Press Release: Chevron Canada Capital Company

Press Release: Chevron Canada Capital Company
Date of Release: Dec 21, 2001
Confirms at R-1 (middle)
Tim Crocker 450-297-4474 / Michael R. Rao, CFA 416-593-5577 / email:
mrao @dbrs.com
Rating		Trend		Rating Action		Debt Rated
R-1 (middle)	Stable		Confirmed		Commercial Paper
Guaranteed by ChevronTexaco Corporation

The Commercial Paper rating of Chevron Canada Capital Company (based on
the guarantee of ChevronTexaco Corporation) is confirmed at R-1 (middle)
with a Stable Trend. Chevron Canada Capital Company is a financing
vehicle for the Canadian operations of ChevronTexaco Corporation
("ChevronTexaco").
The rating is based on the following considerations:
(1) ChevronTexaco (formed through a share exchange merger of Chevron
Corporation and Texaco Inc. in October 2001) is the world's fourth
largest non-government-owned integrated oil and gas company. In global
oil and gas markets, absolute size, critical mass and market penetration
are a strategic competitive advantage. (2) The merger provides
opportunities for ongoing productivity and efficiency-related cost
savings, as well as creating a large pool of financial resources. This,
in turn will enhance the ability of the combined enterprise to pursue
and undertake larger upstream and other growth opportunities and
projects for which the individual companies lacked the financial
wherewithal to proceed on their own. (3) At September 30, 2001, the net
debt to capital ratio was below 20%, and total debt represented only 8.4
months of cash flow. Thus the merged company started off with a strong
balance sheet. (4) Chevron and Texaco achieved record earnings in 2000
and in the first nine months of 2001. Earnings and cash flow in 2002
will come under pressure as a result of much lower oil prices and a
weaker economy. Nevertheless, we expect that ChevronTexaco's
profitability will remain above average, and that the balance sheet will
remain strong.
Dominion Bond Rating Service Limited (DBRS) will publish a full report
shortly that will provide additional analytical detail on this rating
action. If you are interested in receiving this report, please contact
us at: info@dbrs.com.
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