Good day, everyone, and welcome to this Exxon Mobil Corporation third quarter 2017 earnings call. Today's call is being recorded. At this time, I would like to turn the call over to the Vice President of Investor Relations & Secretary, Mr. Jeff Woodbury. Please go ahead, sir.

Thank you. Ladies and gentlemen, good morning, and welcome to ExxonMobil's third quarter earnings call. My comments this morning will refer to the slides that are available through the Investors section of our website. Before we go further, I'd like to draw your attention to our cautionary statement shown on slide 2. Turning now to slide 3, let me begin by summarizing the key headlines of our third quarter performance. ExxonMobil earned $4 billion in the quarter, bringing year-to-date earnings to $11.3 billion. Earnings rose 50% from the prior-year period, as commodity prices improved and business performance strengthened. All three business segments delivered solid results, generating cash flow from operations and asset sales that exceeded dividends and net investments for the fourth consecutive quarter. These results were achieved as the company worked to safely bring our Gulf Coast manufacturing operations back online following the devastating effects of Hurricane Harvey. In addition, we continued capturing attractive opportunities across the value chain from securing high-potential exploration acreage, to logistics investments, to expanding chemical capacity in growing markets. I'll highlight these items in more detail later. Moving to slide 4, we provide an overview of some of the external factors affecting our results. Overall, global economic growth was modest in the quarter. The Eurozone and Japan experienced slower economic expansion along with the U.S., which was negatively impacted by hurricanes. In China, economic expansion remained steady compared to the previous quarter. The commodity price environment was mixed, as crude oil prices increased, but natural gas prices were flat to down. Global rig count increased slightly, driven by higher activity in North America. Refining margins improved with stronger global distillate demand while global chemical commodity margins softened, driven by increases in feed and energy costs. Turning now to the financial results on slide 5.…

Thank you, Mr. Woodbury. And we will first go to Doug Leggate from Bank of America.

Thanks. Good morning, everyone. Good morning, Jeff.

Good morning, Doug.

And, Jeff, the capital expenditure year-to-date continues to look quite right relative to your guidance. So I wonder if you could just speak to if whether you really expect a catch-up at the back-end of the year and also maybe the $25 billion indication you gave for 2018. I guess what's at the back of my mind is that the Permian is a very low-cost offset to whatever you think the portfolio decline is. And it seems to us your CapEx flexibility is a lot better than perhaps your guidance suggests?

Doug, as you said, our year-to-date expenditures on CapEx is trending lower at this point, but we still have our guidance at $22 billion. You may recall that our objective is to go ahead and close the transaction for the Mozambique Area 4 acreage before year end, and that's still the plan, and that was about $2.8 billion. At the same time, we have also ramped up some activity in our unconventional business. And, of course, we've got the Brazil transactions that we just consummated. And all of that really leads us to the view that the guidance is appropriate.

To be honest, I didn't – go on, go on, I'm sorry.

Looking forward into 2018 and thereafter, of course, we'll go ahead and provide an update before 2018 gets there. But our plan is still – and I wouldn't assume that our CapEx is linear over that timeframe. And I think we showed $70 billion to $80 billion over 2018 to 2020. But it is going to be in the general ballpark of about $25 billion plus or minus. But like I said, we'll go ahead and provide an update here early next year.

So I didn't mean to interrupt you, Jeff. But just to be clear, first of all, I didn't realize that Mozambique had not yet closed, so that explains it perhaps. But the $25 billion number next year also include acquisitions?

Well, Doug, we tend to leave a little flexibility in the budget to pursue opportunities that come up. But we'll give you – if there's something that we believe is fairly close and certain, we typically would include it. But if it's not at a point where we believe it's going to close, we typically do not.

Okay, thank you. My follow-up is – I'm not going to be too predictable here, but is Guyana, your comments on Turbot. I guess my understanding is the rig stayed on location several weeks after you disclosed the result. One wouldn't expect you to do that on a small discovery. So I wondered if you could speak to what you're thinking in terms scale of the greater Turbot area. And maybe an update on how you're thinking about the coincident timing of multiple phases in Liza, Payara? And I'll leave it there. Thank you.

Yeah, sure. Well, again, as you would expect that we are very pleased with the Turbot discovery. We do plan – as I may have indicated previously, we do a plan going back and drill a follow-up well in 2018. The important message on Turbot is that it did confirm a new play, different depositional environment, and there's still a lot of work to be done. It's early days in order to assess it, but there were a number of follow-up plays in this area that allows us to go ahead and better define and potentially go ahead and assess. As you go forward, to your second question about the subsequent developments, what I would tell you is that obviously, we're very encouraged by the results in Guyana. We had previously given you a range of about 2.3 million to 2.8 million barrels of recoverable resource. Obviously, the Turbot results puts us towards the higher end of that. And we will certainly, as we better define Turbot, we will certainly refine our resource range. But given those results, we have had active development planning for subsequent phases and progress. I would say given the significant exploration success to date that we are considering at least two more phases, Phase 2 and Phase 3, for Guyana. And we are also considering higher processing capacity for the ships. Now, of course, as we continue our parallel exploration program, that will be integrated into our development planning efforts, and things may change. But very positive progress and certainly a very important component of our portfolio going forward.

Okay, Jeff, I'll leave it there. But I just wondered if you would give us some idea as to when you would expect to FID the subsequent phases. And I'll really leave it there. Sorry for the extended question.

I really don't have – I certainly appreciate the interest, Doug, and I really don't have a timeline at this point. We're looking at all the various options, but given the progress we made, I mean, you can appreciate with the Phase 1 development, that was a best-in-class five year from discovery to startup, and the extent that we can continue to capture the, if you will, Design One Build Many concept, we want to keep on a fairly good pace going forward. Okay?

Thanks, Jeff.

And we'll now go to Doug Terreson from Evercore ISI.

Good morning, Jeff.

Good morning, Doug.

