Earnings Call: Q4 2015

Feb 2, 2016

Good day, everyone, and welcome to this ExxonMobil Corporation 4th Quarter and Full Year 20 15 Earnings Conference Call. Today's call is being recorded. At this time, I'd like to turn the call over to the Vice President of Investor Relations and Secretary, Mr. Jeff Woodbury. Please go ahead. Thank you. Ladies and gentlemen, good morning, and welcome to ExxonMobil's 4th quarter and full year 2015 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 would like to draw your attention to our cautionary statement shown on Slide 2. Now turning to Slide 3. Let me begin by summarizing the key headlines of our performance. ExxonMobil generated full year earnings of $16,200,000,000 and 4th quarter earnings of $2,800,000,000 These results reflect proven strategies that we've consistently applied for decades, along with a relentless focus on the business fundamentals, including project execution and effective cost management. While our upstream financial results reflect the challenging business environment, stronger performance in our Downstream and Chemical major upstream projects during the year. These new developments in Canada, Indonesia, Norway, the United States and West Africa added 300,000 oil equivalent barrels per day of working interest production capacity and contributed 3.2% volumes growth. Performance of the base portfolio, along with these project additions, delivered full year production of 4,100,000 oil equivalent barrels per day consistent with our plans. The corporation's 2015 cash flow from operations sales were $32,700,000,000 with positive free cash flow of $6,500,000,000 despite sharply lower crude oil and natural gas prices. Moving to Slide 4, we provide an overview of some of the external factors affecting our results. Global economic growth continued to slow during the Q4 across nearly all major economies. In the U. S, estimates show growth softening further since the Q3. In Asia, China continued to decelerate with significant volatility in the financial sector. And Japan experienced ongoing economic weakness, whereas Europe's economy remained stable with continued temperate growth. Crude oil prices extended declines on global oversupply conditions and natural gas prices moved lower reflecting unseasonably warm weather through the quarter. For the mark, global refining and chemical margins weakened due to lower seasonal fuels demand and decreased chemical realizations. Turning now to the financial results shown on Slide 5. As indicated, 4th quarter earnings were $2,800,000,000 or $0.67 per share. Corporation distributed $3,600,000,000 to shareholders in the quarter through dividends and share purchases to reduce shares outstanding. Of that total, dollars 500,000,000 was used to purchase shares. CapEx was $7,400,000,000 down more than $3,000,000,000 from our Q4 of 2014. As a result of ongoing capital efficiencies, market savings, reduced activity and timely project delivery. Cash flow from operations and asset sales was $5,100,000,000 and at the end of the quarter, cash totaled $3,700,000,000 and debt was $38,700,000,000 The next slide provides more detail on sources and uses of cash. So over the quarter, cash decreased from 4 $300,000,000 to $3,700,000,000 Earnings adjusted for depreciation expense, changes in working capital and other items and our ongoing asset management program yielded $5,100,000,000 of cash flow from operations asset sales. The cash decrease from working capital changes includes both normal seasonality as well as the effect of the decline in crude prices on account balances and receivables and payables. Uses included net investments in the business of $6,000,000,000 and shareholder distributions of $3,600,000,000 Cash flows were balanced over the quarter by increasing short term borrowing by about $4,000,000,000 Moving on to Slide 7 for a review of our segmented results. ExxonMobil's 4th quarter earnings decreased $3,800,000,000 from a year ago quarter. Lower upstream earnings were partially offset by and financing costs. In the sequential comparison shown on Slide 8, earnings decreased $1,500,000,000 due to lower earnings across all business segments. On average, corporate and financing expenses are anticipated to be $500,000,000 to $700,000,000 per quarter over the next few years. Turning now to the upstream financial and operating results starting on Slide 9. 4th quarter upstream earnings were 857 $1,000,000 down $4,600,000,000 from a year ago quarter. Sharply lower commodity prices reduced earnings by more than $3,700,000,000 Crude realizations declined more than $30 per barrel and gas was down $2.76 per 1,000 cubic feet. Favorable volume and mix effects increased earnings by $100,000,000 Volume additions from new developments were partly offset by regulatory restrictions in the Netherlands. All other items decreased earnings by $960,000,000 reflecting the absence of prior year impacts, including U. S. Deferred income tax effects and the recognition of a favorable arbitration Moving to Slide 10. Oil equivalent production increased to 194,000 barrels per day or 4.8% compared to a year ago quarter. Liquids production was up almost 300,000 barrels per day or nearly 14 percent where ramp up of new development projects, work programs and entitlement effects were partly offset by field decline. Natural gas production decreased about 630,000,000 cubic feet per day due to regulatory Turning now to the sequential comparison starting on Slide 11. Upstream earnings decreased about $500,000,000 from the 3rd quarter. Lower realizations reduced earnings $840,000,000 where crude prices were about $8 per barrel lower than the 3rd quarter and natural gas prices were down 0.4 dollars per 1,000 cubic feet. Volume and mix effects increased earnings $250,000,000 reflecting new project and work program growth along with higher seasonal demand. All other items added $90,000,000 driven by tax impacts. Upstream unit profitability for the 4th quarter was $2.26 per barrel, excluding the impact of non controlling interest volumes. Moving to Slide 12. Sequentially, volumes increased 330,000 oil equivalent barrels per day or 8.4%. Liquid production was up 150,000 barrels per day, reflecting new project growth, work programs and entitlement effects. Natural gas production was 1,100,000,000 cubic feet per day higher than the Q3, driven by stronger seasonal demand in Europe, entitlement effects and new project start ups. Moving now to the Downstream Financial operating results starting on Slide 13. Downstream earnings for the quarter were $1,400,000,000 up $854,000,000 compared to the year ago quarter. Stronger margins and favorable volumes mix improved earnings by $610,000,000 $70,000,000 respectively. All other items increased earnings $170,000,000 primarily driven by reduced maintenance activities and favorable foreign exchange and tax effects, partly offset by unfavorable inventory impacts. Turning to Slide 14. Sequentially, downstream earnings decreased 682,000,000 dollars as lower margins reduced earnings by $860,000,000 Volume and mix effects increased earnings by $60,000,000 reflecting lower U. S. Maintenance. Other items improved earnings by $120,000,000 primarily due to higher Moving now to the Chemical Financial and operating results starting on Slide 15. 