Murphy Oil Corporation · NYSE:MUR
Murphy Oil — UBS Global Oil and Gas Conference 2019
37 slides from Murphy Oil's conference presentation, May 22, 2019
Slide 1: UBS Global Oil and Gas Conference
MURPHY OIL CORPORATION 0 www.murphyoilcorp.com NYSE: MUR UBS GLOBAL OIL AND GAS CONFERENCE MAY 22, 2019 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER
Slide 2: Cautionary Note to U.S. Investors and Forward-Looking Statements
MURPHY OIL CORPORATION 1 www.murphyoilcorp.com NYSE: MUR Cautionary Note to U.S. Investors – The United States Securities and Exchange Commission (SEC) requires oil and natural gas comp anies, in their filings with the SEC, to disclose proved reserves that a company has demonstrated by actual produc
Slide 3: Murphy at a Glance
MURPHY OIL CORPORATION 2 www.murphyoilcorp.com NYSE: MUR Murphy at a Glance 2018 Proved Reserves 68% 32% Onshore Offshore 816 MMBOE 50% 7% 43% Oil NGL Natural Gas 57% Liquids - Weighted NOTE: Includes 129 MMBOE from Malaysia; Excludes 66 MMBOE from LLOG Acquisition 26% 30% 28% 16% US Onshore Canada
Slide 4: Deliberate Value-Adding Transformation
MURPHY OIL CORPORATION 3 www.murphyoilcorp.com NYSE: MUR Deliberate Value - Adding Transformation 2014 Sell - Down 30% Malaysia $2.0 BN 2016 Divested Syncrude $730 MM 2016 Divested Montney Midstream $412 MM 2017 Divested Heavy Oil $51 MM 2019 Divested Malaysia $2.127 BN 2014 – 2015 Repositioning Por
Slide 5: Transformation Through Strategic Acquisitions & Divestitures
MURPHY OIL CORPORATION 4 www.murphyoilcorp.com NYSE: MUR Transformation Through Strategic Acquisitions & Divestitures Acquired Gulf of Mexico Assets for $2.3 BN • MP Gulf of Mexico: $961 MM (2) • LLOG: $1.375 BN • Supports Shift to Oil - Weighted, Lower Cost Basins • Increases Net Oil Production • A
Slide 6: Increasing Margins with Oil-Weighted Gulf of Mexico Production & Reserves
MURPHY OIL CORPORATION 5 www.murphyoilcorp.com NYSE: MUR Increasing Margins with Oil - Weighted, Gulf of Mexico Production & Reserves Repositioning Murphy’s Portfolio Acquisition & Divestiture of Assets 2019E Prod MBOEPD 2019 – 2023 Avg Prod MBOEPD 2019 – 2023 Avg Oil Prod MBOPD Reserves (1P) MMBOE
Slide 7: Focusing on Oil-Weighted Reserves & Lowering F&D Costs
MURPHY OIL CORPORATION 6 www.murphyoilcorp.com NYSE: MUR • Organic Reserves Replacement 166% • Total Reserves Replacement 287% with Petrobras America Inc. Transaction • Maintained Total Oil Reserves > 400 MMBOE • 3 Year Cumulative F&D Costs of $10.62/BOE • Reserve Life Index of Over 10 Years Focusin
Slide 8: Long History of Rewarding Shareholders
MURPHY OIL CORPORATION 7 www.murphyoilcorp.com NYSE: MUR $0 $200 $400 $600 $800 $1,000 Dividends Special Dividends Repurchases Long History of Rewarding Shareholders Source: Bloomberg 0% 5% 10% 15% 20% 25% 30% 35% 40% *2012 Excludes Special Dividend of $2.50/Share Murphy Dividend as % of CF from Ope
Slide 9: Eagle Ford Shale Update
MURPHY OIL CORPORATION 8 www.murphyoilcorp.com NYSE: MUR 2019 Well Delivery Plan • Operated Well Delivery – 92 Wells Online FY 2019 • 13 Wells Online 1Q • 9 Karnes – 4 Upper EFS, 5 Lower EFS (2 Days in 1Q) • 4 Tilden – 4 Lower EFS • 23 Wells Online 2Q • 23 Karnes – 14 Lower EFS, 3 Upper EFS, 6 AC •
Slide 10: Significant Running Room in the Eagle Ford Shale
MURPHY OIL CORPORATION 9 www.murphyoilcorp.com NYSE: MUR Significant Running Room in the Eagle Ford Shale 0 1 2 3 4 5 2019E 2020E 2021E 2022E 2023E 0 50 100 150 200 Number of Rigs Wells Online Wells Online Rigs Per Year Long - Term Plan Eagle Ford Shale Well Cadence * As of December 31, 2018 Area Ne
Slide 11: Revitalizing Gulf of Mexico Portfolio
MURPHY OIL CORPORATION 10 www.murphyoilcorp.com NYSE: MUR Revitalizing Gulf of Mexico Portfolio Producing Assets Asset Operator Murphy WI Marmalard Murphy 26.8% Marmalard East Murphy 69.6% Neidermeyer Murphy 52.8% Kodiak (1) Kosmos 48.2% Son of Bluto II Murphy 26.8% Powerball Murphy 75% Otis Murphy
