Murphy Oil Corporation Announces Third Quarter 2023 Financial and Operating Results, Raises Full Year 2023 Production Guidance

Source Press Release
Company Murphy Oil Corporation 
Tags Hedging, Production/Development, Exploration, Upstream Activities, Capital Spending, Guidance, Strategy - Corporate, Financial & Operating Data
Date November 02, 2023
  • Exceeded Upper End of Guidance Range With Production of 202 MBOEPD,
  • Sanctioned Lac Da Vang Field Development Project in Vietnam,
  • Executed $249 Million of Debt Reduction, Repurchased $75 Million of Shares Outstanding

Murphy Oil Corporation (NYSE: MUR) today announced its financial and operating results for the third quarter ended September 30, 2023, including net income attributable to Murphy of $255 million, or $1.63 net income per diluted share. Excluding discontinued operations and other items affecting comparability between periods, adjusted net income attributable to Murphy was $249 million, or $1.59 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 third quarter include:

  • Exceeded upper end of guidance range with production of 202 thousand barrels of oil equivalent per day (MBOEPD), including 103 thousand barrels of oil per day (MBOPD)
  • Redeemed remaining $249 million of 5.75% Senior Notes due 2025
  • Repurchased $75 million, or 1.7 million shares outstanding, at an average price of $44.53 per share
  • Closed divestiture of certain non-core operated Kaybob Duvernay and all non-operated Placid Montney assets for net cash proceeds of $103 million

Subsequent to the third quarter:

  • Sanctioned by board the Lac Da Vang field development project in Vietnam, targeting first oil in 2026
  • Increased share repurchase authorization by $300 million

“Murphy had another great quarter with strong execution across our assets, resulting in significant free cash flow that we dedicated to paying down debt and repurchasing stock in accordance with our capital allocation framework. We also utilized part of the proceeds from the divestiture of a non-core portion of our Canadian assets to support our new country entry in Côte d’Ivoire and advance our Lac Da Vang field development project in Vietnam,” said Roger W. Jenkins, President and Chief Executive Officer. “I am delighted we are progressing our strategy of Delever, Execute, Explore, Return as we close out 2023, and I look forward to Murphy’s many opportunities in the new year.”

THIRD QUARTER 2023 RESULTS

The company recorded net income attributable to Murphy of $255 million, or $1.63 net income per diluted share, for the third 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 $249 million, or $1.59 adjusted net income per diluted share for the same period. The only adjustment to net income this quarter was foreign exchange gain totaling $9 million before tax. Details for third quarter results and an adjusted net income reconciliation can be found in the attached schedules.

Earnings before interest, taxes, depreciation and amortization (EBITDA) attributable to Murphy were $595 million. Earnings before interest, tax, depreciation, amortization and exploration expenses (EBITDAX) attributable to Murphy were $618 million. Adjusted EBITDA attributable to Murphy was $597 million. Adjusted EBITDAX attributable to Murphy was $620 million. Reconciliations for third quarter EBITDA, EBITDAX, adjusted EBITDA and adjusted EBITDAX can be found in the attached schedules.

Third quarter production averaged 202 MBOEPD and consisted of 51 percent oil volumes, or 103 MBOPD. Production for the quarter exceeded the upper end of the guidance range due to several factors, including strong well performance across onshore assets, lower realized royalty rates in the Tupper Montney natural gas asset and outperformance in the Gulf of Mexico due to an absence of hurricane downtime. Details for third quarter production can be found in the attached schedules.

FINANCIAL POSITION

Murphy had approximately $1.1 billion of liquidity on September 30, 2023, with no borrowings on the $800 million credit facility and $328 million of cash and cash equivalents, inclusive of NCI.

On September 15, 2023, the company announced the redemption of its remaining $249 million of 5.75 percent Senior Notes due 2025. Murphy funded the redemption during the third quarter and the obligation was satisfied. As a result, at the end of the third quarter, Murphy’s total debt was reduced to $1.6 billion, and consisted of long-term, fixed-rate notes with a weighted average maturity of 7.8 years and a weighted average coupon of 6.2 percent. Overall, Murphy has achieved a 47 percent, or $1.4 billion, reduction in total debt since year-end 2020.

SHARE REPURCHASE PROGRAM

During the third quarter, Murphy repurchased $75 million, or 1.7 million shares outstanding, at an average price of $44.53 per share. Subsequent to the quarter, the share repurchase authorization was increased by $300 million, and Murphy now has $525 million remaining.

“I am pleased that the adjusted free cash flow generated allowed us to execute the senior notes redemption and share repurchases under Murphy 2.0 of our capital allocation framework. With continued operational success next year, we will further strengthen our balance sheet and enhance shareholder returns through the allocations established in our framework,” said Jenkins.

