Good afternoon. We're very excited to have John Hess and the Hess team here for the keynote of the day 2 of the conference. We're looking forward to a great discussion. John, thank you very much for being here. Neil, it's an honor and thanks for the opportunity. Glad to be here. Happy New Year. Happy New Year to you too, sir. Now, there's a lot we wanna talk about. We wanna talk about Guyana, we wanna talk about the oil macro, we wanna talk about managing the challenges of the business. We have argued that Hess really has an idiosyncratic story, something that's differentiated in your value proposition. Maybe set the tone on that because it hasn't been rewarded in the past, certainly over the last six months, more so over the last five years, but the last six months. What do you think investors are underappreciating and how does 2022 start to change that narrative? Thanks, Neil. Look, our strategy has been and continues to be to deliver high return resource growth, deliver low cost of supply, and deliver industry-leading cash flow growth while keeping our industry leadership in ESG. In terms of the resource growth, we do have a differentiated portfolio. We've been very disciplined allocating capital to the best rocks for the best returns, focused on our portfolio of the Bakken, Deepwater Gulf of Mexico, Malaysia, and Guyana. All four of those assets are free cash flow generative in 2022. In terms of the low cost of supply, you know, because of the investments we're making, our cash costs decline by 25% to $9 per BOE by 2026, and our portfolio break even will be one of the lowest in the business, decreasing to $45 per barrel Brent by 2026. You know, it really does position us as we go forward and ultimately focuses on cash flow. In terms of delivering industry-leading cash flow, it's really two components. One is rate of change and the other is durability. In terms of rate of change, we have a slide in our investor presentation that uses third-party estimates, companies like yours, with your estimates for our cash flow. Taking it out to 2024, our rate of change, our cash flow compounds at 20% a year to 2024, where our peers, we're 3x greater. We're differentiated or idiosyncratic in cash flow growth using third party estimates out to 2024, and actually puts us in the top 5% of the S&P in terms of cash flow growth. I think that's underappreciated and what that means, and hopefully we attract generalist investors, not just oil and gas investors, because it's a cash flow growth story. In terms of durability of cash flow, that matters too. It hasn't hurt Apple. You know, we have a differentiated portfolio that allows us, at $65 Brent, and obviously the market's higher than that now, to grow our cash flow and compound it 25% a year out to 2026. Basically out for those five years, and this is, you know, low risk cash flow growth. It's basically resources in the ground that we're bringing out and we're doing it in a very low cost manner. Our cash flow grows at twice the rate of our top line. Any business that can grow their cash flow at twice the rate of the top line is a business you wanna have in your portfolio. Obviously, you heard Jeff Currie talk yesterday on CNBC. Oil's you know, a pretty good hedge in the inflationary higher interest rate environment we have. We think we have the best cash flow story, both in terms of rate of change and durability. What that leads us to, Hess has been in the investment mode for the last several years, building our portfolio to where it can be free cash flow generative. 2022 is the year that we go from the investment mode to the return of capital mode, and still be able to invest in the business. As we generate that free cash flow, once Liza phase 2 is on in the first quarter, and it's on schedule, and we pay our $500 million term loan off, top priority will be to increase return of capital to our shareholders, focusing first on the dividend and then as each... It's a base dividend, it's not a variable dividend, and it will be a meaningful increase. Once we get past that and our free cash flow continues to compound as our cash flow compounds, then we'll look at continuing to strengthen the dividend and also accelerate share repurchases. We think it's a unique value proposition because we're growing cash flow and yet at the same time we'll be growing our returns to our shareholders. Thanks, John, and we're gonna dig more of that into that here in a moment. Let's spend some time on the oil macro. Why don't you put the cycle into context? Because there are two types of upcycles. There's the temporary cyclical upcycle. That's really what we saw from 2016- 2018, which was a fade. Then there's the structural upcycle that take a really long time to have duration to it. Yeah. How do you see the one that we're in right now? Well, first of all, you know what we went through the last two years is unprecedented in the oil industry. Usually oil market downturns in our industry were either demand shocks or supply shocks. This is the first time we had both. If you think about it, demand for oil overnight was down 25 million bbl a day versus a 100 million a day market. It's taken about seven quarters for us to get back to pre-COVID levels of a demand of a 100 million bbl a day. I do think