Q3 2023 Exxon Mobil Corp Earnings Call

Please standby we are about to begin.

Good morning, everyone and welcome to Exxon Mobil Corporation's third quarter 2023 earnings webcast. Today's call is being recorded I'll now turn it over to assist Jennifer Driscoll. Please proceed ma'am.

Good morning, everyone welcome to Exxon Mobile's third quarter 2023 earnings call. We appreciate your joining the call today I'm, Jennifer Driscoll Vice President Investor Relations I'm joined by Darren Woods, Chairman and CEO, Kathy Michael <unk>, Senior Vice President and CFO, and Neil Chapman Senior Vice President.

This presentation and prerecorded remarks are available on the investors section of our website. They are meant to accompany the third quarter earnings release, which is posted in the same location.

Shortly darrin will provide brief opening comments and reference a few slides from this presentation then we'll take your questions.

In conjunction with our recent announcements regarding pioneer natural resources and then Barry we've included additional information on slide two related to comments or information included in today's presentation.

Please be aware that this presentation is not intended to be a solicitation of any vote for approval.

During today's presentation, we'll make forward looking statements, which are subject to risks and uncertainties. Please read our cautionary statement on slide three you can find more information on the risks and uncertainties that apply to any forward looking statements in our SEC filings on our website. Please note that we also provided supplemental information at the end of our earnings.

Slides, which are posted on the website.

And now please turn to slide four for Darren his opening remarks.

Good morning, Thanks for joining us today.

We delivered another robust quarter of earnings cash flow and shareholder returns, reflecting our ongoing efforts to structurally improve our company and drive sustained industry leading performance.

We reported $9 $1 billion of earnings an increase of $1 $2 billion compared to last quarter.

Well the market provided a bit of a tailwind. Our success was enabled by the continued strength of our operational performance, which reflects the hard work of our people across the company.

Whether it's continuing to drive efficiency and maintenance and turnarounds.

Running at high throughput and utilization rates.

We're delivering big projects first quintile cost and schedule.

The excellent work of our people underpins our results and sustains our drive to deliver industry, leading performance and everything we do.

Their work is fundamentally strengthening the underlying earnings power of the company.

Establishing a strong foundation to deliver industry, leading results in any price environment.

Consistent with our capital allocation strategy, we continue to share the success of the company with our shareholders.

This morning, we were pleased to announce a 4% increase to the quarterly dividend to 95 per share.

This year is our 40 <unk> consecutive year of annual dividend increases.

Our record that we're proud of and that we know our investors value highly.

We continue to strengthen our portfolio businesses by investing in advantaged high return opportunities.

Divesting businesses that are no longer a strategic fit.

During the quarter, we closed on the sale of our Thailand refinery.

Our year to date cash proceeds from asset sales to more than $3 billion.

We followed this in October with the close the refinery sell in Italy.

Recently announced acquisitions are great examples of the and equation.

Meeting the world's needs for energy in the central products and reducing emissions.

Acquiring danbury strengthens our position to economically reduce submissions and harder to decarbonize the industries.

Which today have limited practical options.

We see the potential to drive strong returns with the capacity reduce the nation's carbon emissions by 100 million tons per year.

That's 20 times, our current C O two off take agreements with CF industries, Lindy and Nucor.

Which by themselves could reduce C O two emissions by an amount equivalent to replacing 2 million cars with Evs roughly.

Roughly the same number of electric vehicles currently on U S roads, we expect to close the transaction in early November with 10 very shareholder scheduled to vote next week.

Earlier this month, we signed an agreement to acquire pioneer natural resources and another all stock transaction.

This combination will further strengthen our already advantaged upstream portfolio and create significant value for the shareholders of both companies.

Together, we will cover more resource more efficiently and with a lower environmental impact.

We plan to accelerate pioneers Permian net your ambition by 15 years and fully leverage their advances and water recycling.

This deal is a win anyway, you look at it good for our shareholders good for the environment good for it.

The economy and good for U S energy security.

He will say more about the benefits of the transaction in a few moments.

We're also continuing to drive profitable growth organically.

Energy products, we achieved our highest third quarter refinery throughput on record driven by our Beaumont refinery expansion.

At a time of strong demand and low inventories. This project is providing 250000 barrels per day of much needed new capacity to the market.

In addition, we recently started up our baytown chemical expansion, which grows volume and improved mix.

It provides 750000 tons per year of new performance chemical capacity.

Including 330000 tons of linear alpha olefins, marking our entry into this growing market.

We delivered another quarter of strong operational and financial performance with earnings of $9 $1 billion in cash flow from operations of $16 billion.

These results reflect the structural earnings improvements we've delivered over the past several years as we've improved our mix of assets and driven significant structural cost reductions, while maintaining our focus on industry, leading safety and reliability.

We lowered our structural costs by $9 billion since 2019, beating our plan and expect to deliver additional savings in the fourth quarter.

We continue to identify opportunities to improve our base operations, including enhancing our maintenance and turnaround processes.

Strengthening our digital capabilities and optimizing our supply chain.

Our year to date production of $3 7 million oil equivalent barrels per day is on track with our full year guidance.

Capex investments of $18 $6 billion a year to date are on plan, we expect 2023 capex to finish the year at the top end of our guidance range as we continue to invest in high return advantage projects are.

Our top priority for creating long term shareholder value.

As always we remain focused on sharing the company's success with our shareholders. We.

We delivered $8 1 billion and shareholder distributions in the third quarter three.

$3 $7 billion in dividends and $4 4 billion in share repurchases with that I will turn it over to Neil.

Thanks Darren.

Good morning, everyone.

As we said with you recently pioneer is arguably the best Permian pure play company with the largest undeveloped tier one inventory in the Midland Basin.

Pioneer is premier asset base as much by the quality of its workforce. Its employees are innovative and hardworking and possess a deep knowledge of unconventional operations in the Permian.

When you combine these attributes of our technology and industry, leading operational capabilities. We're confident we can unlock far more value together than either of us could do alone.

We expect synergies of approximately $1 billion before tax annually beginning in the second year of post closing and an average of about $2 billion per year over the next decade driving double digit returns.

This transaction not only strengthens our current position, but it also transforms our portfolio.

Increasing our exposure to short cycle low cost of supply liquids in the United States.

Based on our initial assessment, we expect our combined Permian production to increase to approximately 2 million oil equivalent barrels per day by the end of 2027.

Downstream. This merger also increases the integration between high value light Permian crude and they are a premier refinery and chemical footprint on the U S Gulf Coast.

Finally, we said many times that we're working to sell the end equation, providing the energy and product society needs and reducing emissions, both ours and others.

This transaction reflects both parts of our commitment we will increase our Permian production with plans to accelerate pioneers zero plan to 2035 from 2050 and decrease our combined Permian emissions.

With that.

Pass it to Jennifer.

Thank you Neil.

Yes, two quick announcements to share with you first.

Please mark your calendars for our annual corporate plan update scheduled for Wednesday December six at nine a M. Central time, Jamie Kathy is going to provide formal remarks five questions from ourselves by analysts.

Second please keep an eye out for our 2024 advancing climate solutions and we expect to publish it online in mid system.

And with that I'm going to begin our Q&A session. Please note we continue to ask analysts to limit yourself to one question.

However, please remain on the line in case, we need any clarification. Please.

Please based centers.

Yes.

Thank you Mrs. Jessica on the question and answer session will be conducted electronically. If you would like to ask a question. Please do so by pressing the star key followed by the digit one on your Touchtone phone.

The first question comes from Neil Mehta with Goldman Sachs. Your line is open. Please go ahead.

Good morning, and thanks for the update.

First question for for me is on the Permian.

Here and and slide 17 to 19 are interesting and incremental I was wondering aneel. If you could take a moment to walk us through it and it doesn't in the context of some of the investor feedback we've gotten around the transaction is as folks are looking for a little more clarity on the top line synergies that are going to come from better productivity. Thank you.

Yeah, Good morning, Neil.

Well, we outlined in the slides with the earnings release is really the basis of what I always describe is real.

Quantifiable synergies.

We have created the deal space and as transaction. These synergies are already demonstrated in our existing operations either in the Delaware or the Midland.

It does not include the pipeline of new technologies that are either in the early stages of deployment or close to deployment.

So by applying what we've already demonstrated with.

We're confident we can really cover an additional 1 billion oil equivalent barrels more than either pioneer or industry could have demonstrated with our existing performance and the challenge.

We highlight two areas one industries need to cube developments with mood to cube development to get a higher net present value.

We were the pioneer in that and that has helped us to avoid the parent child.

And the top judge on all that shows that we've been drilling cube since 2000, 2100% in the Midlands and you can see that over the period pioneers moved to 100% Skus as well.

But in 2022 when the boat.

Developing a 100% cubes you can see we've got equivalent recovery rates months were notably lower quality acreage lower quality resorts so equivalent recovery.

Lower quality results and when we look to truly comparable acreage and that's really really important.

Generalization can lead to misleading results.

In the bottom we talk about adjacent margin County, Hudson Pioneer in one of our other peers are drilling.

Please stand by, and we are about to begin.

Same 10000 foot lateral Q you can see we get 20% Hyatt recovery and Thats why we are targeting all targeting the same in both of these are middle Sprayberry, Wolfcamp B Wolfcamp C and similar proportions.

Jennifer Driscoll: Good morning, everyone, and welcome to Exxon Mobil Corporation's third quarter, 2023 Earnings Webcast. Today's call is being recorded. I'll now turn it over to Mrs. Jennifer Driscoll. Please proceed, ma'am. Good morning, everyone. Welcome to Exxon Mobil's third quarter, 2023 Earnings Call. We appreciate your joining the call today. I'm Jennifer Driscoll, Vice-President Investor Relations. I'm joined by Darren Woods, Chairman and CEO, Kathy Michaels, Senior Vice-President, and CFO, and Neil Chapman, Senior Vice-President.

There is and what the difference is the stacking and landing zones and while there is as the optimal well spacing that we are delivering which includes things like vertical orientation, just one final point on that Neil.

