Murphy Oil Corporation Announces Third Quarter 2017 Financial and Operating Results
Announces Low-Cost Strategic Acreage Position in
Operating and financial highlights for the third quarter 2017 include:
- Achieved decade-low lease operating expense of
$7.58 per boe, surpassing second quarter 2017 record - Disclosed low-cost onshore entry into
Midland Basin , currently testing Lower Spraberry and Wolfcamp B zones - Entered four exploration blocks in the Sergipe-Alagoas Basin Offshore
Brazil - Acquired Gulf of Mexico Clipper Field, producing into the company’s operated Front Runner facility
- Maintained
$1.0 billion of cash on balance sheet while investing approximately$287 million of capital - Issued
$550 million of 5.75 percent senior notes due 2025 and repaid$550 million of notes that were to mature inDecember 2017
THIRD QUARTER 2017 FINANCIAL RESULTS
Murphy recorded a net loss from continuing operations of
Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations totaled
Production in the third quarter 2017 averaged 154 thousand barrels of oil equivalent per day (Mboepd). Production was negatively affected by approximately 5,100 barrels of oil equivalent per day (boepd) by the following temporary factors:
Eagle Ford Shale partial field shut-in and delayed completions in conjunction with mid-stream and refining issues associated with Hurricane Harvey – 2,700 boepd- Canada Offshore (non-operated) extended turnaround time and unplanned downtime – 1,800 boepd
Tupper Montney natural gas downstream curtailments fromTransCanada Pipeline – 600 boepd
“In the third quarter, we continued to successfully execute on our annual plan. We have quickly recovered from the impacts of Hurricane Harvey on our
FINANCIAL POSITION
As of
REGIONAL OPERATIONS SUMMARY
North American Onshore
The North American onshore business produced 86 Mboepd in the third quarter, with 51 percent liquids. Third quarter 2017 operating expenses were
For the fourth quarter of 2017, the company expects to bring 15 wells online, of which 12 are in
In the third quarter, Murphy drilled, cored, and cased two wells in
“I am pleased to add another oil-weighted asset to our North American onshore unconventional portfolio. We are encouraged by the results from our preliminary core analysis, the execution of the initial wells, and the production from offset operators,” stated Jenkins.
Kaybob Duvernay – Production in the quarter averaged over 3,700 boepd, an increase of 32 percent from first quarter 2017, with 65 percent liquids. During the third quarter, three wells were brought online at the 11-18 pad in the oil window with peak rates over 1,000 boepd and 75 percent liquids. The company will continue to optimize completion designs and test well placement, lateral length, frac design, and flow-back strategy.
Currently, Murphy has three drilling rigs and one frac crew executing the company’s appraisal plans in the
Global Offshore
The offshore business produced over 68 Mboepd for the third quarter, with 73 percent liquids. Third quarter 2017 operating expenses were
Gulf of Mexico Exploration – During the third quarter, Murphy was the high bidder in the recent Gulf of Mexico Lease Sale for Block MC 556, which contains the Leibniz prospect. Murphy will operate the block with a 50 percent working interest. The company continues to evaluate high-return tieback offshore opportunities that will enhance the current inventory.
Murphy is progressing through the permitting process for the first exploration well in
In the
Brazil Exploration – During the third quarter, Murphy entered into a farm-in agreement with Queiroz Galvão Exploração e Produção S.A. (QGEP) to acquire a 20 percent working interest in Blocks SEAL-M-351 and SEAL-M-428, located in the deepwater
In addition, Murphy and its co-venturers were the high bidder in Brazil’s Round 14 lease sale for Blocks SEAL-M-501 and SEAL-M-503, which are adjacent to SEAL-M-351 and SEAL-M-428.
Murphy’s total acreage position in
PRODUCTION AND CAPITAL EXPENDITURE GUIDANCE
Production for the fourth quarter 2017 is estimated in the range of 170 to 172 Mboepd. The ramp in fourth quarter production guidance is due to minimal scheduled downtime in offshore operations and additional online wells in North American Onshore. It also accounts for a seven day Gulf of
“I remain pleased with our execution across all our operations, especially in the wake of an active hurricane season, as we look to finish the year with strong fourth quarter production. Our high crude differentials are a benefit of having a diversified portfolio that earns exceptional margins. Since entering the play mid 2016, our Kaybob
CONFERENCE CALL AND WEBCAST SCHEDULED FOR
Murphy will host a conference call to discuss third quarter 2017 financial and operating results on
FINANCIAL DATA
Summary financial data, operating statistics and a summary balance sheet for the third quarter 2017, with comparisons to the same period from the previous year, are contained in the following schedules. Additionally, a schedule indicating the impacts of items affecting comparability of results between periods and schedules comparing EBITDA and EBITDAX between periods are included with these schedules as well as guidance for the fourth quarter.
ABOUT
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified through the inclusion of words such as “aim”, “anticipate”, “believe”, “drive”, “estimate”, “expect”, “expressed confidence”, “forecast”, “future”, “goal”, “guidance”, “intend”, “may”, “objective”, “outlook”, “plan”, “position”, “potential”, “project”, “seek”, “should”, “strategy”, “target”, “will” or variations of such words and other similar expressions. 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 future events or results not to occur as implied by any forward-looking statement include, but are not limited to, increased volatility or deterioration in the level of crude oil and natural gas prices, deterioration in the success rate of our exploration programs or in our ability to maintain production rates and replace reserves, reduced customer demand for our products due to environmental, regulatory, technological or other reasons, adverse foreign exchange movements, political and regulatory instability in the markets where we do business, natural hazards impacting our operations, any other deterioration in our business, markets or prospects, any failure to obtain necessary regulatory approvals, any inability to service or refinance our outstanding debt or to access debt markets at acceptable prices, and adverse developments in the U.S. or global capital markets, credit markets or economies in general. For further discussion of factors that could cause one or more of these future events or results not to occur as implied by any forward-looking statement, see “Risk Factors” in our most recent Annual Report on Form 10-K filed with the
NON-GAAP FINANCIAL MEASURES
This news release contains certain non-GAAP financial measures 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 financial measures are broadly used to value and compare companies in the crude oil and natural gas industry, although not all companies define these measures in the same way. In addition, these non-GAAP financial measures are not a substitute for financial measures prepared in accordance with GAAP, and should therefore be considered only as supplemental to such GAAP financial measures. Please see the attached schedules for reconciliations of the differences between the non-GAAP financial measures used in this news release and the most directly comparable GAAP financial measures.
