Good afternoon, everyone, and good morning if you're in the United States. Thanks very much indeed for joining us for our next session in our annual ESG conference. I'm delighted to welcome John Hess, who is CEO of Hess Corporation. Probably one of the most differentiated investment cases in the industry right now. I think hopefully those of you who are familiar with our research are aware of how we've positioned that investment case relative to the rest of the sector. The challenge for all oil companies is clearly how to navigate I guess, the volatility of a commodity, but in particular, the changing sentiment around oil energy, if you like, in an energy transition. We think, for sure that Hess, with a sustainability report that now stretches over 20 years, has been front and center on this discussion for a long time, has some of the best, if not the best ESG metrics in the industry. I think, John, that's something that's to be commended. Nevertheless still sits within this challenge for the broader sector, which is how we navigate an energy transition as an old, if you like, traditional oil and gas company. John, welcome. I'd like to introduce my co-moderators, Francisco Blanch, who heads our commodity strategy team, Chase Mulvehill, who heads midstream and services, and Christopher Kuplent, who heads oil and gas equity research out of London. John, maybe I'll kick off, first of all, with a big picture question. Really hitting that topic that I introduced, and whatever way you'd like to take this. How does a company stand apart, address investor concerns, navigate the politics and the changing views of the role of energy for a traditional E&P company through an energy transition? That's a great question. Doug, thanks for having me. Grateful for your interest and support in the company. Look forward to the conversation we're about to have, and thank you to everybody who may be watching or listening. Look, the energy transition and climate change are very much real. It's probably the greatest scientific undertaking of the 21st century. I think there's a big challenge ahead. It's a dual challenge, which is how do we grow energy about 20% between now and the next 20 years, but at the same time, how do we get to net zero, let's say, by 2050? You know, one of the resources that we use to try to get knowledgeable about this dual challenge is the IEA. They came out with a World Energy Outlook in October before COP26, and it really lays out 4 scenarios. I think the key part of those 4 scenarios is that oil and gas are gonna be needed in all 4. To have an orderly energy transition, you need oil and gas. I think we're starting to see the cracks in the dike now for those who didn't invest enough in oil and gas. Europe's feeling that strain obviously accelerated with the Russian invasion of Ukraine. We already saw a tightening oil market that was going on the last 7 quarters, where we had greater demand than supply. I think the key challenge for the industry, for oil and gas, is we actually need more investment, even though some on the ESG side, some on the government policy side, we don't need. I think John Kerry even said, "We don't need more oil and gas five years from now." That's an erroneous assumption. It's a long lead time business. What's that global number? That global number is probably nearing $500 billion a year, 'cause I'm accounting for some of the inflation. It used to be $450 billion a year that we need to invest every year, each year for the next 10 years to make sure that we have enough oil and gas, and so that we also can have an affordable, just and secure energy transition. I think that's one of the dilemmas that investors face, that politicians face, that business leaders face. That while we need to invest more in clean energy, and I think that number from the IEA globally is going from $1 trillion-$3 trillion. Francisco and I have talked about that challenge. Are the resources even there, not just on the capital side, but on the resource side to pull that off. But oil itself, we need more investment. The last 5 years, the industry, in part because oil prices went down because of too much shale, and in part because people lost money. Two years ago, the global industry spent $300 billion. Last year, maybe $350 billion. This year, I think it's about $450 billion. But we've had five years of underinvestment, and we're starting to pay the price because demand for oil continues to go up, and you have to invest through the cycle. Now, fortunately, our company has invested through the cycle, and we're very much focused on three elements in our strategy, which are to deliver high return resource growth, deliver a low cost of supply, and deliver industry-leading cash flow growth at the same time. I'm happy to get more into that. As we do that, we're committed, and we've had a long-standing commitment that you just talked about to sustainability. We believe sustainability is fundamental to our long-term strategy and building a successful enterprise in a very profitable way for the long term. You mentioned our sustainability report. We're about to come out in July with our 25th one. We talk about climate change. We talk about the fact that our board is climate change literate. We have experts come in and talk to our directors and our leadership team about that. We are very involved with our board, with them overseeing our sustainability practices, all of ESG, both in terms of strategy and reporting. You know, we're committed to this sustainability, and yet at the same time, the world's gonna need the oil and gas, and you have to have balance between the two. I always say, for us to have a smooth energy transition, the world for government officials as well as business leaders needs to have climate literacy, energy literacy, and economic literacy. I think a lot of the well-intended ideologues on climate change haven't really understood the physics, chemistry, or economics of energy. Then the economic undertaking that we need, where is all this capital gonna come from? U.S. being the greatest example, we've been outspoken about it. Even our industry has been outspoken about it. If the Biden administration is serious about climate change, we need a price on carbon. We as a company and also the oil industry have advocated that. I know Europe's