Unocal Sees Lower 1999 Capital Spending

Unocal Corporation said it expects 1999 capital spending to total between $1 billion and $1.1 billion, down from the estimated $1.7 billion in capital expenditures last year. The lower spending reflects Unocal's narrowed focus on the company's core oil and gas exploration and production program in response to lower commodity prices. The 1998 capital expenditures included significant outlays, such as the Gulf of Mexico OCS leases, to build the company's strong deepwater exploration and growth portfolio. That level of spending for leases is not expected to be repeated in 1999, accounting for about one-fourth of the reduction in the overall capital spending plan. Roger C. Beach, Unocal chairman and CEO said Unocal's actual capital spending in 1999 depends on commodity prices during the year. "If oil and gas prices remain at current levels, our capital spending for the year could be even lower. We want to ensure that our debt ratio remains below 50 percent, and we will review the investment plan on a month-to-month basis," he said. More than 90 percent of the planned capital spending will be for oil and gas exploration and production, with more than half of that going to projects outside the U.S.