Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Wells Fargo West Coast Energy Conference 2019
48 slides from Murphy Oil's conference presentation, Jun 12, 2019
Slide 1: Wells Fargo West Coast Energy Conference
MURPHY OIL CORPORATION 0 www.murphyoilcorp.com NYSE: MUR WELLS FARGO WEST COAST ENERGY CONFERENCE JUNE 12, 2019 DAVID R. LOONEY EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER
Slide 2: Cautionary Note to U.S. Investors
MURPHY OIL CORPORATION 1 www.murphyoilcorp.com NYSE: MUR 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 reserves that a company has demonstrated by actual produc
Slide 3: Murphy at a Glance
MURPHY OIL CORPORATION 2 www.murphyoilcorp.com NYSE: MUR Murphy at a Glance 2018 Proved Reserves 68% 32% Onshore Offshore 816 MMBOE 50% 7% 43% Oil NGL Natural Gas 57% Liquids - Weighted NOTE: Includes 129 MMBOE from Malaysia; Excludes 73 MMBOE from LLOG Acquisition 26% 30% 28% 16% US Onshore Canada
Slide 4: Deliberate Value-Adding Transformation
MURPHY OIL CORPORATION 3 www.murphyoilcorp.com NYSE: MUR Deliberate Value - Adding Transformation 2014 Sell - Down 30% Malaysia $2.0 BN 2016 Divested Syncrude $730 MM 2016 Divested Montney Midstream $412 MM 2017 Divested Heavy Oil $51 MM 2019 Divested Malaysia $2.127 BN 2014 – 2015 Repositioning Por
Slide 5: Transformation Through Strategic Acquisitions & Divestitures
MURPHY OIL CORPORATION 4 www.murphyoilcorp.com NYSE: MUR Transformation Through Strategic Acquisitions & Divestitures Acquired Gulf of Mexico Assets for $2.3 BN • MP Gulf of Mexico: $961 MM (2) • LLOG: $1.375 BN • Supports Shift to Oil - Weighted, Lower Cost Basins • Increases Net Oil Production • A
Slide 6: Increasing Margins with Oil-Weighted Gulf of Mexico Production & Reserves
MURPHY OIL CORPORATION 5 www.murphyoilcorp.com NYSE: MUR Increasing Margins with Oil - Weighted, Gulf of Mexico Production & Reserves Repositioning Murphy’s Portfolio Acquisition & Divestiture of Assets 2019E Prod MBOEPD 2019 – 2023 Avg Prod MBOEPD 2019 – 2023 Avg Oil Prod MBOPD Reserves (1P) MMBOE
Slide 7: Value-Adding Oil-Weighted Reserve Acquisitions
MURPHY OIL CORPORATION 6 www.murphyoilcorp.com NYSE: MUR 38% 35% 27% US Onshore Canada Onshore NA Offshore 760 MMBOE 8 % NGL 38% Natural Gas 54% Oil 35% 33% 16% 16% US Onshore Canada Onshore NA Offshore Malaysia 816 MMBOE 7 % NGL 43 % Natural Gas 50% Oil Value - Adding Oil - Weighted Reserve Acquisi
Slide 8: Achieving Premium Oil-Weighted Realizations
MURPHY OIL CORPORATION 7 www.murphyoilcorp.com NYSE: MUR Achieving Premium Oil - Weighted Realizations $5.10/BBL Mars $8.23/BBL Brent $5.92/BBL MEH $7.06/BBL LLS 1Q 19 WTI Differentials vs $54.90 WTI Oil - Weighted Realizations in 1Q 19 • > 90% of Volumes Sold at Premium to $54.90 WTI • Eagle Ford S
Slide 9: Long History of Rewarding Shareholders
MURPHY OIL CORPORATION 8 www.murphyoilcorp.com NYSE: MUR $0 $200 $400 $600 $800 $1,000 Dividends Special Dividends Repurchases Long History of Rewarding Shareholders Source: Mizuho Securities USA Research 0% 2% 4% 6% 8% 10% 12% Dividend + Buyback Yield 2019E 1999 – 2019E Cash Paid to Shareholders, $
Slide 10: Offshore Portfolio Update
MURPHY OIL CORPORATION 9 www.murphyoilcorp.com NYSE: MUR OFFSHORE PORTFOLIO UPDATE
Slide 11: Revitalizing Gulf of Mexico Portfolio
MURPHY OIL CORPORATION 10 www.murphyoilcorp.com NYSE: MUR Revitalizing Gulf of Mexico Portfolio Acquired Producing Assets Asset Operator Murphy WI Marmalard Murphy 26.8% Marmalard East Murphy 69.6% Neidermeyer Murphy 52.8% Kodiak (1) Kosmos 48.2% Son of Bluto II Murphy 26.8% Powerball Murphy 75% Oti
Slide 12: Efficient Capital Spending Driving Free Cash Flow
MURPHY OIL CORPORATION 11 www.murphyoilcorp.com NYSE: MUR Efficient Capital Spending Driving Free Cash Flow • Generates ~$1.0 BN Annual Average EBITDA Per Year • Requires ~$325 MM of Annual Average Capital Spending • Results in Annual Average Free Cash Flow ~$675 MM • Achieves Average EBITDA/BOE ~$3
Slide 13: Gulf of Mexico
MURPHY OIL CORPORATION 12 www.murphyoilcorp.com NYSE: MUR Gulf of Mexico • Obtained Regulatory Approval to Operate Assets Acquired from Petrobras America Inc. • Dalmatian • 1 Well Program in 2Q 19 – Online 4Q 19 • Medusa • Platform Rig Workover 2Q 19 – Online 3Q 19 • Front Runner • 3 Well Program Co
Slide 14: Khaleesi / Mormont Overview
MURPHY OIL CORPORATION 13 www.murphyoilcorp.com NYSE: MUR Khaleesi / Mormont Overview • Discovered 2017 • 2P ~165 MMBOE (Gross) – 90% Liquids • ~100 MMBOE at Khaleesi • ~65 MMBOE at Mormont • High Quality Sands, 32 – 36 o API Crude Kings Quay FPS • Phase 1 Development – 5 Wells • 3 at Khaleesi • 2 a
Slide 15: Acquiring & Developing Low Cost De-Risked Tie-Backs
MURPHY OIL CORPORATION 14 www.murphyoilcorp.com NYSE: MUR Nearly Headless Nick – Mississippi Canyon 387 • ~3.5 Mile Subsea Tie - Back in to Existing Subsea Manifold – 1 Well Drilled • First Oil 4Q 19 Calliope – Mississippi Canyon 609 • 4 Mile Tie - Back to Third Party Platform – 1 Well Drilled • Fir
Slide 16: Exploration Strategy Overview
MURPHY OIL CORPORATION 15 www.murphyoilcorp.com NYSE: MUR Focused & Meaningful • Four Primary Exploration Areas • 3 to 5 Exploration Wells per Year • ~10% of Capital Budget $100 – $125 MM/Year Reduced Risk • Proven Oil Provinces • Targeting 20 – 50% Working Interest • Leveraging Strategic Partnershi
Slide 17: Offshore Mexico Discovery at Cholula
MURPHY OIL CORPORATION 16 www.murphyoilcorp.com NYSE: MUR Block 5 Overview • Increased Working Interest to 40% at Low Cost • Murphy 40% (Op), Petronas 30%, DEA 30% • 34 Leads / Prospects • Mean to Upward Gross Resource Potential: • 800 MMBO – 2,000 MMBO • Planning Additional Exploration Program in 2
Slide 18: Offshore Vietnam Discovery at LDT-1X
MURPHY OIL CORPORATION 17 www.murphyoilcorp.com NYSE: MUR BLOCK 15 - 1/05 LDV - 4X LDV - 2X GRANITE 5km LDN - 3X LDV - 1X Additional LDV Near - Field Potential Note: Volumes Refer to Gross Mean Resources LDV - 3X LDT - 1X LDV Field Additional “G” Prospects Additional “D” Prospects LDT - 1X 39 MMBO L
Slide 19: Onshore Portfolio Update
MURPHY OIL CORPORATION 18 www.murphyoilcorp.com NYSE: MUR Summary of Shareholder Support ONSHORE PORTFOLIO UPDATE
Slide 20: Eagle Ford Shale Update
MURPHY OIL CORPORATION 19 www.murphyoilcorp.com NYSE: MUR 2019 Well Delivery Plan – $600 MM CAPEX • Operated Well Delivery – 92 Wells Online FY 2019 • 13 Wells Online 1Q • 9 Karnes – 4 Upper EFS, 5 Lower EFS (2 Days in 1Q), 4 Tilden – 4 Lower EFS • 23 Wells Online 2Q • 23 Karnes – 14 Lower EFS, 3 Up
Slide 21: Significant Running Room in the Eagle Ford Shale
