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) July 27, 2000
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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)
<PAGE>
Item 5. Other Events.
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Second Quarter 2000 Earnings
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Unocal Corporation's net earnings were $264 million, or $1.05 per share diluted,
for the second quarter of 2000, with $250 million from continuing operations and
$14 million from discontinued operations. This compared to $9 million, or 4
cents per share diluted, for the second quarter of 1999, with $6 million from
continuing operations and $3 million from discontinued operations. Discontinued
operations include the results of the company's Agricultural Products business
segment, whose sale is pending. The sale is subject to clearance by the U.S.
Federal Trade Commission.
Earnings from continuing operations were $250 million, or $1.00 per share
(diluted), in the second quarter of 2000 compared to $6 million, or $0.03 per
share (diluted), for the same period a year ago. The increase was primarily due
to higher crude oil and natural gas prices. The company's worldwide average
crude oil price was $24.78 per barrel, up $10.79, or 77 percent, in the second
quarter of 2000 compared with the same period a year ago. The company's
worldwide average natural gas price was $2.62 per thousand cubic feet (mcf) in
the second quarter of 2000, an increase of 33 percent, compared with the same
period a year ago. The second quarter of 2000 included a $55 million after-tax
benefit from payment received for infringement of one of the company's five
reformulated gasoline patents during a five-month period in 1996. The company
also recorded $21 million after-tax insurance recovery and a $42 million
after-tax gain from the Pure Resources, Inc. (Pure) transaction. These positive
factors in the second quarter of 2000 were partially offset by $30 million
after-tax in higher litigation and environmental costs.
For the first six months of 2000, the company's net earnings were $397 million,
or $1.60 per share diluted, with $374 million from continuing operations and $23
million from discontinued operations. This compared to $16 million, or 7 cents
per share diluted, for the first six months of 1999, with $10 million coming
from continuing operations and $6 million from discontinued operations.
Earnings from continuing operations increased by $364 million in the first six
months of 2000 compared with the first six months of 1999. Higher crude oil and
natural gas prices were major factors for this increase. The company's worldwide
average crude oil price increased by $12.35 per barrel, or 102 percent, to
$24.51 per barrel in the first six months of 2000 compared with the same period
a year ago. The company's worldwide average natural gas price increased by $0.52
per mcf, or 27 percent, to $2.44 per mcf in the first six months of 2000
compared with the same period a year ago.
Total revenues from continuing operations for the second quarter of 2000 were
$2.2 billion, compared with $1.4 billion for the second quarter of 1999. Total
revenues from continuing operations for the first six months of 2000 were $4.1
billion, compared with $2.6 billion for the same period a year ago.
Capital spending for the second quarter of 2000 was $263 million, compared with
$243 million for the second quarter of 1999. Capital spending in the second
quarter of 2000 excluded $161 million for the acquisition of the remaining
Northrock Resources, Ltd. (Northrock) common shares. The capital spending in the
second quarter of 1999 excluded $184 million for the initial acquisition of
Northrock shares.
The company's total debt at the end of the second quarter of 2000 was $2.78
billion, compared with $2.85 billion at the end of 1999.
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<PAGE>
Outlook
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The company expects adjusted after-tax earnings per share to approximate 70
cents per share for the third quarter of 2000, assuming an average West Texas
Intermediate (WTI) crude oil price of $29.75 per barrel and a Henry Hub natural
gas price of $4.00 per million British thermal units (MMBtu). The company also
expects adjusted after-tax earnings per share of $2.70 to $2.90 for the full
year of 2000, assuming an average WTI crude oil price of $28.60 per barrel and a
Henry Hub natural gas price of $3.55 per MMBtu.
Forward-looking statements and estimates regarding exploration and production
activities, production levels, oil and gas prices and their related earnings
effects, costs and capital expenditures in this filing are based on assumptions
about operational, market, competitive, regulatory, environmental, political and
other considerations. Actual results could differ materially as a result of
factors discussed in Unocal 's 1999 Annual Report on Form 10-K.
