Exxon Mobil Corp Corporate Plan Update and Upstream Spotlight Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Devin McDermott - Morgan Stanley - Analyst : Hey, good morning. Thanks for the helpful update today. And thanks for taking my question. First just a quick comment, Darren, having watched the progress here since you laid out this growth plan since 2018, it's really great to see the results and then the continuation of that attractive growth through decade. And so a lot of attractive opportunities ahead. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 2:30PM, XOM.N - Exxon Mobil Corp Corporate Plan Update and Upstream Spotlight Kathy, I wanted to start with you toward the end of your presentation, you talked about what this all drives and that's this falling break even over the next five years, $35 per barrel by 2027, by 2030 was a very impressive and by a wide margin peer leading number, and I wanted to get into what this means for shareholder returns. Your thoughts on dividend capacity specifically that you do have a lot of room to accelerate dividend growth. It would seem as this break even falls and reinvestment rate falls over time. So how are you thinking about some of the moving pieces there?

Question: Neil Mehta - Goldman Sachs - Analyst : Thank you and thanks for this presentation. I think you put out a release a couple of days ago saying it's been 25 years since the merger of Exxon and Mobil. And then you've done some terrific deals over the last couple of years, including in the Permian with Pioneer, which I know we're going to hear from Neil in a bit. So I'm just curious on your perspective on M&A, is it continues to be a core competency for the organization, given the organic growth opportunity that you outlined, you don't have to do M&A, but do you see that as a growth value creation mechanism for the organization in the next couple of years?

Question: Doug Leggate - Wolfe Research, LLC - Analyst : Still getting used to that. Thank you guys. Well, I think Devin was reading over my shoulder on the dividends question. So I'm going to try something else and Darren, I apologize in advance. This is the first time the collective community has really had a chance to sit with all of you since the arbitration was announced with Hess. And I wonder if I could ask you for everyone here to frame to the extent you can the rationale as to why you launched that arbitration and your level of confidence in your position. And obviously Guyana has been an extraordinary asset. But you know, I think we're all a little confused still as to what the position of Exxon is.

Question: John Royall - JPMorgan - Analyst : Hi, good morning. Thanks for the presentation today. So you talked a lot about driving down reinvestment rates, but you had a lot of success back in 2020 at the lower part of the cycle, kind of weaning into the lower part of the cycle. So I guess my question is, do you have a cap in mind on the reinvestment rate. Should you find yourself in bottom cycle conditions again? Should we expect you to wean into the next down cycle the same way you have in the past? Or is this reinvestment rate somewhat of a constraint today?

Question: Betty Jiang - Barclays - Analyst : Hello. Thank you very much for the presentation. I want to focus on the low carbon investments. I think it's really a strong contrast against other measures that will seemingly pulling back from low carbon investment and yet Exxon is leaning in and I think the conversation should be focusing on the competitive advantage. I don't think energy transition can happen without Exxon being part of it. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 2:30PM, XOM.N - Exxon Mobil Corp Corporate Plan Update and Upstream Spotlight So when we're talking about these advantages, even with the policy environment, the broader low carbon environment seeming to be more uncertain, do you think your advantages has expanded as you start evaluating the businesses, the markets, the customer demand? Maybe just elaborate on what you're seeing how that has evolved over time and you're confident in those long-term growth earnings potential.

Question: Bob Brackett - Sanford C. Bernstein & Co., LLC - Analyst : Good morning. Let's follow-up on that topic around low carbon data centers. For a while, you've had a strategy around molecules and not electrons. Data centers run off of electrons. You could have a model where you are feeding advantaged gas into a data center and then you're taking away the CO2 where you're just managing those molecules or you could do something more complicated, what's the business model that you're pursuing on this low carbon data center strategy?

Question: Ryan Todd - Piper Sandler - Analyst : Since we'll cover that sooner or later, a question the energy product side, you've got a growth outlook there from 2024 to 2030 of roughly doubling your earnings power from $4 billion to $8 billion. A lot of that driven by volume and a mix. The primary driver is there. It looks like on the project side is mostly a couple of projects that shift from gasoline to diesel and a couple of renewable diesel projects. Can you maybe talk about the what else is going on? It's a big growth number for relatively not dramatic projects. Are there other things that are involved in the number there? And maybe on a step back as you think about your view on refining in general, the shift out of gasoline and the diesel. Can you maybe talk about how you view the macro side of the refining environment over the course of the plan.

