Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Investor Presentation (June 2020)
49 slides from Murphy Oil's investor presentation, Jun 17, 2020
Slide 1: Investor Update June 2020
0 www.murphyoilcorp.com N Y SE : M U R 0 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER INVESTOR UPDATE JUNE 2020
Slide 2: Cautionary Note to U.S. Investors and Forward-Looking Statements
1 www.murphyoilcorp.com NYSE: MUR 1 Cautionary Note to U . S . 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
Slide 3: Agenda
2 www.murphyoilcorp.com NYSE: MUR 2 Agenda 2 4 6 1 Company Overview Current Environment and Financial Update 3 Onshore Portfolio Update Offshore Portfolio Update 5 Exploration Update Looking Ahead
Slide 4: Murphy Overview
3 www.murphyoilcorp.com NYSE: MUR 3 • Long corporate history, IPO 1956 • Global offshore and North American onshore portfolio • Oil - weighted assets drive high margins • Exploration renaissance in focus areas • Appropriate liquidity management and strong balance sheet • Deliver energy in a safe and
Slide 5: Murphy at a Glance
4 www.murphyoilcorp.com NYSE: MUR 4 59% 7% 34% 23% 28% 49% Eagle Ford Shale Canada Onshore NA Offshore Crude oil NGL Natural gas 50% 7% 43% 36% 38% 26% Eagle Ford Shale Canada Onshore NA Offshore Crude oil NGL Natural gas Murphy at a Glance 800 MM BO E 57% Liquids - W e i g h t ed 66% Liquids - W e
Slide 6: Current Environment and Financial Update
5 www.murphyoilcorp.com N Y SE : M U R 5 Current Environment and Financial Update
Slide 7: Adapting to a New Energy Landscape
6 www.murphyoilcorp.com NYSE: MUR 6 Adapting to a New Energy Landscape Portfolio streamlined through accretive, oil - weighted transactions since 2014 without issuing equity Current budget supports long - term projects with low break - evens Cost structure reductions through significant operational
Slide 8: Navigating Our Business Through Low Commodity Price Cycle
7 www.murphyoilcorp.com NYSE: MUR 7 Navigating Our Business Through Low Commodity Price Cycle Production Update, Capital and Cost Reductions • Shut - ins of 7 MBOEPD for April and 40 MBOEPD for May • All volumes back online in June • ~180 MBOEPD current production Adjusting CAPEX by ~$750 MM to $700
Slide 9: Balance Sheet Resilience
8 www.murphyoilcorp.com NYSE: MUR 8 Balance Sheet Resilience Strong Foundation for Commodity Price Cycles • Low - levered, high yield E&P at YE 2019 • $1.6 BN senior unsecured credit facility available through Nov 2023 • All debt is unsecured • Senior credit facility not subject to semi - annual bor
Slide 10: Onshore Portfolio Update
9 www.murphyoilcorp.com N Y SE : M U R 9 Onshore Portfolio Update
Slide 11: Concentrated Onshore Assets with Multi-Year Inventories
1 0 www.murphyoilcorp.com NYSE: MUR 10 Concentrated Onshore Assets with Multi - Year Inventories Tupper Montney Kaybob Duvernay Eagle Ford Shale ABILITY TO Flex Capital THROUGHOUT PRICE CYCLES PRICE - ADVANTAGED Oil - W eighted EAGLE FORD SHALE WELL POSITIONED FOR Natural Gas IN TUPPER MONTNEY Nearl
Slide 12: Significant Running Room in the Eagle Ford Shale
1 1 www.murphyoilcorp.com NYSE: MUR 11 Area Net Acres R eser v o ir Inter - Well Spacing (ft) Gross Remaining Wells* Lower EFS 300 99 Karnes 10,918 Upper EFS 700 155 Austin Chalk 700 102 Lower EFS 500 354 Tilden 64,737 Upper EFS 500 140 Austin Chalk 600 100 Lower EFS 450 272 Catarina 47,653 Upper EF
Slide 13: Eagle Ford Shale 2020 Well Delivery and Capital Plan Update