Slide 12: Efficient Capital Spending Driving Free Cash Flow
MURPHY OIL CORPORATION 11 www.murphyoilcorp.com NYSE: MUR Efficient Capital Spending Driving Free Cash Flow • Generates ~$1.0 BN Annual Average EBITDA Per Year • Requires ~$325 MM of Annual Average Capital Spending • Results in Annual Average Free Cash Flow ~$675 MM • Achieves Average EBITDA/BOE ~$3
Slide 13: Gulf of Mexico
MURPHY OIL CORPORATION 12 www.murphyoilcorp.com NYSE: MUR Gulf of Mexico • Obtained Regulatory Approval to Operate Assets Acquired from Petrobras America Inc. • Dalmatian • 1 Well Program in 2Q 19 – Online 4Q 19 • Medusa • Platform Rig Workover 2Q 19 – Online 3Q 19 • Front Runner • 3 Well Program Co
Slide 14: Expanding Significant Fields at Khaleesi / Mormont
MURPHY OIL CORPORATION 13 www.murphyoilcorp.com NYSE: MUR Khaleesi / Mormont Overview • Discovered 2017 • 2P ~165 MMBOE (Gross) – 90% Liquids • ~100 MMBOE at Khaleesi • ~65 MMBOE at Mormont • High Quality Sands, 32 – 36 o API Crude Kings Quay FPS • Phase 1 Development – 5 Wells • 3 at Khaleesi • 2 a
Slide 15: Acquiring & Developing Low Cost Deepwater Tie-Backs
MURPHY OIL CORPORATION 14 www.murphyoilcorp.com NYSE: MUR Nearly Headless Nick – Mississippi Canyon 387 • ~3.5 Mile Subsea Tie - Back in to Existing Subsea Manifold – One Well Drilled • First Oil 4Q 19 Calliope – Mississippi Canyon 609 • 4 Mile Tie - Back to Third Party Platform • First Oil 4Q 20 Ou
Slide 16: Exploration Strategy Overview
MURPHY OIL CORPORATION 15 www.murphyoilcorp.com NYSE: MUR Focused & Meaningful • Four Primary Exploration Areas • 3 to 5 Exploration Wells per Year • ~10% of Capital Budget $100 – $125 MM/Year Reduced Risk • Proven Oil Provinces • Targeting 20 – 50% Working Interest • Strong Partnerships Key Strateg
Slide 17: Offshore Mexico Discovery at Cholula
MURPHY OIL CORPORATION 16 www.murphyoilcorp.com NYSE: MUR Block 5 Overview • Increased Working Interest to 40% at Low Cost • Murphy 40% (Op), Petronas 30%, DEA 30% • 34 Leads / Prospects • Mean to Upward Gross Resource Potential: • 800 MMBO – 2,000 MMBO • Planning Additional Exploration Program in 2
Slide 18: Offshore Vietnam Discovery at LDT-1X
MURPHY OIL CORPORATION 17 www.murphyoilcorp.com NYSE: MUR Cuu Long Basin Overview • Murphy 40% (Op), PVEP 35%, SKI 25% • > 250 MMBOE Remaining Resource Potential on Block Cuu Long Basin – LDT - 1X Exploration Well • ~$13 MM Net Drilling Costs • Drilled to Total Depth (TD) of 14,100 Feet • 62 Feet of
Slide 19: Looking Ahead
MURPHY OIL CORPORATION 18 www.murphyoilcorp.com NYSE: MUR LOOKING AHEAD
Slide 20: Long-Term Strategy for Cash Flow Generation & Production Growth
MURPHY OIL CORPORATION 19 www.murphyoilcorp.com NYSE: MUR Providing Solid Five - Year Production Growth • Total Production CAGR ~8% • Oil Production CAGR ~12% Balancing Onshore / Offshore Portfolio • Increases US Onshore Production by 15% CAGR Through Organic Growth • Multiple Offshore Development P
Slide 21: Positioning Company for Long-Term Value Creation
MURPHY OIL CORPORATION 20 www.murphyoilcorp.com NYSE: MUR Positioning Company for Long - Term Value Creation Transforming Company Drives Further Profitable Oil - Weighted Growth Progressing Closing on Two Outstanding Deals Producing Oil - Weighted Assets that Realize Premium Pricing Focusing on Shar
Slide 22: Appendix
MURPHY OIL CORPORATION 21 www.murphyoilcorp.com NYSE: MUR APPENDIX
Slide 23: Appendix Contents
MURPHY OIL CORPORATION 22 www.murphyoilcorp.com NYSE: MUR Appendix Non - GAAP Reconciliation Abbreviations Guidance Hedging Positions
Slide 24: Non-GAAP Financial Measure Definitions & Reconciliations
MURPHY OIL CORPORATION 23 www.murphyoilcorp.com NYSE: MUR Non - GAAP Financial Measure Definitions & 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 19