Tims in recovery.

It's not just about how you deliver huge when you've got better recovery when you've got better capital efficiency. It gives access to economically developing what we would describe the secondary benches.

Jennifer Driscoll: This presentation and prerecorded remarks are available on the investor's section of our website. They are meant to accompany the third quarter earnings release, which is posted in the same location. Shortly, Darren will provide brief opening comments and reference a few slides from this presentation. Then we'll take your questions. In conjunction with our recent announcements regarding Pioneer Natural Resources and Denverery, we've included additional information on fly-to related to commons and information included in today's presentation.

Now as you recall like the Wolfcamp C. Jo Mill extension and in addition, obviously we have all the techniques that we attempt to keep confidential, which gives us this higher level of recovery.

Thank you Neil.

Okay.

Hi.

The next question comes from Bob Brackett with Bernstein Research. Please go ahead.

Jennifer Driscoll: Please be aware that this presentation is not intended to be a solicitation of any vote or approval. During today's presentation, we'll make forward-looking statements, which are subject to risks and uncertainties. Please read our cautionary statement on slide three. You can find more information on the risks and uncertainties that apply to any forward-looking statements in our SEC filings on our website. Please note that we also provided supplemental information at the end of our earning slides, which are posted on the website.

Good morning, when you talk about your 2 million barrel a day initial sort of view of where production from the combined entity can get to in 2027.

Do I think about the gating factor is that a fixed rig or activity or Capex program and the volume is an outcome or is that a volume target and you'll adjust activity down as more synergies come through.

Yes, Bob it's Neil again, I Wonder if.

Jennifer Driscoll: And now please turn to slide four for Darren's opening remarks.

We don't have all the intelligence, we have a value target we have a volume outcome and that's really really important.

Darren Woods: Good morning. Thanks for joining us today. We delivered another robust quarter earnings, cash flow and shareholder returns, reflecting our ongoing efforts to structurally improve our company and drive sustained industry-leading performance. We reported $9.1 billion of earnings and increased at $1.2 billion compared to the last quarter. Well, the market provided a bit of tailwind. Our success was enabled by the continued strength of our operation performance, which reflects the hard work of our people across the company.

And our.

Basis, we've talked about in the outcome being 1 million barrels a day by the end of 2027 based on our Delaware and Midland Basin.

Based on our initial assessments of Pioneer's plans, obviously, we had access to that through the due diligence process, we see that with similar <unk>.

Capital spending as pioneer have today, when you can equate that to similar number of rigs we would anticipate that pioneer's production under Exxonmobil in Chinese combined operations would also get to a million barrels a day by the end of 2027, if you add current.

Darren Woods: Whether it's continuing to drive efficiency in maintenance and turnarounds, running at high throughputs and utilization rates, we're delivering big projects at first quintile cost and schedule. The excellent work of our people underpins our results and sustains our drive to deliver industry-leading performance and everything we do. The work is fundamentally strengthening the underlying earnings power of the company, establishing a strong foundation to deliver industry-leading results in any price environment. Consistent with our capital allocation strategy, we continue to share the success of the company with our shareholders.

And in the Midland Basin from both pioneer and Exxon Mobil today, it's already at a million barrels today, it's really important though volume is an outcome, which driving the value. That's why we focus on the cube developments, but I would say the basis is consistent with existing cash.

Spending the pioneer.

Making today, we do anticipate as I've just outlines improvements in recovery, we do anticipate improvements in capital efficiency spacing on the synergies that we outlined in the earnings release.

Darren Woods: This morning, we were pleased to announce a 4% increase to the quarterly dividend to $0.95 per share. This year is our 41st consecutive year of annual dividend increases, a record that we're proud of and that we know our investors value highly. We continue to strengthen our portfolio of businesses by investing in advanced high-return opportunities, while the investing businesses that are no longer a strategic fit. During the quarter, we close on the sale of our Thailand refinery, bringing our year-to-date cash proceeds from asset sales to more than $3 billion.

But that's not really built into that outlook.

A million barrels a day from from.

Pioneer operations.

Very clear thank you.

Thank you.

The next question is from Devin Mcdermott with Morgan Stanley. Please go ahead.

Great.

Thanks for taking my question.

I wanted to stick.

Darren Woods: We follow this in October with the close of refinery sale in Italy. Recently announced acquisitions are great examples of the AND equation, meeting the world's needs for energy in essential products and reducing emissions. Requiring den very strengthens our position to economically reduce emissions and harder to carbonize industries, which today have limited practical options. We see the potential to drive strong returns with the capacity to reduce the nation's carbon emissions by 100 million tons per year.

Stick with upstream and take advantage of having you on the call here, Neil and ask about Guyana.

The slides noted that production is now coming in ahead of plan for the full year, a little bit better on your full year target and part of that is the <unk> start up part of that seems to be debottlenecking.

Wanted to just focus on the Debottlenecking opportunity could you walk us through how much uplift you've realized so far versus nameplate. How much is left and then the repeatability of this outperformance as we look at the additional episodes that are set to start up over the next few years.

Darren Woods: That's 20 times our current CO2 offtake agreements with CF industries, Lundy and Newcore, which by themselves could reduce CO2 emissions by an amount equivalent to replacing 2 million cars with EVs. Roughly the same number of electric vehicles currently on US roads. We expect to close the transaction in early November with den very shareholder scattered to vote next week.

Yes. Thank you.

We're really encouraged by what we're seeing in Guyana, I mean, let's just start with the two boats trainer operations day, Lisa while no destiny has a nameplate capacity of 120000 barrels a day with consistently running that about 150000 barrels a day Liza two unity with a 220 capacity and we've been running that.

Consistently above 240000 barrels a day so that those two combined are getting close to full in 2000 barrels a day, which is quite a bit above and this comes from I would just say good operational performance you look at every aspect of the operations you tweak them you push them and you can get more.

Darren Woods: Earlier this month, we signed an agreement to acquire pioneer natural resources and another all stock transaction. This combination will further strengthen our already-advantaged upstream portfolio and create significant value for the shareholders of both companies. Together, we will recover more resources more efficiently and with a lower environmental impact. We plan to accelerate pioneers' permeant net zero ambition by 15 years and fully leverage their advances in water recycling. This deal is a win anyway you look at it. Good for shareholders, good for the environment, good for the economy, and good for US energy security. You will say more about the benefits of the transaction in a few moments.

More and more out.

We still have plenty of Lora, which is 220000 barrels a day nameplate capacity, we would hope we would expect to have a similar type of uplift. There is no reason to think that we wouldn't but we have to start that up the plan is to start that up in the middle of November.

That would give us a combined nameplate capacity of 560000 barrels a day, but obviously you were the first two but its running more like 400000 barrels will be expect to be in excess of 600000 barrels a day production. Just just just to add to that we've got three more boats in the pipeline as you are aware of.

Darren Woods: We're also continuing to drive profitable growth organically. In energy products, we achieved the highest third-core refinery throughput on record, driven by our Beaumont refinery expansion. At a time of strong demand and low inventories, this project is providing 250,000 barrels per day of much needed new capacity to the market. In addition, we recently started up our Baytown Chemical expansion, which grows volume and improves mix. It provides 750,000 tons per year of new performance chemical capacity, including 350,000 tons of linear alpha-old funds, marking our entry into this growing market.

Three.

But it's in the pipeline that's the yellow.

And then with <unk>. These are all large boat sold 250000 barrels a day.

Yellow tailing wahoo and construction with tail, we've submitted the development plan to the government and we would we would hope and expect to.

Rich.

In 2024 for that and that will give us our combined nameplate capacity of one 2 million barrels a day at the end of 2027, but that doesn't include the uplift.

Darren Woods: We delivered another quarter of strong operational and financial performance, with earnings at $9.1 billion in cash flow from operations of $16 billion. These results reflect the structural earnings improvements we delivered over the past several years, as we've improved our mix of assets in driven significant structural cost reductions, while maintaining our focus on industry-leading safety and reliability. We lower our structural cost by $9 billion since 2019, beating our plan, and expect to deliver additional savings in the fourth quarter.

Performance the production performance that we've got access to boats.

I mean, we suddenly all message to the organization started out we started up on time each vote, that's what we'll do them.

Once we get subtle will try and follow the same protocols that we've done on the first two boats and then strives to get maximum production ounces.

The Biogen and that's obviously good for the shareholders. It's good for the co ventures, and it's even better for the country.

Darren Woods: We continue to identify opportunities to improve our base operations, including enhancing our maintenance and turnaround processes, strengthening our digital capabilities, and optimizing our supply chain. Reign, Our year-to-day production of 3.7 million oil-equivalent barrels per day is on track with our full-year guidance. Capix investments of $18.6 billion a year to date are on plan. We expect 2023 Capix to finish the year at the top end of our guidance range as we continue to invest in high-return, advanced projects.

I would add to neal's comment if you recall we.

<unk> brought all of our projects organization together to make sure that we're leveraging the best capability in terms of development and designing these projects. We've also brought together our technology organizations and the big benefit we have there as we're now leveraging not only the capacity that was in the upstream in terms of optimization and run these facilities, we've got decades and deck.

These are experienced people optimizing and running our chemical plants in a refinery.

Facilities to squeeze out and optimized.

Darren Woods: Our top priority for creating long-term, shareholder value. As always, we remain focused on sharing the company's success with our shareholders. We delivered $8.1 billion in shareholder distributions in the third quarter, $3.7 billion in dividends, $4.4 billion in share purchases.

Every piece of the production pipeline and make sure that we are at.

The design.

Limits.

For equipment.

That optimization, which has been kind of the lifeblood of the refining business given the very narrow margins as big payoffs when we apply it to the upstream facilities and so there is an additional benefit just in terms of leveraging the broader organizational capability, which again has been part of our strategy from the very beginning is to make sure that we're.

Neil Chapman: With that, I'll turn it over to Neil. Thanks, Darren.

