David S. Rosenthal - Vice President, Investor Relations and Secretary

Doug Leggate - Howard Weil Michael LaMotte - J.P. Morgan Neil McMahon - Stanford Bernstein Mark Flannery - Credit Suisse Mark Gilman - The Benchmark Company Paul Cheng - Barclays Capital Erik Mielke - Merrill Lynch Faisal Khan - Citigroup Paul Sankey - Deutsche Bank Securities

Thank you for standing by and welcome to the Exxon Mobil Corporation First Quarter 2009 Earnings Conference Call. Today's call is being recorded. At this time for opening remarks, I'd like turn the call over to the Vice President of Investor Relations and Secretary, David Rosenthal. David S. Rosenthal: Good morning, and welcome to ExxonMobil's teleconference and webcast on our first quarter 2009 financial and operating results. As you are aware from this morning's press release, ExxonMobil's first quarter earnings performance reflects the strength of our business model during this period of global economic weakness. Crude oil and natural gas prices were well below the levels of a year ago, reducing the absolute level of earnings, however our operating performance was strong and we delivered solid results. While we continue to see significant changes in markets and in our industry, ExxonMobil remains committed to investing in our portfolio of advantage project through the business cycle and we remain well positioned for the future as a direct result of our long-term focus, capital discipline, financial strength, and rigorous approach to risk management. 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 discussed and factors noted in our SEC filing. Please see Factors Affecting Future Results and the Form 8-K we furnished this morning, which are available through the Investors section of our website. Please also see the frequently used terms, the supplements to this morning's press release, and the 2008 financial and operating review on our website. This material defines key terms I will use today, shows ExxonMobil's net interest in specific projects and includes our SEC Regulation G disclosure. Now, I am pleased to turn your attention to the first quarter results. ExxonMobil's first quarter 2009 earnings and earnings excluding special items were $4.6 billion, a reduction of 6.3 billion from the first quarter of 2008, reflecting a sharp reduction in commodity prices. Earnings per share were $0.092, down $1.10 from a year ago. During the first quarter 2009, ExxonMobil distributed a total of $9 billion to shareholders, including dividends of $2 billion and share purchases to reduce shares outstanding, of $7 billion, again demonstrating our commitment to return cash to shareholders. Reported results and the earning per share calculation are consistent with the new FASB accounting standards adopted by the Corporation in the first quarter of 2009. Please refer to page six in our press release for more information. I would now like to share some of the milestones we have achieved since the last earnings call. In April, ExxonMobil and our joint venture partners inaugurated the Qatargas II project at Ras Laffan Industrial City, Qatar. This project represents another technological milestone that will make cleaner burning natural gas available to significantly more people across the globe. The project includes two liquefied natural gas trains; Trains 4 and 5, each of which is designed to produce 7.8 million tons per year of LNG, about 50% more than another LNG train currently in service worldwide. Both trains are expected to start up this year. In addition to the two LNG trains, the Qatargas II project includes a fleet of the world's largest LNG carriers and the South Hook LNG Terminal in Milford Haven, Wales. The first cargo arrived at the South Hook Terminal in March. The Terminal adds to the UK's LNG import capacity and energy diversity with the ability to deliver up to two billion cubic feet of gas daily into the natural gas grid when full operational capacity is reached. The Qatargas II project represents industry's first linkage of natural gas production, liquefaction, shipping and regasification infrastructure, together into a single, fully-integrated LNG development and supply initiative. In total, we expect nine major project startups during 2009; four LNG trains in Qatar, Qatargas II, Trains 4 and 5, and RasGas Trains 6 and 7, South Hook LNG Terminal, the Adriatic LNG Terminal in Porto Levante, Italy, Al Khaleej Gas Phase-2 in Qatar, Piceance Phase-1 in Colorado; and the Tereance (ph) project offshore Norway. These major project startups demonstrate our continuing commitment to bring additional oil and gas supplies to market. During the quarter, ExxonMobil's U.S. production operations earned the Gas Processors Association's 2009 Company Safety Award. This marks the third time in four years that ExxonMobil's U.S. production organization has earned this award, demonstrating our continuing commitment to industry rating safety performance. In exploration, the semi-submersible drilling rig West Aquarius began drilling the Wancong-1 well (ph) in the deepwater Seromano (ph) block offshore Indonesia. The West Aquarius joined the West Polaris as the second of three new state-of-the-art drilling rigs, we will utilize to evaluate our highly perspective deepwater acreage portfolio over the next few years. Wancong-1 is the first of several wells that the West Aquarius will drill offshore Indonesia and the Philippines during the course of this year. In Brazil, the West Polaris moved from the Azulao well in the Block BM-S-22 despite the second well in the drilling program, the Gironi (ph) well. The well is currently drilling ahead to target depth. During the quarter, we also continued to progress our high potential, unconventional natural gas opportunities around the world. In the Horn River Basin in Northeastern British Columbia Canada, and in the lower Saxony basin in Germany, we continue the initial phase of our drilling and evaluation program on our Shale gas acreage. In the Mako Trough in southeast Hungary we continue drilling and evaluation operations on several wells in this tight gas play. Testing operations will begin later in 2009. Also during the quarter, we were the high bidder for 15 blocks in the recent Gulf of Mexico leased sale. Moving now to the downstream. During the quarter, we inaugurated a new, high-efficiency, co-generation plant at our refinery in Antwerp, Belgium. Co-generation, is a simultaneous production of electricity and useful heater steam, is significantly more efficient than traditional methods of producing steam and power separately, resulting in lower operating cost and fewer greenhouse gas emissions. This high efficiency unit is capable of reducing Belgium's carbon dioxide emissions by an amount equivalent to removing about 90,000 cars from Europe's roads. Also in refining, we continued our activities to reduce raw material cost by managing our crude flexibility. This quarter, ExxonMobil ran 30 crudes that were new to individual refineries. In our lubricants business, ExxonMobil introduced the new Mobil DTE 10 Excel series of lubricants. This new family of lubricants is designed to meet the needs of numerous industrial and of