RESERVE REPORTING TO THE SECURITIES EXCHANGE COMMISSION
The
MURPHY OIL CORPORATION | |||||||||||||
SUMMARIZED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | |||||||||||||
(Thousands of dollars, except per share amounts) | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2017 |
2016* |
2017 |
2016* |
||||||||||
Revenues | |||||||||||||
Sales and other operating revenues | $ | 498,202 | 486,276 | 1,552,473 | 1,326,587 | ||||||||
Gain (loss) on sale of assets | 117 | (730 | ) | 130,765 | 3,101 | ||||||||
Total revenues | 498,319 | 485,546 | 1,683,238 | 1,329,688 | |||||||||
Costs and expenses | |||||||||||||
Lease operating expenses | 112,751 | 119,663 | 346,072 | 435,296 | |||||||||
Severance and ad valorem taxes | 10,816 | 9,592 | 32,771 | 35,668 | |||||||||
Exploration expenses | 28,492 | 19,866 | 77,356 | 83,910 | |||||||||
Selling and general expenses | 56,672 | 55,523 | 168,259 | 196,143 | |||||||||
Depreciation, depletion and amortization | 243,636 | 255,900 | 714,782 | 797,288 | |||||||||
Accretion of asset retirement obligations | 10,654 | 11,043 | 31,638 | 35,514 | |||||||||
Impairment of assets | – | – | – | 95,088 | |||||||||
Other expense (benefit) | 2,454 | 6,486 | 10,988 | (1,446 | ) | ||||||||
Total costs and expenses | 465,475 | 478,073 | 1,381,866 | 1,677,461 | |||||||||
Operating income (loss) from continuing operations | 32,844 | 7,473 | 301,372 | (347,773 | ) | ||||||||
Other income (loss) | |||||||||||||
Interest and other income (loss) | (47,721 | ) | 14,987 | (93,524 | ) | 38,602 | |||||||
Interest expense, net | (48,681 | ) | (39,219 | ) | (138,423 | ) | (103,889 | ) | |||||
Total other loss | (96,402 | ) | (24,232 | ) | (231,947 | ) | (65,287 | ) | |||||
Income (loss) from continuing operations before income taxes | (63,558 | ) | (16,759 | ) | 69,425 | (413,060 | ) | ||||||
Income tax expense (benefit) | 2,760 | (2,176 | ) | 95,602 | (201,897 | ) | |||||||
Loss from continuing operations | (66,318 | ) | (14,583 | ) | (26,177 | ) | (211,163 | ) | |||||
Income (loss) from discontinued operations, net of income taxes |
425 | (1,593 | ) | 1,177 | (885 | ) | |||||||
NET LOSS | $ | (65,893 | ) | (16,176 | ) | (25,000 | ) | (212,048 | ) | ||||
INCOME (LOSS) PER COMMON SHARE – BASIC | |||||||||||||
Continuing operations | $ | (0.38 | ) | (0.08 | ) | (0.15 | ) | (1.23 | ) | ||||
Discontinued operations | - | (0.01 | ) | 0.01 | (0.01 | ) | |||||||
Net loss | $ | (0.38 | ) | (0.09 | ) | (0.14 | ) | (1.24 | ) | ||||
INCOME (LOSS) PER COMMON SHARE – DILUTED | |||||||||||||
Continuing operations | $ | (0.38 | ) | (0.08 | ) | (0.15 | ) | (1.23 | ) | ||||
Discontinued operations | - | (0.01 | ) | 0.01 | (0.01 | ) | |||||||
Net loss | $ | (0.38 | ) | (0.09 | ) | (0.14 | ) | (1.24 | ) | ||||
Cash dividends per Common share | 0.25 | 0.25 | 0.75 | 0.95 | |||||||||
Average Common shares outstanding (thousands) | |||||||||||||
Basic | 172,573 | 172,199 | 172,509 | 172,165 | |||||||||
Diluted | 172,573 | 172,199 | 172,509 | 172,165 | |||||||||
*Reclassified to conform to current presentation. |
MURPHY OIL CORPORATION | ||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||||||||
(Thousands of dollars) | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||
Operating Activities | ||||||||||||||
Net loss | $ | (65,893 | ) | (16,176 | ) | (25,000 | ) | (212,048 | ) | |||||
Adjustments to reconcile net loss to net cash provided by continuing operations activities: |
||||||||||||||
(Income) loss from discontinued operations | (425 | ) | 1,593 | (1,177 | ) | 885 | ||||||||
Depreciation, depletion and amortization | 243,636 | 255,900 | 714,782 | 797,288 | ||||||||||
Impairment of assets | – | – | – | 95,088 | ||||||||||
Amortization of deferred major repair costs | – | – | – | 3,794 | ||||||||||
Dry hole costs (credits) | (3,043 | ) | 956 | (1,139 | ) | 15,226 | ||||||||
Amortization of undeveloped leases | 20,553 | 10,409 | 40,859 | 35,828 | ||||||||||
Accretion of asset retirement obligations | 10,654 | 11,043 | 31,638 | 35,514 | ||||||||||
Deferred income tax benefit | (36,697 | ) | (28,956 | ) | (3,567 | ) | (345,157 | ) | ||||||
Pretax (gains) losses from disposition of assets | (117 | ) | 730 | (130,765 | ) | (3,101 | ) | |||||||
Net (increase) decrease in noncash operating working capital | (41,511 | ) | (65,825 | ) | 1,070 | (152,618 | ) |
1 |
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Other operating activities, net | 100,949 | (2,702 | ) | 192,867 | 9,651 | |||||||||
Net cash provided by continuing operations activities | 228,106 | 166,972 | 819,568 | 280,350 | ||||||||||
Investing Activities | ||||||||||||||
Property additions and dry hole costs | (274,763 | ) | (177,081 | ) | (706,417 | ) | (781,668 | ) |
2 |
|||||
Proceeds from sales of property, plant and equipment | 4,843 | 1,298 | 69,146 | 1,154,623 | ||||||||||
