Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Q2 2023 Earnings Presentation
49 slides from Murphy Oil's earnings presentation, Aug 3, 2023
Slide 1: Second Quarter 2023 Earnings Conference Call & Webcast
2023 SECOND QUARTER EARNINGS CONFERENCE CALL & WEBCAST AUGUST 3, 2023 ROGER W. JENKINS PRESIDENT & 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: Why Murphy Oil?
Why Murphy Oil? Sustainable, multi-basin oil and natural gas assets that are safely operated with low carbon emissions intensity across North America High-potential exploration portfolio with industry-leading offshore capabilities Strong generator of free cash flow with capital allocation flexibilit
Slide 4: Advancing Strategic Priorities
Advancing Strategic Priorities DELEVER EXECUTE EXPLORE • Prioritize capital allocation framework to achieve • Exceeded upper end of guidance range with production • Initiated new exploration focus area in targeted $500 MM debt reduction goal for of 184 MBOEPD, including 99 MBOPD Côte d’Ivoire FY 202
Slide 5: 2Q 2023 Production, Pricing and Revenue Update
2Q 2023 Production, Pricing and Revenue Update Generating High Revenue From Oil Production 2Q 2023 Production 2Q 2023 Revenue by Area by Area Onshore Canada Eagle Ford Shale $80 MM Eagle Ford Shale $188 MM 35,200 BOEPD 10% 19% 25% 34% Onshore Canada 62,400 BOEPD 184 $760 MM MBOEPD Offshore 47% 65% 8
Slide 6: 2Q 2023 Financial Results
Financial Results Generating Income to Support Corporate Priorities 2Q 2023 Financial Results Net Income Attributable to Murphy 2Q 2023 ($MM Except Per Share) • Net income $98 MM Income (loss) $98 • Adjusted net income $124 MM $/Diluted share $0.62 Adjusted Income from Continuing Ops. 2Q 2023 2Q 202
Slide 7: Highlights From Our Fifth Sustainability Report
Highlights From Our Fifth Sustainability Report Taking Action to Drive Benefit for All Stakeholders CONTINUED POSITIVELY IMPACTING OUR STRONG ENVIRONMENTAL STEWARDSHIP PEOPLE AND COMMUNITIES GOVERNANCE OVERSIGHT ADVANCING OUR CLIMATE GOALS CONSISTENTLY Well-defined BOARD AND MANAGERIAL OUTPERFORMING
Slide 8: Onshore Portfolio Update
ONSHORE PORTFOLIO UPDATE www.murphyoilcorp.com NYSE: MUR 8
Slide 9: Eagle Ford Shale
Eagle Ford Shale Enhancing Portfolio and Production Through Strong Execution, Improved Completions 2Q 2023 35 MBOEPD, 89% Liquids Eagle Ford Shale Acreage • 17 operated wells online – 9 Catarina, 8 Tilden Strong Performance Across Locations • Optimized completions design continues to KARNES outperfo
Slide 10: Tupper Montney: New Completions Design Drives Strong Well Performance
Tupper Montney New Completions Design Drives Strong Well Performance 2Q 2023 341 MMCFD Net Tupper Montney Acreage • 10 operated wells online 3Q 2023 Well Delivery Schedule • 1 operated well online New Completions Design Enhancing Well Performance • Applying learnings from Eagle Ford Shale to Tupper
Slide 11: Onshore Canada Transaction Summary
Onshore Canada Transaction Summary Monetizing Non-Core Portion of Canadian Assets Accelerating Value of Non-Core Assets1 Kaybob Duvernay and Placid Montney Acreage • C$150 MM before-tax net proceeds Kaybob North • Expected close 3Q 2023, effective date Mar 1, 2023 Kaybob East • Currently producing ~
Slide 12: Offshore Portfolio Update
OFFSHORE PORTFOLIO UPDATE www.murphyoilcorp.com NYSE: MUR 12
Slide 13: Offshore Update: Executing Highly-Accretive Development Projects
Offshore Update Executing Highly-Accretive Development Projects 2Q 2023 87 MBOEPD, 80% Oil Total Offshore Gulf of Mexico Development and Tieback Projects • Well performance continuing to exceed expectations Field Drilling Completions Online Development and Tieback Projects Samurai 1Q 2023 1Q 2023 Da
Slide 14: Vietnam Development Update
Vietnam Development Update Cuu Long Basin, Vietnam Cuu Long Basin Asset Overview BLOCK 15-01/05 LAC DA TRANG • Murphy 40% (Op), PetroVietnam Exploration 15 km NORTHWEST Production 35%, SK Earthon 25% Block 15-1/05, Lac Da Vang (LDV) LAC DA TRANG WEST • Received government approval for field developm
Slide 15: Exploration Update
EXPLORATION UPDATE www.murphyoilcorp.com NYSE: MUR 15
Slide 16: Expanding Exploration Focus to Côte d'Ivoire
New Country Entry Expanding Exploration Focus to Côte d’Ivoire Tano Basin Asset Overview CÔTE D’IVOIRE GHANA • Blocks CI-102, CI-502, CI-531 and CI-709 CI-102 • Murphy 90% (Op), PETROCI1 10% Baleine CI-531 • Block CI-103 CI-502 Jubilee • Murphy 85% (Op), PETROCI1 15% Paon CI-103 TEN • Includes undev
Slide 17: 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 14.5% (Op) Eden Park Dalmatian S. VK DD • Progressing development of discovery Silver Dollar Silver Dollar West Chinook #7, Walker Ridge 425 Powerball Medusa
Slide 18: Looking Ahead
LOOKING AHEAD www.murphyoilcorp.com NYSE: MUR 18
Slide 19: 2023 Capital and Production Plan
2023 Capital and Production Plan Increasing Oil-Weighted Production With Disciplined Spending 3Q 2023 Guidance FY 2023E Production By Area • 188 – 196 MBOEPD1 • 99 MBOPD or 52% oil, 58% liquids volumes 18% • Includes: • 4.6 MBOEPD for assumed Gulf of Mexico storm 183 48% downtime MBOEPD • 2.9 MBOEPD
