Q3 2025 Earnings Call Transcript

Good morning, everyone. Welcome to Exxon Mobil Corporation's Third Quarter 2025 Earnings Call. Today's call is being recorded. We appreciate you joining us.

I am Jim Chapman, Vice President, Treasurer, and Investor Relations. I am joined by Darren Woods, Chairman and Chief Executive Officer, and Kathy Mikells, Senior Vice President and Chief Financial Officer. This quarter's presentation and prerecorded remarks are available on the Investors section of our website. They are meant to accompany the third quarter earnings press release, which is posted in the same location.

During today's presentation, we will make forward-looking remarks, including comments on our long-term plans, which are subject to risks and uncertainties. Please read our cautionary statement on slide two. You can find more information on the risks and uncertainties that apply to any forward-looking statements in our SEC filings on our website. We also provide supplemental information at the end of our earnings slides, which are also posted on our website.

I will now turn it over to Darren for opening remarks.

Good morning. Thanks for joining us. Last December, we reviewed our corporate plan under the theme of "A League of Our Own." The results we have delivered since then continue to support that theme. From the technologies we are deploying to the major projects we are delivering to the structural cost savings we are capturing and the value we are creating, our results are truly in a league of their own.

In fact, in the third quarter, we delivered our highest earnings per share compared to other quarters in a similar price environment. Let's start with Guyana, where we are breaking records with production of more than 700,000 barrels per day in the quarter. We brought Yellowtail online four months ahead of schedule. It is our fourth and largest development with a production capacity of 250,000 barrels per day.

Yellowtail was delivered in nearly the same time as previous FPSOs despite a 70% increase in facility weight from its higher production capacity and improvements in GHG performance. We also sanctioned our seventh development, Hammerhead, which is expected to begin production in 2029. Importantly, we are making a positive and growing local impact. Guyanese now make up over two-thirds of the country's oil and gas workforce, more than 6,000 people, with more than 2,000 local businesses engaged. In the Permian Basin, another advantaged asset, we set yet another production record of nearly 1,700,000 oil-equivalent barrels per day.

We also acquired more than 80,000 net high-quality acres in the Midland Basin from Sinakin Petroleum. The transaction provides control of drilling locations and opportunities to further deploy our technology to drive greater returns. It is another example of bringing our portfolio advantages to an acquisition, ensuring that one plus one equals three or more. In addition, during the quarter, multiple third parties published reports validating the benefits of our lightweight proppant.

Last December, we shared how we are using low-cost refinery coke as a proppant that penetrates deeper into fracs. This improves access and flow, which increases well recoveries by up to 20%. Wood Mackenzie reported that our proprietary proppant is delivering significant improvements in resource recovery, supporting our own results. They acknowledged that our upstream integration with refining operations creates a strategic advantage that is difficult for others to replicate.

That lightweight proppant is just one of many innovations we are developing to maximize upstream recoveries and grow the value of our unconventional business. This year, we expect about a quarter of our wells will use our new patented proppant, and roughly 50% of new wells by 2026. This, along with our cube development, pipeline of new technologies, and deep inventory of quality acreage, is why our Permian production continues to grow well into the next decade. This is an important point, as it clearly differentiates us from our competitors who are talking about reduced investments, peak production, or a shift to harvest mode.

In our corporate plan update in December, we will share more on our Permian success and how it is strengthening the value proposition of our broader portfolio. New-to-the-world technologies are also playing a critical role, albeit on a slightly longer time frame. In our product solutions business, we are making solid progress with new products based on our Proxima systems. This year, we are tripling production capacity.

At the same time, we are continuing to demonstrate significant value in use. With our Proxima-based rebar, we have demonstrated a 40% improvement in installation efficiency compared to steel. We have also introduced a new one-coat solution for marine cargo tanks that replaces the standard three-coat process. This cuts coating time in half, speeds up return to service, and delivers significant cost savings.

These performance gains are helping us penetrate large established markets in key segments, where we are building the foundation of a strong pipeline of opportunities. We have had significant interest in our Proxima battery enclosures from tier-one auto OEM suppliers, based on the fast production speed and light weighting provided by our product. In 2026, we have the opportunity to demonstrate the superior subsea insulation and installation characteristics of our Proxima products in the oil and gas sector on our own Hammerhead FPSO. Our rebar infrastructure opportunities are expected to yield approximately 20,000 tons of sales by 2027. Through our signed MOUs with Masdar and Goel Steel, investments in Proxima-based rebar manufacturing facilities will grow over the next two years.

This will allow us to scale quickly into these fast-growing markets. In Singapore, we successfully started up our resid upgrade project and are converting low-value fuel oil into high-value lubricant products and diesel using a proprietary catalyst at scale. Project utilization is currently around 80%, ramping to full capacity by year-end. With our new-to-the-world base stock on grade and delivered to customers, we have also progressed the development of our revolutionary battery anode graphite that can deliver breakthrough improvements in battery performance.

