Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Investor Presentation (March 2021)
52 slides from Murphy Oil's investor presentation, Mar 3, 2021
Slide 1: Investor Update
0 www.murphyoilcorp.com NYSE: MUR 0 INVESTOR UPDATE ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER MARCH 2021
Slide 2: Cautionary Note to US Investors
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 Environmental, Social and Governance 5 Exploration Update 6 2021 Capital Plan 7 Looking Ahead Onshore Portfolio Update 3 Offshore Portfolio Update 4
Slide 4: Murphy Overview
3 www.murphyoilcorp.com NYSE: MUR 3 Murphy Overview • Long corporate history, IPO 1956 • Advantaged low - carbon portfolio on both federal and private lands • Global offshore and North American onshore assets • Oil - weighted production drive high margins • Exploration renaissance in focus areas • M
Slide 5: What's New in 1Q 2021
4 www.murphyoilcorp.com NYSE: MUR 4 What’s New in 1Q 2021 Launched Bond Transaction March 2, 2021 • Objective is risk management of 2022 note maturities • Maintain goal of aggregate debt reduction in oil price recovery Progressing King’s Quay Negotiations • Producer and owner groups finalizing docum
Slide 6: Executing Our Strategy
5 www.murphyoilcorp.com NYSE: MUR 5 Executing Our Strategy Employ Foresight, Talent and Financial Discipline to Deliver Inspired Energy Solutions Operate in a Sustainable, Safe and Conscientious Manner Develop and Produce Offshore Assets with a Complementary Unconventional Onshore Portfolio Explore
Slide 7: Leaning into Challenges with Sustainable Solutions
6 www.murphyoilcorp.com NYSE: MUR 6 Leaning into Challenges with Sustainable Solutions Portfolio diversification across both federal and private lands provides flexibility and enhanced low - carbon footprint Eagle Ford Shale operations located on private land and offer significant upside in an oil p
Slide 8: 2020 Proved Reserves
7 www.murphyoilcorp.com NYSE: MUR 7 24% 23% 53% • Total proved reserves 697 MMBOE at YE 2020 vs 801 MMBOE at YE 2019 • Total proved reserves declined 13% due to: • Nearly 30% lower crude oil prices and less capital allocation toward shale production growth • Resulted in transfer of Eagle Ford Shale
Slide 9: Capital Allocation in Multi-Year Plan Drives Reserve Bookings
8 www.murphyoilcorp.com NYSE: MUR 8 Capital Allocation in Multi - Year Plan Drives Reserve Bookings • Reduced capital allocation to Eagle Ford Shale and Kaybob Duvernay resulted in PUDs transferred to probable reserves • Increased capital in Tupper Montney due to operational improvements, price reco
Slide 10: Environmental, Social and Governance
9 www.murphyoilcorp.com NYSE: MUR 9 ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Slide 11: Committed to Benefitting All Stakeholders
10 www.murphyoilcorp.com NYSE: MUR 10 Committed to Benefitting All Stakeholders 4 IOGP* recordable spills FY 2020, equaling rate of 1.1 BBLS per MMBOE • Gulf of Mexico IOGP spill free since 2014 • Canada onshore 3 years with no IOGP spill Achieved YoY flaring reductions in NA onshore by implementing
Slide 12: 2020 Sustainability Report Highlights
11 www.murphyoilcorp.com NYSE: MUR 11 2020 Sustainability Report Highlights Sustainability Report Disclosure Framework Aligned to the TCFD framework Reported to SASB disclosure topics and metrics Included TCFD and SASB content indices Expanded GHG and air quality disclosures Established goal of redu