4th quarter chemical earnings were $963,000,000 down $264,000,000 compared to the Q4 of 2014. Weaker margins decreased earnings by $210,000,000 while favorable volumes and mix effects added $170,000,000 due to lower maintenance. All other items decreased earnings by $230,000,000 largely due to unfavorable foreign exchange, inventory and tax effects. Moving to Slide 16. Chemical earnings were down $264,000,000 sequentially. Weaker margins reduced earnings by 190 $1,000,000 while favorable volumes mix added $80,000,000 Other items decreased earnings 160 $160,000,000 primarily reflecting increased maintenance activities. Turning now to the full year financial results starting on Slide 17. Now as I mentioned, earnings were $16,200,000,000 or $3.85 $8.5 per share. Corporation distributed over $15,000,000,000 to shareholders through dividends and share purchases to reduce shares shares outstanding and of that total $3,000,000,000 was used to purchase shares. CapEx totaled about $31,000,000,000 for the year, a reduction of almost $7,500,000,000 or 19% versus 20 14 and approximately $3,000,000,000 below our plans for 2015. Cash flow from operations and asset sales was $32,700,000,000 Turning to Slide 18. Cash decreased from $4,700,000,000 to 3,700,000,000 depreciation expense, changes in working capital and other items and our ongoing asset management program resulted in $32,700,000,000 of cash flow from operations and asset sales. Uses included net investments of 26 point $2,000,000,000 and shareholder distributions of $15,000,000,000 Debt and other financing items provided $7,600,000,000 in the year. Moving to Slide 19. Graphic illustrates the corporation's sources and uses of cash during the year and highlights our ability to meet our financial year and highlights our ability to meet our financial objectives. Cash flow from operations and asset sales of $32,700,000,000 funded shareholder distributions and most of our net investments in the business supplemented by an increase in debt financing. The investments we select have attractive financial returns and justify the moderate use of our strong balance sheet capacity. The scale and integrated nature of our cash flows along with our financial strength flexibility and confidence to invest through the commodity price cycle to meet long term energy demand. Corporation has continued to pay a reliable and growing dividend, directly sharing the corporation's success with our shareholders. Total dividends per share, 2 Q1 of 20 16, ExxonMobil will limit share purchases to amounts needed to offset dilution related to our benefit plans and During 2015, ExxonMobil generated $6,500,000,000 of free cash flow, reflecting our cost and capital discipline and the resilience of our integrated business model. Looking forward, we anticipate capital and exploration expenditures to be $23,200,000,000 in 2016, a decrease almost $8,000,000,000 or 25 percent from 2015. So to summarize this slide, the corporation finished the year with positive free cash flow. We have significantly lowered our capital production from our major projects, all of which will support cash flow moving forward. We will provide further details on investment plans at our upcoming analyst meeting. Moving now to Slide 20 and a review of our full year segmented results. 2015 earnings decreased $16,400,000,000 as weaker upstream results were partially offset by stronger downstream performance and lower corporate costs. Turning now to the full comparison of upstream results starting on Slide 21. Upstream earnings of $7,100,000,000 were $20,400,000,000 lower than 2014. Realizations reduced earnings by 18 point $8,000,000,000 as crude oil prices declined more than $45 per barrel and natural gas dropped about $2.50 per 1,000 cubic feet. Favorable volumemix effects increased earnings $810,000,000 for contributions for major project startups over the last couple of years as well as our work program activities were partially offset by the impact of regulatory restrictions in Lower gains on asset sales and absence of prior year deferred income tax effects were partly offset by lower operating expenses. Upstream unit profitability for the year was $4.89 per barrel, excluding impact of non controlling interest volumes. This reflects significantly lower commodity prices, partially offset by asset high grading, including the start up of new development projects. Moving to Slide 22. As indicated, volumes ended the year at 4,100,000 oil equivalent barrels per day, up 3.2% compared to last year. Liquids production was up 234,000 barrels per day or 11%, benefiting from major projects in several countries, work programs and entitlement impacts, which were partly offset by field decline. Natural gas production, however, was down 630,000,000 cubic feet per day as regulatory restrictions in the Netherlands and field decline were partly offset by additional major project volumes in Papua New Guinea and the U. S. Along with higher entitlements. Full year comparison for downstream results is shown on Slide 23. Earnings were $6,600,000,000 an increase of $3,500,000,000 from 2014. Stronger refining and marketing margins increased earnings by $4,100,000,000 Volume and mix effects mainly driven by increased maintenance reduced earnings by $200,000,000 All other items decreased earnings by 420,000,000 dollars reflecting higher maintenance activities and unfavorable inventory impacts, partly offset by favorable foreign exchange effects. On Slide 24, we show the full year comparison for chemical results. 2015 earnings were $4,400,000,000 up $103,000,000 from 2014. Stronger margins increased earnings $590,000,000 while favorable volumes mix added $220,000,000 due to lower maintenance. Other items reduced earnings $710,000,000 reflecting $1,000,000 reflecting unfavorable foreign exchange, tax and inventory effects, partly offset by asset management gains. Moving next to an update on our upstream project activities. We continue to deliver on our investment plans, which are adding higher value production capacity to meet long term demand growth. 6 major project startups in 2015 added nearly 300,000 oil equivalent barrels per day of working interest capacity. We also progressed development of our high quality acreage in the Permian and Bakken at a measured pace, where drilling programs added 85,000 oil equivalent barrels per day of gross production in 2015. In the Q4, the Banyan Europe Central Processing Facility successfully started up. Current gross production is 150,000 barrels per day and continues to ramp up towards full capacity as we optimize both well and facility performance. Looking forward, construction activities continue to progress on 10 major projects that will come online over the next 2 years. We expect to start up 6 of those in 2016, which will add more than 250,000 barrels per day of working interest production capacity. Moving now to Slide 26. We continue to execute a paced and focused exploration program to deliver accretive value to ExxonMobil's asset portfolio, while capturing cost efficiencies in today's softer market. In offshore Guyana, the largest 3 d seismic survey in the company's history is nearly complete and we will begin appraising the Liza discovery during the Q1. We also acquired a 35% interest and operatorship of the Conje Block, which is adjacent to the Stabroek Block, adding over 520,000 net acres. In the Romanian Black Sea, ExxonMobil has completed exploration activities in Neptune block after successfully drilling 7 consecutive wells since July 2014. Based on the results of the program, including a successful well test of the Domino prospect, we are advancing detailed development and economic viability studies. And in Argentina, we are beginning a production pilot program on the La Vernada and Bajo del Choeque blocks in the New Queen Province. Program consists of 5 wells along with construction of production facilities and a gas pipeline. Over the past few months, we have also added high potential acreage to our diverse portfolio. ExxonMobil acquired a 35% interest in Block 14 Offshore, Uruguay, capturing almost 580,000 net acres. In Canada, we were awarded interest in 3 blocks offshore New Plymouth and Labrador, adding over 650,000 net acres. These blocks are in a proven oil prone hydrocarbon basin with recent industry discoveries. And this new opportunity will build on our 18 years of success in Eastern Canada with Hibernia, Terra Nova and the ongoing development at Hebron. And in Western Canada, we acquired additional working interest in our currently producing Duvernay acreage, adding 10,000 net acres. So I would now like to conclude today's comments with a summary of our 2015 performance, which demonstrates the resilience of our integrated business. ExxonMobil earned $16,200,000,000 underpinned by the benefits of our integrated business model, which captures value through the cycle, as demonstrated by our strong Downstream and Chemical results. Corporation achieved its full year plan to produce 4 point 1,000,000 oil equivalent barrels per day. Volume contributions from a portfolio of new developments underscore our project