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Murphy Oil Corporation Announces Second Quarter 2023 Financial and Operating Results, Strategic Portfolio Repositioning

Exceeded Upper End of Guidance Range With Production of 184 MBOEPD,

Signed Production Sharing Contracts for Côte d’Ivoire New Country Entry,

Executed Agreement to Divest Non-Core Canadian Assets

Murphy Oil Corporation (NYSE: MUR) today announced its financial and operating results for the second quarter ended June 30, 2023, including net income attributable to Murphy of $98 million, or $0.62 net income per diluted share. Excluding discontinued operations and other items affecting comparability between periods, adjusted net income attributable to Murphy was $124 million, or $0.79 adjusted net income per diluted share.

Unless otherwise noted, the financial and operating highlights and metrics discussed in this news release exclude noncontrolling interest (NCI). 1

Highlights for the second quarter include:

  • Exceeded upper end of guidance range with production of 184 thousand barrels of oil equivalent per day (MBOEPD), including 99 thousand barrels of oil per day (MBOPD)
  • Received government approval on Block 15-1/05 Lac Da Vang field development plan in Vietnam
  • Signed production sharing contracts (PSCs) for five blocks offshore Côte d’Ivoire

Subsequent to the second quarter:

  • Signed a Purchase and Sale Agreement to divest a portion of Kaybob Duvernay and Placid Montney assets for C$150 million net purchase price
  • Published the fifth annual Sustainability Report with enhanced disclosures on improved environmental activities, increased community support and continuing strong governance oversight

“Murphy’s operational excellence continues to shine as our portfolio again outperformed expectations this quarter. From offshore maintenance being completed faster than scheduled to onshore wells achieving production rates above type curves, our team has done a great job executing our 2023 plan. We also have exciting opportunities ahead, including advancing the Vietnam Lac Da Vang field development plan towards project sanction as well as evaluating our new Côte d’Ivoire acreage. I look forward to progressing our capital allocation framework this year with increasing returns to shareholders and additional debt reduction, which will be supported by monetizing a non-core portion of our Canadian assets,” said Roger W. Jenkins, President and Chief Executive Officer. “Additionally, Murphy continues to operate sustainably, and we were recently recognized by Rystad Energy as the highest-scoring company in ESG performance for the 2021 reporting year across 41 operators in the United States and Canada.”

SECOND QUARTER 2023 RESULTS

The company recorded net income attributable to Murphy of $98 million, or $0.62 net income per diluted share, for the second quarter 2023. Adjusted net income, which excludes both the results of discontinued operations and certain other items that affect comparability of results between periods, was $124 million, or $0.79 adjusted net income per diluted share for the same period. Adjustments to net income total $28 million before tax. Details for second quarter results and an adjusted net income reconciliation can be found in the attached schedules.

Including NCI, second quarter 2023 exploration expense of $116 million contains three primary items: $80 million of dry hole expense for the Chinook #7 exploration well in the Gulf of Mexico, inclusive of $26 million attributable to NCI; a $17 million write-off of the previously suspended Cholula-1EXP exploration well in offshore Mexico; and $10 million in seismic costs for the Côte d’Ivoire new country entry.

Earnings before interest, taxes, depreciation and amortization (EBITDA) attributable to Murphy were $373 million. Earnings before interest, tax, depreciation, amortization and exploration expenses (EBITDAX) attributable to Murphy were $463 million. Adjusted EBITDA attributable to Murphy was $412 million. Adjusted EBITDAX attributable to Murphy was $485 million. Reconciliations for second quarter EBITDA, EBITDAX, adjusted EBITDA and adjusted EBITDAX can be found in the attached schedules.

In the second quarter, Murphy paid the final contingent consideration payments of $28 million related to the Gulf of Mexico acquisition that closed in 2019. This amount was primarily attributable to the one-year anniversary of achieving first oil at King’s Quay. Murphy has no remaining contingent consideration payment obligations.

Second quarter production averaged 184 MBOEPD and consisted of 54 percent oil volumes, or 99 MBOPD. Production for the quarter exceeded the upper end of the guidance range, primarily driven by 2.5 MBOEPD of strong well performance in the Gulf of Mexico, 2.1 MBOEPD in the Tupper Montney and 1.5 MBOEPD in the Eagle Ford Shale, as well as 1.4 MBOEPD attributed to lower realized royalty rates in the Tupper Montney natural gas asset. Details for second quarter production can be found in the attached schedules.

FINANCIAL POSITION

Murphy had approximately $1.1 billion of liquidity on June 30, 2023, with no borrowings on the $800 million credit facility and $369 million of cash and cash equivalents, inclusive of NCI.

On June 30, 2023, the company’s total debt was unchanged from year-end 2022 at $1.82 billion, and consisted of long-term, fixed-rate notes with a weighted average maturity of 7.2 years and a weighted average coupon of 6.1 percent.

CANADA TRANSACTION SUMMARY

Subsequent to quarter end, a subsidiary of Murphy signed a Purchase and Sale Agreement to divest a non-core portion of its operated Kaybob Duvernay assets and all of its non-operated Placid Montney assets to a private company. Under the terms of the agreement, the buyer will pay Murphy C$150 million at closing in an all-cash transaction, subject to customary closing adjustments and conditions. The transaction has a March 1, 2023 effective date, with closing anticipated to occur in the third quarter of 2023.

The assets to be divested include the Saxon and Simonette areas of the Kaybob Duvernay, where Murphy holds a 70 percent working interest as operator, as well as Murphy’s 30 percent working interest in the Placid Montney assets operated by Athabasca Oil Corporation. Also included are batteries, pipelines and the assumption of related processing and marketing contracts.

The combined assets currently produce approximately 1,700 barrels of oil equivalent per day (BOEPD) net and are comprised of 39 percent oil. Net proved reserves are 5.3 million barrels of oil equivalent (MMBOE) as of December 31, 2022. Also included are 250 gross drilling locations, or 138 net, across 42,000 net acres in Kaybob Duvernay and 26,000 net acres in Placid Montney. After the transaction closes, Murphy will have approximately 488 gross drilling locations with an average 75 percent oil weighting remaining in the Kaybob Duvernay, all of which are operated with a 70 percent working interest. Murphy will have no remaining position in the Placid Montney.

“This transaction brings forward the value of a small, non-core portion of our onshore Canadian portfolio, as we were not planning to develop these locations for many years. I look forward to progressing our capital allocation framework goals in Murphy 2.0 with the proceeds from this divestiture, and continuing to reward our supportive, long-term shareholders in the upcoming quarters,” said Jenkins.

OPERATIONS SUMMARY

Onshore

In the second quarter of 2023, the onshore business produced approximately 98 MBOEPD, which included 36 percent liquids volumes.

Eagle Ford Shale – Production averaged 35 MBOEPD with 76 percent oil volumes and 89 percent liquids volumes. As planned, during the second quarter Murphy brought nine Catarina and eight Tilden operated wells online. Murphy continues to see stronger performance from completion design improvements across its well locations, including promising results in its new Tilden wells with an average gross 30-day (IP30) rate of approximately 1,200 BOEPD with 85 percent oil.

Tupper Montney – Natural gas production averaged 341 million cubic feet per day (MMCFD) in the second quarter, with 10 operated wells brought online. Of those wells, seven were brought on early that were originally planned for the third quarter. Production for the quarter exceeded guidance by 21 MMCFD, which included 13 MMCFD of improved well performance as Murphy realized its highest initial production rates in Tupper Montney history, as well as an 8 MMCFD benefit from a lower realized royalty rate of 2.4 percent.