ahead on this now. If we're gonna attract the $ trillions we need for an efficient and smooth energy transition, we need a price on carbon. Now, on top of that, I think the U.S. needs a master plan in terms of what that energy transition's gonna look like, what the balance is gonna be. You just can't fly blind and have regulations that change all the time. Ultimately, you need to have people who are climate literate, energy literate, and economically literate in the administration to work with business. Government and business need to work together. There aren't those people, well-intended people in the Biden administration. There's very little, if any, energy literacy and very little, if any, economic literacy. We're not moving in the right direction. How does a company plow ahead? It's by making sure that the world has a low cost, low carbon oil that's sustainable for the long term, that's durable in terms of cash flow growth, and yet at the same time, in our practices, get our carbon footprint down, invest in groundbreaking research that hopefully might help on the nature side to capture more carbon, and it's doing both. We're doing our best to get that balance right. Invest for high durable returns through growing our oil resource, and yet at the same time, continuing to decrease our carbon footprint. John, it wouldn't be fair on everybody if we didn't talk a little bit about Hess investment case later on in the session. I'm gonna come back to a lot of those things. I think anyone listening is very familiar with our research. You and I have had a chance to talk many times about the energy transition, but we've had a little bit of a significant event to shift the world's view of what the right balance between energy security and that transition is, which, of course, is Russia, the Ukraine invasion. I'd just love to get your perspective, not just on oil markets, but in terms of how this might shift the ideology. I wanna quote Rick Muncrief on his earnings call. I don't know if you heard this. He said, "Energy policy matters. If we misstep, physics and economics will defeat platitudes and untethered ideologies over time." You talk to a lot of the politicians. You see how this is impacting the oil market. What's your perspective on how it changes the outlook for the commodity and the approach from governments, particularly here in the United States, to an energy transition? Well, I would hope. I was talking before about how you reconcile the two challenges. How do we grow energy? Oil and gas are going to be needed for the next 20, 30 years. We need to invest in it to make sure we have an affordable, just, and secure energy transition. It's educating government leaders and business leaders alike for that. Yet, what can we do to reduce the carbon footprint? I think one of the most eloquent and simple ways of saying it is what Fatih Birol, the executive director of the IEA, says, "More energy is good, more emissions are bad." So how do we deal with that dual mandate? Now, Russia the consequences of Russia, obviously on geopolitics, people have talked about it having a profound and long-lasting impact, in terms of maybe going from a globalized world to a de-globalized world where you really bifurcate not only Europe and Russia, but Europe and the US from Russia and China. What does that mean? What does that mean for supply chains? What does that mean for the cost of inputs? What does that mean for the world economy? I think we're witnessing that, and I think they're gonna be profound, long-lasting impacts, in terms of how we think about the energy transition. The oil and gas markets now are even tighter. They were tight before. Demand was greater than supply. Seven quarters of inventory draws. I think global oil inventory is now. I don't know what Francisco's numbers are. We think it's about 400 million barrels less than pre-COVID levels. No cushion in the system. Very little spare capacity. You heard the energy minister of Saudi Arabia two days ago, and the energy minister of the UAE two days ago say we don't have enough capacity of oil for the future, and we need more investment. At the end of the day, the market's gonna stay tight going into the second quarter. There's no flex or cushion in the system. Oil price has been between $95 and $110, WTI the last month, $106 right now. While there are headwinds because of China lockdowns, maybe 2 million barrels a day down, on a 100 million barrel a day market. China, I think just for social reasons, is gonna get their economy going in the next month or 2, so that 2 million a day comes back. People are starting to fly more. You can see it in statistics. We actually think by the end of the year, oil demand will be about 101 million barrels a day, and it'll really start ramping up in the next 3 months. At the end of the day, the market's tightening. While there's about 1 million barrels a day of Russian oil off the market now, we think that could increase by another 1 million barrels a day as the EU is finalizing agreement to ban the import of more Russian oil. You're seeing cracks in the dike as well on natural gas as well as on diesel supply. The price is starting to bite. I know, and Francisco knows this better than anybody, the price of diesel or natural gas is the equivalent of $150-$200 a barrel. That's gonna have an impact on the world economy, and we see that impact being underpinned. Now, I think the biggest change to your question about Russia's impact on how we think about the energy transition or the oil markets, I talked about the geopolitics. Let's talk about the energy transition. I think it's put a spotlight on the word energy security. Energy security is fundamental to world economic prosperity, but also a successful energy transition. It's really foundational. Europe and Russia have been so integrated over the years in oil and gas, where 50% of Russia's oil and gas exports go to Europe, 30% of Europe's oil imports come from Russia, 40% of gas imports into Europe come from Russia. People are gonna start thinking about being that dependent upon one supplier in Europe, but you can't fix the problem overnight. You also look at a place like China, that's 80% dependent upon imports, Japan, 100% on imports. You know, I think people need to really start thinking about, how do they have