Murphy Oil Corporation Announces First Quarter 2018 Financial and Operating Results

Source Press Release
Company Murphy Oil Corporation 
Tags Production/Development, Exploration, Upstream Activities, Financial & Operating Data
Date May 02, 2018

Murphy Oil Corporation (NYSE: MUR) today announced its financial and operating results for the first quarter ended March 31, 2018, including income from continuing operations of $169 million, or $0.97 per diluted share.

Financial highlights for the first quarter include:

  • Generated adjusted income of $40 million
  • Achieved annualized EBITDA to average capital employed of 20 percent
  • Realized competitive EBITDAX per barrel of oil equivalent sold of $26.70
  • Returned 16 percent of operating cash flow to shareholders through dividend
  • Preserved balance sheet yielding 30 percent net debt to total capital employed
  • Maintained approximately $2.0 billion of liquidity, with no borrowings on credit facility

Operating highlights for the first quarter include:

  • Produced 168,000 BOEPD, on track to achieve full year production guidance
  • Increased Kaybob Duvernay production 92 percent, year-over-year, delivering eight wells: five wells in the oil window with average IP30 rates of approximately 1,000 BOEPD and three wells in the gas condensate window with average early production potential of approximately 2,000 BOEPD
  • Expanded exploration footprint in the Gulf of Mexico and Brazil with co-venturer groups

FIRST QUARTER 2018 RESULTS

Murphy recorded income from continuing operations of $169 million, or $0.97 per diluted share, for the first quarter 2018. The company reported adjusted income, which excludes both the results of discontinued operations and certain other items that affect comparability of results between periods, of $40 million, or $0.23 per diluted share. The adjusted income excludes the following items: after-tax gain of $120 million associated with 2017 U.S. tax reform and a $12 million after-tax gain on foreign exchange, partially offset by a mark-to-market after-tax loss on crude oil derivative contracts of $11 million. Net cash provided from continuing operations was $279 million. This includes a one-time cash payment of $35 million for a Canadian tax withholding associated with repatriating cash from Canada to the U.S. The tax expense associated with the repatriation of cash was recorded in 2017. Details for first quarter results can be found in the attached schedules.

Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $373 million, or $24.78 per barrel of oil equivalent (BOE) sold. Earnings before interest, taxes, depreciation, amortization and exploration expenses (EBITDAX) totaled $402 million, or $26.70 per BOE sold. Details for first quarter EBITDA and EBITDAX reconciliation can be found in the attached schedules.

Production in the first quarter 2018 averaged 168,000 barrels of oil equivalent per day (BOEPD). Offshore production exceeded guidance primarily driven by Gulf of Mexico wells at Kodiak and Habanero coming back online with production levels above expectations, as well as higher uptime across all offshore assets (3,000 BOEPD). Onshore production in the Tupper Montney also exceeded production guidance primarily due to wells performing above expectation (900 BOEPD). This was partially offset by lower U.S. onshore production in the Eagle Ford Shale (1,500 BOEPD) due to the continued recovery of shut-in wells from offset operators’ frac operations as well as underperformance of wells in the Midland Basin (800 BOEPD).

“Over the course of the first quarter, we had strong production results from our offshore assets in Malaysia and the Gulf of Mexico and our onshore Canadian assets in the Tupper Montney and Kaybob Duvernay. We were also able to achieve competitive margins across our oil-weighted assets for the U.S. and Malaysia operating areas. We continue to maintain our key balance sheet metrics while delivering on our 2018 plans. Our diverse, high margin portfolio coupled with the recent improvement in oil prices allows Murphy to generate free cash flow above our dividend this year,” stated Roger W. Jenkins, President and Chief Executive Officer.

FINANCIAL POSITION

As of March 31, 2018, the company had $2.8 billion of outstanding long-term, fixed-rate notes and $939 million in cash and cash equivalents. The fixed-rate notes have a weighted average maturity of 8.5 years and a weighted average coupon of 5.5 percent. The next senior note maturity for the company is in 2022. There were no borrowings on the $1.1 billion unsecured senior credit facility at quarter end.

