press release

Unocal scores 82% success rate in worldwide shelf and onshore exploration drilling program

Unocal scores 82% success rate in worldwide shelf and onshore exploration drilling program

El Segundo, Calif., May 22, 2000 -- Unocal Corporation today said it has been highly successful in its shelf and onshore oil and gas exploration drilling program so far this year, with 27 successes out of 33 wells completed.

The exploration drilling success includes 16 successful wells in Asia (84% success rate) and 11 successful exploration wells in the Gulf of Mexico region (79% success rate).

"Our shelf and onshore resources are the company's bread and butter, providing the cash flow and earnings necessary to fund the exploration of our highly promising deepwater prospects," said Roger C. Beach, Unocal chairman and chief executive officer. "The successes we've recorded this year can generally be developed at low cost and brought on line relatively quickly to generate cash flow for the company."

Gulf of Mexico Region

Unocal's Spirit Energy 76 unit drilled 11 successful exploration wells (out of 14 drilled), including 4 wildcat wells. All of these discoveries will contribute to 2000 production and drive immediate cash flow and earnings.

This successful exploratory program includes an appraisal well on the Muni field (Ship Shoal 295) that penetrated two additional secondary gas pay zones. This new field, which was discovered in late 1999, is expected to begin production in late-2000 at an initial sustained rate of 100 million cubic feet per day (mmcfd), plus 2,000 barrels of condensate per day. The estimated discovery volume for the field is 100 to 130 billion cubic feet. Unocal has a 100-percent working interest in the block, which was acquired in the Central Gulf lease sale in 1999.

"The Muni project offers excellent economics -- low acquisition and development costs and significant potential natural resources coupled with expected continued high prices for natural gas," Beach said.

In addition to wildcat discoveries such as Muni, the Lower 48 exploratory drilling program is adding significant production near existing fields. For example, two of the discoveries this year are stepouts at Ship Shoal 208. These two discoveries will add 28 mmcfd (gross) of near-term gas production into existing facilities. Unocal has an 87-percent working interest in the field.


Unocal Thailand, Ltd., has participated in 13 successful exploration and delineation wells in three areas offshore in the Gulf of Thailand so far this year.

In the Arthit project (Blocks 14A, 15A and 16A), 6 successful wells have been drilled, following up on the discovery announced in November 1999. All of the wells encountered hydrocarbons, proving a mature and extensive system with significant amounts of natural gas and condensate.

The 6 exploration wells encountered an average 202 feet of pay and tested at a daily average of 33 million cubic feet of gas and 750 barrels of condensate.

Unocal Thailand has a 16-percent working interest in Arthit. PTT Exploration and Production Public Co., Ltd., is the operator.

The participants expect the Arthit project to be ready to supply the Thai market with gas as early as 2005. A second phase of the exploration drilling program is set for the second quarter 2001. The Arthit acreage offsets highly prospective acreage in Vietnam (block 52/97) where Unocal expects to drill the first exploration well later this year.

Unocal Thailand is also exploring two other prospects -- Yala and Plamuk -- north of the Erawan gas field in the Gulf of Thailand. The exploration program is yielding important new resources, including crude oil.

So far this year, Unocal has drilled 7 successful exploration and delineation wells on these prospects -- 4 in the Yala field and 3 in the Plamuk field. The wells encountered an average of 200 feet of pay. Six drillstem tests in five of the wells averaged 1,051 barrels of oil per day.

The oil discoveries are particularly important because they are a potential source of additional production that is not subject to market constraints. Depending upon additional analysis, first production from these fields could begin in 2001. Unocal Thailand is operator and holds a 71.25-percent working interest in the Yala and Plamuk areas.


Unocal Indonesia Company has drilled 3 successful shelf exploration wells offshore East Kalimantan this year. Two of the exploration wells, located in the Attaka unit and the East Kalimantan production-sharing contract (PSC) area, discovered oil and natural gas. A third exploration well, located on the East Kalimantan PSC area, discovered oil.

While these are moderately sized discoveries (between 10-20 MMBOE each), we have several prospects of the same size that could provide a boost to Unocal's near-term production profile. An additional 8 to 10 exploration and appraisal wells are planned for this year. Unocal Indonesia is operator and has a 50-percent in the Attaka unit and a 100-percent working interest in the remainder of the East Kalimantan PSC area.

Unocal Indonesia pioneered low-cost exploration drilling techniques, which have been applied globally by the company to add incremental production and reserves at low cost in shelf and deepwater areas.

About Unocal Corporation

Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. The company also focuses on pipeline and power plant projects in Asia and the Americas.

At year-end 1999, the company had worldwide natural gas reserves of 6.6 trillion cubic feet, representing two-thirds of the company's overall hydrocarbon reserves. In North America, Unocal is one of the largest independent natural gas producers, with current net production of 1 billion cubic feet per day.

Forward-looking statements regarding future exploration activities, resource potential, production rates and timing for new production in this news release are based on assumptions concerning operational, market, competitive, regulatory, environmental and other considerations. Actual results could differ materially as a result of the foregoing and other factors discussed in Unocal's 1999 Form 10-K report filed with the U.S. Securities and Exchange Commission.

Under the terms of the East Kalimantan PSC, Unocal Indonesia Company, as a contractor to Pertamina, the Indonesia national oil company, is entitled to varying shares of the oil and gas produced from commercial discoveries.