Roger Read : Yes, thanks. Good morning. Keeping with the upstream theme here, I’d like to dig into the, I guess call it a slight transition here, the high value-added or high margin liquid barrels, so specifically the comment, 100,000 barrels a day higher versus 2022’s gases declined or been sold, and the liquids have grown. But as you think about the change out to 2027, the growth in Guyana, the growth in the Permian, and we compare that to where you were, say in 2019, how do you think about the total value-added liquid barrels, the impact on margins, the impact on returns? What’s the right way for us to think about the transition of the company over roughly that eight-year period?
Neil Chapman: Roger, it’s Neil again. Let’s just park the Pioneer acquisition for a moment and just talk about our existing plans as Exxon Mobil. Back in 2018 and 2019, I talked about the strength of our developments that we had in the pipeline, and obviously they were headlined by Guyana and by the Permian. 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. If I outlook to 2027, we will go from something sub-65% liquids to something around 70% liquids in our portfolio in 2027, and 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 or to crude oil.
That’s a big transition but it’s driven by the quality of those resources, primarily in the Permian and Guyana, and we’re going to be adding onto 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. I’d just add one other comment – if you take the liquids and the LNG, which would take us to 85% liquids indexed in 2027, of the gas that remains, 7% of that is associated gas, so in other words gas associated with liquids production. 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 pre the Pioneer acquisition.
Darren Woods: I’d 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 businesses is focused on moving to the left-hand side of the cost of supply curve, so that we remain robust to any period in the commodity cycle and making sure that we’re positioned competitively versus everyone else in the industry. That drive over time to reshape the portfolio continues to move our collective production to the left and to lower cost, and then at the same time adding higher value barrels, we’re lowering cost and increasing revenue, and so that’s where the value game is getting played out. That’s the work that we’ve been doing and that’s the high grading that you’ve seen in the portfolio and the improvements in structural cost.
We mentioned at the top of the meeting that we’ve actually achieved the $9 billion in structural cost this quarter, third quarter, so a quarter ahead of what our initial plans were, and we expect to see more in the fourth quarter. 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. The whole strategy is around making sure that we have the best portfolio and 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 the strategy, and you see that playing out certainly in the upstream, but you also seeing it playing out in the downstream where we’ve been high grading our assets there and playing out in our chemical business, where we continue to bring on units that produce high performance products.
That strategy is manifesting itself in each of our businesses. Then I’ll just end on that same philosophy underpins what we’re doing in low carbon solution. As we build out that business and position ourselves for the long term, it’s making sure that every investment that we’re making, every value chain that we’re creating, that Dan and his team have a clear view about where that will sit in the cost supply curve, or you can think of it as the cost of abatement curve, and making sure that we’re going to be advantaged versus the rest of the industry.
Roger Read: Great, thank you.
Operator: The next question is from John Royall of JP Morgan. Your line is open, please go ahead.
John Royall: Hi, good morning. Thanks for taking my question. My question is on the capex. Could you maybe help us bridge the top end that you’re guiding to now for this year versus maybe the midpoint? It’s a tight range, so not super material, but just any color there would be helpful. 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 in Pioneer? Just anything on the moving pieces for capex next year would be great, thank you.
Kathryn Mikells: I would say nothing really unusual going on in capex. As you stated, it was a pretty tight range to start with, obviously with a 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 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 discussion later on in December, but we feel very good about our overall execution. As Darren mentioned earlier, we’re bringing projects online at a cost and schedule that’s typically within the top quintile, 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 our shareholders.
Darren Woods: I might just add to that, as we think about capex, we provide that range because we recognized going into the year that things move around a bit, and as we prosecute a plan that with time, we find additional opportunities as 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 it, we’re going to go after it. We’re not going to constrain ourselves artificially to a guidance range if we find an opportunity set; but to date, things are moving pretty consistent with where we thought we were going to be, and frankly as we look out going forward, continue to see a very consistent set of opportunity sets that we’re going to prosecute.
I think the one change that we’ll spend more time talking about in low carbon solutions is as that business matures and we establish, I’d say, an advantaged position, there are a lot of opportunities coming our way, so we’re working our way through those opportunities and making sure that we focus on the highest priority ones, the ones that generate the most value and are competitive in our portfolio. We’ll talk more about that as we get into the plan release.
John Royall: Very helpful, thank you.
Operator: The next question is from Jason Gabelman of TD Cowen. Your line is open, please go ahead.
Jason Gabelman: Yes, good morning. Thanks for taking my question. A lot’s happened in the past few months, but about three months ago, there was a handful of news articles about Exxon’s lithium endeavors. I just wanted to get an update on that. Are you still drilling in the Smackover for lithium, are you exploring potential processing unit there, and how have things trended the past few months? Do you expect that to figure into your growth plans here over the next five years? Thanks.
Darren Woods: Sure, I’ll take that. 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, go back to the fundamental of what are our key technology competencies and capabilities, and then what businesses lend themselves to those capabilities where we can carve out an advantage and produce the products society needs. 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, it’s focus first on what we can fundamentally contribute and bring an advantage to and therefore generate returns higher than the rest of industry, and then figure out how those advantages apply themselves to what the world needs.
