press release

Unocal posts 3Q 2001 operating earnings of 52 cents per share

El Segundo, Calif., Oct. 24, 2001 - Unocal Corporation (NYSE: UCL) today reported adjusted aftertax earnings from continuing operations (excluding special items) in the third quarter were $127 million, or 52 cents per share (diluted). This compares with the latest Thompson/First Call estimates of 45 to 60 cents per share (51 cents per share consensus).

In the third quarter 2000, Unocal had adjusted aftertax earnings from continuing operations of $228 million, or 92 cents per share (diluted).

Including special items, Unocal's net earnings for the third quarter were $102 million, or 42 cents per share (diluted). This compares with net earnings in the same period a year ago of $190 million, or 77 cents per share (diluted). The year ago results included $14 million, or 6 cents per share, from discontinued operations.

CONSOLIDATED RESULTS (unaudited) Unocal Corporation
Millions of dollars except per share amounts 3Q 2001 2Q 2001 3Q 2000

Adjusted after-tax earnings from continuing operations $ 127 $ 228 $ 228
Special items (25) 7 (52)

Earnings from continuing operations $ 1022 $ 235 $ 176
Earnings from discontinued operations - 12 14

Net earnings $ 102 $ 247 $ 190

DILUTED EARNINGS PER SHARE DATA (unaudited)
Adjusted after-tax earnings per share from continuing operations $ 0.52 $ 0.92 $ 0.92

Net earnings per share:
Continuing operations $ 0.42 $ 0.95 $ 0.71
Discontinued operations - 0.04 0.06

Total net earnings per share $ 0.42 $ 0.99 $ 0.77

CASH FLOW DATA (unaudited)
Adjusted discretionary cash flow $ 526 $ 614 $ 596
Adjusted discretionary cash flow per share (diluted) $ 2.15 $ 2.39 $ 2.33

REVENUES FROM CONTINUING OPERATIONS (unaudited) $ 1,579 $ 1,696 $ 2,347

Production and prices

Unocal's third quarter 2001 earnings reflected declines in crude oil and natural gas prices, which were offset partially by higher worldwide production volumes, compared with the same period a year ago.

Net natural gas production in North America averaged 1,114 million cubic feet per day (mmcf/d), up from 1,001 mmcf/d last year. Net North America liquids (crude oil, condensate and natural gas liquids) production averaged 102,000 barrels per day (b/d), compared with 94,000 b/d in 2000.

Unocal's North America average price for natural gas was $2.85 per thousand cubic feet (mcf) in third quarter, down from $3.69 per mcf in the same period a year ago. The average price for liquids was $22.37 per barrel, off from $27.45.

Worldwide, Unocal's consolidated net daily production in the third quarter 2001 averaged 506,000 barrels-of-oil equivalent (BOE) per day, compared with 470,000 BOE a year ago. Average worldwide price for natural gas was $2.75 per mcf, down from $3.11 per mcf a year ago. Worldwide average liquids price was $22.87 per barrel, down from $27.90 in the third quarter 2000.

Financial measures

Unocal's adjusted discretionary cash flow for the third quarter was $526 million, or $2.15 per share (diluted). This compares with $596 million, or $2.33 per share (diluted), a year ago.

Capital spending in the third quarter was $437 million, compared with $314 million in the third quarter 2000. The capital spending in the current period excludes major acquisition costs.

The company's long-term debt (including current maturities) was $2.86 billion (43% debt-to-total capitalization ratio) at the end of the third quarter. This compares with $2.51 billion (44% debt-to-total capitalization ratio) at year-end 2000.

Third quarter revenues from continuing operations were $1.58 billion, compared with $2.35 billion in the third quarter 2000. The lower 2001 revenues primarily reflected reduced crude oil trading activity by the company's Trade segment, as well as lower commodity prices. Revenues from exploration and production operations were $871 million, compared with $885 million in the third quarter 2000.