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<PAGE>
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: August 2, 2000 By: /s/ JOE D. CECIL
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Joe D. Cecil
Vice President and Comptroller
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<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED RESULTS
(UNAUDITED)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
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Millions of dollars except per share amounts 2000 1999 2000 1999
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<S> ....................................................................... <C> <C> <C> <C>
Adjusted after-tax earnings from continuing operations .................... $ 170 $ 16 $ 309 $ 33
Special items ............................................................. 80 (10) 65 (23)
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Earnings from continuing operations ....................................... 250 6 374 10
Earnings from discontinued operations ..................................... 14 3 23 6
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Net earnings .......................................................... $ 264 $ 9 $ 397 $ 16
====================================================================================================================================
DILUTED EARNINGS PER SHARE DATA (UNAUDITED)
Adjusted after-tax earnings per share from continuing operations .......... $ 0.69 $ 0.06 $ 1.26 $ 0.13
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Net earnings per share:
Continuing operations ................................................ $ 1.00 $ 0.03 $ 1.51 $ 0.05
Discontinued operations .............................................. 0.05 0.01 0.09 0.02
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Total net earnings per share .............................................. $ 1.05 $ 0.04 $ 1.60 $ 0.07
====================================================================================================================================
REVENUES FROM CONTINUING OPERATIONS (UNAUDITED) ........................... $ 2,248 $ 1,441 $ 4,129 $ 2,609
</TABLE>
<TABLE>
<CAPTION>
ADJUSTED AFTER-TAX EARNINGS BY BUSINESS SEGMENT
(UNAUDITED)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
------------------------ ------------------------
Millions of dollars except per share amounts 2000 1999 2000 1999
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Exploration & Production
<S> ....................................................................... <C> <C> <C> <C>
North America
Lower 48 (a) .................................................... $ 92 $ 6 $ 155 $ 7
Alaska .......................................................... 23 6 47 8
Canada (a) ...................................................... (11) 5 (7) 9
International
Far East ........................................................ 88 39 170 87
Other ........................................................... 19 (4) 17 (23)
Global Trade .............................................................. 6 -- 4 2
Pipelines ................................................................. 15 16 30 33
Geothermal and Power Operations ........................................... 5 10 14 20
Carbon & Minerals (a) ..................................................... 6 7 14 16
Corporate and Unallocated
Administrative & General ........................................ (21) (21) (43) (42)
Interest Expense - Net (a) ...................................... (37) (34) (73) (65)
Environmental & Litigation ...................................... (3) (4) (6) (6)
Other ........................................................... (12) (10) (13) (13)
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Adjusted after-tax earnings from continuing operations .................... 170 16 309 33
Adjusted after-tax earnings from discontinued operations .................. -- 3 -- 6
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Adjusted after-tax earnings ............................................... $ 170 $ 19 $ 309 $ 39
====================================================================================================================================
<FN>
(a) Includes minority interests of:
Lower 48 ........................................................ (6) (4) (11) (3)
Canada .......................................................... 12 (1) 20 (1)
Carbon & Minerals ............................................... (1) -- (1) (1)
Corporate and Unallocated ....................................... 1 1 2 1
</FN>
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
OPERATING HIGHLIGHTS
(UNAUDITED)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
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2000 1999 2000 1999
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North America Net Daily Production
Crude oil (thousand barrels)
<S> ....................................................................... <C> <C> <C> <C>
Lower 48 (a) ......................................................... 44 40 44 40
Alaska ............................................................... 26 28 26 28
Canada (a) ........................................................... 15 12 16 10
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Total North America crude oil ................................... 85 80 86 78
Natural gas - wet basis (million cubic feet)
Lower 48 (a) ......................................................... 756 764 744 772
Alaska ............................................................... 138 131 146 137
Canada (a) ........................................................... 94 59 97 31
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Total North America natural gas ................................. 988 954 987 940
North America Average Prices (c)
Crude oil (per barrel)
Lower 48 ............................................................. $27.12 $14.98 $27.16 $13.15
Alaska ............................................................... $23.81 $12.02 $23.25 $10.01
Canada ............................................................... $18.50 $11.91 $18.86 $11.01
Average North America crude oil prices .......................... $24.51 $13.47 $24.40 $11.72
Natural gas (per mcf)
Lower 48 ............................................................. $3.41 $2.05 $2.96 $2.01
Alaska ............................................................... $1.20 $1.20 $1.20 $1.20
Canada ............................................................... $1.50 $1.90 $1.49 $1.90
Average North America natural gas prices ........................ $2.89 $1.93 $2.53 $1.88
International Net Daily Production (b)
Crude oil (thousand barrels)
Far East ............................................................. 71 72 71 71
Other ................................................................ 19 23 19 23
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Total International crude oil ................................... 90 95 90 94
Natural gas - wet basis (million cubic feet)
Far East ............................................................. 945 851 928 840
Other ................................................................ 58 29 60 33
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Total International natural gas ................................. 1,003 880 988 873
International Average Prices (c)
Crude oil (per barrel)
Far East ............................................................. $24.40 $14.76 $24.03 $12.59
Other ................................................................ $26.38 $14.26 $26.19 $12.75
Average International crude oil prices .......................... $25.10 $14.61 $24.67 $12.64
Natural gas (per mcf)
Far East ............................................................. $2.31 $2.03 $2.30 $1.95
Other ................................................................ $2.80 $1.89 $2.76 $1.81
Average International natural gas prices ........................ $2.35 $2.02 $2.34 $1.95
Worldwide Net Daily Production (a) (b) ....................................
Crude oil (thousand barrels) ............................................ 175 175 176 172
Natural gas (million cubic feet) ........................................ 1,991 1,834 1,975 1,813
Barrels oil equivalent (thousands) ...................................... 507 481 506 474
Worldwide Average Prices (c)
Crude oil (per barrel) .................................................. $24.78 $13.99 $24.51 $12.16
Natural gas (per mcf) ................................................... $2.62 $1.97 $2.44 $1.92
<FN>
(a) production includes 100 percent of consolidated subsidiaries and
proportionate share of equity affiliates.
(b) production includes certain host countries' shares of: Crude oil...... 27 26 28 19
Natural gas ... 117 77 114 74
(c) average prices include hedging gains and losses but exclude gains or losses
on derivative positions not accounted for as hedges and other Global Trade
margins.
</FN>
</TABLE>
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