Filed by Unocal Corporation
                           Pursuant to Rule 425 under the Securities Act of 1933
                                           Subject Company: Pure Resources, Inc.
                                                   Commission File No. 001-15899

Q3 2002 Unocal Earnings Conference Call - Thursday, October 24, 2002


OPERATOR: Good afternoon and welcome to the Unocal third quarter earnings
conference call. Following todays presentation there will be a formal
question-and-answer session. At that time, instructions will be given should
anyone wish to ask a question. Until that time, all lines will be in a
listen-only mode. At the request of Unocal the conference is being recorded. If
you have any objections you may disconnect at this time. I would now like to
turn the call over to todays host, Mr.Robert Wright. Sir, you may begin.

ROBERT WRIGHT, VICE PRESIDENT OF INVESTOR RELATIONS, UNOCAL CORPORATION: Thank
you. Good day everybody and welcome to the Unocal third quarter conference call.
As Muhammad said, my name is Robert Wright and for those of you who don't know,
I'm the Vice President of Investor Relations. Joining me in the call today are
Chuck Williamson, our Chairman and CEO, Tim Ling, President and COO, Terry
Dallas, Executive Vice President and CFO and Ron Moore, Manager of Investor
Relations .

Chuck and Ron are in Sugarland and the rest of us are here in El Segundo. A
replay of the audio broadcast will be available through our website til November
29th. An audio replay is also available over the telephone. Please call Investor
Relations at El Segundo or Sugarland for more information. We also have some
slides available for you to view as you listen to the call. You can view the
slides through the Unocal website at, www.Unocal.com. As we go through the call,
I will reference the slides by number.

My remarks today will include certain projections and estimates, which are
obviously forward-looking statements. Actual results could be significantly
different, depending on many factors. If you are unsure of what the various
risks are in this business, please review them in more detail on pages 59
through 65 of Unocal's 2001 SEC as amended. SEC 10-K as amended. Excuse me.

If you have not yet reviewed the Unocal's third quarter earnings package, the
news release and detailed tables of financial information are available on our
company website. Again, www.Unocal.com. In the investor information section, go
to the data warehouse section and look for the quarterly fact book. The website
also contains a third-quarter earnings news release and all the company's news
releases from 1996 to the present. Those can be found in the news from Unocal
section.

Now I'll cover the major earnings factors for the third quarter if you'll look
at slide 1 now. Unocal's third quarter adjusted earnings were $126 million or 52
cents per basic and diluted share. Those results were down $8 million from the
second quarter. Operating results from the non-expiration production segment and
corporate were responsible for $16 million of the sequential decrease.
Expiration production operations were up $8 million in the second quarter. I
will cover each segment later in the call.

But to summarize, the largest positive factor was a lower effective
international tax rate, which resulted in a favorable $15 million variance. This
variance is due to changes is the Thai baht foreign exchange rate from the
second quarter to the third. Oil and gas prices were a net $4 million positive
factor and lower production was a $7 million unfavorable factor. World wide oil
and gas production was down 4% due primarily to natural declines, temporary
mechanical well problems, weather related shut-ins in the Gulf of Mexico and
price related changes to entitlement bonding within production sharing
countries.

Chuck will have -- and Tim will have more to say about the production later on.
A list of high-level variance factors can be viewed on slide 1. Adjusted
discretionary cash flow is $521 million or $2.13 per share in the third quarter,
up 6% from $491 in the second quarter or $2.00 per share. Total debt at the end
of the third quarter stood at $3.078 billion including $8 million of current
portion. The cash balance at the end of September was $275 million up $114
million from June. Debt less cash declined $155 million in the third quarter.

The ratio of debt to total capitalization was 45% at the end of September,
compared to 46% at the end of June. Capital spending in the third quarter was
$418 million compared with $440 million in the second quarter. The third quarter
reported net earnings which includes special items were $99 million or 41 cents
per share. Negative special items include environmental and litigation accruals
amounting to $22 million. These accruals are primarily related to closed sites
in the minerals business. [INAUDIBLE] There is also a $5 million non-hedged mark
to market derivative loss.

Before Chuck and Tim's part of the call, I'll quickly go over the major factors
affecting the segments of the third quarter, adjusted after tax earnings, versus
second quarter. Again, that is earnings excluding special items. Go to slide 2.

Unocal's lower 48 business recorded earnings of $13 million, down $19 million
from the prior quarter. Lower production is responsible for $6 million of the
lower sequential earnings. Production volumes declined from 1.091 billion cubic
feet equivalent per day to 1.027 billion or 6%. Natural fuel declines, pipeline
curtailments, and temporary mechanical problems, at the Gulf of Mexico shut-ins
from hurricane Isidore all contributed to the decrease. Lower natural gas prices
from 312 to 297 accounted for $6 million of lower results. Higher drive hull
expenses in the third quarter was responsible for $8 million unfavorable
balance. In addition to other operating items increased accruals for the Pure
Resources management put and Pure's legal and advisor costs lowered Unocal's
third quarter earnings by $8 million.