Question: Jason Gableman - TD Cowen - Analyst : Yeah, thanks. I wanted to go back to the surplus cash and I appreciate the ranges at lower and higher oil prices. And I guess I'm wondering to some extent, given $110 billion excess cash at a lower oil price, are you trying to signal that $20 billion of buybacks is kind of the floor moving forward given the outlook for earnings growth and the fact that you're going to generate $110 billion over six years? And then on the other side, as that earnings growth comes in, how do you expect buybacks to trend over time? Thanks.

Question: Paul Cheng - Scotiabank - Analyst : Thank you. Darren, everyone talk about AI and I think within the energy sector, probably Exxon is more capable and equipped to do that. Can you tell us that how much money that you are investing in this area and realistically how this AI perceive today is different than what you have been doing like machine language, big data before? Do we really see the result going to be different or it just become more efficient and better maybe that lower cost? And Kathryn on the $7 billion the efficiency gain. How much is that, which relate to the AI or AI related? Thank you.

Question: Jean Ann Salisbury - BofA Securities, Inc. - Analyst : Hi, just one more on the new businesses. Thank you for the projections for the $3 billion and the $13 billion in earnings by 2030 and 2040. Can you speak a little bit more about what you would need to see to ramp the CapEx to achieve these opportunities and earnings and kind of positioning for the upside as Darren said earlier, is it, is it basically long term customer contracting that's driving the cadence or are there other major things that we should be looking for?

Question: Neal Dingmann - Truist - Analyst : Thank you. And thanks for the time today. A quick question on something you started with today just, could you talk about maybe a little bit on the profit, I'm just curious now to hear more about that, maybe on that lightweight prop and how much, looking at that, how much would you consider the cost to bring that new proppant to location? And what, how do you think you all can scale that?

Question: Paul Sankey - Sankey Research - Analyst : Thanks very much, and thanks for inviting me here. Neil, we've asked this question a couple of times already today, but the market is worried about oil oversupply and would really like to see less CapEx. Can you talk about the sensitivity of what you're doing in this league of your own concept as to whether you'll recognizing that you're quite possibly going to drive the oil price down and whether you would be better perhaps pursuing more natural gas at what price you would be cutting CapEx, given what you've already talk about your base and your incremental. And could you talk a little bit about what those numbers are, your base upstream CapEx and how much growth and how much you can reduce it if you need to. And at what oil price? Thank you.

Question: Nitin Kumar - Mizuho Securties USA LLC - Analyst : Great. Thanks for taking my question. Neil, you reiterated the outlook for doubling your resource recovery in the Permian. You achieved 15% to date. What's the time line of getting to that 100% -- the doubling? Because you're eight months into this, in 10 years, you need $30 billion of synergies. It's a big chunk of that. So I'd love to understand how quickly can you double that resource recovery?

Question: Doug Leggate - Wolfe Research, LLC - Analyst : Thank you guys. I appreciate the question. I'm not going to ask again a question, Neil.

Question: Doug Leggate - Wolfe Research, LLC - Analyst : I'd like to ask a question. It kind of got a part A and part B, if I may, and it's really the Permian capacity of 2.3 million barrels in 2030. Is that -- I'm trying to understand what the flexibility is beyond that, what the longevity of this is beyond that. And the part B is really about contract explorations, because although you've given guidance out to 2030, there's a decent amount of stuff happening around that timeline, 10 years goes away, currently in April 2033. Qatargas, Rasgas have explorations, and arguably the Permian gives you a lot of flexibility. So I wonder if you could just give us a little bit of a look as to how you manage that part of the business looking beyond the current plan.

Question: Biraj Borkhataria - RBC Capital Markets - Analyst : Hi, thanks for taking my question, and thanks for the presentation. Just to follow up on the setting the pace, comment, and the question is on LNG. So in your slides, you showed the onshore development of Mozambique, but not the second floating development, which some of the partners seem to be actively pushing for. So I just wanted a perspective on that. Do you expect that to move to FID? And is that embedded in the plans you present today?

Question: Phil Jungwirth - BMO Capital Markets Corp - Analyst : Thanks. Can you talk about long tail in Guyana a bit, which is now the going to be the eighth boat there? You also characterize it as a light oil gas condensate development. When do you need to start thinking about additional gas solutions in Guyana as you bring this on towards the end of the decade? And what is the remainder of that 11 billion barrels of resource in Guyana look like as far as resource type oil gas, light, heavy.

