Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Investor Presentation (December 2021)
56 slides from Murphy Oil's investor presentation, Dec 6, 2021
Slide 1: December Investor Presentation
0www.murphyoilcorp.com NYSE: MUR DECEMBER INVESTOR PRESENTATION ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER DECEMBER 2021
Slide 2: Cautionary Note to US Investors; Forward-Looking Statements
1www.murphyoilcorp.com NYSE: MUR 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 formatio
Slide 3: Agenda
2www.murphyoilcorp.com NYSE: MUR Agenda 1 Company Overview 2 Murphy Priorities Murphy Portfolio3 Looking Ahead4
Slide 4: Murphy at a Glance
3www.murphyoilcorp.com NYSE: MUR 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 37.3 MBOEPD in 3Q 2021, comprised of 70% oil and 86% liquids Onshore Canada • Tupper Montney ~1,400 future locations on
Slide 5: Why Murphy Oil?
4www.murphyoilcorp.com NYSE: MUR Why Murphy Oil? Sustainable 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
Slide 6: Low Emissions Intensity Energy Generation
5www.murphyoilcorp.com NYSE: MUR 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 the lowest
Slide 7: 2021 Sustainability Report Highlights
6www.murphyoilcorp.com NYSE: MUR 2021 Sustainability Report Highlights Ranked #1 in Governance by ISS since 2018 Continued Environmental Leadership and Stewardship • Revised and strengthened climate change position • Obtained third-party assurance of 2020 Scope 1 and 2 GHG emissions • Established go
Slide 8: High-Potential Exploration Portfolio With Leading Offshore Execution Ability
7www.murphyoilcorp.com NYSE: MUR 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 Gulf o
Slide 9: Long-Term Shareholder Support With Significant Board Ownership
8www.murphyoilcorp.com NYSE: MUR 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 dir
Slide 10: Murphy Priorities
9www.murphyoilcorp.com NYSE: MUR MURPHY PRIORITIES
Slide 11: 3Q 2021 Progress on Strategic Priorities
10www.murphyoilcorp.com NYSE: MUR 3Q 2021 Progress on Strategic Priorities • Redeemed $150 MM of 2024 Senior Notes in 3Q 2021 • Announced additional $150 MM senior notes redemption to occur in Dec 2021 • Achieved long-term debt reduction goal of $300 MM; reduced total debt ~17% in FY 2021 • Transpor
Slide 12: What's New in 4Q 2021
11www.murphyoilcorp.com NYSE: MUR What’s New in 4Q 2021 King’s Quay Floating Production System • Installing flowlines and progressing moorings in Gulf of Mexico Gulf of Mexico Major Projects • Samurai #4 drilled • Preparing for well completions • Remain on track for first oil in 1H 2022 Gulf of Mexi
Slide 13: Strong Cash Flow Generation Supports Shareholder Initiatives
12www.murphyoilcorp.com NYSE: MUR Strong Cash Flow Generation Supports Shareholder Initiatives Canada Onshore Gulf of Mexico US Onshore Flexible Capital to Maximize FCF Generation • All assets generated FCF YTD 3Q 2021, excluding corporate activities • Lowered FY 2021 CAPEX guide midpoint by $20 MM
Slide 14: Murphy Portfolio
13www.murphyoilcorp.com NYSE: MUR MURPHY PORTFOLIO
Slide 15: Concentrated Onshore Portfolio With Multi-Year Inventories
14www.murphyoilcorp.com NYSE: MUR 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 RESERVES
Slide 16: Well-Established Gulf of Mexico Portfolio
15www.murphyoilcorp.com NYSE: MUR Well-Established Gulf of Mexico Portfolio GC WR EW KC GB MC DC LU AT LL HE VK DD Miles 500Lucius Cascade St. Malo Chinook Front Runner Medusa Dalmatian S. Murphy WI Block Offshore Platform FPSO2021 Well Discovery Key Exploration Project Gulf of Mexico Asset Delta Ho
Slide 17: High-Impact Exploration Portfolio
16www.murphyoilcorp.com NYSE: MUR 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
17www.murphyoilcorp.com NYSE: MUR LOOKING AHEAD
Slide 19: Disciplined Execution to Achieve Production Goals
18www.murphyoilcorp.com NYSE: MUR Disciplined Execution to Achieve Production Goals Production Guidance • 4Q 2021 production of 145.5 – 153.5 MBOEPD • Midpoint of oil production at 81 MBOPD • Includes 4.5 MBOEPD of Gulf of Mexico facility downtime for quarter, which occurred in October, and 2.2 MBOE
Slide 20: Disciplined Strategy Leads to Long-Term Value
19www.murphyoilcorp.com NYSE: MUR 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 12/31/2024 E F
Slide 21: Focused on Targeted Priorities
20www.murphyoilcorp.com NYSE: MUR Focused on Targeted Priorities • Achieving goal for 2Q – 4Q 2021 long-term debt reduction of $300 MM, for total of ~17% reduction FY 2021 • Plan allows for long-term debt reduction to ~$1.4 BN by YE 2024 from YE 2020*, with potential for further reductions long-term
Slide 22: Why Murphy Oil?
