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) February 7, 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)
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Item 5. Other Events.
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Unocal Corporation reported that it replaced 159 percent of its net worldwide
crude oil and natural gas production during 1999 with new proved reserves.
Excluding purchases and sales, the company replaced 100 percent of its worldwide
production.
At year-end 1999, Unocal's net worldwide reserves totaled 1.66 billion
barrels-of-oil-equivalent (BOE), up 7 percent from 1.55 billion BOE the year
before.
During 1999, the company added reserves of 289 million BOE, including 107
million BOE from net purchases and sales and 182 million BOE from all other
sources. Net production for the year was 181 million BOE. About two-thirds of
Unocal's proved reserves are natural gas. Approximately 72 percent of the
reserves are outside the U.S.
Unocal holds a 47.8-percent interest in Canada-based Northrock Resources Ltd.
(Northrock), which is accounted for on a consolidated basis. Excluding the
minority share of Northrock's reserves, the company's overall estimated reserve
replacement ratio was 131 percent.
International operations
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Unocal's international operations replaced 242 percent of production in 1999
from all sources. Excluding purchases and sales, the replacement ratio was 129
percent. At year-end, total international reserves were 1.19 billion BOE, up 14
percent from the previous year. This included 95 million BOE due to the
acquisition of Northrock.
More than 100 million BOE in new reserves came from Unocal's exploration program
in Thailand and Indonesia.
Spirit Energy 76
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Spirit Energy 76, Unocal's Lower 48 exploration and production unit, replaced 65
percent of its production in 1999 with new reserves. In total, Spirit booked
more than 34 million BOE from discoveries and extensions, including the new Muni
field on Ship Shoal 295 and the long-producing Vermilion 39 field.
Spirit's reserve performance was affected by low exploration capital
expenditures in 1999 in response to oil prices. The 1999 reserves also do not
include any additions for deepwater Gulf of Mexico discoveries.
Costs
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For the year, Unocal's finding, development and acquisition (FD&A) costs for new
reserves were $4.90 per BOE. Excluding the minority interest in Northrock's
reserves, FD&A costs were $5.69 per BOE. Unocal's worldwide F&D costs, excluding
purchases, were $6.95/BOE. Excluding Spirit deepwater, the effective F&D costs
were $5.89/BOE.
The attached tables provide details on the company's reserves and FD&A costs.
Forward-looking statements and estimates regarding reserves in this filing are
based on assumptions concerning operational, market, competitive, regulatory,
geological, pricing, environmental, cost, and other considerations. Actual
results could differ materially as a result of factors discussed in Unocal
Corporation's 1998 Form 10-K report filed with the U.S. Securities and Exchange
Commission.
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<TABLE>
<CAPTION>
UNOCAL CORPORATION
Crude Oil and Natural Gas Reserve Data
Estimated proved reserves of crude oil, condensate and natural gas
Crude Oil Natural Gas Oil Equivalent
(MMbbls) (bcf) (MMBOE)
---------------------------------------
<S> <C> <C> <C>
1999 Beginning Reserves ..................................................................... 532 6,122 1,552
Discoveries and Extensions ............................................................... 31 705 148
Improved Recovery ........................................................................ 2 50 11
Revisions ................................................................................ 26 (20) 23
Purchases ................................................................................ 38 621 142
Sales .................................................................................... (15) (115) (35)
Production .................................................................................. (64) (706) (181)
2000 Beginning Reserves* .................................................................... 550 6,657 1,660
<FN>
* Includes host country shares for Indonesia and Democratic Republic of Congo of: ........... 46 441 120
</FN>
</TABLE>
