ExxonMobil announces third quarter 2023 results

• Generated strong third-quarter earnings of $9.1 billion, or $2.25 per share, reflecting reliable operating performance of an advantaged portfolio

• Produced $16.0 billion of operating cash flow and increased cash balance by $3.4 billion

• Delivered the best-ever third-quarter global refinery throughput¹ at 4.2 million barrels per day

• Returned $8.1 billion to shareholders in the quarter and increased fourth-quarter dividend to $0.95 per share

• Announced agreement to merge with Pioneer Natural Resources, a combination that will increase U.S. Permian production, enhance energy security and accelerate Pioneer’s path to net zero

SPRING, Texas–(BUSINESS WIRE)–Exxon Mobil Corporation (NYSE:XOM):

Exxon Mobil Corporation today announced third-quarter 2023 earnings of $9.1 billion, or $2.25 per share assuming dilution. Cash flow from operations was $16.0 billion, up $6.6 billion versus the second quarter. In line with plans, capital and exploration expenditures were $6.0 billion in the third quarter, bringing year-to-date 2023 expenditures to $18.6 billion. Full-year capital and exploration expenditures are expected to be at the top end of the guidance of $23 billion to $25 billion as the company pursues value accretive opportunities.

“We delivered another quarter of strong operational performance, earnings and cash flows, adding nearly 80,000 net oil-equivalent barrels per day to support global supply³,” said Darren Woods, chairman and chief executive officer. “The organization’s relentless focus on safety, environment and value is paying off – driving record refining throughputs, delivering big projects at first-quintile cost and schedule, and exceeding planned structural cost savings while reducing emissions intensity and the impact on the environment.

“The two transactions we’ve announced further underscore our ongoing commitment to the ‘and’ equation by continuing to meet the world’s needs for energy and essential products while reducing emissions. Pioneer will help us grow supply to meet the world’s energy needs with lower carbon intensity while Denbury improves our competitive position to economically reduce emissions in hard-to-decarbonize industries. Our disciplined operational and financial performance, combined with these strategic transactions, will strengthen our portfolio and position us to deliver profitable growth and attractive returns for many years to come.”

¹ Highest third-quarter global refinery throughput (2000-2023) since Exxon and Mobil merger in 1999, based on current refinery circuit.

² Assuming dilution.

³ Compared to third-quarter 2022; Excludes impacts from divestments, entitlements, and government-mandated curtailments.

Third-Quarter 2023 Financial Highlights

• Earnings were $9.1 billion compared with second-quarter earnings of $7.9 billion. Results improved with strong operating performance, including record third-quarter refining throughput¹ as well as a higher crude price and industry refining margin environment. These factors were partly offset by weaker chemical margins, unfavorable derivative mark-to-market impacts and trading timing effects that are expected to unwind over time.
• The company achieved $9.0 billion of cumulative structural cost savings versus 2019, ahead of schedule, with further savings expected by year-end.
• Strong earnings drove cash flow from operations of $16.0 billion and free cash flow of $11.7 billion, an increase of $6.6 billion and $6.7 billion respectively versus the second quarter. Third-quarter shareholder distributions of $8.1 billion included $3.7 billion of dividends and $4.4 billion of share repurchases. Year-to-date share repurchases were $13.1 billion, consistent with the company’s plan to repurchase $17.5 billion of shares in 2023.
• The Corporation declared a fourth-quarter dividend of $0.95 per share, payable on Dec. 11, 2023, to shareholders of record of Common Stock at the close of business on Nov. 15, 2023. The company has increased its annual dividend for 41 consecutive years, including this increase of $0.04 per share, or 4 percent.
• The debt-to-capital ratio remained at 17% and the net-debt-to-capital ratio was 4%, reflecting a period-end cash balance of $33.0 billion.
• The company continued to strengthen its portfolio with the closing of the Thailand refinery divestment in the third quarter. Total asset sales and divestments generated $0.9 billion of cash proceeds, bringing the year-to-date total to $3.1 billion.

¹ Highest third-quarter global refinery throughput (2000-2023) since Exxon and Mobil merger in 1999, based on current refinery circuit.

ADVANCING CLIMATE SOLUTIONS

Progress Toward Net Zero

• ExxonMobil has industry-leading plans to achieve net zero Scope 1 and 2 greenhouse gas emissions from its Permian unconventional operations by 2030. As part of the announced Pioneer merger, ExxonMobil plans to accelerate Pioneer’s net-zero Permian ambition to 2035 from 2050. In addition, using a combination of technology, operating capabilities, infrastructure, recycling, and water sharing, the company expects to increase the amount of water sourced from oil and gas production used in its Permian fracturing operations to more than 90% by 2030.

