Regional Overview

North America

UNITED STATES

ExxonMobil is the largest oil and gas producer and reserve holder in the United States. The company's U.S. portfolio is geographically diverse with significant positions in all major producing regions including Alaska, the Gulf of Mexico shelf and deepwater, California onshore and offshore, and the mid-continent. ExxonMobil's U.S. properties accounted for 29 percent of the company's net oil and gas production in 1999 and accounted for one-quarter of the proved reserves at year-end.

ExxonMobil has maintained a strong contribution from the U.S. through a sizable, but selective, drilling program, investment in profitable new projects, and continued efficiency improvements throughout our operations. Reservoir management is key to enhancing the long-term performance of each field. Base production decline is mitigated through active workover and development drilling programs. In 1999, 435 development wells were drilled, proving up reserves at a cost of less than $3.50 per oil-equivalent barrel. Production has been enhanced recently through the addition of deepwater Gulf of Mexico volumes from projects including Genesis and Ursa. Additional deepwater contributions are expected over the next several years from Hoover/Diana, Mica, Madison/Marshall, Crazy Horse, and others.

The merger provides an opportunity in areas such as Mobile Bay and the Permian Basin to consolidate activities where operations overlap, capturing expense savings and enhancing capital productivity.

The reduction in unit costs and selective investment from a high-quality inventory of prospects and ideas are key to further enhancing our profitable U.S. performance.

DEEPWATER GULF OF MEXICO

The company's technological leadership and deepwater expertise continue to transform the deepwater Gulf of Mexico into a growth area for exploration and production operations. ExxonMobil has an interest in over 600 deepwater Gulf of Mexico blocks (about 3.6 million acres). With producing fields, developments underway, and an attractive inventory of prospects, ExxonMobil is well-positioned in this frontier region. The Hoover/Diana deep-draft-caisson vessel (DDCV) was installed in late 1999 and set a new offshore heavy lift record when the facilities were lifted onto the floating structure in deep water. This development will be the deepest combined drilling and production platform in the world when production begins in mid-2000. A second well is currently underway on Crazy Horse to further delineate this significant discovery of at least 1 billion oil-equivalent barrels (ExxonMobil interest 25 percent). Additional major discoveries are under development and described on the facing page.

Hoover/Diana Development

Mica Development

Madison/Marshall Development

Nile Development

CANADA

In Canada, ExxonMobil is the largest crude oil producer and holds the leading resource position through its wholly-owned affiliate, Mobil Oil Canada, and its majority-owned affiliate, Imperial Oil Limited (ExxonMobil interest 69.6 percent). ExxonMobil has a significant presence in new major project developments offshore Eastern Canada and well-established production in Western Canada.

CONVENTIONAL OIL AND GAS

With interests in 59 blocks totaling 4.3 million gross acres and 13 discoveries, ExxonMobil has a leading position offshore Newfoundland. The company has a 33.1 percent share of the Hibernia oil field located 195 miles east-southeast of St. John's, Newfoundland. Estimated recoverable hydrocarbons from Hibernia are 750 million barrels of oil. Production at year-end 1999 was 150 thousand barrels per day (gross). With some additional investment, production capacity is expected to increase to 180 thousand barrels per day during 2000.

Southeast of Hibernia, another discovery has confirmed the presence of a large accumulation of oil. Additional drilling in this area is planned for 2000.

At Terra Nova (ExxonMobil interest 22 percent), first production is anticipated in 2001. Terra Nova is located 25 miles southeast of Hibernia, and is estimated to contain 370 million barrels of recoverable oil.

The Sable Offshore Energy Project (SOEP) (ExxonMobil interest 60 percent) consists of six fields that are estimated to hold recoverable hydrocarbons in excess of 3.5 trillion cubic feet of natural gas and over 100 million barrels of gas liquids. Initial production from SOEP of over 400 million cubic feet per day (gross) is expected to increase to over 500 million cubic feet per day by the end of 2000.

Terra Nova Development

Sable Offshore Energy Project Development

Natural gas from SOEP is transported to natural gas markets in the Canadian maritime provinces and northeast United States via the Maritimes and Northeast Pipeline (ExxonMobil interest 12.5 percent). As future natural gas development occurs, capacity can be expanded to accommodate market growth.

The company also has a leading position in the Scotian Shelf with an interest in 19 discoveries and 44 blocks covering 2.5 million gross acres. In 1999, ExxonMobil acquired interests in six new deepwater blocks on the Scotian Shelf.

In the Laurentian Basin between Newfoundland and Nova Scotia, the company has an interest in 8.6 million acres. In Western Canada, ExxonMobil has interests in 9 million gross acres.

The main conventional development focus in Western Canada is new natural gas opportunities in the foothills of central Alberta and Northeastern British Columbia.

HEAVY OIL AND TAR SANDS DEVELOPMENT

The majority of Imperial's oil production is from the Cold Lake field (Imperial interest 100 percent) and the Syncrude tar sands (Imperial interest 25 percent) in Western Canada. The Cold Lake operation differs significantly from traditional oil production in that steam is injected into the formation permitting the heavy oil to be produced. The injection-production cycle is repeated to maximize economic recovery. During the year, the government of Alberta approved Imperial's application for a further expansion of Imperial's Cold Lake operations. When completed, this expansion will increase the field's gross heavy oil production by approximately 30 thousand barrels per day. Construction is expected to start in 2000, with first production in late 2002. Cold Lake reserves potential and economics have been markedly improved in recent years through the application of leading-edge technologies that provide enhanced resource description, better recovery forecasting, and a means of identifying portions of the resource not contacted by steam.

The Syncrude operation involves extraction of crude bitumen and upgrading into high-quality synthetic crude oil. Since its start-up more than 20 years ago, the Syncrude tar sands production facility has become the largest in the world, producing nearly 230 thousand barrels of crude oil per day in 1999. The final product of the operation, Syncrude Sweet Blend, is a 32-degree API gravity crude, which has value in the market place approximately equal to West Texas Intermediate crude. Net interest proved reserves total almost 600 million barrels, providing a reserve life of more than 25 years at current production rates.

Staged expansion is underway to further develop the north area reserves to feed the existing upgrading plant. The next expansion, the Aurora project, is underway and expected to be operational in 2000. The Aurora project and future planned expansions are expected to nearly double production output over the next several years.

STRONG GROWTH IN LARGE NORTH AMERICAN GAS MARKET

ExxonMobil is the largest equity gas supplier to the growing North American gas market. Gas sales in 1999 totaled 7.5 billion cubic feet per day from a diversified portfolio of mature fields, new developments, and the company's 40-percent interest in the Duke Energy Trading and Marketing U.S. and Duke Energy Marketing Canadian joint ventures.

Additionally, the company's U.S. operations produce one-third of the world's helium with nearly 4 million cubic feet per day of supply. ExxonMobil is the largest wholesale marketer of helium in the world.

ExxonMobil is well-positioned to meet demand growth with supplies in major producing basins, and exploration and development prospects tributary to key markets. Gas marketing and transportation contracting activities are focused on optimizing both existing gas and new gas production.

Following the merger, a new organization was established to manage the company's 690-thousand-barrel-per-day natural gas liquids business in North America. The company is a significant player in all aspects of the NGL business from gas production through processing, transportation, fractionation, refining and chemical feedstocks, and propane marketing. The company has interests in 100 gas plants with net processing capacity of 5 billion cubic feet of gas per day.