energy security. Now, the strong point for America, that really came as a consequence of shale, going back to 2005 when America was actually down to production of crude of 5 million barrels a day. Now it's close to 1,2 million barrels a day. The U.S. is energy secure. The U.S. is energy independent. We export 3 million barrels a day of crude. We export 12 BCF a day of natural gas, and we're the largest oil and gas producer in the world. That's a strong suit for us. At the end of the day, the U.S. government leaders as well as business executives have to realize that that's a strength we should play to the next 10 years instead of denigrating and saying oil companies should leave the oil and gas in the ground, bring it forward. You gotta remember, we're U.S. oil and gas industry is a strategic engine of the economy. Jobs, 12 million jobs, nearly. It's more than automotive jobs, it's more than aviation jobs. Lower power costs by, God knows, a factor of 5, maybe 10 versus Europe, where Europe power costs now. Having national security because of energy security that's a big deal. That's gonna underpin economic growth in the U.S. for a long time. I think another point that people need to remember, the Russia impact isn't just on oil and gas. Russia produces, and this gets to the energy transition, 10% of the world's nickel. Nickel's needed in batteries, it's needed in steel. Russia produces 43% of the world's palladium. It's needed in catalytic converters and ultimately the materials you need for electrolyzers to make hydrogen. Then, when you get to food, 30% of the world's wheat exports and 20% of corn exports come from Russia and Ukraine. Russia is gonna have a fundamental impact on commodities, fundamental impact on world economic growth. Energy security, food security, mineral security is gonna be key to having, I think, a prosperous, growth in the world economy. Right now, we've got major headwinds that we got to work through, but the U.S. has a real advantage. U.S. is really one of the winners in terms of this, Russian crisis that we're facing. John, I realize it's a very nebulous topic right now. I do wanna pass it over to Francisco to talk about some of those commodity issues. Then we'll come back to some of the HES specific issues later on in the call, if that's okay. Francisco, would you like to take it from there? Sure. Thank you. Thank you, Larkin. Thanks for that great introduction, John, because I concur with you on almost everything you said there. You know, the U.S. actually is very well positioned to weather this storm, given the energy independence. Also, I think it's important to understand, for everyone listening in, what could be the role of the U.S. in the future. I mean, I've been arguing, for 10 years, that the U.S. was going to become energy independent. For the last year and a half or so, I've been arguing that the U.S. was going to become energy dominant. I think the whole Russia meltdown with the Ukraine is going to turbocharge America's energy dominance of markets. Because as you rightly pointed out, the U.S. is the world's largest oil and gas producer, but actually is not that big an oil and gas exporter on a net basis. Now, Russia, on the other hand, is the world's largest energy exporter. Do you see that shifting? More importantly, does the U.S. have the capacity, the resource base, and do we have to include Canada in that context? As you think about it, I compare all the things that you said were priced, but you forgot to mention one very important price which people seem to be forgetting about. It's the most expensive energy source right now on the planet. It ain't oil or gas. On a relative basis, it's actually thermal coal. Australian thermal coal prices are $95 a barrel of oil equivalent. You think oil is expensive at $100. Natural gas is expensive at $30 per million BTU. There you have something like thermal coal, which is, to many, dirt on the ground, something we've completely given up on, right? Because we were gonna transition out of it in the next year or two, supposedly. How do we solve this? What's America's role? Do we have the resource? Are we gonna see a capital enabling the industry to fill European energy needs and maybe the rest of the world's energy needs? If we're trying to fill a 7 million barrels a day gap and just cut off Russia's oil exports, both crude and products, no, I don't think that can be done in the short term. Quite frankly, I don't think America could do it in the long term. Let's talk about America for a second. Shale has been a game changer in the last 10 years, making the US energy dominant, both in oil and gas. I see that continuing. You know, I think US government officials didn't realize that the rig count has gone up in the US to 700 rigs running. Oil is growing about 1 million barrels a day year-on-year. When Russia hit, Biden and the administration were ill-informed. I think they're informed now, 'cause our industry has tried to help them get more literate about oil and gas and energy. But the U.S. producers are actually investing to grow production, obviously in a capital efficient way, where you grow but you also return cash to shareholders, and they're not mutually exclusive. They actually can be done in parallel. We see U.S. production at this kind of rig rate growing another 1 million barrels a day to probably get to near pre-COVID levels for the U.S. to produce 13 million a day. The question is, and you and I have talked about it, how much more juice is there in the orange? How much more can shale grow? Shale's a mature business. It's been around for 15 years. Most shale producers have about a 10-year inventory. I do see shale growing, getting US production from 11.7 million barrels a day now to over 13, maybe 13.5 million barrels a day in the next 2 years or 3 years or so, but then it plateaus. It's a mature asset. You can't have a 10-year inventory, and if you went faster, it would be a 5-year inventory and be able to sustain the growth that the world's going to need. At the end of the day, yes, the U.S. Will play a role on oil, providing some of the incremental supply we need, but there's only so much more that can be done. Maybe it's another 2 million a day from where we are now, and then we see it plateauing. The Bakken where we are, yes, we can grow. We'll grow