EX-99.1 2 mur-20160727xex99_1.htm EX-99.1 2Q 2016 Earnings Exhibit 99.1

Exhibit 99.1



MURPHY OIL CORPORATION ANNOUNCES PRELIMINARY SECOND QUARTER 2016 FINANCIAL AND OPERATING RESULTS



EL DORADO, Arkansas, July 27, 2016 – Murphy Oil Corporation (NYSE: MUR) today announced its preliminary financial and operating results for the second quarter ended June 30, 2016, including net income of $3 million, or $0.02 per diluted share.

Operating and financial highlights for the second quarter 2016 include:

·

Closed the divestitures of Syncrude and Montney natural gas processing and sales pipeline assets generating combined proceeds of approximately $1.15 billion

·

Completed the company’s joint venture entry into the Kaybob Duvernay and Placid Montney plays

·

Paid down the entire outstanding amount drawn on the company’s revolving credit facility and exited the second quarter with total debt of $2.46 billion and $399 million of cash  

·

Reduced lease operating expense per barrel by over 23 percent quarter-over-quarter, excluding Syncrude

·

Lowered G&A expense by approximately 15 percent quarter-over-quarter

SECOND QUARTER FINANCIAL RESULTS

Net income of $3 million, or $0.02 per diluted share for the second quarter 2016, was mostly attributable to net income tax benefits associated with divestitures of the company’s interests in Syncrude and Montney natural gas processing and sales pipeline assets. The company reported an adjusted loss, which excludes both the results of discontinued operations and certain other items that affect comparability of results between periods, of $62 million, or $0.36 per diluted share, in the second quarter of 2016. Details for second quarter can be found in the attached schedules.   

Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations in the second quarter 2016 totaled $158 million, or $10.42 per barrel of oil equivalent (boe) sold. Earnings before interest, taxes, depreciation, amortization and exploration expenses (EBITDAX) in the second quarter 2016 totaled $196 million, or $12.86 per boe sold. Both EBITDA and EBITDAX were significantly impacted by a 21 percent decrease in the company’s crude oil realizations and a 44 percent decrease in North American natural gas realizations, compared to the second quarter of 2015. Details for second quarter EBITDA and EBITDAX can be found in the attached schedules.

1

 



Second quarter 2016 production averaged approximately 168,600 barrels of oil equivalent per day (boepd). Production in the second quarter was lower than anticipated primarily due to downtime from a third party gas operated plant servicing assets in Block K, Malaysia, and downstream natural gas pipeline restrictions in onshore Canada. Additionally, eight completions in the Eagle Ford Shale (“EFS”) were rescheduled to the second quarter from the third quarter, which shut-in production from offset wells during completion operations. These new wells were brought online and began producing early in the third quarter. As previously announced, there was also increased downtime at Syncrude, which was divested in the quarter, due to scheduled maintenance and the wildfires near Fort McMurray, which also impacted our new Kaybob Duvernay oil assets.

Second quarter 2016 lease operating expense was reduced 23 percent from the second quarter 2015, excluding Syncrude, to $8.36 per boe. The lower lease operating expense rate is a result of ongoing systematic cost reductions and efficiency initiatives as well as supplier pricing negotiations. This also includes the new tariff applicable to the Tupper Montney assets following the sale of natural gas processing and sales pipeline assets during the quarter. Second quarter 2016 general and administrative costs decreased by 9 percent from first quarter 2016. More importantly, the company has been able to decrease general and administrative costs by 23 percent from the first quarter of 2015.

“During the second quarter, we continued progressing our 2015 repositioning efforts as we closed the Syncrude non-core asset sale, along with the Montney processing assets, and entered into a new North American unconventional play and further strengthened our balance sheet,” stated Roger W. Jenkins, President and Chief Executive Officer. “We will continue to focus on costs and capital allocation while pursuing new exploitation efforts in our three significant onshore unconventional plays and maintaining our original capital plan with adjusted production levels accounting for asset purchases and sales,” Jenkins added.

ASSET SALES PROCEEDS AND LIQUIDITY

Murphy received approximately $1.15 billion in net proceeds during the quarter from the sale of its interest in Syncrude and its Montney natural gas processing and sales pipeline assets. The divestiture proceeds were used to reduce outstanding borrowings by $971 million during the quarter and to fund $207 million for the Kaybob Duvernay and Placid Montney joint venture (JV) acquisition. These actions significantly improved the company’s liquidity profile. At June 30, 2016, the company had zero drawn on its revolving credit facility, which expires in June 2017.

2

 



REGIONAL OPERATIONS SUMMARY

North American Onshore

Eagle Ford Shale – Production in the second quarter 2016 averaged over 47 thousand barrels of oil equivalent per day (Mboepd), which includes 87 percent liquids. Drilling and completion costs decreased to an average of $4.0 million per well across our diverse oil weighted areas, representing over a 25 percent decrease from second quarter 2015. As previously mentioned, eight operated EFS wells were completed late in the second quarter. The wells were completed ahead of plan to synchronize completion schedules with offset operators. In addition to the aforementioned wells, there are 22 wells currently scheduled to be brought online during the second half of 2016, including two Austin Chalk wells that will further evaluate the resource. Our original Austin Chalk test well continues to flow above plan. The capital for these wells are within previously announced annual corporate capital expenditures.

Tupper Montney – Murphy produced over 197 million cubic feet per day (MMcfd) of natural gas in the second quarter 2016. The first half of the year production has been hampered in the region by unpredictable flow restrictions caused by third-party downstream pipeline constraints. Six new wells were brought online during the quarter, including two wells that are testing extended laterals and increased proppant per lateral foot in the completion phase. The wells are still in the early production stages, however, initial results appear encouraging.

Kaybob Duvernay and Placid Montney – Murphy completed the previously announced JV mid-quarter and produced approximately 1.9 Mboepd, which includes 52 percent liquids, during the second quarter. For the remainder of 2016, it is expected that there will be two wells drilled and four wells completed in the Murphy operated Kaybob Duvernay, and twelve wells drilled and four wells completed in the non-operated Placid Montney. The company plans to spend approximately $50 million on drilling, completing and infrastructure for the remainder of 2016 and is expected to produce an average of 2.4 Mboepd for the year.

Global Offshore

Malaysia – Block K and Sarawak oil production in the second quarter was approximately 39 thousand barrels of oil per day, while Sarawak natural gas production was over 96 MMcfd. During the third quarter, the company is planning a topside installation at the South Acis satellite platform. The wells were drilled earlier this year and are expected to commence production during the fourth quarter.