REGIONAL OPERATIONS SUMMARY

North American Onshore

The North American onshore business produced 92 thousand barrels of oil equivalent per day (MBOEPD) in the first quarter, with 47 percent liquids.

Eagle Ford Shale – Production in the quarter averaged 43 MBOEPD, with 88 percent liquids. During the quarter, the company brought six operated wells online, all of which were in the Tilden area in the Lower Eagle Ford Shale with average initial production rates over 30 days (IP30 rate) exceeding 700 BOEPD. By employing Gen 5.0 completions in the Tilden area, IP30 rates have improved 115 percent over the past six years.

“In the first quarter, we had planned limited well delivery, as a result of focusing our drilling activity on a ten well pad in the Karnes area. These ten wells are part of the 22 operated wells we expect to bring online in the second quarter. The ten well pad at Karnes is important to learnings in the area as we were able to test a staggered lateral completion style that we believe could be beneficial for future pads. With the wells recently being placed on production, early indications are positive and we look forward to giving more conclusive results in the coming quarters,” stated Jenkins. “Our first quarter production was temporarily affected by a large number of our best Catarina wells being shut in for offset fracs from peers in the area. All of these wells have recently been brought back online,” Jenkins added.

Tupper Montney – Natural gas production in the quarter averaged 240 million cubic feet per day (MMCFD). The company drilled the remaining three wells on a five well pad, with all five wells expected to be brought online in the second quarter.

Full cycle break-even costs, with a ten percent rate of return, continue to decrease and are currently C$1.90 AECO per thousand cubic feet (MCF). As a result of long-term forward sales contracts and other marketing agreements, Murphy achieved strong first quarter netbacks in the Tupper Montney of C$2.20 per MCF, consisting of a blended sales price of C$2.47 per MCF less C$0.27 per MCF of transportation costs. Furthermore, the company continues to significantly reduce its future multi-year exposure to AECO prices through a combination of forward sales contracts and market diversification to the Malin, Chicago, Emerson and Dawn markets.

Kaybob Duvernay – Production increased 92 percent from first quarter 2017, averaging near 5,500 BOEPD with 70 percent liquids. During the first quarter, the company continued appraising the play by drilling 12 wells and bringing online eight wells, including Murphy’s first wells in the Simonette area. The IP30 rates at the 15-16 two well pad averaged 985 BOEPD with 70 percent liquids, and one well at 01-12 averaged 900 BOEPD IP30 with 80 percent liquids. The 12-29 two well pad in the Kaybob East area flowed at an average of 1,040 BOEPD with 80% liquids. The 16-3 three well pad in the Saxon area was placed online just prior to quarter end, with the wells flowing above expectations.

“Our appraisal of the Kaybob Duvernay is paying off. Since entering the play in 2016, we have meaningfully reduced drilling and completion costs, with recent pacesetter wells averaging below the $8.0 million mark. We are well on our way to achieving planned drilling and completions costs of $6.5 million per well that have average lateral lengths of approximately 9,000 feet. Currently, production rates are exceeding our expectations,” commented Jenkins.

Global Offshore

The offshore business produced over 75 MBOEPD for the first quarter, with 72 percent liquids.

Malaysia & Brunei – Production in the quarter averaged over 51 MBOEPD, with 63 percent liquids. Block K and Sarawak averaged over 31 thousand barrels of liquids per day, while Sarawak natural gas production averaged 107 MMCFD. The company continues to progress the Kikeh DTU gas lift project with expected startup in the third quarter 2018, as well as preparing for the production startup of Block H FLNG in 2020.

North America – Production in the quarter for the Gulf of Mexico and East Coast Canada averaged 24 MBOEPD, with 91 percent liquids. The non-operated Kodiak well resumed production during the quarter with rates exceeding expectations. The well achieved gross rates over 25 MBOEPD, with net rates more than 6,100 BOEPD. The non-operated Habanero well was also brought back online during the quarter and is producing above expectations.

EXPLORATION

Gulf of Mexico Exploration – During the first quarter, Murphy farmed into the Highgarden prospect (GC 895). At the March 2018 Gulf of Mexico lease sale, Murphy and it’s co-venturer were also the high bidder for two blocks with Miocene prospects, one at GC 939 and the other at MC 599.

