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May 2018 Investor Update – Murphy Oil Corp

Murphy Oil Corp · May 2, 2018 · 54 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. May 2018 Investor Update – Murphy Oil Corp – slide 1
    INVESTOR UPDATE MAY 2018 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER
  2. May 2018 Investor Update – Murphy Oil Corp – slide 2
    Agenda 01 BUSINESS ENVIRONMENT 02 COMPANY UPDATE 03 BUSINESS UPDATE 04 PORTFOLIO REVIEW 05 EXPLORATION REVIEW MURPHY OIL CORPORATION www.m urp h yo i lc o rp.c om NYSE: MUR 3
  3. May 2018 Investor Update – Murphy Oil Corp – slide 3
    ONSHORE BUSINESS ENVIRONMENT MURPHY OIL CORPORATION www.m urp h yo i lc o rp.c om NYSE: MUR 4
  4. May 2018 Investor Update – Murphy Oil Corp – slide 4
    Historical Crude Oil Prices since MUSA Spin-Off MUSA Spin-Off US/BBL 130 120 110 100 90 80 70 60 50 40 30 20 10 0 2014 2015 2016 2017 2018 WTI Brent MURPHY OIL CORPORATION www.m urp h yo i lc o rp.c om NYSE: MUR…
  5. May 2018 Investor Update – Murphy Oil Corp – slide 5
    WTI Forward Curves 2018 US/BBL 70 Apr 16 Mar 29 65Jan 31 Jan 16 Feb 28 Feb 15 Jan 2 Mar 15 60 55 50 45 2018 2019 2020 2021 2022 2023 Jan 02 Jan 16 Jan 31 Feb 15 Feb 28 Mar 15 Mar 29 Apr 16 MURPHY OIL…
  6. May 2018 Investor Update – Murphy Oil Corp – slide 6
    Oil & Natural Gas Will Continue to Be Vital Part of Energy Mix Long-Term Key Themes from Updated IEA Outlook (2017) World Energy Demand, MMBOEPD* 400 Rapid Deployment & Falling Costs of Clean Energy Growing Electrification of Energy…
  7. May 2018 Investor Update – Murphy Oil Corp – slide 7
    International Energy Agency New Policies Scenario IEA Scenarios Current Policies (CP): No Enhanced Global Effort to Energy Demand by Fuel in 2040, MMBOEPD Lower Emissions Oil & Gas 52% 54% 53% 53% 49% New Policies (NP): Nationally…
  8. May 2018 Investor Update – Murphy Oil Corp – slide 8
    Additional Scenarios Energy Demand by Fuel in 2040, MMBOEPD Oil & Gas 52%, 54% 53% 53% 49% 44% 53% 57% 450 Scenario Oil Demand Peak IEA CP Beyond 2040 400 IEA NP (Base) Beyond 2040 350 IEA SD 2020 300 IHS Base Beyond 2040 MIT…
  9. May 2018 Investor Update – Murphy Oil Corp – slide 9
    Increasing Oil Demand Passenger Vehicles, Millions Oil Demand by End-Use, MMBOPD EVs Grow from 0.2% to 14% of Vehicles, Doubled from Last Year Strong Growth in Petrochemicals, Aviation & Navigation Demand 2,000 110 280 MM 100 1,800…
  10. May 2018 Investor Update – Murphy Oil Corp – slide 10
    Increasing Global Oil Supply & Demand Oil Supply & Demand, MMBOPD Oil Supply Sources, MMBOPD 120 120 100 100 80 80 60 60 40 40 70 MMBOPD New Supply Needed by 20 2040 in NP Scenario 20 223 BN Barrels of New Supply…
  11. May 2018 Investor Update – Murphy Oil Corp – slide 11
    Oil & Natural Gas Vital Part of Energy Mix for Long-Term Global Energy Demand Highly Likely to Continue to Grow Population & GDP Growth Exceed Efficiency Gains Continued Demand for Power Generation Oil has Unique Usefulness in…
  12. May 2018 Investor Update – Murphy Oil Corp – slide 12
    PORTFOLIO REVIEW COMPANY UPDATE MURPHY OIL CORPORATION www.m urp h yo i lc o rp.c om NYSE: MUR 13
  13. May 2018 Investor Update – Murphy Oil Corp – slide 13
    Our Company 2017 Proved Reserves 46% Gas 47% Oil Long Corporate History, IPO in 1956 19% US Onshore Global Offshore & North American Onshore Portfolio 7% 698 37% Canada Onshore MMBOE Canada Offshore 3% Diverse Portfolio…
  14. May 2018 Investor Update – Murphy Oil Corp – slide 14
    Murphy Mission Vision & Values Purpose We Believe in Providing Energy that Empowers People Mission We Challenge the Norm, Tap into Our Strong Legacy & Use Our Foresight & Financial Discipline to Deliver Inspired Energy Solutions…