As most of you know, we have an outstanding tender offer for the remaining
shares of Pure Resources that we do not presently own. We have entered into an
agreement with senior management and a special committee of the Board of
Directors has recommended the offer to the shareholders. The details of the
offer are available on the latest S-4, which we published, dated October 11th,
and amended on October 18th. The offer is set to expire at midnight October
29th.

Getting back to earnings factors, partially offsetting the negative factors in
lower 48 were lower operating expenses of $6 million. $4 million due to higher
liquids prices of $1.27 per barrel and lower D&D rates amounted to $2 million.

Moving on now to slide 3. Results from the Unocal's Alaska EMP operations were
up $15 million from Q2. Timing of a $12 million impairment recorded in the
second quarter was the primary factor. Higher oil prices of $1.31 per barrel
from $20.86 to $22.17 was responsible for $2 million in higher earnings. Another
favorable variance was lower operating expense of $2 million. Partially
offsetting these positive factors was higher dry hole expense of $1 million.

Slide four, results from Canada improved by a million in the third quarter.
Lower dry hole and operating expenses plus higher oil and liquids prices from
$21.92 to $22.70 were partially offset by lower natural gas prices. Natural gas
prices in Canada declined from $2.97 to $2.10. Slide five. Our international EMP
operations earned $136 million. The quarterly amount was up $11 million from the
previous quarter. Our lower effective income tax rate from 43% to 37% due to
time bought in foreign exchange differences was the largest favorable variance
of $15 million. Higher oil and liquids prices from $22.84 to $24.80 amounted to
a quarterly of $5 million. Higher natural gas prices from $2.64 to $2.69 were a
$2 million positive factor. And then, rounding it out, timing of oil lifting was
responsible for $5 million in improved results. Partially offsetting the
positive factors was higher dry hole expense of $5 million, higher operating
expenses of $5 million and higher D&D expenses of $5 million.

Let's go on to slide 6. Moving on now to non-EMP operations which are oil and
gas marketing, which is our trade segment. Midstream and geothermal were lower
by $12 million in total. Lower oil and gas margin or trading markets were
responsible for $2 million in lower results. Increased accruals in the pipeline
group caused a $6 million unfavorable variance for the quarter. Lower geothermal
steam sales, electricity generation, and foreign exchange were responsible for
$9 million in the lower sequential earnings in the geothermal and power
segments.

Looking forward to the fourth quarter, adjusted earnings for the non-EMP
segments are expected to be as follows: Trade between break-even to plus $2
million, Midstream between $14 and $16 million in positive earnings, and
geothermal between $10 and $12 million positive earnings. After-tax, corporate
and other net costs of $57 million, were $1 million lower than the second
quarter. After-tax, corporate and other results are currently expected to be
between $50 and $60 million of net expense for the fourth quarter of 2002.
Looking forward, Unocal's estimate of fourth quarter earnings is between 50 and
60 cents per share depending on commodity prices and other factors.

Average diluted shares in the fourth quarter is expected to be $254 million,
assuming the Pure deal closes somewhere around November 1st. Also included in
this earnings estimate are several one-time costs related to the Pure
transaction as well. These costs, which are for employee severance, deferred
compensation accruals related to the conversion of Pure options, stock options,
to Unocal stock options and transactions costs will amount to $15 million after
tax, it will be recorded in the lower 48 segment. This fourth quarter earnings
forecast assumes the benchmark commodity prices of $29.75 per unit for non-mix
crude and $4.10 per unit for North American non-mix natural gas.

Fourth quarter production is forecasted to be between 445,000 and 460,000 BOE
per day, including temporary production losses of between 15,000 and 23,000
B.O.E. per day due to hurricane Lili. In a separate disclosure today, we
provided an estimate of 2003 production which is up 2 1/2% to 5% from 2002
levels and that puts that range at between 480,000 and 495,000 B.O.E.per day.
The fourth quarter earnings estimate also includes estimated dry holes between
$25 and $35 million pretax.

For the purposes of your own estimate analysis, Unocal's quarterly earnings
sensitivity is 4 cents per share for each dollar change in worldwide commodity
oil prices and two cents per share for each 10 cent change in non-mix natural
gas prices. Annual estimates can be determined by adding the fourth quarter
guidance to the year to date numbers. Unocal's hedging activity changes over
time but in the third quarter of 2002, our hedging program had minimal or no
impact. Looking forward in the remaining months of the fourth quarter, we had 16
billion units of lower 48 natural gas with calls between $5.01 to $3.49.
Remaining fourth quarter hedge volumes represent less than 28% of expected lower
48 natural gas production and less than 11% of worldwide natural gas production.

In the first quarter 2003, we have 6 billion units of lower 48 natural gas with
calls between $5.48 and $4. Forward-looking price assumptions are subject to
significant change on a daily basis. And analysts should look to the changes in
the latest benchmark prices for oil and natural gas to adjustment their earnings
estimates accordingly during the quarter and over the remainder of the year. Now
for perspective in the third quarter results and other matters, I am going to
turn discussion over to Mr. Chuck Williamson, Unocal's Chairman and CEO. Chuck.