OPERATIONS SUMMARY

Onshore

In the third quarter of 2023, the onshore business produced approximately 113 MBOEPD, which included 33 percent liquids volumes.

Eagle Ford Shale – Production averaged 38 MBOEPD with 74 percent oil volumes and 88 percent liquids volumes. As planned, Murphy brought online four operated wells in Catarina and three operated wells in Tilden during the quarter.

Tupper Montney – Natural gas production averaged 414 million cubic feet per day (MMCFD) in the third quarter. Production exceeded guidance by 35 MMCFD, of which 17 MMCFD was due to record high initial production rates, and 18 MMCFD was the result of a lower realized royalty rate of 3.9 percent.

Kaybob Duvernay – During the third quarter, production averaged 5 MBOEPD with 67 percent liquids volumes. As previously announced, in the third quarter Murphy closed the divestment of certain non-core operated Kaybob Duvernay and all of its non-operated Placid Montney assets for cash proceeds of $103 million, with an effective date of March 1, 2023. As a result of this transaction, Murphy no longer holds working interests in Placid Montney.

Offshore

Excluding NCI, the offshore business produced approximately 89 MBOEPD for the third quarter, which included 81 percent oil.

Gulf of Mexico – Production averaged approximately 86 MBOEPD, consisting of 80 percent oil during the third quarter. While production was positively impacted by the absence of Gulf of Mexico storms in the quarter, a mechanical issue developed at a well in the operated Neidermeyer field, causing production from that well to be shut in late in the quarter. In addition, a well in the operated Dalmatian field remains offline due to a mechanical issue that occurred earlier in the year. Workovers are planned for both wells in 2024.

Canada – In the third quarter, production averaged 3 MBOEPD, consisting of 100 percent oil, all from the Hibernia field. 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 – Subsequent to the third quarter, the Board of Directors sanctioned the Lac Da Vang field development project in Block 15-1/05 of the Cuu Long Basin. Murphy as operator holds a 40 percent working interest in the block. This project is expected to achieve first oil in 2026, with development phased through 2029. Overall, the field has an estimated ultimate recovery of 100 million barrels of oil equivalent (MMBOE) gross resources, with peak gross production of 30 to 40 MBOEPD.

Côte d’Ivoire – During the quarter, Murphy commenced initial work, including a review of commerciality and field development concepts for the Paon discovery in Block CI-103.

EXPLORATION

Gulf of Mexico – The company advanced preparations to resume drilling the Oso #1 (Atwater Valley 138) exploration well.

Côte d’Ivoire – Murphy commenced seismic reprocessing during the third quarter.

2023 CAPITAL EXPENDITURE AND PRODUCTION GUIDANCE

Third quarter accrued CAPEX of $162 million was lower than guidance primarily due to timing of non-operated projects. Murphy maintains its 2023 accrued CAPEX range of $950 million to $1.025 billion, which excludes $49 million in acquisition-related CAPEX for Côte d’Ivoire and Vietnam.

The company is raising its full year 2023 production range to 185 to 187 MBOEPD, consisting of approximately 53 percent oil and 59 percent liquids volumes. This represents a 3 MBOEPD increase in the midpoint from the previous range.

Production for fourth quarter 2023 is estimated to be in the range of 181.5 to 189.5 MBOEPD with 95 MBOPD, or 51 percent, oil volumes. This range includes planned downtime of 500 BOEPD in the Gulf of Mexico and 1.5 MBOEPD onshore. Production is also impacted by mechanical issues in two operated Gulf of Mexico wells, with plans in place for workovers in 2024.

Both production and CAPEX guidance ranges exclude NCI. Detailed guidance for the fourth quarter and full year 2023 is contained in the attached schedules.

FIXED PRICE FORWARD SALES CONTRACTS

Murphy maintains fixed price forward sales contracts in Canada 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 NOVEMBER 2, 2023

Murphy will host a conference call to discuss third quarter 2023 financial and operating results on Thursday, November 2, 2023, at 9:00 a.m. EDT. The call can be accessed either via the Internet through the events calendar on the Murphy Oil Corporation Investor Relations website at   or via telephone by dialing toll free 1-888-886-7786, reservation number 10064350.

FINANCIAL DATA

Summary financial data and operating statistics for third 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 fourth 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.