Purchases of investment securities3 | – | – | (212,661 | ) | (651,218 | ) | ||||||||
Proceeds from maturity of investment securities3 | 36,635 | 11,485 | 320,828 | 712,863 | ||||||||||
Other investing activities, net | – | 411 | – | (7,229 | ) | |||||||||
Net cash (required) provided by investing activities | (233,285 | ) | (163,887 | ) | (529,104 | ) | 427,371 | |||||||
Financing Activities | ||||||||||||||
Borrowings of debt, net of issuance costs | 541,772 | 541,444 | 541,772 | 541,444 | ||||||||||
Repayments of debt | (550,000 | ) | – | (550,000 | ) | (600,000 | ) | |||||||
Capital lease obligation payments | (2,704 | ) | (2,636 | ) | (14,687 | ) | (7,808 | ) | ||||||
Withholding tax on stock-based incentive awards | (70 | ) | – | (7,151 | ) | (1,138 | ) | |||||||
Issue cost of debt facility | – | (13,971 | ) | – | (13,971 | ) | ||||||||
Cash dividends paid | (43,143 | ) | (43,051 | ) | (129,421 | ) | (163,586 | ) | ||||||
Other financing activities, net | – | (20 | ) | – | (20 | ) | ||||||||
Net cash (required) provided by financing activities | (54,145 | ) | 481,766 | (159,487 | ) | (245,079 | ) | |||||||
Cash Flows from Discontinued Operations | ||||||||||||||
Operating activities | 3,210 | (2,355 | ) | 12,134 | 2,830 | |||||||||
Changes in cash included in current assets held for sale | (3,980 | ) | 2,355 | (12,904 | ) | (2,830 | ) | |||||||
Net change in cash and cash equivalents of discontinued operations | (770 | ) | – | (770 | ) | – | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (1,186 | ) | 759 | (5,797 | ) | 7,268 | ||||||||
Net increase in cash and cash equivalents | (61,280 | ) | 485,610 | 124,410 | 469,910 | |||||||||
Cash and cash equivalents at beginning of period | 1,058,487 | 267,483 | 872,797 | 283,183 | ||||||||||
Cash and cash equivalents at end of period | $ | 997,207 | 753,093 | 997,207 | 753,093 | |||||||||
12016 nine-months includes payments for deepwater rig contract exit of $266.6 million. |
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2Includes costs of $206.7 million associated with an acquisition of Kaybob Duvernay and Placid Montney. |
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3Investments are Canadian government securities with maturities greater than 90 days at the date of acquisition. |
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MURPHY OIL CORPORATION | |||||||||||||
SCHEDULE OF ADJUSTED LOSS | |||||||||||||
(Unaudited) | |||||||||||||
(Millions of dollars, except per share amounts) | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||
Net loss | $ | (65.9 | ) | (16.2 | ) | (25.0 | ) | (212.0 | ) | ||||
Discontinued operations loss (income) | (0.4 | ) | 1.6 | (1.2 | ) | 0.8 | |||||||
Loss from continuing operations | (66.3 | ) | (14.6 | ) | (26.2 | ) | (211.2 | ) | |||||
Adjustments: | |||||||||||||
Mark-to-market (gain) loss on crude oil derivative contracts | 11.8 | 0.8 | (28.9 | ) | 52.8 | ||||||||
Foreign exchange losses (gains) | 43.9 | (11.5 | ) | 86.6 | (32.9 | ) | |||||||
Deferred tax on undistributed foreign earnings | 4.7 | – | 65.2 | – | |||||||||
Tax benefits on investments in foreign areas | – | (6.4 | ) | (32.9 | ) | (15.8 | ) | ||||||
Gain on sale of assets | – | – | (96.0 | ) | – | ||||||||
Oil Insurance Limited dividends | – | – | (2.8 | ) | (2.2 | ) | |||||||
Syncrude operations, including tax benefits of $68.0 million on sale in 2016 | – | – | – | (47.9 | ) | ||||||||
Income tax benefits associated with Montney midstream divestiture | – | – | – | (20.9 | ) | ||||||||
Impairments of assets | – | – | – | 68.9 | |||||||||
Restructuring charges | – | – | – | 6.2 | |||||||||
Total adjustments after taxes | 60.4 | (17.1 | ) | (8.8 | ) | 8.2 | |||||||
Adjusted loss | $ | (5.9 | ) | (31.7 | ) | (35.0 | ) | (203.0 | ) | ||||
Adjusted loss per diluted share | $ | (0.03 | ) | (0.18 | ) | (0.20 | ) | (1.18 | ) | ||||
Non-GAAP Financial Measures
Presented above is a reconciliation of Net loss to Adjusted loss. Adjusted loss excludes certain items that management believes affect the comparability of results between periods. Management believes this is important information to provide because it is used by management to evaluate the Company's operational performance and trends between periods and relative to its industry competitors. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company's financial results. Adjusted loss is a non-GAAP financial measure and should not be considered a substitute for Net loss as determined in accordance with accounting principles generally accepted in
Note: Amounts shown above as reconciling items between Net loss and Adjusted loss are presented net of applicable income taxes based on the estimated statutory rate in the applicable tax jurisdiction. The 2017 pretax and income tax impacts for adjustments shown above are as follows by area of operations.