back to 200,000 barrels a day, which is what we were producing before COVID hit. The Bakken overall, most people don't have a 15-year inventory like we have. The Bakken's probably near a plateau. The Eagle Ford is near a plateau. The Permian, because one, it started later of the 3 oil shale plays, but two, in addition to that, has more horizons to produce from. That's where the real growth is gonna come from, but there are limits to that too. A lot of these Permian producers have 10-year inventories as well. The U.S. will play a role, but it won't be a swing producer role going forward. It will have a seat at the table. I think really what this does, and I know you've talked about it puts the spotlight on OPEC to make more investments to grow their productive capacity. It's not either/or. It's gonna be shale. More investments for more capacity, but there's a limit in the U.S, and it's also OPEC, and there's one other one which has been overlooked. It's the offshore. Obviously, we've got a strong hand in Guyana. Happy to talk more about that. The offshore is about 30% of the world's supply. Exploration expenditures in the world have gone from about $60 billion a year to $20 billion a year. They're starting to go up, but they've been really shut down for the last 3 to 5 years, in part because shale was getting all the money. Then you had COVID hit. The offshore business is gonna come back, but the only three basins that we see really being prospective there to grow, because the rest are in decline, obviously Guyana, where we see over 1 million barrels a day of oil by 2027. Brazil, we think will grow a couple hundred thousand, 100,000-200,000 barrels a day, a couple of years going forward. Brazil is really depleting their resource base. From what we've seen, exploration for new resources there has been challenged. You have the Gulf of Mexico. The Gulf of Mexico is still, with new technology, and we're a player there, has some upside. Then you look at places like the North Sea, you look at Angola, you look at Mexico, a lot of these areas, West Africa, that were cornerstones of oil growth in the nineties and the two thousands, that's over. If you look at the three major places you can get oil supply, one, there's shale, two, the offshore, and that's a global opportunity, and three, OPEC. We're not investing enough to grow the capacity the world's gonna need in the next 5 years. We see a pretty constructive market to keep prices high enough to ensure that investment occurs. I think investors have to realize that, maybe the pendulum has gone too far. There was over-investment that made too much supply, crushed oil prices. Now there's under-investment. We have to find a happy medium. Oil companies have to do that in a very environmentally responsible way. Thank you. Thank you, John. I think this last point, obviously, given the fact we are at the ESG energy conference is critical. How do we do that? There's been a lot of news on methane emissions, and obviously methane was a big focus. Now you and I talked about this earlier, during Glasgow. Clearly, I mean, methane seems like the lowest hanging fruit here. Some of the better technology that has been developed in the past couple of years is usage of drones and satellite technology to really map out methane emissions and ensure that investment is going into capping those methane emissions and ensure, just providing a much cleaner BTU through a higher carbon chain. Two questions for you. First how do you see that playing out and how are you working to limit methane emissions? The second question really more around what is the risk as we isolate Russia, right? As we curtail the supply of engineering equipment, Western technology, where's the risk that we end up having huge methane releases from Russia? Because again, if Russia can't push that gas into Europe, and how difficult it is to bring a field down 50% or 30%, whatever number it is there a risk that we might be making environmental problems a lot worse, as that split that you referred to earlier between Europe, U.S. and Russia, China unfolds, right? Those two kind of related questions on methane. No, I'll answer it what are we doing? We recently set new 5-year targets for 2025 to reduce operated Scope 1 and 2 greenhouse gas emissions by 50% and methane intensity emissions by 15%. Greenhouse gas emission intensity down 50%, methane emissions intensity down 50%. That's above and beyond in addition to the last five years where we had major reductions. You know, both in terms of absolute numbers as well as rate of change, our targets are industry leading. We're committed also to achieving net zero routine flaring at our operated assets, and that's basically the Bakken by the end of 2025. I know most companies in the oil business in the Western world, certainly, both in Europe and in the U.S., are doing all they can to reduce their carbon footprint. It won't get you to net zero, but it'll go a long way to minimizing the impact. One of the issues is that when I would say some of the Western oil companies sell their assets to another operator, that operator, be it from a national oil company in an emerging market, I'm not making a comment one way or another, may not have the same standards for environmental stewardship that the U.S. and Europe has. I think that's an issue in addition to the issue that you're talking about in terms of Russia. I think Bill Gates wrote a great book that I recommend to have really a stable. You talked about coal, and you're right. Need coal to be a backfill. It's shocking that Europe is using coal, gas, and we use more renewable energy. The 10% reduction that we've had in the last 10 years of carbon emissions in the U.S., we could go a long way as a world. Now, where is that challenge, and displace coal? You can't do it right now because people just need the electric electrons to come out. At the end of the day, the real challenge isn't so much the U.S. and Europe for reducing the carbon emissions. It's China and India that need coal for 60%-70% of their power, and that has awful emissions. It's not just about what are the emissions that are gonna come out of Russia, depending upon how the crisis gets resolved. It's dealing with the fact that even though US is down, Europe's down over 10% in carbon emissions the last 10 