execution excellence and reputation as a reliable operator. Our results also reflect a relentless focus to reduce costs. In 2015, we achieved about $11,500,000,000 in capital and cash operating cost reductions. Solid operating performance combined with continued investment and cost discipline, generated cash flow from operations and asset sales of $32,700,000,000 and positive free cash flow of $6,500,000,000 Our commitment to shareholders remains strong as demonstrated by a reliable and growing dividend. So regardless of industry conditions, we remain focused on what we can control and are driven to create shareholder value through the cycle. And we will discuss our forward plans in more detail at our upcoming analyst meeting, which will take place at the New York Stock Exchange on Wednesday, March 2, with a live webcast beginning at 9 a. M. Eastern Time. That concludes my prepared remarks, and I would now be happy to take your questions. Thank you, Mr. Woodbury. The question and answer session will be conducted electronically. And we'll go first to Doug Leggate with Bank of America Merrill Lynch. Thanks. Good morning, Jeff. Good morning, everybody. Good morning, Doug. Jeff, the CapEx cut is pretty material. I wonder if you could help us reconcile Exxon's view of spending through the cycle with the extent of the cut and maybe give us some idea as to maybe just clarify 2 things. Where is this really a function of the slowdown in E and P spending that was already underway? And does it still include the minority or affiliate contribution? And I've got a follow-up, please. Yes. Doug, first, let me start with your second question first. The CapEx guidance that we provided for 2016 of $23,200,000,000 is all in. It includes consolidated and equity companies and it compares directly with the $31,100,000,000 that we spent in 2015. To answer your first question, I'd first like to say that as I said in my prepared comments, we were down in the year in 2015, both from 2014 performance as well as our planned guidance in 2015. And that was primarily a continued focus on capital efficiencies, market savings in a soft business climate. There was reduced activity and then importantly, timely project delivery. If you think about 2016, it's more of the same. It reflects our prudent cash management and our continued investment through the cycle in attractive high quality opportunities that we believe will generate long term shareholder value. The short of it is that we're going to continue to live within our means. We're going to maintain financial flexibility. And we've got as you heard us talk in the past, we've got a very diverse high quality inventory investment opportunities that will continue to progress. Thanks, Jeff. Sorry, I assume that was one question with a couple of parts to it. So my follow-up is, I realize you've been fairly tight lipped on Guyana to date. Obviously, this is a big acreage that you've had and there's my understanding is Fugro has already started the subsea survey, which suggests that there's an early production system scheme underway. Can you just give us a general update as to where things stand in Guyana, whether there is indeed an early production system target and how you see the overall scale of the opportunity to the extent you can chat about that at this point? Thanks. Yes. Thanks, Doug. I clearly understand the industry interest in the discovery. As we said at the time of discovery, we're very encouraged with the initial results recognizing that we only have one well in a very, very large block over 6,500,000 acres. We have since the discovery moved quickly to get a drillship contracted and on-site to appraise the discovery. We expect that to spud very shortly. As I said, the seismic acquisition is nearing completion. The results from both the well as well as the seismic are being actively assessed to assess the full block potential as well as the commercial viability of the Liso discovery. Obviously, the objective of the first well is an appraisal well in Liso and it's intended to give us important information to size the resource as well as get a test on it to assess the key variables associated with commercial viability. So I would tell you that there are early studies underway on potential development options for the field, but I don't have anything more to share on that. Thanks a lot, Jeff. You're welcome. We'll go next to Sam Margolin with Cowen and Company. Good morning. Good morning, Sam. On the in the press release, you called out some of the project startups and what seemed like a net overall favorable mix effect on income. I think that maybe Western Canada is included in the Starbucks, but not maybe a contributor to mix income enhancements. Can you talk about Western Canada, kind of the heavy levels of pressure we're seeing on heavy oil out there and maybe profitability is compressed in this price environment. As I have said before, we remain very focused on the fundamentals. And I'd tell you that the team there in Canada have done just an exceptional job in driving the cost structure down and enhancing reliability. We are not by any means where we want to be. In fact, I would tell you that we're never satisfied with the status quo. We will continue to work that, recognizing that we feel very good about the resource potential, not only in Kearl, but in Western Canada and in our portfolio. We think that over the long term, the asset is going to be high value. The focus is around maintaining cash profit and maximizing long term value in the asset. Thank you. And sort of on the other end of the same spectrum, I guess, as LNG, which is considered by many investors to be cost prohibitive, but actually has a pretty low overhead once it's operating. Can you help us understand how that contributed this quarter and through the year, specifically with P and G and some of the positive income contributions there? Sure. I mean, Sam, it's a great question because LNG clearly is a key component of our portfolio and it is an important part of our margin generation. Remember, we're constructive on long term demand for gas, as you just saw the recent update on our energy outlook, we got gas growing about 1.6% per year. LNG is anticipated to triple between now and 2,040. So we're very well poised to participate in that demand growth over the long term. I will tell you that for let's use P and G as a really good example. The initial design basis of P and G was about 6,900,000 tons per annum. As we said in the 3rd quarter, the organization did an exceptional job in doing what we do very well and that is get more out of the asset and we were able to get it up to in excess of 7,400,000 tons per annum, which has been just a phenomenal result. And we're still going. So it's a good example of how we really continue to manage the existing assets to reduce the cost structure, improve operational reliability to maximize long term asset value. Very helpful. Thank you so much. You bet, Sam. And we'll go next to Phil Gresh with JPMorgan. Hey, Jeff. Good morning. Good morning, Phil. First question is this kind of a bigger picture macro question. Obviously, pricing has been tough across all end markets, oil, natural gas, LNG. And I'm just curious if you see a funnel a fundamental supply demand improvement happening in any one particular market versus another over the next year or 2? So for example, do you see oil recovering faster than natural gas or anything else along those lines? Yes. So I guess I'd say that we're price takers and we manage the business to create margin through self help. Whatever we have built this business to ensure that it's durable in a low price environment. And then any upside from that is additional return on the investment. So the organization is very focused on really managing the fundamentals. As I indicated, we're for both gas and oil, we're constructive on long term demand growth. And it's the fundamental basis for the investment decisions that we put in place. And if you look near term, demand has been growing about 1,000,000 barrels per day per year. And although a day in excess of demand. We expect that to converge in the second half as seasonal demand increases. We got to come in balance like we have seen historically. We do have a bit of a buildup in crude storage that will have to be worked off before you see real growth in prices. But ultimately, we're going to manage wherever we are in the price cycle to create margin by focusing on the fundamentals. Same story around LNG is, as I said previously, that we're very constructive on where LNG demand is going to go over from now to 2,040. Okay, understood. The second question is just on Thanks for giving us the preview ahead of the Analyst Day. I guess what I was wondering was year over year, how much of that you might attribute to project roll off or deflationary benefits versus a reduction in activity? And just in general, you came in under the 2015 budget as you said. How much flexibility is there do you think relative to the guidance number versus that being kind of the lowest you could go? Yes, Phil, I don't have specific numbers to quote with you. I mean, and as I said, we'll talk more about our investment plans and our thoughts on volumes next month in the analyst meeting. But a couple of things to share with you. Clearly, our peak was back in 2013 at about $42,500,000,000 The drop from 2013 to 2014 was primarily a result of a drop off on this very significant major project load that we decided to take on. Obviously, in every year, we are working on capital efficiency opportunities to build into our spend pattern. As we go forward, I would tell you right now, most of the drop is associated with the prudent cash management that we've got. It's not indicative of the quality of the portfolio. As I've said previously, our portfolio is very deep and diverse across the upstream, downstream and chemical business. Some of the activity that we've slowed down really provides us an opportunity to rethink near term investments and really fully capture the market benefits going forward. But short of that, I really don't have any more specifics to share as to breaking the CapEx down further. We'll continue to live within our means, as we've shown historically. And if we need be, we'll have to tighten up if we have to further. So you see some additional flexibility even relative to this guidance? We've got flexibility both ways. Okay, thanks. And we'll go next to Evan Kallio with Morgan Stanley. Hey, good day. Good morning, Jeff. Good morning, Evan. Exxon is unique, relatively unique in its ability and dedication to counter cyclically spend. I mean, can you discuss the decision to cut the buyback in that context? And is that a reduction, any reflection on relative attractiveness within the portfolio, value of the stock or a weaker macro outlook? No. I mean, we've got a very as I said, a very deep and diverse portfolio. Much of that investment could be moved forward in today's environment. But as I indicated, we have a real opportunity to go ahead and rethink some of those expenditure patterns and capture more value from those investments. So the decision to cut the buyback doesn't at all reflect the quality of inventory. Quite the contrary, I mean, the inventory is very robust. Decision on the buyback, as we said before, our capital allocation approach is really focused on the dual priority of funding attractive investments and continuing to provide a reliable and growing dividend. And the share buybacks have always been the flexible part of our capital allocation program. As we continue to progress in a very challenging business climate, you saw us prudently taper back the buyback program. We will continue to evaluate the buyback program on a quarterly basis, depending on changes in the business as well as the investment climate and advise on a quarterly basis when we think it's appropriate. Great. Maybe if I can shift gears into in the U. S, you're currently running, I think, 7 rigs in the Bakken and 8 rigs in the Permian. I mean, maybe particularly in the Bakken, what's the driver of continued activity at current prices? I mean, is that are those economic wells? Are you preserving efficiencies for an ultimate reacceleration? And maybe the same question for the Permian that might be kind of HPP driven. Any color would be helpful. Evan, it's a good question because we have a very extensive well inventory in our unconventional business, particularly in the liquids place, the Permian, Bakken and the Woodford Ardmore. Once again, it's a conscious decision to be measured in our investment program. When we saw the big ramp up in rigs back in 2014, 2015, we were very measured in how we ramped up because we wanted to ensure that we fully developed the learning curve and capture those real cost benefits that translate into higher value as we fully develop these fields. So the investments that we're making right now are economic. They're attractive in this business climate. We are maintaining a certain base load of activity where we can continue to leverage some of the best service providers that we've got. We're one of the few that can continue to invest in a down cycle. We've high graded our all the services that we get in our unconventional business. In fact, I'd extend that globally. And we are continuing on those learning curves. And I think it just better positions us to maximize the value from these assets. Great. Appreciate it. Thanks. Okay. We'll go next to Doug with Evercore ISI. So on Slides 2526, you talked about the project portfolio and the growth trajectory longer term. Simultaneously though, when you consider that the growth has come at the expense of returns during the past cycle, not just for Exxon, but the other super majors too. It makes me wonder whether there should be more emphasis towards value creation, especially when considering that the valuation for some of the big oil companies is pretty much at its lowest level of the past 2 decades and in some cases, 3 decades. So my question is whether or not the issues of structure and returns and growth are being revisited internally, maybe more so than in the past? Or is that what is implied in the new spending outlook that you talked about today? And then also whether or not returns on capital, which I didn't see mentioned in the presentation, is still as relevant as it used to be? So two questions. Yes. Well, Doug, on the first one, I mean, your point about value creation in our investment program, we couldn't agree with you more. And I would tell you that it has never our view has never changed on the importance of making the right value choices. We saw back in the, I'd say, in the early 2000s to the mid 2010 timeframe, we saw a number of major upstream projects that got to the point of maturity that we could make an investment decision and capture unique value by progressing such a large load of major upstream investments. There were cost synergies that we were going to capture that ultimately was going to improve the long term return of those assets. So we knew that by taking on such a large load, it was going to impact our return on capital employed because we would build up a very large load of non productive capital employed. But we also knew that when those projects came on stream that they were going to be accretive to our overall average financial performance. So unfortunately, as these projects are coming on, the price environment has changed for us. But nonetheless, we still very feel very good about the long term financial performance of these assets. Because remember, when we make the final investment decision, we're testing those investments across a wide range of economic parameters, including price. And as I said earlier, our fundamental focus has been making sure that our business is viable and durable in a low price environment. So ultimately, we believe that these 30 plus major upstream projects that had an impact, rightfully so, had an impact on our return on capital employed, are going to be accretive to our financial performance over the long term and we believe that it was the right decision. Now to your second question on return on capital employed, it is still very much relevant to us. Okay. We believe it is a fundamental measure that differentiates us and that's why we continue to talk about it. We have never lost sight of the importance of that metric investment decisions