Early feedback from leading auto OEMs and battery producers has been promising. Their testing shows the batteries can be charged 30% faster, provide a 30% increase in effective range, and last up to four times longer. This quarter, we also announced the acquisition of key assets from Superior Graphite, a leader in the graphite and specialty carbon market. Working with their team and incorporating their technology, we will develop and scale a differentiated graphitization process that has higher throughput, is 50% more energy-efficient, and significantly lower cost than available industry alternatives today.

We also commissioned our newest supercomputer, Discovery Six, developed with Hewlett Packard Enterprise and NVIDIA, delivering a step change in exploration and seismic processing. This is the world's seventeenth most powerful computer. Seismic processing that used to take months now takes just weeks and is already having an impact in Guyana, enabling more than a billion dollars in potential value capture from increased resource recovery at our first six FPSOs in the Stabroek Block. Our longstanding focus on and investment in technical innovation is paying dividends.

When coupled with the capabilities we have developed in execution excellence, we deliver results that others cannot match. You have seen it this year with our global projects organization and the eight key startups we have highlighted to date, which include some of the industry's largest and most complex projects. Our Proxima systems expansion and Golden Pass LNG project both remain on track for startup around year-end, completing the last two of our 10 key 2025 startups. Together, these 10 projects establish an important foundation for our 2030 earnings and cash flow growth plans.

They are expected to drive more than $3 billion in earnings contributions next year at constant prices and margin. Before closing, I want to briefly touch on a new tool we introduced in the quarter to make it easier for our retail shareholders to support their company and vote their shares. In September, we introduced a first-of-its-kind free opt-in voting program for our millions of retail shareholders. Typically, only about a quarter of them, who own almost 40% of the company, vote at our annual meetings.

We think shareholder participation should be the norm, not the exception. Our program, approved by the US Securities and Exchange Commission, allows participants who choose to opt in to have their shares automatically voted to support management's recommendations. The program is completely optional, and participants can easily change their votes or opt out at any time. Since implementing it, we have been very encouraged by the positive feedback we have received, especially from other companies looking to replicate the program and make it easier for the voices of their retail shareholders to be heard.

This is just one more example of the work we are doing to grow shareholder benefits and value. Stepping back, looking at the quarter and reflecting on the year-to-date results, we feel good about the progress we are making. We are delivering on all the challenging commitments we made, consistent with our track record since the pandemic, and setting the pace for the industry. We are deploying innovative technologies that are delivering new-to-the-world approaches, processes, and products that drive industry-unique value.

We are transforming how and where we work to improve our effectiveness and deliver structural cost reductions that exceed all of our competition. We are defining the industry benchmark in project execution for schedule and cost on an unmatched number of projects. Most importantly, we are strengthening our competitive advantages in all aspects of our business to deliver earnings and cash flow growth now and far into the future. Looking forward, I am confident we will remain in a league of our own.

With that, we are happy to answer your questions.

Thank you, Darren. Before we move to Q&A, I have a quick announcement to share. Please mark your calendar for our annual corporate plan update, a virtual event this year, for Tuesday, December 9, at 9 AM Central Time. With that, we will move to Q&A.

Please note that we ask each analyst to limit themselves to one question as a courtesy to others. Operator, please open the line for our first question.

The question and answer session will be conducted electronically. If you would like to ask a question, please do so by pressing the star key followed by the digit one on your telephone. The first question comes from Neil Mehta of Goldman Sachs.

Yes. Good morning, Darren, and good morning, team. I just want to pick up on the capital spend point. You are indicating that you are going to be below the range this year, and of course, we will get a little more color on December 9 about how you are thinking about 2026. But could you talk about the moving pieces?

Is it about capturing the deflation? Is it about deferring investment, particularly around some of the low carbon solutions? How should we be thinking about the drivers of that?

Sure. Good morning, Neil. Thanks for calling in. I will take you back to the corporate plan presentation we gave last December, where we talked about our CapEx spend, and we broke it down between the base and then some of the things that we were pursuing where we had to develop the markets, had to develop the sales.

We were looking at policy coming in place, and we indicated at that time that that capital would move depending on what we saw in the market and how those markets developed. That is exactly what we are seeing as we have gone forward in some of these new ventures, particularly low carbon solutions. The market is not developing as fast as we had planned for, and so we are pacing the spend in that. As consistent with what we talked about.

From my perspective, it is much easier to plan on doing something and then pull back than it is to not plan on something and then try to rush into it. So we feel really good about where we are at with that and continue to watch, and we will continue to pace the market as it develops and as we see the demand for some of those products grow. The other point I would just make is we provide that range, going on time, and that reflects really the uncertainty around exactly when all the projects in our portfolio get FIDed or get, as they progress, and when exactly those things happen are hard to call far into the future, but so we give ourselves we recognize that variability and make sure that we encompass that in the range that we provide.