21www.murphyoilcorp.com NYSE: MUR Why Murphy Oil? Sustainable 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 fre
Slide 23: December Investor Presentation
22www.murphyoilcorp.com NYSE: MUR DECEMBER INVESTOR PRESENTATION ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER DECEMBER 2021
Slide 24: Appendix
23www.murphyoilcorp.com NYSE: MUR Appendix 1 Non-GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 Hedging Positions 4 Supplemental Information 5 Acreage Maps
Slide 25: Non-GAAP Financial Measure Definitions and Reconciliations
24www.murphyoilcorp.com NYSE: MUR 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 obliga
Slide 26: EBITDA and EBITDAX
25www.murphyoilcorp.com NYSE: MUR 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 explora
Slide 27: Adjusted EBITDA
26www.murphyoilcorp.com NYSE: MUR 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
Slide 28: Adjusted EBITDAX
27www.murphyoilcorp.com NYSE: MUR 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
Slide 29: Glossary of Abbreviations
28www.murphyoilcorp.com NYSE: MUR 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 day C
Slide 30: Achieving Strategic 2021 Priorities Through Disciplined Capital Allocation
29www.murphyoilcorp.com NYSE: MUR Achieving Strategic 2021 Priorities Through Disciplined Capital Allocation Continuing Plan Execution • 3Q 2021 accrued CAPEX of $103 MM vs $160 MM guide • 3Q 2021 lower than guide primarily due to: • $18 MM Terra Nova credit • $18 MM net reduction in Gulf of Mexico
Slide 31: 4Q 2021 Guidance
30www.murphyoilcorp.com NYSE: MUR 4Q 2021 Guidance Producing Asset Oil (BOPD) NGLs (BOPD) Gas (MCFD) Total (BOEPD) US – Eagle Ford Shale 22,600 5,100 27,200 32,200 – Gulf of Mexico excluding NCI1 50,500 3,400 49,800 62,200 Canada – Tupper Montney – – 258,600 43,100 – Kaybob Duvernay and Placid Montn
Slide 32: Current Hedging Positions – Oil
31www.murphyoilcorp.com NYSE: MUR Current Hedging Positions – Oil * As of November 3, 2021 United States Commodity Type Volumes (BBL/D) Price (BBL) Start Date End Date WTI Fixed Price Derivative Swap 45,000 $42.77 10/1/2021 12/31/2021 WTI Fixed Price Derivative Swap 20,000 $44.88 1/1/2022 12/31/2022
Slide 33: Current Hedging Positions – Natural Gas
32www.murphyoilcorp.com NYSE: MUR Current Hedging Positions – Natural Gas Montney, Canada Commodity Type Volumes (MMCF/D) Price (MCF) Start Date End Date Natural Gas Fixed Price Forward Sales at AECO 196 C$2.55 10/1/2021 12/31/2021 Natural Gas Fixed Price Forward Sales at AECO 186 C$2.36 1/1/2022 1/
Slide 34: Balance Sheet Stability
33www.murphyoilcorp.com NYSE: MUR Balance Sheet Stability Solid Foundation for Commodity Price Cycles • $505 MM of cash and cash equivalents at Sept 30, 2021 • Redeemed $150 MM of 6.875% Notes due 2024 on Dec 2, 2021 • ~$242 MM of 2024 senior notes remain outstanding • $1.6 BN senior unsecured credi
Slide 35: North America Onshore Well Locations
34www.murphyoilcorp.com NYSE: MUR 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 550 238 Up
Slide 36: North America Onshore Executing Well Delivery Plan
35www.murphyoilcorp.com NYSE: MUR North America Onshore Executing Well Delivery Plan On Schedule and Within Budget FY 2021 Onshore Activity • Eagle Ford Shale • 4 operated wells online in 4Q 2021 • Total 23 operated + 45 gross non-operated wells* online in FY 2021 • Tupper Montney • Activity complet
Slide 37: Eagle Ford Shale Base Production Outperforms While Lowering Costs
36www.murphyoilcorp.com NYSE: MUR 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 3Q 2021 3
Slide 38: Strong Catarina Well Performance Offers Potential to De-Risk Portfolio
37www.murphyoilcorp.com NYSE: MUR Volatile Oil Condensate Wet Gas Dry Gas 10 Miles MEXICO EFS HC phase windows are approximate Dimmit La Salle Webb Austin Chalk Test Eagle Ford Shale Strong Catarina Well Performance Offers Potential to De-Risk Portfolio 2021 Catarina Lower EFS Well Performance Eagle
Slide 39: Tupper Montney Continual Improvement Drives Improved Well Performance
