press release

Unocal posts 4Q 2000 earnings of $173 million

El Segundo, Calif., Jan. 25, 2001 -- Unocal Corporation (NYSE: UCL) today reported net earnings of $173 million, or 70 cents per share (diluted), for the fourth quarter 2000.

Adjusted aftertax earnings from continuing operations for the quarter (excluding special items) were $261 million, or $1.04 per share (diluted).

The fourth quarter 2000 results compare with net earnings of $97 million, or 40 cents per share (diluted), in the same period a year ago. Adjusted aftertax earnings from continuing operations for the fourth quarter 1999 were $72 million, or 30 cents per share (diluted).

CONSOLIDATED RESULTS (unaudited) Unocal Corporation
Millions of dollars except per share amounts 4Q 2000 3Q 2000 4Q 1999

Adjusted after-tax earnings from continuing operations $ 261 $ 228 $ 72
Special items (88) (52) (1)

Earnings from continuing operations $ 173 $ 176 $ 71
Earnings from discontinued operations - 14 26

Net earnings $ 173 $ 190 $ 97

DILUTED EARNINGS PER SHARE DATA (unaudited)
Adjusted aftertax earnings per share from continuing operations $ 1.04 $ 0.92 $ 0.30

Net earnings per share:
Continuing operations $ 0.70 $ 0.71 $ 0.29
Discontinued operations - 0.06 0.11

Total net earnings per share $ 0.70 $ 0.77 $ 0.40

CASH FLOW DATA (unaudited)
Adjusted discretionary cash flow $ 677 $ 596 $ 384
Adjusted discretionary cash flow per share (diluted) $ 2.64 $ 2.33 $ 1.58

REVENUES FROM CONTINUING OPERATIONS (unaudited) $ 2,816 $ 2,391 $ 1,928

"The 260-percent increase in our adjusted aftertax earnings over 1999's fourth quarter was directly attributable to higher commodity prices, as well as increased production," said Charles R. Williamson, Unocal chief executive officer. "We had an 18-percent increase in our Lower 48 natural gas production. This continued a trend that started in the first quarter last year and allowed us to take advantage of higher market prices in the Lower 48."

The Lower 48 natural gas production increase was due mainly to the new Muni field on the Ship Shoal 295 lease offshore Louisiana, and various acquisitions. The Muni field came on production early in the fourth quarter.

In the Far East, Unocal's net natural gas production rose nearly 14 percent.

The company noted that it took a $20 million (aftertax) charge in the quarter for the Dana Point prospect deepwater well. Overall, the dry hole costs for the quarter were $36 million (aftertax). "We have already moved the Discoverer Spirit drillship to the Dendara prospect and expect to reach total depth on that well sometime in late March," Williamson said. The Dendara prospect is located on Green Canyon blocks 785 and 786. Unocal holds a 75-percent working interest in the prospect. Williamson noted that Unocal plans to drill or participate in 16 to 20 deepwater exploration wells in 2001, including its first deepwater wells offshore Brazil and Gabon.

"While there is risk in exploration, these prospects have significant resource potential," he said. "If we find commercial hydrocarbons on just one or two of these prospects, we would significantly add to the value of the company."

Commodity prices and production

Unocal's worldwide average realized natural gas price rose nearly 70 percent to $3.76 per thousand cubic feet (mcf), compared with the fourth quarter 1999. The average worldwide price for crude oil was $28.30 per barrel, up 39 percent.

Worldwide consolidated net daily production in the fourth quarter 2000 averaged 512,000 barrels-of-oil equivalent (BOE), compared with 490,000 BOE for the same period last year.

Lower 48 natural gas production in the fourth quarter was 852 million cubic feet per day (mmcfd), compared with 722 mmcfd in fourth quarter 1999. Far East natural gas production rose to 940 mmcfd, compared with 825 mmcfd in the same period a year ago.

Financial measures

Unocal's adjusted discretionary cash flow for the fourth quarter was $677 million, or $2.64 per share (diluted). This compares with $384 million, or $1.58 per share (diluted), in the same period of 1999.