“Our new onshore well completion design, developed within the last three years, is paying off with higher initial production rates,” said Jenkins. “With this new design, we have achieved continued exceptional results from new wells in both our Eagle Ford Shale and Tupper Montney assets.”

Kaybob Duvernay – During the second quarter, production averaged 4 MBOEPD with 60 percent liquids volumes. Production was minimally impacted from wildfires during the quarter, and no damage was sustained to facilities.

Offshore

Excluding NCI, the offshore business produced approximately 87 MBOEPD for the second quarter, which included 80 percent oil.

Gulf of Mexico – Production averaged approximately 84 MBOEPD, consisting of 79 percent oil during the second quarter. Facility maintenance was completed as planned during the quarter, with work at King’s Quay concluded ahead of schedule.

Canada – In the second quarter, production averaged 3 MBOEPD, consisting of 100 percent oil. The asset life extension project is progressing for the non-operated Terra Nova floating, production, storage and offloading vessel, which Murphy anticipates will return to production by year-end 2023.

Vietnam – As previously disclosed, during the second quarter Murphy received government approval of the Block 15-1/05 Lac Da Vang field development plan in the Cuu Long Basin. Murphy holds a 40 percent working interest as operator of the block. PetroVietnam Exploration Production Corporation Limited and SK Earthon Co., Ltd. hold the remaining 35 percent and 25 percent working interest, respectively. Murphy is working to advance the development project in preparation for final review and sanction in late 2023.

EXPLORATION

Côte d’Ivoire – During the second quarter, Murphy signed production sharing contracts to secure working interests as operator in five deepwater blocks in the Tano Basin offshore Côte d’Ivoire. Murphy will initially hold a 90 percent working interest in four blocks, with an 85 percent working interest in the fifth block. Société Nationale d’Opérations Pétrolières de la Côte d’Ivoire (PETROCI) holds the remaining working interest for each block.

Included in Block CI-103 is the Paon discovery, which was appraised with multiple wells by a previous operator. The PSC for the block includes a commitment to formulate and submit a viable field development plan for this discovery by the end of 2025.

“We are excited for our new country entry as an operator in Côte d’Ivoire, and are pleased with the competitive terms and low entry cost,” said Jenkins. “These blocks offer tremendous opportunities for exploration, and we look forward to maturing geophysical studies in this area and working with PETROCI on the possible development of the Paon discovery.”

Gulf of Mexico – Following the quarter, Murphy, as operator of its subsidiary MP Gulf of Mexico, LLC, concluded drilling the Chinook #7 exploration well in Walker Ridge 425. The well encountered non-commercial hydrocarbons. Murphy plugged and abandoned the well, and approximately $80 million of the well cost before tax, inclusive of $26 million attributable to NCI, was expensed in the second quarter. Murphy holds a 66.66 percent working interest in the well.

As previously announced, during the second quarter Murphy, as operator, drilled a discovery at the Longclaw #1 exploration well. The company holds a 14.5 percent working interest in the well. The well reached a total measured depth of 25,106 feet at a net cost of approximately $6 million. The well encountered approximately 62 feet of net oil pay and is undergoing further evaluation.

Also during the quarter, Murphy was awarded five exploration blocks from the Gulf of Mexico Federal Lease Sale 259 with an average working interest of 90 percent.

Mexico – In conjunction with the July 2023 expiration of the Cholula appraisal period, Murphy wrote off previously suspended exploration well costs of $17 million.

2023 CAPITAL EXPENDITURE AND PRODUCTION GUIDANCE

Second quarter accrued capital expenditures (CAPEX) of $300 million, excluding lease acquisition costs, was lower than guidance due to timing of non-operated activity. Murphy accrued a total of $32 million in acquisition-related costs during the quarter, which will be paid in third quarter 2023.

Murphy is tightening its 2023 accrued CAPEX range to $950 million to $1.025 billion, which excludes $45 million in acquisition-related CAPEX for Côte d’Ivoire and Vietnam.

The company is raising its full year 2023 production range of 180 to 186 MBOEPD, consisting of approximately 53 percent oil and 59 percent liquids volumes.

Production for third quarter 2023 is estimated to be in the range of 188 to 196 MBOEPD with 99 MBOPD, or 52 percent, oil volumes. This range includes assumed Gulf of Mexico storm downtime of 4.6 MBOEPD, as well as operated planned downtime of 2.3 MBOEPD onshore and 600 BOEPD offshore. Murphy forecasts third quarter accrued CAPEX of $215 million, excluding acquisition-related costs.

Both production and CAPEX guidance ranges exclude NCI. Production guidance will be adjusted following closing of the Canadian divestiture announced today.

Detailed guidance for the third quarter and full year 2023 is contained in the attached schedules.

FIXED PRICE FORWARD SALES CONTRACTS

Murphy maintains fixed price forward sales contracts tied to AECO pricing points to lessen its dependence on variable AECO prices. These contracts are for physical delivery of natural gas volumes at a fixed price, with no mark-to-market income adjustments. Details for the current fixed price contracts can be found in the attached schedules.

CONFERENCE CALL AND WEBCAST SCHEDULED FOR AUGUST 3, 2023

Murphy will host a conference call to discuss second quarter 2023 financial and operating results on Thursday, August 3, 2023, at 9:00 a.m. EDT. The call can be accessed either via the Internet through the Investor Relations section of Murphy Oil’s website at http://ir.murphyoilcorp.com or via the telephone by dialing toll free 1-888-886-7786, reservation number 24655854.

FINANCIAL DATA

Summary financial data and operating statistics for second quarter 2023, with comparisons to the same period from the previous year, are contained in the following schedules. Additionally, a schedule indicating the impacts of items affecting comparability of results between periods, a reconciliation of EBITDA, EBITDAX, adjusted EBITDA and adjusted EBITDAX between periods, as well as guidance for the third quarter and full year 2023, are also included.

1In accordance with GAAP, Murphy reports the 100 percent interest, including a 20 percent noncontrolling interest (NCI), in its subsidiary, MP Gulf of Mexico, LLC (MP GOM). The GAAP financials include the NCI portion of revenue, costs, assets and liabilities and cash flows. Unless otherwise noted, the financial and operating highlights and metrics discussed in this news release, but not the accompanying schedules, exclude the NCI, thereby representing only the amounts attributable to Murphy.

CAPITAL ALLOCATION FRAMEWORK

This news release contains references to the company’s capital allocation framework and adjusted free cash flow. As previously disclosed, the capital allocation framework defines Murphy 1.0 as when long-term debt exceeds $1.8 billion. At such time, adjusted free cash flow is allocated to long-term debt reduction while the company continues to support the quarterly dividend. The company reaches Murphy 2.0 when long-term debt is between $1.0 billion and $1.8 billion. At such time, approximately 75 percent of adjusted free cash flow is allocated to debt reduction, with the remaining 25 percent distributed to shareholders through share buybacks and potential dividend increases. When long-term debt is at or below $1.0 billion, the company is in Murphy 3.0 and begins allocating 50 percent of adjusted free cash flow to the balance sheet, with a minimum of 50 percent of adjusted free cash flow allocated to share buybacks and potential dividend increases.

