Chevron exits Caltex

Caltex's share price dropped by 9.25 per cent this morning (Monday, March 30), in the wake of Chevron's recent sale of its 50 per cent stake in the Australian fuel giant.

Chevron announced on Thursday, March 26, that it would sell down its shareholding in Caltex Australia Limited as part of its on-going portfolio review. The completion of the sale was announced yesterday (March 29), with the sale price of $35 per share giving the transaction a total value of $4.73 billion.

The value of Caltex's shares dropped to as low as $34.38 in Monday morning trading but it's still up by 56 per cent over the past year, underlining the gains made by the company in recent times as it moves away from local fuel production to focus on distribution and retailing.

Caltex Australia Managing Director and CEO, Julian Segal, said the success of the Chevron sale highlighted the strides made by the company as it rolls out its restructure.

"Caltex understands from Chevron that the book was oversubscribed with a final price of $35 a share, reflecting strong interest in the stock," he said in a media statement.

"The success of the sale is also a strong endorsement of our strategy, which we have delivered on to date, and which remains unchanged."

Caltex will retain its executive leadership team and will continue to seek our fresh opportunities, the company says.

"Our focus in delivering shareholder returns is to explore areas for growth – we continue to look to leverage our existing capabilities in retailing, franchising, supply chain management, infrastructure services, and the processing, storage and distribution of hydrocarbons," Mr Segal said.

Caltex says the deal won't affect its supply chain, while Chevron says it will continue to move the Gorgon and Wheatstone LNG project in Western Australia towards fruition.

Mr Segal said Caltex's fuel supplies remained secure.

"Ampol Singapore has been operating for over 12 months and has successfully forged strong links to a broad range of reputable fuel suppliers across Asia and beyond," he said.

"Chevron is one of several suppliers contributing to our comprehensive and flexible supply chain."

Chevron will receive the proceeds from the sale on April 2, meaning the gain will be reflected in its second-quarter results.