years, China's on the way up, and India's way up. Most people don't realize that if you added up the carbon emissions of the US and Europe together, China emits more right now. There's a real challenge there, geopolitically in how we deal with that, because China has every right to have low cost energy to enable their economy to grow. They're only gonna have social unrest if their economy doesn't grow. You're starting to see some of that just because of the COVID lockdowns. India, similar thing. People tend to oversimplify the energy transition. It's very complex. As I always say in the energy transition, it's gonna take a long time, cost a lot of money, and need technologies that don't exist today. You just need that sober reality, and you need the sober reality that oil and gas are part of the energy picture for the next 20 years, if you're gonna have an affordable energy transition where the world economy can continue its growth. Yes. I think that's definitely very well framed there. Thank you. Thank you, John. I concur. It's a very complex problem to solve. If we are serious about it, we should start by doubling or tripling our mining investment because right now we just don't. We're just not doing enough. You see it in the price of lithium, which has skyrocketed in the past 6 months. Incredibly high levels. Francisco, you also talked about natural gas. We need to invest more there. I think the number for demand in Europe is what? About 50 Bcf a day of gas? Something like that. The U.S. is exporting 10-12. Maybe it can get up to 16 or 17, get the permits and the liquefaction plants out there. Again, it's almost like oil. While there are more shale gas basins and resources to exploit than there are oil shale provinces to exploit. I think there's more upside to gas growth in the U.S. for export. There's gonna be a limit to how much is available if what you have to do is replace what Europe uses. The U.S. can't fill that gap. It can fill part of it, and it'll probably take 3-5 years for that sort of realignment to occur. Again, we've got to be very, very focused that Russia and Europe are gonna need each other, once the political issues get resolved, God willing, they get resolved, and how do you work out the geopolitics and economics of that? Right now, we have a big gap between demand and supply, which is why prices for oil and gas are so elevated. Absolutely. I do agree with you that the German plan to build LNG regasification facilities here within the next year, and it only helps so much because you not only need the regasification plants, we also need the LNG to come in. We know what kind of liquid natural gas market we have in the global economy right now, as tight as it's ever been. With that, let me bring in Chase, who's got a few questions for you as well? Thank you for your answers on my questions. Thank you. Thank you. Thanks, Francisco. Thanks, John, for joining us today. I've got a couple of questions. You know, one is just really on U.S. shale and thinking about efficiency gains and inflation. Obviously, inflation's is a big topic today in U.S. shale. If we think about over the medium term and we kind of think about efficiency gains and contrast that versus inflation, like I cover the oilfield service sector, I would think that the sector's earned its cost of capital in a decade. It's been a tough decade for the oilfield service sector. When y ou think about this in U.S. shale over the medium term, like, what do you think that breakevens have peaked and we've kind of squeezed all that we can out of efficiency gains and inflation is probably gonna be more dominant going forward? Or do you think that we can continue to kinda push down breakevens as we go forward? That's a broader statement for you at shale, not necessarily the Bakken. No, Chase, it's a great question. I can only talk from our experience in the Bakken. You know, when you think about shale, we always say it comes down to the three Is, investors, inflation, and inventory. Investors obviously want a new compact. Doug is at the forefront of hearing both sides and getting that compact done, where invest for growth, put it in the ground, but don't put all your cash flow on the ground, give returns of cash along the way. That seems to be working even though the world needs more oil now. I think actually oil companies should be accelerating some of their investment for more oil production. I can only talk about our company, where we're going from 3 rigs and giving serious consideration to go to 4 rigs and to start to accelerate some of our growth in the Bakken. You talk about inflation. I think inflation in the Bakken is less. It's more a regional market, you know that. Our own company is facing inflation where our drilling and completion costs, which we're running at about $5.8 million to drill and complete a well, is now $6.2 million. It's about a 7% increase. You know, we are leaders in lean manufacturing. We've had a great history of bringing our drilling and completion costs down just from lean manufacturing, more than offsetting any supply chain increases. I think the industry now, in part because of what you were saying with the service companies, they have to earn a reasonable return. They're paying more for labor and equipment. I think while you'll still have incremental improvements in efficiency, the rate of change of input costs coming from the service companies, I think, will be greater than that. I have a hard time seeing, as our own company, which are leaders in lean manufacturing, this is the first time where our drilling and completion costs, with all those efficiencies baked in, are being outweighed by the service cost inputs actually coming up. I think there's gonna be, as I said, inflation that even with efficiencies, I see the cost to complete and drill a well going forward having an upward bias. Now, at the same time, I think efficiencies and innovation will continue to temper that. You're having costs in the Permian that I see over 20%. You're not gonna temper that. We have costs in the Bakken. We're tempering it. We're still ending up at 7%. I think that gives you some context that as activity levels pick up with that 700 rig count. I've heard whether it's Scott Sheffield or other Permian oil and gas companies talk that it's gettingthat, pretty