Alabama Supreme Court Reverses $3.5 Billion Punitive Damage Verdict Against ExxonMobil in Mobile...

Business Editors

IRVING, Texas--(BUSINESS WIRE)--Dec. 20, 2002

In a decision today, the Alabama Supreme Court reversed a $3.5 billion jury verdict levied against Exxon Mobil Corporation (NYSE:XOM) in the Mobile Bay royalties dispute that sends the case back to a lower court for

ExxonMobil had presented its position to the court earlier this year on its appeal of the case. The company has contended that the issue, at best, is a difference in view over how to compute royalties under offshore gas leases offered by Alabama, leases that even the trial court found to be unclear. ExxonMobil noted that the state has brought similar lawsuits against all five oil companies producing natural gas from state leases at Mobile Bay.

"We are pleased with the court's decision because the original verdict was without merit," said Terry Koonce, president of ExxonMobil Production Company. "The facts in this case and ExxonMobil's conduct during the course of its long history in Alabama simply do not support the state's charges or the trial court's judgement. We conduct our business in an ethical, honest and forthright manner."

During the oral arguments to the Alabama Supreme Court in April, ExxonMobil noted that it has paid more than $1 billion in royalty and lease payments to the state, and that the amount in dispute -- about $87 million including interest -- by comparison is relatively small.

The company also pointed out that it had fully reported all royalty information to the state and that punitive damages in the case were unjustified. It noted that the punitive damage award rendered was nearly 40 times the compensatory damages and more than the total of all punitive damage awards affirmed by the Alabama Supreme Court in its history.

ExxonMobil's capital investment in Alabama exceeds $3 billion. The company employs more than 200 people and thousands of contractors, and more than 200 retirees live in the state. Since 1995, ExxonMobil has contributed nearly $3.5 million to charitable, civic and educational organizations throughout Alabama.

The U.S. Department of the Interior honored ExxonMobil earlier this year for excellence in mineral royalty and production reporting and compliance.

For more information on Exxon Mobil Corporation, visit the company's Web site at www.exxonmobil.com.