Neil Chapman: Good morning, everyone. As we shared with you recently, Pioneer is arguably the best Permian pure-play company with the largest undeveloped Tier 1 inventory in the middle of basin. Pioneer's premier asset base is matched by the quality of its workforce, its employees are innovative and hard-working, and possess a deep knowledge of unconventional operations in the Permian. When you combine these attributes with our technology and industry-leading operational capabilities, we're confident we can unlock far more value together than either of us could do alone.

Bringing to bear the best thinking across all of our corporation on the most important.

Facilities project. This is certainly one of those.

Great. Thanks, so much.

Yes.

The next question is from Doug Leggate with Bank of America. Your line is open. Please go ahead.

Hi, Good morning, Thanks for taking my question good morning, everyone.

Darren.

So forgive me I would like also to take advantage of new I've been on the call.

Neil Chapman: We expect synergies of approximately $1 billion before tax annually, beginning in the second year post-closing, and an average of about $2 billion per year over the next decade, driving double-digit returns. This transaction not only strengthens our current position, but it also transforms our portfolio, increasing our exposure to short cycle, low-cost or supply liquids in the United States. Based on our initial assessment, we expect our combined Permian production to increase to approximately $2 million oil equivalent barrels per day by the end of 2027.

To follow on with Guyana question, if I may but Neil if you don't mind I'd like to frame. This question a little bit because a couple of years ago, you talked about.

If the deeper resource potential proved to be as prolific as the original.

Targets that you had them in the area.

Could look to double your resource potential from 10 at that time, you with an answer.

Potentially significantly larger.

You have an updated resource number in a while.

You've heard the lancet fish.

It looks like fine tooth is in the Q based on your Eas submissions.

Submissions to Guyana, but yet you still talk about production capacity and more production.

Neil Chapman: Downstream, this merger also increases the integration between high-value light Permian crude and our premier, refinery and chemical footprint on the US Gulf Coast. Finally, we've said many times that we're working to solve the end equation, providing the energy and product society needs and reducing emissions both ours and others. This transaction reflects both parts of our commitment. We will increase our Permian production with plans to accelerate pioneers net zero plan to 2035 from 2050 and decrease our combined Permian emissions.

So my question to you is with capability of obviously, keeping esports field for an extended period of time.

What do you ultimately see as the production.

Production capacity, sorry actual production.

Posed to capacity trajectory through the end of the decade at this point.

Yeah, Thanks, Doug I mean, just probably too.

Part of that question. One is exploration and then one is production capacity I mean, let me just handle exploration for us.

As you are aware three discoveries this year, including lancetfish too which is that the most recent one and we continue to integrate those results both on exploration and appraisal drilling again.

Jennifer Driscoll: With that, I'll pass it to Jennifer. Thank you, Neil. We have two quick announcements to share with you.

That resource base, when we see it as a significant change.

Jennifer Driscoll: First, please mark your calendars for our annual corporate plan update scheduled for Wednesday, December 6th, at 9 a.m. Central Time. During the Kathy, you're going to provide formal remarks and take live questions from our self-wide analysts. You zoom.

Our program of exploration and appraisal continues and the way I like to frame. It is in the southeast corner of the Stabroek block, we're continuing to appraise around our discoveries.

Jennifer Driscoll: Second, please keep an eye out for our 2024 Advancing Climate Solutions report. We expect to publish it online in mid-December.

And that will take a lot of work and a lot of activity we have six drillships.

In the basin, and then narrowing development appraisal and exploration drilling in addition to all that appraisal drilling that we're doing in the southeast part of the block.

Operator: And with that, we're going to begin our Q&A session. Please note, we continue to ask analysts to limit yourself to one question as a courtesy to others. However, please remain on the line in case we need any clarification. Operator, please bring us a first call. Thank you, Mrs Driscoll. The question and answer session will be conducted electronically. If you would like to ask a question, please do so by pressing this star key, followed by the digit one on your touch tone phone.

We're looking for what I would describe as anchor prospects further to the north and further to the west.

We continue to look and we've probably got the order of magnitude.

Q3, what I call true Wildcat exploration targets looking for anchors.

Wells in the next 10 to 12 months something like that that can change based on results.

Neil Mehta: The first question comes from Neil Mehta with Goldman Sachs. Your line is open. Please go ahead. Good morning and thanks for the update. The first question for me is on the Permian here. And it slides 17 to 19 are interesting and incremental.

Either the appraisal all the exploration drilling.

We're going to update when we see something meaningful and when we see something significant we've been very clear that we had success dsos in the pipeline they affirm and I'd just like one of the previous questions outlined to all of those indeed, they will have a capacity and you strive to keep them full all the time as you know jud.

Neil Chapman: I was wondering, Neil, if you could take a moment to walk us through it and it doesn't look context of some of the investor feedback we've gotten around the transaction is his folks are looking for a little more clarity on on the top lines energies that are going to come from better productivity. Thank you. Yeah, good morning, Neil and you know what we outlined in the slide with the earnings releases really the basis of what I always describe as real quantifiable synergies that have created the deal space for this transaction.

One of the beauties about the stable block as the density of the resource and the proximity of these boats, which gives a potential tie backs.

Well into the future, but the water cut will increase as everybody knows in deep water. So we constantly look we'd like to talk about capacity and we optimize as we go and we will increase the production versus the nameplate capacity as we go.

Neil Chapman: These synergies are already demonstrated in our existing operations either in the Delaware or the Midland. It does not include a pipeline of new technologies that are either in the early stages of deployment or close to deployments. So by applying what we've already demonstrated we're confident we can recover an additional one billion oil equivalent barrels more than by the pioneer or industry could have demonstrated with their existing performance and the charts. We highlight two areas one you know industries move to cube development remove to cube development to get the higher net present value.

That's why I think what we can be firm on is we will have six votes by the end of 2020. They will have a name plate capacity of one two and obviously, we will strive to keep them as full of liquids or oil as we can over that period.

I mean, I think as we get closer and closer to the 2027, obviously, we'll update those numbers Doug.

I appreciate the full answer Neil Thanks, so much.

Yes sure. Thanks.

The next question is from Stephen Richardson with Evercore ISI. Your line is open. Please go ahead.

Neil Chapman: We were the pioneer in that that's obviously to avoid the parent child impacts the top chart on their shows that we've been drawing cubes since 2020 100% in the midland and you can see that over the period pioneer has moved to 100% and cubes as well. But in 2022 when we're both developing 100% cubes you can see we've got equivalent recovery rates but we're at notably lower quality acreage lower quality resource so equivalent recovery at lower quality results and when we look for truly comparable acreage and that's really really important because generalizations can lead to misleading results.

Great.

Thank you Neil.

Neil busy this morning, another one on the pioneer disclosure.

Sure the Incrementals.

Neil I guess it sounds like from your previous comments.

Barrel, a day target and output, it's still there for the legacy Exelon position and Youre thinking about the additive from pioneer can you talk a little bit about it.

As you integrate the two assets are you assuming some high grading around some of the higher quality acreage does anything do you envision prioritizing more activity on one asset versus the other or are you still kind of thinking about them as two separate and then also maybe you could just talk a little bit about.

<unk> around acreage bolt ons or any positions that could well if there are a lot of work to do in terms of extending some of this lateral length that you are talking about thanks very much.

Neil Chapman: In the bottom we talk about adjacent Martin County where us and pioneer and one of our other peers are drilling the same 10,000 lateral cubes you can see we get a 20% higher recovery and that's where we're targeting all targeting the same interval these are middle slavery to will count will can see in similar proportions and what varies and what's the difference is the stacking and landing zones. And what varies is the optimal world spacing that we are delivering which includes things like vertical orientation just one final point on that meal in terms of recovery.

Yes, yes.

First of all I would say, it's very early in the process of course, we've done the due diligence we are into the transition now I think it's very important to make the point pioneer are a very very capable organization they've demonstrated that what we're really excited about is the combination of these two organizations pioneer have a deep deep understanding of the Midland Basin.

As we've talked about it this is absolutely in the fairway of tier one quality resource and pioneer have done an exceptional job of developing that resource.

Neil Chapman: If it's not just about how you deliver cubes when you've got better recovery when you've got better capital efficiency it gives access to economically developing what we would describe as secondary ventures. Now as you recall light the walls can see in like Joe Mill extension and in addition obviously we have other techniques that we attempt to keep confidential which gives us this higher level of recovery. Thank you Neil.

Side, we've got a whole range of different operating techniques development plans and technologies and it's the integration of those that we're most excited about and everything we've seen in the initial transition what would suggest all of that is correct.

You just look at the acreage position and you look at where Exxon.

Exxonmobil and pioneer all obviously it gives an opportunity for both high grading the inventory and clay mentioned includes.

Bob Brackett: The next question comes from Bob Brackett with Bernstein Research. Please go ahead. Good morning.

Bolt ons and I have to say that Scott Sheffield and his organization have done an extraordinary job bolting on and increasing the acreage in the basin and they have a very very capable land organization and we forged to working with those folks. So I think it's a combination that got it.

Neil Chapman: When you talk about your two million barrel a day, initial sort of view of where production from the combined entity can get to in 2027, how do I think about the gating factor? Is that a fixed rig or activity or capex program and the volume is an outcome? Or is that a volume target and you'll adjust activity down as more synergies come through? Yeah, Bob, I want to be clear. We don't have a volume target.

The most powerful.

And developing that resource.

I'd just add to what Nielsen if you look at what we've been doing over the last six years.

Really been around integrating our organizations.

Solid hitting them and making sure that we're concentrating like capabilities into.

Neil Chapman: We have a value target. We have a volume outcome, and that's really, really important. And for our basis, you know, we've talked about an outcome being a million barrels a day by the end of 2027 based on our Delaware and Midland Basin based on our initial assessment of Pioneers plans. Obviously, we've had access to that through the due diligence process. We see that with similar capital spending as Pioneer have today, when you can equate that to a similar number of rigs, we would anticipate that Pioneers production under Exxon mobile and Pioneers combined operations would also get to a million barrels a day by the end of 2027.

The same organization and that is paying huge dividends and this is no different.

