Exceeded Upper End of Guidance Range With
Production of 172.5 MBOEPD, Announced Discovery at Longclaw #1
Exploration Well in Gulf of Mexico, Received Credit Rating Upgrade
to BB+ from S&P Global
Murphy Oil Corporation (NYSE: MUR) today 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.
Unless otherwise noted, the financial and operating highlights
and metrics discussed in this news release exclude noncontrolling
interest (NCI). 1
Highlights for the first quarter include:
- 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
“We are off to a great start for 2023 as we advance our strategy
of Delever, Execute, Explore, Return,” said Roger W. Jenkins,
President and Chief Executive Officer. “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.”
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.
FINANCIAL POSITION
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.
OPERATIONS SUMMARY
Onshore
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.
Offshore
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.
Canada – 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.
EXPLORATION
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.
2023 CAPITAL EXPENDITURE AND PRODUCTION GUIDANCE
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.
FIXED PRICE FORWARD SALES CONTRACTS
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.
CONFERENCE CALL AND WEBCAST SCHEDULED FOR MAY 3, 2023
Murphy will host a conference call to discuss first quarter 2023
financial and operating results on Wednesday, May 3, 2023, at 9:00
a.m. EDT. The call can be accessed either via the Internet through
the Investor Relations section of Murphy Oil’s website at
http://ir.murphyoilcorp.com or via the telephone by dialing toll
free 1-888-886-7786, reservation number 04864163.
FINANCIAL DATA
Summary financial data and operating statistics for first
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 second 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.
ABOUT MURPHY OIL CORPORATION
As an independent oil and natural gas exploration and production
company, Murphy Oil Corporation believes in providing energy that
empowers people by doing right always, staying with it and thinking
beyond possible. Murphy challenges the norm, taps into its strong
legacy and uses its foresight and financial discipline to deliver
inspired energy solutions. Murphy sees a future where it is an
industry leader who is positively impacting lives for the next 100
years and beyond. Additional information can be found on the
company’s website at www.murphyoilcorp.com.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are generally identified through the
inclusion of words such as “aim”, “anticipate”, “believe”, “drive”,
“estimate”, “expect”, “expressed confidence”, “forecast”, “future”,
“goal”, “guidance”, “intend”, “may”, “objective”, “outlook”,
“plan”, “position”, “potential”, “project”, “seek”, “should”,
“strategy”, “target”, “will” or variations of such words and other
similar expressions. These statements, which express management’s
current views concerning future events, results and plans, are
subject to inherent risks, uncertainties and assumptions (many of
which are beyond our control) and are not guarantees of
performance. In particular, statements, express or implied,
concerning the company’s future operating results or activities and
returns or the company's ability and decisions to replace or
increase reserves, increase production, generate returns and rates
of return, replace or increase drilling locations, reduce or
otherwise control operating costs and expenditures, generate cash
flows, pay down or refinance indebtedness, achieve, reach or
otherwise meet initiatives, plans, goals, ambitions or targets with
respect to emissions, safety matters or other ESG
(environmental/social/governance) matters, or pay and/or increase
dividends or make share repurchases and other capital allocation
decisions are forward-looking statements. Factors that could cause
one or more of these future events, results or plans not to occur
as implied by any forward-looking statement, which consequently
could cause actual results or activities to differ materially from
the expectations expressed or implied by such forward-looking
statements, include, but are not limited to: macro conditions in
the oil and gas industry, including supply/demand levels, actions
taken by major oil exporters and the resulting impacts on commodity
prices; increased volatility or deterioration in the success rate
of our exploration programs or in our ability to maintain
production rates and replace reserves; reduced customer demand for
our products due to environmental, regulatory, technological or
other reasons; adverse foreign exchange movements; political and
regulatory instability in the markets where we do business; the
impact on our operations or market of health pandemics such as
COVID-19 and related government responses; other natural hazards
impacting our operations or markets; any other deterioration in our
business, markets or prospects; any failure to obtain necessary
regulatory approvals; any inability to service or refinance our
outstanding debt or to access debt markets at acceptable prices; or
adverse developments in the U.S. or global capital markets, credit
markets, banking system or economies in general. For further
discussion of factors that could cause one or more of these future
events or results not to occur as implied by any forward-looking
statement, see “Risk Factors” in our most recent Annual Report on
Form 10-K filed with the U.S. Securities and Exchange Commission
(“SEC”) and any subsequent Quarterly Report on Form 10-Q or Current
Report on Form 8-K that we file, available from the SEC’s website
and from Murphy Oil Corporation’s website at
http://ir.murphyoilcorp.com. Investors and others should note that
we may announce material information using SEC filings, press
releases, public conference calls, webcasts and the investors page
of our website. We may use these channels to distribute material
information about the company; therefore, we encourage investors,
the media, business partners and others interested in the company
to review the information we post on our website. The information
on our website is not part of, and is not incorporated into, this
report. Murphy Oil Corporation undertakes no duty to publicly
update or revise any forward-looking statements.
