Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Investor Presentation (September 2021)
56 slides from Murphy Oil's investor presentation, Sep 8, 2021
Slide 1: September Investor Presentation
0 www.murphyoilcorp.com NYSE: MUR 0 SEPTEMBER INVESTOR PRESENTATION ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER SEPTEMBER 2021
Slide 2: Cautionary Note to US Investors and Forward-Looking Statements
1 www.murphyoilcorp.com NYSE: MUR 1 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 forma
Slide 3: Agenda
2 www.murphyoilcorp.com NYSE: MUR 2 Agenda 1 Company Overview 2 Murphy Priorities Murphy Portfolio 3 Looking Ahead 4
Slide 4: Murphy at a Glance
3 www.murphyoilcorp.com NYSE: MUR 3 Murphy at a Glance Onshore United States • Eagle Ford Shale on private lands in Texas with ~1,400 future locations on ~134,000 net acres • Produced 41.5 MBOEPD in 2Q 2021, comprised of 75% oil and 88% liquids Onshore Canada • Tupper Montney ~1,400 future locations
Slide 5: Why Murphy Oil?
4 www.murphyoilcorp.com NYSE: MUR 4 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
Slide 6: Low Emissions Intensity Energy Generation
5 www.murphyoilcorp.com NYSE: MUR 5 Low Emissions Intensity Energy Generation Ranked top - quartile in carbon intensity for 2020 among oil - weighted peers • Lowering emissions intensity 15 - 20% by 2030 • Realizing lower costs while reducing environmental impacts • Deepwater offshore assets have th
Slide 7: 2021 Sustainability Report Highlights
6 www.murphyoilcorp.com NYSE: MUR 6 2021 Sustainability Report Highlights Ranked #1 in Governance by ISS since 2018 Continued Environmental Leadership and Stewardship • Revised and strengthened climate change position • Obtained third - party assurance of 2020 Scope 1 and 2 GHG emissions • Establish
Slide 8: High-Potential Exploration Portfolio With Leading Offshore Execution Ability
7 www.murphyoilcorp.com NYSE: MUR 7 High - Potential Exploration Portfolio With Leading Offshore Execution Ability Focused and Meaningful • Four primary exploration areas • Targeting 3 to 5 exploration wells per year Reduced Risk • Leveraging strategic partnerships Strategic Themes • Consistent US G
Slide 9: Long-Term Shareholder Support With Significant Board Ownership
8 www.murphyoilcorp.com NYSE: MUR 8 Long - Term Shareholder Support With Significant Board Ownership • Initiated dividend in 1961 • Returned ~$4.0 BN to shareholders in last 10 years • $1.9 BN in share repurchases, 2012 – 2021E • Representing >20% of total shares outstanding • High stock ownership b
Slide 10: Murphy Priorities
9 www.murphyoilcorp.com NYSE: MUR 9 MURPHY PRIORITIES
Slide 11: 2Q 2021 Progress on Strategic Priorities
10 www.murphyoilcorp.com NYSE: MUR 10 2Q 2021 Progress on Strategic Priorities • Achieved initial debt reduction event in 1Q 2021 of 8%, or ~$230 MM • Increased goal for 2Q – 4Q 2021 long - term debt reduction to $300 MM from $200 MM, for total of ~17% reduction FY 2021 at $65 oil price for remainde