we are going from a COVID demand recovery market this year to a structural supply deficit market, which means it is more durable and it's gonna need more investment. If you just look at the current market, you know, you look at it through three lenses: demand, supply, and inventories. The demand continues to recover. Obviously, we have a setback now with Omicron. We think we've lost about 1 million bbl a day of global oil demand. It's probably running at about 99 million barrels a day. We continue to see more lockdowns. You know, while the severity of cases for hospitalizations is running much less than the cases, the cases are actually running higher. The U.S. has hit over 1 million cases a day. I think it's gonna take a while for Omicron to run through the globe, both the U.S. and the rest of the world, and probably set us back on demand for a couple of months. Some people are saying the end of January. I think it's probably gonna be longer, seeing that China is starting to do shutdowns now as well. We do think we get through this. Once you get through the Omicron, I think, you know, with the stimulus programs fiscally and monetarily that are going on in the world, and the fact that international travel really hasn't picked up. There's over 2 million bbl a day of jet fuel demand that hasn't come onto the market. I actually think by the end of 2022, oil demand will be 102- 103 million bbl a day, versus 99 million bbl a day now. On the supply side, shale's been disciplined. OPEC's been disciplined. Allowed us to draw down inventories for seven quarters in a row. You know, shale at a 586 rig count in, probably close this year, 750,000 bbl a day. OPEC's been very disciplined. They're back in the driver's seat, being the swing supplier. It's no longer shale. They've been the Federal Reserve of oil prices, keeping market stability, adding that 400,000 bbl a day, month in, month out, sometimes a little lower. Obviously more recently, but we think as you get into the second half of 2022, the market's gonna have very low inventories. We're probably 200 million bbl less than pre-COVID levels. OPEC surplus capacity, which is currently about 5 million bbl a day, will be closer to two. The question is, where is it really? Jeff talked about it yesterday. Probably just concentrated in Saudi Arabia and the UAE. As you look at 2023 coming out the end of 2022, you're gonna have strong demand. You're not gonna have a cushion in inventory, and you're not gonna have much surplus capacity. That's why I say we're going into a supply deficit structural market, having recovered from a COVID demand-led market. I think, you know, a lot of times people talk about, you know, the demand outlook and talk about peak oil. We'll talk about that for a second. I think they're missing the boat because I think the real challenge going forward for the industry is supply and needing more investment. On the demand side, you know, we believe that by 2030, oil demand will probably be 105-106 million bbl a day. Even if you use the World Energy Outlook recent scenarios of announced policies and/or the Paris Agreement, the sustainable development scenario, oil demand in that case will be 100 million bbl a day. Oil demand is not falling off a cliff, even with the acceleration of electric vehicles in the world. You know, we think demand is gonna be pretty well supported. Then the question is supply. In those scenarios that I talked about from the IEA, the World Energy Outlook, in any credible scenario, oil and gas are gonna be needed for the next 20 years. The key is that oil gonna be low cost and low carbon? Obviously the position that our company has, both in Guyana and the rest of our portfolio, we're gonna be well positioned to capitalize on that. You know, we are moving now to a very different market. More investment is needed, and that's not disputed by industry leaders or commentators on our industry. I think using any of those scenarios that the IEA talks about, the world needs to invest $450 billion a year in, year out, for the next 10 years. The industry for global oil and gas to keep up with demand. In 2020, that number was $300 billion. Last year it was $330 billion. While investors and oil companies need to be capital disciplined going forward, we also need to invest more to make sure that we keep oil prices affordable for the rest of the world. John, you have one of these really important projects that are gonna meet that incremental need as demand at OPEC's capacity gets worked down, and there are very few of them, and that's Guyana. It's an important year for Guyana with Liza Phase Two coming online. It's also an important year to continue to delineate how large this play is. Talk to us about two developments. One, the exploration announcements from this week, and two, how Liza Phase Two is progressing and how we're feeling about bringing more barrels to market. Thank you. Well, you know, Guyana is one of the world's largest oil discoveries that we have with Exxon and CNOOC as our partners. Exxon is the operator, doing a great job, 35%. CNOOC, 25%. Hess has 30%. In a 6.6 million acre block. It's a large offshore block there. Our first discovery was in 2015. First oil is already producing in excess of 120,000 bbl a day from the first