Energy, Automobile, EV, Renewable News | Murphy Oil Announces Third Quarter 2024 Financial and Operating Results

Murphy Oil Announces Third Quarter 2024 Financial and Operating Results

November 7, 2024

Repurchased $194 Million of Shares Outstanding, Initiated Vietnam Exploration Program

HOUSTON–(BUSINESS WIRE)–Murphy Oil Corporation (NYSE: MUR) today announced its financial and operating results for the third quarter ended September 30, 2024, including net income attributable to Murphy of $139 million, or $0.93 net income per diluted share. Excluding discontinued operations and other items affecting comparability between periods, adjusted net income attributable to Murphy was $111 million, or $0.74 adjusted net income per diluted share.

Unless otherwise noted, the financial and operating highlights and metrics discussed in this commentary exclude noncontrolling interest (NCI).¹

Highlights for the third quarter include:

Produced 185 thousand barrels of oil equivalent per day (MBOEPD), with 88 thousand barrels of oil per day (MBOPD)
Repurchased $194 million of stock, or 5.4 million shares, at an average price of $36.12 per share
Initiated a two-well Vietnam exploration program, drilling the Hai Su Vang-1X exploration well in Block 15/2-17
Maintained quarterly dividend of $0.30 per share or $1.20 per share annualized

Subsequent to the third quarter:

Issued $600 million aggregate principal amount of 6.000 percent senior notes due 2032, and used proceeds to tender an aggregate $521 million of senior notes due 2027, 2028 and 2029
Entered into new five-year, $1.2 billion senior unsecured credit facility, representing a 50 percent increase from previous facility size
Commenced platform construction for the Lac Da Vang field development project in Vietnam
Announced Chief Executive Officer transition, effective January 1, 2025

“The company has gone through an incredible transformation since we first established our strategy of Delever, Execute, Explore, Return,” said Roger W. Jenkins, Chief Executive Officer. “Most recently, we improved our balance sheet by securing a highly competitive rate on our new senior notes and significantly upsizing our unsecured credit facility. Further, we continue to reward our shareholders through a long-standing dividend and ongoing meaningful share repurchases, and our exploration opportunities in Vietnam and Côte d’Ivoire provide upside to our portfolio.”

THIRD QUARTER 2024 RESULTS

The company recorded net income attributable to Murphy of $139 million, or $0.93 net income per diluted share, for the third quarter 2024. Adjusted net income, which excludes both the results of discontinued operations and certain other items that affect comparability of results between periods, was $111 million, or $0.74 adjusted net income per diluted share for the same period. Details for third quarter results and an adjusted net income reconciliation can be found in the attached schedules.

Earnings before interest, taxes, depreciation and amortization (EBITDA) attributable to Murphy were $378 million. Earnings before interest, tax, depreciation, amortization and exploration expenses (EBITDAX) attributable to Murphy were $410 million. Adjusted EBITDA attributable to Murphy was $397 million. Adjusted EBITDAX attributable to Murphy was $429 million. Reconciliations for third quarter EBITDA, EBITDAX, adjusted EBITDA and adjusted EBITDAX can be found in the attached schedules.

Third quarter production averaged 185 MBOEPD, which included 88 MBOPD. Onshore production was approximately 2.1 MBOEPD above guidance primarily due to stronger well performance in Tupper Montney. This partially offset 1.4 MBOEPD of unplanned downtime in the Gulf of Mexico, primarily due to temporary outages at third-party downstream facilities, and 1.7 MBOEPD of additional downtime at non-operated Terra Nova.

Accrued capital expenditures (CAPEX) for third quarter 2024 totaled $211 million, excluding NCI. Details for third quarter production and CAPEX can be found in the attached schedules.

CAPITAL ALLOCATION FRAMEWORK

Share Repurchases

During the third quarter, Murphy repurchased $194 million of stock, or 5.4 million shares, at an average price of $36.12 per share.

In the first nine months of 2024, Murphy repurchased $300 million of stock, or 8.0 million shares, at an average price of $37.46 per share. Murphy currently has $650 million remaining under its share repurchase authorization and 145.8 million shares outstanding.

Liquidity and Debt Transactions

Murphy had approximately $1.1 billion of liquidity on September 30, 2024, with no borrowings on the $800 million senior unsecured credit facility and $271 million of cash and cash equivalents, inclusive of NCI.