Special items

In the third quarter 2001, Unocal recorded $26 million in environmental and litigation provisions. The company also recorded a $1 million gain in mark-to-market accruals and realized gains/losses by its Northrock Resources Ltd. subsidiary related to commodity derivative positions not accounted for as hedges.

Nine months results

For the first nine months of 2001, Unocal's adjusted aftertax earnings from continuing operations were $695 million, or $2.78 per share (diluted). This compares with $537 million, or $2.18 per share, for the first nine months of 2000. Including special items, discontinued operations and the cumulative effect of an accounting change, Unocal's net earnings for the first nine months were $644 million, or $2.59 per share (diluted), up from $587 million, or $2.37 per share in 2000.

Total revenues from continuing operations for the nine months were $5.49 billion, compared with $6.42 billion in 2000. Revenues from exploration and production operations were $3.06 billion, compared with $2.41 billion in the first nine months of last year.

CONSOLIDATED RESULTS (Unaudited) For the 9 months ended September 30
Millions of dollars except per share amounts 2001 2000

Adjusted after-tax earnings from continuing operations $ 695 $ 537
Special items (66) 13

Earnings from continuing operations $ 629 $ 550
Earnings from discontinued operations 16 37
Cumulative effect of accounting change (1) -

Net earnings $ 644 $ 587

DILUTED EARNINGS PER SHARE DATA (Unaudited)
Adjusted after-tax earnings per share from continuing operations $ 2.78 $ 2.18

Net earnings per share:
Continuing operations $ 2.53 $ 2.23
Discontinued operations 0.06 0.06

Total net earnings per share $ 2.59 $ 2.37

CASH FLOW DATA (unaudited)
Adjusted discretionary cash flow $ 1,854 $ 1,503
Adjusted discretionary cash flow per share (diluted) $ 7.21 $ 5.87

REVENUES FROM CONTINUING OPERATIONS (Unaudited) $ 5,489 $ 6,419

Earnings/production forecast

Unocal is forecasting adjusted earnings from continuing operations of 25 to 35 cents per share in the fourth quarter 2001, reflecting continued lower U.S. commodity prices.

The fourth quarter earnings forecast assumes average NYMEX benchmark prices of $22.25 per barrel of crude oil and $2.55 per million British thermal units (mmBtus) for Lower 48 natural gas.

Unocal's fourth-quarter forecasted earnings are expected to change 3 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 Lower 48 natural gas price.

The company expects that net daily worldwide production for the fourth quarter 2001 will average between 500,000 and 510,000 BOE.

The forecast also assumes pretax dry hole costs in the fourth quarter of $20 to $25 million.

About Unocal Corporation

Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. The company's principal exploration and production operations are located in North America (Gulf of Mexico region, Alaska and Canada) and in Asia (Thailand, Indonesia, Myanmar, Bangladesh and Azerbaijan). The company is also pursuing exploration programs in West Africa and Brazil.

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 Presentations section of the Unocal website. Replays of the conference call, including questions and answers, will be available until Nov. 30, 2001.

In addition, complete detailed financial tables for the 3Q 2001 and the comparable prior periods are available in the "Quarterly Fact Book," which has been posted in the Unocal Investor Data Warehouse on the website.

This news release contains certain forward-looking statements about commodity prices, production, dry hole costs, and earnings. 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 2000 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.

Production amounts include minority interest and equity investee shares in the U.S. Investors are urged to consider closely the disclosure in Unocal's 2000 Form 10-K and other reports (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)
                                                 3Q          2Q          3Q
    Millions of dollars                         2001        2001        2000
    Exploration & Production
       North America
              Lower 48 (a) (b)                    51         142         104
              Alaska                              17          13          22
              Canada (a)                           5          (7)         10
       International
              Far East                           109         113         120
              Other                                2           5          15
    Trade                                          3           4          (1)
    Midstream                                     13          18          16
    Geothermal and Power Operations                2           2           4
    Corporate and Other
              Administrative & General           (19)        (21)        (19)
              Interest Expense - Net (a)         (31)        (32)        (36)
              Environmental & Litigation          (4)         (2)         (5)
              Other                              (21)         (7)         (2)
    Adjusted after-tax earnings from
     continuing operations                       127        $228         228
    (a)  Includes minority interests of:
              Lower 48                           (10)        (15)        (14)
              Canada                               -           -          (1)
              Corporate and Other                  2           1           2
    (b)  Includes earnings (loss) from:
              Onshore / Shelf                     58         150         137
              Deepwater                           (7)         (8)        (33)