CHARLES WILLIAMSON, PH.D., CHAIRMAN AND CHIEF EXECUTIVE OFFICER, UNOCAL
CORPORATION: Thanks, Robert. And good afternoon, everyone. I'd like to make a
few remarks first about the third quarter and then advise briefly on the
fourth quarter in our 2003 outlook.

As Robert has outlined, our third quarter production and financials were pretty
much as we expected with the exception of the hurricane effects in the Gulf of
Mexico. And Tim can provide a little more color around the results of the
hurricane in a few moments. I want to highlight progress this past quarter on
two of our major international development projects that will impact our
production from 2003 onwards. At [Aza Bijan] and [deep water] in Indonesia. In
Aza Bijan where were are the second largest interest holder in the ALC
development, the construction of the main export pipeline, 1100 mile pipeline
from Bacule to Jahon has started and completion is expected in late 2004 at an
estimated gross cost of about $2.9 billion. We expect oil production to grow
from currently about 140 thousand barrels a day to 800 to 850 thousand barrels a
day by 2008.

This is an important project for us. We hold an 8.9% working interest in the
pipeline and 10.28% in the field development. I want to emphasize the
construction started on the pipeline and we're very pleased with the progress
thus far at Aza Bijan.

In Indonesia, we're making very good progress in our West Sano deep water
development facilities. We launched the floating storage unit and still expect
our first production in April of next year. Phase 1, I'll remind you have peak
production potential of 52,000 B.O.E. today net to Unocal and we'll be ramping
that production up over 2003. So this is an important part of our 2003
production growth.

Now I'd like to address and just talk briefly about our production outlook that
we released this morning for 2003 and preliminary for the five-year outlook. I
also want to take this time to put in a plug for an analyst meeting we expect to
have on November 20th in New York for the business unit leaders and some of the
explorationist will be able to provide some more details, particularly on the
2003 program.

For 2003, we expect a modest production growth of 2 1/2% to 5% off of our 2002
base. And you'll see that we are continuing to allocate more capital to these
large, big developments like Aza Bijan and West Sano that I just mentioned.

We have a good queue of these developments, for the first time, I feel, in many
years, we have a development inventory that includes four major projects that
are now sanctioned and under production. The [AIOC] Phase I and II, West Sano
Phase I and II, that I mentioned and the Mad Dog in the Gulf of Mexico and then
project in Alaska, a new gas project, South [Kenai] gas. But probably, just as
importantly, we have a healthy list we expect to sanction over the next two
years, including a couple more projects in deep water Indonesia in the line gas
fields which we have merely appraised, Mera Bizarre field which has been
appraised, Phase three [AIOC] and then the Gulf of Mexico, the K-2 development
and the Trident in the Gulf of Mexico in deep water. So with these other
projects we have queued up. As I said, a good inventory we haven't had in the
past that allows to project the 5% to 7% production growth over the next five
years. In addition, I think as many are aware, we have large discoveries in our
Asian gas in Indonesia, Thailand Bangla Desh and Vietnam. Places that we think
will assure production growth beyond 2006, well out into the next decade.

Our production forecast is underpinned, first of all, by our Thailand
[INAUDIBLE] operations. We don't talk as much about that because it's a very
steady state business for us. The market there continues to show nearly 6% year
on year power growth and gas sales have been 3% to 5% and we expect the same
increases over the next few years. We're currently producing roughly 145,000
barrels of oil equivilant per day between Thailand and [Miadmah]. And we have a
very stable business there for many years to come. So it's an important part of
the ongoing production.

Now, let me make just a few comments about our exploration programs before we
turn to the North American production outlook. You know, this past year I feel
that we've made very good progress in dialing our exploration program to a
sustainable funding level of about $250 million a year. Excluding the Pure
exploration program.

his is more than adequate to fund, I think, a very strong program this next year
and 2003. In deep water Indonesia we have nearly nine months of drilling with
some deep oil targets and some new PFCs with oil targets. Deep water Gulf of
Mexico will have at least 3 to 5 major new prospects in Mississippi canyon and
Green canyon plus our Trident appraisal program. And a full year of deep shelf
prospects which Tim will talk - update you on in just a minute.

So we have $250 million. I think we have a very strong expiration program on an
ongoing basis and good portfolio. Our biggest production challenge remains in
North America. There's no question we have been struggling along with the rest
of the industry with our Gulf of Mexico declines. I think we've taken a very
aggressive approach and some ways to flatten a decline that we'll be talkin'
about with you. I'd like to remind all of our investors, if you look at our
total lower 48 and Canada production together, nearly half of that is in the
high decline Gulf of Mexico shelf, the treadmill that we all fight very hard,
but the other half is in the longer RP and the onshore U.S. and Canada.

So one of the reasons we've done the Pure tender is to give us a stable balance
for some of the steep Gulf of Mexico declines. Our deep shelf exploration
program is aimed at offsetting some of those steep decline rates as I said
earlier. We're not spending as much capital on the smaller target type
prospects. And I think we're ramping up now very aggressive deep water and deep
shelf program in the Gulf of Mexico.

