press release

Unocal Spirit Energy 76 unit starts production from first horizontal well in Ship Shoal 266 field

Sugar Land, Texas, Feb. 3, 1997 -- Unocal's Spirit Energy 76 unit today said it had started production from the first horizontal well drilled in the Ship Shoal 266 field offshore Louisiana. The new well raises total peak daily field production to more than 2,800 barrels of oil and 19 million cubic feet of gas.

The horizontal A-15 well encountered 406 feet of pay in the horizontal section below 5,471 feet. The new well is currently producing about 700 barrels of oil per day and 148,000 cubic feet of gas.

Unocal acquired the Ship Shoal 266 field in 1993 after it was put up for divestment by another operator. At the time Unocal acquired the property, it was producing 370 barrels of oil per day and 2 million cubic feet (mmcf) of gas per day.

"We have drilled eight wells in the field and optimized completion procedures to make this field economically attractive," said David E. Thompson, Spirit Energy vice president for Exploitation. "By using new completion techniques and recompleting existing wells, we have been able to substantially increase the productivity of the field."

The company said it expects to drill additional wells in the field this year.

The company also said that production from Spirit Energy's Mobil 904 field offshore Mississippi had risen to 52 mmcf per day. Spirit had announced the start of production in early January at 33 mmcf per day. Spirit has a 66.67 percent working interest in the Mobile 904 field.

Spirit Energy 76 is Unocal's domestic oil and gas business unit responsible for exploration and exploitation of the company's assets in the Lower 48. The unit was formed last year to focus on maximizing the value of these assets by improving efficiency, reducing costs of existing operations and capturing higher return projects to increase earnings.

Updated: February 1997