Murphy Oil Corporation announced first quarter 2023 results.
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.
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.