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XOM Exxon Mobil

Participants
Neil Hansen Vice President of Investor Relations & Secretary
Neil Chapman Senior Vice President & Member of the Management Committee
Doug Leggate Bank of America
Doug Terreson Evercore ISI
Sam Margolin Wolfe Research
Neil Mehta Goldman Sachs.
Phil Gresh JPMorgan
Jon Rigby UBS
Biraj Borkhataria RBC
Roger Read Wells Fargo.
Paul Cheng Scotia Howard Weil
Jason Gabelman Cowen
Call transcript
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Operator

Good day, everyone. Welcome to this Exxon Mobil Corporation Second Quarter 2019 Earnings Call. Today's call is being recorded. At this time, I'd like to turn the call over to the Vice President of Investor Relations and Secretary, Mr. Neil Hansen. sir. ahead go Please

Neil Hansen

is you. call. everyone. on We your ExxonMobil. today Thank Investor President second Relations. the to quarter and This in interest earnings appreciate continued Hansen, Good right. Vice Welcome of morning, our call Neil All your participation

is Neil me Member Senior and is Vice Upstream. today Joining the for Management the a President of Committee Neil Chapman. with responsibility

progress, and perspectives updates financial review business. operating made substantial on on quarter I will the his performance, major After provide the give the and the across growth we've on Neil projects

Following Neil's remarks, we'll be happy to take your questions.

information will the cautionary the of the to presentation. this morning this comments end Investors also your the draw available statement section on Our of website. like at I'd reference supplemental slides slide to on X attention our the and

X. Moving to slide

me I to more summarizing first our will key growth solid plans have accomplishments. on touch we after with detail highlights. few by my go major some progress wanted Neil made other take but noteworthy a on along moments to into start Let the remarks,

our competitive robust on environment we've half including we our For progress made investments good experiencing. that fundamentals growth strong. margin demand plans. year, across The remain commodity The we've price first of and into underpin them the built long-term the projects the our make growth advantages cycles are currently

of Mozambique. achieved three growth New in projects four in all Cyprus projects development the with and we projects key first just discoveries; from three Papua major lines. six success in LNG two final Guinea the the one reached Guyana strategic for in of year decisions milestones in deepwater of We including nine investment Offshore and our significant months and continued business exploration

production growth we XXXX, barrels from infrastructure X production increase build-out the also XXX,XXX with with in the driven day supporting last Permian. strong by barrels by capacity. Permian as per per Liquids and to plans million up remain to We oil-equivalent day in schedule to takeaway or X% on significantly volumes continue increased year

America startups positive contribution projects to In making the businesses, North Downstream Europe the current and to demonstrating already has earnings are In the the these production exceptionally cracker, accretive exceeding well recent in projects and which particular, results. are last These steam Baytown even when envisioned in up margin Chemical investments. resiliency making started environment performed XX%. by a design we market year with capacity

dividend line we Lastly, reiterated the we dividend half growth. momentum long-term very increased laid to XXth plans by generate and generated the marking of positions we shareholder value. with in of the consecutive out XXXX X% well in us is quarterly year the in March first and year Positive the in

$X.XX financial $X.X including now were I'll during in rate share a we positive the billion maintenance impacts on second expectations tax per starting planned highlight per performance our in slide a line $X.XX or Canada. from with quarter. share margin impact seasonal experienced in environment, and change Earnings were Alberta, quarter results the given the quarter X. These our

were to continued quarter the remained After the from industry and adjusting quarter. flow changes margins. imbalances product prices capital, short-term asset consistent. Cash challenging margin and environment second for was natural pressure supply nature working The demand in in billion seasonal sales gas in $X as and in and which operations primarily

capacity. leveraging across the a quarter March. of of shareholder and in the in provided is billion commodity year guidance XX% billion was grow the $X the full for and the free the cash representing year $XX financial CapEx our quarter strategy of focused result on is our second through flow long-term CapEx first half cycles The value deficit we

than Upstream. Average the detailed the first now first realizations were I'll in higher next slide. Starting the ExxonMobil's by and $X.XX. Brent the with oil through more line liquids $X.XX of quarter in first with on increased WTI view with quarter increase go up the $X.XX a prices crude since up developments crude markers.

This and continues with consistent crude-linked to $X.XX that production typical month month in Gas the in six realizations the outpace on were lag in other the U.S LNG down a Hub as pricing three second we was hand Henry pricing demand quarter. experienced decline to growth the

with increase relative Permian prices production last Gas is realizations the by and up weaker averaged first to in per the the quarter. imports. second XX% XXX,XXX production in the were an an increase we demand saw impacted of oil-equivalent also quarter average Production of Europe in XX% year. lower LNG in barrels Permian nearly from seasonal day,

In first Liza is Phase the Guyana. which for of exploration year, X, addition, construction FPSO the of recently now in three the Destiny to half transit the in discoveries we Liza in completed Guyana

We final barrel estimate the updated resource investment project also XXX,XXX the than for Phase made day billion X Liza a barrels. oil-equivalent decision we and per X more to

Rovuma for of approval plan the decision project government. progressed also investment the by We LNG Mozambique a toward Mozambique development from final securing

We the X portfolio in Namibia. of announced Deepwater million Muerta unconventional basin including acquisition our exploration expanded exploration Argentina's deepwater to plans growing Vaca expand operations offshore and acres

portfolio impacted Rotterdam improved Downstream, quarter, expanded the near our further but production second II a the quarter five-year and margins lubricant during In Singapore. hydrocracker expansion remained the increased events Sarnia from Yanbu reliability lows. the with base and refining refineries in Group results. Baytown, at stocks Unrelated industry negatively We

Chemical to the out expansion We polyethylene to startup as recent Paraxylene Although, Baytown long-term supply will accretive be current in remain cash and margins benefits cracker. from premium flow our of the during business, plans length fundamentals lined the another with a capture earnings important it's sales which product additions. grow in the quarter capacity result weakened milestone strong to industry And environment. steam the expected integration with achieved Chemical second in once the at high-value margin Beaumont, of

X.X We million Christi and a Gulf construct ton growth Coast where decision cracker the with units. in we year final a investment SABIC partner steam per also announced will venture our for derivative Corpus

In dioxide emissions development signed from technologies. joint emissions and capture to agreement we including a carbon progress concentrate advance to of the Global technology lower industrial to with sources breakthrough and development power plants. quarter, Thermostat continue We research

initiated We with National research a emissions. bring that lower to to Laboratory partnership develop and solutions biofuels with focus commercial Laboratory efforts Renewable ways National scale. Both and range Energy help emissions carbon capture Energy's and Technology technologies focus aligned on important our develop Energy reduce science a storage specific of the of a these Department also to leveraging of with fundamental to breakthrough are global can and on

year. an the to earnings Let's quarter overview second now first X to move relative of for of Slide the quarter

were natural nearly up from million quarter. first driven realizations up $XXX $XXX partly by million tax Second liquids Upstream were the onetime prices. earnings offset quarter billion and gas lower earnings of by items, approximately $X.X higher

earnings Downstream improved negative Improvements mark-to-market to were and million derivative earnings by lower partly Downstream with by earnings higher maintenance of reliability scheduled than impacts. wider million more fuels margins, American North by $XXX absence Chemical mentioned the $XXX were the finally increased margins. in crude And previously offset weaker and due differentials, events. paraxylene