Around this time of the year, companies often reassess strategy and pay incentives to reflect changes in competitive and corporate governance environments. And on this point, ExxonMobil has historically emphasized returns on capital employed and free cash flow and shareholder distributions, and these metrics have very strong correlations to total shareholder return, which is obviously a good thing, especially in relation to some of the growth metrics. Simultaneously, ExxonMobil's stock is flat versus a decade ago and relative performance versus energy peers is mixed. And so that begs the question whether a change in the mix or weightings of incentives is needed or whether a more challenging peer group, which might include S&P 500, as a peer has done, might be beneficial to shareholders, too. So can you comment, Jeff, on how the company thinks about these issues given the performance of the stock over the past decade? And how important this topic is internally in the grand scheme of things?

Doug, as we've talked in the past, I'll just reinforce to the broader group that it is very important. And the fundamental principle for our executive compensation structure is to tie a large component of the compensation to the same performance that our shareholders will experience. So we have one of, if not the longest, incentive programs in terms of vesting. And the -again, the – that whole ultimate compensation is driven by how the stock will ultimately do. As you know, we are in a business that has very long cycle times on returns because of the magnitude of the investment. And we want to make sure that we hold our executives to the decisions that they made over a long period of time. So we have a very large part of the compensation that is performance-based, that is tied directly to the share's performance. As you said, there are other parameters that the board considers, and return on capital employed and safety performance are two of the seven key criteria.

Yeah. No, you definitely seem to be using the right metric, so I just wonder if the weightings could be reset or what have you. But anyway, so – I also have one other question, Jeff. You guys announced a pretty meaningful asset sale, if I read this correctly. Can you talk about how it affected the published earnings number of $0.93 per share in the quarter?

The – you mean the overall asset proceeds of...

Yes. Yes. Was there any gains and losses we should know about that were meaningful?

Yeah. So, overall, from an earnings impact, it was actually a quarter-on-quarter decrease.

Okay.

A quarter-to-quarter decrease on earnings by about 300 – just over $300 million.

Okay.

On the overall proceeds, in the release, it was about $850 million. And a lot of that in the third quarter was really associated with the receivable that we had due in Papua New Guinea.

Okay, absolutely.

Okay?

Okay, Jeff. Thanks a lot.

All right. Thank you, Doug.

You're welcome.

Our next question comes from Evan Calio from Morgan Stanley. Evan Calio - Morgan Stanley & Co. LLC: Good morning, Jeff.

Good morning. Evan Calio - Morgan Stanley & Co. LLC: Maybe another strategic question to start. Peak oil demand driven by (32:59) penetration has increasingly captivated investor attention, and it does represent a medium to longer-term challenge. I know that you expect on your macro work to see demand growth for decades yet. Has the risk of peak oil demand altered in any way, or how is that considered in your gating process for both Upstream and Downstream projects, especially given the depth in your portfolio?

Evan, this is a very important question and one that probably can take a lot of time to describe. But for us, it really starts with the annual update of our energy outlook. That is fundamental to providing us the insights around our business strategy and our investment planning. If I very quickly summarize that oil demand is primarily driven by three components: light-duty vehicle consumption, heavy-duty consumption and petrochemicals. And what's really driving that growth are the latter two: petrochemicals and heavy-duty consumption. Right now, there's not a sufficient alternative to replace those energy sources because of the energy intensity requirements. Now our energy outlook assumes on light-duty vehicles that we will reach a peak in gasoline demand and come down, and that's driven by two things. It's driven by efficiency of ICE, of internal combustion engines, as well as greater hybrid and EV penetration into the marketplace. So the bottom result of all this is, is that we do look at variations in the peak or in the EV penetration. And if you look at our forecast right now, we have by 2040 the fleet is about 6% EV. If you were to increase that by 50%, that would have a liquids demand impact of about 0.5 million barrels per day. So not substantial when you think about overall oil demand of over 100 million barrels per day at that point, but certainly, something that we keep a very close look at as we think about our research and development activities, as well as building the strategy. And then a key element of what we have been doing in this area is, and you've heard us talk about it, is how we are making strategic investments today in order to upgrade those gasoline molecules into higher-value products, like distillates and lubricants. Evan Calio - Morgan Stanley & Co. LLC: Great. Appreciate the color. Second one on the U.S. onshore bases. Exxon is one of the fastest accelerators here, growth you've gone from 16 to 25 rigs and four in the Permian just since mid-year, and your plan is here to add another 10 by 2018. I guess, particularly as it relates to the Permian, are you seeing any deterioration in equipment or completion crew quality that is being highlighted by some smaller operators? And are you able to fully mitigate or offset some of those pressures given your global sourcing advantage?

Yeah. No, that's a good question because any time you come off a very low cycle like we've just been through, you have to be very mindful of the crew qualifications and the equipment capability. But remember, Evan, that even in that low cycle, we maintained a fairly active rig program in the onshore U.S., and that is because we want to maintain that learning curve benefit and we want to make sure that we are taking full advantage of the market at that point. So therefore, as we ramp up, we've got a very strong fleet of service providers. As we add additional rigs, clearly, the partnership that we've got with our service providers, they understand what the minimum standards are because what you want to avoid is all that rework associated with execution, shortfalls in quality – shortfalls in quality performance. But we have not – there is nothing material that I would point to at this stage, but it's something that you've got to watch very carefully as you go into a ramp-up phase, especially in areas where there's a lot of activity. Evan Calio - Morgan Stanley & Co. LLC: Great. Makes sense. Thank you.

And we'll now go to Phil Gresh from JPMorgan.

Yeah. Hi, good morning, Jeff. Just first question, I just want to clarify the comment on the asset sale gains in earnings. You mentioned that quarter-over-quarter, but could you give us the absolute number? I know Downstream – we didn't have the gains from last quarter, but what was the absolute Upstream gain?

And you're asking for in the quarter or quarter-on-quarter?

In the quarter on an absolute basis.

The absolute gain was almost $80 million in the quarter, and most of that was in the Upstream.

Okay. Got it. Thank you. Second question is on the CapEx that was asked about before looking towards the longer term. You were talking about $25 billion plus or minus in a given year. And I think when I asked about this last quarter, you did seem to suggest maybe it'd be a bit more of a linear path lower and then kind of ramping in the out years. Is that still how you think about it, or will 2018 be more in that $25 billion plus or minus?

