And even in bringing these projects online, that takes a tremendous amount of focus and discipline from an execution standpoint. So that is job one. And then obviously the strategy, that is also an emphasis every year. It’s just, as we’ve always talked about, it’s really a function of can we find the right opportunities, the right equation that brings value to our shareholders. And if it’s M&A, it’s got to be one plus one has to equal three or more. If it’s a project, it’s got to be advantageous, it’s got to position ourselves on the very far left-hand side of the cost of supply curve. And so we’ve laid out what we know of and what we see ahead of us, certainly in the capital standpoint, but as the organization continues to execute and continues to look for ways to translate the strategy into bottom line value, we find new opportunities and then we don’t hesitate to go after those if they meet our criteria with respect to the advantages and they are within our ability to effectively execute.
So I wouldn’t say 2024 there’s any different emphasis than there was in 2023. The project piece of it, frankly that’s the way the projects have been developed and kind of the work that’s required to deliver those has led to that 2024 year of execution. But I wouldn’t read more into that than just the scheduling of the projects.
Bob Brackett: Very clear. Thanks.
Darren Woods: You bet. Thank you, Bob.
Operator: The next question is from Ryan Todd of Piper Sandler.
Ryan Todd: Great, thank you. Maybe if I could ask one, with the Denbury deal now closed, can you talk about what we might see over the course of the next year or two, particularly on the carbon capture business? Should we start to see announcements or notable signs of acceleration or efforts on that side?
Darren Woods: Yeah, sure. I think the Denbury acquisition, just maybe a slight update on that first is, we’ve closed it, we’ve been going through the integration process and frankly continue to be very pleased with what we see as the opportunities to integrate that with the work we’re doing around our Low Carbon Solutions business in carbon capture. So we see huge potential in terms of linking together all the opportunities to reduce emissions, high concentration emissions along the US Gulf Coast and along that pipeline system. So the team’s doing a lot of work around developing the business there, a lot of work with potential customers around how we can help capture their emissions, and a lot of work around the operations and improving and growing the capacity of that pipeline.
So all that’s ongoing. My expectation is, with time, when we — as we negotiate the opportunities with customers, we’ll see more and more deals that bring emissions into that pipeline. That’s certainly the plan. But I would tell you we’re very focused on building this business for the long term. If you think about what we’re trying to do there with respect to addressing the risk of climate change and significantly reducing emissions for third parties, that’s a business that doesn’t exist today anywhere in the world. We’re trying to make sure that as the first mover here that we establish a very strong foundation for business that we expect to be around for decades to come. And so my guidance to the team is while we want to move quickly to reduce emissions and to get customers and to grow the volume of emissions we’re reducing, we don’t want to do that and sacrifice the value opportunity here.
And so we’re striking that balance. And I think what you’ll see happen is, we’ll bring on customers and grow that business in a way that is value-accretive and generates the returns that we need for the capital in that business.
Ryan Todd: Okay, thank you.
Darren Woods: You bet.
Operator: We’ll go next to Biraj Borkhataria with RBC.
Biraj Borkhataria: Hi, thanks for taking my question. I had a question on gas realizations because they were just well ahead of, at least what we had modeled using the kind of rules of thumb and the portfolio mix you put out before. So is it just a case of the trading contribution coming into that number or is there something else driving that? And then just one quick clarification on the underlying cash flow from operations. Again, that was ahead of where the earnings beat would have suggested it would have been. So is there anything one-off in nature in the CFFO number that we should be aware of for 4Q? Thank you.
Darren Woods: Yeah, I’ll let Kathy address the cashflow thing. And I’ll just say from a gas realization standpoint, I don’t think there’s anything unique in terms of what was realized as we went through the quarter. Obviously, we’ve been growing our trading business and that is going to manifest itself and our results, we’re going to see that in our energy business, we’re going to see that in our gas businesses. So that will continue to kind of, and as volatility changes and opportunities in the market change, we’ll see that kind of ebb and flow. But we expect to see with time, a continued growth, structural improvement in the earnings with the work that we’re doing in the trading space. And then I think quarter-on-quarter we’re going to see changes in mix as we move across the quarters.
And so we’ll see some variation there. But I wouldn’t put anything structurally other than the trading work that we’ve been doing and to our realizations. And I’ll hand it to Kathy for any other comments on that and the cash flow.
Kathy Mikells: Yep. And so I’ll just speak specifically to cash flow from operations and I think you’re referencing the quarter but I’m happy to talk about the quarter and the year. Our cash flow from operations, if you look at the quarter was $13.7 billion. If you exclude working capital, we would have been at $16.9 billion. You’re mentioning a beat relative to the street, and so was there anything unusual going on? As I look at people’s models, I think sometimes they struggle to get depreciation and amortization right, so that’s the only thing I’m going to speak to. And when we have a quarter where we’re taking impairments, then we get an increase kind of in terms of a non-cash add back that flows through to cash flow from operations and we obviously took an impairment in the quarter. So that’s my best guess as to anything that might be nuanced. Otherwise, no, nothing particularly unusual going on.
Biraj Borkhataria: Okay, understood. Thank you.
Operator: The next question is from Sam Margolin with Wolfe Research.
Sam Margolin: Hello, good morning. Thanks for taking the question. I’d like to come back to CapEx if possible, just because, when the organization’s performing so well as it is, it feels like there’s always going to be opportunities to pull something forward or for people throughout the organization to kind of pursue their incentives and spend a bit more. And obviously this is something that’s been a topic in the industry for a long time. And so particularly like, as we look at your Permian results, it looks like your ‘23 wells are still improving and everything’s getting better. So I guess the question is, how do we think about this with respect to your planning when it feels like there’s always going to constantly be opportunities for you to add kind of nickels and dimes to CapEx to do some quick and high return opportunities? Thank you.