highway sectors. These products are another example of our ongoing commitment to help consumers improve the efficiency and productivity of their operations, enabled by our proprietary technology to develop new specialized product formulations. Turning now to our chemical business. During the first quarter ExxonMobil announced plans to build a technology center in Shanghai, China, to provide product application support for our growing business throughout Asia. The selection of Shanghai as the site for our new technology center reflects the importance of Asia in the business development and growth plans for our chemical business. The technology center is expected to be operational in 2010 and will support our growing sales of premium products by providing innovative solutions to a wide range of customer needs. Now turning to the business line results. Upstream earnings in the first quarter were $3.5 billion, down 5.3 billion from the first quarter of 2008. Upstream after-tax unit earnings in the first quarter of 2009 were $9.32 per barrel. Sharply lower crude oil prices and lower natural gas realizations in all regions reduced earnings by about $4.9 billion. Worldwide crude oil realizations were down over $52 per barrel and natural gas realizations were down $1.28 per kcf from first quarter 2008. Volume and mix affects reduced earnings by $130 million. Other affects decreased earnings by 280 million, due primarily to increased operating expenses, reflecting higher activity level. In total, oil equivalent volumes increased slightly from the first quarter of last year. Entitlement volume effects, including price and spend impacts and PSE net interest reductions, increased volumes by 62,000 barrels per day, while OPEC quota effects reduced volumes by 123,000 barrels per day. Excluding the impact of entitlement effects, quotas, and divestments, production was up over 2%. Major project ramp-ups in the U.S., West Africa and the North Sea, and lower maintenance activity, more than offset natural field decline. Liquids production increased 7,000 barrels per day from the first quarter of last year, excluding the impact of entitlement effects, OPEC quotas and divestments, liquids production was up over a 3%. Major project ramp ups in the U.S., West Africa and the North Sea, and lower maintenance activity more than offset natural field decline. Gas volumes decreased 34 million cubic feet per day from the first quarter of 2008, reflecting lower demand in Europe. New project volumes in Qatar, the North Sea and Malaysia, more than offset natural field decline. Turning now to the sequential comparison. Versus the fourth quarter of 2008, upstream earnings decreased $2.1 billion, primarily due to lower crude oil and natural gas realizations. Higher crude oil and natural gas volumes increased earnings by $200 million. Other effects reduced earnings by 810 million, as lower gains from asset sales and negative tax of foreign exchange impacts more that offset the benefit of lower expenses. Liquids production increased 3,000 barrels per day as new project volume, lower maintenance and positive entitlement effects, more than offset the impact of OPEC quotas and natural field decline. Natural gas production was up 3.5%, driven by seasonally higher demand in Europe. Oil equivalent volumes were up 1.5% from the fourth quarter of 2008. For further data on regional volumes, please refer to the press release and IR supplement. Turning now to our downstream results. Downstream earnings in the first quarter were $1.1 billion, down 30 million from the first quarter of 2008. Higher margins increased earnings by $720 million, primarily due to stronger refining margins including positive price finalization effects. Marketing margins were also higher. Volume and mix effects reduced earnings by $370 million, driven primarily by a lower global demand. Other effects were negative 380 million, including adverse foreign exchange impacts and higher activity-driven operating expenses. Sequentially, first quarter downstream earnings decreased by $1.3 billion. Lower margins reduced earnings by 700 million, driven by lower marketing and refining margins, including adverse price finalization effects, partly offset by the absence of negative inventory change impacts. Volume and mix affects decreased earnings by $50 million. Other factors reduced earnings by $530 million, driven by lower asset sales and the absence of positive LIFO effects. Turning now to our chemical earnings. First quarter chemical earnings were $350 million, down $680 million from the first quarter of 2008. Weaker margins reduced earnings by $270 million reflecting lower realizations, while volume effects were negative 290 million, primarily due to lower demand. Other effects reduced earnings by $120 million, including negative foreign exchange impacts and hurricane related repair costs. Sequentially, first quarter chemical earnings increased by $200 million. Weaker margins reduced earnings by 70 million while positive volume and mix effect increased earning by $130 million. Other effects were positive 130 million, with lower hurricane related impacts and reduced operating expenses, partially offset by the absence of positive LIFO effects. Turning now to our corporate and financing segment. Consistent with our expectations, corporate and financing expenses increased by $347 million versus first quarter 2008, primarily due to lower interest income, reflecting both a reduced cash balance and lower interest rates. These results also included the impact of positive tax effects. Compared with the fourth quarter of 2008, corporate and financing expenses increased by $53 million. As we look forward, we currently expect corporate and financing charges in 2009 to be in the region of 500 to $700 million per quarter. Effective tax rate for the first quarter was 45%. At the end of the first quarter our cash balance was $25 billion and debt was $9 billion. The corporation distributed $9 billion to shareholders in the first quarter, through dividends and share purchases to reduce shares outstanding. Of that total, $7 billion was distributed to purchase shares in excess of dilution, reducing the number of shares outstanding by almost 2%. Share purchases to reduced shares outstanding are expected to be $5 billion in the second quarter of 2009. Yesterday our Board announced an increase in the quarterly dividend to $0.42 per share. ExxonMobil has paid a dividend each year for more than a century and has increased its annual dividend payment for 27 consecutive years. CapEx in the first quarter was $5.8 billion, an increase of 5% from first quarter 2008 and in line with our previous guidance. We continue to invest in robust projects through the business cycle to help meet global demand for crude oil, natural gas and finished products. In summary, these results reflect the strength of ExxonMobil's business model. We remain confident that our long-term perspective, financial strength and disciplined investment approach, will continue to deliver superior, differentiated results and positions us well for the future. That concludes my prepared remarks. I would now be happy to take your questions.