Slide 20: 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 21: 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 20231 • Realizing average annual production of • Reinvesting ~40% of operating cash flow1 to ~210 MBOEPD with ~53% average oil weighting DELEVER maintain average 55% oil-weighting •
Slide 22: Advancing Strategic Priorities
Advancing Strategic Priorities DELEVER EXECUTE EXPLORE • Prioritize capital allocation framework to achieve • Complete 2023 onshore well program while continuing • Initiate new exploration focus area in targeted $500 MM debt reduction goal for to improve downtime and base production decline rates Cô
Slide 23: Second Quarter 2023 Earnings Conference Call & Webcast
2023 SECOND QUARTER EARNINGS CONFERENCE CALL & WEBCAST AUGUST 3, 2023 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 23
Slide 24: Appendix
Appendix 1 Non-GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 3Q 2023 Guidance 4 Current Fixed Price Contracts 5 Supplemental Information 6 Acreage Maps www.murphyoilcorp.com NYSE: MUR 24
Slide 25: 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 26: 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 27: 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 28: 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 29: 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 30: 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 31: 3Q 2023 Guidance
3Q 2023 Guidance Oil NGLs Gas Total Producing Asset (BOPD) (BOPD) (MCFD) (BOEPD) US – Eagle Ford Shale 27,000 4,900 27,900 36,600 – Gulf of Mexico excluding NCI1 65,900 6,200 66,200 83,100 Canada – Tupper Montney – – 380,400 63,400 – Kaybob Duvernay and Placid Montney 2,900 700 12,700 5,700 – Offsho
Slide 32: 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 7/1/2023 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 33: Murphy Ranked Best for 2021 ESG Performance
Murphy Ranked Best for 2021 ESG Performance Independent Benchmarking of North American Upstream Companies, July 2023 Peer Group Consists Overall ESG Scores for the Top 20 Operators (Maximum Points: 300) of 41 of the Largest Murphy Peer 1 Unconventional Public Peer 2 Operators in North Peer 3 Peer 4
Slide 34: Strengthening Balance Sheet
Financial Results Strengthening Balance Sheet Note Maturity Profile2 Solid Foundation to Weather Commodity $MM Price Cycles $750 • Targeting $500 MM debt reduction goal $500 in FY 20231 $250 10 Year 20 Year • $1.1 BN of liquidity on Jun 30, 2023 $0 Long-Term Debt Profile • Total bonds outstanding: $
Slide 35: North America Onshore Locations: 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 > 15 years of inventory < $40 / BBL > 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 118,235 984-1323 993 Inter-Well Gross Remaining Area Net Acres Reservoir Spacing (ft) Locations Kaybob Duvernay
Slide 38: Eagle Ford Shale Peer Acreage
Eagle Ford Shale Peer Acreage Acreage as of August 1, 2023 www.murphyoilcorp.com NYSE: MUR 38
Slide 39: 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 40: 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 August 1, 2023 www.murphyoilcorp.com NYSE: MUR 40
Slide 41: Placid Montney Peer Acreage
Placid Montney Peer Acreage CNRL ARC HALO KAYBOB EAST PARAMOUNT HWN Murphy ENERGY RIDGEBACK ARC Cenovus CNRL KAYBOB WEST KEYERA Halo SIMONETTE HWN Energy I3 I3 Energy SAXON Kiwetinohk RAZOR Paramount PGI PROCESSING Razor KAYBOB Ridgeback SPARTAN KIWETINOHK Spartan Delta DELTA Whitecap CENOVUS Open C
Slide 42: Gulf of Mexico Murphy Blocks
Gulf of Mexico Murphy Blocks Gulf of Mexico Assets PRODUCING ASSETS Asset Operator Murphy WI1 Eden Park Dalmatian S. Calliope Murphy 29% VK DD Cascade Murphy 80% Silver Dollar Chinook Murphy 86% Silver Dollar West Clipper Murphy 80% Medusa Powerball Delta House Dalmatian Murphy 56% Front Runner Murp
Slide 43: 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 44: Interests in 109 Gulf of Mexico OCS Blocks
Exploration Update Gulf of Mexico Gulf of Mexico Exploration Area Interests in 109 Gulf of Mexico OCS Blocks Eden Park Dalmatian S. VK DD • ~610,000 total gross acres Silver Dollar Silver Dollar West • 65 exploration blocks Powerball Medusa Delta House • Targeting operated exploration program Kodiak
Slide 45: Salina Basin, Mexico: Block 5 Overview
Exploration Update Salina Basin, Mexico Salina Basin Block 5 Overview • Murphy 40% (Op), PC Carigali Mexico 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 Tul
Slide 46: 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 47: 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 48: 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 Block 15-1/05 LAC DA VANG • LDT-1X discovery in 2019 LAC DA TRANG DISCOVERY • Maturi
Slide 49: Second Quarter 2023 Earnings Conference Call & Webcast
2023 SECOND QUARTER EARNINGS CONFERENCE CALL & WEBCAST AUGUST 3, 2023 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 49