press release

Unocal posts 4Q 2001 adjusted operating earnings of 24 cents per share

El Segundo, Calif., Jan. 29, 2002 - Unocal Corporation (NYSE: UCL) today reported adjusted aftertax earnings from continuing operations (excluding special items) in the fourth quarter were $58 million, or 24 cents per share (diluted). This compares with the Thompson/First Call consensus (Published Jan. 28, 2002) of 23 cents per share.

In the fourth quarter 2000, Unocal had adjusted aftertax earnings from continuing operations of $261 million, or $1.04 per share (diluted).

Including special items, Unocal reported a preliminary unaudited net loss of $29 million, or 12 cents per share (diluted), for the fourth quarter. This compares with net earnings in the same period a year ago of $173 million, or 70 cents per share (diluted).

Consolidated Results (unaudited) Unocal Corporation 4Q 2001 3Q 2001 4Q 2000
Millions of dollars except per share amounts

Adjusted after-tax earnings from continuing operations $ 58 $ 127 $ 261
Special items (88) (25) (88)

Earnings (loss) from continuing operations $ (30) $ 102 $ 173
Earnings from discontinued operations 1 - -

Net earnings (loss) $ (29) $ 102 $ 173

Diluted Earnings per Share Data (unaudited)
Adjusted after-tax earnings per share from continuing operations $ 0.24 $ 0.52 $ 1.04

Net earnings (loss) per share:
Continuing operations $ (0.13) $ 0.42 $ 0.70
Discontinued operations 0.01 - -

Total net earnings (loss) per share $ (0.12) $ 0.42 $ 0.70

Cash Flow Data (unaudited)
Adjusted discretionary cash flow $ 439 $ 526 $ 677
Adjusted discretionary cash flow per share (diluted) $ 1.79 $ 2.15 $ 2.64

Revenues from Continuing Operations (unaudited) $ 1,263 $ 1,579 $ 2,783

Prices and production

Unocal's fourth quarter 2001 earnings reflected declines in natural gas and crude oil prices, compared with the same period a year ago.

Worldwide, Unocal's consolidated net daily production in the fourth quarter 2001 averaged 497,000 barrels-of-oil equivalent (BOE) per day, compared with 475,000 BOE a year ago. Average worldwide price for natural gas was $2.42 per mcf, down from $3.76 per mcf a year ago. Worldwide average liquids price was $17.90 per barrel, down from $28.12 in the fourth quarter 2000.

Financial measures

Unocal's adjusted discretionary cash flow for the fourth quarter was $439 million, or $1.79 per share (diluted). This compares with $677 million, or $2.64 per share (diluted), a year ago.

Capital spending in the fourth quarter was $580 million, essentially unchanged from the fourth quarter 2000. The fourth quarter spending includes $113 million to acquire a portion of Forest Oil Corporation's interests in certain Gulf of Mexico shelf properties. The fourth quarter 2000 total 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 $2.91 billion (44% debt-to-total capitalization ratio) at the end of the fourth quarter. This compares with $2.51 billion (44% debt-to-total capitalization ratio) at year-end 2000.

Fourth quarter revenues from continuing operations were $1.26 billion, compared with $2.78 billion in the fourth 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, net of purchases, from exploration and production operations were $763 million, compared with $1.07 billion in the fourth quarter 2000.

Special items

Fourth quarter 2001 special items include an $86 million non-cash aftertax charge for impairment of certain Gulf of Mexico shelf properties, due principally to lower commodity prices.

Unocal also recorded a $24 million aftertax charge for environmental and litigation matters.

These negative special items were partially offset by a $17 million aftertax gain from the sale of a Gulf of Mexico production property and a $5 million aftertax gain in mark-to-market accruals for non-hedge commodity derivatives.

Full-year 2001 results

For the full-year 2001, Unocal's adjusted aftertax earnings from continuing operations were $753 million, or $3.04 per share (diluted). This compares with $798 million, or $3.22 per share, for the full-year 2000. Including special items, discontinued operations and the cumulative effect of an accounting change, Unocal's preliminary unaudited net earnings for full-year 2001 were $615 million, or $2.50 per share (diluted), down from $760 million, or $3.08 per share in 2000.

For the full year 2001, special items included the $86 million non-cash charge for impairments and a $95 million aftertax charge for environmental and litigation matters. These negative special items were partially offset by the $17 million aftertax gain from the sale of a Gulf of Mexico production property, a $10 million aftertax gain on mark-to-market accruals for non-hedge commodity derivatives and a $17 million aftertax gain related to certain gasoline margins subject to a participation agreement tied to Unocal's former West Coast refining, marketing and transportation assets.

Total revenues from continuing operations for the 12 months were $6.75 billion, compared with $9.20 billion in 2000. Revenues, net of purchases, from exploration and production operations were $3.82 billion, compared with $3.48 billion in 2000.