    ADJUSTED DISCRETIONARY CASH FLOW (UNAUDITED) 3Q          2Q          3Q
    Millions except per share amounts           2001        2001        2000
    Adjusted after-tax earnings                 $127        $228        $228
    Adjustments to earnings, excluding
     special items:
          Depreciation, depletion and
           amortization                          270         268         239
          Dry hole costs                          53          47          47
          Deferred income taxes                   47          45          38
          Exploration expenses                    37          32          48
          Capitalized interest                    (8)         (6)         (4)
             Total adjusted discretionary
              cash flow                         $526        $614        $596

    Diluted weighted average shares              245         257         256
    Adjusted discretionary cash flow per
     share (diluted)                            2.15        2.39        2.33

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)              3Q          2Q          3Q
                                                 2001        2001        2000
    North America Net Daily Production
      Crude oil, condensate and natural
       gas liquids (thousand barrels)
         Lower 48 (a)                             60          59          53
         Alaska                                   26          24          25
         Canada (a)                               16          15          16
              Total crude oil, condensate
               and natural gas liquids           102          98          94
      Natural gas - dry basis (million
       cubic feet)
         Lower 48 (a)                            939         954         777
         Alaska                                   83          93         128
         Canada (a)                               92          85          96
              Total natural gas                1,114       1,132       1,001
    North America Average Prices (b)
      Crude oil, condensate and natural
       gas liquids (per barrel)
         Lower 48                             $23.11      $24.57      $28.45
         Alaska                               $21.58      $22.27      $25.70
         Canada                               $20.89      $20.84      $26.89
              Average                         $22.37      $23.45      $27.45
      Natural gas (per mcf)
         Lower 48                              $2.97       $4.62       $4.26
         Alaska                                $1.57       $1.20       $1.20
         Canada                                $2.76       $2.48       $2.66
              Average                          $2.85       $4.16       $3.69
    International Net Daily Production
      Crude oil, condensate and natural
       gas liquids  (thousand barrels)
         Far East                                 49          48          47
         Other                                    19          19          18
              Total crude oil, condensate
               and natural gas liquids            68          67          65
      Natural gas - dry basis (million
       cubic feet)
         Far East                                833         908         816
         Other                                    66          69          52
              Total natural gas                  899         977         868
    International Average Prices (b)
      Crude oil, condensate and natural
       gas liquids (per barrel)
         Far East                             $23.04      $24.91      $28.30
         Other                                $25.27      $27.51      $29.24
              Average                         $23.65      $25.61      $28.57
      Natural gas (per mcf)
         Far East                              $2.62       $2.54       $2.44
         Other                                 $2.80       $2.92       $2.86
              Average                          $2.63       $2.56       $2.47
    Worldwide Net Daily Production (a)
      Crude oil, condensate and natural
       gas liquids  (thousand barrels)           170         165         159
      Natural gas - dry basis (million
       cubic feet)                             2,013       2,109       1,869
      Barrels oil equivalent (thousands)         506         516         470
    Worldwide Average Prices (b)
      Crude oil, condensate and natural
       gas liquids (per barrel)               $22.87      $24.33      $27.90
      Natural gas (per mcf)                    $2.75       $3.41       $3.11

    (a)  Production includes 100 percent of production of consolidated
          subsidiaries and proportional shares of production of equity
          investees.
    (b)  Average prices include hedging gains and losses but exclude gains or
          losses on derivative positions not accounted for as hedges and other
          Trade margins.

Updated: October 2001