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Murphy Oil Corporation First Quarter 2023 Results

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   |    Thursday,May 04,2023

Murphy Oil Corporation announced first quarter 2023 results.


  • Exceeded upper end of guidance range with production of 172.5 thousand barrels of oil equivalent per day (MBOEPD), including more than 94 thousand barrels of oil per day (MBOPD)
  • Commenced production at Samurai #5 in Green Canyon 432 in the Gulf of Mexico, with eight wells from the Khaleesi, Mormont and Samurai fields now producing at King's Quay
  • Named apparent high bidder on six deepwater blocks in Gulf of Mexico Federal Lease Sale 259
  • Brought online 10 operated wells in the Eagle Ford Shale and five operated wells in the Tupper Montney with production meeting company expectations

Subsequent to the first quarter:

  • Celebrated one-year anniversary of achieving first oil at King's Quay with gross cumulative production exceeding 30 million barrels of oil equivalent (MMBOE)
  • Drilled a discovery at the Longclaw #1 operated exploration well in Green Canyon 433 in the Gulf of Mexico
  • Initiated drilling the Chinook #7 operated exploration well in Walker Ridge 425 in the Gulf of Mexico
  • Maintained quarterly dividend of $0.275 per share or $1.10 per share annualized
  • Received a credit rating upgrade to BB+ with a stable outlook from S&P Global
Murphy Oil Corp. announced its financial and operating results for the first quarter ended March 31, 2023, including net income attributable to Murphy of $192 million, or $1.22 net income per diluted share. Excluding discontinued operations and other items affecting comparability between periods, adjusted net income attributable to Murphy was $195 million, or $1.24 adjusted net income per diluted share.

Roger W. Jenkins, President and Chief Executive Officer, said: "We are off to a great start for 2023 as we advance our strategy of Delever, Execute, Explore, Return, We continued our execution excellence by maintaining strong well performance and uptime across all our assets. Onshore, we began our well delivery program, realizing initial results aligned to our plan. In the Gulf of Mexico, we brought online Samurai #5 following last year's discovery of additional pay zones in the field, and production is exceeding expectations. Early in the second quarter we celebrated the one-year anniversary of achieving first oil at King's Quay, where we recently established another record rate of 126 MBOEPD gross production. As we progress our exploration strategy, I'm pleased with the discovery at our Longclaw prospect that was drilled in the second quarter near King's Quay. This well will support the facility's long-term production profile. Looking ahead to the remainder of the year, we will continue to progress our capital allocation framework with increasing returns to shareholders and additional debt reduction."


The company recorded net income attributable to Murphy of $192 million, or $1.22 net income per diluted share, for the first 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 $195 million, or $1.24 adjusted net income per diluted share for the same period. Adjusted net income includes an after-tax increase for a $3 million non-cash mark-to-market loss on contingent consideration. Details for first 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 $464 million. Earnings before interest, tax, depreciation, amortization and exploration expenses (EBITDAX) attributable to Murphy were $474 million. Adjusted EBITDA attributable to Murphy was $478 million. Adjusted EBITDAX attributable to Murphy was $488 million. Reconciliations for first quarter EBITDA, EBITDAX, adjusted EBITDA and adjusted EBITDAX can be found in the attached schedules.

In the first quarter, Murphy paid a total of $172 million in contingent consideration payments related to two Gulf of Mexico acquisitions that closed in 2018 and 2019. Of these remaining revenue-sharing contingent payments, $124 million was associated with improved operational activity and prices and $48 million is reflected in financing activities as originally calculated. The final payment of $25 million, attributable to the one-year anniversary of achieving first oil at King's Quay, was paid in April.

First quarter production averaged 172.5 MBOEPD and consisted of 55 percent oil volumes, or 94 MBOPD. Production in the quarter exceeded the upper end of the guidance range, primarily driven by ongoing strong well performance from the Khaleesi, Mormont and Samurai fields in the Gulf of Mexico, as well as lower realized royalty rates in the Tupper Montney natural gas asset. Details for first quarter production can be found in the attached schedules.