Thank you, Mr. Rosenthal. (Operators Instructions). Our first question will come from Doug Leggate with Howard Weil. Doug Leggate - Howard Weil: Hear me okay?

Yeah, we can hear you fine. Doug Leggate - Howard Weil: Great. I've got a couple of questions. The first one; I think you kind of addressed it with your corporate guidance there. As far as the interest income last year was concerned, given that the cash balance in now declining; can you quantify that? I mean you're now assuming basically no interest income on underlying corporate expense going forward?

Good morning, Doug. With regard to our interest income, it was down significantly from the first quarter of last year and again, that was due both to the smaller cash balance as well as the interest rates available in the market. We did have of course some income this quarter, but again our focus with regard to cash balance (ph) has been and continues to be preservation of our balance. Doug Leggate - Howard Weil: Okay. Hopefully that doesn't qualify as perfect question, but the related question I guess is, when you look at your $25 billion cash balance, it's now down 15 billion from a year ago, where do you see that going? I mean, in terms of, in terms -- how you manage it, how aggressive will you be with share buybacks given the little commodity because a $5 billion clip per quarter, you start basically will write through that pretty quickly here. Can you just conceptualize how you think about that please?

Well, Doug first of all we are not really prepared to provide any guidance beyond the second quarter, where as I mentioned a (inaudible) we do expect to spend $5 billion on share repurchases. As we've said before, share purchases is the flywheel (ph) with our cash. Our first objective with our cash is to fund our very robust investment program and we are continuing to do that through the first quarter this year and onward. The second thing we've always said we do with our cash is pay the dividend and as I mentioned a little bit ago we are please to announce that yesterday our Board did increase the dividend by $0.02 a share a quarter After funding the investment plan and the dividend, you do take a look then at the share repurchases but again on the guidance for second quarter (inaudible) is to offer any more guidance, but of course we'll adjust the rate of purchases as appropriate as we manage our cash balances while maintaining flexibility to implement any future plans that we may have.

Our next question is from Michael LaMotte with J.P. Morgan. Michael LaMotte - J.P. Morgan: Thank you. David I apologize if you went over this at the beginning of the call because I did get on a little bit late, but could you provide an update on the status of Qatargas II Train 4 and when that could be expected to be fully up and running?

Michael, I'd be happy to talk about Qatargas Train -- II Train 4. Our progress and commissioning is proceeding well. We did start up the train in March and we actually produced our first LNG and loaded a cargo. Since that time, Qatargas has brought Train 4 down to correct some issues identified during our rigorous commissioning and our start up process. As you know, these are very large trains. This is the first of four and we have a very rigorous disciplined approach to commissioning and start up and we are pleased with how that is going. And obviously, any lessons learnt from this start-up will be applied to the trains. But we do expect LNG production will again commence in the near-term. But all in, we're very pleased. We feel very good about how that startup went. It's a lot of equipment and we're very pleased with how things are going so far. Michael LaMotte - J.P. Morgan: Any specifics on timing?

