SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: April 25, 1994
UNOCAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-8483 95-3825062
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
1201 West Fifth Street, Los Angeles, California 90017
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (213) 977-7600
<PAGE>
Item 5. Other Events
On April 25, 1994, the following news release was issued:
UNOCAL POSTS $54 MILLION EARNINGS
FOR FIRST QUARTER 1994
------------------------------------
Los Angeles, April 25 -- Unocal Corporation today said its net earnings
for the first quarter 1994 were $54 million, or 19 cents per common share.
This compares with earnings of $11 million, or one cent per common share for
the same period a year ago.
Excluding the effect of special items (detailed in attached table),
Unocal's earnings for the first quarter 1994 were $62 million, or 22 cents
per common share, compared with $98 million, or 37 cents per common share
the year before.
Richard J. Stegemeier, Unocal chairman and chief executive officer,
said the first quarter operating results reflected the steep decline in
crude oil prices from a year ago, which were offset partially by increased
natural gas revenues due to higher domestic prices and production.
Special items in the first quarter included the proceeds from the
settlement of the Mesa lawsuit arising from the takeover attempt in 1985 and
various oil and gas asset sales. These gains were more than offset by the
write down of investment and provisions for abandonment and remediation of
the Guadalupe oil field on the central California coast and provisions for
various legal issues. Earlier the company had announced that a charge would
be taken in the first quarter to provide fully for abandonment and
remediation of the Guadalupe field. This charge covers remediation and
clean up efforts that are now under way at the field.
"In the first quarter, we saw continued increases in Unocal's worldwide
natural gas and crude oil production as a result of our accelerated
development efforts," Stegemeier said. "Domestic natural gas production was
13 percent above the fourth quarter 1993. Foreign gas production was also
above the fourth quarter 1993 level by 12 percent."
The company said it expects total production of natural gas to average
about 1,800 million cubic feet per day during the full-year 1994, up nearly
6 percent from the 1993 level. Total production should grow to almost 2,000
million cubic feet per day by 1996, driven by higher production from the
Gulf of Mexico area and Thailand.
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<PAGE>
Stegemeier also said that crude oil and condensate production has been
more directly affected by the lower oil prices. He said if the West Texas
Intermediate price remains in the $15 per barrel range, the company would
expect oil production to remain at about the current level through 1996. If
oil prices recover to $18 per barrel, however, Unocal's production could
increase to 280,000 barrels per day by 1996, Stegemeier said.
Cash flows from operations in the first quarter, before working capital
changes, were $350 million, down slightly from $363 million last year. The
effect of lower crude oil prices was largely offset by higher gas revenues
and the Mesa lawsuit settlement.
Stegemeier noted that Unocal's worldwide average crude oil sales price
was $11.32 per barrel in the first quarter, down from $14.90 per barrel
during the same period of 1993. The company's worldwide average natural gas
sales price was $2.04 per thousand cubic feet (mcf), compared with $1.89 per
mcf a year ago.
First quarter revenues were $1.92 billion, down from $2.32 billion in
1993. The lower revenues were due to the sale of businesses in 1993 and the
continuing phase out of Southeast U.S. retail gasoline marketing.
Capital expenditures for the first quarter were $264 million, up from
$192 million a year ago. The increase reflected Unocal's accelerated
exploration and development program in Louisiana and Alaska's Cook Inlet, as
well as refinery construction to prepare for manufacturing reformulated
gasoline. Exploration and dry hole expense for the quarter totaled $49
million, up from $35 million in the first quarter 1993.
PETROLEUM EXPLORATION AND PRODUCTION
- ------------------------------------
First quarter 1994 earnings from petroleum exploration and production
totaled $71 million, compared with $142 million in 1993. Excluding special
charges related to the Guadalupe oil field and gains from asset sales,
petroleum exploration and production earnings were $87 million, compared
with $120 million during the same period a year ago.
The results reflected lower worldwide crude oil prices and higher
domestic natural gas prices and production.
Net worldwide crude oil and condensate production for the first quarter
averaged 257,100 barrels per day, up from 252,900 barrels per day a year
ago. First quarter daily worldwide natural gas production averaged 1,804
million cubic feet in 1994, up 10 percent from 1,637 million cubic feet in
1993.
