press release

Unocal reaches agreement for sale of Geysers geothermal interest to Calpine

El Segundo, Calif., Jan. 26, 1999 -- Unocal Corporation today said it has reached agreement to sell its 75-percent interest in a geothermal steam venture at The Geysers in Northern California to Calpine Corporation for $101 million.

The transaction is expected to close by March 1 pending necessary consents. Unocal subsidiaries hold a 75-percent working interest in the geothermal energy production venture. Thermal Power Company, a Calpine affiliate, has the remaining 25- percent working interest.

"We believe that this transaction captures the full value of this asset," said Randy Howard, Unocal group vice president, International/Geothermal Operations. "We are proud of the pioneering work we have been able to do on geothermal technology at The Geysers, and we now look forward to putting this capital to work for us in our oil and gas exploration and production activities around the world."

The company's core focus is on its oil and gas exploration and production business in the Gulf of Mexico, South and Southeast Asia, Latin America and West Africa. Unocal recently announced fast-track development for West Seno, a promising deepwater oil and gas field in the Kutei Basin offshore East Kalimantan, Indonesia.

Unocal also recorded a 64-percent success rate in its core Gulf of Mexico shelf exploration program during 1998 and plans to explore attractive deepwater prospects in the Gulf using innovative cost-effective drilling techniques that can cut the cost of exploration wells by one-half or more.

The Geysers contributed approximately $18 million in pre-tax earnings and $23 million in pre-tax operating cash flow to Unocal's 1998 results.

Unocal is one of the world's largest independent oil and gas exploration and production companies, with major resource development, power plant and pipeline projects. The company also continues to be a leading producer of geothermal energy, with major projects in the Philippines and Indonesia.

Forward-looking statements about future business arrangements and transactions in this news release are based on assumptions concerning market, competitive, regulatory, and other considerations. Actual results could differ materially.

Updated: January 1999