I wouldn't want to give any specifics other than to say the work is progressing very well. Michael LaMotte - J.P. Morgan: Okay.

On a couple of issues that we're resolving and we would expect that to start up in the near-term. Michael LaMotte - J.P. Morgan: Okay. Perhaps -- it's my related follow up. Perhaps you could just remind us of sort of ExxonMobil's philosophy on liquefaction, capacity utilization, particularly as it pertains to demand and pricing in the end markets?

Sure Mike, I'll be happy to talk about that. As we've mentioned before, one of the things that makes our investments in the LNG business in Qatar unique in the industry, is we have a fully integrated value chain from the gas, from the north field through liquefaction, the largest LNG trains ever built and the largest ships ever built to transport the LNG, as well as our terminals that we have located in major, in major margin. This gives us really an advantage project, at the lowest LNG cost. It is competitive. In all of the markets that we serve, our intention is to start these trains up safely and successfully, and run them and make that gas available to markets worldwide. Michael LaMotte - J.P. Morgan: Any reason that wouldn't run at 90%, 95% with...

There is no reason that we won't run those trains to their full capacity after again a safe and successful start-up. Michael LaMotte - J.P. Morgan: Right. Thank you, David.

Our next question is from Neil McMahon with Stanford Bernstein. Neil McMahon - Stanford Bernstein: Hi. A few questions again. Maybe just still back on Qatargas II Train 4. Could you go into what the start-up problems were and obviously on something which is brand new from the scale of this project, there are going to be some issues to begin with. So, I am wondering if that will delay, as you said with the lessons learnt the other projects coming up this year?

Yeah, let me just first reiterate. We had a very successful commissioning process and start up. All of the equipment worked as we had expected. Again, these are very large, very complex trains. And again, we are very pleased with how things started up. We did produce the Cargo. And then Qatargas took the train down again for some maintenance. I really don't have a lot of details on what the items were. They were a few different things. But again our focus is on the long-term nature of this project and getting the first train here, Train 4, up and running again. But we do not foresee any issues with our plans to start up the next three trains. Neil McMahon - Stanford Bernstein: Okay. Maybe just looking at the situation in the chemical market, what was your chemical plant utilization in the quarter? It looks like, as expected I suppose pretty weak demand for chemicals and so maybe if you could mention the utilization and roughly your outlook in the near-term for chemicals globally?

Yes, rather than talking terms of plant utilization rates, I think what we aught to focus on is the general demand situation. We did see weak demand across our geographic sectors as well as across our products, some to different degrees than others, but general weak demand all around. As we've said for a long time, this is a very cyclical business. We are certainly experiencing one of the downturns in that cycle. But we are maintaining a very long term focus continuing on with our investment program and looking forward to being well positioned when the market turns around. I can tell you where we're sitting today. We really don't have any outlook on changes in demand going forward. It's probably a little early to tell. Again, it's a very large diversified business. And generally speaking, consistent with the global economy demand is weak and we can't predict how long that will take, but again, we are very pleased with our portfolio both the manufacturing facilities as well as the product mix that we have to offer. And we're managing this business through the downturn as we have in the past and we're very pleased with our position in the industry when this thing turns around. Neil McMahon - Stanford Bernstein: Okay. Thank you.

Our next question is from Mark Flannery of Credit Suisse. Mark Flannery - Credit Suisse: Hey good morning. I wonder if you could comment in general terms on costs. I know earlier in the call you mentioned that operating costs were a little higher year-over-year in the upstream, and described these as activity based. We've heard from other big oil companies that costs are falling in the upstream on a unit basis. Could you may be give us some color on what you are seeing in your portfolio?

Yes, I'd believe happy to comment on OpEx. Obviously, this is a very important topic in our industry given where we are in the current economic climate. But let me step back just a second and talk broadly about cost management in ExxonMobil because it does transcend all of our business units, and then I will give you a couple of specifics. As you know, keeping a relentless focus on cost management has been a hallmark of ExxonMobil for a very long time and throughout our business cycle. We don't wait for downturns in the market to get to work efficiencies, in cost savings. We learned a long time ago that if you don't let your check book get out of control in the good times, you don't have to slam on the breaks and disrupt the organization when the market turns down a little bit. We feel very good about our ability to maintain our cost leadership, given our size and scale and global reach, and all of that combined with our single global procurement and contracting organization. We are confident that we're getting the lowest prices for goods and services that the market has to offer but nonetheless as you'll see in our detailed first quarter filings, our costs in total are down significantly versus the first quarter 2008. In fact, our total expenses are down about 10 % or just under $2 billion before tax quarter-over-quarter. Now of course lower energy costs are a big piece of that as are some favorable foreign exchange effects, the dollar has strengthened against some of the other major currencies. But I will note that we also delivered several hundred million dollars of savings as a result of both operating efficiencies and divestments. And I will also add on an ongoing basis, we are seeing some decline in vendor rates and material prices flowing through to our operating expenses. So once again, I'd like to say that if you look at our business over a long-term, we maintain that focus on cost management and that allows us to grow the business and invest through the business cycle and execute our plans for the business. Mark Flannery - Credit Suisse: Great. May be I -- my second question would be related to that, which is; let's assume for the sake of arguments that vendor pricing and capital costs continue to fall through 2009, do you think there is a change for you to understand your capital budget this year and its leads to same results?