Question: Devin McDermott - Morgan Stanley - Analyst : Great. Thank you. I actually wanted to stick on Guyana. You just laid out a lot of longer term opportunity. If we look out over this next five year window, you do have the current exploration license that expires in 2027. I believe there's a two year appraisal window that goes beyond that, and then still longer term development optionality within the overall area. What's your strategy to make sure that you can capture all of this opportunity within the existing licenses? Does it change how you think about exploring, appraising, and developing that tail beyond 2030 planning over the next five years?

Question: Josh Silverstein - UBS Securities LLC - Analyst : Yeah, thanks. Just sticking with Guyana. Can you talk a little bit more about the gap in your production outlook versus the capacity 1.7 million barrel versus the 1.3 million barrel. Is this timing related, is this because you start to see declines in the first Liza projects in 2030? And what can you do to close that gap?

Question: Bob Brackett - Sanford C. Bernstein & Co., LLC - Analyst : I have a bunch of questions, but I'll ask an annoying one that's a follow up, which is to say on that capacity versus deliverability. You've got eight independent FPSOs that play off of each other. You've got 40 seismic watching the reservoir, you have the ability to go out and drill more wells, if you're going to underdeliver, you've built a build one, deliver many concepts. So you understand the top sides. So against all of that, is that 1.4 million versus -- 1.3 million versus the 1.7 million, is that a P90 in 90% of your models you beat that. Is it a P99? Is it a P50?

Question: Bob Brackett - Sanford C. Bernstein & Co., LLC - Analyst : It's 300,000, 400,000 barrels. So it's material.

Question: Jason Gableman - TD Cowen - Analyst : Hey, thanks for taking my question. I wanted to ask on broader on the advantage production growth. It looks like in the plan, advantage production has grown by about 1.1 million, 1.2 million barrels of oil equivalent a day. That's the same as the Permian growth. But you do have other advantage growth in Guyana as we talked about in LNG portfolio as well. So I'm wondering if there's an offset to that advantage growth because the overall bucket equals that Permian growth.

Question: Jason Gableman - TD Cowen - Analyst : All right, Thanks.

Question: Paul Cheng - Scotiabank - Analyst : Thank you. Neil and the team want to go back into Permian on the low cost proponent. You saying that the full program you expect to deploy about 2 million tons of the Kearl. But can you give us some idea how that translates into a number of well, and what kind of impact we are talking about, and how quickly you will be able to ramp up? I assume that you get -- you need a 2% recovery improvement that will represent that some longer later you said two mile pass or three mile pass. I mean, any kind of form that you can give us. And in your combined program today, if we assume that's the case, what percent of your prospect inventory or a number, whatever you want to share, that will be considered more than two miles today. Thank you.

Question: Neil Mehta - Goldman Sachs - Analyst : Thanks Katrina. I just want to spend some time on Qatar and LNG. You indicated on the slide Neil that you expect first LNG by the end of 2025, and just your perspective of the gating items to get that project to completion, what do you think the world looks like in the for LNG post Qatar coming into service, does it flip into structural oversupply? And then just tying into I think Doug's question around contract expiration, how do you think about the business? It's a broad question Qatar and LNG, but any color there would be helpful.

Question: John Royall - JPMorgan - Analyst : Thank you. So I just had a question portfolio mix. So you mentioned oil sands being higher cost and kind of mixing up your overall production cost. Can you talk about how oil sands fits into your portfolio more broadly? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 2:30PM, XOM.N - Exxon Mobil Corp Corporate Plan Update and Upstream Spotlight And then maybe just a broader question around kind of short cycle versus long cycle? And do you think about kind of an optimal mix between short cycle and long cycle or is that not really how you think about your business?

Question: Betty Zhang - Barclays - Analyst : Thank you. Well, I guess I try to make it good. Actually want to ask about the Permian, back to the Permian about the free cash flow profile from that asset because we heard resources going up, cost is going down. So CapEx is $2 billion less than what you thought before. So how do we think about this free cash flow? And the asset bases if we're getting to $25 billion of cash flow by 2030, do you think that CapEx is flattish or at some point start to (inaudible) And we like basically how big is that free cash flow wedge over time?