Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Q2 2024 Earnings Presentation
44 slides from Murphy Oil's earnings presentation, Aug 8, 2024
Slide 1: Second Quarter Earnings Conference Call & Webcast
2024 SECOND QUARTER EARNINGS CONFERENCE CALL & WEBCAST AUGUST 8, 2024 ROGER W. JENKINS CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 1
Slide 2: Cautionary Statement
Cautionary Statement 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 conclusive formation tests to b
Slide 3: Advancing Strategic Priorities
Advancing Strategic Priorities DELEVER EXECUTE EXPLORE RETURN • Lowered debt by $50 MM • Produced 181 MBOEPD with • Drilled discovery at non-op Accelerated Shareholder through open market 91 MBOPD, or 50 percent, oil Ocotillo #1 well in Gulf of Mexico repurchases of senior notes in volumes in 2Q 202
Slide 4: Accelerating Shareholder Returns With Revised Capital Allocation Framework
Accelerating Shareholder Returns With Revised Capital Allocation Framework1 Adjusted Free Cash Murphy 3.0 – Flow Formula Murphy 2.0 – Long-term debt Murphy 1.0 – ≤ $1.3 BN Long-term debt Long-term debt of $1.3 BN – $1.8 BN Cash Flow From Operations > $1.8 BN Minimum of 50% of Before WC Change ~75% o
Slide 5: Generating Solid Revenue From Oil Production
Production, Pricing and Revenue Generating Solid Revenue From Oil Production 2Q 2024 Production 2Q 2024 Revenue by Area by Area Onshore Canada Eagle Ford Shale $72 MM Eagle Ford Shale $157 MM 27,900 BOEPD 10% 15% 21% Onshore Canada 40% 71,300 BOEPD 181 $746 MM MBOEPD 45% Offshore 81,400 BOEPD Offsho
Slide 6: Generating Income to Support Corporate Priorities
Financial Results Generating Income to Support Corporate Priorities 2Q 2024 Financial Results Net Income Attributable to Murphy 2Q 2024 ($MM Except Per Share) • Net income $128 MM; adjusted net income $124 MM Income (loss) $128 • EBITDA $389 MM; adjusted EBITDA $396 MM $/Diluted share $0.83 2Q 2024
Slide 7: Targeting Lower Debt with Ample Liquidity
Financial Results Targeting Lower Debt with Ample Liquidity Solid Foundation to Withstand Commodity Price Debt Maturity Profile1 $MM Cycles $1,250 • $1.1 BN of liquidity on June 30, 2024 $1,000 $750 • Includes $800 MM senior unsecured credit facility due $500 Nov 2027 with no borrowings as of June 3
Slide 8: Highlights From Our 2024 Sustainability Report
Highlights From Our 2024 Sustainability Report CONTINUED POSITIVELY IMPACTING OUR STRONG ENVIRONMENTAL STEWARDSHIP PEOPLE AND COMMUNITIES GOVERNANCE OVERSIGHT ADVANCING OUR CLIMATE GOALS Well-defined CONSISTENTLY BOARD AND MANAGERIAL GHG OUTPERFORMING OVERSIGHT US Bureau of Labor Statistics for indu
Slide 9: Operations Update
OPERATIONS UPDATE www.murphyoilcorp.com NYSE: MUR 9
Slide 10: Eagle Ford Shale: Enhancing Portfolio Through Strong Execution
Eagle Ford Shale Enhancing Portfolio Through Strong Execution Eagle Ford Shale Acreage 2Q 2024 28 MBOEPD, 71% Oil, 86% Liquids • 11 operated wells online in Catarina • 4 gross non-operated wells online in Tilden KARNES 3Q 2024 Plan TILDEN • 5 operated wells online in Tilden CATARINA • 3 gross non-op
Slide 11: Tupper Montney: Completions Design Drives Strong Well Performance
Tupper Montney Completions Design Drives Ongoing Strong Well Performance 2Q 2024 400 MMCFD Net, 100% Natural Gas Tupper Montney Acreage • 13 operated wells online TUPPER WEST • Completed 2024 well delivery program • Achieved record high peak gross production of 496 MMCFD Optimized Completion Design
Slide 12: Kaybob Duvernay: Future Oil-Weighted Optionality Preserved
Kaybob Duvernay Future Oil-Weighted Optionality Preserved Kaybob Duvernay Acreage 2Q 2024 4 MBOEPD, 72% Liquids KAYBOB NORTH • 3 operated wells online in Kaybob West KAYBOB EAST • Completes 2024 well delivery program Strong Performance from Recent Wells • Achieving highest IP30 rates in company hist
Slide 13: Offshore Update: Executing Highly-Accretive Development Projects
Offshore Update Focusing on Executing Highly-Accretive Development Projects Total Offshore 2Q 2024 81 MBOEPD, 83% Oil Highly-Accretive Development and Tieback Projects Gulf of Mexico 2Q 2024 74 MBOEPD, 82% Oil Field Drilling Completions Online • Operated Khaleesi #4 (Green Canyon 389) well online Kh
