Henry Hubble - VP of IR, Secretary

Douglas Terreson - Morgan Stanley Mark Flannery - Credit Suisse Neil McMahon - Bernstein Michael LaMotte - J.P. Morgan Arjun Murti - Goldman Sachs Paul Sankey - Deutsche Bank Doug Leggate - Citigroup Paul Cheng - Lehman Brothers Robert Kessler - Simmons & Company Mark Gilman - Benchmark

Good day everyone and welcome to this Exxon Mobil Corporation First Quarter 2008 Earnings Conference Call. Today's call is being recorded. At this time, for opening remarks, I would like to turn the call over to the Vice President of Investor Relations and Secretary, Mr. Henry Hubble. Please go ahead, sir. Henry Hubble - Vice President of Investor Relations, Secretary: Thank you. Good morning and welcome to Exxon Mobil's teleconference and webcast on our first quarter 2008 financial and operating results. As you are aware from this morning's press release, Exxon Mobil continues to deliver strong earnings performance. In an environment of high commodity prices, Exxon Mobil's outstanding portfolio of integrated businesses performed well allowing us to deliver record first-quarter results. Before we go further, I would like to draw your attention to our cautionary statement. Please note that estimates, plans and expectations are forward-looking statements. Actual results including resource recoveries, volume growth and project outcomes could differ materially due to factors I discuss and factors noted in our SEC filings. Please see factors affecting future results and the form 8-K we furnished this morning, which are available through the investor section of our website. Please also see the frequently used terms, the supplements to this morning's press release. And the 2007 financial and operating review on our website. This material defines key terms I will use today; shows Exxon Mobil's net interest in specific projects and includes our SEC regulations G disclosure. Now I'm pleased to turn your attention to our first quarter results. Exxon Mobil's first quarter 2008 normalized earnings and net income were $10.9 billion, an increase of $1.6 billion from the first quarter of 2007. Earnings per share were $2.03, up 25% from a year ago. Driven by the strong earnings and also the continuing benefits of our share repurchase program. In the first quarter of 2008, we increased our quarterly share repurchases to reduce shares outstanding from $7 billion to $8 billion, demonstrating our commitment to return cash to our shareholders. Before I discuss specific business line results, I would like to share some of the milestones we achieved since the last earnings call. During the first quarter start-up was achieved at the Bulba field [ph] located at 120 miles off the coast of Norway in the southern section of the Norwegian Continental Shelf. At its peak, this development is expected to produce 50,000 barrels of oil and 30 million cubic feet of natural gas per day. Further demonstrating the quality of our North Sea portfolio, in the first quarter we also announced the start-up of production from the Starling field in the U.K. sector of the North Sea. At peak production, the field is expected to deliver 110 million cubic feet of natural gas per day to the U.K. market. Following the January start-up of the Exxon Mobil operated Mondo field in the field in the Kizomba C development offshore Angola, Starling are the second and third major upstream start-ups for Exxon Mobil this year. In total, we anticipate 12 major upstream project start-ups in 2008, including the first two 7.8 million ton per annum LNG trains in Qatar, in the second half of the year. Also in the first quarter, Exxon Mobil signed the main principles agreement for a new 25-year production-sharing contract with the Malaysian National Oil Company, Petronas. Through the new PSC, we expect to invest in significant enhanced oil recovery and conventional oil development activities in Malaysia, utilizing our proprietary technologies and industry leading project execution capabilities. Exxon Mobil's advantage technologies continue to deliver competitive differentiation and maximize the profitability of our upstream producing assets. In the first quarter, we broke our own world record for extended reach drilling total depth, with the completion of the Z-12 well at our Sakhalin I project in Russia. The well was drilled from land and reached its target depth more than seven miles offshore. Through the implementation of Exxon Mobil leading edge technologies, we've improved drilling performance at Sakhalin by over 50% since the project began. Also, in the first quarter we added to our global portfolio of outstanding deepwater exploration opportunities. In the recent Gulf of Mexico lease sale, we were the high bidder for 15 blocks totaling 85,000 acres. Additionally, we were awarded 13 full and partial blocks totaling 760,000 gross acres in the Porcupine basin, offshore Ireland. Exxon Mobil continues to make significant progress in the capture of high potential, unconventional exploration opportunities around the globe. In April, we announced two new agreements related to unconventional gas and liquids opportunities in Hungary. The first is a joint exploration program covering a 387,000 gross acres in the Mako Trough area of southeast Hungary. The second is a production and development agreement covering a further 185,000 gross acres on an adjacent block. Our work programs in Hungary including wells, production tests and reservoir evaluation studies are getting underway this year. Exxon Mobil, along with majority owned affiliate, Imperial Oil Limited, further enhanced our portfolio of unconventional exploration opportunities, with the recently announced capture of about 115,000 acres in the Horn River Basin in the Northeastern British Columbia, Canada. Plans to evaluate the shale gas play potential, includes seismic acquisition and exploration drilling in late 2000 and beyond. Exxon Mobil brings industry leading technical expertise to all of these opportunities, including our fast drill process and our tight gas development capability. Exxon Mobil continues to pursue and capture a wide variety of opportunities to develop hydrocarbon resources to help meet growing energy demand. Now, moving to the downstream. In refining, we continue to improve our... the profitability of our operations through crude diversification. In the first quarter, we ran 35 crude new to individual refineries, nine of which were new to Exxon Mobil. We also continue to identify and implement projects to improve performance at our refineries by applying new technologies, which further enhance operations reliability, and margin capture. In our Lubricants and Specialties business, we launched the Mobil 1, advanced fuel economy synthetic motor oils in the U.S. In addition to providing outstanding engine protection, these advanced products can improve fuel efficiency in modern gasoline engines by up to 2% compared to traditional engine oils. In our Chemical Segment, Exxon Mobil launched a new methyllysine polyethylene platform called Enable mPE in