I think that with that for next year in our production forecast in the Gulf, we
think we can hold the Gulf of Mexico nearly flat to the end of the year with the
current portfolio that we have with modest deep shelf exploration success. Fair
enough if we don't have exploration success in 2003 and the end of this year,
then 2004 will not be as easy to hold flat and we'll take a different approach.
But right now, we are very optimistic about the exploration program and Tim can
update you. It's been a difficult year for our North American production. The
steep declines in the [muni] field but hurricanes and more rapid declines, but I
think we're making the right adjustments on capital and expense side.

We've shown the discipline of not funding things strictly for production and I
think we have some very large developments in the international side that will
help us improve our margin as we go forward. With that said, we have an
excellent portfolio, I think, of projects that will help us replace production
in the U.S. I'm going to let Tim talk a little bit more about some of the North
American, Gulf of Mexico activity. So I'll turn it back to Tim.

TIMOTHY LING, PRESIDENT, CHIEF OPERATING OFFICER, DIRECTOR, UNOCAL
CORPORATION: Thanks, Chuck.

With respect to the hurricane, I think we in our press release this morning
tried to outline in a fair degree of detail what the losses have been and what
we think the outlook is for production loss for the rest of the year. I wanted
to give you a little more detail on that.

As those of who you followed the two hurricanes, hurricane Isidore, we really
got by with fairly minimal damage. The 4,000 a day that hit our second quarter
really was just production that had to be shut in before, during, and slightly
after the passing of Isidore. But we had no real lasting damage.

Lili was another story entirely. For those of you that followed the track of
that storm, before it hit landfall in and around the bay, its most destructive
hurricane force winds happened really in the heart of our Eastern Gulf
production area in and around Eugene Island, South Marshal Island, Ship Shoal
before it made land with some sustained winds above 140 miles per hour. Our
damage in the Eastern Gulf infrastructure was significant. Our Central and
Western Gulf production really had no sustained damage and was returned to
production two days after hurricane had passed.

As of today, we have somewhere between 13 and 14,000 barrels of oil equivalent
per day still down. Mainly as a result of major facilities damage above the
surface and below the surface. We had extensive facilities damage on nine
platforms. Foremost amongst those is South Marshal Island 6, Eugene Island 276,
Eugene Island 32, Ship Shoal 208 and we lost two platforms in South Morris
Island 11 block, which actually are going to be nonrecoverable.

So we have somewhere between 1 1/2 and 2,000 barrels of oil a day, from those
two platforms which literally were just gone. That we're not going to recover.
The scope of the repairs and the damages in the facilities that I mentioned,
though, that will be recoverable ran the gamut from damage to living quarters,
damage to sumps, [INAUDIBLE] cases and other equipment. Processed piping, flow
lines, generators, compressors, et cetera.

We are now fairly well through the process of the damage assessment. We are
bringing on platforms as we speak, but there are some significant inspection and
regulatory issues that we're going to have to get through before we are willing,
from a safety and OSHA standpoint to return some of these platforms to service.
Our best guess is right now, we do believe we will get everything on by the end
of the year. We are targeting sort of three days middle of November, early
December and the end of December really bring on the things that are down right
now. But I did want to give you a little bit of detail and color. This was
significant damage.

As you know, many of you have seen the pictures of the four pile Eugene Island
322 structure, operated by BP, which literally was just bent over in an
unrecoverable state. So that area did in general sustain a lot of damage and
unfortunately, a lot of our production is in that area. I wanted to just talk a
little bit about the exploration activity that we have going on and will have
going on over the next 18 months.

Chuck talked, one of the keys for us to being able to extend the R to P range on
our shelf production is to change the mix of our capital towards exploratory
activity targeting deeper, the deeper [miocene] larger targets. We will, by the
end of the year have had activities, on about 11 or 12 deep wells. Because of
the hurricane damages among delays, not all of those wells will be down and
evaluated.

Currently, we have -- we've had one well, which we've completed and evaluated.
Well we drilled with [INAUDIBLE] called "Luck of the Draw". That was a
noncommercial gas discovery, which we have decided not to complete. We had two
wells drilling right now Corky in South Marsh Island 6 and Leprechaun on Eugene
Island 24. And we were about to spud five additional wells. Jalapeno on Hyatt
Island 36, Andosite in East Caan 64, two Mustang Island prospects, Rio Grande
and Escondito and an onshore prospect in the Louisiana State waters called
[INAUDIBLE] which we will be drilling with ORE and all of these prospects meet
our criteria. Deeper horizons below 14,5 thousand added significant upside. So I
think that program was going well.

The key for us for 2003 is we want to generate significant inventory such that
we can high grade that inventory and really drill 15 or 16 prospects that we
really feel are not only ready but technically sound and marketable. Because we
want to make sure our working interest is at the right level. Deep water
Indonesia, we will be taking a drilling hiatus probably until the beginning of
2003.

