $23.81    $14.50
        Canada                                   $27.34    $21.88    $13.69
          Average North America crude oil
           prices                                $28.25    $25.12    $16.20
      Natural gas (per mcf)
        Lower 48                                 $ 4.26    $ 3.41    $ 2.26
        Alaska                                   $ 1.20    $ 1.20    $ 1.20
        Canada                                   $ 2.66    $ 1.73    $ 2.05
          Average North America natural gas
           prices                                $ 3.69    $ 2.91    $ 2.11
    International Net Daily Production (b)
      Crude oil (thousand barrels)
        Far East                                     69        71        73
        Other                                        18        19        25
          Total International crude oil              87        90        98
      Natural gas - wet basis (million cubic feet)
        Far East                                    950       945       884
        Other                                        53        58        39
          Total International natural gas         1,003     1,003       923
    International Average Prices (c)
      Crude oil (per barrel)
        Far East                                 $28.47    $24.40    $16.43
        Other                                    $29.24    $26.38    $18.69
          Average International crude oil
           prices                                $28.70    $25.10    $17.21
      Natural gas (per mcf)
        Far East                                 $ 2.44    $ 2.31    $ 2.02
        Other                                    $ 2.86    $ 2.80    $ 2.23
          Average International natural gas
           prices                                $ 2.47    $ 2.35    $ 2.03
    Worldwide Net Daily Production (a) (b)
      Crude oil (thousand barrels)                  173       175       180
      Natural gas - wet basis (million cubic
       feet)                                      2,025     1,991     1,868
      Barrels Oil Equivalent (thousands)            511       507       491
    Worldwide Average Prices (c)
      Crude oil (per barrel)                     $28.44    $25.11    $16.65
      Natural gas (per mcf)                      $ 3.11    $ 2.64    $ 2.07
    (a) production includes 100 percent of
        consolidated subsidiaries and
        proportionate share of equity
        affiliates.
    (b) production includes certain host
        countries' shares of:    Crude oil           25        27        30
                                 Natural gas        114        99        95
    (c) average prices include hedging gains
        and losses but exclude gains or losses
        on derivative positions not accounted
        for as hedges and other Global Trade
        margins.


Updated: October 2000