Slide 25: Non-GAAP Reconciliation: Free Cash Flow
MURPHY OIL CORPORATION 24 www.murphyoilcorp.com NYSE: MUR Non - GAAP Reconciliation FREE CASH FLOW Murphy defines Free C ash F low as net cash provided from continuing operations activities (as stated in the Consolidated Statements of Cash Flows) reduc ed by capital expenditures and investments. Fre
Slide 26: Non-GAAP Reconciliation: EBITDA and EBITDAX
MURPHY OIL CORPORATION 25 www.murphyoilcorp.com NYSE: MUR Non - GAAP Reconciliation EBITDA and EBITDAX Murphy defines EBITDA as income from continuing operations attributable to Murphy 1 before interest, taxes, depreciation and amortization (DD&A) . Murphy defines EBITDAX as income from continuing o
Slide 27: Abbreviations
MURPHY OIL CORPORATION 26 www.murphyoilcorp.com NYSE: MUR Abbreviations BBL: barrels (equal to 42 US gallons) BCF: billion cubic feet BCFE: billion cubic feet equivalent BN: billions BOE: barrels of oil equivalent (1 barrel of oil or 6000 cubic feet of natural gas) BOEPD: barrels of oil equivalent p
Slide 28: Guidance – 2Q
MURPHY OIL CORPORATION 27 www.murphyoilcorp.com NYSE: MUR Guidance – 2Q 19 Guidance 2Q 2Q 2019 Liquids (BOPD) 2Q 2019 Gas (MCFD) 2Q 2019 Total (BOEPD) 1Q Production: US – Eagle Ford Shale 38,800 35,000 44,600 Gulf of Mexico 1 44,700 19,300 47,900 Canada – Tupper Montney – 206,700 34,500 Kaybob Duver
Slide 29: 2019 Hedging Positions
MURPHY OIL CORPORATION 28 www.murphyoilcorp.com NYSE: MUR 2019 Hedging Positions Area Commodity Type Volumes (BBL/D) Price (BBL) Start Date End Date US WTI Fixed Price Derivative Swap 20,000 $63.64 5/1/2019 12/31/2019 US WTI Fixed Price Derivative Swap 20,000 $60.10 1/1/2020 12/31/2020 Area Commodit
Slide 30: Financial Position and Note Maturity Profile
MURPHY OIL CORPORATION 29 www.murphyoilcorp.com NYSE: MUR $- $500 $1,000 $1,500 $2,000 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 >2046 $MM Notes Drawn RCF Undrawn RCF Financial Position as of March 31,
Slide 31: Eagle Ford Shale – Peer Acreage
MURPHY OIL CORPORATION 30 www.murphyoilcorp.com NYSE: MUR Eagle Ford Shale – Peer Acreage Pioneer EOG EP Energy Murphy Pioneer Encana Marathon ConocoPhillips Lewis/BP Chesapeake Sanchez Carrizo OIL CONDENSATE GAS
Slide 32: Eagle Ford Shale – Murphy Spacing vs Peers
MURPHY OIL CORPORATION 31 www.murphyoilcorp.com NYSE: MUR Eagle Ford Shale – Murphy Spacing vs Peers Murphy BP Chesapeake Conoco Devon Encana EOG Equinor (Statoil) Inpex (Gulftex) Magnolia Marathon Pioneer Sanchez Catarina Typical Murphy Spacing LEFS ~300’ to 600’ Karnes Typical Murphy Spacing LEFS
Slide 33: Kaybob Duvernay – Peer Acreage
MURPHY OIL CORPORATION 32 www.murphyoilcorp.com NYSE: MUR Kaybob Duvernay – Peer Acreage Fox Creek SAXON KAYBOB WEST KAYBOB EAST ENCANA SHELL CHEVRON PARAMOUNT XTO REPSOL PLACID CENOVUS 6 Miles Volatile Oil Gas Condensate Wet Gas SIMONETTE
Slide 34: Tupper Montney – Peer Acreage
MURPHY OIL CORPORATION 33 www.murphyoilcorp.com NYSE: MUR Tupper Montney – Peer Acreage
Slide 35: Placid Montney – Peer Acreage
MURPHY OIL CORPORATION 34 www.murphyoilcorp.com NYSE: MUR Placid Montney – Peer Acreage Fox Creek SAXON KAYBOB WEST KAYBOB EAST ENCANA CHEVRON PARAMOUNT XTO DELPHI PLACID CENOVUS 6 Miles RMP CNRL CIOC Condensate Limit SIMONETTE Dry Gas Limit
Slide 36: Increasing Margins with Oil-Weighted Production – Footnote Details
MURPHY OIL CORPORATION 35 www.murphyoilcorp.com NYSE: MUR Increasing Margins with Oil - Weighted, Gulf of Mexico Production & Reserves Repositioning Murphy’s Portfolio – Footnote Details Acquisition & Divestiture of Assets 2019E Prod MBOEPD 2019 – 2023 Avg Prod MBOEPD 2019 – 2023 Avg Oil Prod MBOPD
Slide 37: UBS Global Oil & Gas Conference
MURPHY OIL CORPORATION 36 www.murphyoilcorp.com NYSE: MUR UBS GLOBAL OIL & GAS CONFERENCE MAY 22, 2019 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER