Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Q2 2022 Earnings Presentation
44 slides from Murphy Oil's earnings presentation, Aug 4, 2022
Slide 1: Second Quarter 2022 Earnings Conference Call & Webcast
2022 SECOND QUARTER EARNINGS CONFERENCE CALL & WEBCAST AUGUST 4, 2022 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 0
Slide 2: Cautionary Statement and Investor Relations Contacts
Cautionary Statement and Investor Relations Contacts Cautionary Note to US Investors – The United States 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
Slide 3: Why Murphy Oil?
Why Murphy Oil? Sustainable oil and natural gas assets that are safely operated with low carbon emissions intensity in three operating areas across North America High-potential exploration portfolio with industry-leading offshore capabilities Strong generator of free cash flow with capital allocatio
Slide 4: Progressing Strategic Priorities
Progressing Strategic Priorities DELEVER EXECUTE EXPLORE • Redeemed $200 MM of 2024 Senior Notes • Brought online four wells in Khaleesi, • Received drilling permit for Tulum-1EXP in in June 2022 Mormont, Samurai fields with 97% uptime at offshore Mexico with spud in 4Q 2022 King’s Quay FPS • Announ
Slide 5: 2Q 2022 Production, Pricing and Revenue Update
2Q 2022 Production, Pricing and Revenue Update Oil Production Drives High Revenue 2Q 2022 Production 2Q 2022 Revenue by Area by Area Onshore Canada Eagle Ford Shale $118 MM Eagle Ford Shale $302 MM 36,400 BOEPD 11% 22% 32% 28% Onshore Canada 53,300 BOEPD 164 $1.1 BN MBOEPD Offshore 61% 45% 74,700 BO
Slide 6: 2022 Sustainability Report Highlights
2022 Sustainability Report Highlights CONTINUED POSITIVELY IMPACTING OUR STRONG ENVIRONMENTAL STEWARDSHIP PEOPLE AND COMMUNITIES GOVERNANCE OVERSIGHT from 2019 to 2021 from 2019 to 2021 Well-defined Board and managerial oversight and management of ESG matters 20% GHG emissions intensity 46% improvem
Slide 7: Financial Results: Advancing Goals Through Cash Flow Generation
Financial Results Advancing Goals Through Cash Flow Generation Financial Results Net Income Attributable to Murphy ($MM Except Per Share) 2Q 2022 • Net income $351 MM; adjusted net income $305 MM Income (loss) $351 $/Diluted share $2.23 One-Off Non-Cash Income Adjustments After-Tax Adjusted Income f
Slide 8: Strengthening Balance Sheet
Financial Results Strengthening Balance Sheet Solid Foundation for Commodity Price Cycles Long-Term Debt Profile* • $432 MM of cash and cash equivalents at Total Bonds Outstanding $BN $2.27 June 30, 2022 • Redeemed $200 MM of 6.875% Senior Notes Weighted Avg Fixed Coupon 6.2% due 2024 Weighted Avg Y
Slide 9: Onshore Portfolio Update
ONSHORE PORTFOLIO UPDATE www.murphyoilcorp.com NYSE: MUR 8
Slide 10: Eagle Ford Shale
Eagle Ford Shale Enhancing Portfolio and Production Through Strong Execution, Improved Completions 2Q 2022 36 MBOEPD, 86% Liquids Eagle Ford Shale Acreage • 23 operated wells online – 17 Karnes, 6 Catarina 3Q 2022 Well Delivery Schedule KARNES • 4 operated wells online – 4 Catarina TILDEN • 5 gross
Slide 11: Tupper Montney
Tupper Montney 2022 Wells Forecast to Achieve Fast Payback 2Q 2022 275 MMCFD Tupper Montney Acreage • 15 wells online 3Q 2022 Well Delivery Schedule • 5 wells now producing • Completes FY 2022 program Alberta BC Achieving Record-High Production Results • Continue realizing strong well performance wi
