Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Scotia Howard Weil 2019 Energy Conference
42 slides from Murphy Oil's conference presentation, Mar 25, 2019
Slide 1: Scotia Howard Weil 2019 Energy Conference
MURPHY OIL CORPORATION 1 www.murphyoilcorp.com NYSE: MUR SCOTIA HOWARD WEIL 2019 ENERGY CONFERENCE MARCH 25, 2019 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER
Slide 2: Cautionary Statement & Investor Relations Contacts
MURPHY OIL CORPORATION 2 www.murphyoilcorp.com NYSE: MUR Cautionary Statement & Investor Relations Contacts 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 reserv
Slide 3: Agenda
MURPHY OIL CORPORATION 3 www.murphyoilcorp.com NYSE: MUR Agenda 01 COMPANY UPDATE 02 OFFSHORE UPDATE 03 EXPLORATION UPDATE 04 ONSHORE UPDATE 05 LOOKING AHEAD 06 TAKEAWAYS
Slide 4: Accomplishing Our Strategic Objectives
MURPHY OIL CORPORATION 4 www.murphyoilcorp.com NYSE: MUR Accomplishing Our Strategic Objectives Develop DIFFERENTIATED PERSPECTIVES In Underexplored Basins & Plays • Drilled Successful Samurai - 2 Sidetrack Increasing Resources • Executed Successful Deep Water Offshore Projects • Grew Oil - Weighted
Slide 5: Sale of Murphy's Malaysian Business for $2.127 BN All-Cash
MURPHY OIL CORPORATION 5 www.murphyoilcorp.com NYSE: MUR Sale of Murphy’s Malaysian Business for $2.127 BN All - Cash Positive Outcomes for Murphy • Further Benefit Shareholders with Share Repurchase & Debt Reduction • Simplifying Portfolio with Strategic Exit from Malaysia • Enhancing Focus on Oil
Slide 6: Expected Use of Proceeds
MURPHY OIL CORPORATION 6 www.murphyoilcorp.com NYSE: MUR Expected Use of Proceeds $500 MM Share Repurchase Authorization $750 MM Cash on Balance Sheet • Potential Oil - Weighted Acquisition • Accretive Deep Water/US Onshore Opportunities Returning Immediate Value Delivering Dividends & Share Repurch
Slide 7: Malaysia Divestiture & Use of Proceeds 2019-2023
MURPHY OIL CORPORATION 7 www.murphyoilcorp.com NYSE: MUR Jan 01 2019 Cash Balance Divestiture Proceeds Use of Proceeds Post-Divest. Cash Balance Free Cash Flow Generated Free Cash Flow Used Dec 31 2023 Cash Balance Cash Balance With Use of Proceeds Jan 01 2019 Cash Balance CF > CAPEX Before Dividend
Slide 8: History of Benefitting Shareholders
MURPHY OIL CORPORATION 8 www.murphyoilcorp.com NYSE: MUR -5% 0% 5% x Denotes Equity Issued in 2016 Source: Bloomberg, as of Dec 31, 2018 Note: Adjusted CFO = Cash Flow from Operations Before Changes in Non - Cash Working Capital History of Benefitting Shareholders 0% 1% 2% 3% 4% MUR Source: Bloomber
Slide 9: Offshore Portfolio Review
MURPHY OIL CORPORATION 9 www.murphyoilcorp.com NYSE: MUR OFFSHORE PORTFOLIO REVIEW
Slide 10: Executing in Global Offshore
MURPHY OIL CORPORATION 10 www.murphyoilcorp.com NYSE: MUR Executing in Global Offshore Vietnam Block 15 - 01/05, LDV Field • Progressing Field Development Plan, Development Team in Place • Received Declaration of Commerciality 1Q 19 2019 Plan – US Gulf of Mexico • $140 MM CAPEX in 2019 for Long - Te
Slide 11: Portfolio Review Exploration Update
MURPHY OIL CORPORATION 11 www.murphyoilcorp.com NYSE: MUR PORTFOLIO REVIEW EXPLORATION UPDATE
Slide 12: Vietnam Exploration & Upside
MURPHY OIL CORPORATION 12 www.murphyoilcorp.com NYSE: MUR BLOCK 15 - 2/17 BLOCK 15 - 1/05 LDV - 3X LDV - 4X LDV - 2X LDT - 1X GRANITE LDT North LDC North LDT NW LDC South LDT West LDV South 5km LDV Field First Oil 2021 Vietnam Exploration & Upside Cuu Long Basin – LDT - 1X Exploration Well • Murphy
Slide 13: Offshore Mexico Exploration & Upside
MURPHY OIL CORPORATION 13 www.murphyoilcorp.com NYSE: MUR Block 5 • Murphy 30% WI (Op), PETRONAS 22.3%, Ophir 22.3% & Sierra Oil & Gas 22.3% • Equivalent to ~100 Gulf of Mexico Blocks • Reviewing Newly Processed Wide Azimuth Seismic, Confirms Multiple Prospects • 25+ Identified Opportunities • Block