As of September 30, 2024, Murphy’s total debt was $1.28 billion, and consisted of long-term, fixed-rate notes with a weighted average maturity of 7.5 years and a weighted average coupon of 6.2 percent.

As previously announced, subsequent to the third quarter Murphy issued $600 million of 6.000 percent senior notes due 2032. Proceeds were used to redeem $259 million of senior notes due 2027, $200 million of senior notes due 2028 and $62 million of senior notes due 2029, totaling $521 million. Murphy plans to call the remaining $79 million of senior notes in fourth quarter 2024 to achieve a debt-neutral transaction.

Also subsequent to the third quarter, Murphy entered into a new five-year, $1.2 billion senior unsecured credit facility, representing a 50 percent increase from the previous facility size, or $400 million of additional liquidity.

OPERATIONS SUMMARY

Onshore

In the third quarter of 2024, the onshore business produced approximately 109 MBOEPD, which included 29 percent liquids volumes.

Eagle Ford Shale – Production averaged 32 MBOEPD with 72 percent oil volumes and 86 percent liquids volumes in the third quarter. Murphy brought online five operated Tilden wells as planned, in addition to three non-operated Karnes wells and nine non-operated Tilden wells during the quarter.

Tupper Montney – During the third quarter, natural gas production averaged 429 million cubic feet per day (MMCFD), which exceeded guidance by approximately 11 MMCFD primarily due to stronger well performance.

Kaybob Duvernay – Production averaged 5 MBOEPD with 73 percent liquids volumes in the third quarter.

Offshore

Excluding NCI, in the third quarter of 2024, the offshore business produced approximately 75 MBOEPD, which included 81 percent oil.

Gulf of Mexico – Production averaged approximately 67 MBOEPD, consisting of 79 percent oil during the third quarter. As previously announced, Murphy brought online the operated Mormont #3 (Green Canyon 478) well and concluded workovers in the Neidermeyer, Dalmatian and non-operated Kodiak fields. Also during the quarter, the company spud the operated Mormont #4 (Green Canyon 478) well, and Murphy’s operating partner began water injection at the St. Malo waterflood project.

Canada – In the third quarter, production averaged 8 MBOEPD, consisting of 100 percent oil.

EXPLORATION

Gulf of Mexico – During the third quarter, Murphy drilled the Sebastian #1 (Mississippi Canyon 387) exploration well. The well encountered non-commercial hydrocarbons and has been plugged and abandoned. Approximately $12 million of the net well cost was expensed in the third quarter. Murphy holds a 26.8 percent working interest in the well.

Vietnam – Murphy as operator spud the Hai Su Vang-1X (Block 15-2/17) exploration well during the third quarter, initiating its two-well Vietnam exploration program. Murphy holds a 40 percent working interest in the well. Following this well, the company will spud the Lac Da Hong-1X (Block 15-1/05) exploration well as operator with a 40 percent working interest.

CHIEF EXECUTIVE OFFICER TRANSITION

As previously announced, the Board of Directors has appointed Eric M. Hambly, Murphy’s current President and Chief Operating Officer, to succeed Roger W. Jenkins as the company’s President and Chief Executive Officer, effective January 1, 2025. In addition, Mr. Hambly will become a member of the Board of Directors. Mr. Jenkins will retire from the Board on December 31, 2024. He will remain with Murphy in a non-executive role as an advisor until his retirement on December 31, 2025.

2024 CAPITAL EXPENDITURE AND PRODUCTION GUIDANCE

Murphy maintains its 2024 accrued CAPEX range of $920 million to $1.02 billion. The company is tightening its full year 2024 production range to 180 to 182 MBOEPD, consisting of approximately 50 percent oil and 55 percent liquids volumes. As previously disclosed, the company expects to be at the lower end of the production range due to operational impacts in the Gulf of Mexico and at non-operated Terra Nova.

Production for fourth quarter 2024 is estimated to be in the range of 181.5 to 189.5 MBOEPD with 94 MBOPD, or approximately 51 percent, oil volumes. This includes 1.5 MBOEPD of planned onshore downtime and 1.0 MBOEPD of planned downtime for maintenance at non-op Terra Nova. Both production and CAPEX guidance ranges exclude NCI.

