Neal Dingmann: Thank you Kathy.
Operator: Our next question is from Paul Cheng with Scotiabank. Your line is open, please go ahead.
Paul Cheng: Thank you, good morning. Neil, the industry in the Permian, whether it’s for emission reasons or for cost efficiency, seems to move and trying to electrify the operation as much as we could, can you share with us where is Exxon in that journey? How far are you in terms of electrifying your operation in the Permian, and when you’re comparing to Pioneer, I don’t know whether you have the information that you can share, and whether you guys are ahead of them or that this will be part of the $2 billion of synergy benefit, or that you’re going to do more aggressively on that, this is going to be on top. Thank you.
Neil Chapman: Yes, 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 rigs and we’re working on fracs. Right now, I think we have one electric frac out of six frac crews running in the Permian. This is all part of our drive to get to Permian net zero that we said we would get to by 2030. Our plans are in place for that and we’re on schedule for it. That program, it’s simple as this – you have to reduce methane emissions. We’re well on track with reducing methane emissions. We have no routine flaring in the Permian now. We’ve replaced over 6,400 pneumatic devices, so you eliminate or your reduce methane emissions, then you electrify your operations, and as I’ve just described, we’re long way down the road in terms of electrification.
Then we have to secure renewable electricity for those rigs and frac crews, and that’s the program we’re working on. In terms of Pioneer, I don’t have those numbers for Pioneer in terms of where they are on electrification, but what we have said is that we’re going to advance Pioneer’s target to go to net zero from 2050 to 2035, so 15 years sooner than anticipated, and that will follow probably that same protocol, that same process of reducing methane, electrification, and then securing renewable electricity.
Darren Woods: Yes, I would add to that, I think Scott and the team at Pioneer have been–this has been an area of focus for them, and I know they have worked hard to drive those down. The advantage that we bring is we’ve got a large organization, more resources. We’ve got a technical organization that has been leaning into this space and working broadly with the industry and other organizations to develop the technology to better manage methane. Neil talked about the central organization that we’ve put in place to kind of monitor everything that’s happening out in the unconventional space and make sure that we’re responding in real time to things that we’re seeing through this centralized operating center. Bringing the Pioneer portfolio into that center 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 a big improvement in 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 in to apply, and 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 to support what was already, I think, a very important focus for the Pioneer organization.
Paul Cheng: Thank you. Is the savings on your electrification is already built into that $2 billion synergy benefit?
Neil Chapman: Yes, in terms of the synergy benefits, as you know and we’ve talked about many, many times, 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 our plans going forward.
Darren Woods: Yes, I would say our drive to bring their net zero commitment forward by 15 years, we’ve also built that into our thinking around getting net synergies there, so we’ve comprehended the additional effort required to improve the emissions profile and bring their net zero ambitions forward, so all that’s netted with our synergy numbers.
Paul Cheng: Thank you.
Operator: The next question is from Josh Silverstein with UBS. Your line is open, please go ahead.
Josh Silverstein: Thanks, good morning everyone. On the Pioneer acquisition call, you had mentioned that the inventory of the combined companies in the Permian was around 15, 20 years. Was just curious how that may be split between the Pioneer asset and your Delaware asset, and does it contemplate the accelerated growth rate improves the outlying longer laterals or a potential 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.
Neil Chapman: Yes, I think Josh, it’s early stages. I mean, the numbers that we gave and that you just referenced in our initial release are based on our understanding. We’d certainly say that the combined resource for the two companies is order of magnitude 16 billion oil-equivalent barrels – that’s 15 to 20 years life. Most of our resource is, as you’re aware, is on the Delaware side. Obviously Pioneer is exclusive in the Midland side, so that’s the way it is. It’s based on our early assessments.
Josh Silverstein: Well, maybe if there was just any more details as far as what your split may be of that 16 versus what theirs may be.
Neil Chapman: Yes, I mean, they’re close, I would say in total. Exxon’s is closer to 9, Pioneer’s is closer to 7, is what I would say in total, but that’s based on our initial understanding.
Darren Woods: For the resource.
Neil Chapman: For the resource, yes.
Josh Silverstein: Okay, that’s it.
Operator: We have time for one more question. Our final question is from Sam Margolin of Wolfe Research. Your line is open, please go ahead.
Sam Margolin: Good morning, thanks for taking the question at the end. 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 the share repurchase in terms of percentage, and I know you’re issuing share for Pioneer but you’ve also got a pathway to a lot of upstream growth and then downstream is growing too, as we learned about in the product solutions spotlight. You’re running with sort of a significant operational cash surplus on a recurring basis, even before this growth, and so just wondering about your thoughts on dividend growth going forward and if we are through this period where you were tending the balance sheet and the portfolio, and now some of this growth will translate to sort of a dividend CAGR that is in line with the operations. Thanks.
Kathryn Mikells: Sure, so we have always said we’re looking to ensure we have a dividend that’s sustainable, competitive and growing. I think the increase of $0.04 to the quarterly dividend is very reflective of that. 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 was a really strong quarter, whether you look at earnings, cash, shareholder 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 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.