the first quarter. This new product generates films with exceptional performance and also delivers energy savings in the production process. Our commitment to technology leadership and innovation continues to deliver breakthrough chemical products to meet the needs of our customers. During the quarter, Exxon Mobil's polyolefin plant in Baton Rouge was awarded the distinguished safety award from the National Petrochemical and Refiners Association for an unprecedented sixth consecutive year. This honor is a reflection of our fundamental and ongoing commitment to safety in all aspects of our operations. Now turning to the business line results. Upstream earnings in the first quarter were a record at $8.8 billion up $2.7 billion from the first quarter of 2007. We continue to capture the benefit of strong industry conditions this quarter with upstream after-tax unit earnings of just over $23 per barrel. Record crude oil and natural gas realizations increased earnings by $4.4 billion. Worldwide crude oil realizations were up $38.50 per barrel, and natural gas realizations were up $2.43 per Kcf from the first quarter of 2007. Volume and mix effects reduced earnings, as increased natural gas volumes were more than offset by lower crude oil volumes. Other effects reduced earnings by $900 million. Just over a third of that reduction was due to higher taxes; about 250 million reflects the impact of increased operating expenses including the effect of new field start-ups and increased exploration activity. And the balance was primarily lower earnings from asset sales. As anticipated in our outlook for 2008, volumes were lower in the first quarter than a year ago. Oil equivalent volumes decreased about 5.5% from the first quarter of last year. Excluding the Venezuela expropriation, divestments, coders and pricing spend impacts volumes were down 3%. The decrease was primarily due to PSC net interest reductions of approximately 80,000 barrels per day and the impact of maintenance activities in West Africa. Major project ramp ups in the North Sea and West Africa and increased European natural gas demand, offset fuel decline in mature areas. Our 2008, volume profile which we shared at our recent march Analyst Meeting, is back-end loaded due to the timing of major field start-ups, including the two large LNG trains in Qatar, [inaudible] SGP build facilities in Kazakhstan, and Thunder Horse in the Gulf of Mexico in the third and fourth quarters of this year. Liquid's production decreased about 270,000 barrels per day or 10% from the first quarter of last year. Excluding the Venezuela expropriation, divestments, quotas and price and spend impacts on volumes, production was down 6%. Major project ramp ups in West Africa and the North Sea were more than offset by natural fuel decline in matured areas, PSC net interest reductions and the impact of maintenance activities in West Africa. Gas volumes increased approximately 130 million cubic feet per day from the first quarter of 2007. New product volumes and higher demand due to colder weather in Europe were partly offset by natural fuel decline in mature areas. Turning now to the sequential comparison. Versus the fourth quarter of 2007. upstream earnings increased $580 million due to higher crude oil and natural gas realizations, partly offset by lower volumes and other effects primarily lower earnings from asset sales. Liquid's production decreased 2% due to the maintenance activities in West Africa and also price and spend impact. Natural gas production was also lower primarily due to natural fuel decline in mature areas. Oil equivalent volumes were down 2% from the fourth quarter. For further data on regional volumes, please refer to the press release and IR supplement. Turning now to the downstream results. Earnings in the first quarter were $1.2 billion, down nearly $750 million from the first quarter of 2007. Refining margins were markedly lower, compressed by rising crude prices, which reduced earnings by $1 billion. Volume and mix affects increased earnings by $350 million primarily due to refinery optimization activities. Other effects reduced earnings by $90 million, reflecting higher operating expenses including increased U.S. turnaround activity, partly offset by positive foreign exchange effects. Sequentially, first quarter earnings were $1.1 billion, below fourth quarter 2007. Lower margins reduced earnings by $360 million, while volume and mix effects decreased earnings by $80 million, primarily due to increased turnaround activity in the U.S. Other factors reduced earnings by $660 million, including the absence of positive LIFO inventory effects of about $250 million and approximately $400 million in lower earnings associated from asset sales. Focusing now on our chemical earnings. First quarter chemical earnings of $1 billion were $210 million lower than the first quarter of 2007. Lower margins reduced earnings by $350 million, as higher feedstock costs, more than offset increased product realizations. Other impacts increased earnings by $140 million, reflecting favorable foreign exchange and tax effects. Sequentially, first quarter chemical earnings decreased by $85 million. Higher margins increased earnings by $40 million as increased realizations more than offset higher feedstock cost. Lower volumes reduced earnings by $30 million, while other factors including the absence of positive tax and LIFO effects reduced earnings by $90 million. Turning now to our corporate and financing segment. Corporate and financing expenses in the first quarter were $90 million, versus earnings of $90 million in the same period a year ago, including the impact of higher corporate costs and the absence of positive tax effects. The effective tax rate for the first quarter was 49%. Our cash balance was $41 billion and debt was $10 billion at the end of the first quarter. The corporation distributed a total of nearly $10 billion to shareholders in the first quarter through dividends and share purchases to reduce shares outstanding, an increase of $1.1 billion or 13% versus the first quarter of 2007. During the first quarter, Exxon Mobil made share purchases in excess of dilution of $8 billion, reducing the number of shares outstanding by 1.8% and further demonstrating our ongoing commitment to return cash to our shareholders. Yesterday, our Board announced an increase in the quarterly dividend, of just over 14% to $0.40 per share. Exxon Mobil has paid a dividend each year for more than a century. And has increased its annual dividend payment for 26 consecutive years. CapEx in the first quarter was $5.5 billion, up almost $1.3 billion or 30% from the first quarter of 2007, and consistent with our outlook for 2008. In summary, this quarter's results again highlight the quality of our integrated business model and disciplined investment approach allowing us to leverage, robust industry conditions and deliver superior results for our shareholders. That concludes my prepared remarks, and I'd now be happy to take your questions. Question and Answer

