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ExxonMobil Corp  (NYSE:XOM)
Q1 2019 Earnings Conference Call
April 26, 2019, 9:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, everyone. Welcome to the ExxonMobil Corporation First Quarter 2019 Earnings Call. Today's call is being recorded.

At this time, I would like to turn the call over to the Vice President of Investor Relations and Secretary, Mr. Neil Hansen. Please go ahead, sir.

Neil Hansen -- Vice President-Investor Relations, Secretary

Right. Thank you; and good morning, everyone. Welcome to our first quarter earnings call. We appreciate your participation and continued interest in ExxonMobil. This is Neil Hansen, Vice President of Investor Relations. Joining me on the call today is Jack Williams. Jack is a Senior Vice President and Member of the Management Committee with responsibilities for the projects, organization and the Downstream and Chemical business lines.

After I review the quarterly financial and operating performance, Jack will provide his perspectives on the quarter and give updates on the significant progress made in a number of key areas across the business that will generate accretive value for our shareholders. Following Jack's remarks, we'll be happy to take your questions.

Our comments this morning will reference the slides available on the Investors section of our website. I'd also like to draw your attention to the cautionary statement on Slide 2 and the supplemental information at the end of the presentation.

Moving to Slide 3. I'll now highlight our first quarter financial performance. Over the past few months, we made excellent progress on our growth projects, with several key final investment decisions and continued exploration success. We also remain on track with plans to increase production in the Permian Basin to 1 million oil equivalent barrels per day by 2024. In fact, growth in the Permian during the quarter supported a 5% year-over-year increase in liquids volumes.

The first quarter was also characterized by solid operating performance including the successful execution of scheduled maintenance across a number of our Downstream facilities. Impressive progress in the first quarter was achieved in a margin environment that for both the Downstream and Chemical business lines was extremely challenging.

In addition, North American crude differentials narrowed significantly, eliminating the large arbitrage opportunities that our logistics allowed us to capture in the fourth quarter. So while the fundamentals and demand growth that underpin our investments remain strong, near-term supply and demand imbalances pressured margins; in fact, in the Downstream to the lowest levels we've seen in the last decade.

Earnings per share for the quarter were $0.55, including a negative $0.04 per share impact from asset impairments. All-in-all, the results were in line with our expectations, given the margin environment we experienced during the quarter.

I'll now go through a more detailed view of developments since the fourth quarter, starting first with the Upstream. Average crude oil prices were lower than the fourth quarter with Brent down $4.56 and WTI down $4.22. However, despite the decline in crude markers, ExxonMobil's liquids realizations increased by $2.32, driven by improved Western Canadian differentials. Gas realizations, on the other hand, were down in the first quarter, consistent with crude-linked LNG pricing lag and a $0.50 decline in Henry Hub pricing. Production in the Permian averaged 226,000 oil equivalent barrels per day, an increase of 19% relative to the fourth quarter, and more than double the average production we saw in the first quarter of last year.

Exploration success continued offshore Guyana, with three additional discoveries since the beginning of the year. In February, we announced discoveries at the Tilapia and Haimara wells, and the Yellowtail well, which we announced last week marked our 13th discovery on the Stabroek Block. These discoveries add to the previously announced estimated recoverable resource of approximately 5.5 billion oil equivalent barrels.

We also discovered a major natural gas reservoir with the Glaucus well in Cyprus, made a final investment decision to proceed with development of the Golden Pass LNG project and made significant progress on another key project in our LNG portfolio with the signing of a gas agreement with the PNG government to support the Papua LNG expansion.

In the Downstream, industry refining margins weakened due primarily to excess gasoline supply. As I mentioned, North American differentials narrowed in the first quarter with increased takeaway capacity in the Permian and production curtailments in Western Canada. From an operational standpoint, we successfully completed a heavy slate of scheduled maintenance in part to prepare for the upcoming IMO 2020 sulfur spec change. We announced final investment decisions for the Singapore resid upgrade project, the Fawley hydrofiner and the light-crude expansion project in Beaumont. These advanced investments will increase our capacity to produce higher value products including ultra-low sulfur fuels and Group 2 premium lubricant base stocks.

Although fundamentals remain strong in the Chemical business, margins were challenged during the first quarter with supply length from recent industry capacity additions pressuring realizations. Supported by continued demand growth, our volumes in the Chemical business increased by 100,000 tons. We also progressed a polyethylene expansion at Beaumont, which is on track to start up in the third quarter and we funded three major olefin-derivative projects on the US Gulf Coast.

Moving to Slide 5 for an overview of Upstream volumes. Production in the first quarter of 2019 was 4 million oil equivalent barrels per day, in line with the production in the fourth quarter of last year. Again, production in the Permian increased by 36,000 oil equivalent barrels per day, a 19% increase, bringing total production in the Permian to 226,000 oil equivalent barrels per day in the first quarter. This impressive growth was more than offset by lower Kearl output and natural field decline.

Looking at first quarter production relative to the same period as last year, shown on the bottom-left chart, liquids volumes increased 5%, growth of 126,000 oil equivalent barrels per day in the Permian drove volumes higher. The absence of the PNG earthquake and lower maintenance in Canada and Qatar also contributed to an increase in volumes. Warmer weather in Europe led to lower seasonal gas demand, but again, overall volumes were higher by more than 90,000 oil equivalent barrels per day compared to the first quarter of last year.

Moving to Slide 6, and a review of first quarter results compared to the fourth quarter of 2018. First quarter earnings of $2.4 billion were down $3.7 billion. Upstream earnings were down approximately $400 million, driven by the impact of fewer sales days in the quarter, higher maintenance and downtime notably at Gorgon, and the absence of various one-time items that impacted our fourth quarter results.

Downstream earnings decreased by $3 billion with several factors contributing to the lower results: narrowed North American differentials, lower industry margins, the absence of fourth quarter asset sales in Germany and Italy, and derivative impacts. And I'll provide more details on these drivers on upcoming slides.

Finally, Chemical earnings were lower by $200 million, primarily driven by the absence of a favorable non-US tax item in the fourth quarter and chemical margins remained under pressure with recent industry capacity additions.

Turning to Slide 7. I'll expand on the business drivers that impacted our Downstream results, again, relative to the fourth quarter. Downstream results for the first quarter were a loss of $256 million, a decrease of $3 billion compared to the fourth quarter of last year, driven by the absence of the Germany retail and Augusta refinery asset sales and unfavorable margin impacts of approximately $2 billion.

