Murphy Oil Corporation · NYSE:MUR
Murphy Oil — J.P. Morgan 2021 Energy, Power & Renewables Conference
56 slides from Murphy Oil's conference presentation, Jun 22, 2021
Slide 1: J.P. Morgan 2021 Energy, Power & Renewables Conference
0 www.murphyoilcorp.com NYSE: MUR 0 J.P. Morgan 2021 Energy, Power & Renewables Conference ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER JUNE 22, 2021
Slide 2: Cautionary Note to US Investors; 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 30 MBOEPD in 1Q 2021, comprised of 74% oil and 87% liquids Onshore Canada • Tupper Montney ~1,400 future locations o
Slide 5: Why Murphy Oil?
4 www.murphyoilcorp.com NYSE: MUR 4 Why Murphy Oil? 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
Slide 6: Global Energy Transition
5 www.murphyoilcorp.com NYSE: MUR 5 Murphy’s environmentally - advantaged portfolio positions the company to navigate these trends Global Energy Transition Global demand for energy sources, including oil and natural gas, remains strong Demand is growing for clean energy sources Regulations that ince
Slide 7: Low Emissions Intensity Energy Generation
6 www.murphyoilcorp.com NYSE: MUR 6 Low Emissions Intensity Energy Generation Ranked top - quartile in 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 have th
Slide 8: Strong Sustainability Efforts Reinforce Corporate Longevity
7 www.murphyoilcorp.com NYSE: MUR 7 Strong Sustainability Efforts Reinforce Corporate Longevity 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 2018 2020 2022 2024 2026 2028 2030 COP CVX MUR EOG HES MRO, CPE PXD GHG Intensity Targets mt CO2e / MMBOE Murphy adheres to SASB and TCFD framework
Slide 9: High-Potential Exploration Portfolio With Leading Offshore Execution Ability
8 www.murphyoilcorp.com NYSE: MUR 8 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 10: Long Term Shareholder Support With Significant Board Ownership
9 www.murphyoilcorp.com NYSE: MUR 9 Long Term Shareholder Support With Significant Board Ownership • Initiated dividend in 1961 • Returned ~$4.0 BN to shareholders in last 10 years • $1.9 BN in share repurchases, 2012 – 2021E • Representing >20% of total shares outstanding • High stock ownership by
Slide 11: Murphy Priorities
10 www.murphyoilcorp.com NYSE: MUR 10 MURPHY PRIORITIES
Slide 12: Our 2021 Priorities Accomplished in the First Quarter
11 www.murphyoilcorp.com NYSE: MUR 11 Our 2021 Priorities Accomplished in the First Quarter • Achieved debt reduction of 8%, or ~$230 MM, in 1Q 2021 • Goal of further ~$200 MM in 2021, for total of ~15% reduction FY 2021 at current strip prices • Brought onshore wells online ahead of schedule and un
Slide 13: What's New in 2Q 2021
12 www.murphyoilcorp.com NYSE: MUR 12 What’s New in 2Q 2021 King’s Quay Floating Production System • Completed construction with planned sailaway in 3Q 2021 • Mooring installation ongoing Gulf of Mexico Major Project • Khaleesi #3 drilling in progress, Samurai #3 drilled • On track for first oil in
Slide 14: Murphy Portfolio
13 www.murphyoilcorp.com NYSE: MUR 13 MURPHY PORTFOLIO
Slide 15: Concentrated Onshore Portfolio With Multi-Year Inventories
14 www.murphyoilcorp.com NYSE: MUR 14 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 16: Well-Established Gulf of Mexico Portfolio
15 www.murphyoilcorp.com NYSE: MUR 15 Well - Established Gulf of Mexico Portfolio Top 5 Operator BY PRODUCTION High Margin EBITDA/BOE Over 100 Blocks 4 OPERATED PRODUCTION FACILITIES Low - Emission Intensity Asset GC WR EW KC GB MC DC LU AT LL HE VK DD Miles 50 0 Lucius Cascade St. Malo Chinook Fron
Slide 17: High-Impact Exploration Portfolio
16 www.murphyoilcorp.com NYSE: MUR 16 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 AUSTRALIA Exploration Focus Areas
Slide 18: Looking Ahead
17 www.murphyoilcorp.com NYSE: MUR 17 LOOKING AHEAD
Slide 19: Focusing CAPEX On High-Margin Assets
18 www.murphyoilcorp.com NYSE: MUR 18 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 20: Disciplined Strategy Leads to Long-Term Value
19 www.murphyoilcorp.com NYSE: MUR 19 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 21: Focused on Targeted Priorities
20 www.murphyoilcorp.com NYSE: MUR 20 Focused on Targeted Priorities • Goal of further ~$200 MM, for total of ~15% reduction in FY 2021 at current strip prices • Plan allows for debt reduction to ~$1.4 BN by FYE 2024 from FYE 2020, with potential for further reductions long - term • Progress major p
Slide 22: Why Murphy Oil?