Slide 14: US Gulf of Mexico Exploration & Upside
MURPHY OIL CORPORATION 14 www.murphyoilcorp.com NYSE: MUR US Gulf of Mexico Exploration & Upside Hoffe Park (MC 165) • Murphy 50% WI, Operator • Middle Miocene • Expected Spud 3Q 19 • Net Mean Resource Potential – 30 MMBOE to 48 MMBOE (Upside) • Multiple Nearby Tieback Opportunities • Net Well Cost
Slide 15: Brazil Exploration Update
MURPHY OIL CORPORATION 15 www.murphyoilcorp.com NYSE: MUR Brazil Exploration Update Renewed Exploration Portfolio with Low - Cost Entry & Long - Term Opportunities in Sergipe - Alagoas Basin • Murphy 20% (Non - Op), ExxonMobil 50% (Op), QGEP 30% • 6 Blocks, ~1.1 MM Acres • Progressing In - House Sei
Slide 16: Leading Offshore Drilling Execution
MURPHY OIL CORPORATION 16 www.murphyoilcorp.com NYSE: MUR Leading Offshore Drilling Execution 0 10 20 30 40 50 60 70 80 90 Drilling Days / 10,000 ft Global Exploration/Appraisal Wells 2008 – 2018 > 1,500 ft Water Depth US Gulf of Mexico Deep Water Drilling Days vs Total Depth Source: Rushmore Review
Slide 17: Onshore Portfolio Update
MURPHY OIL CORPORATION 17 www.murphyoilcorp.com NYSE: MUR ONSHORE ONSHORE PORTFOLIO UPDATE
Slide 18: Increasing Low Break-Even Locations for High Return Growth
MURPHY OIL CORPORATION 18 www.murphyoilcorp.com NYSE: MUR Increasing Low Break - Even Locations for High Return Growth Over 60% Onshore Oil - Weighted Locations Break - Even < $45/BBL Eagle Ford Shale • ~60% of Remaining Locations with Break - Even of < $45/BBL Kaybob Duvernay • All Remaining Locati
Slide 19: De-Risked Acreage in Eagle Ford
MURPHY OIL CORPORATION 19 www.murphyoilcorp.com NYSE: MUR Offset Operator Development Murphy Drilled Wells (Oil) Murphy Acreage – Undeveloped Developing De - Risked Acreage in Eagle Ford • Acreage Completely De - Risked by Industry • > 80% of Remaining Locations Could be Characterized as PUD* • Succ
Slide 20: Increasing Production With Optimized Wells
MURPHY OIL CORPORATION 20 www.murphyoilcorp.com NYSE: MUR 0 1 2 3 4 5 0 50 100 150 200 Number of Rigs Wells Online Wells Online Rigs Per Year 2019 Plan • Operated Well Delivery – 90 Wells Online FY 2019 • ~$600 MM CAPEX Significant Development Across ~125,000 Net Acres • Conservative Inter - Well Sp
Slide 21: Delivering Low Cost Production in Tupper Montney
MURPHY OIL CORPORATION 21 www.murphyoilcorp.com NYSE: MUR 2019 Plan • Operated Well Delivery – 8 Wells Online FY 2019 • ~$55 MM CAPEX Long - Term Plan • Limited Spend of ~$50 MM Average per Year Delivering Low Cost Production in Tupper Montney *C$0.27 Transportation Cost to AECO Not Subtracted Succe
Slide 22: Retaining Our Position in Proven Kaybob Duvernay
MURPHY OIL CORPORATION 22 www.murphyoilcorp.com NYSE: MUR Retaining Our Position in Proven Kaybob Duvernay Kaybob North MUR 165 Locations H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H
Slide 23: Looking Ahead
MURPHY OIL CORPORATION 23 www.murphyoilcorp.com NYSE: MUR ONSHORE LOOKING AHEAD
Slide 24: 2019-2023 Production Growth Long-Term Plan
MURPHY OIL CORPORATION 24 www.murphyoilcorp.com NYSE: MUR US Onshore US Onshore US Onshore CAN Onshore CAN Onshore NA Offshore NA Offshore NA Offshore Malaysia Malaysia Other SE Asia 0 50 100 150 200 250 2019E Malaysia Divestiture Growth 2023E [MBOEPD Long - Term Plan Post - Malaysia Asset Sale 2019
Slide 25: Continuing the Legacy of Rewarding Shareholders
MURPHY OIL CORPORATION 25 www.murphyoilcorp.com NYSE: MUR Continuing the Legacy of Rewarding Shareholders Spending Within Our Means & Maintaining Strong Free Cash Flow Yield Enhancing Financial Flexibility & Strengthening Balance Sheet Simplifying Portfolio With Strategic Exit From Malaysia Focusing