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 September 30,    Nine Months Ended September 30, 
(Thousands of dollars, except per share amounts)  2023    2022    2023    2022 
Revenues and other income               
Revenue from production  945,889      1,120,909      2,541,956      3,101,736   
Sales of purchased natural gas    7,877      45,500        64,628      132,285   
Total revenue from sales to customers    953,766      1,166,409        2,606,584      3,234,021   
Gain (loss) on derivative instruments    —      115,191        —      (308,654 
Gain on sale of assets and other income    5,879      21,825        9,365      32,076   
Total revenues and other income    959,645      1,303,425        2,615,949      2,957,443   
Costs and expenses               
Lease operating expenses    193,402      198,710        587,678      482,887   
Severance and ad valorem taxes    10,937      15,140        35,142      47,340   
Transportation, gathering and processing    61,518      55,348        175,308      152,219   
Costs of purchased natural gas    5,467      43,622        47,393      125,258   
Exploration expenses, including undeveloped lease amortization    26,514      9,491        152,489      72,208   
Selling and general expenses    30,745      29,348        74,398      90,007   
Depreciation, depletion and amortization    237,493      214,521        648,830      574,501   
Accretion of asset retirement obligations    11,675      11,286        34,196      34,725   
Other operating expense (benefit)    4,385      (27,129      21,333      115,726   
Total costs and expenses    582,136      550,337        1,776,767      1,694,871   
Operating income from continuing operations    377,509      753,088        839,182      1,262,572   
Other loss               
Other income    8,811      18,301        1,044      21,114   
Interest expense, net    (29,984    (37,440      (88,695    (116,102 
Total other loss    (21,173    (19,139      (87,651    (94,988 
Income from continuing operations before income taxes    356,336      733,949        751,531      1,167,584   
Income tax expense    78,111      159,451        166,813      247,574   
Income from continuing operations    278,225      574,498        584,718      920,010   
Loss from discontinued operations, net of income taxes    (421    (422      (744    (1,916 
Net income including noncontrolling interest    277,804      574,076        583,974      918,094   
Less: Net income attributable to noncontrolling interest    22,462      45,648        38,701      152,445   
NET INCOME ATTRIBUTABLE TO MURPHY  255,342      528,428      545,273      765,649   
               
INCOME (LOSS) PER COMMON SHARE – BASIC               
Continuing operations  1.64      3.40      3.50      4.94   
Discontinued operations    —      —        —      (0.01 
Net income  1.64      3.40      3.50      4.93   
               
INCOME (LOSS) PER COMMON SHARE – DILUTED               
Continuing operations  1.63      3.36      3.47      4.87   
Discontinued operations    —      —        —      (0.01 
Net income  1.63      3.36      3.47      4.86   
Cash dividends per common share  0.275      0.250      0.827      0.575   
Average common shares outstanding (thousands)               
Basic    155,454      155,446        155,749      155,221   
Diluted    156,829      157,336        157,135      157,407   

MURPHY OIL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) 
       
  Three Months Ended
September 30, 
  Nine Months Ended September 30, 
(Thousands of dollars)  2023    2022    2023    2022 
Operating Activities               
Net income including noncontrolling interest  277,804      574,076      583,974      918,094   
Adjustments to reconcile net income to net cash provided by continuing operations activities               
Loss from discontinued operations    421      422        744      1,916   
Depreciation, depletion and amortization    237,493      214,521        648,830      574,501   
Unsuccessful exploration well costs and previously suspended exploration costs    11,292      1,122        107,825      35,224   
Amortization of undeveloped leases    2,846      2,671        8,215      10,651   
Accretion of asset retirement obligations    11,675      11,286        34,196      34,725   
Deferred income tax expense    59,547      140,414        152,104      207,105   
Contingent consideration payment    —      —        (139,574    —   
Mark-to-market (gain) loss on contingent consideration    —      (31,367      7,113      98,451   
Mark-to-market (gain) loss on derivative instruments    —      (239,050      —      (138,707 
Long-term non-cash compensation    20,426      17,145        42,502      57,612   
Gain from sale of assets    (12    (18,836      (12    (18,871 
Net (increase) decrease in non-cash working capital    (127,447    61,724        (142,788    (59,874 
Other operating activities, net    (37,978    (14,643      (97,395    (42,101 
Net cash provided by continuing operations activities    456,067      719,485        1,205,734      1,678,726   
Investing Activities               
Property additions and dry hole costs    (207,542    (248,043      (902,295    (800,868 
Acquisition of oil and natural gas properties    (22,773    (79,111      (22,773    (125,602 
Proceeds from sales of property, plant and equipment    102,913      (2,176      102,913      (2,129 
Net cash required by investing activities    (127,402    (329,330      (822,155    (928,599 
Financing Activities               
Borrowings on revolving credit facility    100,000      200,000        300,000      300,000   
Repayment of revolving credit facility    (100,000    (200,000      (300,000    (300,000 
Retirement of debt    (248,675    (246,032      (248,675    (446,032 
Early redemption of debt cost    —      (1,981      —      (5,419 
Repurchase of common stock    (75,023    —        (75,023    —   
Contingent consideration payment    —      —        (60,243    (81,742 
Cash dividends paid    (42,790    (38,863      (128,657    (89,354 
Distributions to noncontrolling interest    (4,069    (50,419      (20,052    (145,273 
Withholding tax on stock-based incentive awards    (12    (641      (14,232    (17,338 
Capital lease obligation payments    (161    (155      (457    (475 
Issue costs of debt facility    —      —        (20    —   
Net cash required by financing activities    (370,730    (338,091      (547,359    (785,633 
Net cash required by discontinued operations    —      (14,500      —      (14,500 
Effect of exchange rate changes on cash and cash equivalents    479      (3,585      (414    (5,180 
Net (decrease) increase in cash and cash equivalents    (41,586    33,979        (164,194    (55,186 
Cash and cash equivalents at beginning of period    369,355      432,019        491,963      521,184   
Cash and cash equivalents at end of period  327,769      465,998      327,769      465,998   

