press release

Unocal's Spirit Energy 76 secures deepwater rig contract

Sugar Land, Texas, Jan. 20, 1998 -- Spirit Energy 76, Unocal Corporation's Lower 48 exploration and production business unit, announced today that it has reached agreement on a letter of commitment (LOC) with Transocean Offshore Inc. to contract for a deepwater drillship. The new drillship, capable of operating in water depths of up to 10,000 feet of water, is designed with dual activity drilling capabilities.

The contract has a five-year term, with the option to extend on a yearly basis for the following five years. At the end of the tenth year, the company has a preferential right to negotiate a new contract for the drillship.

Until the new drillship is delivered in the first quarter 2000, Spirit Energy 76 will continue to accelerate partner-operated drilling, utilize spot rig slots, and participate in joint ventures.

Spirit Energy 76's exploration program has significantly boosted activity in the past year. In 1997, the unit quadrupled its deepwater tracts, increasing the total inventory from 30 to 119, and nearly doubled its shelf tracts from 28 to 47. Drilling activity has increased five-fold since first quarter 1997.

Spirit Energy 76 employs approximately 1,300 people and operates 300 offshore platforms and approximately 2,700 active wells in 355 fields in the United States.

Forward-looking statements and estimates of future business arrangements and exploration activities in this news release are based on assumptions concerning market, competitive, regulatory, environmental, operational and other considerations. Actual results could differ materially.

Updated: January 1998