Intent is to fully integrate the pioneer organization and people into our business. My expectation is we will bring a lot of advantages to their acreage, but at the same time. We expect there are people, who bring a lot of advantages to other parts of our business, including what we're doing in the Delaware and so.

Our whole strategy is really around the value you create by taking experts in areas.

Getting the collaboration and the innovation that comes from that so.

There won't be a separate eight approach here and it'll be one I think what youre seeing today to Neil's point. The fact that we're very early stage, but as we get together and work through the plans and the development it'll be one seamless.

Neil Chapman: If you add current production in the Midland Basin from both Pioneer and Exxon mobile today, it's already got a million barrels today. It's really important, though, volume is an outcome with striving for the value. That's why we focus on acute development. But I would say the basis is consistent with existing capital spending that Pioneer making today. We do anticipate as I've just outlined improvements in recovery. We do anticipate improvements in capital efficiency, basing on the synergies that we outlined in the earnings release. But that's not really built into that outlook of a million barrels a day from from the Pioneer operations.

unknown: Very clear. Thank you.

Integrating the organization and plan and seeing just one small addition to illustrate that.

<unk> talked before that we have a basin wide remote operations center in Houston, where we control all our operations in Houston, that's drilling thats tracking the field operations.

Methane tracking methane emissions tracking as well from one central.

Control Center in Houston, obviously, our plan would be to.

Bring in the whole pioneer operations and in time to have one central organization well that gives you gives you all of that competency OLED ecstasies applied to the whole of the Midland and Delaware basins from one central control control Center.

Devon McDermott: The next question is from Devon McDermott with Morgan Stanley. Please go ahead. Great.

Thanks very much.

Thank you Steve. The next question is from Roger read of Wells Fargo. Your line is open. Please go ahead.

Neil Chapman: Good morning. They've taken my question. So I wanted to stick with upstream and take advantage of having you on the call here, Neil, and ask about Diana. The slides noted that production is now coming in ahead of plan for the full year, a little bit better in your full year target. And part of that is the piara startup. Part of that seems to be debattlenecking. I wanted to just focus on the debattlenecking opportunity.

Yeah. Thanks, good morning.

Keeping with the upstream theme here I'd like to dig into the.

I guess call it slight transition here the high value added or high margin liquid barrels. So specifically kind of a comment of 100000 barrels a day higher versus 2020, twos gasses decline or been sold and the liquids of ground, but as you think about the change out.

Neil Chapman: Could you walk us through how much uplift you've realized so far, versus name plate, how much is left? And then the repeatability of this app performance as we look at the additional FPSOs that are set to start up over the next few years.

For 2027, the growth in Guiana, and the growth in the Permian and we compare that to where you were say in 2019, how do you think about the sort of total value added liquid barrels the impact on margins the impact on returns like what's the right way for us to think about the <unk>.

Neil Chapman: Yeah, thank you. I mean, we're really encouraged by what we're seeing in Guyon. I mean, let's just start with the two boats that are in our operation today. We saw one of Destiny had a name plate capacity of 120,000 barrels a day. We're consistently running that about 150,000 barrels a day. We saw two unity was a 220 capacity, and we've been running that consistently above 240,000 barrels a day. So those two combined are getting close to 400,000 barrels a day, which is quite a bit above.

<unk> as a company.

Over roughly that eight year period.

Well Ross just Neal again.

It's just that's just part of the pioneer acquisition.

For a moment and just talk about our existing plans exxonmobil and you'll back in 2018 in 2019 I talked about the strength of our developments that we had in the pipeline and obviously they were headlined by Guyana and buy.

Neil Chapman: And this comes from, I would just say, good operational performance. You look at every aspect of the operations. You tweak them, you push them, and you can get more and more out. Now, we're starting off the piara, which is 220,000 barrels a day, name plate capacity. You know, we would hope we would expect to have a similar type of uplift. There is no reason to think that we wouldn't, but we have to start that up.

The Permian and what.

I said at the time is what you will see is an increase in the percent of liquids.

And a reduction in the percentage of dry gas of the total.

And if you if I outlook to 2027, we will go from something so 65% liquids to something around 70% liquids and our portfolio in 2027.

Neil Chapman: The plan is to start that up in the middle of November. That would give us a combined name plate capacity of 560,000 barrels a day. But obviously with the first two boats running more like 400,000 barrels, we'll be expected to be an excess of 600,000 barrels a day of production. Just to add to that, you know, we've got three more boats in the pipeline. That's the yellowtail, the wireroot, and then whippedtail.

15% or thereabouts.

Of liquefied natural gas so that takes us up to 85% I would call liquids index, obviously, 80% of our LNG sales index to Brent towards crude oil.

Neil Chapman: These are all larger boats. They're all 250,000 barrels a day. Yellowtail and Waru in construction. Whiptail, we've submitted the development plan to the government, and you know, we would hope and expect to reach FID in 2024 for that. And that will give us a combined nameplate capacity of 1.2 million barrels a day at the end of 2027, but that doesn't include the uplift and performance, the production performance that we've got at the first two boats.

Baked transition, but it's driven by the quality of those resources are primarily in the Permian and.

And Guyana, and we're going to be adding onto that of course. The programs. We have developed we have in LNG and Papua New Guinea, and then in Mozambique at the end of the decade I'd just add one other comment if you take the liquids and LNG, which would take us to 85% liquids indexed in 2027.

Of the gas that remaining 7% of that is associated gas <unk> gas associated with liquids production. So you can see that we will be in the order of magnitude of seven or 8% of dry gas in our portfolio at that time, and that's pretty the pioneer acquisition.

Neil Chapman: And, you know, I mean, we certainly, our message to the organization started up safely, started it up on time, each boat, that's what we'll do in Paira. And once we get settled, we'll try and follow the same protocols that we've done on the first two boats, and then try to get maximum production out of the boat. And that's obviously good for the shareholders, it's good for the co ventures, and it's even better for the country.

I would just add to that Roger if you just step back and think more conceptually around the strategy and what we're trying to do every one of our business is focused on.

Darren Woods: Yeah, I would add to it, Neil's comment, if you recall, you know, we brought all our projects organization together to make sure that we were leveraging the best capability in terms of development and designing these projects. We've also brought together our technology organizations, and the big benefit we have there is we're now leveraging not only the capacity that was in the upstream in terms of optimization around these facilities. But we've got decades and decades of experience of people optimizing and running our chemical plants in a refinery facilities to squeeze out and optimize, you know, every, every piece of the production pipeline and make sure that we are at, you know, the design limits of the different equipment.

Moving to the left hand side of the cost of supply curve. So that we remain robust too.

Any any period in the in the commodity cycle and making sure that we're positioned competitively versus those everyone else in the industry and so that drive over time to reshape the portfolio continues to move our collective production to the left into lower cost, which at the same and then the same.

<unk>.

Adding.

Fair value barrels.

Lowering costs, increasing revenue and so that's where the kind of the value game is getting played out.

That's the work that we've been doing and Thats the high grading that you've seen in the portfolio and the improvements in structural costs when we mentioned.

Darren Woods: And that optimization, which has been kind of the lifeblood of the requiring business given the very narrow margins, has big pay off when we apply it to the upstream facilities. And so there's an additional benefit just in terms of leveraging the broader organizational capability, which again has been part of our strategy from the very beginning is to make sure that we're bringing to pair the best thinking across all over corporation on the most important facilities and projects. This is certainly one of those.

Top top top of the meeting that we've actually achieved the $9 million in structural costs.

unknown: Great. Thanks so much.

This quarter third quarter, so quarter ahead of what our initial plans, where I expect to see more in the fourth quarter and as we go forward with the changes that we've been making in the organization continuing we're going to continue to deliver more structural cost savings. So all strategies around making sure that we have.

The best portfolio in the most resilient portfolio. So that we can basically be successful irrespective of the commodity price environment that we're in and that we're well positioned versus others in the industry that is strategy and you see that playing out certainly in the upstream but you can also see playing out in the downstream, where we've been high grading our assets there and playing out.

Doug Liga: The next question is from Doug Liga with Bank of America. Your line is open. Please go ahead.

Neil Chapman: Good morning. Thanks for seeking my question. Good morning, everyone. I also forgive me. I'd like also to take advantage of Neil been on the call and follow on with a guy on a question if I may. But Neil, if you don't mind, I'd like to frame this question a little bit because a couple of years ago, you talked about if the deeper resource potential proved to be as prolific as the original, you know, targets that you had in the, in the area.

In our chemical business, where we continue to bring on.

Units that produce high performance products. So that strategy is manifesting itself in each of our businesses and then I'll just add and on that same philosophy underpins, what we're doing in low carbon solutions as we build out that business and position ourselves for long terms, making sure every investment that we're making.

Neil Chapman: You could look to double your resource potential from 10 at that time you announced, you know, potentially significantly larger. You haven't updated that resource number in a while. Now you've had Lancet fish. It looks like fine tooth is in the queue based on your EIS submissions to Guyana, but yet you still talk about production capacity and not production. So my question to you is with capability of obviously keeping these boats filled from extended period of time.

The value chain that we're creating Dan and his team have a clear view about where that will sit in the cost of supply curve or you can pick the best cost of abatement curves and making sure that we're gonna be advantaged versus the rest of industry.

Great. Thank you.

You bet.

The next question is from John Royall with Jpmorgan. Your line is open. Please go ahead.

Hi, good morning, Thanks for taking my question so.

So my question is on the Capex could.

Neil Chapman: What do you ultimately see as the production capacity, sorry, actual production as opposed to capacity to directory through the end of the decade at this point. Yeah, thanks, Doug. I mean, there's probably two parts to that question. One is exploration and then one is production and capacity limit. Let me just handle exploration first. You know, we've had as you're aware three discoveries this year, including Lancet, fish two, which is the most recent one.

Could you maybe help US bridge the top end that you're guiding to now for this year versus.

Maybe the midpoint of its a tight range so not super material, but just any color there would be helpful. And then I know you'll give your update in December but is there any color you can give us directionally on.