Slide than of in per relative second day to million per impressive XXXX I'll the year day year-over-year was quarter equivalent XXX,XXX Production in Upstream the to volumes. of X% an increase Turning increase. barrels the of more X.X quarter second increase equivalent oil last X, oil representing on barrels expand a

an per Increased in day production Kaombo increase oil equivalent prior driven the was volumes. higher represents than volume barrels of year to Hebron from also higher XXX,XXX growth XX% which and by contributed production Permian The the quarter. the

stronger earthquake with Papua seasonal gas Lower from Europe, impacts New Guinea, in Canada, and combined volume the in maintenance in the provided additional absence of demand uplift.

liquids of X% year-over-year The the XXX,XXX from second growth XXXX. increase bottom left day, highlights an barrels quarter per strong chart of the of

XXXX the Importantly, highest decade. quarter in marks liquids and second production a production liquids this highest the quarterly since

Slide to X, of I'll XXXX flow. second cash quarter Moving review the

from $X quarter and over Second typical capital cash by impact for draw driven billion when was operating the line primarily second working the lower in billion a $X.X working yielded a a capital capital in which adjusted draw depreciation about activities. on of pattern There earnings $X in decade. quarter, working billion changes last flow on This has of the been in payables. quarter seasonal average seasonal with expense is

from earnings noncash impact a the the tax Alberta in change to resulted included approximately million. which items $XXX benefit of Other rate

asset significant in marketing line from our no by sales asset have end completed plans our activities are divestment with consistent sales expectation the year-to-date, $XX XXXX. billion and of While with asset generating of

billion quarter in cash PP&E basin. the to $X.X and advances $X primarily and $X.X the increased billion. Second in driven billion, additions net were quarter activity by quarter investments approximately by debt at the ended Gross and Permian increased

let me as is the element commodity discussed we As some can capacity value next perspective price important additional and accretive financial you invest This advantaged I strategy, to our of our so leveraging are slide. an see projects the through in cycle. on provide have

the prices past of of chart the the provides The and left at and environment XXXX position relative XX years page to of of the first a top that in view we've margins seen range. half the the over commodity

when of and While we are margins investment consistent across many levels the make low XX-year this end have businesses anticipate decisions. the on been experience our the that far these we historical range so with of scenarios year importantly, with consistent

invest to fact businesses and of critically in price commodity across cyclical recently refining the financial I and cycles environment cash grow Chemical earnings are capacity The even startups the contributing the flow. these have recent it dividend. In to project market positive today's that important mentioned highlighted and as nature makes

This we of to downturns to opportunities in through value industry. from years with had Over investments and and best the consistent the is unique those the cycle taken advantage past investing of are in set commodity several assemble prices combination that and capture opportunities. portfolio now we've the capacity years we've of deep a XX strategy to of our financial attractive invest these

free of left on generation cash several past free highlights the in bottom dividend. cumulative Cumulative annual over our time of is well over flow our chart years. period flow cash page excess the the The this

two accretive opportunities linked the strong The resilient price cycles. time. being grow and those provided value continued investments And a over in This accretive, to the we ability view closely make across as investments requires grow to basis together. dividend efforts dividend

when portfolio counter-cyclically able price With and we During number low-cost volatility, advantage key keep our there in financial back. advantaged in by of times can pulling strength investing invest long be to of number a as to the taking are growth attractive others environments. areas competitively term mind opportunities been we've a incremental a capture value of of

provide on the Upstream, our XX. line slide the with the second to starting for outlook third the in some quarter. In in I'll quarter on be we volumes quarter expect now perspective third

$XXX will see also non-U.S. of second absence of onetime approximately the million. help tax We the impact quarter the of

maintenance Scheduled additional differentials be quarter as patterns. In in refining capacity Downstream, significantly the in comes expected relative with should third are to to the online. quarter. the to takeaway we lower be Permian Industry narrow seasonal line expect crude second margins demand

expected Chemical recent continues details margins is some the length in the are be the to capacity pressure, I'll also scheduled third Downstream, Consistent to scheduled on work additional And the as slide. additions. from remain maintenance market quarter next lower. to business with maintenance the in provide on expected Chemical supply under through

we discussed, higher quarter in As than in the expect scheduled the to for line the quarter. maintenance second scheduled part demand normal, this what relative third in in tends we be we've downtime IMO with be maintenance will And maintenance Downstream year be preparation lower and to patterns. impact previously this, consistent with in from experienced seasonal, the XXXX. to to Planned due

shown activity in upper below quarter fourth into again the left maintenance then pick The enter but activity second the fourth estimated third remain season, up and levels. anticipate should maintenance on earnings quarter the for And for impacts fall we as quarter, the are the to chart. Downstream we

chart, second maintenance, the In saw expect provides the third anticipated bottom we quarter. some hope the scheduled with below quarter. market Chemical the shown business, on on the drivers fourth lower this in We upcoming key impact factors and for left you quarters with the planned we what of also perspectives helpful in and

like I'd over it that, to with time, to Neil. at this And hand

Neil Chapman

everyone. morning be the to on back Good call. good It's

March questions, your provide to few going perspective take discussions. second that then like laid As I'm on share our in Neil my quarter we out results, said, to the we to I'd York before the New plans updates a

want acknowledging strong to growth. by start liquids the I

of is plans grow growth the said of well volume reflects target. Upstream outcome Nevertheless, As stages growth the liquids executing value. It I organization maintaining schedule a the is many on our times, to our our in early not an plans.

of plans plans, to projects Guyana those in FID-ed of Chemicals, these are slightly project schedule. New terms is growth ones XX further and York six quarter, of And we're are laid going progress. online feel we in on schedule. we year the the Permian slides. some outstanding out last out strong York, and that second in the in and In following or in on ahead I the another we growth Downstream making XX on laid New details provide the

a are We unique in versus position industry. rest of the

opportunity very attractive projects that are the the have a cycle These set. bottom the We are robust of conditions. at advantaged

a have the in financial pursue business we have attractive to very set that we them and cyclical. So a very opportunity is capacity

quarter, three second businesses low their the cycles. in In our were points of major at

As Neil, on factor you major quarterly that's heard from been a results. our

financial prefer be the have we contemplated and of current top cycle, our obviously to to margin the plans. While scenario at margins we the the was capacity maintain

results. the financial strategies, impact That cyclical on us business. with having sheet our on our why built investment proceed nature would plans long-term our range growth through a we the to importance margins on such to strong enable we've put based is have potential a full weather our In they and of and of fact, balance industry

On has have a first Arabia; incidents. Upstream been in refining strong whole reliability and the been performed discrete referenced. Sarnia, the the Saudi Chemicals in also in our and actually with in Baytown, during well of that the Texas year. one exception businesses of has the the and half one they second extremely excellent Neil one The Yanbu, Canada; three quarter,

$XXX three of one-offs, Although, earnings, we to the estimate second of performance. the million to they're quarter from In impact tune these be of earnings systemic these are that's impact. the total, overall our not instances

Of now be disappointing. production Baytown Sarnia are in facility is rates Yanbu course, back lower will the and through the this marginally and quarter. full at fourth

update on our to I that want week. olefins occurred earlier plant opportunity fire at to this you the take this Baytown

serious community. that. is say, First potential much An surrounding the this And too of investigation than and the at I'm injuries. safety really there in and people pleased the were cause say our of damage to to it's stage, the continues. and reported foremost incident early into those no frankly more the

larger point of focus consistently time. and a extensively ranked facilities the been an our area long average. for industry It reliability, Downstream We On us. has than for of important benchmark are course, better the it's