Capital spending for the fourth quarter was $587 million, up from $410 million for the same period a year ago. The current quarter expenditures included $157 million to acquire additional interests in the Makassar Strait and Rapak production-sharing contracts in Indonesia.

The company's long-term debt (including current maturities) was $2.51 billion (44% debt-to-total capitalization ratio) at the end of 2000, 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 in 2001 on the strength of Unocal's forecasted earnings.

Fourth quarter revenues from continuing operations were $2.82 billion, up 46 percent from $1.93 billion in the same period a year ago.

Special items

Significant aftertax special items in the fourth quarter included a $33 million write-down of the company's Questa, New Mexico, molybdenum mining operation, a $28 million provision for environmental and litigation matters, and a $26 million charge covering deferred income tax adjustments and a provision for prior years' income tax matters.

Full-year 2000 results

For the full-year 2000, Unocal recorded net earnings of $760 million, or $3.08 per share (diluted) from continuing operations, on revenues of $9.34 billion. This compares with net earnings of $137 million, or 56 cents per share (diluted), on revenues from continuing operations of $6.06 billion last year.

Adjusted aftertax earnings from continuing operations for the year (excluding special items) were $798 million, or $3.22 per share, compared with $149 million, or 61 cents per share, for 1999.

CONSOLIDATED RESULTS (Unaudited) FOR THE 12 MONTHS ENDED DECEMBER 31
Millions of dollars except per share amounts 2000 1999

Adjusted aftertax earnings from continuing operations $ 798 $ 149
Special items (75) (36

Earnings from continuing operations $ 723 $ 113
Earnings from discontinued operations 37 24

Net earnings $ 760 $ 137

DILUTED EARNINGS PER SHARE DATA (Unaudited)
Adjusted aftertax earnings per share from continuing operations $ 3.22 $ 0.61

Net earnings per share:
Continuing operations $ 2.93 $ 0.46
Discontinued operations 0.15 0.10

Total net earnings per share $ 3.08 $ 0.56

CASH FLOW DATA (unaudited)
Adjusted discretionary cash flow $ 2,180 $ 1,233
Adjusted discretionary cash flow per share (diluted) $ 8.52 $ 5.07

REVENUES FROM CONTINUING OPERATIONS (Unaudited) $ 9,336 $ 6,057

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 production operations are located in North America (Gulf of Mexico region, Alaska and Canada) and in Asia (Thailand, Indonesia, and Bangladesh). 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. PST (4 p.m. EST) 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 Feb. 23, 2001.

In addition, complete detailed financial tables for the 4Q and full-year 2000 and the comparable prior periods are available in the "Quarterly Fact Book," which has been posted in the Unocal Investor Data Warehouse.

This news release contains certain forward-looking statements about exploration drilling, debt ratio and other financial measures. 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 and other reports report filed with the U.S. Securities and Exchange Commission. Unocal undertakes no obligation to update the information in this news release.

Production amounts include estimated minority interest and equity investee shares in the U.S. and host-country shares in Indonesia. Investors are urged to consider closely the disclosure in Unocal's 1999 Form 10-K and other reports. 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 AFTERTAX EARNINGS BY BUSINESS SEGMENT
    (UNAUDITED)                                 4th         3rd        4th
    Millions of dollars                       Quarter    Quarter     Quarter
                                                2000       2000        1999
    Exploration & Production
     North America
          Lower 48 (a) (b)                       149        104          26
          Alaska                                  23         22          20
          Canada (a)                              14         10           5
     International
          Far East                               127        120          57
          Other                                   14         15           4
    Global Trade                                   2         (1)          1
    Pipelines                                      7         16          16
    Geothermal and Power Operations                6          4           2
    Carbon & Minerals (a)                          1         10           1
    Corporate and Unallocated
          Administrative & General               (26)       (19)        (16)
          Interest Expense - Net (a)             (36)       (36)        (37)
          Environmental & Litigation              (2)        (5)         (2)
          Other                                  (18)       (12)         (5)
    Adjusted aftertax earnings
     from continuing operations                  261        228         $72
    Adjusted aftertax earnings
     from discontinued operations                 --         --           5
    Adjusted aftertax earnings                  $261       $228         $77
    (a) Includes minority interest
        expense of:
          Lower 48                               (14)       (14)         (4)
          Canada                                   1         (1)         (3)
          Carbon & Minerals                       --          1          --
          Corporate and Unallocated               --          1          (1)
    (b) Includes earnings (loss) from:
          Onshore / Shelf                        188        137          54
          Deepwater                              (39)       (33)        (28)