What's your thinking for next year on the legacy business prior to where again pioneer just anything on the moving pieces for Capex next year would be great. Thank you.

Sure. So I would say nothing really unusual going on in Capex and you said it it was a pretty tight range to start with obviously with the focus on us looking to ensure that we're investing in advantaged high return projects, that's exactly what we're delivering so I would characterize that.

Neil Chapman: And we continue to integrate those results both of exploration and appraisal drilling and we're going to update that resource base when we see it is a significant change. You know, our program of exploration and appraisal continues and the way I like to frame it is in the southeast corner of the stable block, we're continuing to appraise around our discoveries. And that will take a lot of work and a lot of activity.

Neil Chapman: You know, we have six drill ships in the in the basin and they're both there in development appraisal and exploration drilling. In addition to all that appraisal drilling that we're doing in the southeast part of the block, we're looking for what I would describe as anchor process. We expect further to the north and further to the west. You know, we continue to look and we probably got order of magnitude three, what I call true well cats or exploration targets looking for anchors wells in the next 10 to 12 months, something like that can change based on results of either the appraisal or the exploration drilling.

The updated guidance, that's pretty consistent with our plans as we can give you a further update when we get to that grant.

Discussion later on in December, but we feel very good about our overall execution as Darren mentioned earlier, we're bringing projects online and cost and schedule.

That's typically in the chalk.

And we feel really good about or capabilities and our execution and our ongoing focus with our highest priority ensuring that we're executing great projects with high returns for our shareholders, Yes, I might just add to that.

As we think about the Capex, we provide that range because we recognize going into the year, if things move around a bit and as we.

First acute.

Lan prosecute the plan that with time, we find additional opportunities and some things move around if you look at where we're at through the third quarter. We are right on our plan and so as we move forward.

Neil Chapman: So, you know, we're going to update when we see something meaningful and when we see something significant, we've been very clear that we have six FESOs in the pipeline. They are firm and I've just the one of the previous questions outlined all of those. Indeed, they will have a capacity and you strive to keep them full all the time. As you know, Doug, that one of the beauties about the stable block is the density of the resource and the proximity of these boats, which gives out potential for tiebacks well into the future.

We're going to continue to do the things that we had planned to do last year, but I would say, we're always looking for opportunities too.

To build on the value proposition, we see I'm going to go after we're not going to constrain ourselves artificially to the guidance range. If we find an opportunity set up to date.

Things are moving pretty consistent with where we thought we were going to be in.

Neil Chapman: But the water cup will increase as everybody knows in deep water. So, we constantly love we like to talk about capacity and we optimize as we go and we will increase the production versus the name like capacity as we go. And so, that's why I think what we can be firm on is we will have six boats by the end of 2027 and they will have a name cake play capacity of 1.2 and obviously we will strive to keep them as full of liquids or of oil as we can over that period. I mean, I think as we get closer and closer to the 2027, obviously, we will update those numbers. Appreciate the full answer, Neil. Thanks so much. Yes, sure.

And frankly, as we look out going forward and continue to see very consistent set of opportunities that we're going to prosecute things.

One change it will spend more time talking about and low carbon solutions as that business matures and we establish.

I would say in an advantaged position there are a lot of opportunities coming our way. So we're working on where our way through those opportunities making sure that we.

Focus on the highest priority ones the ones that generate.

The most value and are competitive in our portfolio and we'll talk more about that as we get into the planning of these.

Very helpful. Thank you.

Bob.

The next question is from Jason <unk> of TD Cowen. Your line is open. Please go ahead.

Stephen Richardson: Thanks. The next question is from steward Richardson, whatever core ISI. Your line is open. Please go ahead. Great. Thank you. We're going to keep Neil busy this morning. Another one on the pioneer disclosure appreciate the the incremental. You know, I guess it sounds like from your previous comments, the million barrel a day target and output is still there for the legacy exon position and you're thinking about the additive from pioneer. Can you talk a little bit about as you integrate the two assets?

Yeah, Hey, good morning, Thanks for taking my question.

A lot has happened in the past few months, but about three months ago. There was a handful of news articles about exxon's lithium endeavors and I just wanted to get an update on that are you still drilling in the smack over for lithium are you exploring a potential process.

<unk> unit, there and and how have things trended the past few months and do you kind of expect that to figure into your growth plans here over the next five years.

Stephen Richardson: Are you assuming some high grading around some of the higher quality acreage? Does anything? Do you do envision prioritizing more activity on one asset versus the other? Are you still kind of think about them as two separate and then also maybe you could just talk a little bit about assumptions around acreage both ons or any positions as well as there are a lot of work to do in terms of extending some of this lateral length that you're talking about. Thanks very much.

Yeah.

Yes, sure I'll take that I think just stepping back and maybe setting.

Setting the context of what we're trying to do.

I'll call it in the transition space.

And frankly more broadly.

Let's go back to the fundamental.

What are our key technology competencies and capabilities and Thats and then what businesses.

Neil Chapman: Yeah, yeah, well, I mean, first of all, I would say it's very early in the process, of course, you know, we're done to do jellyance, we're into transition now. And it's very important to make the point pioneer or a very, very capable organization, they've demonstrated that. What we're really excited about is the combination of these two organizations, pioneer have a deep deep understanding of the middle and basis. As we've talked about it, this is absolutely in the fairway of tier one quality resource.

Themselves to those capabilities, where we can carve out an advantage and produce the products that society needs and so rather than chase what I would say is the current narrative or the current conventional wisdom as to what the world's going to need to focus first on our what we can fundamentally contribute and bring an advantage to you and therefore general.

Returns higher than the rest of industry and then figure out how those advantages apply themselves to what the world needs. Obviously lithium is an important part of.

Neil Chapman: And pioneer have done an exceptional job of developing that resource. For our side, we've got a whole range of different operating techniques, development plans and technologies. And it's the integration of those that we're most excited about. And everything we've seen in the initial transition work, would suggest all of that is correct. If you just look at the acreage position, and you look at where Exxon and Exxon Mobil are and pioneer are, obviously, it gives an opportunity for both high grading the inventory and climate includes bolt-ons.

Okay.

Transition going forward and the electrification and the need for for batteries and storage and power and energy and so we've looked at that space and clearly with the opportunity to smack over the ability to drill extract lithium from the Brian Warren and re inject that as Scott that's much lower environmental impact.

The current production.

Process for lithium.

It fits very well with our capabilities.

Neil Chapman: And I have to say that Scott Sheffield and his organization have done an extraordinary job, vaulting on and increasing their acreage in the basin. And they have a very, very capable land organization. And we look forward to working with those folks. So I think it's a combination that's going to be most powerful in developing that resource. Yeah, I just add to what Neil said, if you look at what we've been doing over the last few years, it's really been around integrating our organizations, consolidating them, and making sure that we're concentrating like capabilities into the same organization.

<unk> and <unk>.

Cost of supply curve, its very competitive so it looks attractive and the challenge that we've been given as Dan and his team is.

Develop a business plan, where that becomes a material with respect to what Exxon Mobil and Exxon mobil's portfolio and effectively competes for capital that's looking as Dan and his team.

Hum.

Develop that concept in that potential business specialty more and more promising and we see an opportunity to really leverage the things that we're pretty good at in the base case, and it's very synergistic with our traditional businesses. So I think when we when we come out and talk about the plan.

Neil Chapman: And that is paying huge dividends. And this is no different. The intent is to fully integrate the pioneer organization and people into our business. My expectation is we'll bring a lot of advantages to their acreage, but at the same time, we expect there are people to bring a lot of advantages to other parts of our business, including what we're doing in the Delaware. And so our whole strategy is really around the value you create by taking experts in areas and getting the collaboration and the innovation that comes from that.

I'll talk more about where we see the lithium business going but it looks fairly promising at this stage and I would just say the aperture is wide open.

I think for a long time, we've been characterized as an energy company and they're almost discounts what is one of the world's largest chemical businesses.

Which we feel pretty good about and it comes back to this fundamental capability.

Managing and transforming hydrogen and carbon molecules products that the world needs and leveraging our capabilities in lithium fits into that along with our other businesses in biofuels hydrogen.

Neil Chapman: So there won't be a separate approach or it'll be one. I think what you're seeing today, the news point, the fact that we're very early stage, but as we get together and work through the plans and the development, it'll be one seamless integrated organization and plan.

Carbon capture and storage and so while we'll continue to develop those and again as I said earlier are seeing that opportunity space and the opportunity to generate higher return projects looking more and more promising so.

I would expect that to be part of the portfolio going forward.

Darren Woods: I've seen just one small addition to illustrate that, you know, I've talked before that we have a basin wide remote operations center in Houston where we control all our operations. It's drilling, that's tracking the field operations, that's methane tracking, methane emissions tracking as well from one central control center in Houston. And obviously our plan would be to bring in the whole pioneer operations in time to have one central organization. What that gives you is you give you all that competency, all that expertise applied to the whole of the middle and Delaware basins from one central control control center. Thanks very much.

Great that's really helpful. Thanks.

Welcome.

The next question is from Ryan Todd of Piper Sandler. Your line is open. Please go ahead.

Yes.

Okay. Thanks.

Maybe one follow up on some of the earlier Permian conversation.

Uh huh.

You were always known as developing your side of the Permian on a very long term plan you built up a lot of infrastructure early on on the infrastructure side as you think about this post pioneer transaction.

On the infrastructure do you have the combined infrastructure in place that you need to arrive at that 2 million barrels a day of combined production will this require any additional infrastructure spend or any shift around and how you think about things versus previous anticipated.

Roger Read: The next question is from Roger Read of Wells Fargo. Your line is open. Please go ahead. Yeah, thanks. Good morning. Keeping with the upstream theme here, I'd like to dig into the, I guess, call it slight transition here, the high value added or high margin liquid barrels. So specifically, you know, kind of the common 100,000 barrels a day higher versus 2022's gases declined and or been sold and the liquids have grown.

And maybe if there's any comments on whether you see any potential bottlenecks in the basin over the next few years.

