Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Q1 2023 Earnings Presentation
47 slides from Murphy Oil's earnings presentation, May 3, 2023
Slide 1: First Quarter Earnings Conference Call & Webcast
2023 FIRST QUARTER EARNINGS CONFERENCE CALL & WEBCAST MAY 3, 2023 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 0
Slide 2: Cautionary Statement and Investor Relations Contacts
Cautionary Statement and Investor Relations Contacts 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
Slide 3: Why Murphy Oil?
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 of free cash flow with capital allocatio
Slide 4: Advancing Strategic Priorities
Advancing Strategic Priorities DELEVER EXECUTE EXPLORE • Announced $500 MM debt reduction goal for • Exceeded upper end of guidance range with production • Drilled discovery at operated Longclaw #1 FY 20231 of 172.5 MBOEPD, including 94 MBOPD well in Gulf of Mexico • Positioned to begin executing Mu
Slide 5: 1Q 2023 Production, Pricing and Revenue Update
1Q 2023 Production, Pricing and Revenue Update Generating High Revenues From Oil Production 1Q 2023 Production 1Q 2023 Revenue by Area by Area Onshore Canada Eagle Ford Shale $96 MM Eagle Ford Shale $144 MM 27,500 BOEPD 13% 16% 19% 32% Onshore Canada 55,000 BOEPD 172.5 $752 MM MBOEPD Offshore 52% 90
Slide 6: 1Q 2023 Financial Results
Financial Results Generating Income to Support Corporate Priorities 1Q 2023 Financial Results Net Income Attributable to Murphy ($MM Except Per Share) 1Q 2023 • Net income $192 MM Income (loss) $192 $/Diluted share $1.22 • Adjusted net income $195 MM Adjusted Income from Continuing Ops. 1Q 2023 1Q 2
Slide 7: Strengthening Balance Sheet
Financial Results Strengthening Balance Sheet Note Maturity Profile 2 Upgrade to BB+, Stable Outlook by S&P $MM Global $750 $500 Solid Foundation to Weather Commodity 10 Year 20 Year Price Cycles $250 • Targeting $500 MM debt reduction goal $0 in FY 20231 • $1.1 BN of liquidity on Mar 31, 2023 Total
Slide 8: Ongoing Sustainability Initiatives
Ongoing Sustainability Initiatives Focused on Reducing Greenhouse Gas Emissions Recycled Water Ratio % • Displaced 1.125 MM gallons of diesel with natural gas in 40% onshore drilling and completions in 1Q 2023 30% • Reduced flaring and methane emissions with more effective vapor recovery units in th
Slide 9: Onshore Portfolio Update
ONSHORE PORTFOLIO UPDATE www.murphyoilcorp.com NYSE: MUR 8
Slide 10: Eagle Ford Shale
Eagle Ford Shale Enhancing Portfolio and Production Through Strong Execution, Improved Completions 1Q 2023 27 MBOEPD, 85% Liquids Eagle Ford Shale Acreage • 10 operated wells online in Karnes • Includes 2 refracs KARNES • 7 gross non-operated wells online TILDEN • 4 gross Tilden wells, 3 gross Catar
Slide 11: Tupper Montney: Ongoing Price Diversification Reduces AECO Exposure
Tupper Montney Ongoing Price Diversification Reduces AECO Exposure 1Q 2023 292 MMCFD Net Tupper Montney Acreage • 5 operated wells online 2Q 2023 Well Delivery Schedule • 3 operated wells online Mitigating AECO Exposure in 1Q 2023* • Realized price of US$2.59 / MCF, 9% above AECO average • 269 MMCFD
Slide 12: Offshore Portfolio Update
OFFSHORE PORTFOLIO UPDATE www.murphyoilcorp.com NYSE: MUR 11
Slide 13: Offshore: Executing Highly-Accretive Development Projects
Offshore Executing Highly-Accretive Development Projects 1Q 2023 90 MBOEPD, 80% Oil Total Offshore Gulf of Mexico Development and Tieback Projects Development and Tieback Projects Field Drilling Completions Online • Operated Samurai #5 (Green Canyon 432) well online in Samurai 1Q 2023 1Q 2023 1Q 202
Slide 14: Exploration Update
EXPLORATION UPDATE www.murphyoilcorp.com NYSE: MUR 13
Slide 15: Advancing Gulf of Mexico Operated Exploration Plans
Exploration Update Advancing Gulf of Mexico Operated Exploration Plans Gulf of Mexico Exploration Area Longclaw #1, Green Canyon 433 • Murphy 10% (Op) Dalmatian S. • Discovery well, spud in 1Q 2023 Eden Park VK DD • ~$6 MM net cost Silver Dollar Silver Dollar West • ~62 feet of net oil pay Medusa De
Slide 16: Looking Ahead