1 2 www.murphyoilcorp.com NYSE: MUR 12 2020 Revised Budget $200 MM • 25 operated wells online • 5 non - operated wells online • No wells online 2H 2020 1Q 2020 42 MBOEPD, 74% Oil, 87% Liquids • 14 wells online, 95% liquids • 10 Catarina – 8 Lower EFS, 2 Upper EFS • 4 Karnes – 2 Lower EFS, 2 Upper EF
Slide 14: Canada Onshore Scalable Assets for Future Growth
1 3 www.murphyoilcorp.com NYSE: MUR 13 Canada Onshore Scalable Assets for Future Growth Kaybob Duvernay • >170,000 net acres with >700 remaining locations* • Completed retention drilling program • Capital carry obligation with partner fulfilled • Optimizing development plan and lateral lengths • Con
Slide 15: Kaybob Duvernay Scalable Asset for Future Growth
1 4 www.murphyoilcorp.com NYSE: MUR 14 Kaybob Duvernay Scalable Asset for Future Growth Oil - Weighted Production from Low Cost Assets • Completed retention drilling program • Optimizing development plan and lateral lengths • Continuing outperformance with high - rate wells • Achieving as low as <$6
Slide 16: Kaybob Duvernay 2020 Well Delivery and Capital Plan Update
1 5 15 Kaybob Duvernay 2020 Well Delivery and Capital Plan Update Kaybob East 1Q 2020 New Well Performance Cum MBOE 0 50 1 0 0 0 20 40 60 80 100 www.murphyoilcorp.com NYSE: MUR 1 2 0 0 50 1 0 0 0 20 40 60 80 1 0 0 1 2 0 Kaybob North 1Q 2020 New Well Performance Cum MBOE 2020 Revised Budget $100 MM •
Slide 17: Tupper Montney 2020 Well Delivery and Capital Plan Update
1 6 www.murphyoilcorp.com NYSE: MUR 16 Tupper Montney 2020 Well Delivery and Capital Plan Update 2020 Revised Budget $15 MM • 4 wells drilled, to be completed in 2021 1Q 2020 246 MMCFD, 100% Natural Gas • Increased drilling rates >25% YoY with 9% increase in lateral length and lower costs • No furth
Slide 18: Offshore Portfolio Update
1 7 www.murphyoilcorp.com N Y SE : M U R 1 7 Offshore Portfolio Update
Slide 19: Gulf of Mexico Free Cash Flow Generating Assets
1 8 www.murphyoilcorp.com NYSE: MUR 18 Gulf of Mexico Free Cash Flow Generating Assets TOP 5 Operator BY PRODUCTION High Margin EBI T D A/BOE Long Runway FOR FURTHER DEVELOPMENT Revitalized PORTFOLIO Gulf of Mexico Assets Murphy Assets Offshore Platform FPSO GC WR EW KC GB MC DC AT LL LU HE VK DD Lu
Slide 20: Gulf of Mexico Multi-Year Project Execution Update
1 9 www.murphyoilcorp.com NYSE: MUR 19 Gulf of Mexico Multi - Year Project Execution Update Tieback and Workover Projects Project Drilling & Completions Subsea Tie - In First Oil Front Runner Rig Program 2 - 3 Wells 1Q – 3Q 2020 n/a 2Q – 4Q 2020 Dalmatian 134 #2 workover 2Q 2020 1 n/a 2Q 2020 Callio
Slide 21: Exploration Update
2 0 www.murphyoilcorp.com N Y SE : M U R 2 0 Exploration Update
Slide 22: Exploration Strategy Overview
2 1 www.murphyoilcorp.com NYSE: MUR 21 Exploration Strategy Overview Focused and Meaningful • Four primary exploration areas • Target up to 5 total exploration wells per year • Flexible capital spending to preserve large resources • Portfolio upside maintains long - term resilience Reduced Risk • Pr
Slide 23: Salina Basin, Mexico
2 2 www.murphyoilcorp.com NYSE: MUR 22 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 Cholula - 2DEL Appraisa
Slide 24: Sergipe-Alagoas Basin, Brazil
2 3 www.murphyoilcorp.com NYSE: MUR 23 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 opportunities identified on Murphy blocks Continuing to Ev
Slide 25: Potiguar Basin, Brazil