“We achieved a significant milestone this year as we reached Murphy 3.0 of our capital allocation framework. This allowed us to increase our shareholder returns through additional share repurchases after previously raising our dividend in first quarter 2024. Additionally, we extended the maturity profile of our debt and enhanced our liquidity position with a 50 percent increase in our senior unsecured credit facility,” said Eric M. Hambly, President and Chief Operating Officer. “As we look to 2025, I am excited to increase shareholder returns, progress our Vietnam development project and announce exploration results – all of which we expect to accomplish while maintaining a strong balance sheet.”

Detailed guidance for the fourth quarter and full year 2024 is contained in the attached schedules.

FIXED PRICE CONTRACTS

The company employs derivative commodity instruments to manage certain risks associated with commodity price volatility and underpin capital spending associated with certain assets. During the third quarter, Murphy executed NYMEX natural gas swaps of 20 MMCFD of full-year 2025 production at an average price of $3.20 per thousand cubic feet.

Murphy also maintains fixed price forward sales contracts in Canada to mitigate volatility of AECO prices. These contracts are for physical delivery of natural gas volumes at a fixed price, with no mark-to-market income adjustments. Details for the current fixed price contracts can be found in the attached schedules.

CONFERENCE CALL AND WEBCAST SCHEDULED FOR NOVEMBER 7, 2024

Murphy will host a conference call to discuss third quarter 2024 financial and operating results on Thursday, November 7, 2024, at 9:00 a.m. EST. The call can be accessed either via the Internet through the events calendar on the Murphy Oil Corporation Investor Relations website at http://ir.murphyoilcorp.com or via telephone by dialing toll-free 800-717-1738, reservation number 41884. For additional information, please refer to the Third Quarter 2024 Earnings Presentation available under the News and Events section of the Investor Relations website.

FINANCIAL DATA

Summary financial data and operating statistics for third quarter 2024, with comparisons to the same period from the previous year, are contained in the attached schedules. Additionally, a schedule indicating the impacts of items affecting comparability of results between periods, a reconciliation of EBITDA, EBITDAX, adjusted EBITDA and adjusted EBITDAX between periods, as well as guidance for the fourth quarter and full year 2024, are also included.

CAPITAL ALLOCATION FRAMEWORK

This news release contains references to the company’s capital allocation framework and adjusted free cash flow. As previously disclosed, Murphy now allocates capital pursuant to Murphy 3.0 of the company’s capital allocation framework, under which the company allocates a minimum of 50 percent of adjusted free cash flow to shareholder returns, primarily through buybacks. Murphy will continue to assess the appropriate shareholder return allocation under the framework, including potential dividend increases. The remainder of adjusted free cash flow will be allocated to the balance sheet as the company maintains the $1.0 billion total long-term debt goal.

Adjusted free cash flow is defined as cash flow from operations before working capital change, less capital expenditures, distributions to NCI and projected payments, quarterly dividend and accretive acquisitions.

ABOUT MURPHY OIL CORPORATION

As an independent oil and natural gas exploration and production company, Murphy Oil Corporation believes in providing energy that empowers people by doing right always, staying with it and thinking beyond possible. Murphy challenges the norm, taps into its strong legacy and uses its foresight and financial discipline to deliver inspired energy solutions. Murphy sees a future where it is an industry leader who is positively impacting lives for the next 100 years and beyond. Additional information can be found on the company’s website at www.murphyoilcorp.com.