tight in terms of labor, in terms of equipment. The only way to loosen that up is to pay a little bit more to increase your activity. I see the inflationary pressures continuing as activity levels continue to grow. I think every oil and gas company or shale producer are gonna do what they can on the efficiency side to offset it, but I don't think they're gonna be able to offset it one for one. You know, I talked about inventory before. I think there's a real issue here, what the role shale's gonna play. It's not gonna be a swing producer in the world anymore. It'll increase its production, but other producers, be they offshore, be they national oil companies, be they OPEC, are gonna have to increase their investment more, and they're gonna be fighting inflation as well. We're not seeing the same inflation in the offshore, but now a lot of those rigs that were laid up, the best ones are coming out, so you're starting to get inflation in rig rates as well on the offshore side. We've been very fortunate as a company, because Exxon has done such a great job managing the project and executing the project and committing ahead with the service suppliers. We've been able to keep our development expenditures for the Guyana this year at $1 billion, and we're not giving guidance for that in the second half of the year because we made those commitments and pre-invested early on that. You know, Hess is in a pretty good position, both with our position in the Bakken and our position in Guyana, to minimize the inflationary impacts that other companies, I think, are having a bigger challenge with. Can I follow that up real quick, and then I'll hand it over to Chris? Yo u talked about offshore. A couple of years ago, I was talking with Andrew Gould, and he had done a lot of consulting work with larger offshore IOCs or national oil companies and he made a comment that you'd be surprised at the discount rate that people are using just because you take a lot of duration risk going offshore. Now, obviously, you've started to try to phase things a lot more to reduce that duration risk. I mean, you all have done that in Guyana, and other people have done it offshore as well. Internally, are you using higher discount rates when you think about offshore? I mean, I know that you got Guyana, but. I think the real issue there is getting in this short cycle, long cycle debate. Yep. Short cycle, what does that really mean? Probably a year from investment decision to really getting the oil out of a shale well. Some people may say it's 9 months, but my equivalent, 9 or 12 months. That's how you would define short cycle for the onshore. What's short cycle and long cycle for the offshore? Well if you go to an emerging province, let's say, in South Africa, offshore South Africa, you drill some wells, then you appraise them, then you wanna get development done. You know, you're probably, best case, 5 years, more really realistic, 7+ years before you can get first oil or first gas. Guyana is very different. It's short cycle and the long cycle. From the time that we found oil in Liza Phase 1, five years later, it was producing. Now, because we have this wealth of resource of over 11 billion barrels of oil equivalent there, the returns that we get from Guyana, in fact, Yellowtail, the last ship we sanctioned in April ExxonMobil will tell you, Hess will tell you, it's probably the highest return investment in the oil industry today because it's. Sure. 900 million barrels that's being developed. It's a 250,000-barrel-a-day ship. They're highly prolific wells. People talk about EUR as being a million barrels for a shale well. These are between 40 and 80 million barrels per well. A lot of it, to your question, is the resource. It's not whether it's onshore or offshore and what the discount rate. Do you have a prolific resource that's low cost and low carbon? That's really what's driving our investment in Guyana. Okay, perfect. Appreciate all the color. John, thanks for joining us. I'm gonna turn it over to Chris real quick. Thanks, Chase, and hi, John. You were expecting, I'm sure, a question from Europe about carbon. Thank you for your comment earlier that, of course, we're ahead of North America here, making inflation even higher. Of course- That's true, by the way. Wanted to ask you about carbon accounting, which I think is a relatively young science. Your views on the relative merits comparing carbon intensity versus an absolute carbon budget to your Guyana position, right? It'll be, I think, one of the outstanding data points on relative carbon intensity. Of course, if we count absolute carbon also depending on your ESG screen, that creates a bit of an issue. How do you advocate- To discuss this, I can tell you there's no conclusion. It's complex how you measure it. As you know, carbon intensity of an offshore development is infinitely better than shale and much better than, let's say, the heavy oil in Canada. I think carbon intensity is about as good as you can get. When you start measuring things like absolute amounts, or you say, "Look, you've got to account for your Scope 3," I'll give you an example. You asked me a question, I'm gonna ask you and the viewers to answer this question as well, because who takes account for what? Sempra, for example, and I know the CEO of Sempra, he's building LNG plants. His carbon intensity is going up, his absolute carbon is going up, his Scope 3 is going up because he's building the LNG plants that the world needs. His numbers are gonna be terrible, and you're gonna put it all on him to reduce that footprint. From a global perspective, he's probably gonna displace coal being burnt either in Europe or in China. Where does he get that credit? When you're talking about absolute carbon accounting, you have to put the consumers as part of this because sometimes the investments we're making as an oil and gas company are actually helping the world's carbon account. How do you get people to work together to measure this? I can tell you, we don't have the answer on it, but I think we need to work together so we're not myopic about looking at it just through one prism. We have to look at it through two prisms. Ultimately, I think what it comes down to, Chris, you've got to have a price on carbon. You got to have a price on carbon through the world. You