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
March 31,
(Thousands of
dollars, except per share amounts)
2023
2022
Revenues and other income
Revenue from production
$
796,231
834,528
Sales of purchased natural gas
43,737
36,846
Total revenue from sales to customers
839,968
871,374
Loss on derivative instruments
—
(320,777
)
Gain on sale of assets and other
income
1,748
2,364
Total revenues and other income
841,716
552,961
Costs and expenses
Lease operating expenses
199,984
136,825
Severance and ad valorem taxes
11,440
14,635
Transportation, gathering and
processing
53,922
46,923
Costs of purchased natural gas
32,269
33,665
Exploration expenses, including
undeveloped lease amortization
10,182
47,566
Selling and general expenses
18,308
33,529
Depreciation, depletion and
amortization
195,670
164,124
Accretion of asset retirement
obligations
11,157
11,876
Other operating expense
11,988
105,942
Total costs and expenses
544,920
595,085
Operating income (loss) from continuing
operations
296,796
(42,124
)
Other income (loss)
Other expenses
(73
)
(2,495
)
Interest expense, net
(28,855
)
(37,277
)
Total other loss
(28,928
)
(39,772
)
Income (loss) from continuing operations
before income taxes
267,868
(81,896
)
Income tax expense (benefit)
53,833
(16,961
)
Income (loss) from continuing
operations
214,035
(64,935
)
Income (loss) from discontinued
operations, net of income taxes
279
(551
)
Net income (loss) including noncontrolling
interest
214,314
(65,486
)
Less: Net income attributable to
noncontrolling interest
22,670
47,850
NET INCOME (LOSS) ATTRIBUTABLE TO
MURPHY
$
191,644
(113,336
)
INCOME (LOSS) PER COMMON SHARE –
BASIC
Continuing operations
$
1.23
(0.73
)
Discontinued operations
—
—
Net income (loss)
$
1.23
(0.73
)
INCOME (LOSS) PER COMMON SHARE –
DILUTED
Continuing operations
$
1.22
(0.73
)
Discontinued operations
—
—
Net income (loss)
$
1.22
(0.73
)
Cash dividends per common share
$
0.275
0.15
Average common shares outstanding
(thousands)
Basic
155,857
154,916
Diluted
157,389
154,916
MURPHY OIL CORPORATION
CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited)
Three Months Ended
March 31,
(Thousands of
dollars)
2023
2022
Operating Activities
Net income (loss) including noncontrolling
interest
$
214,314
(65,486
)
Adjustments to reconcile net income (loss)
to net cash provided by continuing operations activities
(Income) loss from discontinued
operations
(279
)
551
Depreciation, depletion and
amortization
195,670
164,124
Unsuccessful exploration well costs and
previously suspended exploration costs
851
32,831
Amortization of undeveloped leases
2,653
4,198
Accretion of asset retirement
obligations
11,157
11,876
Deferred income tax expense (benefit)
49,042
(20,253
)
Contingent consideration payment
(123,965
)
—
Mark-to-market loss on contingent
consideration
3,938
98,126
Mark-to-market loss on derivative
instruments
—
188,509
Long-term non-cash compensation
8,536
17,288
Net increase in non-cash working
capital
(75,031
)
(80,922
)
Other operating activities, net
(7,110
)
(12,512
)
Net cash provided by continuing operations
activities
279,776
338,330
Investing Activities
Property additions and dry hole costs
(345,319
)
(244,908
)
Net cash required by investing
activities
(345,319
)
(244,908
)
Financing Activities
Borrowings on revolving credit
facility
100,000
—
Repayment of revolving credit facility
(100,000
)
—
Distributions to noncontrolling
interest
(9,679
)
(39,884
)
Contingent consideration payment
(47,678