Slide 12: Offshore Portfolio Update
OFFSHORE PORTFOLIO UPDATE www.murphyoilcorp.com NYSE: MUR 11
Slide 13: Gulf of Mexico: Development and Tiebacks Drive Future Free Cash Flow
Gulf of Mexico Development and Tiebacks Drive Future Free Cash Flow Gulf of Mexico Assets 2Q 2022 70 MBOEPD, 79% Oil FY 2022 Capital Plan Hoffe Park Dalmatian S. VK DD • ~80% of spend for major projects in Gulf of Mexico Silver Dollar Silver Dollar West • Remainder for development and tie-back proje
Slide 14: Opportunistic, High-Returning Bolt-On Acquisitions Enhance Portfolio Value
Gulf of Mexico Opportunistic, High-Returning Bolt-On Acquisitions Enhance Portfolio Value Gulf of Mexico Assets Acquisitions Enhanced With Near-Term Development Dalmatian S. Hoffe Park VK DD • Incremental production forecast of 1.5 MBOEPD in Silver Dollar FY 2022 and 4.1 MBOEPD in FY 2023 Silver Dol
Slide 15: Khaleesi, Mormont, Samurai Field Development Details
Khaleesi, Mormont, Samurai Field Development Details Khaleesi, Mormont, Samurai Fields Field Development Project • Achieved first oil at King’s Quay FPS April 2022, ahead of schedule and on budget • 97% facility uptime King’s Quay FPS • 4 wells currently producing 70 MBOEPD gross, 18 MBOEPD net, 87%
Slide 16: Exploration Update
EXPLORATION UPDATE www.murphyoilcorp.com NYSE: MUR 15
Slide 17: Salina Basin, Mexico Block 5 Overview
2022 Exploration Plan Salina Basin, Mexico Salina Basin Block 5 Overview • Murphy 40% (Op), Petronas 30%, Wintershall Dea 30% Block 5 • 34 leads / prospects Tulum-1EXP • Mean to upward gross resource potential Block 5 Cholula • 800 MMBO – 2,000 MMBO Batopilas • Proven oil basin in proximity to multi
Slide 18: Gulf of Mexico Exploration Area
Exploration Update Gulf of Mexico Gulf of Mexico Exploration Area Interests in 113 Gulf of Mexico OCS Blocks Hoffe Park VK DD • ~650,000 total gross acres Silver Dollar Silver Dollar West • 69 exploration blocks Medusa Delta House • ~1 BBOE gross resource potential Carver / Donzi • 20 key prospects
Slide 19: Looking Ahead
LOOKING AHEAD www.murphyoilcorp.com NYSE: MUR 18
Slide 20: 2022 Production Plan
2022 Production Plan Major Project Execution, Enhanced Well Design Drive Production Guidance Increase Well Design Enhancements, Top-Tier Execution FY 2022E Production By Area Achieve Higher Rates Across Assets • Enhanced Eagle Ford Shale completions design, longer 20% Tupper Montney laterals support
Slide 21: 2022 Capital Allocation Plan: Prioritizing Capital To Support Free Cash Flow
2022 Capital Allocation Plan Prioritizing Capital To Support Free Cash Flow Capital Plan Supports Further Delevering, FY 2022 CAPEX By Area Enhanced Shareholder Returns 2% 10% • Maintaining FY 2022 CAPEX guidance of $900 – $950 MM, excluding acquisitions 14% ~$925 MM 46% • Prioritizing major Gulf of
Slide 22: Capital Allocation Priorities
Capital Allocation Priorities Framework1 Allows for Long-Term Debt Reduction, Shareholder Returns Beyond Quarterly Dividend Initial $300 MM Share Repurchase Program2 Authorized by Board Murphy 1.0 – Long-Term Debt > $1.8 BN Adjusted Free Cash Flow Formula • Allocate adjusted FCF to long-term debt re
Slide 23: Progressing Strategic Priorities
