August 8, 2019 - 6:00 AM EDT
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Murphy Oil Corporation Announces Second Quarter Financial and Operating Results

EL DORADO, Ark.

Closed Gulf of Mexico Acquisition for $1.2 Billion and, Subsequent to Quarter End, Closed Malaysia Asset Divestiture for $2.0 Billion

Murphy Oil Corporation (NYSE: MUR) today reported financial and operating results for the quarter ended June 30, 2019, including net income attributable to Murphy of $92 million, or $0.54 per diluted share. Adjusted net income, which excludes discontinued operations and other one-off items, was $36 million, or $0.21 per diluted share.

The recently divested Malaysia assets were reported as “discontinued operations” and classified as “held for sale” for financial reporting purposes beginning with the first quarter 2019. Unless otherwise noted, the financial and operating highlights and metrics discussed in this commentary exclude discontinued operations and noncontrolling interest. 1

Operating highlights for the second quarter:

  • Produced 159 thousand barrels of oil equivalent per day, exceeding production guidance
  • Increased Eagle Ford Shale production over 23 percent as compared to first quarter 2019
  • Closed accretive deep water Gulf of Mexico transaction, which included the addition of over 73 million barrels of oil equivalent of proved reserves 2
  • Sanctioned three Gulf of Mexico projects that drive oil-weighted production growth
  • Divested non-core North Midland Basin acreage in Dawson County for approximate $20 million, with acreage still remaining in Andrews County

Financial highlights for the second quarter:

  • Repurchased approximately seven percent of outstanding shares for $300 million, resulting in cumulative share repurchases of more than $1.6 billion since 2012
  • Realized high-value EBITDA per barrel of oil equivalent sold of $35 for the Eagle Ford Shale and $38 for North America Offshore at the field level
  • Reduced lease operating expenses to below $9 per barrel of oil equivalent

Highlights subsequent to quarter end:

  • Closed the divestiture of Malaysia portfolio for $2.0 billion in cash proceeds
  • Drilled successful Hoffe Park #2 well in the Gulf of Mexico
  • Entered into additional crude oil commodity hedge contracts with combined average prices above $60 per barrel WTI for 2019 and 2020, underpinning multi-year capital program
  • Repaid $1.9 billion of debt on the balance sheet at quarter end, resulting in liquidity of more than $2.0 billion as of July 31, 2019

SECOND QUARTER 2019 RESULTS

The company recorded net income, attributable to Murphy, of $92 million, or $0.54 per diluted share, for the second quarter 2019. Adjusted net income, which excludes both the results of discontinued operations and certain other items that affect comparability of results between periods, was $36 million, or $0.21 per diluted share for the same period. The adjusted income from continuing operations excludes the following after-tax items: a $40 million mark-to-market non-cash gain on crude oil derivatives, a $13 million gain from the impact of foreign tax law changes and a $12 million mark-to-market non-cash loss on contingent consideration. Details for second quarter results can be found in the attached schedules.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations attributable to Murphy totaled $362 million, or $25 per barrel of oil equivalent (BOE) sold. Adjusted earnings before interest, tax, depreciation, amortization and exploration expenses (EBITDAX) from continuing operations attributable to Murphy equaled $393 million, or $28 per BOE sold. Details for second quarter EBITDA and EBITDAX reconciliations can be found in the attached schedules.

Second quarter production from continuing operations averaged 159 thousand barrels of oil equivalent per day (MBOEPD) with 67 percent liquids. Overall, production was above guidance due to reduced downtime and better performance from the company’s newly acquired Gulf of Mexico assets, as well as increased drilling efficiencies and asset outperformance in the onshore portfolio. Details for second quarter production can be found in the attached schedules.

“2019 is proving to be an excellent year for Murphy. We closed our Gulf of Mexico and Malaysia transactions, leading to a completely transformed portfolio. Our now simplified and concentrated Gulf Coast asset base, in the Eagle Ford Shale and Gulf of Mexico, has an extensive runway that is able to generate oil-weighted, high-margin production. Additionally, our Eagle Ford Shale team executed beyond their well delivery plan, further supporting forecasted growth expectations,” stated Roger W. Jenkins, President and Chief Executive Officer.

FINANCIAL POSITION

As of June 30, 2019, the company had total debt outstanding of $4.7 billion, consisting of $2.8 billion of outstanding long-term, fixed-rate notes, $1.4 billion of borrowings on the $1.6 billion unsecured senior credit facility and a $500 million unsecured senior term loan. The fixed-rate notes had a weighted average maturity of 7.3 years and a weighted average coupon of 5.5 percent. Subsequent to quarter end, the unsecured senior credit facility was repaid to a zero balance and the unsecured senior term loan was repaid and terminated.

As previously announced, Murphy completed $300 million in share repurchases in the second quarter 2019 at an average price of $26.34 per share. This share repurchase is part of the authorized $500 million program, which expires December 31, 2020. Overall, the company reduced its share count by 11.4 million shares, or approximately seven percent, to 162.3 million shares outstanding as of June 30, 2019.

As of July 31, 2019, liquidity totaled more than $2.0 billion, including approximately $450 million in cash and cash equivalents.

“I am very pleased with our financial position. We have completed the execution of a year-long business development plan that resulted in a transformed company with a strong liquidity position. Furthermore, I am most proud of setting up the company with an improved asset base capable of generating fourth quarter 2019 production of approximately 200,000 barrels of oil equivalent per day with more oil production and reserves, all while reducing share count and providing a leading dividend yield to our shareholders,” stated Jenkins.

REGIONAL OPERATIONS SUMMARY

North American Onshore

The North American onshore business produced approximately 93 MBOEPD in the second quarter.

Eagle Ford Shale – Production for the quarter averaged approximately 44 MBOEPD, a 23 percent increase over the previous quarter, and was comprised of 88 percent liquids, 74 percent oil. As planned, Murphy brought online 23 Karnes wells in the second quarter with six wells in the Austin Chalk, three wells in the Upper Eagle Ford Shale and 14 wells in the Lower Eagle Ford Shale. The Austin Chalk wells had gross 30-day (IP30 rate) rates averaging 925 barrels of oil equivalent per day (BOEPD), with the Upper Eagle Ford Shale wells averaging over 1,200 BOEPD IP30 and the Lower Eagle Ford Shale wells averaging 1,300 BOEPD IP30.

Additionally, the company advanced its 2019 drilling program ahead of schedule, bringing online an additional 12 Tilden wells in late June. The Tilden wells have achieved strong results, as eight Central Tilden wells exceeded expectations in the area with average IP30 rates over 1,350 BOEPD, and four East Tilden wells averaged 700 BOEPD IP30.

“Our Eagle Ford Shale well campaign is on track to achieve guided third quarter production of more than 50 thousand barrels of oil equivalent per day, with forecasted fourth quarter volumes approaching 57 thousand barrels of oil equivalent per day. The last time we experienced production at these high levels was in 2015,” stated Jenkins. “The team continues to improve efficiencies and reduce downtime, leading to operating expenses of $8.26 per barrel of oil equivalent in the second quarter.”

Tupper Montney – Natural gas production for the quarter averaged 219 million cubic feet per day (MMCFD). Murphy brought online five wells in Tupper Montney, with initial performance trending in line with an 18 Bcf type curve. No further drilling is planned for the remainder of the year.