)
(55,169
)
Issue costs of debt facility
(17
)
—
Cash dividends paid
(42,925
)
(23,300
)
Withholding tax on stock-based incentive
awards
(14,217
)
(15,421
)
Capital lease obligation payments
(139
)
(158
)
Net cash required by financing
activities
(114,655
)
(133,932
)
Effect of exchange rate changes on cash
and cash equivalents
618
(87
)
Net decrease in cash and cash
equivalents
(179,580
)
(40,597
)
Cash and cash equivalents at beginning of
period
491,963
521,184
Cash and cash equivalents at end of
period
$
312,383
480,587
MURPHY OIL CORPORATION
SCHEDULE OF ADJUSTED NET INCOME
(LOSS) (unaudited)
Three Months Ended
March 31,
(Millions of
dollars, except per share amounts)
2023
2022
Net income (loss) attributable to Murphy
(GAAP)
$
191.6
(113.3
)
Discontinued operations (income) loss
(0.3
)
0.6
Net income (loss) from continuing
operations attributable to Murphy
191.3
(112.7
)
Adjustments1:
Mark-to-market loss on contingent
consideration
3.9
98.1
Foreign exchange loss
0.4
—
Mark-to-market loss on derivative
instruments
—
188.5
Total adjustments, before taxes
4.3
286.6
Income tax expense related to
adjustments
0.9
60.6
Total adjustments after taxes
3.4
226.0
Adjusted net income from continuing
operations attributable to Murphy (Non-GAAP)
$
194.7
113.3
Adjusted net income from continuing
operations per average diluted share (Non-GAAP)
$
1.24
0.73
1 Certain prior-period amounts have been
updated to conform to the current period presentation.
Non-GAAP Financial Measures
Presented above is a reconciliation of Net income (loss) 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 (loss) 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
March 31, 2023
(Millions of
dollars)
Pretax
Tax
Net
Exploration & Production:
United States
$
3.9
(0.8
)
3.1
Corporate
0.4
(0.1
)
0.3
Total adjustments
$
4.3
(0.9
)
3.4
MURPHY OIL CORPORATION
SCHEDULE OF EARNINGS BEFORE
INTEREST, TAXES, DEPRECIATION
AND AMORTIZATION (EBITDA)
(unaudited)
Three Months Ended
March 31,
(Millions of
dollars, except per barrel of oil equivalents sold)
2023
2022
Net income (loss) attributable to Murphy
(GAAP)
$
191.6
(113.3
)
Income tax expense (benefit)
53.8
(17.0
)
Interest expense, net
28.9
37.3
Depreciation, depletion and amortization
expense ¹
189.3
156.6
EBITDA attributable to Murphy
(Non-GAAP)
$
463.6
63.6
Accretion of asset retirement obligations
¹
9.9
10.5
Mark-to-market loss on contingent
consideration
3.9
98.1
Foreign exchange loss
0.4
—
Mark-to-market loss on derivative
instruments
—
188.5
Discontinued operations (income) loss
(0.3
)
0.6
Adjusted EBITDA attributable to Murphy
(Non-GAAP)
$
477.5
361.3
Total barrels of oil equivalents sold from
continuing operations attributable to Murphy (thousands of
barrels)
15,541
12,565
Net income (loss) attributable to Murphy
per barrel of oil equivalents sold
$
12.33
(9.02
)
Adjusted EBITDA per barrel of oil
equivalents sold (Non-GAAP)
$
30.72
28.75
1 Depreciation, depletion, and
amortization expense, 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 (loss) 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 (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 adjusted EBITDA per barrel of oil equivalent
sold. Management believes adjusted EBITDA per barrel of oil
equivalent sold is important information because it is used by
management to evaluate the Company’s profitability of one barrel of
oil equivalent sold in that period. Adjusted EBITDA per barrel of
oil equivalent sold is a non-GAAP financial metric.