However, we significant eliminate an events, average not satisfied above the with must just we're one-off being as performer. industry

outside reliability year. leveraging our it's no This program drive improvement and insights that out lead a late leaders Chemical ensure We're that leave all Refining in reaching of we times. progressing to initiated comprehensive reliability and last also our across is industry Upstream, our we at industry businesses to stone unturned to

following summarizes Slide Guyana Permian XX provide In our Carcara development some the proceeding the to portfolio. schedule. subsequent major progress I'm Upstream, going our details the and is more of pages. on on Brazil, on with Starting

of our first that's exploration adjacent Uirapuru and second We the expect to the in that's well spud half Carcara the to with on block this Petrobras partner year.

high-value low-value in quarter, the Rovuma Beaumont, to in the and Papua to at and In streams are all development major Papua Rotterdam LNG projects we the three significant plans. of the are streams, are Downstream, the investments passed And government We these earnings Guinea contributing our for FID and out lined New upgrading Mozambique. two in remaining approvals with completed our cash. refinery second that three of in growth our they're milestones Antwerp host all plans and

current polyethylene well, Santoprene elastomer two the thermoplastic to of up plants and of investments also cracker and started the this high-margin expansion these Baytown are All new the in earnings. May you Chemicals, In are year. in performing accretive business

the third in month of and up ahead July plant at one Beaumont schedule. We polyethylene was started that

the our plant were four half three the world-scale the industry-leading Baytown be Christi. have polypropylene built Baytown a in high-margin major Corpus new Chemical derivatives plus in will the business the completed ExxonMobil's new and plastomer is plants olefins Baton product first that to at At ever also quarter. steam alpha FIDs the at portfolio our line of linear at we at Vistamaxx, which new of Rouge, second also We to which that propylene largest at and expansion cracker

Bakken growing XX, quarter, can rigs versus at is frac We we the in sales crews line second second and unconventional and are our brought increased XX% Permian volumes to the now wells in see with slide by which in second and the you Permian our Permian quarter year. XX last XX% volumes that the On We're plan. XX up XX quarter. in

understand efficiency the extremely Our long-term delivering unique and ExxonMobil resource And our development leveraging capital which of to and scale the as approach well drive performance are plans is maximizing I to is both focused the yield may results. recovery. ultimate can on encouraging The single strong. said rocks value larger previously IPs, on are lower with Drilling impact several completion completions. development of versus recovery a and fracture long-term a intensity applying and intense but and well higher practices rates it yield drilling operating IP wells with higher less of

the and an IPs ways It's team Cowboy Delivery Lake and ultimate region in a the million balancing facilities Capital efficiency Coast. achieve above our Delaware. the the the barrel level great is area ramped of Gulf value. surface FID we we're construction the making activity day our the is looking to constantly liquids with Central proceed capital activity We've outlay improve. about the than and critical And is progress. Point high pipeline to The finalized where greater ongoing all one Permian to up with highest recovery to it's Poker of for

FPSO second FPSO Guyana. quarter do for on of that. FPSO but we'll is We Pacora on size than year, first Liza route Payara second FID startup XXXX. completed and for which third of schedule and Destiny the en up quarter Page I'm at the in development remains next the of our The better will optimistic schedule that start double in We first the Liza-X, to XXXX the startup. the is for XX, started Liza-X the the to close

discoveries their three to in ready are and to yet assess of We've first Tilapia XXXX not half Haimara, the finalize discoveries the had We're and continuing further size. results of resource Yellowtail. these

X-plus resource billion be I've However, resource will oil-equivalent the again to Stabroek continues and barrels this grow. as before said

in spud be likely three fourth further Tripletail fourth and They will and second to have basin, quarter. station currently to with potential fourth in half. the a We one We include three in Maku are exploration anticipate before drillships on year-end. wells Uaru the the the

left, increase of future the chart a prospects. inventory On exploration continuing in the we've to bottom our illustrate included

you page plans XXXX. We've included I've XX of anticipate previously to remind asset sales divestment billion. Upstream about that through communicated $XX we

I the candidates said course the in We're public, assets divestment right. the are As listed on and so But this will marketing before, them discussions of not on schedule and the some we on $XX is $XX track that listed here. is have I assets marketing the that other billion also a not in includes and communicated. anticipate our not billion delivering previously number anticipate program we is Again, in retention that put program the of value. risk market realize the

above the on slide and The up on earlier, at significant aligned ethylene design XX, last milestones margins. accretive ethylene growth and capacity. polyethylene have The at quick which at at a the Mont on capacity. Coast. year And current investments Finally Baytown are up even operating The Baytown, time. update low said business steam XXXX at cracker in polyethylene is as XX% units are Mont for operating Belvieu Belvieu I some started earnings and started our in Gulf been the to integrated

July to line the startup ahead the very to gas was higher and polyethylene the reactor value, started metallocene on polyethylene at that from in produce first pleased first notoriously up of in but third a difficult of The We're up that world Beaumont was flawless. phase in was operations. This day the start schedule. line our

lower to course In versus advantaged located on cracker products. they're the the Coast largest our completed build, capital investments and adjacency costs with of will and be the quarter, plus Permian the high-value Corpus partner and the steam location, second ever to highly of in Gulf we derivatives be FID SABIC. the This will going the industry we based

scheduled remain Chemical Startup these is supporting The for XXXX. fundamentals investments strong.

by of growing to done All growth increasing is and be middle being global we demand this what will class. the population supported know

we absolutely growth In to-date expect summary, the on performance and delivering our our is organization focused plans. delivering on operating

we track. We of year deliver half will have the of first we're and through a high performance on our demonstrates level confidence that this that

Neil with And that, for Q&A. hand I'll you to back

Neil Hansen

now questions you Thank Yeah. any happy Great. than you. for We'll to Thank be might Neil. your comments, have. you take more

Operator

We'll Chapman of America. of Doug you, and question are first line Thank Instructions] the Mr. Leggate our [Operator Mr. take from from Hansen. Bank

Doug Leggate

is call. appraisal Good first predictable two Clearly, the program off everyone, Hammerhead you've Guyana. Thanks. Turbot know got have from be questions, My fully Longtail of you hub I've drilling. as your to be on great morning, I may. and understand on a Neil, not assets to terribly I kind Neil it to if the to I going in but the exploration – back one – dedicated area. development partner could you're both major you're what appraise

fourth wonder, and I little have still bit just I be are just undersized. have likely and well would the chosen it push if had you on XXX clearly yet because not you you a least because to running fifth looks revisit trajectory, to production not those boat a like means ahead why So could

us clearly could into play the see you frame for which potential date? would XXXX you like out on on that today of So your how is just what outlook

Neil Chapman

out date. of bit Yes, a

in on of I what by -- tremendous amount that to big it's activity to you, would start KBD was this know, You tell going up time. point. in basin. is increase there we XXX I communicated the March want getting at that a

the on first have the we way. boat As we said,

in We boat second have the construction.

drillships. three have We

tremendous items pace. of at great a And all going going We great, a activity on. these of we're amount have --

each partners have maintain the government alignment We get -- our on with up with to and one.

that's community. is primarily to I'm communicated focused laid the numbers in What out focused really what is investment on and And delivering we organization on March. the to we on you and the

at there another or just some be stage what to are to course, change that very resource outlook ready production will this optimistic I -- that indicated, we will make the the we're either Of at anything least on not do. more as We're base. up

mentioned Hammerhead. You

just Hammerhead. on comments make me a Let couple of

you describe reinforcing we positive. I there's connectivity wells high-quality good were more as good We've planning. that would in and drilled there's They're which I aware in them three two which on communication, wells think Hammerhead. the communication, Hammerhead suggests results that are again reservoirs. press drilled recently now the is means very the in news at development

talked You appraisal drilling. about

You drilling carbonate to Ranger, course. know, we're quantified going not be the some That's of we've on which doing appraisal yet. structure, large

we've being anything for that to. outlook organization have in of update different All want production, I think frankly, said, focused in going until an give tremendous just I activity what of of update we the significant next on. And terms don't on a delivering year. next the amount we'll committed March

Doug Leggate

the what so changed by Well, you of was still the just target, When meant. and out guidance know didn't It's date, XXX,XXX way haven't XXX,XXX a I let first well, impertinent clarify barrels away, gave my but can want it's a now long day. more than me XXXX. to obviously be I point. the saying that I XXXX I you -- was

a study on bit proceeds. the ball follow-up on might related my of understanding the is conducted balance My little -- cash question, a of you in off of pace the you disposal side lean of potential Neil return and on to that use consider opinions an how is to buybacks would future a kind shareholders perhaps that sheet. share you the But to probably kind recently on how buy the even the a with with

the as survey could you're what of reason the the your pace if Analyst I'm was to the comfortable and whether just share still that with wondering at Day. laid behind out thoughts you for program that you disposal

Now, Thanks. it leave I'll there.

