Unocal’s Profit Soars Sixfold on Higher Oil, Natural Gas Prices

Thanks to higher oil and natural gas, Unocal Corp. reported a sixfold increase in first-quarter earnings even though production lagged compared with the same period last year.

The El Segundo-based company drills around the world for oil and natural gas, prices of which rose sharply in the first quarter. Unocal posted net income of $134 million, or 52 cents a share, in the first quarter compared with $22 million, or 9 cents, in the year-ago quarter.

Operating income rose to $229 million, or 87 cents a share, from $43 million, or 17 cents. First-quarter results surpassed Wall Street expectations as measured by the average prediction of 79 cents a share among analysts surveyed by Thomson First Call.

Income was reduced by $83 million for the effects of accounting changes and $14 million in environmental and litigation expenses. Unocal is defending itself in a civil suit alleging the company looked the other way while Myanmar government troops abused villagers pressed into work on a pipeline project. The company also is involved in litigation over disputed fuel patents.

Sales rose to $1.8 billion, up 74% from the $1 billion the firm recorded in the period last year.

Unocal said production of natural gas and oil fell during the first quarter to the equivalent of 471,000 barrels of oil a day, from 477,000 barrels a year ago. But production was up from the fourth quarter, when Unocal produced the equivalent of 451,000 barrels of oil per day.

Output is improving in Thailand and in the Gulf of Mexico, Unocal said.

Unocal’s shares rose 19 cents to $27.49 on the New York Stock Exchange.