MURPHY OIL CORPORATION
SCHEDULE OF EARNINGS BEFORE
INTEREST, TAXES, DEPRECIATION
AND AMORTIZATION AND EXPLORATION
(EBITDAX)
(unaudited)
Three Months Ended
March 31,
(Millions of
dollars, except per barrel of oil equivalents sold)
2023
2022
Net income (loss) attributable to Murphy
(GAAP)
$
191.6
(113.3
)
Income tax expense (benefit)
53.8
(17.0
)
Interest expense, net
28.9
37.3
Depreciation, depletion and amortization
expense ¹
189.3
156.6
EBITDA attributable to Murphy
(Non-GAAP)
463.6
63.6
Exploration expenses
10.2
47.6
EBITDAX attributable to Murphy
(Non-GAAP)
473.8
111.2
Accretion of asset retirement obligations
¹
9.9
10.5
Mark-to-market loss on contingent
consideration
3.9
98.1
Foreign exchange loss
0.4
—
Discontinued operations (income) loss
(0.3
)
0.6
Mark-to-market loss on derivative
instruments
—
188.5
Adjusted EBITDAX attributable to Murphy
(Non-GAAP)
$
487.7
$
408.9
Total barrels of oil equivalents sold from
continuing operations attributable to Murphy (thousands of
barrels)
15,541
12,565
Net income (loss) attributable to Murphy
per barrel of oil equivalents sold
$
12.33
(9.02
)
Adjusted EBITDAX per barrel of oil
equivalents sold (Non-GAAP)
$
31.38
32.54
1 Depreciation, depletion, and
amortization expense, and accretion of asset retirement obligations
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 (loss) 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 (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 adjusted EBITDAX per barrel of oil equivalent
sold. Management believes adjusted EBITDAX per barrel of oil
equivalent sold is important information because it is used by
management to evaluate the Company’s profitability of one barrel of
oil equivalent sold in that period. Adjusted EBITDAX per barrel of
oil equivalent sold is a non-GAAP financial metric.
MURPHY OIL CORPORATION
FUNCTIONAL RESULTS OF OPERATIONS
(unaudited)
Three Months Ended
March 31, 2023
Three Months Ended
March 31, 2022
(Millions of
dollars)
Revenues
Income
(Loss)
Revenues
Income
(Loss)
Exploration and production
United States ¹
$
682.3
226.0
707.4
252.9
Canada
155.8
21.9
166.1
22.7
Other
3.6
(5.2
)
—
(44.2
)
Total exploration and production
841.7
242.7
873.5
231.4
Corporate
—
(28.7
)
(320.5
)
(296.3
)
Continuing operations
841.7
214.0
553.0
(64.9
)
Discontinued operations, net of tax
—
0.3
—
(0.6
)
Total including noncontrolling
interest
$
841.7
214.3
553.0
(65.5
)
Net income (loss) attributable to
Murphy
191.6
(113.3
)
1 Includes results attributable to a
noncontrolling interest in MP Gulf of Mexico, LLC (MP GOM).
MURPHY OIL CORPORATION
OIL AND GAS OPERATING RESULTS
(unaudited)
THREE MONTHS ENDED MARCH 31,
2023, AND 2022
(Millions of
dollars)
United
States 1
Canada
Other
Total
Three Months Ended March 31,
2023
Oil and gas sales and other operating
revenues
$
682.3
112.1
3.6
798.0
Sales of purchased natural gas
—
43.7
—
43.7
Lease operating expenses
162.6
36.8
0.6
200.0
Severance and ad valorem taxes
11.1
0.3
—
11.4
Transportation, gathering and
processing
37.4
16.5
—
53.9
Costs of purchased natural gas
—
32.3
—
32.3
Depreciation, depletion and
amortization
160.3
31.6
0.9
192.8
Accretion of asset retirement
obligations
9.1
1.9
0.1
11.1
Exploration expenses
Dry holes and previously suspended
exploration costs
(0.2
)
—
1.1
0.9
Geological and geophysical
0.3
—
0.5
0.8
Other exploration
1.6
0.1
4.2
5.9
1.7
0.1
5.8
7.6
Undeveloped lease amortization
2.0
0.1
0.6
2.7
Total exploration expenses
3.7
0.2
6.4
10.3
Selling and general expenses
6.4
2.3
0.2
8.9
Other
9.4
4.4
(0.2
)
13.6
Results of operations before taxes
282.3
29.5
(4.4
)
307.4
Income tax provisions
56.3
7.6
0.8
64.7
Results of operations (excluding Corporate
segment)
$
226.0
21.9
(5.2
)
242.7
Three Months Ended March 31,
2022
Oil and gas sales and other operating
revenues
$
707.4
129.3
—
836.7
Sales of purchased natural gas
—
36.8
—
36.8
Lease operating expenses
99.9
36.9
—
136.8
Severance and ad valorem taxes
14.2
0.4
—
14.6
Transportation, gathering and
processing
29.2
17.7
—
46.9
Costs of purchased natural gas
—
33.7
—
33.7
Depreciation, depletion and
amortization
126.5
34.2
0.1
160.8
Accretion of asset retirement
obligations
9.4
2.5
—
11.9
Exploration expenses
Dry holes and previously suspended
exploration costs
—
—
32.8
32.8
Geological and geophysical
2.6
—
0.2
2.8
Other exploration
1.5
0.1
6.1
7.7
4.1
0.1
39.1
43.3
Undeveloped lease amortization
2.4
0.1
1.8
4.3
Total exploration expenses
6.5
0.2
40.9
47.6
Selling and general expenses
8.3
5.1
2.4
15.8
Other
102.8
5.1
0.4
108.3
Results of operations before taxes
310.6
30.3
(43.8
)
297.1
Income tax provisions (benefits)
57.7
7.6
0.4
65.7
Results of operations (excluding Corporate
segment)
$
252.9
22.7
(44.2
)
231.4
1 Includes results attributable to a
noncontrolling interest in MP GOM.