Kaybob Duvernay – During the quarter, production averaged approximately 9 MBOEPD, comprised of 61 percent liquids. Murphy brought online two wells in Kaybob North and four wells in Two Creeks, with average facility-constrained IP30 rates of more than 1,050 BOEPD for Kaybob North and 750 BOEPD for Two Creeks. Drilling in this area will resume in the third quarter as part of ongoing re-risking along with satisfying lease maintenance requirements. These wells are expected to be brought online in 2020.

Global Offshore

The offshore business produced 65 MBOEPD for the second quarter, comprised of 91 percent liquids. This excludes production from discontinued operations. Gulf of Mexico production in the quarter averaged 58 MBOEPD, consisting of 90 percent liquids. Canada offshore production averaged 7 MBOEPD with 100 percent liquids.

Gulf of Mexico – As previously announced, on June 1, 2019 Murphy closed the Gulf of Mexico acquisition from LLOG Exploration Offshore, L.L.C. and LLOG Bluewater Holdings, L.L.C., (LLOG) for net cash consideration of $1.2 billion, after closing adjustments. The acquired assets are fully owned by Murphy and not part of MP Gulf of Mexico, LLC (MP GOM), the entity which owns all of Murphy’s legacy producing Gulf of Mexico assets. The contribution from the LLOG assets in the above volume was limited to one month only and averaged approximately 8,800 BOEPD over the quarter, exceeding guidance by over 1,200 BOEPD.

In the second quarter, Murphy successfully drilled and completed the Dalmatian #2 well (Desoto Canyon 4) with first oil expected in the fourth quarter and additional wells were brought online at the non-operated Lucius field. Third quarter Gulf of Mexico activity includes the tie-in of the new Dalmatian well to existing infrastructure and completion of the previously drilled Nearly Headless Nick well (Mississippi Canyon 387), which will tie back to the Delta House facility, with first oil expected in the fourth quarter. Additionally, the company plans to initiate a workover at the Chinook #5 well (Walker Ridge 425) and expects to bring the well online in first quarter 2020.

In support of longer-term development, the company has sanctioned three additional Gulf of Mexico projects:

  • King’s Quay floating production system (FPS) facility to receive and process up to 80 MBOPD of production anchored by the Khaleesi/Mormont and Samurai developments.
  • Khaleesi/Mormont Field Development, with seven subsea wells, of which four were previously drilled, and infrastructure tie-back to King’s Quay.
  • Samurai Field Development, with four subsea wells and tie-back to King’s Quay.

“Our planned execution on our new Gulf of Mexico revitalized asset base continues. These projects have outstanding returns offering high-margin production and a free cash flow runway going forward. We and a partner have sanctioned a new midstream FPS asset, King’s Quay, to anchor our two developments. This new FPS asset could be easily monetized, and we are currently evaluating all our options. We forecast first production from the FPS along with our two new fields in mid-2022. Initial production from these assets is expected to exceed 30,000 BOEPD net at first oil,” stated Jenkins.

Southeast Asia – Brunei production was approximately 448 BOEPD for the quarter. Beginning in the third quarter, these assets will be classified as “held for sale” for financial reporting purposes.

EXPLORATION

Mexico Exploration – During the second quarter, Murphy entered an agreement to acquire a proportionate share of Ophir’s interest in Block 5 for approximately $15 million, resulting in 40 percent working interest, with Petronas and Wintershall DEA each increasing their ownership to 30 percent. This transaction remains subject to regulatory approval. Murphy has also initiated seismic reprocessing of both the Cholula Area and the western subsalt portion of the block.

Gulf of Mexico Exploration – Subsequent to the end of the second quarter, Murphy drilled a successful well at Hoffe Park #2 (Mississippi Canyon 122) with a 60 percent working interest for a total net cost of approximately $20 million. Murphy encountered oil in multiple zones and is completing the evaluation of the well.

COMMODITY HEDGE POSITIONS

The company employs derivative commodity instruments to manage certain risks associated with commodity prices and to underpin capital spending associated with certain assets. Subsequent to quarter end, Murphy entered into additional 2019 and 2020 WTI based fixed price derivative swaps. Details for the current hedge positions can be found in the attached schedules.

2019 CAPITAL EXPENDITURE AND PRODUCTION GUIDANCE

Following the closing of significant Gulf of Mexico and Malaysia transactions, Murphy’s planned 2019 capital program is now estimated to be in the range of $1.35 to $1.45 billion. The range includes $140 million of additional capital that is expected to be allocated toward the recently acquired Gulf of Mexico assets.

“It is important to note that the mid-point of our modified capex range is within our original guidance for 2019, even after all the significant portfolio changes we have completed. We plan to spend approximately $140 million on our newly acquired Gulf of Mexico assets, offsetting the previously allocated capital of $105 million in 2019 for our discontinued operations in Malaysia,” stated Jenkins.

Full year production is expected to be in the range of 174 to 178 MBOEPD, excluding noncontrolling interest. For the third quarter, Murphy estimates total production of 192 to 196 MBOEPD, comprised of 66 percent liquids.

“Murphy is positioned to achieve free cash flow growth over the long-term as we focus on investing in meaningful, high-returning, multi-year projects in the Gulf of Mexico. This coincides with our Eagle Ford Shale growth plans, as our team strategically and prudently allocates capital,” stated Jenkins.

The operated onshore well cadence for the year is updated to include the advanced drilling schedule, which moved Eagle Ford and Kabob Duvernay wells into the second quarter from the third quarter, as well as three wells in Simonette coming back online in the third quarter after the third-party midstream specification constraint prevented the wells from flowing to sales in the first half of the year.

2019 Operated Onshore Wells Online

 

 

1Q 2019A

 

2Q 2019A

 

3Q 2019E

 

4Q 2019E

 

2019 TotalE

Eagle Ford Shale

 

13

 

35

 

25

 

18

 

91

Kaybob Duvernay

 

1

 

6

 

3

 

0

 

10

Tupper Montney

 

3

 

5

 

0

 

0

 

8

Details for third quarter and full year guidance can be found in the attached schedules.

CONFERENCE CALL AND WEBCAST SCHEDULED FOR AUGUST 8, 2019

Murphy will host a conference call to discuss second quarter 2019 financial and operating results on Thursday, August 8, 2019, at 10:00 a.m. ET. The call can be accessed either via the Internet through the Investor Relations section of Murphy Oil’s website at http://ir.murphyoilcorp.com or via the telephone by dialing toll free 1-888-886-7786, reservation number 89637238.

FINANCIAL DATA

Summary financial data and operating statistics for second quarter 2019, 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, as well as a reconciliation of adjusted net income, EBITDA and EBITDAX between periods and guidance for the third quarter 2019, are also included.

1With the close of the previously announced Gulf of Mexico transaction in the fourth quarter 2018, and in 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 will 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, will exclude the NCI, thereby representing only the amounts attributable to Murphy.

2Transaction reserves are based on external third party engineering estimates by Ryder Scott Petroleum Consultants as of January 1, 2019, using strip prices in effect on April 12, 2019.