MURPHY OIL CORPORATION 20 www.murphyoilcorp.com NYSE: MUR Significant Running Room in the Eagle Ford Shale 0 1 2 3 4 5 2019E 2020E 2021E 2022E 2023E 0 50 100 150 200 Number of Rigs Wells Online Wells Online Rigs Per Year Long - Term Plan Eagle Ford Shale Well Cadence * As of December 31, 2018 Area N
Slide 22: Kaybob Duvernay Update
MURPHY OIL CORPORATION 21 www.murphyoilcorp.com NYSE: MUR 2019 Well Delivery Plan • 7 Wells Online & 3 Wells Deferred Retention Plan in 2019 • 18 Wells Drilled – Drill - to - Retain Strategy De - Risking of Asset • De - Risked All Acreage Except Two Creeks • 4 Wells Online at Two Creeks in 3Q 19 Kay
Slide 23: Optimizing Kaybob Duvernay
MURPHY OIL CORPORATION 22 www.murphyoilcorp.com NYSE: MUR Optimizing Kaybob Duvernay Cashless Acreage Swap • Acquired 19,840 Acres in Kaybob East and Two Creeks • Adds >50 Well Locations • High Rate, Oily Wells • Optimized Development Plan and Lateral Lengths • Divested 5,760 Acres in Simonette • No
Slide 24: Delivering Low Cost Production in Tupper Montney
MURPHY OIL CORPORATION 23 www.murphyoilcorp.com NYSE: MUR Mitigating AECO Exposure – 1Q 19 Montney Natural Gas Sales 44% 26% 17% 9% 4% AECO Price Exposure Hedged Chicago Price Exposure Malin Price Exposure Dawn Price Exposure 2019 Well Delivery Plan • Operated Well Delivery – 8 Wells Online FY 2019
Slide 25: Looking Ahead
MURPHY OIL CORPORATION 24 www.murphyoilcorp.com NYSE: MUR LOOKING AHEAD
Slide 26: Executing Our Strategy In 2019
MURPHY OIL CORPORATION 25 www.murphyoilcorp.com NYSE: MUR 200 MBOEPD Production Rate by 4Q 19 Executing Our Strategy In 2019 68 % Liquids - Weighted Production in 2H 19 $ 300 Million Share Re - Purchase Completed by YE 19 95 % Sales Volumes at Premium to WTI in 2H 19 > Transforming the Company for L
Slide 27: Long-Term Strategy For Cash Flow Generation & Production Growth
MURPHY OIL CORPORATION 26 www.murphyoilcorp.com NYSE: MUR Providing Solid Five - Year Production Growth • Total Production CAGR ~8% • Oil Production CAGR ~12% Balancing Onshore / Offshore Portfolio • Increases US Onshore Production by 15% CAGR Through Organic Growth • Multiple Offshore Development P
Slide 28: Positioning Company for Long-Term Value Creation
MURPHY OIL CORPORATION 27 www.murphyoilcorp.com NYSE: MUR Positioning Company for Long - Term Value Creation Transforming Company Drives Further Profitable Oil - Weighted Growth Producing Oil - Weighted Assets that Realize Premium Pricing Focusing on Shareholder Priorities Ramping Eagle Ford Shale w
Slide 29: Wells Fargo West Coast Energy Conference
MURPHY OIL CORPORATION 28 www.murphyoilcorp.com NYSE: MUR WELLS FARGO WEST COAST ENERGY CONFERENCE JUNE 12, 2019 DAVID R. LOONEY EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER
Slide 30: Appendix
MURPHY OIL CORPORATION 29 www.murphyoilcorp.com NYSE: MUR APPENDIX
Slide 31: Appendix: Non-GAAP Reconciliation, Abbreviations, Guidance, Hedging Positions
MURPHY OIL CORPORATION 30 www.murphyoilcorp.com NYSE: MUR Appendix Non - GAAP Reconciliation Abbreviations Guidance Hedging Positions
Slide 32: Non-GAAP Financial Measure Definitions & Reconciliations
MURPHY OIL CORPORATION 31 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 33: Non-GAAP Reconciliation: Free Cash Flow
MURPHY OIL CORPORATION 32 www.murphyoilcorp.com NYSE: MUR Non - GAAP Reconciliation FREE CASH FLOW Murphy defines Free Cash Flow as net cash provided from continuing operations activities (as stated in the Consolidated State men ts of Cash Flows) reduced by capital expenditures and investments. Free
Slide 34: Abbreviations
MURPHY OIL CORPORATION 33 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 35: Guidance – 2Q
MURPHY OIL CORPORATION 34 www.murphyoilcorp.com NYSE: MUR Guidance – 2Q 19 Guidance 2Q 2Q 2019 Liquids (BOPD) 2Q 2019 Gas (MCFD) 2Q 2019 Total (BOEPD) 1Q Production: US – Eagle Ford Shale 38,800 35,000 44,600 Gulf of Mexico 1 44,700 19,300 47,900 Canada – Tupper Montney – 206,700 34,500 Kaybob Duver
Slide 36: 2019 Hedging Positions
MURPHY OIL CORPORATION 35 www.murphyoilcorp.com NYSE: MUR 2019 Hedging Positions Area Commodity Type Volumes (BBL/D) Price (BBL) Start Date End Date US WTI Fixed Price Derivative Swap 20,000 $63.64 5/1/2019 12/31/2019 US WTI Fixed Price Derivative Swap 20,000 $60.10 1/1/2020 12/31/2020 Area Commodit
Slide 37: Financial Position and Note Maturity Profile
MURPHY OIL CORPORATION 36 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 Drawn RCF Undrawn RCF Financial Position as of March 31,
Slide 38: Eagle Ford Shale – Peer Acreage
MURPHY OIL CORPORATION 37 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 39: Eagle Ford Shale – Murphy Spacing vs Peers
MURPHY OIL CORPORATION 38 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 40: 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 41: Tupper Montney – Peer Acreage
MURPHY OIL CORPORATION 40 www.murphyoilcorp.com NYSE: MUR Tupper Montney – Peer Acreage
Slide 42: Placid Montney – Peer Acreage
MURPHY OIL CORPORATION 41 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 43: Strengthening Gulf of Mexico Position
MURPHY OIL CORPORATION 42 www.murphyoilcorp.com NYSE: MUR Strengthening Gulf of Mexico Position 1 Excluding Non - Controlling Interest 2 Includes 23.25% MP GOM Interest Existing Assets Asset Operator Murphy WI 1 Cascade Murphy 80% Chinook Murphy 53.336% Clipper Murphy 80% Cottonwood Murphy 80% Dalma
Slide 44: US Gulf of Mexico Exploration Update
MURPHY OIL CORPORATION 43 www.murphyoilcorp.com NYSE: MUR US Gulf of Mexico Exploration Update Niedermeyer Field Hoffe Park #2 Hoffe Park #1 Salt Cretaceous Miocene ~7 Miles Gulf of Mexico Murphy Lease Map MC DC AT LL VK DD EW Medusa Ourse Kodiak Calliope Otis Neidermeyer Son of Bluto II Nearly Head
Slide 45: Brazil Exploration Update
MURPHY OIL CORPORATION 44 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 46: Australia Exploration Update
MURPHY OIL CORPORATION 45 www.murphyoilcorp.com NYSE: MUR Australia Exploration Update Vulcan Basin • Murphy 40% – 60% WI, Operator • Target Spud 2020 • Identifying Multiple Prospects, Up to 200 MMBOE Gross Recoverable Resource Potential • Evaluating 3D Seismic Data • No Well Commitment Ceduna Basin
Slide 47: Increasing Margins – Footnote Details
MURPHY OIL CORPORATION 46 www.murphyoilcorp.com NYSE: MUR Increasing Margins with Oil - Weighted, Gulf of Mexico Production & Reserves Repositioning Murphy’s Portfolio – Footnote Details Acquisition & Divestiture of Assets 2019E Prod MBOEPD 2019 – 2023 Avg Prod MBOEPD 2019 – 2023 Avg Oil Prod MBOPD
Slide 48: Wells Fargo West Coast Energy Conference
MURPHY OIL CORPORATION 47 www.murphyoilcorp.com NYSE: MUR WELLS FARGO WEST COAST ENERGY CONFERENCE JUNE 12, 2019 DAVID R. LOONEY EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER
Murphy Oil — Wells Fargo West Coast Energy Conference 2019 on 6ix