can't manage what you can't measure. When Jens Stoltenberg was Prime Minister of Norway, I heard him talk at one of the Oslo Energy Forum conferences that they have every winter in Oslo. He said, "You have to have a price on carbon." The only way we're gonna make the investments necessary to reduce the carbon footprint and yet still incentivize the oil and gas and energy the world needs to be produced is to have a price on carbon. I think the way I would answer it is not so much the accounting, which is important, but let's have the financial incentives so people start using innovation and investment to really deal with this problem seriously. The Biden administration is against a carbon tax. I don't get it. I think they're afraid of, to your point, inflating. The economy's input costs even more. At the end of the day, the longer we kick that down the road, as the United States or the world, the worse we're gonna be. Europe's ahead on this, and I laud Europe for it, even though right now it's getting a lot of mixed signals because of the interruption in oil and gas supplies from Russia. Thank you very much, John. That's almost finishing up on a European consensus. I think we're gonna have to have a separate debate then around the impact on demand destruction, which I think, particularly here in Europe, feels like the only variable that is going to solve this equation that we're looking at right now. Time is short for that. That's why Chris, Fatih Birol, who I'm sure he says, "Look, let's not kid. More energy is good. It means, the poor countries are getting a higher standard of living, and the richer countries are doing well as well." More energy is good. It's the emissions that are bad. Certainly, if you have more efficiency in how those energies are used, that's a good thing. Just to say that we can get rid of the energy system that exists today and replace it with hydrogen and replace it with wind and replace it with solar, I would call those people energy illiterate and economically illiterate. You have to be climate literate, energy literate, and economically literate to have an affordable energy transition. You know, it's meetings like this that hopefully move the ball forward. You gotta have people talking to each other and working together, which there's a lot of room for improvement. Thank you very much, John. I'm afraid just to end it on a down note, as far as Europe's concerned, we're not replacing much here with hydrogen or low carbon. We are just exporting the activity to North America, to the Middle East, where actually jobs will go. At the moment, without a global pricing system, as you say, it is creating an even more skewed marketplace. Don't want to use this platform to go on about Europe and its fantastically competitive position in the world. Just wanted to say thank you again for your remarks, John, and hand you back to Doug. Thanks. One point there, that's why I said Russia-Ukraine conflict that's going on, which is horrific, it's shining a light on energy security. I think where Europe got it wrong was they didn't focus on energy security as the foundation for the energy transition. Well, you'll all be delighted to know that our next panel, John, is on carbon tax. We're gonna be talking about that with the Tax Foundation, amongst others. I wanna close out on, perhaps a more optimistic note because while we're all aware the industry has perhaps underinvested, you along with ExxonMobil have not, I would say. While the focus is on carbon intensity, Guyana arguably has some of the lowest, if not the lowest offshore carbon intensity of any project ongoing currently. I wanna ask you about what this, the S in the ESG, something I think gets overlooked a lot. You talked about developing economies get to prosper with oil and gas development. I put it to you, and I'm gonna put you on the spot here, that you have line of sight probably for 2 million barrels a day of growth in Guyana by the end of the decade. One, is that unreasonable? And two, what is it? How do you manage that in the lowest per capita country in terms of GDP in the world, transforming to perhaps, no, in the Western Hemisphere, I should say, to perhaps one of the highest? How do you manage that economy through that kind of level of wealth creation? Yeah, no, it's a great question. I think first point, our company has always been committed to having a positive social impact on the communities where we do business. Obviously, at the forefront of that is Guyana. It is the industry's largest oil discovery in 20 years. WoodMac, as you point out, shows that Guyana is one of the lowest cost, highest margin, lowest carbon intensity oil developments in the world. That oil's gonna be moving 20 years from now, to your point. I'm not gonna make forecasts for that 2 million a day. What we are saying is by 2027 it'll be a million barrels a day with six ships. We have line of sight to at least 10, so you can do the math and extrapolate that you could get near that 2 million number, but we're not gonna put that out there right now. You know, if we just get to a million, that's, it's gonna be one of the larger oil producers in the world. Guyana itself is 750,000 people. Originally an English colony, since independent, contract sanctity, parliamentary system, basically a two-party system that has ruled the country, well, since its inception as an independent state. We and Exxon and China in its own ways are doing what we can to have a positive impact. Their GDP per capita, just playing out the numbers, not what you do with the cash, from the cash flows they're gonna be getting from royalty and profit oil, their GDP per capita was 2 years ago the equivalent of Jordan, a poor country in the world, which we have a lot of sympathy for in terms of the challenges they face, not having the oil resource under them, where their neighbors around them in the Gulf have that. They have wonderful people resources. Well, Guyana had a GDP per capita comparable to Jordan. In the next 5 years, they're gonna have GDP per capita stronger than Mexico or Brazil. It's probably one of the greatest wealth transformations in history. The challenge for the government is how do we invest that money wisely? The government's very clear. We're gonna honor the production sharing contract. We want you and