I would expect as we go forward, you will see some of that movement just frankly because you cannot predict exactly when that capital spend will happen as you are executing a project. But we feel good about where we are at. We feel good about where that underrun is coming from. I would also say we are getting a really good product on the capital we are spending in the Permian as well, which is a benefit.

And then all I would add to that is obviously we had an acquisition, actually a couple of acquisitions this quarter in total, $2.4 billion. So when we gave that guidance that we expect to be a bit below the low end of the $27 to $29 billion cash CapEx, that is excluding those M&A transactions, and we obviously do not plan for those transactions, so that is why we excluded them.

Thanks, Darren. Thanks, Kathy.

Sure. Thank you, Neil.

The next question is from Devin McDermott of Morgan Stanley.

Thanks for taking my question.

Sure. Good morning, Devin.

So I wanted to morning. Wanted to dive into the Permian a bit more. It is record production results in the quarter. You also raised the guide for the full year.

I was hoping you could unpack the drivers for us a little bit more. Are we already seeing some outperformance as a result of your advanced proppant rollout? There have been other changes you have made to development or spacing? And how does this all impact how you are thinking about the capital and activity requirements to achieve your multiyear growth target?

Yeah, thanks, Devin. I would say if you look at what we are doing in the Permian, and the innovation that is occurring with that organization, it is hard to predict the improvements when you are planning ahead of time. But what the team is constantly doing is looking for how they can improve and evaluating what they have been doing and then making changes on the fly. We have been testing a whole pipeline of potential technology options that will unlock resource, lower our capital cost, and we are seeing improvements across the range of those technologies as we implement them.

So we feel really good about the productivity of what we are seeing in the Permian. I feel really good about what the team is looking at and to grow the production, and when we talk to you in December with the plan, you will see that every year, we are looking to kind of build that improvement into the plan outlook. So it is hard to it is not any one single thing. It is a function of a lot of hard work by the team, a lot of innovation, and the technology organization continuing to bring good ideas into the field.

That has resulted in better production and more effective capital deployment.

Look forward to learning more in December. Thanks.

Thank you.

The next question is from Arun Jayaram of JPMorgan.

Little bit of a bigger picture question. Exxon recently published its global outlook through 2050. 20% gas growth and a doubling of LNG demand called over the next twenty-five years. I was wondering if you could talk about how this outlook informs your strategy and how should we think about, you know, where the puck will go in terms of future organic or inorganic opportunities for the company?

Yeah. Thanks for the question, Arun. With respect to the first part of your question, the global outlook is the foundation on which we think about our strategy and then build our plans. Obviously, it is difficult to predict with precision how things are going to move, particularly in the short term.

But longer term, we focus on fundamentals where the economic growth is happening, to what level it is happening, how technology is developing, policies are being put in place, and then try to synthesize all that into an outlook and have been doing that as long as I can remember in this company. It does not change a whole lot year to year. But it does form the foundation of how we think about things. You may recall back during the pandemic when people were extrapolating from a very unusual market condition, we remained focused on what our long-term outlook was telling us and continued to make investments when a lot of other people had pulled back during that time.

That has proven to be the right approach as time moved on. We think about it in those terms. The growth in LNG is what underpins our continued interest in finding low-cost advantaged LNG production. The recognition of economies growing and people's livelihoods improving and the energy demand required to facilitate that underpins continued growth in oil and gas, and so we continue to look for cost-advantaged oil production as well.

I think people often forget that there is a depletion rate here, and so if you are not continuing to invest and find new resources, your supply will rapidly decline, particularly given the role that unconventional production now plays in the global supply. That depletes a lot quicker, therefore, the depletion curve is a lot steeper, therefore, the industry has to bring more barrels on to just stand still. All of that goes into our thinking in terms of what is needed from an investment standpoint. It really keeps our focus on the medium to long term rather than the very short term.

Great. Thanks.

You bet.

The next question is from Doug Leggett of Wolfe Research.

Thank you. Good morning, Darren. You know, I listened to you talk about a class of your own, and I think about all the growth you have had in free cash flow and the reduction in the dividend breakeven, but yet, your dividend growth rate remains quite pedestrian. Frankly, I think that is probably holding back market recognition of value.

So I wonder if you can address that. At what point do you think the free cash flow expansion translates to a more competitive, let's say, versus a broader market, dividend growth rate?

I am happy to take that question, Doug. You know, we look at our overall dividend growth rate and we constantly think about sustainability, right? We think about growth. When we measure it on those three pretty important qualitative factors, we feel pretty happy with where we have ended up.