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Gulf of Mexico – Production for the second quarter of 2016 was just under 17 Mboepd, comprised of 83 percent liquids. The Kodiak well resumed production during the quarter following facility upgrades. Currently, the well is flowing at 12,500 boepd gross with evaluations taking place to co-mingle an upper zone and offset well opportunities.

2016 AND THIRD QUARTER GUIDANCE

Capital expenditure guidance for full-year 2016 is being maintained at $620 million, excluding $207 million of acquisition costs for the Kaybob Duvernay and Placid Montney JV.  Details for capital expenditures for the first six months of 2016 can be found in the attached schedules. The company’s third quarter and full-year 2016 production outlook from its retained assets remains unchanged after incorporating the previously announced effects from the sale of Syncrude and the production associated with the purchase of Kaybob Duvernay and Placid Montney assets. Production for the third quarter 2016 is estimated in the range of 167,500 – 169,500 boepd and full-year 2016 is estimated in the range of 173,000 – 177,000 boepd, reflecting the above net changes due to asset sales and purchases. Details for third quarter and full-year 2016 production guidance can be found in the attached schedules.

CONFERENCE CALL AND WEBCAST SCHEDULED FOR JULY 28, 2016

Murphy will host a conference call to discuss second quarter 2016 results on Thursday, July 28, 2016, at 1:00 p.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 1-888-802-2266. The telephone reservation number for the call is 9900445. Replays of the call will be available through the same address on the company’s website, and a recording of the call will be available through August 11, 2016, by calling 1-888-203-1112 and referencing reservation number 9900445. A replay of the conference call will also be available on the Murphy website at http://ir.murphyoilcorp.com.



FINANCIAL DATA

Summary financial data and operating statistics for the second quarter and first six months of 2016 with comparisons to the same periods the previous year are contained in the following schedules. Additionally, a schedule indicating the impacts of items affecting comparability of earnings between periods and a schedule comparing EBITDA and EBITDAX between periods are included with these schedules as well as guidance for the third quarter.

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ABOUT MURPHY OIL CORPORATION

Murphy Oil Corporation is a global independent oil and natural gas exploration and production company. The company's diverse resource base includes offshore production in Malaysia, Canada and Gulf of Mexico, as well as, North American onshore plays in the Eagle Ford Shale, Kaybob Duvernay and Montney.



FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as “targets”, “expectations”, “plans”, “forecasts”, “projections” and other comparable terminology often identify forward-looking statements. These statements, which express management’s current views concerning future events or results are subject to inherent risks and uncertainties. Factors that could cause one or more of these forecasted events not to occur include, but are not limited to, a failure to obtain necessary regulatory approvals, a deterioration in the business or prospects of Murphy, adverse developments in Murphy business’ markets, adverse developments in the U.S. or global capital markets, credit markets or economies in general. Factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements include, but are not limited to, the volatility and level of crude oil and natural gas prices, the level and success rate of our exploration programs, our ability to maintain production rates and replace reserves, customer demand for our products, adverse foreign exchange movements, political and regulatory instability, and uncontrollable natural hazards.  For further discussion of risk factors, see Murphy’s 2015 Annual Report on Form 10-K, on file with the U.S. Securities and Exchange Commission. Murphy undertakes no duty to publicly update or revise any forward-looking statements.



NON-GAAP MEASURES

This news release also contains certain historical non-GAAP measures of financial performance that management believes are good tools for internal use and the investment community in evaluating Murphy Oil Corporation's overall financial performance. These non-GAAP measures are broadly used to value and compare companies in the crude oil and natural gas industry. Please see the attached schedules for reconciliations of the differences between non-GAAP measures used in this news release and the most directly comparable GAAP financial measures.



RESERVE REPORTING TO THE SECURITIES EXCHANGE COMMISSION

The Securities and Exchange Commission (SEC) requires oil and natural gas companies, in their filings with the SEC, to disclose proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We may use certain terms in this news release, such as “resource”, “gross resource”, “recoverable resource”, “net risked PMEAN resource”, “recoverable oil”, “resource base”, “EUR or estimated ultimate recovery” and similar terms that the SEC’s rules strictly prohibit us from including in filings with the SEC. The SEC permits the optional disclosure of probable and possible reserves; however, we have not disclosed the Company's probable and possible reserves in our filings with the SEC. Investors are urged to consider closely the disclosures and risk factors in our most recent annual report on Form 10-K

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and in other reports on file with the SEC, available from Murphy Oil Corporation's offices or website at http://ir.murphyoilcorp.com.

Investor Contacts:

Kelly Whitley, kelly_whitley@murphyoilcorp.com, 281-675-9107

Nancy Perkins, nancy_perkins@murphyoilcorp.com, 281-675-9252

Emily McElroy, emily_mcelroy@murphyoilcorp.com, 870-864-6324



 

6

 

MURPHY OIL CORPORATION

SUMMARIZED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Thousands of dollars, except per share amounts)





 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



 

Three Months Ended

 

Six Months Ended



 

June 30,

 

June 30,



 

2016

 

2015

 

2016

 

2015



 

 

 

 

 

 

 

 

Revenues

$

 437,462 

 

 738,290 

 

 867,757 

 

 1,660,037 



 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

     Lease operating expenses

 

 156,530 

 

 227,489 

 

 315,633 

 

 459,910 

     Severance and ad valorem taxes

 

 13,439 

 

 19,043 

 

 26,076 

 

 39,834 

     Exploration expenses

 

 37,128 

 

 64,959 

 

 64,044 

 

 193,693 

     Selling and general expenses

 

 67,113 

 

 79,176 

 

 140,620 

 

 166,143 

     Depreciation, depletion and amortization

 

 255,239 

 

 403,390 

 

 541,388 

 

 884,417 

     Accretion of asset retirement obligations

 

 12,346 

 

 11,750 

 

 24,471 

 

 23,519 

     Impairment of assets

 

– 

 

– 

 

 95,088 

 

– 

     Interest expense

 

 35,058 

 

 30,466 

 

 67,119 

 

 59,936 

     Interest capitalized

 

 (608)

 

 (1,823)

 

 (2,449)

 

 (3,208)

     Other expense (benefit)

 

 (7,516)

 

 13,931 

 

 (7,932)

 

 63,612 



 

 568,729 

 

 848,381 

 

 1,264,058 

 

 1,887,856 

Loss from continuing operations before income taxes

 

 (131,267)

 

 (110,091)

 

 (396,301)

 

 (227,819)

Income tax benefit

 

 (134,172)

 

 (21,105)

 

 (199,721)

 

 (142,363)

Income (loss) from continuing operations

 

 2,905 

 

 (88,986)

 

 (196,580)

 

 (85,456)

Income (loss) from discontinued operations, net of income taxes

 

 25 

 

 15,152 

 

 708 

 

 (2,819)

