press release

Unocal unit signs agreement to invest in Canadian oil and gas company; expands North America natgas position

El Segundo, Calif., April 15, 1999 - Unocal Corporation today said its Unocal Canada Resources subsidiary has signed a definitive agreement to invest up to C$265 million (US$175 million) to acquire up to 46 percent of Calgary-based Northrock Resources Ltd.

"The addition of the Northrock interest is a key element of our North American gas strategy and will compliment our already strong natural gas base in the Gulf of Mexico region and the equity position we are acquiring in Tom Brown, Inc., in the Rocky Mountains," said Roger C. Beach, Unocal chairman and chief executive officer. "At the same time, the savings we realize by reinvesting the pretax proceeds from the disposition of our Tarragon Oil and Gas Limited holdings enhance the attractiveness of this investment." Marathon Oil Company acquired Tarragon last year, including Unocal's Tarragon holdings.

Beach added, "Northrock has a talented management team with a proven track record of high margins, low finding and development costs, and consistent reserve and production increases that will enhance Unocal's future growth." In 1998, Northrock recorded a 72-percent increase in natural gas production and a 111-percent increase in natural gas reserves.

Under the agreement, Unocal Canada Resources proposes to make a partial tender offer to Northrock's shareholders which, if successful, would result in Unocal Canada acquiring approximately 10 million shares of Northrock common stock at C$14 per share, representing approximately 32 percent of all outstanding shares.

Northrock's board has agreed to support Unocal Canada's tender offer and recommend acceptance by Northrock's shareholders. The tender offer will include a condition that Unocal Canada obtain at least 6.9 million shares of Northrock common stock.

If Unocal's tender offer is successful, Unocal Canada will acquire approximately 7.6 million additional shares of Northrock common stock at C$16 per share under a private placement, increasing Unocal Canada's interest in Northrock to as much as 46 percent.

As part of the agreement, Northrock has the right, until Dec. 31, 1999, to require that Unocal purchase additional common shares from treasury at a price of C$15 per share, up to a maximum ownership level to 49.9 percent.

Unocal Canada's obligations under the agreement are subject to regulatory approvals and certain other conditions. The transaction is expected to be completed by mid-May.

Northrock has also agreed to pay Unocal Canada a non-completion fee in certain circumstances in the event that the proposed acquisition of Northrock shares by Unocal Canada is unsuccessful.

In March, Northrock reported current average daily gross production of 160 million cubic feet of gas and 11,000 barrels of crude oil and natural gas liquids. Unocal estimates Northrock has current net proved reserves of approximately 35 million barrels of crude oil and liquids and 363 billion cubic feet of gas. In addition, Northrock has valued its exploration assets (land and seismic) at C$132 million (US$88 million).

Unocal is being advised by CIBC World Markets in this transaction.

Unocal is one of the world's largest independent oil and gas exploration and production companies, with resource development, power plant and pipeline projects in Asia, the U.S. Gulf of Mexico region and Latin America. In Canada, the company currently produces about 7,700 barrels-of-oil-equivalent per day in southwest Saskatchewan and operates the Aitken Creek natural gas storage facility in British Columbia.

Forward-looking statements regarding business and market transactions, and production and reserve quantities in this news release are based on assumptions concerning market, competitive, regulatory, environmental, operational 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: April 1999