MURPHY OIL CORPORATION SCHEDULE OF ADJUSTED NET INCOME (LOSS) (unaudited) 
       
  Three Months Ended
September 30, 
  Nine Months Ended
September 30, 
(Millions of dollars, except per share amounts)  2023    2022    2023    2022 
Net income attributable to Murphy (GAAP) 1  255.3      528.4      545.3      765.6   
Discontinued operations loss    0.4      0.4        0.7      1.9   
Net income from continuing operations attributable to Murphy    255.7      528.8        546.0      767.5   
Adjustments 2:               
Write-off of previously suspended exploration well    —      —        17.1      —   
Foreign exchange (gain)    (8.6    (20.7      (0.3    (28.7 
Mark-to-market (gain) loss on contingent consideration    —      (31.3      7.1      98.5   
Mark-to-market (gain) on derivative instruments    —      (239.0      —      (138.7 
(Gain) on sale of assets    —      (15.2      —      (15.2 
Early redemption of debt cost    —      2.4        —      6.8   
Total adjustments, before taxes    (8.6    (303.8      23.9      (77.3 
Income tax expense (benefit) related to adjustments    2.2      64.7        (1.4    17.3   
Total adjustments after taxes    (6.4    (239.1      22.5      (60.0 
Adjusted net income from continuing operations attributable to Murphy (Non-GAAP)  249.3      289.7      568.5      707.5   
               
Adjusted net income from continuing operations per average diluted share (Non-GAAP)  1.59      1.84      3.62      4.49   
                           
1 Excludes results attributable to a noncontrolling interest in MP GOM. 2 Certain prior-period amounts have been reclassified 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
September 30, 2023 
  Nine Months Ended
September 30, 2023 
(Millions of dollars)  Pretax    Tax    Net    Pretax    Tax    Net 
Exploration & Production:                       
United States  —      —    —      7.1      (1.5    5.6   
Other    —      —    —        17.1      —      17.1   
Corporate    (8.6    2.2    (6.4      (0.3    0.1      (0.3 
Total adjustments  (8.6    2.2    (6.4    23.9      (1.4    22.5   

MURPHY OIL CORPORATION SCHEDULE OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) (unaudited) 
       
  Three Months Ended
September 30, 
  Nine Months Ended
September 30, 
(Millions of dollars)  2023    2022    2023    2022 
Net income attributable to Murphy (GAAP) 1  255.3      528.4      545.3      765.6   
Income tax expense    78.1      159.5        166.8      247.6   
Interest expense, net    30.0      37.4        88.7      116.1   
Depreciation, depletion and amortization expense 2    231.5      207.7        630.8      552.5   
EBITDA attributable to Murphy (Non-GAAP)  594.9      933.0      1,431.6      1,681.8   
Write-off of previously suspended exploration well    —      —        17.1      —   
Accretion of asset retirement obligations 2    10.4      10.0        30.4      30.7   
Foreign exchange (gain)    (8.6    (20.7      (0.3    (28.7 
Mark-to-market (gain) loss on contingent consideration    —      (31.4      7.1      98.5   
Discontinued operations loss    0.4      0.4        0.7      1.9   
Mark-to-market (gain) on derivative instruments    —      (239.1      —      (138.7 
(Gain) on sale of assets 2    —      (15.2      —      (15.2 
Adjusted EBITDA attributable to Murphy (Non-GAAP)  597.1      637.1      1,486.6      1,630.3   
                           