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, 2017 | September 30, 2017 | ||||||||||||||||
Pretax | Tax | Net | Pretax | Tax | Net | ||||||||||||
Exploration & Production: | |||||||||||||||||
United States | $ | 18.1 | (6.3 | ) | 11.8 | (44.5 | ) | 15.6 | (28.9 | ) | |||||||
Canada | – | – | – | (132.4 | ) | 36.4 | (96.0 | ) | |||||||||
Other International | – | – | – | – | (32.9 | ) | (32.9 | ) | |||||||||
Total E&P | 18.1 | (6.3 | ) | 11.8 | (176.9 | ) | 19.1 | (157.8 | ) | ||||||||
Corporate: | 50.2 | (1.6 | ) | 48.6 | 94.6 | 54.4 | 149.0 | ||||||||||
Total adjustments | $ | 68.3 | (7.9 | ) | 60.4 | (82.3 | ) | 73.5 | (8.8 | ) | |||||||
MURPHY OIL CORPORATION | |||||||||||||
SCHEDULE OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION | |||||||||||||
AND AMORTIZATION (EBITDA) AND EXPLORATION EXPENSES (EBITDAX) | |||||||||||||
(Unaudited) | |||||||||||||
(Millions of dollars, except per barrel of oil equivalents sold) | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||
Net loss (GAAP) | $ | (65.9 | ) | (16.2 | ) | (25.0 | ) | (212.0 | ) | ||||
Discontinued operations loss (income) | (0.4 | ) | 1.6 | (1.2 | ) | 0.8 | |||||||
Income tax expense (benefit) | 2.8 | (2.2 | ) | 95.6 | (201.9 | ) | |||||||
Interest expense | 49.8 | 40.1 | 141.8 | 107.2 | |||||||||
Interest capitalized | (1.1 | ) | (0.9 | ) | (3.4 | ) | (3.3 | ) | |||||
Depreciation, depletion and amortization expense | 243.6 | 255.9 | 714.8 | 797.3 | |||||||||
Impairments of long-lived assets | – | – | – | 95.1 | |||||||||
EBITDA (Non-GAAP)1 | $ | 228.8 | 278.3 | 922.6 | 583.2 | ||||||||
Exploration expenses | 28.5 | 19.9 | 77.4 | 83.9 | |||||||||
EBITDAX (Non-GAAP)1 | $ | 257.3 | 298.2 | 1,000.0 | 667.1 | ||||||||
Total barrels of oil equivalents sold (thousands of barrels) | 14,879.2 | 15,637.9 | 44,215.1 | 48,382.6 | |||||||||
EBITDA per barrel of oil equivalents sold | $ | 15.38 | 17.80 | 20.87 | 12.05 | ||||||||
EBITDAX per barrel of oil equivalents sold | $ | 17.29 | 19.07 | 22.62 | 13.79 | ||||||||
1Certain pretax items that increase (decrease) EBITDA and EBITDAX above include:
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||
Gain (loss) on foreign exchange2 | $ | (50.3 | ) | 14.0 | (99.1 | ) | 36.4 | ||||||
Mark-to-market gain (loss) on crude oil derivative contracts | (18.1 | ) | (1.3 | ) | 44.5 | (81.2 | ) | ||||||
Gain (loss) on sale of assets3 | 0.1 | (0.7 | ) | 130.8 | 3.1 | ||||||||
Accretion of asset retirement obligations | (10.7 | ) | (11.0 | ) | (31.6 | ) | (35.5 | ) | |||||
$ | (79.0 | ) | 1.0 | 44.6 | (77.2 | ) | |||||||
2Gain (loss) on foreign exchange principally relates to the revaluation of intercompany loans denominated in US dollars and recorded in functional currency Canadian dollar business. |
3Gain (loss) on sale of assets in the nine months ended September 30, 2017 primarily consists of a pretax gain of $132.4 million related to the sale of Seal assets in Canada. |
Non-GAAP Financial Measures
Presented above is a reconciliation of Net loss to Earnings before interest, taxes, depreciation and amortization (EBITDA) and Earnings before interest, taxes, depreciation, amortization, and exploration expenses (EBITDAX). Management believes EBITDA and EBITDAX are important information to provide because they are used by management to evaluate the Company's operational performance and trends between periods and relative to its industry competitors. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company's financial results. EBITDA and EBITDAX are non-GAAP financial measures and should not be considered a substitute for Net loss or Cash provided by operating activities as determined in accordance with accounting principles generally accepted in
Presented above is EBITDA per barrel of oil equivalents sold and EBITDAX per barrel of oil equivalents sold. Management believes EBITDA per barrel of oil equivalents sold and EBITDAX per barrel of oil equivalents sold are important information because they are used by management to evaluate the Company’s profitability of one barrel of oil equivalent sold in that period. EBITDA per barrel of oil equivalents sold and EBITDAX per barrel of oil equivalents sold are non-GAAP financial metrics.