Adjusted free cash flow is defined as cash flow from operations before working capital change, less capital expenditures, distributions to NCI and projected payments, quarterly dividend and accretive acquisitions.

ABOUT MURPHY OIL CORPORATION

As an independent oil and natural gas exploration and production company, Murphy Oil Corporation believes in providing energy that empowers people by doing right always, staying with it and thinking beyond possible. Murphy challenges the norm, taps into its strong legacy and uses its foresight and financial discipline to deliver inspired energy solutions. Murphy sees a future where it is an industry leader who is positively impacting lives for the next 100 years and beyond. Additional information can be found on the company’s website at www.murphyoilcorp.com.

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified through the inclusion of words such as “aim”, “anticipate”, “believe”, “drive”, “estimate”, “expect”, “expressed confidence”, “forecast”, “future”, “goal”, “guidance”, “intend”, “may”, “objective”, “outlook”, “plan”, “position”, “potential”, “project”, “seek”, “should”, “strategy”, “target”, “will” or variations of such words and other similar expressions. These statements, which express management’s current views concerning future events, results and plans, are subject to inherent risks, uncertainties and assumptions (many of which are beyond our control) and are not guarantees of performance. In particular, statements, express or implied, concerning the company’s future operating results or activities and returns or the company's ability and decisions to replace or increase reserves, increase production, generate returns and rates of return, replace or increase drilling locations, reduce or otherwise control operating costs and expenditures, generate cash flows, pay down or refinance indebtedness, achieve, reach or otherwise meet initiatives, plans, goals, ambitions or targets with respect to emissions, safety matters or other ESG (environmental/social/governance) matters, make capital expenditures or pay and/or increase dividends or make share repurchases and other capital allocation decisions are forward-looking statements. Factors that could cause one or more of these future events, results or plans not to occur as implied by any forward-looking statement, which consequently could cause actual results or activities to differ materially from the expectations expressed or implied by such forward-looking statements, include, but are not limited to: macro conditions in the oil and gas industry, including supply/demand levels, actions taken by major oil exporters and the resulting impacts on commodity prices; increased volatility or deterioration in the success rate of our exploration programs or in our ability to maintain production rates and replace reserves; reduced customer demand for our products due to environmental, regulatory, technological or other reasons; adverse foreign exchange movements; political and regulatory instability in the markets where we do business; the impact on our operations or market of health pandemics such as COVID-19 and related government responses; other natural hazards impacting our operations or markets; any other deterioration in our business, markets or prospects; any failure to obtain necessary regulatory approvals; any inability to service or refinance our outstanding debt or to access debt markets at acceptable prices; or adverse developments in the U.S. or global capital markets, credit markets, banking system or economies in general. For further discussion of factors that could cause one or more of these future events or results not to occur as implied by any forward-looking statement, see “Risk Factors” in our most recent Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K that we file, available from the SEC’s website and from Murphy Oil Corporation’s website at http://ir.murphyoilcorp.com. Investors and others should note that we may announce material information using SEC filings, press releases, public conference calls, webcasts and the investors page of our website. We may use these channels to distribute material information about the company; therefore, we encourage investors, the media, business partners and others interested in the company to review the information we post on our website. The information on our website is not part of, and is not incorporated into, this report. Murphy Oil Corporation undertakes no duty to publicly update or revise any forward-looking statements.

NON-GAAP FINANCIAL MEASURES

This news release contains certain non-GAAP financial measures that management believes are useful tools for internal use and the investment community in evaluating Murphy Oil Corporation’s overall financial performance. These non-GAAP financial measures are broadly used to value and compare companies in the crude oil and natural gas industry. Not all companies define these measures in the same way. In addition, these non-GAAP financial measures are not a substitute for financial measures prepared in accordance with GAAP and should therefore be considered only as supplemental to such GAAP financial measures. Please see the attached schedules for reconciliations of the differences between the non-GAAP financial measures used in this news release and the most directly comparable GAAP financial measures.

MURPHY OIL CORPORATION

SUMMARIZED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

(Thousands of dollars, except per share amounts)

2023

 

2022

 

2023

 

2022

Revenues and other income

 

 

 

 

 

 

 

Revenue from production

$

799,836

 

 

1,146,299

 

 

$

1,596,067

 

 

1,980,827

 

Sales of purchased natural gas

 

13,014

 

 

49,939

 

 

 

56,751

 

 

86,785

 

Total revenue from sales to customers

 

812,850

 

 

1,196,238

 

 

 

1,652,818

 

 

2,067,612

 

Loss on derivative instruments

 

 

 

(103,068

)

 

 

 

 

(423,845

)

Gain on sale of assets and other income

 

1,738

 

 

7,887

 

 

 

3,486

 

 

10,251

 

Total revenues and other income

 

814,588

 

 

1,101,057

 

 

 

1,656,304

 

 

1,654,018

 

Costs and expenses

 

 

 

 

 

 

 

Lease operating expenses

 

194,292

 

 

147,352

 

 

 

394,276

 

 

284,177

 

Severance and ad valorem taxes

 

12,765

 

 

17,565

 

 

 

24,205

 

 

32,200

 

Transportation, gathering and processing

 

59,868

 

 

49,948

 

 

 

113,790

 

 

96,871

 

Costs of purchased natural gas

 

9,657

 

 

47,971

 

 

 

41,926

 

 

81,636

 

Exploration expenses, including undeveloped lease amortization

 

115,793

 

 

15,151

 

 

 

125,975

 

 

62,717

 

Selling and general expenses

 

25,345

 

 

27,130

 

 

 

43,653

 

 

60,659

 

Depreciation, depletion and amortization

 

215,667

 

 

195,856

 

 

 

411,337

 

 

359,980

 

Accretion of asset retirement obligations

 

11,364

 

 

11,563

 

 

 

22,521

 

 

23,439

 

Other operating expense

 

4,960

 

 

36,913

 

 

 

16,948

 

 

142,855

 

Total costs and expenses

 

649,711

 

 

549,449

 

 

 

1,194,631

 

 

1,144,534

 

Operating income from continuing operations

 

164,877

 

 

551,608

 

 

 

461,673

 

 

509,484

 

Other income (loss)

 

 

 

 

 

 

 

Other (expenses) income

 

(7,694

)

 

5,308

 

 

 

(7,767

)

 

2,813

 

Interest expense, net

 

(29,856

)

 

(41,385

)

 

 

(58,711

)

 

(78,662

)

Total other loss

 

(37,550

)

 

(36,077

)

 

 

(66,478

)

 

(75,849

)

Income from continuing operations before income taxes

 

127,327

 

 

515,531

 

 

 

395,195

 

 

433,635

 

Income tax expense

 

34,870

 

 

105,084

 

 

 

88,703

 

 

88,123

 

Income from continuing operations

 

92,457

 

 

410,447

 

 

 

306,492

 

 

345,512

 

Loss from discontinued operations, net of income taxes

 

(602

)

 

(943

)

 

 

(323

)

 

(1,494

)

Net income including noncontrolling interest

 

91,855

 

 

409,504

 

 

 

306,169

 

 

344,018

 

Less: Net (loss) income attributable to noncontrolling interest

 

(6,431

)

 

58,947

 

 

 

16,239

 

 

106,797

 

NET INCOME ATTRIBUTABLE TO MURPHY

$

98,286

 

 

350,557

 

 

$

289,930

 

 

237,221

 

 

