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) Ocotober 3, 2003
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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)
Item 5. Other Events.
Unocal Corporation announced that its oil and gas production for the third
quarter of 2003 is expected to be lower than previously forecasted mainly from
startup issues at the West Seno deepwater development project in Indonesia.
Production volumes were also negatively affected by higher host country
production shares in Asia, a return to Daily Contract Quantity level production
in Thailand as PTT Public Co., Ltd. reduced nominations, and divestitures and
production declines in the U.S. Lower 48.
For the third quarter, worldwide production is expected to be about 3 to 5
percent below the previously expected range of between 460,000 and 470,000
barrels of oil equivalent ("BOE") per day. Worldwide fourth quarter 2003
production is expected to range between 430,000 and 440,000 BOE per day. The
fourth quarter forecast reflects the West Seno delays, the sale of nearly 7,000
BOE per day of equity production from the Company's holdings in Tom Brown, Inc.
and Matador Petroleum Corporation, and the expected close of the sale of more
than 20,000 BOE per day of production to Forest Oil Corporation and others
during the fourth quarter.
West Seno Production Issues
The slower than anticipated ramp-up in West Seno production is related mainly to
the facilities and start-up operations. The reservoir is performing as
predicted, and the Company is encouraged by what it sees in terms of oil pay
thickness and initial well performance. The Company expects to achieve peak
gross production rates of 35,000 to 45,000 BOE per day from Phase 1, rising to
55,000 to 65,000 BOE per day when Phase 2 is completed.
The Company experienced a series of facility-related processing issues that have
been corrected. A chemical treatment to minimize oil/water emulsions during
surface processing has proven to be effective and is now being utilized,
allowing existing wells to come up to full production levels. The Company has
completed six wells, which are currently producing 17,000 BOE per day, including
15,000 barrels of oil. Estimated actual gross production for the third quarter
from West Seno averaged 5,000 BOE per day. The Company had expected average
production of nearly 20,000 BOE per day from West Seno in the third quarter. The
Company will now bring on additional development wells, which is expected to
ramp up gross production from the field up to 30,000 to 35,000 BOE per day by
year-end.
The Company's share of West Seno production will be approximately 85 percent of
gross production during the early cost recovery period.
Outlook: 2004 and beyond
The Company anticipates that the delays at West Seno should not affect the
expected 2004 worldwide production outlook of 450,000 to 460,000 BOE per day.
The Company is encouraged as it begins bringing on-line its inventory of
development projects and continues to move forward on existing discoveries.
* * * * *
This filing contains certain forward-looking statements about future production.
The statements are based upon Unocal's current expectations and beliefs and are
subject to a number of known and unknown risks and uncertainties that could
cause actual results to differ materially from those described in the forward
looking statements. Actual results could differ materially as a result of
factors discussed in Unocal's 2002 Form 10-K and other reports filed with the
U.S. Securities and Exchange Commission.
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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: October 6, 2003 By: /s/ JOE D. CECIL
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Joe D. Cecil
Vice President and Comptroller
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