FPSO that's on stream. You know, basically a queue of developments following that. Yesterday we were very happy to announce more discoveries, Fangtooth and Lau Lau. Both of these discoveries are significant pay zones. Significant high quality reservoirs and significant aerial extent. They will add to the 10 billion bbl of gross BOE that we've discovered. They should be, you know, fairly significant adds as we delineate them, and they'll go into our queue of development opportunities. Pretty meaningful. Fangtooth itself is meaningful because it was the first deeper horizon, the lower Santonian that we just tested in and of itself. The other times we tested these horizons, it was really from focusing on the more shallow horizons. These horizons, by the way, 15,000 ft for the shallower horizon, 18,000 feet for the deeper horizon. Relatively shallow relative to other offshore deepwater drilling, including the Gulf of Mexico. I think, you know, it shows that we still have a lot of running room for exploration in Guyana. When we say there's multi-billion barrels of exploration potential remaining above and beyond the 10 billion bbl that we've discovered, I think this validates that. It also opens up this deep play for us to pursue as well. You know, I'd say, you know, just a unique place for our investors to invest money, and a lot of organic leverage for us to continue to underpin growing our queue of developments as well as growing our resource base of low cost high value low carbon oil. John, these are two you had said, you expected by the end of the first quarter. That still feels, sounds like it's on track. Yeah. In terms of Liza phase 2, on schedule for first oil in the first quarter. Remember, that ship is a 220,000 bbl capacity ship, close. So pretty meaningful. That's on track. Payara, which is really Phase 3, that's on track for a 220,000 bbl a day ship. Hull build topsides construction underway in Singapore. That's on track for oil in 2024. Then Yellowtail, which is probably going to be a ship in the range of 250,000 bbl a day capacity. So it's gonna be a bigger ship, bigger capital investment, but also bigger resource and have returns, quite frankly, that are probably one of the best in the business compared to onshore or compared to offshore. That is on track now for imminent government approval, for us to move forward. That first oil would be in 2025. John, we get a lot of questions about cost trends, you know, for these incremental phases. We're certainly in an inflationary environment for so many things, and I think investors are concerned that some of those costs will compete away returns. But you also have some unique mechanisms that allow you to pass through those costs and, again, this low cost resource. I would love your perspective on that, and particularly as it relates to Yellowtail. Yeah. Neil, great question. There are some cost pressures in the offshore, but we're still very much in the low cost part of the cycle for offshore developments. I have to say, I think Exxon is arguably the industry's leader in project management for a mega project like this that have costs for each FPSO and drilling development in excess of $6 billion, doing a great job of design one, build many, keeping those cost pressures controlled. We're still in low part of the cost cycle for offshore. While there's some cost pressures, Exxon's doing a great job managing that. As you pointed out, we have a production sharing contract here. They were devised by oil producers in 1998. Government would share the risk of prices being volatile. That allows you to have a cost oil. In this case, you know, basically, if the price of oil goes down, we get more barrels. If the price of oil goes up, we get less barrels. Quite frankly, the sooner we get our money back is the time that the government gets the money back. Everybody wins in these production sharing contracts. With the great developments that we have and the superior management by Exxon of this project, you know, I think we can keep these cost pressures under control and ensure the cash returns that we need for our shareholders, but also the government needs for their citizens. John, the other risk that investors bring up is the concentration risk in Guyana. If there are either fiscal or political risks that could eat away at project returns. It seems like you guys are developing a really good relationship, and it's sustained a good relationship, you know, through this government transition. Can you talk about the state of play of that relationship and how we should think about the risks? No, look, President Ali and Vice President Jagdeo are very pro-business. They've been very clear that they want to accelerate the development of their oil resources. In fact, I see both of them at public events. I know Vice President Jagdeo at the UN in September made the point that Guyana has every right to develop its oil resources. Both President Ali, Vice President Jagdeo said they're gonna do it in a very environmentally responsible manner. They're one of the largest holders of forest and green land in the country. I think over 75% of Guyana is jungle and also rainforest and forest. They will be able to develop their oil resource in a net zero manner. They're gonna be responsible