Slide 14: 2024 Offshore Workovers and Projects
2024 Offshore Workovers and Projects Execution Update Completed Workovers and Projects Operated Workovers and Projects • $68 MM 2Q 2024 total workover expense Net Field Location Project Online Production Status • Operated Neidermeyer #1 sidetrack well Mississippi Zone online in 3Q 2024 Marmalard Can
Slide 15: Lac Da Vang Field Development Project
Lac Da Vang Field Development Project Cuu Long Basin, Vietnam Cuu Long Basin Lac Da Vang Field Development Overview BLOCK 15-01/05 LAC DA TRANG NORTH WEST SU TU VANG • Murphy 40% (Op), PetroVietnam Exploration LAC DA TRANG Production 35%, SK Earthon 25% WEST • 100 MMBOE estimated gross recoverable L
Slide 16: Exploration Update
EXPLORATION UPDATE www.murphyoilcorp.com NYSE: MUR 16
Slide 17: FY 2024 Exploration Results
Exploration Update Gulf of Mexico FY 2024 Exploration Results Gulf of Mexico Exploration Area • Drilled discovery at Ocotillo #1 (Mississippi Ocotillo Orange VK DD Canyon 40) Silver Dollar • Oxy 33% (Op), Murphy 33%, Chevron 34% Silver Dollar West Medusa Delta House Powerball • ~100 ft of net pay ac
Slide 18: Cuu Long Basin, Vietnam Asset Overview
Exploration Update Cuu Long Basin, Vietnam Asset Overview Cuu Long Basin BLOCK 15-01/05 LAC DA TRANG • Murphy 40% (Op), PetroVietnam Exploration NORTH WEST SU TU VANG Production 35%, SK Earthon 25% LAC DA TRANG WEST • $30 MM total net well cost LAC DA VANG Block 15-2/17 LAC DA TRANG DISCOVERY • Adva
Slide 19: Tano Basin, Côte d'Ivoire Asset Overview
Development and Exploration Update Tano Basin, Côte d’Ivoire Asset Overview Tano Basin • ~1.5 MM gross acres, equivalent to 256 Gulf of Mexico blocks CÔTE D’IVOIRE GHANA CI-102 • Seismic reprocessing ongoing; final data expected 4Q 2024 Baleine CI-531 Diverse Opportunities Adjacent to Oil Discoverie
Slide 20: Looking Ahead
LOOKING AHEAD www.murphyoilcorp.com NYSE: MUR 20
Slide 21: 2024 Capital and Production Plan
2024 Capital and Production Plan Prioritizing Capital To Maximize Production and Adjusted Free Cash Flow1 3Q 2024 Guidance FY 2024E CAPEX FY 2024E Production By Area By Area • 181.5 – 189.5 MBOEPD production, 91.5 MBOPD 3% or ~50% oil, 54% liquids volumes 12% 16% • Includes the following: 38% 13% 18
Slide 22: Disciplined Strategy Leads to Long-Term Value With Current Assets
Disciplined Strategy Leads to Long-Term Value With Current Assets DELEVER EXECUTE EXPLORE RETURN NEAR-TERM LONG-TERM • Reducing debt to reach $1.0 BN debt target in mid-20251 with no debt • Realizing average annual production of 210-220 MBOEPD with maturities until Dec 2027 > 50% average oil weighti
Slide 23: Delivering On 2024 Goals
Delivering On 2024 Goals Accelerating shareholder returns by revising capital allocation framework Exceeding production guidance across onshore assets Advancing Gulf of Mexico well program Expanding Gulf of Mexico portfolio with a discovery Preparing for Vietnam exploration program www.murphyoilcorp
Slide 24: Second Quarter Earnings Conference Call & Webcast
2024 SECOND QUARTER EARNINGS CONFERENCE CALL & WEBCAST AUGUST 8, 2024 ROGER W. JENKINS CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 24
Slide 25: Appendix
Appendix 1 Non-GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 3Q 2024 Guidance 4 Current Fixed Price Contracts 5 Supplemental Information 6 Acreage Maps www.murphyoilcorp.com NYSE: MUR 25
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: Adjusted Earnings
Non-GAAP Reconciliation ADJUSTED EARNINGS Murphy defines Adjusted Earnings as net income attributable to Murphy1 adjusted to exclude discontinued operations and certain other items that affect comparability between periods. Adjusted Earnings is used by management to evaluate the company’s operationa
Slide 28: 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 29: 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 30: 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 31: Glossary of Abbreviations