REFINING, MARKETING AND TRANSPORTATION
- --------------------------------------
First quarter earnings for Unocal's refining, marketing and
transportation segment totaled $41 million, compared with $48 million in
1993. For the quarter, margins on refined product sales were slightly
lower.
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In the first quarter, sales of petroleum products averaged 306,200
barrels per day, down from 379,900 barrels per day the previous year. The
sale of the company's Auto/TruckStop system and the continuing phase out of
Southeast U.S. retail gasoline marketing contributed to the lower product
sales. However, the company's West Coast U.S. petroleum product sales
volumes increased 7 percent to 240,000 barrels per day in the first quarter
1994, up from 224,200 barrels per day a year ago.
CHEMICALS
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Unocal's chemicals segment recorded earnings in the first quarter of $9
million, compared with $12 million a year ago. The results reflected lower
earnings from agricultural products.
GEOTHERMAL
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First quarter 1994 geothermal earnings were $5 million, compared with
$32 million a year ago. The 1993 first quarter included a $26 million gain
from the sale of the company's Imperial Valley (California) geothermal
assets and other geothermal exploration properties.
CORPORATE AND OTHER
- -------------------
Net expense for corporate and other was $72 million in the first
quarter 1994. This compares with $93 million in the same period in 1993.
Adjusted for special items, net expense for corporate and other was $80
million in 1994, versus $89 million for the same period a year ago.
The decrease reflected lower net interest expense and a reduction in
administrative and general expense.
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<PAGE>
<TABLE>
<CAPTION>
UNOCAL CORPORATION
1994 EARNINGS PRESS RELEASE SUPPLEMENT
SPECIAL ADJUSTMENTS - CONSOLIDATED
(UNAUDITED)
For the Three Months Ended
Mar. 31, 1994 Mar. 31, 1993
Dollars in Millions except
per share amounts
<S> <C> <C>
Reported Earnings $54 $11
Less: Special items
Cumulative effect of accounting changes
- for postretirement health care costs (SFAS 106) - (121)
- for postemployment benefits (SFAS 112) - (9)
Writedown of investment and provision for abandonment
and remediation of the Guadalupe oil field (23) -
Litigation (17) (1)
MESA settlement 24 -
Asset sales 8 47
Other - (3)
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Total Special Items (8) (87)
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Adjusted Earnings 62 98
Less: Dividends on preferred stock 9 9
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Adjusted Earnings Applicable to Common Shares $53 $89
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Adjusted Earnings per Common Share $0.22 $0.37
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
UNOCAL CORPORATION
1994 EARNINGS PRESS RELEASE SUPPLEMENT
SPECIAL ADJUSTMENTS ALLOCATED BY BUSINESS SEGMENTS
(UNAUDITED)
For the Three Months Ended
Mar. 31, 1994 Mar. 31, 1993
Dollars in Millions except
per share amounts
<S> <C> <C>
U.S. PETROLEUM EXPLORATION AND PRODUCTION
Reported Earnings $25 $87
Less special items:
Writedown of investment and provision for abandonment
and remediation of the Guadalupe oil field (23) -
Asset sales 7 22
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Adjusted U.S. E&P Earnings $41 $65
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FOREIGN PETROLEUM EXPLORATION AND PRODUCTION
Reported Earnings $46 $55
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REFINING, MARKETING AND TRANSPORTATION
Reported Earnings $41 $48 *
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CHEMICALS
Reported Earnings $9 $12
Less special items:
Asset sales - (1)
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Adjusted Chemicals Earnings $9 $13
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GEOTHERMAL
Reported Earnings $5 $32
Less special items:
Asset sales - 26
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Adjusted Geothermal Earnings $5 $6
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CORPORATE AND OTHER
Reported Earnings ($72) ($93)
Less special items:
MESA settlement 24 -
Litigation (17) (1)
Asset sales 1 -
Other - (3)
Adjusted Corporate and Other ($80) ($89)
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Total Adjusted Earnings $62 $98
Less: Dividends on preferred stock 9 9
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Adjusted Earnings Applicable to Common Shares $53 $89
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Adjusted Earnings per Common Share $0.22 $0.37