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 production from North America onshore plays in the Eagle Ford Shale, Kaybob Duvernay, Tupper Montney and Placid Montney, as well as offshore Gulf of Mexico and Canada. Additional information is available on the Company’s website 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 or results, are subject to inherent risks and uncertainties. Factors that could cause one or more of these future events or results not to occur as implied by any forward-looking statement include, but are not limited to: 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; natural hazards impacting our operations; 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; and adverse developments in the U.S. or global capital markets, credit markets 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. 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 good 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, although 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)

 

(Thousands of dollars, except per share amounts)

Three Months Ended
June 30,

 

Six Months Ended
June 30, 2019

 

2019

 

2018 1

 

2019

 

2018 1

Revenues

 

 

 

 

 

 

 

Revenue from sales to customers

$

646,114

 

 

426,767

 

 

1,236,664

 

 

823,096

 

Gain (loss) on crude contracts

57,916

 

 

(37,624

)

 

57,916

 

 

(67,126

)

Gain on sale of assets and other income

5,019

 

 

437

 

 

5,473

 

 

8,400

 

Total revenues

709,049

 

 

389,580

 

 

1,300,053

 

 

764,370

 

Costs and expenses

 

 

 

 

 

 

 

Lease operating expenses

137,132

 

 

81,236

 

 

268,828

 

 

170,069

 

Severance and ad valorem taxes

13,072

 

 

12,876

 

 

23,169

 

 

25,033

 

Exploration expenses, including undeveloped lease amortization

30,674

 

 

18,889

 

 

63,212

 

 

47,627

 

Selling and general expenses

57,532

 

 

56,295

 

 

120,892

 

 

104,391

 

Depreciation, depletion and amortization

264,302

 

 

190,751

 

 

493,708

 

 

373,494

 

Accretion of asset retirement obligations

9,897

 

 

6,396

 

 

19,237

 

 

12,768

 

Other expense (benefit)

25,437

 

 

658

 

 

55,442

 

 

(10,387

)

Total costs and expenses

538,046

 

 

367,101

 

 

1,044,488

 

 

722,995

 

Operating income from continuing operations

171,003

 

 

22,479

 

 

255,565

 

 

41,375

 

Other income (loss)

 

 

 

 

 

 

 

Interest and other income (loss)

(8,968

)

 

(717

)

 

(13,716

)

 

3,870

 

Interest expense, net

(54,096

)

 

(44,325

)

 

(100,165

)

 

(88,866

)

Total other loss

(63,064

)

 

(45,042

)

 

(113,881

)

 

(84,996

)

Income (loss) from continuing operations before income taxes

107,939

 

 

(22,563

)

 

141,684

 

 

(43,621

)

Income tax expense (benefit)

9,115

 

 

2,622

 

 

19,937

 

 

(109,017

)

Income (loss) from continuing operations

98,824

 

 

(25,185

)

 

121,747

 

 

65,396

 

Income from discontinued operations, net of income taxes

24,418

 

 

70,704

 

 

74,264

 

 

148,376

 

Net income including noncontrolling interest

123,242

 

 

45,519

 

 

196,011

 

 

213,772

 

Less: Net income attributable to noncontrolling interest

30,970

 

 

 

 

63,557

 

 

 

NET INCOME ATTRIBUTABLE TO MURPHY

$

92,272

 

 

45,519

 

 

132,454

 

 

213,772

 

 

 

 

 

 

 

 

 

INCOME (LOSS) PER COMMON SHARE – BASIC

 

 

 

 

 

 

 

Continuing operations

$

0.40

 

 

(0.14

)

 

0.34

 

 

0.38

 

Discontinued operations

0.15

 

 

0.41

 

 

0.44

 

 

0.86

 

Net Income

$

0.55

 

 

0.27

 

 

0.78

 

 

1.24

 

 

 

 

 

 

 

 

 

INCOME (LOSS) PER COMMON SHARE – DILUTED

 

 

 

 

 

 

 

Continuing operations

$

0.40

 

 

(0.15

)

 

$

0.34

 

 

$

0.37

 

Discontinued operations

0.14

 

 

0.40

 

 

0.43

 

 

0.85

 

Net Income

$

0.54

 

 

0.25

 

 

$

0.77

 

 

$

1.22

 

Cash dividends per Common share

0.25

 

 

0.25

 

 

0.50

 

 

0.50

 

Average Common shares outstanding (thousands)

 

 

 

 

 

 

 

Basic

168,538

 

 

173,043

 

 

170,556

 

 

172,908

 

Diluted

169,272

 

 

173,983

 

 

171,433

 

 

174,927

 

1 Reclassified to conform to current presentation.

MURPHY OIL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

 

(Thousands of dollars)

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2019

 

2018 1

 

2019

 

2018 1

Operating Activities

 

 

 

 

 

 

 

Net income including noncontrolling interest

$

123,242

 

 

45,519

 

 

196,011

 

 

213,772

 

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

 

 

 

 

 

 

 

(Income) loss from discontinued operations

(24,418

)

 

(70,704

)

 

(74,264

)

 

(148,376

)

Depreciation, depletion and amortization

264,302

 

 

190,751

 

 

493,708

 

 

373,494

 

Previously suspended exploration costs (credits)

(350

)

 

(3

)

 

12,901

 

 

(8

)

Amortization of undeveloped leases

7,105

 

 

9,606

 

 

15,150

 

 

22,774

 

Accretion of asset retirement obligations

9,897

 

 

6,396

 

 

19,237

 

 

12,768

 

Deferred income tax charge (benefit)

2,412

 

 

(937

)

 

18,001

 

 

(148,653

)

Pretax (gain) loss from sale of assets

 

 

(221

)

 

(12

)

 

118

 

Mark to market and revaluation of contingent consideration

15,360

 

 

 

 

28,890

 

 

 

Mark to market of crude contracts

(50,831

)

 

12,738

 

 

(50,831

)

 

27,088

 

Long-term non-cash compensation

22,367

 

 

14,953

 

 

44,755

 

 

29,010

 

Net (increase) decrease in noncash operating working capital

93,139

 

 

26,051

 

 

(5,366

)

 

22,498

 

Other operating activities, net

(23,991

)

 

(13,355

)

 

(42,749

)

 

(72,804

)

Net cash provided by continuing operations activities

438,234

 

 

220,794

 

 

655,431

 

 

331,681

 

Investing Activities

 

 

 

 

 

 

 

Acquisition of oil and gas properties

(1,226,261

)

 

 

 

(1,226,261

)

 

Property additions and dry hole costs

(374,831

)

 

(318,183

)

 

(645,169

)

 

(565,237

)

Proceeds from sales of property, plant and equipment

16,816

 

 

361

 

 

16,816

 

 

621

 

Net cash required by investing activities

(1,584,276

)

 

(317,822

)

 

(1,854,614

)

 

(564,616

)

Financing Activities

 

 

 

 

 

 

 

Borrowings on revolving credit facility

1,075,000

 

 

 

 

1,075,000

 

 

 

Proceeds from term loan

500,000

 

 

 

 

500,000

 

 

 

Repurchase of common stock

(299,924

)

 

 

 

(299,924

)

 

 

Capital lease obligation payments

(175

)

 

 

 

(335

)

 

 

Withholding tax on stock-based incentive awards

 

 

(280

)

 

(6,991

)

 

(6,922

)

Distribution to noncontrolling interest

(50,339

)

 

 

 

(68,776

)

 

 

Cash dividends paid

(42,105

)