 

 

 

 

 

 

 

INCOME (LOSS) PER COMMON SHARE – BASIC

 

 

 

 

 

 

 

Continuing operations

$

0.63

 

 

2.27

 

 

$

1.86

 

 

1.54

 

Discontinued operations

 

 

 

(0.01

)

 

 

 

 

(0.01

)

Net income

$

0.63

 

 

2.26

 

 

$

1.86

 

 

1.53

 

 

 

 

 

 

 

 

 

INCOME (LOSS) PER COMMON SHARE – DILUTED

 

 

 

 

 

 

 

Continuing operations

$

0.62

 

 

2.24

 

 

$

1.84

 

 

1.51

 

Discontinued operations

 

 

 

(0.01

)

 

 

 

 

(0.01

)

Net income

$

0.62

 

 

2.23

 

 

$

1.84

 

 

1.50

 

Cash dividends per common share

$

0.275

 

 

0.175

 

 

$

0.550

 

 

0.325

 

Average common shares outstanding (thousands)

 

 

 

 

 

 

 

Basic

 

156,127

 

 

155,389

 

 

 

155,976

 

 

155,121

 

Diluted

 

157,299

 

 

157,455

 

 

 

157,308

 

 

157,852

 

MURPHY OIL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

(Thousands of dollars)

2023

 

2022

 

2023

 

2022

Operating Activities

 

 

 

 

 

 

 

Net income including noncontrolling interest

$

91,855

 

 

409,504

 

 

$

306,169

 

 

344,018

 

Adjustments to reconcile net income to net cash provided by continuing operations activities

 

 

 

 

 

 

 

Loss from discontinued operations

 

602

 

 

943

 

 

 

323

 

 

1,494

 

Depreciation, depletion and amortization

 

215,667

 

 

195,856

 

 

 

411,337

 

 

359,980

 

Unsuccessful exploration well costs and previously suspended exploration costs

 

95,682

 

 

1,271

 

 

 

96,533

 

 

34,102

 

Amortization of undeveloped leases

 

2,716

 

 

3,782

 

 

 

5,369

 

 

7,980

 

Accretion of asset retirement obligations

 

11,364

 

 

11,563

 

 

 

22,521

 

 

23,439

 

Deferred income tax expense

 

43,515

 

 

86,944

 

 

 

92,557

 

 

66,691

 

Contingent consideration payment

 

(15,609

)

 

 

 

 

(139,574

)

 

 

Mark-to-market loss on contingent consideration

 

3,175

 

 

31,692

 

 

 

7,113

 

 

129,818

 

Mark-to-market (gain) loss on derivative instruments

 

 

 

(88,166

)

 

 

 

 

100,343

 

Long-term non-cash compensation

 

13,540

 

 

23,179

 

 

 

22,076

 

 

40,467

 

(Gain) from sale of assets

 

 

 

(35

)

 

 

 

 

(35

)

Net decrease (increase) in non-cash working capital

 

59,691

 

 

(40,676

)

 

 

(15,340

)

 

(121,598

)

Other operating activities, net

 

(52,307

)

 

(14,946

)

 

 

(59,417

)

 

(27,458

)

Net cash provided by continuing operations activities

 

469,891

 

 

620,911

 

 

 

749,667

 

 

959,241

 

Investing Activities

 

 

 

 

 

 

 

Property additions and dry hole costs

 

(349,434

)

 

(307,917

)

 

 

(694,753

)

 

(552,825

)

Acquisition of oil and natural gas properties

 

 

 

(46,491

)

 

 

 

 

(46,491

)

Proceeds from sales of property, plant and equipment

 

 

 

47

 

 

 

 

 

47

 

Net cash required by investing activities

 

(349,434

)

 

(354,361

)

 

 

(694,753

)

 

(599,269

)

Financing Activities

 

 

 

 

 

 

 

Borrowings on revolving credit facility

 

100,000

 

 

100,000

 

 

 

200,000

 

 

100,000

 

Repayment of revolving credit facility

 

(100,000

)

 

(100,000

)

 

 

(200,000

)

 

(100,000

)

Retirement of debt

 

 

 

(200,000

)

 

 

 

 

(200,000

)

Early redemption of debt cost

 

 

 

(3,438

)

 

 

 

 

(3,438

)

Distributions to noncontrolling interest

 

(6,304

)

 

(54,970

)

 

 

(15,983

)

 

(94,854

)

Contingent consideration payment

 

(12,565

)

 

(26,573

)

 

 

(60,243

)

 

(81,742

)

Issue costs of debt facility

 

(3

)

 

 

 

 

(20

)

 

 

Cash dividends paid

 

(42,942

)

 

(27,191

)

 

 

(85,867

)

 

(50,491

)

Withholding tax on stock-based incentive awards

 

(3

)

 

(1,276

)

 

 

(14,220

)

 

(16,697

)

Capital lease obligation payments

 

(157

)

 

(162

)

 

 

(296

)

 

(320

)

Net cash required by financing activities

 

(61,974

)

 

(313,610

)

 

 

(176,629

)

 

(447,542

)

Effect of exchange rate changes on cash and cash equivalents

 

(1,511

)

 

(1,508

)

 

 

(893

)

 

(1,595

)

Net increase (decrease) in cash and cash equivalents

 

56,972

 

 

(48,568

)

 

 

(122,608

)

 

(89,165

)

Cash and cash equivalents at beginning of period

 

312,383

 

 

480,587

 

 

 

491,963

 

 

521,184

 

Cash and cash equivalents at end of period

$

369,355

 

 

432,019

 

 

$

369,355

 

 

432,019

 

MURPHY OIL CORPORATION

SCHEDULE OF ADJUSTED NET INCOME (LOSS) (unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

(Millions of dollars, except per share amounts)

2023

 

2022

 

2023

 

2022

Net income attributable to Murphy (GAAP)

$

98.3

 

350.6

 

 

$

289.9

 

237.2

 

Discontinued operations loss

 

0.6

 

0.9

 

 

 

0.3

 

1.5

 

Net income (loss) from continuing operations attributable to Murphy

 

98.9

 

351.5

 

 

 

290.2

 

238.7

 

Adjustments1:

 

 

 

 

 

 

 

Write-off of previously suspended exploration well

 

17.1

 

 

 

 

17.1

 

 

Foreign exchange (gain) loss

 

7.9

 

(8.0

)

 

 

8.3

 

(8.0

)

Mark-to-market loss on contingent consideration

 

3.2

 

31.7

 

 

 

7.1

 

129.8

 

Mark-to-market (gain) loss on derivative instruments

 

 

(88.2

)

 

 

 

100.3

 

Early redemption of debt cost

 

 

4.4

 

 

 

 

4.4

 

Total adjustments, before taxes

 

28.2

 

(60.1

)

 

 

32.5

 

234.5

 

Income tax expense (benefit) related to adjustments

 

2.7

 

(13.2

)

 

 

3.6

 

47.4

 

Total adjustments after taxes

 

25.5

 

(46.9

)

 

 

28.9

 

179.1

 

Adjusted net income from continuing operations attributable to Murphy (Non-GAAP)

$

124.4

 

304.6

 

 

$

319.1

 

417.8

 

 

 

 

 

 

 

 

 

Adjusted net income from continuing operations per average diluted share (Non-GAAP)

$

0.79

 

1.93

 

 

$

2.03

 

2.65

 

1 Certain prior-period amounts have been updated to conform to the current period presentation.

Non-GAAP Financial Measures

Presented above is a reconciliation of Net income to Adjusted net income from continuing operations attributable to Murphy. Adjusted net income excludes certain items that management believes affect the comparability of results between periods. Management believes this is important information to provide because it is used by management to evaluate the Company’s operational performance and trends between periods and relative to its industry competitors. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company’s financial results. Adjusted net income is a non-GAAP financial measure and should not be considered a substitute for Net income as determined in accordance with accounting principles generally accepted in the United States of America.

