press release

Unocal replaces 101 percent of production through successful Indonesia, Gulf of Mexico exploration program

El Segundo, Calif., Feb. 8, 1999 - Unocal Corporation today said that it replaced 101 percent of its worldwide crude oil and natural gas production (excluding sales and price-related revisions) during 1998 with new proved reserves as the company focused on adding value and re-energizing its domestic U.S. exploration program.

"Our focused exploration and development program during 1998 yielded significant reserve additions in both our new growth areas and in our existing production operations," said Roger C. Beach, Unocal chairman and chief executive officer.

"We added more than 50 million barrels of proved oil reserves from our two new deepwater fields, Merah Besar and West Seno, in the Kutei Basin in Indonesia. In the U.S., our Spirit Energy 76 unit recorded more than 30 discoveries in the Gulf of Mexico shelf and onshore area and added 65 MMBOE in proved reserves through discoveries and extensions, improved recovery and purchases," he said.

Beach went on to say that the company made major investments in 1998 to capture additional new exploration opportunities that have increased the resource potential of Unocal's portfolio. "The new exploration prospects in Africa, Latin America and Asia offer the potential for significant reserve additions in the years to come," he said.

International Operations

Unocal's international operations replaced 114 percent of production in 1998 (excluding sales and price-related revisions), primarily through exploration drilling. This included net additions of 55 MMBOE in Indonesia, 30 MMBOE in Thailand, and 15 MMBOE in Bangladesh. For the year, the preliminary finding, development and acquisition (FD&A) costs for new reserves in Unocal's international operations (excluding price-related revisions) were $7.70 per BOE in the Far East and $8.03 per BOE for total international operations.

International FD&A costs rose in 1998 due to several timing factors, including spending on the pipeline in Myanmar, entry costs in Gabon, India, Bangladesh and Brazil, and the impact of the company's "just-in-time" exploration program in Thailand.

Spirit Energy 76

Spirit Energy 76 replaced 108 percent of its production (excluding sales and price-related revisions), particularly as a result of a 64-percent exploration success rate on the Gulf of Mexico shelf during the year. Spirit Energy's preliminary finding, development and acquisition costs (excluding price-related revisions) for new reserves in 1998 on the GOM shelf and onshore were $7.26 per BOE.

"Spirit's success in 1998 was the first time in many years that its replacement ratio exceeded 100 percent," Beach said. "Our new projects have projected returns of 15 to 20 percent, and we expect even higher returns as we move forward with our deepwater program in the Gulf of Mexico."

Resource Potential

With the current growth portfolio, Unocal estimates its total oil and gas risked resource base at 6.0 to 8.2 billion BOE, including year-end 1998 proved oil and gas reserves of 1.55 billion BOE. The estimate is up from 4.8 to 6.7 billion BOE last year, which included proved reserves of 1.63 billion BOE. The additional potential comes principally from new prospects in the deepwater Gulf of Mexico, Gabon, Bangladesh, Indonesia, Brazil and Vietnam. [The unproved resource base includes discovered and potential resources with price and market risk. It also includes targeted opportunities not yet captured by contract, which aggregated approximately 650 MMBOE at year-end 1998, compared with approximately 1,100 MMBOE in mid-1998.]

Unocal is a leading global oil and gas exploration and production company with significant pipeline and power plant project developments worldwide. For more information about the company, visit Unocal's website at www.unocal.com.

Forward-looking statements and estimates regarding reserves, returns on investment, future reserve replacement and resource potential in this news release are based on assumptions concerning market, competitive, regulatory, geological, pricing, environmental, operational and other considerations. Actual results could differ materially.

The attached tables provide details on the company's reserves and FD&A costs.