Brazil Exploration – During the first quarter, Murphy and its co-venturers, ExxonMobil and QGEP, were the successful bidders on blocks 430 and 573 in the Sergipe-Alagoas basin, with no well commitments. These two blocks are strategically located next to the company’s existing four block position.

“We continue to execute on our focused exploration strategy by increasing our acreage in plays where we envision adding low-cost resources with meaningful upside. In the Gulf of Mexico, we are excited to get back to work as we recently spud our operated Samurai (GC 432) appraisal well with our new partner BHP. This well is consistent with our strategy of pursuing oil-weighted, lower risk opportunities with competitive returns and low finding and development costs,” commented Jenkins.

PRODUCTION AND CAPITAL EXPENDITURE GUIDANCE

Production for the second quarter 2018 is estimated to be in the range of 166 to 169 MBOEPD, with updated full year 2018 production guidance in the range of 167 to 170 MBOEPD. The low end of the full year production guidance is being increased by 1,000 BOEPD from the previous guidance.

Full year capital expenditure guidance is being increased by five percent from $1.06 billion to $1.11 billion. Approximately three-quarters of the additional capital is attributable to the increased working interest to drill the Samurai appraisal well, increased working interest in Vietnam and workovers at the Medusa field in the Gulf of Mexico.

“We are pleased with our first quarter production where our offshore fields delivered high-margin results for our company. We are increasing the midpoint of our annual guidance after our strong first quarter results. In the second quarter, we look forward to delivering 22 operated wells in the Eagle Ford Shale as well as re-igniting our exploration program in the Gulf of Mexico. Also, following spring break-up, we will be resuming our drilling and completions activities in the Duvernay,” stated Jenkins.

Details for production can be found in the attached schedules.

CONFERENCE CALL AND WEBCAST SCHEDULED FOR MAY 3, 2018

Murphy will host a conference call to discuss first quarter 2018 financial and operating results on Thursday, May 3, 2018, at 11:00 a.m. ET. The call can be accessed either via the Internet through the Investor Relations section of Murphy Oil’s website at  or via the telephone by dialing toll free 1-888-886-7786, reservation number 18948426.

FINANCIAL DATA

Summary financial data and operating statistics for first quarter 2018, 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 and schedules comparing EBITDA and EBITDAX between periods are included with these schedules as well as guidance for the second quarter and full year 2018.

MURPHY OIL CORPORATION SUMMARIZED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (Thousands of dollars, except per share amounts) 
             
      Three Months Ended
March 31, 
      2018      2017 1 
Revenues             
Revenue from sales to customers      606,954        509,035   
Gain (loss) on crude contracts        (29,502      37,077   
Gain on sale of assets and other income        8,153        130,528   
Total revenues        585,605        676,640   
             
Costs and expenses             
Lease operating expenses        136,496        122,142   
Severance and ad valorem taxes        12,157        11,213   
Exploration expenses, including undeveloped lease amortization        28,928        28,663   
Selling and general expenses        51,417        51,255   
Depreciation, depletion and amortization        230,733        236,154   
Accretion of asset retirement obligations        9,914        10,556   
Other expense (benefit)        (11,048      2,157   
Total costs and expenses        458,597        462,140   
Operating income from continuing operations        127,008        214,500   
             
Other income (loss)             
Interest and other income (loss)        15,084        (15,021 
Interest expense, net        (45,049      (44,597 
Total other loss        (29,965      (59,618 
             
Income from continuing operations before income taxes        97,043        154,882   
Income tax expense (benefit)        (71,647      97,387   
Income from continuing operations        168,690        57,495   
Income (loss) from discontinued operations, net of income taxes        (437      969   
             
NET INCOME      168,253        58,464   
             
INCOME PER COMMON SHARE – BASIC             
Continuing operations      0.98        0.33   
Discontinued operations        (0.01      0.01   
Net Income      0.97        0.34   
             
INCOME PER COMMON SHARE – DILUTED             
Continuing operations      0.97        0.33   
Discontinued operations        (0.01      0.01   
Net Income      0.96        0.34   
             