 

(43,259

)

 

(85,503

)

 

(86,517

)

Net cash provided (required) by financing activities

1,182,457

 

 

(43,539

)

 

1,113,471

 

 

(93,439

)

Cash Flows from Discontinued Operations 2

 

 

 

 

 

 

 

Operating activities

(1,197

)

 

123,463

 

 

122,272

 

 

290,849

 

Investing activities

(23,360

)

 

(23,062

)

 

(49,798

)

 

(49,910

)

Financing activities

(2,367

)

 

(2,243

)

 

(4,914

)

 

(4,648

)

Net cash provided by discontinued operations

(26,924

)

 

98,158

 

 

67,560

 

 

236,291

 

Cash transferred from discontinued operations to continuing operations

2,485

 

 

92,602

 

 

48,565

 

 

464,258

 

Effect of exchange rate changes on cash and cash equivalents

863

 

 

3,331

 

 

3,268

 

 

24,382

 

Net increase (decrease) in cash and cash equivalents

39,763

 

 

(44,634

)

 

(33,879

)

 

162,266

 

Cash and cash equivalents at beginning of period

286,281

 

 

837,333

 

 

359,923

 

 

630,433

 

Cash and cash equivalents at end of period

$

326,044

 

 

792,699

 

 

326,044

 

 

792,699

 

1 Reclassified to current presentation. 2 Cash flows from discontinued operations are not part of the cash flow reconciliation.

MURPHY OIL CORPORATION

SCHEDULE OF ADJUSTED INCOME (LOSS)

(unaudited)

 

(Millions of dollars, except per share amounts)

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2019

 

2018

 

2019

 

2018

Net income attributable to Murphy (GAAP)

$

92.3

 

 

45.5

 

 

$

132.5

 

 

$

213.8

 

Discontinued operations loss (income)

(24.4

)

 

(70.7

)

 

(74.3

)

 

(148.4

)

Income (loss) from continuing operations

67.9

 

 

(25.2

)

 

58.2

 

 

65.4

 

Adjustments:

 

 

 

 

 

 

 

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

(40.2

)

 

10.1

 

 

(40.2

)

 

21.4

 

Mark-to-market (gain) loss on contingent consideration

12.1

 

 

 

 

22.8

 

 

 

Business development transaction costs

6.2

 

 

 

 

16.0

 

 

 

Impact of tax reform

(13.0

)

 

 

 

(13.0

)

 

(120.0

)

Write-off of previously suspended exploration wells

 

 

 

 

13.2

 

 

 

Foreign exchange losses (gains)

2.7

 

 

7.1

 

 

5.1

 

 

(4.8

)

Seal insurance proceeds

 

 

 

 

 

 

(8.2

)

Total adjustments after taxes

(32.2

)

 

17.2

 

 

3.9

 

 

(111.6

)

Adjusted income (loss) from continuing operations attributable to Murphy

$

35.7

 

 

(8.0

)

 

$

62.1

 

 

$

(46.2

)

 

 

 

 

 

 

 

 

Adjusted income (loss) from continuing operations per average diluted share

$

0.21

 

 

(0.05

)

 

$

0.36

 

 

$

(0.26

)

Non-GAAP Financial Measures

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

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

(Millions of dollars)

Three Months Ended June 30, 2019

 

Six Months Ended June 30, 2019

 

Pretax

 

Tax

 

Net

 

Pretax

 

Tax

 

Net

Exploration & Production:

 

 

 

 

 

 

 

 

 

 

 

United States

$

21.7

 

 

(4.6

)

 

17.1

 

 

$

47.7

 

 

$

(10.0

)

 

$

37.7

 

Canada

 

 

(13.0

)

 

(13.0

)

 

 

 

(13.0

)

 

(13.0

)

Other International

 

 

 

 

 

 

13.2

 

 

 

 

13.2

 

Total E&P

21.7

 

 

(17.6

)

 

4.1

 

 

60.9

 

 

(23.0

)

 

37.9

 

Corporate:

(46.3

)

 

10.0

 

 

(36.3

)

 

(43.8

)

 

9.8

 

 

(34.0

)

Total adjustments

$

(24.6

)

 

(7.6

)

 

(32.2

)

 

$

17.1

 

 

$

(13.2

)

 

$

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
June 30,

 

Six Months Ended
June 30,

 

2019

 

2018

 

2019

 

2018

Net income attributable to Murphy (GAAP)

$

92.3

 

 

45.5

 

 

132.5

 

 

213.8

 

Discontinued operations loss (income)

(24.4

)

 

(70.7

)

 

(74.3

)

 

(148.4

)

Income tax expense (benefit)

9.1

 

 

2.6

 

 

19.9

 

 

(109.0

)

Interest expense, net

54.1

 

 

44.3

 

 

100.2

 

 

88.9

 

Depreciation, depletion and amortization expense 1

246.0

 

 

190.8

 

 

458.1

 

 

373.5

 

EBITDA attributable to Murphy (Non-GAAP)

$

377.1

 

 

212.5

 

 

636.4

 

 

418.8

 

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

(50.8

)

 

(12.7

)

 

(50.8

)

 

(27.1

)

Mark-to-market (gain) loss on contingent consideration

15.4

 

 

 

 

28.9

 

 

 

Business development transaction costs

7.8

 

 

 

 

20.3

 

 

 

Accretion of asset retirement obligations

9.9

 

 

6.4

 

 

19.2

 

 

12.8

 

Write-off of previously suspended exploration wells

 

 

 

 

13.2

 

 

 

Foreign exchange losses (gains)

3.0

 

 

(12.2

)

 

5.6

 

 

4.4

 

Seal insurance proceeds

 

 

 

 

 

 

(8.2

)

Adjusted EBITDA attributable to Murphy (Non-GAAP)

$

362.4

 

 

194.0

 

 

672.8

 

 

400.7

 

 

 

 

 

 

 

 

 

Total barrels of oil equivalents sold from continuing operations attributable to Murphy (thousands of barrels)

14,268.9

 

 

11,019.0

 

 

27,766.0

 

 

21,550.7

 

 

 

 

 

 

 

 

 

EBITDA per barrel of oil equivalents sold

$

26.43

 

 

19.28

 

 

22.92

 

 

19.43

 

Adjusted EBITDA per barrel of oil equivalents sold

$

25.40

 

 

17.61

 

 

24.23

 

 

18.59

 

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 (loss) or Cash provided by operating activities as determined in accordance with accounting principles generally accepted in the United States of America.

Presented above is EBITDA per barrel of oil equivalent sold and adjusted EBITDA per barrel of oil equivalent sold. Management believes EBITDA per barrel of oil equivalent sold and adjusted EBITDA per barrel of oil equivalent sold are important information because they are used by management to evaluate the Company’s profitability of one barrel of oil equivalent sold in that period. EBITDA per barrel of oil equivalent sold and adjusted EBITDA per barrel of oil equivalent sold are non-GAAP financial metrics.

1 Depreciation, depletion, and amortization expense used in the computation of EBITDA excludes the portion attributable to the non-controlling interest.