Net income (loss)

$

 2,930 

 

 (73,834)

 

 (195,872)

 

 (88,275)

Income (loss) per Common share – Basic

 

 

 

 

 

 

 

 

     Continuing operations

$

 0.02 

 

 (0.51)

 

 (1.14)

 

 (0.48)

     Discontinued operations

 

– 

 

 0.09 

 

– 

 

 (0.02)

         Net loss

$

 0.02 

 

 (0.42)

 

 (1.14)

 

 (0.50)

Income (loss) per Common share – Diluted

 

 

 

 

 

 

 

 

     Continuing operations

$

 0.02 

 

 (0.51)

 

 (1.14)

 

 (0.48)

     Discontinued operations

 

– 

 

 0.09 

 

– 

 

 (0.02)

         Net loss

$

 0.02 

 

 (0.42)

 

 (1.14)

 

 (0.50)

Cash dividends per Common share

$

 0.35 

 

 0.35 

 

 0.70 

 

 0.70 

Average Common shares outstanding (thousands)

 

 

 

 

 

 

 

 

     Basic

 

 172,197 

 

 174,489 

 

 172,150 

 

 176,343 

     Diluted

 

 172,800 

 

 174,489 

 

 172,150 

 

 176,343 



 

7

 

MURPHY OIL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Thousands of dollars)





 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



 

Three Months Ended

 

Six Months Ended



 

June 30,

 

June 30,



 

2016

 

2015

 

2016

 

2015

Operating Activities

 

 

 

 

 

 

 

 

Net income (loss)

$

 2,930 

 

 (73,834)

 

 (195,872)

 

 (88,275)

Adjustments to reconcile net loss to net cash provided
  by continuing operations activities:

 

 

 

 

 

 

 

 

(Income) loss from discontinued operations

 

 (25)

 

 (15,152)

 

 (708)

 

 2,819 

Depreciation, depletion and amortization

 

 255,239 

 

 403,390 

 

 541,388 

 

 884,417 

Impairment of assets

 

– 

 

– 

 

 95,088 

 

– 

Amortization of deferred major repair costs

 

 1,796 

 

 1,296 

 

 3,798 

 

 3,404 

Dry hole costs

 

 14,339 

 

 20,394 

 

 14,270 

 

 99,023 

Amortization of undeveloped leases

 

 14,950 

 

 24,219 

 

 25,419 

 

 45,825 

Accretion of asset retirement obligations

 

 12,346 

 

 11,750 

 

 24,471 

 

 23,519 

Deferred and noncurrent income tax benefits

 

 (230,518)

 

 (10,054)

 

 (316,201)

 

 (194,240)

Pretax gains from disposition of assets

 

 (3,809)

 

 (18,246)

 

 (3,831)

 

 (154,123)

Net (increase) decrease in noncash operating working capital

 

 17,554 

 

 (151,636)

 

 (86,793)

1

 107,171 

Other operating activities, net

 

 (14,736)

 

 (10,760)

 

 12,349 

 

 (14,329)

Net cash provided by continuing operations activities

 

 70,066 

 

 181,367 

 

 113,378 

 

 715,211 

Investing Activities

 

 

 

 

 

 

 

 

Property additions and dry hole costs

 

 (394,558)

2

 (609,775)

 

 (604,587)

2

 (1,433,615)

Proceeds from sales of property, plant and equipment

 

 1,153,292 

 

 5,864 

 

 1,153,325 

 

 423,106 

Purchases of investment securities3

 

 (601,941)

 

 (364,024)

 

 (651,218)

 

 (629,763)

Proceeds from maturity of investment securities3

 

 614,395 

 

 361,879 

 

 701,378 

 

 663,343 

Other investing activities, net

 

 14,018 

 

 (20,342)

 

 (7,640)

 

 (20,568)

Net cash provided (required) by investing activities

 

 785,206 

 

 (626,398)

 

 591,258 

 

 (997,497)

Financing Activities

 

 

 

 

 

 

 

 

Borrowings of debt

 

– 

 

 668,000 

 

– 

 

 823,000 

Repayments of debt

 

 (971,000)

 

– 

 

 (600,000)

 

 (450,000)

Capital lease obligation payments

 

 (2,482)

 

 (2,232)

 

 (5,172)

 

 (4,703)

Purchase of treasury stock

 

– 

 

 (250,000)

 

– 

 

 (250,000)

Withholding tax on stock-based incentive awards

 

 (86)

 

– 

 

 (1,138)

 

 (8,976)

Cash dividends paid

 

 (60,268)

 

 (62,294)

 

 (120,535)

 

 (124,581)

Other financing activities, net

 

– 

 

 (44)

 

– 

 

 (152)

Net cash (required) provided by financing activities

 

 (1,033,836)

 

 353,430 

 

 (726,845)

 

 (15,412)

Cash Flows from Discontinued Operations

 

 

 

 

 

 

 

 

Operating activities

 

 2,873 

 

 (20,586)

 

 5,185 

 

 (85,445)

Investing activities

 

– 

 

 5,276 

 

– 

 

 5,322 

Changes in cash included in current assets held for sale

 

 (2,873)

 

 24,519 

 

 (5,185)

 

 89,226 

Net increase in cash and cash equivalents of
discontinued operations

 

– 

 

 9,209 

 

– 

 

 9,103 

Effect of exchange rate changes on cash and cash equivalents

 

 22,984 

 

 10,658 

 

 6,509 

 

 4,555 

Net decrease in cash and cash equivalents

 

 (155,580)

 

 (71,734)

 

 (15,700)

 

 (284,040)

Cash and cash equivalents at beginning of period

 

 423,063 

 

 981,002 

 

 283,183 

 

 1,193,308 

Cash and cash equivalents at end of period

$

 267,483 

 

 909,268 

 

 267,483 

 

 909,268 



1  2016 balance includes payments for deepwater rig contract exit of $261.8 million.