Roger Read: But did you think about the change out to 2027, the growth in Guiana, the growth in the Permian, and we compare that to where you were saying 2019. How do you think about the sort of total value added liquid barrels, the impact on margins, the impact on returns?

Yes, Brian it's Neil I'll take that question I think as you know.

There is a big difference between Delaware and the Midland Basin Midland Basin has got far more mature infrastructure.

And.

Pioneer has done an exceptional job in both developing and acquiring and contracting both.

Infrastructure to exit products and full of water, it's quite a different doses.

The Delaware of course in the Delaware, we had to put that infrastructure in place. We did it at scale. We built this large central processing facility called Cowboy.

We currently have a capacity there.

Darren Woods: Like what's the right way for us to think about the transition of the company over roughly that a here period? Well, that's just part of the pioneer acquisition for the start of the moment and just talk about our existing plans as Exxon Mobil. And you're back in 2018 and 2019, I talked about the strength of our developments that we had in the pipeline. And obviously, they were outlined by Guy Anna and by the Permian.

About 250000 barrels a day of crude and about 400 Mcf of gas.

And to expand that.

In Midland.

Most of the infrastructure already exists.

Always going to be incremental investments, but nothing like the scale Ryan that we've seen.

In the Delaware and I feel very good about the infrastructure, we put place put in place in the Delaware, We made that investment upfront we talked about it in 2018 in 2019, and we are clearly benefiting from that investment that we made.

Darren Woods: And what I said at the time is what you will see is an increase in the percent of liquids in our portfolio and a reduction in the percent of dry gas of the total. And if I look to 2027, we will go from something sub 65% liquids to something around 70% liquids in our portfolio in 2027. And 15% were there about a liquefied natural gas. So that takes us up to 85% I would call liquids index.

Quite a contrast in Midland.

Yes, I would add to that if you go back in time as we were looking at the integrated value chain.

We are certainly focused on the molecules that we are producing in the Permian, but we're also recognize there is an opportunity for us to take advantage of the.

Geographic locale and the proximity to our facilities in the Gulf coast to optimize broader Permian production and so we built the logistics systems.

Pipeline systems capability with our facilities to manage that and so what we're now going to be bringing into the portfolio in the Midlands fits very well with this.

Darren Woods: Obviously 80% of our LNG sales index to Brent or to crude oil. That's a big transition, but it's driven by the quality of those resources, primarily in the Permian and and Guy Anna. And we're going to be adding on to that. Of course, the programs we have developed. We have in LNG in Papua New Guinea and then in Mozambique at the end of the decade.

Broader play of an integrated value chain and making sure that we're maximizing the value of those molecules strong facilities and as we've said early on when we first introduced this deal that piece of the equation, which we believe there is a value opportunity on in terms of better managing the molecules through the hole from end to end from from the crude clears.

Through to the finished products. We believe there is additional opportunity there.

Darren Woods: I just had one other comment. If you take the liquids and the LNG, which it takes to 85% liquid index in 2027. Of the gas that remains 7% of that is associated gas. So in other words, gas associated liquid production. So you can see that we'll be in the order of magnitude of 7 or 8% of dry gas in our portfolio at that time. And that's pretty the pioneer acquisition. Yeah, I just added that Roger.

We got to get in and work through the details of that my view is that additional upside to what we've been talking about.

I feel really good about and one that frankly, we anticipated early on by making sure that we built capacity ahead.

I'm actually needing it for our own molecule somewhere in a very good position there and then Ryan I didn't answer your question do we do we anticipate any any bottlenecks and against and that is based on what we have seen so far joined the transition weapon. The due diligence and there is no we don't see any any bottlenecks and getting to the <unk>.

Darren Woods: If you just step back and think more conceptually around the strategy of what we're trying to do. Every one of our businesses focused on moving to the left hand side, the cost of supply curve. So that we remain robust to any, any period in the commodity cycle and making sure that we're positioned competitively versus those. Everyone else in the industry. And so that drive over time to reshape portfolio continues to move our collective production to the left and to lower costs, which at the same, and at the same time.

Production levels that we anticipate.

Great. Thank you.

Thank you.

The next question is from Neal Dingmann of cure.

Securities. Your line is open. Please go ahead.

Hi, good morning, Thanks for the time, maybe for you Cathy just my question is on shareholder return.

It looks like you paid out a bit over 100% of free cash flow. Following the prior quarter. I think you are closer to even higher than that maybe about 118% I'm. Just wondering when you think about shareholder return.

Darren Woods: Adding higher value barrels. We're lowering costs and increasing revenue, and so that's where the value game is getting played out, and that's the worth that we've been doing, and that's the high rating that you've seen in the portfolio and the improvements in structural costs, who we mentioned in the top of the meeting that we've actually achieved the $9 million in structural costs, this quarter, third quarter, so quarter, ahead of what our initial plans were, expect to see more in the fourth quarter, and as we go forward with the change that we've been making in the organization continuing, we're going to continue to deliver more structural costs that we've sold, all strategies around making sure that we have the best portfolio in the most resilient portfolio so that we can basically be successful, irrespective of the commodity price environment that we're in, and they were well positioned versus others in the industry, that is strategy and see that playing out certainly at the upstream, but you also see it playing out in the downstream where we've been hydrating our assets there, and playing out[inaudible] in the cost of supply curve, or anything that was cost of the maintenance curve, and making sure that we're going to be advantage versus the rest of the industry. Great, thank you. You bet, thank you.

Continue to lean into the buybacks as you look in the out years or maybe just if you could give a little bit of a color I think I understand kind of your role and your thoughts on the dividend side, So maybe I'm asking a bit more on shareholder.

Share buybacks going forward. Thank you.

Sure I'm happy to take that so if you look at our overall free cash flow results for the quarter. It was just under $12 billion at 11 7 billion and we paid out eight.

$1 billion to shareholders.

Shareholders and that was split between $3 7 million and hit it and $4 4 million in the share repurchase program in fact in the quarter, our cash balance actually it went up $3 $4 billion and we ended the quarter at $33 billion. So I think you can see that in the quarter and we were in fact well.

Under a 100% in terms of what we see now is what enables us to grow our cash balance and strengthen our balance sheet even further.

When you look overall and our approach to capital allocation our priorities continue to be the same first and foremost, let's make sure. We're investing in advantaged projects right that are differentiated and drive high returns for our shareholders. We do that both organically and as you've seen recently.

Inorganically as well, making sure we're maintaining really strong balance sheet you need that ultimately at some point the cycle will turn against us and that balance sheet will be there for us in Q and being balanced in our approach as to how we share the success of the company and those rewards our shareholders and I think you can continue to.

See that balance coming through between dividends and share repurchases, we're looking to be more consistent in our share repurchase program again, I think youre seeing that we continue to say we're on track to execute $17 5 billion of share repurchases. This year, we'll complete that before the end of the year and we already have a pro.

John Royall: The next question is from John Royal of J.P. Morgan. Your line is open, please go ahead. Hi, good morning, thanks for taking my question. So my question's on the CAPEX. Could you maybe help us bridge the top end that you're guiding to now for this year versus this year? Maybe the midpoint.

Kathy Mikells: It's a tight range, so not, you know, super material, but just any color there would be helpful, and then I know you'll give your update in December, but is there any color you can give us directionally on what you're thinking of for next year on the legacy business prior to layering and pioneer or just anything on the moving pieces for CAPEX next year. We would focus on us looking to ensure that we're investing in a managed high return project.

Graham and plays a similar program in place for 2024, So we're trying to get that balance right and it's important that we continue to maintain a strong balance sheet that can curious.

The cycle.

Thank you Kevin.

Our next question is from Paul Cheng with Scotiabank. Your line is open. Please go ahead.

Thank you good morning.

Neil.

This morning in the parent good morning industry and in the Permian, whether it's for the mission we've done on cost efficiency. It seems to move and trying to metric by the operation that as much as we could.

Kathy Mikells: That's exactly what we're delivering. So I would characterize this as updated guidance that's pretty consistent with our plans, and we can give you a further update when we get to that corporate plan to discussion later on in December, but we feel very good about our overall execution. As Darren mentioned earlier, you know, we're bringing projects online at a cost and a schedule that's typically within the top one file, so we feel really good about our capabilities and our execution and our ongoing focus with our highest priority, ensuring that we're executing great projects with high returns for shareholders.

Can you share with us that we're yet Exxon in that.

Johnny.

You get in terms of yeah. That's it for your operation in the Permian and when you are comparing to.

Pioneer I don't know whether you have the information that you can share and what does that do you.

As a head of them or that this would be part of the 2 billion of the synergy benefit or that you're going to do more aggressive knowing that this is going to be on top.

Kathy Mikells: Yeah, I might just add to that, you know, as we think about the CAPEX, we provide that range because we recognize going into the year that things move around a bit. And as we first accused us of the plan, prosecute the plan that with time we find additional opportunities and things move around, if you look at where we're at through the third quarter, we are right on our plan. And so as we move forward, we're going to continue to do the things that we had planned to do last year, but I would say we're always looking for opportunities to build on the value proposition if we see everyone go after.

Yeah. Thanks, Paul good to hear from you from our perspective.

We have I think 17 rigs running right now in the Permian all of those rigs are electrified so we're 100% on.

Risks and we are working on Fracs right now I think we have one electric frac.

Six frac crews running in the Permian. This is all part of our drive to get to Permian net zero.

That we said we will get to by 2030, our plans are in place for that and we're on schedule for it I mean that program as simple as this is you have to reduce methane emissions.

Kathy Mikells: We're not going to constrain ourselves artificially to a guidance range if we find an opportunity set but to date things are moving pre consistent with where we're going to be. And frankly, if we let that go forward and continue to see a very consistent set of opportunities that we're going to prosecute.

We are well on track with reducing methane emissions, we have no routine flaring in the Permian now we've replaced over 6400 pneumatic devices. So you eliminate and reduce methane emissions than you electrify your operations as Ive just described for a long way down the road in <unk>.

Kathy Mikells: I think the one change it will spend more time talking about and the carbon solutions is that that business matures and we establish. I'd say in a vantage position, there are a lot of opportunities coming out waste. We're working our way through those opportunities, making sure that we focus on the highest priority ones, the ones that generate the most value and are competitive in our portfolio. And we'll talk more about that as we get into the plan at least. Very helpful.

Electrification and then we have to secure renewable electricity for those.

Rigs and Frac crews.

That's the program we're working on in terms of pioneer I don't have those numbers a pioneer in terms of where they are on electrification, but what we have said is that.

We're going to advance pioneers.

Target to go to net zero from 2015 to 2035 15 years sooner.

Jason Gabelman: Thank you. Next question is from Jason Gabelman. I have TD Cowan. Your line is open. Please go ahead. Yeah. Hey, good morning. Thanks for taking my question. A lot happened in the past few months, but about three months ago, there was a handful of news articles about Exxon lithium endeavors. And I just wanted to get an update on that.

Than anticipated and that will follow that same protocol that same process of reducing methane electrification and then securing renewable electricity.

Darren Woods: Are you still drilling in the smack over for lithium or are you exploring potential processing unit there and how of things trended the past few months and do you kind of expect that to figure into your growth plans here over the next five years. Thanks. Yeah, sure. I'll take that.

I would add to that I think Scott and the team at pioneer had been this has been an area of focus for them and I know they've worked hard to drive those down the advantage that we bring in we've got a large organization more resources <unk> got a technical organization that has been leaning into this space and working.

Rodley with the industry and other organizations to develop the technology to better measure better manage methane.

Neil talked about the central organization that we've put in place to kind of monitor everything that's happening out at in the unconventional space and make sure that we are responding in real time to things that we're seeing through the centralized operating center, bringing the pioneer portfolio into that.

Darren Woods: I think just stepping back and maybe setting the context of what we're trying to do. I'll call it in the transition space. And frankly, more broadly is, is go back to the fundamental of what are our key technology competencies and capabilities. And that's and then what businesses lend themselves to those capabilities where we can carve out an advantage and produce the products society needs. And so rather than chase what I would say is the current narrative or the current conventional wisdom as to what the world is going to need to focus first on our what we can fundamentally contribute and bring an advantage to and therefore generate returns higher than the rest of industry.

Centre, and then allowing us to apply a lot of the work that frankly, our scale and size has allowed us to advance I think is going to make big improvements and what we're doing with pioneer just by bringing additional capability. There I think the culture and the mindset is already in place. We're now going to bring some additional resources and tools to go by and so my expectation.

Is that we're going to see we're going to raise the game here just because were bringing some additional capability to support what was already I think a very important focus for the pioneer organization.

Okay.

Alright, Thank you Neil.

Darren Woods: And then figure out how those advantages apply themselves to what the world needs. Obviously, lithium is an important part of transition going forward in electrification and the need for batteries and storage of power and energy. And so we've looked at that space and clearly with the opportunity to smack over the ability to drill extract the lithium from the brine water and re inject that it's got as much lower environmental impact and the current production process for lithium.

Same thing from the truth.

Oh, Yeah, that's application, it's already paved unions at that $2 billion and that's the benefit.

Yes.

In terms of the synergy benefits.

As you know and we've talked about many many times.

It's not just about the.

The cost of the rig it's about the quality of the rig and the performance of the rig but electrification of those rigs it doesn't really impact that the electrification of all of those facilities is built into our plans going forward, yes, I would say the our drive to bring their net zero commitment for.

Darren Woods: It fits very well with our capabilities and cost of supply curve. It's very competitive. So it looks attractive and the challenge that we've been given to Dan and his team is to develop a business plan where that becomes the material with respect to what exome mobile and in exome mobile portfolio and effectively defeats for capital. That's looking as Dan is team developed that concept and that potential business, that's looking more and more promising and we see an opportunity to really leverage the things that we're pretty good at today's case and it's very synergistic with our traditional businesses.

By 15 years, we've also built that into our thinking around and get net synergies. There. So we've comprehended the additional effort required to improve the emissions profile and bring their net zero ambitions for us all that netted with our synergy numbers.

Yes.

Thank you.

Okay.

Yeah.

The next question is from John Silver excuse me, Josh Silverstein with UBS. Your line is open. Please go ahead.

Hey, Thanks, good morning, everyone.

Darren Woods: So I think when we come out and talk about the plan, we'll talk more about where we see the lithium business going but it looks fairly promising at this stage. And I would just say the aperture is wide open.

On the morning of the pioneer acquisition. This morning on the Finder acquisition call you had mentioned that the inventory of the combined companies in the Permian was around 15 to 20 years.

Darren Woods: I think for a long time we've been characterized as an energy company and that almost discounts what is one of the world's largest chemical businesses which we feel pretty good about and it comes back to this fundamental capability of managing and transforming hydrogen and carbon molecules to products that the world needs and leveraging our capabilities and let them fit into that along with our other businesses and biofuels hydrogen carbon capture storage. So we'll continue to develop those and again as I said earlier seeing that opportunity space and the opportunity to generate high return projects looking more and more promising so I would expect that to be part of the portfolio going forward. Great that's that's really helpful thanks. Welcome.

Curious how that may be split between the pioneer asset in your Delaware asset and does it contemplate the accelerated growth rate than previously outlined.

Laterals or central plateau.

I'm just curious to get some more details there because there was a view of pioneer having over 20 years of inventory. So any more details there would be helpful. Thanks.

Yes, I think.

Thank you Josh.

Early stages I mean, the numbers that we gave and you just referenced.

Our initial release is based on our understanding we certainly say that the combined resources of the two companies is order of magnitude 16 billion oil equivalent barrels. That's 15 to 20 units like most of our resources. As you are aware is in the Delaware side, obviously pioneer is exclusive in the Midland side.

Neil Chapman: The next question is from Ryan Todd, a Piper Sandler, your line is open please go ahead. Thanks maybe when follow up on on some of the earlier Permian conversation on the I mean you were always known as developing your your side of the Permian on a very long term plan you built a lot of infrastructure early on. On the infrastructure side did you think about this post pioneer transaction on the infrastructure do you have the combined infrastructure in place that you need to arrive the two million barrel today combined production will just require any additional infrastructure spend or any shifts around and how you think about things versus previously anticipated.

Yes, so I mean.

That's the way it is it's based on our early assessments.

Okay got it.

Or just any more detail just on as far as like what your split maybe about 16 versus what maybe.

Yes.

Let's close I would say in total.

Exxon is closer to nine pioneers, it's closer to 7% is what I would say in total, but that's based on our initial understanding for the resource the resource yet.

Okay. Okay.

Neil Chapman: And maybe just any comments on whether you see any potential bottlenecks in the base in over the next few years. Yeah Ryan, Neil, I'll take that question. I think it is you're aware you know there is a big difference between Delaware and the middle and base and there's got far more mature infrastructure and I would say that by this pioneer has done an exceptional job in both developing and acquiring and contracting.

We have time for one more question. Our final question is from Sam Margolin Wolfe Research. Your line is open. Please go ahead.

Good morning, Thanks for taking the question again.

The.

I wanted to follow up on the capital allocation question and the dividend increase specifically.

We've talked a lot about this in the past that this dividend increase looks like it's roughly the same as the amount of share repurchase in terms of percentage.

Neil Chapman: Both infrastructure to exit product and for water it's quite a different sources. Delaware puts in a Delaware we have to put that infrastructure in place we did it at scale we built this large central processing facility called cowboy. We currently have a capacity there of about 250,000 barrels a day of crude and about 400 MCFD of gas you know we plan to expand that in midland most of that infrastructure already exists there is always going to be incremental investment but nothing like the scale Ryan that we've seen in the Delaware.

And I know youre issuing shares for pioneer, but you've also got you now.

Our pathway to a lot of upstream growth.

And then downstream is growing too as we learned about and are in the product solutions spotlights and youre running what sort of a significant.

Operational cash surplus.

On a recurring basis, even before this growth and so.

I'm just wondering about your thoughts on dividend growth going forward.

We are sort of through this period, where you were trending to the balance sheet and the portfolio and and now some of this growth will translate to sort of our dividend CAGR that is in line with what the operations.

Neil Chapman: And I feel very good about the infrastructure we put place put in place in the Delaware we made that investment up front we talked about it in 2018 and 2019 and we're clearly benefiting from that investment that we made now quite a contrast in the middle. Now I would add to that if you go back in time as we were looking at the integrated value chain we were certainly focused on the molecules that we were producing in the Permian but we're also recognized as an opportunity for us to take advantage of the geographic locale and the proximity to our facilities in the Gulf Coast to optimize broader Permian production.

Sure. So we have always said, we're looking to ensure we have a dividend that sustainable competitive and growing I think the increase.

For a sense of the quarterly dividend and hearing reflective of that right. I think it also reflects the overall confidence that we have in the business and the underlying improvement in earnings power that we've seen over the last couple of years I mean by any metric. This is a really strong quarter, whether you look at earnings cash shareholder.

Neil Chapman: So we built the logistics systems the pipeline systems the capability with our facility to manage that and so what we're now going to be bringing into the portfolio in the midland it's very well with this broader play of an integrated value chain and making sure that we're maximizing the value of those molecules for our facilities. And as we said early on we first introduced the steel that piece of the equation which we believe there is a value opportunity on in terms of better managing the molecules through the whole from end to end from from the crude clear through to the finished products we believe there's additional opportunities there.

Returns it was a very strong quarter and we have a great degree of confidence in the business. So we increased the dividend a bit more than we did about a year ago. Obviously, we havent cadence now looking at the dividend in the fourth quarter of the year and that increase is very reflective of our confidence in the business and our underlying performance.

Yes, I would just add to that Sam obviously.

We view the dividend as a commitment.

And as we saw through the pandemic, even when things get tough we work hard to make sure that we're continuing to deliver on that commitment to our shareholders and so as we think about going forward and the volatility in the markets and the commodity cycle, you'll need to make sure that as we think about growth in the dividend that we also think about sustainability in the again the ability to deliver.