that we're making. Okay, great. Maybe there'll be a returns and valuation and catch up in a more normalized environment in the future then? That's correct. Okay. Thanks a lot. Thank you, Doug. Yes. We'll go next to Ed Westlake with Credit Suisse. Yes. Good morning. Congrats on obviously $11,500,000,000 of capital and OpEx savings. OpEx, you haven't really spoken about as much this morning. Just maybe run through some of the actions you took to reduce OpEx over the course of last year and then the potential to cut OpEx further? Yes. Thanks for that, Ed, because it is a very important story of our 2015 performance. First, let me just make sure everybody Of the Of the $11,500,000,000 I mentioned, about $8,500,000,000 of that is operating expenses. And it includes a number of things, positive and negative. For instance, it includes the structural efficiencies that we were able to capture. It includes the market savings that we've been able to capture. Remember, I've talked in the past about having a unique organization or a global procurement organization that is really focused on achieving the lowest life cycle cost. The number includes benefits and energy costs, includes benefits from our asset management program as well as ForEx. There are increases in that number. Obviously, we've been talking about all these new projects coming on stream. Well, with them comes an increase in operating costs. And we'll continue to manage those assets like we do with our mature inventory. There was also a higher downstream load on unplanned maintenance that added cost during the year. So simply put, the $8,500,000,000 is a year on year comparison. The rest, dollars 3,000,000,000 is in CapEx. It includes a lot of the same actions I just talked about as well as decisions to slow down some activity to capture opportunities in this business climate. I will note that that $3,000,000,000 only reflects the reduction from our planned guidance. As I said in the prepared comments, our year on year reduction in CapEx was $7,500,000,000 So we didn't really include the $4,500,000,000 in the $11,500,000,000 that I talked about in the prepared comments. So in total year on year, our total reduction is really $16,000,000,000 if you include the 4 $500,000,000 Yes. And then in terms of the ability to drive further OpEx, I mean another 10%, another 15%, I mean how low do you think you can get that OpEx saving? It's a great question, Ed. It really is because it really talks to the strength of the organization. In this low price environment, it presents opportunities too. And the organization is never satisfied with the status quo. The organization is very focused on leading that cost curve. And while we may have some internal stewardship objectives, rest assured, we continue to look for new unique ways to capture structural improvements, which are most important. Because remember, those are the ones that are going to be permanent going forward. So there is a lot more to work on, but I don't have any specific numbers at this point. Okay. I look forward to the Analyst Day. Thank you. Okay. We'll go next to Ryan Todd with Deutsche Bank. Great. Thanks. Good morning, Jeff. Maybe if I could follow-up on the comment that you made a couple of times now, you've talked about how you guys are rethinking near term investments and the way you deploy capital. I mean, how much does this refer to an evolution of your views on relative attractiveness amongst various components of the portfolio in terms of is there a does this represent at all a shift in attractiveness of on shore versus deepwater versus oil sands or LNG, etcetera? Or how much is just referring to rethinking the cost structure in the near term environment in an effort to continue to push down prices? It's really both. It's every investment dollar is competing. So it's all about how do we get the most value out of those investment dollars that are being deployed throughout the business. The organization, as I indicated, really views the down cycle as a real opportunity to go back and retest development concepts, retest the cost structures, retest the commercial terms. And whether it's short cycle or long cycle, we're going to maintain that competitive focus and make the right value choices coupled with our prudent cash management. Great. Thanks. And then maybe just as a follow-up on that. I mean during the most recent downturn in 'eight, 'nine, you took advantage of the environment by pushing through more countercyclical investment in places like the Canadian oil sands. And I think we all realize that this downturn is different. But do you see similar opportunities to leverage your strength in this environment, either on the cost and project development side or maybe even on the resource acquisition side? Or is your outlook different enough at this point that you feel that more prudence is necessary in the short to medium term? Well, I mean, clearly, I mean, given the uncertainty in prices, we're going to maintain prudency. But at the same time, as I've said a couple of times, Ryan, we really do see that this is an opportunity to capture further value in the bottom of the cycle. And across all the areas I've already mentioned, but there are plenty of opportunities that the organization is focused on to really make that value proposition. And I'd also add that because of our ability to invest through this cycle, our service providers understand that if they can provide lower cost, higher value solutions to us, then we'll continue to invest if it makes good business sense. So having the not only the organization focused on it, but also our service providers focused on it has provided some unique opportunities for us. And we'll go next to Paul Sankey with Wolfe Research. Good morning, Paul. Jeff, I'm looking forward to seeing you all at the analyst meeting. I know that Mr. Tillerson has been in New York a a couple of times, I should say in New York and in Miami making some statements. I haven't personally spoken to him since last March. The general message that he had then was certainly that we would be lower for longer. I assume he's still making that argument. I think that he was saying that you guys would be typically keen to make acquisitions at the bottom of the cycle, but the bid ask spreads were too wide. He was saying less interest in buying a balance sheet that was bad. He would prefer to buy a balance sheet that was good. And I think you've said that consolidation in the Permian would be an area of interest. Is that the latest message that we've got, for example, in the Miami conference? I'm sorry, I wasn't present. I was wondering if the message has changed. Thanks. Yes. Well, I mean, from a supply demand perspective, I shared some of our thoughts around expectations. Clearly, the oversupply currently and the overhang from storage is going to have a dampening effect on prices in the near term. But Paul, as we've talked in the past, we continue to be focused on the fundamentals and through our self help creating margin. And that's what's most important for this business. We invest to ensure that the business is durable at low prices. We continue to manage the business based on our focus on the fundamentals to create margin. From an acquisition perspective, clearly, I'm sure there's a tremendous amount of interest. We remain very patient. We keep alert to the value propositions. But it's as I've said before, anything that we see out there has got to be competitive with our current investment inventory. Sure. I mean, the bid ask spread element, is that must I mean, by just looking at the share price charts, that has to be narrowing now between what you guys would see as value and what sellers would? Yes. Well, I mean, clearly, bid ask is going to be a function of a number of factors, including the business climate, unique carry code, the more pressure it will put on the bid ask. But I think also Paul as you're probably well aware, I mean, the absence of any major deals absent a few couple one offs really talks that there's still a gap to valuations. We'll be thoughtful. We'll make sure that anything that looks of interest is going to be value adding. Indeed. And then a bit of a technical question. Does