But we have, as Chuck mentioned earlier, a very full program of drilling for the
year 2003 that really is still going to be focusing on a bit of appraisal on
some of our giant gas fields. But mostly exploration tests targeting oil.
There's really three types of plays where we'll have oil potential next year. We
have numerous prospects in the final drill schedule still a little bit in flux.
But there are oil tests in the next suite of outboard acreage that was just
acquired last year. There are three blocks there and we will have multiple
targets again targeting very ultra deep oil prospects. We have a number of
remains prospects in around Arongas that we've called Arongas lookalikes.

One of them called Gahan is shaping up nicely and will probably be on the first
half of 2003 drilling schedule. And we have a number of tests which we're going
to be going through existing discoveries to target deep horizons for oil.
[INAUDIBLE] are likely amongst those three which we'll be testing deeper
horizons. Again, a very robust schedule in Indonesia. And that continues to play
in a very fair way for us. And as Chuck mentioned, I think the company is
anticipating accelerating the commercial appraisal and move forward plans for
things like Rhombus and Maribisar.

Finally, in the deep water Gulf of Mexico, as many of you know, 2002 was a
hiatus year for us where we were digesting the results of our 2001 drilling
program and the industries results in 2002. Happy to report I believe that we
have a very robust portfolio of prospects that we will be drilling. Towards the
end of this year and in 2003. We're currently drilling our second appraisal well
on Trident. It is a -- a strikeline test and this well has probably been delayed
by about a month because of hurricane activities as well. But we intend to have
this well through the primary appraisal objectives by hopefully the end of
November. We are going to move off of the Trident appraisal well and go over to
a well prospect called Bore.

This is a Shell-owned prospect that Unocal will be operating, the exploration
program on. It is a very large, turtle structure in the center of the
Mississippi canyon area, where the industry is obviously had a fair amount of
success in these turtles there are multiple people that are going to be in this
prospect. It say five-block large prospect and we intend to be spuding this
hopefully sometime in December 2003.

2003 - We will probably drill somewhere between two and four wildcats, and we
have seven or eight prospects that we're currently maturing and marketing. The
vast majority of these prospects lie in the Southern Green Canyon / Northern
Walker Ridge area in and around Mad Dog, K-2, and Tahiti discoveries. So we're
really, really have a program that will be focused around what we call very
attractive neighborhoods for adjacent discoveries.

As Chuck mentioned before, we believe we'll be able to manage our capital
exposure. We have multiple companies that have come in and looked at our
inventory. And we're very confident that we'll be able to drill these two to
four wildcats next year in a promoted basis to manage our capital exposure. With
that, I will turn it back to Robert Wright.

ROBERT WRIGHT: Thanks, Tim.

We're ready for the Q&A portion now. I know it's been a long day for the
analysts on the call. A lot of calls today. So I ask Mohammed to start the Q&A
process.

OPERATOR: At this time we'll begin the question and answer session. If you would
like to ask a question, please press star 1 on your telephone touchpad. If you
are using speaker equipment, you may need to pick up the handset prior to
pressing star 1. To withdraw your question, simply press star 2. Once again,
star 1 to ask a question, star 2 to withdraw your question. Our first question
comes from Argen Mardi with Goldman Sachs. You may ask your question.

ARGEN MARDI, GOLDMAN SACHS: Thanks. It's Argen with Goldman. Just curious
what your backup plan is in the Gulf if deep shelf success did not happen
with you? Would you let things decline? I know there are other exploitations
you can do. Or do we start thinking about other acquisitions?

CHARLES WILLIAMSON, PH.D.: Argen, this is Chuck. I'm going to let Tim take a
whack at that. I may add to it.

TIMOTHY LING: Hey, Argen. How you doin'? I think obviously our view have --
is where with a sufficient portfolio of deep shelf prospects. In the
likelihood to have a totally failure program is statistically very low,
especially given the amount of geotechnical work we've done in preparation
with [Proram].

That being said, if you're asking where we had a scenario where we truly had no
success in the deep shelf, I believe our response would probably be two-fold.
First of all, you could see us on selective properties that really have the
highest declines if the price environment and the market environment is such,
accelerates some divestiture activity. You will likely see us redeploy
significant amounts of capital away from that higher decline rate environment
into some of the onshore and canyon things that we see that have, I think,
greater line of sight and that's just sort of less of a harsh decline
environment. And those are probably things we would do.

There is still going to be, Argen, I think, a relatively robust layer of
workover investments in some of the larger, older fields that we'll always want
to do. I think the things that Chuck mentioned earlier that we really are
staying away from. You know, are the 1BCF exploitation shots and even with $4.30
gas, we have held ourselves to the discipline of not chasing those things.

And I think again, we have a larger portfolio in the pipeline, which quite
honestly we did not have over the past few years, allows us to still show fairly
robust growth without having to go to those small projects, which as we know
have lower return profiles and symetrics that we're not altogether happy with as
well.

ARGEN MARDI: That's terrific and just a question on West Sano. Production
costs per barrel and DDA & tax rates relative to your current far east
business?