I would tell you, as we speak to investors, we tend to get positive commentary about our dividend growth rate, about our overall approach to dividend growth, and about our overall approach to not just dividend growth, but, obviously, to a more consistent program with regard to share buybacks as well. We look at the dividend growth rate over a long period of time. We look at it both relative to IOC competitors. We look at it relative to general S&P.

We look at it relative to industrials. When we measure it against those criteria, I would say we come up with an answer that says we feel like we are in a pretty good place, and generally speaking, we get positive commentary from investors on our approach with regard to our dividend growth rate.

Yeah. I would add to that, Doug, that we are very mindful of the commitment we have on our dividend and the context in which that commitment will play out over the years. As you move through the commodity cycle, we think it pays to be confident with what we are doing and thinking through where the cycles are going. We all know the prices are going to go up, and we know they are going to go down.

Making sure that we build a business that can reliably deliver across any price environment is a critical part of how we think about the things that we do in the company.

The last thing I would say is we now have forty-three consecutive years of annual dividend growth that puts us in a category of less than 5% of S&P 500 companies. I would say that is a track record we are quite proud of.

Thank you, guys.

You bet.

The next question is from Bob Brackett of Bernstein Research.

Good morning. I would like to talk a bit about Superior Graphite. I am curious what exactly you acquired from them. Was it their facilities in the US and Europe or more technology? I am also curious how tightly integrated would that be into your existing refining petrochemical strategy? Then I will tack on, what do you think that total addressable market might be?

Yeah. Thank you, Bob. Appreciate the question. You know, we have talked about now for some time the work we have been doing from a technology standpoint, leveraging our capabilities to manipulate and transform molecules to make products the world needs, to address gaps and grow value.

One of those pieces of work was around what can we do with carbon molecules, particularly given the drive necessary to reduce emissions and the CO2 out of the atmosphere that leads to more and more carbon. So we saw a trend of a cheap feedstock that is growing. What can we make out of it? Our technologists have come up with a unique carbon molecule that we see the opportunity to graphitize and then put into batteries as anodes.

As I said in my comments, the work that we have done with our pilot plants has led to or demonstrated significant step change improvements in lithium-ion batteries. 30% faster charging, 30% more range, and then extends the battery life cycle by four times current technology. So we see it as a huge opportunity. The TAM on that could be up to $40 billion. So that is, in our mind, a market worth going after.

One of the challenges beyond designing the molecule is the graphitization process. If you look at what the industry norm is in that space, it is a very, very old technology that dates back to the 1800s. It takes close to a month, frankly, to develop the product. We said we have got to bring that into current times, and so we were looking for a technology that really leveraged our process technology capabilities, and Superior Graphite had a technology and some assets that, working with them, we could adapt to this.

We think it fundamentally revolutionizes making this material for the battery market. So that is the approach. We purchased the key assets, have the technology rights to those assets, and we will be working with the folks to convert that technology and grow it at scale so we can begin to produce material at a much higher rate and much lower cost. Really, really importantly, outcompete the Chinese.

This market is dominated by the Chinese, and so we are very cognizant of anything that we do here for the long run has to be on the very low end of the cost of supply curve. This technology is going to help us achieve that.

You are very clear. Thanks for that.

You bet.

The next question is from Sam Margolin of Wells Fargo.

Sam, do we have you? Operator, maybe we should come back to Oh, sorry. Can you hear me now? Here we go. Now we do. Yep. Go ahead.

I am here. Okay. About that. Thanks for taking the question. Sorry.

Sure.

So yeah, I wanted to ask about the organic and inorganic strategy a little bit. You know, it seems like it is accommodated kind of by two factors. The first is capital efficiency in the business, and the second is the balance sheet, which is, you know, leading among peers. So the question is, you know, given all these tailwinds in the business and in the capital structure, do you feel like you can step up inorganic activity even more now and, you know, set the table for additional opportunities beyond what is in your pipeline today?

Yeah. Thanks, Sam. What I would tell you, you know, if you go back in time when we first started talking about our strategy, it very much focused on our core competitive advantages. Strengthening those advantages and growing them, in my mind, not only allowed us to improve and drive profit in our base business, but it opened up the opportunity for inorganic transactions where we could take advantage of those core competencies, leverage them in an acquisition, and bring more value than either company could do on its own.

That is the foundation of the one plus one equals three, which we have been talking about for quite some time. I think the Pioneer acquisition is a great example of that, where we brought in a very good organization, very good people, very good assets, combined them with our good people, our assets, and technology, and together, we are doing more than either company could have before. That drive and our efforts to find those opportunities do not ebb and flow with the commodity price cycle. It is a constant force, and I made that in the second quarter.