Thank you Mr. Hubble. The question and answer session will be conducted electronically. [Operator Instructions]. And we'll go first to Doug Terreson with Morgan Stanley. Douglas Terreson - Morgan Stanley: Good morning Henry. Henry Hubble - Vice President of Investor Relations, Secretary: Hi Doug. Douglas Terreson - Morgan Stanley: In U.S. refining and marketing, specifically Shell, my question in regard whether the economic effect of the switch, away from Venezuelan and feedstock was significant in the period and if so any quantification on that factor would be appreciated? Henry Hubble - Vice President of Investor Relations, Secretary: It was not a major factor in the results. The primary issue associated with the margins that you saw really they're kind of across the Board, if you look around the globe. Douglas Terreson - Morgan Stanley: Sure. Henry Hubble - Vice President of Investor Relations, Secretary: When you look at the composite worldwide margin, it was down about 245 a barrel and it was really kind of shared throughout the system. And so, I wouldn't point to anything specific at Shell [ph]. Douglas Terreson - Morgan Stanley: And also, did you say that the $660 million of other item that unfavorably affected the down stream was related to LIFO mix effects and if I missed that, what was that negative delta related to? Henry Hubble - Vice President of Investor Relations, Secretary: Yes. We had about $250 million of LIFO effect in the fourth quarter, you may recall, and then there was also lower gains from asset sales. We had a number of asset sales that were in that period and it was the absence of about 400... a little $400 million worth of asset sales that were not in the period. So, what you're seeing here is pretty clean in terms of overall other impacts. Douglas Terreson - Morgan Stanley: Okay. Okay, thanks a lot.

And we will go next to Mark Flannery with Credit Suisse. Mark Flannery - Credit Suisse: Hi, I've got a couple of questions, one is can you tell us what's happening with units production costs and unit DD&A in international E&P. Are we still seeing both of those numbers rise, and would you expect maybe to see them bend down a little bit in the second half of the year, as you get some of that in your production on? Then, I've a second one. Henry Hubble - Vice President of Investor Relations, Secretary: Well, if you look kind of, you are going to have impacts, non-cash impacts associated with new projects that we're bringing on, and you are seeing those continuing impacts as we are basically spending… the CapEx spending to bring on those new projects. But, I guess, if I step back from in terms of, inflationary effects, we have a consistent program of working to offset those things and if you look at... when we look kind of across the Board around the globe, we're pretty well able to offset the normal inflation effects, now there is some areas of our business, where we are seeing higher rates of inflation that we're not able to fully offset, but we've been able to get two-thirds of that essentially in the past. And we're just not immune to those cost impacts, but I think from the upstream perspective, the real focus I would point to is, if you look at the net income per barrel, you will find that the capture rate of earnings that we have on our per barrel basis, continues to be quite strong, and that's a reflection of being able to manage all of these impacts overall in a positive way. Mark Flannery - Credit Suisse: Okay, thanks. Can I just switch my second one over to European refinery run rate, which at least against old model, a little bit light in the first quarter, how would you characterize your maintenance activities there? Henry Hubble - Vice President of Investor Relations, Secretary: Well, in the throughput area, if you look at, the biggest impact in Europe was the Englestock refinery sale, that we had in the period that took out over 90 a day of capacity. So, that was the big and we did have a turnaround that fall in the period as well. But, if you're looking at general, we did see some… we did see some lower demand and as well but that was... those were the big impact in the period. Mark Flannery - Credit Suisse: Right. And just around that question, on US refining, are you faring any downstream capacity right now, particularly think about SGCS or other gasoline units? Henry Hubble - Vice President of Investor Relations, Secretary: No we are... all of our conversion capacity is running full, has been running full, and we did have some turnaround activity in parallel basically doing essential maintenance that we have to do and we tend to be a little in the outside of the gasoline season, we tend to take more of those turnarounds. So we end up about, if you look around the globe about 30% of our turnarounds in the first quarter. But in the US in particular, basically we are running conversion capacity full out. Mark Flannery - Credit Suisse: Great. Henry Hubble - Vice President of Investor Relations, Secretary: And overall when you look at the market supply, because as you know the gasoline inventories are... have been quite high, we have been really aiming to maximize distillate production in the period as well. Mark Flannery - Credit Suisse: Great. Thank you.