1 Excludes results attributable to a noncontrolling interest in MP GOM. 2 Depreciation, depletion, and amortization expense, gain on sale of assets, 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
September 30, 
  Nine Months Ended
September 30, 
(Millions of dollars)  2023    2022    2023    2022 
Net income attributable to Murphy (GAAP) 1  255.3        528.4      545.3        765.6   
Income tax expense    78.1        159.5        166.8        247.6   
Interest expense, net    30.0        37.4        88.7        116.1   
Depreciation, depletion and amortization expense 2    231.5        207.7        630.8        552.5   
EBITDA attributable to Murphy (Non-GAAP)    594.9        933.0        1,431.6        1,681.8   
Exploration expenses 2    23.0        9.5        122.6        72.2   
EBITDAX attributable to Murphy (Non-GAAP)    617.9        942.5        1,554.2        1,754.0   
Accretion of asset retirement obligations 2    10.4        10.0        30.4        30.7   
Foreign exchange (gain)    (8.6      (20.7      (0.3      (28.7 
Mark-to-market (gain) loss on contingent consideration    —        (31.4      7.1        98.5   
Discontinued operations loss    0.4        0.4        0.7        1.9   
Mark-to-market (gain) on derivative instruments    —        (239.1      —        (138.7 
(Gain) on sale of assets 2    —        (15.2      —        (15.2 
Adjusted EBITDAX attributable to Murphy (Non-GAAP)  620.1      646.6      1,592.1      1,702.5   
                               
1 Excludes results attributable to a noncontrolling interest in MP GOM. 2 Depreciation, depletion, and amortization expense, accretion of asset retirement obligations, gain on sale of assets, 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 September 30, 2023  Three Months Ended September 30, 2022 
(Millions of dollars)  Revenues  Income (Loss)  Revenues  Income (Loss) 
Exploration and production         
United States 1  823.7  310.3    973.8  481.5   
Canada    129.3  10.5      209.6  41.4   
Other    3.4  (12.5    4.8  (5.8 
Total exploration and production    956.4  308.3      1,188.2  517.1   
Corporate    3.2  (30.1    115.2  57.4   
Continuing operations    959.6  278.2      1,303.4  574.5   
Discontinued operations, net of tax    —  (0.4    —  (0.4 
Total including noncontrolling interest  959.6  277.8    1,303.4  574.1   
Net income attributable to Murphy    255.3      528.4   

  Nine Months Ended September 30, 2023  Nine Months Ended September 30, 2022 
(Millions of dollars)  Revenues  Income (Loss)  Revenues  Income (Loss) 
Exploration and production         
United States 1  2,202.2  705.2    2,659.2    1,225.9   
Canada    403.3  34.9      582.3    111.3   
Other    7.1  (50.0    18.5    (53.5 
Total exploration and production    2,612.6  690.1      3,260.0    1,283.7   
Corporate    3.3  (105.4    (302.6  (363.7 
Continuing operations    2,615.9  584.7      2,957.4    920.0   
Discontinued operations, net of tax    —  (0.7    —    (1.9 
Total including noncontrolling interest  2,615.9  584.0    2,957.4    918.1   
Net income attributable to Murphy    545.3      765.6   
             
1 Includes results attributable to a noncontrolling interest in MP GOM. 

MURPHY OIL CORPORATION OIL AND GAS OPERATING RESULTS (unaudited) THREE MONTHS ENDED SEPTEMBER 30, 2023, AND 2022 
         
(Millions of dollars)  United States 1  Canada  Other  Total 
Three Months Ended September 30, 2023         
Oil and gas sales and other operating revenues  823.7    121.4  3.4    948.5   
Sales of purchased natural gas    —    7.9  —    7.9   
Lease operating expenses    153.2    39.5  0.7    193.4   
Severance and ad valorem taxes    10.6    0.3  —    10.9   
Transportation, gathering and processing    41.9    19.6  —    61.5   
Costs of purchased natural gas    —    5.5  —    5.5   
Depreciation, depletion and amortization    193.6    40.4  0.7    234.7   
Accretion of asset retirement obligations    9.6    2.0  0.1    11.7   
Exploration expenses         
Dry holes and previously suspended exploration costs    11.3    —  —    11.3   
Geological and geophysical    1.9    —  2.4    4.3   
Other exploration    2.4    —  5.6    8.0   
    15.6    —  8.0    23.6   
Undeveloped lease amortization    2.1    —  0.7    2.8   
Total exploration expenses    17.7    —  8.7    26.4   
Selling and general expenses    3.4    4.3  3.0    10.7   
Other    4.1    3.4  0.3    7.8   
Results of operations before taxes    389.6    14.3  (10.1  393.8   
Income tax provisions    79.3    3.8  2.4    85.5   
Results of operations (excluding Corporate segment)  310.3    10.5  (12.5  308.3   
         