* Restated for the transfer of certain expense to Corporate and Other.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
FINANCIAL DATA
(UNAUDITED)
For the Three Months
Ended March 31
1994 1993
<S> <C> <C>
Dollars in millions except per share amounts
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Total revenues (a) $1,916 $2,318
Costs and other deductions (a) 1,811 2,068
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Earnings before income taxes 105 250
Income taxes 51 109
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Earnings before cumulative effect of accounting changes 54 141
Cumulative effect of accounting changes - (130)
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Net earnings $54 $11
Dividends on preferred stock 9 9
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Net earnings applicable to common shares $45 $2
Earnings per common share: (b)
Before cumulative effect of accounting changes $0.19 $0.55
Cumulative effect of accounting changes - (0.54)
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Net earnings $0.19 $0.01
(a) Includes consumer excise taxes of $222 $237
(b) Based on weighted average common shares outstanding (in millions) 242 241
</TABLE>
<TABLE>
<CAPTION>
NET EARNINGS BY BUSINESS SEGMENT
(UNAUDITED)
For the Three Months
Ended March 31
1994 1993
<S> <C> <C>
1994 1993
Millions of dollars
---------------------------------------------------------------------------------------------
Petroleum
Exploration and Production
United States $25 $87
Foreign 46 55
Refining, Marketing and Transportation (a) 41 48 (d)
Chemicals 9 12
Geothermal 5 32
Corporate and Other (b) (c) (72) (93)
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Sub-total 54 141
Cumulative effect of accounting changes - (130)
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Total $54 $11
(a) Includes equity in earnings of affiliates (after-tax) of $15 $13
(b) Includes net interest expense (after-tax) of ($46) ($52)
(c) Includes minerals and real estate operations.
(d) Restated for the transfer of certain expense to Corporate and Other
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
OPERATING HIGHLIGHTS
(UNAUDITED)
For the Three Months
Ended March 31
1994 1993
<S> <C> <C>
Net daily production (a)
Crude oil and condensate (thousand barrels):
United States 141.9 152.5
Foreign:
Thailand 15.4 19.2
Indonesia 61.9 49.8
Canada 16.6 18.5
Other 21.3 12.9
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Total Foreign 115.2 100.4
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Worldwide 257.1 252.9
Natural gas (million cubic feet):
United States 1,118 929
Foreign:
Thailand 422 532
Indonesia 167 109
Canada 93 61
Other 4 6
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Total Foreign 686 708
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Worldwide 1,804 1,637
Natural gas liquids (thousand barrels) 19.4 19.9
Geothermal (million kilowatt-hours) 19.6 22.1
Average sales prices
Crude oil and condensate (per barrel):
United States $10.48 $14.38
Foreign:
Thailand $13.35 $17.35
Indonesia $13.06 $15.58
Canada $11.44 $14.86
Other $12.71 $16.59
Total Foreign $12.72 $16.01
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Worldwide $11.32 $14.90
Natural gas (per mcf):
United States $2.08 $1.82
Foreign:
Thailand $2.10 $2.08
Indonesia $1.68 $2.05
Canada $1.77 $1.46
Other $2.13 $2.42
Total Foreign $1.97 $1.96
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Worldwide $2.04 $1.89
(a) Includes net profits type agreements on a gross basis.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
OPERATING HIGHLIGHTS
(UNAUDITED)
For the Three Months
Ended March 31
1994 1993
<S> <C> <C>
Input to crude oil processing units (thousand barrels daily) (a) 294.2 279.4
Sales of petroleum products (thousand barrels daily) (a) 306.2 379.9
Capital expenditures (millions of dollars) 264 192
Exploration expense (millions of dollars) 25 27
Dry hole costs (millions of dollars)
United States 15 5
Foreign 9 3
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Total 24 8
Depreciation, Depletion & Amortization 272 234
Cash flows from operating activities (millions of dollars)
Excluding working capital changes 350 363
Including working capital changes 288 305
Pretax proceeds from asset sales (millions of dollars) 38 320
(a) Includes the company's 50% equity portion of The UNO-VEN Company.
</TABLE>
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<PAGE>
SIGNATURE
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
UNOCAL CORPORATION
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(Registrant)
by: CHARLES S. MCDOWELL
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(Charles S. McDowell,
Vice President and Comptroller)
Dated: April 25, 1994
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