ARCO Second Quarter Results Up 37%: Oil Price Recovery and R&M Performance Spur Earnings Increase; Cost Reductions Accelerated


LOS ANGELES, July 26, 1999 (PRIMEZONE)-- ARCO (NYSE: ARC) today reported 1999 second quarter net income of $313 million, or $0.95 per diluted share. In the 1998 second quarter, ARCO's net income was $154 million, or $0.47 per diluted share.

Excluding special items earnings were $302 million, or $0.92 per diluted share, up 37% over earnings of $220 million, or $0.67 per share, in the same quarter last year.

"The improved earnings picture in the second quarter reflects strengthening oil prices and another outstanding performance from ARCO's refining and marketing operations," said ARCO Chairman and Chief Executive Officer Mike R. Bowlin. "In addition, we are able to accelerate delivery of our cost reduction targets, while continuing efforts to focus our portfolio."

COST REDUCTION PROGRAM ACCELERATED

In October of last year, ARCO announced a program designed to reduce before-tax costs by $500 million over a two-year period, with approximately $350 million of the savings in 1999. Through the first half of the year, the company has delivered $220 million of savings, versus the 1998 baseline, exceeding its cost reduction schedule by more than $100 million to-date. Adjusted for special items and material portfolio changes, controllable costs were $1.6 billion for the first half of 1999, compared to $1.8 billion for the comparable period in 1998.

"All areas of our company are contributing to this achievement," said Bowlin. "Given our performance in the first half of the year, we expect to deliver our two-year $500 million commitment by the end of 1999, one year sooner than planned."

A STRONG QUARTER FOR REFINING AND MARKETING

ARCO's refining and marketing operations earned $206 million after tax in the 1999 second quarter, up from $97 million in 1998's second quarter. Several large West Coast refineries' unplanned outages reduced product supplies, driving product realizations higher during the quarter. Higher product prices were partially offset by increased crude oil costs and scheduled maintenance work which shut down production capabilities at ARCO's Cherry Point Refinery near Ferndale, Washington for most of June. At the retail level, ARCO's gasoline sales volumes grew by more than 2% compared to the 1998 second quarter.

EXPLORATION AND PRODUCTION

ARCO's worldwide exploration and production operations for the 1999 second quarter earned $174 million after tax, up from $17 million in the second quarter of last year (which included a $75 million special item writedown in the value of a North Sea gas field). The improvement in earnings was driven by improved crude oil prices, increased production, and cost reduction efforts.

Total oil and gas production was up 10% versus the second quarter of 1998. Production totaled 994 thousand barrels of oil equivalent per day (boe/d) versus 907 thousand boe/d in the prior period. ARCO's petroleum liquids production was flat with the 1998 second quarter. Production of natural gas increased 30% for the quarter, compared to the same period last year. The production growth was primarily due to volume increases in the United Kingdom, Indonesia and Venezuela and increased production at Vastar Resources, Inc. (NYSE: VRI). Total production from Vastar rose 18% over last year's second quarter. ARCO holds an 82.1% interest in Vastar.

Domestic petroleum liquid realizations averaged $11.43 per barrel for the quarter versus $8.71 last year. Domestic natural gas prices averaged $1.85 per thousand cubic feet (Mcf), down slightly from $1.92 per Mcf in the prior period.

On the exploration front, ARCO Alaska and Anadarko Petroleum Corporation announced an oil discovery north of the Alpine Field (which is under development on Alaska's western North Slope). The Fiord accumulation is estimated to contain more than 50 million barrels of proven and potential reserves. The discovery well is located on a lease in which ARCO owns a 78% working interest. Earlier in the quarter, ARCO successfully bid for acreage in the National Petroleum Reserve-Alaska (NPRA).

PORTFOLIO MANAGEMENT

In Venezuela, ARCO agreed to increase its interest in the LL-652 block in Lake Maracaibo by acquiring Phillips Petroleum Company's share of LL-652 in exchange for a portion of ARCO's interest in the Hamaca heavy oil project in eastern Venezuela. In a separate agreement, Texaco assumed ARCO's remaining interest in Hamaca for an undisclosed cash payment.

