Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Investor Presentation (March 2021)
52 slides from Murphy Oil's investor presentation, Mar 23, 2021
Slide 1: Investor Update
0 www.murphyoilcorp.com NYSE: MUR 0 INVESTOR UPDATE ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER MARCH 23, 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 Onshore Portfolio Update 6 Offshore Portfolio Update 7 Exploration Update New for the Quarter 3 2021 Capital Program 4 8 Looking Ahead
Slide 4: Murphy Overview
3 www.murphyoilcorp.com NYSE: MUR 3 Murphy Overview • Long corporate history, IPO 1956 • Advantaged, diverse, low - carbon portfolio on both federal and private lands • Oil - weighted production drives high margins • Company - making unique exploration portfolio • Balance sheet maintained with appro
Slide 5: Murphy at a Glance
4 www.murphyoilcorp.com NYSE: MUR 4 Murphy at a Glance Exploration Office Production
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 That Benefit Society and Shareholders Operate in a Sustainable, Safe and Conscientious Manner As We Navigate the Energy Transition Develop and Produce Our
Slide 7: Environmental, Social and Governance
6 www.murphyoilcorp.com NYSE: MUR 6 ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Slide 8: 2020 Sustainability Report Highlights
7 www.murphyoilcorp.com NYSE: MUR 7 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 reduci
Slide 9: Murphy's Role in the Energy Transition
8 www.murphyoilcorp.com NYSE: MUR 8 Murphy’s Role in the Energy Transition As the energy economy transitions under the Paris Agreement, oil and natural gas will continue to play a vital role in the long - term fuel mix Advantaged Portfolio Mix With Low Emissions Intensity • Oil - weighted assets are
Slide 10: Low-Emissions Energy Generation
9 www.murphyoilcorp.com NYSE: MUR 9 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, a
Slide 11: New for the Quarter
10 www.murphyoilcorp.com NYSE: MUR 10 NEW FOR THE QUARTER
Slide 12: What's New in 1Q 2021
11 www.murphyoilcorp.com NYSE: MUR 11 What’s New in 1Q 2021 Closed King’s Quay Floating Production System Transaction • Proceeds of ~$270 MM used to repay borrowings on the senior unsecured credit facility and remainder held as cash Successful Bond Offering March 2021 • Issued $550 MM of 6.375% Seni
Slide 13: 2021 Capital Program
12 www.murphyoilcorp.com NYSE: MUR 12 2021 CAPITAL PROGRAM
Slide 14: Focusing CAPEX on High-Margin Assets
13 www.murphyoilcorp.com NYSE: MUR 13 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 15: Onshore Portfolio Update
14 www.murphyoilcorp.com NYSE: MUR 14 ONSHORE PORTFOLIO UPDATE
Slide 16: North America Onshore Balancing Investments for Free Cash Generation
15 www.murphyoilcorp.com NYSE: MUR 15 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 17: Eagle Ford Shale
16 www.murphyoilcorp.com NYSE: MUR 16 Eagle Ford Shale Strong Base Production Delivers Low, Stable Declines • Low base decline achieved through less downtime, artificial lift optimization and facility optimization • ~24% base production decline in 2021 for all pre - 2021 wells Eagle Ford Shale Acrea
Slide 18: Tupper Montney Generated Positive Free Cash in FY 2020
17 www.murphyoilcorp.com NYSE: MUR 17 Tupper Montney Generated Positive Free Cash of ~$50 MM in FY 2020 • Tightening AECO / Henry Hub basis due to improving market access from infrastructure buildouts has led to cash flow improvement ~1,400 Remaining Locations* Support a Low - Carbon Energy Future O
Slide 19: Tupper Montney Advantages
18 www.murphyoilcorp.com NYSE: MUR 18 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 20: Tupper Montney Development
19 www.murphyoilcorp.com NYSE: MUR 19 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 21: Kaybob Duvernay
20 www.murphyoilcorp.com NYSE: MUR 20 Kaybob Duvernay Lower Costs Support Long - Term Development • Established integrated remote operating center, reduces downtime and costs • Industry - leading well productivity, in - line with core performance of other top NA shale plays • Tightening differential
Slide 22: Offshore Portfolio Update
21 www.murphyoilcorp.com NYSE: MUR 21 OFFSHORE PORTFOLIO UPDATE
Slide 23: Gulf of Mexico Short-Term Projects Execution Update
22 www.murphyoilcorp.com NYSE: MUR 22 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 24: Gulf of Mexico Major Projects Drive Future Free Cash Flow
