Q2 2025 Exxon Mobil Corp Earnings Call

Good morning everyone. Welcome to Exxon Mobile's second quarter 2025 earnings call.

Today's call is being recorded; we appreciate you joining us.

I'm Jim Chapman, Vice President, Treasurer, and Investor Relations.

And I'm joined by Darren Woods, Chairman and Chief Executive Officer.

Kathy Michaels, our senior vice president, and CFO is not on the call today, as she's recovering from a planned, medical procedure.

We wish her a speedy recovery.

This quarter's presentation and pre-recorded remarks are available on the investor section of our website.

They're meant to accompany the second quarter earnings press release, which is posted in the same location.

During today's presentation, we'll make forward-looking comments, including discussions of our long-term plans which are subject to risks and uncertainties. Please read our cautionary. Statement on slide 2

You can find more information on the risks and uncertainties that apply to any forward-looking statements in our SEC filings on our website.

Note that we also provided supplemental information at the end of our earnings slides, which are also posted on the website.

And now, I'll turn it over to Dan for opening remarks.

Good morning and thank you for joining us.

This quarter once again, prove the value of our strategy and our competitive advantages. They continue to deliver for our shareholders no matter the market conditions or geopolitical developments.

We built our strategy to take maximum advantage of XOM Mobile's uniquely Diversified business across multiple markets and products.

Products that exist today.

And new products that are groundbreaking technology will enable for the future.

And our Upstream business. We achieve the highest second quarter production since the merger of Exxon and Mobil more than 25 years ago.

But it's not just about the volume.

We're going production from assets. That deliver the most value.

More than half of our oil and natural gas production comes from high return advantaged assets.

We have three major developments online producing roughly 650,000 gross barrels per day in total.

Considerably above our investment basis.

Our fourth development in the largest to date. Yellow. Tail is next in line and anticipated to achieve first oil next week, delivered 4 months ahead of schedule. And under budget by 2030, we expect to have total production capacity of 1.7 million oil equivalent barrels per day from 8 developments.

The success of these projects as established Diana, is the world's fastest growing economy.

It's also 1 of the reasons. I believe the Gana development will prove to be 1 of the most successful deep water developments of all time.

Regarding the recent arbitration decision.

I admit the ruling was a surprise. We were highly confident in our position and so with cuk,

This dispute was about protecting our contractual rights, the sanctity of contracts among governments and investors. Co-ventures are critical for the upstream industry.

Without it confidence in a large, Capital Investments is undermined.

Having co-written the contract with Shell, we understood its intent and believed the contractual language conveyed it.

Unfortunately, the tribunal interpreted it differently.

While disappointed we respect the process and the ruling.

As we move forward, I hope our investors take comfort. In the links, we will go to and protect the value our employees create for the company and our shareholders.

With respect to the continuing development of Ghana, the arbitrator's decision changes, nothing for us. And we welcome Chevron to this day, Brook block

During the quarter, we produced roughly 1.6 million oil equivalent barrels per day, which was another record for us.

Nowhere is our emphasis on technology and innovation paying off more clearly and immediately than in the Permian, where we have the largest inventory of Tier 1 acreage.

Last year, we increased the total resources from 16 to 18 billion oil-equivalent barrels with successful development of new technologies.

Our team is making great progress on the challenge to double recovery from the industry, with an average of roughly 7%.

We continue to make progress on the deployment of lightweight proppant, a patent material made at very low cost with petroleum Coke from our refineries. It is proving to be more effective at keeping fractures open, allowing us to extract more oil and gas from each. Well.

On a 10,000 lateral foot equivalent basis.

We've deployed this in over 100 per million wells and are seeing improved recovery, up to 20%. That's up 5 percentage points from what we announced last December.

By year end, we expect deployments to reach roughly 150 more Wells. We're also leveraging, our advantage of contiguous acreage to drill, 4 Mile, laterals without losing any productivity.

Others are drilling wells half that length at far greater cost, resulting in much lower capital efficiency.

so, while some operators in the Permian are talking about Peak production,

Our current plans grow permanent production from about 1.6 million oil equivalent barrels to 2.3 million by 2030.

And with the Deep portfolio of Technologies, we're developing.

We have the industry unique opportunity to drive Capital efficient, High return growth, well beyond that.

Turning to our product solutions project startups.

We're continuing to ramp up operations if the China chemical complex.

This facility supplies China's growing domestic Market. The largest in the world with high value consumer oriented chemical products used in household appliances hygiene products and safe food, packaging.

We're also starting up our Singapore RES upgrade project.

Deploying new-to-the-world technology that converts the lowest value molecules at the bottom of the barrel into some of the highest value products we offer.

With this new technology, we've introduced a new lubricant based stock which we've sold out and have essentially sold out the incremental 20,000 barrels per day of production.

We've started up our poly Hydro finder project in the UK. Converting, isil for gas oil exports to domestic ultra low, sulfur diesel, cells.

We are now producing renewable diesel at Strathcona in Canada for the first time.

This is a key part of our lower emissions fuel strategy, corn production, where policy and economics are supportive of cost-effectively reducing the carbon intensity of essential products.

Lastly, we expanded operations at our new Proxima systems blending facilities in Texas, a critical step to more than tripling production capacity this year.

We also signed an mou with a leading building materials and construction company based in the Middle East to manufacture and distribute rebar made with Proxima.