Glossary of Abbreviations AECO: Alberta Energy Company, the Canadian EBITDAX: Income from continuing operations MCF: Thousands of cubic feet benchmark price for natural gas before taxes, depreciation, depletion and amortization, net interest expense, and MCFD: Thousands cubic feet per day BBL: Barre
Slide 32: 3Q 2024 Guidance
3Q 2024 Guidance Oil NGLs Gas Total Producing Asset (BOPD) (BOPD) (MCFD) (BOEPD) US – Eagle Ford Shale 23,800 4,400 25,200 32,400 – Gulf of Mexico excluding NCI1 54,900 4,300 55,400 68,400 Canada – Tupper Montney 400 – 417,500 70,000 – Kaybob Duvernay 2,700 600 9,600 4,900 – Offshore 9,600 – – 9,600
Slide 33: Current Fixed Price Contracts – Natural Gas
Current Fixed Price Contracts – Natural Gas Tupper Montney, Canada Volumes Price Commodity Type (MMCF/D) (MCF) Start Date End Date Natural Gas Fixed Price Forward Sales at AECO 162 C$2.39 7/1/2024 12/31/2024 Natural Gas Fixed Price Forward Sales at AECO 28 C$2.76 1/1/2025 12/31/2025 Natural Gas Fixe
Slide 34: Maintaining Proved Reserves and Reserve Life
2023 Proved Reserves Maintaining Proved Reserves and Reserve Life • Total proved reserves 724 MMBOE at YE 2023 vs 697 MMBOE at YE 2022 2023E Proved Reserves By Area • Achieved 139% total reserve replacement • Added ~13 MMBOE of proved reserves for Lac Da Vang field in Vietnam 22% • Maintained proved
Slide 35: Diversified, Low Breakeven Portfolio
North America Onshore Locations More Than 50 Years of Robust Inventory with Low Breakeven Rates Diversified, Low Breakeven Portfolio Eagle Ford Shale and Kaybob Duvernay • Multi-basin portfolio provides optionality in > 25 years of inventory < $50 / BBL all price environments ~ 55 years of total inv
Slide 36: Offshore Development Opportunities
Offshore Development Opportunities Multi-Year Inventory of High-Return Projects Diversified, Low Breakeven Opportunities in Offshore Portfolio • Multi-year inventory of identified offshore projects in current portfolio • Maintaining annual offshore production of 90 – 100 MBOEPD with average annual C
Slide 37: North America Onshore Well Locations
North America Onshore Well Locations Tupper Montney Well Locations Inter-Well Gross Remaining Area Net Acres Spacing (ft) Locations Eagle Ford Shale Operated Well Locations Tupper Montney 118,235 984 - 1,323 976 Inter-Well Gross Remaining Area Net Acres Reservoir Spacing (ft) Locations Lower EFS 300
Slide 38: Eagle Ford Shale Peer Acreage
Eagle Ford Shale Peer Acreage Acreage as of August 6, 2024 www.murphyoilcorp.com NYSE: MUR 38
Slide 39: Kaybob Duvernay Peer Acreage
Kaybob Duvernay Peer Acreage Murphy Paramount Whitecap Crescent Point Chevron Kiwetinohk PCC Cenovus GMT Hitic Halo Cygnet Duvernay Energy Open Crown Other Leased Battery Facility 6 Miles Acreage as of August 6, 2024 www.murphyoilcorp.com NYSE: MUR 39
Slide 40: Tupper Montney Peer Acreage
Tupper Montney Peer Acreage Advantage Montney ARC Montney Birchcliff Montney Ovintiv Montney Peyto Montney Shell Montney Tourmaline Montney Other Competitors Open Crown Murphy TCPL Pipeline Murphy Pipeline Battery Facility 0 Miles 10 Acreage as of August 6, 2024 www.murphyoilcorp.com NYSE: MUR 40
Slide 41: Gulf of Mexico Murphy Blocks
Gulf of Mexico Murphy Blocks PRODUCING ASSETS Gulf of Mexico Exploration Area Asset Operator Murphy WI1 Ocotillo Cascade Murphy 80% VK Chinook Murphy 86% Silver Dollar Clipper Murphy 80% Silver Dollar West Dalmatian Murphy 56% Medusa Delta House Front Runner Murphy 50% Powerball Dalmatian S. Habaner
Slide 42: Sergipe-Alagoas Basin, Brazil Asset Overview
Exploration Update 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 gross acres • >2.8 BN BOE discovered in basin • >1.2 BN BOE in deepwater since 2007 351 • Evaluating next st
Slide 43: Potiguar Basin, Brazil Asset Overview
Exploration Update Potiguar Basin, Brazil Asset Overview Potiguar Basin • Murphy 100% (Op) Murphy WI Block Other Block • Hold WI in 3 blocks, spanning ~775 M Discovered Field gross acres Kilometers • Proven oil basin in proximity to Pitu 0 50 oil discovery Petrobras Extending the Play Into the Deepw
Slide 44: Second Quarter Earnings Conference Call & Webcast
2024 SECOND QUARTER EARNINGS CONFERENCE CALL & WEBCAST AUGUST 8, 2024 ROGER W. JENKINS CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 44