Cash dividends per Common share        0.25        0.25   
             
Average Common shares outstanding (thousands)             
Basic        172,805        172,422   
Diluted        174,620        173,089   
 
1 Reclassified to conform to current presentation. 

 
MURPHY OIL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Thousands of dollars) 
       
      Three Months Ended
March 31, 
      2018      2017 
Operating Activities             
Net income      168,253        58,464   
Adjustments to reconcile net income to net cash provided by continuing operations activities:             
(Income) loss from discontinued operations        437        (969 
Depreciation, depletion and amortization        230,733        236,154   
Dry hole costs (credits)        (9      2,904   
Amortization of undeveloped leases        13,168        9,957   
Accretion of asset retirement obligations        9,914        10,556   
Deferred income tax (benefit) charge        (145,920      58,533   
Pretax loss (gain) from disposition of assets        339        (131,982 
Net decrease in noncash operating working capital        41,554        43,418   
Other operating activities, net        (39,948      18,478   
Net cash provided by continuing operations activities        278,521        305,513   
             
Investing Activities             
Property additions and dry hole costs        (273,901      (211,631 
Proceeds from sales of property, plant and equipment        260        64,097   
Purchases of investment securities 1        –        (212,661 
Proceeds from maturity of investment securities 1        –        113,210   
Net cash required by investing activities        (273,641      (246,985 
             
Financing Activities             
Capital lease obligation payments        (2,404      (9,660 
Withholding tax on stock-based incentive awards        (6,642      (5,808 
Cash dividends paid        (43,258      (43,136 
Net cash required by financing activities        (52,304      (58,604 
             
Effect of exchange rate changes on cash and cash equivalents        21,051        3,132   
Net increase (decrease) in cash and cash equivalents        (26,373      3,056   
Cash and cash equivalents at beginning of period        964,988        872,797   
Cash and cash equivalents at end of period      938,615        875,853   
                   
1 Investments are Canadian government securities with maturities greater than 90 days at the date of acquisition. 

             
MURPHY OIL CORPORATION SCHEDULE OF ADJUSTED INCOME (LOSS) (unaudited) (Millions of dollars, except per share amounts) 
             
      Three Months Ended
March 31, 
      2018      2017 
Net income      168.3        58.5   
Discontinued operations loss (income)        0.4        (1.0 
Income from continuing operations        168.7        57.5   
Adjustments:             
Impact of tax reform        (120.0      –   
Mark-to-market (gain) loss on crude oil derivative contracts        11.3        (26.0 
Foreign exchange losses (gains)        (11.9      11.6   
Seal insurance proceeds        (8.2      –   
Deferred tax on undistributed foreign earnings        –        54.6   
Tax benefits on investments in foreign areas        –        (11.9 
Gain on sale of assets        –        (96.0 
Total adjustments after taxes        (128.8      (67.7 
Adjusted income (loss)      39.9        (10.2 
             
Adjusted income (loss) per diluted share      0.23        (0.06 
                   

Non-GAAP Financial Measures

Presented above is a reconciliation of Net income to Adjusted income (loss). Adjusted income (loss) 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 income (loss) is a non-GAAP financial measure and should not be considered a substitute for Net income (loss) as determined in accordance with accounting principles generally accepted in the United States of America.

Note:    Amounts shown above as reconciling items between Net income and Adjusted income (loss) are presented net of applicable income taxes based on the estimated statutory rate in the applicable tax jurisdiction. The pretax and income tax impacts for adjustments shown above are as follows by area of operations. 

                                         
        Three Months Ended        Three Months Ended 
        March 31, 2018        March 31, 2017 
        Pretax      Tax      Net        Pretax      Tax      Net 
Exploration & Production:                                         
Canada          (11.3      3.1        (8.2        (132.4      36.4        (96.0 
Other International          –        –        –          –        (11.9      (11.9 
Total E&P          (11.3      3.1        (8.2        (132.4      24.5        (107.9 
Corporate 1:          (2.3      (118.3      (120.6        (26.8      67.0        40.2   
Total adjustments        (13.6      (115.2      (128.8        (159.2      91.5        (67.7 

     
  In 2018, the Company reported realized and unrealized gains and losses on crude oil contracts in the Corporate segment to reflect how segments are currently evaluated, how resources are allocated and how risk is managed by the Company. The 2017 amounts have been reclassified from the Explorationand production business to reflect comparable disclosure. 