Neil Chapman

survey. make Neil in specifics the the comment again, a on second, mean can I Yeah. maybe of a

words, anticipate -- We're make Let a you We me the tell In I risk I in more March. was billion. comments the that number. some we'll track communicated disposal $XX investment that have with just to we to in number. other would we're I the told community program. that. market highlighted on achieve on put that

three-month into program. months a four just We're

And of three-year -- was said, track our value-accretive capital with we marketing. use so And change no starts time, in with on our the priority allocation that terms projects. a of with in investing use at -- program What of continuous capital that we're there's the cash rather.

our to many we're maintain to we do We look Secondly, what we going and the the then maintain March. else in financial at discussed for else want have way, And flexibility reinforce in -- of dividend. that's and it growing our think cash I how buybacks. terms we'll with years we'll that

and Of market then at that time. about to the on the billion do with returning to the in based Neil, $XX in, conditions want could on we that that course, survey? you the we result set indicated cash will shareholders. comes that the we'll But basis some planning look at talk as cash that

Neil Hansen

again different the It was take. a had buyback on certainly about you to a capital execute buybacks classify priority, what's intended No, the talk what's it wasn't I might that, you of wouldn't them buy-side survey. Doug, firms with as as a more the program. gain mentioned, to a Neil buy-side remain perspective Yes. we've as out We get the perspective which this wouldn't a to just -- to It same. mentioned, firms, how with do some discussion discussions Neil if a as allocation survey. firms a few of It a our handful a on shareholders. to you philosophy was best again, approach larger But few I of buy-side the classify from our execute should reach

Doug Leggate

thanks Understood. Appreciate the getting for and answers again on Neil. guys,

Neil Chapman

Doug. Thanks, Yeah.

Operator

to with go Terreson we'll Doug ISI. Evercore Next

Doug Terreson

Analyst results tracking XXXX XXXX. the highlighted everybody. first Hi, for at the Day Neil seem be half in to of below financial plan

that Although the projections at and company and those the made were Brent flat time rail predicated Downstream upon too. clear margins flat Chemical

gap $XX is XXXX billion my there the comfortable Neil the think you are we'll X Or for deem projections? the bridge so, the his you full else what appropriate, XX% first year whatever opening if get return with factors market for in annual page to employed comments? of help XXXX? question the So half from factors adjusting and still you on mentioned that normalization and factors will solely when market may figures And actuals XXXX from do earnings capital on

Neil Chapman

bringing the I have we out going say, I'm in is Neil laid were we again, remember Chapman. to the in is flow time, here March margins at do the power we margins. -- it when question. we and that said Chemicals power, barrel Downstream this we're What and what business we answer this that earnings Yeah. quiet course, is doubt actual flat but At flat trying dollars intention. and XXXX XXXX – we that prices at -- a was for -- of at constant would $XX into -- a if did to the I'm cash and got Doug, Neil’s our indicate Neil plan I we

that's the skewered been -- of significant pretty the these the doing how the you're And go asking think and margin are current away course, of And back if and you price what our of is concern performance. we're we say we I take plan. in that we've reliability had the particularly much ones course we’ve The matching events, had Downstream. would I has earnings. the impacts

suggest to reported that doesn't minuses. out quarter, there's our It last Outside there say of to surprises and in laid nothing and months second much think changed stage us ago. I have say say positive out surprises, we first we adjust would for But It mean those this reason no naive at absolutely from and material I perfect. plan we on that negative XX we mean would tracking that some doesn't or pretty some that to aren't year. average, plan, so outlooks is that's ones pluses and everything be we're there's the laid that the the to

Doug Terreson

on Okay. but get just No, imperfect, a try wanted I to its realize to it. gauge

a thanks lot. So,

Operator

Sam Next Margolin we'll with Research. go Wolfe to

Sam Margolin

precise don't for do lateral Good spacing section. we coming a or impact development industry some morning. lot to of its a -- with head stacking issues a Permian. just a concentration are mile the having and your your per feet they're a you wells but -- question be while spacing, maybe up for that My calls productivity. that on is your of lot know plan call about it it first seems The have to square of but We in have here high numbers about now

So you're your you the don't managing talk a be about in in might broadly nature to given Permian? these the the broadly this just just some want how complex too can get too question. we're but of development seeing esoteric, issues industry I plan of

Neil Chapman

that. our the you Yeah. in the different industry. And went unchanged with it’s that terms a time plan than a from you approach I that that the basis, different through March. the course, ExxonMobil. of in course, results tell will large combination in are I as scale I at I Simon what out of that of would recall detailed industry And, this planning these and of that all many -- laid I read that of driving like the leveraging really we acreage it's leveraging contiguous again we've of said you had of

develop that we'll working that on we that multiple at horizontal plans I one discussed are drill and also time. benches at time

go. laid and there benches, go between or -- the right drill the now feeling between drilling should these And our dissipate. belief and expect multiple in we of communication do horizontal be bench is the one years benches and to there's Our appears believe it that out to in come approach if back drill later that the and simultaneously benches you we benches. And to way do is communication see other I

the too to of we aware our last year. early looked and a are that I there there have at have at very plans. Frankly of having March heard said that. it's I anything have new who've along spacing early I back competitors spacing from of out We're am in highlight closer than what in that. line stages moved

about I think has in the everybody industry read that.

involved My has understanding successful. hasn't is company been that it. the It in back pulled from

We have that taken approach. not

that. as tight as not is spacing Our

days. early it's So

to versus what We nothing last we new report said time. have

As plan nothing are and I we different. said, on

Sam Margolin

March due to is but the of it's face now of Chemicals macro this headwinds Okay, get to in on margin highlighted FID capacity industry globally. materials. there's continues the And right go some in to My back thank and capacity, helpful. you. pressure. That's you the margin We'll sanctioned that sort There's question. follow-up a

a for side. high-level And so in does I your big that capacity the on Are supply seeing petchem related was side about on term views now? wondering the chem headwinds some with pull new you longer for your and the And chain the perspective demand margin even say are? what anything cycle

Neil Chapman

And down you focused are the and business. individual about the highlighted to let polyethylene talk course ethylene that in that again margins to business, polyethylene that's and of break the it Sam but typically Yeah. those me our major driver we talk Chemical and paraxylene Chemical on of and products, the because ethylene are about. heavily would Neil we just and tell I

Polyethylene GDP. globally. as is million about I demand tons ethylene about at X.X recall, And grows market times the XXX