for that. They wanna accelerate the development of their oil. They've been very clear to our joint venture that they want us to move on that path, be very capital disciplined, be very environmentally responsible for us to get after it. They've been a good partner for the joint venture. I hope they become the role model for the world of how to develop oil resources in a responsible manner. I want you to know that we and Exxon are supporting independent work by Michael Porter of the Harvard Business School, with a project team down in Georgetown called the Guyana Development Initiative. This is something totally independent from Hess and Exxon to help the country come up with a development plan to develop their human capital through healthcare, as well as education to develop their infrastructure, building a electric plant using the lower cost, lower carbon cooking natural gas that we have from our developments, and to also look at building their national capital to manage this oil wealth. Hopefully 5, 10 years from now, we'll be looking at Guyana as a role model for how to develop oil resources responsibly. We certainly as a company believe in social responsibility and wanna do our fair share to contribute to that exemplary development that hopefully the government will be able to conduct. you know, social responsibility is very important to us, and we wanna make a positive impact on the communities where we work. Guyana is going to be at the top of that list. Yeah. Johnny and I talked about in the ESG discussion, a lot of talk on the E, which is incredibly important, but not enough talk on the S, for the social impact. You have an opportunity to transform that economy in the world in a positive way if you do this right. Yeah. The leadership of the country is on the right path, I think, to do this. We wanna help, and Exxon does, and I'm sure Sinopec does, to help in any way we can. Not just to have an economic legacy because of the oil treasure, but to also have a social legacy that's even more enduring and sustainable. We're committed to that. Absolutely. Let's talk about some of the challenges to the business cases. What do you think the greatest business challenges are perhaps, and how are you thinking about getting ahead of them? I'd say, you know, one of them is to manage our capital investment so we can grow the business and yet at the same time return capital both through dividends and share repurchases in both rate of change and long lasting or durable manner. We're on track for that. Our CapEx, John Rielly talked about it in our quarterly call, is slated to be $2.6 billion in 2022. We'll officially announce that at the end of the month. That compares to $1.9 billion. Some people say, Oh, you know, you're spending too much money. We're investing in high return, low cost opportunities that actually compound cash flow growth and free cash flow that we will return to our investors, not just this year, but in years to come. I think getting clarity on that, you know, just the challenge of communication. You know, many of the companies in, whether they're majors or independents, you know, are generating a lot of free cash and not growing their business. We're growing our business, and yet at the same time also accelerating the return of capital. I think that's a unique value proposition and just getting people to realize that. I obviously believe that this year being our cash flow inflection year, it's a unique opportunity for us, as that, at least the phase 2 comes on, we'll get $1 billion a year of incremental cash flow, that more than covers the CapEx increase. That's at $65 Brent. At $75 Brent, there's another $1 billion for the company. You know, we wanna keep a strong balance sheet. We're after that debt of $500 million is paid off, we'll get on track to getting our debt to EBITDA ratio under one. Then basically as free cash flow compounds every year and each ship comes on in Guyana adding another $1 billion of cash, you know, we're gonna have a very unique value proposition of that cash building. So, and the majority of that is gonna be returned to our shareholders, both by strengthening the base dividend but also accelerating share repurchases. That's the biggest challenge, you know, deliver, execute the strategy. That's what every CEO and every management team and board should be focused on. The other challenge is obviously on the ESG side. On ESG, I think our industry needs to do a much better job of making the case for the oil and gas industry, making clear that under any credible scenario, oil and gas are gonna be needed 20 years from now. Oil and gas are needed to have affordable and secure and just energy supplies at the right price. Actually, as I said before, the industry needs to actually step up its investments, whether it's in shale versus current levels, whether it's in offshore or whether it's in OPEC. OPEC's mature, too. It's not just shale that's become mature or the offshore; it's also OPEC. We need to invest more, not only for offshore completion, but also to provide the world with the increased oil it needs to meet the demand that you're gonna have in oil and gas 5 and 10 years from now. I think educating people is gonna be very important in that regard. I think we need to