The pretax and income tax impacts for adjustments shown above are as follows by area of operations and exclude the share attributable to non-controlling interests.

 

Three Months Ended

June 30, 2023

 

Six Months Ended

June 30, 2023

(Millions of dollars)

Pretax

 

Tax

 

Net

 

Pretax

 

Tax

 

Net

Exploration & Production:

 

 

 

 

 

 

 

 

 

 

 

United States

$

3.2

 

0.7

 

2.5

 

$

7.1

 

1.5

 

5.6

Other

 

17.1

 

 

17.1

 

 

17.1

 

 

17.1

Corporate

 

7.9

 

2.0

 

5.9

 

 

8.3

 

2.1

 

6.2

Total adjustments

$

28.2

 

2.7

 

25.5

 

$

32.5

 

3.6

 

28.9

MURPHY OIL CORPORATION

SCHEDULE OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION

AND AMORTIZATION (EBITDA)

(unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

(Millions of dollars)

2023

 

2022

 

2023

 

2022

Net income attributable to Murphy (GAAP)

$

98.3

 

350.6

 

 

$

289.9

 

237.2

 

Income tax expense

 

34.9

 

105.1

 

 

 

88.7

 

88.1

 

Interest expense, net

 

29.9

 

41.4

 

 

 

58.7

 

78.7

 

Depreciation, depletion and amortization expense ¹

 

210.1

 

188.2

 

 

 

399.3

 

344.8

 

EBITDA attributable to Murphy (Non-GAAP)

$

373.2

 

685.3

 

 

$

836.6

 

748.8

 

Write-off of previously suspended exploration well

 

17.1

 

 

 

 

17.1

 

 

Accretion of asset retirement obligations ¹

 

10.1

 

10.2

 

 

 

20.0

 

20.7

 

Foreign exchange loss (gain)

 

7.9

 

(8.0

)

 

 

8.3

 

(8.0

)

Mark-to-market loss on contingent consideration

 

3.2

 

31.7

 

 

 

7.1

 

129.8

 

Discontinued operations loss

 

0.6

 

0.9

 

 

 

0.3

 

1.5

 

Mark-to-market (gain) loss on derivative instruments

 

 

(88.1

)

 

 

 

100.4

 

Adjusted EBITDA attributable to Murphy (Non-GAAP)

$

412.1

 

632.0

 

 

$

889.4

 

993.2

 

1 Depreciation, depletion, and amortization expense, and accretion of asset retirement obligations used in the computation of Adjusted EBITDA exclude the portion attributable to the non-controlling interest (NCI).

Non-GAAP Financial Measures

Presented above is a reconciliation of Net income to Earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA. Management believes EBITDA and adjusted EBITDA are important information to provide because they are used by management to evaluate the Company’s operational performance and trends between periods and relative to its industry competitors. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company’s financial results. EBITDA and adjusted EBITDA are non-GAAP financial measures and should not be considered a substitute for Net income or Cash provided by operating activities as determined in accordance with accounting principles generally accepted in the United States of America.

MURPHY OIL CORPORATION

SCHEDULE OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION

AND AMORTIZATION AND EXPLORATION (EBITDAX)

(unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

(Millions of dollars)

2023

 

2022

 

2023

 

2022

Net income attributable to Murphy (GAAP)

$

98.3

 

 

350.6

 

 

$

289.9

 

 

237.2

 

Income tax expense

 

34.9

 

 

105.1

 

 

 

88.7

 

 

88.1

 

Interest expense, net

 

29.9

 

 

41.4

 

 

 

58.7

 

 

78.7

 

Depreciation, depletion and amortization expense ¹

 

210.1

 

 

188.2

 

 

 

399.3

 

 

344.8

 

EBITDA attributable to Murphy (Non-GAAP)

 

373.2

 

 

685.3

 

 

 

836.6

 

 

748.8

 

Exploration expenses 1

 

89.5

 

 

15.2

 

 

 

99.7

 

 

62.7

 

EBITDAX attributable to Murphy (Non-GAAP)

 

462.7

 

 

700.5

 

 

 

936.3

 

 

811.5

 

Accretion of asset retirement obligations ¹

 

10.1

 

 

10.2

 

 

 

20.0

 

 

20.7

 

Foreign exchange loss (gain)

 

7.9

 

 

(8.0

)

 

 

8.3

 

 

(8.0

)

Mark-to-market loss on contingent consideration

 

3.2

 

 

31.7

 

 

 

7.1

 

 

129.8

 

Discontinued operations loss

 

0.6

 

 

0.9

 

 

 

0.3

 

 

1.5

 

Mark-to-market (gain) loss on derivative instruments

 

 

 

(88.1

)

 

 

 

 

100.4

 

Adjusted EBITDAX attributable to Murphy (Non-GAAP)

$

484.5

 

$

647.2

 

 

$

972.0

 

$

1,055.9

 

1 Depreciation, depletion, and amortization expense, accretion of asset retirement obligations and exploration expenses used in the computation of adjusted EBITDAX exclude the portion attributable to the non-controlling interest (NCI).

Non-GAAP Financial Measures

Presented above is a reconciliation of Net income to Earnings before interest, taxes, depreciation and amortization, and exploration expenses (EBITDAX) and adjusted EBITDAX. Management believes EBITDAX and adjusted EBITDAX are important information to provide because they are used by management to evaluate the Company’s operational performance and trends between periods and relative to its industry competitors. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company’s financial results. EBITDAX and adjusted EBITDAX are non-GAAP financial measures and should not be considered a substitute for Net income or Cash provided by operating activities as determined in accordance with accounting principles generally accepted in the United States of America.

MURPHY OIL CORPORATION

FUNCTIONAL RESULTS OF OPERATIONS (unaudited)

 

 

Three Months Ended

June 30, 2023

Three Months Ended

June 30, 2022

(Millions of dollars)

Revenues

Income

(Loss)

Revenues

Income

(Loss)

Exploration and production

 

 

 

 

United States 1

$

696.2

168.9

 

$

978.0

 

491.5

 

Canada

 

118.3

2.5

 

 

206.6

 

47.2

 

Other

 

(32.3

)

 

13.7

 

(3.5

)

Total exploration and production

 

814.5

139.1

 

 

1,198.3

 

535.2

 

Corporate

 

0.1

(46.6

)

 

(97.2

)

(124.8

)

Continuing operations

 

814.6

92.5

 

 

1,101.1

 

410.4

 

Discontinued operations, net of tax

 

(0.6

)

 

 

(0.9

)

Total including noncontrolling interest

$

814.6

91.9

 

$

1,101.1

 

409.5

 

Net income attributable to Murphy

 

98.3

 

 

350.6

 

 

Six Months Ended

June 30, 2023

Six Months Ended

June 30, 2022

(Millions of dollars)

Revenues

Income

(Loss)