2 4 www.murphyoilcorp.com NYSE: MUR 24 Asset Overview • Wintershall Dea 70% (Op), Murphy 30% • Hold WI in 3 blocks, spanning ~774 M gross acres • Proven oil basin in proximity to Pitu oil discovery Extending the Play into the Deepwater • >2.1 BBOE discovered in basin • Onshore and shelf exploration
Slide 26: Looking Ahead
2 5 www.murphyoilcorp.com N Y SE : M U R 2 5 Looking Ahead
Slide 27: Leaning Into Challenges – Murphy Priorities
2 6 www.murphyoilcorp.com NYSE: MUR 26 Leaning Into Challenges – Murphy Priorities Reducing G&A to create a flatter, single - office organization Lowering operating expenses to increase margins across oil - weighted portfolio Modeling a flatter production profile to generate excess cash flow to redu
Slide 28: Roger W. Jenkins, President & CEO
2 7 www.murphyoilcorp.com N Y SE : M U R 2 7 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER INVESTOR UPDATE JUNE 2020
Slide 29: Appendix
2 8 www.murphyoilcorp.com NYSE: MUR 28 Appendix 1 Non - GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 Reserves Summary 4 Current Hedging Positions 5 Current Financial Position 7 Environmental, Social and Governance 6 Acreage Maps
Slide 30: Non-GAAP Financial Measure Definitions and Reconciliations
2 9 www.murphyoilcorp.com NYSE: MUR 29 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 31: EBITDA and EBITDAX
3 0 www.murphyoilcorp.com NYSE: MUR 30 EBITDA and EBITDAX Murphy defines EBITDA as net income attributable to Murphy 1 before interest, taxes, depreciation and amortization (DD&A). Murphy defines EBITDAX as net income attributable to Murphy before interest, taxes, depreciation and amortization (DD&A
Slide 32: Adjusted EBITDA
3 1 www.murphyoilcorp.com NYSE: MUR 31 ADJUSTED EBITDA Murphy defines Adjusted EBITDA as income from continuing operations attributable to Murphy 1 before interest, taxes, depreciation and amortization (DD&A), impairment expense, foreign exchange gains and losses, mark - to - market loss on crude oi
Slide 33: Adjusted EBITDAX
3 2 www.murphyoilcorp.com NYSE: MUR 32 ADJUSTED EBITDAX Murphy defines Adjusted EBITDAX as income from continuing operations attributable to Murphy 1 before interest, taxes, depreciation and amortization (DD&A), exploration expense, impairment expense, foreign exchange gains and losses, mark - to -
Slide 34: Glossary of Abbreviations
3 3 www.murphyoilcorp.com NYSE: MUR 33 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
Slide 35: Reserves Summary
3 4 www.murphyoilcorp.com NYSE: MUR 34 As of December 31, 2019 Crude Oil NGLs Natural Gas Total Proved Developed (Millions of Barrels) (Billions of Cubic Feet) (Millions of Barrels Equivalent) United States 187.3 25.6 246.0 253.9 Canada 25.1 1.9 1,026.7 198.1 Other 1 0.8 0.0 0.0 0.8 Total Proved Dev
Slide 36: Current Hedging Positions
3 5 www.murphyoilcorp.com NYSE: MUR 35 Current Hedging Positions United States Commodity Type Volumes (BBL/D) Price (BBL) Start Date End Date WTI Fixed Price Derivative Swap 45,000 $56.42 4/1/2020 4/30/2020 WTI Fixed Price Derivative Swap 65,000 $47.20 5/1/2020 6/30/2020 WTI Fixed Price Derivative S
Slide 37: Current Financial Position
3 6 www.murphyoilcorp.com NYSE: MUR 36 0 5 0 0 1 , 000 1 , 500 2 , 000 N o tes Drawn RCF Undrawn RCF • $2.8 BN senior notes outstanding, excluding capital leases • $170 MM drawn on $1.6 BN unsecured senior credit facility • Total liquidity $1.8 BN • $407 MM of cash and cash equivalents • 38% total d
Slide 38: Eagle Ford Shale Peer Acreage
3 7 www.murphyoilcorp.com NYSE: MUR 37 Eagle Ford Shale Peer Acreage OIL CONDENSATE G A S M urph y EOG Lewis/BP ConocoPhilli p s Marathon EP Energy Ensign Ovintiv Callon Chesapeake Sanchez BP Equinor Sundance