We will go next to Neil McMahon at Bernstein. Neil McMahon - Bernstein: Hi, Henry. Henry Hubble - Vice President of Investor Relations, Secretary: Hi Neil? Neil McMahon - Bernstein: Just a few questions. The first is really on your increase in exploration expense, I think this must be going to the Tayrona block in Colombia and it looks like that a dry well was drilled there, and that was done using your R3M electromagnetic technology and it is sort of follows, I think a separate news reports correctly sort of disappointing results from Northern basin last year as well. Am I right in thinking this because that sort of raise questions about some of that technology? Henry Hubble - Vice President of Investor Relations, Secretary: Well, what you see in the numbers, the increased cost is really… have been associated with seismic activity. When you look at the number of places that we have acquired acreage positions and we are now out basically shooting seismic to evaluate those in both Libya and New Zealand and others. Now when you get back to the comment on the R3M technology, we are utilizing that broadly. It is not a silver bullet though, I mean it's a technology that helps reduce risk, it helps improve our valuation of these, but it doesn't give you 100% indication. So the way we utilize it helps to de-risk these plays, but whenever you are dealing with a wildcat exploration well, you are going to have still have, even with R3M significant risk associated with those. But obviously these are prospects that we think have potential and we are evaluating the data from both the open wells and Tayrona wells that we drilled and looking at next steps. Neil McMahon - Bernstein: But you are still planning Madagascar and Southern Basin off shore in New Zealand and little sort of exploration well, there is still a part of the whole well count risk awarded program? Henry Hubble - Vice President of Investor Relations, Secretary: Yes, I mean yes. I mean all of those things, and we continue to utilize the R3M as part of our data collection efforts in these new areas, because we do think it's delivering value in our ability to assess the prospects. Neil McMahon - Bernstein: Okay. Second question was really on, as you mentioned the production sharing agreements, in West Africa, what's… certainly it looks like Kizomba A and B went form cost oil to profit oil last year. What, was there anything and addition for that may be on your interest in block 17, that did that in this quarter, that brought volumes down or was there just a general West African effect, that’s all from me. Henry Hubble - Vice President of Investor Relations, Secretary: Well, you have a combination, I mean when you have, when you do on a year-on-year comparison, I mean the tranche effects that we saw during last year, you're still seeing those in the year-on-year comparison, you're going to continue to see those year-on-year comparisons. Now, there are multiple tranches, different projects came on at different points, so you are different places and different ones, but the other PSC effect that we talked a about a little bit was continue to have pricing spend impacts associated with them and that's basically variable reflecting the current price of crude, and the relative spend that is going on in the given period. So, we see both of those effects, but, all of that when you come back and look at it on the grand scheme of things, we've been gathering significant early value, these projects, they're performing very well and both from the original project development but also in their continuing operations. But, we are getting into some lower tranches in the number of these deals. Neil McMahon - Bernstein: Great. Thanks a lot. Henry Hubble - Vice President of Investor Relations, Secretary: Yes.

And to next to Michael LaMotte at JP Morgan. Michael LaMotte - J.P. Morgan: Hi Henry. Henry Hubble - Vice President of Investor Relations, Secretary: Hi. Michael LaMotte - J.P. Morgan: Pretty quickly on the Hungary, maybe if I can ask you to do a little bit of comparing contrast, particularly given a news flow around Hansfield [ph], Marcellus and some of the shale plays and unconventional plays in lower 48, that's in Horn River Basin in Canada, obviously but, I'm wondering if you're taking a look at those lower 48 plays at all, and see something in Hungry, that's truly unique, can you give provide a little bit more color on that? Maybe in contrast with some relative opportunities here? Henry Hubble - Vice President of Investor Relations, Secretary: Yes. Well, I'm not, I can't give you a relative comparison, what I can tell you is we are… we got a pretty wide approach on what we're looking at. We look at a lot of prospects and we have a global program that allows us to look and sets opportunities around the globe. And what we try to do is identify the best resources of type wherever they are and having that global capability is one of the advantages that we have. And these are some of the areas that we think have potential but it is still early days. We're going to be going through evaluation of the Hungary, Horn River and others.

When you come down to, why do we see advantage in some of these areas, we bring some technology frankly that makes that we think... provides us with some unique advantages in this kinds of developments with the multi zone stimulation technology that we have with the fast drill technologies that we have. All of those are really important in these kinds of developments. We're going to be drilling a lot of wells in there in tight gas kind of place. Michael LaMotte - J.P. Morgan: Is it geology or end market or both that sort of pushes you into an area like Hungary? Henry Hubble - Vice President of Investor Relations, Secretary: All of the above. Michael LaMotte - J.P. Morgan: And is there anything in particular in the resource that you can talk about today that would lead you to build such a big position, almost 600,000 acres. Henry Hubble - Vice President of Investor Relations, Secretary: As I say, we basically being able to take advantage of our global understanding of these potential basins and to get in there early and work with the folks and being able to evaluate these prospects. Again we are going through an evaluation phase, we are going to be doing seismic and other delineation activities to understand what we have there. Michael LaMotte - J.P. Morgan: Okay. Maybe to assume back on global sales quickly, just in terms of seismic activity. How do you see that unfolding over the next few quarters? Or you still sort of in expansion mode there, or is it a steady state, or is it going to be winding down over the next few quarters? Henry Hubble - Vice President of Investor Relations, Secretary: We have been watching our acreage pickup. We have a number of areas that we are going to be taking a look at. So I'd say, I can't give you a direct figure but directionally up. Michael LaMotte - J.P. Morgan: Okay. That is helpful. And then lastly, thoughts on the Alaska pipeline? Henry Hubble - Vice President of Investor Relations, Secretary: Yes. Well as... we continue to look for ways to move that forward, have been evaluating the various proposals and discussions around those various proposals. And basically looking for the most effective way to… the one, get the maximum value for the State of Alaska or ourselves, production and to move that ahead. But, what we're trying do is, basically evaluate the various options that are there are now and what our next steps are to be? Michael LaMotte - J.P. Morgan: Okay. How should be think about the current proposal with the DP and Conoco going forward? Henry Hubble - Vice President of Investor Relations, Secretary: We're in the, from our own prospective, I think probably I want to talk to those guys about that in particular. But from our own prospective, we're evaluating that. We've been asked to participate, and we're looking at it. Michael LaMotte - J.P. Morgan: Okay. Thank you.