Revenues

Income

(Loss)

Exploration and production

 

 

 

 

United States 1

$

1,378.5

394.9

 

$

1,685.4

 

744.4

 

Canada

 

274.1

24.4

 

 

372.7

 

69.9

 

Other

 

3.6

(37.6

)

 

13.7

 

(47.7

)

Total exploration and production

 

1,656.2

381.7

 

 

2,071.8

 

766.6

 

Corporate

 

0.1

(75.2

)

 

(417.8

)

(421.1

)

Continuing operations

 

1,656.3

306.5

 

 

1,654.0

 

345.5

 

Discontinued operations, net of tax

 

(0.3

)

 

 

(1.5

)

Total including noncontrolling interest

$

1,656.3

306.2

 

$

1,654.0

 

344.0

 

Net income attributable to Murphy

 

289.9

 

 

237.2

 

1 Includes results attributable to a noncontrolling interest in MP Gulf of Mexico, LLC (MP GOM).

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (unaudited)

THREE MONTHS ENDED JUNE 30, 2023, AND 2022

 

(Millions of dollars)

United

States 1

Canada

Other

Total

Three Months Ended June 30, 2023

 

 

 

 

Oil and gas sales and other operating revenues

$

696.2

 

105.3

 

 

801.5

Sales of purchased natural gas

 

 

13.0

 

 

13.0

Lease operating expenses

 

156.5

 

37.5

 

0.1

 

194.1

Severance and ad valorem taxes

 

12.4

 

0.4

 

 

12.8

Transportation, gathering and processing

 

39.9

 

20.1

 

 

60.0

Costs of purchased natural gas

 

 

9.7

 

 

9.7

Depreciation, depletion and amortization

 

178.0

 

35.0

 

 

213.0

Accretion of asset retirement obligations

 

9.3

 

1.9

 

0.1

 

11.3

Exploration expenses

 

 

 

 

Dry holes and previously suspended exploration costs

 

79.8

 

 

15.8

 

95.6

Geological and geophysical

 

0.4

 

0.1

 

10.0

 

10.5

Other exploration

 

1.7

 

 

5.3

 

7.0

 

 

81.9

 

0.1

 

31.1

 

113.1

Undeveloped lease amortization

 

2.1

 

 

0.6

 

2.7

Total exploration expenses

 

84.0

 

0.1

 

31.7

 

115.8

Selling and general expenses

 

(1.9

)

4.7

 

2.6

 

5.4

Other

 

0.5

 

5.4

 

1.4

 

7.3

Results of operations before taxes

 

217.5

 

3.5

 

(35.9

)

185.1

Income tax provisions (benefits)

 

48.6

 

1.0

 

(3.6

)

46.0

Results of operations (excluding Corporate segment)

$

168.9

 

2.5

 

(32.3

)

139.1

 

 

 

 

 

Three Months Ended June 30, 2022

 

 

 

 

Oil and gas sales and other operating revenues

$

977.8

 

156.8

 

13.7

 

1,148.3

Sales of purchased natural gas

 

0.2

 

49.8

 

 

50.0

Lease operating expenses

 

109.5

 

36.9

 

0.9

 

147.3

Severance and ad valorem taxes

 

17.3

 

0.3

 

 

17.6

Transportation, gathering and processing

 

32.3

 

17.6

 

 

49.9

Costs of purchased natural gas

 

0.2

 

47.7

 

 

47.9

Depreciation, depletion and amortization

 

153.7

 

35.6

 

3.4

 

192.7

Accretion of asset retirement obligations

 

9.1

 

2.4

 

0.1

 

11.6

Exploration expenses

 

 

 

 

Dry holes and previously suspended exploration costs

 

(0.7

)

 

2.0

 

1.3

Geological and geophysical

 

 

0.1

 

0.8

 

0.9

Other exploration

 

2.9

 

0.3

 

6.0

 

9.2

 

 

2.2

 

0.4

 

8.8

 

11.4

Undeveloped lease amortization

 

2.3

 

 

1.4

 

3.7

Total exploration expenses

 

4.5

 

0.4

 

10.2

 

15.1

Selling and general expenses

 

3.2

 

3.8

 

2.1

 

9.1

Other

 

35.3

 

(2.3

)

 

33.0

Results of operations before taxes

 

612.9

 

64.2

 

(3.0

)

674.1

Income tax provisions

 

121.4

 

17.0

 

0.5

 

138.9

Results of operations (excluding Corporate segment)

$

491.5

 

47.2

 

(3.5

)

535.2

1 Includes results attributable to a noncontrolling interest in MP GOM.

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (unaudited)

SIX MONTHS ENDED JUNE 30, 2023, AND 2022

 

(Millions of dollars)

United

States 1

Canada

Other

Total

Six Months Ended June 30, 2023

 

 

 

 

Oil and gas sales and other operating revenues

$

1,378.5

 

217.2

3.6

 

1,599.3

Sales of purchased natural gas

 

 

56.8

 

56.8

Lease operating expenses

 

319.2

 

74.3

0.7

 

394.2

Severance and ad valorem taxes

 

23.5

 

0.7

 

24.2

Transportation, gathering and processing

 

77.3

 

36.5

 

113.8

Costs of purchased natural gas

 

 

41.9

 

41.9

Depreciation, depletion and amortization

 

338.2

 

66.7

0.9

 

405.8

Accretion of asset retirement obligations

 

18.4

 

3.9

0.2

 

22.5

Exploration expenses

 

 

 

 

Dry holes and previously suspended exploration costs

 

79.6

 

16.9

 

96.5

Geological and geophysical

 

0.7

 

0.1

10.5

 

11.3

Other exploration

 

3.3

 

0.1

9.4

 

12.8

 

 

83.6

 

0.2

36.8

 

120.6

Undeveloped lease amortization

 

4.1

 

0.1

1.2

 

5.4

Total exploration expenses

 

87.7

 

0.3

38.0

 

126.0

Selling and general expenses

 

4.5

 

7.1

2.8

 

14.4

Other

 

9.9

 

9.7

1.4

 

21.0

Results of operations before taxes

 

499.8

 

32.9

(40.4

)

492.3

Income tax provisions (benefits)

 

104.9

 

8.5

(2.8

)

110.6

Results of operations (excluding Corporate segment)

$

394.9

 

24.4

(37.6

)

381.7

 

 

 

 

 

Six Months Ended June 30, 2022

 

 

 

 

Oil and gas sales and other operating revenues

$

1,685.2

 

286.1

13.7

 

1,985.0

Sales of purchased natural gas

 

0.2

 

86.6

 

86.8

Lease operating expenses

 

209.4

 

73.8

0.9

 

284.1

Severance and ad valorem taxes

 

31.5

 

0.7

 

32.2

Transportation, gathering and processing

 

61.5

 

35.3

 

96.8

Costs of purchased natural gas

 

0.2

 

81.6

 

81.8

Depreciation, depletion and amortization

 

280.2

 

69.8

3.5

 

353.5

Accretion of asset retirement obligations

 

18.5

 

4.9

0.1

 

23.5

Exploration expenses

 

 

 

 

Dry holes and previously suspended exploration costs

 

(0.7

)

34.8

 

34.1

Geological and geophysical

 

2.6

 

0.1

1.0

 

3.7

Other exploration

 

4.4

 

0.4

12.1

 

16.9

 

 

6.3

 

0.5

47.9

 