These are important steps in establishing this new business.

In total, our 2025 project startups are expected to drive more than 3 billion dollars of earnings in 2026 at constant prices and margin.

This goes a long way towards the risking our plans to achieve 2030 by 2030, that's 20 billion dollars of additional earnings and 30 billion dollars of cash. Flow versus 2024 on a constant price in margin basis.

You know, low carbon Solutions business, our first third party, carbon capture and storage project is now in operation.

The project uses our CO2 transport and storage network, the world's only large-scale system.

To store up to 2 million metric tons of CO2 per year, that otherwise would have been emitted to the atmosphere.

We also recently announced our seventh CCS customer contract.

This brings total third-party CO2 off, takes nearly 10 million metric tons per year.

In addition, the US Environmental Protection Agency issued the draft class 6 permit for a rose, CO2 storage facility in Texas.

We expect rows to be the first of many storage sites, linked to our CO2 transport pipeline.

Returning to the status of our Baytown. Hydrogen plant, the world's largest low-carbon hydrogen project. We've seen mixed progress.

As we've said, this is a complicated project that requires simultaneous development of Supply, demand and policy.

We were disappointed that under the recently approved 45V tax credit.

Timing for the startup of construction was shortened from 2033 to the beginning of 2028.

Of a broader Market.

Which is critical to transition from government incentives.

If we can't see an eventual path to a market-driven business, we won't move forward with the project.

We're now working to determine if the combination of 45 Q and a shortened 45 V will provide the support needed to catalyze a broader low-carbon hydrogen market.

Beyond that, we're working to translate heads of agreements into firm sales contracts, including exports of ammonia to Asia and Europe, and domestic hydrogen cells.

When new, helping to establish a brand new product and a brand new market, initially driven by government policy, would not be easy or advance in a straight line.

It's why we focused on low-carbon opportunities aligned with our existing capabilities and advantages,

Our strategy provides optionality and flexibility which is critically important in this Dynamic and often uncertain world.

I'm pleased to see that it's working.

For strengthening advantages, our competitors can match.

With a focused portfolio of advantaged assets, operated to the highest standards.

Oral class execution of large-scale, high-return projects.

Captured cost savings that exceed all other ioc's combined since 2019 and driving Superior earnings and cash flow growth potential.

Irrespective of the market environment or geopolitical uncertainty.

It's why we believe and more importantly are demonstrating that we are in a league of Our Own.

Thank you.

And we're happy to answer your questions.

All right. Thank you Jan. Before we move to Q&A, I want to highlight that we will be publishing our annual Global Outlook later this month.

That, as normally as, as usual contains our latest views on global energy demand and supply through 2050, which forms the basis of our business planning.

So with that, we can move to Q&A.

As a reminder, we asked each participant to keep it to one question.

And operator, will you please open the line for the first question.

Thank you. The question and answer session will be conducted electronically. If you'd like to ask a question please, do so by pressing the star key followed by the digital 1 on your telephone,

The first question comes from Devin McDermott of Morgan Stanley.

So a lot of uh, a lot of good stuff to dive into in in the release but I actually wanted to ask Darren about some comments. He recently made an interview around m&a and I'm paraphrasing a bit but just talking about seeing opportunities and working to bring some of that to fruition want to just unpack that a bit. You know, if you think about your portfolio you have a really strong organic opportunity ahead. And I imagine that creates a very high bar and then at the same time you've also talked a lot about the technology. You bring to bear like the uplift highlighting and the release on the puran and that may be able to create value and assets that others can't. So when you put these factors Together, High bar differentiated technology differentiated scale. How does that influence? Your thoughts on further Acquisitions and m&a for Exxon? Are there asset types, or regions, where you see the biggest opportunity?

Yeah, good morning, Devon. And thanks for the question. I think, you know, you're touching on, frankly, what is the core of our strategy here, which was...

To focus on building a unique seat, uh, set of capabilities and competitive advantages that we can then leverage to grow organic value importantly, which is what we've been very focused on as, you know. But also, uh, use those advantages and apply them to other opportunities in organically to grow and create value, and create more value than frankly, the combination of 2 entities, uh, would normally give. So it's kind of the 1

Plus 1 has to equal 3 or more, which we've talked about. For some time, we saw that play out, and I think we're continuing to see it play out with the Pioneer acquisition, where we're making really good progress at growing the synergies. We started off with $2 billion; we announced we're up to $3 billion per year on average over the next 10 years. My expectation, as we go into.

The corporate plan discussion at the end of this year is that we'll update that number, even further. So very very pleased with what we're seeing there. And that opens us up to, uh, looking at additional opportunities to do the same thing. Um, where we stay very focused on value deals. We're not really interested in buying volumes. Uh, we're interested in building value and building Val, uh, uh, volumes. And that's you know what we've been doing in in Pioneer. And what we're, what we look for another opportunity.

Uh, a leading technology and scale.

Uh, we also, in that transaction, took advantage of...

A creative talent acquisition and leadership acquisition. And so we're not looking at, you know, GNA as one part of the equation. But as, you know, with Pioneer, it was a very small part. Our expectation is that would be true as we go forward. Not looking to buy companies and then...

strip all the people out of them. Instead, we're looking to, uh, buy companies with talented folks, where we learn from them and they learn from us. So, that's a really important part of our, um, acquisition strategy and I guess the other example to point to in terms of that integration and taking advantage of the talent and Leadership. The former CEO of pioneers is now running all of our time, uh permanent business, so uh contributing at a very high level and then frankly we got to have the right cultural fit uh as you bring folks into the organization, you know, an intense focus on safety and environmental um care.

