Exxon Mobil Corp 10-Q

ITEM 1. FINANCIAL STATEMENTS CONDENSED CONSOLIDATED STATEMENT OF INCOME (millions of dollars, unless noted) Three Months Ended March 31, 2024 2023 Revenues and other income Sales and other operating revenue 80,411 83,644 Income from equity affiliates 1,842 2,381 Other income 830 539 Total revenues and other income 83,083 86,564 Costs and other deductions Crude oil and product purchases 47,601 46,003 Production and manufacturing expenses 9,091 9,436 Selling, general and administrative expenses 2,495 2,390 Depreciation and depletion (includes impairments) 4,812 4,244 Exploration expenses, including dry holes 148 141 Non-service pension and postretirement benefit expense 23 167 Interest expense 221 159 Other taxes and duties 6,323 7,221 Total costs and other deductions 70,714 69,761 Income (loss) before income taxes 12,369 16,803 Income tax expense (benefit) 3,803 4,960 Net income (loss) including noncontrolling interests 8,566 11,843 Net income (loss) attributable to noncontrolling interests 346 413 Net income (loss) attributable to ExxonMobil 8,220 11,430 Earnings (loss) per common share (dollars) 2.06 2.79 Earnings (loss) per common share - assuming dilution (dollars) 2.06 2.79 The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. 3 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (millions of dollars) Three Months Ended March 31, 2024 2023 Net income (loss) including noncontrolling interests 8,566 11,843 Other comprehensive income (net of income taxes) Foreign exchange translation adjustment ( 1,267 ) 173 Postretirement benefits reserves adjustment (excluding amortization) ( 42 ) 19 Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs 9 6 Total other comprehensive income (loss) ( 1,300 ) 198 Comprehensive income (loss) including noncontrolling interests 7,266 12,041 Comprehensive income (loss) attributable to noncontrolling interests 226 436 Comprehensive income (loss) attributable to ExxonMobil 7,040 11,605 The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. 4 CONDENSED CONSOLIDATED BALANCE SHEET (millions of dollars, unless noted) March 31, 2024 December 31, 2023 ASSETS Current assets Cash and cash equivalents 33,320 31,539 Cash and cash equivalents – restricted 29 29 Notes and accounts receivable – net 40,366 38,015 Inventories Crude oil, products and merchandise 18,891 20,528 Materials and supplies 4,600 4,592 Other current assets 2,171 1,906 Total current assets 99,377 96,609 Investments, advances and long-term receivables 47,608 47,630 Property, plant and equipment – net 213,723 214,940 Other assets, including intangibles – net 17,210 17,138 Total Assets 377,918 376,317 LIABILITIES Current liabilities Notes and loans payable 8,227 4,090 Accounts payable and accrued liabilities 59,531 58,037 Income taxes payable 4,163 3,189 Total current liabilities 71,921 65,316 Long-term debt 32,213 37,483 Postretirement benefits reserves 10,475 10,496 Deferred income tax liabilities 24,106 24,452 Long-term obligations to equity companies 1,909 1,804 Other long-term obligations 24,242 24,228 Total Liabilities 164,866 163,779 Commitments and contingencies (Note 3) EQUITY Common stock without par value ( 9,000 million shares authorized, 8,019 million shares issued) 17,971 17,781 Earnings reinvested 458,339 453,927 Accumulated other comprehensive income ( 13,169 ) ( 11,989 ) Common stock held in treasury ( 4,076 million shares at March 31, 2024 and 4,048 million shares at December 31, 2023) ( 257,891 ) ( 254,917 ) ExxonMobil share of equity 205,250 204,802 Noncontrolling interests 7,802 7,736 Total Equity 213,052 212,538 Total Liabilities and Equity 377,918 376,317 The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. 