Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Investor Presentation (January 2022)
54 slides from Murphy Oil's investor presentation, Jan 5, 2022
Slide 1: January Investor Presentation
0 www.murphyoilcorp.com NYSE: MUR 0 JANUARY INVESTOR PRESENTATION ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER JANUARY 2022
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 37.3 MBOEPD in 3Q 2021, comprised of 70% oil and 86% 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 low 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 hav
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: Murphy Priorities
8 www.murphyoilcorp.com NYSE: MUR 8 MURPHY PRIORITIES
Slide 10: 3Q 2021 Progress on Strategic Priorities
9 www.murphyoilcorp.com NYSE: MUR 9 3Q 2021 Progress on Strategic Priorities • Redeemed $150 MM of 2024 Senior Notes in 3Q 2021 • Announced additional $150 MM senior notes redemption to occur in Dec 2021 • Achieved long - term debt reduction goal of $300 MM ; reduced total debt ~17% in FY 2021 • Tra
Slide 11: What's New in 4Q 2021
10 www.murphyoilcorp.com NYSE: MUR 10 What’s New in 4Q 2021 King’s Quay Floating Production System • Mooring in progress in Gulf of Mexico Terra Nova FPSO • In Spain for drydock repairs Gulf of Mexico Major Projects • Well completions have commenced • Remain on track for first oil in 1H 2022 Gulf of
Slide 12: Strong Cash Flow Generation Supports Shareholder Initiatives
11 www.murphyoilcorp.com NYSE: MUR 11 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 3Q 2021, excluding corporate activities • Lowered FY 2021 CAPEX guide midpoint by $20
Slide 13: Murphy Portfolio
12 www.murphyoilcorp.com NYSE: MUR 12 MURPHY PORTFOLIO
Slide 14: Concentrated Onshore Portfolio With Multi-Year Inventories
13 www.murphyoilcorp.com NYSE: MUR 13 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 15: Well-Established Gulf of Mexico Portfolio
14 www.murphyoilcorp.com NYSE: MUR 14 Well - Established Gulf of Mexico Portfolio GC WR EW KC GB MC DC LU AT LL HE VK DD Miles 50 0 Lucius Cascade St. Malo Chinook Front Runner Medusa Dalmatian S. Murphy WI Block Offshore Platform FPSO 2021 Well Discovery Key Exploration Project Gulf of Mexico Asset
Slide 16: High-Impact Exploration Portfolio
15 www.murphyoilcorp.com NYSE: MUR 15 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 Exploration Focus Areas
Slide 17: Looking Ahead
16 www.murphyoilcorp.com NYSE: MUR 16 LOOKING AHEAD
Slide 18: Disciplined Execution to Achieve Production Goals
17 www.murphyoilcorp.com NYSE: MUR 17 Disciplined Execution to Achieve Production Goals Production Guidance • 4Q 2021 production of 145.5 – 153.5 MBOEPD • Midpoint of oil production at 81 MBOPD • Includes 4.5 MBOEPD of Gulf of Mexico facility downtime for quarter, which occurred in October, and 2.2
Slide 19: Disciplined Strategy Leads to Long-Term Value
18 www.murphyoilcorp.com NYSE: MUR 18 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 20: Focused on Targeted Priorities
19 www.murphyoilcorp.com NYSE: MUR 19 Focused on Targeted Priorities • Achieving goal for 2Q – 4Q 2021 long - term debt reduction of $300 MM, for total of ~17% reduction FY 2021 • Plan allows for long - term debt reduction to ~$1.4 BN by YE 2024 from YE 2020*, with potential for further reductions l
Slide 21: Why Murphy Oil?