2  Includes costs of $206.7 million associated with acquisition of Kaybob Duvernay and Liquids Rich Montney.

3 Investments are Canadian government securities with maturities greater than 90 days at the date of  acquisition.

 

8

 



MURPHY OIL CORPORATION

SCHEDULE OF ADJUSTED LOSS

(Unaudited)

(Millions of dollars, except per share amounts)







 

 

 

 

 

 

 

 

 

 



 

 

 

Three Months Ended

 

Six Months Ended



 

 

 

June 30,

 

June 30,



 

 

 

2016

 

2015

 

2016

 

2015

Net income (loss)

 

 

$

 2.9 

 

 (73.8)

 

 (195.9)

 

 (88.3)

Discontinued operation (earnings) loss

 

 

 

 –

 

 (15.2)

 

 (0.7)

 

 2.8 

Earnings (loss) from continuing operations

 

 

 

 2.9 

 

 (89.0)

 

 (196.6)

 

 (85.5)

Mark-to-market loss (gain) on crude oil derivative contracts

 

 

 

 38.6 

 

 (4.8)

 

 51.9 

 

 (4.8)

Foreign exchange gains

 

 

 

 (19.5)

 

 (1.3)

 

 (21.3)

 

 (35.1)

Syncrude operations, including tax benefits of $68.0 on sale

 

 

 

 (51.9)

 

 –

 

 (47.9)

 

 –

Income tax benefits associated with Montney midstream divestiture

 

 

 

 (20.9)

 

 –

 

 (20.9)

 

 –

Income tax benefits on investments in foreign areas

 

 

 

 (9.4)

 

 –

 

 (9.4)

 

 –

Oil Insurance Limited dividends

 

 

 

 (2.2)

 

 –

 

 (2.2)

 

 (4.5)

Impairments of assets

 

 

 

 –

 

 –

 

 68.9 

 

 –

Restructuring charges

 

 

 

 –

 

 7.5 

 

 6.2 

 

 7.5 

Gain on sale of 10% interest in Malaysia

 

 

 

 –

 

 (19.3)

 

 –

 

 (218.8)

Environmental provisions

 

 

 

 –

 

 –

 

 –

 

 35.8 

Increase in Alberta corporate tax rate

 

 

 

 –

 

 23.8 

 

 –

 

 23.8 

Total adjustments after taxes

 

 

 

 (65.3)

 

 5.9 

 

 25.3 

 

 (196.1)

Adjusted loss

 

 

$

 (62.4)

 

 (83.1)

 

 (171.3)

 

 (281.6)

Adjusted loss per diluted share

 

 

$

 (0.36)

 

 (0.48)

 

 (1.00)

 

 (1.60)



Non-GAAP Financial Measures

Presented above is a reconciliation of Net loss to Adjusted loss.  Adjusted loss 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 loss is a non-GAAP financial measure and should not be considered a substitute for Net loss as determined in accordance with accounting principles generally accepted in the United States of America





Note:  Amounts shown above as reconciling items between Net loss and Adjusted loss are presented net of applicable income taxes based on the statutory rate applicable by jurisdiction.  The 2016 pretax and income tax impacts for adjustments shown above are as follows by area of operations:







 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Six Months Ended



June 30, 2016

 

June 30, 2016



Pretax

 

Tax

 

Net

 

Pretax

 

Tax

 

Net

Exploration & Production:

 

 

 

 

 

 

 

 

 

 

 

  United States

 59.4 

 

 (20.8)

 

 38.6 

 

 84.1 

 

 (29.1)

 

 55.0 

  Canada

 21.6 

 

 (94.5)

 

 (72.9)

 

 123.7 

 

 (122.6)

 

 1.1 

  Malaysia

 –

 

 –

 

 –

 

 1.5 

 

 (0.6)

 

 0.9 

  Other International

 –

 

 (9.4)

 

 (9.4)

 

 2.2 

 

 (10.1)

 

 (7.9)



 81.0 

 

 (124.7)

 

 (43.7)

 

 211.5 

 

 (162.4)

 

 49.1 

Corporate:

 (25.4)

 

 3.8 

 

 (21.6)

 

 (25.7)

 

 1.9 

 

 (23.8)

Total adjustments

 55.6 

 

 (120.9)

 

 (65.3)

 

 185.8 

 

 (160.5)

 

 25.3 



 

9

 

MURPHY OIL CORPORATION

SCHEDULE OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION

AND AMORTIZATION (EBITDA)

(Unaudited)

(Millions of dollars, except per barrel of oil equivalents sold)







 

 

 

 

 

 

 

 

 



Three Months Ended

 

Six Months Ended

 



June 30,

 

June 30,

 



2016

 

2015

 

2016

 

2015

 

Income (loss) from continuing operations

$

 2.9 

 

 (89.0)

 

 (196.6)

 

 (85.5)

 

Income tax benefit

 

 (134.2)

 

 (21.1)

 

 (199.7)

 

 (142.3)

 

Interest expense

 

 35.1 

 

 30.4 

 

 67.1 

 

 59.9 

 

Interest capitalized

 

 (0.6)

 

 (1.8)

 

 (2.4)

 

 (3.2)

 

Depreciation, depletion and amortization expense

 

 255.2 

 

 403.4 

 

 541.4 

 

 884.4 

 

Impairments of assets

 

 –

 

 –

 

 95.1 

 

 –

 

Earnings before interest, taxes, depreciation and
  amortization (EBITDA)

$

 158.4 

 

 321.9 

 

 304.9 

 

 713.3 

1

Total barrels of oil equivalents sold (thousands of barrels)

 

 15,198.9 

 

 17,717.7 

 

 32,744.5 

 

 38,431.2 

 

EBITDA per barrel of oil equivalents sold

$

 10.42 

 

 18.17 

 

 9.31 

 

 18.56 

 





Non-GAAP Financial Measures

Presented above is a reconciliation of Income (loss) from continuing operations to Earnings before interest, taxes, depreciation and amortization (EBITDA).  Management believes EBITDA 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.  EBITDA is a non-GAAP financial measure 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.



1 Includes pre-tax gain on sale of 10% interest in Malaysia in 2015 of $135.8 million.





 

10

 

MURPHY OIL CORPORATION

SCHEDULE OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION,

AMORTIZATION AND EXPLORATION (EBITDAX)

(Unaudited)

(Millions of dollars, except per barrel of oil equivalents sold)







 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



Three Months Ended

 

Six Months Ended

 



June 30,

 

June 30,

 



2016

 

2015

 

2016

 

2015

 

Income (loss) from continuing operations

$

 2.9 

 

 (89.0)

 

 (196.6)

 

 (85.5)

 

Income tax benefit

 

 (134.2)

 

 (21.1)

 

 (199.7)

 

 (142.3)

 

Interest expense

 

 35.1 

 

 30.4 

 

 67.1 

 

 59.9 

 

Interest capitalized

 

 (0.6)

 

 (1.8)

 

 (2.4)

 

 (3.2)

 

Depreciation, depletion and amortization expense

 

 255.2 

 

 403.4 

 

 541.4 

 

 884.4 

 

Impairments of assets

 

 –

 

 –

 

 95.1 

 

 –

 

Exploration expense

 

 37.1 

 

 65.0 

 

 64.0 

 

 193.7 

 

Earnings before interest, taxes, depreciation, amortization
  and exploration (EBITDAX)

$

 195.5 

 

 386.9 

 

 368.9 

 

 907.0 

1

Total barrels of oil equivalents sold (thousands of barrels)

 

 15,198.9 

 

 17,717.7 

 

 32,744.5 

 

 38,431.2 

 

EBITDAX per barrel of oil equivalents sold

$

 12.86 

 

 21.84 

 

 11.27 

 

 23.60 

 



Non-GAAP Financial Measures

Presented above is a reconciliation of Income (loss) from continuing operations to Earnings before interest, taxes, depreciation, amortization and exploration (EBITDAX).  Management believes EBITDAX 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.  EBITDAX is a non-GAAP financial measure 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.