Focus on efficiency and performance, and then the quality and commitment of people. You know, we've often talked about it in our company; we have averaged 10 years of experience over 30 years. We like companies where their employees are committed to the company and the work that they're doing. So those are the things that we're looking for. I would argue that we've got a fairly strong foundation.

A high standards in looking at opportunities, but I think it's what's required to really build the volume slash value proposition rather than just a consolidation of volume. But as I said in the interview, we think there are opportunities out there and, um,

Or across all of our sectors. Frankly, not just in the Upstream, but...

across all the areas that we do business, we have a very active

Uh, Activity Set where we're looking at opportunities. And that's really what I meant in my comments is we're continuing to

Keep a really close eye on the waterfront. Uh, see where the opportunities are, uh, do a good job of understanding what that unique value creation opportunity looks like and see if we can't find something that we can then, uh, eventually land. But that's an ongoing and long-term process. So, that's the process that we're in today, and we feel pretty good about that.

Makes a lot of sense. Thanks for the thoughts. Darren

You bet.

The next question is from Neil Mehta of Goldman Sachs.

Yeah, thanks Darren for the comments that want to drill down on on, uh, slide 7, uh, where you provide some new disclosure about the permanent production potential. And there's been a lot that's been said about Peak, permium production, um, AC the Basin, do you have a different view given your technology? Upside certainly seems like you do for your portfolio.

In that context.

On the back of Devon's question about um, m&a, is it logical to think that this is the the right space for you to be the consolidator in?

Yeah, thank you, Neil. And to the first part of the question is, do we? Are we different have a different View and I think the answer to that is absolutely. Yes. Um, you may recall from very early days,

when we came into the unconventional space, the challenge at the time that I kind of put into a baseball analogy was

You know, we're, we're a long ball hitter. Everybody in the unconventional space space is playing a short game. What's the long ball? Uh, look like in unconventional and that led us, uh, into the cube development discussions. That we've, we've talked about in the past that initially were, um, I think discounted but now have become the industry standard and it led to the challenge of giving how early we are in the

Technical development of unconventional resources to really push hard on the technology envelope. And I said a stretch target of, you know, doubling that recovery.

Frankly, as a starting point because as we all know, the recovery levels are fairly low compared to other resource types, and that's our technology organization. And the changes that we've made at at, uh, resulted in a very

Promising portfolio of technologies that we see some significant potential.

And and our early in the stages of deploying those and getting results, we we've talked about on that slide. The fact that the lightweight profit that we shared.

Continue in parallel to develop that. So that work, the early evidence that we're seeing, which frankly...

From an external standpoint will be very difficult to see given the size of our business there and, you know, the how early we are in these deployments but uh that has led us to uh, have growing confidence that the projections that we have passed passed. 2030 is an upward vector and we'll continue to grow. And, and frankly.

We're still and I would tell you the technology organization is very committed to.

Delivering on, um, doubling recovery, if not more. And I I think that's that's going to be within our grasp at some point in the future, not there today. But I really like the work that the teams doing, and the fact that they now own that that challenge,

So your point then is given that you need capabilities. That does that

create opportunities for, um,

You know the 1 plus 1 equals 3 and I say it absolutely does. I think, you know, it is a function of finding the right resource base, the base, the acreage that we can deploy that technology on and then these other criteria that I just went through with Devon. And that's I think a huge opportunity for us.

we've also got unique, um,

Uh, the technology that we're deploying in the lubricants business, we've also got unique innovations in the chemicals business. So, you go across the portfolio; our technology organization is, frankly, driving developments across our whole portfolio of businesses that will lead to better performance.

And our base case assets and then potentially open up uh, different types of opportunities for integrating, um, acquisitions.

Darren.

You bet. Thank you, Neil.

The next question is from Doug Leggit of Wolfe Research.

Uh, good morning everyone. Thank you for taking my questions. Good morning Darren. Um, good morning, Doug. I I I hate, I, I hate to beat on the Parian, but I'm I'm going to ask the question again, but a little bit differently. Um, site, 7 suggests, you have a 20 year inventory.

Um, I'm not quite sure what the definition of that is. Is it today's production, or is it the 2.3? And in terms of sustaining the 2.3 by 2030, and of course, the hour is up until the right. My question is this.

Obviously, you don't have a treadmill in Perrym and it's going to be 40% of your production.

And you basically are a dividend company.

So you you're you're way it seems to us at least that you're you're pushing the company towards our skewing the company towards higher decline, higher sustaining capital, and presumably shrinking inventory life as you grow their production uh which is a big part of the free cash. Presumably contributing to your dividend. So how how do you think about that risk profile? Putting that much of a high decline asset into a long-term dividend visibility? Um, anchor to your stock?

Well I I think, um, Doug that the way we think about it is this is just 1 part of a big portfolio. Uh we've always uh been faced in the Upstream with the challenges of depletion and finding barrels.

To replace. Um,

The depletion rate in the production that we bring online. And so, that's not a new challenge for the company. We don't think the best way of addressing that challenge is by inventorying value.

Our view is that you get to strike the right balance between, frankly, the pace at which we develop. This is balanced with the progress we're making in technical developments and making sure that we.

Uh, give ourselves the time to develop technology to improve the capital efficiency and the cost to bring more on. So my my perspective is that we're going to see uh continued improvements and 1, our ability to uh the capital that we have to spend to access the resource and then 2, the recovery that we're getting with that capital. And so I think you're extrapolating from, I'd say a paradigm of today. Uh, our view is the Paradigm of the future will be different, but on top of that, it's uh, you're going to open up new space.

um, with these technologies that as we just talked about,

Provide inorganic opportunities, that's a critical aspect of this. It's we're going to open up new space where other other types of resource around the world will benefit from the technologies that we're tapping into and so it all comes back fundamentally to focusing on core capabilities.

Business and our expectation. And the challenge that we've given all of our businesses continued, cash flow and earnings growth.

And I would couple those two things. It's not good enough to grow cash flow without the earnings; that, to me, says you're just spending too much for the cash. So, our plans that we're putting together, the ones that we'll talk to you about in December and the ones that we're building, you know, beyond 2030, are going to drive towards this earnings and cash flow growth well into the future.

Explicitly comprehending the, uh, development plans that we have here in the Permian.

The 8, the 20 years of inventory that is basically the number of Wells, we're bringing on every year Wells to sales. So, how we think about that?

Got it. Thank you, Don.

Thank you, Doug.

The next question is from Steve Richardson of evercore isi.

Hey, good morning. Uh, Darren. I was wondering if you could talk a little bit about, um, some of the downstream projects, um, obviously you've had great success bringing on a number of these major projects this year, but, um, I was wondering if you could talk, maybe be able to listen Lessons Learned, um, you know, Strathcona, Singapore. Um, and then if you could also talk a little bit about, um, maybe some of your future growth Ambitions in Refinery, uh, in in, in refining. Um, you know, how do you think about the next wave of opportunities and are they as fruitful as what the last 5 years has proven, um, in the downstream specifically?

Sure, not... I appreciate the question. It is, uh, we've had, I would tell you, um,

Extremely good success in bringing up these large um product solutions. Projects, in fact, if you go back in time,

Historically, before we formed a centralized projects organization, we had very mixed results across the portfolio of bringing large projects online. And it was a function of the fact that we had distributed capabilities and weren't always.

Bringing the the, the best, uh, skill, set, and capability set to some of our hardest challenges with the projects organization that we've put in place. And then with the way we've reshaped the business and the Venture, uh, organizations that we put in there, there is

Tremendous. We've had tremendous success, uh, success in building these projects at very...

um, basically leading efficiencies Capital efficiency and amazingly have brought these projects on

in less time.

And with less um uh challenges than we've ever done in our history. And so I I'm extremely proud of how the organization has has brought some of these on the China chemical complexes by far 1 of the largest most uh complicated uh grassroot startups we've done for decades and we brought that up.

Record time, and I got on to production very, very quickly. I'm really proud to say I just found out this morning that...

The Singapore resid upgrade project has just produced, on-spec, based off.

Which if you remember that is taking resid bottom of barrel and converting it to lubricant Bay stocks which has never been done before. Brand new brand new new to the world technology at huge scale, very complicated process and organization, has success successfully brought all that online and got on great here. So really proud of what they're doing. And the the what we're seeing in all these is the opportunity to take very low value molecules, convert them into high-value, molecules and do it in facilities where we take advantage of the existing utilities and equipment that we already have there. So very low cost of capital incremental cost to Capital. That's I I would just say is the um,

um,

Formula going forward. And so my expectation is we look, you know, we've been concentrating, our Refinery of and Manufacturing footprint down to the facilities where we feel like we've got these integrated uh, capability sets that are making a variety of high value products. I would uh, count on seeing us continue to find Opportunities, to shift the production, make in those refineries and and move them up the value. Uh, curve get uh, dispose of the lower value products and bring in the higher value products. My expectation is that's where you'll see our investments.

Began to shift feeds and and produce more um, biofuels the floor emissions. We've got more opportunities to recycle plastic. So there's just a, a lot of things we can do with these facilities and it's been a, you know, we broke the Paradigm of thinking about these is transportation fuel.

Or or purely, chemical manufacturing facilities and just have started thinking about them as a manufacturing facility with deploy technology and what can we do? And what can we make with these things? And my expectation is, we'll continue to develop new products of higher value. I think the Lessons Learned is the project organization was a damn good idea and is delivering, and we were out really Allowed by taking that responsibility off the organization, we've allowed the businesses and the operations to focus on making. Sure we can bring these facilities up smoothly and quickly and get on grade, uh, quickly and frankly, all that seems to be working very, very well. So, um, we don't have a lot of scabs to pick at in that area right now.

Certainly sounds like it, thanks.

Thank you.

The next question is from Betty Jeng of Barkley's.

Good morning. Um, thank you for taking my question. I may be pivoting a bit to the low carbon businesses. Um, I, it's interesting to see the contrast from the big beautiful bill that, uh, between the roll back in the hydrogen incentive, but arguably enhancement enhancement in the carbon capture incentive. Just curious on your thoughts on. How do you see the low carbon business opportunity set and capex. Evolving versus what was laid out in the December analyst day and specifically on CCS um that 10 million ton per Anum is

No small fee. So as as uh the credit now is putting carbon utilization and sequestration at parody. Does that further open up the opportunity set for projects. Thanks.

