press release

Unocal sees production, earnings growth from global exploration and production projects, analysts told

Unocal sees production, earnings growth from global exploration and production projects, analysts told

New York City, Nov. 20, 2002 - Unocal Corporation (NYSE: UCL) expects significant growth in production, earnings and cash flow over the next five years from crude oil and natural gas development projects that have been sanctioned or expected to be approved soon, the company told financial analysts here today.

Speaking at Unocal's analyst meeting, Charles R. Williamson, Unocal chairman and chief executive officer, said the company's growth will come by delivering major new production projects on time and advancing the next tier of development projects. "The foundation of our forecast is a portfolio of projects with proven resources and markets," Williamson said.

Over the 2002 to 2007 period, Unocal expects an average annual growth in production of 5 to 7 percent. This assumes average NYMEX benchmark prices of $26.35 per barrel of crude oil and $3.15 per million British thermal units for North America natural gas. Over that same five-year period, the company expects adjusted earnings (excluding special items) will grow at an average annual rate of 8 to 11 percent, while adjusted discretionary cash flow would increase by an average annual rate of 6 to 10 percent.

"We have a strategy to accomplish these financial objectives," Williamson said. "First, we are looking to enhance the company's legacy asset production and profitability from North America, Thailand and the Indonesia shelf."

Second, Williamson said, is a string of major production projects that are slated to come on line over the next five years and other projects throughout the company's global operations arena that Unocal is expected to sanction in 2003 and beyond.

Currently sanctioned projects include West Seno Phases One and Two, AIOC Phases One and Two, Mad Dog (Gulf of Mexico) and South Kenai (Alaska) gas. The company expects to make sanction decisions on AIOC Phase Three, Ranggas and Merah Besar in Indonesia, K2 and Trident in the deepwater Gulf of Mexico, and Arthit in Thailand.

"Supplementing the development projects, we expect to make new discoveries with high-impact exploration in the deepwater Indonesia and Gulf of Mexico, as well as the deep gas in the Gulf and onshore," Williamson said. "At the same time, we will work to expand our long-term Asia gas position in Indonesia, Thailand, Vietnam and Bangladesh."

Capital expenditures

Unocal told analysts it expects to keep its overall capital spending in 2003 about even with the 2002 level. The expected spending level is $1.7 billion.

"We see a ramp-up of spending on large, high-impact development projects, while reducing spending on the smaller scale development and exploitation projects," Williamson said, "while maintaining or reducing exploration capital spending."

Capital spending for large developments project, including deepwater Indonesia and Gulf of Mexico and the Caspian development and pipeline should total about $700 million next year, up from $430 million.

Other E&P development capital would be reduced to about $600 million, compared with $815 million in 2002.

The company is forecasting exploration capital spending in 2003 at $300 million, down from an expected $370 million this year.

Deepwater GOM appraisal

Williamson also announced that the second appraisal well on the deepwater Trident prospect in the Gulf of Mexico was successful.

"We expect to move forward now with studies on development options," Williamson said. The company has no plans for further appraisal wells on the Trident prospect, and the development schedule will depend on industry drilling results in the area.

The Trident prospect area covers seven blocks in Alaminos Canyon. Unocal is operator and has a 59.5-percent working interest in the prospect. Co-venturers include Chevron U.S.A. Inc. (NYSE: CVX), 15%; Ocean Energy, Inc. (NYSE: OEI), 12.75%; Agip Petroleum Co., the American subsidiary of Eni SpA (NYSE: E), 8.5%; and ConocoPhillips (NYSE: COP), 4.25%.

Analyst meeting webcast

Unocal's analyst meeting is being broadcast over the Internet via Unocal's web site. To access the video webcast, click on the "Analyst Meeting Webcast" link on the Unocal home page. A schedule of the presentations will be posted on the web site. The live analyst meeting will be streamed in RealPlayer and Windows Media Player formats. Replays will be available until Dec. 31, 2002.

The slides used in the presentations can also be downloaded in pdf format.

About Unocal Corporation

Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. The company's principal operations are located in North America and Asia.

This news release contains certain forward-looking statements about Unocal's possible production rates, adjusted earnings, discretionary cash flow, capital spending, and development activities. These statements are not guarantees of future performance. The statements are based upon Unocal's current expectations and beliefs and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements. Actual results could differ materially as a result of factors discussed in Unocal's amended 2001 Annual Report on Form 10-K/A and subsequent reports filed with the Securities and Exchange Commission. U.S. investors are urged to consider closely the disclosure in Unocal's amended 2001 Annual Report on Form 10-K/A (SEC File No. 1-8483). Copies of the company's SEC filings are available from the company by calling 800-252-2233. The reports are also available on the Unocal web site. You can also obtain this form from the SEC by calling 800-SEC-0330.

Updated: November 2002