  15. May 2018 Investor Update – Murphy Oil Corp – slide 15
    Committed to Our Strategy DIFFERENTIATED PREFERRED DEVELOP & ACHIEVE & BALANCE PERSPECTIVES PARTNER PRODUCE MAINTAIN Balance Free Cash Achieve & Maintain Develop Differentiated Continue to be Preferred Generating Offshore Develop…
  16. May 2018 Investor Update – Murphy Oil Corp – slide 16
    Murphys Unique Onshore & Offshore Strategy North American Unconventional Business Low Cost Entry in All Positions Over 5,000 Undrilled Locations Continue to Improve Eagle Ford Shale with Technology Enhancements Eagle Ford Shale is…
  17. May 2018 Investor Update – Murphy Oil Corp – slide 17
    Price 2018 2019 2020 2021 2022 Our Strategy in Action WTI 52.00 54.60 57.33 60.20 63.21 Brent 55.50 58.10 60.83 63.70 66.71 HH 3.00 2.81 2.86 2.92 2.98 Measured, Oil-Weighted Production Growth 300 3,000 Within Cash Flow 250…
  18. May 2018 Investor Update – Murphy Oil Corp – slide 18
    Price 2018 2019 2020 2021 2022 Drives EBITDA Growth WTI 52.00 54.60 57.33 60.20 63.21 Brent 55.50 58.10 60.83 63.70 66.71 HH 3.00 2.81 2.86 2.92 2.98 2,600 Measured, Oil-Weighted Production Growth Within Cash Flow 2,400 2,200…
  19. May 2018 Investor Update – Murphy Oil Corp – slide 19
    Paying Our Way & Living Within Cash Flow Peer Adjusted Free Cash Flow & Equity Issuance Comparison 2014 2017 Protected Our Shareholders by Not Issuing 4 Equity During Downturn 3 Maintained Strong Balance Sheet with Measured…
  20. May 2018 Investor Update – Murphy Oil Corp – slide 20
    Committed to Returning Cash to Shareholders Dividend + Buyback Payout % of Adj CFO, 2015 2017 Returned 4.3 BN to Shareholders, Since 1961 35% MUR 30% 25% Returned 2.5 BN to Shareholders in Last 10 Years 20% 15% Sustained High…
  21. May 2018 Investor Update – Murphy Oil Corp – slide 21
    PORTFOLIO REVIEW BUSINESS UPDATE MURPHY OIL CORPORATION www.m urp h yo i lc o rp.c om NYSE: MUR 22
  22. May 2018 Investor Update – Murphy Oil Corp – slide 22
    Safety Performance 2014 2018 YTD Total Recordable Incident Rate Highlights 1.0 Top Quartile Ranking Amongst 11 Peers 0.8 Gulf of Mexico 5+ Years LTI-Free for 0.70 Operations Combined TRIR Eagle Ford Shale Civil Works Team 2+…
  23. May 2018 Investor Update – Murphy Oil Corp – slide 23
    2017 Environmental Performance Spill Rate Highlights 0.40 Oil Spills 1 Bbl per MMBOE 85% Improvement in Spill Rate 2014 to 2017 0.35 0.30 Asset Integrity Management Focus 0.25 0.20 Gulf of Mexico Spill-Free Since Start of…
  24. May 2018 Investor Update – Murphy Oil Corp – slide 24
    2017 Highlights Achieving High-Margin Maintaining Shareholder- Driving Valuable EBITDA Production from Focused Strategy & Building Expansion by Lowering Costs Diversified Portfolio Long-Term Portfolio FY 17 Production Averaged…
  25. May 2018 Investor Update – Murphy Oil Corp – slide 25
    Increasing Reserves & Lowering Finding & Development Costs 3 Year Finding & Development Costs Maintaining High-Margin, Oil-Weighted Portfolio 30 25 2017 Total Reserves Replacement 123% /BOE 20 3 Year Cumulative F&D Costs of…
  26. May 2018 Investor Update – Murphy Oil Corp – slide 26
    ONSHORE PORTFOLIO REVIEW MURPHY OIL CORPORATION www.m urp h yo i lc o rp.c om NYSE: MUR 27
  27. May 2018 Investor Update – Murphy Oil Corp – slide 27
    Diversified Oil-Weighted Production US 2017 Production 12% Gas 75% 13% 23% Oil NGL 61 Eagle Ford Shale MBOEPD Gulf of Mexico 77% Canada Malaysia 2017 Production 63% United States 36% Oil Gas 41% 53 Sarawak MBOEPD 59%…
  28. May 2018 Investor Update – Murphy Oil Corp – slide 28
    Eagle Ford Shale Overview Highly Economic Long Life Asset at Low End of Cost Curve Low Cost Entry, 2,000 per Acre Atascosa Price Advantaged, LLS Based Crude Sales Karnes Total Resource Potential Tilden Karnes 500+ MMBOE Dimmit…
