>>> WELCOME BACK, EVERYBODY. EXXONMOBIL OUT WITH FIRST QUARTER RESULTS THIS MORNING THE COMPANY EARNING $2.06 A SHARE FOR FIRST QUARTER. THAT WAS SHY OF THE CONSENSUS ESTIMATE OF $2.20. REVENUE DID BEAT EXPECTATIONS, THOUGH, AT $83.1 BILLION AND JOINING US RIGHT NOW FOR AN EXCLUSIVE INTERVIEW IS DARREN WOODS, EXXONMOBIL'S CHAIRMAN AND CEO. WELCOME. THANK YOU FOR BEING HERE TODAY >> GOOD MORNING, BECKY GOOD TO BE HERE. >> WHY DON'T YOU TALK ABOUT WHAT HAPPENED DURING THE QUARTER. STOCK IS OFF BY ABOUT 1.4% REVENUE IS STRONGER THAN ANTICIPATED, BUT THE EARNINGS PER SHARE WAS BELOW WHAT THE STREET WAS LOOKING FOR. >> IF YOU LOOK AT THE BUSINESS IN OUR OPERATIONS, THEY DELIVERED EXACTLY IN LINE WITH OUR PLAN IN FACT, IN SOME CASES THEY OUTPERFORMED YOU CAN SEE THAT IN OUR CASH FLOW OPERATIONS WHICH CONCEDED CONSENSUS BY A BILLION DOLLARS THE MISS THE STREET HAD FOR OUR EARNINGS ARE A FUNCTION OF SOME NONCASH TAX AND INVENTORY ADJUSTMENTS WHICH WE SEE QUARTER ON QUARTER OCCASIONALLY AND THIS QUARTER THEY HAPPENED TO STACK UP WE FEEL GOOD ABOUT THE OPERATIONS AND WHAT THE BUSINESS IS DELIVERING. >> ONE OF THE HIGHLIGHTS THAT YOU POINT OUT IS THE GROSS PRODUCTION NUMBERS THAT YOU'RE SEEING NOW IN GUYANA 600,000 BARRELS A DAY THERE. THAT HAS TURNED OUT TO BE A HUGELY IMPORTANT STAKE FOR YOU >> YES, I THINK A GREAT EXAMPLE OF CAPABILITY OF THIS ORGANIZATION, AND EACH OF THE DIFFERENT SECTORS COMING TOGETHER, TECHNOLOGY COMPANY, OPERATIONS COMPANY, OUR PROJECTS COMPANY COMING TOGETHER TO MAKE THESE THINGS POSSIBLE. WE DELIVER THESE PROJECTS AT AN INDUSTRY-LEADING PACE, WE DELIVER THEM AHEAD OF SCHEDULE, BELOW BUDGET AND WHEN WE BRING THEM ON, THE OPERATIONS TEAM STARTS OPTIMIZING AND WE TEND TO RESET WHAT WE THINK IS POSSIBLE AND VERY SAFELY RAISE THE PRODUCTION TO A POINT WHERE WE ARE NOW RUNNING THOSE THREE SHIPS -- THOSE PRODUCTION UNITS AT A RATE HIGHER THAN WHAT WE MADE THE INVESTMENT DECISION ON SO EXTREMELY PROUD OF THAT WE HAVE GOT THREE MORE IN THE WORKS, I FEEL REALLY GOOD ABOUT. THIS IS A TREMENDOUS EXAMPLE OF WHAT THE ORGANIZATION IS CAPABLE OF DOING. >> BUT THE PRODUCTION THAT YOU'VE SEEN IN GUYANA IS I'M SURE PART OF THE REASON THAT YOU'RE INVOLVED NOW IN THIS ARBITRATION, WITH CHEVRON. CHEVRON WANTS TO BUY HESS. HESS IS A 30% PARTNERSHIP IN THAT DEAL WITH YOU YOU GUYS HAVE A 45% STAKE IN IT. WHAT IS THE ARBITRATION OVER AND WHAT DO YOU THINK IS LIKELY TO HAPPEN HERE? >> I THINK GREAT CONTEXT FOR THAT DISCUSSION AND IF YOU LOOK AT GUYANA, AND THE DEVELOPMENT THERE, I THINK IT WILL GO DOWN AS ONE OF THE BEST DEEP WATER DEVELOPMENTS IN THE HISTORY OF THE INDUSTRY SO, A LOT OF VALUE THAT HAS BEEN CREATED THROUGH THE HARD WORK OF THE PARTNERS, BUT SPECIFICALLY WITH OUR ENGINEERING ORGANIZATION, OUR PROJECT'S ORGANIZATION, SO UNDERSTAND WHY CHEVRON'S INTERESTED IN PARTICIPATING IN SUCH AN ATTRACTIVE DEVELOPMENT THE PARTNERSHIP THAT EXISTS TODAY IS RUN OR DEFINED BY A JOINT OPERATING AGREEMENT. THAT AGREEMENT GIVES EXISTING PARTNERS RIGHTS WHEN THERE ARE CHANGES IN CONTROLS. THE CHEVRON HESS TRANSACTION IGNORED THOSE RIGHTS, WE'RE STANDING UP FOR THE RIGHTS TO MAKE SURE WE PROTECT THE VALUE WE CREATED THERE, TO MAKE SURE WE UNDERSTAND WHAT THE GUYANA ASSETS, THE VALUE OF THOSE ASSETS ARE IN THE CHEVRON HESS TRANSACTION AND MAKE SURE WE HAVE A LINE OF SIGHT TO HOW BEST TO OPTIMIZE VALUE FOR OUR SHAREHOLDERS. >> I'M SURE YOU UNDERSTAND CHEVRON'S