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 http://ir.murphyoilcorp.com 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.
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, make capital
expenditures 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
news release. 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
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
¹ Excludes noncontrolling interest of MP
GOM of 6,400 BOPD of oil, 200 BOPD of NGLs, and 2,700 MCFD gas.
² Excludes noncontrolling interest of MP
GOM of 6,200 BOPD of oil, 200 BOPD of NGLs, and 2,200 MCFD gas.
³ Excludes noncontrolling interest of MP
GOM of $70 million and acquisition-related costs of $49
million.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101852306/en/
Investor Contacts: InvestorRelations@murphyoilcorp.com
Kelly Whitley, 281-675-9107 Megan Larson, 281-675-9470
Murphy Oil (NYSE:MUR)
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