1 Includes pre-tax gain on sale of 10% interest in Malaysia in 2015 of $135.8 million.



 

11

 

MURPHY OIL CORPORATION

FUNCTIONAL RESULTS OF OPERATIONS (Unaudited)

(Millions of dollars)







 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



Three Months Ended
June 30, 2016

 

Three Months Ended
June 30, 2015



 

Revenues

 

Income
(Loss)

 

Revenues

 

Income
(Loss)

Exploration and production

 

 

 

 

 

 

 

 

    United States

$

 143.6 

 

 (65.7)

 

 339.8 

 

 (16.5)

    Canada

 

 77.4 

 

 55.3 

 

 152.9 

 

 (32.2)

    Malaysia

 

 190.5 

 

 47.7 

 

 244.5 

 

 27.6 

    Other

 

 (0.1)

 

 (5.1)

 

– 

 

 (30.1)

        Total exploration and production

 

 411.4 

 

 32.2 

 

 737.2 

 

 (51.2)

Corporate and other

 

 26.1 

 

 (29.3)

 

 1.1 

 

 (37.8)

Revenue/income (loss) from continuing operations

 

 437.5 

 

 2.9 

 

 738.3 

 

 (89.0)

Discontinued operations, net of tax

 

– 

 

– 

 

– 

 

 15.2 

Total revenues/net income (loss)

$

 437.5 

 

 2.9 

 

 738.3 

 

 (73.8)



 

 

 

 

 

 

 

 



Six Months Ended
June 30, 2016

 

Six Months Ended
June 30, 2015



 

Revenues

 

Income
(Loss)

 

Revenues

 

Income
(Loss)

Exploration and production

 

 

 

 

 

 

 

 

    United States

$

 318.3 

 

 (131.4)

 

 619.9 

 

 (110.4)

    Canada

 

 183.5 

 

 (31.9)

 

 305.2 

 

 (70.7)

    Malaysia

 

 338.8 

 

 70.1 

 

 690.2 

 

 250.7 

    Other

 

– 

 

 (31.2)

 

– 

 

 (102.1)

        Total exploration and production

 

 840.6 

 

 (124.4)

 

 1,615.3 

 

 (32.5)

Corporate and other

 

 27.2 

 

 (72.2)

 

 44.7 

 

 (53.0)

Revenue/income (loss) from continuing operations

 

 867.8 

 

 (196.6)

 

 1,660.0 

 

 (85.5)

Discontinued operations, net of tax

 

– 

 

 0.7 

 

– 

 

 (2.8)

Total revenues/net income (loss)

$

 867.8 

 

 (195.9)

 

 1,660.0 

 

 (88.3)



Note:  Corporate and other above includes unallocated administrative expenses, interest income and net interest expense, the impacts of foreign exchange, and income taxes associated with these income and expense items.



 

12

 

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (Unaudited)

THREE MONTHS ENDED JUNE 30,  2016 AND 2015



 

 

 

 

 

 

 



 

 

 

 

 

 

 



 

 

Canada

 

 

 



 

United

Conven-

Syn-  

 

 

 

(Millions of dollars)

 

States

tional 

thetic 

Malaysia

Other

Total

Three Months Ended June 30, 2016

 

 

 

 

 

 

 

Oil and gas sales and other revenues

$

 143.6  61.6  15.8  190.5  (0.1) 411.4 

Lease operating expenses

 

 54.5  25.0  31.8  45.2 

– 

156.5 

Severance and ad valorem taxes

 

 11.0  1.1  1.3 

– 

– 

13.4 

Depreciation, depletion and amortization

 

 146.6  45.9  3.1  54.0  1.6  251.2 

Accretion of asset retirement obligations

 

 4.3  2.8  1.2  4.0 

– 

12.3 

Impairment of assets

 

– 

– 

– 

– 

– 

– 

Exploration expenses

 

 

 

 

 

 

 

    Dry holes

 

 (0.8)

– 

– 

4.5  10.7  14.4 

    Geological and geophysical

 

 0.3 

– 

– 

0.2 

– 

0.5 

    Other

 

 1.0  0.1 

– 

– 

6.2  7.3 



 

 0.5  0.1 

– 

4.7  16.9  22.2 

    Undeveloped lease amortization

 

 13.7  1.0 

– 

– 

0.2  14.9 

        Total exploration expenses

 

 14.2  1.1 

– 

4.7  17.1  37.1 

Selling and general expenses

 

 12.7  8.1  0.2  5.0  9.1  35.1 

Other expenses (benefits)

 

 (0.1) 1.6 

– 

0.9  (9.9) (7.5)

Results of operations before taxes

 

 (99.6) (24.0) (21.8) 76.7  (18.0) (86.7)

Income tax provisions (benefits)

 

 (33.9) (27.4) (73.7) 29.0  (12.9) (118.9)

Results of operations (excluding
  corporate overhead and interest)

$

 (65.7) 3.4  51.9  47.7  (5.1) 32.2 



 

 

 

 

 

 

 

Three Months Ended June 30, 2015

 

 

 

 

 

 

 

Oil and gas sales and other revenues

$

 339.8  102.2  50.7  244.5 

– 

737.2 

Lease operating expenses

 

 78.6  32.7  43.5  72.7 

– 

227.5 

Severance and ad valorem taxes

 

 16.1  1.3  1.7 

– 

– 

19.1 

Depreciation, depletion and amortization

 

 196.7  59.4  11.6  132.1  1.6  401.4 

Accretion of asset retirement obligations

 

 4.9  1.7  1.4  3.7 

– 

11.7 

Exploration expenses

 

 

 

 

 

 

 

    Dry holes

 

 17.7 

– 

– 

– 

2.7  20.4 

    Geological and geophysical

 

 3.6 

– 

– 

1.3  1.8  6.7 

    Other

 

 3.1  0.2 

– 

– 

10.4  13.7 



 

 24.4  0.2 

– 

1.3  14.9  40.8 

    Undeveloped lease amortization

 

 19.7  4.2 

– 

– 

0.3  24.2 

        Total exploration expenses

 

 44.1  4.4 

– 

1.3  15.2  65.0 

Selling and general expenses

 