             
MURPHY OIL CORPORATION SCHEDULE OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) AND EXPLORATION EXPENSES (EBITDAX) (unaudited) (Millions of dollars, except per barrel of oil equivalents sold) 
       
      Three Months Ended 
      March 31, 
      2018      2017 
Net income (GAAP)      168.3        58.5   
Discontinued operations loss (income)        0.4        (1.0 
Income tax expense (benefit)        (71.6      97.4   
Interest expense, net        45.0        44.6   
Depreciation, depletion and amortization expense        230.7        236.2   
EBITDA (Non-GAAP) 1      372.8        435.7   
             
Exploration expenses        28.9        28.7   
EBITDAX (Non-GAAP) 1      401.7        464.4   
             
Total barrels of oil equivalents sold (thousands of barrels)        15,043.7        14,757.5   
             
EBITDA per barrel of oil equivalents sold      24.78        29.52   
             
EBITDAX per barrel of oil equivalents sold      26.70        31.47   
             
1 Certain pretax items that increase (decrease) EBITDA and EBITDAX above include: 
       
      Three Months Ended 
      March 31, 
      2018      2017 
Gain (loss) on foreign exchange 2      16.6        (13.8 
Mark-to-market gain (loss) on crude oil derivative contracts        (14.4      39.9   
Gain (loss) on sale of assets 3        (0.3      132.0   
Accretion of asset retirement obligations        (9.9      (10.6 
      (8.0      147.5   

     
  Gain (loss) on foreign exchange principally relates to the revaluation of intercompany loans denominated in US dollars and recorded in functional currency Canadian dollar business (this loan was settled in the first quarter of 2018) and revaluation of Malaysian Ringgit monetary assets and liabilities. 
     
  Gain (loss) on sale of assets in the three months ended March 31, 2017 primarily consists of a pretax gain of $132.4 million related to the sale of the Seal heavy oil asset in Canada. 

Non-GAAP Financial Measures

Presented above is a reconciliation of Net income to Earnings before interest, taxes, depreciation and amortization (EBITDA) and Earnings before interest, taxes, depreciation, amortization, and exploration expenses (EBITDAX). Management believes EBITDA and 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. EBITDA and EBITDAX are non-GAAP financial measures and should not be considered a substitute for Net loss or Cash provided by operating activities as determined in accordance with accounting principles generally accepted in the United States of America.

Presented above is EBITDA per barrel of oil equivalents sold and EBITDAX per barrel of oil equivalents sold. Management believes EBITDA per barrel of oil equivalents sold and EBITDAX per barrel of oil equivalents sold are important information because they are used by management to evaluate the Company’s profitability of one barrel of oil equivalent sold in that period. EBITDA per barrel of oilequivalent sold and EBITDAX per barrel of oil equivalent sold are non-GAAP financial metrics.

                           
MURPHY OIL CORPORATION FUNCTIONAL RESULTS OF OPERATIONS (unaudited) (Millions of dollars) 
               
      Three Months Ended
March 31, 2018 
      Three Months Ended
March 31, 2017 
      Revenues      Income
(Loss) 
      Revenues      Income
(Loss) 
Exploration and production                           
United States 1      278.1        36.2          224.2      (1.1 
Canada 2        118.3        24.4          218.0      100.6   
Malaysia        210.8        70.4          197.3      58.6   
Other        –        (15.4        –      (7.1 
Total exploration and production        607.2        115.6          639.5      151.0   
Corporate 1,3        (21.6      53.1          37.1      (93.5 
Revenue/income from continuing operations        585.6        168.7          676.6      57.5   
Discontinued operations, net of tax        –        (0.4        –      1.0   
Total revenues/net income      585.6        168.3          676.6      58.5   

     
  In 2018, the Company reported realized and unrealized gains and losses on crude oil contracts in the Corporate segment to reflect how segments are currently evaluated, how resources are allocated and how risk is managed by the Company. The 2017 amounts have been reclassified from the U.S. Exploration and production business to reflect comparable disclosure. Realized and unrealized gains (losses) of ($29.5) million and $37.1 million are included in the Corporate segment for the three months ended March 31, 2018 and 2017, respectively. Corporate segment income (loss) for the three-month periods ended March 31, 2018 and 2017 included foreign exchange gains (losses) of $16.6 million and ($13.8) million, respectively. 
     