  29. May 2018 Investor Update – Murphy Oil Corp – slide 29
    Eagle Ford Shale Highlights Completing Karnes 10 Well Pad, Expected Online 2Q 18 IP30 Substantial Improvement in Catarina Atascosa Enhanced Spacing & Frac Designs Karnes Catarina Cluster Spacing Optimized by Area Tilden Karnes…
  30. May 2018 Investor Update – Murphy Oil Corp – slide 30
    Eagle Ford Shale Data & Analytics Integrated Operations Platform & New Operating Model New Model Driven by Operating Expense (OPEX) Challenges OPEX Reduction (2014 to 2017) through Infrastructure & Remote Ops Center (ROC) Houston Office…
  31. May 2018 Investor Update – Murphy Oil Corp – slide 31
    Kaybob Duvernay Overview Kaybob Duvernay 70% WI, Operatorship, 140,000 Net Acres 56 Total Wells Online* Optimizing Completion Designs Multi-Year Running Room with Resource Upside Highly Economic Low Entry Cost Top Quartile Field…
  32. May 2018 Investor Update – Murphy Oil Corp – slide 32
    Kaybob Duvernay 2018 Plan 2018 Appraisal & Development Plan Kaybob North Move Kaybob West & Saxon into 150 Locations 20% De-Risked Kaybob East 295 Locations Development Mode H Learnings: Fit for Purpose Rigs, J K Optimizing…
  33. May 2018 Investor Update – Murphy Oil Corp – slide 33
    Growing Onshore Production While Increasing Low Break-Even Locations Net Production, MBOEPD 100 1,800 Eagle Ford Shale 90 1,600 1,000 Economic Locations* Below 40 WTI 80 1,400 Production, MBOEPD 70 1,200 CAPEX, MM More…
  34. May 2018 Investor Update – Murphy Oil Corp – slide 34
    Tupper Montney Overview British Columbia Alberta Tupper Montney 100,000 Net Acres Over 1,200 Remaining Locations 320 MMCFD Gross Non-Operated Processing Plant Tupper West Capacity 240 Total Wells Online* 20 Year Processing…
  35. May 2018 Investor Update – Murphy Oil Corp – slide 35
    Southeast Asia Offshore Overview Murphy Lease Block H Oil Field Malaysia Gas Field Pipeline CA-1 Sabah Paus Block K Kikeh Electric Submersible Pump (ESP) Pilot Start Up 4Q Kota 17, DTU Gas Lift Project Ongoing Kinabalu Kimanis…
  36. May 2018 Investor Update – Murphy Oil Corp – slide 36
    North American Offshore Overview Murphy Lease ALABAMA MISSISSIPPI FLORIDA Murphy Facility Gulf of Mexico LOUISIANA 99.5% Uptime of Operated Facilities 4Q 17 Medusa Subsea Well Workover 1Q 18 Front Runner Preparing for Rig Program in…
  37. May 2018 Investor Update – Murphy Oil Corp – slide 37
    EXPLORATION REVIEW MURPHY OIL CORPORATION www.m urp h yo i lc o rp.c om NYSE: MUR 38
  38. May 2018 Investor Update – Murphy Oil Corp – slide 38
    New Exploration Strategy New Exploration Leadership Team Exploration Focus Areas Updated Rules of the Road Focused in Four Areas Target 35% Working Interest No 100% New Entry Blocks Partner with Proven Explorers National Oil…
  39. May 2018 Investor Update – Murphy Oil Corp – slide 39
    Now is the Time for Offshore Exploration Exploration Spend vs Brent Global Offshore, Deepwater & Shelf Wells Industry at Bottom of Service Cost 70 Exploration 140 Oil Price, US/BBL & Spend/Well, Price Cycle 60 Sweet Spot 120…
  40. May 2018 Investor Update – Murphy Oil Corp – slide 40
    Gulf of Mexico Exploration Update Planning for Samurai (GC 432) Appraisal Finalized King Cake Prospect Farm-In (AT 23) Murphy 50% WI, Operator Murphy 31.5% WI, Operator Expected Spud 2Q 18 Expected Spud 3Q 18 Mean Gross Resource…
  41. May 2018 Investor Update – Murphy Oil Corp – slide 41
    Offshore Mexico Exploration Update Block 10 Block 21 Mexico Deepwater Block 5 30.5 MM Repsol, PETRONAS, Ophir 110.2 MM Shell Block 20 Murphy 30% WI, Operator, Partners 90.2 MM Block Name Cash Bonus Shell PETRONAS, Ophir & Sierra…