                              Unocal Corporation
                    Crude Oil and Natural Gas Reserve Data

Estimated proved reserves of crude oil, condensate and natural gas

                                  Crude Oil/      Natural Gas  Oil equivalent
                                   (MMbbls)           (bcf)         (MMBOE)

    1998 beginning reserves             533           6,550         1,625
     Discoveries/extensions              81             437           154
     Improved recovery                    6              20             9
     Revisions
     - Price-related                    (23)            (15)          (26)
     - Other                             14            (51)             6
     Purchases                            7              52            15
     Sales                              (19)           (181)          (49)
    Production                          (67)           (690)         (182)
    1999 beginning reserves*            532           6,122         1,552

    *Includes host country shares for
     Indonesia, Yemen and Democratic
     Republic of Congo of:               44             389           109


Estimated proved reserves by geographic area (millions of BOE)

                    Spirit       Other          Far        Other       Total
                   Energy 76      U.S.          East   International
    1998 beginning
     reserves         406          156          856          207       1,625
      Discoveries/
       extensions      45            6           87           16         154
      Improved
       recovery         5            2            1            1           9
      Revisions
      - Price-related  (8)         (15)          --           (3)        (26)
      - Other           6           (3)         (12)          15           6
      Purchases        15           --           --           --          15
      Sales           (21)          --           --          (28)        (49)
    Production        (66)         (21)         (83)         (12)       (182)
    1999 beginning
     reserves*        382          125          849          196       1,552

    *Includes host
     country shares
     for Indonesia,
     Yemen and
     Democratic
     Republic of
     Congo of:         --           --          104            5         109


    Note: Other U.S. is principally Alaska.  Far East includes Thailand,
Indonesia and Myanmar.  Other international includes Azerbaijan, Bangladesh,
Canada, Democratic Republic of Congo, Netherlands and Yemen.

                              Unocal Corporation
     Preliminary 1998 finding, development and acquisition costs per BOE

                                                  Spirit Energy 76
                                    Deepwater          Other         Total
    Costs incurred (MM$)
     Exploration                        319             262           581
     Development                          5             202           207
     Proved property acquisitions        --              53            53
       Total costs incurred             324             517           841

    Reserve data (MMBOE)
     Discoveries/extensions              --              45            45
     Improved recovery                   --               5             5
     Purchases                           --              15            15
       Subtotal                          --              65            65
     Revisions - price related          --               (8)           (8)
     Revisions - other                   --               6             6
       Total changes                     --              63             63

    Finding and development costs
     per BOE*
      Excluding price revisions          --           $8.36        $14.20
      Excluding all revisions            --           $9.32        $15.83
      Including revisions                --           $9.73        $16.53

    Finding, development and
     acquisition costs per BOE
      Excluding price revisions          --           $7.26        $11.81
      Excluding revisions                --           $7.89        $12.84
      Including revisions                --           $8.16        $13.27

    * Excludes proved property acquisition costs and purchases volumes


                              Unocal Corporation
     Preliminary 1998 finding, development and acquisition costs per BOE

                              Other       Far     Other    Total      Total
                            Domestic     East     Int'l     Int'l
    Costs
     incurred
     (MM$)
      Exploration                 3       209       167      376        960
      Development                42       378       116      494        743
      Proved property
       acquisitions              --        --        10       10         63
        Total costs
         incurred                45       587       293      880      1,766

    Reserve data (MMBOE)
     Discoveries/
      extensions                  6        87        16      103        154
     Improved recovery            2         1         1        2          9
     Purchases                   --        --        --       --         15
      Subtotal                    8        88        17      105        178
     Revisions
     - price related            (15)       --        (3)      (3)       (26)
     Revisions
     - other                     (3)      (12)       15        3          6
      Total changes             (10)       76        29      105        158

    Finding and
     development
     costs
     per BOE*
      Excluding
       price
       revisions             $11.08     $7.70     $8.49    $7.94     $10.07
      Excluding all
       revisions              $6.52     $6.65    $15.62    $8.18     $10.44
      Including
       revisions            ($4.23)     $7.70     $9.46    $8.19     $11.90

    Finding,
     development and
     acquisition costs
     per BOE
      Excluding price
       revisions             $11.08     $7.70     $8.80    $8.03      $9.56
      Excluding
       revisions              $6.52     $6.65    $16.19    $8.23      $9.88
      Including
       revisions            ($4.23)     $7.70     $9.81    $8.29     $11.12

    * Excludes proved property acquisition costs and purchases volumes


Updated: February 1999