Yeah, good morning, Betty. Um, so I think you know, the way we're you you recall, when we talked about the capex that we had, this base level of capex, we had the early stage, some of these major projects that were very early stage and are thinking, we kind of broke that level out and then we had this policy, new business broken out and the intent there was to really reflect

Uh, frankly, the challenge of predicting.

Uh, the the technology developments that we're putting into some of those, uh, projects. But then also the pace at which demand would pick up, uh, the pace at which policy would evolve. And so a lot of uncertainty in how we mapped out that that capex. And so we put it in that separate bucket. So that all of you would know that while we've got plans in place, they've got a lot more variables than maybe some of our traditional businesses. And so a lot more uncertainty that I would say, on the carbon capture side of the equation. Um,

You know, we've made great progress. The team has got a lot of additional opportunities in sight. I wouldn't say it's changed dramatically with the additional incentive or the parody. Our plans in the base case were to sequester them so bringing up the eor piece of the equation, doesn't materially change. Um the plans that we had in place there

But I think really good continued progress in a lot of interest in that space. And of course, we're very advantaged with this large scale. End to end transportation system and storage system. I think, you know, the good news is the administration is really helping with permitting. We're we're anxious to get the rose permit uh in place and then we'll have continued to add more sites, particularly as uh States get uh Primacy. So I think that business feels like it's in a good place and is on the front end of a growing demand profile for a technology and a carbon reduction opportunity that frankly and

In the portfolio. What could be done is some of the lowest cost in the country. So we we feel good about that.

so I I expect you know, that will the spending that we had in that profile will it was an aggressive Pace in the plan and I I expect we'll continue on that and

aren't looking a lot of big changes there, the blue hydrogen 1, which is obviously

As I said, in my prepared remarks, uh, not only from the fact that they've shortened the time to develop the industry, but it's, uh, you know, it's a product that's got an alternative in the market today. And so cost and the cost of production and the cost, and the price of the product is a big variable, with respect to buyers and many buyers are working their way through that, that, that number. And I would tell you today, that's

They say slit versus the original timing. It's a little early to tell but that's uh I think certainly a strong possibility.

and then I'd say the to finish up on, um,

on carbon capture piece of the equation, low carbon data centers, as you all know, huge appetite in that space, we are uniquely positioned that. If the, uh, hyperscalers want low carbon power and they want it in a, in a, uh, expeditious time frame where we're really the only the only available option to today and so we'll see how that plays out. I think, you know, there is some talk now of maybe gas first, uh, underrated gas, and then ultimately, uh, decarbonization later so that that may end up slipping, as well. We'll have to see how that, how that piece of it, uh, matures but the good news is we've got a a proposition that's available for the market and are working with all the serious uh players there looking at building, my data centers. And then finally, I would just say uh, on the lithium side of the equation, we're continuing to work the the lithium technology piece of the equation, very focused on getting that cost down and making sure that when we bring that onto Market, that from a cost to

Supply standpoint. We are very competitive uh, including uh, competing with the Chinese and that works going on uh, that may take longer than we had anticipated. Just to get our costs down, so that's how that portfolio shaping up. But again, I would just emphasize we recognize that when we talked about it as part of the plan. And uh, the reason why we broke that Capital out, so you could see the less certainty in that spend profile. Everything's still, I think we still see good value propositions there. But as I said in my prepared remarks, these things don't all move in a straight line. And so, I, my suspicions will see some of that moving around a little bit too early to tell exactly what that looks like. But as we update that and when we get into the Plan update in December, I would expect to give you uh, some more details on that.

Great. Thank you. Super helpful.

Thank you, Betty.

The next question is from Paul Chang of Scotia Bank.

Uh, thank you. Good morning. Um, Darren good morning. Paul. Excellent has always been a great technology company and in your preparing mind you talking about how, uh, the acting been and all the calls. Saving talk about 2030 and new technology. May you able to bring in, um, more opportunity and and beyond that. Uh, so from that standpoint, I mean, 2 of the biggest, uh, uh, rapidly. Advanced technology is AI and robotic. And so, can you know how much understand that? Uh, we are the biggest opportunity.

Ity for Exxon in those 2 area and how it will change your workflow processes or your ability, I mean are you able to do things that you previously will not be able to do? And that, uh, how much is the, uh, potential, uh, incremental, uh, benefit causing energy or efficiency gain beyond what you already building into your current Target that uh you could see. Potentially that is out there. Uh, and why that you think Exxon is better than other, you know, industry be able to, we need to take advantage of that. Thank you.

Yeah, thank you Paul. Well, you've touched on, you know, obviously a very uh, topical technology subject. And frankly the way that we've reorganized is really put us in a, a great position to take advantage of that new technology with a centralized technology organization, uh, and a, an organization that has information technology.

Married with the other traditional forms of technology. There's very close collaboration. Amongst that whole groups who are taking a very consistent approach across technology vectors.

As we think about them across the whole company, one thing that we're doing that I think differentiates us and will give us an advantage in this space is a corporate-wide ERP solution. Historically, our company had very fragmented systems across the different businesses.

That we have established over the years.

We have been in the process of converting all that into a corporate-wide ERP system, coming up with a consistent, uh, data architecture. So it's, you know, we will have a platform that makes, uh, all of our data across the entire corporation and all of our historical data basically available, uh, for um, use and, uh, AI-type applications. So I think we're going to have a systems construct that is very much aligned with what.