54.7

Undeveloped lease amortization

 

4.7

 

0.1

3.2

 

8.0

Total exploration expenses

 

11.0

 

0.6

51.1

 

62.7

Selling and general expenses

 

11.5

 

8.9

4.5

 

24.9

Other

 

138.1

 

2.8

0.4

 

141.3

Results of operations before taxes

 

923.5

 

94.5

(46.8

)

971.2

Income tax provisions (benefits)

 

179.1

 

24.6

0.9

 

204.6

Results of operations (excluding Corporate segment)

$

744.4

 

69.9

(47.7

)

766.6

1 Includes results attributable to a noncontrolling interest in MP GOM.

MURPHY OIL CORPORATION

PRODUCTION-RELATED EXPENSES

(unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

(Dollars per barrel of oil equivalents sold)

2023

 

2022

 

2023

 

2022

United States – Eagle Ford Shale

 

 

 

 

 

 

 

Lease operating expense

$

11.48

 

11.41

 

$

13.06

 

11.81

Severance and ad valorem taxes

 

3.68

 

5.07

 

 

3.93

 

5.10

Depreciation, depletion and amortization (DD&A) expense

 

26.48

 

25.57

 

 

26.35

 

25.67

 

 

 

 

 

 

 

 

United States – Gulf of Mexico1

 

 

 

 

 

 

 

Lease operating expense

$

14.72

 

10.25

 

$

14.71

 

10.63

Severance and ad valorem taxes

 

0.07

 

0.07

 

 

0.08

 

0.08

DD&A expense

 

11.44

 

9.86

 

 

11.33

 

9.71

 

 

 

 

 

 

 

 

Canada – Onshore

 

 

 

 

 

 

 

Lease operating expense

$

6.01

 

6.82

 

$

6.38

 

7.14

Severance and ad valorem taxes

 

0.07

 

0.06

 

 

0.07

 

0.07

DD&A expense

 

5.65

 

6.55

 

 

5.82

 

6.81

 

 

 

 

 

 

 

 

Canada – Offshore

 

 

 

 

 

 

 

Lease operating expense

$

10.96

 

11.60

 

$

12.60

 

13.63

DD&A expense

 

9.48

 

11.51

 

 

9.40

 

11.96

 

 

 

 

 

 

 

 

Total E&P continuing operations

 

 

 

 

 

 

 

Lease operating expense

$

11.21

 

9.41

 

$

11.76

 

9.80

Severance and ad valorem taxes

 

0.74

 

1.12

 

 

0.72

 

1.11

DD&A expense

 

12.44

 

12.51

 

 

12.27

 

12.41

 

 

 

 

 

 

 

 

Total oil and gas continuing operations – excluding noncontrolling interest

 

 

 

 

 

 

 

Lease operating expense

$

11.02

 

9.36

 

$

11.58

 

9.70

Severance and ad valorem taxes

 

0.76

 

1.18

 

 

0.75

 

1.17

DD&A expense

 

12.53

 

12.64

 

 

12.36

 

12.56

1 Includes results attributable to a noncontrolling interest in MP GOM.

MURPHY OIL CORPORATION

CAPITAL EXPENDITURES

(unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

(Millions of dollars)

2023

 

2022

 

2023

 

2022

Exploration and production

 

 

 

 

 

 

 

United States1

$

245.5

 

225.4

 

$

500.2

 

418.2

Canada

 

75.4

 

74.0

 

 

143.5

 

150.9

Other

 

37.8

 

12.5

 

 

44.7

 

42.3

Total

 

358.7

 

311.9

 

 

688.4

 

611.4

 

 

 

 

 

 

 

 

Corporate

 

3.6

 

5.2

 

 

9.9

 

10.5

Total capital expenditures - continuing operations2

 

362.3

 

317.1

 

 

698.3

 

621.9

 

 

 

 

 

 

 

 

Charged to exploration expenses3

 

 

 

 

 

 

 

United States1

 

81.9

 

2.2

 

 

83.6

 

6.3

Canada

 

0.1

 

0.4

 

 

0.2

 

0.5

Other

 

31.2

 

8.8

 

 

36.8

 

47.9

Total charged to exploration expenses - continuing operations

 

113.2

 

11.4

 

 

120.6

 

54.7

 

 

 

 

 

 

 

 

Total capitalized

$

249.1

 

305.7

 

$

577.7

 

567.2

1 Includes results attributable to a noncontrolling interest in MP GOM.

2 For the three months ended June 30, 2023, total capital expenditures excluding acquisition-related costs (Côte d’Ivoire and Vietnam) of $32.3 million (2022: $46.5 million) and noncontrolling interest (NCI) of $29.9 million (2022: $5.0 million) is $300.1 million (2022: $265.6 million). For the six months ended June 30, 2023, total capital expenditures excluding acquisition-related costs of $32.3 million (2022:$46.5 million) and noncontrolling interest (NCI) of $38.8 million (2022: $8.6 million) is $627.2 million (2022: $566.8 million).

3 For the three-month and six-month-ended June 30, 2023, charges to exploration expense excludes amortization of undeveloped leases of $2.7 million (2022: $3.7 million) and $5.4 million (2022 $8.0 million), respectively. For the three-month and six-months ended June 30, 2023, charges to exploration expense excluding previously suspended exploration costs of $17.1 million (2022: $0) and NCI of $26.3 million (2022: $0) is $69.8 million (2022: $11.4 million) and $77.2 million (2022: $54.7 million), respectively.

MURPHY OIL CORPORATION

CONSOLIDATED BALANCE SHEETS

(unaudited)

 

(Thousands of dollars)

June 30,

2023

 

December 31,

2022

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

369,355

 

 

491,963

 

Accounts receivable

 

409,989

 

 

391,152

 

Inventories

 

62,450

 

 

54,513

 

Prepaid expenses

 

27,354

 

 

34,697

 

Total current assets

 

869,148

 

 

972,325

 

Property, plant and equipment, at cost

 

8,426,045

 

 

8,228,016

 

Operating lease assets

 

867,353

 

 

946,406

 

Deferred income taxes

 

40,678

 

 

117,889

 

Deferred charges and other assets

 

46,306

 

 

44,316

 

Total assets

$

10,249,530

 

 

10,308,952

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities

 

 

 

Current maturities of long-term debt, finance lease

$

705

 

 

687

 

Accounts payable

 

584,107

 

 

543,786

 

Income taxes payable

 

23,539

 

 

26,544

 

Other taxes payable

 

32,091

 

 

22,819

 

Operating lease liabilities

 

258,278

 

 

220,413

 

Other accrued liabilities

 

135,788

 

 

443,585

 

Total current liabilities

 

1,034,508

 

 

1,257,834

 

Long-term debt, including finance lease obligation

 

1,823,521

 

 

1,822,452

 

Asset retirement obligations

 

843,328

 

 

817,268

 

Deferred credits and other liabilities

 

299,089

 

 

304,948

 

Non-current operating lease liabilities

 

624,736

 

 

742,654

 

Deferred income taxes

 

235,665

 

 

214,903

 

Total liabilities

 

4,860,847

 

 

5,160,059

 

Equity

 

 

 

Common Stock, par $1.00

 

195,101

 

 

195,101

 

Capital in excess of par value

 

861,951

 

 

893,578

 

Retained earnings

 

6,259,561

 

 

6,055,498

 

Accumulated other comprehensive loss

 