And next over to Arjun Murti of Goldman Sachs. Arjun Murti - Goldman Sachs: Thank you Henry. A follow-up to some of the comments on the West African oil production, you mentioned maintenance activity hurt volumes in the first quarter? Henry Hubble - Vice President of Investor Relations, Secretary: Yes. Arjun Murti - Goldman Sachs: Would it be possible to quantify the rough magnitude of that? Henry Hubble - Vice President of Investor Relations, Secretary: Yes. I mean it was in… about 40 a day of impact there. Henry Hubble - Vice President of Investor Relations, Secretary: 40 a day. Got you. So, then that sort of get this stock towards the 3Q and 4Q production was and the profit shared? Henry Hubble - Vice President of Investor Relations, Secretary: Yes. When you look at the PSC net interest changes, and the price spend impacts because we did see even higher prices in this period. You've got about in total the combination of those in West Africa is about 120. Arjun Murti - Goldman Sachs: The combination of maintenance and PSC effects? Henry Hubble - Vice President of Investor Relations, Secretary: No, actually the combination of PSC net interest changes and price spend impacts. Arjun Murti - Goldman Sachs: I'm sorry, price spends impact. Got you, that's 120? Henry Hubble - Vice President of Investor Relations, Secretary: Yes, correct. And then maintenance was on top of that. Arjun Murti - Goldman Sachs: Yes, that then starts making more sense, I guess we've thought South Africa overall is a growing region, So your net volumes can be what they are, but the gross volumes we thought are probably increasing, it sounds like that would get us closer. Henry Hubble - Vice President of Investor Relations, Secretary: Well, when you're looking at gross production in the area, yes it is a growing area. Arjun Murti - Goldman Sachs: Absolutely. Henry any update on the timing of some of the Qatar LNG products that are scheduled to start up this year, are they still slated for second half of this year? Henry Hubble - Vice President of Investor Relations, Secretary: Yes, As I mentioned, are both of them we expect to have on this year. One we basically looking at the [inaudible] in 2008 and then [inaudible] in 2008. But, they will be back-end loaded as we mentioned. Arjun Murti - Goldman Sachs: Back-end loaded and then presumably some ramp up period as well? Henry Hubble - Vice President of Investor Relations, Secretary: Yes. Well, they've come on pretty fast, but… once they start-up, but basically you're going to see part year effects from the start-ups. Arjun Murti - Goldman Sachs: That's great. And then just a final one on the Alaskan gas. Some of the controversy that's right word over Point Thomson field, your participation or not in the Alaska pipeline, potentially tied to what ultimately happens to Point Thomson resource? Henry Hubble - Vice President of Investor Relations, Secretary: Well, Point Thomson is going to be, as important to the Alaska pipeline, it's hard to make sense out of that pipeline without Point Thomson being developed, so there, you need both. And our view on Point Thomson, I mean, we were frankly surprised and disappointed by the Department of Natural Resources decisions there, and we will be pursuing our rights in that area and we're appealing or asking for rehearing on that, but we laid out commitments there to bring that production on, and develop that production. So, frankly we were surprised to see how that turned down at this point and we'll be pursuing for rehearing and our rights to further in that regard. Arjun Murti - Goldman Sachs: Got you. That's great, thank you very much Henry. Henry Hubble - Vice President of Investor Relations, Secretary: No problem.

