The operator introduces the Exxon Mobil Corporation's third quarter 2023 earnings webcast and hands it over to Ms. Jennifer Driscoll, Vice President of Investor Relations. She is joined by the Chairman and CEO, CFO, and Senior Vice President. The presentation and pre-recorded remarks are available on the company's website. The CEO will provide brief opening comments and reference a few slides before taking questions. The company has included additional information on Slide 2 related to recent announcements. A cautionary statement is provided regarding forward-looking statements and supplemental information is available on the website. The CEO highlights the company's strong quarter of earnings, cash flow, and shareholder returns.

The company reported an increase in earnings of $1.2 billion compared to last quarter, attributing their success to the hard work of their employees and strong operational performance. They also announced a 4% increase in quarterly dividends and continued to strengthen their portfolio through investments and divestments. The recent acquisition of Denbury will help the company reduce emissions in industries that are difficult to decarbonize.

In addition to their current CO2 off-take agreements, the company sees potential to reduce the nation's carbon emissions by 100 million tons per year through a recent acquisition and plans to accelerate another company's net zero ambition. They are also driving organic growth through record refinery throughput and new chemical capacity, leading to strong operational and financial performance.

The company has seen significant structural earnings improvements due to a focus on cost reduction and safety, resulting in a decrease in structural costs and meeting their plan. They continue to identify opportunities for improvement and are on track with their production and capex investments. The company remains focused on sharing their success with shareholders. The CEO then hands over to Neil, who discusses the company's position as a top Permian pure play company and the quality of their workforce. He expresses confidence in their ability to unlock more value together.

The merger between two companies is expected to result in annual synergies of $1 billion before taxes and an average of $2 billion per year over the next decade. The combined company will have increased exposure to short cycle low cost to supply liquids in the United States and an expected increase in Permian production. The merger also aims to reduce emissions and provide the energy and products society needs. The company will be hosting a corporate plan update and publishing an Advancing Climate Solutions report in December. One question per analyst is requested during the Q&A session.

Neil Mehta from Goldman Sachs asks a question about the Permian region and the top line synergies that will come from better productivity. Neil Chapman explains that the synergies outlined in the earnings release are real and quantifiable, based on existing operations in the Delaware and Midland. These synergies do not include new technologies that are in early stages of deployment. By applying these demonstrated methods, they are confident they can recover an additional 1 billion oil-equivalent barrels. The charts highlight industry's move to cube development and how they have been drilling cubes since 2020, while Pioneer has also moved to 100% cubes.

In 2022, both companies were developing 100% cubes with equivalent recovery rates, but at lower quality acreage. When comparing adjacent Martin County, it is clear that the company has a 20% higher recovery rate due to better stacking and landing zones and optimal well spacing. This allows for access to economically developing secondary benches. The combined entity has a value target, not a volume target, and will adjust activity accordingly to achieve the desired outcome.

Neil discusses the expectation for Pioneer's production to reach a million barrels a day by the end of 2027, based on their current capital spending and similar number of rigs. He also mentions the potential for improvements in recovery and capital efficiency due to synergies with Exxon Mobil. The next question asks about Guyana, and Neil notes that production is ahead of plan for the year due to Payara start-up and debottlenecking. He mentions the potential for further uplift and repeatability of this outperformance with the upcoming FPSOs.

Neil Chapman, a representative from an oil company, is pleased with the performance of their operations in Guyana. They have consistently exceeded the nameplate capacity of their two boats, Liza 1 and Liza 2, and are expecting similar results with their upcoming boat, Payara. They have three more boats in the pipeline, which will increase their combined nameplate capacity to 1.2 million barrels a day by 2027. However, this does not include the potential for further production performance from their current boats.

The speakers discuss their plans for safely and efficiently starting up the Payara boat and maximizing production for the benefit of shareholders, co-ventures, and the country. They also mention how they have leveraged the expertise of their organization to optimize the project and bring together the best thinking for its success. A question is then asked about Guyana.

Neil Chapman is asked about the potential for increased production due to recent discoveries in the Stabroek Block. He explains that they are constantly updating their resource numbers and will do so when there is a significant change. The company is currently focused on exploration and appraisal in the southeast corner of the block, while also looking for new prospects in the north and west.

The company is looking for new exploration targets and plans to have six FPSOs by 2027 with a capacity of 1.2 million barrels. They will strive to keep the boats full of oil and will update their numbers as they get closer to 2027. The company is also considering the potential for tie-backs in the future due to the density of resources in the Stabroek Block. The water cut will increase in deepwater, so they constantly look for ways to optimize production. The company is also striving to keep their production at a high level and will update their numbers as they get closer to 2027.

Neil Chapman, an executive at Exxon Mobil, discusses the integration of two assets with Pioneer Natural Resources. He mentions that it is early in the process and that Pioneer has a deep understanding of the Midland Basin. He is excited about the combination of the two organizations and the potential for high grading the inventory and acquiring bolt-ons. He also praises Pioneer's land organization and looks forward to working with them.

Darren Woods and Neil Chapman discuss the integration of Pioneer's organization into their business, emphasizing the benefits of collaboration and innovation. They mention plans to bring Pioneer's operations under one central organization in Houston. Roger Read from Wells Fargo asks a question.

Neil Chapman discusses the transition of Exxon Mobil's portfolio over the next eight years, with an increase in the percentage of high value-added liquid barrels and a decrease in dry gas. This is driven by the strength of their developments in Guyana and the Permian, as well as their plans for LNG in Papua New Guinea and Mozambique. Chapman also notes that of the remaining gas, 7% is associated with liquids production.

The company's strategy is focused on moving towards lower cost production and increasing revenue by high grading their portfolio and reducing structural costs. This strategy is seen in all of their businesses, including upstream, downstream, and chemical, and is aimed at creating a resilient portfolio that can thrive in any commodity price environment. The company has already achieved $9 billion in structural cost savings and expects to see more in the future.

The speaker discusses the philosophy behind their low carbon solutions business and how they are ensuring that every investment and value chain is positioned to be advantageous in the industry. They also touch on capex for the current year and mention that there are no unusual factors, with a focus on investing in high return projects. They plan to give a further update on capex during their corporate plan discussion in December.

Darren Woods and the company are confident in their ability to bring projects online on time and within budget. They are focused on executing high-return projects for their shareholders and are open to pursuing additional opportunities. They are currently on track with their plans and are consistently finding valuable opportunities. They will be discussing their low carbon solutions business in more detail in their upcoming plan release.

The speaker discusses Exxon's focus on their key technology competencies and capabilities in the transition space, rather than chasing the current narrative. They mention their interest in lithium production and the potential for it to be a part of their growth plans, particularly at the Smackover site where they can extract it from brine water with a lower environmental impact. The goal is for this to become a material part of Exxon Mobil's portfolio and compete for capital.

Dan and his team are working on a promising concept for a lithium business that is synergistic with their traditional businesses. The company is often seen as an energy company, but they also have a large chemical business. They have a fundamental capability of transforming molecules into products that the world needs, and lithium fits into this along with their other businesses. The company sees the opportunity to generate higher return projects and expects lithium to be a part of their portfolio going forward. On the infrastructure side, they have built out a lot of infrastructure early on and have the combined infrastructure in place to reach their goal of 2 million barrels a day of combined production.

Neil Chapman, speaking on behalf of ExxonMobil, addresses a question about potential infrastructure needs and bottlenecks in the Permian Basin. He notes that the Delaware and Midland Basins have different levels of infrastructure, with the Midland Basin being more mature and already having existing infrastructure. Chapman praises Pioneer for their infrastructure development in the Midland Basin. In the Delaware Basin, ExxonMobil has invested in large-scale infrastructure, such as the Cowboy central processing facility, and plans to expand it. Overall, ExxonMobil believes they have made strategic investments in infrastructure in the Permian Basin and are benefiting from them now. Darren Woods adds that ExxonMobil also saw the opportunity to optimize production in the Permian Basin and built logistics and pipeline systems to support this.

The speaker discusses how the company's recent acquisition fits into their strategy of maximizing the value of molecules through their facilities. They anticipate additional upside and do not foresee any bottlenecks in production. The question of shareholder return is raised, specifically regarding buybacks, and the speaker defers to another person to answer.

In the third quarter, the company had a free cash flow of $11.7 billion and paid out $8.1 billion to shareholders. This allowed them to grow their cash balance and strengthen their balance sheet. Their priorities for capital allocation include investing in high-return projects, maintaining a strong balance sheet, and sharing success with shareholders through dividends and share repurchases. They plan to execute $17.5 billion in share repurchases this year and have a similar program in place for 2024. The company emphasizes the importance of a strong balance sheet to weather any downturns in the market. A question was then asked by Paul Cheng from Scotiabank.

Neil Chapman, from Exxon, discussed the company's efforts to electrify operations in the Permian region for emission and cost efficiency purposes. Currently, all 17 rigs in the Permian are electrified, and one out of six frac crews are using electric fracs. This is part of their goal to achieve Permian net zero by 2030, which includes reducing methane emissions, electrifying operations, and securing renewable electricity. While there is no information on Pioneer's progress in electrification, Exxon has committed to helping Pioneer achieve net zero by 2035, 15 years earlier than their original target.

Darren Woods, CEO of ExxonMobil, and Neil Chapman, Senior Vice President, discuss the company's partnership with Pioneer in reducing methane emissions. Woods highlights the advantage of ExxonMobil's large organization and technical resources in addressing this issue, and how they plan to bring Pioneer's portfolio into their centralized operating center to improve their efforts. Chapman confirms that the savings from electrification is already included in their $2 billion synergy benefit plan.

Darren Woods of ExxonMobil discusses the company's efforts to bring their net zero commitment forward by 15 years and how this aligns with their synergy numbers. Neil Chapman adds that the combined resource of the company, post-Pioneer acquisition, is estimated to be around 16 billion oil-equivalent barrels with a lifespan of 15-20 years. Most of the resource is on the Delaware side, with Exxon's resource being closer to 9 billion barrels and Pioneer's being closer to 7 billion barrels. However, these numbers are still based on early assessments.

During the Q&A session, Sam Margolin of Wolfe Research asked about the company's capital allocation and dividend increase. He noted that the dividend increase is roughly the same as the share repurchase, but the company has a pathway for growth in both upstream and downstream operations. He also mentioned the company's strong operational cash surplus and asked about the potential for further dividend growth. In response, Kathryn Mikells stated that the company aims for a sustainable, competitive, and growing dividend, and the recent increase of $0.04 reflects their confidence in the business and its strong performance. The company has a cadence of reviewing the dividend in the fourth quarter and the increase this year shows their confidence in the business and its performance.

Darren Woods, CEO of the company, affirms their commitment to paying dividends to shareholders even during tough times. However, they also consider sustainability and the market's volatility when deciding on dividend growth. The company also has the option of buying back shares. A transcript of the Q&A session will be posted on the investor website next week. The next call will be on December 6 for a corporate plan update. The operator thanks everyone for participating and concludes the call.

This summary was generated with AI and may contain some inaccuracies.