AI needs to truly make a difference at a corporate level. And I think we're going to have a access to a a data

A set of data that is far beyond what any other company in the industry has access to. So I think those will be 2 enduring advantages, uh, that will help us take advantage of the technology to, to find new and better ways of doing things. I will tell you that, you know, in this space, it's very early on the technology curve. We've spent a lot of time talking about how best

To, in this early stage, where resources are limited, prioritize the work that we're doing in AI. We have put the cost efficiency side as a second priority. We understand it's an important one and it will deliver value, but we think a bigger value lever is frankly on the effectiveness side of the equation. And so we're looking better at how we can take advantage of AI to, um,

Frankly, uh, make the products that we make at, uh, much lower cost, uh, and with much better performance parameters, um, find oil cheaper. You know, you can just kind of go through the list of things that we do to produce the products that we make, we think they're a coupled with the state that I talked about huge opportunities to approve upon that, that will be the first order of business. Obviously, as we Implement these things, we're finding efficiencies, but I would tell you in the first,

Uh stage of this the efficiencies we find is to free our people up from doing a lot of um lower value work and allow them to focus on higher value work. So we can bring more value to the bottom line and that's kind of the where we're at and that Journey. But we recognize it will be an evolution, we're at the early stage of that.

Evolution. We're being very thoughtful about how we approach this, and we're doing it on a corporate-wide basis. We're making sure that we take those limited resources and put them on the highest value opportunity set.

Thanks for the question.

The next question is from BRZ Bore with RBC.

Hi, thanks for taking my uh question. Uh, it was just a quick 1 on the uh, corporate cost guidance. Um, just noticed over the last few quarters. It's um, it's it's been creeping up um with you know, the 2025 Runway looks like it's about double 2024 levels. So just if you could help me understand you know, what is, driving that increase and how we should think about it in 2026, that'd be really helpful.

Yeah, barrage is Jim. Thanks for the question that uh the expense line you're you're referring to is driven. I think largely uh in 2025 by the very large slate of new projects, we have coming online

Uh, which is Darren has just walked through.

his, uh,

Very much, uh, on track, on schedule, and on budget.

The additional item there would be in DDNA.

Where, of course, this year versus last, we would expect a higher level of non-cash DD&A given the fourth year of Pioneer in our numbers and given the growth in our production volume and the same very same new project.

So I think to the extent going into 2026, we will revisit that uh as part of our corporate plan and the fourth quarter.

But to the extent, you know, additional new projects which would be more marginal next year compared to this and increase production which will drive that ddna. We we'd expect continued increase in line with our Activity Set and production level.

That said, an offset to our expenses is always our success and continuing on our path of realizing structural cost savings.

You know this year today, we've added 1.4 billion dollars to that. Total, uh, we expect to continue that to get to our 18 billion Target by 2030 off of 2019 basis. And we see that as effective and offsetting some of the increased uh, expense levels, which is largely activity driven.

Yeah, I would add to that, if you look at the, um, in 2019, our cash Opex and look at where we're at today. Uh, Exxon's energy cost and ex production taxes were actually still lower.

Uh, than we were in 2019 on our operating expenses. So we've offset all the inflation and all the growth that we put into the business with the, uh, savings that we've been driving here since since that time. So not sure anybody else could.

Give you the same track record that we've delivered in that space.

Yep. Thank you both. I I'll follow up offline. Thanks.

Thank you.

the next question is from Jean and salbury with Bank of America,

Hi. Good morning. Um, since Liberation day, there has been a massive influx of interest in US LNG Contracting. Uh, and it looks like many more us projects. May move forward, uh, versus initially anticipated.

Do you view this as a structural shift in the market? And does it affect I guess, either your interest in getting into more us LNG or the timeline for your pre-id, International LG projects.

Yeah, good morning, Gina. I, uh, the short answer is no. Uh, I think the way I kind of think about this is the tariffs and, you know, the...

frankly, the the countries that sign up are going to sign up for, uh, energy that meets the demand for their economies on uh, and unless the Tariff

Agreements result in, you know, a step change in economic activity. The demand that is out there around the world is going to be driven by the fundamental, you know, base economy and economic activity. And so this is the way I'm thinking about it: how does that demand get met, and from what sources of supply does it come? And so,

I'm not sure that and, you know, we haven't seen all the details of it so haven't done all the math here, but my initial reaction is, you know, what we're going to do is see trade flows, may be changed, but ultimately the world's round, um, and there's still a level of demand that has to be met and there's still, um, sources of Supply that can meet meet it. So I don't know that it changes the rate or Pace of how much new

um, Supply comes on given the demand that's out there, for, for us in particular, you know, we tend to, um,

contract up.

The sales for the capacity that we're bringing on, and so if you look at what we're doing in Pop 1 or Mozambique, as we develop those projects, we're at the same time, our LG organization is securing sales outlets for those. So that when we FID those projects, we have secured sales that are linked to crude. So, we've got a good understanding of what the economics are going to look like and what the optics are going to look like. And so these short-term things don't really.

Impact, how we think about, you know, the long term fundamentals. And these long-term Investments that we're making

Very clear. Thanks Darren.

You bet. Thank you.

The next question is from Jason gableman of TD Cowen.