do a better job with investors. We need to do a better job with business leaders, but most of all with political leaders and the public at large. Well, John, you talked about two different challenges. One is allocating excess free cash, which is a good problem to have. And the other is on the policy side. Let's talk on capital returns first. As you think about a dividend versus a buyback, do you have a preference? What's your general philosophy around it? It sounds like dividend is what comes to mind first. Yeah. We've talked to our shareholders, and I'd say the majority of them would like a stronger base dividend, stronger than the S&P because we have greater risk in the oil and gas industry than many of the S&P companies. It also shows a durable commitment. We have durable capital growth, so we will have durable dividend growth. That'll be the top priority. As you go out to Payara and future phases of adding another $1 billion a year of cash flow to the company, most of which translates to free cash flow for the company, then we will accelerate and prioritize share repurchases. You know, yes, we definitely think we're under our target price here. You know, I'll let you comment on what that target price is. I think our stock's a great investment, and so we will start accelerating share repurchases as soon as we can. First priority will be strengthening the dividend as a vote of confidence and a commitment to our shareholders. Yeah. John, it sounds like you've stayed true to the $2.6 billion of capital. While there are inflationary pressures that we're seeing throughout the system, you feel good about your ability to offset that. Yeah. I think Greg Hill and our team in the back-end have done a great job offsetting, you know, the high single-digit inflation that we're seeing in the back. The back-end doesn't have the same cost pressures that the Permian has, but there are some. But you know, we've been practicing under his leadership lean manufacturing for many years. We think the $5.8 billion drilling and completion cost that we've driven down to from about $7 billion in the last couple of years, we'll be able to hold that, notwithstanding the inflationary pressures. The cost pressures we have in Guyana, Exxon's doing a good job offsetting those with their philosophy of design one and build many. John, on the second point about changing the hearts and minds of both policymakers and investors, let's start with policymakers first. You talked about your frustration that there's a lack of an energy master plan. What do you mean by that, and what's your message to Washington? Well, I think the Biden administration, there are probably three pieces of advice I would suggest to them if they would listen. One is, they need a master plan for the energy transition. The energy transition is monumental. It's Herculean of how you get to a fully electrified clean energy system. It's gonna cost trillions of dollars. If any business had a plan like that, we'd have to present it to our board of directors and also to our investors to make sure we get buy-in and make sure that it's validated. I have not seen any energy transition master plan from our government. To spend these trillions of dollars, I think is economically irresponsible to spend taxpayer money without having that master plan that then we would fully support. The second thing is you need a price on carbon. The Biden administration has no appetite for a price on carbon. The only way you'll attract the trillions of dollars of investment you need for the energy transition is to have a price on carbon. Let the free market and the American ingenuity that works so well in Shell work on the energy transition. The third thing that I'd suggest to the administration is that, you know, they don't have anybody with business and experience or leadership in the administration. They don't have anybody with energy experience and leadership in the administration. They should get some people like that. We should all have a voice at the table, and we should work arm in arm at tackling probably the greatest scientific challenge in the 21st century, which is climate change. The energy transition is gonna take a long time, cost a lot of money, and also need technologies that don't exist today for at least half the emission reduction we need to get to net zero. John, on the second point, changing the hearts and minds of investors. It does seem like there is starting to be an evolution from one of exclusion for energy to recognition that we need to engage and that energy companies are actually part of the solution. Where do you think we are in that journey, and how do you convince those who think that your company is producing something that's a sin, that it's not? Yeah. We have to step up our engagement in education that oil and gas is gonna be needed the next 20 years. That we're part of the solution, that in any credible scenarios that are presented by the IEA, oil and gas is needed. I think the rush to going to clean energy and some of the risks associated are already being seen in Europe, where they don't have the master plan that balances the need for oil and gas, but also balances the need for more clean energy investment. Fatih Birol, you know, has been very clear that the