And next to Paul Sankey at Deutsche Bank. Paul Sankey - Deutsche Bank: Hi, good morning Henry. Henry Hubble - Vice President of Investor Relations, Secretary: Good morning. Paul Sankey - Deutsche Bank: Henry, if you don't want to, just like to keep reaching around in the volumes a bit here. Firstly, just to go through the lines, on the U.S, I'm assuming that its just all natural fuel decline, the 10% overall decline, you got there is related to that, or whether some issues with maintenance and down time there? Henry Hubble - Vice President of Investor Relations, Secretary: The big chunk of that is, decline, it's a mature area and the bulk of what you have is decline. When we talk about our global decline rates, we've been talking about high 5% to 6% in that level. So, this is mature area and its… that's what you're seeing there. Paul Sankey - Deutsche Bank: Great. Thanks and then, kind of the South America, I know there was some issues in Canada. Could you strip out what was Canada, what was Venezuela for us? Henry Hubble - Vice President of Investor Relations, Secretary: Venezuela is essentially all of it that you're looking out there. When you get down into the gas, the big change there, I mean that's basically was a bulk of that was blow down, we had that at the… it's the absence of having blow down versus last year. Paul Sankey - Deutsche Bank: Okay. And you've gone through Africa in some detail. The one question of course is Nigeria. Now is reportedly had a 800,000 barrel a day outage, and its right? Could you comment on that for the quarter, this quarter? Henry Hubble - Vice President of Investor Relations, Secretary: Yes. Well, what you heard, you know we had, on April 24th, the local chapter of the Senior Oil Workers Union there in Nigeria, halted collective bargaining discussions that we had and withdrew their services there. The union subsequently shut in those facilities. What we have heard this morning is that the union has directed the employees to return to facilities and so we are anticipating that will to move things ahead there. Paul Sankey - Deutsche Bank: So this should be about 10 day, I guess outage for the quarter? Henry Hubble - Vice President of Investor Relations, Secretary: That implies a start-up or ramp up and I really can't, I don't know what that is going to be. So more to come on that, there are still some discussions going on. I mean they have agreed basically direct the people back to work but we still have some discussions going on there. Paul Sankey - Deutsche Bank: And the last one on this kind of granularity on the volumes, Europe obviously we can see the jump with the gas season, but I was wondering on the oil, if there is anything you could strip out there between the various effects on the decline? Henry Hubble - Vice President of Investor Relations, Secretary: No. I mean there is some downtime in there but the big piece of that again is, it's a mature area and mostly decline. Paul Sankey - Deutsche Bank: Got you Sales, Henry of product over the world wide down 5% US down 8%, Asia Pacific down 6%, could you just walk us through, I'm assuming that is not the market collapsing, if you could just walk us through the effects there, that would be great on petroleum product sales? Henry Hubble - Vice President of Investor Relations, Secretary: Yes. I mean if you look at by region the impacts... I mean it is actually US markets... essentially what we are seeing is in the mature markets we are seeing some softening of demand. But if we look at global growth overall, we are still seeing on a overall net basis, petroleum product growth, lower rates of growth versus our 10 year average, but still growth. Most of that occurring in the developing parts of the world and in the price controlled areas. Now the... our specific results, the bulk of our reductions are actually associated with the portfolio of high grading and the divestment activities about 60% of that is associated with that. The balance is due to a number of factors including as we talked lower refinery throughput but also demand softening of the demand and those are really the major impacts in the decrease in overall product sales. Paul Sankey - Deutsche Bank: Great. I appreciate that. And then the final one on this line and I have got one very brief follow up, is just chemicals, it's notable that your US volumes are, the sales volumes are sharply down. Henry Hubble - Vice President of Investor Relations, Secretary: There is some of that is... there was a piece of that that we are… mostly in commodities, and you saw that both in the US and Europe but some of that is basically associated with turnarounds as well. In the chemicals business we talk about many cycles within the business and frequently when you see rapidly rising crude prices and feed stock costs, there will be pre-buying and then people holding off, so you will see some swings in volumes associated with that basically trying to manage the price impacts. Paul Sankey - Deutsche Bank: Okay, so we should go back to expecting more like 2.7 million tons in the US, and what's the potential for growth? Henry Hubble - Vice President of Investor Relations, Secretary: Well, I mean, we will see how it develops but I mean, I don't have any better basis to tell you at this point and the quality of the business obviously is very good. And that's a growing business and we continue to see it growing couple of GDP above... a couple of percent above worldwide GDP growth, so it's a growing. But most of that again has been Asia-Pac area. So that's where we are making the investments. Paul Sankey - Deutsche Bank: Yes. And then the very last... final one from me briefly is the tax rate of 49%, can you just talk more about whether or not that a sustainable, the ongoing level? Henry Hubble - Vice President of Investor Relations, Secretary: Well. I mean, when you look at the tax rates increase there, essentially part of that, the biggest piece of it as you look year-on-year is associated with it's... essentially mix of earnings. You have more upstream earnings, less in the downstream areas and also the mix around the globe as to where we are getting those earnings. So that was a big piece of that. And then we did have some lower one-time tax items that was, that was also in there. So those are the... those were the two big things and it's going to be very dependent on that mix of earnings for the future. So it's hard to predict, we've seen them moving around here a bit more likely because of the volatility in prices. So it's hard to predict exactly how that's going to be going forward. Paul Sankey - Deutsche Bank: Thanks Henry, I leave it there. Thank you. Henry Hubble - Vice President of Investor Relations, Secretary: All right. Very good

And we'll go next to Doug Leggate at Citigroup. Doug Leggate – Citigroup: Thanks. Hi, Henry. Henry Hubble - Vice President of Investor Relations, Secretary: Hi Doug. Doug Leggate – Citigroup: Couple of things. I guess also some housekeeping questions. The cash flow, operating cash flow is very high this quarter. Henry Hubble - Vice President of Investor Relations, Secretary: Yes. Doug Leggate – Citigroup: Can you... is that just timing of tax payments or can you help understand a little bit what's going on there? Henry Hubble - Vice President of Investor Relations, Secretary: You've got a piece of it. The timing of tax payments we typically see that in the first quarter where both Norway and US we have more tax expense and we have actual payments in the period. And then the other, but the bigger factor actually was associated with crude payables. And as you saw the rapid ran up in or the higher crude prices, we have basically close through into the higher crude payables, and that was the bigger impact. Of course we also had some net income increased that also impacted that as well. But the biggest factors were in the working capital changes. Doug Leggate – Citigroup: Can you give a total working capital move in the quarter? Henry Hubble - Vice President of Investor Relations, Secretary: Well, I mean if you come back to... it will come out in the Q, but there is the bulk of that is basically associated with the crude payables, and if you look at that delta, it's the biggest piece of the unexplained portion as the DD&A is about the same. Doug Leggate – Citigroup: Second one is to jump back to Paul's question about the tax rate, just to get a... may be a little bit of a breakdown, can you possibly give us what we quantify rather what was one-time tax items were, so we can get the underlying tax rate for the quarter? Henry Hubble - Vice President of Investor Relations, Secretary: It was a smaller piece of the delta, if you look at it; it's about 20 about a third of the delta that you saw between the period. Doug Leggate – Citigroup: Will it be reasonable, let’s assume we were in a similar environment over the balance of this year we'd expect that kind of rate going forward. Henry Hubble - Vice President of Investor Relations, Secretary: Well. As I said, it's going depend very must on how the margins and the mix of earnings play out. It get identical may be it never has been identical. Doug Leggate – Citigroup: All right. Thanks Henry. Henry Hubble - Vice President of Investor Relations, Secretary: All right, very good.