21 www.murphyoilcorp.com NYSE: MUR 21 Why Murphy Oil? 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 ca
Slide 23: J.P. Morgan 2021 Energy, Power & Renewables Conference
22 www.murphyoilcorp.com NYSE: MUR 22 J.P. Morgan 2021 Energy, Power & Renewables Conference ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER JUNE 22, 2021
Slide 24: Appendix
23 www.murphyoilcorp.com NYSE: MUR 23 Appendix 1 Non - GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 2Q 2021 Guidance 4 Current Hedging Positions 6 Acreage Maps 5 Supplemental Information
Slide 25: Non-GAAP Financial Measure Definitions and Reconciliations
24 www.murphyoilcorp.com NYSE: MUR 24 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 26: EBITDA and EBITDAX
25 www.murphyoilcorp.com NYSE: MUR 25 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 27: Adjusted EBITDA
26 www.murphyoilcorp.com NYSE: MUR 26 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 28: Adjusted EBITDAX
27 www.murphyoilcorp.com NYSE: MUR 27 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 29: Glossary of Abbreviations
28 www.murphyoilcorp.com NYSE: MUR 28 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 30: 2Q 2021 Guidance
29 www.murphyoilcorp.com NYSE: MUR 29 2Q 2021 Guidance Producing Asset Oil (BOPD) NGLs (BOPD) Gas (MCFD) Total (BOEPD) US – Eagle Ford Shale 28,300 5,000 27,400 37,900 – Gulf of Mexico excluding NCI 1 57,400 5,100 68,800 74,000 Canada – Tupper Montney – – 236,400 39,400 – Kaybob Duvernay and Placid
Slide 31: Capital Execution and Guidance
30 www.murphyoilcorp.com NYSE: MUR 30 Capital Execution and Guidance Executing In - Line With Plan • 1Q 2021 accrued CAPEX* of $230 MM aligned with plan • Primary business units’ CAPEX heavily weighted to 1Q 2021 Outperformance Leads to Production Guidance Raise • Improved drilling technical perform
Slide 32: Current Hedging Positions
31 www.murphyoilcorp.com NYSE: MUR 31 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 4/1/2021 12/31/2021 WTI Fixed Price Derivative Swap 20,000 $44.88 1/1/2022 12/31/2022 Montney, Canada Commodity T
Slide 33: Balance Sheet Stability
32 www.murphyoilcorp.com NYSE: MUR 32 Balance Sheet Stability Solid Foundation for Commodity Price Cycles • $1.6 BN senior unsecured credit facility matures Nov 2023, undrawn at March 31, 2021 • All debt is unsecured, senior credit facility not subject to semi - annual borrowing base redetermination
Slide 34: 1Q 2021 Cash Flow Simplification
33 www.murphyoilcorp.com NYSE: MUR 33 1Q 2021 Cash Flow Simplification Cash Flow Attributable to Murphy ($MM) Inflow Outflow Net Cash from operations and property additions 1 $238 ($241) ($3) King’s Quay monetization $268 ($218) 2 $50 Senior notes transactions $542 ($610) 3 ($68) Dividends ($19) ($1
Slide 35: North America Onshore Well Locations
34 www.murphyoilcorp.com NYSE: MUR 34 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 36: North America Onshore Balancing Investments for Free Cash Generation
35 www.murphyoilcorp.com NYSE: MUR 35 North America Onshore Balancing Investments for Free Cash Generation to Delever Balance Sheet 1Q 2021 Onshore Activity • Eagle Ford Shale • 16 operated wells + 16 gross non - operated wells* online • $75 MM of $170 MM FY 2021 CAPEX guidance • Tupper Montney • 4
Slide 37: Eagle Ford Shale Base Production Outperforms While Lowering Costs
36 www.murphyoilcorp.com NYSE: MUR 36 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 $0 $1
Slide 38: Tupper Montney Increasing Recoveries While Lowering Costs
