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|MURPHY OIL ANNOUNCES PRELIMINARY SECOND QUARTER 2015 EARNINGS AND WELL RESULTS|
EL DORADO, Arkansas, July 29, 2015 - Murphy Oil Corporation (NYSE: MUR) announced today a net loss of $73.8 million ($0.42 per diluted share) in the 2015 second quarter, down from net income of $129.4 million ($0.72 per diluted share) in the second quarter a year ago. The net loss from continuing operations in the 2015 second quarter was $89.0 million ($0.51 per diluted share) compared to a profit of $142.7 million ($0.79 per diluted share) earned in the second quarter a year ago.
Adjusted earnings (loss), which excludes both the results of discontinued operations and certain other items that affect comparability of results between periods, in the second quarter of 2015 showed a loss of $83.1 million ($0.48 per diluted share). This was a decrease of $244.8 million ($1.38 per diluted share) compared to the prior year's quarter primarily attributed to significantly lower realized sales prices in the current quarter compared to a year ago.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for continuing operations totaled $321.9 million in the second quarter 2015, down from $792.3 million in the second quarter of 2014. EBITDA per barrel of oil equivalent (boe) sold was $18.17 in the 2015 quarter compared to $40.20 in the 2014 quarter. Earnings before interest, taxes, depreciation, amortization and exploration expenses (EBITDAX) totaled $386.9 million in the second quarter 2015, down from $927.1 million in the second quarter of 2014. EBITDAX per barrel of oil equivalent (boe) sold was $21.84 in the 2015 quarter compared to $47.04 in the 2014 quarter. Both EBITDA and EBITDAX were greatly impacted by the drop in WTI and Brent oil prices by 44% between the comparative quarterly periods.
Second quarter 2015 highlights were as follows:
Roger W. Jenkins, President and Chief Executive Officer, commented, "We continue to streamline our portfolio with the final sale of the U.K. downstream assets. Our recent gas discovery at Permai in Block H Malaysia will reduce complexity and development costs in our floating LNG project. We achieved first production from the Medusa subsea expansion ahead of schedule, which along with the Kodiak completion milestone, reduced our risk for Gulf of Mexico (GOM) future production levels. We remain focused on organizational efficiency, capital allocation and reducing operating expenses. We addressed general and administrative costs by reducing our workforce by 7%. Murphy remains well-positioned financially to carry out our plans and evaluate opportunities to improve our business going forward."
North America Onshore
In Western Canada, natural gas production from the Montney in the second quarter of 2015 was 192 million cubic feet per day (mmcfd). We continue to see above plan sub-surface performance from our new wells in the Montney.
In our global offshore business we continue to reduce our exploration focus areas to the GOM and Southeast Asia. We have restructured the exploration function to report to our Global Offshore business leader as we concentrate our exploration efforts and better allocate capital across the offshore business while lowering overall exploration costs.
In Malaysia, in the second quarter we completed a five-well drilling program for natural gas at the Belum field in shallow water offshore Sarawak. The Belum field has lower nitrogen content that will blend into our current gas production fields and allow us to de-risk our 250 mmcfd contractual volume on demand. We are currently drilling oil wells at the Permas shallow water development. Sarawak gas production for the second quarter was 111 mmcfd supported by strong gas nominations and liquids production was near 14,700 bopd. We successfully finalized the planned outage in early second quarter at our Sarawak facilities to complete regulator-required inspections and major maintenance. Production offshore Sabah averaged near 30,900 boepd for the second quarter with 85% liquids. At the Gumusut-Kakap main facility, planned maintenance activities to install gas handling and injection systems commenced on June 9 and were recently completed ahead of schedule. Early this month, we had a gas discovery at the Permai exploration well in Block H where we operated the well with a 42% working interest, our eighth consecutive success in the area around the Rotan field floating LNG project.
In the GOM, production for the quarter was over 22,900 boepd with 61% liquids. The Medusa two-well expansion achieved first oil in the second quarter with the wells starting up on April 30 and June 19, respectively. Development work at the non-operated Kodiak project continues, where the first of two wells has been drilled and completed to plan and fabrication of topside facilities is underway. The Sea Eagle prospect in Mississippi Canyon Block 692 failed to encounter commercial quantities of hydrocarbon and will be expensed as a dry hole. The well, which we operated with a 35% working interest, was not included in our second quarter guidance as it was expected to reach total depth in the third quarter. Our drilling operations team completed the well 30 days ahead of schedule and $25 million gross under budget with the sixth generation drillship, Ocean Black Rhino.
Recognizing our lack of exploration success, we plan to focus rig commitments on our lower risk appraisal wells in blocks where we have had prior exploration success. We will allocate capital to higher return opportunities near existing infrastructure, such as Thunder Bird and Dalmatian South, and not invest in the higher risk, higher cost wells at this time.
Production & Guidance
Earnings Conference Call
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management's current views concerning future events or results, are subject to inherent risks and uncertainties. Factors that could cause one or more of these forecasted events not to occur include, but are not limited to, a failure to obtain necessary regulatory approvals, a deterioration in the business or prospects of Murphy, adverse developments in Murphy business' markets, and adverse developments in the U.S. or global capital markets, credit markets or economies in general. Factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements include, but are not limited to, the volatility and level of crude oil and natural gas prices, the level and success rate of our exploration programs, our ability to maintain production rates and replace reserves, customer demand for our products, adverse foreign exchange movements, political and regulatory instability, and uncontrollable natural hazards. For further discussion of risk factors, see Murphy's 2014 Annual Report on Form 10-K on file with the U.S. Securities and Exchange Commission. Murphy undertakes no duty to publicly update or revise any forward-looking statements.
This news release also contains certain historical non-GAAP measures of financial performance that management believes are good tools for internal use and the investment community in evaluating Murphy Oil Corporation's overall financial performance. These non-GAAP measures are broadly used to value and compare companies in the crude oil and natural gas industry. Please see the attached schedules for reconciliations of the differences between non-GAAP measures used in this news release and the most directly comparable GAAP financial measures.
The Securities and Exchange Commission requires oil and 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 be economically and legally producible under existing economic and operating conditions. The SEC permits the optional disclosure of probable and possible reserves; however, we have not disclosed the Company's probable and possible reserves in our filings with the SEC. Investors are urged to consider closely the disclosures and risk factors in our most recent annual report on Form 10-K and in other reports on file with the SEC, available from Murphy Oil Corporation's offices or website at http://ir.murphyoilcorp.com.
For further information contact Kelly Whitley, Vice President, Investor Relations and Communications at 281-675-9107.
2Q 2015 Schedules Accessible at the Link Below.