Yeah. Phil, I think it's probably best to wait until we get to the next phase of communication around our forward investment plans. I mean, it's going to be in the – where we are in 2017 to around that ballpark. But as you know, we picked up a number of very attractive new assets that we're going to get after right away. And that needs to be integrated into our forward investment plans.

Okay. Got it. And then you made a comment that you will not be doing buybacks to offset dilution. I think in the third quarter – I mean, it tends to be lumpy it appears, maybe if you can just comment on that and the decision not to do that.

Yeah. So there's two components. One is the purchase of shares to offset dilution for our benefits plans and programs, and that is lumpy. That happens usually I believe in the first quarter timeframe. The second component of that is our buyback program. And as we've talked previously in capital allocation, the way we think about it from our sources of funds, the first things that are being funded are our dividends and our investment program. And if there's any cash left at that point given that the corporation does not want to hold large cash reserves, it's at that point that we will look for what the next best thing is. And maybe if we have some debt maturing, we'll pay that debt down. But on a quarterly basis, we'll make a decision on whether we go ahead and buy back some shares. And I'll say, Phil, that decision is a function of number of factors. One being the current financial position of the corporation, as I said, both our CapEx and dividend requirements, as well as what we see in the near term in terms of the business outlook, but it's a decision that ultimately is made on a quarterly basis.

Okay. I will leave it there. Thanks.

Thank you.

And we'll now go to Roger Read from Wells Fargo.

Thanks. Good morning.

Good morning, Roger.

If we could come back to the Permian, the comment about 10,000-foot average laterals now going to 12,500 or at 12,500 and then the idea of 15,000, can you give us an idea of maybe what you've done pilot-wise to this point that gives you confidence that's the right direction to go just because as you go longer laterals, more things can go wrong, and since you do have the acreage, maybe an idea of the performance you're seeing out of those longer wells relative to, say, 10,000 or less?

It's a good question, and you're really honing in on a key element of our overall strategy. I'll start with it's probably becoming much clearer to the group what the value chain strategy that we've put in place for the Permian. We've built up a very large contiguous acreage position that really allows us to leverage the strength of our technology capability. For us, I'll be real clear. It's not about just how we execute. It's all about how do we extend best-in-class performance. Clearly, what we're trying to do is leverage our full technological capability to go ahead and achieve the lowest unit cost and then capturing the highest value from the barrels through the full value chain, ultimately to the customer. Okay? So what have we done is we have recently drilled several wells in the Bakken on 3-mile laterals. The first one has been completed now. These are very long wells. We want to make sure that we get good inflow performance across the full lateral length. We drilled the first well in Delaware at 12,500 feet, and that well is just coming on right now. And we're getting ready to drill a 3-mile lateral in the Permian as well. And we've got a very focused research effort on this from the reservoir all the way to the hardware, and we're really looking at how do we make a step change in the ultimate development here.

Okay, great. Thanks. And then just as a follow-up, back to the earlier question on CapEx, if we make the adjustment for the – let's just assume the Permian acreage was the big change Q2 to Q3, it implies that your overall CapEx was fairly stable Q2 to Q3. And then you have the Mozambique in front of you. Is there any other – other than the comments about higher drilling in the Lower 48, anything else that we should think about that steps up as we go into year end the first part of 2018?

Let me just correct you. On the increase in the third quarter, that was primarily driven by closing the acquisition for Jurong Aromatics. Okay?

I'm sorry. I was talking Upstream CapEx only.

Oh. Okay.

So $2.8 billion went to roughly $3.2 billion, and the math works out that that's the Permian. Obviously, you've got plenty of things moving around, but I was just trying to understand. If that is the case, then the step-up, even if we adjust for Mozambique, still has to be fairly significant in the latter part of this year. And then I was just wondering what else was going on as we walk our way into 2018 other than an increase in Lower 48 activity?

Probably the biggest piece is the increase in the Lower 48 drilling, predominantly in the unconventional. I'll just remind you, we also have four major projects underway that a couple of them are getting close to a startup stage, so it's primarily project spending, it's the ramp-up on unconventional, and then our base work program in the Upstream.

Okay, thank you.

And we'll now go to Sam Margolin from Cowen & Company. Sam Margolin - Cowen & Co. LLC: Hey, good morning.

Good morning, Sam. Sam Margolin - Cowen & Co. LLC: I'd like to get your assessment of the LNG market right now, considering it ties back to a couple of the acquisitions you made over the past year-plus. And you did mention that some of the capital ramp is going into those new assets. The market has been really quiet over the course of all of 2017, not a lot of new FID activity or reports of buyers really looking to accelerate commitments. And I wonder how much of that is due to the wall of supply that's coming on between now and 2018? And if you think that can pick up as the second half of next year emerges, or if this quiet period might last a little bit longer and how that might affect some of your timing around those new big global gas assets you have?

Sam, again, I'd start with our energy outlook, where we've got gas growing from 2015 to 2040 at about 1.5% per year. And a pretty sizable component is our LNG business, and that's growing probably about 2.5 times over that timeframe. Now, just like any type of commodity, we're going to have periods of oversupply and periods where there will be insufficient supply. And I think everybody's well aware there's a number of projects that have come on that are ramping up. Others will be starting up, and that's likely to provide a period where we'll have oversupply to, say, the mid-2020s. But as we think about the very large, very diverse portfolio we have that potentially could be LNG projects, we're moving all of them forward at the pace consistent with where the project is in its maturation timeline. And the objective is to move all of them into a final investment decision. But we recognize they're not all going to go at that same pace. The key here, the very important message here is, we've got to be on the far left side of the cost of supply curve. We have got to be the most cost competitive out there in the market in order to attract that demand growth that I was talking about. Sam Margolin - Cowen & Co. LLC: Okay. And I guess – so the follow-up then, I guess, because this hasn't been apparent, by the way. The market has progressed over the past year or so. Do you think that there will be opportunities for you to get commitments from buyers at the scale that you might need to FID some of these project, even if the market at that time is oversupplied? Are you seeing from your customers a look out into that post-2022 timeframe when the market is more balanced and they can sign up commitments out in the future, or do they need to see more near-term evidence of tightness before they move?