    DISCRETIONARY CASH FLOW                     4th        3rd         4th
    Millions except per share amounts         Quarter    Quarter     Quarter
                                                2000       2000        1999
    Adjusted aftertax earnings                  $261       $228         $77
    Adjustments to earnings,
     excluding special items:
       Depreciation, depletion
        and amortization                         250        239         225
       Dry hole costs                             58         47          41
       Deferred income taxes                      72         38         (16)
       Exploration expenses                       41         48          59
       Capitalized interest                       (5)        (4)         (2)
         Total adjusted discretionary
          cash flow                             $677       $596        $384

    Diluted weighted average shares              256        256         243
    Adjusted discretionary cash flow
     per share (diluted)                        2.64       2.33        1.58

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                        4th         3rd        4th
    (UNAUDITED)                               Quarter     Quarter    Quarter
                                                2000       2000        1999
    North America Net Daily Production
     Crude oil (thousand barrels)
      Lower 48 (a)                                46         46          41
      Alaska                                      25         25          28
      Canada (a)                                  15         15          14
        Total North America crude oil             86         86          83
     Natural gas - wet basis
      (million cubic feet)
      Lower 48 (a)                               852        793         722
      Alaska                                      90        131         154
      Canada (a)                                 104         98         105
        Total North America natural gas        1,046      1,022         981

    North America Average Prices (b)
     Crude oil (per barrel)
      Lower 48                                $30.43     $29.93      $21.90
      Alaska                                  $28.03     $25.72      $18.35
      Canada                                  $22.54     $27.34      $17.77
        Average North America
         crude oil prices                     $28.32     $28.25      $20.01
     Natural gas (per mcf)
      Lower 48                                 $5.27      $4.26       $2.41
      Alaska                                   $1.20      $1.20       $1.20
      Canada                                   $3.20      $2.66       $2.28
        Average North America
         natural gas prices                    $4.69      $3.69       $2.19

    International Net Daily Production (c)
     Crude oil (thousand barrels)
      Far East                                    69         69          76
      Other                                       17         18          21
        Total International crude oil             86         87          97
     Natural gas - wet basis
      (million cubic feet)
      Far East                                   940        950         825
      Other                                       58         53          53
        Total International natural gas          998      1,003         878

    International Average Prices (b)
     Crude oil (per barrel)
      Far East                                $28.07     $28.47      $20.08
      Other                                   $29.08     $29.24      $22.08
        Average International
         crude oil prices                     $28.28     $28.70      $20.73
     Natural gas (per mcf)
      Far East                                 $2.68      $2.44       $2.22
      Other                                    $2.86      $2.86       $2.74
        Average International
         natural gas prices                    $2.69      $2.47       $2.25

    Worldwide Net Daily Production (a) (c)
     Crude oil (thousand barrels)                172        173         180
     Natural gas - wet basis
      (million cubic feet)                     2,044      2,025       1,859
     Barrels oil equivalent (thousands)          512        511         490
    Worldwide Average Prices (b)
     Crude oil (per barrel)                   $28.30     $28.44      $20.34
     Natural gas (per mcf)                     $3.76      $3.11       $2.22

    (a) production includes 100 percent of consolidated
        subsidiaries and proportionate share of equity affiliates.
    (b) 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.
    (c) production includes certain host countries' shares of:

                               Crude oil          23         25          27
                             Natural gas         104        114          75

Updated: January 2001