Slide 39: Eagle Ford Shale Murphy Spacing vs Peers
3 8 www.murphyoilcorp.com NYSE: MUR 38 Eagle Ford Shale Murphy Spacing vs Peers 20 0 M il e s Murphy Other Operators Karnes Typical Murphy Spacing LEFS ~250 - 500’ CHK Offset Spacing LEFS ~350’ to 1000’ Tilden Typical Murphy Spacing LEFS ~350’ to 800’ CHK Offset Spacing LEFS ~300’ to 800’ SE Offset
Slide 40: Kaybob Duvernay Peer Acreage
3 9 www.murphyoilcorp.com NYSE: MUR 39 Kaybob Duvernay Peer Acreage Fox Creek S A X O N KAYBOB WEST KAYBOB EAST OVINTIV S H ELL CH EV R ON P A R A MOUNT XTO REPSOL P L A CI D C ENO V U S 6 Miles KEYERA S IM O NE TT E SE MC A M S KAYBOB DVRN Rights 70/30 MUR/ATH Paramount R ep s ol XTO Shell Chevron
Slide 41: Tupper Montney Peer Acreage
4 0 www.murphyoilcorp.com NYSE: MUR 40 Tupper Montney Peer Acreage Advantage Montney Crown Land Arc Montney Crown Land Birchcliff Montney Crown Land Ovintiv Montney Crown Land Tourmaline Montney Crown Land Shell Montney Crown Land Other Competitor Montney Crown Land Open Crown - Montney Murphy Montn
Slide 42: Placid Montney Peer Acreage
4 1 www.murphyoilcorp.com NYSE: MUR 41 Placid Montney Peer Acreage MONT Rights 70/30 MUR/ATH Cequence Cenovus H a mm er head Chevron CNRL Delphi Ovintiv Open Crown - Mont Other Leased - Mont Paramount Tangle Creek XTO Non - Operated Area Battery Facility O V I N T I V CHEVR ON PARAMOUNT X T O CEN O
Slide 43: Gulf of Mexico Murphy Blocks
4 2 www.murphyoilcorp.com NYSE: MUR 42 Asset PRODUCING ASSETS 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 9% Marmalard Murphy 27% Marmalard East M
Slide 44: Offshore Mexico Salina Basin Block 5 Prospects
4 3 www.murphyoilcorp.com NYSE: MUR 43 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 Offshore Mexico Salina Basin, Mexico Block
Slide 45: Cuu Long Basin, Vietnam
4 4 www.murphyoilcorp.com NYSE: MUR 44 Asset Overview • Murphy 40% (Op), PVEP 35%, SKI 25% • ~400 MMBOE remaining resource potential on blocks 15 - 1/05 and 15 - 2/17 Block 15 - 1/05 • Received approval of the retained area and the Lac Da Vang (LDV) development area • LDV field development plan subm
Slide 46: Effective Governance Supports Long-Term Financial Strength
4 5 www.murphyoilcorp.com NYSE: MUR 45 Effective Governance Supports Long - Term Financial Strength Long - term industry, operating and HSE expertise Separate CEO and Chairman 12 out of 13 directors are independent Board of Directors elected with average vote of 99% over past 5 years Health, Safety
Slide 47: Mitigating Risk Through Sustainable Environmental Operations
4 6 www.murphyoilcorp.com NYSE: MUR 46 Mitigating Risk Through Sustainable Environmental Operations 0.36 average TRIR over past 5 years Eagle Ford Shale well work 5.7 years lost time incident free Gulf of Mexico 7.7 years lost time incident free One IOGP* recordable spill in 2019, equaling rate of 1
Slide 48: Employee and Community Investments Support Stable Operations
4 7 www.murphyoilcorp.com NYSE: MUR 47 In the Workplace In the Community Employee and Community Investments Support Stable Operations Human Capital Initiatives • Reviewing pay equity annually across employee groups and the organization • Offering training and development through a variety of platfor
Slide 49: Roger W. Jenkins, President & CEO
4 8 www.murphyoilcorp.com N Y SE : M U R 4 8 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER INVESTOR UPDATE JUNE 2020