CHARLES WILLIAMSON, PH.D.: Argen, this is Chuck. I can't give those to you
off the top of my head. Maybe Robert can. If not, we can follow up.

ARGEN MARDI: We can follow up. Thanks.

CHARLES WILLIAMSON, PH.D.: Thanks, Argen.

OPERATOR: Our next question comes Phil Pace with Credit Suisse.

PHIL PACE, CREDIT SUISSE: Thanks, guys. Couple things. Tim, this may be you. But
with the complete implosion of the marketers in the pipeline companies, can you
discuss what impact that's had on your marketing of gas, particularly out of the
Gulf of Mexico? And could you also discuss what sort of insurance provisions
you've had from the losses you've sustained out there?

TIMOTHY LING: Yeah. Phil, it's Tim here.

The insurance that we have - basically we feel we're well insured with a
deductible of about $15 million. So the maximum on an uninsured loss is what
we're looking at right now. We're tracking to just to that deductible. With
respect to gas, and that's an excellent question, I will tell you our guys have
to work a lot harder today to place the gas and maintain the margins.

There is no question that some of the trends you're going to see are almost like
back to the old environment where the producers had to look at some of the end
users for more and more direct sale. The intermediary layer topped off with
Dynergies announcement that they're just exiting the business. It's clearly
going to become a lot liquids. The paper transactions versus physical
transaction ratio is going to come down significantly. And it's just going to
be, you know, we're going to have to establish the network necessary to advance
and maintain margins will recognizing then we'll do more end user sales. I will
tell you, Phil, one interesting thing out there and it's certainly not being led
by us.

There is a lot more talk again out amongst producers about potential needs for
marketing consortiums and as you remember, Phil, in the pre-Enron days, that's
where the industry thought it was going. And I think you may see initiatives
like that, again getting high visibility.

PHIL PACE: If people started to rehire their own staffs to do more of that
marketing?

TIMOTHY LING: Well, our perspective, and I think it was hopefully the right one
in retrospect, we kept the marketing group not to do high levels of third party
paper trade, but really to maximize sales and marketing of our own gas. So we
haven't had the need to hire any. We have a great group of guys that market our
hydrocarbon and we're happy with the capabilities we have.

PHIL PACE: That's helpful. Thanks, Tim.

CHARLES WILLIAMSON, PH.D.: Thank you, Phil.

OPERATOR: Our next question comes from John Wolf with Wachovia Securities.
You may ask your question.

JOHN WOLF, WACHOVIA SECURITIES: Hi, guys. Your 2003 outlook is down 6% to 8%
from my expectations.

Also looking at the model, production looks like it will be about the same as it
was in 1998. And I remember at that time you put out big production numbers
quite similar for this 5% to 7% for this coming years. I'm having a tough time
seeing what's different now first of all, if that is realistic, and particularly
in light of the Gulf of Mexico declines that you're seeing.

CHARLES WILLIAMSON, PH.D.: Yeah, John. This is Chuck.

It's a tough question and I don't have a simple answer. But you know, I think
what we had out -- if you look at our forecasts, frankly, they have been pretty
close in most of our businesses with the exception, largely of North America and
the Gulf of Mexico. And I will say that, the declines have surprised us I think
more than I expected. So you know, what's different now?

I think if you look at our production quarter by quarter for the Gulf over the
last year, year and a half, once the Muni Field came off, I think we are much
better able now to forecast the stability and sustainability of that Gulf of
Mexico production layer. So it's -- I concur with what you said. It surprised
all of us here. That was not anything but a surprise. But I think we're also
pulling the wells harder and doing a better job of monetizing it.

So I'd like to think the forecast we have out there now is -- I'm much more
confident certainly than I was before. And it doesn't have this international
timing in it because we have redevelopments now. So I think it's a combination.

We've probably found a sustainable level for the Gulf of Mexico given the
capital we're willing to invest. And the international projects have largely
turned into construction phase and we have more real estimates on the production
timing than we've ever had before. That's about the assurance I can give you.
Tim, I don't know if you want to add anything to that.

TIMOTHY LING: No.

I think that John, the good question, I think, and the right one to ask is, you
know, what makes us more confident about the program that we've laid out today
versus what we've had out two years ago? And I just reiterate.

We did not have the pipeline of large sustainable projects coming into the fold
year by year that we now do. And we certainly didn't have a backlog of
additional projects that could actually provide either backfill or upside to the
estimates that aren't currently sanctioned. And that's what we have. We have two
layers.

Line of sight and things now, you know, great example of that would be either
Ronmas or K-2 and we think will be sanctioned within the next year or have
near-timed impact in this five year plan. So we have a backlog of those
potential projects as well. And that just means that we're going to not have to
keep going to the smaller treadmill stuff to get our production growth. Our
production growth is going to come from the large projects and our challenge,
which we've talked about today is just stabilizing the legacy base. And I think
we feel pretty good about the initiatives we put in place. Thailand, as Chuck
said, is a big part of our legacy base. Which really has a functional zero
decline.