MURPHY OIL CORPORATION

SCHEDULE OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION

AND AMORTIZATION AND EXPLORATION (EBITDAX)

(unaudited)

 

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

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2019

 

2018

 

2019

 

2018

Net income attributable to Murphy (GAAP)

$

92.3

 

 

45.5

 

 

132.5

 

 

213.8

 

Discontinued operations loss (income)

(24.4

)

 

(70.7

)

 

(74.3

)

 

(148.4

)

Income tax expense (benefit)

9.1

 

 

2.6

 

 

19.9

 

 

(109.0

)

Interest expense, net

54.1

 

 

44.3

 

 

100.2

 

 

88.9

 

Depreciation, depletion and amortization expense 1

246.0

 

 

190.8

 

 

458.1

 

 

373.5

 

EBITDA attributable to Murphy (Non-GAAP)

377.1

 

 

212.5

 

 

636.4

 

 

418.8

 

Exploration expenses

30.7

 

 

18.9

 

 

63.2

 

 

47.6

 

EBITDAX attributable to Murphy (Non-GAAP)

$

407.8

 

 

231.4

 

 

699.6

 

 

466.4

 

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

(50.8

)

 

(12.7

)

 

(50.8

)

 

(27.1

)

Mark-to-market (gain) loss on contingent consideration

15.4

 

 

 

 

28.9

 

 

 

Business development transaction costs

7.8

 

 

 

 

20.3

 

 

 

Accretion of asset retirement obligations

9.9

 

 

6.4

 

 

19.2

 

 

12.8

 

Foreign exchange losses (gains)

3.0

 

 

(12.2

)

 

5.6

 

 

4.4

 

Seal insurance proceeds

 

 

 

 

 

 

(8.2

)

Adjusted EBITDAX attributable to Murphy (Non-GAAP)

$

393.1

 

 

212.9

 

 

722.8

 

 

448.3

 

 

 

 

 

 

 

 

 

Total barrels of oil equivalents sold from continuing operations attributable to Murphy (thousands of barrels)

14,268.9

 

 

11,019.0

 

 

27,766.0

 

 

21,550.7

 

 

 

 

 

 

 

 

 

EBITDAX per barrel of oil equivalents sold

$

28.58

 

 

21.00

 

 

25.20

 

 

21.64

 

Adjusted EBITDAX per barrel of oil equivalents sold

$

27.55

 

 

19.32

 

 

26.03

 

 

20.80

 

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 (loss) or Cash provided by operating activities as determined in accordance with accounting principles generally accepted in the United States of America.

Presented above is EBITDAX per barrel of oil equivalent sold and adjusted EBITDAX per barrel of oil equivalent sold. Management believes EBITDAX per barrel of oil equivalent sold and adjusted EBITDAX per barrel of oil equivalent sold are important information because they are used by management to evaluate the Company’s profitability of one barrel of oil equivalent sold in that period. EBITDAX per barrel of oil equivalent sold and adjusted EBITDAX per barrel of oil equivalent sold are non-GAAP financial metrics.

1 Depreciation, depletion, and amortization expense used in the computation of EBITDA excludes the portion attributable to the non-controlling interest.

MURPHY OIL CORPORATION

FUNCTIONAL RESULTS OF OPERATIONS (unaudited)

 

 

Three Months Ended
June 30, 2019

Three Months Ended
June 30, 2018

(Millions of dollars)

Revenues

Income

(Loss)

Revenues

Income

(Loss)

Exploration and production

 

 

 

 

United States1

$

549.0

 

133.0

 

318.8

 

72.6

 

Canada

94.8

 

(5.9

)

108.4

 

9.7

 

Other

3.1

 

(3.4

)

 

(15.0

)

Total exploration and production

646.9

 

123.7

 

427.2

 

67.3

 

Corporate

62.1

 

(24.9

)

(37.6

)

(92.5

)

Revenue/income from continuing operations

709.0

 

98.8

 

389.6

 

(25.2

)

Discontinued operations, net of tax 2

 

24.4

 

 

70.7

 

Total revenues/net income (loss)

$

709.0

 

123.2

 

389.6

 

45.5

 

 

 

Six Months Ended
June 30, 2019

Six Months Ended
June 30, 2018

(Millions of dollars)

Revenues

Income
(Loss)

Revenues

Income
(Loss)

Exploration and production

 

 

 

 

United States1

$

1,018.2

 

249.2

 

596.9

 

108.7

 

Canada

213.7

 

1.6

 

226.7

 

34.3

 

Other

6.0

 

(31.7

)

 

(30.5

)

Total exploration and production

1,237.9

 

219.1

 

823.6

 

112.5

 

Corporate

62.2

 

(97.4

)

(59.2

)

(47.1

)

Revenue/income from continuing operations

1,300.1

 

121.7

 

764.4

 

65.4

 

Discontinued operations, net of tax 2

 

74.3

 

 

148.4

 

Total revenues/net income (loss)

$

1,300.1

 

196.0

 

764.4

 

213.8

 

1 2019 includes results attributable to a noncontrolling interest in MP Gulf of Mexico, LLC (MP GOM).

2 Malaysia is reported as discontinued operations effective January 1, 2019.

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (unaudited)

THREE MONTHS ENDED JUNE 30, 2019, AND 2018

 

(Millions of dollars)

United

States 1

Canada

Other

Total

Three Months Ended June 30, 2019

 

 

 

 

Oil and gas sales and other operating revenues

549.0

 

94.8

 

3.1

 

646.9

 

Lease operating expenses

99.7

 

36.9

 

0.6

 

137.2

 

Severance and ad valorem taxes

12.8

 

0.3

 

 

13.1

 

Depreciation, depletion and amortization

201.2

 

56.8

 

1.3

 

259.3

 

Accretion of asset retirement obligations

8.4

 

1.5

 

 

9.9

 

Exploration expenses

 

 

 

 

Dry holes and previously suspended exploration costs

(0.2

)

 

 

(0.2

)

Geological and geophysical

15.4

 

 

2.4

 

17.8

 

Other exploration

2.8

 

0.1

 

3.1

 

6.0

 

 

18.0

 

0.1

 

5.5

 

23.6

 

Undeveloped lease amortization

5.9

 

0.4

 

0.9

 

7.2

 

Total exploration expenses

23.9

 

0.5

 

6.4

 

30.8

 

Selling and general expenses

12.9

 

6.1

 

6.1

 

25.1

 

Other

27.9

 

0.2

 

0.1

 

28.2

 

Results of operations before taxes

162.2

 

(7.5

)

(11.4

)

143.3

 

Income tax provisions (benefits)

29.2

 

(1.6

)

(8.0

)

19.6

 

Results of operations (excluding corporate overhead and interest)

133.0

 

(5.9

)

(3.4

)

123.7

 

 

 

 

 

 

Three Months Ended June 30, 2018

 

 

 

 

Oil and gas sales and other operating revenues

$

318.8

 

108.4

 

 

427.2

 

Lease operating expenses

52.0

 

29.2

 

 

81.2

 

Severance and ad valorem taxes

12.7

 

0.2

 

 

12.9

 

Depreciation, depletion and amortization

128.3

 

56.8

 

0.7

 

185.8

 

Accretion of asset retirement obligations

4.5

 

1.9

 

 

6.4

 

Exploration expenses

 

 

 

 

Geological and geophysical

0.2

 

 

0.7

 

0.9

 

Other exploration

2.4

 

 

5.9

 

8.3

 

 

2.6

 

 

6.6

 

9.2

 

Undeveloped lease amortization

8.7

 

0.2

 

0.7

 

9.6

 

Total exploration expenses

11.3

 

0.2

 

7.3

 

18.8

 

Selling and general expenses

10.5

 

6.6

 

5.9

 

23.0

 

Other

6.9

 

0.3

 

1.1

 

8.3

 

Results of operations before taxes

92.6

 

13.2

 

(15.0

)

90.8

 

Income tax provisions (benefits)

20.0

 

3.5

 

 

23.5

 

Results of operations (excluding corporate overhead and interest)

72.6

 

9.7

 

(15.0

)

67.3

 

1 2019 includes results attributable to a noncontrolling interest in MP GOM.