 22.9  6.5  0.2  0.5  14.4  44.5 

Other expenses (benefits)

 

 1.8  (0.1)

– 

– 

12.1  13.8 

Results of operations before taxes

 

 (25.3) (3.7) (7.7) 34.2  (43.3) (45.8)

Income tax provisions (benefits)

 

 (8.8) 13.8  7.0  6.6  (13.2) 5.4 

Results of operations (excluding
  corporate overhead and interest)

$

 (16.5) (17.5) (14.7) 27.6  (30.1) (51.2)



 

13

 

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (Unaudited)

SIX MONTHS ENDED JUNE 30,  2016 AND 2015







 

 

 

 

 

 

 



 

 

Canada

 

 

 



 

United

Conven-

Syn-  

 

 

 

(Millions of dollars)

 

States

tional 

thetic 

Malaysia

Other

Total

Six Months Ended June 30, 2016

 

 

 

 

 

 

 

Oil and gas sales and other revenues

$

 318.3  119.2  64.3  338.8 

– 

840.6 

Lease operating expenses

 

 110.0  42.7  69.8  93.1 

– 

315.6 

Severance and ad valorem taxes

 

 21.4  2.2  2.5 

– 

– 

26.1 

Depreciation, depletion and amortization

 

 315.3  90.8  16.5  108.1  3.0  533.7 

Accretion of asset retirement obligations

 

 8.6  5.4  2.4  8.1 

– 

24.5 

Impairment of assets

 

– 

95.1 

– 

– 

– 

95.1 

Exploration expenses

 

 

 

 

 

 

 

    Dry holes

 

 (0.5)

– 

– 

4.1  10.7  14.3 

    Geological and geophysical

 

 0.6  2.9 

– 

0.5  4.3  8.3 

    Other

 

 2.1  0.4 

– 

– 

13.5  16.0 



 

 2.2  3.3 

– 

4.6  28.5  38.6 

    Undeveloped lease amortization

 

 22.7  2.3 

– 

– 

0.4  25.4 

        Total exploration expenses

 

 24.9  5.6 

– 

4.6  28.9  64.0 

Selling and general expenses

 

 35.2  15.7  0.5  8.4  19.2  79.0 

Other expenses (benefits)

 

 0.1 

– 

– 

0.9  (8.9) (7.9)

Results of operations before taxes

 

 (197.2) (138.3) (27.4) 115.6  (42.2) (289.5)

Income tax provisions (benefits)

 

 (65.8) (58.5) (75.3) 45.5  (11.0) (165.1)

Results of operations (excluding
  corporate overhead and interest)

$

 (131.4) (79.8) 47.9  70.1  (31.2) (124.4)



 

 

 

 

 

 

 

Six Months Ended June 30, 2015

 

 

 

 

 

 

 

Oil and gas sales and other revenues

$

 619.9  199.3  105.9  690.2 

– 

1,615.3 

Lease operating expenses

 

 180.4  58.3  87.4  133.8 

– 

459.9 

Severance and ad valorem taxes

 

 34.4  2.7  2.8 

– 

– 

39.9 

Depreciation, depletion and amortization

 

 401.5  119.5  25.4  330.7  3.1  880.2 

Accretion of asset retirement obligations

 

 9.7  3.4  2.8  7.6 

– 

23.5 

Exploration expenses

 

 

 

 

 

 

 

    Dry holes

 

 64.4 

– 

– 

– 

34.6  99.0 

    Geological and geophysical

 

 5.3 

– 

– 

1.3  16.9  23.5 

    Other

 

 4.8  0.4 

– 

– 

20.2  25.4 



 

 74.5  0.4 

– 

1.3  71.7  147.9 

    Undeveloped lease amortization

 

 36.5  8.4 

– 

– 

0.9  45.8 

        Total exploration expenses

 

 111.0  8.8 

– 

1.3  72.6  193.7 

Selling and general expenses

 

 45.3  13.3  0.4  1.2  29.1  89.3 

Other expenses

 

 7.5  43.9 

– 

– 

12.1  63.5 

Results of operations before taxes

 

 (169.9) (50.6) (12.9) 215.6  (116.9) (134.7)

Income tax provisions (benefits)

 

 (59.5) 1.5  5.7  (35.1) (14.8) (102.2)

Results of operations (excluding
  corporate overhead and interest)

$

 (110.4) (52.1) (18.6) 250.7  (102.1) (32.5)



14

 



MURPHY OIL CORPORATION

PRODUCTION-RELATED EXPENSES

(Dollars per barrel of oil equivalents sold)





 

 

 

 

 

 

 

 



 

Three Months Ended

 

Six Months Ended



 

June 30,

 

June 30,



 

2016

 

2015

 

2016

 

2015

United States – Eagle Ford Shale

 

 

 

 

 

 

 

 

Lease operating expense

$

 9.32 

 

 10.14 

 

 8.57 

 

 12.21 

Severance and ad valorem taxes

 

 2.58 

 

 2.90 

 

 2.27 

 

 3.04 

Depreciation, depletion and amortization (DD&A) expense

 

 25.29 

 

 27.94 

 

 25.10 

 

 27.06 

United States – Gulf of Mexico

 

 

 

 

 

 

 

 

     Lease operating expense

$

 9.37 

 

 10.81 

 

 8.93 

 

 9.86 

     Severance and ad valorem taxes

 

 –

 

 –

 

 –

 

 –

     DD&A expense

 

 24.54 

 

 20.14 

 

 24.08 

 

 22.25 

Canada – Conventional operations

 

 

 

 

 

 

 

 

     Lease operating expense

$

 6.14 

 

 7.84 

 

 5.06 

 

 6.91 

     Severance and ad valorem taxes

 

 0.27 

 

 0.32 

 

 0.26 

 

 0.32 

     DD&A expense

 

 11.28 

 

 14.22 

 

 10.80 

 

 14.15 

Canada – Synthetic oil operations

 

 

 

 

 

 

 

 

     Lease operating expense

$

 112.81  1  52.35 

 

 41.15 

 

 42.36 

     Severance and ad valorem taxes

 

 4.76  1  1.96 

 

 1.46 

 

 1.34 

     DD&A expense

 

 10.89 

 

 13.96 

 

 9.72 

 

 12.30 

Malaysia – Sarawak

 

 

 

 

 

 

 

 

     Lease operating expense

$

 4.42 

 

 11.02 

 

 6.25 

 

 8.73 

     DD&A expense

 

 9.43 

 

 21.59 

 

 9.60 

 

 23.15 

Malaysia – Block K

 

 

 

 

 

 

 

 

     Lease operating expense

$

 13.38 

 

 18.55 

 

 12.95 

 