I think it's a mix of both. I think the buyers are looking far out. Obviously, they need that supply. They need to make sure that they are well positioned from their standpoint to competitively capture that supply. I would just remind everybody that we have underpinned our past LNG project funding decisions with long-term firm contracts. And we all know that the market continues to evolve, adding more flexibility in commercial terms on shorter durations. So while our objective remains to secure commercial certainty to underpin these large funding decisions, it's more likely that projects in the near future were based on a hybrid of sales, although that doesn't diminish our interest in locking in long-term firm contracts. Sam Margolin - Cowen & Co. LLC: All right, thank you so much.

Thanks, Sam.

And we'll now go to Paul Sankey from Wolfe Research.

Hi, Jeff. There's a little bit more Permian disclosure that's being referenced. When I look at the data that you've given here, you added 22,000 operated acres, more than 400 million oil equivalent barrels. So would I be mistaken in assuming that you spent about $400 million in the quarter based on the statement that you paid about $1 an oil equivalent barrel? And would I be even more mistaken if I said that that was about $18,000 an acre, or is that pretty much inferenced?

That's an implied cost. And the reason I say that, Paul, is because the five transactions we're talking about were both cash and trades. So there were a number of non-cash trades that were in there as well.

Okay, all right. That's fine. And then it's interesting that you're talking about these much longer laterals, the 10,000 feet. And then you're saying that you're going to be drilling a 3-mile lateral in the Permian, but you've actually just completed one in the Bakken. I think that's what I heard, correct?

That's right. We actually drilled – I think it's four in the Bakken, and we've completed the first one.

Great, thank you. And then if I look at the slide, and this is obviously slide 15, the implication of the very impressive growth forecast that you have is that you have all the acreage you need more or less to achieve the very aggressive volume growth that you're going for insofar as you identify the acreage that's going to provide that. Again, is that too much inference, or is that a fair sort of...

No, Paul, that's a good clarification. The volume that we have on slide 15 is really based on existing acreage that we have. Now, as I said in my prepared comments, one of the things that we're doing in a lot of our transactions is a build on – they bolt on to existing acreage that we have. So directionally, I can share that one of the strategies is to continue to grow that contiguous acreage.

Got it. Okay, that's helpful. Thanks a lot. And then Jurong was reported in the press to be a $1.7 billion sale. I think that's public information. Is that about the number? I'm trying to get obviously to the clean underlying CapEx.

Paul, unfortunately, we're bound by a confidentiality agreement on that with the sellers.

Understood, Jeff. And then the last one for me was that you did mention that you've been trending lower in corporate and other expenses, but there will be a bounce in Q4. I just wondered what that was about. It's bit of an arcane question for you, but thanks.

As you know, corporate finance costs have a lot of variables in them. But I would say that probably the largest part of it, Paul, will be the absence of some of the favorable items that we're seeing in this quarter.

Fair enough, thank you.

Thank you, Paul.

Our next question comes from Ryan Todd from Deutsche Bank.

Thanks. Jeff, maybe just a couple quick ones. In the Permian disclosure that you have there, you talk about the planned increase from 20 Permian rigs to 30 by year-end 2018. Is the assumed pace of activity growth the same as what was implied in the 2017 Analyst Day earlier this year?

I would tell you that it's picking up a bit. And I will just – just make sure I want to clarify for everybody that these are operated rigs. This does not include non-operated rigs that we participated in. But the volumes itself is our total net production. The – but the rig counts – I mean, it's comparable to what we had originally planned when we detailed out the basis for the acquisition, and that's what we shared with you in the March Analyst.

And how do you think – when you look at over that multi-year period, how much does commodity price figure into that? I mean, you tend to kind of – I know you are executing the long-term plan, which is based on value creation. But as you think about potential upside and downside risk to that plan going forward, how much does the commodity figure in versus if you think of things like efficiency gains and cost inflation or inflation?

Certainly it's a factor, but we're working on both sides of that equation. We're not only working on the realization being mindful of it as we do the economics, but we're also working on the overall capital invested and operating costs driving that cost basis down. And you may recall in an earlier call, we provided a snapshot – I think it was in the Analyst Meeting, a snapshot of the economic resiliency of the existing portfolio. And at $40 flat rail, which is a reasonable lower end here, we had over 5,500 wells in the Permian and the Bakken that generated at least a 10% rate of return. And a large part of them – let's say about a third of them generated actually better than a 30% rate of return. So very good economic resiliency, but don't think of that as being static because we continue to work on dropping that cost. And you remember, last quarter I was sharing with you all that while our average unit development cost is $7 per oil equivalent barrel, we are trying to push that down further to – as far down as $5 per barrel.

That's great. Thanks. And then maybe just one on Brazil. I appreciate the disclosure you have in the slides on Brazil. Can you maybe talk a little bit about your thoughts on the acreages that you've acquired, and how it would compare possibly to the upcoming pre-salt round, which I think is going on today in blocks, which I think you're potentially involved in? And then maybe what are your requirements from a drilling and seismic point of view over the next few years and how it more broadly fits into your global exploration portfolio?

As you probably pick up from my prepared comments, we're very excited about the acreage position that we have. In fact, the bid round that's going on right now, I guess it's been announced now that ExxonMobil won the high bid on North Carcara as well. So this has really allowed us to get into a very prolific basin that we've been looking at for some time. You're all very much aware that this is all about value for us, and we've been very mindful of making sure that while it's got a very strong resource endowment, we needed to do it on the terms that it was competitive with our existing inventory, and we're very pleased with that. So, obviously, when you think about how we high-grade the portfolio, it's all about through our acquisitions and our exploration program, bringing in resources that go to the very top of the portfolio and then through our divestment program, monetizing the resources at the very bottom. And our full intent, as I said in my prepared comments, to get right after the Brazil acreage, we've got some really strong partners that we'll be working with. Well, we've already got some seismic – as I said in the prepared comments that we have some good sense of what's out there we're going to get right out to in 2018 3D seismic and then shortly thereafter, drilling. So very pleased with where we are. The potential that we've got and yet another high-quality deepwater resource that we'll bring our expertise to.

Perfect. Thank you.

Our next question comes from Alastair Syme from Citi.

Good morning, Jeff. It's a topic that you mentioned, the Brazil award that has just been announced. I'm going to guess Exxon shifted a lot of the deepwater focus in recent years from West Africa to South America. Do you think the focus on the other side of the Atlantic margin is geological based or regulatory or really a combination of both?

Well, I mean, we keep a very broad brief of where there is high-value potential in the various basins. And really when you think about how we have structured our exploration program, it's primarily focusing in two areas. One being a focused exploration program on high-quality resources where we have existing operations that we can quickly leverage to get those discoveries on production in a very fast timeframe. And then the second area is new big, high-value potential that's play-opening. In Brazil, very strong geology, the government has evolved the fiscal basis and it's got good fiscal – competitive fiscal terms. So that's where – how we are focusing it on – on the exploration program.

My follow-up, Jeff, on the offshore is we're seeing a lot of deflation, and some of the recently awarded rig contracts have been getting pretty low. Are we at the stage yet that ExxonMobil is getting concerned about the financial viability of the supply chain that you see? And if so, what are you trying to do about it?

Well, I think you do address an issue that this industry has had to deal with over the cycles. When you get into low period, as I referenced earlier, the service sector starts getting down to their cost structure and we have got to find – continue to find those win-win solutions that allow the producer to achieve an attractive return, and at the same time keep the service sector healthy. One of the areas that I think ExxonMobil contributes is, we develop very long effective relationships with our supplier sector. And they fully understand that – the amount of activity that we can provide is a function of the value they add to the investment decisions. They have a tremendous amount of capability and innovative concepts that they have brought to collaborate with us in terms of providing new solutions for some of the more challenging resources. And I think we have a mutual objective here, and I think most of the service sectors understand that as well.

Okay, thank you very much.

Thanks, Alastair.

Our next question comes from Paul Cheng from Barclays.

Hey, Jeff. Good morning.

Good morning, Paul.

Simple really quick clarification. Earlier in your presentation when you were looking at the Permian expected growth, say, up to 500,000 – 600,000-barrel per day production by year 2025, is that based on the rig program at 30 by the end of next year and then steady, or whether that's based on a continuing incremental growth in the rig program?

It's really the latter. We would see some further growth in the rig program.

And at this point, that is too early for you to comment on what is the growth rate of the rigs that you may have in mind?

No, and really it's an interesting question because remember, these rigs are getting much, much more productive and how we drill these wells are getting much – much more efficient. I mean, I would expect over this timeframe that we will see much greater efficiency as we continue to progress this development as we have historically. I mean, if you look the rig counts right now in the Lower 48, while they're down more than 50%, that's not an equivalent reduction in overall activity because these rigs are much, much more productive today than they were back at the peak periods.

Sure. Second question, that in the press release and you also mentioned the half year impact is $160 million. Just want to clarify, is that represent only the cost associated for the repair or this is also include the lost opportunity costs?

Yeah. It includes two components. It includes the expenses as well as the lost volume. So that $160 million as we had in the press release and as I talked about previously equates to about a $0.04 per share hit.

And on Turbot, the mix – where are you going to drill next year, is that a place or to the Turbot discovery itself, or are you just going to test on the good (01:04:12) Turbot area other structures?

It will – on the existing resource, it will be a delineation of the existing resource, there's some – anytime you drill – remember this is a large area with a very small wellbore that's gone through it. These are generally stratigraphic traps. And it's about making sure that we test these multiple traps that we've seen in these accumulations. So it's going to have several objectives as we go forward. And then, of course, there in the general Turbot area, there are several other prospects that given now we have now proven the play, we need to go ahead and integrate those learnings into our forward rig schedule.

Okay. And final one. The 22,000 net acre, the five transaction that you did, you mentioned there's about $20,000, so that's roughly about $440 million. So should we assume that the increase in – from the second to third quarter in the U. S. CapEx is all related to this because I mean if you back out $440 million, it actually – well, it means that CapEx in U.S. actually slightly down sequentially?

No, actually that's not the case, Paul, because as I responded to Paul Sankey earlier, that is a combination of both cash as well as trades that we made.

I see, okay.

Because there were some non-cash transactions there.

But you still have a net increase of 22,000, right, or that the 22,000 is the final transaction, which is not a net increase?

That's a net increase of 22,000 in the Permian.

Right. So it is a net increase even now that you have the trade, you're still – no, but that's fine. We can get you off-line. Thank you.

Yeah. Don't think that the trade is – involved is just Permian assets.

Understand, thank you.

Okay.

And we'll now move to Blake Fernandez from Scotia Howard Weil. Blake Fernandez - Scotia Capital (USA), Inc.: Hey, Jeff. Good morning. It's late in the hour, so I'll just keep it to one question. I wanted to just shift gears a bit to our European gas, last quarter that came off pretty dramatically and it looks like it's remained depressed. I don't know if you could just help us kind of ways to think about modeling that going forward. I know seasonally you would typically have an uptick into 4Q, but any thoughts on that potentially returning at some point to next year or so?

Yeah, there really are two components on the European gas. Obviously, as you already pointed out, seasonal demand impacts which would turn around in the fourth quarter or start to turnaround in the fourth quarter. And then the second, it was about – I'm thinking it was about a 90 million cubic feet a day impact associated with the regulatory cap on the Netherlands, as well I think, Blake, there was some downtime in the UK. Blake Fernandez - Scotia Capital (USA), Inc.: And just so I'm clear on that 90 million a day, is there any outlook on that potentially changing into the future? Or should we just view that as pretty much out of the volume mix going forward?

Well, we are in – or NAM is in active discussion with the government. I really can't speculate on how that will play itself out over time. Blake Fernandez - Scotia Capital (USA), Inc.: Understood. Thank you.

Okay.

And we'll now go to Jason Gammel from Jefferies.

Well, thanks. I just wanted to come back to the point that you're making about enhancing Permian across the integrated value chain. Obviously, you've been building a big Upstream position and already have the Downstream position on the Gulf Coast. Can you talk about appetite for owning midstream assets? And I guess to put them in the context of the terminal acquisition at Wink. What would you consider strategic that you would want to own with obviously your low cost of capital, and what are you willing to contract out?

Jason, thanks for highlighting that because that's really the key message that we wanted to convey as it relates to our Permian. It's just not a pure Permian play, it's the full value chain from resource all the way to molecules to the customers, whether it would be refined products or chemical products. And as you heard in my prepared comments, one of the things that we're looking and we continue to look at is, where is the value leakage across that value chain, and do we add value in that? And if we do, that's what will play into our strategy and how we capture incremental assets along that value chain. On the Permian, we've got a very strong Gulf Coast manufacturing facilities. We have a very strong Permian resource position, we pick up these flexibility in a logistic system through the pipeline transactions that we've made. We've now got this oil terminal. It gives us control and value capture. We will continue – like we do in all of our assets, by the way, we'll continue to look at how can you further strengthen that value chain proposition that we or our shareholders are capturing a majority of the value there. Now, there may be some things along that value chain that we just don't add value to, and we're okay with someone else providing that missing piece in the value chain and getting value for it. But I think you get a better line of sight of what we're doing in terms of our value chain management.

Okay, thanks a lot, Jeff. And just the second one, if I could, please. Now that the Jurong transaction has been completed, can you give us some idea of how to think about the incremental profitability from the Chemical business? And I know we've got the PX volume and we can take that times margin, but can you just talk about some of the synergistic benefits that you get from that transaction when you combine it with your existing Singapore assets?

I think probably the best guidance we've got from me for a quantification is what you just said in terms of the additional aromatics that we are picking up from it. And remember, there's still about – it's about 65,000 barrels a day of fuel coming from that facility as well. But, of course, the value proposition for us was not only the added value we will get from what the market currently values the asset from because of the unique contributions we think we bring to it, but also the synergies between the Jurong Aromatics site and our big Singapore manufacturing facilities. Probably the biggest part of that is logistics, leveraging the logistics capability of that site for the full integrated site, but we have not put numbers out there externally on that.

Okay. I guess I'll just make some guesses then. Thanks, Jeff.

Biraj Borkhataria from RBC Capital Markets has our next question.

Hi, thanks for taking my question. I had two. First one is on Mozambique, could you just talk through the steps from now until closing and any significant things you need to close it by year-end, and if there's any risk to that slipping into 2018? And the second one is just on the Carcara acquisition that was announced just now. In the press release, from one of your peers, there were some contingent payments. I was wondering if you could just detail whether these are just related to the oil price or anything else that you can highlight. Thank you.

Okay. On the first one, on Mozambique, I mean, it's really simple in that we need to get a number of approvals and we are still waiting for those approvals. As to the possibility that it's spilling into 2018, there's always a possibility. But our objective right now, Biraj, is to go ahead and conclude this, this year. On Carcara, I'm not sure I know what you're really referring to. I'm going to have to punt on this one because I'm not sure what you're referring to.

Just the press release from Statoil says they'll get $800 million from you guys and then a contingent payment of $500 million. So I was wondering what that $500 million was contingent on.

Okay. Yeah. Biraj, I don't – we're bound under the confidentiality agreement. I really can't talk about the commercial terms.

Okay. No worries. Thank you very much.

Theepan Jothilingam from Exane BNP has our next question.

Good morning, Jeff, just a couple of questions. Firstly, you have been very active in the asset market in Mozambique and Brazil. I was just wondering how you see some of the potential offset by being a bit more active on the disposal side, particularly given some firming of prices there? That's my first question, actually. Thank you.

Theepan, a key element of our asset management program, as I said earlier, is to go ahead and monetize those assets on the bottom of the portfolio, importantly where others see value that is incremental above what we expect that we can capture from the continuing operation. We are always considering whether we can go ahead and complete that type of a transaction. So if you look at, for instance, the last five years, our total proceeds from asset sales were over $20 billion. So as I've said before, anywhere from $2 billion to $4 billion a year, we've historically went ahead and sold. But it is very focused on making sure that we're getting the most value from each one of our assets. And if we get the right value proposition, we'll go ahead and pursue it. But it is a key element of our ongoing asset management to the various business lines.

Great. And then the second question I had was – and I come back to the recent asset transactions, and you talk very much about having control in the Permian. I'm interested in terms of the moves both in Brazil and Mozambique to a certain degree where you've got less control. Is that a trend that we can expect more of outside U.S. onshore that you're prepared to take more non-operated positions?

I would say fundamentally, if we can operate, we feel like we've got the greatest value proposition to bring. But that doesn't make that an exclusive criterion. If we think that there is a good value proposition and the co-venture – the structure of the co-venture is certainly very much willing to go ahead and allow us to contribute to the maximum extent, that's what we're going to try to go ahead and set up. But the key here is the value capture proposition and the operatorship, and the qualifications of those operators and our ability to make sure that we can influence the outcomes is all incorporated in that value proposition.

Okay, all right. Thanks, Jeff.

Thanks, Theepan.

And we'll go to Brendan Warn from BMO Capital Markets.

Thanks, Jeff. I'll keep this to one question considering the timing. Just on Baytown, you've obviously reiterated you haven't had too much in terms of production impacts because of Harvey. But can you just give us an update on the steam cracker and the development project there in terms of just impacts, delays, and are there any carryover to 2018, and just if there's going to be a slower ramp-up to 2020 impacts?

So just to recap, the whole project included a new steam cracker at Baytown for 1.5 million tons per annum. And then currently, we've invested in Mont Belvieu for the derivative units two 650,000-ton metallocene polyethylene trains. On the latter part, the first train has started up and the second train is starting up now. So we have started generating a revenue stream for that project. On the steam cracker, the site was temporarily shut down due to the hurricane, but the construction activities resumed once all of our assessments were completed. And right now, the plan is that we would get to mechanical completion early in the part of next year and then production by the middle of the year.

Okay, I appreciate the update.

You bet.

Anish Kapadia from TPH has our next question. Anish Kapadia - Tudor, Pickering, Holt & Co. International LLP: Hi, Jeff. The first question was on Golden Pass. So I was just wondering how does that fit into your U.S. integration strategy. And has the decision by Qatar to increase its LNG capacity significantly shifted your partners' focus and I suppose your own focus in expanding production in Qatar rather than going ahead with Golden Pass?

Anish, it's a good question. As I said earlier, we've got a number of opportunities in which we can invest in order to capture that LNG demand growth. And we're progressing them all concurrently. Now, Golden Pass obviously is another key aspect of the value chain within North America gas. We're the largest producer of North American gas, so we continue to progress the opportunity there. As you know, after a fairly extensive period of time, earlier this year, we received the Department of Energy's authorization for export of LNG to non-FTA countries, which was an important milestone that happened in April of this year. Now we're focused on bringing together the remaining elements of the project, that being finalizing the technical definition as well as the commercial details for a final investment decision. But it is one of many opportunities that we're progressing. Anish Kapadia - Tudor, Pickering, Holt & Co. International LLP: Okay, thank you. And then I had another question. I just wanted to go back to the CapEx once again, and sorry to get back to that. I just wanted to clarify. So the way I understand the CapEx for this year, it seems like on an organic basis, if you strip out the acquisitions, it's approximately $17 billion, I think going up to $25 billion next year on an organic basis. So I just wanted to try and bridge what that gap is. So where does the incremental $8 billion come from? And the acquisition that was announced today from Statoil of approximately $1.4 billion, is that included also in the 2018 spend? Thank you.

A couple points. One is that, remember, when we set up a budget, there's a fair bit of flexibility. And fundamentally, what we're trying to do is live within our means. We're very focused on being selective in our investment program, maintaining our capital discipline. And there may be some things that we'll decide to slow down and replace it with an opportunity that comes in. So it's not necessarily that it's 100% fixed and all of the specific budget allocations are going to be executed with whatever we came up with in our planning process. I'll give you a good example, and I think I've said it before. Jurong Aromatics specifically was not in our budget for 2017. And we still believe that the budget guidance that we issued almost a year ago is still staying appropriate for sharing with you all. So there are some things that will move in and out. And as a result, there is a level of change-out – or dynamic change-out going on in that forward projection. If you go back to the 2018 and 2020 forward look, we shared with you in the analyst presentation the key components that were driving those capital expenditures over that timeframe, and that's probably the best guidance I've got for you at this point. Anish Kapadia - Tudor, Pickering, Holt & Co. International LLP: Okay, thank you.

You're welcome.

We'll now go to Neil Mehta from Goldman Sachs. Neil Mehta - Goldman Sachs & Co. LLC: Good morning, Jeff.

Good morning, Neil. Neil Mehta - Goldman Sachs & Co. LLC: Jeff, we've talked a lot about the asset deals that you've done here, whether it's InterOil, Bass, the 22,000 acres, Jurong, Mozambique. But can you talk a little bit about the corporate M&A market? Now historically you guys have said that the U.S. E&P sector, for example, was not appropriately valued or you weren't able to identify attractive opportunities at the right price as that sector has underperformed or other corporate deals that are out there. Has that bid/ask started to close from your perspective?

I'd tell you, Neil, I would respond this way; that we're not limiting any of our potential opportunity base. So we'll keep open to where there may be attractive opportunities for us to pursue. Remember, there are two things you're trying to achieve here. One is, you're trying to – in anything you pick up, whether it'd be an asset acquisition or a corporate acquisition, you either want to get material synergy benefits or being able to add value above what the market values that asset at or both, ideally both. So we keep a very full look, we keep the aperture very wide on where there may be opportunities. But as you've seen here in the recent past, primarily where we see the greatest value is on asset acquisitions. Now, some of those assets were held by a single company, and that's what they had, so it ended up being one and the same. But right now, what's most attractive to us has been these asset acquisitions. Neil Mehta - Goldman Sachs & Co. LLC: Got it. That's great. And then the follow-up, Jeff, is just on your Canadian oil sands business. The ramp at Kearl has been taken a little bit longer than anticipated a few years ago, where do you stand there, and just the latest in terms of the potential sanctioning of that, recognizing that Imperial is also on a position to comment on this?

Clearly, I'll just say upfront, I mean, the Imperial organization has really worked Kearl very hard and making some really great progress. I give them a lot of credit for the progress that they're making. This is a long-lived asset, and we see the long-term value in it. It has not ramped up as we would have expected. But we have made, as I said, very good progress in reducing the cost structure and very focused on improving the reliability. And we're bringing the full capability of the organization to bear on this. And remember, this is just not the asset, we are thinking about the full value chain benefits as well. But I have the utmost confidence that the organization is going to continue to grow value on Kearl. And – but I think job number one right now is to get that reliability up. So we've got some work to be done there. And we are not shy about it, but we are very optimistic about where we are heading. Around future investments in the oil sands, I think I'd characterize it this way that – and, Neil, you've heard me say this before in that we are really building this business to be durable in a low-price environment. That means we've got to get the technology to the point that it is going to get the cost of supply down that regardless of where we are in the price cycle, that we're generating a very attractive return. And I will tell you, we've made great progress in terms of in situ technology and capability. And we're very encouraged by that progress, particularly in SA-SAGD. And – but I would say that we still got a little bit further to go. Not only are we at a point where we are able to substantially increase the overall return, but also reduce the cost, as well as reduce the environmental footprint. And that's important for us as we go forward. But we've got a very large acreage position, it's important that we get this thing right, and the organization is very focused on it. Neil Mehta - Goldman Sachs & Co. LLC: Thanks, Jeff.

You bet.

We'll go to Pavel Molchanov from Raymond James. Pavel S. Molchanov - Raymond James & Associates, Inc.: Yeah, thanks for taking the question, guys. When your guiding to CapEx for 2018, and you talk about the $25 billion number, what's the breakdown of that between organic and acquisitions? In other words, are you baking in credit for cash outlays on acquisition activity for next year?

Good morning, Pavel. As we talked earlier, I mean, probably the best guidance I can give you right now would be going back and look at how we've segmented our investment plans between 2018 to 2020 in the Analyst Meeting. As I said earlier, if there is a transaction that we believe is very close to reaching agreement, we will typically go ahead and include it in our forward-looking investment plans, like Mozambique was for this year. But other than that, we keep some flexibility in our budget. And remember what we're trying to do here is, it's all about the value proposition. We're going to live within our means, we're going to manage our CapEx appropriately. We're going to keep our financial flexibility, but we are not going to forego opportunities. We've got significant financial capability to go ahead and pursue opportunities when they come up. And I think that is a unique attribute of this corporation, is that when, particularly in a down cycle, we can go ahead and respond fairly quickly when those opportunities come up. And let me say, a lot of them come up and they come up very quickly. You have got to be able to respond, and we've got the financial capability and the expertise to go ahead and accrete value on a lot of these things. Pavel S. Molchanov - Raymond James & Associates, Inc.: All right. That's it for me. Thanks, guys.