  42. May 2018 Investor Update – Murphy Oil Corp – slide 42
    Vietnam Exploration Update Cuu Long Basin Block 15-1/05 Murphy 35% WI, Non-Op Working to LDV Field Up to 250 MMBOE Become Operator & Increase to 40% WI Gross Recoverable LDT Prospect Expected Spud 2Q 18 Block 15-01/05 Mean Gross…
  43. May 2018 Investor Update – Murphy Oil Corp – slide 43
    Brazil Exploration Update Renewed Exploration Portfolio with Low-Cost Entry & Long-Term Opportunities Farm-In to QGEPs Sergipe-Alagoas Blocks Farfan Secured Blocks 351 & 428 400 MMBOE Murphy 20%, ExxonMobil 50% (Op), QGEP 30%…
  44. May 2018 Investor Update – Murphy Oil Corp – slide 44
    Vulcan Basin Australia Exploration Update Murphy Block Blocks Vulcan Basin Oil Field AC/P-58 Murphy 60% WI, Operator Gas Field Jurassic Play Ceduna Basin Fairway Expected Spud 2019 & 2021 Identifying Multiple Prospects, Up to…
  45. May 2018 Investor Update – Murphy Oil Corp – slide 45
    Multi-Year Global Exploration Plan Global Exploration Production & CAPEX, Net Risked 45 300 Renewed Exploration Portfolio with Low-Cost 40 35 250 Entries & Near, Mid & Long-Term Opportunities Production, MBOEPD 30 200…
  46. May 2018 Investor Update – Murphy Oil Corp – slide 46
    Takeaways Increasing Long-Term Global Oil Demand Executing Murphys Unique Onshore & Offshore Strategy Positioning Company for Long-Term Value Creation Maintaining Oil-Weighted & Diversified Reserve Base Continuing to Return…
  47. May 2018 Investor Update – Murphy Oil Corp – slide 47
    APPENDIX MURPHY OIL CORPORATION www.m urp h yo i lc o rp.c om NYSE: MUR 48
  48. May 2018 Investor Update – Murphy Oil Corp – slide 48
    Caring for Our Environment Reduced Emissions 30% Improvement in Greenhouse Gas (GHG) Emissions Intensities Since 2014 Malaysia Flare Management Program Gulf of Mexico Lower Emissions Eagle Ford Shale Well Tie-in Improvements…
  49. May 2018 Investor Update – Murphy Oil Corp – slide 49
    Impacting Our Communities Murphy Disaster Relief Foundation Raised 315,000 from Employees, Retirees & Directors Enabling Murphy to Grant Funds to 26 Employees & Retirees Impacted by Hurricane Harvey El Dorado Promise Awarded Funding…
  50. May 2018 Investor Update – Murphy Oil Corp – slide 50
    Turning the Corner EBITDA, BN Production, BOEPD 3.0 300 266 2.4 243 2.5 250 219 2.0 1.8 190 182 2.0 200 168 168 163 1.5 1.5 1.2 1.3 150 0.9 1.0 0.8 100 0.5 50 0.0 0 2015 2016 2017 2018E 2019E 2020E 2021E 2022E 2015 2016…
  51. May 2018 Investor Update – Murphy Oil Corp – slide 51
    YE 2017 Peer Comparison 2017 EBITDA, /BOE 2017 Production Costs, /BOE 25 14 20 12 15 Peer Avg = 10.42 10 Peer Avg = 9.44 10 5 8 0 6 -5 -10 4 -15 2 -20 -25 0 MUR MUR MUR 2017 Production Netback, /BOE 2017 Net Debt/Capital 35…
  52. May 2018 Investor Update – Murphy Oil Corp – slide 52
    Strengthening Our Business Through the Commodity Cycle 30% Malaysia Acquired Kaybob Drill LDT Well Duvernay & Liquids Entered Brazil Cuu Long Basin, Sell-Down for Move Kaybob Drill Ceduna Basin Rich Montney via Farm-In & Vietnam 2.0…
  53. May 2018 Investor Update – Murphy Oil Corp – slide 53
    Credit Metrics vs E&P Peers 2017 Net Debt / Adj EBITDAX 2017 Net Debt / Proved Reserves (/BOE)* 5x 4.6x 9 5x 7.74 8 4x 3.6x 7 4x 3.3x 5.80 2.9x 6 5.21 3x 2.3x 2.4x 5 4.48 4.60 3x 2.1x 2.1x 2x 1.7x 1.8x 1.8x 4 3.40 3.59 1.5x…
  54. May 2018 Investor Update – Murphy Oil Corp – slide 54
    Bloomberg Definitions Net Income/BOE = Net Income (Loss) as Reported / Total Annual Production EBITDA = Loss from Continuing Operations - Interest & Other Income + Income Tax Expense (Benefit) + Interest Expense - Interest Capitalized…

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