20 www.murphyoilcorp.com NYSE: MUR 20 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 22: January Investor Presentation
21 www.murphyoilcorp.com NYSE: MUR 21 JANUARY INVESTOR PRESENTATION ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER JANUARY 2022
Slide 23: Appendix
22 www.murphyoilcorp.com NYSE: MUR 22 Appendix 1 Non - GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 Hedging Positions 4 Supplemental Information 5 Acreage Maps
Slide 24: Non-GAAP Financial Measure Definitions and Reconciliations
23 www.murphyoilcorp.com NYSE: MUR 23 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 25: EBITDA and EBITDAX
24 www.murphyoilcorp.com NYSE: MUR 24 EBITDA and EBITDAX Murphy defines EBITDA as net income (loss) attributable to Murphy 1 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 ex
Slide 26: Adjusted EBITDA
25 www.murphyoilcorp.com NYSE: MUR 25 ADJUSTED EBITDA Murphy defines Adjusted EBITDA as net income (loss) attributable to Murphy 1 before interest, taxes, depreciation, depletion and amortization (DD&A), impairment expense, discontinued operations, foreign exchange gains and losses, mark - to - mark
Slide 27: Adjusted EBITDAX
26 www.murphyoilcorp.com NYSE: MUR 26 ADJUSTED EBITDAX Murphy defines Adjusted EBITDAX as net income (loss) attributable to Murphy 1 before interest, taxes, depreciation, depletion and amortization (DD&A), exploration expense, impairment expense, discontinued operations, foreign exchange gains and l
Slide 28: Glossary of Abbreviations
27 www.murphyoilcorp.com NYSE: MUR 27 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 29: Achieving Strategic 2021 Priorities Through Disciplined Capital Allocation
28 www.murphyoilcorp.com NYSE: MUR 28 Achieving Strategic 2021 Priorities Through Disciplined Capital Allocation Continuing Plan Execution • 3Q 2021 accrued CAPEX of $103 MM vs $160 MM guide • 3Q 2021 lower than guide primarily due to: • $18 MM Terra Nova credit • $18 MM net reduction in Gulf of Mex
Slide 30: 4Q 2021 Guidance
29 www.murphyoilcorp.com NYSE: MUR 29 4Q 2021 Guidance Producing Asset Oil (BOPD) NGLs (BOPD) Gas (MCFD) Total (BOEPD) US – Eagle Ford Shale 22,600 5,100 27,200 32,200 – Gulf of Mexico excluding NCI 1 50,500 3,400 49,800 62,200 Canada – Tupper Montney – – 258,600 43,100 – Kaybob Duvernay and Placid
Slide 31: Current Hedging Positions – Oil
30 www.murphyoilcorp.com NYSE: MUR 30 Current Hedging Positions – Oil * As of November 3, 2021 United States Commodity Type Volumes (BBL/D) Price (BBL) Start Date End Date WTI Fixed Price Derivative Swap 45,000 $42.77 10/1/2021 12/31/2021 WTI Fixed Price Derivative Swap 20,000 $44.88 1/1/2022 12/31/
Slide 32: Current Hedging Positions – Natural Gas
31 www.murphyoilcorp.com NYSE: MUR 31 Current Hedging Positions – Natural Gas Montney, Canada Commodity Type Volumes (MMCF/D) Price (MCF) Start Date End Date Natural Gas Fixed Price Forward Sales at AECO 196 C$2.55 10/1/2021 12/31/2021 Natural Gas Fixed Price Forward Sales at AECO 186 C$2.36 1/1/202
Slide 33: Balance Sheet Stability
32 www.murphyoilcorp.com NYSE: MUR 32 Balance Sheet Stability Solid Foundation for Commodity Price Cycles • $505 MM of cash and cash equivalents at Sept 30, 2021 • Redeemed $150 MM of 6.875% Notes due 2024 on Dec 2, 2021 • ~$242 MM of 2024 senior notes remain outstanding • $1.6 BN senior unsecured c
Slide 34: North America Onshore Well Locations
33 www.murphyoilcorp.com NYSE: MUR 33 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 35: North America Onshore Executing Well Delivery Plan
34 www.murphyoilcorp.com NYSE: MUR 34 North America Onshore Executing Well Delivery Plan On Schedule and Within Budget FY 2021 Onshore Activity • Eagle Ford Shale • 4 operated wells online in 4Q 2021 • Total 23 operated + 45 gross non - operated wells* online in FY 2021 • Tupper Montney • Activity c
Slide 36: Eagle Ford Shale Base Production Outperforms While Lowering Costs