We will go next to Paul Cheng at Lehman Brothers. Paul Cheng - Lehman Brothers: Hi Henry, how are you doing? Henry Hubble - Vice President of Investor Relations, Secretary: Hi Paul, very good. Paul Cheng - Lehman Brothers: Number of quick ones, just want to clarify. I think you were talking about the lack of foreign exchange gain on inventory in the number of your comment. So could we assume that this is a thin quarter that really no major, on the absolute term, no major foreign exchange or loess or inventory gain or loss and [inaudible]? Henry Hubble - Vice President of Investor Relations, Secretary: That's correct. The inventory impacts as you see in our results generally and you seen in the fourth quarter associated with LIFO. Paul Cheng - Lehman Brothers: Right. So that, this quarter if we on the project forward that is a pretty clean quarter to use? Henry Hubble - Vice President of Investor Relations, Secretary: That's correct. It did have some FOREX impact in the small though overall. Paul Cheng - Lehman Brothers: And what is the magnitude on... you said some FOREX impact, you said 50 million or 100, 200? Henry Hubble - Vice President of Investor Relations, Secretary: No, less than $100 million. Paul Cheng - Lehman Brothers: Less than a hundred? Henry Hubble - Vice President of Investor Relations, Secretary: For total, yes. Paul Cheng - Lehman Brothers: Okay, in Alaska after the acquisition [ph], the higher tax rate or the… whatever you call production tax I guess. Can you quantify what's that in the first quarter with the higher oil price that what's that incremental hit on you guys? Henry Hubble - Vice President of Investor Relations, Secretary: I don't really have a delta quarter-on-quarter on that. Paul Cheng - Lehman Brothers: May be, I try another one. Henry, when I looked at the European gas sales volume, certainly that you have a nice pickup typically they always do in the first quarter, that's for quite some time I think the message is that, you have substantially more excess capacity as a function of the demand, if the demand is there you can sell far more gas. So, I thought that the gas volume given how robust the market there will be even higher. So, is that now that the sort of like we've been on a swing by the production capacity in Europe, that and most you can do is about 5.1, 5.2 to be unless that you'll bring on new gas? Henry Hubble - Vice President of Investor Relations, Secretary: No. I mean we have... we're basically meeting demand there and as you know [inaudible] operations, service a bit of the swing, our European swing and it was not tapped out. And it basically, its reflecting the cooler weather, that's what and you're meeting demand there. Paul Cheng - Lehman Brothers: No. I mean the weather is pretty cold over there, so I thought that would be higher demand in that. So, you're saying that you actually spilled even in the first quarter, have excess capacity and production capacity than if you, if there is a demand that you can actually increase that? Henry Hubble - Vice President of Investor Relations, Secretary: Yes, that's correct. Paul Cheng - Lehman Brothers: Okay. What is your capacity over there now, any rough idea? Henry Hubble - Vice President of Investor Relations, Secretary: I don't have that off the top here. Paul Cheng - Lehman Brothers: Okay. A final question over the last 18 months, I think lot of your smaller kind of pause has been pretty optimistic above some of the non-conventional pay in U.S. and obviously Exxon is very optimistic about and beyond. But, we haven't heard much about Bakken or the Barnett Shale or the other one. Wondering that how Exxon looking at in the lower 48 non-conventional play outside Pean [ph] is that those is too small economic enough that for you guys to be interest or that is an area that you guys may be interested also? Henry Hubble - Vice President of Investor Relations, Secretary: Yes. We're doing, we're constantly evaluating and we basically are looking for what we do is, we look for the best opportunities on a global basis and as I mentioned earlier that's one of the benefits we have with that global approach and we're targeting what we feel are the best opportunities with that we see out there. Paul Cheng - Lehman Brothers: So, in another words, that seems you guys have not made any significant attempt into the other non conventional, is that in your global portfolio, those that just not going high up. Henry Hubble - Vice President of Investor Relations, Secretary: Well, I mean we don't talk about everything we are looking at. So maybe more to come, who knows. Paul Cheng - Lehman Brothers: Very good. Thank you.

We'll go next to Robert Kessler with Simmons & Company. Robert Kessler- Simmons & Company: I have some fairly quick, but granular questions on production. One, do you have a stat for what Mondo would have produced on average in the quarter of what it's producing today. And then secondly on Piceance, where are you at in terms of total production there now? Henry Hubble - Vice President of Investor Relations, Secretary: Piceance is still above 55 million cubic feet per day. Robert Kessler- Simmons & Company: Is that what you are running, say a year ago, isn't it? Henry Hubble - Vice President of Investor Relations, Secretary: Yes. I mean, basically the expansion has not come on at this point. We are working on that direction but that has not come on. So that's... and Mondo it is about 100? Robert Kessler- Simmons & Company: About 100 on average for the quarter or today? Henry Hubble - Vice President of Investor Relations, Secretary: That's down a day. Robert Kessler- Simmons & Company: 100 a day, great. And just in terms of the follow-up on the Piceance, I mean I would have thought this is just a fairly well intensive development, and I'd have expected a bit more ratable production growth there? Is it going to be more lumpy or what should we really… Henry Hubble - Vice President of Investor Relations, Secretary: It requires gas processing and that's... some of those facilities, basically the facilities are full, just waiting for those increments of gas processing. Robert Kessler- Simmons & Company: Okay. Thank you. Henry Hubble - Vice President of Investor Relations, Secretary: Yes.

