press release

Unocal sees 2000 capex spending at about $1.1-$1.2 billion; balance between near-term returns and long-term growth

El Segundo, Calif., Dec. 21, 1999 -- Unocal Corporation today said its current plans peg capital spending for 2000 at between $1.1 and $1.2 billion, relatively flat compared with the estimated 1999 spending level.

"The capital program in 2000 will focus on our key production areas -- the Gulf of Mexico shelf, Thailand, Indonesia and the Caspian," said Roger C. Beach, Unocal chairman and chief executive officer. "In total, more than 90 percent of the capital spending plan focuses on oil and gas exploration and production projects, with about half earmarked for projects outside the U.S."

The company expects to spend about $210 million on emerging E&P businesses in the deepwater Gulf of Mexico and Indonesia, as well as in Brazil and West Africa. This includes the company's first deepwater development of the West Seno field in Indonesia.

The company said that keeping the expected 2000 capital spending relatively flat, even with higher commodity prices, requires Unocal to continue to high-grade projects and balance near-term earnings with long-term growth.

"The actual capital spending level could shift based on changes in our portfolio of opportunities," Beach said. "We expect to review the plan regularly and make adjustments as appropriate." He noted that the capital forecast does not include the costs of any acquisitions.

Capital spending for 1999 is expected to total about $1.16 billion (excluding the acquisition of an interest in Northrock Resources Ltd.).

Forward-looking statements regarding capital expenditures and exploration and production activities 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 factors discussed in Unocal's 1998 Form 10-K report filed with the Securities and Exchange Commission.

Updated: December 1999