DEVELOPMENT PROGRAMS

ARCO and its partners in the Malaysia-Thailand Joint Development Area (JDA) in the Gulf of Thailand agreed to commence sale of natural gas from one of its fields to Malaysia and Thailand at the end of 2001, nearly a year ahead of schedule. The field will supply 1 billion cubic feet of gas daily by 2010 and is expected to yield 2.8 trillion feet of gas over its lifetime. Total reserves in this area, in which ARCO has a 25% stake, are expected to exceed 10 trillion cubic feet of gas.

ARCO's liquefied natural gas project, Tangguh, has been given top priority by the Indonesian government. The Tangguh LNG plant will be fed with natural gas from three production-sharing blocks, which contain over 18 trillion cubic feet of proven and probable gas reserves.

First production from the newly developed Villano field in Ecuador began in late May. Production now flows into the Transecuadorian Pipeline System (SOTE) at a rate of approximately 6,000 barrels per day and is expected to increase to about 40,000 b/d later this year.

In June, ARCO reached agreement to supply the Tambak Lorok power plant in Indonesia with between 80-120 million cubic feet of natural gas per day for 10 to 20 years. The natural gas will come from ARCO's Kepodang gas field, which is part of the Muriah block in the Central Java Sea. The power plant will switch from imported diesel fuel to domestic natural gas early in 2004.

OTHER OPERATIONS

Other operations, which include ARCO Aluminum and ARCO's Lower 48 pipelines, contributed after-tax earnings of $24 million in the 1999 second quarter, compared with $29 million in the 1998 period.

During the quarter, the Seaway Pipeline Company, which is operated by ARCO Pipe Line Company, approved funding to increase the capacity of its 30-inch crude oil pipeline by approximately 110,000 barrels a day, with completion expected by January 2000. This expansion will increase the overall long-haul crude oil system capacity to approximately 350,000 barrels per day.

DISCONTINUED OPERATIONS

As part of its strategy to divest non-core businesses, ARCO completed the sale of its 19.5% stake in the Clermont coal deposit in Queensland, Australia, to Queensland Coal Pty Limited, a subsidiary of Rio Tinto Ltd., for $14 million effective May 31, 1999.

###

Editor's Note: On April 1, ARCO and BP Amoco announced that the two companies had agreed to combine. A special meeting of ARCO shareholders is scheduled for August 30 to vote on the merger; BP Amoco has scheduled an Extraordinary General Meeting on September 1. The all-share transaction, approved by the boards of both companies, will involve the exchange of 0.82 BP Amoco American Depositary Shares (ADS) for each ARCO share.

Some of the matters discussed in this news release are forward-looking statements that involve risks and uncertainties. Actual results could differ materially based on numerous factors, including the realized level of crude oil and natural gas production and other risks detailed from time to time in the company's SEC reports, including the 1998 report on Form 10-K.

(Cautionary Note to Investors - The Securities and Exchange Commission (SEC) only permits oil and gas companies to disclose in their filings with the SEC those reserves classified as proved, i.e., reserves that are economically and legally producible under existing economic and operating conditions. In this press release we use the term "proven and probable" which SEC guidelines strictly prohibit using in SEC filings. Investors are urged to consider the reserve disclosure in our 1998 report on Form 10-K.)



ATLANTIC RICHFIELD COMPANY
CONSOLIDATED STATEMENT OF INCOME
PRELIMINARY
(Unaudited)


(Millions, except per share amounts)        Three Months Ended
                                                 June 30,
                                              1999     1998
REVENUES
Sales and other operating revenues         $ 3,047   $ 2,564
Other revenues                                 173        90
     Total revenues                          3,220     2,654
EXPENSES
Trade purchases                              1,179     1,071
Operating expenses                             594       559
Selling, general and administrative expenses   176       202
Depreciation, depletion and amortization       428       436
Exploration expenses (including undeveloped
     leasehold amortization)                   108       126
Taxes other than income taxes                  116       122
Interest  (a)                                   95       106
     Total expenses                          2,696     2,622
Income from continuing operations before income taxes
     and minority interest                     524        32
Provision (benefit) for taxes on income        202       (37)
Minority interest in earnings of subsidiaries    9         5
Income from continuing operations              313        64
Income (loss) from discontinued operations (b)   -        90
Net income                                 $   313   $   154