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (unaudited)

SIX MONTHS ENDED JUNE 30, 2019, AND 2018

 

(Millions of dollars)

United

States 1

Canada

Other

Total

Six Months Ended June 30, 2019

 

 

 

 

Oil and gas sales and other operating revenues

$

1,018.2

 

213.7

 

6.0

 

1,237.9

 

Lease operating expenses

192.1

 

75.9

 

0.9

 

268.9

 

Severance and ad valorem taxes

22.6

 

0.6

 

 

23.2

 

Depreciation, depletion and amortization

365.1

 

116.3

 

2.3

 

483.7

 

Accretion of asset retirement obligations

16.2

 

3.0

 

 

19.2

 

Exploration expenses

 

 

 

 

Dry holes and previously suspended exploration costs

(0.1

)

 

13.1

 

13.0

 

Geological and geophysical

15.9

 

 

7.9

 

23.8

 

Other exploration

4.0

 

0.2

 

7.1

 

11.3

 

 

19.8

 

0.2

 

28.1

 

48.1

 

Undeveloped lease amortization

12.8

 

0.7

 

1.7

 

15.2

 

Total exploration expenses

32.6

 

0.9

 

29.8

 

63.3

 

Selling and general expenses

30.2

 

13.7

 

11.7

 

55.6

 

Other

58.5

 

0.4

 

0.4

 

59.3

 

Results of operations before taxes

300.9

 

2.9

 

(39.1

)

264.7

 

Income tax provisions (benefits)

51.7

 

1.3

 

(7.4

)

45.6

 

Results of operations (excluding corporate overhead and interest)

$

249.2

 

1.6

 

(31.7

)

219.1

 

 

 

 

 

 

Six Months Ended June 30, 2018

 

 

 

 

Oil and gas sales and other operating revenues

$

596.9

 

226.7

 

 

823.6

 

Lease operating expenses

110.5

 

59.5

 

 

170.0

 

Severance and ad valorem taxes

24.5

 

0.5

 

 

25.0

 

Depreciation, depletion and amortization

249.9

 

112.5

 

1.5

 

363.9

 

Accretion of asset retirement obligations

8.9

 

3.9

 

 

12.8

 

Exploration expenses

 

 

 

 

Geological and geophysical

6.2

 

 

3.6

 

9.8

 

Other exploration

3.6

 

0.1

 

11.3

 

15.0

 

 

9.8

 

0.1

 

14.9

 

24.8

 

Undeveloped lease amortization

21.4

 

0.4

 

1.0

 

22.8

 

Total exploration expenses

31.2

 

0.5

 

15.9

 

47.6

 

Selling and general expenses

24.9

 

14.3

 

11.9

 

51.1

 

Other

7.7

 

(11.4

)

1.0

 

(2.7

)

Results of operations before taxes

139.3

 

46.9

 

(30.3

)

155.9

 

Income tax provisions (benefits)

30.6

 

12.6

 

0.2

 

43.4

 

Results of operations (excluding corporate overhead and interest)

$

108.7

 

34.3

 

(30.5

)

112.5

 

1 2019 includes results attributable to a noncontrolling interest in MP GOM.

 

 

 

 

 

 

 

 

 

MURPHY OIL CORPORATION

PRODUCTION-RELATED EXPENSES

(unaudited)

 

(Dollars per barrel of oil equivalents sold)

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2019

 

2018

 

2019

 

2018

Continuing operations

 

 

 

 

 

 

 

United States – Eagle Ford Shale

 

 

 

 

 

 

 

Lease operating expense

$

8.26

 

 

8.09

 

 

10.33

 

 

8.22

 

Severance and ad valorem taxes

3.16

 

 

3.15

 

 

3.10

 

 

3.08

 

Depreciation, depletion and amortization (DD&A) expense

23.56

 

 

24.50

 

 

23.71

 

 

24.67

 

 

 

 

 

 

 

 

 

United States – Gulf of Mexico

 

 

 

 

 

 

 

Lease operating expense

$

10.63

 

 

11.02

 

 

9.37

 

 

14.10

 

DD&A expense

17.03

 

 

16.86

 

 

15.45

 

 

17.08

 

 

 

 

 

 

 

 

 

Canada – Onshore

 

 

 

 

 

 

 

Lease operating expense

$

6.15

 

 

4.92

 

 

6.02

 

 

4.88

 

Severance and ad valorem taxes

0.07

 

 

0.03

 

 

0.07

 

 

0.06

 

DD&A expense

10.87

 

 

10.55

 

 

10.95

 

 

10.36

 

 

 

 

 

 

 

 

 

Canada – Offshore

 

 

 

 

 

 

 

Lease operating expense

$

15.91

 

 

9.94

 

 

16.73

 

 

10.50

 

DD&A expense

14.31

 

 

12.57

 

 

13.98

 

 

13.06

 

 

 

 

 

 

 

 

 

Total oil and gas continuing operations

 

 

 

 

 

 

 

Lease operating expense

$

8.93

 

 

7.37

 

 

8.93

 

 

7.89

 

Severance and ad valorem taxes

0.85

 

 

1.17

 

 

0.77

 

 

1.16

 

DD&A expense

17.21

 

 

17.31

 

 

16.40

 

 

17.33

 

 

 

 

 

 

 

 

 

Total oil and gas continuing operations – excluding noncontrolling interest

 

 

 

 

 

 

 

Lease operating expense

$

8.86

 

 

7.37

 

 

8.94

 

 

7.89

 

Severance and ad valorem taxes

0.92

 

 

1.17

 

 

0.83

 

 

1.16

 

DD&A expense

17.24

 

 

17.31

 

 

16.50

 

 

17.33

 

MURPHY OIL CORPORATION

OTHER FINANCIAL DATA

(unaudited)

(Millions of dollars)

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2019

 

2018

 

2019

 

2018

Capital expenditures for continuing operations

 

 

 

 

 

 

 

Exploration and production

 

 

 

 

 

 

 

United States 1

$

1,541.3

 

 

178.9

 

 

$

1,746.8

 

 

$

326.4

 

Canada

60.0

 

 

83.3

 

 

155.7

 

 

202.3

 

Other

23.1

 

 

8.0

 

 

64.4

 

 

17.7

 

Total

1,624.4

 

 

270.2

 

 

1,966.9

 

 

546.4

 

 

 

 

 

 

 

 

 

Corporate

3.1

 

 

5.1

 

 

5.6

 

 

7.9

 

Total capital expenditures - continuing operations

1,627.5

 

 

275.3

 

 

1,972.5

 

 

554.3

 

 

 

 

 

 

 

 

 

Charged to exploration expenses 2

 

 

 

 

 

 

 

United States

18.0

 

 

2.6

 

 

19.8

 

 

9.8

 

Canada

0.1

 

 

 

 

0.2

 

 

0.1

 

Other

5.5

 

 

6.6

 

 

28.1

 

 

14.9

 

Total charged to exploration expenses - continuing operations

23.6

 

 

9.2

 

 

48.1

 

 

24.8

 

 

 

 

 

 

 

 

 

Total capitalized 3

$

1,603.9

 

 

266.1

 

 

$

1,924.4

 

 

$

529.5

 

Memo: Capital expenditures on discontinued operations

38.0

 

 

25.1

 

 

59.6

 

 

44.0

 

1 Includes $1,226.3 million for acquisition of exploration and production properties in the US Gulf of Mexico in the three-months and six-months ended June 30, 2019.