MURPHY OIL CORPORATION | |||||||||||||
FUNCTIONAL RESULTS OF OPERATIONS (Unaudited) | |||||||||||||
(Millions of dollars) | |||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||
September 30, 2017 | September 30, 2016 | ||||||||||||
Revenues | Income (Loss) |
Revenues | Income (Loss) |
||||||||||
Exploration and production | |||||||||||||
United States | $ | 195.9 | (19.9 | ) | 201.8 | (27.1 | ) | ||||||
Canada | 81.9 | (3.2 | ) | 80.9 | (4.8 | ) | |||||||
Malaysia | 220.5 | 67.7 | 202.7 | 65.0 | |||||||||
Other | – | (11.0 | ) | 0.2 | (8.1 | ) | |||||||
Total exploration and production | 498.3 | 33.6 | 485.6 | 25.0 | |||||||||
Corporate | – | (99.9 | ) | * | (0.1 | ) | (39.6 | ) | |||||
Revenue/income from continuing operations | 498.3 | (66.3 | ) | 485.5 | (14.6 | ) | |||||||
Discontinued operations, net of tax | – | 0.4 | – | (1.6 | ) | ||||||||
Total revenues/net loss | $ | 498.3 | (65.9 | ) | 485.5 | (16.2 | ) | ||||||
Nine Months Ended | Nine Months Ended | ||||||||||||
September 30, 2017 | September 30, 2016 | ||||||||||||
Revenues | Income (Loss) |
Revenues | Income (Loss) |
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Exploration and production | |||||||||||||
United States | $ | 696.7 | 11.0 | 520.2 | (158.5 | ) | |||||||
Canada | 388.1 | 102.6 | 264.4 | (36.9 | ) | ||||||||
Malaysia | 594.4 | 173.9 | 541.4 | 135.1 | |||||||||
Other | – | (10.9 | ) | 0.2 | (39.2 | ) | |||||||
Total exploration and production | 1,679.2 | 276.6 | 1,326.2 | (99.5 | ) | ||||||||
Corporate | 4.0 | (302.8 | ) | * | 3.5 | (111.7 | ) | ||||||
Revenue/income from continuing operations | 1,683.2 | (26.2 | ) | 1,329.7 | (211.2 | ) | |||||||
Discontinued operations, net of tax | – | 1.2 | – | (0.8 | ) | ||||||||
Total revenues/net loss | $ | 1,683.2 | (25.0 | ) | 1,329.7 | (212.0 | ) | ||||||
*Corporate segment net loss for the three-month and nine-month periods ended
MURPHY OIL CORPORATION | ||||||||||||||||
OIL AND GAS OPERATING RESULTS (Unaudited) | ||||||||||||||||
THREE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016 | ||||||||||||||||
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United | ||||||||||||||||
(Millions of dollars) | States | Canada | Malaysia | Other | Total | |||||||||||
Three Months Ended September 30, 2017 | ||||||||||||||||
Oil and gas sales and other revenues | $ | 195.9 | 81.9 | 220.5 | – | 498.3 | ||||||||||
Lease operating expenses | 43.5 | 28.7 | 40.6 | – | 112.8 | |||||||||||
Severance and ad valorem taxes | 10.5 | 0.3 | – | – | 10.8 | |||||||||||
Depreciation, depletion and amortization | 128.4 | 45.9 | 63.7 | 1.0 | 239.0 | |||||||||||
Accretion of asset retirement obligations | 4.3 | 2.0 | 4.4 | – | 10.7 | |||||||||||
Exploration expenses | ||||||||||||||||
Dry holes | (0.6 | ) | – | (2.5 | ) | – | (3.1 | ) | ||||||||
Geological and geophysical | 0.1 | – | – | 1.5 | 1.6 | |||||||||||
Other | 1.5 | 0.2 | – | 7.7 | 9.4 | |||||||||||
1.0 | 0.2 | (2.5 | ) | 9.2 | 7.9 | |||||||||||
Undeveloped lease amortization | 20.4 | 0.2 | – | – | 20.6 | |||||||||||
Total exploration expenses | 21.4 | 0.4 | (2.5 | ) | 9.2 | 28.5 | ||||||||||
Selling and general expenses | 16.6 | 6.9 | 4.8 | 5.1 | 33.4 | |||||||||||
Other expenses | 0.8 | 0.5 | 1.2 | – | 2.5 | |||||||||||
Results of operations before taxes | (29.6 | ) | (2.8 | ) | 108.3 | (15.3 | ) | 60.6 | ||||||||
Income tax provisions (benefits) | (9.7 | ) | 0.4 | 40.6 | (4.3 | ) | 27.0 | |||||||||
Results of operations (excluding corporate overhead and interest) |
$ | (19.9 | ) | (3.2 | ) | 67.7 | (11.0 | ) | 33.6 | |||||||
Three Months Ended September 30, 2016 | ||||||||||||||||
Oil and gas sales and other revenues | $ | 201.8 | 80.9 | 202.7 | 0.2 | 485.6 | ||||||||||
Lease operating expenses | 59.6 | 30.7 | 29.4 | – | 119.7 | |||||||||||
Severance and ad valorem taxes | 8.5 | 1.1 | – | – | 9.6 | |||||||||||
Depreciation, depletion and amortization | 141.1 | 46.5 | 62.0 | 1.5 | 251.1 | |||||||||||
Accretion of asset retirement obligations | 4.2 | 2.8 | 4.0 | – | 11.0 | |||||||||||
Exploration expenses | ||||||||||||||||
Dry holes | 0.8 | – | 0.4 | (0.2 | ) | 1.0 | ||||||||||
Geological and geophysical | (0.1 | ) | – | 0.1 | 0.5 | 0.5 | ||||||||||
Other | 2.5 | – | – | 5.5 | 8.0 | |||||||||||
3.2 | – | 0.5 | 5.8 | 9.5 | ||||||||||||
Undeveloped lease amortization | 9.3 | 1.1 | – | – | 10.4 | |||||||||||
Total exploration expenses | 12.5 | 1.1 | 0.5 | 5.8 | 19.9 | |||||||||||
Selling and general expenses | 14.7 | 5.2 | 0.2 | 7.4 | 27.5 | |||||||||||
Other expenses | 1.0 | – | 5.4 | 0.1 | 6.5 | |||||||||||
Results of operations before taxes | (39.8 | ) | (6.5 | ) | 101.2 | (14.6 | ) | 40.3 | ||||||||
Income tax provisions (benefits) | (12.7 | ) | (1.7 | ) | 36.2 | (6.5 | ) | 15.3 | ||||||||