your joint venture led by ExxonMobil to accelerate the development of that oil. We have every right to develop that oil. Don't put the burdens or responsibilities for all the carbon emissions that exist in Europe and exist in China and exist in the US, that we shouldn't develop our oil because you've already had that development. We have every right to improve the standard of living for our people. President Ali and Vice President Jagdeo talked at the UN about it. They talked to government leaders about it. We're gonna do that development in Guyana, as a country in a very environmentally responsible way. They have a big carbon sink, with jungles and forests, rainforests, so they can develop their oil basically on a net zero basis. The challenge is, yes, you're absolutely right. How do they improve the standard of living, for their society? As Hess, we're doing our share. We're working with them. We and Exxon have supported work that's independent of Hess or Exxon by Michael Porter of the Harvard Business School to have a country development plan called the Greater Guyana Initiative. Let me tell you, the leadership of Guyana know what their priorities are. I think Michael gave it a more comprehensive and deeper support, but they come up with human development, healthcare, education, infrastructure development. You know, gas-to-energy plant that's, in the process of being sanctioned, which is gonna lower their carbon footprint, but also, lower their cost of electricity by a factor of 3-5, versus what they're paying now. It's human capacity development too. That's really, I'd say, the third leg on the stool. How do you get more people in Guyana being able to invest the money it improves the economic standards of living for all the Guyanese citizens? One of the projects we're working on, I happen to be on the board of Mount Sinai Hospital. Mount Sinai has a global practice. They are going to be consultants to the government, we're working on that, where they improve the healthcare system in terms of protocols, in terms of testing, in terms of doctors, in terms of nurses. Every Guyanese, the kind of healthcare that we have in either Europe or in the United States. There's every reason that can be done. It's a small enough country that if they make the right social investments the right way, it can transform the company, country, and really be a role model for the rest of the world for how you can use the oil treasure and develop your economy in a responsible way that other countries will admire. We are doing our share, ExxonMobil's doing its share, China's doing its share to try to help the country help themselves to develop their countries in an economically responsible way, in a socially responsible way, and in an environmentally responsible way. It's very exciting, but this takes a while, but I can tell you the leadership of the country, President Ali and Vice President Jagdeo, want to create a better world for every citizen in Guyana. We, as Hess, and certainly our partners in our joint venture, wanna help all that we can. Well, we know it's a great success story for Hess and ExxonMobil, but my point, I guess, John, was it's also a tremendous success story for the country of Guyana. I think I did have a chance to speak to the administration down there, and their point was, thank goodness that we have the company partners partnering with us to have been able to continue investing through the COVID downturn. I think that's a nice place to kind of draw a line under this. Any closing remarks, John, before we wind up? I'm afraid we are out of time. I think the key is just Hess's value proposition, grow the resource, go down the cost curve so our break even goes to $45 Brent, in the next five years, and have industry-leading cash flow growth, 25% a year the next five years. W e have a differentiated value proposition. One, in terms of rate of change, our production's growing 30% from Q1 to Q4, a lot because of Guyana, but also the Bakken. And then we have a rate of change story the next five years. That 25% cash flow growth, it'll allow us to continue to invest in our high return projects, which are advantaged by low costs, that I talked about. I think the first four ships in Guyana have a break-even Brent price of $25-$35 a barrel. That oil's gonna move. As Wood Mackenzie says, it's some of the highest return barrels that are out there, but some of the lowest carbon barrels. At the end of the day, we're gonna be investing to grow our intrinsic value. At the same time, we're gonna be growing our free cash flow. We've come out with a return of capital framework that's at least 75% of our free cash flow gets returned to shareholders. We just increased our dividend 50%. As our cash flow and free cash flow grow, we'll continue to grow the dividend, but a growing proportion of that free cash flow that's returned is gonna be share repurchases. As we get more visibility on our production growth this year and oil prices, we're gonna give serious consideration to starting that buyback program. The biggest difference in Hess, we can grow intrinsic value, but we also can grow cash returns to our shareholders. Most of the shale producers in the industry and most of the major oil companies are liquidating their intrinsic value. They're not growing it. We're growing it, and yet at the same time, we're building a durable pathway to growing our cash returns. I think that's differentiating in the oil space, but it's also differentiating in S&P, where the S&P is struggling. You want companies that can grow their cash flow. Hess is one of the few companies, whether it's in the oil space or in the S&P space, that can do that, and I think that's gonna be more recognized. You've been great to recognize it. I hope other people start to recognize it, all of that is gonna be done with our commitment to sustainability being at the forefront. Well, I've said it before, John, I haven't seen anything like this in 30 years in this business, so congratulations. Thank you. Thank you very much for being here, John. I appreciate you being part of our event and offering your perspectives on the bigger picture issues as well. Thanks very much indeed. Doug, thanks for the time. Thank you. Thank you, everybody, for giving us the opportunity to speak. Thank you. Thanks so much. Bye-bye.