Mr. Tillerson retire on his 65th birthday or at the beginning of 2017 typically? I mean, what would be the model? I guess what I'm driving at is, is this going to be his last analyst meeting? Yes. Well, I mean, I'm not going to provide any specifics. I mean, that's really at the function of the Board's decision. Right. Okay. Thank you. All right. Thank you, Paul. We'll go next to Roger Read with Wells Fargo. Thanks. Good morning, Jeff. Good morning, Roger. I guess I'd like to follow-up a little more on the right amount of service sector capability and all. But as you look at Lower forty eight volume growth, which was certainly reasonable in the past year, does it grow in 2016 at these levels? And I know you wouldn't necessarily share with you right now, but I would tell you think about this is that the choices that we are making are all based on value propositions. The outcome of those will be volumes. And as I indicated earlier, Roger, we've got a very deep portfolio of investment opportunities in the Lower 48, particularly in the unconventional business. And we'll maintain an appropriate balance of short cycle investments. And when we feel like that the business climate supports it, we'll probably increase the amount of activity. I think what's important to note is that we are very well poised to flex the program up or down depending on the business climate. Appreciate that. The other question I had was on the share repo program, I understand taking it off the table for now. If you were to get a surprise influx of cash flow, just say higher commodity prices, is the decision in the near term that it would likely go towards shareholder returns or that CapEx would go up? And I know Exxon is not a quick trigger place like some other businesses, but you do have opportunities as you said in the lower 48. What's sort of the internal thinking on that front? Well, I mean if it was an influx of cash flow, I mean, I would tell you that it's going to be a function of the Board's decision on a quarterly basis. I mean, if we see supply and demand continuing to balance out, that may be a signal for us to modify our investment plans going forward. But as I've indicated previously, Roger, the Board makes the decision on a quarterly basis on what level of buybacks we want to maintain and consider a whole range of factors including the business climate in making that decision. All right. So Powerball lottery by itself doesn't do it. You have to have some other fundamental things helping you out. All right. All right. Thank you. Thank you, Roger. We'll go next to Neil Mehta with Goldman Sachs. Hey, good morning, Jeff. Good morning, Neil. Jeff, you've had a great year here of production. This is something where we I'm sure we'll get more clarity in March. But can you just talk about it $23,000,000,000 how you think about the level of production relative to the 4,200,000 barrels a day that you outlined last year for 2016? And then which broadly speaking, which regions where you would see potential changes? Yes. Well, Neil, let me first just take an opportunity to acknowledge a very strong operational year in 2015, achieving the 4,100,000 oil crude barrels per day, which I'll just want to emphasize for the group, it's really our an outcome of our value choices that we've made. The organization has really delivered on the timely start up of our major projects, which are a very key and significant contribution to our volumes this year. I'll say looking forward, as I alluded to in the prepared comments, we have 10 more large scale long life projects starting up over the next couple of years. The first the next tranche of that will be 6 of the 10 starting up in 2016. We maintain a very strong focus on the high value work program as well as operational reliability. Looking forward, we will be sharing more on our near term investment plans and some thoughts on our volumes in the upcoming analyst meeting. But I really don't have any more specifics to share with you at this point. I appreciate that, Jeff. And then obviously, one of the Exxon's key advantages here is your balance sheet. In light of some of the comments from the ratings agencies, can you just talk about your commitment to your AAA rating here? And then any perspective that you can provide around how that could change as ratings agencies think about their market outlook? It's a good question, Neal. And clearly, I mean, it's topical for many in the energy sector. I mean, 1st and foremost, let me just be clear. I mean, we get value from the AAA credit rating in our business, whether it be access to financial markets or access to resources. I mean, there is a benefit that we get from it and we see it as being including things like our strong balance sheet, the way we have prudently managed our cash, our disciplined investment and our leading financial and operating results, all of which has allowed us the financial flexibility to invest through the cycle as we've been discussing. I tell you that the current environment is clearly tough, but we've managed the business to be durable on the low end of commodity prices. We're very well positioned to continue the same level of superior performance in the future. And we think that all underpins the strong credit rating that we have. Thanks, Jeff. You're welcome. And we'll go next to Paul Cheng with Barclays. Hey, Jeff. Good morning. Good morning, Paul. Two very quick questions. The $23,200,000,000 how much is related to the cellphone equity of Finney? And also that within that number, how much is for the major project spending? You're talking about our 2016 CapEx guidance? Yes. We'll provide Paul, we'll provide you more information on our spending plans in the analyst meeting. I really don't have anything more to share at this point. I see. Okay. The second one then, real quick, look like you have $800,000,000 on the asset sales proceeds. What is the asset sales gain in the quarter? And that also do you have seems like that you may have some tax adjustment benefit in the quarter and that you have also mentioned, I think some FX impact and also inventory impact. Can you quantify those items in the quarter and if possible by segment also? Yes. So Paul on the proceeds from asset sales, which was about $800,000,000 in the Q4, the equivalent earnings impact is about $350,000,000 primarily in the downstream. Could you talk a little bit more about the second question just to make sure I It looked like that, I mean, the effective tax rate is 13% in the quarter. We understand the mix of the earning oftentimes that impact the absolute level of the tax, but it does look like it's low enough that you may have some tax benefit or adjustment year and adjustment on that. Just curious if that's the case and if it is, can you quantify it? What is the tax adjustment benefit? And also that which settlement is being impact? And also that I think in your prepared remarks you have comment that there's some impact on the earning from the FX and also inventory. So just want to see if you can quantify those. Sure, sure. Okay. Let me walk through them for you. On ForEx, the quarter on quarter impact is essentially nil. I mean, it's a slight negative to earnings, less than $5,000,000 How about sequentially? I'm sorry, say that again? Sequentially, you're talking about, right? This one close to 0? That was quarter on quarter. Q4 2015 to Q4 2014. The full year had a negative impact on our earnings about $125,000,000 That's ForEx, okay? On tax, so yes, our effective tax rate was 13% in the Q4 and that was down about 19% quarter on quarter. A fair bit of that had to do with one time tax items. The rest about 5% was due to portfolio mix of income across the business segments and the geographies. And that's really spread across our corporate and finance as well as some of the segments. Jeff, when you say that one time tax item, 14%, it seems like you're talking about 14% because you say 19% overall reduction, 5% is due to the mix of the asset and so the one time item is 14%. Is that 14% spread across all different segment or is it primary in upstream? It's in corporate and finance and several of the other segments. I don't have a breakdown for you. Okay. And how about