Three Months Ended September 30, 2022         
Oil and gas sales and other operating revenues  973.8    164.1  4.8    1,142.7   
Sales of purchased natural gas    —    45.5  —    45.5   
Lease operating expenses    158.8    39.6  0.3    198.7   
Severance and ad valorem taxes    14.9    0.3  —    15.2   
Transportation, gathering and processing    38.5    16.9  —    55.4   
Costs of purchased natural gas    —    43.7  —    43.7   
Depreciation, depletion and amortization    169.4    40.9  0.9    211.2   
Accretion of asset retirement obligations    8.8    2.4  —    11.2   
Exploration expenses         
Dry holes and previously suspended exploration costs    0.2    —  0.9    1.1   
Geological and geophysical    1.1    0.1  0.4    1.6   
Other exploration    1.5    —  2.6    4.1   
    2.8    0.1  3.9    6.8   
Undeveloped lease amortization    2.0    0.1  0.6    2.7   
Total exploration expenses    4.8    0.2  4.5    9.5   
Selling and general expenses    2.6    5.2  2.0    9.8   
Other    (27.7  3.7  0.6    (23.4 
Results of operations before taxes    603.7    56.7  (3.5  656.9   
Income tax provisions    122.2    15.3  2.3    139.8   
Results of operations (excluding Corporate segment)  481.5    41.4  (5.8  517.1   
                 
1 Includes results attributable to a noncontrolling interest in MP GOM. 

MURPHY OIL CORPORATION OIL AND GAS OPERATING RESULTS (unaudited) NINE MONTHS ENDED SEPTEMBER 30, 2023, AND 2022 
         
(Millions of dollars)  United States 1  Canada  Other  Total 
Nine Months Ended September 30, 2023         
Oil and gas sales and other operating revenues  2,202.2    338.7  7.1    2,548.0 
Sales of purchased natural gas    —    64.6  —    64.6 
Lease operating expenses    472.4    113.8  1.4    587.6 
Severance and ad valorem taxes    34.1    1.0  —    35.1 
Transportation, gathering and processing    119.1    56.2  —    175.3 
Costs of purchased natural gas    —    47.4  —    47.4 
Depreciation, depletion and amortization    531.8    107.0  1.6    640.4 
Accretion of asset retirement obligations    28.0    5.8  0.3    34.1 
Exploration expenses         
Dry holes and previously suspended exploration costs    90.9    —  16.9    107.8 
Geological and geophysical    2.6    0.1  12.9    15.6 
Other exploration    5.7    0.2  15.0    20.9 
    99.2    0.3  44.8    144.3 
Undeveloped lease amortization    6.2    0.1  1.9    8.2 
Total exploration expenses    105.4    0.4  46.7    152.5 
Selling and general expenses    7.9    11.3  5.8    25.0 
Other    14.1    13.2  1.7    29.0 
Results of operations before taxes    889.4    47.2  (50.4  886.2 
Income tax provisions (benefits)    184.2    12.3  (0.4  196.1 
Results of operations (excluding Corporate segment)  705.2    34.9  (50.0  690.1 
         
Nine Months Ended September 30, 2022         
Oil and gas sales and other operating revenues  2,659.0    450.2  18.5    3,127.7 
Sales of purchased natural gas    0.2    132.1  —    132.3 
Lease operating expenses    368.2    113.4  1.2    482.8 
Severance and ad valorem taxes    46.4    1.0  —    47.4 
Transportation, gathering and processing    100.0    52.2  —    152.2 
Costs of purchased natural gas    0.2    125.1  —    125.3 
Depreciation, depletion and amortization    449.6    110.7  4.4    564.7 
Accretion of asset retirement obligations    27.3    7.3  0.1    34.7 
Exploration expenses         
Dry holes and previously suspended exploration costs    (0.5  —  35.7    35.2 
Geological and geophysical    3.7    0.2  1.4    5.3 
Other exploration    5.9    0.4  14.7    21.0 
    9.1    0.6  51.8    61.5 
Undeveloped lease amortization    6.7    0.2  3.8    10.7 
Total exploration expenses    15.8    0.8  55.6    72.2 
Selling and general expenses    14.1    14.1  6.5    34.7 
Other    110.4    6.5  1.0    117.9 
Results of operations before taxes    1,527.2    151.2  (50.3  1,628.1 
Income tax provisions    301.3    39.9  3.2    344.4 
Results of operations (excluding Corporate segment)  1,225.9    111.3  (53.5  1,283.7 
               
1 Includes results attributable to a noncontrolling interest in MP GOM. 

MURPHY OIL CORPORATION PRODUCTION-RELATED EXPENSES (unaudited) 
       
  Three Months Ended September 30,    Nine Months Ended September 30, 
(Dollars per barrel of oil equivalents sold)  2023    2022    2023    2022 
United States – Eagle Ford Shale               
Lease operating expense  11.38    9.31    12.42    10.87 
Severance and ad valorem taxes    2.91    3.97      3.54    4.67 
Depreciation, depletion and amortization (DD&A) expense    26.35    25.57      26.35    25.63 
               
United States – Gulf of Mexico1               
Lease operating expense  13.42    15.92    14.27    12.62 
Severance and ad valorem taxes    0.06    0.06      0.07    0.08 
DD&A expense    12.05    9.82      11.57    9.75 
               