(495,783

)

 

(534,686

)

Treasury stock

 

(1,586,522

)

 

(1,614,717

)

Murphy Shareholders' Equity

 

5,234,308

 

 

4,994,774

 

Noncontrolling interest

 

154,375

 

 

154,119

 

Total equity

 

5,388,683

 

 

5,148,893

 

Total liabilities and equity

$

10,249,530

 

 

10,308,952

 

MURPHY OIL CORPORATION

PRODUCTION SUMMARY

(unaudited)

 

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

(Barrels per day unless otherwise noted)

2023

 

2022

 

2023

 

2022

Net crude oil and condensate

 

 

 

 

 

 

 

United States

Onshore

26,880

 

 

26,304

 

 

23,100

 

 

23,334

 

 

Gulf of Mexico 1

72,022

 

 

63,427

 

 

73,850

 

 

59,363

 

Canada

Onshore

3,097

 

 

4,419

 

 

3,190

 

 

4,400

 

 

Offshore

2,913

 

 

3,128

 

 

2,687

 

 

3,224

 

Other

 

212

 

 

1,383

 

 

240

 

 

833

 

Total net crude oil and condensate - continuing operations

105,124

 

 

98,661

 

 

103,067

 

 

91,154

 

Net natural gas liquids

 

 

 

 

 

 

 

 

United States

Onshore

4,328

 

 

5,178

 

 

4,243

 

 

5,006

 

 

Gulf of Mexico 1

6,291

 

 

4,913

 

 

6,316

 

 

4,223

 

Canada

Onshore

558

 

 

859

 

 

691

 

 

921

 

Total net natural gas liquids - continuing operations

11,177

 

 

10,950

 

 

11,250

 

 

10,150

 

Net natural gas – thousands of cubic feet per day

 

 

 

 

 

 

 

United States

Onshore

24,195

 

 

29,651

 

 

24,178

 

 

28,512

 

 

Gulf of Mexico 1

69,904

 

 

63,703

 

 

72,539

 

 

59,902

 

Canada

Onshore

352,265

 

 

288,019

 

 

328,878

 

 

273,237

 

Total net natural gas - continuing operations

446,364

 

 

381,373

 

 

425,595

 

 

361,651

 

Total net hydrocarbons - continuing operations including NCI 2,3

190,695

 

 

173,173

 

 

185,250

 

 

161,579

 

Noncontrolling interest

 

 

 

 

 

 

 

 

Net crude oil and condensate – barrels per day

(5,949

)

 

(7,962

)

 

(6,279

)

 

(8,044

)

Net natural gas liquids – barrels per day

(204

)

 

(319

)

 

(218

)

 

(303

)

Net natural gas – thousands of cubic feet per day 2

(1,751

)

 

(3,097

)

 

(2,051

)

 

(2,845

)

Total noncontrolling interest

(6,445

)

 

(8,797

)

 

(6,839

)

 

(8,821

)

Total net hydrocarbons - continuing operations excluding NCI 2,3

184,250

 

 

164,376

 

 

178,411

 

 

152,758

 

1 Includes net volumes attributable to a noncontrolling interest in MP GOM.

2 Natural gas converted on an energy equivalent basis of 6:1.

3 NCI – noncontrolling interest in MP GOM.

MURPHY OIL CORPORATION

WEIGHTED AVERAGE PRICE SUMMARY

(unaudited)

 

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2023

 

2022

 

2023

 

2022

Crude oil and condensate – dollars per barrel

 

 

 

 

 

 

 

 

United States

Onshore

$

72.39

 

110.66

 

$

73.47

 

$

103.39

 

Gulf of Mexico 1

 

73.82

 

109.55

 

 

73.54

 

 

102.76

Canada 2

Onshore

 

68.50

 

100.51

 

 

71.46

 

 

96.84

 

Offshore

 

80.14

 

115.65

 

 

79.26

 

 

113.46

Other

 

 

 

86.51

 

 

89.05

 

 

86.51

Natural gas liquids – dollars per barrel

 

 

 

 

 

 

 

 

United States

Onshore

 

16.60

 

38.29

 

 

19.28

 

 

38.30

 

Gulf of Mexico 1

 

20.16

 

40.46

 

 

22.89

 

 

41.95

Canada 2

Onshore

 

29.90

 

63.99

 

 

39.82

 

 

59.23

Natural gas – dollars per thousand cubic feet

 

 

 

 

 

 

 

 

United States

Onshore

 

1.88

 

7.06

 

 

2.19

 

 

5.89

 

Gulf of Mexico 1

 

2.33

 

7.52

 

 

2.81

 

 

6.43

Canada 2

Onshore

 

1.85

 

2.78

 

 

2.17

 

 

2.66

1 Prices include the effect of noncontrolling interest in MP GOM.

2 U.S. dollar equivalent.

MURPHY OIL CORPORATION

FIXED PRICE FORWARD SALES AND COMMODITY HEDGE POSITIONS (unaudited)

AS OF AUGUST 1, 2023

 

 

 

 

 

 

 

Volumes

(MMcf/d)

 

Price/MCF

 

Remaining Period

Area

 

Commodity

 

Type 1

 

 

 

Start Date

 

End Date

Canada

 

Natural Gas

 

Fixed price forward sales

 

250

 

C$2.35

 

7/1/2023

 

12/31/2023

Canada

 

Natural Gas

 

Fixed price forward sales

 

162

 

C$2.39

 

1/1/2024

 

12/31/2024

Canada

 

Natural Gas

 

Fixed price forward sales

 

25

 

US$1.98

 

7/1/2023

 

10/31/2024

Canada

 

Natural Gas

 

Fixed price forward sales

 

15

 

US$1.98

 

11/1/2024

 

12/31/2024

1 Fixed price forward sale contracts are accounted for as normal sales and purchases for accounting purposes.

MURPHY OIL CORPORATION

THIRD QUARTER 2023 GUIDANCE

 

 

Oil

BOPD

 

NGLs

BOPD

 

Gas

MCFD

 

Total

BOEPD

Production – net

 

 

 

 

 

 

 

U.S. – Eagle Ford Shale

27,000

 

4,900

 

27,900

 

 

36,600

– Gulf of Mexico excluding NCI

65,900

 

6,200

 

66,200

 

 

83,100

Canada – Tupper Montney

 

 

380,400

 

 

63,400

– Kaybob Duvernay and Placid Montney

2,900

 

700

 

12,700

 

 

5,700

– Offshore

2,900

 

 

 

 

2,900

Other

300

 

 

 

 

300

 

 

 

 

 

 

 

 

Total net production (BOEPD) - excluding NCI 1

188,000 to 196,000

 

 

 

 

 

 

 

 

Exploration expense ($ millions)

$32

 

 

 

 

 

 

 

 

FULL YEAR 2023 GUIDANCE

Total net production (BOEPD) - excluding NCI 2

180,000 to 186,000

Capital expenditures – excluding NCI ($ millions) 3

$950 to $1,025

 

 

¹ Excludes noncontrolling interest of MP GOM of 5,700 BOPD of oil, 200 BOPD of NGLs, and 2,100 MCFD gas.

² Excludes noncontrolling interest of MP GOM of 6,100 BOPD of oil, 200 BOPD of NGLs, and 2,100 MCFD gas.

³ Excludes noncontrolling interest of MP GOM of $72 million and acquisition-related costs of $45 million.

 

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