23 www.murphyoilcorp.com NYSE: MUR 23 Gulf of Mexico Major Projects Drive Future Free Cash Flow at Low Breakevens King’s Quay Floating Production System • Transaction closed 1Q 2021 for ~$270 MM of proceeds • Fabrication progressing on schedule, despite COVID - 19 limitations • Construction >90% com
Slide 25: Exploration Update
24 www.murphyoilcorp.com NYSE: MUR 24 EXPLORATION UPDATE
Slide 26: Exploration Update
25 www.murphyoilcorp.com NYSE: MUR 25 Exploration Update 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 • Successfully bid on eig
Slide 27: 2021 Exploration Plan: Gulf of Mexico Silverback
26 www.murphyoilcorp.com NYSE: MUR 26 2021 Exploration Plan Gulf of Mexico 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 resul
Slide 28: 2021 Exploration Plan: Sergipe-Alagoas Basin, Brazil
27 www.murphyoilcorp.com NYSE: MUR 27 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 29: 2021 Exploration Plan: Salina Basin, Mexico
28 www.murphyoilcorp.com NYSE: MUR 28 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 30: Looking Ahead
29 www.murphyoilcorp.com NYSE: MUR 29 LOOKING AHEAD
Slide 31: Strategic Multi-Year Plan Overview 2021-2024
30 www.murphyoilcorp.com NYSE: MUR 30 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 conservative prices • Achieving significant free cash flow after dividend in an oil price recovery
Slide 32: Murphy Priorities and Advantages in Energy Transition
31 www.murphyoilcorp.com NYSE: MUR 31 Advantaged low - carbon footprint across multi - basin portfolio Global assets have added capital allocation flexibility Unique, company - making offshore exploration Top - tier safety and environmental performance Capability to execute both onshore and offshore
Slide 33: ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER MARCH 23, 2021
32 www.murphyoilcorp.com NYSE: MUR 32 INVESTOR UPDATE ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER MARCH 23, 2021
Slide 34: Appendix
33 www.murphyoilcorp.com NYSE: MUR 33 Appendix 1 Non - GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 Reserve Summary 4 Balance Sheet Position 5 1Q 2021 Guidance 6 Current Hedging Positions 7 Acreage Maps
Slide 35: Non-GAAP Financial Measure Definitions and Reconciliations
34 www.murphyoilcorp.com NYSE: MUR 34 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 36: EBITDA and EBITDAX
35 www.murphyoilcorp.com NYSE: MUR 35 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 37: Adjusted EBITDA
36 www.murphyoilcorp.com NYSE: MUR 36 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 38: Adjusted EBITDAX
37 www.murphyoilcorp.com NYSE: MUR 37 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 39: Glossary of Abbreviations
38 www.murphyoilcorp.com NYSE: MUR 38 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 40: 2020 Proved Reserves
39 www.murphyoilcorp.com NYSE: MUR 39 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 Shal
Slide 41: Balance Sheet Stability
40 www.murphyoilcorp.com NYSE: MUR 40 Balance Sheet Stability Solid Foundation for Commodity Price Cycles • Issued $550 MM of 6.375% Senior Notes due 2028 in March 2021 • Proceeds used to redeem all 2022 senior notes • $1.6 BN senior unsecured credit facility matures Nov 2023, $200 MM drawn at Dec 3
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 T59 T60 T61 T62 T63 T64 T65 T66 T67 T59 T60 T61 T62 T63 T64 T65 T66 T67 R13W5R14R15R16R17R18R19R20R21R22R23R24R25R26 R14W5R15R16R17R18R19R20R21R22R23R24R25R26 Kaybob Duvernay Peer Acreage Fox Creek SAXON KAYBOB WEST KAYBOB EAST OVINTIV SHELL CHEVRON PARAMOUNT XT
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 T57 T58 T59 T60 T61 T62 T63 T64 T65 T66 T67 T57 T58 T59 T60 T61 T62 T63 T64 T65 T66 T67 R14W5R15R16R17R18R19R20R21R22R23R24R25R26R27 R14W5R15R16R17R18R19R20R21R22R23R24R25R26R27 Placid Montney Peer Acreage Chevron Open Crown - Mont Hammerhead Other Leased - Mont
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: Development Update Cuu Long Basin, Vietnam
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: Exploration Update Cuu Long Basin, Vietnam
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 23, 2021
51 www.murphyoilcorp.com NYSE: MUR 51 INVESTOR UPDATE ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER MARCH 23, 2021