Neil Chapman: We've got to get in and work through the details of that my view is that additional upside to what we've been talking about the one I feel really good about and one that frankly we anticipated early on by making sure that we built the capacity ahead of actually needing for our own molecule so we're in a very good position there. And then right I didn't ask you a question do we do we anticipate any any bottlenecks I mean yes that is based on what we have seen so far during the transition work in the due diligence the answers no we don't see any any bottlenecks and getting to the production levels that we anticipate.

On that commitment irrespective of what the market throws at us so that goes into the equation as we think about that going forward.

unknown: Thank you.

And then when we got additional cash can be when you distribute we always got buyback, which obviously as Kathy said, we're looking to have a more.

Consistent level of that as well so that's that's kind of how we're thinking about it.

Thanks for the question.

Thank you.

Yeah.

Youre welcome and thanks, everyone for joining the call answering your questions today, we will post a transcript of our Q&A session on the Investor website next week, we look forward to connecting with you again on December six for our corporate plan update.

Neil Dingmann: The next question is for Neil Dingmann of Truest Securities. Your line is open. Please go ahead.

With that have a nice weekend, everyone and I'll turn it back to the operator that concludes our call.

Thank you. This concludes today's call we thank everyone again for their participation.

Kathy Mikells: I'm just wondering when you think about Cheryl Return, will you continue to lean in the buybacks as you look in the outgirds or maybe just to get a little bit of a color. I think I understand kind of your role or your thoughts on the dividend side. So maybe I'm asking a bit more on Cheryl on the share buybacks going forward. Thank you.

Yeah.

[music].

Kathy Mikells: I'm happy to take that. So if you look at our overall three cash flow results for the quarter, it was just under $12 billion at $11.7 billion. And we paid out $8.1 billion to shareholders. And that was with between $3.7 billion in dividends and $4.4 billion in the share repurchase program. In fact, in the quarter cash balance actually went up to $0.4 billion and we ended the quarter at $33 billion. So I think you can see that in the quarter, we were in fact well under 100% in terms of what we paid out, which is what enables us to grow our cash balance and strengthen our balance sheet even further.

Kathy Mikells: You know, when you look overall as our approach to capital allocation, you know, our priorities continue to be the same. First and foremost, let's make sure we're investing in advantage projects, right, that are differentiated in a drive high returns for shareholders. We do that both organically and as you've seen recently and organically as well, making sure we're maintaining a really strong balance sheet. We need that ultimately at some point, the cycle will turn against us and that balance sheet will be there for us to meet into and being balanced in our approaches to how we share the success of the company and those rewards with our shareholders.

Kathy Mikells: And I think you can continue to see that balance coming through between dividends and share repurchases. We're looking to be more consistent in our share repurchase program. Again, I think you're seeing that we continue to say we're on track to execute $17.5 billion of share repurchases this year. We'll complete that before the end of the year and we already have a program in place, a similar program in place for 2024. So we're trying to get that balance right and it's important that we continue to maintain a strong balance sheet that can carry us through the cycle.

Paul Chang: Thank you, Kevin. Our next question is from Paul Chang with Scotia Bank. Your line is open. Please go ahead. Thank you. Good morning.

Neil Chapman: The industry in the current morning industry in the permit, whether it's for admission reason or for course efficiency seems to move and trying to inatric by the operation as much as we could. Can you share with us that where you stick some in that journey? How far are you in terms of inatric by your operation in the permit? And when you're comparing to pioneer, don't know whether you have information that you can share.

Neil Chapman: And whether that you guys are ahead of them or that this will be part of the to pin and of the synergy benefit or that if you're going to do more aggressive on that, this is going to be on top. Thank you. Yeah, thanks Paul. Good to hear from you. From our perspective, you know, we have, I think 17 rigs running right now in the Permian, all of those rigs are electrified.

Neil Chapman: So we're 100% on rigs, and we're working on tracks. Right now, I think we have one electric track out of six track crews running in the Permian. This is all part of our drive to get to Permian net zero. [inaudible] we're a long way down the road in terms of electrification. And then we have to secure renewable electricity for those rigs and track crews. And that's the program we're working on. In terms of pioneer, I don't have those numbers of pioneer in terms of where they are on electrification.

Neil Chapman: But what we have said is that we're going to advance pioneers target to go to net zero from 2050 to 2035. So 15 years sooner than anticipated, and that will stay full of that same protocol, that same process of reducing methane electrification and then securing renewable electricity. Yeah, I would ask that I think, you know, Scott, the team pioneer have been this has been an area focus for them. I know they've worked hard to drive those down.

Neil Chapman: The advantage that we bring is we've got a larger organization more resources. We've got a technical organization that has been leaning into the space and working, you know, broadly with the industry and other organizations to develop the technology to better measure better manage methane. And you'll talk about the central organization that we put in place to kind of monitor everything that's happening out on the unconventional space and make sure that we're responding in real time to things that we're seeing through the centralized operating center bringing the pioneer portfolio into that center and then allowing us to apply a lot of the work.

Neil Chapman: And frankly, our scale and size has allowed us to advance. I think it's going to make a big improvement. And what we're doing with pioneers is by bringing additional capability there. I think the culture in the mindset is already in place. We're now going to bring some additional resources into those supplies. So my expectation is that we're going to see we're going to raise the game here just because we're bringing some additional capabilities support was already. I think a very important focus for the pioneer organization. Thank you.

Darren Woods: I knew you'd be saving from your transportation is already built into that to be an industry benefit. Yeah, I mean, in terms of the strategy benefits, I mean, as you know, and we talked about many, many times, you know, it's not just about the cost of the rig. It's about the quality of the rig and the performance of the rig, but electrification of those rigs doesn't really impact that the electrification of all of those facilities is built into on plans going forward.

Darren Woods: Yeah, I would say they are drive to bring their net zero commitment forward by 15 years, we've also built that into our thinking around and get net synergies there. So we've comprehended the additional effort required to improve the emissions profile and bring their net zero ambitions for us all that's netted with our synergy numbers. Thank you.

John Silverstein: The next question is from John Silverstein with UBS. Your line is open. Please go ahead. Thanks. Good morning, everyone.

Neil Chapman: On the minor opposition, on the minor opposition call, you had mentioned that the inventory of the combined companies in the Perming was around 50-20 years. We'll just hear how that may be split between, you know, the pioneer asset and the New York, your Delaware asset, and does the cost in place the accelerated growth rate and previously outlined longer laterals or potential plateau. We'll just hear some more details there because there was a view of a pioneer having over 20 years of inventory, so any more details there would be helpful. Thanks.

Neil Chapman: Yeah, I think Josh, it's early stages. I mean, the numbers that we gave and you just referenced in our, in our initial release is based on our understanding. We certainly say that the combined resource and the two companies is order of magnitude, 16 billion or the equivalent barrels at 15-20 years' length. You know, most of our resources, as you're aware, is in the Delaware side. Obviously, pioneer is exclusive in the Midland side.

Neil Chapman: Yeah, so, so I mean, that's what it is. It's based on our early assessments. Yeah, yeah. Well, there's a certain more details with them as far as like what your split may be about 16 versus what there's maybe. Yeah, I mean, that close, I would say in total, exons as close as nine pioneers as close to seven is what I would say in total. But that's based on our initial understand for the resource, for the resiliency on.

unknown: We have time for one more question.

Sam Margolin: Our final question is from Sam Margillin of Wolf Research. Your line is open. Please go ahead.

Kathy Mikells: Good morning. Thanks for taking the question at the end. The, I wanted to follow up on the capital allocation question and the dividend increase specifically. You know, we've talked a lot about this in the past that this dividend increase looks like it's roughly the same as the amount of the share we purchased in terms of percentage. And I know you're issuing shares for pioneer, but you've also got, you know, a pathway to a lot of upstream growth.

Kathy Mikells: And then downstream is growing too, as we learned about in the product solutions spotlight. And you're running, you know, with sort of a significant operational cash surplus. You know, on a recurring basis, even before this growth. And so, just wondering about your thoughts on dividend growth going forward. And if we are sort of through this period where you were attending to the balance sheet and the portfolio. And, and now some of this growth will translate to sort of a dividend taker that is in line with with the operations.

Kathy Mikells: Thanks. So we have always said we're looking to ensure we have a dividend that sustainable competitive and growing. I think the increase of four cents to the quarterly dividend is very reflective of that. Right. I think it also reflects the overall confidence that we have in the business and the underlying improvement and earnings power that we've seen over the last couple of years. I mean, by any metric, this was a really strong quarter, you know, whether you look at earnings cash shareholder returns.

Kathy Mikells: It was a very strong quarter and we have a great degree of confidence in the business. So we increase the dividend a bit more than we did about a year ago. Obviously, we have a cadence now of looking at the dividend in the fourth quarter of the year. And that increase is very reflective of our confidence in the business and our underlying performance. Yeah, I'll just add to that, Sam, obviously we view the dividend as a commitment and as we saw through the pandemic, even when things get tough, we'd work hard to make sure that we continue to deliver on that commitment to our shareholders.

Kathy Mikells: So as we think about going forward, and the volatility in the markets and the commodity cycle, we need to make sure that as we think about growth in the dividend, that we also think about sustainability and the ability to deliver on that commitment. Irrespective of what the market throws at us, so that goes into the equation as we think about that going forward. And when we've got additional cash that we wanted to distribute, we've always got to buy back, which obviously, as Kathy said, we're looking to have a more consistent level of that as well. So that's kind of how we're thinking about it. Thanks for a question. Thank you. Yeah, you're welcome.

Jennifer Driscoll: And thanks everyone for joining the call and to your questions today. We will post a transcript of our Q&A session on the investor website next week.

Jennifer Driscoll: We look forward to connecting with you again on December 6th for our corporate plan update.

Operator: With that, have a nice weekend, everyone, and I'll turn back to the operator to consider calls. Thank you.

Operator: This concludes today's call. We thank everyone again for their participation. Thank you.