38www.murphyoilcorp.com NYSE: MUR Murphy Acreage Facility D H H H H H H H H H H H H HH H H H H H H H H H H H H H H H H H H H HH H HH H H H HHH H HH H D H H H HH H H H D H H H H H H H H 50 Miles B C Al be rt a Tupper Montney Acreage Tupper Montney Continual Improvement Drives Improved Well Performanc
Slide 40: Gulf of Mexico Major Projects Drive Future Free Cash Flow
39www.murphyoilcorp.com NYSE: MUR 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 Facilities Project Components Fabrication Commissioning Installation / Hook-u
Slide 41: Progressing King's Quay Floating Production System
40www.murphyoilcorp.com NYSE: MUR Progressing King’s Quay Floating Production System King’s Quay Floating Production System • Completed construction in 2Q 2021 • Arrived shoreside in Gulf of Mexico in September as scheduled Advancing Major Project • Pipeline welding, subsea flowline and equipment in
Slide 42: Gulf of Mexico Major Projects CAPEX and Production Cadence
41www.murphyoilcorp.com NYSE: MUR Gulf of Mexico Major Projects CAPEX and Production Cadence 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 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 3Q 2
Slide 43: Advancing Terra Nova Asset Life Extension Project
42www.murphyoilcorp.com NYSE: MUR Advancing Terra Nova Asset Life Extension Project FPSO – Floating production storage and offloading vessel Terra Nova FPSO • Suncor 48% (Op), Cenovus 34%, Murphy 18% • Partner group advancing asset life extension project • Will extend production life by ~10 years •
Slide 44: Eagle Ford Shale Peer Acreage
43www.murphyoilcorp.com NYSE: MUR Eagle Ford Shale Peer Acreage
Slide 45: Kaybob Duvernay Peer Acreage
44www.murphyoilcorp.com NYSE: MUR Kaybob Duvernay Peer Acreage
Slide 46: Tupper Montney Peer Acreage
45www.murphyoilcorp.com NYSE: MUR Tupper Montney Peer Acreage ARC Montney Shell Montney Advantage Montney Other Competitor Montney Open Crown - Montney Tourmaline Montney Ovintiv Montney Birchcliff Montney Dry Gas Limit TCPL Pipeline Murphy Montney Facility Battery Murphy Pipeline 0 10Miles Dawson C
Slide 47: Placid Montney Peer Acreage
46www.murphyoilcorp.com NYSE: MUR Placid Montney Peer Acreage
Slide 48: Gulf of Mexico Producing Assets
47www.murphyoilcorp.com NYSE: MUR PRODUCING ASSETS Asset Operator Murphy WI1 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 Murphy
Slide 49: 2021 Exploration Update: Gulf of Mexico
48www.murphyoilcorp.com NYSE: MUR 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 • 20 key prospects • Lease sale Nov 17 – no change in royalty rates Silverback #1 (Mississippi Ca
Slide 50: 2021 Exploration Plan: Sergipe-Alagoas Basin, Brazil
49www.murphyoilcorp.com NYSE: MUR 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 opportuniti
Slide 51: 2021 Exploration Update: Potiguar Basin, Brazil
50www.murphyoilcorp.com NYSE: MUR 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 discovered
Slide 52: 2021 Exploration Update: Salina Basin, Mexico
51www.murphyoilcorp.com NYSE: MUR 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 dril
Slide 53: 2021 Exploration Plan: Northwest Borneo Basin, Brunei
52www.murphyoilcorp.com NYSE: MUR 2021 Exploration Plan Northwest Borneo Basin, Brunei Asset Overview • Shell 86.949% (Op), Murphy 8.051%, Petronas 5% • Partners assessing development and appraisal plan • Block CA-1 reclassified as not held for sale Jagus SubThrust-1X (Block CA-1) • Drilled discover
Slide 54: Development Update: Cuu Long Basin, Vietnam Block 15-1/05
53www.murphyoilcorp.com NYSE: MUR 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 adopted by all partners, submitted to government for approval • LDT-1X discovery in 2019 • Matur
Slide 55: Exploration Update: Cuu Long Basin, Vietnam Block 15-2/17
54www.murphyoilcorp.com NYSE: MUR Asset Overview • Murphy 40% (Op), PVEP 35%, SKI 25% Block 15-2/17 • 3-year primary exploration period ends 4Q 2022 • Seeking extension due to COVID-19 related delays • 1 well commitment • 2 initial prospects identified • Seismic reprocessing, geological / geophysica
Slide 56: December Investor Presentation
55www.murphyoilcorp.com NYSE: MUR DECEMBER INVESTOR PRESENTATION ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER DECEMBER 2021