Carbon Capture and Storage

• In July, the company entered into a definitive agreement to acquire Denbury Inc. The planned acquisition will provide ExxonMobil with one of the largest owned and operated carbon dioxide (CO2) pipeline networks in the United States. The combination will further expand ExxonMobil’s ability to provide large-scale emission-reduction services to industrial customers. Denbury scheduled a shareholder vote for October 31, 2023, with the transaction expected to close in early November. The acquisition is an all-stock transaction valued at $4.9 billion, and the expected number of shares issuable in connection with the transaction is approximately 45 million.

• Upstream third-quarter earnings were $6.1 billion, an increase of $1.5 billion from the second quarter, driven by higher crude prices, lower scheduled maintenance, and favorable tax impacts. Identified items unfavorably impacted earnings by $14 million in the quarter.

• Compared to the same quarter last year, earnings decreased $6.3 billion. Excluding identified items, earnings declined $5.7 billion, driven by a nearly 60% decrease in natural gas realizations and a 14% decrease in crude realizations. Excluding the impacts from divestments, entitlements, and government-mandated curtailments, net production grew about 80,000 oil-equivalent barrels per day, driven by the Permian and Guyana.

• Year-to-date earnings were $17.2 billion, a decrease of $11.1 billion versus the first nine months of 2022. The prior-year period was impacted by net negative identified items totaling $2.4 billion, including an identified item associated with the Sakhalin-1 expropriation. Excluding identified items, earnings declined $13.3 billion. Higher production from advantaged projects in Guyana and the Permian provided a partial offset to lower crude and natural gas realizations. Year-to-date production was 3.7 million oil-equivalent barrels per day. The portfolio mix continued to improve with liquid production growth from Guyana and the Permian, offsetting lower natural gas production from divestments.

• In October, ExxonMobil announced an agreement to merge with Pioneer Natural Resources in a $59.5 billion all-stock transaction. The combination is expected to generate double-digit returns by recovering more resources, more efficiently, while accelerating emissions reductions¹.

¹ Expected to leverage Permian GHG reduction plans to accelerate Pioneer’s net-zero emissions plan to 2035 from 2050; plan to lower both companies’ Permian methane emissions through new technology application.

• Energy Products third-quarter earnings were $2.4 billion, up $0.1 billion sequentially due to improved industry refining margins and strong reliability with record throughput. These factors were partly offset by negative trading-related impacts from rising prices including unfavorable derivative mark-to-market impacts and other timing effects that were largely non-cash and are expected to unwind over time.

• Compared to the same quarter last year, earnings decreased $3.4 billion on weaker industry refining margins and unfavorable foreign exchange impacts. In addition, earnings were lower from trading-related impacts including negative derivative mark-to-market and other timing effects that were largely non-cash, which were impacted by rising prices in the quarter compared to declining prices in the third quarter of last year.

• Year-to-date earnings were $8.9 billion, a decrease of $2.0 billion versus the same period last year. Declining industry refining margins and higher planned maintenance expenses were partly offset by higher sales volumes, mainly from the start-up of the Beaumont refinery expansion. Unfavorable derivative mark-to-market impacts were offset by favorable other timing effects, mostly of a non-cash nature.

• Chemical Products third-quarter earnings were $249 million, down from $828 million in the second quarter. Industry margins compressed from higher feedstock costs and lower price realizations as industry supply outpaced rising demand. Improved volume/mix effects from growth in performance chemicals partially offset weaker margins.

• Compared to the same quarter last year, earnings decreased $563 million on weaker industry margins.

• Year-to-date earnings were $1.4 billion compared to $3.3 billion in the first nine months of 2022, driven by weaker industry margins, lower sales volumes reflecting softer demand, and higher planned maintenance.

• The Baytown chemical expansion project started up in the third quarter, adding 750 Kta of performance chemicals production capacity and marks the company’s entry into the linear alpha olefins market.

• Specialty Products third-quarter earnings were $619 million, compared to $671 million in the second quarter, consistently delivering strong earnings from our portfolio of high-value products. Revenue management activities leveraging the company’s leading brand and market position, and lower expenses were more than offset by weaker basestock margins from rising feed costs.

• Compared to the same quarter last year, earnings decreased by $143 million. Improved reliability and stronger finished lubes margins were more than offset by weaker basestock margins.

• Year-to-date earnings were $2.1 billion, an increase of $409 million versus the first nine months of 2022. Improved finished lubes margins from lower feed costs were partially offset by lower specialty products sales volumes due to weaker demand.

• Corporate and Financing third-quarter net charges of $365 million decreased $141 million versus the second quarter, driven by lower financing costs.

• Compared to the same quarter last year, net charges increased $213 million. Excluding prior-year favorable identified items of $400 million related to tax and other reserve adjustments, net charges decreased $187 million from lower financing costs.

• Year-to-date charges of $1.2 billion increased $94 million from last year. Excluding identified items, net charges decreased $208 million from lower financing costs.