These unfavorable margin impacts are in line with the drivers that we previously communicated with the largest impact due to narrowing crude differentials, again, mainly in Western Canada that resulted in about half of the unfavorable margin impact. In addition, industry refining margins were lower, driven by excess gasoline supply and a tightened clean/dirty product spread. Finally, the absence of favorable mark-to-market derivative impacts in the fourth quarter, which were the result of a declining oil price environment combined with the unfavorable impact in the first quarter as a result of rising oil price environment resulted in a negative book margin impact of more than $600 million quarter-on-quarter.

On Slide 8 I'll provide a more detailed view of the current margin environment in the Downstream. The chart on the left of the page plots industry refining margins over time, and clearly shows that the industry is inherently volatile. In the first quarter, industry refining margins were among the lowest we've seen in the last 10 years. Low conversion margins were relatively strong, supported by fuel oil and distillate. However, high conversion margins were challenged, weak gasoline, naphtha and LPG crack spreads, high refinery utilization drove oversupply of these products.

Slide 9 provides some additional perspectives on the current Chemical margin environment. And again, the chart on the upper-left there shows the amount of polyethylene capacity added by year since 2009 compared to the annual growth in demand over that same period. Chemical demand remains strong and is expected to grow at approximately 3% per year or 1.2 times global GDP. However, recent capacity additions have outpaced demand, depressing global PE margins as shown on the bottom-left chart. On the US Gulf Coast alone, the industry has added nearly 5 million tons of capacity since 2017, in great part, to capture the advantage of low cost ethane feedstock. As a result, polyethylene margins have declined by approximately 45% since 2015, reflecting the cyclical nature of the Chemical business.

Moving to slide 10, which provides a review of our cash profile for the first quarter. First quarter earnings when adjusted for depreciation expense and changes in working capital, yielded $8.3 billion in cash flow from operating activities. We experienced a $1.3 billion working capital release during the quarter. This was mostly offset -- this was mostly, I'm sorry, mostly due to higher seasonal payables balances which were primarily tax-related and an inventory release in the Downstream. This occurred as we drew product inventories built prior to planned maintenance turnarounds.

Other non-cash items had a negative impact of approximately $1 billion, which most notably included the reinvestment of equity company earnings as part of the Tengiz Expansion project.

First quarter additions to PP&E were $5.9 billion, driven primarily by increased activity in the Permian Basin. Total capital expenditures were $6.9 billion, in line with the 2019 CapEx guidance that we provided at the Investor Day in March.

Earlier this week, the Board of Directors declared a second quarter cash dividend of $0.87 per share, representing a 6% increase from last quarter and marking our 37th consecutive year of per share dividend growth.

Gross debt increased by approximately $3 billion in the quarter and cash ended the quarter at $4.6 billion.

Now, before I turn it over to Jack, let me provide a few observations regarding the second quarter. In the Upstream, we expect lower gas volumes driven by seasonal demand. I'll provide a little more detail on this on the next slide.

In the Downstream, we expect industry refining margins to recover with higher seasonal gasoline demand and heavier industry maintenance, which has come in this time of the year. North American crude differentials, however, are anticipated to remain near first quarter 2019 levels. Scheduled maintenance in the second quarter in the Downstream will be similar to what we experienced in the first quarter.

Chemical margins are expected to remain under pressure as the market continues to work through supply length from recent capacity additions. Unlike the Downstream, scheduled maintenance in the Chemical business in the second quarter will be significant. And I'll provide some additional details on this unscheduled maintenance in a few slides, but first let me provide some more detail on seasonal gas demand on slide 12.

The chart on the left there shows the negative impacts we typically experience from lower gas demand in Europe in the second quarter. As you know, gas demand is highly seasonal and driven by weather. Second quarter gas demand is on average 200,000 oil equivalent barrels per day lower than the first quarter of the year, and we expect a similar trend to occur this year.

Turning to Slide 13. I'll provide some perspectives on our second quarter outlook for Downstream and Chemical's scheduled maintenance. As we previously communicated, scheduled maintenance in the Downstream in 2019 will be higher than normal; and again, partly in preparation for IMO 2020. We expect the impact from scheduled maintenance in the second quarter to be broadly in line with what we experienced in the first quarter. The estimated earnings impact for the second quarter for the Downstream is shown on the upper-left chart. In the Chemical business, again, shown on the bottom-left chart, and as I indicated, we expect to see significant scheduled maintenance, but the impact in the second quarter similar to the amount we saw in the entire second half of 2018. Hopefully, that provides you with some helpful perspectives on key drivers of our expected performance for the upcoming second quarter.

At this time, I'd like to hand it over to Jack.

Jack Williams -- Senior Vice President

Okay. Thank you, Neil. Well, as Neil covered, it was a tough market environment for us this quarter. Overall, though, we are pleased with the underlying operating performance of the businesses and, of course, wish that margin environment would have supported the translation of that into higher earnings. But as you saw in the Downstream margin plot that Neil showed, the margins were at historically low levels and our results were in line with that margin environment. The plot also demonstrated the historical volatility of Downstream margins and the wide swings that can happen over pretty short periods of time, and that's why we don't try to predict or forecast margins, instead we work to build our businesses to be robust to the swings, and while we test new investments across a broad range of prices. Investments we're currently pursuing across all three sectors stand up to that testing in our advantage versus industry. This going to help us manage through this volatility and it's going to deliver value in markets that remain fundamentally strong.

Our activities to execute those new investments remain on track and some significant progress so far this year that Neil has mentioned, I'll just reiterate. In the Upstream, we doubled Permian production volumes in the first quarter last year and made three new discoveries in Guyana. I feel really good about the strong portfolio of Upstream investments that we have today, which are at the top tier of industry. As you know, a strong opportunity pipeline is critical given the depletion nature of the Upstream business.

In the Downstream, we FID three major refining projects and the other three of the six projects that I've been talking about are now online. These investments improve the yield profiles at strategically important sites, delivering higher value products that are growing in demand.

And in Chemicals, we also funded three projects, three major US Gulf Coast olefin derivative projects that are making good progress with the Corpus steam cracker, which we expect to FID around mid-year this year. And when we do that, that will be our 12th FID of the 13 investments that underpin the Chemical's growth plan and allow us to maintain a strong position in our performance product markets. And finally, we're continuing to see value from our integrated business model and we're really pleased that our new Upstream and project organizations are now up and running.