Actually the around you by world. per world. It's the what having to driver for year per is That's that growing driven high assumption polyethylene. to polyethylene. crackers so four plastics, the for robust that right That very now drives and of three need the crackers just driver remains the three living And of what demand, to means all meet four class around middle-class standard a year. is new that's the demand the worldscale middle we see

demand there So capacity. actually changes globally of a very been remaining all. has is at we robust. There's the no What happened see glut

quickly. the relatively business, the In other so businesses demand. it commodity demand unlike than of capacity in, is polyethylene we're higher some sets And the up

that I year the some tell next and come you will capacity there so. to or in further of Now in are online ethylene polyethylene increments

the change fundamentals So we all. in any at see don't

of increments, all of the The supply is glut most in today Gulf new which these Coast. on are capacity because

short-term try next inevitably if I pretty that capacity I to anticipate But these margins months, period. on during soft think predict So coming the was XX short-term and do. it increments and it are that in extra I would to margins we be wrong, the I of because of get would

the in chemical it coming been on expect the remain think I've six back Chemical the anticipates, is to least Now planning faster know. business And I months. soft at for most but for you career basis, I'd business coming a most than for of of notorious anybody my

Sam Margolin

much. so you Thank

Operator

Next to go Neil we'll with Sachs. Mehta Goldman

Neil Mehta

Good you morning. to and to talk good Hey Neil Neil.

had we've softness I ago. Obviously the it years So was profitability upstream you smaller prices. was mix that a seen in that of a the is question the group? around global European part a just gas on Groningen of can business first risk couple than of And gas. of business upstream -- is out, a at just But how European the a frame as is part gas go-forward-basis? to big the

Neil Chapman

I'll I Yeah. give mean you here, numbers some approximate Neil.

natural XX% European of about gas of and portfolio, volumes our to is the gas, XX% our terms we volumes you. the in what liquefied And about in flowing call it gas, XX% U.S. that of from going gas in think for just down of is I'm I is flowing break half half markets. in gas. is

Groningen European, combination and half that roughly U.K. remember I and of Of about half is a Germany, as is Norway.

part not of It terms So large our of a it's large part volume. in of is the in earnings relatively a relatively business. terms

over gas numbers. of been are this a of price been have the -- And the Europe. MVP these in What gas significantly, the six what's we the course, me Japanese, is last seen I you've -- it over JK seen plus growth as market year not has as liquefied two it's I years. driver would months. natural and And you prices. flowing years. have is in in in the that's price the in That's spot continued LNG many little high previous It's we I dropped has as quote months for as just what Asia. impacting demand six for don't the approximate price tell seen growth remember mean

is is supply has believe about up been LNG of LNG demand up of it or than demand X% north is which lower global I Asia the global and XX%. year-to-date

pressure puts happens home Europe if the look Asia, directed find and they in gas now. you on look what that's well those cargoes gas what's And putting the inventory the can't European is there, pressure the a the get So, that what's they price. for will at level spot That's Europe on quite as towards a flowing and right the LNG price home pressure in European business, high price. on putting

Neil Mehta

the environment XX? That's in to Lower your is Permian. about Exxon's the helpful the shares Day, like do smaller Neil. Analyst you the have guess competitors places relative Exxon's at M&A How and even in the in for I outperformed independent think follow-up role consolidation

Neil Chapman

you gives I'd for balance eyes of looking value. We're start you and that, of first to all, I flexibility one opportunities. act maintain always of I always this. see upstream the reasons it a you you Well that strong mean the something think sheet, open. in with -- tell if we're I wide

in we We comfortable words of plans the we the has we strongest can to merger very, laid corporation and opportunities other beyond. had Mobil. that very feel you we and the see have portfolio corporation out with has anything. growth this need execute I and since do to XXXX of have and In Upstream this -- Exxon the don't through

need we our current do anything business. of capacity is opportunities. from execute something. to set the to a have to need What we don't We So, do do

So, that's a great position to be in.

all the look time value-added for we opportunities. But

question great can look and there, something portfolio. if looking a So, the about out It's versus our bring the other I competitive is portfolio it. of, I at we advantage way a mean which words, think that's in in a portfolio all we part upgrades at competitive is industry. that's the

the the market market. play consolidation the you out in will XX, lot -- hear hear specifically, that In in Lower the about road. like I potential all of the down Permian a chatter But

If to to bring eyes the now. right opportunity I that I an don't For need we really We open. to there's like there, But make believe act us, to we say our need want to out it point what don't forward. organization wide act.

anything you have We here, have Neil? to a it Do great add opportunity is. set as

Neil Hansen

opportunity. we portfolio, our of with an can be very that something type the accretive bring of in interested to Well, and value competitive be we have, I obviously advantages then we if patient, in our see to can that's unique right, would we we the that value be absolutely can we that's an opportunistic guess bring given Neil. do and opportunity overall portfolio And

Neil Chapman

do. I Yes

Just back have to the terms. again Permian to reinforce my point the made go and I

approach. the capacity We wouldn't corporation. We're doing this approach the that. which to cycles. an Permian. players which are are taking leveraging And scale obviously it through manufacturing taking of lot small I a do at we're to the going the to mean is have a the different a scale, approach do It's we of it

can if by capacity we are it that. result as of that doing we We that, have and a advantage capital I way. significant believe think We and demonstrate to will the we And we to do could an plan have we that resources other it. a in do the have should development that to basin that, where can us apply in see we so. we It we advantage fit puts demonstrating demonstrate position a

Neil Mehta

Thanks, guys.

Neil Chapman

Sure.

Operator

Next question the with comes from Phil line of JPMorgan. Gresh

Phil Gresh

quarter fair guess question, first cycle. a asked look of Yes, bit to just my you that amount at have morning. kind it's a my debt good the through talked the of follow-up we question, added I so quarter, been questions this there's differently. couple a hi of of about If maybe investing a slightly and

to think want not You three sheet through Thanks. if proceeds along. you at comes script keep shape have just way assets best you're right you as But targeting and balance way the ready next tie Just think M&A opportunity in invest about the over keep looks sales that sheet look buybacks or asset to the it years sense we an the about make now, the billion cycle? of you if more the and can the that altogether? to does it balance with share of that want the $XX to kind

Neil Chapman

conditions being can market balance it's really then we important sheet you strongly. But you my add. current start think as I the other very strength is by in and want of to course, I'll demonstrated comments, the said but this Neil anything because feel of I add maybe

low investment maintain through commodity the in points cycle. to these our plans have the We capacity

of we conditions were to out maintained chart, at very Neil seen closely. those and believe through Actually, remain from execute conditions, as you they to pointed maintain we conditions they if as should execute current acquisition still these would we we see course, powder -- his have so. were have and capacity it's if we our these you and to the the to if an still low XXXX something do want plans But watch have some

But margins like a anything You're with of the basis, no constantly all if planning looking capacity continue make plans. continued, time. do and add on feel that? we plans. to at at have you these our that can low we today we the change to all have even to to And our Neil,

Neil Hansen

the just -- We comfortable on do available priority balance sheet. thinking we talked have we any we to sheet the need with felt doing the to that dividend time the am and we the additional that felt of very and a balance that growing feel that we talked we conveyed I comfortable reliable with investment that about Yes. back us. maintenance didn't Day this, to Investor at program when about Phil, that we

from And those additional but cash coming the a higher were proceeds and likely so then given come obviously asset buybacks, priorities back we sales or in environment a we what from that environment these are be prices we from current cash in an come different environment today, to know through we where coming that or at will given XXXX, the was to when margins extent, out had target don't these in a price and sales, time. but assumed margin asset is proceeds and we which in would

advantage priorities reliable when when are cash as in to dividend which accretive we the and available including the become to to and prices So back. a going of have we projects, pulling that opportunities to would and we the take strength others margin to We're and to where continue capacity us growing costs is invest go, that reaffirm it's can a what financial we pay but attractive very time a that ensure downturn to are. when have invest predict operate are said difficult exactly in lower

from when the time us. I to will available again, it that next to proceeds and What we on priorities. two happens opportunities could those occur and or that change three no see in think the margin comes what years, there's cash price at environment So, over additional the be dependent