This press release also references structural cost savings. Structural cost savings describe decreases in cash opex excluding energy and production taxes as a result of operational efficiencies, workforce reductions, and other cost-saving measures that are expected to be sustainable compared to 2019 levels. Relative to 2019, estimated cumulative structural cost savings totaled $9.0 billion, which included an additional $1.6 billion in the first nine months of 2023. The total change between periods in expenses above will reflect both structural cost savings and other changes in spend, including market factors, such as inflation and foreign exchange impacts, as well as changes in activity levels and costs associated with new operations. Estimates of cumulative annual structural savings may be revised depending on whether cost reductions realized in prior periods are determined to be sustainable compared to 2019 levels. Structural cost savings are stewarded internally to support management’s oversight of spending over time. This measure is useful for investors to understand the Corporation’s efforts to optimize spending through disciplined expense management.

ExxonMobil will discuss financial and operating results and other matters during a webcast at 7:30 a.m. Central Time on October 27, 2023. To listen to the event or access an archived replay, please visit www.exxonmobil.com.

Important Information about the Pioneer Transaction and the Denbury Transaction and Where to Find It

In connection with the proposed transaction between Exxon Mobil Corporation (“ExxonMobil”) and Pioneer Natural Resources Company (“Pioneer”) (the “Pioneer Transaction”), ExxonMobil and Pioneer will file relevant materials with the Securities and Exchange Commission (the “SEC”), including a registration statement on Form S-4 filed by ExxonMobil that will include a proxy statement of Pioneer that also constitutes a prospectus of ExxonMobil. A definitive proxy statement/prospectus will be mailed to stockholders of Pioneer.

In connection with the proposed transaction between ExxonMobil and Denbury Inc. (“Denbury”) (the “Denbury Transaction”), ExxonMobil and Denbury have filed and will file relevant materials with the SEC. On August 29, 2023, ExxonMobil filed with the SEC a registration statement on Form S-4, as amended (No. 333-274252) to register the shares of ExxonMobil common stock to be issued in connection with the Denbury Transaction. The registration statement, which was declared effective by the SEC on September 29, 2023, includes a definitive proxy statement of Denbury that also constitutes a prospectus of ExxonMobil. Such definitive proxy statement/prospectus was mailed to the stockholders of Denbury on September 29, 2023.

This communication is not a substitute for the registration statement, proxy statement or prospectus or any other document that ExxonMobil, Pioneer or Denbury (as applicable) has filed or may file with the SEC in connection with the Pioneer Transaction or the Denbury Transaction (as applicable).

BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF EXXONMOBIL, PIONEER AND DENBURY ARE URGED TO READ THE APPLICABLE REGISTRATION STATEMENT, THE APPLICABLE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS (AS APPLICABLE), CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PIONEER TRANSACTION OR THE DENBURY TRANSACTION (AS APPLICABLE) AND RELATED MATTERS.

Investors and security holders may obtain free copies of the applicable registration statement and the proxy statement/prospectus (in the case of the Pioneer Transaction, when they become available), as well as other filings containing important information about ExxonMobil, Pioneer or Denbury, without charge at the SEC’s Internet website (http://www.sec.gov). Copies of the documents filed with the SEC by ExxonMobil are and will be available free of charge under the tab “SEC Filings” on the “Investors” page of ExxonMobil’s internet website at www.exxonmobil.com or by contacting ExxonMobil’s Investor Relations Department at investor.relations@exxonmobil.com. Copies of the documents filed with the SEC by Pioneer are and will be available free of charge on Pioneer’s internet website at https://investors.pxd.com/investors/financials/sec-filings/. Copies of the documents filed with the SEC by Denbury are and will be available free of charge on Denbury’s internet website at https://investors.denbury.com/investors/financial-information/sec-filings/ or by directing a request to Denbury Inc., ATTN: Investor Relations, 5851 Legacy Circle, Suite 1200, Plano, TX 75024, Tel. No. (972) 673-2000 or by contacting Denbury’s Investor Relations Department at IR@denbury.com. The information included on, or accessible through, ExxonMobil’s, Pioneer’s or Denbury’s website is not incorporated by reference into this communication.

Participants in the Solicitation

ExxonMobil, Pioneer, Denbury, their respective directors and certain of their respective executive officers may be deemed to be participants in the solicitation of proxies in respect of the Pioneer Transaction or the Denbury Transaction (as applicable). Information about the directors and executive officers of Pioneer is set forth in its proxy statement for its 2023 annual meeting of stockholders, which was filed with the SEC on April 13, 2023, in its Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 23, 2023, in its Form 8-K filed on May 30, 2023, in its Form 8-K filed on April 26, 2023 and in its Form 8-K filed on February 13, 2023. Information about the directors and executive officers of Denbury is set forth in its proxy statement for its 2023 annual meeting of stockholders, which was filed with the SEC on April 18, 2023, and in its Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 23, 2023.

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