Thanks, Pavel.

And our next question comes from Rob West from Redburn. Rob West - Redburn (Europe) Ltd.: Hi, thanks for having me on the call. In Brazil, you talked about competitive fiscal terms. And what I wanted to ask you is, are those fiscal terms competitive with something like the Permian? And really what's behind the question is, as you look at new resource opportunities now around the world, be it Mozambique or Brazil or other ones, how much do the fiscal terms have to compete with the fiscal terms in the Permian to make you want to invest?

Yeah. Rob, think about it a couple of ways. One is, is that I think most resource owners understand that they are competing globally for investment dollars. And the key aspect of that is not only the quality of the resource endowment, but also how competitive the fiscal terms are. Are they globally competitive, are they transparent and are they stable and predictable, I mean, fundamentally? That's what's going to set for a very attractive investment climate. And where you have seen significant investment is generally tied to how those fiscal terms have supported an international investment program. Now, for us, Rob, it is not a kind of either or that we've got to do the Permian or we've got to do something else. As I said a moment ago, we've got sufficient financial flexibility. For us, it is the full package, the resource quality, the fiscal terms and our ability to go ahead and get to market from a value chain perspective and capture value. So it's always that value proposition. So we are making the trade-offs on the full value proposition to make sure that we are meeting our fundamental mission here, and that is growing shareholder value with accretive investments. Now, our portfolio is very geographically diverse, and there are some political aspects that we've got to tie into these investment decisions. And I think that's an attribute of the corporation that once again is very unique. Rob West - Redburn (Europe) Ltd.: Okay. So just the first part of that question was on whether the fiscal terms in Brazil are competitive with fiscal terms in Permian. I'm not sure if you missed that one or you can't comment on it. I just wanted to go back.

No, I really don't have anything to share on comparing and contrasting specific asset fiscal terms. Rob West - Redburn (Europe) Ltd.: Let me ask another one then. And one point you've made before that I think has been well made is that your scale gives you better long term-ism when it comes to procurement, and I was wondering. In 3Q 2017, was that the case in the area of pressure pumping, where it's pretty well known there have been some bottlenecks that have been constraining completion activity? And I'm wondering. Does your scale and long-term procurement in purchases in the Permian, did it help you avoid any of that bottleneck that you can share with us?

Let me respond to you in kind of a broader perspective is that, and it's very similar to what I said earlier, Rob, where developing these long-term supplier relationships is really critical to make sure that we're all in the same page in terms of the quality standards, the operating standards that we adhere to. And when we see cost pressures, we are very quick to react upon, okay, how are we building in the value proposition in our go-forward plans and how do we offset those potential cost increases with more unique alternatives. It might be something as we've seen very significant in the Permian, and that's technology application. So there's been some – in 2017, by way of example, there has been some inflationary pressures largely in the unconventional business. But we have been able to offset that with these cost reductions that we are seeing in our drilling program by way of example. Rob West - Redburn (Europe) Ltd.: Okay. The final one I wanted to ask you is on the San Patricio cracker that I think follows Mont Belvieu, could you just quickly give us a sense of timing on that? And start looking like that as a – something that you're going to really accelerate when Mont Belvieu finishes, or is it really longer term?

Yeah. So this is – it's independent of where the Baytown cracker is. This is a – again, a part of the value chain. For the broader group on the phone, this is a joint – a proposed jointly owned petrochemical facility that would be a 1.8 million ton per annum ethylene steam cracker, and then derivative units monoethylene glycol plant and polyethylene plant. And we have – as you pointed out, we've selected a site in San Patricio County. And right now, we're beginning – we've been working with our partner to begin the planning for front-end engineering and design work. So once we get to the point where we think we've got a good laid out plan, we've moved in the permitting phase. Once we get all the ducks in a row, then we'll make a decision on whether we'd move forward with funding. But it is very well positioned on the Gulf Coast to take full advantage of the feedstock that primarily would be coming from the Permian and the Eagle Ford. Rob West - Redburn (Europe) Ltd.: Okay, thanks for taking my questions. That's great.

Okay, Rob. Thank you.

We'll now go to John Herrlin from Société Générale. John P. Herrlin - Société Générale: Yeah. Hi. Just two quick ones. Regarding Guyana and Phases 2 and 3, Jeff, will this be a lot like Angola where every two years you roll out another FPSO system? I mean, I know it's still early days, but I'm just curious.

Yeah. No – John, good morning. Very similar. I mean, if you think about my comments, you really want to get into that manufacturing mode very quickly. If you've got the resource – obviously, we're going to continue our exploration program, hopefully continue to grow the resource. You want to get into that manufacturing process because that will help continue to progress that learning curve and reduce your overall cost. So I keep on thinking about it like the Angola program that we did on Block 15. John P. Herrlin - Société Générale: Okay, great. And then one question on Brazil. Since you're getting a little further away from the initial discoveries by Petrobras and all that, are you assuming that the pay zones are going to be carbonates or clastics? And that's it for me.

This is early days, and we've got to – like I said, we do have some of our own seismic that we are analyzing, and it's really going to be different wherever we are with the acreage that we've picked up. But in the outer Campos Basin, it's primarily carbonate pre-salt. John P. Herrlin - Société Générale: Okay, you've got a lot of experience in that, I was just curious. Petrobras certainly can use the help. Thanks.

All right. Thank you, John.

And there are no further questions, I will turn it back over to you, Mr. Woodbury, for any additional or closing remarks.

Well, lot of good questions this morning. I really do very much appreciate your time and your thoughts that you've put behind those questions. And, of course, we look forward to our communications – our ongoing communications, and we do appreciate your interest in ExxonMobil. So, thank you.

This concludes today's presentation. Thank you for your participation.