MURPHY OIL CORPORATION
PRODUCTION-RELATED EXPENSES
(unaudited)
Three Months Ended
March 31,
(Dollars per barrel
of oil equivalents sold)
2023
2022
United States – Eagle Ford Shale
Lease operating expense
$
15.12
12.31
Severance and ad valorem taxes
4.24
5.14
Depreciation, depletion and amortization
(DD&A) expense
26.18
25.79
United States – Gulf of Mexico1
Lease operating expense
$
14.69
11.07
Severance and ad valorem taxes
0.08
0.09
DD&A expense
11.22
9.53
Canada – Onshore
Lease operating expense
$
6.81
7.50
Severance and ad valorem taxes
0.06
0.09
DD&A expense
6.01
7.10
Canada – Offshore
Lease operating expense
$
15.06
16.21
DD&A expense
9.29
12.54
Total E&P continuing operations
Lease operating expense
$
12.35
10.25
Severance and ad valorem taxes
0.71
1.10
DD&A expense
12.08
12.29
Total oil and gas continuing operations –
excluding noncontrolling interest
Lease operating expense
$
12.19
10.11
Severance and ad valorem taxes
0.73
1.16
DD&A expense
12.18
12.46
1 Includes results attributable to a
noncontrolling interest in MP GOM.
MURPHY OIL CORPORATION
CAPITAL EXPENDITURES
(unaudited)
Three Months Ended
March 31,
(Millions of
dollars)
2023
2022
Exploration and production
United States1
$
254.7
192.8
Canada
68.1
76.8
Other
6.9
29.8
Total
329.7
299.4
Corporate
6.3
5.3
Total capital expenditures - continuing
operations2
336.0
304.7
Charged to exploration expenses3
United States1
1.7
4.1
Canada
0.1
0.1
Other
5.8
39.1
Total charged to exploration expenses -
continuing operations
7.6
43.3
Total capitalized
$
328.4
261.4
1 Includes results attributable to a
noncontrolling interest in MP GOM.
2 For the three months ended March 31,
2023, total capital expenditures excluding noncontrolling interest
(NCI) of $8.9 million (2022: $3.6 million) are $327.1 million
(2022: $301.1 million).
3 For the three months ended March 31,
2023, charges to exploration expense excludes amortization of
undeveloped leases of $2.7 million (2022: $4.3 million).