So with that, let me provide a few activity highlights starting with the Permian. As you can see on the left-hand graph, we're continuing to track our production outlook. This volumes ramp is supported by strong well inventory. In fact, by the time we reach 1 million barrels a day production level in the Permian, we'd have only drilled about half of our current well inventory. We're running 46 rigs there and we'll be ramping up through the year. And this level of rig activity allows us to develop multiple horizons in either full or half sections concurrently which reduces the risk of parent-child well performance issues as all wells with possible communication will be fracked before any are produced. Development with this method requires blocky acreage and a large rig fleet and a long-term commitment to deal with lumpy year production profiles; and we have all three.

In addition to this drilling activity, we're building out our unique infrastructure in the Delaware with the first phase facilities at the central delivery point in our Southeast New Mexico acreage being ready by year-end. So, good progress in the Permian and also in Guyana. Last week, we announced a new discovery in the Yellowtail-1 well, which, as Neil said, was our 13th discovery on the Stabroek Block. You can see in the map on the left that this discovery is in the Turbot area, which is going to be a large development hub similar to Liza. This well along with Haimara and Tilapia discoveries are going to add to the 5.5 billion oil equivalent barrels recoverable resource estimate that we announced earlier this year at our Investment Day.

And our drilling continues. Development drilling in 17 wells for producing the first phase of Liza is progressing well and should be completed in the third quarter. The other rigs will continue drilling exploration and appraisal wells including further drilling on the Hammerhead and Ranger discoveries. And construction of the Liza Destiny FPSO vessel for Phase 1 is being completed in Singapore with planned sail-away this summer, and should be in Guyanese waters in the third quarter. The Larger Liza Phase 2 development designed to produce 220,000 barrels a day is in the permitting phase and is planned for a 2022 start up. So lots of activity, exciting new discoveries, really good development progress in Guyana.

Let me switch gears and talk about few Downstream project updates, starting in Singapore. I've spoken about the Singapore resid project before and it has now been FID. This project is upgrading resid to higher quality distillates and Group 2 lube base stocks, which will be unique in industry. No one has ever upgraded heavy fuel oil streams into Group 2 lube base stocks. This project is taking a notional $60 a barrel product and upgrading it to $140 a barrel product. It's an industry-first and is made possible through proprietary process and catalyst technology. It's the largest of the six major refining projects that we have. And due to its technology advantage, is expected to generate a high teens return.

And this project is really a great example of several competitive advantages that we spoke about last March -- back in March. It made possible by new unique technology. We filed for 35 patents related to the catalyst and novel processes that will be used and it's a very large project, it's upgrading 90,000 barrels a day of fuel oil, which really moves the needle on site profitability. So clearly this project's leveraging our scale. And it's a terrific example of integration. Singapore is our largest integrated site globally; and with this project, we are upgrading both refinery and chemical resid streams with two different but complementary technology solutions. In fact, I mentioned this as a Downstream project, but you ought to think about this as an integrated Downstream and Chemical project. It significantly improves the competitiveness of the Singapore refinery and reduces the supply cost of our crude cracker below any other liquids cracker in Asia, starts planned for 2023.

So now let me talk about our project we haven't talked much about, and that's it Fawley. Our project at Fawley is the last of the six key refining projects that are introduced to you back in 2018 and it's also now fully funded. This project is more straightforward than Singapore. It leverages advantage logistics. Unlike our Rotterdam and Antwerp projects, it's tightly integrated with the Northwest Europe refining and chemical circuit. It improves our refining profitability in two important ways. First, it upgrades the product slate to better match the UK market. The more ultra-low sulfur diesel, more jet fuel, more lower sulfur mogas, which reduces both imports and exports from the site. And second, the project expands Fawley's logistics into the heart of the UK market, aligned for increased product flow into our West London terminal, which services nearby Heathrow Airport. So the combination of these two aspects will make Fawley the most efficient and most competitive fuel supply into the Greater London market. And this combination also translates into an expected project return in the high-teens.

So again switching gears beyond projects, another activity we've been focused on is the optimization of our entire value chain, both in lubricants and in fuels. We've continued to get some questions on our trading activities. So I thought I'd add some context perhaps since it was a reconciling earnings factor this quarter. On the left is a summary of our global footprint from equity production to refining capacity through logistics, through our branded retail sites. Our assets span the globe and the entire value chain. Our objective is to ensure our shareholders capture the full value of that chain from the reservoir to the gas tank and of our footprint from US to Europe to Asia; so no matter where, the value is realized along the chain or around the world. So we are using asset-backed trading to best achieve that objective without speculating. For example, closing mogas arbs from Europe to the Americas were providing storage for our products when logistics temporarily tightened. We are basically improving the utilization of our global assets and generating solid value from these activities, although sometimes it's difficult to see quarter-on-quarter due to changing mark-to-market impact from open derivative positions, which was certainly the case this quarter.

So to wrap up, we're continuing to leverage our competitive advantages of scale, technology, integration, functional excellence and of course, our high quality workforce to grow shareholder value. We have made good progress toward our growth plan so far this year, with further exploration success and project FIDs. We remain focused on continuously improving our base business, while making investments across the value chain to grow earnings and cash flow across a broad range of price and margin environments. And finally, as evidenced by the additional exploration success in Guyana, we continue to be reminded that there is still a good bit of upside with this exciting growth plan that our company is on.

So with that, let me hand it back to Neil to kick off our Q&A session.

Neil Hansen -- Vice President-Investor Relations, Secretary

Great. Thank you for your comments, Jack. We'll now be more than happy to take any questions you have.

Questions and Answers:

Operator

Thank you, Mr. Williams and Mr. Hansen. (Operator Instructions) We'll first go to Sam Margolin with Wolfe Research.

Sam Jeffrey Margolin -- Wolfe Research, LLC -- Analyst

Good morning, guys. How are you doing?

Jack Williams -- Senior Vice President

Good morning.

Neil Hansen -- Vice President-Investor Relations, Secretary

Great, Sam. Good morning.

Sam Jeffrey Margolin -- Wolfe Research, LLC -- Analyst

So my first question is about the Permian. Your program there is complex in a lot of ways, but one specific element of it is that if you look at the capital you're spending there today there's sort of a split between what's kind of pre-productive in facilities and delineation and what's part of the development program. Can you just broadly tell us where you're at right now in that mix and maybe how that's going to evolve until your 2021 inflection when the pipeline comes on; and it looks like you sort of go hyperbolic on the production side?