I make it here in the third quarter. We are, as we develop these and grow our technology project capabilities, really all the advantages that we bring to the business, how can we leverage those to grow more value organically and inorganically? It is just a function of continuing to look for and find those opportunities. So it is a constant focus of ours, and it is really a question of what presents themselves.

That will happen over time. We do not have a specific plan for when things show up. It is this constant effort, which I think any good company with the advantages that we have would be very focused on that.

And just the thing I would add to that. We look at a lot of things. A lot of things. As you would expect us to.

We transact on very few things because they have to meet our criteria. As we said, one plus one has to equal more than three. Right? We have got to bring advantages to the table, scale, integration, unrivaled technology, things that are going to create synergies, that are going to allow transactions to really generate strong returns.

I think Pioneer is a great example of that. So you should expect that we would look at a lot of things, but we transact on very few. It is the ones where we have a high degree of confidence that we can earn very good returns.

Yeah. I think the bottom line in that is we buy value, not volume. I think that differentiates us from many in the industry. If we cannot see the path to very high returns on transactions, we pursue them.

Thank you so much.

Thank you.

The next question is from Paul Cheng of Scotiabank.

Good morning. Darren and Kathy, just curious that, I mean, you just have a round of course maybe headcount reduction. But I am trying to understand that you have been doing a lot of different projects. I mean, you are probably doing far more than any of your peers at this point.

So should we assume that at this moment, you are pretty running up against your organizational capability limit, or do you think your ability to even increase the pace of investment is just a function of opportunity set and not limited by your capability? Thank you.

Yeah. Thank you, Paul. Just to your point about the reductions that you referenced, you know, that was really the next step in a continuum of work we have been pursuing for some time now. We have worked really hard at transforming the how of what we do, and that has led to much improved effectiveness.

It has also led to the efficiencies that we have been racking up. If you look, you know, since 2019 when we started this work on the strategy, implementing the strategy, we are over $14 billion of structural cost reduction. That is on average about $2.5 billion of structural cost reductions every year. My expectation is we will see something similar to that this year.

Frankly, going forward, we continue to see additional opportunities to become more effective and through that, then get more efficient. The ability in terms of the capacity we have got now is limited by the opportunity set because of the high criteria that we put on it and the insistence that the projects that we bring in are advantaged versus the low end of the cost of supply curve so it is resilient and delivers robust returns across every part of the commodity cycle. That criteria set tends to narrow the pipeline down pretty quickly as we are looking at things. To date, we have not hit that limit.

But I would also tell you that as we continue to learn and sharpen our pencils, the opportunity set that we see across our technology organizations, our project organization, we think there are still untapped opportunity sets to get even better in that space. So not at a limit yet, and frankly, I do not see a limit. Maybe one day we will get there, but when you combine the high hurdle you have to clear in order to get into the portfolio with the existing capabilities we have got, I feel pretty good about the ability to execute. I would point to what we did this year as probably the best example of that.

You know, the 10 projects we have been talking about, the eight of them that we have delivered to date, if you look in total, the gross capital associated with those 10 projects is on the order of $50 billion. I do not think there is a company in our industry at any point in history that has successfully delivered that many projects in the time frame that we are doing. I think that is just a great example of what we are capable of. Like I said, we have got a lot of ideas in the hopper in terms of how we can improve the technical aspects of what we are doing along with the execution aspects.

That is great. I suppose that is why you just bought the Discovery Six. That is part of improving your capability and efficiency.

Absolutely. I mean, that is what I think I said, the seventeenth most powerful computer in the world. If you look at the data that we have to process, if you look at the opportunities that we have, it is allowing us to do things in weeks that used to take us months. So it just speeds that cycle up.

I think if you just look at what we are doing in driving efficiencies, right, it is unmatched across the industry. I mean, you look at just what we put up this quarter, $14.3 billion now in structural cost savings compared to 2019. Our track record in this regard, I think, is bar none. We see more opportunity there.

Thank you.

The next question is from Biraj Borkhataria with RBC.

Hi. Thanks for taking my question. I wanted to ask about Mozambique. There was a meeting with the government which was then deferred. Could you just talk about where you are with that project? Maybe just the security situation, and then whether an FID in early 2026 is likely? Thank you.

Yeah. Sure. I would say where we are at with Mozambique right now is in a very good place. We have got very strong relationships with the government there.

We have got a really good project concept working our way through. The security situation there has improved dramatically. I think Total just lifted their force majeure. We are looking at and are in the process of trying to do the same.

So I would say that project is now moving ahead, and we feel really good about that. As does the government of Mozambique. Working very closely with Total on that. So I think it is in a really good place.

I think the press reports that you are reading, I would just say you cannot read everything that you believe or infer anything that you take from that. Just this week, we had the president and his team here on the campus and took them through what we are doing here and showed them some of our capabilities. It was a really productive session. I think both of us got a lot out of it.

Thank you.