5 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (millions of dollars) Three Months Ended March 31, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) including noncontrolling interests 8,566 11,843 Depreciation and depletion (includes impairments) 4,812 4,244 Changes in operational working capital, excluding cash and debt 2,008 ( 302 ) All other items – net ( 722 ) 556 Net cash provided by operating activities 14,664 16,341 CASH FLOWS FROM INVESTING ACTIVITIES Additions to property, plant and equipment ( 5,074 ) ( 5,412 ) Proceeds from asset sales and returns of investments 703 854 Additional investments and advances ( 421 ) ( 445 ) Other investing activities including collection of advances 215 78 Net cash used in investing activities ( 4,577 ) ( 4,925 ) CASH FLOWS FROM FINANCING ACTIVITIES Additions to long-term debt 108 20 Reductions in short-term debt ( 1,106 ) ( 126 ) Additions/(reductions) in debt with three months or less maturity ( 5 ) ( 192 ) Cash dividends to ExxonMobil shareholders ( 3,808 ) ( 3,738 ) Cash dividends to noncontrolling interests ( 166 ) ( 115 ) Changes in noncontrolling interests 6 ( 16 ) Common stock acquired ( 3,011 ) ( 4,340 ) Net cash used in financing activities ( 7,982 ) ( 8,507 ) Effects of exchange rate changes on cash ( 324 ) 102 Increase/(decrease) in cash and cash equivalents 1,781 3,011 Cash and cash equivalents at beginning of period 31,568 29,665 Cash and cash equivalents at end of period 33,349 32,676 SUPPLEMENTAL DISCLOSURES Income taxes paid 2,718 4,404 Cash interest paid Included in cash flows from operating activities 301 256 Capitalized, included in cash flows from investing activities 297 291 Total cash interest paid 598 547 Noncash right of use assets recorded in exchange for lease liabilities Operating leases 351 393 Finance leases — 438 The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. 6 CONDENSED CONSOLIDATED STATEMENT OF CHANGE IN EQUITY ExxonMobil Share of Equity (millions of dollars, unless noted) Common Stock Earnings Reinvested Accumulated Other Comprehensive Income Common Stock Held in Treasury ExxonMobil Share of Equity Non-controlling Interests Total Equity Balance as of December 31, 2022 15,752 432,860 ( 13,270 ) ( 240,293 ) 195,049 7,424 202,473 Amortization of stock-based awards 158 — — — 158 — 158 Other ( 6 ) — — — ( 6 ) ( 16 ) ( 22 ) Net income (loss) for the period — 11,430 — — 11,430 413 11,843 Dividends - common shares — ( 3,738 ) — — ( 3,738 ) ( 115 ) ( 3,853 ) Other comprehensive income (loss) — — 175 — 175 23 198 Share repurchases, at cost — — — ( 4,385 ) ( 4,385 ) — ( 4,385 ) Dispositions — — — 2 2 — 2 Balance as of March 31, 2023 15,904 440,552 ( 13,095 ) ( 244,676 ) 198,685 7,729 206,414 Balance as of December 31, 2023 17,781 453,927 ( 11,989 ) ( 254,917 ) 204,802 7,736 212,538 Amortization of stock-based awards 197 — — — 197 — 197 Other ( 7 ) — — — ( 7 ) 6 ( 1 ) Net income (loss) for the period — 8,220 — — 8,220 346 8,566 Dividends - common shares — ( 3,808 ) — — ( 3,808 ) ( 166 ) ( 3,974 ) Other comprehensive income (loss) — — ( 1,180 ) — ( 1,180 ) ( 120 ) ( 1,300 ) Share repurchases, at cost — — — ( 2,978 ) ( 2,978 ) — ( 2,978 ) Dispositions — — — 4 4 — 4 Balance as of March 31, 2024 17,971 458,339 ( 13,169 ) ( 257,891 ) 205,250 7,802 213,052 Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Common Stock Share Activity (millions of shares) Issued Held in Treasury Outstanding Issued Held in Treasury Outstanding Balance as of December 31 8,019 ( 4,048 ) 3,971 8,019 ( 3,937 ) 4,082 Share repurchases, at cost — ( 28 ) ( 28 ) — ( 39 ) ( 39 ) Dispositions — — — — — — Balance as of March 31 8,019 ( 4,076 ) 3,943 8,019 ( 3,976 ) 4,043 The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. 7 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1. Basis of Financial Statement Preparation These unaudited condensed consolidated financial statements should be read in the context of the consolidated financial statements and notes thereto filed with the Securities and Exchange Commission in the Corporation's 2023 Annual Report on Form 10-K. In the opinion of the Corporation, the information furnished herein reflects all known accruals and adjustments necessary for a fair statement of the results for the periods reported herein. All such adjustments are of a normal recurring nature. The Corporation's exploration and production activities are accounted for under the "successful efforts" method. Note 2. Pioneer Natural Resources Merger On October 11, 2023, the Corporation entered into a merger agreement with Pioneer Natural Resources Company (Pioneer), an independent oil and gas exploration and production company, in exchange for ExxonMobil common stock. Based on the Octob er 5 closing price for ExxonMobil shares, the fixed exchange rate of 2.3234 per Pioneer share, and Pioneer's outstanding net debt, the implied enterprise value of the transaction was approximately $ 65 billion. We expect that the number of shares issuable in connection with the transaction to be approximately 545 million. The transaction is expected to close in the second quarter of 2024, subject to regulatory approvals. Pioneer holds over 850,000 net acres in the Midland Basin of West Texas, which consist of proved reserves totaling over 2.4 billion barrels of oil equivalent (as of December 31, 2023) and over 700 thousand oil-equivalent barrels per day of production for the three months ended December 31, 2023. 8 Note 3. Litigation and Other Contingencies Litigation A variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of pending lawsuits. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. The Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Corporation does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and which are significant, the Corporation discloses the nature of the contingency and, where feasible, an estimate of the possible loss. For purposes of our contingency disclosures, “significant” includes material matters, as well as other matters which management believes should be disclosed. State and local governments and other entities in various jurisdictions across the United States and its territories have filed a number of legal proceedings against several oil and gas companies, including ExxonMobil, requesting unprecedented legal and equitable relief for various alleged injuries purportedly connected to climate change. These lawsuits assert a variety of novel, untested claims under statutory and common law. Additional such lawsuits may be filed. We believe the legal and factual theories set forth in these proceedings are meritless and represent an inappropriate attempt to use the court system to usurp the proper role of policymakers in addressing the societal challenges of climate change. Local governments in Louisiana have filed unprecedented legal proceedings against a number of oil and gas companies, including ExxonMobil, requesting compensation for the restoration of coastal marsh erosion in the state. We believe the factual and legal theories set forth in these proceedings are meritless. While the outcome of any litigation can be unpredictable, we believe the likelihood is remote that the ultimate outcomes of these lawsuits will have a material adverse effect on the Corporation’s operations, financial condition, or financial statements taken as a whole. We will continue to defend vigorously against these claims. Other Contingencies The Corporation and certain of its consolidated subsidiaries were contingently liable at March 31, 2024, for guarantees relating to notes, loans and performance under contracts. Where guarantees for environmental remediation and other similar matters do not include a stated cap, the amounts reflect management’s estimate of the maximum potential exposure. Where it is not possible to make a reasonable estimation of the maximum potential amount of future payments, future performance is expected to be either immaterial or have only a remote chance of occurrence. March 31, 2024 (millions of dollars) Equity Company Obligations (1) Other Third-Party Obligations Total Guarantees Debt-related 1,130 146 1,276 Other 681 5,820 6,501 Total 1,811 5,966 7,777 (1) ExxonMobil share Additionally, the Corporation and its affiliates have numerous long-term sales and purchase commitments in their various business activities, all of which are expected to be fulfilled with no adverse consequences material to the Corporation’s operations or financial condition. 