That's an excellent question. As you recall at our Analysts Meeting in March, we did table a figure of about $29 billion in CapEx. We set up the time that that was our best estimate, given everything we knew that was going on. Obviously, there are puts and takes in that. Some of our partners have announced a need to perhaps adjust to our investment plans and that might flow through a little bit, but where we are sitting today, that it still, still looks like a pretty good, a pretty good estimate. I would like to comment though just on that $29 billion, that's not a target, Okay. It's not a minimum. We'd be happy if cost come down due to our rigorous efforts and cost management to spend less to achieve the same level of project activity. But I also need to turn the coin over and say that that $29 billion figure is also not a cap and as the year progresses, if new opportunities that weren't originally in our plan present themselves, we're fortunate to have the financial flexibility and the organizational capability to take those, take those projects on if we see them and they come along. So, in summary I'd say we feel pretty good about that 29 billion from where we are today. It's a very large business and a lot of factors go into that. But it's pretty early in the year, and we're very pleased primarily with the progress of our projects and how our plans are proceeding and CapEx looks pretty good for the year. Mark Flannery - Credit Suisse: Right, thank you very much.

Our next question is from Mark Gilman with The Benchmark Company. Mark Gilman - The Benchmark Company: David, good morning.

Good morning, Mark. How are you this morning? Mark Gilman - The Benchmark Company: Good thanks. David with Michael's questions I just want to go back to previously raised subject, because I guess, my understanding just isn't clear. With respect to the cost issue, I listened very carefully to what you say. However, that seems to be contradicted by what you had to say with respect to segment earnings variances. If overall costs are down by anywhere near the amount that you suggested, I frankly don't quite understand how in your discussion of the upstream and downstream segments, higher operating expenses would have been considered a factor? The other thing is the corporate guidance. There must be something else that is occurring in order to take that number to five to $700 million per quarter after tax. It seems to me if would eliminate the full amount of any interest income in 2008, based upon our 30 odd billion cash position, you would not get corporate charges or an increase in corporate charges in the magnitude that's being suggested. So I would appreciate some additional clarification as to what's driving that? Thanks.

I'd be happy to answer both of those. Let me start up off with our earnings factor analysis just to be clear. One of the things I have mentioned in that 10% reduction in overall cost as booked, of course is the impact of lower energy prices. They have a major impact. And of course those show up in our waterfall charts in the margin column. The other factor that's in there is the favorable foreign exchange that helps on the OpEx, but as you know foreign exchange on the other side hurts on the translation of local European currency revenues and if you net both of those off, its not a big factor and we put that in the other category. The efficiencies and impacts of divestments that I mentioned, again we had several hundred million dollars in underlying efficiencies, but those were offset by new business growth and opportunities that were progressing and activities that we have underway in various businesses. So, we're very pleased as I mentioned with how our OpEx is coming along this year and how we're responding to the business. Let me hit the corporate guidance for just a second on Corp and FIN (ph). A number of factors as you know, are in the Corp and FIN. The interest income piece is a big piece of that. As we've talked over the years, tax effects come and go and can vary quite significantly as we go along. As we look in total, at this year versus last year and what's going on in Corp and FIN, we also have some increased pension expense that flows through there. But again, it's not material. So it's a number of factors. But overall, wanted to just let you know that about 500, I thought it would be helpful if we had guidance around 500 to $700 million for each quarter -- for the balance of the year, but again I need to stress that'll move around as things come and go. Mark Gilman - The Benchmark Company: Thanks David.

You're welcome.

Our next question is from Paul Cheng with Barclays Capital. Paul Cheng - Barclays Capital: Hey guys.

Good morning, Paul. How you're doing? Paul Cheng - Barclays Capital: Good morning. Very good. Dave, on the $29 billion of the CapEx for this year -- sorry to ask that question again. What is the percentage of that amount that's currently not tied to already signed fixed contracts? In other words Dave, what is the percentage that maybe subject to the dependent on the fall in the spot price?

