Future Capital Requirements and Resources: Capital expenditures in 2004 are expected to be approximately $1.5 billion. The Corporation anticipates that these expendi- tures will be funded by available cash and cash flow from operations. Lines of credit are available, if necessary. At December 31, 2003, the Corporation has an undrawn facility of $1.5 billion under its committed revolving credit agree- ment and has additional unused lines of credit of $206 mil- lion under uncommitted arrangements with banks. The Corporation’s revolving credit agreement expires in 2006 and the Corporation expects it will be able to arrange a new committed facility at that time, if required. The Corporation also has a shelf registration under which it may issue $825 million of additional debt securities, warrants, common stock or preferred stock. Loan agreement covenants allow the Corporation to bor- row an additional $5 billion for the construction or acquisi- tion of assets at December 31, 2003. At year end, the amount that can be borrowed under the loan agreements for the payment of dividends is $1.9 billion. The Corporation’s aggregate maturities of long-term debt total $221 million over the next three years. Based on current estimates of production, capital expenditures and other factors, and assuming West Texas Intermediate oil prices average $24 per barrel and United States natural gas prices average $4.25 per Mcf, the Corporation antici- pates it will fund its future operations, including capital expenditures, dividends and required debt repayment, with existing cash on-hand, cash flow from operations and, when necessary, borrowings under its credit facilities and the issuance of securities under its shelf registration. Prior to June 30, 1986, the Corporation had extensive exploration and production operations in Libya, however, it was required to suspend participation in these operations as a result of U.S. government sanctions. If U.S. sanctions on Libya are removed, and if the Corporation and its part- ners successfully negotiate with the government of Libya to resume participation in the group’s former operations, man- agement anticipates capital expenditures will likely increase over the current plan. Production and reserves would also Contractual Obligations and Contingencies: Following is a table showing aggregated information about certain contractual obligations at December 31, 2003: *The Corporation intends to continue purchasing its reGLYPH<222>ned product  supply from HOVENSA. Current purchases amount to approximately $2 billion annually. Credit Ratings: While the Corporation maintains invest- ment grade ratings from two rating agencies, one credit rat- ing agency downgraded its rating of the Corporation’s debt to non-investment grade in February 2004. Cash margin or collateral is required under certain contracts with hedging and trading counterparties and certain lenders. The amount of such cash margin or collateral would have increased at December 31, 2003 by approximately $230 million as aresult of the downgrade. The downgrade is expected to increase annual pre-tax financing costs by less than $10 million. increase. On February 24, 2004, the Corporation received U.S. Government authorization to negotiate and enter into an executory agreement with the government of Libya that would define the terms for resuming active participation in the Libyan properties. The Corporation’s performance under this agreement will be contingent on obtaining future U.S. Government authorizations. The Corporation cannot predict the outcome or timing of these events. 23 Payments Due by Period 2005 and 2007 and Millions of dollars Total 2004 2006 2008 Thereafter Long-term debt $ 3,893 $ 63 $ 126 $ 327 $3,377 Capital leases 48 10 22 14 2 Operating leases 1,303 95 142 142 924 Purchase obligations Supply  commitments 14,706 5,233 4,847 4,626 * Capital  expenditures 799 433 296 70 GLYPH<209> Operating  expenses 266 170 44 31 21 Other long-term  liabilities 235 110 56 32 37