Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Q4 2023 Earnings Presentation
48 slides from Murphy Oil's earnings presentation, Jan 25, 2024
Slide 1: Fourth Quarter 2023 Earnings Conference Call & Webcast
2023 FOURTH QUARTER EARNINGS CONFERENCE CALL & WEBCAST JANUARY 25, 2024 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 0
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: Advancing Strategic Priorities
Advancing Strategic Priorities DELEVER EXECUTE EXPLORE RETURN • Utilized proceeds from non-core • Produced 186 MBOEPD with • Named apparent high bidder on Progressed Murphy 2.0 divestiture to progress capital 98 MBOPD, or 52 percent, oil volumes 8 exploration blocks in Gulf of of Capital Allocation
Slide 4: Generating High Revenue From Oil Production
Production, Pricing and Revenue Generating High Revenue From Oil Production 4Q 2023 Production 4Q 2023 Revenue by Area by Area Onshore Canada Eagle Ford Shale $91 MM Eagle Ford Shale $176 MM 31,400 BOEPD 12% 17% 22% Onshore Canada 37% 68,700 BOEPD 185 $788 MM MBOEPD 46% Offshore 84,600 BOEPD Offshor
Slide 5: Maintaining Proved Reserves and Reserve Life
2023 Proved Reserves Maintaining Proved Reserves and Reserve Life • Total proved reserves 724 MMBOE at YE 2023 vs 697 MMBOE at YE 2022 2023E Proved Reserves By Area • Achieved 139% total reserve replacement • Added ~13 MMBOE of proved reserves for Lac Da Vang field in Vietnam 22% • Maintained proved
Slide 6: Generating Income to Support Corporate Priorities
Financial Results Generating Income to Support Corporate Priorities 4Q 2023 Financial Results Net Income Attributable to Murphy 4Q 2023 FY 2023 ($MM Except Per Share) • Net income $116 MM; adjusted net income $140 MM Income (loss) $116 $662 • EBITDA $375 MM; adjusted EBITDA $414 MM $/Diluted share $
Slide 7: Strengthening Balance Sheet
Financial Results Strengthening Balance Sheet Historical Dividend Per Share and Net Debt $MM Solid Foundation to Withstand Commodity Price Cycles $4,000 $1.60 • $1.1 BN of liquidity on Dec 31, 2023 $3,500 $1.40 $3,000 $1.20 • Includes $800 MM senior unsecured credit facility due Nov 2027 $2,500 $1.0
Slide 8: Capital Allocation Priorities
Capital Allocation Priorities Reducing Long-Term Debt, Increasing Shareholder Returns Beyond Quarterly Dividend With Framework1 Adjusted Free Cash Flow Formula Murphy 1.0 – Murphy 2.0 – Murphy 3.0 – Long-Term Debt Long-Term Debt Long-Term Debt Cash Flow From Operations > $1.8 BN of $1.0 BN – $1.8 BN
Slide 9: Sustainability Highlights
Sustainability Highlights Taking Action to Benefit All Stakeholders CONTINUED POSITIVELY IMPACTING OUR PEOPLE STRONG ENVIRONMENTAL STEWARDSHIP AND COMMUNITIES GOVERNANCE OVERSIGHT ADVANCING OUR CLIMATE GOALS CONSISTENTLY Well-defined BOARD AND MANAGERIAL OUTPERFORMING US Bureau of Labor Statistics f
Slide 10: 4Q 2023 Onshore Update
4Q 2023 Onshore Update Consistent Production from Multi-Decade Inventory 4Q 2023 Total Onshore Production 100 MBOEPD, 30% Liquids • Eagle Ford Shale 31 MBOEPD, 86% liquids • 3 non-operated Tilden wells online as planned • Tupper Montney 386 MMCFD net • Initiated drilling 10-well pad with 2 rigs • Ka
Slide 11: 4Q 2023 Offshore Update
4Q 2023 Offshore Update Oil-Weighted Offshore Assets Generate High-Margin Barrels 4Q 2023 Total Production 84 MBOEPD, 82% Oil • Gulf of Mexico 81 MBOEPD, 81% oil • Brought online operated Dalmatian #1 (DeSoto Canyon 90) well in 4Q 2023 • Drilled and completed operated Marmalard #3 (Mississippi Canyo
Slide 12: 2023 Exploration Update
2023 Exploration Update 2024 Exploration Focus Areas Initiated Côte d’Ivoire Exploration Area • Signed PSCs on 5 exploration blocks in 2Q 2023 • Commenced seismic reprocessing • One block includes undeveloped Paon discovery • Committed to submitting field development plan by YE 2025 Vietnam • Prepar
Slide 13: 2024 Capital and Production Plan
2024 CAPITAL AND PRODUCTION PLAN www.murphyoilcorp.com NYSE: MUR 12
Slide 14: 2024 Capital Plan