9 Note 4. Other Comprehensive Income Information ExxonMobil Share of Accumulated Other Comprehensive Income (millions of dollars) Cumulative Foreign Exchange Translation Adjustment Postretirement Benefits Reserves Adjustment Total Balance as of December 31, 2022 ( 14,591 ) 1,321 ( 13,270 ) Current period change excluding amounts reclassified from accumulated other comprehensive income (1) 157 14 171 Amounts reclassified from accumulated other comprehensive income — 4 4 Total change in accumulated other comprehensive income 157 18 175 Balance as of March 31, 2023 ( 14,434 ) 1,339 ( 13,095 ) Balance as of December 31, 2023 ( 13,056 ) 1,067 ( 11,989 ) Current period change excluding amounts reclassified from accumulated other comprehensive income (1) ( 1,138 ) ( 48 ) ( 1,186 ) Amounts reclassified from accumulated other comprehensive income — 6 6 Total change in accumulated other comprehensive income ( 1,138 ) ( 42 ) ( 1,180 ) Balance as of March 31, 2024 ( 14,194 ) 1,025 ( 13,169 ) (1) Cumulative Foreign Exchange Translation Adjustment includes net investment hedge gain/(loss) net of taxes of $ 84 million and $( 74 ) million in 2024 and 2023, respectively. Amounts Reclassified Out of Accumulated Other Comprehensive Income - Before-tax Income/(Expense) (millions of dollars) Three Months Ended March 31, 2024 2023 Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs (Statement of Income line: Non-service pension and postretirement benefit expense) ( 12 ) ( 8 ) Income Tax (Expense)/Credit For Components of Other Comprehensive Income (millions of dollars) Three Months Ended March 31, 2024 2023 Foreign exchange translation adjustment ( 75 ) 48 Postretirement benefits reserves adjustment (excluding amortization) 4 11 Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs ( 3 ) ( 2 ) Total ( 74 ) 57 10 Note 5. Earnings Per Share Earnings per common share Three Months Ended March 31, 2024 2023 Net income (loss) attributable to ExxonMobil (millions of dollars) 8,220 11,430 Weighted-average number of common shares outstanding (millions of shares) (1) 3,998 4,102 Earnings (loss) per common share (dollars) (2) 2.06 2.79 Dividends paid per common share (dollars) 0.95 0.91 (1) Includes restricted shares not vested. (2) Earnings (loss) per common share and earnings (loss) per common share – assuming dilution are the same in each period shown. Note 6. Pension and Other Postretirement Benefits (millions of dollars) Three Months Ended March 31, 2024 2023 Components of net benefit cost Pension Benefits - U.S. Service cost 113 120 Interest cost 168 166 Expected return on plan assets ( 181 ) ( 133 ) Amortization of actuarial loss/(gain) 21 21 Amortization of prior service cost ( 8 ) ( 7 ) Net pension enhancement and curtailment/settlement cost 3 8 Net benefit cost 116 175 Pension Benefits - Non-U.S. Service cost 83 82 Interest cost 227 234 Expected return on plan assets ( 261 ) ( 174 ) Amortization of actuarial loss/(gain) 25 14 Amortization of prior service cost 13 12 Net benefit cost 87 168 Other Postretirement Benefits Service cost 18 20 Interest cost 63 70 Expected return on plan assets ( 5 ) ( 4 ) Amortization of actuarial loss/(gain) ( 26 ) ( 30 ) Amortization of prior service cost ( 16 ) ( 10 ) Net benefit cost 34 46 11 Note 7. Financial Instruments and Derivatives The estimated fair value of financial instruments and derivatives at March 31, 2024 and December 31, 2023, and the related hierarchy level for the fair value measurement was as follows: March 31, 2024 Fair Value (millions of dollars) Level 1 Level 2 Level 3 Total Gross Assets & Liabilities Effect of Counterparty Netting Effect of Collateral Netting Difference in Carrying Value and Fair Value Net Carrying Value Assets Derivative assets (1) 5,813 1,304 — 7,117 ( 6,492 ) ( 88 ) — 537 Advances to/receivables from equity companies (2)(6) — 2,458 4,657 7,115 — — 498 7,613 Other long-term financial assets (3) 1,372 — 1,042 2,414 — — 174 2,588 Liabilities Derivative liabilities (4) 5,944 1,376 — 7,320 ( 6,492 ) ( 218 ) — 610 Long-term debt (5) 25,558 1,378 — 26,936 — — 3,494 30,430 Long-term obligations to equity companies (6) — — 2,039 2,039 — — ( 130 ) 1,909 Other long-term financial liabilities (7) — — 694 694 — — 48 742 December 31, 2023 Fair Value (millions of dollars) Level 1 Level 2 Level 3 Total Gross Assets & Liabilities Effect of Counterparty Netting Effect of Collateral Netting Difference in Carrying