LOOKING AHEAD www.murphyoilcorp.com NYSE: MUR 15
Slide 17: 2023 Capital and Production Plan
2023 Capital and Production Plan Increasing Oil-Weighted Production With Disciplined Spending FY 2023E CAPEX FY 2023E Production 2Q 2023 Guidance By Area By Area • 173 – 181 MBOEPD* 3% 11% 18% • ~95 MBOPD or 54% oil, 60% liquids volumes 14% 38% • Includes planned downtime of 9.7 MBOEPD 179.5 $950 MM
Slide 18: Capital Allocation Priorities
Capital Allocation Priorities Reducing Long-Term Debt, Increasing Shareholder Returns Beyond Quarterly Dividend With Framework1 Initial $300 MM Share Repurchase Program2 Authorized by Board Adjusted Free Cash Flow Formula Cash Flow From Operations Before WC Change (-) Capital expenditures Murphy 2.0
Slide 19: Disciplined Strategy Leads to Long-Term Value With Current Assets
Disciplined Strategy Leads to Long-Term Value With Current Assets NEAR-TERM LONG-TERM • Reducing debt by $500 MM in YE 2023* • Realizing average annual production of • Reinvesting ~40% of operating cash flow* to ~210 MBOEPD with ~53% average oil weighting DELEVER maintain average 55% oil-weighting •
Slide 20: Focused on Strategic Priorities
Focused on Strategic Priorities DELEVER EXECUTE EXPLORE • Targeting $500 MM debt reduction in 2023, • Bring 20 operated wells online in 2Q 2023 with 17 wells • Evaluate results from Longclaw #1 discovery resulting in ~$1.3 BN of total debt outstanding in Eagle Ford Shale, 3 wells in Tupper Montney i
Slide 21: First Quarter Earnings Conference Call & Webcast
2023 FIRST QUARTER EARNINGS CONFERENCE CALL & WEBCAST MAY 3, 2023 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 20
Slide 22: Appendix
Appendix 1 Non-GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 2Q 2023 Guidance 4 Current Fixed Price Contracts 5 Supplemental Information 6 Acreage Maps www.murphyoilcorp.com NYSE: MUR 21
Slide 23: 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 24: 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 25: 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 26: 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 27: 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 28: Glossary of Abbreviations
Glossary of Abbreviations AECO: Alberta Energy Company, the EBITDAX: Income from continuing operations MCF: Thousands of cubic feet Canadian benchmark price for natural gas before taxes, depreciation, depletion and amortization, net interest expense, and MCFD: Thousands cubic feet per day BBL: Barre
Slide 29: 2Q 2023 Guidance
2Q 2023 Guidance Oil NGLs Gas Total Producing Asset (BOPD) (BOPD) (MCFD) (BOEPD) US – Eagle Ford Shale 25,000 4,300 26,700 33,800 – Gulf of Mexico excluding NCI1 63,900 5,600 69,100 81,000 Canada – Tupper Montney – – 320,000 53,300 – Kaybob Duvernay and Placid Montney 2,900 700 12,300 5,700 – Offsho
Slide 30: 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 250 C$2.35 4/1/2023 12/31/2023 Natural Gas Fixed Price Forward Sales at AECO 162 C$2.39 1/1/2024 12/31/2024 Natural Gas Fix
Slide 31: Diversified, Low Breakeven Portfolio
North America Onshore Locations More Than 50 Years of Robust Inventory with Low Breakeven Rates Diversified, Low Breakeven Portfolio • Multi-basin portfolio provides optionality Eagle Ford Shale and Kaybob Duvernay in all price environments > 20 years of inventory < $40 / BBL > 60 years of total inv
Slide 32: 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 33: North America Onshore Well Locations
North America Onshore Well Locations Tupper Montney Well Locations Inter-Well Area Net Acres Spacing (ft) Remaining Wells Eagle Ford Shale Operated Well Locations Tupper Montney 118,235 984-1323 993 Inter-Well Remaining Area Net Acres Reservoir Spacing (ft) Wells Kaybob Duvernay Well Locations Lower
Slide 34: Eagle Ford Shale Peer Acreage
Eagle Ford Shale Peer Acreage Acreage as of May 1, 2023 www.murphyoilcorp.com NYSE: MUR 33
Slide 35: Kaybob Duvernay: Future Oil-Weighted Optionality Preserved
