(GC478) - Murphy Oil

Company Overview

Murphy Oil Corporation is a global oil exploration and production company with a long history of crude oil and natural gas production and exploration across the globe.

Gulf of Mexico Operations

King's Quay Producing Hub

• The King's Quay producing hub, which came online in April 2022, is a significant project for Murphy Oil. It initially started with a seven-well program and is producing 70,000 barrels of oil equivalent per day (boe/d), with 87% being crude oil. Murphy's net share is 18,000 boe/d.
• The hub has a nameplate capacity of 100,000 boe/d and is expected to approach 85,000 boe/d by the end of the year, with potential to reach full capacity with minor adjustments.

Field Expansion and Acquisitions

• Murphy Oil has been expanding its holdings in the US Gulf of Mexico, acquiring additional interests in fields such as the Kodiak and Lucius fields. For example, they acquired an additional 11% working interest in the Kodiak field for $47 million and a 3.4% working interest in the Lucius field for $77 million.
• The company divested its 50% working interest in the Thunder Hawk field, reducing liabilities by $37 million.

Drilling and Development Activities

• In 2023, Murphy brought online the Dalmatian #1 well and drilled and completed the Marmalard #3 well. They also plugged and abandoned the non-commercial Oso #1 exploration well.
• For 2024, Murphy plans to spend approximately $300 million on development drilling and field development projects in the Gulf of Mexico, including operated and non-operated subsea tiebacks and advancing the non-operated St. Malo waterflood project.

Production and CAPEX

• In the fourth quarter of 2023, Murphy's Gulf of Mexico production averaged approximately 81,000 boe/d, with 81% being oil.
• The company has allocated significant capital expenditure (CAPEX) for 2024, with $300 million dedicated to the Gulf of Mexico for development drilling and field development projects.

Other Operational Areas

Eagle Ford Shale

• Murphy Oil plans to spend approximately $320 million in the Eagle Ford Shale in 2024, focusing on drilling and bringing online both operated and non-operated wells.

Canada

• In Canada, Murphy will allocate $130 million for onshore activities in 2024, primarily for the Tupper Montney and Kaybob Duvernay areas. Additionally, $25 million is allocated for offshore development, mainly at the Hibernia Field.

Vietnam

• The company has allocated $45 million for initial Lac Da Vang field development activities offshore Vietnam in 2024. They also plan to drill two exploration wells in Vietnam as part of their $120 million exploration budget.

Financial and Operational Performance

2023 Results

• For the full year 2023, Murphy Oil's production averaged 186,000 boe/d, with 52% being oil. The company's accrued CAPEX for 2023 was $1.008 billion, excluding non-controlling interests and acquisition-related CAPEX.

EBITDA and EBITDAX

• In 2023, Murphy Oil reported EBITDA of $1.8 billion, EBITDAX of $2.0 billion, adjusted EBITDA of $1.9 billion, and adjusted EBITDAX of $2.1 billion.

Exploration Activities

• Murphy Oil has a significant exploration program planned for 2024, with $120 million allocated for drilling two exploration wells in the Gulf of Mexico and two in Vietnam.

Challenges and Maintenance

• The company anticipates some downtime in the Gulf of Mexico in the first quarter of 2024 due to well workovers, facility maintenance, and repairs to subsea equipment serving the Mormont Field. Production is expected to resume by mid-year.