The next question is from Ryan Todd of Piper Sandler.

Thanks. Maybe one on exploration. You have been, I think, increasingly active on this front in recent years. Can you talk about opportunities on the horizon over the next twelve to twenty-four months? How, if at all, do you believe your approach to exploration may have changed relative to maybe times in the past?

Yeah. Sure. Maybe just put exploration in the context. I think you know, when we talk about what we are trying to do in the upstream and grow production in the context of the depletion rate that we see, it is a huge challenge.

So we have been very focused on what we see as the three key levers of filling the hole created by depletion and at the same time growing that, which is, you know, for the things that you have, you have got to squeeze more juice out of it. So a lot of work we have been doing around for the fields and the resources that we are currently developing, how do we get more effective at producing more resources from those fields? That is driven a lot by the project's organization, our technology organization, and the hard work of our operations team. You have got to grow your advantages so that you can take, you know, you can buy things and take advantage of the inorganic opportunities that we just talked about.

One of the reasons why, as Kathy said, we are constantly looking at a lot of opportunities. We recognize if we can take our advantages and create unique value through inorganic opportunity, that is really important, and it helps us again fill this challenge of the depletion curve. Then the final point is you have got to find new things you can develop. So that is always been a part of the equation for addressing the challenges of the upstream.

What we have been very, very focused on is really narrowing what we are doing in the exploration to make sure that things that we are looking for and going after have the opportunity to be material, be commercially attractive, and compete in our portfolios. So we focus that. I think we put a lot of effort into how we interpret the seismic and what we can do there. We feel pretty good about the opportunity set that we have got with Flick.

Pretty good about the technology that we are going to bring into that space. But I would also tell you that, you know, it starts with getting the opportunity to go look at things. We still have to demonstrate and translate that into results and success in terms of finding things.

Thank you.

You bet.

We will take our next question from Betty Jiang with Barclays.

Good morning. Thank you for taking my question. Darren, so Google just recently signed a power contract with a gas power plant. So really great to see development on that front.

Wondering how your conversation is evolving. I know Exxon Mobil Corporation has consistently talked about your only interest in power from a molecule's perspective. But just given how quickly that power demand is growing, and just how quickly that scale is growing as well, I am curious if there is any appetite to start offering maybe traditional power first and then adding on carbon capture capabilities later on.

Yeah. Thank you, Betty. It is an area where there is a lot of interest and activity, and we are very, very engaged with most of the hyperscalers on the opportunity set. But as you pointed out, we are very focused on the carbon capture side, the carbon-abated power side of the equation.

The fact that power is growing and there are a lot of opportunities there does not translate into a value proposition unless you can bring a unique advantage to that space. Frankly, that is not the business that we are in. So it is very much around providing decarbonized natural gas power stations and then capturing the carbon and emissions on the back end of that so that we can offer a low-carbon data center where more than 90% of the emissions are captured and abated. That is the value proposition that we are pursuing.

There is a lot of interest in that space, and we are also working with independent power producers to, with them, provide the electron side of the equation while we provide the molecule side of the equation. I think we got out ahead of this, frankly, as things started to break. We secured locations, got the existing infrastructure. We certainly have the know-how in terms of the technology, in terms of capturing, transporting, and storing it.

So we are in a pretty good place right now. We are pretty advanced in the conversations. I am hopeful that many of these hyperscalers are sincere when they talk about the desire to decarbonize and have low-emission facilities because certainly in the near to medium term, we are probably the only realistic game in town to accomplish that. I think we can do it pretty effectively.

We can partner with these folks to continue to grow that, frankly, over time. So that is where we stand. I am optimistic at this point. But we are early in the game.

We will see what gets translated into actual contracts and then into construction.

I am hopeful as well. Thank you very much for the color.

You bet.

The next question is from Jean Ann Salisbury with Bank of America.

Good morning. I wanted to go back to the proppant. As you referenced in your prepared remarks, the first twelve to eighteen months well results have started to come out. The Woodmac study and the results have been really positive.

As you have been able to get more data this year, is there any other granularity you can share on where you think you are able to improve recovery the most? Like, for example, gassier zones, oilier zones, deeper zones, etcetera. Is there anything you can comment on how you see the strength of your patent or other barriers to entry keeping others from copying it?

Sure. I think, you know, to come back to the proppant itself, remember what we are doing here is as you get the fracs, finding ways to get proppant deeper, you know, deeper penetration into those cracks. So it is really a function of, I would say, the rock and the properties of the rock and the ability to flow the material that has made this as successful as it is. I would also tell you that we are continuing to optimize and fine-tune that.

So I do not know that we are at the end of the learning curve with that. I hope to see continued improvements in that space. I would also tell you that it is just one of a number of technologies that we are pursuing along that whole production process to try to improve recoveries and lower our capital. The pipeline is pretty promising, and we are going to hopefully give you a perspective on that in December when we talk about the plan going forward.