Neil Chapman

in cycle the opportunities I Phil, in low business to this go that Guinea again, oil capacity you, very lent Permian, we and at new if resources prices. back go move something to some in crude for is at attractive I the we New have the mean, very in acquisitions low that and into point in us. XXXX-XXXX the made the is we And of competitive and Mozambique, now back to pick-up have you tell right And when Brazil. in Papua because the that's the strength I'd not prices

Phil Gresh

that. certainly I you asset can't the appreciate that obviously time sales appreciate and quarter-to-quarter so can

look On at every my to the of the Chemical the I quarters five gone down questions your that of the follow-up is over past performance asked quarter. ExxonMobil been some guess that specifically earnings side, if have I have

of back recently some performance, tracked And I and will other your their continued has sides factor have kind there and kind some just they I thinking your to you know degrade think is you Paraxylene think of I that we bit the performance would so that you yours is factor. the this traditionally things have Or that to quarter to shifting performance maintenance kind recently? better here. of performance had say so come relative some other peers where -- about? you're Thanks. seen of I called But other if be know look a differentiating the disaggregate if primary that as of are should you through you softer Is one that

Neil Chapman

think other there are things. I Well,

looking our with that weighted polyethylene sort to of towards of it's of assets the cracking our the XX% think Chemical at start have business magnitude what of steam the order has company configuration you and heavily and Chemical in and I is by business. business Chemical is each

ethylene the reasons already polyethylene have stage cycle we multiple And us ethylene this margins been discussed from very of years for benefited that. margins Polyethylene the strong that for down. and and at the we've for are

impact business company polyethylene. configuration you you It's had. that assets by really see probably of have wouldn't you XX% in of polyethylene business driven the Chemical and that of and the ethylene, a products other its ethylene rest of If that the has in

growth because across been our their has driven That due ethylene plan. these look terms coming higher-margin the over of being XX The capacity the is or impact last incremental company's polyethylene Coast. on on delivering we If Chemical been months performance at to above operations, terms Gulf of and seeing of margins by by in industry total primarily it's are overcapacity. driven primarily down we big in

that significant is ethylene Paraxylene nowhere part businesses. capacity months big similar. margins our that's These put been come cyclical near is in under size also pressure. a has Paraxylene of of increments polyethylene. are Chemical Paraxylene the company and Paraxylene the online and recent China There in some of has

latest talking that The unchanged. about I drivers than drivers continue underlying underlying is these demand were the Corpus crackers why That's performance comments for polyethylene has important change. us else. we competitive really to no are made for businesses deliver of The are anybody steam unchanged. Christi. more What's when the The businesses investment we to in

This producing not It's is We're value significantly Upstream advantaged polyethylene. we other versus plant scale the lower cost. a our Permian. organization. are polyethylene, believe a advantage Gulf investment. located so any the significantly capital cost we leveraging but to the higher and It's higher Coast close or commodity We margin of

by we so to don't supply. of impact-driven short-term in excess any this margin structure a see change This And is the business.

Phil Gresh

the comment. Appreciate Okay.

Neil Chapman

Sure.

Operator

line comes next UBS. the Your of with question Jon from Rigby

Jon Rigby

Good please. also questions. good for taking afternoon and morning. Two Thanks

guess, that up and arise. take the you that about say more you look those come we've at and on hear they is, if But the what Permian transfer singular. somewhat I argue is opportunities opportunity a around when you'll first November M&A The those so I will coming in in could and got periodically Brazil in surplus rights and and

Neil Chapman

Yes.

Jon Rigby

my you whether add your is that? talk to wonder away…. just And I if a So about just what could second maybe little straight more question attitude I

Neil Chapman

Sure.

Jon Rigby

have I looking bumping CapEx do both it something build that guess in and out. just around year-over-year your to at and profile and was in the infrastructure Upstream up sequentially may with I part see the in comments U.S. your I

just bit detail So would the Thanks. be out opportunity it I more well activity. sort could thought around a you in lay activity infrastructure of good maybe as little just if the drilling as

Neil Chapman

Yes. Sure. Jon. Thanks,

of that's is are those of rights. in mean, the with me rights big the kind the Búzios, is course, big very, the surprised Let but start in everybody Búzios transfer very of I'd so of a will that. reservoir of resource is there at Brazil. of if there other largest I transfer It far one call well-delineated. the I in which down course, ones what that's look singular. largest. didn't. Because it it large large. discovered think is resources it's But very Those I'd industry the by sizes be relatively is have they

a the a I look else if can bring don't we some value to get into that can where able industry. we versus that's advantage not can it bidding way to to want want mean bring at players the in have to I we I we therefore business. advantage just resource war an The anybody for find more should shareholders other be get our and because we to participate. We a way versus that bring advantage is to significant And

see to more all at you'd on but we're Jon, that. interesting out. I at world. don't plays resource I certainly the that It as how are resource doesn't large to and it. to We say mean is be me we're think the It confident very expect it are looking say than looking in am it And much that very, that obviously act a will players going major to

the plan halfway terms of as XX% through proud as and CapEx peel are. the Upstream you plan XX% our where corporation of actually a actually we With if in in with very year the our back in of the onion middle I'm year further of the CapEx, CapEx And well. of

puts there tracking mean on total to takes and doesn't say mean I plan. we're So are. aren't It in there some

surface basin. to out the logistics That's development of a above plan. money and in Delaware part put laid facilities we and think out all in basin these in upfront I lot is March buildout, to the corridors our build I of those of the particularly the compression within what terms have of both

longer I and in now would puts It's horizontal Delaware reported that Midland. you all to there well laterals it see in are the we numbers Overall, seen you documented externally. And that. tell these are on in is numbers is taking takes plan. that of the it -- than the drill you've are all right the

way Delaware get find the what the we we a to drilling those down closer times the -- players Key all in see that for to in Midland.

working we're making We are faster, progress, course, we I that decent of progress. us are decent but go making want to

have within of flag production So to today, what of our we is said. we Permian is there's had the And really earnings. outside nothing range already It what accretive to expected.

right We money Permian are now. the making in

Jon Rigby

you. Well, thank

Neil Chapman

Yeah. Sure.

Operator

from line question comes RBC. with next Biraj Borkhataria of the Your

Biraj Borkhataria

Hi, thanks for taking question. my

I so, of prices. Guyana. Just of understand question the And for one, a the taking good development obviously question on very Pay, pace you're advantage available in the services at

overall of that get the amount the are the development. is a could it but you of Permian, have all the I oil. pace oil impact chart your all oil, is growth that market. not the at substantial exponential And of on For growth concerned

you handful And suggests of plus grow Chevron the your peers, you then, that positive guys volumes than of take over may wants like not looks the growing, be the it sector and to the is a majority faster which if market prices medium-term.

all. it's just whether that. So want your think a you Thanks. thoughts to on concern at And get, I

Neil Chapman

remember XXXX, you million said oil-equivalent we Yeah. make out Neil, pace And free, by the mean, Permian Thanks, I'll get one we again some barrels are have and any in laid we Biraj. to I to think, I to I if Bakken feel jump and comments. I mean that going if correctly. in.

outside we execute see supply the That's them driven these. competitive. less standards extremely as to it. And not to the at see it's them we anything And them by and we We to way we them. that as capacity the curve. returns see more of That's than within expect look high execute our

commodity of supply. is of of really competitive in that, advantage I we businesses, our And cost so supply. anyone keen, commodity driven a have it's in important, else to terms by cycle, cost the maintain sure in is make in a discipline That's Permian. am we really why What versus that capital

plans. on this business. cost and is capital down to continue the must to deliver we declining what We in work out our have laid a Remember,

for your keep what's to And have capacity. You key replacing us.

