Presentation to RDC by: Charles A Presentation to RDC by: Charles A. Pierce III Vice President Unocal Alaska

COOK INLET NATURAL GAS SUPPLY ISSUES Cook Inlet Producing Assets are declining There has been very little exploration for gas in the Cook Inlet Exploration for new sources is required to meet mid - long term requirements

2001 Cook Inlet Gas

Possible 3TCF Uncontracted demand through 2022

GAS SUPPLY FUNDAMENTALS Establish Acreage Position Unocal has > 100,000 net acres on the lower Kenai Peninsula Develop Adequate Reserve Base Drilling programs Joint program with Marathon Unocal operated Program to begin in December Secure Transportation System Pipeline project with Marathon, Enstar, and HEA Supply Market Needs Contract to Agrium and Enstar

Kenai - Kachemak Pipeline Project Area Map Phase 1 Kenai - Kachemak Pipeline Project Area Map Ninilchik Unit Phase 2 Anchor Point Area Possible Distribution

PROJECT SUMMARY Drilling Program Current - 3 wells in Ninilchik Unit Planned 2002 - 5 to 9 depending on success Pipeline Design - 12 to 16 inch diameter Cost - ~ $40 - $50 million Total Project Success Budget > $100 million over 3 years Timing Target start-up Nov.1, 2003 Will require expedited approval process