Value and Fair Value Net Carrying Value Assets Derivative assets (1) 4,544 1,731 — 6,275 ( 5,177 ) ( 528 ) — 570 Advances to/receivables from equity companies (2)(6) — 2,517 4,491 7,008 — — 519 7,527 Other long-term financial assets (3) 1,389 — 944 2,333 — — 202 2,535 Liabilities Derivative liabilities (4) 4,056 1,608 — 5,664 ( 5,177 ) ( 40 ) — 447 Long-term debt (5) 30,556 2,004 — 32,560 — — 3,102 35,662 Long-term obligations to equity companies (6) — — 1,896 1,896 — — ( 92 ) 1,804 Other long-term financial liabilities (7) — — 697 697 — — 45 742 (1) Included in the Balance Sheet lines: Notes and accounts receivable - net and Other assets, including intangibles - net. (2) Included in the Balance Sheet line: Investments, advances and long-term receivables. (3) Included in the Balance Sheet lines: Investments, advances and long-term receivables and Other assets, including intangibles - net. (4) Included in the Balance Sheet lines: Accounts payable and accrued liabilities and Other long-term obligations. (5) Excluding finance lease obligations. (6) Advances to/receivables from equity companies and long-term obligations to equity companies are mainly designated as hierarchy level 3 inputs. The fair value is calculated by discounting the remaining obligations by a rate consistent with the credit quality and industry of the company. (7) Included in the Balance Sheet line: Other long-term obligations. Includes contingent consideration related to a prior year acquisition where fair value is based on expected drilling activities and discount rates. At March 31, 2024 and December 31, 2023, respectively, the Corporation had $ 736 million and $ 800 million of collateral under master netting arrangements not offset against the derivatives on the Condensed Consolidated Balance Sheet, primarily related to initial margin requirements. 12 The Corporation may use non-derivative financial instruments, such as its foreign currency-denominated debt, as hedges of its net investments in certain foreign subsidiaries. Under this method, the change in the carrying value of the financial instruments due to foreign exchange fluctuations is reported in accumulated other comprehensive income. As of March 31, 2024, the Corporation has designated $ 4.9 billion of its Euro-denominated debt and related accrued interest as a net investment hedge of its European business. The net investment hedge is deemed to be perfectly effective. The Corporation had undrawn short-term committed lines of credit of $ 323 million and undrawn long-term committed lines of credit of $ 1,914 million as of first quarter 2024. Derivative Instruments The Corporation’s size, strong capital structure, geographic diversity, and the complementary nature of its business segments reduce the Corporation’s enterprise-wide risk from changes in commodity prices, currency rates and interest rates. In addition, the Corporation uses commodity-based contracts, including derivatives, to manage commodity price risk and to generate returns from trading. Commodity contracts held for trading purposes are presented in the Condensed Consolidated Statement of Income on a net basis in the line “Sales and other operating revenue" and in the Consolidated Statement of Cash Flows in “Cash Flows from Operating Activities”. The Corporation’s commodity derivatives are not accounted for under hedge accounting. At times, the Corporation also enters into currency and interest rate derivatives, none of which are material to the Corporation’s financial position as of March 31, 2024 and December 31, 2023, or results of operations for the periods ended March 31, 2024 and 2023. Credit risk associated with the Corporation’s derivative position is mitigated by several factors, including the use of derivative clearing exchanges and the quality of and financial limits placed on derivative counterparties. The Corporation maintains a system of controls that includes the authorization, reporting, and monitoring of derivative activity. The net notional long/(short) position of derivative instruments at March 31, 2024 and December 31, 2023, was as follows: (millions) March 31, 2024 December 