inventory impact? Yes. Before I leave tax, I just want to be clear for everybody that assuming our current commodity prices and our existing portfolio mix, we still would anticipate that the effective tax rate is between 35% to 40%. If you look at the full year tax in 2015, it was just under 34%. And that included obviously some one time tax effects. Okay. On inventory, Paul, quarter on quarter, it had a negative earnings impact of about $375,000,000 Thank you. Okay. You're welcome, Paul. We'll go next to Anish Kapadia with TPH. Good morning, Anish. Hi, good morning. Just had a question looking at kind of production and declines. If we look at 2015, it seems like underlying production was flat. So we saw new projects that were offset by production declines. I wanted to try and understand in terms of 2016, how much of your CapEx is going into the base business to mitigate declines? And so what do you see the underlying decline rate today with the current spend? Thank you. Anish, we have an underlying decline as we included in our 10 ks of about 3%. On top of that, we add major project activity. Again, I don't break it out by use and we'll talk more about the investment plans in the Analyst Meeting next month. Okay. And just to clarify on that, so given the CapEx cuts that we've seen, you wouldn't expect that decline rate to accelerate on the back the CapEx cuts? No. Remember, it's a base decline rate ex major project activity. Okay. And second question was on plans for, I suppose, the new major projects. And given that cutback in the CapEx, do you have any potential FIDs for this year that you're looking to sanction? Yes. On FIDs, we just don't forecast FIDs in advance of the investment decision made by the corporation. When we make that decision, when the investments get to a level of maturity and we make that decision, then we communicate. Excuse me. I'll remind you that we have 10 major projects that will start up in the next 2 years, as I indicated before. And that they will certainly contribute to our base performance. Thanks. I just wanted to clarify I think I might have missed it from earlier. I think there's a question on the impact of U. S. Onshore production today this year. Well, as I indicated, we'll share more about our investment plans as well as our investment plans as well as our thoughts on volumes in next month's analyst meeting. We've got a very deep robust inventory of development projects in upstream and we'll talk more about that next month or I guess, yes, next month. Sure. Okay. Thanks very much. And we'll go next to Jason Gammal with Jefferies. Yes. Hi. Thanks, Jeff. I was hoping you might be able to just give us a little bit of the detail on those project start ups that you're expecting in 2016 2017, just to make sure my list is correct? And if you want to share the contribution that the 16 startups are making towards that 250 kilobytes D capacity, that'd be helpful as well. Yes. On the startups in 2016, of course, we've got Gorgon Jans. We have late in the year, Kashagan. We've got Julia in the Gulf of Mexico, Heidelberg in the Gulf of Mexico, Pointe Thompson in Alaska and Barzan in Qatar. And Jason, we provide the peak level of PASI in our F and L. Great. So that probably hasn't changed too much since that was published then? No. And we'll provide an update to that list next month as well. Got it. And if I could just ask one more, Jeff, on the downstream. You've put in place a couple of projects in Europe to potentially take advantage of heavier feedstocks over time, let's see, Antwerp being the primary one. So maybe you could talk about what you're seeing just in terms of those heavier feedstocks within Europe and how the profitability is evolving on that? Yes. Thanks for the question on the downstream, because the organization has really performed tremendously in the year. Our investments in the downstream, particularly in Europe, are really focused on the following items. 1, to increase feedstock flexibility. The second is to increase logistics flexibility. The third one is to increase higher value product yields. I'll come back to that. And then the last and important one is fully capturing the integration value of our manufacturing facilities and reducing our cost structure. On the higher value product yields, I mean, when we talk about Antwerp or Rotterdam, both are achieving the same objective. On Antwerp, we're converting bunker fuel oil into ultra low sulfur diesel, again constructive on longer term supply demand. And in Rotterdam, we're converting VGO into premium Group 2 base stocks and as well ultra low sulfur diesel. That's great. Appreciate that, Jeff. Great. You're welcome. And we'll go next to Asit Sen with CLSA. Thanks. Hi, Jeff. Hi, Asit. Two questions. One very quick one on Bonny Europe. Nice ramp up there. When do you get to peak? And any update on the size of recover resource? I think it's 450,000,000 barrels and cost, I thought you guys have mentioned 3,000,000,000 dollars Yes. So the size of the resource, let me just confirm your number. It's about 450,000,000 barrels gross. The ramp up, we should be up at full rates somewhere in the first half of this year. Okay. And the cost, I think $3,000,000,000 As I don't think shared the cost publicly. Okay. All right. And then moving on to LNG, thanks for your color on the long term LNG market. Just wondering if you could share any read into emerging near term trend, LNG, particularly response in China to a lower pricing environment, given your comment on China deceleration, I thought that was an overall comment. And also on LNG, any update on Golden Pass? Yes. I guess two points. On the near term expectation of LNG, there's a number of projects as some of which are already coming online that are probably going to take us above demand for a period of time, say, into 2020 to 2023, when supply and demand will start coming to converge again. So clearly, I mean, it's going to have a pressure on those volumes that are trading on the spot market. Just to remind everybody, when we make an investment decision on these projects, we lock in our investment decisions on long term contracts. Golden Pass, we have submitted our formal application with FERC to construct and operate the project. We're working closely with the federal and state agencies for completing the review process in 2016. The final investment decision will be made once we've gone through the government and regulatory approvals. Thanks, Jeff. You're welcome. We'll go next to Alan Good with Morningstar. Good morning. Good morning, Alan. I wonder if given all the changes that we've seen in the oil markets over the last, call it 18 months, has Exxon revised the range of prices that it uses to evaluate investment decisions? Well, I'd say, Alan, that we continue to see that the range is applicable given our constructive view on supply and demand. We won't speculate on specific prices or differentials. We certainly expect the weakness until supply and demand comes back in the balance and the storage overhang has worked off. As I've said a few times, Alan, regardless of what the price is doing, we're going to keep on focused on those things that we control, which really translates into self help margin. Thanks. That helps. And then deepwater offshore, very big part of Exxon's portfolio getting bigger from what you've shared today. Can you give any indication as to what Exxon's seen with respect to either cost savings via equipment or services or maybe even cost savings on the redesign of certain projects that will ultimately lower the breakevens and make them more competitive within your portfolio? Yes, really good question. There's a lot of different variables in this. One, in terms of the quality of the resources and the certainty on overall potential from those resources. Another one being, how do we get the structural capital efficiency built in, so that the economics are more robust. I'll highlight a couple of things. 