 13.25 

     DD&A expense

 

 12.05 

 

 31.64 

 

 12.35 

 

 30.96 

Total oil and gas operations

 

 

 

 

 

 

 

 

     Lease operating expense

$

 10.30 

 

 12.84 

 

 9.64 

 

 11.97 

     Severance and ad valorem taxes

 

 0.88 

 

 1.07 

 

 0.80 

 

 1.04 

     DD&A expense

 

 16.53 

 

 22.65 

 

 16.30 

 

 22.90 

Total oil and gas operations – excluding synthetic oil operations

 

 

 

 

 

 

 

 

     Lease operating expense

$

 8.36 

 

 10.90 

 

 7.92 

 

 10.24 

     Severance and ad valorem taxes

 

 0.81 

 

 1.03 

 

 0.76 

 

 1.02 

     DD&A expense

 

 16.63 

 

 23.08 

 

 16.66 

 

 23.50 



1  2016 lease operating expense and production taxes unfavorably affected by low production volume  caused by downtime for maintenance and localized fires.

 

15

 



MURPHY OIL CORPORATION

OTHER FINANCIAL DATA

(Unaudited)

(Millions of dollars)



 

 

 

 

 

 

 

 



 

Three Months Ended

 

Six Months Ended



 

June 30,

 

June 30,



 

2016

 

2015

 

2016

 

2015

Capital expenditures

 

 

 

 

 

 

 

 

     Exploration and production

 

 

 

 

 

 

 

 

         United States

$

 35.2 

 

 407.9 

 

 100.7 

 

 817.0 

         Canada

 

 240.9 

2

 34.9 

 

 273.5 

2

 99.9 

         Malaysia

 

 14.4 

 

 57.0 

 

 41.9 

 

 132.2 

         Other

 

 16.0 

 

 16.2 

 

 26.8 

 

 70.4 

              Total

 

 306.5 

 

 516.0 

 

 442.9 

 

 1,119.5 

     Corporate

 

 12.3 

 

 16.2 

 

 20.7 

 

 25.6 

              Total capital expenditures

 

 318.8 

 

 532.2 

 

 463.6 

 

 1,145.1 

     Charged to exploration expenses1

 

 

 

 

 

 

 

 

         United States

 

 0.5 

 

 24.4 

 

 2.2 

 

 74.5 

         Canada

 

 0.1 

 

 0.2 

 

 3.3 

 

 0.4 

         Malaysia

 

 4.7 

 

 1.3 

 

 4.6 

 

 1.3 

         Other

 

 16.9 

 

 14.9 

 

 28.5 

 

 71.7 

              Total charged to exploration expenses

 

 22.2 

 

 40.8 

 

 38.6 

 

 147.9 

              Total capitalized

$

 296.6 

 

 491.4 

 

 425.0 

 

 997.2 

1  Excludes amortization of undeveloped leases

$

 14.9 

 

 24.2 

 

 25.4 

 

 45.8 



2 Includes costs of $206.7 million associated with acquisition of Kaybob Duvernay and liquids rich  Montney.



 

16

 



 

 

 

 

MURPHY OIL CORPORATION

CONDENSED BALANCE SHEET (Unaudited)

(Millions of dollars)



 

 

 

 



 

June 30,
2016

 

December 31,
2015

     Assets

 

 

 

 

     Cash and cash equivalents

$

 267.5 

 

 283.2 

     Canadian government securities

 

 131.2 

 

 173.3 

     Other current assets

 

 639.1 

 

 991.9 

     Property, plant and equipment – net

 

 8,565.5 

 

 9,818.4 

     Other long-term assets

 

 311.3 

 

 227.0 

          Total assets

$

 9,914.6 

 

 11,493.8 

     Liabilities and Stockholders' Equity

 

 

 

 

     Current maturities of long-term debt

$

 20.0 

 

 18.9 

     Other current liabilities

 

 860.7 

 

 1,655.7 

     Long-term debt1

 

 2,435.5 

 

 3,040.6 

     Other long-term liabilities

 

 1,426.7 

 

 1,471.9 

     Total stockholders' equity

 

 5,171.7 

 

 5,306.7 

          Total liabilities and stockholders' equity

$

 9,914.6 

 

 11,493.8 



1 Includes a capital lease on production equipment of $202.7 million at June 30, 2016 and $209.8 million at December 31, 2015.



 

17

 

MURPHY OIL CORPORATION

STATISTICAL SUMMARY









 

 

 

 

 

 

 



Three Months Ended

 

Six Months Ended



June 30,

 

June 30, 



2016

 

2015

 

2016

 

2015

Net crude oil and condensate produced – barrels per day

 98,995 

 

 121,262 

 

 111,235 

 

 130,778 

         United States – Eagle Ford Shale

 34,563 

 

 46,948 

 

 38,550 

 

 48,483 

                               – Gulf of Mexico

12,564 

 

 12,263 

 

 13,331 

 

 12,519 

         Canada  – light

 950 

 

 91 

 

 540 

 

 110 

                       – heavy

 2,200 

 

 6,343 

 

 2,759 

 

 6,276 

                       – offshore

 7,217 

 

 6,043 

 

 8,020 

 

 7,702 

                       – synthetic

 3,093 

 

 9,129 

 

 9,326 

 

 11,394 

         Malaysia1 – Sarawak

 13,944 

 

 14,167 

 

 13,490 

 

 15,951 

                          – Block K

 24,464 

 

 26,278 

 

 25,219 

 

 28,343 

Net crude oil and condensate sold – barrels per day

 96,918 

 

 114,178 

 

 108,054 

 

 131,706 

         United States – Eagle Ford Shale

 34,563 

 

 46,948 

 

 38,550 

 

 48,483 

                               – Gulf of Mexico

12,564 

 

 12,263 

 

 13,331 

 

 12,519 

         Canada  – light

 950 

 

 91 

 

 540 

 

 110 

                       – heavy

 2,200 

 

 6,343 

 

 2,759 

 

 6,276 

                       – offshore

 7,315 

 

 6,907 

 

 8,348 

 

 8,065 

                       – synthetic

 3,093 

 

 9,129 

 

 9,326 

 

 11,394 

         Malaysia1 – Sarawak

 9,666 

 

 12,966 

 

 11,712 

 

 17,066 

                          – Block K

 26,567 

 

 19,531 

 

 23,488 

 

 27,793 

Net natural gas liquids produced – barrels per day

 8,883 

 

 9,779 

 

 9,058 

 

 10,094 

         United States – Eagle Ford Shale

 6,751 

 

 7,579 

 

 6,988 

 

 7,517 

                               – Gulf of Mexico

1,468 

 

 1,636 

 

 1,347 

 