Yeah, hey morning, thanks for taking my question. Um, I wanted to ask on Guyana production and at the corporate update in December, you talked about lower production and capacity due to, um, you know, production falling off Plateau levels, can you remind us when we should start to see, uh, that production Plateau, start to come off? Um, and then also remind us, um, activities that you're pursuing to arrest those declines. That that we should be on the lookout for

Yeah. Yeah, I know this has been something that we've gone back and forth on. I, you know, the organization what we said was we're going to have 1.7 million, uh, barrels per day of gross capacity by 2030. And that we thought our production would be about 1.3 and that was reflecting, the best, um, estimates of kind of how declines are working in the steps that are being taken. I would just tell you as a planning basis based on our experience in history, that's a reasonable basis to project what we're going to see. But I would also tell you that um there's nobody on that guy on a team.

That will be satisfied, uh, without, you know, not keeping our boats full. So there's a lot of work around infill Drilling and how do you, you know, optimization and so and, you know, the they're never going to completely offset. The, the physical nature of depletion, but there's a lot of effort going into it, and I say that.

To really I guess defer on answering the question which is I don't know the answer to the question. We have a plan we've shared that plan with you with respect to our production levels, these are the capacity but the organization is looking for every opportunity. They can to um beat that and frankly I'm betting on them.

Understood. Thanks.

You bet.

The next question is from Arun jom of JP Morgan.

Kbd, um, you know, per day versus name plates, uh, at 220 and 250. So I was wondering if you could talk about some of the debottlenecking efforts, you've you've been doing there and if you hear that as a sustainable run rate and maybe just a follow-up, is we have seen output at the Lisa 1 ship, you know kind of come down. More recently in that 1:30 to 1:40 range versus call. It 160 kbd in 20 2024 and thoughts on you know on an infill program to maybe sustain the rate back at back at at full capacity there.

yeah, so I think um on the the broader question around the effort the organization goes through to

Really make sure we're taking advantage of the capital that we put in. You know, obviously have a design basis; you work through what you think it's capable of delivering. And then, as you get it up and running, you've got our technology organization, operations organization, all very focused on making sure that we're maximizing the value of the capital that we put in the ground there without compromising any of the...

Necessary integrity and safety parameters. They’ve done a really good job with that. We frankly do that with all our facilities around the world.

I think with the concentrated, the focused, uh, technology organization that we now have, uh, that's a big.

Big um Aid in doing that. So my view is we're going to continue to see that with every new project that comes on. I would also tell you that as we find those deep bottlenecking opportunities and we think they're applicable to the next project, we build that into the basis,

So that we have a clear understanding of what capital is needed to deliver on the volume. And so we're continuing to update the bases, the investment, uh, in the design, based on what we've learned through the debal necking and then obviously, you've got new kit and the team get started at it again and we develop like, so in theory, you ought to see less. Um,

Capacity creep with time because we keep building that in. But what counter the counter set to that is the innovation of the organization and their desire to continue to demonstrate, um, you know, maximum use of the capital and so those 2 are kind of in competition with 1 another

and, uh, again I would bet on our organization winning that race and continuing to deliver, uh, the bottlenecking opportunities as we go. Go forward, but we give you guys the design basis, that's our best estimate. And then we hope for the upside based on the capability and quality of the folks that are getting. After that, every, every every hour of every day with respect to, I don't have any data on on, at least a 1. So I can't answer that specifically.

I mean, I could, I would say, is on a macro basis. Our expectation is you’ll see some of that with.

You know, natural decline, that's 1 of the reasons why we've got this difference out in 2030. And so, uh, the teams are always working at development plans, nobody's satisfied to have spare capital on the ground. So there's a lot of work going on to make sure that we uh maximize the utilization of the kit we've already invested in. That's that's the cheapest.

That's the highest margin. Barrel is the one that you bring online with capital. It's already in the ground.

Great, thanks.

You bet.

The next question is from Ryan Todd of Piper Sandler.

Good. Thanks. Maybe a question on on the chemical side. Um,

You're earnings have been fairly resilient to the bottom here. Even with lower margins sequentially, this quarter. Can you talk about what has worked? Well, including the contribution that you're seeing from the China chemical complex. Um, and then maybe your thoughts on on where the uh, chemical Outlook goes from here.

Yeah, well, I mean, I started back in and worked forward. I think, you know, clearly, there is really good demand for chemical products around the world, but a lot of supply is chasing that demand, which has led to these.

Uh, very challenging margins that that you see kind of everywhere and that are challenging companies in the industry that my expectation is going to be with us, uh, for longer than anybody would like. And um, we've got to basically either capacity has got to come off which we're seeing some of that, but that's usually slow to happen. And then demand's got to grow. And if it grows faster, we'll get out of the hole that we're in that, much faster. Frankly, we don't, we don't count on that. As a strategy, we've never banked on calling the market as a basis for running the business.

Our focus has really been on making sure that when we're in these bottomless cycle conditions that we've built the business and we've invested in the projects that, um,

To be, I think we feel pretty good about where they are giving the margin environment that we're in, and Visa V our competition. So, and I think, you know what's Driven that is, uh, a lot of focus on the design of the kit that we put in place.

Feed flexibility that we have and the ability to optimize feed stock to to maximize the margin on any any 1 day. It's obviously the locations that we've picked and the structural advantages associated with a feed availability is the high value products that we have been uh purposely focused on and growing and continuing to upgrade production to get to the high value products. That's a, a huge driver here and then we've taken a ton of structural costs to how the business, very, very focused on. Um, making sure that, you know, we're spending only what we have to, to continue to grow the value and to, to move the product. And so those things and we worked on that even when margins were very high. I can I can tell you that at the time.

Uh, the business was very focused on getting more efficient with the view that ultimately, the Market's going to come back around. We'll, we'll end up in a long period. And so, those things are all paying off, uh, hugely and it's a, it's a tremendous credit to the people in that business, their ability to upgrade.

The feed stock and upgrade the products to high value products and do it at lower cost. That is a, that's a real hattrick there that a lot of organizations struggle to accomplish. But uh, the chemical business that we've got and the people running it, have done an excellent job.

In that space with respect to China. I would just say you know we're still in the early days of starting that up. Um we feel good about the production and as I said earlier, it's come on real real. Well and we're basically selling into that market, but that will be we're we still haven't got it running up in full rates and when you got that kind of capital in the ground, you need to get full utilization. So I would say that's

That's a continuing journey. And my expectation is by, by the end of this year and getting into next year, will then be up running full and that will be contributing at its full potential.

Thanks for the question.

The next question is from the Alistair sign with City.

Health. Thanks very much. Good morning. Darren. Good morning.

What if I could return to to the very first question on on m&a? Because it's quite an important. Uh comment. I think you made and and I'll take your point. The volume is not a criteria.

Um, you know, do you feel limited by scale? And I'm trying to ascertain whether you're sort of talking about bolt-on transactions or something larger, and your perspective. Thank you.

Yeah, no scale, obviously is, um, important. But, but, uh, it's got to be the right kind of scale. And I think, you know, what, the point I was trying to make is if you're going after,

Volume for scale.

And you're paying for that volume, then you really aren't doing your shareholders, you're not creating any real advantage.

Uh, and you're not creating any value for your shareholders. And so, uh, while it may help from a

A scale standpoint if you can Leverage.

Um,

You know, integrate that organization into your existing operations and find, you know, significant efficiencies.

But beyond that, in our view, that always should be minor to the opportunity set to actually create some unique value, and that's really what we're focused on. So I'm not saying I want to discount the value of scale; I just think from a value creation standpoint,

You often pay for that. Uh, and so, uh, what we're really looking to do is say where can we uniquely contribute? So that what we bring to the opportunity results in an outcome for both sets of shareholders that is more than either one could achieve independently. That's, in my mind, the magic of successful acquisitions. And what we're looking for,

Hey, Alison here. Just uh, to add to that a lot of interest in this topic this morning.

Uh, we set out as you know, in December a plan through 2030.

To grow earnings by $20 billion and cash flow by $30 billion. That's a flat price margin, just for the avoidance of doubt.

That plan doesn't reflect, and it certainly doesn't rely on any M&A. So this is certainly an opportunistic, uh, additional category.

That's a good point. Thank You. Darren and Jim. Thank you.

We have time for 1 more question. Our final question will be from Lloyd, burn from Jeffrey's

I was wondering if you can just run through kind of

How you're thinking about North American gas today? I mean, you have a lot of vertical integration already.

And maybe it goes back to initial question, but would power ever fit into that? And then maybe, uh, just any comment on Golden pass. Taking first commissioning, gas would be great.

Yeah sure. Thank you Lloyd. I think uh, again starting with the end of your question, golden pass. I uh really good about uh, how that uh, that organization that venture has recovered from the bankruptcy and the progress that they're making on. Um,

The construction, and we still expect them to deliver.

Um,

first gas sometime the back end of this year or early next year. So that's kind of in, in that border border at year end. So, uh, but I feel really good about that progress and the and how that, that group has kind of rallied around and come together and recovered from The Challenge that the bankruptcy. So I don't think we've changed any of our outlooks with respect to what we've communicated there before.

Uh, more broadly on your question about power. We're we're not, you know, that's in my mind.

Uh, developing a demand sink for gas. Um, is not really a

A value driver for us. And and if you look at our capabilities set, I don't think when we look at what we do and what we do well and what we can do, uniquely Power Generation, Um, isn't on that list, we're certainly capable of doing it. And in fact, we've done it all over the world and many of our facilities to enable

the things that we do that, we where we think we create, uh, unique value. So not, we're not interested in a powergen business. We have talked about low carbon data centers and

Having a power aspect to that. Uh, that's really an enabler to, uh, the carbon capture and storage. We're interested in and data centers, not from the power standpoint, but for our ability to decarbonize and to the extent that these hyperscalers won't decarbonize power. And that that was really when we introduced that in December and started talking about, it was a function of a stated commitment by many of the hyperscalers to, uh, reduce their emissions while at the same time, trying to aggressively grow the data centers. And so with that construct or that um, objective statements, we thought we could bring a solution set that would facilitate that and do it at the lowest cost available uh, in the marketplace uh, to today and in the time frame that they were looking at,

That's why we're interested in the low carbon data centers. Obviously, power is a piece of that, but if there's no...

Decarbonization that goes along with that, or no potential decarbonization that goes along with that. I wouldn't see us getting into that business.

Great makes sense. Thank you.

Thank you. All right. Thank you, Lloyd. All right, thanks everybody for joining the call, and thanks for your questions.

We'll post the transcript of this call to the investor section of our website by early next week.

Uh, that concludes today's call. Uh, hope everyone has a good weekend.