1, in 2015, you recall in West Africa, we brought in brought on 2 very capital efficient subsea tiebacks to existing infrastructure, one being the Kazama Satellites Phase 2 and the other one being Iroha North Phase 2 that allows us to leverage existing Olich and develop the deepwater resource in a much more cost effective way. Clearly, there's a lot of opportunity to continue to standardize the Subsea kit. But the organization is looking at all the levers to improve the economics of deepwater. In the Gulf of Mexico, I should note that Hadrian South was another example of an efficient capital efficient subsea tieback into existing infrastructure. Great. Thank you very much. You're welcome. And we'll go next to Brad Heffern with RBC Capital Markets. Good Most of my questions have been answered, so I'll keep it short. I was just curious, back on CapEx. I would assume that downstream is relatively flat sequentially and that the vast majority of the cut is coming from the upstream side? Yes. We'll provide more insight on that, Brad. But as you saw in 2015, our downstream and chemical spending plan increased with a number of very large projects that we saw significant value chain benefit with the polyethylene trains in Baytown to the European investments that we've already talked about. And of course, those projects are continuing as you go into 2016 and start up into 2017. So the trend is going to continue going forward. Okay. I'll leave it there. Thanks. And we'll go next to John Herrlin with Societe Generale. Yes. Hi, Jeff. A couple of quick ones for me since so many things have been asked. For the LISA offset, will we be talking about this in the Q2 conference or in the Q1 conference call? Will it TD by then? So John, I don't really have the specifics. When we believe there's something that would be important to share externally, we'll go ahead and share it. I just don't know whether the Q1 will be the appropriate time or not at this point. Okay. That's fine. Many of your peers, Jeff, are restructuring. They're rightsizing or downsizing. Exxon hasn't had any news like that. So are there any plans to work? Or do you feel that you have an adequate B size workforce given your business model? Yes. It's a good question, John. I appreciate you asking it. Let me first say for the group's benefit that one of our greatest strengths are our people. And I think those of us that went through the layoffs in the '80s really learned some of the hard lessons about how those layoffs significantly impaired organizational effectiveness. I mean, since then, we have been very diligent at managing employee headcount given the cyclical nature of the business and the need by the organization to be ever more productive and at the same time grow collective competency to meet the challenges in front of us. In doing so, I'd also say that we've been unrelenting on our focus of capturing efficiencies to make sure that we right size the organization, again, given the likelihood of business volatility. I'd also highlight, John, that another benefit of our integrated business model is that we're able to be agile in redeploying personnel to segments of our business that are experiencing market strength or growth, such as our Downstream and Chemical businesses right now. All that said, our employee headcount has been coming down consistently since the Exxon and Mobile merger. We're down about 35% through 2015. Over that time period, if you look at just the last 5 years, we're down about 20%. And I can rest assured that the organizations can continue to be focused on productivity enhancements and making sure that we're getting all the efficiencies out of the business. Sure. But you haven't had anything as knee jerk or reactionary as some of your peers of late. It's just been part of your normal plan, correct? That's correct. All right. Thanks. Thank you, John. We'll go next to Paul Molchanov with Raymond James. Hey, guys. Thanks for taking the question. Just one for me. You talk about entering acreage in some new geographies, particularly some frontier type of geographies. Since the oil down cycle began, have you noticed fiscal terms becoming more accommodating in any areas? And if you can provide any examples that would be great. Good morning, Pavel. I would tell you that certainly given the downturn, there are more opportunities for us to consider. There is nothing that I can share with you specifically, but it does speak to the strength of ExxonMobil given that we've got the capability to invest in the down cycle. We bring a tremendous amount of operational, commercial and project expertise. So it allows us to be very selective as to what choices we want to pursue with a very strong focus on placing our attention on those areas that are close to existing producing infrastructure, those areas that have very high quality, large resource potential. Appreciate it. Thank you, Pavel. And we'll go next to Guy Baber with Simmons. Good morning, Jeff, and thanks for answering all the questions. Good morning, Guy. I know this is a tough question to answer, but I'm interested in how you think about this strategically. But given the scale of the CapEx reductions we're seeing, how do you think about the sustainability of these lower organic spending levels with respect to being sufficient to drive a modest level of production growth for the portfolio yet also replenish the resource base. Are you spending now below what you believe is sustainable? And how do you think about the balance between spending at a sustainable level versus perhaps rationing lower to limit your outspend for a period of time? Yes. I would tell you, Guy, to really think about the decisions that we're making are really value driven. The output is really the volumes, but it's really making the choices that are aligned with creating value in the portfolio, whether it be in the upstream or the downstream or chemical business, recognizing that we've got this very strong integration across our portfolio that we can create value through the whole value chain. So the choices are really focused on making sure that we're creating incremental value. The volumes will be an output of that. Got it. That's helpful, Jeff. And then, last one for me, and I apologize if I missed this earlier. But given your global perspective, your participation in various downstream markets across the globe, can you give us the view on leading edge global oil demand growth for 2016? Any color would be great as it's obviously a critical piece of the global supply demand balance. Yes. Well, I mean, you're talking about oil demand? Yes, yes, specifically oil demand. Yes. Well, I talked a little bit earlier about underlying demand growth has been over 1,000,000 barrels a day. So it's been a little bit higher than what we've seen over the 10 year average. You think about where we are today, we're about 1,500,000 barrels a day oversupply in the first We do expect that to converge in the second half with seasonal demand growth. So you think about the impact on prices in the near term, it's really going to be a function of how that supply demand converges and of course working off the storage overhang that's been built up over the last couple of years. That's about all I can share at this point. Got it. Thanks, Jeff. Thank you. And that does conclude our question and answer session. I'll turn it back over to Mr. Jeff Woodbury for any closing remarks. Well, thank you. To conclude, again, I'd like to thank you for your time and your questions. I just want to step back for a moment and take stock of 2015 and say, the organization really did a very significant provide a very significant result when you think about it. Positive free cash flow, very effective cost management, lowering our spending that have bottom line impacts, benefits to the business, our excellence in project execution and are delivering long life, long plateau volumes, the benefits of the integrated business model across the value chain, the financial strength of the organization investing through the commodity price cycle and then of course our dividend growth continuing to share the success of the company. And I think that just points to the strong business fundamentals based on our proven track record. We'll talk more about this in March, but we do appreciate your interest in ExxonMobil and we certainly look forward to meeting with you next month. And that does conclude today's conference call. We appreciate your participation.