MURPHY OIL CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited)
(Millions of
dollars)
March 31, 2023
December 31, 2022
ASSETS
Current assets
Cash and cash equivalents
$
312.4
492.0
Accounts receivable
394.9
391.2
Inventories
63.5
54.5
Prepaid expenses
31.0
34.7
Total current assets
801.8
972.3
Property, plant and equipment, at cost
8,363.0
8,228.0
Operating lease assets
903.1
946.4
Deferred income taxes
74.1
117.9
Deferred charges and other assets
46.5
44.3
Total assets
$
10,188.5
10,309.0
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt,
finance lease
$
0.7
0.7
Accounts payable
516.9
543.8
Income taxes payable
24.8
26.5
Other taxes payable
28.2
22.8
Operating lease liabilities
239.4
220.4
Other accrued liabilities
218.1
443.6
Total current liabilities
1,028.0
1,257.8
Long-term debt, including finance lease
obligation
1,823.0
1,822.5
Asset retirement obligations
830.4
817.3
Deferred credits and other liabilities
301.7
304.9
Non-current operating lease
liabilities
679.9
742.7
Deferred income taxes
220.9
214.9
Total liabilities
4,883.9
5,160.1
Equity
Common Stock, par $1.00
195.1
195.1
Capital in excess of par value
857.0
893.6
Retained earnings
6,204.2
6,055.5
Accumulated other comprehensive loss
(529.9
)
(534.7
)
Treasury stock
(1,588.8
)
(1,614.7
)
Murphy Shareholders' Equity
5,137.6
4,994.8
Noncontrolling interest
167.1
154.1
Total equity
5,304.7
5,148.9
Total liabilities and equity
$
10,188.5
10,309.0
MURPHY OIL CORPORATION
PRODUCTION SUMMARY
(unaudited)
Three Months Ended
March 31,
(Barrels per day unless otherwise
noted)
2023
2022
Net crude oil and condensate
United States
Onshore
19,277
20,330
Gulf of Mexico 1
75,699
55,253
Canada
Onshore
3,283
4,380
Offshore
2,459
3,321
Other
269
276
Total net crude oil and condensate -
continuing operations
100,987
83,560
Net natural gas liquids
United States
Onshore
4,157
4,833
Gulf of Mexico 1
6,342
3,526
Canada
Onshore
826
983
Total net natural gas liquids - continuing
operations
11,325
9,342
Net natural gas – thousands of cubic feet
per day
United States
Onshore
24,160
27,361
Gulf of Mexico 1
75,203
56,058
Canada
Onshore
305,232
258,291
Total net natural gas - continuing
operations
404,595
341,710
Total net hydrocarbons - continuing
operations including NCI 2,3
179,745
149,854
Noncontrolling interest
Net crude oil and condensate – barrels per
day
(6,613
)
(8,128
)
Net natural gas liquids – barrels per
day
(232
)
(287
)
Net natural gas – thousands of cubic feet
per day 2
(2,354
)
(2,590
)
Total noncontrolling interest
(7,237
)
(8,847
)
Total net hydrocarbons - continuing
operations excluding NCI 2,3
172,508
141,007
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
March 31,
2023
2022
Crude oil and condensate – dollars per
barrel
United States
Onshore
$
74.98
$
93.87
Gulf of Mexico 1
73.27
95.02
Canada 2
Onshore
74.29
93.09
Offshore
77.93
110.66
Other
89.05
—
Natural gas liquids – dollars per
barrel
United States
Onshore
22.11
38.32
Gulf of Mexico 1
25.63
44.05
Canada 2
Onshore
46.59
55.02
Natural gas – dollars per thousand cubic
feet
United States
Onshore
2.51
4.61
Gulf of Mexico 1
3.27
5.19
Canada 2
Onshore
2.55
2.52
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 MAY 1, 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
4/1/2023
12/31/2023
Canada
Natural Gas
Fixed price forward sales
162
C$2.39
1/1/2024
12/31/2024
Canada
Natural Gas
Fixed price forward sales
25
US$1.98
4/1/2023
10/31/2024
Canada
Natural Gas
Fixed price forward sales
15
US$1.98
11/1/2024
12/31/2024
1 Fixed price forward sale contracts are
accounted for as normal sales and purchases for accounting
purposes.
MURPHY OIL CORPORATION
SECOND QUARTER 2023 GUIDANCE
Oil
BOPD
NGLs
BOPD
Gas
MCFD
Total
BOEPD
Production – net
U.S. – Eagle Ford Shale
25,000
4,300
26,700
33,800
– Gulf of Mexico excluding NCI
63,900
5,600
69,100
81,000
Canada – Tupper Montney
—
—
320,000
53,300
– Kaybob Duvernay and Placid Montney
2,900
700
12,300
5,700
– Offshore
2,900
—
—
2,900
Other
300
—
—
300
Total net production (BOEPD) - excluding
NCI 1
173,000 to 181,000
Exploration expense ($ millions)
$55
FULL YEAR 2023 GUIDANCE
Total net production (BOEPD) - excluding
NCI 2
175,500 to 183,500
Capital expenditures – excluding NCI ($
millions) 3
$875 to $1,025
¹ Excludes noncontrolling interest of MP
GOM of 5,900 BOPD of oil, 300 BOPD of NGLs, and 2,200 MCFD gas.
² Excludes noncontrolling interest of MP
GOM of 6,500 BOPD of oil, 300 BOPD of NGLs, and 2,500 MCFD gas.
³ Excludes noncontrolling interest of MP
GOM of $65 MM.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230501005772/en/
Investor Contacts: InvestorRelations@murphyoilcorp.com
Kelly Whitley, 281-675-9107 Megan Larson, 281-675-9470 Nathan
Shanor, 713-941-9576
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