Slide 12: What's New in 3Q 2021
11 www.murphyoilcorp.com NYSE: MUR 11 What’s New in 3Q 2021 King’s Quay Floating Production System • Arrived shoreside in Gulf of Mexico on schedule in September • No storm impact Gulf of Mexico Major Projects • Samurai #4 drilling in progress, Khaleesi #3 drilled • Beginning subsea installation 3Q
Slide 13: Strong Cash Flow Generation Supports Shareholder Initiatives
12 www.murphyoilcorp.com NYSE: MUR 12 Strong Cash Flow Generation Supports Shareholder Initiatives Canada Onshore Gulf of Mexico US Onshore Flexible Capital to Maximize FCF Generation • All assets generated FCF YTD 2021, excluding corporate expenses • Maintaining 2021 CAPEX guidance midpoint of $700
Slide 14: Murphy Portfolio
13 www.murphyoilcorp.com NYSE: MUR 13 MURPHY PORTFOLIO
Slide 15: Concentrated Onshore Portfolio With Multi-Year Inventories
14 www.murphyoilcorp.com NYSE: MUR 14 Concentrated Onshore Portfolio With Multi - Year Inventories Tupper Montney Kaybob Duvernay Eagle Ford Shale Oil - Weighted PRICE - ADVANTAGED EAGLE FORD SHALE Natural Gas WELL - POSITIONED FOR IN TUPPER MONTNEY Over 3,400 FUTURE LOCATIONS ~540 MMBOE PROVED RESE
Slide 16: Well-Established Gulf of Mexico Portfolio
15 www.murphyoilcorp.com NYSE: MUR 15 Well - Established Gulf of Mexico Portfolio Top 5 Operator BY PRODUCTION High Margin EBITDA/BOE Over 100 Blocks 4 OPERATED PRODUCTION FACILITIES Low - Emission Intensity Asset GC WR EW KC GB MC DC LU AT LL HE VK DD Miles 50 0 Lucius Cascade St. Malo Chinook Fron
Slide 17: High-Impact Exploration Portfolio
16 www.murphyoilcorp.com NYSE: MUR 16 High - Impact Exploration Portfolio Company - Making Potential BRAZIL & MEXICO Reduced Risk APPROPRIATE WORKING INTEREST Focused Targeting 3 TO 5 WELLS PER YEAR < $12 BOE F&D TARGET GULF OF MEXICO BRAZIL VIETNAM AUSTRALIA Exploration Focus Areas
Slide 18: Looking Ahead
17 www.murphyoilcorp.com NYSE: MUR 17 LOOKING AHEAD
Slide 19: Tightening 2021 Capital Program
18 www.murphyoilcorp.com NYSE: MUR 18 Tightening 2021 Capital Program Note: Production volumes, sales volumes, reserves and financial amounts exclude noncontrolling interest, unless otherwise sta ted 25% 51% 1% 23% CAPEX by Production Year 24% 47% 14% 11% 4% 2021 Total CAPEX Note: 2022 production in
Slide 20: Disciplined Strategy Leads to Long-Term Value
19 www.murphyoilcorp.com NYSE: MUR 19 Disciplined Strategy Leads to Long - Term Value 0 40 80 120 160 200 2021E 2024E Tupper Montney Offshore Oil-Weighted Onshore Note: Oil - weighted onshore includes Eagle Ford Shale and Kaybob Duvernay $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 12/31/2020 A 12/31/
Slide 21: Focused on Targeted Priorities
20 www.murphyoilcorp.com NYSE: MUR 20 Focused on Targeted Priorities • Increased goal for 2Q – 4Q 2021 long - term debt reduction to $300 MM from $200 MM, for total of ~17% reduction FY 2021 at $65 oil price for remainder of year* • Plan allows for long - term debt reduction to ~$1.4 BN by YE 2024 f
Slide 22: Why Murphy Oil?