Results of operations (excluding corporate overhead and interest) |
$ | (27.1 | ) | (4.8 | ) | 65.0 | (8.1 | ) | 25.0 | |||||||
MURPHY OIL CORPORATION | |||||||||||||
OIL AND GAS OPERATING RESULTS (Unaudited) | |||||||||||||
NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016 | |||||||||||||
Canada | |||||||||||||
United | Conven- | Syn- | |||||||||||
(Millions of dollars) | States | tional | thetic* | Malaysia | Other | Total | |||||||
Nine Months Ended September 30, 2017 | |||||||||||||
Oil and gas sales and other revenues | $ | 696.7 | 388.1 | – | 594.4 | – | 1,679.2 | ||||||
Lease operating expenses | 135.7 | 76.8 | – | 133.6 | – | 346.1 | |||||||
Severance and ad valorem taxes | 31.6 | 1.2 | – | – | – | 32.8 | |||||||
Depreciation, depletion and amortization | 402.3 | 136.6 | – | 160.0 | 2.9 | 701.8 | |||||||
Accretion of asset retirement obligations | 12.8 | 5.9 | – | 12.9 | – | 31.6 | |||||||
Exploration expenses | |||||||||||||
Dry holes | (1.9) | – | – | 0.8 | – | (1.1) | |||||||
Geological and geophysical | 1.0 | 0.1 | – | – | 6.0 | 7.1 | |||||||
Other | 5.5 | 0.3 | – | – | 24.8 | 30.6 | |||||||
4.6 | 0.4 | – | 0.8 | 30.8 | 36.6 | ||||||||
Undeveloped lease amortization | 39.4 | 1.4 | – | – | – | 40.8 | |||||||
Total exploration expenses | 44.0 | 1.8 | – | 0.8 | 30.8 | 77.4 | |||||||
Selling and general expenses | 48.7 | 21.2 | – | 10.5 | 15.0 | 95.4 | |||||||
Other expenses | 1.5 | 0.4 | – | 9.1 | – | 11.0 | |||||||
Results of operations before taxes | 20.1 | 144.2 | – | 267.5 | (48.7) | 383.1 | |||||||
Income tax provisions (benefits) | 9.1 | 41.6 | – | 93.6 | (37.8) | 106.5 | |||||||
Results of operations (excluding corporate overhead and interest) |
$ | 11.0 | 102.6 | – | 173.9 | (10.9) | 276.6 | ||||||
Nine Months Ended September 30, 2016 | |||||||||||||
Oil and gas sales and other revenues | $ | 520.2 | 200.2 | 64.2 | 541.4 | 0.2 | 1,326.2 | ||||||
Lease operating expenses | 169.6 | 73.3 | 69.9 | 122.5 | – | 435.3 | |||||||
Severance and ad valorem taxes | 30.0 | 3.2 | 2.5 | – | – | 35.7 | |||||||
Depreciation, depletion and amortization | 456.5 | 137.5 | 16.5 | 170.0 | 4.6 | 785.1 | |||||||
Accretion of asset retirement obligations | 12.8 | 8.2 | 2.4 | 12.1 | – | 35.5 | |||||||
Impairment of assets | – | 95.1 | – | – | – | 95.1 | |||||||
Exploration expenses | |||||||||||||
Dry holes | 0.4 | – | – | 4.5 | 10.4 | 15.3 | |||||||
Geological and geophysical | 0.6 | 2.9 | – | 0.6 | 4.8 | 8.9 | |||||||
Other | 4.5 | 0.5 | – | – | 18.9 | 23.9 | |||||||
5.5 | 3.4 | – | 5.1 | 34.1 | 48.1 | ||||||||
Undeveloped lease amortization | 31.9 | 3.4 | – | – | 0.5 | 35.8 | |||||||
Total exploration expenses | 37.4 | 6.8 | – | 5.1 | 34.6 | 83.9 | |||||||
Selling and general expenses | 49.9 | 20.9 | 0.5 | 8.6 | 26.6 | 106.5 | |||||||
Other expenses (benefits) | 1.1 | – | – | 6.3 | (8.8) | (1.4) | |||||||
Results of operations before taxes | (237.1) | (144.8) | (27.6) | 216.8 | (56.8) | (249.5) | |||||||
Income tax provisions (benefits) | (78.6) | (60.2) | (75.3) | 81.7 | (17.6) | (150.0) | |||||||
Results of operations (excluding corporate overhead and interest) |
$ | (158.5) | (84.6) | 47.7 | 135.1 | (39.2) | (99.5) | ||||||
*The Company sold its 5% non-operated interest in
MURPHY OIL CORPORATION | |||||||||
PRODUCTION-RELATED EXPENSES | |||||||||
(Dollars per barrel of oil equivalents sold) | |||||||||
|
|||||||||
Three Months Ended | Nine Months Ended | ||||||||
September 30, | September 30, | ||||||||
2017 | 2016 | 2017 | 2016 | ||||||
United States – Eagle Ford Shale | |||||||||
Lease operating expense | $ | 6.93 | 10.98 | 7.60 | 9.32 | ||||
Severance and ad valorem taxes | 2.56 | 1.99 | 2.54 | 2.19 | |||||
Depreciation, depletion and amortization (DD&A) expense | 25.42 | 25.68 | 25.74 | 25.28 | |||||
United States – Gulf of Mexico | |||||||||
Lease operating expense | $ | 12.48 | 8.84 | 10.61 | 8.90 | ||||
DD&A expense | 20.07 | 21.90 | 21.13 | 23.40 | |||||
Canada – Conventional operations | |||||||||
Lease operating expense | $ | 6.57 | 7.03 | 5.88 | 5.74 | ||||
Severance and ad valorem taxes | 0.07 | 0.24 | 0.09 | 0.25 | |||||
DD&A expense | 10.53 | 10.67 | 10.46 | 10.75 | |||||
Canada – Synthetic oil operations* | |||||||||
Lease operating expense | $ | – | – | – | 41.15 | ||||
Severance and ad valorem taxes | – | – | – | 1.46 | |||||
DD&A expense | – | – | – | 9.72 | |||||
Malaysia – Sarawak |
|
||||||||
Lease operating expense |
$ |
5.28 | 4.54 | 5.49 | 5.64 | ||||
DD&A expense | 8.53 | 8.25 | 8.09 | 9.12 | |||||
Malaysia – Block K | |||||||||
Lease operating expense | $ | 10.50 | 6.13 | 14.07 | 10.48 | ||||
DD&A expense | 16.20 | 14.38 | 14.65 | 13.08 | |||||
Total oil and gas operations | |||||||||
Lease operating expense | $ | 7.58 | 7.65 | 7.83 | 9.00 | ||||
Severance and ad valorem taxes | 0.73 | 0.61 | 0.74 | 0.74 | |||||
DD&A expense | 16.07 | 16.06 | 15.87 | 16.23 | |||||
Total oil and gas operations – excluding synthetic oil operations | |||||||||
Lease operating expense | $ | 7.58 | 7.65 | 7.83 | 7.83 | ||||
Severance and ad valorem taxes | 0.73 | 0.61 | 0.74 | 0.71 | |||||
DD&A expense | 16.07 | 16.06 | 15.87 | 16.46 | |||||
*The Company sold its 5% non-operated interest in
MURPHY OIL CORPORATION | ||||||||||
OTHER FINANCIAL DATA | ||||||||||
(Unaudited) | ||||||||||
(Millions of dollars) | ||||||||||
|
||||||||||
Three Months Ended | Nine Months Ended | |||||||||
September 30, | September 30, | |||||||||
2017 | 2016 | 2017 | 2016 | |||||||
Capital expenditures | ||||||||||
Exploration and production | ||||||||||
United States | $ | 204.7 | 83.1 | 427.5 | 183.8 | |||||
Canada | 68.7 | 44.6 | 204.6 | 318.1 | 1 | |||||
Malaysia | (3.4) | 38.0 | 7.7 | 80.0 | ||||||
Other | 13.6 | 6.0 | 54.9 | 32.7 | ||||||
Total | 283.6 | 171.7 | 694.7 | 614.6 | ||||||
Corporate | 3.1 | – | 6.9 | 20.7 | ||||||
Total capital expenditures | 286.7 | 171.7 | 701.6 | 635.3 | ||||||
Charged to exploration expenses2 | ||||||||||
United States | 1.0 | 3.2 | 4.6 | 5.5 | ||||||
Canada | 0.2 | – | 0.4 | 3.4 | ||||||
Malaysia | (2.5) | 0.5 | 0.8 | 5.1 | ||||||
Other | 9.2 | 5.8 | 30.8 | 34.1 | ||||||
Total charged to exploration expenses | 7.9 | 9.5 | 36.6 | 48.1 | ||||||
Total capitalized | $ | 278.8 | 162.2 | 665.0 | 587.2 | |||||
1Includes costs of $206.7 million in 2016 associated with acquisition of Kaybob Duvernay and liquids rich Montney. |
2Excludes amortization of undeveloped leases of $20.6 million and $10.4 million for the three months ended September 30, 2017 and 2016, respectively, and $40.8 million and $35.8 million for the nine months ended September 30, 2017 and 2016, respectively. |
MURPHY OIL CORPORATION | |||||
CONDENSED BALANCE SHEET (Unaudited) | |||||
(Millions of dollars) | |||||
September 30, | December 31, | ||||
2017 | 2016 | ||||
Assets |
|||||
Cash and cash equivalents | $ | 997.2 | 872.8 | ||
Canadian government securities | – | 111.5 | |||
Other current assets | 450.0 | 574.8 | |||
Property, plant and equipment – net | 8,283.7 | 8,316.2 | |||
Other long-term assets | 461.9 | 420.6 | |||
Total assets | $ | 10,192.8 | 10,295.9 | ||
Liabilities and Stockholders' Equity |
|||||
Current maturities of long-term debt | $ | 9.8 | 569.8 | ||
Other current liabilities | 821.8 | 932.6 | |||
Long-term debt* | 2,908.3 | 2,422.8 | |||
Other long-term liabilities | 1,472.8 | 1,454.0 | |||
Total stockholders' equity | 4,980.1 | 4,916.7 | |||
Total liabilities and stockholders' equity | $ | 10,192.8 | 10,295.9 | ||
*Includes a capital lease on production equipment of
MURPHY OIL CORPORATION | ||||||||
STATISTICAL SUMMARY | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2017 | 2016 | 2017 | 2016 | |||||
Net crude oil and condensate produced – barrels per day | 84,230 | 96,476 | 89,580 | 106,279 | ||||
United States – Eagle Ford Shale | 33,070 | 33,307 | 33,281 | 36,790 | ||||
– Gulf of Mexico | 10,240 | 11,722 | 11,309 | 12,791 | ||||
Canada – onshore | 3,240 | 1,288 | 2,729 | 791 | ||||
– offshore | 6,225 | 9,400 | 8,100 | 8,483 | ||||
– heavy1 | – | 2,678 | 201 | 2,732 | ||||
– synthetic1 | – | – | – | 6,194 | ||||
Malaysia – Sarawak | 11,508 | 12,889 | 12,727 | 13,288 | ||||
– Block K | 19,947 | 25,192 | 21,233 | 25,210 | ||||
Net crude oil and condensate sold – barrels per day | 92,033 | 97,542 | 89,597 | 104,525 | ||||
United States – Eagle Ford Shale | 33,070 | 33,307 | 33,281 | 36,790 | ||||
– Gulf of Mexico | 10,240 | 11,722 | 11,309 | 12,791 | ||||
Canada – onshore | 3,240 | 1,288 | 2,729 | 791 | ||||
– offshore | 6,533 | 9,027 | 7,812 | 8,576 | ||||
– heavy1 | – | 2,678 | 201 | 2,732 | ||||
– synthetic1 | – | – | – | 6,194 | ||||
Malaysia – Sarawak | 13,083 | 12,641 | 13,350 | 12,024 | ||||
– Block K | 25,867 | 26,879 | 20,915 | 24,627 | ||||
Net natural gas liquids produced – barrels per day | 9,128 | 9,703 | 9,140 | 9,275 | ||||
United States – Eagle Ford Shale | 6,669 | 6,940 | 6,812 | 6,972 | ||||
– Gulf of Mexico | 910 | 1,502 | 967 | 1,399 | ||||
Canada | 510 | 307 | 410 | 162 | ||||
Malaysia – Sarawak | 1,039 | 954 | 951 | 742 | ||||
|
||||||||
Net natural gas liquids sold – barrels per day | 9,213 | 8,770 | 9,165 | 9,289 | ||||
United States – Eagle Ford Shale | 6,669 | 6,940 | 6,812 | 6,972 | ||||
– Gulf of Mexico | 910 | 1,502 | 967 | 1,399 | ||||
Canada | 510 | 307 | 410 | 162 | ||||
Malaysia – Sarawak | 1,124 | 21 | 976 | 756 | ||||
|
||||||||