Slide 13: Low-Emissions Energy Generation
12 www.murphyoilcorp.com NYSE: MUR 12 Low - Emissions Energy Generation 0 10 20 30 40 50 60 70 80 Oil Sands Heavy Oil Conventional Onshore Conventional Shelf Tight Oil Shale Oil Deepwater Murphy * Total Intensity Including Methane tCO2e/kboe 1 1 The foregoing information was obtained from The Edge,
Slide 14: Onshore Portfolio Update
13 www.murphyoilcorp.com NYSE: MUR 13 ONSHORE PORTFOLIO UPDATE
Slide 15: Eagle Ford Shale FY 2021 Plan
14 www.murphyoilcorp.com NYSE: MUR 14 Eagle Ford Shale FY 2021 Plan FY 2021 Capital Budget • $170 MM CAPEX • Includes field development • 19 operated, 53 gross non - operated wells online Strong Base Production Delivers Low, Stable Declines • Low base decline achieved through less downtime, artifici
Slide 16: Tupper Montney FY 2021 Plan
15 www.murphyoilcorp.com NYSE: MUR 15 Tupper Montney FY 2021 Plan FY 2021 Capital Budget • $85 MM CAPEX • Includes field development • 14 operated wells online Generated Positive Free Cash of ~$50 MM in FY 2020 • Tightening AECO / Henry Hub basis due to improving market access from infrastructure bu
Slide 17: Kaybob Duvernay FY 2021 Plan
16 www.murphyoilcorp.com NYSE: MUR 16 Kaybob Duvernay FY 2021 Plan FY 2021 Capital Budget • $10 MM CAPEX, including Placid Montney • No wells online • Field development ahead of well completions in 2022 Lower Costs Support Long - Term Development • Established integrated remote operating center, red
Slide 18: Offshore Portfolio Update
17 www.murphyoilcorp.com NYSE: MUR 17 OFFSHORE PORTFOLIO UPDATE
Slide 19: Gulf of Mexico Short-Term Projects Execution Update
18 www.murphyoilcorp.com NYSE: MUR 18 Gulf of Mexico Short - Term Projects Execution Update Operated Tieback and Workover Projects Project Drilling & Completions Subsea Tie - In First Oil Calliope* ✔ ✔ 2Q 2021 Non - Operated Tieback and Workover Projects Project Drilling & Completions Subsea Tie - I
Slide 20: Gulf of Mexico Major Projects
19 www.murphyoilcorp.com NYSE: MUR 19 Gulf of Mexico Major Projects Capital Drives Future Production King’s Quay Floating Production System • Fabrication progressing on schedule, despite COVID - 19 limitations • Construction >90% complete, achieved significant milestone of mating hull and topsides •
Slide 21: Exploration Update
20 www.murphyoilcorp.com NYSE: MUR 20 EXPLORATION UPDATE
Slide 22: Exploration Update Gulf of Mexico
21 www.murphyoilcorp.com NYSE: MUR 21 Exploration Update Gulf of Mexico FY 2021 Capital Budget • $75 MM CAPEX Interests in 126 Gulf of Mexico OCS Blocks • ~725,000 total gross acres, 54 exploration blocks • ~1 BBOE gross resource potential • 15 key prospects OCS Lease Sale – November 2020 • Successf
Slide 23: 2021 Capital Plan
22 www.murphyoilcorp.com NYSE: MUR 22 2021 CAPITAL PLAN
Slide 24: Focusing CAPEX on High-Margin Assets
23 www.murphyoilcorp.com NYSE: MUR 23 Focusing CAPEX on High - Margin Assets • $325 MM allocated to Gulf of Mexico • 2021 Gulf of Mexico spending primarily directed toward major projects, providing long - term production volumes • $170 MM allocated to Eagle Ford Shale • $85 MM allocated to Tupper Mo
Slide 25: North America Onshore Balancing Investments for Free Cash Generation
24 www.murphyoilcorp.com NYSE: MUR 24 North America Onshore Balancing Investments for Free Cash Generation 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 Aust
Slide 26: Why Sanction Tupper Montney Now?