pathway to net zero is a very narrow one, which I think is the IEA's way of saying we're probably not gonna get to net zero. Once you buy into that, you need more investment in oil and gas for the next 10 years, if not the next 20 years. They've gotta be low cost barrels. They've gotta be low carbon barrels. Guyana's are some of the lowest, both in cost and also carbon footprint. But we need to educate people more. I've made the point about the challenge of the energy transition, but I think what it requires, that we as industry leaders speak up about the importance of oil and gas, that it's a strategic industry for the United States in terms of jobs. Over 12 million jobs, more direct than indirect, than they have in either the aviation industry or the automotive industry. We have lower power costs here because of shale gas working with renewables, providing the backup when the intermittency of both wind and sun isn't shining and wind isn't blowing. You know, we're probably three times less in our power costs than they are in Europe because you know the benefit of oil and gas. When you look at national security, we're the largest oil and gas producer in the world. We ought to play to that economic strength. You know, we gotta make a better case for oil and gas. At the same time, I think we as leaders need to get lock arms with, government policymakers, academicians, and other business leaders to just make it very clear that to deal with the climate challenge, you need climate literacy, you need energy literacy, and you need economic literacy. I think we got a lot of work to do, to making our case to others. Hopefully our voice will be heard, and we'll start getting a seat at the table, because I think that's the only way to get an affordable energy transition, a just energy transition, and a secure one. John, the last question for you is just given the terrific discussion of one of the big pushbacks on our constructive energy view is that if you look at the last decade, or really sort of over the last 15 years, the energy sector hasn't generated competitive returns on capital or returns on capital employed. If we go into a constructive commodity price regime, how does the sector ensure that it doesn't repeat the mistakes of the last upcycle so that it is able to generate those competitive returns, which are the key to attracting the generalist investors? I think a lot of that has to do with shale having been overcapitalized. Remember Jeff Currie about three years ago said the problem with shale wasn't too much oil, it was too much investment. I think responsibility there goes to investors who gave over $60 billion of public equity to shale companies to grow. Also, debt was about $10 billion a year of high yield that was given there. This is overcapitalized, and we grew too fast at an unsustainable rate. We all have scars to show for it as an industry. I think that religion is here to stay. I think that was much more a shale issue of growing too fast without generating profit and without generating cash and free cash. I think those lessons have been learned. Neil, I think it's a question of balance. I think we need to stay capital discipline, but I do think we need to turn the valve on of increasing investment both in shale, offshore and in OPEC. In terms of Hess, often people talk about, well, you have a long-dated resource, you know, we only want short cycle. We're never gonna see the money. I'm paraphrasing here, obviously, to make the point and contrast it. I think a couple of points. First, you know, for those people that have a question about the durability, or long-dated nature of oil and gas is gonna be needed 20 years from now, so it's not gonna be left in the ground. The key is it being low cost and low carbon. Obviously Hess's portfolio is uniquely in differentiated position to deal with that. The other point is, you know, what do we really mean by long cycle? If you're in a frontier where you have your first wildcat, yeah, it's probably 7-10 years before you see the money. Guyana is very different from the investment decision. It's 3 years before you see the money, and it's $1 billion a year of cash flow that comes on. Nothing that any other offshore investment or shale investment can generate in terms of cash flow growth and returns on capital. You know, I think in our case, we are bringing the value forward. As each ship comes on, our cash flow compounds, our free cash flow compounds. We're able to return the majority of that capital to shareholders through dividend increases and also accelerated share repurchases. at the same time, we're still able to invest in the high returns in the business and build the business while returning increasing capital to our shareholders. I do think it's idiosyncratic, but I also think it's a unique value proposition. Well, John, thank you for being the keynote for day two. We really appreciate the perspective, the insights. This is an incredibly important year for your organization, and Guyana continues to ramp it. I wish you lots of success. Good luck. Thanks, Neil. Thanks for the opportunity. Most of all, thanks for your support and interest in our company as well, and giving us this opportunity and wishing everyone a healthy and happy new year. Thank you.