Paul, that's an excellent question. I don't have -- I don't have the numbers in that kind of detail, but as you know, depending on where you are in the project cycle, projects that are finishing up, the CapEx for those won't be impacted in all by the changes in prices and rates. Projects that are in the beginning or middle stages that might have had long lead time equipment purchases a year or two ago, those aren't impacted. And then you move on into the balance of the projects particularly those that are just getting underway. That's where we have a focus really on our ability to roll our cost. So, if you look at the projects that are underway or well along, obviously the focus there is on executing those projects and successfully starting them up. As we look into the projects that are under development and start and we're just getting construction underway, we are of course working those very hard particularly, on some of our large projects that we're just now getting underway. So, I'd say all in again, we think that $29 billion number, given where we are today, looks pretty good. But less assured any opportunity we have that we work this hard everyday to bring those costs down, we are more than happy to do so and coming under that, but again we are also on the lookout for new opportunities... Paul Cheng - Barclays Capital: Great, totally understand that. If you don't have that number, is that something that you guys may believe willing to share and may be me or someone else from your team after the call may be able to give me a call and just shed some light for me.

Paul, I really don't think we even have that detail and if we did, we really probably wouldn't -- we typically just wouldn't disclose that. But we will give you a call and see if we can help you out a little bit on that. Paul Cheng - Barclays Capital: Okay. If I could have a second question?

Sure. Paul Cheng - Barclays Capital: With the Obama Administration there have been long launch release of they trying to keep (ph) on the oil industry. I am sure that you guys probably already looked at that. Have you had any rough estimate that all those proposals are indeed being impact (ph) and what is the total hit on you guys?

That's -- it is way early to talk about what impacts might be from legislation that might be passed. Obviously, there are a lot of ideas out there and a lot of discussion going on Paul Cheng - Barclays Capital: Paul can we ask that if you don't have -- willing to share a number, is there any particular one proposal that may hi Exxon more than the other proposals that based on what you guys can currently identify?

No Paul, I'd say there really isn't any one proposal, what I would offer though is we want to be a part of the debate. We are looking forward to discussing the issues of energy supply with the Administration and again being an active part of that debate. There is a lot to discuss on very important issues, but we are really not prepared at this point to speculate on what might come about and what any impact might be on ExxonMobil. Paul Cheng - Barclays Capital: Can I just may be in a really quick question one more?

Okay Paul Cheng - Barclays Capital: I think you asked about the cash or that the dividend policy, just trying to understand I mean if I look at it in the first quarter, your cash burn rate is roughly about nearly over $6 billion and your dividend is your capital spend, and your capital spending based on the 29 billion is going to be increased by about two billion from the first quarter level for the remaining of the year. And let's assume you understand the opinion on that, so you reduced your share buyback program from the first or second quarter by two billion. So that would suggest that you're still burning roughly about six billion of the cash and wondering that I mean how should we look at, do you think that you feel comfortable of the burn rate or that overtime you want to manage it to a substantially lower burn rate?

Paul I really don't have any guidance to give overall on burn rates or share buyback other than what I've mentioned, which is, we are intending to or planning to spend $5 billion on share backs in the second quarter. But again, if you look at our cash balance and the strength of our balance sheet, we have the flexibility to find a very robust investment plan, pay the growing dividend that was announced yesterday, take advantage of any opportunity that might come along, and then after all of that, we'll take a look at the cash balances and look at the share repurchase program. But gain. I think the important thing is to -- that distinguishes ExxonMobil in this regard is the strength of our balanced sheet, our AAA credit rating, our very strong cash flow, low level of debt, just leave us well positioned to take advantage of opportunities as they come along. And of course the other things that effects a cash burn rate over long period of time is our disciplined approach to investing and we remain very pleased with the decisions we've made over the last few years and how the business looks going forward. Paul Cheng - Barclays Capital: Okay, thank you

Our next question is from Erik Mielke with Merrill Lynch. Erik Mielke - Merrill Lynch: Good morning, David.

Good morning, Erik Erik Mielke - Merrill Lynch: My first question relates to your production outlook for 2009 and just try to fix out that where we are right now compared to where we were two months ago, when you gave your guidance of, let's called it, modest growth for 2009. The things that have changed since then I guess will be more information on where OPEC quotas are taking you and then also what's happening in Qatar? And I was little bit surprised by some of your European gas sales. My question is; are you still comfortable with that guidance or do we need to think about it just in adjustments to that guidance for OPEC quotas or perhaps a Qatar as well?