<TABLE>
<CAPTION>
Estimated proved reserves by geographic area (millions of BOE)
Consolidated Subsidiaries
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Spirit Other Far Other Equity
Energy 76 U.S. East International Total Affiliates Worldwide
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<S> <C> <C> <C> <C> <C> <C> <C>
1999 Beginning Reserves ................. 376 125 849 196 1,546 6 1,552
Discoveries and Extensions ........... 34 3 100 11 148 -- 148
Improved Recovery .................... 4 -- 7 -- 11 -- 11
Revisions ............................ 6 5 12 (1) 22 1 23
Purchases ............................ 4 -- -- 123 127 15 142
Sales ................................ (24) (1) -- (10) (35) -- (35)
Production .............................. (59) (20) (80) (20) (179) (2) (181)
2000 Beginning Reserves* ................ 341 112 888 299 1,640 20 1,660
* Includes host country shares for Indonesia
and Democratic Republic of Congo of: 118 2 120 120
<FN>
Notes: Other U.S. is principally Alaska. Far East includes Thailand, Indonesia
and Myanmar. Other International includes Azerbaijan, Bangladesh, Canada,
Democratic Republic of Congo, Yemen and Netherlands. Included in Spirit Energy's
year-end 1999 reserves are 55 mmboe attributable to Spirit Energy 76
Development, L.P., a consolidated subsidiary, in which there is a minority
interest share respresenting approximately 24 mmboe. Other International's
year-end 1999 reserves include 98 mmboe attributable to Northrock Resources Ltd,
a consolidated subsidiary, in which there is a minority interest share
representing approximately 51 mmboe
Purchases and Sales include reserves acquired and relinguished through property
exchanges of 14 mmboe for Spirit Energy and 10 mmboe for Other International for
which there were no costs incurred
For the above, natural gas is converted at a ratio of 6 mcf to one barrel of oil
</FN>
</TABLE>
<PAGE> 3
<TABLE>
Preliminary 1999 finding, development & acquisition costs per BOE
Spirit Energy Other Far Other Total
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Deepwater Mature Total U.S. East Int'l Intl Total
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Costs Incurred (millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Exploration ................................................. 180 169 349 5 161 141 302 656
Development ................................................. 13 227 240 25 204 122 326 591
Proved property acquisitions ................................ -- 18 18 -- -- 31 31 49
Northrock Acquisition ....................................... -- -- -- -- -- 274 274 274
Total Consolidated Costs Incurred ................................. 193 414 607 30 365 568 933 1,570
Share of Equity Affiliates .................................. -- 11 11 -- 4 -- 4 15
Worldwide Costs Incurred (a) ...................................... 193 425 618 30 369 568 937 1,585
Reserve Data (millions of BOE) (b)
Discoveries/extensions ...................................... -- 34 34 3 100 11 111 148
Improved recovery ........................................... -- 4 4 -- 7 -- 7 11
Revisions ................................................... -- 7 7 5 12 (1) 11 23
Purchases ................................................... -- 19 19 -- -- 123 123 142
Total Changes ..................................................... -- 64 64 8 119 133 252 324
Finding & Development
Costs per BOE (c) ................................................. -- $9.17 $13.50 $3.77 $3.10 $25.14 $4.89 $6.95
Finding, Development & Acquisition
Costs Per BOE (d) ................................................. -- $6.70 $9.74 $3.77 $3.10 $4.26 $3.72 $4.90
F,D & A Costs per BOE Excluding
Northrock Resources Ltd. Minority Interest Share (d,e) ............ -- $6.70 $9.74 $3.77 $3.10 $6.53 $4.47 $5.69
<FN>
(a) Excludes properties acquired through property exchanges by definition.
(b) Includes equity interest in reserves of affiliates and 100% of
Northrock's reserves. (c) Excludes proved property acquisition costs and
purchased volumes. (d) Includes reserves and equity interests in affiliate
reserves acquired in property exchanges. (e) Excludes minority interest
share of costs ($53MM) and minority interest share of reserves (54 mmboe).
</FN>
</TABLE>
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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: Februrary 10, 2000 By: /s/ JOE D. CECIL
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Joe D. Cecil
Vice President and Comptroller