Jack Williams -- Senior Vice President

Yeah. Thanks, Sam. Look, it's a good question and I appreciate you acknowledging all the things we're doing in the Permian right now. But we talk a lot about the rig count, that's kind of the headline number having rigs you're running, which is important and is obviously directly resulting in the volumes growth that we talked about, but we're also doing a lot more. We've been working very hard to delineate this new acreage we have in the Delaware Basin, which we've made some good progress on, and lining up this big kind of differentiated project that we're looking to do there and that's the infrastructure I talked about that we are setting up. Central delivery point in one of the units in our new development will be designed for 100,000 barrels a day of crude and 200 million cubic feet of gas and it's set up to keep expanding that as our production grows. So we spend a good bit of time -- spending a lot of time and energy and resources on setting ourselves up for long-term success in the Permian not just in near-term volumes growth. Hard for me to give you a percentage break between those two activities, but I'll tell you that the infrastructure piece of it is pretty material.

Sam Jeffrey Margolin -- Wolfe Research, LLC -- Analyst

Okay. Thanks. That's helpful. And then, somebody's going to ask this, so it might as well be me. Just on your position there today, it looks like there's going to be some consolidation at least chatter around for a while just to clarify all your forecast that you put out publicly, that's based on what you've got in the portfolio today, there is not necessarily any additional A&D activity that's baked into that. Is that correct? And, I don't know, it's hard for you -- and what do you see in the landscape of maybe private and public sector available to you right now?

Jack Williams -- Senior Vice President

Yeah. Thanks, Sam. Yeah, you're probably right, somebody's going to ask that question. Look, I mean, clearly, that's why I wanted to mention the well inventory issue in my remarks. What we have today is clearly only dependent on what we have in our resource estimate and well inventory today, it's not depending on any additional acquisition, it's not depending on any technology improvements, any continued efficiency improvements in our well designs, all of which I think will happen, but it's not baked into any outlooks we have right now.

In terms of -- I think, let me just step back and look at the whole M&A environment and just make the comment that I think it's a reminder of the statement I made about the Upstream being a depletion business. You have to have a good pipeline of investment opportunities to continue to replenish as you deplete those resources. And that was very much on our mind back in 2015 and 2016 as we were very active in the bottom of the cycle to bring on this nice set of new opportunities we have that we're currently executing today.

That we large -- some of those were acquisitions, it was partly organic, partly small company acquisitions, but all picked up at the bottom of the market and they made good sense back in that kind of, I'll call it $40, $50 environment, so you can imagine in kind of the $60, $70 environment they looked that much better. So, very happy with what we picked up and it gives us the luxury to sit here today and to not need to do any further M&A activity. Not to say we won't, but we don't need to.

So, for instance, I would be surprised if over time we did not pick up some more Permian acreage, but I don't know whether that's going to be small bolt-on acquisitions that we pick up over time, I don't know what the timing when it's going to happen or whether it's something more significant, but we don't need to. We don't need to, so we had the luxury of being able to look over the horizon and make sure that whatever we look hard at is bringing significant value and makes really good sense and is very compelling for the Corporation.

Sam Jeffrey Margolin -- Wolfe Research, LLC -- Analyst

Thanks so much.

Neil Hansen -- Vice President-Investor Relations, Secretary

Thanks, Sam.

Operator

Next we'll go to Roger Read with Wells Fargo.

Roger Read -- Wells Fargo. -- Analyst

Yeah, good morning. I guess, maybe we could take a look at Guyana; three discoveries year-to-date. I mean, if you did one a year, it'd be a pretty good track record. This was definitely a focus of the Analyst Day and you've continued to have discoveries, you mentioned the resource above 5.5 billion barrels most likely with these additional discoveries. Jack, when do you think Exxon considers maybe more than just what's been laid out? Maybe, what's the timing for when you're thinking about that internally, maybe when that gets addressed at the public level and then what that could mean in terms of additional developments beyond the five FPSOs that had been discussed?

Jack Williams -- Senior Vice President

Well, thanks for the question. And yeah, I mean, Guyana, it's really exciting time for it there right now; a lot of activity. And we are incorporating to the extent we can, we are incorporating that data real-time as we get more developments in, more discoveries, but as we get these discoveries, we naturally want to drill some delineation wells, get some more get some more data, core, get some dynamic well test data. So we're incorporating -- and by the way, on all of these development wells we're drilling for Liza 1, these 17 wells, every single time we're penetrating reservoir, we're getting more opportunities to the tune up our seismic data and improve our sub-surface understanding. So we are learning significant amounts kind of day by day in Guyana.

I think I would just say that again the 5.5 billion barrels recoverable resource estimate did not include these last three discoveries. So I would say it's safe to say there is a good bit of upside to that number. I can't really give you anything further right now in terms of quantifying that, but we are continuing to look at the development plan and looking what would be the best way to continue to incorporate this additional encouraging results that we're getting.

Roger Read -- Wells Fargo. -- Analyst

Okay. And along those lines, I guess, maybe the seismic shoot that's currently -- I can't remember it's currently under way or it's about to be under way, but I guess you'd want to get all that information and that analysis done before you'd really kind of make any major change, I would guess.

Jack Williams -- Senior Vice President

Yeah, I think, again, clearly, as I said, our sub-service understanding is really growing and that's going to further add to it. So the more we can get as we're planning these new developments, the better -- the more efficient we can plan them. So, yeah, that's another piece of data that's going to be important.

Roger Read -- Wells Fargo. -- Analyst

And then if I could pivot real quick to the Chemicals business, the chart on the capacity additions in the margin is definitely very helpful. I mean, Jack, you've got a lot of experience in that in the Downstream Chemicals area. What would be kind of the typical workout process here as you think about what's coming on globally and the demand expectations, the 3.3% a year? Need help for when we kind of get back to maybe a more, call it, normalized margin environment or at least one we're not facing headwinds in terms of the direction of margins?

Jack Williams -- Senior Vice President

Well, the demand growth is, call it, 4 MTA -- 3 MTA to 4 MTA a year global demand growth and we brought on 5 MTA to 6 MTA. So it's going to take -- it's not months, but it's not more than a handful of years either. I'm thinking, things -- I would think certainly depending on what more comes on in 2020, we start -- not start seeing relief then, but the rest of 2019 might be pretty tough, but we're not going to -- not trying to predict where margins going to go, there is all kinds of other factors that come into play. But, and there is good reason, we understand why the oversupply happened. This ethane advantage in the US is very real.