Canada – Onshore               
Lease operating expense  5.33    5.48    5.97    6.46 
Severance and ad valorem taxes    0.05    0.05      0.06    0.06 
DD&A expense    5.53    5.73      5.70    6.36 
               
Canada – Offshore               
Lease operating expense  12.12    15.43    12.45    14.19 
DD&A expense    10.02    14.39      9.59    12.72 
               
Total E&P continuing operations               
Lease operating expense  10.12    10.88    11.16    10.22 
Severance and ad valorem taxes    0.57    0.83      0.67    1.00 
DD&A expense    12.43    11.75      12.33    12.15 
               
Total oil and gas continuing operations – excluding noncontrolling interest               
Lease operating expense  9.94    10.64    10.98    10.07 
Severance and ad valorem taxes    0.59    0.86      0.69    1.05 
DD&A expense    12.50    11.85      12.41    12.29 
                   
1 Includes results attributable to a noncontrolling interest in MP GOM. 

MURPHY OIL CORPORATION CAPITAL EXPENDITURES (unaudited) 
       
  Three Months Ended September 30,    Nine Months Ended September 30, 
(Millions of dollars)  2023    2022    2023    2022 
Exploration and production               
United States1  143.9    259.5    644.0    677.7 
Canada    27.1    25.0      170.6    175.9 
Other    11.0    8.2      55.7    50.5 
Total    182.0    292.7      870.3    904.1 
               
Corporate    5.5    3.4      15.4    13.9 
Total capital expenditures - continuing operations2    187.5    296.1      885.7    918.0 
               
Charged to exploration expenses3               
United States1    15.5    2.8      99.2    9.1 
Canada    0.1    0.1      0.3    0.6 
Other    8.0    3.9      44.8    51.8 
Total charged to exploration expenses - continuing operations    23.6    6.8      144.3    61.5 
               
Total capitalized  163.9    289.3    741.4    856.5 
                   
1 Includes results attributable to a noncontrolling interest in MP GOM. 2 For the three months ended September 30, 2023, total capital expenditures excluding acquisition-related costs of $7.5 million (Côte d’Ivoire and Vietnam) (2022: $79.1 million) and noncontrolling interest (NCI) of $18.4 million (2022: $8.0 million) is $161.6 million (2022: $209.0 million). For the nine months ended September 30, 2023, total capital expenditures excluding acquisition-related costs of $39.8 million (Côte d’Ivoire and Vietnam) (2022:$125.6 million) and noncontrolling interest (NCI) of $57.2 million (2022: $16.6 million) is $788.7 million (2022: $775.8 million). 3 For the three and nine months ended September 30, 2023, charges to exploration expense excludes amortization of undeveloped leases of $2.8 million (2022: $2.7 million) and $8.2 million (2022 $10.7 million), respectively. For the three months ended September 30, 2023, charges to exploration expense excluding NCI of $3.6 million (2022: $0) is $20 million. For the nine months ended September 30, 2023, charges to exploration expense excluding previously suspended exploration costs of $17.1 million (2022: $0) and NCI of $29.9 million (2022: $0) is $97.3 million. 

MURPHY OIL CORPORATION CONSOLIDATED BALANCE SHEETS (unaudited) 
       
(Thousands of dollars)  September 30,
2023 
  December 31,
2022 
ASSETS       
Current assets       
Cash and cash equivalents  327,769      491,963   
Accounts receivable, net    460,630      391,152   
Inventories    60,435      54,513   
Prepaid expenses    38,177      34,697   
Total current assets    887,011      972,325   
Property, plant and equipment, at cost less accumulated depreciation, depletion and amortization    8,218,015      8,228,016   
Operating lease assets    792,149      946,406   
Deferred income taxes    1,111      117,889   
Deferred charges and other assets    44,292      44,316   
Total assets  9,942,578      10,308,952   
LIABILITIES AND EQUITY       
Current liabilities       
Current maturities of long-term debt, finance lease  714      687   
Accounts payable    449,960      543,786   
Income taxes payable    24,000      26,544   
Other taxes payable    34,335      22,819   
Operating lease liabilities    245,884      220,413   
Other accrued liabilities    137,500      443,585   
Total current liabilities    892,393      1,257,834   
Long-term debt, including finance lease obligation    1,576,279      1,822,452   
Asset retirement obligations    859,123      817,268   
Deferred credits and other liabilities    289,962      304,948   
Non-current operating lease liabilities    561,254      742,654   
Deferred income taxes    250,768      214,903   
Total liabilities    4,429,779      5,160,059   
Equity       
Common Stock, par $1.00    195,101      195,101   
Capital in excess of par value    869,132      893,578   
Retained earnings    6,472,114      6,055,498   
Accumulated other comprehensive loss    (533,940    (534,686 
Treasury stock    (1,662,376    (1,614,717 
Murphy Shareholders' Equity    5,340,031      4,994,774   
Noncontrolling interest    172,768      154,119   
Total equity    5,512,799      5,148,893   
Total liabilities and equity  9,942,578      10,308,952   