21 www.murphyoilcorp.com NYSE: MUR 21 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 generato
Slide 23: September Investor Presentation
22 www.murphyoilcorp.com NYSE: MUR 22 SEPTEMBER INVESTOR PRESENTATION ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER SEPTEMBER 2021
Slide 24: Appendix
23 www.murphyoilcorp.com NYSE: MUR 23 Appendix 1 Non - GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 Hedging Positions 4 Supplemental Information 5 Acreage Maps
Slide 25: Non-GAAP Financial Measure Definitions and Reconciliations
24 www.murphyoilcorp.com NYSE: MUR 24 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. Murphy undertakes no
Slide 26: EBITDA and EBITDAX
25 www.murphyoilcorp.com NYSE: MUR 25 EBITDA and EBITDAX Murphy defines EBITDA as net income (loss) attributable to Murphy 1 before interest, taxes, depreciation and amortization (DD&A). Murphy defines EBITDAX as net income (loss) attributable to Murphy before interest, taxes, depreciation and amort
Slide 27: Adjusted EBITDA
26 www.murphyoilcorp.com NYSE: MUR 26 ADJUSTED EBITDA Murphy defines Adjusted EBITDA as net income (loss) attributable to Murphy 1 before interest, taxes, depreciation and amortization (DD&A), impairment expense, discontinued operations, foreign exchange gains and losses, mark - to - market gains an
Slide 28: Adjusted EBITDAX
27 www.murphyoilcorp.com NYSE: MUR 27 ADJUSTED EBITDAX Murphy defines Adjusted EBITDAX as net income (loss) attributable to Murphy 1 before interest, taxes, depreciation and amortization (DD&A), exploration expense, impairment expense, discontinued operations, foreign exchange gains and losses, mark
Slide 29: Glossary of Abbreviations
28 www.murphyoilcorp.com NYSE: MUR 28 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 6,000 cubic feet of natural gas) BOEPD: Barrels of oil equivalent per day BOPD: Barrels of oil per d
Slide 30: Achieving Disciplined Capital Execution to Support 2021 Priorities
29 www.murphyoilcorp.com NYSE: MUR 29 Achieving Disciplined Capital Execution to Support 2021 Priorities Continuing Plan Execution • 2Q 2021 accrued CAPEX of $198 MM aligned with plan • Primary business units’ CAPEX heavily weighted to 1H 2021 • Eagle Ford Shale 63% of FY 2021 plan • Gulf of Mexico
Slide 31: Hedging Positions
30 www.murphyoilcorp.com NYSE: MUR 30 Hedging Positions United States Commodity Type Volumes (BBL/D) Price (BBL) Start Date End Date WTI Fixed Price Derivative Swap 45,000 $42.77 7/1/2021 12/31/2021 WTI Fixed Price Derivative Swap 20,000 $44.88 1/1/2022 12/31/2022 Montney, Canada Commodity Type Volu
Slide 32: Balance Sheet Stability
31 www.murphyoilcorp.com NYSE: MUR 31 Balance Sheet Stability Solid Foundation for Commodity Price Cycles • $418 MM of cash and cash equivalents at June 30, 2021 • Executed $150 MM partial redemption of 6.875% Notes due 2024 on Aug 16, 2021 • $1.6 BN senior unsecured credit facility matures Nov 2023
Slide 33: North America Onshore Well Locations
32 www.murphyoilcorp.com NYSE: MUR 32 North America Onshore Area Net Acres Reservoir Inter - Well Spacing (ft) Remaining Wells Karnes 10,092 Lower EFS 300 106 Upper EFS 600 142 Austin Chalk 1,200 97 Tilden 64,770 Lower EFS 600 264 Upper EFS 500 138 Austin Chalk 600 100 Catarina 48,375 Lower EFS 550
Slide 34: North America Onshore Balancing Investments for Free Cash Generation
33 www.murphyoilcorp.com NYSE: MUR 33 North America Onshore Balancing Investments for Free Cash Generation to Delever Balance Sheet 2Q 2021 Onshore Activity • Eagle Ford Shale • 3 operated wells + 29 gross non - operated wells* online • Tupper Montney • 10 operated wells online, FY 2021 program comp
Slide 35: Eagle Ford Shale Base Production Outperforms While Lowering Costs
34 www.murphyoilcorp.com NYSE: MUR 34 Eagle Ford Shale Base Production Outperforms While Lowering Costs Eagle Ford Shale Acreage CATARINA TILDEN KARNES Zavala Atascosa Karnes McMullen Frio Dimmit La Salle Live Oak Bee Wilson Murphy Acreage Eagle Ford Shale Drilling and Completions $MM per well 2Q 20
Slide 36: Analyzing Results in Austin Chalk
35 www.murphyoilcorp.com NYSE: MUR 35 Volatile Oil Condensate Wet Gas Dry Gas 10 Miles MEXICO EFS HC phase windows are approximate Dimmit La Salle Webb Proposed Austin Chalk Test Eagle Ford Shale Analyzing Results in Austin Chalk De - Risk Murphy Locations 2021 Karnes Austin Chalk Well Performance 0
Slide 37: Tupper Montney Increasing Recoveries While Lowering Costs
36 www.murphyoilcorp.com NYSE: MUR 36 Murphy Acreage Facility 5 0 Miles BC Alberta Tupper Montney Acreage Tupper Montney Increasing Recoveries While Lowering Costs * Includes contingent well count Tupper Montney Drilling and Completions $MM per well 2Q 2021 Activity • 10 wells online, activity compl
Slide 38: Tupper Montney Advantages
37 www.murphyoilcorp.com NYSE: MUR 37 Tupper Montney Advantages • Employ capital allocation process that maximizes free long term cash flow • Generates greater cash margin per well than Eagle Ford Shale at conservative prices • < $1 / MCF average new well breakeven cost • Long history of continuous
Slide 39: Tupper Montney Development
38 www.murphyoilcorp.com NYSE: MUR 38 Tupper Montney Development High Impact Development Drives Future Cash Flows $0 $50 $100 $150 $200 $250 0 100 200 300 400 500 2020A 2021 2022 2023 2024 2025 Production Cum FCF Tupper Montney Production and Cumulative FCF MMCFD $MM Tupper Montney Development Plan
Slide 40: Gulf of Mexico Major Projects Drive Future Free Cash Flow
39 www.murphyoilcorp.com NYSE: MUR 39 Drilling and Completions Field Drilled Completions Online Khaleesi 4Q 2021 1H 2022 Mormont 1Q 2022 1H 2022 Samurai 2Q 2022 2H 2022 Gulf of Mexico Major Projects Drive Future Free Cash Flow Facilities Project Components Fabrication Commissioning Installation / Ho
Slide 41: King's Quay Update
40 www.murphyoilcorp.com NYSE: MUR 40 King’s Quay Update King’s Quay Floating Production System • Completed construction in 2Q 2021 • Arrived shoreside in Gulf of Mexico in September • Pipeline welding, subsea flowline and equipment installation 4Q 2021 – 1H 2022 • On track to receive first oil 1H 2
Slide 42: Gulf of Mexico Major Projects CAPEX and Production Cadence
41 www.murphyoilcorp.com NYSE: MUR 41 Gulf of Mexico Major Projects CAPEX and Production Cadence Major projects include Khaleesi, Mormont, Samurai and St. Malo waterflood Major Projects Net CAPEX $MM 0 15 30 45 60 75 90 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023
Slide 43: Eagle Ford Shale Peer Acreage
42 www.murphyoilcorp.com NYSE: MUR 42 Eagle Ford Shale Peer Acreage
Slide 44: Kaybob Duvernay Peer Acreage
43 www.murphyoilcorp.com NYSE: MUR 43 Kaybob Duvernay Peer Acreage
Slide 45: Tupper Montney Peer Acreage
44 www.murphyoilcorp.com NYSE: MUR 44 T74 T75 T76 T77 T78 T79 T80 T77 T78 T79 T80 R12W6R13R14R15R16R17R18R19R20 R13W6 Tupper Montney Peer Acreage ARC Montney Shell Montney Advantage Montney Other Competitor Montney Open Crown - Montney Tourmaline Montney Ovintiv Montney Birchcliff Montney Dry Gas Li
