press release

Unocal records significant deepwater gas discovery in Ganal PSC area offshore Indonesia

El Segundo, Calif., Feb. 8, 2000 -- Unocal Corporation today said that its Unocal Ganal, Ltd., subsidiary drilled a significant deepwater gas discovery on the Gendalo prospect in the southern portion of the Ganal Production-Sharing Contract (PSC) area, offshore East Kalimantan, Indonesia.

The Gendalo-1 discovery well was drilled to a total depth of 15,000 feet (4,572 m) in 4,677 feet (1,425 m) of water. The well encountered 242 feet (74 m) of net gas pay in Miocene-age reservoirs. The pay occurred principally in two zones of very high-quality reservoir sands.

The first zone contained 144 feet (44 m) of net pay over a 230-foot (70 m) interval of a continuous gas column. The second zone consisted of 73 feet (22 m) of net gas pay within a 584-foot (178 m) Miocene zone.

The pay zones are traceable on seismic and appear to extend over the entire 10,000-acre structural closure mapped for the Gendalo prospect. The Gendalo-1 pay is approximately the same age as that found in the West Seno oil and gas field, 90 miles to the north on the Makassar Strait PSC. Unocal expects to begin production from West Seno in 2002.

The gross unrisked resource potential for the Gendalo prospect is estimated at 1 to 3 trillion cubic feet of gas.

Gandang discovery

The Gendalo-1 discovery follows an earlier gas discovery on the Gandang prospect, approximately 12 miles (20 km) northeast of the Gendalo well.

The Gandang-1 well, drilled to 13,350 feet (4,069 m) in 5,524 feet (1,684 m) of water, encountered 136 feet (41 m) of gas pay in reservoirs that are of similar age to the Gendalo reservoirs.

Another exploration well, the Goda-1, was drilled on a stratigraphic prospect as a test of the same reservoir interval that was encountered in the Gandang well. The Goda-1 well, located southeast of the Gandang discovery, did not encounter significant hydrocarbons in the thick sands.

The three wells -- Gendalo, Gandang and Goda -- have been drilled in water depths ranging from 4,677 feet (1,425 m) to 5,672 feet (1,728 m) for an average cost of less than $6 million per well and an average drilling time of 18 days.

Unocal Ganal, Ltd., is operator of the Ganal PSC and holds an 80-percent working interest. Lasmo plc holds the remaining 20-percent working interest.

Forward-looking statements regarding future exploration and production activities, estimates of area extension and resource potential in this news release are based on assumptions concerning operational, geological, market, competitive, regulatory, environmental, and other considerations. Actual results could differ materially as a result of factors discussed in Unocal Corporation's 1998 Form 10-K report filed with the U.S. Securities and Exchange Commission.

Under the terms of the PSCs, Unocal Indonesia and its affiliates, as contractors to Pertamina, the Indonesia national oil company, are entitled to varying shares of the oil and gas produced from commercial discoveries.

Unocal East Kalimantan Deepwater Drilling Update - Ganal PSC

Well Name Rig Days Water Depth Well Depth Pay Remarks
Gandang #1 19 5,524 ft. 13,350 ft. 136 ft. Gas discovery
Goda #1 15 5,672 ft. 11,848 ft. 0 Dry hole
Gendalo #1 20 4,677 ft. 15,000 ft. 242 ft. Gas discovery
Total last 3 wells 54 $17.8 MM
Average 18 5,291 ft. 13,400 ft. <$6 MM per well

Updated: February 2000