Murphy had approximately $1.1 billion of liquidity on March 31, 2023, with no borrowings on the $800 million credit facility and $312 million of cash and cash equivalents, inclusive of NCI.

On March 31, 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 7.5 years and a weighted average coupon of 6.2 percent.

Subsequent to quarter end, Murphy received a credit rating upgrade by S&P Global to BB+ with a stable outlook.

"Murphy's credit rating upgrade is a reflection of our strong operational execution, which has led to enhanced quarterly cash flows and ongoing debt reduction. With the contingent payments related to our successful Gulf of Mexico acquisitions now behind us, our operational momentum underpins our capital allocation framework goals for the year," stated Jenkins.



In the first quarter of 2023, the onshore business produced approximately 82 MBOEPD, which included 33 percent liquids volumes.

Eagle Ford Shale

Production averaged 27 MBOEPD with 70 percent oil volumes and 85 percent liquids volumes. As planned, during the quarter Murphy brought 10 operated Karnes wells online. Additionally, four non-operated Tilden wells and three non-operated Catarina wells were brought online.

Tupper Montney

Natural gas production averaged 292 million cubic feet per day (MMCFD) in the first quarter. Five operated wells were brought online as planned. Production for the quarter exceeded guidance by 27 MMCFD, which included more than 20 MMCFD benefit from a lower realized royalty rate of 10 percent, as well as nearly 7 MMCFD of improved well performance.

Kaybob Duvernay

During the first quarter, production averaged 5 MBOEPD with 72 percent liquids volumes.


Excluding NCI, the offshore business produced approximately 90 MBOEPD for the first quarter, which included 80 percent oil.

Gulf of Mexico

Production averaged approximately 87 MBOEPD, consisting of 79 percent oil during the first quarter. These volumes were nearly 4 MBOEPD above guidance, primarily due to stronger well performance. Murphy completed the Samurai #5 well (Green Canyon 432) and commenced production at the end of the quarter with production volumes exceeding company expectations, reflecting ongoing success following last year's discovery of new pay zones in the field.


In the first quarter, production averaged 2.5 MBOEPD, consisting of 100 percent oil. The asset life extension project is ongoing for the non-operated Terra Nova floating, production, storage and offloading vessel, which Murphy anticipates will return to production by year-end 2023.


Gulf of Mexico

During the first quarter, Murphy, as operator, temporarily suspended drilling the Oso #1 (Atwater Valley 138) exploration well and spud the Longclaw #1 (Green Canyon 433) exploration well. Murphy highlights that this is no indication of potential Oso #1 well results, and the company intends to resume drilling in the third quarter 2023 once the necessary managed pressure drilling equipment and permits have been received. Murphy holds a 33.34 percent working interest (WI) in the Oso well.

Also during the quarter, Murphy participated in the Gulf of Mexico Federal Lease Sale 259 and was named apparent high bidder on six deepwater blocks.

Subsequent to the first quarter, Murphy drilled a discovery at the Longclaw #1 exploration 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. Murphy as operator holds a 10 percent WI in the well.

The company continued its operated Gulf of Mexico exploration program as it spud the Chinook #7 exploration well in Walker Ridge 425 after quarter end. Murphy holds a 66.66 percent WI in the well, excluding NCI.

"I am pleased with our success in our first exploration well of the year. We look forward to the upcoming results of the Oso and Chinook wells later this year, which are larger opportunities for Murphy," Jenkins stated.


Murphy reaffirms its 2023 accrued capital expenditures (CAPEX) plan range of $875 million to $1.025 billion. First quarter accrued CAPEX of $327 million was lower than guidance primarily due to timing revisions for Gulf of Mexico projects. The company also reaffirms its full year 2023 production range of 175.5 to 183.5 MBOEPD, consisting of approximately 55 percent oil and 61 percent liquids volumes.

Production for second quarter 2023 is estimated to be in the range of 173 to 181 MBOEPD with 95 MBOPD, or 54 percent, oil volumes. This range includes planned downtime of 6.7 MBOEPD offshore and 3.0 MBOEPD onshore. Murphy forecasts second quarter accrued CAPEX of $320 million. Both production and CAPEX guidance ranges exclude NCI.

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


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.

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