Net natural gas sold – thousands of cubic feet per day | 362,901 | 381,988 | 379,182 | 376,592 | ||||
United States – Eagle Ford Shale | 29,476 | 34,900 | 32,862 | 36,430 | ||||
– Gulf of Mexico | 11,232 | 16,873 | 11,654 | 19,012 | ||||
Canada | 223,032 | 204,816 | 220,121 | 206,458 | ||||
Malaysia – Sarawak | 90,181 | 115,535 | 106,481 | 103,327 | ||||
– Block K | 8,980 | 9,864 | 8,064 | 11,365 | ||||
Total net hydrocarbons produced – equivalent barrels per day2 | 153,842 | 169,844 | 161,917 | 178,319 | ||||
Total net hydrocarbons sold – equivalent barrels per day2 | 161,730 | 169,977 | 161,959 | 176,579 | ||||
1The Company sold the Seal area heavy oil field in January 2017 and its 5% non-operated interest in Syncrude Canada Ltd. in June 2016. |
2Natural gas converted on an energy equivalent basis of 6:1. |
MURPHY OIL CORPORATION | ||||||||||
STATISTICAL SUMMARY (Continued) | ||||||||||
|
||||||||||
Three Months Ended | Nine Months Ended | |||||||||
September 30, | September 30, | |||||||||
2017 | 2016 | 2017 | 2016 | |||||||
Weighted average sales prices | ||||||||||
Crude oil and condensate – dollars per barrel | ||||||||||
United States – Eagle Ford Shale | $ | 48.49 | 44.59 | $ | 48.42 | 40.65 | ||||
– Gulf of Mexico | 47.82 | 43.93 | 47.48 | 40.53 | ||||||
Canada1 – onshore | 43.15 | 36.36 | 43.64 | 41.04 | ||||||
– offshore | 51.26 | 45.87 | 50.35 | 40.15 | ||||||
– heavy2 | – | 19.50 | 25.12 | 14.20 | ||||||
– synthetic2 | – | – | – | 35.59 | ||||||
Malaysia – Sarawak3 | 52.62 | 47.05 | 52.07 | 43.62 | ||||||
– Block K3 | 51.36 | 46.24 | 50.95 | 43.70 | ||||||
Natural gas liquids – dollars per barrel | ||||||||||
United States – Eagle Ford Shale | $ | 17.89 | 10.89 | $ | 16.12 | 10.06 | ||||
– Gulf of Mexico | 19.00 | 13.65 | 17.84 | 11.60 | ||||||
Canada1 | 22.77 | 39.23 | 22.48 | 41.04 | ||||||
Malaysia – Sarawak3 | 49.66 | 45.12 | 49.94 | 37.50 | ||||||
Natural gas – dollars per thousand cubic feet | ||||||||||
United States – Eagle Ford Shale | $ | 2.44 | 2.24 | $ | 2.53 | 1.69 | ||||
– Gulf of Mexico | 2.49 | 2.35 | 2.56 | 1.81 | ||||||
Canada1 | 1.84 | 1.88 | 1.99 | 1.58 | ||||||
Malaysia – Sarawak3 | 3.60 | 3.01 | 3.50 | 3.25 | ||||||
– Block K3 | 0.25 | 0.23 | 0.24 | 0.24 | ||||||
1U.S. dollar equivalent. |
2The Company sold the Seal area heavy oil field in January 2017 and its 5% non-operated interest in Syncrude Canada Ltd. in June 2016. |
3Prices are net of payments under the terms of the respective production sharing contracts. |
MURPHY OIL CORPORATION | |||||||||||||
COMMODITY HEDGE POSITIONS | |||||||||||||
AS OF OCTOBER 31, 2017 | |||||||||||||
Volumes | Price | Remaining Period | |||||||||||
Area | Commodity | Type | (Bbl/d) | (USD/Bbl) | Start Date | End Date | |||||||
United States | WTI | Fixed price derivative swap | 22,000 | $50.41 | 10/1/2017 | 12/31/2017 | |||||||
United States | WTI | Fixed price derivative swap | 7,000 | $51.92 | 1/1/2018 | 12/31/2018 | |||||||
Volumes | Price | Remaining Period | |||||||||||
Area | Commodity | Type | (MMcf/d) | (Mcf) | Start Date | End Date | |||||||
Montney | Natural Gas | Fixed price forward sales | 124 | C$2.97 | 10/1/2017 | 12/31/2017 | |||||||
Montney | Natural Gas | Fixed price forward sales | 59 | C$2.81 | 1/1/2018 | 12/31/2020 | |||||||
Duvernay | Natural Gas | Fixed price forward sales | 20 | US $3.51 | * | 11/1/2017 | 3/31/2018 | ||||||
*Title transfer at Alberta Alliance pipeline. Sale price fixed and transported to Chicago Gate. | |||||||||||||
MURPHY OIL CORPORATION | ||||||
FOURTH QUARTER 2017 GUIDANCE | ||||||
Liquids | Gas | |||||
BOPD | MCFD | |||||
Production – net | ||||||
U.S. – Eagle Ford Shale | 46,750 | 33,500 | ||||
– Gulf of Mexico | 13,500 | 12,500 | ||||
Canada – Tupper Montney | – | 223,000 | ||||
– Kaybob Duvernay and Placid Montney | 4,600 | 19,500 | ||||
– Offshore | 8,250 | – | ||||
Malaysia – Sarawak | 13,000 | 104,000 | ||||
– Block K | 18,000 | 8,900 | ||||
Total net production (BOEPD) | 170,000 - 172,000 | |||||
Total net sales (BOEPD) | 160,000 - 164,000 | |||||
Realized oil prices (dollars per barrel): | ||||||
Malaysia – Sarawak | $55.10 | |||||
– Block K | $53.95 | |||||
Realized natural gas price (dollars per thousand cubic feet): |
||||||
Malaysia – Sarawak | $3.50 | |||||
Exploration expense ($ millions) | $45.0 | |||||
FULL YEAR 2017 GUIDANCE | ||||||
Total production (BOEPD) | 164,000 to 165,000 | |||||
Capital expenditures ($ millions) | $940.0 | |||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20171101006839/en/
Source:
Murphy Oil Corporation
Investor Contacts:
Kelly Whitley, 281-675-9107
kelly_whitley@murphyoilcorp.com
or
Amy Garbowicz, 281-675-9201
amy_garbowicz@murphyoilcorp.com
or
Emily McElroy, 870-864-6324
emily_mcelroy@murphyoilcorp.com