Slide 46: Placid Montney Peer Acreage
45 www.murphyoilcorp.com NYSE: MUR 45 Placid Montney Peer Acreage
Slide 47: Producing Assets
46 www.murphyoilcorp.com NYSE: MUR 46 PRODUCING ASSETS Asset Operator Murphy WI 1 Cascade Murphy 80% Chinook Murphy 80% Clipper Murphy 80% Cottonwood Murphy 80% Dalmatian Murphy 56% Front Runner Murphy 50% Habanero Shell 27% Kodiak Kosmos 48% Lucius Anadarko 13% Marmalard Murphy 27% Marmalard East M
Slide 48: 2021 Exploration Update Gulf of Mexico
47 www.murphyoilcorp.com NYSE: MUR 47 2021 Exploration Update Gulf of Mexico Interests in 126 Gulf of Mexico OCS Blocks • ~725,000 total gross acres, 54 exploration blocks • ~1 BBOE gross resource potential • 15 key prospects Silverback #1 (Mississippi Canyon 35) • Chevron 80% (Op), Murphy 10%, Ecop
Slide 49: 2021 Exploration Plan Gulf of Mexico – Mississippi Canyon 35
48 www.murphyoilcorp.com NYSE: MUR 48 2021 Exploration Plan Gulf of Mexico – Mississippi Canyon 35 Murphy WI Block Offshore Platform 2021 Well Additional Play Opportunities Farm - in Block MC VK Delta House Marmalard Neidermeyer Hoffe Park DC Silverback SOB II / Nearly Headless Nick Asset Overview •
Slide 50: 2021 Exploration Plan Northwest Borneo Basin, Brunei
49 www.murphyoilcorp.com NYSE: MUR 49 2021 Exploration Plan Northwest Borneo Basin, Brunei Asset Overview • Shell 86.949% (Op), Murphy 8.051%, Petronas 5% • Partners assessing development and appraisal plan • Block CA - 1 reclassified as not held for sale Jagus SubThrust - 1X (Block CA - 1) • Drille
Slide 51: 2021 Exploration Plan Sergipe-Alagoas Basin, Brazil
50 www.murphyoilcorp.com NYSE: MUR 50 2021 Exploration Plan Sergipe - Alagoas Basin, Brazil Asset Overview • ExxonMobil 50% (Op), Enauta Energia S.A. 30%, Murphy 20% • 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 • Material oppor
Slide 52: 2021 Exploration Update Potiguar Basin, Brazil
51 www.murphyoilcorp.com NYSE: MUR 51 2021 Exploration Update Potiguar Basin, Brazil Asset Overview • Wintershall Dea 70% (Op), Murphy 30% • Hold WI in 3 blocks, spanning ~775 M gross acres • Proven oil basin in proximity to Pitu oil discovery Extending the Play into the Deepwater • >2.1 BBOE discov
Slide 53: 2021 Exploration Update Salina Basin, Mexico
52 www.murphyoilcorp.com NYSE: MUR 52 Block 5 Overview • Murphy 40% (Op), Petronas 30%, Wintershall Dea 30% • 34 leads / prospects • Mean to upward gross resource potential • 800 MMBO – 2,000 MMBO • Proven oil basin in proximity to multiple oil discoveries in Miocene section • Targeting exploration
Slide 54: Development Update Cuu Long Basin, Vietnam – Block 15-1/05
53 www.murphyoilcorp.com NYSE: MUR 53 Asset Overview • Murphy 40% (Op), PVEP 35%, SKI 25% Block 15 - 1/05 • Received approval of the Lac Da Vang (LDV) retainment / development area • LDV field development plan updated, resubmitted 1Q 2021 • LDT - 1X discovery in 2019 • Maturing remaining block prosp
Slide 55: Exploration Update Cuu Long Basin, Vietnam – Block 15-2/17
54 www.murphyoilcorp.com NYSE: MUR 54 Asset Overview • Murphy 40% (Op), PVEP 35%, SKI 25% Block 15 - 2/17 • 3 - year primary exploration period • 1 well commitment by 4Q 2022 • 2 initial prospects identified • Seismic reprocessing, geological / geophysical studies ongoing Exploration Update Cuu Long
Slide 56: September Investor Presentation
55 www.murphyoilcorp.com NYSE: MUR 55 SEPTEMBER INVESTOR PRESENTATION ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER SEPTEMBER 2021