press release

Unocal posts sharply higher 1Q 2000 earnings on stronger crude, natgas prices

El Segundo, Calif., April 26, 2000 -- Unocal Corporation today reported first quarter 2000 net earnings of $133 million, or 55 cents per share (diluted). Adjusted net earnings (excluding special items) were $139 million, or 57 cents per share (diluted).

The first quarter results compare with net earnings of $7 million, or 3 cents per share, for the same period a year ago. Adjusted net earnings in the first quarter 1999 were $20 million, or 8 cents per share.

CONSOLIDATED RESULTS (unaudited) Unocal Corporation
Millions of dollars except per share amounts 1Q 2000 4Q 1999 1Q 1999

Earnings from continuing operations $ 124 $ 71 $ 4
Earnings from discontinued operations 9 26 3

Net earnings $ 133 $ 97 $ 7
Special items $ (6) $ 20 $ (13)

Adjusted net earnings $ 139 $ 77 $ 20
Diluted net earnings per share:
Continuing operations $ 0.51 $ 0.29 $ 0.02
Discontinued operations $ 0.04 $ 0.11 $ 0.01

Diluted net earnings per share $ 0.55 $ 0.40 $ 0.03
Diluted adjusted net earnings per share $ 0.57 $ 0.32 $ 0.08

Adjusted discretionary cash flow $ 412 $ 384 $ 256
Adjusted discretionary cash flow per share $ 1.70 $ 1.58 $ 1.06

Total revenues from continuing operations $ 1,881 $ 1,928 $ 1,168

"The strength of our sustaining production portfolio enabled us to take advantage of higher crude oil and natural gas prices, which were a key factor in Unocal's improved earnings performance," said Roger C. Beach, Unocal chairman and chief executive officer.

"We are also making strides to reduce continuing expenses, while moving forward on additional programs to lower our cost structure," Beach said. The special adjustments in the first quarter included an $11 million (aftertax) restructuring charge. The restructuring program is expected to reduce Unocal's annualized aftertax salaries and benefits expense by $14 million.

Commodity prices and production

Compared with the first quarter 1999, Unocal's worldwide average crude oil price rose $13.99 per barrel, or 135 percent, to $24.39 per barrel. Realized price for natural gas was $2.25 per thousand cubic feet (mcf), up 23 percent from a year ago.

Worldwide consolidated net daily production was 506,000 barrels-of-oil-equivalent (BOE), compared with 469,000 BOE in 1999.

Adjusted discretionary cash flow for the first quarter was $412 million, or $1.70 per share. This compares with $256 million, or $1.06 per share, in the same period of 1999.

Capital spending for the first quarter was $295 million, up from $225 million in the first quarter a year ago.

First quarter revenues from continuing operations were $1.88 billion, up 61 percent from $1.17 billion last year.

Discontinued operations

The reported results also included earnings of $9 million, or 4 cents per share (diluted), from the company's agricultural products business (discontinued operations). The company is in the process of completing the sale of this business unit. The sale is dependent on clearance by the U.S. Federal Trade Commission.

Excluding agricultural products, Unocal's earnings from continuing operations were $124 million, or 51 cents per share, for the first quarter 2000.

Earnings forecast

"Assuming an average WTI price of $25.60 per barrel of oil and Henry Hub price of $2.95 per mmBtu of gas, we are projecting that 2Q earnings will exceed 50 cents per share. How much we exceed the 50 cents per share will depend upon the results of our drilling on a key deepwater Gulf of Mexico project and other factors," Beach said.

Beach added that for the full-year 2000 Unocal is forecasting earnings of $2.20 to $2.50 per share, also dependent on the company's deepwater drilling success. This forecast is based on an average WTI price of $25.70 per barrel for oil and a Henry Hub price of $2.90 per mmBtu for gas.

Unocal is a leading independent oil and gas exploration and production company with pipeline and power plant projects worldwide.

Forward looking statements and projections regarding future earnings and oil and gas commodity prices in this news release are based on assumptions about operational, market, competitive, regulatory, environmental, political and other considerations. Actual results could differ materially as a result of factors discussed in Unocal's 1999 Form 10-K filed with the U.S. Securities and Exchange Commission.