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified through the inclusion of words such as “aim”, “anticipate”, “believe”, “drive”, “estimate”, “expect”, “expressed confidence”, “forecast”, “future”, “goal”, “guidance”, “intend”, “may”, “objective”, “outlook”, “plan”, “position”, “potential”, “project”, “seek”, “should”, “strategy”, “target”, “will” or variations of such words and other similar expressions. These statements, which express management’s current views concerning future events, results and plans, are subject to inherent risks, uncertainties and assumptions (many of which are beyond our control) and are not guarantees of performance. In particular, statements, express or implied, concerning the company’s future operating results or activities and returns or the company’s ability and decisions to replace or increase reserves, increase production, generate returns and rates of return, replace or increase drilling locations, reduce or otherwise control operating costs and expenditures, generate cash flows, pay down or refinance indebtedness, achieve, reach or otherwise meet initiatives, plans, goals, ambitions or targets with respect to emissions, safety matters or other ESG (environmental/social/governance) matters, make capital expenditures or pay and/or increase dividends or make share repurchases and other capital allocation decisions are forward-looking statements. Factors that could cause one or more of these future events, results or plans not to occur as implied by any forward-looking statement, which consequently could cause actual results or activities to differ materially from the expectations expressed or implied by such forward-looking statements, include, but are not limited to: macro conditions in the oil and gas industry, including supply/demand levels, actions taken by major oil exporters and the resulting impacts on commodity prices; geopolitical concerns; increased volatility or deterioration in the success rate of our exploration programs or in our ability to maintain production rates and replace reserves; reduced customer demand for our products due to environmental, regulatory, technological or other reasons; adverse foreign exchange movements; political and regulatory instability in the markets where we do business; the impact on our operations or market of health pandemics such as COVID-19 and related government responses; other natural hazards impacting our operations or markets; any other deterioration in our business, markets or prospects; any failure to obtain necessary regulatory approvals; any inability to service or refinance our outstanding debt or to access debt markets at acceptable prices; or adverse developments in the US or global capital markets, credit markets, banking system or economies in general, including inflation. 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 US Securities and Exchange Commission (“SEC”) and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K that we file, available from the SEC’s website and from Murphy Oil Corporation’s website at http://ir.murphyoilcorp.com. Investors and others should note that we may announce material information using SEC filings, press releases, public conference calls, webcasts and the investors page of our website. We may use these channels to distribute material information about the company; therefore, we encourage investors, the media, business partners and others interested in the company to review the information we post on our website. The information on our website is not part of, and is not incorporated into, this news release. Murphy Oil Corporation undertakes no duty to publicly update or revise any forward-looking statements.

NON-GAAP FINANCIAL MEASURES

This news release contains certain non-GAAP financial measures that management believes are useful tools for internal use and the investment community in evaluating Murphy Oil Corporation’s overall financial performance. These non-GAAP financial measures are broadly used to value and compare companies in the crude oil and natural gas industry. Not all companies define these measures in the same way. In addition, these non-GAAP financial measures are not a substitute for financial measures prepared in accordance with GAAP and should therefore be considered only as supplemental to such GAAP financial measures. Please see the attached schedules for reconciliations of the differences between the non-GAAP financial measures used in this news release and the most directly comparable GAAP financial measures.

¹In accordance with GAAP, Murphy reports the 100 percent interest, including a 20 percent noncontrolling interest (NCI), in its subsidiary, MP Gulf of Mexico, LLC (MP GOM). The GAAP financials include the NCI portion of revenue, costs, assets and liabilities and cash flows. Unless otherwise noted, the financial and operating highlights and metrics discussed in this news release, but not the accompanying schedules, exclude the NCI, thereby representing only the amounts attributable to Murphy.


MURPHY OIL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(Thousands of dollars, except per share amounts)	2024			2023			2024			2023
Revenues and other income
Revenue from production	$	753,169		$	945,889		$	2,345,282		$	2,541,956
Sales of purchased natural gas		—			7,877			3,742			64,628
Total revenue from sales to customers		753,169			953,766			2,349,024			2,606,584
(Loss) on derivative instruments		(1,344	)		—			(1,344	)		—
Gain on sale of assets and other income		6,506			5,879			9,834			9,365
Total revenues and other income		758,331			959,645			2,357,514			2,615,949
Costs and expenses
Lease operating expenses		222,886			193,402			716,778			587,678
Severance and ad valorem taxes		10,503			10,937			31,006			35,142
Transportation, gathering and processing		47,438			61,518			157,461			175,308
Costs of purchased natural gas		—			5,467			3,147			47,393
Exploration expenses, including undeveloped lease amortization		31,284			26,514			118,390			152,489
Selling and general expenses		24,871			30,745			78,925			74,398
Depreciation, depletion and amortization		223,632			237,493			650,309			648,830
Accretion of asset retirement obligations		13,241			11,675			39,068			34,196
Other operating expense		5,450			4,385			10,497			21,333
Impairment of assets		—			—			34,528			—
Total costs and expenses		579,305			582,136			1,840,109			1,776,767
Operating income from continuing operations		179,026			377,509			517,405			839,182
Other income (loss)
Other (loss) income		(3,926	)		8,811			33,870			1,044
Interest expense, net		(21,258	)		(29,984	)		(62,265	)		(88,695	)
Total other loss		(25,184	)		(21,173	)		(28,395	)		(87,651	)
Income from continuing operations before income taxes		153,842			356,336			489,010			751,531
Income tax expense		2,122			78,111			64,855			166,813
Income from continuing operations		151,720			278,225			424,155			584,718
Loss from discontinued operations, net of income taxes		(608	)		(421	)		(2,123	)		(744	)
Net income including noncontrolling interest		151,112			277,804			422,032			583,974
Less: Net income attributable to noncontrolling interest		12,018			22,462			65,197			38,701
NET INCOME ATTRIBUTABLE TO MURPHY	$	139,094		$	255,342		$	356,835		$	545,273

