SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) December 17, 1997
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UNOCAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-8483 95-3825062
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(Commission File Number) (I.R.S. Employer Identification No.)
2141 Rosecrans Avenue, Suite 4000, El Segundo, California 90245
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(Address of Principal Executive Offices) (Zip Code)
(310) 726-7600
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(Registrant's Telephone Number, Including Area Code)
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ITEM 5. OTHER EVENTS.
On December 17, 1997 the following news release was issued:
UNOCAL'S HIGHER 1998 CAPITAL SPENDING
REFLECTS INCREASED FOCUS ON EXPLORATION
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El Segundo, Calif., Dec. 17, 1997 - Unocal Corporation today said that
its capital expenditure plan of $1.5 billion for 1998 focuses on expanding the
company's exploration efforts in the U.S. Gulf of Mexico region and Asia. This
investment plan compares with an estimated $1.3 billion capital program in 1997.
About 37 percent of the planned capital expenditures, or nearly $555
million, are earmarked for low-risk oil, gas and geothermal exploration projects
in proven resource provinces. This compares with an estimated $315 million this
year.
"We believe we can significantly grow our production and reserves
through the drill bit with an aggressive, but intelligent, exploration program,"
said Roger C. Beach, Unocal chairman and chief executive officer. "We have an
outstanding portfolio of exploration prospects in the Gulf of Mexico, Indonesia,
Azerbaijan, Vietnam, Bangladesh and elsewhere, and our spending plan next year
will enable us to begin exploiting those opportunities."
Beach added that the company expects to drill or participate in more
than 180 exploration wells in 1998, including several deepwater prospects in the
Gulf of Mexico and Indonesia.
"The lion's share of our capital spending will go into three growth
engines for Unocal," Beach said. He said these three areas are Spirit Energy 76
(Unocal's Lower 48 U.S. oil and gas unit), Unocal's International Operations,
and the New Ventures group, which is pursuing high-return projects to connect
energy resources with growing markets, principally in Asia and Latin America.
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In 1998, 57 percent of the capital spending plan, or $850 million, is
earmarked for foreign projects. This compares with 69 percent, or an estimated
$920 million, for foreign projects in 1997.
PETROLEUM EXPLORATION AND DEVELOPMENT
Approximately $1.33 billion of the forecasted 1998 capital spending
is directed toward the company's worldwide petroleum exploration and production
activities, up 17 percent from an estimated $1.14 billion in 1997. About $775
million is earmarked for foreign oil and gas activities in 1998.
Capital spending on foreign projects focuses on growing operations in
Indonesia, and Thailand, as well as developing new oil and gas production, power
plants, terminals and pipelines in Asia.
In the U.S., planned capital spending for Unocal's Spirit Energy 76 unit is
up 70 percent to $500 million for 1998. Another $50 million is slated for the
company's oil and gas operations in Alaska.
The company is also planning for $200 million in exploration expense for
geologic and geophysical activities and other exploration operations. This
higher expense reinforces the company's increased focus on oil and gas
exploration.
GEOTHERMAL OPERATIONS
Capital expenditures for foreign geothermal operations are expected to
total more than $70 million, including $20 million for exploration. Exploration
will focus principally on prospects in Indonesia. This will include further
delineation of the prospects in the Sarulla contract area on North Sumatra, and
further field development of the Gunung Salak area on Java where the company
began operation of three new power plants.
DIVERSIFIED BUSINESS GROUP
Capital spending for the company's Diversified Business Group -
agricultural products, carbon and minerals operations and worldwide pipelines -
is $70 million, unchanged from the estimated 1997 level.
Forward-looking statements and estimates of capital expenditures in this
news release are based on assumptions concerning geology, drilling success,
costs, discount rates, market conditions, competition, and other considerations.
Actual results could differ materially.
News releases and other information about Unocal are available at the
company's Internet website, www.unocal.com.
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Unocal Corporation
Capital Expenditure Forecast
(millions of dollars)
1998 PLAN 1997 EST.
PETROLEUM EXPLORATION AND DEVELOPMENT 1,325 1,140
Exploration
United States 295 155
International 245 160
Development
United States 255 180
International 530 645
GEOTHERMAL OPERATIONS 75 110
DIVERSIFIED BUSINESS GROUP 70 70
CORPORATE AND OTHER 30 10
TOTAL CAPITAL EXPENDITURES 1,500 1,330
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PETROLEUM EXPLORATION EXPENSE 200 175
Note: 1997 excludes discontinued operations
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Pursuant to the requirements 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
(Registrant)
Date: December 19, 1997 By: /s/ JOSEPH A. HOUSEHOLDER
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Joseph A. Householder
Vice President, Tax and Comptroller
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