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Before we go further, I would like to draw your attention to our cautionary statement. Statements of future events or conditions are forward-looking statements. Actual results, including resource recoveries, volume growth and project outcomes could differ materially due to factors I discussed and factors noted in our SEC filings. Please see factors affecting future results and the Form 8-K we furnished this morning, which are available through the Investors Section of our Website. Please also see the frequently used terms and the 2009 financial and operating review on our Website. This material defines key terms I will use today and shows ExxonMobil's net interest in specific projects.Now, I am pleased to turn your attention to the second quarter results. ExxonMobil’s second quarter 2010 earnings were $7.6 billion, an increase of $3.6 billion from the second quarter of 2009, reflecting higher crude oil prices, upstream volume growth, improved downstream margins and strong chemical results. Earnings excluding special items were also $7.6 billion, up $3.5 billion from 2009 as last year’s earnings included a $140 million special charge related to interest on the Valdez settlement. Earnings per share excluding special items were $1.60, up $0.76 from a year ago. During the second quarter of 2010, ExxonMobil distributed more than $3.4 billion to shareholders, including dividends of over $2 billion and share purchases to reduce shares outstanding of about $1.4 billion, again demonstrating our commitment to return cash to shareholders. Turning now to our business line results and some of the milestones we have achieved since the last earnings call, first in the upstream. On June 25 th, ExxonMobil completed the merger with XTO Energy Inc. Through this transaction, we have acquired a resource base in excess of 45 trillion cubic feet of gas equivalent at a cost well under $1 per kcf equivalent. ExxonMobil is now the largest natural gas producer in the US. On a combined basis, the XTO merger will almost triple ExxonMobil’s US natural gas production from 1.3 billion cubic feet per day to nearly 3.7 billion cubic feet per day. With this addition, ExxonMobil’s global unconventional portfolio now exceeds 8 million acres. During the quarter, ExxonMobil progressed our plans in the West Qurna-1 field in Iraq. We are pleased with the progress we and the south oil company are making to restore and enhance recovery from this field. Production uplift and longer-term redevelopment activities continue to advance. We also began establishing our offices in country. In addition, ExxonMobil was selected to lead a concept selection study for a large scale seawater supply system. We have initiated work on this study with the Iraqi Ministry of Oil, other government ministries and IOCs with field rehabilitation contracts in the area.
Overall, we are on target with our planned activity. In compliance with the US drilling moratorium, ExxonMobil suspended drilling activities offshore the US, including activities at our Hoover Diana platform in the Gulf of Mexico. Plans for an appraisal well at the Hadrian discovery in the Gulf of Mexico were also delayed. Our production operations have not been affected by the moratorium and we do not anticipate it to have a significant impact on our 2010 production outlook.ExxonMobil is actively involved in significant industry efforts to improve prevention, well intervention and spill response capabilities. In July, ExxonMobil along with Chevron, ConocoPhillips, and Shell announced a plan to build and deploy a rapid response system that will be available to capture and contain oil in the event of a potential future underwater well blowout in the deepwater Gulf of Mexico. The four companies have committed $1 billion to fund the initial cost of the system and will form a non-profit organization called the Marine Well Containment Company to operate and maintain this system. Deepwater production is critical for meeting future energy needs. Turning now to activities in our unconventional resource portfolio, a significant level of drilling activity continues in the US. During the quarter, we supplied the first well on our Birchus Ranch [ph] acreage in the Eagle Ford Shale of South Texas. ExxonMobil holds 50,000 acres in its emerging shale gas play. In the Haynesville shale gas play, we recently commenced production from the first well on acreage held by ExxonMobil prior to the XTO merger and a second well is near completion. Read the rest of this transcript for free on seekingalpha.com