But as you think about our investments going forward, I'll take for instance the Corpus cracker that I referenced, we're testing that over over the whole resiliency of -- we're testing the resiliency of the whole range of the cycle. And in that particular project we have tested that the current environment we see today is within the band of what we're testing on that project and remains robust. So all we can do is continue to make the best investments in industry, which we're doing and I think that'll be worked off in a relatively short time, but I don't think it's going to be in the coming couple of months.

Roger Read -- Wells Fargo. -- Analyst

Great. Thank you.

Operator

Next we'll go to Neil Mehta with Goldman Sachs.

Neil Mehta -- Goldman Sachs. -- Analyst

Jack, Neil, thanks for taking the question. The first is just on the asset sale program. You guys introduced a relatively robust asset sale target earlier this year. Can you give us an update on the program and just frame for us again how we should think about that target? Is it really a P50 type of target or did you bake in a level of conservatism given the uncertainty around the macro?

Jack Williams -- Senior Vice President

Yeah, thanks for the question. It's an important topic for us these days. Naturally, as I mentioned, with bringing in all of these attractive assets and investment opportunities, it's a really good opportunity to go back and look at the portfolio kind of prune the tail of it, if you will. And so we work just -- we looked at the whole portfolio and had this plan that we laid out. And you can imagine that as we give you all our number that we haven't done before, we feel fairly confident in it. So there is some risking in there, we could overshoot that a bit. But we feel like that's a good number. I'll call it P50, maybe a tad more conservative than P50, but I'll call it that as we go forward, and we're making good progress. We have lots of activity in the market right now and I would expect to see some significant divestment this calendar year as we move toward this three-year plan.

Neil Mehta -- Goldman Sachs. -- Analyst

And could you remind us, Jack, what the regions are? I know you've called out Gulf of Mexico that's on the market right now.

Jack Williams -- Senior Vice President

No, It's global, I'll just tell you that. I mean, it's not just a US focused divestment plan. It kind of spans the -- it spans all regions. So it's pretty broad. I don't have the specific breakout on regions, but it's broad.

Neil Mehta -- Goldman Sachs. -- Analyst

Fair enough. Thank you. The follow-up is on -- going back to your comments on the M&A market. Can you just give us the framework again for the way you think about acquiring incremental assets, whether acquiring companies, what's Exxon looking for here? And the context is that the bid -- want to get some perspective on: one, the bid-ask; and two, the relative valuation multiple of Exxon based on consensus cash flow numbers relative to potential acquisition targets has increased over the course of the last six months. And so, from an accretion perspective, it does seem more compelling at least on in a spreadsheet, but I just want a little bit more color on the framework and just thoughts on the opportunity set to build on your prior comments.

Jack Williams -- Senior Vice President

Yeah, OK. Good, thanks. Let me provide a little more on how we're thinking about M&A. In terms of what we're looking for, clearly we want to -- if you think about what we've brought in recently with our acquisition in Papua New Guinea acquisition and Mozambique acquisition in the Permian, these are all assets where we can add significant value. They're going to leverage our competitive strength, allow us to bring a lot of value to their asset and a lot more value than what we -- than the acquisition costs. So we're not really interested in buying well developed assets that are more or less buying cash flow. We're interested in buying something where we can bring our competitive strengths and to bear on uplifting the value of that asset. I think, that's been very clear in terms of what we brought into portfolio in that method.

And so one thing to think about that we also think about especially these days is that we have a full plate of opportunities right now. So one thing we're doing is, we just talked about the investments we're kind of making -- we're moving stuff off the plate to make sure we have plenty of room to continue to develop these great assets that we have. But clearly, as we think about incremental opportunities, we are thinking about substitution, we're not thinking about additive, because we are -- the organization has plenty to work on right now and we are cognizant of that fact and that ultimately be the limiting factor in terms of what we're trying to do. So we kind of factor all that in, but one thing I can tell you for sure is that any acquisition opportunity we look at would be something we think we can bring a lot of additional value to.

Neil Mehta -- Goldman Sachs. -- Analyst

Appreciate it. Jack. Thanks, Neil.

Neil Hansen -- Vice President-Investor Relations, Secretary

Thank you, Neil.

Jack Williams -- Senior Vice President

Thanks.

Operator

Our next question comes from the line of Biraj Borkhataria with RBC.

Biraj Borkhataria -- RBC Capital Markets -- Analyst

Hi. Thanks for taking my question. Just following up on Neil's question. On future projects and new additions in the portfolio, are you basically saying that the project organizational capacity is in limit at the moment, because obviously the balance sheet is very strong you could do more if you wanted to, but there's probably a level of efficiency with how many major projects you want to do at the same time? That will be my first question and I have a follow-up.

Jack Williams -- Senior Vice President

Yeah. What I would tell you is it's a big consideration. I'm not saying we necessarily at our limit, but I'm saying it's a big consideration, because it's key to capital efficiency. The industry is littered with projects that look really good at FID and were not executed well, and ended up not providing the value that they should have. We are committed to making sure that what we take on we can execute well. And as we bring something else in the portfolio, we're going to make that test, we're going to test to make sure that we can -- whatever we bring in, we can execute it well. And so the ones we funded, we're going to get the value out of our shareholders. So I wouldn't tell you necessarily we're at some limit, but we're looking at it closely and it's a strong consideration as we bring new opportunities on.

Operator

Okay. Moving on, we'll go to Doug Leggate with Bank of America.

Doug Leggate -- Bank of America -- Analyst

Excuse me. Thank you. You took me by surprise there. Good morning, everybody.

Neil Hansen -- Vice President-Investor Relations, Secretary

Good morning, Doug.

Doug Leggate -- Bank of America -- Analyst

Guys, I guess, this is an opening comment. I guess, a lot of people maybe didn't pay enough attention to your 8-K in terms of the numbers that you tried to walk back early in April. And my suggestion to you is, perhaps a press release around that detail might be a better way of getting that out there, because it seems to me that there were still a lot of steel numbers in your earnings, just an opening comment if you can indulge me.

My two questions -- yeah, go ahead.