2024 Capital Plan Prioritizing Capital To Maximize Production and Adjusted Free Cash Flow1 FY 2024E CAPEX Further Delevering, Enhancing Shareholder By Area Returns 3% 12% • FY 2024 guidance $920 MM – $1.02 BN CAPEX Offshore 38% US Onshore • ~60% of spend is in 1H 2024 13% $970 MM Canada Onshore Expl
Slide 15: 2024 Production Plan
2024 Production Plan 1Q 2024 Production Guidance 163 – 171 MBOEPD FY 2024E Production By Area • 89 MBOPD or 53% oil, 59% liquids volumes • Includes planned downtime of: 16% • 13 MBOEPD of total Gulf of Mexico downtime, comprised of: • 6 MBOEPD for workovers; will return to production 1H 2024 Offshor
Slide 16: Eagle Ford Shale
Eagle Ford Shale Enhancing Portfolio and Production Through Strong Execution, Improved Completions $320 MM 2024 Capital Budget, ~30 MBOEPD Eagle Ford Shale Acreage • 71% oil volumes, 86% liquids volumes • 19 operated wells online – 15 Catarina wells, 4 Karnes wells KARNES TILDEN • 18 gross non-opera
Slide 17: Tupper Montney
Tupper Montney New Completions Design Drives Strong Well Performance $90 MM 2024 Capital Budget, ~370 MMCFD Tupper Montney Acreage • 100% dry gas • 13 operated wells online in 2Q 2024 • Assumes C$2.46 / MMBTU AECO New Completions Design Enhancing Well Performance Alberta BC • Producing 2 of top 10,
Slide 18: Kaybob Duvernay
Kaybob Duvernay Future Oil-Weighted Optionality Preserved $40 MM 2024 Capital Budget, ~4 MBOEPD Kaybob Duvernay Acreage • 55% oil volumes, 67% liquids volumes • 3 operated wells online in 2Q 2024 Robust Remaining Well Inventory • 488 future locations on ~110,000 net acres • Maintaining base producti
Slide 19: 2024 Offshore Plan
2024 Offshore Plan Focusing on Executing Highly-Accretive Development Projects 2024 Offshore Capital Budget $370 MM Highly-Accretive Development and Tieback Projects Field Drilling Completions Online 88 MBOEPD Forecast for FY 2024 Marmalard 1Q 2024 $300 MM for Gulf of Mexico, ~79 MBOEPD Khaleesi 2Q
Slide 20: 2024 Offshore Workover Projects
2024 Offshore Workover Projects Execution Update Well Workover Projects Operated Workovers and Projects • Non-op Lucius #9 well workover completed in Net 4Q 2023, online 1Q 2024 Field Location Project Online Production • Operated Marmalard #1 and #2 zone changes Marmalard Mississippi Zone 1Q 2024 ~1
Slide 21: Lac Da Vang Field Development Project
Lac Da Vang Field Development Project Cuu Long Basin, Vietnam Cuu Long Basin Lac Da Vang Field Development Overview BLOCK 15-01/05 LAC DA TRANG NORTH WEST SU TU VANG • Murphy 40% (Op), PetroVietnam Exploration Production 35%, SK Earthon 25% LAC DA TRANG WEST • 100 MMBOE estimated gross recoverable L
Slide 22: 2024 Exploration Plan
2024 Exploration Plan Gulf of Mexico Assets $120 MM 2024 Total Exploration Capital Budget • Targeting ~120 MMBOE net mean unrisked Ocotillo resources with FY 2024 program Eden Park Orange Dalmatian S. • Drilling 2 Gulf of Mexico and 2 Vietnam wells Silver Dollar Silver Dollar West Delta House Powerb
Slide 23: Cuu Long Basin, Vietnam Exploration Update
Exploration Update Cuu Long Basin, Vietnam Asset Overview Cuu Long Basin BLOCK 15-01/05 LAC DA TRANG SU TU VANG • Murphy 40% (Op), PetroVietnam Exploration NORTH WEST Production 35%, SK Earthon 25% LAC DA TRANG WEST Block 15-1/05 LAC DA VANG LAC DA TRANG • Advancing plans for Lac Da Hong DISCOVERY e
Slide 24: Tano Basin, Côte d'Ivoire
Development and Exploration Update Tano Basin, Côte d’Ivoire Asset Overview Tano Basin • ~1.5 MM gross acres, equivalent to 256 CÔTE D’IVOIRE GHANA Gulf of Mexico blocks CI-102 • Initiated seismic reprocessing CI-531 Baleine CI-502 • Adjacent to oil discoveries, including Baleine Jubilee • Identifie
Slide 25: Looking Ahead
LOOKING AHEAD www.murphyoilcorp.com NYSE: MUR 24
Slide 26: Peer-Leading Balance Sheet and Free Cash Flow Metrics
Peer-Leading Balance Sheet and Free Cash Flow Metrics Free Cash Flow Yield – TTM2 By Percentage Peer-Leading Cash Flow Yield 15% 13% Financial Strength Provides Low Risk 10% to Sustainable Returns S&P Energy Index = 9.6% • Peer leading ~$23 FCF / BOE 5% S&P 500 = 3.8% • 0.7x debt / TTM EBITDA 0% MUR
Slide 27: 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 $300 MM to reach $1.0 BN debt target in • Realizing average annual production of 20241 with no debt maturities until Dec 2027 210-220 MBOEPD with > 50% average oil weighting • Reinvesting ~50% of
Slide 28: Consistent Focus for Future Success
Consistent Focus for Future Success 2023 2024 and Beyond • Protected our employees and the • Enduring focus on stakeholder protection and environment further emission improvements • Achieved lowest carbon intensity on record • Continuing focus on shareholder returns • Executed capital allocation fra
Slide 29: Fourth Quarter Earnings Conference Call & Webcast
2023 FOURTH QUARTER EARNINGS CONFERENCE CALL & WEBCAST JANUARY 25, 2024 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 28
Slide 30: Appendix
Appendix 1 Non-GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 1Q 2024 Guidance 4 Current Fixed Price Contracts 5 Supplemental Information 6 Acreage Maps www.murphyoilcorp.com NYSE: MUR 29
Slide 31: 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 32: 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 33: 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 34: 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 35: 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 36: 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 37: 1Q 2024 Guidance
1Q 2024 Guidance Oil NGLs Gas Total Producing Asset (BOPD) (BOPD) (MCFD) (BOEPD) US – Eagle Ford Shale 19,400 4,400 24,400 27,900 – Gulf of Mexico excluding NCI1 59,500 4,700 56,500 73,600 Canada – Tupper Montney – – 327,100 54,500 – Kaybob Duvernay and Placid Montney 2,000 400 7,000 3,600 – Offshor
Slide 38: 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 162 C$2.39 1/1/2024 12/31/2024 Natural Gas Fixed Price Forward Sales at AECO 25 US$1.98 1/1/2024 10/31/2024 Natural Gas Fix
Slide 39: Diversified, Low Breakeven Portfolio
North America Onshore Locations More Than 50 Years of Robust Inventory with Low Breakeven Rates Diversified, Low Breakeven Portfolio Eagle Ford Shale and Kaybob Duvernay • Multi-basin portfolio provides optionality > 25 years of inventory < $50 / BBL in all price environments ~ 55 years of total inv
Slide 40: 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 41: 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 - 1,323 976 Inter-Well Gross Remaining Area Net Acres Reservoir Spacing (ft) Locations Lower EFS 300
Slide 42: Peer Acreage: Eagle Ford Shale
Eagle Ford Shale Peer Acreage Acreage as of January 23, 2024 www.murphyoilcorp.com NYSE: MUR 41
Slide 43: Peer Acreage: Kaybob Duvernay
Kaybob Duvernay Peer Acreage Murphy Paramount Whitecap Crescent Point Chevron Kiwetinohk PCC Cenovus GMT Hitic Halo Cygnet Duvernay Energy Open Crown Other Leased Battery Facility 6 Miles Acreage as of January 23, 2024 www.murphyoilcorp.com NYSE: MUR 42
Slide 44: Peer Acreage: Tupper Montney
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 January 23, 2024 www.murphyoilcorp.com NYSE: MUR 43
Slide 45: Murphy Blocks: Gulf of Mexico
Gulf of Mexico Murphy Blocks Gulf of Mexico Assets PRODUCING ASSETS Asset Operator Murphy WI1 Calliope Murphy 29% Cascade Murphy 80% Chinook Murphy 86% Ocotillo Clipper Murphy 80% Eden Park Orange Dalmatian Murphy 56% Silver Dollar Dalmatian S. Front Runner Murphy 50% Silver Dollar West Habanero She
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%, Murphy 20% BRAZIL • Hold WI in 9 blocks, spanning >1.6 MM gross acres • >2.8 BN BOE discovered in basin • >1.2 BN BOE in deepwater since 2007 351 • Evaluating next st
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 gross acres 0 Kilometers 50 • Proven oil basin in proximity to Pitu oil discovery Petrobras Extending the Play Into the Deepw
Slide 48: Fourth Quarter Earnings Conference Call & Webcast
2023 FOURTH QUARTER EARNINGS CONFERENCE CALL & WEBCAST JANUARY 25, 2024 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 47