2 Excludes amortization of undeveloped leases of $7.2 million and $15.2 million for the three-month and six months ended June 30, 2019 and $9.6 million and $22.8 million for the three-month and six months ended June 30, 2018.

3 Includes noncontrolling interest capital expenditures of $10.1 million and $23.2 million for the three-month and six months ended June 30, 2019.

MURPHY OIL CORPORATION

CONDENSED BALANCE SHEETS (unaudited)

(Millions of dollars)

June 30, 2019

 

December 31, 2018 1

Assets

 

 

 

Cash and cash equivalents

$

326.0

 

 

359.9

 

Other current assets 2

2,425.8

 

 

520.0

 

Property, plant and equipment – net

10,041.2

 

 

8,432.1

 

Other long-term assets

742.9

 

 

1,740.6

 

Total assets

$

13,535.9

 

 

11,052.6

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Current maturities of long-term debt

$

0.7

 

 

0.7

 

Short-term loan payable

500.0

 

 

 

Other current liabilities 2

1,702.1

 

 

845.4

 

Long-term debt

4,185.9

 

 

3,109.3

 

Other long-term liabilities

2,048.7

 

 

1,899.6

 

Total equity 3,4

5,098.5

 

 

5,197.6

 

Total liabilities and stockholders' equity

$

13,535.9

 

 

11,052.6

 

1 Reclassified to conform to current presentation.

2 Includes $1,863.8 million and $772.8 million in 2019 in Other current assets and Other current liabilities, respectively, classified as held for sale and related to Malaysia.

3 Includes noncontrolling interest of $358.5 million and $368.3 million as of June 30, 2019 and December 31, 2018, respectively.

4 Number of shares of Common Stock, $1.00 par value, outstanding at June 30, 2019 was 162,250,593.

MURPHY OIL CORPORATION

PRODUCTION SUMMARY

(unaudited)

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

Barrels per day unless otherwise noted

2019

 

2018

 

2019

 

2018

Continuing operations

 

 

 

 

 

 

 

 

Net crude oil and condensate

 

 

 

 

 

 

 

United States

Onshore

33,145

 

 

31,936

 

 

29,532

 

 

31,630

 

 

Gulf of Mexico 1

61,062

 

 

15,365

 

 

61,055

 

 

14,113

 

Canada

Onshore

5,943

 

 

5,254

 

 

6,199

 

 

4,809

 

 

Offshore

6,685

 

 

7,982

 

 

7,304

 

 

8,085

 

Other

 

448

 

 

580

 

 

477

 

 

582

 

Total net crude oil and condensate - continuing operations

107,283

 

 

61,117

 

 

104,567

 

 

59,219

 

Net natural gas liquids

 

 

 

 

 

 

 

 

United States

Onshore

5,977

 

 

6,824

 

 

5,641

 

 

6,772

 

 

Gulf of Mexico 1

3,118

 

 

1,391

 

 

2,940

 

 

1,114

 

Canada

Onshore

1,073

 

 

1,033

 

 

1,083

 

 

959

 

Total net natural gas liquids - continuing operations

10,168

 

 

9,248

 

 

9,664

 

 

8,845

 

Net natural gas – thousands of cubic feet per day

 

 

 

 

 

 

 

United States

Onshore

32,209

 

 

32,679

 

 

30,752

 

 

31,894

 

 

Gulf of Mexico 1

39,029

 

 

14,284

 

 

29,356

 

 

13,548

 

Canada

Onshore

249,367

 

 

264,748

 

 

252,120

 

 

263,036

 

Total net natural gas - continuing operations

320,605

 

 

311,711

 

 

312,228

 

 

308,478

 

Total net hydrocarbons - continuing operations including NCI 2,3

170,885

 

 

122,317

 

 

166,269

 

 

119,477

 

Noncontrolling interest

 

 

 

 

 

 

 

 

Net crude oil and condensate – barrels per day

(11,160

)

 

 

 

(11,669

)

 

 

Net natural gas liquids – barrels per day

(458

)

 

 

 

(506

)

 

 

Net natural gas – thousands of cubic feet per day

(4,507

)

 

 

 

(4,203

)

 

 

Total noncontrolling interest

(12,369

)

 

 

 

(12,876

)

 

 

Total net hydrocarbons - continuing operations excluding NCI 2,3

158,516

 

 

122,317

 

 

153,394

 

 

119,477

 

Discontinued operations

 

 

 

 

 

 

 

 

Net crude oil and condensate – barrels per day

21,556

 

 

28,950

 

 

23,744

 

 

30,084

 

Net natural gas liquids – barrels per day

529

 

 

872

 

 

636

 

 

665

 

Net natural gas – thousands of cubic feet per day 2

93,382

 

 

113,125

 

 

97,465

 

 

114,195

 

Total discontinued operations

37,649

 

 

48,676

 

 

40,624

 

 

49,782

 

Total net hydrocarbons produced excluding NCI 2,3

196,165

 

 

170,993

 

 

194,018

 

 

169,259

 

1 2019 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
SALES SUMMARY
(unaudited)

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

Barrels per day unless otherwise noted

2019

 

2018

 

2019

 

2018

Continuing operations

 

 

 

 

 

 

 

 

Net crude oil and condensate

 

 

 

 

 

 

 

United States

Onshore

33,145

 

 

31,936

 

 

29,532

 

 

31,630

 

 

Gulf of Mexico 1

58,842

 

 

15,365

 

 

61,053

 

 

14,113

 

Canada

Onshore

5,943

 

 

5,254

 

 

6,199

 

 

4,809

 

 

Offshore

6,723

 

 

7,333

 

 

7,324

 

 

8,255

 

Other

 

470

 

 

 

 

468

 

 

 

Total net crude oil and condensate - continuing operations

105,123

 

 

59,888

 

 

104,576

 

 

58,807

 

Net natural gas liquids

 

 

 

 

 

 

 

United States

Onshore

5,977

 

 

6,824

 

 

5,641

 

 

6,772

 

 

Gulf of Mexico 1

3,118

 

 

1,391

 

 

2,940

 

 

1,114

 

Canada

Onshore

1,073

 

 

1,033

 

 

1,083

 

 

959

 

Total net natural gas liquids - continuing operations

10,168

 

 

9,248

 

 

9,664

 

 

8,845

 

Net natural gas – thousands of cubic feet per day

 

 

 

 

 

 

 

United States

Onshore

32,209

 

 

32,679

 

 

30,752

 

 

31,894

 

 