MURPHY OIL CORPORATION PRODUCTION SUMMARY (unaudited) 
       
  Three Months Ended September 30,    Nine Months Ended September 30, 
(Barrels per day unless otherwise noted)  2023    2022    2023    2022 
Net crude oil and condensate               
United States - Onshore  27,772      28,522      24,674      25,082   
United States - Gulf of Mexico 1  74,843      68,315      74,185      62,380   
Canada - Onshore  2,935      3,891      3,104      4,228   
Canada - Offshore  2,956      2,171      2,778      2,869   
Other  262      487      247      716   
Total net crude oil and condensate  108,768      103,386      104,988      95,275   
Net natural gas liquids               
United States - Onshore  5,272      5,782      4,590      5,268   
United States - Gulf of Mexico 1  5,882      4,780      6,170      4,411   
Canada - Onshore  732      986      705      942   
Total net natural gas liquids  11,886      11,548      11,465      10,621   
Net natural gas – thousands of cubic feet per day               
United States - Onshore  28,312      30,054      25,571      29,032   
United States - Gulf of Mexico 1  70,240      65,319      71,764      61,727   
Canada - Onshore  426,725      392,483      361,852      313,422   
Total net natural gas  525,277      487,856      459,187      404,181   
Total net hydrocarbons - including NCI 2,3  208,200      196,243      192,984      173,260   
Noncontrolling interest               
Net crude oil and condensate – barrels per day  (5,989    (7,125    (6,181    (7,735 
Net natural gas liquids – barrels per day  (191    (264    (209    (290 
Net natural gas – thousands of cubic feet per day  (1,887    (2,202    (1,996    (2,628 
Total noncontrolling interest 2,3  (6,495    (7,756    (6,723    (8,463 
Total net hydrocarbons - excluding NCI 2,3  201,705      188,487      186,261      164,797   
                       
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 September 30,    Nine Months Ended September 30, 
  2023    2022    2023    2022 
Crude oil and condensate – dollars per barrel               
United States - Onshore  81.19    94.33    76.40    99.92 
United States - Gulf of Mexico 1    82.94    92.96      76.73      99.04 
Canada - Onshore 2    76.33    82.25      73.01      92.31 
Canada - Offshore 2    94.85    111.76      84.13      112.93 
Other 2    77.19    117.18      82.87      92.91 
Natural gas liquids – dollars per barrel               
United States - Onshore    20.52    34.33      19.76      36.83 
United States - Gulf of Mexico 1    20.16    36.56      22.01      39.99 
Canada - Onshore 2    37.72    54.40      39.08      57.53 
Natural gas – dollars per thousand cubic feet               
United States - Onshore    2.32    7.62      2.24      6.49 
United States - Gulf of Mexico 1    2.84    8.68      2.82      7.23 
Canada - Onshore 2    1.93    2.75      2.07      2.70 
                     
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 OCTOBER 31, 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    10/1/2023    12/31/2023 
Canada    Natural Gas    Fixed price forward sales    25    US$1.98    10/1/2023    10/31/2024 
Canada    Natural Gas    Fixed price forward sales    162    C$2.39    1/1/2024    12/31/2024 
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 FOURTH QUARTER 2023 GUIDANCE 
               
  Oil BOPD    NGLs BOPD    Gas MCFD    Total BOEPD 
Production – net               
U.S. – Eagle Ford Shale  22,800    5,000    27,300    32,400 
– Gulf of Mexico excluding NCI  66,300    4,800    64,000    81,800 
Canada – Tupper Montney  —    —    380,300    63,400 
– Kaybob Duvernay and Placid Montney  2,000    500    7,700    3,800 
– Offshore  3,800    —    —    3,800 
Other  300    —    —    300 
               
Total net production (BOEPD) - excluding NCI 1  181,500 to 189,500 
               
Exploration expense ($ millions)  $53 
               
FULL YEAR 2023 GUIDANCE 
Total net production (BOEPD) - excluding NCI 2  185,000 to 187,000 
Capital expenditures – excluding NCI ($ millions) 3  $950 to $1,025 
   
⊃; Excludes noncontrolling interest of MP GOM of 6,400 BOPD of oil, 200 BOPD of NGLs, and 2,700 MCFD gas. 
⊃; Excludes noncontrolling interest of MP GOM of 6,200 BOPD of oil, 200 BOPD of NGLs, and 2,200 MCFD gas. 
⊃; Excludes noncontrolling interest of MP GOM of $70 million and acquisition-related costs of $49 million.  

Source: EvaluateEnergy® ©2024 EvaluateEnergy Ltd