You know, as we shift our production in North America away from the treadmill
shelf towards onshore Canada and deep water I think we have the ability there to
stabilize our production. And in Indonesia, which we did mention, we're in an
environment now where we're going to begin switching some of our gas production
away from the higher cost treadmill shelf towards some of these giant and super
giant discoveries that we've already made and are in the process of putting
development plans together on.

JOHN WOLF: So you think the key of 5% to 7% growth rate, you need 150% to 175%
reserve replacement. Do you feel like you have the reserves at ready and it's
just not booked or is it more of an exploration game?

CHARLES WILLIAMSON, PH.D.: No, John, I'm fairly confident now. Because if you
look at these large development projects I keep talking about. Not all of those
are booked and we can have line of sight. We're not dependent on that kind of
replacement.

But if you look at our production forecast and the reserves required to support
it, I'm you know much more confident we can deliver that. What we need is
additional expiration success so we we're can do better than 125% or 150%. And
we have pretty good exploration programs that should deliver that as well. So I
think it you look at our production growth -- and we'll talk about this on
November 20th, so you can see where the components are on the 5% to 7%. A lot of
it are these big projects, Aza Bijan, where the reserves are solid and growing.
Things like West Sano, where we've already appraised the field and are
developing it. I think the reserves will support the production growth. I just
want to add more.

TIMOTHY LING: And us -- also, things like deep water fields like Mad Dog which
we're still - We feel very good, have ultimate potential when you include the
west bank of 350 to 400 million barrels. We have very very little of that in our
bookings today. And when those, as you know, when those large fields come on,
you actually have the real probability of upward positive revisions based on
performance early on in the fields history. And we haven't had those things
either because the portfolio here has been so much more on focused on smaller
fields. And as that shifts, I think we'll actually have the opportunity to have
positive revisions.

JOHN WOLF: Is there an assumption on Asian gas group embedded in the
forecast?

CHARLES WILLIAMSON, PH.D.: John, in the five-year forecast, I think the -- we
don't have any of the Indonesia deep water gas other than the kind of west sano
produced gas and gas at the understand of the five-year period. But things like
Bangladesh, Viet Nam, they're not in that forecast.

ROBERT WRIGHT: Thailand has a growth. In of what? 3% of a year?

CHARLES WILLIAMSON, PH.D.: Yeah. About 3% a year, which is pretty much
incremental growth that we have been seeing.

TIMOTHY LING: Actually, one development that I don't think Chuck talked about is
in Thailand. We have a large series of gas discoveries in the concession called
Artit. And just from our observations of where the time markets is, we think
it's very likely the third pipeline is going to be constructed, again within
this five-year time arise and to bring the next supplies of gulf land gas into
Thailand and we think that PTT has already made a decision that that gas will
come from our gas consumption,Artit. So we think we'll hit that as well in
Thailand.

ROBERT WRIGHT: And 2006 is the third pipeline.

JOHN WOLF: Okay. Thanks. Helpful.

CHARLES WILLIAMSON, PH.D.: Sure.

TIMOTHY LING: Thank you.

OPERATOR: Operator: Our next question comes from Mark Gilman with First
Albany. You may ask your question.

MARK GILMAN, FIRST ALBANY: Guys, good afternoon. Couple of things. If you
take exploratory success out of the 2 1/2 to 5% number for next year, what
would it look like?

CHARLES WILLIAMSON, PH.D.: Mark, this is Chuck. Let me take a stab at that. You
know, I don't have -- and again, I'd rather show tau that in detail November
20th, because quite frankly, I don't have that in front of me.

MARK GILMAN: Just rough, Chuck.

CHARLES WILLIAMSON, PH.D.: The biggest driver this n that forecast, I think,
will probably be the Gulf of Mexico exploration success. And as I said, next
year there's not a lot in that. We're assuming if we're drilling 12 years, we're
going to have something we can turn on in that. So the next forecast is in the
deep shelf Gulf of Mexico. And I think, Tim, you can join in.

TIMOTHY LING: Yeah, Mark, it's about 5,000 a day. That we have in our forecast.
You know, I don't think if you go around the rest of the company, our Thailand
production next year is not going to be dependent on exploration success. Our
Indonesia is not -- we don't have any exploration activity targeted for the
shelf next year. Canada is mainly, you know, smaller scale exploration
exploitation, which we have risked in the forecast. Onshore we would likely do
less exploration than Pure is doing currently and have tailored our projections
for the onshore likely. So I believe the answer is fairly minimal, like maybe
5,000 a day, which we're assuming from the second half of 2002 and the first
half of 2003 on the deep shelf.

ROBERT WRIGHT: Yeah, Mark. I was answering for the five years.

MARK GILMAN: Yeah, I was focusing primarily on '03.

ROBERT WRIGHT: I'm sorry. I misunderstood.

MARK GILMAN: That's okay.

ROBERT WRIGHT: Talking about for the five years, I think the main exploration
success wedge is still the deep shelf in the out years, 3, 4, 5, but not for
next year.

MARK GILMAN: Okay. The 52,000 peak number for West Sano, given that you're
now reporting Indonesia on entitlement basis, what's the underlying on that
figure?