Gulf of Mexico 1

39,029

 

 

14,284

 

 

29,356

 

 

13,548

 

Canada

Onshore

249,367

 

 

264,748

 

 

252,120

 

 

263,036

 

Total net natural gas - continuing operations

320,605

 

 

311,711

 

 

312,228

 

 

308,478

 

Total net hydrocarbons - continuing operations including NCI 2,3

168,725

 

 

121,088

 

 

166,278

 

 

119,065

 

Noncontrolling interest

 

 

 

 

 

 

 

 

Net crude oil and condensate – barrels per day

(10,715

)

 

 

 

(11,669

)

 

 

Net natural gas liquids – barrels per day

(458

)

 

 

 

(506

)

 

 

Net natural gas – thousands of cubic feet per day 2

(4,507

)

 

 

 

(4,203

)

 

 

Total noncontrolling interest

(11,924

)

 

 

 

(12,876

)

 

 

Total net hydrocarbons - continuing operations excluding NCI 2,3

156,801

 

 

121,088

 

 

153,403

 

 

119,065

 

 

 

 

 

 

 

 

 

 

Discontinued operations

 

 

 

 

 

 

 

 

Net crude oil and condensate – barrels per day

21,121

 

 

30,107

 

 

23,676

 

 

30,031

 

Net natural gas liquids – barrels per day

498

 

 

632

 

 

580

 

 

798

 

Net natural gas – thousands of cubic feet per day 2

93,382

 

 

113,125

 

 

97,465

 

 

114,195

 

Total discontinued operations

37,183

 

 

49,593

 

 

40,500

 

 

49,862

 

Total net hydrocarbons sold excluding NCI 2,3

193,984

 

 

170,681

 

 

193,903

 

 

168,927

 

1 2019 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
PRICE SUMMARY
(unaudited)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2019

 

2018

 

2019

 

2018

Weighted average Exploration and Production sales prices

 

 

 

 

 

 

 

Continuing operations

 

 

 

 

 

 

 

 

Crude oil and condensate – dollars per barrel

 

 

 

 

 

 

 

 

United States

Onshore

$

63.72

 

 

68.14

 

 

$

60.95

 

 

$

66.24

 

 

Gulf of Mexico 1

62.41

 

 

68.11

 

 

58.84

 

 

65.81

 

Canada 2

Onshore

48.94

 

 

59.45

 

 

47.97

 

 

57.12

 

 

Offshore

67.86

 

 

72.40

 

 

64.39

 

 

68.69

 

Other

 

73.05

 

 

 

 

70.50

 

 

 

Natural gas liquids – dollars per barrel

 

 

 

 

 

 

 

 

United States

Onshore

11.73

 

 

21.29

 

 

12.29

 

 

20.62

 

 

Gulf of Mexico 1

10.53

 

 

23.27

 

 

13.46

 

 

23.01

 

Canada 2

Onshore

28.37

 

 

36.66

 

 

31.78

 

 

39.83

 

Natural gas – dollars per thousand cubic feet

 

 

 

 

 

 

 

 

United States

Onshore

1.89

 

 

2.11

 

 

2.04

 

 

2.25

 

 

Gulf of Mexico 1

1.87

 

 

2.18

 

 

1.72

 

 

2.36

 

Canada 2

Onshore

1.07

 

 

1.17

 

 

1.51

 

 

1.42

 

Discontinued operations

 

 

 

 

 

 

 

 

Crude oil and condensate – dollars per barrel

 

 

 

 

 

 

 

 

 

 

Malaysia 3

Sarawak

78.25

 

 

69.72

 

 

70.32

 

 

67.13

 

 

Block K

65.79

 

 

67.20

 

 

65.56

 

 

65.20

 

Natural gas liquids – dollars per barrel

 

 

 

 

 

 

 

 

Malaysia 3

Sarawak

40.81

 

 

69.61

 

 

47.42

 

 

70.57

 

Natural gas – dollars per thousand cubic feet

 

 

 

 

 

 

 

 

Malaysia 3

Sarawak

2.57

 

 

3.86

 

 

3.60

 

 

3.62

 

 

Block K

0.24

 

 

0.25

 

 

0.24

 

 

0.24

 

1 Prices include the effect of noncontrolling interest share for MP GOM.

2 U.S. dollar equivalent.

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

MURPHY OIL CORPORATION
COMMODITY HEDGE POSITIONS (unaudited)
AS OF JULY 31, 2019

 

 

 

Commodity

 

Type

 

Volumes
(Bbl/d)

 

Price
(USD/Bbl)

 

Remaining Period

Area

 

 

 

 

 

Start Date

 

End Date

United States

 

WTI

 

Fixed price derivative swap

 

20,000

 

 

$63.64

 

7/1/2019

 

7/31/2019

United States

 

WTI

 

Fixed price derivative swap

 

23,000

 

 

$63.17

 

8/1/2019

 

12/31/2019

United States

 

WTI

 

Fixed price derivative swap

 

24,000

 

 

$59.67

 

1/1/2020

 

12/31/2020

 

 

 

 

 

 

Volumes
(MMcf/d)

 

Price
(CAD/Mcf)

 

Remaining Period

Area

 

Commodity

 

Type

 

 

 

Start Date

 

End Date

Montney

 

Natural Gas

 

Fixed price forward sales at AECO

 

59

 

 

C$2.81

 

7/1/2019

 

12/31/2020

MURPHY OIL CORPORATION
THIRD QUARTER 2019 GUIDANCE

 

 

Liquids

BOPD

 

Gas

MCFD

 

BOEPD

Production – net

 

 

 

 

 

U.S.

– Eagle Ford Shale

45,700

 

 

33,900

 

 

51,300

 

– Gulf of Mexico excluding NCI

67,300

 

 

69,400

 

 

78,900

 

– Gulf of Mexico including NCI 1

78,200

 

 

74,100

 

 

90,500

 

Canada – Tupper Montney

 

 

267,400

 

 

44,600

 

– Kaybob Duvernay and Placid Montney

7,700

 

 

25,900

 

 

12,000

 

– Offshore

6,800

 

 

 

 

6,800

 

Other

400

 

 

 

 

400

 

 

 

 

 

 

 

Total net production (BOEPD) - excluding NCI

192,000 to 196,000

Total net production (BOEPD) - including NCI 1

203,600 to 207,600

 

 

 

 

 

 

Exploration expense ($ millions)

$31

 

 

 

 

 

 

1 Includes noncontrolling interest of MP GOM of 10,900 BOPD liquids and 4,700 MCFD gas.

 

 

 

 

 

 

FULL YEAR 2019 GUIDANCE

Total net production (BOEPD) - excluding NCI

174,000 to 178,000

 
Total net production (BOEPD) - including NCI2

186,600 to 190,600

 
Capital expenditures – excluding NCI ($ billions) 3

$1.35 - $1.45

 
2Includes noncontrolling interest of MP GOM of 12,600 BOEPD  
3Excludes noncontrolling interest of MP GOM of $48 MM and $20 MM for assets held for sale.

 

Investor Contacts:
Kelly Whitley, [email protected], 281-675-9107
Bryan Arciero, [email protected], 281-675-9339
Megan Larson, [email protected], 281-675-9470


Source: Business Wire (August 8, 2019 - 6:00 AM EDT)

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