Slide 26: Appendix
MURPHY OIL CORPORATION 26 www.murphyoilcorp.com NYSE: MUR ONSHORE APPENDIX
Slide 27: Appendix
MURPHY OIL CORPORATION 27 www.murphyoilcorp.com NYSE: MUR Appendix • Non - GAAP Reconciliation • Abbreviations • Hedging Positions • Asset Overview
Slide 28: Non-GAAP Financial Measure Definitions & Reconciliations
MURPHY OIL CORPORATION 28 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 29: Non-GAAP Reconciliation: Free Cash Flow
MURPHY OIL CORPORATION 29 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 30: Non-GAAP Reconciliation: Adjusted Cash Flow from Operations
MURPHY OIL CORPORATION 30 www.murphyoilcorp.com NYSE: MUR Non - GAAP Reconciliation ADJUSTED CASH FLOW FROM OPERATIONS Murphy defines Adjusted Cash Flow from Operations (CFFO) as net cash provided from continuing operations activities (as state d i n the Consolidated Statements of Cash Flows) before
Slide 31: Abbreviations
MURPHY OIL CORPORATION 31 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 32: 2019 Hedging Positions
MURPHY OIL CORPORATION 32 www.murphyoilcorp.com NYSE: MUR 2019 Hedging Positions Area Commodity Type Volumes (MMCFD) Price (MCF) Start Date End Date Montney Natural Gas Fixed Price Forward Sales at AECO 59 C$2.81 1/1/2019 12/31/2020 Montney Natural Gas Fixed Price Forward Sales at AECO 10 C$4.19 1/1
Slide 33: Financial Position and Note Maturity Profile
MURPHY OIL CORPORATION 33 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 Undrawn RCF Drawn RCF Financial Position as of December 3
Slide 34: Eagle Ford Shale – Peer Acreage
MURPHY OIL CORPORATION 34 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 35: Eagle Ford Shale – Murphy Spacing vs Peers
MURPHY OIL CORPORATION 35 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 36: Growing & De-Risking Kaybob Duvernay
MURPHY OIL CORPORATION 36 www.murphyoilcorp.com NYSE: MUR Growing & De - Risking Kaybob Duvernay Location Pad Wells Window Online x A 01 - 12 1 Oil 1Q 2018 x B 15 - 16 2 Oil 1Q 2018 x C 12 - 29 2 Oil 1Q 2018 x D 16 - 03 3 Condensate 1Q 2018 x E 03 - 33 4 Oil 2Q 2018 x F 16 - 06 2 Oil 3Q 2018 x G 11
Slide 37: Continuing Strong Execution in the Kaybob Duvernay
MURPHY OIL CORPORATION 37 www.murphyoilcorp.com NYSE: MUR 0 20 40 60 80 100 120 140 160 0 100 200 300 MBOE Producing Days 16-06 Average 16-06 TC 12-29 Average 12-29 TC 04-21 A 04-21 TC 4.0 0 20 40 60 80 100 120 140 160 0 50 100 150 200 250 300 MBOE Producing Days 16-18 Average 16-18 TC 03-33 Average
Slide 38: Kaybob Duvernay – 2019 Activity to Date
MURPHY OIL CORPORATION 38 www.murphyoilcorp.com NYSE: MUR Kaybob Duvernay – 2019 Activity to Date Keyera Simonette Semcams Kaybob 16 - 25 (1) Jan Frac Feb Prod Simonette Saxon Two Creeks Kaybob North Kaybob East Kaybob West Facility Pipeline Battery Pad Location 16 - 29 (2) Jan Drill Mar Frac Kaybob
Slide 39: Kaybob Duvernay – Peer Acreage
MURPHY OIL CORPORATION 39 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 40: Placid Montney – Peer Acreage
MURPHY OIL CORPORATION 40 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 41: Tupper Montney – Peer Acreage
MURPHY OIL CORPORATION 41 www.murphyoilcorp.com NYSE: MUR Tupper Montney – Peer Acreage
Slide 42: Australia Exploration Update
MURPHY OIL CORPORATION 42 www.murphyoilcorp.com NYSE: MUR Australia Exploration Update Murphy Santos EPP 43 BP EPP 38 BP EPP 37 Statoil EPP 39 Statoil EPP 40 Chevron EPP 44 Chevron EPP 45 Karoon EPP 46 Bight EPP 41 Bight EPP 42 AC/P - 21 AC/P - 58 AC/P - 57 AC/P - 59 Jurassic Play Fairway Gas Field
Murphy Oil — Scotia Howard Weil 2019 Energy Conference on 6ix