INCOME (LOSS) PER COMMON SHARE – BASIC
Continuing operations	$	0.93		$	1.64		$	2.37		$	3.50
Discontinued operations		—			—			(0.01	)		—
Net income	$	0.93		$	1.64		$	2.36		$	3.50

INCOME (LOSS) PER COMMON SHARE – DILUTED
Continuing operations	$	0.93		$	1.63		$	2.35		$	3.47
Discontinued operations		—			—			(0.01	)		—
Net income	$	0.93		$	1.63		$	2.34		$	3.47
Cash dividends per common share	$	0.300		$	0.275		$	0.900		$	0.827
Average common shares outstanding (thousands)
Basic		149,384			155,454			151,401			155,749
Diluted		150,353			156,829			152,437			157,135


MURPHY OIL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(Thousands of dollars)	2024			2023			2024			2023
Operating Activities
Net income including noncontrolling interest	$	151,112		$	277,804		$	422,032		$	583,974
Adjustments to reconcile net income to net cash provided by continuing operations activities
Depreciation, depletion and amortization		223,632			237,493			650,309			648,830
Impairment of assets		—			—			34,528			—
Unsuccessful exploration well costs and previously suspended exploration costs		11,268			11,292			69,548			107,825
Deferred income tax (benefit) expense		(8,792	)		59,547			45,136			152,104
Accretion of asset retirement obligations		13,241			11,675			39,068			34,196
Long-term non-cash compensation		8,237			20,426			30,060			42,502
Amortization of undeveloped leases		1,929			2,846			7,707			8,215
Mark-to-market loss on derivative instruments		1,344			—			1,344			—
Loss from discontinued operations		608			421			2,123			744
Contingent consideration payment		—			—			—			(139,574	)
Mark-to-market loss on contingent consideration		—			—			—			7,113
Other operating activities, net		(4,301	)		(37,990	)		(38,260	)		(97,407	)
Net decrease (increase) in non-cash working capital		30,709			(127,447	)		31,835			(142,788	)
Net cash provided by continuing operations activities		428,987			456,067			1,295,430			1,205,734
Investing Activities
Property additions and dry hole costs		(216,413	)		(207,542	)		(733,289	)		(902,295	)
Acquisition of oil and natural gas properties		—			(22,773	)		—			(22,773	)
Proceeds from sales of property, plant and equipment		—			102,913			—			102,913
Net cash required by investing activities		(216,413	)		(127,402	)		(733,289	)		(822,155	)
Financing Activities
Borrowings on revolving credit facility		150,000			100,000			350,000			300,000
Repayment of revolving credit facility		(150,000	)		(100,000	)		(350,000	)		(300,000	)
Retirement of debt		—			(248,675	)		(50,000	)		(248,675	)
Repurchase of common stock		(194,245	)		(75,023	)		(300,132	)		(75,023	)
Cash dividends paid		(44,663	)		(42,790	)		(136,208	)		(128,657	)
Withholding tax on stock-based incentive awards		(12	)		(12	)		(25,310	)		(14,232	)
Distributions to noncontrolling interest		(35,408	)		(4,069	)		(96,618	)		(20,052	)
Finance lease obligation payments		(171	)		(161	)		(502	)		(457	)
Contingent consideration payment		—			—			—			(60,243	)
Issue costs of debt facility		—			—			—			(20	)
Net cash required by financing activities		(274,499	)		(370,730	)		(608,770	)		(547,359	)
Effect of exchange rate changes on cash and cash equivalents		(471	)		479			778			(414	)
Net decrease in cash and cash equivalents		(62,396	)		(41,586	)		(45,851	)		(164,194	)
Cash and cash equivalents at beginning of period		333,619			369,355			317,074			491,963
Cash and cash equivalents at end of period	$	271,223		$	327,769		$	271,223		$	327,769