Jack Williams -- Senior Vice President

Can I go ahead now at your opening comment, because I think you're right. I mean, we certainly -- we endeavor it in a fairly concerted effort to provide appropriate perspectives on what we were seeing in the quarter. And I think during the call in the fourth quarter, we kind of listed out some of those factors, and then, as you mentioned, we also provided additional couple of 8-Ks during the quarter to help people understand, especially in the Downstream and Chemical business, some of the challenges we are facing. And again, from our perspective, there were no surprises in the results. I think the results that we're communicating today are exactly in line with what we provided in those 8-Ks and again during the quarter, in the fourth quarter. So we appreciate that, and maybe we're continuing to look at ways to improve providing that transparency, making sure that we provide the context to the market.

Doug Leggate -- Bank of America -- Analyst

Terrific effort on that point. No question, the disclosure has gotten a lot better, for what is worth, you have my number. So we're quite happy. Anyway I got two questions, if I may. My first one, Jack, the disposals were very light on this quarter. I just wonder, if you could speak to why that might be your expectation if that was timing related, and your confidence level as if whether you still expect to hit the kind of run rate laid out in March? And then my follow-up, I'll wait till you answer that. My follow-up is on the Guyana please. Thank you.

Jack Williams -- Senior Vice President

Yeah. Sure, Doug. Yeah, you're right, very light in this quarter, fully expected by us, the timeframe on these, generally, we're starting a year ahead of time in terms of getting these things in the market and being able to get something to the point where we can announce it. So fully expected and does not alter my confidence one bit in terms of our target going forward, lot of activity right now. And like I said, I'd expect more this year.

Doug Leggate -- Bank of America -- Analyst

Thanks. We'll look forward to that. My follow-up is a kind of a part A and a part B, if you've been named (ph) on Guyana, while we just come back from Singapore, I visited the Liza Destiny. And I guess, sort of a couple of points around this. SPM are telling us a number of what I think are incremental data points for us, at least. First of all, they expect to sail mid-June which would put you in Guyana run by early August. So I'm just wondering -- or mid-August. What that means for the timing of Phase 1? That's my first question.

Second question is they're also telling as you've confirmed to them Payara will be 220,000 barrels a day. So, wonder if you can speak to that. And then finally, two appraisal wells in Hammerhead, both your exploration assets dedicated to appraisal, but seems to me, you wouldn't do that unless you were planning a fast track FID, which obviously got implications for your volume targets. So, I wonder if you could speak to that and I'll leave it there. Thank you.

Jack Williams -- Senior Vice President

Okay. Thanks you, Doug. On the FASO, the Liza Destiny, look, what you mentioned was consistent with what I said earlier in terms of a summer sail-away in the third quarter being in Guyanese waters. We've set our start-up as was early first quarter of 2020 and we always are trying to do better. So if we can get that thing online before them, we will. And I would just say the project's going very well, very well. We're pleased in both the FPSO, construction activity and also the drilling activity going on in country. So everything is just a bright green light on that and we'll see where we end up in terms of actual start-up.

On Payara, again, I would just tell you that the number you threw out wasn't within the range we've been talking about. I really don't have any update today in terms of where that's specifically going to be, but that's not really inconsistent with what we've been talking about, just to kind of on the high end.

And then on Hammerhead, look, I would just say, Doug, it's still early days, we're still doing a lot of delineation drilling, we're still a lot to learn. In Guyana we have multiple play types, we have multiple parts to the stratigraphic section, it's a huge block, we're continuing to learn. I wouldn't draw too much into where we're going in terms of delineation activities. We're still just trying to gather a lot of data. I would just tell you that, in general, the vector is very positive, but I wouldn't get more specific than that.

Doug Leggate -- Bank of America -- Analyst

Well, I appreciate you taking part A, B and C. Thanks a lot, Jack. Thanks, Neil.

Jack Williams -- Senior Vice President

Thank you.

Operator

Our next question comes from the line of Phil Gresh with JPMorgan.

Philip Mulkey Gresh -- JP Morgan Chase & Co -- Analyst

Hi. Good morning. I guess, just a follow-up on Doug's original comment, maybe some clarifications to help us perhaps trying to avoid something in the second quarter; two parts to it. One is, the derivatives impact you're talking about quarter-over-quarter of $600 million, if we go back to a more neutral, flattish price environment, your comments obviously are clear they are not adding back a full $600 million, but I'm just trying to understand order of magnitude, how to think about that.

And then, secondarily, on the cash flow side, you talked about the affiliates elements there, some of which was Tengiz, I believe, which according to Chevron's slides are expected to continue. But also I remember last year's first quarter that there were some seasonal elements to this where it was a big headwind in the first quarter last year as well. So if you could clarify both of those items moving forward, that will be helpful.

Neil Hansen -- Vice President-Investor Relations, Secretary

Sure. Phil, I can take that. So on the derivatives, so the impact we saw in the first quarter, and we talk about the mark-to-market, it was a combination of a gain that we saw on the unsettled positions we had during the fourth quarter in a price environment that was declining; again, that was roughly $300 million, $400 million on the mark-to-market. And then, when you look at the first quarter, again, we had a derivative activity on the unsettled positions there. With rising oil prices, we saw a negative or an unfavorable mark-to-market on those positions. And so, it's really, when you look at a relative comparison, that's where we see the $600 million impact on the earnings.

Going forward, it's not an easy thing to predict. It obviously depends on what happens in the price environment. I can tell you that, again, generally what will happen is, if oil prices rise, we're likely to see unfavorable impacts on those mark-to-market positions. And then, if prices decline, we're likely to see a gain. I think, if you looked at the quarterly, the absolute quarterly effect last year, it was a couple of hundred million dollars per quarter; again, sometimes it was negative, sometimes It was positive, but hopefully that gives you some indication of the level of activity. And as Jack mentioned, we're increasing the amount of asset-backed trading that we're doing, so that might increase the impact you see in a quarter, but again, we're not taking speculative positions,this is based on our assets and so you're not likely to see a significant increase. But again, hopefully that gives you some perspective, Phil, on what to expect going forward.