Progressing Strategic Priorities DELEVER EXECUTE EXPLORE • Redeemed $200 MM of 2024 Senior Notes • Brought online four wells in Khaleesi, • Received drilling permit for Tulum-1EXP in in June 2022 Mormont, Samurai fields with 97% uptime at offshore Mexico with spud in 4Q 2022 King’s Quay FPS • Announ
Slide 24: Second Quarter Earnings Conference Call & Webcast
2022 SECOND QUARTER EARNINGS CONFERENCE CALL & WEBCAST AUGUST 4, 2022 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 23
Slide 25: Appendix
Appendix 1 Non-GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 3Q 2022 Guidance 4 Current Hedging Positions 5 Supplemental Information 6 Acreage Maps www.murphyoilcorp.com NYSE: MUR 24
Slide 26: Non-GAAP Financial Measure Definitions and Reconciliations
Non-GAAP Financial Measure Definitions and Reconciliations The following list of Non-GAAP financial measure definitions and related reconciliations is intended to satisfy the requirements of Regulation G of the Securities Exchange Act of 1934, as amended. This information is historical in nature. Mu
Slide 27: Non-GAAP Reconciliation: EBITDA and EBITDAX
Non-GAAP Reconciliation EBITDA and EBITDAX Murphy defines EBITDA as net income (loss) attributable to Murphy1 before interest, taxes, depreciation, depletion and amortization (DD&A). Murphy defines EBITDAX as net income (loss) attributable to Murphy before interest, taxes, DD&A and exploration expen
Slide 28: Non-GAAP Reconciliation: Adjusted EBITDA
Non-GAAP Reconciliation ADJUSTED EBITDA Murphy defines Adjusted EBITDA as net income (loss) attributable to Murphy1 before interest, taxes, depreciation, depletion and amortization (DD&A), impairment expense, discontinued operations, foreign exchange gains and losses, mark-to-market gains and losses
Slide 29: Non-GAAP Reconciliation: Adjusted EBITDAX
Non-GAAP Reconciliation ADJUSTED EBITDAX Murphy defines Adjusted EBITDAX as net income (loss) attributable to Murphy1 before interest, taxes, depreciation, depletion and amortization (DD&A), exploration expense, impairment expense, discontinued operations, foreign exchange gains and losses, mark-to-
Slide 30: Glossary of Abbreviations
Glossary of Abbreviations BBL: Barrels (equal to 42 US gallons) EBITDAX: Income from continuing operations MM: Millions before taxes, depreciation, depletion and BCF: Billion cubic feet amortization, net interest expense, and MMBOE: Millions of barrels of oil equivalent BCFE: Billion cubic feet equi
Slide 31: 3Q 2022 Guidance
3Q 2022 Guidance Oil NGLs Gas Total Producing Asset (BOPD) (BOPD) (MCFD) (BOEPD) US – Eagle Ford Shale 27,600 4,800 28,900 37,200 – Gulf of Mexico excluding NCI1 56,300 4,300 61,300 70,800 Canada – Tupper Montney – – 394,400 65,700 – Kaybob Duvernay and Placid Montney 4,100 800 14,800 7,400 – Offsho
Slide 32: Current Hedging Positions – Oil
Current Hedging Positions – Oil United States Volumes Price Commodity Type (BBL/D) (BBL) Start Date End Date WTI Fixed Price Derivative Swap 20,000 $44.88 7/1/2022 12/31/2022 Volumes Put Price Call Price Commodity Type (BBL/D) (BBL) (BBL) Start Date End Date WTI Derivative Collar 25,000 $63.24 $75.2
Slide 33: Current Fixed Price Contracts – Natural Gas
Current Fixed Price Contracts – Natural Gas Montney, Canada Volumes Price Commodity Type (MMCF/D) (MCF) Start Date End Date Natural Gas Fixed Price Forward Sales at AECO 247 C$2.34 7/1/2022 10/31/2022 Natural Gas Fixed Price Forward Sales at AECO 266 C$2.36 11/1/2022 12/31/2022 Natural Gas Fixed Pri