But I would think about the lightweight proppant as just one of a number of levers that we are pursuing. We feel good about what we see there. We think there is potential, additional potential. But I would also say that we see other technologies that will work in conjunction with those and be additive with respect to recovery.

You remember I challenged our technology organization to double recovery, and at the time we did that, we did not have a path, a line of sight to how we would do it. But we just recognized given how early we were in the technology cycle, there should be opportunities there, and our job was to go find them. I would say today that we have got a pipeline and certainly a line of sight to how we might do that. We have got a number of things we have got to make work and a number of technologies that have to prove themselves.

But we have come from kind of a white sheet of paper to one that is now filled out with a lot of ideas that we are pursuing. So I would say we are well on the way to making some of that a reality. With respect to protecting it, we feel pretty good about the patent. We feel pretty good about the supply of the raw materials that the patent covers.

Everything that we are pursuing in this space, we are very focused on protecting. We do feel the technology provides and the benefits of technology should be proprietary to Exxon Mobil Corporation.

Great. Thank you.

You bet.

The next question is from Jason Gabelman of TD Cowen.

Good morning. I want to go back to the exploration discussion because it was notable since we last spoke. You have entered into multiple new blocks to expand exploration. It is not only Exxon Mobil Corporation pursuing additional exploration efforts, but you are seeing peers advertise their kind of exploration intentions also.

So the question is really, what do you think is driving this industry trend? Do you see competition to enter into new blocks becoming more competitive? I am thinking given Exxon Mobil Corporation's view that shale is going to peak in the next five to ten years, is that a decent part of why you have seen kind of the industry focus more on exploration?

Yeah. Sure. So I think going all the way back, I can remember talking in this forum in 2020 when the industry had sharply pulled back, and we were somewhat in isolation with continuing our investment program, making the point and the case that with the depletion curve, the industry has to continue to think long term, invest, and find resources. That, I think, you are now seeing play out.

The unconventional that you mentioned obviously filled a hole in the short term. But like all resources, there is a finite life, particularly when you do not have the technology portfolio that we do where we can advance and grow the recoveries. So unlike many of our competitors in the unconventional space where they see maybe production plateauing or even declining, we continue to see and grow production with technology that I have been referencing. So I think as an industry as a whole, I think people see that resource and the horizon of it.

So they are shifting now to the longer-term, longer-cycle projects that are out there. From my perspective, we have never taken our eye off of that. We continue to work it. It has always been a very competitive space, and frankly, from my perspective, the way you succeed in a very competitive environment is to bring unique capabilities and advantages.

So it keeps coming back to the things that we have been working on. Resource owners want to see cost-efficient development. They want to see development that happens quickly, that is on schedule, does not have overruns, so that they can start accruing the benefits of that resource development quickly. Guyana is a great example of that.

So our work has been on improving our abilities to bring a unique set of skills, technology, and project capability so that we can develop resources more cost-effectively, which resource owners ultimately pay for. They like that. To bring it on quicker so that they can benefit from the resource development in a sooner time frame. So all those things play to our strengths.

I think that gives us a competitive advantage. I think importantly too, they know that we have been steadfast in our focus in this space. We do not blow with the winds. We do not come in and out of this, and so they know when we commit to something that we are going to deliver on that.

So those things I think give us a bit of an edge advantage in the discussions. I think you see that manifesting itself in some of the announcements that we have made with some of the opportunities that we are pursuing.

Great. Thanks for the color, Darren.

You bet.

The next question is from Paul Sankey of Sankey Research.

You have referenced a lot of this already on this call, but I wondered if you could give Exxon Mobil Corporation's perspective on the current AI CapEx boom? Especially as you are bringing down your CapEx guidance today? It is sort of a process and strategy question at a high level. Your CapEx, your peak CapEx spending at Exxon Mobil Corporation around 2013 was over $30 billion a year, which would be about $40 billion in today's dollars.

If we look at Meta alone, they have a trailing run rate of your peak $30 billion and are going to $70 billion a year next. Could you talk about, Darren, the challenges that you envisage for that kind of capital deployment from a management perspective, firstly? Secondly, given the speed of this, what are the impacts directly on your business? What are the areas where this boom is either challenging or benefiting you?

Thank you.

Yeah. Sure, Paul. I cannot say I can speak with much insight on what some of the hyperscalers are doing or Meta is doing with their capital. I will just say generically that it is very difficult to effectively and efficiently swing capital from one level to another level that is materially different.

So, I mean, our approach is to have long-term plans, as you know, to basically meticulously develop plans with rigor and then execute those with excellence. That is how we think about it. The lower guidance that you heard that we talked about today is not a function of a change in activity set. We are still pursuing the same businesses.