On your second question on the cash, so -- in the first quarter we did see -- I think, we mentioned, there is always going to be some timing on the equity companies, difference between when earnings occur and when we get those dividends. There's always going to be an impact on that. And in the first quarter, we do typically see a bit higher increase in that area. When it comes to the timing when that comes back, if you look at the biggest impact there is on Tengiz, our equity investment in Tengiz. And so, as you know, they're undertaking a significant expansion and so a lot of those earnings are being reinvested back into that expansion. We are still getting some dividends from them, but a lot of that is going to be delayed until they have completed that expansion. And in the first quarter that was roughly about $400 million, that timing difference between earnings and dividends. But for the rest of it, again, we see a little bit of a headwind in the first quarter, that's likely to work itself off during the year. The one specific item where it might be longer than that is the TCO investment in Tengiz.

Philip Mulkey Gresh -- JP Morgan Chase & Co -- Analyst

And just to clarify, the Tengiz part of that, is that included in the co-land (ph) or is that separate?

Neil Hansen -- Vice President-Investor Relations, Secretary

I think the co-land is separate. This is just an effect of them taking the earnings and then reinvesting them back into that expansion.

Philip Mulkey Gresh -- JP Morgan Chase & Co -- Analyst

Got it. Okay. Last question would just be for Jack. On the Downstream side of things, maybe you could just give us your latest thoughts here. Obviously, the first quarter is challenging. The cracks element is getting better as we progress through the year, but where have you put yourself about how optimistic you are around IMO 2020, the impact we could see from that and when we might see it? Valero was saying that maybe September, October you start to see some impacts on crack spreads from it, but curious how you think about things in light of all the diesel upgrading investments you've been making.

Jack Williams -- Senior Vice President

Yeah. Thanks. The terms of the overall margins -- you saw the vector of the graph that we showed, that Neil showed going up quite a bit in March and further up a bit in April. So I would say things are restoring to, what I would call, more typical levels in terms of overall industry refining margins. So don't know how much further I can really project that out, but in terms of margin we're seeing right now, certainly clearly different than the average of the first quarter.

And in terms of the IMO, I think that the timeframe you talked about is a pretty good estimate, that's kind of what my guys were telling me too, that kind of late third quarter, early fourth quarter is when the market is going to be adjusting to that January 1st spec change. So we ought to start seeing something in that sort of timeframe.

All I can tell you is that the market fundamentals would say that the clean/dirty spread needs to expand and grow. Don't know how much that's going to grow, don't know how long it's going to stay there. Obviously, one of the things that was interesting in the first quarter it actually contracted, the clean/dirty spread actually contracted, because of all the conversion capacity that's been added just kind of destroying demand for fuel oil. So hard to predict. The fundamentals would say yes, but it clearly needs to go out and of course that's going to help all the high conversion refineries, which we have many. So I'm kind of -- we're looking forward to that time period, but it's really, really hard to tell the exact numbers on how big that's going to get and, like I said, how long it's going to last.

Philip Mulkey Gresh -- JP Morgan Chase & Co -- Analyst

Thanks for the comment.

Neil Hansen -- Vice President-Investor Relations, Secretary

Thanks, Phil.

Jack Williams -- Senior Vice President

Thanks, Phil.

Operator

And your next question comes from the line of Jon Rigby with UBS.

Jon Rigby -- UBS. -- Analyst

Thank you. Hi, Jack. I just wanted to return to the Downstream, and to echo the comments, appreciate the pre-close guidance and the detail on it and granularity. But it does strike me it's the sort of second-quarter in a rolling year where the Downstream in total has had a difficult quarter. It shares some of those with peers, but it does look to me that ExxonMobil has become quite volatile in the way it delivers its Downstream earnings both refining market and chemicals, and that's somewhat different to what we've experienced historically. So I just wanted to sort of explore that a little bit more and ask you, is that just a function of some idiosyncratic characteristics of the market right now? Is that to do with some changes that are going on at ExxonMobil itself or is it just that it's to do largely with the preparation ahead of IMO in the sort of the downtime that you're having to experience? It just looks that a lot of kilter would what we've seen over many years. Thanks.

Jack Williams -- Senior Vice President

Yeah, Jon, first of all, fourth quarter was actually very strong for the Downstream.

Jon Rigby -- UBS. -- Analyst

Yeah.

Jack Williams -- Senior Vice President

The market environment was better, but not a lot better, but what was different was we had those differentials in North America, and they helped us in the fourth quarter and of course that's not just -- it's not just something that just came out of thin air. We made investments in the Midstream to be able to where we're seeing across the value chain. In some quarters, that's going to help us a lot more than other quarters. So in other words, where there is market disconnect, we're going to be in an advantage position. So fourth quarter and first quarter was a big difference. As Neil said, some of that was mark-to-market impacts, which that maybe something that may be a little different than what we saw historically. The Midstream exposure, we feel really good about. We think it's adding a lot of value for our shareholders. That might provide a little more fluctuations. But other than that I don't see it and I feel very strongly at both of those activities are adding material value over the mid-term and long-term. So feel really good about what we're doing there.

Jon Rigby -- UBS. -- Analyst

Right. It just --

Jack Williams -- Senior Vice President

In terms of -- again, in terms of IMO, we have very high conversion, we're adding to that conversion. Everything we're doing on these refining projects is adding advantaged products, products that are growing in demand and feel really good -- we're making our refineries more competitive as we go forward. All of them are moving to lower cost to supply more competitive in the global refining spectrum.

Jon Rigby -- UBS. -- Analyst

Right. So would it be fair to say that the sort of measures that you're taking about extending your participation along the entire value chain at the same time just -- lot of happened at the same time as some of the macro conditions have worked against you to show what the benefits of those initiatives are, is that the way of thinking about it right now?

Jack Williams -- Senior Vice President

Actually, Jon, I really wouldn't look at it that way, because I think we've benefited net benefited. If you call that macro, if you're talking about one particular quarter, OK, maybe I would agree. If you look at it over just take a year, we've got -- we've had net benefit from looking across the value chain, clearly net benefit and our asset-backed trading activities clearly have benefits. So I think the macro factors have played out pretty much as we expected and we're benefiting from what we're doing. You just got to expand your horizon beyond one quarter.

Jon Rigby -- UBS. -- Analyst

Right. Okay. Thanks.

Operator

Okay. We'll next move to Jason Gammel with Jefferies.

Jason Gammel -- Jefferies. -- Analyst

Thanks very much and good morning, gentlemen. The first question I had was on some comments that you had made earlier, Jack, about essentially project capabilities. You obviously sanctioned Golden Pass during the first quarter, you made some pretty significant strides on PNG, LNG -- or at PNG as it relates to the Elk-Antelope fields during the quarter and also have made progress on Mozambique. You're essentially the operator for all three of these on the Downstream. Do you think the organization would have the capabilities by proceeding with all three at the same time?

Jack Williams -- Senior Vice President

Yes, I do think we have those capabilities. And we've actually modeled it all out and we definitely have the capability to do that. And I would tell you one thing also that's helping us in that regard is our new projects organization, combining all our project resources into one functional company, that's really going to allow us to capture a lot of synergies across executing those projects. You mentioned all those were upstream projects, but we have some big projects in Downstream and Chemicals as well. So it's one company, we're able to look across the entire project spectrum and make sure we're deploying the right resources on the right projects and they have looked at all of that activity and we feel confident in our ability to execute it. My point I was making earlier was as we bring new things on, we're going to continue to reassess that. As we bring in new opportunities, which I fully expect we will, we're going to continue to test that statement and it is a consideration as we continue to look at bringing new things in.

Jason Gammel -- Jefferies. -- Analyst

Thanks for that clarification, Jack. Second question is completely unrelated. We've been looking at just some of the state data for well productivity in the Permian Basin and your wells are essentially pretty close to best-in-class. I was just wondering if you could comment on any proprietary technology advantages that you feel that you have in the Permian or is this just a reflection of just better quality rock than others? Is it a combination of the two, any comments you might have?

Jack Williams -- Senior Vice President

Yeah, we've been -- obviously we're putting a lot of focus in the Permian right now. And I would say it's kind of a combination of all the above. I mentioned this more kind of cube development you've heard people talk about. It's pretty easy to talk about, it's pretty hard to execute it. And as I said, you got to be committed to kind of a lumpy production profile. But we are seeing some very positive results with that methodology. We've seen here from the guys that recently about a 16-well development in the Delaware Basin where we executed that with average well results about 1,300 barrels of oil equivalent per day for 16 wells. So I would say, the combination of the technology organization looking focusing on the Permian, the delineation results that are coming in positive they're allowing us more confidence in terms of getting out there and doing these stacked developments, combined with just continuing to go up the learning curve and especially in the Delaware Basin. I think all kind of combining to starting to really hit our stride in the Permian.

Jason Gammel -- Jefferies. -- Analyst

Appreciate that, Jack.

Operator

And next we'll go to Blake Fernandez with Simmons Energy.

Blake Fernandez -- Simmons Energy -- Analyst

Guys, good morning. Thanks for taking the question. Neil, appreciate the color going into 2Q, and I think you flagged the European volumes. My question was more around the Canadian side of things with Kearl and government curtailments. Do you have any color on how to think about that kind of moving forward versus 1Q levels?

Jack Williams -- Senior Vice President

I'm sorry. Say it one more time.

Blake Fernandez -- Simmons Energy -- Analyst

So the Canadian piece of the puzzle, I think there were some government curtailments in Kearl, and I'm just trying to understand how we should be thinking about volumes moving forward versus 1Q levels?

Jack Williams -- Senior Vice President

Yeah, we definitely had some production impacts from the curtailment. They weren't hugely significant relative to timing of downtime, unscheduled maintenance and so forth, but there was some impact, some of the Kearl impact was not that, but we had some impact from Syncrude in that regard. And so overall there was impact for Upstream for that curtailment activity. I would just kind of make the comment in general about the unintended consequences of that action, which is, there is some curtailment right now, there is production shut-in, and yet there is spare rail capacity that's not being utilized to get barrels to market. So clearly that's not -- that was not an intended consequence and it's not -- it's a market inefficiency right now that the markets having to work around. So we hope that that's going to be improved going forward. We think the right market clearing mechanism is that we do have the rail -- available rail working and hope to get that point where it is and that will allow more production be flowing out of Western Canada.

Blake Fernandez -- Simmons Energy -- Analyst

Yeah, totally agreed. Second question, Jack, you mentioned in the Permian, once you get up to 1 million barrels a day, that's going to be about half of your inventory. I'm just trying to understand the thought process as you get to that and kind of move forward. I mean, at some point, it doesn't make sense to whipsaw up and down. Obviously, you want to keep infrastructure full et cetera. So is it kind of a view that once you hit that level, maybe sustaining production is kind of the right way to think about it.

Jack Williams -- Senior Vice President

I would tell you that's more or less our current thought. We'll just continue testing that as we get more well results in. And as I've said, if we get more bolt-on acreage and so forth, we may test that some some further. But you're right, capital efficiency is really important for us. We are set up with this infrastructure to continue to expand those central delivery points. So we're planned to have the flexibility to continue to move that plateau level, but that kind of reflects our current plan. The other thing that I'd tell you, I'm absolutely confident, technology is going to continue to improve, we're going to continue to get some upside in terms of EURs out there and that may also play into retesting that plateau level. But I would say right now that's kind of our base case, that's our case to be.

Blake Fernandez -- Simmons Energy -- Analyst

Helpful. Thank you so much.

Operator

And we'll take our last question from Jason Gabelman with Cowen.

Jason Gabelman -- Cowen -- Analyst

Hey asked and answered. Thanks.

Neil Hansen -- Vice President-Investor Relations, Secretary

Okay. Thank you. Are there any other questions?

Operator

It looks like there are no further questions at this time.

Neil Hansen -- Vice President-Investor Relations, Secretary

Okay. Well, we appreciate you allowing us the opportunity today to highlight our first quarter that included solid operating performance in a challenging margin environment, continued success in Guyana, excellent progress in the Permian and final investment decisions on key Downstream and Chemical projects. We appreciate your interest and hope you enjoy the rest of your day. Thank you.

Operator

And that does conclude today's call. We thank everyone again for your participation.

Duration: 69 minutes

Call participants:

Neil Hansen -- Vice President-Investor Relations, Secretary

Jack Williams -- Senior Vice President

Sam Jeffrey Margolin -- Wolfe Research, LLC -- Analyst

Roger Read -- Wells Fargo -- Analyst

Neil Mehta -- Goldman Sachs -- Analyst

Biraj Borkhataria -- RBC Capital Markets -- Analyst

Doug Leggate -- Bank of America -- Analyst

Philip Mulkey Gresh -- JP Morgan Chase & Co. -- Analyst

Jon Rigby -- UBS -- Analyst

Jason Gammel -- Jefferies -- Analyst

Blake Fernandez -- Simmons Energy -- Analyst

Jason Gabelman -- Cowen -- Analyst

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