Thanks. That's a good question. I'm happy the happy to talk about that. It has been less then two months since our meeting were we did talk about a production outlook of about four million barrels per day. As we mentioned at the time, there are a lot of puts and takes around that and a lot of things that can sway that. But where we're sitting today, we still think that's a pretty good outlook. Again in the context of our very long-term approach to investing, I'll tell you the projects that we have on the table that we're progressing are all progressing well and we're very pleased with that. And of course, the production in any quarter, any given year will be a function of how those projects come online. But you mentioned OPEC quotas, the gas trains as I mentioned are coming on as planned over the course of the year, and all in we're looking at, we would still expect to come in around that four million barrel a day mark. And more importantly, as we look out over the next several years, meet those -- meet the target, and meet the outlook that we showed you in the Analyst Meeting. Erik Mielke - Merrill Lynch: That's great, thanks. My follow up question relates to Sakhalin-1 where the trade presses talked about progress that you've made in your negotiations with the Russian Government on domestic gas. Can you give us an update on that project please and what are the key milestones you look forward to?

Yes, I'll be happy too. First of all, if you look at the Sakhalin project, today we've been very pleased with how that project has come along. We're very pleased with the production and performance of that project and its performing well. As we look into to 2009 and beyond, as you read in the press, we did have a delay getting the budgets approved for some of the projects and the work plan for this year. We successfully worked through that with the local officials and those work plans and budgets are approved and we continue to progress the development of the Adap-2 (ph) project. And we're also working on the activities for the (inaudible) development. So, that whole project is underway and working well As opposed to the gas supply, we can confirm that the Sakhalin-1 consortium is prepared to supply an additional 1.5 Bcm a year of gas to the Russian domestic market and we continue to evaluate all the viable options and work with the appropriate government authorities to work through that. But again, there is a lot going on, a lot of things we are working on but I think the most important thing to keep in mind is so far that project has met our expectations, met the governments expectations and delivered well, and we feel very good about how we are moving forward and progressing our plans for the balance of that project. Erik Mielke - Merrill Lynch: Thank you

Our next question is from Faisal Khan with Citigroup. Faisal Khan - Citigroup: Good morning.

Good morning, Faisal. How are you? Faisal Khan - Citigroup: Okay. How are you doing?

I am fine, thank you. Faisal Khan - Citigroup: All right. I just want to confirm the production you guys reported in Asia, Asia-Pac and Middle East that was down sequentially quarter-over-quarter, is that -- I take it that OPEC, OPEC production cuts?

That would certainly be a big piece if that in the Middle East. We do produce a lot of volumes out of there and yeah that would be a major factor there. Faisal Khan - Citigroup: Okay, and I just want to confirm, in your prepared remarks I think you said that you had started up the production in the Piceance Basin, is that correct?

We are progressing phase-1 in the Piceance Basin and that project is progressing well. As we've said in the past, that is a very large resource and it gives me the -- gives us the opportunity to really apply some of our technology. And yes, we did get the startup in the second quarter and we would -- and as we move on we're continuing to progress that project. Faisal Khan - Citigroup: And there is no reason to think that it would slowdown the pace of that production profile?

The good thing about the Piceance project is we're developing that in phases. We're taking a very long-term approach to a very large resource. We do have the flexibility around pace, but I can tell you where we're at today. We're progressing in phase-I of that project per the plan. Faisal Khan - Citigroup: Okay. One last question.

Sure. Faisal Khan - Citigroup: Your petroleum products sales in Europe fell off pretty precipitously from fourth quarter to first quarter '09. I was wondering if you could just give a little color around that. What do you guys going on in Europe? Do you see further declines given the economy or are you seeing stabilization there?

Well first of all as you noted, those volumes are down considerably and really it just reflects underlying changes in demand. And as we look across the quarter, as we sit here today, it's just too soon to tell anything about the future going forward. We'll have to see how the general economy progresses going forward. But it's just too early to tell and there is really no data out there that gives us the ability to make any predictions or draw any conclusions about what the near-term demand might be. Faisal Khan - Citigroup: Okay, great. I appreciate the time. Thank you.

Sure.

Next question is from Paul Sankey with Deutsche Bank. Paul Sankey - Deutsche Bank Securities: Hi David.

Good morning Paul, how are you? Paul Sankey - Deutsche Bank Securities: Okay. Thanks. The -- I just have follow ups really David. The first one really goes way back to the first question I think, regarding you cash balance. Is it fair to say that you don't want to hold cash on your balance sheet? Essentially you would be looking overtime to work your cash balance towards there?

What I would say is there is no change to our cash management approach. If you look a long time over history, we have not typically carried the large cash balances. But again, I think Paul you have to stand back and look at what our overall objectives are in this regard. And one of the foremost one is to maintain our AAA credit rating and the strength of our balance sheet and maintain our ability to invest in our opportunities that we have in front of us and pay our dividend. And as I said before, once we do that we'll evaluate our cash position and look at our share buyback. But I think the important thing really is the approach to risk management that we've had with our cash over the last year too and the wise use of that cash going forward. Paul Sankey - Deutsche Bank Securities: But you would still say that holding cash is low return, right?

