Item 3. Legal
Proceedings

As
reported in the Corporation's Form 10-Q for the second quarter of 2017, on June
20, 2017, the United States Department of Justice (DOJ) and the United States
Environmental Protection Agency (EPA) notified XTO Energy Inc. (XTO) concerning
alleged violations of the Clean Air Act and the Fort Berthold Indian
Reservation Federal Implementation Plan regarding the alleged failure of vapor
control systems to properly route tank vapors to control devices at well pads
and tank farms on the Fort Berthold Indian Reservation. In January 2018, XTO,
the DOJ and the EPA agreed to the terms of a Consent Decree concerning those
alleged violations. XTO has agreed to pay a penalty of $320,000, install
automatic tank gauging on 30 well sites, and monitor and report emissions for
three years. Following signature by EPA and the DOJ, the Consent Decree is
subject to a 30-day public comment period and approval by the United States
Federal District Court for the District of North Dakota - Western Division, in
Bismarck, North Dakota, which is expected in March 2018.

As
reported in the Corporation's Form 10-Q for the second quarter of 2017, in late
April 2017, the State of North Dakota Department of Health (NDDOH) and the
North Dakota State Office of the Attorney General notified XTO of their
interest in settling alleged violations of the North Dakota Century Code and
implementing regulations regarding the alleged failure of vapor control systems
to properly route tank vapors to control devices at well pads and tank farms
outside the Fort Berthold Indian Reservation. On February 1, 2018, the South
Central Judicial District Court in Bismarck, North Dakota, approved a Consent
Decree between XTO and NDDOH concerning those alleged violations. Under the
Consent Decree, XTO will pay a civil penalty of up to $665,000, but that amount
may be reduced if specified corrective actions are achieved by deadlines set
forth in the Consent Decree. Assuming these deadlines are met, XTO anticipates
that it will pay a penalty of approximately $440,000 in the fourth quarter of
2018. XTO will monitor and report compliance with the terms of the Consent
Decree for a period of two years.

On
July 20, 2017, the United States Department of Treasury, Office of Foreign
Assets Control (OFAC) assessed a civil penalty against Exxon Mobil Corporation,
ExxonMobil Development Company and ExxonMobil Oil Corporation for violating the
Ukraine-Related Sanctions Regulations, 31 C.F.R. part 589. The assessed civil
penalty is in the amount of $2,000,000. ExxonMobil and its affiliates have been
and continue to be in compliance with all sanctions and disagree that any
violation has occurred. ExxonMobil and its affiliates filed a complaint on July
20, 2017, in the United States Federal District Court, Northern District of
Texas seeking judicial review of, and to enjoin, the civil penalty under the
Administrative Procedures Act and the United States Constitution, including on
the basis that it represents an arbitrary and capricious action by OFAC and a
violation of the Company's due process rights.

Refer to the relevant portions of "Note 16: Litigation
and Other Contingencies" of the Financial Section of this report for additional
information on legal proceedings.

Item 4. MINE SAFETY DISCLOSURES