ADJUSTED EARNINGS BY BUSINESS SEGMENT                 Unocal Corporation
    (After-tax)(Unaudited)

                                               1st         4th        1st
                                             Quarter     Quarter    Quarter
    Millions of dollars                       2000        1999       1999

    Exploration & Production
      North America
        Lower 48 (a) (b)                        63          26           1
        Alaska                                  24          20           2
        Canada (a)                               4           5           4
    International
        Far East                                82          57          48
        Other                                   (2)          4         (19)
    Global Trade                                (2)          1           2
    Pipelines                                   15          16          17
    Geothermal and Power Operations              9           2          10
    Carbon & Minerals (a)                        8           1           9
    Corporate and Unallocated
        Administrative & General               (22)        (16)        (21)
        Interest Expense - Net (a)             (36)        (37)        (31)
        Environmental & Litigation              (3)         (2)         (2)
        Other                                   (1)         (5)         (3)

    Adjusted after-tax earnings
     from continuing operations                139          72          17
    Adjusted after-tax earnings
     from discontinued operations               --           5           3
    Adjusted after-tax earnings               $139         $77         $20

    (a)  Includes minority interests of:
          Lower 48                              (5)         (4)          1
          Canada                                 8          (3)         --
          Carbon & Minerals                     --          --          (1)
          Corporate and Unallocated              1          (1)         --
    (b)  Includes earnings (loss) from:
          Onshore / Shelf                       75          54          16
          Deepwater                            (12)        (28)        (15)


    ADJUSTED DISCRETIONARY CASH FLOW                     Unocal Corporation
    (Unaudited)

                                                4th         1st        4th
                                               Quarter    Quarter   Quarter
    Millions except per share amounts           2000        1999      1999

    Adjusted after-tax earnings                 $139         $77        $20

    Adjustments to earnings, excluding
     special items:
      Depreciation, depletion and amortization   206         225        200
      Dry hole costs                              14          41         27
      Deferred income taxes                        6         (16)       (24)
      Exploration expenses                        49          59         38
      Capitalized interest                        (2)         (2)        (5)

        Total adjusted discretionary
         cash flow                              $412        $384       $256

    Diluted weighted average shares              243         243        242
    Adjusted discretionary cash
     flow per share                             1.70        1.58       1.06

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 all 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                                 Unocal Corporation
    (Unaudited)

                                               1st         4th         1st
                                             Quarter     Quarter    Quarter
                                              2000         1999        1999

    North America Net Daily Production
      Crude oil (thousand barrels daily)
        Lower 48 (a)                            45          41           39
        Alaska                                  27          28           27
        Canada (b)                              16          14            8
          Total North America crude oil         88          83           74
      Natural gas - wet basis
      (million cubic feet daily)
        Lower 48 (a)                           737         722          775
        Alaska                                 154         154          153
        Canada (b)                             101         105            3
          Total North America natural gas      992         981          931
    North America Average Prices (d)
      Crude oil (per barrel)
        Lower 48                            $27.52      $21.90       $11.26
        Alaska                              $23.15      $18.35        $8.05
        Canada                              $19.24      $17.77        $9.65
          Average North America
           crude oil prices                 $24.60      $20.01        $9.85
      Natural gas (per mcf)
        Lower 48                             $2.50       $2.41        $1.92
        Alaska                               $1.20       $1.20        $1.20
        Canada                               $1.50       $2.28        $1.84
          Average North America
           natural gas prices                $2.18       $2.19        $1.80
    International Net Daily Production (c)
      Crude oil (thousand barrels daily)
        Far East                                71          76           70
        Other                                   19          21           23
          Total International crude oil         90          97           93
    Natural gas - wet basis
     (million cubic feet daily)
      Far East                                 911         825          842
      Other                                     62          53           36
          Total International natural gas      973         878          878
    International Average Prices (d)
      Crude oil (per barrel)
        Far East                            $23.63      $20.08       $10.85
        Other                               $25.53      $22.08       $11.17
          Average International
           crude oil prices                 $24.05      $20.73       $10.93
    Natural gas (per mcf)
      Far East                               $2.29       $2.22        $1.88
      Other                                  $2.73       $2.74        $1.75
          Average International
           natural gas prices                $2.33       $2.25        $1.87
    Worldwide Net Daily
     Production (a) (b) (c)
      Crude oil (thousand barrels daily)       178         180          167
      Natural gas (per mcf)                  1,965       1,859        1,809
      Barrels Oil Equivalent                   506         490          469
    Worldwide Average Prices (d)
      Crude oil (per barrel)                $24.39      $20.34       $10.40
      Natural gas (per mcf)                  $2.25       $2.22        $1.83

    (a) production includes proportionate share of equity affiliates
    (b) production includes 100% of Northrock
         Resources Ltd:         Crude oil        9           6           --
                                Natural gas     99         104           --
    (c) production includes certain host countries'
         shares of:             Crude oil       29          27           12
                                Natural gas     94          75           84
    (d) average prices include hedging gains and losses, but exclude
         other Global Trade margins.

Updated: April 2000