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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 9, 1996
UNOCAL CORPORATION
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(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.)
2141 Rosecrans Avenue, Suite 4000, El Segundo, California 90245
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 726-7718
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ITEM 5. OTHER EVENTS
On April 9, 1996, the following news release was issued:
UNOCAL COMPLETES SALE OF CALIFORNIA
OIL AND GAS ASSETS TO NUEVO ENERGY
El Segundo, Calif., April 9, 1996 -- Unocal Corporation today said it
has completed the sale of its California crude oil and natural gas assets for
$492 million to Nuevo Energy Company of Houston.
The effective date of the sale is October 1, 1995. After adjustments
for revenues, operating expenses, capital expenditures and accrued interest,
Unocal realized $481 million in cash from the transaction. In addition, the
company could receive contingent payments, which have an estimated present value
of $53 million, over a 7-year period beginning in 1998. This estimate is based
on company forecasts. Future oil prices and production will determine the actual
level of additional payments .
The sale includes Unocal's interests in 68 oil and gas fields,
including 11 producing platforms off the California coast in state and federal
waters.
Unocal's average net daily production from these properties was 27,000
barrels of oil and 59 million cubic feet of gas during 1995. Estimated net
reserves for the properties were 120 million barrels of oil and 162 billion
cubic feet of gas. On a barrel of oil equivalent (BOE) basis, the California
operations in 1995 accounted for about 7 percent of the company's oil and gas
production and 8 percent of its reserves.
"This sale will provide the flexibility for Unocal to move ahead with
new growth opportunities we have in Central and Southeast Asia," said Roger C.
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Beach, Unocal chairman and chief executive officer. "By shifting our investment
dollars into these higher return, overseas projects that also offer significant
growth potential, we expect to realize important gains in earnings and returns
to our stockholders in the next few years."
Beach pointed out that Unocal's upstream California operations earned
only about 60 cents per BOE produced in 1995. By comparison, Unocal's operations
in the Far East, as well as the U.S. Gulf Coast, earned more than $3 per BOE
produced last year.
Unocal is increasing its natural gas production in Thailand and
developing new oil and gas fields in Indonesia. In addition, the company is a
partner in the development of a new gas field offshore Myanmar and part of an
international consortium that is developing oil resources in the Caspian Sea.
"Unocal's new business focus follows an arc from the Black Sea to the Pacific
Ocean as we pursue opportunities where we can link known energy resources with
growing, ready energy markets," Beach said.
"When the company was founded in 1890 in California, the state was an
oil frontier," Beach said. "As we exit from California oil and gas production, I
want to acknowledge the generations of talented and skilled employees who have
worked long and hard in California over the decades to make Unocal successful.
With this success as a foundation, our upstream focus has shifted overseas to
Unocal's new oil and gas frontiers. We have become a global enterprise."
The sale of the California production is not expected to have a
material effect on the company's future operating earnings. Unocal will post a
one-time gain from the sale that will be reflected in the company's second
quarter results.
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Unocal Corporation
California Upstream Assets Sale
Fact Sheet
Sales price $492 million
Interest on sales price (from 10/1/95) $13 million
Net operating adjustments (from 10/1/95) ($24) million
Sales price per barrel of oil equivalent (BOE) reserves $3.35
Sales price ratios 55 times after-tax
earnings 10 times
after-tax operating
cash flow
Asset and Operating Information (1995)
Properties 68 fields, including
11 offshore
platforms in federal
and state waters
Reserves
Crude oil 120 mmbbls
Natural gas 162 mmcf
Barrels of oil equivalent (6.0 mcf=1bbl) 147 mmBOE
Net production
Crude oil 27,000 b/d
Natural gas 59 mmcf/d
Average sales prices
Crude oil $13.53/bbl
Natural gas $1.29/mcf
Cash production costs $7.30/BOE
After-tax earnings $9 million, or
$0.63/BOE
After-tax operating cash flow $49 million
After-tax return on average net properties 2.6%
Capital expenditures $41 million
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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: /s/ CHARLES S. MCDOWELL
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(Charles S. McDowell,
Vice President and Comptroller)
Dated: April 9, 1996
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