25 www.murphyoilcorp.com NYSE: MUR 25 Why Sanction Tupper Montney Now? • Employ capital allocation process that maximizes free long term cash flow • Generates greater cash margin per well than Eagle Ford Shale at conservative prices • Long history of continuous improvement • Increasing laterals to ~
Slide 27: Tupper Montney Development
26 www.murphyoilcorp.com NYSE: MUR 26 Tupper Montney Development High Impact Development Drives Future Cash Flows $0 $50 $100 $150 $200 $250 0 100 200 300 400 500 2020A 2021 2022 2023 2024 2025 Production Cum FCF Tupper Montney Production and Cumulative FCF MMCFD $MM Tupper Montney Development Plan
Slide 28: 2021 Exploration Plan Silverback Farm-In
27 www.murphyoilcorp.com NYSE: MUR 27 2021 Exploration Plan Silverback Farm - In Silverback (Mississippi Canyon 35) • Farm - in for 10% WI, non - operated • Attractive play - opening trend • Acreage is adjacent to large position held by Murphy and partners • Additional play opportunities • Farm - in
Slide 29: 2021 Exploration Plan Sergipe-Alagoas Basin, Brazil
28 www.murphyoilcorp.com NYSE: MUR 28 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 30: 2021 Exploration Plan Salina Basin, Mexico
29 www.murphyoilcorp.com NYSE: MUR 29 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 31: Looking Ahead
30 www.murphyoilcorp.com NYSE: MUR 30 LOOKING AHEAD
Slide 32: Strategic Multi-Year Plan Overview 2021-2024
31 www.murphyoilcorp.com NYSE: MUR 31 Strategic Multi - Year Plan Overview 2021 – 2024 Dynamic Plan to Manage Cash Flow and CAPEX After Dividend • Generating cumulative free cash flow after dividend at a conservative price • Achieving significant free cash flow after dividend in an oil price recover
Slide 33: Murphy Priorities and Advantages
32 www.murphyoilcorp.com NYSE: MUR 32 Advantaged low - carbon footprint led by multi - basin portfolio Global assets have the added flexibility being on both federal and private lands Unique offshore company - making exploration Top - tier safety and environmental performance ADVANTAGES Murphy Prior
Slide 34: ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER MARCH 2021
33 www.murphyoilcorp.com NYSE: MUR 33 INVESTOR UPDATE ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER MARCH 2021
Slide 35: Appendix
34 www.murphyoilcorp.com NYSE: MUR 34 Appendix 1 Non - GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 Balance Sheet Position 4 1Q 2021 Guidance 5 Current Hedging Positions 6 Acreage Maps
Slide 36: Non-GAAP Financial Measure Definitions and Reconciliations
35 www.murphyoilcorp.com NYSE: MUR 35 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 37: EBITDA and EBITDAX
36 www.murphyoilcorp.com NYSE: MUR 36 EBITDA and EBITDAX Murphy defines EBITDA as net income (loss) attributable to Murphy 1 before interest, taxes, depreciation and amortization (DD&A). Murphy defines EBITDAX as net income (loss) attributable to Murphy before interest, taxes, depreciation and amort
Slide 38: Adjusted EBITDA
37 www.murphyoilcorp.com NYSE: MUR 37 ADJUSTED EBITDA Murphy defines Adjusted EBITDA as net income (loss) attributable to Murphy 1 before interest, taxes, depreciation and amortization (DD&A), impairment expense, discontinued operations, foreign exchange gains and losses, mark - to - market gains an
Slide 39: Adjusted EBITDAX