POSITION I'M SURE THEY EXPLAINED IT TO YOU. THEY ARE SAYING THAT THERE IS A HESS SUBSIDIARY THAT WON'T CHANGE AND THEY THINK THAT THAT IS ENOUGH TO SATISFY WHAT THEY'RE CALLING A CONTRACT LANGUAGE DISPUTE THAT THEY THINK IS SOMETHING THAT IS ROUTINELY PUT IN AND USUALLY IS NOT TAKEN UP BY THE OTHER PARTNERS HOW IS THIS DIFFERENT AND HOW DO YOU THINK IT WILL PLAY OUT >> WELL, I AM FAMILIAR WITH THEIR ARGUMENT AND THEIR INTERPRETATION WE WROTE THE JOA, SO WE HAVE A PRETTY CLEAR LINE OF SIGHT AS TO THE INTENT AND THE CIRCUMSTANCES THAT APPLY AND THE LANGUAGE THAT APPLIES TO THE CIRCUMSTANCES SO WE FEEL PRETTY CONFIDENT IN OUR INTERPRETATION AND THAT'S THE POINT OF THE ARBITRATION THE JOA ALLOWS FOR THAT. IT IS UNDERSTANDABLE THAT PARTNERS FROM TIME TO TIME CAN HAVE A DIFFERENT INTERPRETATION OF THAT. WE'LL TAKE IT TO THE ARBITRATION PROCESS AND LET THE FACTS SPEAK FOR THEMSELVES. >> WOULD YOU PUT IN A BID YOURSELF IF ARBITRATION ALLOWED YOU TO DO THAT YOU ARE STILL CAUGHT UP WITH PIONEER NATURAL RESOURCES TRYING TO DIGEST THAT MAJOR ACQUISITION. WOULD YOU HAVE THE MONEY TO GO AHEAD AND TRY TO PUT A BID IN FOR THE ASSETS AS WELL >> I MADE IT CLEAR IN THE PAST, THIS IS NOT A PLAY FOR HESS. WE'RE NOT INTERESTED IN A TRANSACTION ON HESS. THIS IS AROUND PROTECTING THE VALUE WE CREATED AS PART OF THE DEVELOPMENT. MAKING SURE THAT THE PREEMPTION RIGHTS WE BELIEVE EXIST IN THE JOA ARE RECOGNIZED AND CONFIRMED AND THEN UNDERSTANDING WHAT THE VALUE THEY'RE PUTTING ON THAT ASSET IS AND WHAT THE OPTIONS ARE TO MAXIMIZE THE VALUE TO YOUR SHAREHOLDERS. >> WHAT DOES THAT MEAN JUST TO DIG INTO IT, DOES THAT MEAN YOU'RE NOT LOOKING TO BUY HESS OUTRIGHT BUT YOU WOULD BE LOOKING TO BUY THE ASSETS OR JUST WANT TO BE COMPENSATED AND MAYBE PUSH FOR A HIGHER DEAL FOR THOSE ASSETS WHERE YOU GUYS ARE COMPENSATED AS WELL? >> I THINK THERE ARE A LOT OF OPTIONS ON THE TABLE WE'RE GOING TO LOOK AND SEE WHAT THE CASH VALUE OF THAT WE'LL CONFIRM THE RIGHTS OF PREEMPTION AND LOOK TO SEE WHAT THE CASH VALUE OF THE ASSET IS WITHIN THE TRANSACTION AND EXPLORE THE OPPORTUNITIES THAT ARE AVAILABLE TO US. >> DARREN, WHILE YOU'RE HERE, DEFINITELY WANT TO TALK TO YOU ABOUT WHAT YOU'RE SEEING IN THE DEMAND FOR OIL THESE DAYS. WE HAVE GOTTEN A FEW CONCERNING NUMBER, THAT GDP NUMBER THAT WAS BELOW EXPECTATIONS YESTERDAY, A LOWER THAN EXPECTED MANUFACTURING INDEX NUMBER ARE YOU SEEING ANY SORT OF SLOWDOWN AND WHAT DO YOU SEE ON THE GLOBAL STAGE >> I WOULD TELL YOU, ACTUALLY, THE FIRST QUARTER WAS STRONGER THAN FRANKLY WE HAD ANTICIPATED. AND SO, THE FIRST QUARTER LOOKS GOOD AS WE LOOK FORWARD TO THE REST OF THE YEAR, OUR EXPECTATIONS, WE'RE GOING TO SEE DEMAND GROWTH FOR OIL, PROBABLY HIT ANOTHER RECORD THIS YEAR, LAST YEAR HIT A RECORD THIS YEAR WE EXPECT IT TO HIT ANOTHER RECORD TRANSPORTATION FUEL DEMAND IS VERY HEALTHY IF YOU LOOK AT THE FIRST QUARTER REFINING MARGINS THAT MAKE PETROLEUM PRODUCTS FROM CRUDE, IT WAS THE SECOND HIGHEST FIRST QUARTER MARGIN WE HAVE SEEN OVER THE LAST TEN YEARS, SO, VERY CONSTRUCTIVE FIRST QUARTER FOR REFINING WE'RE IN A DIP NOW AS WE HEAD TO THE TRANSITION TO THE SUMMER DRIVING SEASON SO, WE'LL SEE HOW THAT PICKS UP GOING IN NOTHING INDICATES THAT'S COMING OFF THE CRUDE MARKETS LOOK FAIRLY WELL SUPPLIED, BUT BALANCED, NATURAL GAS IS A LITTLE ON RIGHT NOW. I THINK THAT'S A SHORT-TERM ISSUE. THE ONE MARKET THAT WE SEE SOME WEAKNESS IN FROM A MARGIN STAND POINT IS