And portfolio Do win in key And to make to part Permian our industry. big of that's a is on is the basis this have in the of business that. And sure that is the add these to most that? competitive plans. anything you the

Neil Hansen

committed the market growth Obviously, I continues to strong. remains I only be guess their the remained No. add thing has balanced. OPEC would Demand to cuts. globally again

that's have Iran and and Venezuela off-line You oil in locations. other

you think still Permian. growth seeing the balanced are seeing a So relatively in market. overall, I we But are

Operator

All right.

with to Your Roger Fargo. next Read goes question Wells

Roger Read

morning. Good Thanks. Yeah.

Neil Hansen

Roger. morning, Good

Neil Chapman

morning, Good Roger.

Roger Read

look If X, come think the was so back And we are slide Chemicals. and where to we curious, the downstream just one the at relative particularly the could of was you it the showing as I kind to margins. I XX-year,

might versus performances for margin about much had lost your at or a think activity, truly adjusted those it was think margin run you how normal you kind a where been? have you margins level loss of downtime, opportunity of those call If

where levels think maybe more us normalized of Can back be year, flow should downtime? maybe given of cash you half this help about

Neil Chapman

make incidents, be have I'll question, the your didn't Roger. question? would if you What we the Well. the Yeah. sure is impact, I that reliability understand

Roger Read

only of or if the isolate margin price net to in offered terms margin let's What the were margin we you captured? net Yeah. just say industry aspect versus

Neil Chapman

Yeah.

bear to things two think mind. in I

I that you And highlighted think of the those number. impact quarter from reliability three first those the earnings in significant million there terms the events. in second gives $XXX comments, a performance, of in I and was that in our my half Isolate year. refining,

you I change terms fourth else impact quarter. larger if scheduled gave anything much heavier the numbers we will a maintenance Neil that how would some is turnarounds, from to There add? of that Neil, know, And have the have. in manifest in and how that don't and third

Neil Hansen

not we so industry footprint. just are again, industry the that they are Those X, are of Roger charts obviously Those But are realization reflective what slide margins. those again And somewhat Yeah. I asking. our you're captured. understand The on margins.

Neil Chapman

really, industry is, important think refinery It the I the configuration. here thing each your themselves to players. manifest depends on really differently other margins of -- the in

players the have that Europe European the Just course to a no will who don't refining low European Europe. And if you hit players. the margins give in in footprint and not an hit are of have example, assets

United just one even you States, region, like And the if into are go the different. refineries

conversion different low margin. high There margins, are conversion are some refineries, high are low Some and refineries. for

versus U.S. different there In Midwest. the the Gulf are the Coast on margins

configuration, configurations back company specific to at the and further from of individual to so, you peel apply and assets you margins, onion refining And these that have to company. your the when both technical the differs geographic margins look

has I industry an What the on was of been Neil chart that or of an think shown showed, was industry this. market average price

Neil Hansen

That's a downtime, from And just impact maybe maintenance, first right. Roger, year. the the of Yeah. earnings in half

Chart in Downstream on second I $XXX $XXX showed think million the it's for the we roughly XX in quarter million.

was quarter think I first a little the So that. than bit lower

below tried was to fourth it little then on the And in then Chemicals, quarter. a for slide looks XX, show, we million. bit $XXX third like And what that and

that significantly, second half gives we in in what have seen second will be year. I indication where quarter. again the we Hopefully, you of the think the So from down some

Neil Chapman

back Roger Downstream weighting that the point margins, just on to slide a-third an of that a-third, go in and was a-third, Asia. U.S. my equal markets X reflects to Europe

an an different And It's margins average. illustrative. that. so than your it's a-third, in don't if you three regions a-third But have then a-third, be could those

Roger Read

Yeah.

the I industry For my sure, not margins. clarification. your interpretation Because was just original margins was that appreciate

Neil Chapman

Yeah.

Roger Read

Okay.

Neil Chapman

you. Thank

Roger Read

timing have as the things with well know performance Permian. I of And that QX phenomenal on follow-up that. shows and the familiar completions then the just there, but we chart mean, a in I pace question like

and zagging is line you're couple quarters little the think saw becomes we line. above the just the you we Permian what zigs next you over quarters those towards is juncture of maybe a about particular what one where zag more Or of zigging QX representative? believe Just this just kind As in growth QX, bit? at and of back

what contemporaneously. of lot a of or a have not don't on at there we clarity you're out lot mentioned, doing least Sam As

And performance curious the was how shakes think So you up? that just in to the maybe where I about Permian?

Neil Chapman

is, as a zagging, say, we a Permian lumpy And zigging times. and lot a it's frac because and vocabulary we we Your the I way different can lot can describe drill docks of I on at lumpy. reason is it the the that are developing

anticipate if of to that's read kind and to what see the don't back I you or going our So when you go you're actual see. performance, chart

the green same single blob. meet to But to -- You're we are will every can we we say quarter. confident the called But what growth are growth I'd profile, Roger the that's going not we see green famously going very that a what's that green meet.

absolutely You’re zigging Delaware, everyone necessarily in our It right, but will of and zagging, going a pads. to it is be would well we're way development plan particularly the the long develop. not these that reflects corridors it have

in multiple rigs time. down a bring And we're frac think going move the at drilling if see to production. it corridor about then you'll And frac up boost those one those drill and crews, you them in benches

it be growth we're that don't overall growth rate meet very that I that famous every quarter say growth the in quarter. repeat think the single at am to we do look to rate that I every we'll single represented confident So and But going right will that production to thing zone. green

Roger Read

Great. Thank you.

Neil Chapman

Sure.

Operator

Howard Scotia go Next Paul to Weil. we'll with Cheng

Paul Cheng

Hey, guys. Good morning.

Neil Chapman

thanks. Paul, Hi,

Paul Cheng

I one Neil go Upstream. year then about in have mentioning to next probably Permian, go rate and year that one rig you will I for has based to this was information exit think you may March seen the at been XX that the Downstream, count several point still the depends XX, this additional months? over changed some that XX Is last or the on activity of on pain have level. digging June

Neil Chapman

in mean, wells don't mean capital keep say we that was a productivity that I about we I really is what the is a number have. of think these any on still this would get fixated to. estimate and of rigs all quite that's number If I frankly. I better, year-end, we could back on of sort reduce, that I be will the the efficiency the I I plan Yeah. will coming -- we we would haven't that. number XX don't at change got

what XX, number can we think but I XX I to as are best that could basins call XX, basis So XX, up today across sort in at you. now. a That's be it it could mean, planning with say the the line year-end, give is basis, right getting I both I planning of XX be

Paul Cheng

question improvement I last either my over plan? the mean I your current deterioration There's and haven't have basically I the seen changed. nor guess or to comparing really based that you material that several no that plan months in Sorry. same you information the is within feel you still is on see productivity that everything what that

Neil Chapman

Delaware. Delaware are to improve drilling it in well nothing within is I XX% there in time length our the basis. it that length to saying as ago, minutes the planning same it lateral really taking industry the read in important of Yeah. is flag, drill longer about same a the mentioned because I the to numbers Midland. I is is is mean, in the few and what's range people the increase or

that of exchange, longer, bit too down depending things. on down, Actually, and taking is I think some little can't lateral drilling get that's and you can length different that this if parts a to it's to to is are is the time a time it one planning that. you than is that where the us indicative There of for high but activity because two you the get key drilling level in that that obvious, expect your it basis, do

more add you can back cut rigs. your so volumes can You

We number thing still and believe the capital basis, outlay the rigs, that and planning Paul, reflects the in the most productivity get that we we're will volumes I is have But you. our would predicting. of that it the we important tell

Paul Cheng

Sure.