Slide 34: North America Onshore
North America Onshore Eagle Ford Shale Operated Well Locations Inter-Well Remaining Area Net Acres Reservoir Spacing (ft) Wells Lower EFS 300 108 Karnes 10,092 Upper EFS 1,000 151 Austin Chalk 1,100 106 Lower EFS 630 231 Tilden 64,770 Upper EFS 1,200 51 Austin Chalk 1,200 86 Lower EFS 560 234 Catari
Slide 35: Eagle Ford Shale Peer Acreage
Eagle Ford Shale Peer Acreage www.murphyoilcorp.com NYSE: MUR 34
Slide 36: Kaybob Duvernay Peer Acreage
Kaybob Duvernay Peer Acreage HALO GMT HITIC KAYBOB EAST Murphy Crescent Paramount Repsol Point XTO Crescent Point PARAMOUNT Chevron Kiwetinohk CENOVUS PCC PCC Cenovus KAYBOB WEST GMT Hitic KEYERA SIMONETTE Halo Open Crown SAXON Other Leased CHEVRON ENERGY TRANSFER JV Area KAYBOB Battery KIWENTINOHK
Slide 37: Tupper Montney Peer Acreage
Tupper Montney Peer Acreage Advantage Montney ARC Montney Birchcliff Montney Ovintiv Montney Tourmaline Montney Shell Montney Other Competitors Open Crown Murphy TCPL Pipeline Murphy Pipeline Battery Facility 0 Miles 10 www.murphyoilcorp.com NYSE: MUR 36
Slide 38: Placid Montney Peer Acreage
Placid Montney Peer Acreage ARC CNRL KAYBOB EAST HALO Murphy ARC Cenovus HAWTHORNE PARAMOUNT CNRL ENERGY Halo I3 Energy KAYBOB WEST Kiwetinohk Open Crown KEYERA SIMONETTE Other Leased I3 SAXON Paramount Spartan Delta ENERGY TRANSFER KAYBOB Hawthorne Energy SPARTAN XTO DELTA KIWETINOHK Non-Operated A
Slide 39: Gulf of Mexico Murphy Blocks
Gulf of Mexico Murphy Blocks Gulf of Mexico Assets PRODUCING ASSETS Asset Operator Murphy WI1 Dalmatian S. Calliope Murphy 29% Hoffe Park VK DD Cascade Murphy 80% Silver Dollar Chinook Murphy 86% Silver Dollar West Clipper Murphy 80% Medusa Delta House Cottonwood Murphy 80% Dalmatian Murphy 56% Kodi
Slide 40: Sergipe-Alagoas Basin, Brazil Asset Overview
2022 Exploration Plan Sergipe-Alagoas Basin, Brazil Sergipe-Alagoas Basin Asset Overview • ExxonMobil 50% (Op), Enauta Energia S.A. 30%, Murphy 20% BRAZIL • Hold WI in 9 blocks, spanning >1.6 MM acres • >2.8 BN BOE discovered in basin • >1.2 BN BOE in deepwater since 2007 351 • Material opportunitie
Slide 41: Potiguar Basin, Brazil Asset Overview
Exploration Update Potiguar Basin, Brazil Potiguar Basin Asset Overview • Wintershall Dea 70% (Op), Murphy 30% Murphy WI Block Other Block • Received offshore operator approval from Discovered Field ANP, necessary step to acquire Wintershall Kilometers WI position at no cost 0 50 • Hold WI in 3 bloc
Slide 42: Cuu Long Basin, Vietnam Block 15-1/05
Development Update Cuu Long Basin, Vietnam Asset Overview Cuu Long Basin BLOCK 15-01/05 LAC DA TRANG • Murphy 40% (Op), PVEP 35%, SKI 25% NORTH WEST SU TU VANG LAC DA TRANG Block 15-1/05 WEST • Received approval of the Lac Da Vang LAC DA VANG LAC DA TRANG (LDV) retainment / development area DISCOVER
Slide 43: Cuu Long Basin, Vietnam Block 15-2/17
Exploration Update Cuu Long Basin, Vietnam Asset Overview Cuu Long Basin 5 • Murphy 40% (Op), PVEP 35%, SKI 25% BLOCK 15-02/17 HAI SU BAC HAI SU VANG Block 15-2/17 • 3-year primary exploration period ends HAI SU DEN PHUONG 4Q 2022 15-2 DONG • Seeking extension due to COVID-19 HAI SU HONG HAI SU TRAN
Slide 44: Second Quarter Earnings Conference Call & Webcast
2022 SECOND QUARTER EARNINGS CONFERENCE CALL & WEBCAST AUGUST 4, 2022 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 43