35 www.murphyoilcorp.com NYSE: MUR 35 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 3Q 20
Slide 37: Strong Catarina Well Performance Offers Potential to De-Risk Portfolio
36 www.murphyoilcorp.com NYSE: MUR 36 Volatile Oil Condensate Wet Gas Dry Gas 10 Miles MEXICO EFS HC phase windows are approximate Dimmit La Salle Webb Austin Chalk Test Eagle Ford Shale Strong Catarina Well Performance Offers Potential to De - Risk Portfolio 2021 Catarina Lower EFS Well Performance
Slide 38: Tupper Montney Continual Improvement Drives Improved Well Performance
37 www.murphyoilcorp.com NYSE: MUR 37 Murphy Acreage Facility 5 0 Miles BC Alberta Tupper Montney Acreage Tupper Montney Continual Improvement Drives Improved Well Performance 3Q 2021 292 MMCFD, 100% Natural Gas • Activity complete for FY 2021 Record - High IP30 Rates in 2021 • Modifications to flow
Slide 39: Gulf of Mexico Major Projects Drive Future Free Cash Flow
38 www.murphyoilcorp.com NYSE: MUR 38 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 40: Gulf of Mexico Major Projects CAPEX and Production Cadence
39 www.murphyoilcorp.com NYSE: MUR 39 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 41: Advancing Terra Nova Asset Life Extension Project
40 www.murphyoilcorp.com NYSE: MUR 40 Advancing Terra Nova Asset Life Extension Project FPSO – Floating production storage and offloading vessel Terra Nova FPSO • Suncor 48% (Op), Cenovus 34%, Murphy 18% • Partner group advancing asset life extension project • Will extend production life by ~10 year
Slide 42: Eagle Ford Shale Peer Acreage
41 www.murphyoilcorp.com NYSE: MUR 41 Eagle Ford Shale Peer Acreage
Slide 43: Kaybob Duvernay Peer Acreage
42 www.murphyoilcorp.com NYSE: MUR 42 Kaybob Duvernay Peer Acreage
Slide 44: Tupper Montney Peer Acreage
43 www.murphyoilcorp.com NYSE: MUR 43 Tupper Montney Peer Acreage ARC Montney Shell Montney Advantage Montney Other Competitor Montney Open Crown - Montney Tourmaline Montney Ovintiv Montney Birchcliff Montney Dry Gas Limit TCPL Pipeline Murphy Montney Facility Battery Murphy Pipeline 0 10 Miles Daw
Slide 45: Placid Montney Peer Acreage
44 www.murphyoilcorp.com NYSE: MUR 44 Placid Montney Peer Acreage
Slide 46: Producing Assets
45 www.murphyoilcorp.com NYSE: MUR 45 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 47: 2021 Exploration Update Gulf of Mexico
46 www.murphyoilcorp.com NYSE: MUR 46 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 • 20 key prospects • Lease sale Nov 17 – no change in royalty rates Silverback #1 (Mississipp
Slide 48: 2021 Exploration Plan Sergipe-Alagoas Basin, Brazil
47 www.murphyoilcorp.com NYSE: MUR 47 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 49: 2021 Exploration Update Potiguar Basin, Brazil
48 www.murphyoilcorp.com NYSE: MUR 48 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 50: 2021 Exploration Update Salina Basin, Mexico
49 www.murphyoilcorp.com NYSE: MUR 49 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 51: 2021 Exploration Plan Northwest Borneo Basin, Brunei
50 www.murphyoilcorp.com NYSE: MUR 50 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 52: Development Update Cuu Long Basin, Vietnam Block 15-1/05
51 www.murphyoilcorp.com NYSE: MUR 51 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 adopted by all partners, submitted to government for approval • LDT - 1X discovery in 2019
Slide 53: Exploration Update Cuu Long Basin, Vietnam Block 15-2/17
52 www.murphyoilcorp.com NYSE: MUR 52 Asset Overview • Murphy 40% (Op), PVEP 35%, SKI 25% Block 15 - 2/17 • 3 - year primary exploration period ends 4Q 2022 • Seeking extension due to COVID - 19 related delays • 1 well commitment • 2 initial prospects identified • Seismic reprocessing, geological /
Slide 54: January Investor Presentation
53 www.murphyoilcorp.com NYSE: MUR 53 JANUARY INVESTOR PRESENTATION ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER JANUARY 2022