37 www.murphyoilcorp.com NYSE: MUR 37 Tupper Montney Increasing Recoveries While Lowering Costs * Includes contingent well count $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 Dr
Slide 39: Tupper Montney Advantages
38 www.murphyoilcorp.com NYSE: MUR 38 Tupper Montney Advantages • Employ capital allocation process that maximizes free long term cash flow • Generates greater cash margin per well than Eagle Ford Shale at conservative prices • < $1 / MCF average new well breakeven cost • Long history of continuous
Slide 40: Tupper Montney Development
39 www.murphyoilcorp.com NYSE: MUR 39 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 41: Gulf of Mexico Major Projects Drilling and Completions
40 www.murphyoilcorp.com NYSE: MUR 40 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 Khaleesi / Mormont / Samurai • Launched drilling campaign 2Q 2021 • Drill
Slide 42: Progressing King's Quay Floating Production System
41 www.murphyoilcorp.com NYSE: MUR 41 Progressing King’s Quay Floating Production System King’s Quay Floating Production System • Monetization closed 1Q 2021 for $268 MM of proceeds • Completed construction in 2Q 2021 • Sailaway to Gulf of Mexico on track for 3Q 2021 • On track to receive first oil
Slide 43: Gulf of Mexico Major Projects CAPEX and Production Cadence
42 www.murphyoilcorp.com NYSE: MUR 42 Gulf of Mexico Major Projects CAPEX and Production Cadence Major Projects Net Production MBOEPD 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
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 T74 T75 T76 T77 T78 T79 T80 T77 T78 T79 T80 R12W6R13R14R15R16R17R18R19R20 R13W6 Tupper Montney Peer Acreage ARC Montney Shell Montney Advantage Montney Other Competitor Montney Open Crown - Montney Tourmaline Montney Ovintiv Montney Birchcliff Montney Dry Gas Li
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 Update Gulf of Mexico
48 www.murphyoilcorp.com NYSE: MUR 48 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 • 15 key prospects Silverback #1 (Mississippi Canyon 35) • Chevron 80% (Op), Murphy 10%, Ecop
Slide 50: 2021 Exploration Plan Gulf of Mexico - Mississippi Canyon 35
49 www.murphyoilcorp.com NYSE: MUR 49 2021 Exploration Plan Gulf of Mexico – Mississippi Canyon 35 Murphy WI Block Offshore Platform 2021 Well Additional Play Opportunities Farm - in Block MC VK Delta House Marmalard Neidermeyer Hoffe Park DC Silverback SOB II / Nearly Headless Nick Asset Overview •
Slide 51: 2021 Exploration Plan Sergipe-Alagoas Basin, Brazil
50 www.murphyoilcorp.com NYSE: MUR 50 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 52: 2021 Exploration Update Potiguar Basin, Brazil
51 www.murphyoilcorp.com NYSE: MUR 51 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 53: 2021 Exploration Update Salina Basin, Mexico
52 www.murphyoilcorp.com NYSE: MUR 52 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 54: Development Update Cuu Long Basin, Vietnam
53 www.murphyoilcorp.com NYSE: MUR 53 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 submitted to government • LDT - 1X discovery in 2019 • Maturing remaining block prospectiv
Slide 55: Exploration Update Cuu Long Basin, Vietnam
54 www.murphyoilcorp.com NYSE: MUR 54 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 ongoing Exp
Slide 56: J.P. Morgan 2021 Energy, Power & Renewables Conference
55 www.murphyoilcorp.com NYSE: MUR 55 J.P. Morgan 2021 Energy, Power & Renewables Conference ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER JUNE 22, 2021
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