Kaybob Duvernay Future Oil-Weighted Optionality Preserved 1Q 2023 5 MBOEPD, 72% Liquids Kaybob Duvernay Acreage Kaybob Robust Well Inventory North Kaybob East • No development required to maintain position • Maintaining base production through optimization Simonette Kaybob initiatives West Two Creek
Slide 36: Kaybob Duvernay Peer Acreage
Kaybob Duvernay Peer Acreage HALO GMT HITIC KAYBOB EAST Crescent Murphy Point Paramount Whitecap Crescent Point PARAMOUNT Chevron Kiwetinohk CENOVUS PCC PCC KAYBOB WEST Cenovus GMT KEYERA Hitic SIMONETTE Halo Open Crown SAXON Other Leased CHEVRON PGI PROCESSING Battery KAYBOB Facility KIWENTINOHK Wh
Slide 37: Tupper Montney Peer Acreage
Tupper Montney Peer Acreage Advantage Montney ARC Montney Birchcliff Montney Ovintiv Montney Tourmaline Montney Shell Montney Other Competitors Open Crown Murphy TCPL Pipeline Murphy Pipeline Battery Facility 0 Miles 10 Acreage as of May 1, 2023 www.murphyoilcorp.com NYSE: MUR 36
Slide 38: Placid Montney Peer Acreage
Placid Montney Peer Acreage CNRL ARC HALO KAYBOB EAST Murphy PARAMOUNT ARC HWN Cenovus ENERGY RIDGEBACK CNRL Halo KAYBOB WEST HWN Energy I3 Energy KEYERA I3 SIMONETTE Kiwetinohk Paramount SAXON RAZOR Razor Ridgeback PGI PROCESSING Spartan Delta SPARTAN KAYBOB Whitecap DELTA KIWETINOHK Open Crown Oth
Slide 39: Gulf of Mexico: Murphy Blocks
Gulf of Mexico Murphy Blocks Gulf of Mexico Assets PRODUCING ASSETS Asset Operator Murphy WI1 Dalmatian S. Calliope Murphy 29% Eden Park VK DD Cascade Murphy 80% Silver Dollar Chinook Murphy 86% Silver Dollar West Clipper Murphy 80% Medusa Delta House Dalmatian Murphy 56% Front Runner Murphy 50% Kod
Slide 40: Advancing Terra Nova Asset Life Extension Project
Offshore Canada Advancing Terra Nova Asset Life Extension Project Terra Nova Field, Offshore Canada Terra Nova FPSO • Suncor 48% (Op), Cenovus 34%, LABRADOR Murphy 18% QUEBEC • Partner group advancing asset life extension (ALE) project • Will extend production life by ~10 years • Government of Newfo
Slide 41: Gulf of Mexico Exploration Area: Interests in 108 OCS Blocks
Exploration Update Gulf of Mexico Gulf of Mexico Exploration Area* Interests in 108 Gulf of Mexico OCS Blocks* Eden Park Dalmatian S. VK DD • ~622,000 total gross acres Silver Dollar Silver Dollar West • 66 exploration blocks Medusa Delta House • Targeting three-well operated exploration Kodiak Carv
Slide 42: Salina Basin, Mexico: Block 5 Overview
Exploration Update Salina Basin, Mexico Salina Basin Block 5 Overview • Murphy 40% (Op), Petronas 30%, Wintershall Dea 30% Jokol • Proven oil basin in proximity to multiple oil Block 5 discoveries in Miocene section Najaal Tulum-1EXP • Evaluating leads / prospects to incorporate recent Cholula Tulum
Slide 43: 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%, BRAZIL Murphy 20% • Hold WI in 9 blocks, spanning >1.6 MM gross acres • >2.8 BN BOE discovered in basin 351 • >1.2 BN BOE in deepwater since 2007 Cutthroat-1 • Materi
Slide 44: Potiguar Basin, Brazil: Asset Overview
Exploration Update Potiguar Basin, Brazil Potiguar Basin Asset Overview Murphy WI Block • Murphy 100% (Op) Other Block Discovered Field • Hold WI in 3 blocks, spanning ~775 M Kilometers gross acres 0 50 • Proven oil basin in proximity to Pitu Petrobras oil discovery Petrobras Petrobras Extending the
Slide 45: Cuu Long Basin, Vietnam: Block 15-2/17
Exploration Update Cuu Long Basin, Vietnam Cuu Long Basin Asset Overview 5 BLOCK 15-02/17 • Murphy 40% (Op), PVEP 35%, SKE 25% HAI SU BAC HAI SU VANG Block 15-2/17 HAI SU DEN • 2-year exploration extension to 4Q 2024 PHUONG DONG 15-2 • 1 well commitment HAI SU HONG HAI SU TRANG • 2 drill-worthy pros
Slide 46: Cuu Long Basin, Vietnam: Block 15-1/05
Development Update Cuu Long Basin, Vietnam Cuu Long Basin Asset Overview LAC DA TRANG BLOCK 15-01/05 NORTH WEST SU TU VANG • Murphy 40% (Op), PVEP 35%, SKE 25% LAC DA TRANG Block 15-1/05 WEST • LDV field development plan submitted to LAC DA VANG LAC DA TRANG DISCOVERY government for approval LAC DA
Slide 47: First Quarter Earnings Conference Call & Webcast
2023 FIRST QUARTER EARNINGS CONFERENCE CALL & WEBCAST MAY 3, 2023 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 46