I would say over the long-term again historically, we don't tend to hold large cash balances. But as you know this is a cyclical business and cash flows do tend to move up and down with the general industry conditions. And then we'll use that cash as we move along and keep our balance sheet strong. And again, as we said before, maintain the capital discipline and not do anything dumb with the money. Paul Sankey - Deutsche Bank Securities: Okay. I think I -- I just move on to my own questions and come back with a follow up on CapEx, but if I could just on Europe, you mentioned projects start up in the North Sea, you mentioned weather, but at the same time it seems to me that your volumes in Europe and oil are down 10% and your natural gas volume's down 3%. Can you specify what the project startups were and how big they were? I guess what I am trying to infer is the underlying decline rates, there must believe pretty aggressive?

Let's step back and look at what happened in sales overall from first quarter last year to first quarter this year. We did see demand drop down as we mentioned and as you've noted and we don't think that was weather related. If you look at the degree days and that sort of thing, I think the winter was at least as cold if not a little cooler than last year. So that would imply some drop in underlying industry demand. And I think that's kind of the story there. As we look quarter-to-quarter, we didn't have any real major project impacts on the gas side. We do have the continuing effects from the projects of last year particularly Volvo and University (ph) but all of those effects again it's really a demand story. Our projects are doing well again, Volvo and Starling last year and I think he asked the question this year will be starting up the Tereance (ph) project in the North Sea. So, other than demand I would say that things are going just about as we would expect on European Gas. Paul Sankey - Deutsche Bank Securities: I mean it was colder right and there was problem with gas supply from Russia; it would imply that your volumes were up?

Well, but I think you'll have to look at what the underlying industrial demand was in Europe. Paul Sankey - Deutsche Bank Securities: Okay.

And it's probably the primary factor for the overall decline. Paul Sankey - Deutsche Bank Securities: Yeah, I understand. Okay.

There's a lot of capacity issue. Paul Sankey - Deutsche Bank Securities: Okay. Great. Thanks. And then product sales are down 5.6% I think is the number that is to say your oil product sales you kind of referenced it a little bit in terms of the Europe in the previous question but is there anything little funky in there in terms of deposals or is that just a pure economic downturn and that would demand downturn? And as a follow up to that same question, gasoline demand, you have down 8% I think year-over-year and just up 4.7% which is totally the opposite of the industry trend that we are seeing, for example in the U.S. weekly data, could you talk a little about that? Thanks.

Sure, let me start out with your first question as we look at the decline in product sales. We did have we did see lower sales due to demand of course consistent with the general economic conditions, but we did have some lower sales due to divestments from the prior year. So, it was the combination of both of those. Paul Sankey - Deutsche Bank Securities: That's about 50-50, that demand?

Yeah, in order of magnitude, that's probably about right. Paul Sankey - Deutsche Bank Securities: Right. And then (inaudible)

Excuse me? Paul Sankey - Deutsche Bank Securities: The gasoline versus distillate?

Yeah if we look at gasoline versus distillates, if you're looking in the U.S., we did see quarter-on-quarter versus last year mo-gas was down and diesel was up I don't think any of really any of what we're seeing in this is vastly different than what we're seeing in the industry. Paul Sankey - Deutsche Bank Securities: Well the U.S. gasoline demand is down slightly and distillates down like 10%, so for you to be down 8% in gasoline and up in distillate, is roughly different?

We certainly could be seeing some, some mix effects in there Paul but I don't think there is anything significant or major in that difference. Paul Sankey - Deutsche Bank Securities: What do you ...

That I can point to. Paul Sankey - Deutsche Bank Securities: What do you mean by mix effects?

Just say what we're selling and how we're running our refineries Paul Sankey - Deutsche Bank Securities: Okay.

And optimizing crude slates and the products we're offering into the market. But again I can't point to anything significant or an individual item that would make us different from the rest of industry. Paul Sankey - Deutsche Bank Securities: Okay and finally from me, David on CapEx again. The run rate for Q1 is way behind the 29 billion that you're talking about. Are you saying that we should -- and I guess you are saying quite frankly that we should expect to ramp up to that kind of pace to meet the 29 billion for the rest of year?

That's a good question, we typically -- it's really a timing issue. Typically if you look historically, first quarter capital expenditures are lower than they tend to be over the rest of the year. Paul Sankey - Deutsche Bank Securities: Yes.

What I would say is, CapEx is coming in about what we expected Paul Sankey - Deutsche Bank Securities: Right.

And we're still on track. Paul Sankey - Deutsche Bank Securities: Yeah, I've got it. Thanks David.

Thank you very much.

And with that, that does conclude the question and answer session. I would like turn the call to David Rosenthal for any additional or closing comment.

Thank you very much. All I would like to say here in closing is we had a very good quarter operationally. Our plans are progressing as we expected. And to conclude, I'd just like to thank everybody for their time and joining us and the excellent questions that you asked. So again, thanks you very much for participating in the conference call today.