CHARLES WILLIAMSON, PH.D.: First of all for the next, for 2003, 2004, because
we're in maximum cost recovery it doesn't matter a whole lot. It doesn't
affect our net net a whole lot for those first couple of years. So I don't
know the oil price assumption there. Maybe Robert does. 24 is it?

ROBERT WRIGHT: Yeah. 23 or 24. But the answer is, you know, we get max
recovery in the first two years because that's, you know, the first
production out of the new concession. A lot of exploration will be recovered.

MARK GILMAN: So that your cost recovery is up to 100%?

ROBERT WRIGHT: No. Because there's always a royalty wedge that comes out
first. But it will be 100 after that royalty is considered, and of course we
have a partner [INAUDIBLE] in for 10% as well. But it's very close to, you
know, it's a very high percentage.

MARK GILMAN: Okay. I assume that by talking about this substitution of deep gas
or shallow gas, that we're talking about West Sano as being the source of it and
- -- therefore that the gas portion of the West Sano increment, the associated
gas, Chuck, will result in no growth on a net basis.

CHARLES WILLIAMSON, PH.D.: Yeah. That's right, Mark, for the first couple of
years of that. That's exactly right.

MARK GILMAN: That's right?

CHARLES WILLIAMSON, PH.D.: Yes.

MARK GILMAN: Okay, guys. Thanks.

CHARLES WILLIAMSON, PH.D.: Thank you, Mark.

OPERATOR: Remember once again, that's star 1 to ask a question. Next question
comes from Ross Paine with Wachovia Securities. You may ask your next
question.

ROSS PAINE, WACHOVIA SECURITIES: Just want some clarification on Pure right now.
Do you have the amount of expected shares at this time in the process? And with
the most recent distinguish, does that include -- disclosure, does that include
the management shares that we're agreed -- that the agreement that was reached?
As the shares that are disclosed by you guys include management shares?

TERRY DALLAS, CHIEF FINANCIAL OFFICER AND EXECUTIVE VICE PRESIDENT, UNOCAL
CORPORATION: Actually, it's mostly management shares that are in that disclosure
and as you know, and most of the time in these processes, people don't put their
shares in until the last minute. So we don't expect a lot of shares in until the
last day. But the shares that are in there right now are management shares to a
large extent the point, with a small percentage of other.

ROSS PAINE: Okay. So --

TERRY DALLAS: So we're hopeful we'll get our 90% and we will know that as the
deal closes next week.

ROSS PAINE: Okay. Some of the things they were doing from a technology
standpoint, do you guys feel that you can lever across a lot of your other
operations?

TIMOTHY LING: It's Tim here.

You know, I'm not sure how much they have been doing with technologies
applicable to our other operations. I'd say the key for us in our major
operations are subsalt, prestacked imaging and deep water drilling and Pure
really isn't doing any of that. I think there may be some insights with respect
to -- insights to -- yeah with weapon to what we can do in Canada and deeper
plays. But generally, I think the issue for us is going to be how to maintain
and leverage the technologies to continue to actually exploit and expand some of
the interesting gas plays that they've gotten on to over the past few years.

ROSS PAINE: Okay. Thanks very much.

OPERATOR: Our next question comes from Mark Gilman with First Albany. You may
ask your question.

MARK GILMAN: Guys, you have a couple of western Canadian gas discoveries that I
think have been tight but the release refers to Canada being a source of growth
for next year. I wonder if you could provide at this point any color on them?

TIMOTHY LING: Yeah, Mark. As you know, the land situation up there is just so
competitive that we probably prefer right now to keep them tight. We'll probably
give you a look see in the end of November in New York about what the type of
plays are. But we're still actively building a land position up there especially
around one our plays and it just doesn't make sense to talk about them much
right now.

MARK GILMAN: Okay. Can I just ask -- you extended the Pure offer. The
expiration of the offer because of additional disclosures by Pure. What were
they?

TIMOTHY LING: They were mostly -- you can look at the 14 D 9. But they mostly
had to do with what economic advice they had been given by their investment
banks. So they disclosed more information that the special committee was given
by their investment banks.

MARK GILMAN: Well, I guess we heavily discount that. Is that right?

TIMOTHY LING: I have no comment on that.

MARK GILMAN: No comment. Okay.

TIMOTHY LING: I'm kidding. Thanks.

MARK GILMAN: Thank you.

TIMOTHY LING: Thanks, Mark.

OPERATOR: At this time I show no further questions, Mr. Wright.

ROBERT WRIGHT: Okay. That will wind up the Q&A. Thanks, everybody, for being on
the call. I know it's been a long day. There've been several references to the
November 20th meeting in New York. And I want to urge you, if you haven't called
to register, to call either the Investor Relations office in El Segundo or
Sugarland. It's be your chance to hear more details about our future and to meet
the people who are gonna make it happen.

As always, don't hesitate to call any of us in IR, whether it be Ron or myself
or Nancy or if you have any other questions. And that concludes today's
conference call. Thanks for listening and goodbye.

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