  2017 revenue includes a pretax gain of $132.4 million ($96.0 million after-tax) related to the sale of the Seal heavy oil asset in Canada. 
     
  Income for the three-month period ended March 31, 2018 included a credit to income tax expense of $120.0 million related to an IRS interpretation of the Tax Cuts and Jobs Act. 

                               
MURPHY OIL CORPORATION OIL AND GAS OPERATING RESULTS (unaudited) THREE MONTHS ENDED MARCH 31, 2018 AND 2017 
                               
                               
      United                         
(Millions of dollars)      States 1      Canada 2      Malaysia      Other      Total 
Three Months Ended March 31, 2018                               
Oil and gas sales and other revenues      278.1        118.3        210.8        –        607.2   
Lease operating expenses        58.5        30.4        47.6        –        136.5   
Severance and ad valorem taxes        11.8        0.4        –        –        12.2   
Depreciation, depletion and amortization        121.6        55.7        47.7        0.8        225.8   
Accretion of asset retirement obligations        4.4        2.0        3.5        –        9.9   
Exploration expenses                               
Geological and geophysical        5.9        –        0.2        2.9        9.0   
Other        1.2        0.1        –        5.4        6.7   
        7.1        0.1        0.2        8.3        15.7   
Undeveloped lease amortization        12.7        0.2        –        0.3        13.2   
Total exploration expenses        19.8        0.3        0.2        8.6        28.9   
Selling and general expenses        14.4        7.7        2.8        5.9        30.8   
Other expense (benefit)        0.8        (11.7      (1.1      (0.1      (12.1 
Results of operations before taxes        46.8        33.5        110.1        (15.2      175.2   
Income tax provisions        10.6        9.1        39.7        0.2        59.6   
Results of operations (excluding corporate overhead and interest)      36.2        24.4        70.4        (15.4      115.6   
                               
Three Months Ended March 31, 2017                               
Oil and gas sales and other revenues      224.2        218.0        197.3        –        639.5   
Lease operating expenses        48.0        22.6        51.5        –        122.1   
Severance and ad valorem taxes        10.7        0.5        –        –        11.2   
Depreciation, depletion and amortization        138.3        44.7        47.9        1.0        231.9   
Accretion of asset retirement obligations        4.2        2.0        4.4        –        10.6   
Exploration expenses                               
Dry holes        (0.3      –        3.2        –        2.9   
Geological and geophysical        0.3        0.1        –        4.4        4.8   
Other        2.0        0.1        –        8.9        11.0   
        2.0        0.2        3.2        13.3        18.7   
Undeveloped lease amortization        8.9        1.1        –        –        10.0   
Total exploration expenses        10.9        1.3        3.2        13.3        28.7   
Selling and general expenses        15.5        7.2        2.3        4.9        29.9   
Other expense (benefit)        (3.0      –        5.1        –        2.1   
Results of operations before taxes        (0.4      139.7        82.9        (19.2      203.0   
Income tax provisions (benefits)        0.7        39.1        24.3        (12.1      52.0   
Results of operations (excluding corporate overhead and interest)      (1.1      100.6        58.6        (7.1      151.0   

     
  In 2018, the Company reported realized and unrealized gains and losses on crude oil contracts in the Corporate segment to reflect how segments are currently evaluated, how resources are allocated and how risk is managed by the Company. The 2017 amounts have been reclassified from the Explorationand production business to reflect comparable disclosure. 
     
  2017 revenue includes a pretax gain of $132.4 million related to the sale of Seal heavy oil assets in Canada. 