31, 2023 Crude oil (barrels) 15 ( 7 ) Petroleum products (barrels) ( 39 ) ( 43 ) Natural gas (MMBTUs) ( 577 ) ( 560 ) Realized and unrealized gains/(losses) on derivative instruments that were recognized in the Condensed Consolidated Statement of Income are included in the following lines on a before-tax basis: (millions of dollars) Three Months Ended March 31, 2024 2023 Sales and other operating revenue ( 792 ) 651 Crude oil and product purchases 3 ( 25 ) Total ( 789 ) 626 13 Note 8. Disclosures about Segments and Related Information (millions of dollars) Three Months Ended March 31, 2024 2023 Earnings (Loss) After Income Tax Upstream United States 1,054 1,632 Non-U.S. 4,606 4,825 Energy Products United States 836 1,910 Non-U.S. 540 2,273 Chemical Products United States 504 324 Non-U.S. 281 47 Specialty Products United States 404 451 Non-U.S. 357 323 Corporate and Financing ( 362 ) ( 355 ) Corporate total 8,220 11,430 Sales and Other Operating Revenue Upstream United States 2,190 2,770 Non-U.S. 3,526 5,387 Energy Products United States 24,803 24,924 Non-U.S. 39,409 39,976 Chemical Products United States 2,194 2,029 Non-U.S. 3,646 3,692 Specialty Products United States 1,469 1,568 Non-U.S. 3,150 3,289 Corporate and Financing 24 9 Corporate total 80,411 83,644 Intersegment Revenue Upstream United States 5,988 4,956 Non-U.S. 9,980 9,399 Energy Products United States 6,558 5,451 Non-U.S. 6,752 6,969 Chemical Products United States 1,865 1,788 Non-U.S. 1,025 777 Specialty Products United States 655 680 Non-U.S. 164 99 Corporate and Financing 79 64 14 Geographic Sales and Other Operating Revenue (millions of dollars) Three Months Ended March 31, 2024 2023 United States 30,656 31,291 Non-U.S. 49,755 52,353 Total 80,411 83,644 Significant Non-U.S. revenue sources include: (1) Canada 7,055 6,721 United Kingdom 5,160 7,011 Singapore 4,018 3,731 France 3,473 3,484 Australia 2,425 2,428 Belgium 2,407 2,649 Germany 2,347 2,293 (1) Revenue is determined by primary country of operations. Excludes certain sales and other operating revenues in non-U.S. operations where attribution to a specific country is not practicable. Revenue from Contracts with Customers Sales and other operating revenue include both revenue within the scope of ASC 606 and outside the scope of ASC 606. Trade receivables in Notes and accounts receivable – net reported on the Balance Sheet also includes both receivables within the scope of ASC 606 and those outside the scope of ASC 606. Revenue and receivables outside the scope of ASC 606 primarily relate to physically settled commodity contracts accounted for as derivatives. Contractual terms, credit quality, and type of customer are generally similar between those revenues and receivables within the scope of ASC 606 and those outside it. Sales and other operating revenue (millions of dollars) Three Months Ended March 31, 2024 2023 Revenue from contracts with customers 58,419 64,304 Revenue outside the scope of ASC 606 21,992 19,340 Total 80,411 83,644 15 Note 9. Divestment Activities Through March 31, 2024, the Corporation realized proceeds of approximately $ 0.7 billion from its divestment activities with negligible impact on net after-tax earnings. This included the sale of the Santa Ynez Unit and associated facilities in California, as well as other smaller divestments. In 2023, the Corporation realized proceeds of approximately $ 4.1 billion and recognized net after-tax earnings of approximately $ 0.6 billion from its divestment activities. This included the sale of the Aera Energy joint venture, Esso Thailand Ltd., the Billings Refinery, certain unconventional assets in the United States, as well as other smaller divestments. In February 2022, the Corporation signed an agreement with Seplat Energy Offshore Limited for the sale of Mobil Producing Nigeria Unlimited. The agreement is subject to certain conditions precedent and government approvals. In mid-2022, a Nigerian court issued an order to halt transition activities and enter into arbitration with the Nigerian National Petroleum Company. The closing date and any loss on sale will depend on resolution of these matters. 16