 1,895 

         Canada

 164 

 

 5 

 

 88 

 

 14 

         Malaysia1 – Sarawak

 500 

 

 559 

 

 635 

 

 668 

Net natural gas liquids sold – barrels per day

 9,339 

 

 9,611 

 

 9,550 

 

 9,794 

         United States – Eagle Ford Shale

 6,751 

 

 7,579 

 

 6,988 

 

 7,517 

                               – Gulf of Mexico

1,468 

 

 1,636 

 

 1,347 

 

 1,895 

         Canada

 164 

 

 5 

 

 88 

 

 14 

         Malaysia1 – Sarawak

 956 

 

 391 

 

 1,127 

 

 368 

Net natural gas sold – thousands of cubic feet per day

 364,582 

 

 425,463 

 

 373,864 

 

 424,961 

         United States – Eagle Ford Shale

 36,113 

 

 37,790 

 

 37,203 

 

 39,030 

                               – Gulf of Mexico

16,779 

 

 54,093 

 

 20,094 

 

 55,563 

         Canada

 204,753 

 

 195,159 

 

 207,288 

 

 193,133 

         Malaysia1 – Sarawak

 96,057 

 

 110,816 

 

 97,155 

 

 111,431 

                          – Block K

 10,880 

 

 27,605 

 

 12,124 

 

 25,804 

Total net hydrocarbons produced – equivalent barrels per day2

 168,642 

 

 201,952 

 

 182,604 

 

 211,699 

Total net hydrocarbons sold – equivalent barrels per day2

 167,021 

 

 194,700 

 

 179,915 

 

 212,327 



1  The Company sold a 10% interest in Malaysia properties on January 29, 2015.  Production in this table includes production for these sold interests through the date of disposition.

2  Natural gas converted on an energy equivalent basis of 6:1.

18

 



MURPHY OIL CORPORATION

STATISTICAL SUMMARY (Continued)







 

 

 

 

 

 

 

 



 

Three Months Ended

 

Six Months Ended



 

June 30,

 

June 30,



 

2016

 

2015

 

2016

 

2015

Weighted average sales prices

 

 

 

 

 

 

 

 

     Crude oil and condensate – dollars per barrel

 

 

 

 

 

 

 

 

          United States – Eagle Ford Shale

$

 43.95 

 

 55.66 

 

 38.93 

 

 49.55 

                                – Gulf of Mexico

 

 43.41 

 

 59.14 

 

 39.00 

 

 52.52 

          Canada1   – heavy

 

 18.03 

 

 33.85 

 

 11.83 

 

 27.02 

                         – offshore

 

 44.51 

 

 60.35 

 

 36.82 

 

 55.51 

                       – synthetic

 

 45.78 

 

 60.88 

 

 35.58 

 

 51.27 

          Malaysia – Sarawak2

 

 47.22 

 

 57.91 

 

 41.74 

 

 52.87 

                          – Block K2

 

 46.53 

 

 59.81 

 

 41.97 

 

 56.96 

     Natural gas liquids – dollars per barrel

 

 

 

 

 

 

 

 

          United States – Eagle Ford Shale

$

 11.21 

 

 12.15 

 

 9.65 

 

 12.22 

                                – Gulf of Mexico

 

 11.89 

 

 14.32 

 

 10.59 

 

 14.50 

          Canada1

 

 30.18 

 

 21.62 

 

 29.38 

 

 22.31 

          Malaysia – Sarawak2

 

 34.62 

 

 47.59 

 

 35.65 

 

 58.08 

     Natural gas – dollars per thousand cubic feet

 

 

 

 

 

 

 

 

          United States – Eagle Ford Shale

$

 1.38 

 

 2.23 

 

 1.43 

 

 2.39 

                                – Gulf of Mexico

 

 1.46 

 

 2.37 

 

 1.62 

 

 2.48 

          Canada1

 

 1.33 

 

 2.47 

 

 1.44 

 

 2.44 

          Malaysia – Sarawak2

 

 3.29 

 

 3.82 

 

 3.52 

 

 4.53 

                          – Block K2

 

 0.23 

 

 0.23 

 

 0.25 

 

 0.24 



1  U.S. dollar equivalent.

2  Prices are net of payments under the terms of the respective production sharing contracts.

19

 

MURPHY OIL CORPORATION

COMMODITY HEDGE POSITIONS

AS OF JULY 26, 2016













 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

Volumes

 

Price

 

Remaining Period

Area

 

Commodity

 

Type

 

(Bbl/d)

 

(USD/Bbl)

 

Start Date

 

End Date

United States

 

WTI

 

Fixed price derivative swap

 

 25,000 

 

$50.67

 

7/1/2016

 

12/31/2016

United States

 

WTI

 

Fixed price derivative swap

 

 7,000 

 

$50.10

 

1/1/2017

 

12/31/2017



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

Volumes

 

Price

 

Remaining Period

Area

 

Commodity

 

Type

 

(MMcf/d)

 

(CAD/Mcf)

 

Start Date

 

End Date

Western Canada

 

Natural Gas

 

Fixed price forward sales

 

 99 

 

C$3.00

 

7/1/2016

 

12/31/2016

Western Canada

 

Natural Gas

 

Fixed price forward sales

 

 59 

 

C$2.81

 

1/1/2017

 

12/31/2020



 

20

 



MURPHY OIL CORPORATION

THIRD QUARTER 2016 GUIDANCE



 

 

 



 

 

 



Liquids

 

Gas



BOPD

 

MCFD

Production – net

 

 

 

     U.S.  – Eagle Ford Shale

 41,000 

 

 35,000 

              – Gulf of Mexico

 12,000 

 

 14,000 

     Canada – Seal heavy

 3,000 

 

 2,000 

                  – Montney and Duvernay

 2,000 

 

 205,000 

                  – Offshore

 8,500 

 

– 

     Malaysia – Sarawak

 13,500 

 

 123,000 

                     – Block K

 23,500 

 

 11,000 



 

 

 

            Total net production (BOEPD)

 

167,500 - 169,500

            Total net sales (BOEPD)

 

164,500 - 166,500

Realized oil prices ($ per barrel):

 

 

 

     Malaysia – Sarawak

 

 $46.02 

 

                     – Block K

 

 $45.62 

 

Realized natural gas price ($ per MCF):

 

 

 

     Malaysia – Sarawak

 

 $3.29 

 

Exploration expense ($ millions)

 

 $19.0 

 

FULL YEAR  2016 GUIDANCE

Total production (BOEPD)

 

173,000 to 177,000

Capital expenditures ($ millions)

 

 $620.0 

*



*Excludes costs of $206.7 million associated with acquisition of Kaybob Duvernay and liquids rich Montney.

21