It is very consistent with what we talked about last year, which is there are things that we have built in the plan that have more uncertainty than our base business. These new things that we are developing, new businesses, data centers are one of them, low carbon solutions are another. The carbon material ventures, Proxima, all these things where you are going into new markets that are at the very early stages of their growth, there is a lot of uncertainty as to when those things actually materialize into concrete opportunities. We talked about that last year, and what you see happening is as that market evolves, those opportunities begin to materialize, and the schedule gets clearer and clearer, we are shifting our capital in line with that to make sure that when we do make the investments, we generate the returns that we expect of ourselves that are advantaged versus the rest of the industry.

So I would really just caution everyone to take the changes in the CapEx that you are hearing today as a reflection of, in my mind, what we refer to as disciplined capital spending, which is not cutting CapEx, but spending it in a wise way. With respect to the AI piece of it, we certainly see the business opportunity there with the low carbon data centers. As I said earlier, there is a lot of interest in what we could bring to this space, particularly in the near term. We are continuing to pursue that.

My gut tells me that those opportunities will materialize, and they will become a part of our portfolio. We will leverage the Denbury acquisition that we made some time ago to really help accelerate the decarbonization of data centers. Within our own four walls here, with our centralized technology organization, which has IT and artificial intelligence and the whole technology set around digital as part of that integrated technology organization, we see huge opportunities with AI. In fact, we are deploying that today.

We are deploying it downhole in the work that we are doing in the Permian, we are deploying it in our operating sites around the world. Anything where we have got a lot of data, we are using AI to help make sure that we are learning as much as we can from that data and optimizing our production. We see a lot of value coming from that today and a lot more value coming forward in the future. I will say we are taking maybe a slightly different approach than many of the folks I see out there, which is we have stepped back and said, what moves the needle?

Where do we want to focus this effort? So it is not a scattershot approach here. It is a very focused and material movement in the areas that will make a big difference to the corporation. We are making great progress in that space.

Thank you.

You bet. Thank you.

We have time for one more question. Our final question will be from Philip Jongworth of BMO.

Thanks for taking the question. Refining margins have been pretty supportive this year and were a contributor to sequential earnings growth in the quarter. A lot of moving pieces here at the moment. I was just hoping you could touch on how you see the market considering GoPak online supply disruptions, resilient demand, and then also touch on the Baytown project you FIDed this quarter and just how you are positioning the business based on the longer term.

Sure. So I guess the first context to set with respect to this is the demand for petroleum products. While ultimately that backs up into crude, I think it is really important to point out that there are two supply-demand balances at play here. One is on the crude side, which is the feed that goes into the refinery, and then there is the other on the product side.

Those are two separate demand balances that have an impact on refining margins. What we have seen here of late is a looser crude market. The feed side of the equation has been looser, prices have come down, so you have got cheaper feedstock. Then on the product side of the equation, we have seen capacity coming offline and supply disruptions around the world.

That is tightening the product side of the equation, the supply-demand balance. So we see prices going up. That has benefited the refining industry as a whole. For those companies that have refineries that are up and running reliably, they have added significantly to the bottom line.

Frankly, for the work that we have been doing in our company, in the third quarter, we saw the highest reliability that we have ever had. So the work that we have done with the centralized global operations organization is really paying off. Not only are we driving down significantly driving down maintenance costs, at the same time, we are driving our portfolio reliability to a very high level. On top of that, as you know, we have been very focused on really making sure that we are high grading our refinery footprint and putting our efforts and investment in the sites that have diversified product offerings, that have advantage conversion, and that have low cost so that they will be resilient to a number of potential demand environments.

As a result of that, we have much, much fewer refineries today that are much, much more effective at converting crude to products that society needs. So we have really upgraded the footprint of the refinery. Then the last point, which you touched on, is within those refineries that we say are strategic and have an advantage in the base case, how do we continue to grow that advantage? It really is a function of high grading the molecules in the refineries.

We are taking the low-value products that come out of a barrel of crude and putting in the conversion capacity to make those high-value products. The most recent and significant example of that is what we did in Singapore with our CRISP project, where we took the lowest value product, residue fuel oil, and converted that to some of our highest value products with a brand new to the world lube base stocks and additional diesel. So a great example of a proprietary new-to-the-world process to make higher value products and, in fact, new-to-the-world products with respect to one of our base stocks.

So a great example of what we are trying to do there. The Baytown project is a continued step in that direction, which is finding a way to high grade the molecule conversion that you have in the refinery. We have got really good opportunities with that asset base, and we are pursuing it aggressively. They come with very good returns and very resilient returns.

Okay, Phil, thank you, and thanks, everybody, for this call and for all the questions. We will post the transcript of this call to the investors section of our website early next week. We look forward to connecting on December 9 for our corporate plan update. Have a good weekend.