press release

Unocal's Canadian subsidiary to make take-over bid for Tethys Energy

El Segundo, Calif., May 25, 2001 -- Unocal Corporation (NYSE: UCL) today said that its Northrock Resources Ltd. subsidiary has entered into an agreement to make an offer, by way of a take-over bid, to acquire all of the common shares of Tethys Energy Inc. (TO: TET) for approximately C$144 million (US$93 million). The bid has the unanimous support of the Tethys board of directors.

The offer price for each Tethys share will be C$4.25 (US$2.74) in cash. Tethys has 33.9 million shares outstanding on a fully diluted basis. In addition, Northrock will assume Tethys' existing long-term debt of approximately C$30 million (US$19 million). The offer will be conditional on at least 66-2/3-percent of Tethys' shares being tendered under the offer. Tethys has agreed that it will not solicit competing offers and will pay a C$6.5 million (US$4.2 million) non-completion fee in certain circumstances.

"The acquisition of Tethys will not only build on Northrock's active exploration and development initiatives in our core areas, but will also provide us with entry into new and exciting growth areas" said Don R. Hansen, Northrock president and chief executive officer. "Tethys' focused asset base is complementary to Northrock's operations in Western Canada, providing significant operational synergies with existing activity in Northrock's West-Central Alberta and Southeast Saskatchewan core areas."

Based on an independent reserve report and successful exploration and development activity in 2001, Tethys has proved reserves (U.S. basis) of 12 million barrels-of-oil equivalent (BOE) on a 6:1 net basis. More than 60 percent of the reserves are liquids-rich natural gas.

The total acquisition cost is C$13.34 per BOE (US$8.60), after ascribing value to Tethys' 165,000 net acres of undeveloped lands and its seismic position.

Tethys' current production is 4,600 barrels-of-oil equivalent (6:1 net basis) per day, including 16 million cubic feet per day of natural gas production.

"We expect to increase production to more than 6,000 BOE per day from the Tethys properties by the end of this year," Hansen said. "Most of this additional production will be natural gas."

The board of directors of Tethys will recommend that stockholders accept Northrock's offer. Tethys directors, officers and major stockholders, who have an aggregate of approximately 12.1 million Tethys shares and 2.9 million options and warrants (representing 44 percent of the fully diluted number of Tethys shares), have agreed to tender and not withdraw those shares under the offer.

Northrock intends to mail the offer to Tethys shareholders by June 4, 2001, with a closing date expected in mid-July. Northrock has retained Yorkton Securities Inc. as its financial advisor and soliciting dealer manager.

This news release contains certain forward-looking statements about expected production and business transactions. 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 2000 Form 10-K and other reports filed with the U.S. Securities and Exchange Commission. Unocal undertakes no obligation to update the information in this news release.

Investors are urged to consider closely the disclosure in Unocal's 2000 Form 10-K and other reports. Copies of the company's SEC filings are available from the company by calling 800-252-2233. The reports are also available in Unocal's on-line Investor Information Center.

Updated: May 2001