38 www.murphyoilcorp.com NYSE: MUR 38 ADJUSTED EBITDAX Murphy defines Adjusted EBITDAX as net income (loss) attributable to Murphy 1 before interest, taxes, depreciation and amortization (DD&A), exploration expense, impairment expense, discontinued operations, foreign exchange gains and losses, mark
Slide 40: Glossary of Abbreviations
39 www.murphyoilcorp.com NYSE: MUR 39 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 41: Balance Sheet Stability
40 www.murphyoilcorp.com NYSE: MUR 40 Balance Sheet Stability Solid Foundation for Commodity Price Cycles • $1.6 BN senior unsecured credit facility matures Nov 2023, $200 MM drawn at Dec 31, 2020 • All debt is unsecured, senior credit facility not subject to semi - annual borrowing base redetermina
Slide 42: 1Q 2021 Guidance
41 www.murphyoilcorp.com NYSE: MUR 41 1Q 2021 Guidance Producing Asset Oil (BOPD) NGLs (BOPD) Gas (MCFD) Total (BOEPD) US – Eagle Ford Shale 20,600 4,300 23,400 28,800 – Gulf of Mexico excluding NCI 1 50,900 5,800 68,500 68,100 Canada – Tupper Montney – – 245,600 40,900 – Kaybob Duvernay and Placid
Slide 43: Current Hedging Positions
42 www.murphyoilcorp.com NYSE: MUR 42 Current Hedging Positions United States Commodity Type Volumes (BBL/D) Price (BBL) Start Date End Date WTI Fixed Price Derivative Swap 45,000 $42.77 1/1/2021 12/31/2021 WTI Fixed Price Derivative Swap 20,000 $44.88 1/1/2022 12/31/2022 Montney, Canada Commodity T
Slide 44: Eagle Ford Shale Peer Acreage
43 www.murphyoilcorp.com NYSE: MUR 43 Eagle Ford Shale Peer Acreage OIL CONDENSATE GAS EOG EP Energy Murphy Ensign Ovintiv Marathon ConocoPhillips Lewis/BP Chesapeake Mesquite Energy Callon BP Equinor Sundance
Slide 45: Kaybob Duvernay Peer Acreage
44 www.murphyoilcorp.com NYSE: MUR 44 Kaybob Duvernay Peer Acreage
Slide 46: Tupper Montney Peer Acreage
45 www.murphyoilcorp.com NYSE: MUR 45 93 94 P 7 8 10 9 T74 T75 T76 T77 T78 T79 T77 T78 T79 T80 R11W6R12R13R14R15R16R17R18R19 R12W6R13 Tupper Montney Peer Acreage Arc Montney Crown Land Shell Montney Crown Land Advantage Montney Crown Land Other Competitor Montney Crown Land Open Crown - Montney Tour
Slide 47: Placid Montney Peer Acreage
46 www.murphyoilcorp.com NYSE: MUR 46 Placid Montney Peer Acreage
Slide 48: Gulf of Mexico Producing Assets
47 www.murphyoilcorp.com NYSE: MUR 47 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 49: 2021 Exploration Plan Potiguar Basin, Brazil
48 www.murphyoilcorp.com NYSE: MUR 48 2021 Exploration Plan 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 discover
Slide 50: Cuu Long Basin, Vietnam Block 15-1/05
49 www.murphyoilcorp.com NYSE: MUR 49 Asset Overview • Murphy 40% (Op), PVEP 35%, SKI 25% Block 15 - 1/05 • Received approval of the Lac Da Vang (LDV) retainment/development area • 100 MMBL recoverable reserves • LDV field development plan submitted 3Q 2020 • Targeting well campaign in 2022 • LDT -
Slide 51: Cuu Long Basin, Vietnam Block 15-2/17
50 www.murphyoilcorp.com NYSE: MUR 50 Asset Overview • Murphy 40% (Op), PVEP 35%, SKI 25% Block 15 - 2/17 • Signed joint operating agreement with partners in 4Q 2020 • 3 - year primary exploration period • 1 well commitment in 2022 • Seismic reprocessing, geological/geophysical studies in 1Q 2021 Ex
Slide 52: ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER MARCH 2021
51 www.murphyoilcorp.com NYSE: MUR 51 INVESTOR UPDATE ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER MARCH 2021