Neil Chapman

going way the we're ExxonMobil about it moved basin. we is capability have into the this total And

are could important close faster. drilling very feel our where world area. confident comfortable in all around gap very very, to I plans, with very of we very, all And heading. from we our I feel that applying this are the We wish capabilities I

Paul Cheng

about and years? And Midland between that will I Should next think Delaware. we count standpoint your be -- a XX-XX for the from assume case you're or rig the one two

Neil Chapman

We're of than but have part not Actually, that's today -- now. we're I remember, right think the in the plan in of think and the do we Delaware XX if rigs Delaware the in XX in Midland, more Yeah. development I our I'm the numbers. have we for still sure XX-XX just now is the Midland maybe, magnitude, in order I it right we

And well well conclusions. our an stage again such we inventory is And early -- than is Midland. this of Delaware we you the it resource, to back and the inventory I quite we've come our been jump But to is X,XXX. in much, to just have indication, give I in think an higher much to the a estimate in around something Delaware clear

We So XXX. X,XXX well inventory, we drilled XXX. drilled

XXX be very with So to where going tough from X,XXX. wells to it's extrapolate you're

about planning but important think wells, I of needs we and so long-term number be to what And think that's too careful just that I from basis. stick our we try draw We know doing -- conclusions extrapolate do, think need so, got that. have that to to why it's we many I it and to

Paul Cheng

of system? ability question high IMO your your to coker sulphur minimal directly a it refinery XXXX feed the we Final world take Right. as in see to under for with me most the the

Neil Chapman

Yeah.

oil, know you install scrubbers can or can could some with They sort they have the fuel onion these sulfur peel switch if at think like the low regulations piece other I liquefied new multiple if shipowners option. to buy back gas. of this can IMO natural you as they

The plan to that plays recedes, the demand high you course. will that would could anticipate would is will sulfur and And the sulfur demand way increase. for out decline it anticipate of will that spreads -- low lead so changing for we

sweet I think if running run you have -- to low sulfur conversion by crudes. refineries, to you'll be incented reduce

with high on conversion particularly the fuel refineries refineries Coast Our Gulf oil are low production.

feel well positioned in U.S. And so we very would that say the we

coker We high that high sulfur Antwerp oil new have reduce in production in this We investing conversion projects added fuel in refineries. Singapore. and we're big

time. sit long, strong So we've but feel very a position. planning The market do market directionally do, the like and we we advantage will a will long this what been for in

Paul Cheng

take the sulfur a oil by oil as that's the your high feedstock that sulfur my high heavy oil oil? the into fuel replace refinery Sure. mean, of directly question my and instead feed I I I question. buying fuel guess using run can heavy guess is you coker So your it

Neil Chapman

the we they're the is think That's for. think that have I line bottom what yes, capacity. mean, I answer if there I to that's spare that. on

But it course, capacity. the of facilities But size could fundamentally across do you that. why to we is, do invested can You in balanced for Europe. coker answer that's that you if yes, across our have we're the

Paul Cheng

Okay. Thanks.

Neil Chapman

Paul. you, Thank

we more think for time I question. have one

Operator

from We'll of Jason take our Gabelman last with Cowen. question the line

Jason Gabelman

the hey. Yeah, call. a taking the question Thanks end of for my

going Mozambique in Firstly, we on what's didn't touch Papua couple and on of LNG Guinea. projects. The a development New

I'm looking You your the that And did going release who's the helpful. of would and put would when on there's in project wondering delay still on any maybe government that negotiations this with year, that Papua what's Mozambique been you end doing but then reporting press just it? you're be at sanction that to the New on updates could with Thanks. some sanction expect changing Guinea EPC if you at at

Neil Chapman

Sure, Jason.

read ownership on I we're likely the be think at least change in lines will Rovuma. is Mozambique, basis course be two have to there Total to and discussions think down. get that we reads this X on costs and that very week is publicly for between more very, X in AreaX the can had proceeding to we're in we Patrick something planning there Area I a Area comments capital the say, put made we There that have some X, to Area going everyone do on and of with that we some earlier preliminary still and to

not the there companies, improve But at something our in so will as stage, early that course capital yet. very ownership right interest changed But both the sure current to look change if Patrick basis. we of of for said, very, in I a now has because no That's that planning efficiency. there's think

then think we X Area already Patrick's advantageous what Area if it. the or we've consortiums something would both communicated. with comments base obviously ahead than go to it's road planning companies more our X talking look about were down I But comes more to is at both

as Papua has government Marape there I In said And New is LNG change the terms Guinea him look at of in the power met and as President, Papua aspects publicly has petroleum one about Papua. and to with he ago. minister want and they said legal of month of

Our review had the discussing that they're of they've that understanding and outcome now. is review

we're we an the Marape concerned, with have Minister, Prime As government. that. agreement understands far as

this details I we'll say, change, of comes out with the And see to more talk have I wait on is have but any have to what discussions. them. you block, so and Total don't operator see government really the to

we're As we change contracts far our anticipate we agreement. and a we that contract no have concerned, as and in honor

Jason Gabelman

landscape And of just the could a covered China depth that ask seeing mentioned today, know and pretty in another had been one peer Chemical there's about Thanks. terms I question in destocking they're inventory I If a but in been it's chem. emerging And reverberating costs wondering seeing discussions one kind the for of supply particularly Thanks. that back of chain if was its per oversupply. you're feedstock China is naphtha? tapering purchases? if about just an I kind through naphtha

Neil Chapman

sure make understand I Just to Jason.

You're talking about polyethylene? destocking of

Jason Gabelman

No.

not feedstock crackers of their for kind as buying cost the much and So naphtha inventory on hand.

Neil Chapman

and inventory inventory commodity typical reduce business. think a I their it's pretty levels People in their raise levels.

some be Naphtha naphtha. price, in is to between destocking on Sometimes naphtha driven a fundamentally if the people people by change of speculate of I they price. course are expectation that. and in of naphtha going know but going where typically also is supply/demand margins is and in crude terms going China there there's the believe that's don't oil by think folks crude prices differential and why do are by that driven

So -- I they're I why speculate destocking. to on really hate

think naphtha. seen I prices relatively by leads over naphtha is more low driven think is which versus that's last crude the more which is months more market to crude markets in primarily what XX I on it to condensate, the the have oil. like you And leads this

would in on it over to China can think seeing I think you're a to I destocking that. add that But Neil? short-term in be recent anything speculate don't months. so And trend I

Jason Gabelman

Thanks.

Neil Hansen

you us achievement the excellent the progress key the allowing appreciate continued in our day. your Thank opportunity and number highlight you. that Permian the of We you. second Again, of Thank enjoy concluded. appreciate the you across and to today I your hope of rest milestones quarter portfolio. interest a

Operator

today's conclude We does again their conference. That for everyone thank participation.