press release

ChevronTexaco Reaches Agreement in Principle with Dynegy Inc. to Exchange Series B Preferred Dynegy Stock for Cash and New Securities

SAN RAMON, Calif., Jul. 15, 2003 -- ChevronTexaco Corp. today announced that it has reached an agreement in principle with Dynegy Inc. to exchange its Series B Preferred Dynegy Stock for an aggregate of $850 million in cash and new Dynegy securities.

ChevronTexaco acquired the preferred shares in November 2001 for $1.5 billion. In the proposed restructuring, ChevronTexaco will receive from Dynegy Inc. $225 million in cash, $225 million of Junior Unsecured Subordinated Notes due 2016 and $400 million of Series C Convertible Preferred Stock.

The exchange is subject to certain approvals of ChevronTexaco and Dynegy, execution of definitive documentation, the consummation by Dynegy of a proposed recapitalization, and other terms and conditions to be set forth in the definitive documentation governing the transaction.

Cautionary Statement Relevant to Forward-Looking Information for the Purpose of "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995.

This press release contains forward-looking statements relating to the future exchange by ChevronTexaco of Dynegy's Series B Preferred Stock for cash and new securities of Dynegy. The statements are based on management's current expectations, estimates and projections; are not guarantees of future occurrences or performance; and are subject to certain risks, uncertainties and other factors, some of which are beyond the company's control and are difficult to predict. Among the factors that could cause actual results to differ materially are the failure of ChevronTexaco or Dynegy to receive the necessary approvals for the exchange; consummation by Dynegy of its proposed recapitalization; potential delays in obtaining such approvals or in completing the definitive documentation governing the transaction; or the occurrence of any other event which would cause ChevronTexaco and Dynegy to not complete the exchange. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, ChevronTexaco undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Updated: July 2003