And next to Mark Gilman at Benchmark. Mark Gilman – Benchmark: Henry, good morning. Henry Hubble - Vice President of Investor Relations, Secretary: Hi, Mark. Mark Gilman – Benchmark: I noticed in conjunction with your entry into the Horn River Basin, this is not a second thing I guess I can point to where you and Imperial have interested side by side. Is it mandated that in Canada to the extent Exxon Mobil does anything, it has to be along with Imperial's participation? Henry Hubble - Vice President of Investor Relations, Secretary: No. Mark Gilman – Benchmark: It is not? Henry Hubble - Vice President of Investor Relations, Secretary: No. Mark Gilman – Benchmark: Okay. Henry Hubble - Vice President of Investor Relations, Secretary: We work with them obviously very closely. Mark Gilman – Benchmark: I mean, I guess I just kind of wonder if.... similar kind of structure is... and why it is, all things considered that you wouldn't do it on 100% basis as oppose to necessarily involving Imperial at all? Henry Hubble - Vice President of Investor Relations, Secretary: Well I mean, we basically enter into these arrangements with what we think who is going to deliver the most overall value to our shareholders and the structure is aligned with that. Mark Gilman – Benchmark: Secondly, you made reference in your opening comments to the new Malaysian PSC. You have been the industry's leading producer in that country for a number of years operating under an existing PSC. I'm wondering does this new PSC essentially extend the existing one and/or the terms more on risk? Henry Hubble - Vice President of Investor Relations, Secretary: Well. It's basically an extension of the existing arrangements that we have there, but it does anticipate more enhanced oil recovery. And it's basically a PSC... extension of that PSC arrangement. Mark Gilman – Benchmark: But the physical terms the same? Henry Hubble - Vice President of Investor Relations, Secretary: We don't get into the specifics on that. Mark Gilman – Benchmark: Okay. Final one, in your discussion of the E&P variances, you referred to tax factors in the other category and I'm wondering whether that was rate oriented or nearly total dollar oriented that was at the root of your comment? Henry Hubble - Vice President of Investor Relations, Secretary: It's a mix of different things; I really wouldn't point to one in particular. It's a bit of both as to what you have there, but they are onetime effects. Mark Gilman – Benchmark: They are one time? Henry Hubble - Vice President of Investor Relations, Secretary: Yes. Most of them. Mark Gilman – Benchmark: So therefore it's not a rate item? Henry Hubble - Vice President of Investor Relations, Secretary: Well, I mean it's rate in a period. Mark Gilman – Benchmark: Well, yes, but not a statutory rate change or something... Henry Hubble - Vice President of Investor Relations, Secretary: That's right, that's right. Mark Gilman – Benchmark: Okay. Just one final volume question on Asia-Pacific, Middle Eastern gas volumes, sort of little bit lower than what I would thought they would be, is that a PSC effect at all? I mean Alkelege [ph] has that kind of structure I believe? Henry Hubble - Vice President of Investor Relations, Secretary: I mean basically the decrease is largely lower demand in Qatar and then you also some in Australia as well. So you've seen a combined effect. We did have some plant maintenance in Qatar and that's really was the big impact. Mark Gilman – Benchmark: Okay. Thanks a lot, Henry.

And we will go next to Eric Milky [ph] at Merrill Lynch.

Hi, good morning, Henry. Henry Hubble - Vice President of Investor Relations, Secretary: Hi, Eric.

Couple of quick ones from me. Just want to make sure I understand the maintenance impact in West Africa in the first quarter correctly. Could you quantify the sequential impact and if we should expect those volumes to be back on in the second quarter? Henry Hubble - Vice President of Investor Relations, Secretary: Yes. Sequentially it is about 30 in that range.

And then they should be back on for Q2? Henry Hubble - Vice President of Investor Relations, Secretary: I'm looking to what I have on schedule. I think, that's good to some.

Okay. And on the production sharing contract impact on production, is there a seasonal; impact, is there a quarterly impact that you've more cost recovery at the beginning of the year, and therefore you have great entitlement in the earlier quarters. What do you accrue for that, so just be doing the entitlement process? Henry Hubble - Vice President of Investor Relations, Secretary: It's not accrual. Basically, as spending occurs, it's reimbursed.

Okay. And on TMS 22 [ph] in Brazil, are you able to give us an update on where you have the rig? Henry Hubble - Vice President of Investor Relations, Secretary: Well, we had scheduled basically looking to do that in the third quarter of this year, and as you know, we're bringing in sea drill rigs to do that work, and we have no change for that plan, and basically we've done in the second half.

Then you see rig effect, when do you expect delivery of that? Henry Hubble - Vice President of Investor Relations, Secretary: Yes, I mean basically in the summer, but I don't know the exact date on it.

Okay. And for Sakhalin 1 production in Russia, and peak was 250. You are kind of running at about 225. Do you expect to maintain 225? Henry Hubble - Vice President of Investor Relations, Secretary: Yes. It is going to be in that range with may be some decline, but that's pretty close.

But not the 10% type decline that we saw year-on-year? Henry Hubble - Vice President of Investor Relations, Secretary: No, I really don't have a field specific data that I can throw out there for you. But...

All right. And since the Investor Day that you had back in March, it's been some Ko [ph] project, can you tell what how that if that influences your timing of Ko, in terms of the water permit? Henry Hubble - Vice President of Investor Relations, Secretary: As you know, we were disappointed with water permit issue. We're basically proceeding with the work that can go on outside of that, so we're doing tranche work and that kind of thing. And then, in terms of the timing of the project, though we're optimistic we're going to get this… the permit was valid and we'll get that result there. So, we are not identifying any significant impacts in the schedule and we will be updating that as we move forward. Henry Hubble - Vice President of Investor Relations, Secretary: No.

Okay. That's all for me. Thanks. Henry Hubble - Vice President of Investor Relations, Secretary: Yes.

This does conclude the mean time that we have set aside for questions, and at this time I'd like to turn the conference back for any the closing or additional comments. Henry Hubble - Vice President of Investor Relations, Secretary: I would just like to thank everybody for the time and questions and look forward to next quarter. Thank you.

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