                 
MURPHY OIL CORPORATION PRODUCTION-RELATED EXPENSES (unaudited) (Dollars per barrel of oil equivalents sold) 
         
        Three Months Ended 
        March 31, 
        2018        2017 
                 
United States – Eagle Ford Shale                 
Lease operating expense        8.34        7.90 
Severance and ad valorem taxes          3.01        2.57 
Depreciation, depletion and amortization (DD&A) expense          24.84        26.33 
                 
United States – Gulf of Mexico                 
Lease operating expense        17.90        10.86 
DD&A expense          17.35        20.69 
                 
Canada – Onshore                 
Lease operating expense        4.85        4.90 
Severance and ad valorem taxes          0.10        0.15 
DD&A expense          10.15        10.01 
                 
Canada – Offshore                 
Lease operating expense        10.96        7.59 
DD&A expense          13.46        13.42 
                 
Malaysia – Sarawak                 
Lease operating expense        7.41        6.31 
DD&A expense          8.40        7.78 
                 
Malaysia – Block K                 
Lease operating expense        16.13        16.78 
DD&A expense          14.41        12.54 
                 
Total oil and gas operations                 
Lease operating expense        9.07        8.28 
Severance and ad valorem taxes          0.81        0.76 
DD&A expense          15.34        16.00 

               
MURPHY OIL CORPORATION OTHER FINANCIAL DATA (unaudited) (Millions of dollars) 
       
      Three Months Ended 
      March 31, 
      2018        2017 
Capital expenditures               
Exploration and production               
United States      147.5        98.4 
Canada        119.0        88.2 
Malaysia        19.1        1.7 
Other        9.7        25.3 
Total        295.3        213.6 
               
Corporate        5.1        0.9 
Total capital expenditures        300.4        214.5 
               
Charged to exploration expenses 1               
United States        7.1        2.0 
Canada        0.1        0.2 
Malaysia        0.2        3.2 
Other        8.3        13.3 
Total charged to exploration expenses        15.7        18.7 
               
Total capitalized      284.7        195.8 
 
1 Excludes amortization of undeveloped leases of $13.2 million and $10.0 million for the three months ended March 31, 2018 and 2017, respectively. 

 
MURPHY OIL CORPORATION 
CONDENSED BALANCE SHEETS (unaudited) 
(Millions of dollars) 
             
      March 31,
2018 
    December 31,
2017 
             
Assets             
Cash and cash equivalents      938.6      965.0 
Other current assets        369.5      406.6 
Property, plant and equipment – net        8,207.7      8,220.0 
Other long-term assets        422.4      269.3 
Total assets      9,938.2      9,860.9 
             
Liabilities and Stockholders' Equity             
Current maturities of long-term debt      9.6      9.9 
Other current liabilities        856.5      824.3 
Long-term debt 1        2,898.9      2,906.5 
Other long-term liabilities        1,480.9      1,500.0 
Total stockholders' equity        4,692.3      4,620.2 
Total liabilities and stockholders' equity      9,938.2      9,860.9 
             
1 Includes a capital lease on production equipment of $125.3 million at March 31, 2018 and $134.0 million at December 31, 2017. 

                 
MURPHY OIL CORPORATION STATISTICAL SUMMARY (unaudited) 
         
        Three Months Ended 
        March 31, 
        2018        2017 
Net crude oil and condensate produced – barrels per day        88,533        95,605 
United States – Eagle Ford Shale        31,321        33,603 
– Gulf of Mexico        12,847        12,364 
Canada – Onshore        4,358        1,882 
– Offshore        8,189        9,916 
– Heavy1        –        610 
Malaysia – Sarawak        12,861        13,518 
– Block K        18,372        23,712 
Brunei        585        – 
                 
Net crude oil and condensate sold – barrels per day        87,668        89,887 
United States – Eagle Ford Shale        31,321        33,603 
– Gulf of Mexico        12,847        12,364 
Canada – Onshore        4,358        1,882 
– Offshore        9,188        7,982 
– Heavy1        –        610 
Malaysia – Sarawak        13,322        13,476 
– Block K        16,632        19,970 
                 
Net natural gas liquids produced – barrels per day        8,892        8,916 
United States – Eagle Ford Shale        6,719        6,848 
– Gulf of Mexico        834        1,113 
Canada        884        260 
Malaysia – Sarawak        455        695 
                 