Earned per share:
  Basic
     Continuing operations                 $  0.97   $  0.19
     Discontinued operations                     -      0.29
     Net income                            $  0.97   $  0.48
  Diluted 
     Continuing operations                 $  0.95   $  0.19
     Discontinued operations                     -      0.28
     Net income                            $  0.95   $  0.47

Dividends per common share                 $0.7125   $0.7125


(a)    Excludes capitalized interest of:   $    49   $    21
(b)    Net of income taxes of:             $     -   $    43


(Millions, except per share amounts)         Six Months Ended
                                                 June 30,
                                              1999     1998
REVENUES
Sales and other operating revenues         $ 5,462   $ 5,100
Other revenues                                 309       200
     Total revenues                          5,771     5,300
EXPENSES
Trade purchases                              1,979     2.057
Operating expenses                           1,160     1,094
Selling, general and administrative expenses   328       385
Depreciation, depletion and amortization       911       788
Exploration expenses (including undeveloped
     leasehold amortization)                   182       275
Taxes other than income taxes                  236       276
Interest  (a)                                  190       203
     Total expenses                          4,986     5,078
Income from continuing operations before income taxes
     and minority interest                     785       222
Provision (benefit) for taxes on income        295        10
Minority interest in earnings of subsidiaries   12        14
Income from continuing operations              478       198
Income (loss) from discontinued operations (b)   -       176
Net income                                 $   478    $  374

Earned per share:
  Basic
     Continuing operations                 $  1.48   $  0.61
     Discontinued operations                     -      0.55
     Net income                            $  1.48   $  1.16
  Diluted 
     Continuing operations                 $  1.46   $  0.60
     Discontinued operations                     -      0.54
     Net income                            $  1.46   $  1.14

Dividends per common share                 $ 1.425   $ 1.425


(a)    Excludes capitalized interest of:   $    88   $    37
(b)    Net of income taxes of:             $     -   $    89


ATLANTIC RICHFIELD COMPANY
AFTER-TAX SEGMENT EARNINGS
PRELIMINARY
(Unaudited)

(Millions)                               Three Months Ended
                                              June 30,
                                           1999        1998
Exploration and production                $ 174       $ 17
Refining and marketing                      206         97
Other (a)                                    24         29
Unallocated expenses                        (20)        (4)
Interest expense                            (71)       (75)
Income from continuing operations           313         64
Discontinued operations (b)                   -         90
Net income                                $ 313      $ 154

                                           Six Months Ended
                                                June 30,
                                           1999        1998 

Exploration and production                $ 263      $ 199
Refining and marketing                      335        116
Other (a)                                    48         53
Unallocated expenses                        (27)       (26)
Interest expense                           (141)      (144)
Income from continuing operations           478        198
Discontinued operations (b)                   -        176
Net income                                 $478      $ 374


SEGMENT OPERATING INCOME
(Unaudited)

(Millions except per 
share amounts)             Three months ended June 30, 1999
                                        Less:
                                     Special Items   Before
                         Reported  (charge) benefit  Special
                                                      Items
Exploration and production $  174       $   5        $  169
Refining and marketing        206           -           206
Other (a)                      24           -            24
Unallocated expenses          (20)          6           (26)
Interest expense              (71)          -           (71)
     Total                 $  313       $  11        $  302

Average shares outstanding 
 (diluted)                  328.9                     328.9
Earned per share           $ 0.95                    $ 0.92


(Millions except per 
share amounts)             Three months ended June 30, 1998
                                        Less:
                                    Special Items    Before
                         Reported  (charge) benefit  Special
                                                      Items
Exploration and production $   17       $ (75)       $   92
Refining and marketing         97           -            97
Other (a)                      29           -            29
Unallocated expenses           (4)         (3)           (1)
Interest expense              (75)          -           (75)
Income from continuing 
 Operations                    64         (78)          142
Discontinued operations (b)    90          12            78
     Total                 $  154       $ (66)       $  220

Average shares outstanding 
 (diluted)                  327.6                     327.6
Earned per share           $ 0.47                    $ 0.67

(a) Consists of ARCO Pipeline (Lower 48 pipelines) and 
    aluminum operations 
(b) Consists of interest in ARCO Chemical, petrochemical
    operations acquired from Union Texas Petroleum, and coal
    operations.


ATLANTIC RICHFIELD COMPANY
AFTER-TAX SEGMENT EARNINGS
PRELIMINARY

SEGMENT OPERATING INCOME (continued)

(Unaudited)

                             Six months ended June 30, 1999
                                         Less:
                                     Special Items    Before
                          Reported  (charge) benefit  Special
                                                       Items
Exploration and production $   263       $   5        $   258
Refining and marketing         335          (2)           337
Other (a)                       48           -             48
Unallocated expenses           (27)          1            (28)
Interest expense              (141)          -           (141)
     Total                 $   478       $   4        $   474
Average shares outstanding 
 (diluted)                   328.1                      328.1
Earned per share           $  1.46                    $  1.44


                            Six months ended June 30, 1998
                                         Less:
                                     Special Items    Before
                          Reported  (charge) benefit  Special
                                                       Items
Exploration and production $  199       $  (75)       $   274
Refining and marketing        116            -            116
Other (a)                      53            -             53
Unallocated expenses          (26)           5            (31)
Interest expense             (144)           -           (144)
Income from continuing
 Operations                   198          (70)           268
Discontinued operations (b)   176           12            164
     Total                 $  374       $  (58)       $   432
Average shares outstanding
 (diluted)                  327.4                       327.4
Earned per share           $ 1.14                       $1.32

(a)  Consists of ARCO Pipeline (Lower 48 pipelines) and 
     aluminum operations 
(b)  Consists of interest in ARCO Chemical, petrochemical 
     operations acquired from Union Texas Petroleum, and coal 
     operations.


ATLANTIC RICHFIELD COMPANY
CONSOLIDATED BALANCE SHEET
PRELIMINARY

(Unaudited)

(Millions)                             June 30,   December 31,
                                         1999          1998
ASSETS

Current assets:
   Cash and cash equivalents          $    640       $    657 
   Short-term investments                  259            260 
   Accounts receivable                   1,245          1,002 
   Inventories                             487            475 
   Prepaid expenses and other 
    current assets                         159            317 
   Total current assets                  2,790          2,711 

Investments and long-term receivables:
   Investments accounted for on 
    the equity method                    1,264          1,235 
   Other investments and long-term 
    Receivables                          1,199            831 
                                         2,463          2,066 

Net property, plant and equipment       18,964         18,762 
Net assets of discontinued operations       51            339 
Deferred charges and other assets        1,413          1,321 

Total assets                          $ 25,681       $ 25,199 

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Notes payable                      $ 1,451        $  2,403 
   Accounts payable                       802             976 
   Taxes payable                          821             634 
   Long-term debt due within one year     174             399 
   Other                                  927           1,285 
   Total current liabilities            4,175           5,697 

Long-term debt                          5,870           4,332 
Deferred income taxes                   3,314           3,318 
Dismantlement, restoration 
 and reclamation                        1,104           1,058 
Other deferred liabilities and credits  2,904           2,955 
Minority interest                         269             259 
Total Liabilities                      17,636          17,619 
Stockholders' equity:
   Preference stocks                        1               1 
   Common stock                           815             815 
   Capital in excess of par value 
    of stock                              860             863 
   Retained earnings                    6,608           6,589 
   Treasury stock                        (294)           (344)
   Accumulated other comprehensive 
    Income                                 55            (344)
   Total stockholders' equity           8,045           7,580 

Total liabilities and 
 stockholders' equity                $ 25,681        $ 25,199 



ATLANTIC RICHFIELD COMPANY
FINANCIAL AND STATISTICAL DATA
PRELIMINARY

(Unaudited)

(Millions)                               Three Months Ended
                                              June 30, 
                                          1999          1998 

Additions to fixed assets 
Exploration and production 
 (including dry hole costs)              $ 556         $ 699 
Refining and marketing                      77           140 
Other                                        -            18 
Total                                    $ 633         $ 857 

Exploration and production
   Pretax earnings (loss), 
    before exploration expense:
      Alaska                             $ 180         $  97 
      International                         73           (79)
      Vastar                                86            76 
      Other Lower 48 operations             49            43 
                                           388           137

   Exploration expense                     108           126

   Exploration & production 
    pretax earnings                      $ 280         $  11

   Pretax exploration expense:
      Alaska                             $  20         $   9
      International                         41            52
      Vastar                                46            64
      Other Lower 48                         1             1
   Total exploration expense *           $ 108         $ 126

After-tax exploration and production earnings (loss)
      Alaska                             $ 100         $  55
      International                          8           (91)
      Vastar                                48            33 
      Other Lower 48                        18            20 
   Total                                 $ 174         $  17

* Includes costs recovered under 
   provisions of production-sharing 
   agreements:                           $   1         $   4


(Millions)                                Six months ended 
                                               June 30, 
                                          1999          1998 
Additions to fixed assets 
Exploration and production
 (including dry hole costs)             $1,198        $1,325 
Refining and marketing                     181           260 
Other                                       14            27 
Total                                   $1,393        $1,612 

Exploration and production
   Pretax earnings (loss), before exploration expense:
      Alaska                            $  239       $   303 
      International                        134            (7)
      Vastar                               120           177 
      Other Lower 48 operations             93            88 
                                           586           561 
   Exploration expense                     182           275 
   Exploration & production
    pretax earnings                    $   404       $   286 

   Pretax exploration expense:
      Alaska                           $    32       $   28 
      International                         63          109 
      Vastar                                85          132 
      Other Lower 48                         2            6 
   Total exploration expense *         $   182       $  275 

After-tax exploration and production earnings (loss)
      Alaska                           $   131       $  171 
      International                         27          (90)
      Vastar                                67           81 
      Other Lower 48                        38           37 
   Total                               $   263       $  199 

* Includes costs recovered under 
 provisions of production-sharing
 agreements:                           $     3       $   10 


ATLANTIC RICHFIELD COMPANY
FINANCIAL AND STATISTICAL DATA
PRELIMINARY

(Unaudited)

                                         Three Months Ended 
                                              June 30,
                                         1999          1998 
OPERATING STATISTICS

EXPLORATION AND PRODUCTION:

Crude, condensate and NGL production
(net thousand bbls/day):
   United States:
     Prudhoe Bay                         127.7         142.1
     Kuparuk                             108.5         123.5
     Greater Point McIntyre               29.6          41.6
     Tarn                                 13.7          -   
     NGLs / Other                         37.2          32.7
          Total Alaska                   316.7         339.9
     Vastar liquids                       59.7          49.4
     Other Lower 48 liquids               85.6         138.6
   Total United States                   462.0         527.9

   International:
     United Kingdom                       43.0          14.4
     Indonesia                            27.5          26.1
     Algeria                              13.6          18.9
     Venezuela                            30.7          -   
     NGLs / Other                         35.2          24.6
   Total International (a)               150.0          84.0

Total liquids production 
 (net thousand bbls/day)                 612.0         611.9

(a) Includes equity affiliates             8.2           3.2 

Natural gas production (million cubic feet per day - net)
   United States:
     Vastar                            1,095.0         940.5
     Other U.S.                          164.0         180.0
   Total United States                 1,259.0       1,120.5
   International:
     United Kingdom                      356.2         287.2
     Indonesia                           287.5         245.6
     Indonesia LNG                       235.9          -   
     China                               103.8          97.2
     Other                                49.9          17.8
   Total International (b)             1,033.3         647.8

Total natural gas production           2,292.3       1,768.3


(b) Includes equity affiliates            78.8          - 

Total production (barrels of oil 
 equivalent - net thousands/day)         994.1         906.6


                                          Six months ended 
                                              June 30, 
                                         1999          1998 
OPERATING STATISTICS

EXPLORATION AND PRODUCTION:

Crude, condensate and NGL production
(net thousand bbls/day):
   United States:
     Prudhoe Bay                         136.2         149.7
     Kuparuk                             114.9         127.2
     Greater Point McIntyre               31.8          42.1
     Tarn                                 11.8          -   
     NGLs / Other                         36.2          32.9
          Total Alaska                   330.9         351.9
     Vastar liquids                       57.8          50.5
     Other Lower 48 liquids               88.9         139.6
   Total United States                   477.6         542.0

   International:
     United Kingdom                       46.5          15.0
     Indonesia                            33.7          24.1
     Algeria                              17.2          20.3
     Venezuela                            31.0          -   
     NGLs / Other                         35.6          24.4
   Total International (a)               164.0          83.8

Total liquids production
 (net thousand bbls/day)                 641.6         625.8

(a) Includes equity affiliates             8.6          3.3 

Natural gas production (million cubic feet per day - net)
   United States:
     Vastar                            1,131.3        921.4
     Other U.S.                          177.5        184.7
   Total United States                 1,308.8      1,106.1

   International:
     United Kingdom                      482.1        372.0
     Indonesia                           276.1        245.2
     Indonesia LNG                       252.9         -   
     China                                97.5        110.8
     Other                                53.6         19.2
   Total International (b)             1,162.2        747.2

Total natural gas production           2,471.0      1,853.3

(b) Includes equity affiliates            82.5           - 

Total production (barrels of oil
 equivalent - net thousands/day)       1,053.4       934.7


ATLANTIC RICHFIELD COMPANY
FINANCIAL AND STATISTICAL DATA
PRELIMINARY

(Unaudited)

                                          Three Months Ended 
                                               June 30, 
                                            1999      1998 
OPERATING STATISTICS
Average sales prices
   Oil and gas liquids (per barrel):
     Alaska                               $  10.44  $   7.58
     Lower 48, including Vastar           $  13.59  $  10.74
     U.S. composite average price         $  11.43  $   8.71
     Venezuela                            $   3.95  $      -
     International composite
      average price                       $  12.88  $  12.11

   Natural gas (per Mcf):
     U.S., including Vastar               $   1.85  $   1.92
     International (excluding LNG)        $   2.03  $   2.56
     Indonesia LNG                        $   3.03  $      -

REFINING AND MARKETING:
Refinery runs (net thousand bbls per day):
   Crude oil                               376,900   445,500

U.S. petroleum product sales  volumes, including
  intersegment sales (net thousand bbls per day):
     Gasoline                              316,200   313,900
     Jet fuels                             104,200   111,800
     Distillate fuels                       79,700    78,100
     Other                                  89,100    89,600
     Total                                 589,200   593,400


                                           Six months ended
                                                June 30,
                                            1999       1998 
OPERATING STATISTICS


Average sales prices
   Oil and gas liquids (per barrel):
     Alaska                              $   8.17  $   8.95 
     Lower 48, including Vastar          $  11.66  $  11.71 
     U.S. composite average price        $   9.24  $   9.92 
     Venezuela                           $   3.47  $    -   
     International composite 
      average price                      $  10.83  $  12.35 

   Natural gas (per Mcf):
     U.S., including Vastar              $   1.72  $   1.91 
     International (excluding LNG)       $   2.27  $   2.63 
     Indonesia LNG                       $   2.65  $    -   

REFINING AND MARKETING:
Refinery runs (net thousand bbls per day):
   Crude oil                              416,600   454,900 

U.S. petroleum product sales volumes, including
  intersegment sales (net thousand bbls per day):
     Gasoline                            312,000    304,700 
     Jet fuels                           100,800    111,000 
     Distillate fuels                     83,300     78,000 
     Other                                73,700     76,500 
     Total                               569,800    570,200 

CONTACT:  Atlantic Richfield Company
          News Media: 
          Linda Dozier or Marylou Flynn 
          (213) 486-3384
     
          Investors: 
          Eden Warner (213) 486-1511 
            or 
          David DeSonier (213) 486-1811
     
          Visit our website at http://www.arco.com