Consolidated Results (unaudited) For the Year Ended December 31
Millions of dollars except 2001 2000

Adjusted afte-tax earnings from continuing operations $ 753 $ 798
Special items (154) (75)

Earnings from continuing operations $ 599 $ 723
Earnings from discontinued operations 17 37
Cumulative effect of accounting change (1) -

Net earnings $ 615 $ 760

Diluted Earnings per Share Data (unaudited)
Adjusted aftertax earnings per share from continuing operations $ 3.04 $ 3.22

Net earnings per share:
Continuing operations $ 2.43 $ 2.93
Discontinued operations 0.07 0.15

Total net earnings per share $ 2.50 $ 3.08

Cash Flow Data (unaudited)
Adjusted discretionary cash flow $ 2,293 $ 2,180
Adjusted discretionary cash flow per share (diluted) $ 8.92 $ 8.52

Revenues from Continuing Operations (unaudited) $ 6,752 $ 9,202

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 oil and gas operations are located in North America (Gulf of Mexico region, Permian Basin, Alaska and Canada) and in Asia (Thailand, Myanmar, Indonesia, Bangladesh and Azerbaijan). The company is also pursuing exploration programs in Brazil 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. 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. 28, 2002.

In addition, complete detailed financial tables for the fourth quarter and full-year 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 web site.

ADJUSTED AFTER-TAX EARNINGS
BY BUSINESS SEGMENT (UNAUDITED)                 4Q      3Q      4Q
Millions of dollars                            2001    2001    2000

Exploration & Production
North America
Lower 48(a)(b)                                  10        51     149
Alaska                                           6        17      23
Canada(a)                                      (12)        5       6
International
Far East                                        82       109     127
Other                                            4         2      14
Trade                                           (4)        3       2
Midstream                                        14       13      15
Geothermal and Power Operations                   6        2       6
Corporate and Other
Administrative & General                        (17)     (19)    (26)
Interest Expense - Net(a)                       (35)     (31)    (36)
Environmental & Litigation                       (4)      (4)     (2)
Other                                             8      (21)    (17)
Adjusted after-tax earnings from
continuing operations                            58       127     261
(a)Includes minority interests of:
Lower 48                                        (5)      (10)    (14)
Canada                                          --        --       1
Corporate and Other                              2         2      --
(b)Includes earnings (loss) from:
Onshore / Shelf                                 19        58     188
Deepwater                                       (9)       (7)    (39)


ADJUSTED DISCRETIONARY CASH FLOW (UNAUDITED)     4Q       3Q      4Q
Millions except per share amounts               2001     2001    2000

Adjusted after-tax earnings                     $58      $127    $261
Adjustments to earnings, excluding
special items:
Depreciation, depletion and amortization        279       270     250
Dry hole costs                                   35        53      58
Deferred income taxes                            21        47      72
Exploration expenses                             54        37      41
Capitalized interest                             (8)       (8)     (5)
Total adjusted discretionary cash flow          $439      $526    $677
Diluted weighted average shares                  245       245     256
Adjusted discretionary cash flow per share
(diluted)                                       1.79      2.15    2.64

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 that 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)             4Q        3Q        4Q
                                            2001      2001      2000
North America Net Daily Production
Crude oil, condensate and natural gas
liquids (thousand barrels)
Lower 48(a)(b)                               59        60       52
Alaska                                       26        26       25
Canada                                       19        16       16
Total crude oil, condensate and
natural gas liquids                         104       102       93
Natural gas - dry basis
(million cubic feet)
Lower 48(a)(b)                              860       939      840
Alaska                                      101        83       87
Canada                                       89        92      105
Total natural gas                         1,050     1,114    1,032
North America Average Prices(c)
Crude oil, condensate and natural gas
liquids (per barrel)
Lower 48                                 $18.69    $23.11   $29.69
Alaska                                   $16.80    $21.58   $28.02
Canada                                   $13.49    $20.89   $22.55
Average                                  $17.21    $22.37   $27.97
Natural gas (per mcf)
Lower 48                                  $2.50     $2.97    $5.27
Alaska                                    $1.57     $1.57    $1.20
Canada                                    $2.37     $2.76    $3.20
Average                                   $2.40     $2.85    $4.69
International Net Daily Production
Crude oil, condensate and natural gas
liquids (thousand barrels)
Far East                                     57        49       50
Other(a)                                     19        19       17
Total crude oil, condensate and
natural gas liquids                          76        68       67
Natural gas - dry basis
(million cubic feet)
Far East                                    782       833      799
Other(a)                                     69        66       56
Total natural gas                           851       899      855
International Average Prices(c)
Crude oil, condensate and natural gas
liquids (per barrel)
Far East                                 $18.68    $23.04   $28.16
Other                                    $19.11    $25.27   $29.08
Average                                  $18.80    $23.65   $28.34
Natural gas (per mcf)
Far East                                  $2.45     $2.62    $2.68
Other                                     $2.43     $2.80    $2.86
Average                                   $2.45     $2.63    $2.69
Worldwide Net Daily Production(a)(b)
Crude oil, condensate and natural
gas liquids (thousand barrels)              180       170      160
Natural gas - dry basis (million
cubic feet)                               1,901     2,013    1,887
Barrels oil equivalent (thousands)          497       506      475
Worldwide Average Prices(c)
Crude oil, condensate and natural gas
liquids (per barrel)                     $17.90    $22.87   $28.12
Natural gas (per mcf)                     $2.42     $2.75    $3.76

(a)Production includes proportional shares of production of equity
investees.
(b) Includes minority interest shares of:

Crude oil , condensate and
natural gas liquids                         9         9        8
Natural gas                               104       111       77
Barrels oil equivalent                     26        27       21

(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.

Updated: January 2002