Net natural gas liquids sold – barrels per day        9,403        9,381 
United States – Eagle Ford Shale        6,719        6,848 
– Gulf of Mexico        834        1,113 
Canada        884        260 
Malaysia – Sarawak        966        1,160 
                 
Net natural gas sold – thousands of cubic feet per day        420,484        388,223 
United States – Eagle Ford Shale        31,101        34,328 
– Gulf of Mexico        12,802        12,115 
Canada        261,305        217,095 
Malaysia – Sarawak        106,672        116,560 
– Block K        8,604        8,125 
                 
Total net hydrocarbons produced – equivalent barrels per day2        167,506        169,225 
Total net hydrocarbons sold – equivalent barrels per day2        167,152        163,972 
                 

1 The Company sold the Seal area heavy oil field in January 2017.

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

             
MURPHY OIL CORPORATION STATISTICAL SUMMARY (Continued) (unaudited) 
             
      Three Months Ended 
      March 31, 
      2018      2017 
Weighted average Exploration and Production sales prices             
Crude oil and condensate – dollars per barrel             
United States – Eagle Ford Shale      64.28      49.45 
– Gulf of Mexico        63.00      48.74 
Canada 1 – Onshore        54.29      40.67 
– Offshore        65.69      51.53 
– Heavy 2        –      26.81 
Malaysia – Sarawak3        64.48      54.24 
– Block K3        63.18      48.87 
             
Natural gas liquids – dollars per barrel             
United States – Eagle Ford Shale      19.93      15.63 
– Gulf of Mexico        22.57      19.35 
Canada1        43.58      18.45 
Malaysia – Sarawak3        71.21      49.63 
             
Natural gas – dollars per thousand cubic feet             
United States – Eagle Ford Shale      2.40      2.26 
– Gulf of Mexico        2.58      2.52 
Canada1        1.68      2.04 
Malaysia – Sarawak3        3.37      3.68 
– Block K3        0.22      0.24 

1 U.S. dollar equivalent.

2 The Company sold the Seal area heavy oil field in January 2017.

3 Prices are net of payments under the terms of the respective production sharing contracts.

 
MURPHY OIL CORPORATION 
COMMODITY HEDGE POSITIONS (unaudited) 
AS OF MARCH 31, 2018 
                                                 
                        Volumes        Price        Remaining Period 
Area        Commodity        Type        (Bbl/d)        (USD/Bbl)        Start Date        End Date 
United States        WTI        Fixed price derivative swap1        21,000        $54.88        4/1/2018        12/31/2018 
                                                 
                        Volumes        Price        Remaining Period 
Area        Commodity        Type        (MMcf/d)        (Mcf)        Start Date        End Date 
Montney        Natural Gas        Fixed price forward sales        59        C$2.81        4/1/2018        12/31/2020 

  Realized and unrealized gains and losses on Fixed price derivatives swaps are reported in the Corporate segment to reflect how segments are currently evaluated, how resources are allocated and how risk is managed by the Company. 

       
MURPHY OIL CORPORATION SECOND QUARTER 2018 GUIDANCE 
       
  Liquids    Gas 
  BOPD    MCFD 
Production – net       
U.S. – Eagle Ford Shale  38,600    31,000 
– Gulf of Mexico  15,350    12,600 
       
Canada – Tupper Montney  –    233,800 
– Kaybob Duvernay and Placid Montney  5,500    23,500 
– Offshore  8,300    – 
Malaysia – Sarawak  12,600    107,000 
– Block K / Brunei  18,150    6,100 
       
       
Total net production (BOEPD)    166,000 - 169,000 
       
Total net sales (BOEPD)    166,000 - 169,000 
       
Realized oil prices (dollars per barrel):       
Malaysia – Sarawak    64.30   
– Block K    64.50   
       
Realized natural gas price ($ per MCF):       
Malaysia – Sarawak    3.90   
       
Exploration expense ($ millions)    41.0   
       
       
       
FULL YEAR 2018 GUIDANCE 
       
Total production (BOEPD)    167,000 to 170,000 
       
Capital expenditures ($ billions)    1.11   

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd