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Murphy Oil Corporation Announces Fourth Quarter and Full Year 2020 Results, Provides 2021 Capital Expenditure and Production Guidance

01/28/2021

Sanctioned Low Cost Tupper Montney Natural Gas Development

HOUSTON--(BUSINESS WIRE)-- Murphy Oil Corporation (NYSE: MUR) today announced its financial and operating results for the fourth quarter ended December 31, 2020, including a net loss attributable to Murphy of $172 million, or $1.11 net loss per diluted share. Adjusted net loss, which excludes discontinued operations and other one-off items, was $14 million, or $0.09 net loss per diluted share.

Unless otherwise noted, the financial and operating highlights and metrics discussed in this commentary exclude noncontrolling interest. 1

Highlights for the fourth quarter include:

  • Sanctioned low cost, capital efficient Tupper Montney development
  • Produced 149 thousand barrels of oil equivalent per day, in line with guidance
  • Generated adjusted EBITDAX of $271 million, or $19.77 per barrel of oil equivalent sold
  • Continued on-time and on-budget execution of major Gulf of Mexico projects

Highlights for full year 2020 include:

  • Preserved liquidity of $1.7 billion, including $311 million of cash at year-end
  • Maintained capital discipline with full year accrued capital expenditures of $712 million, excluding King’s Quay floating production system
  • Decreased full year G&A costs by 40 percent from 2019, establishing a baseline for a continued lower cost structure
  • Established a greenhouse gas emissions intensity reduction goal of 15 to 20 percent by 2030 from 2019 levels, excluding Malaysia
  • Instituted COVID-19 protocols, resulting in an offshore infection rate at half the industry average while maintaining all project timelines
  • Maintained a reserve life index of more than 11 years with 57 percent proved developed reserves

During and subsequent to the fourth quarter:

  • Entered into additional crude oil hedges for 2021 and 2022, bringing the total contracted position to 45 thousand barrels of oil per day and 20 thousand barrels of oil per day, respectively
  • Committed to fixed price forward sales contracts related to the Tupper Montney asset for calendar years 2021 through 2024

“We quickly responded to the major pullback in commodity prices by drastically reducing our capital budget and cost structure while adjusting our operational plans, and continued supporting capital allocation to our major offshore projects. Our efforts resulted in strong liquidity, cash on hand and paying a dividend to our shareholders,” stated Roger W. Jenkins, President and Chief Executive Officer.

FOURTH QUARTER 2020 RESULTS

The company recorded a net loss, attributable to Murphy, of $172 million, or $1.11 net loss per diluted share, for the fourth quarter 2020. Adjusted net loss, which excludes both the results of discontinued operations and certain other items that affect comparability of results between periods, was $14 million, or $0.09 net loss per diluted share for the same period. The adjusted net loss from continuing operations excludes the following primary after-tax items: $137 million mark-to-market loss on crude oil derivative contracts and $12 million mark-to-market loss on contingent consideration. Details for fourth quarter results can be found in the attached schedules.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations attributable to Murphy was $246 million, or $17.96 per barrel of oil equivalent (BOE) sold. Adjusted earnings before interest, tax, depreciation, amortization and exploration expenses (EBITDAX) from continuing operations attributable to Murphy was $271 million, or $19.77 per BOE sold. Details for fourth quarter EBITDA and EBITDAX reconciliations can be found in the attached schedules.

Fourth quarter production averaged 149 thousand barrels of oil equivalent per day (MBOEPD) with 55 percent oil and 62 percent liquids. Production was impacted by two subsea equipment issues in the Gulf of Mexico late in the quarter, totaling approximately 3,700 BOEPD of unplanned downtime. The subsea repairs are ongoing, with a return to full production expected during the first quarter 2021. Our onshore assets were able to offset the impact of the subsea matters due to strong well performance.

Details for fourth quarter production can be found in the attached schedules.

FULL YEAR 2020 RESULTS

The company recorded a net loss, attributable to Murphy, of $1.1 billion, or $7.48 net loss per diluted share, for the full year 2020. The company reported an adjusted loss, which excludes both the results of discontinued operations and certain other items that affect comparability of results between periods, of $193 million, or $1.25 net loss per diluted share. This includes after tax impairments of $854 million. Details for full year 2020 results can be found in the attached schedules.

Production for the full year averaged 164 MBOEPD and consisted of 57 percent oil and 64 percent liquids volumes. Details for 2020 production can be found in the attached tables.

FINANCIAL POSITION

The company had $2.8 billion of outstanding long-term, fixed-rate notes at the end of fourth quarter 2020. The fixed-rate notes had a weighted average maturity of 6.8 years and a weighted average coupon of 5.9 percent. Murphy also had $200 million drawn on the $1.6 billion senior unsecured credit facility at year-end 2020.

As of December 31, 2020, Murphy had approximately $1.7 billion of liquidity, comprised of $1.4 billion available under the $1.6 billion senior unsecured credit facility and approximately $311 million of cash and cash equivalents.

COMMODITY HEDGE POSITIONS MITIGATE CASH FLOW VOLATILITY

The company employs commodity derivative instruments to manage certain risks associated with commodity price volatility and underpin capital returns associated with certain assets. During and subsequent to the fourth quarter, Murphy layered on hedges to protect cash flow with the execution of West Texas Intermediate (WTI) fixed price swaps, as detailed in the table below.

Type

 

Volumes
(MBOPD)

 

Price
(BBL)

 

Start Date

 

End Date

WTI Fixed Price Swaps

 

45

 

$42.77

 

1/1/2021

 

12/31/2021

WTI Fixed Price Swaps

 

20

 

$44.88

 

1/1/2022

 

12/31/2022

As of January 26, 2021

To support the sanctioned Tupper Montney development, the company also entered into fixed price forward sales contracts for physical delivery at the AECO hub in Canada, with the current contracts as follows:

Type

 

Volumes
(MMCFD)

 

Price
(MCF)

 

Start Date

 

End Date

Fixed Price Forward Sales at AECO

 

160

 

C$2.54

 

1/1/2021

 

1/31/2021

Fixed Price Forward Sales at AECO

 

203

 

C$2.55

 

2/1/2021

 

5/31/2021

Fixed Price Forward Sales at AECO

 

212

 

C$2.55

 

6/1/2021

 

12/31/2021

Fixed Price Forward Sales at AECO

 

222

 

C$2.41

 

1/1/2022

 

12/31/2022

Fixed Price Forward Sales at AECO

 

192

 

C$2.36

 

1/1/2023

 

12/31/2023

Fixed Price Forward Sales at AECO

 

147

 

C$2.41

 

1/1/2024

 

12/31/2024

As of January 26, 2021

YEAR-END 2020 PROVED RESERVES

Murphy’s preliminary year-end 2020 proved reserves were 697 million barrels of oil equivalent (MMBOE), consisting of 36 percent oil and 41 percent liquids. Total proved reserves were 13 percent lower than at year-end 2019 in part due to a nearly 30 percent reduction in crude oil prices. Additionally, Murphy’s focus on free cash flow generation, resulting in a lower capital allocation and flatter oil shale production over the five-year plan, has led to approximately 149 MMBOE net of Eagle Ford Shale and Kaybob Duvernay proved undeveloped reserves being reclassified as probable reserves.

These proved reserve reductions were partially offset by improved well performance in the Gulf of Mexico totaling 13 MMBOE net, as well as sanctioning the Tupper Montney development, which added more than 750 billion cubic feet equivalent (BCFE), or 126 MMBOE, of proved reserves with low subsurface risk.

The company maintained a reserve life index in excess of 11 years with 57 percent proved developed reserves.

 

2020 Proved Reserves – Preliminary *

Category

Net Oil
(MMBBL)

Net NGLs
(MMBBL)

Net Gas
(BCF)

Net Equiv.
(MMBOE)

Proved Developed (PD)

167

28

1,208

397

Proved Undeveloped (PUD)

84

9

1,246

301

Total Proved

251

38

2,454

697

* Reserves are based on preliminary year-end 2020 audited proved reserves. Numbers may not add exactly due to rounding.

“We are pleased with the improved well performance in our Gulf of Mexico wells. Further, by sanctioning the low-cost Tupper Montney development, we were able to add more than 750 BCFE of, natural gas reserves with minimal subsurface risk to our proved reserve base,” stated Jenkins. “Outside of the current five-year plan, we do plan to continue developing the Eagle Ford Shale and Kaybob Duvernay, which would lead to the probable reserves being reclassified as proved undeveloped reserves.”

REGIONAL OPERATIONS SUMMARY

North American Onshore

The North American onshore business produced approximately 82 MBOEPD in the fourth quarter.

Eagle Ford Shale – During the quarter, production averaged 31 MBOEPD with 71 percent oil volumes.

Tupper Montney – Natural gas production averaged 234 million cubic feet per day (MMCFPD) for the quarter.

Kaybob Duvernay – Fourth quarter production averaged 10 MBOEPD.

Global Offshore

The offshore business produced 67 MBOEPD for the fourth quarter, comprised of 79 percent oil. This excludes production from discontinued operations and noncontrolling interest. Gulf of Mexico production in the quarter averaged 63 MBOEPD, consisting of 78 percent oil. Canada offshore production averaged 4 MBOEPD, comprised of 100 percent oil.

Gulf of Mexico – The company progressed the Calliope project subsea work during the quarter and remains on schedule for second quarter 2021 production. The Khaleesi, Mormont and Samurai project advanced ahead of the 2021 drilling campaign, with first oil remaining on target for mid-2022. Construction of the King’s Quay floating production system continued and is approximately 90 percent complete, having reached a significant milestone of mating the hull and topsides.

Murphy, along with its operating partner, drilled a producer well and injector well for the St. Malo waterflood during the quarter. The company also worked with a separate operating partner to spud the Lucius #9 and Lucius #3 wells in Keathley Canyon. Completions work was initiated on the non-operated Kodiak #3 well, which is scheduled to come online in first quarter 2021.

EXPLORATION

Gulf of Mexico – The non-operated Highgarden well (Green Canyon 895) reached total depth in the fourth quarter and has been classified as a dry hole. The 20 percent working interest resulted in a final cost of $12.8 million net to Murphy.

Also in the fourth quarter, Murphy successfully bid on eight blocks in the deepwater Gulf of Mexico lease sale with a net cost of $5.3 million for 100 percent working interest. These blocks include five prospects and provide standalone and near-field opportunities with an average gross resource potential of more than 90 MMBOE. Subsequent to quarter end, these blocks were awarded to Murphy by the Bureau of Energy Management.

Murphy has farmed into an attractive play-opening trend with Chevron as operator, and the first well is planned for the Silverback prospect (Mississippi Canyon 35). The acreage is located adjacent to a large position held by Murphy and its partners.

2021 CAPITAL EXPENDITURE AND PRODUCTION GUIDANCE

Murphy is planning 2021 capital expenditures (CAPEX) to be in the range of $675 to $725 million with full year 2021 production to be in the range of 155 to 165 MBOEPD, comprised of approximately 52 percent oil and 59 percent total liquids volumes. Production for first quarter 2021 is estimated to be in the range of 149 to 157 MBOEPD. Both production and CAPEX guidance ranges exclude Gulf of Mexico noncontrolling interest (NCI). Murphy’s 2021 plan reflects management’s continued focus on spending within cash flow, with capital directed toward major projects and short-term free cash flow-generating projects. Such a plan would allow the company to return cash to shareholders through the longstanding dividend, with additional cash utilized in a price recovery to pay down debt.

The table below illustrates the capital allocation by area.

2021 Capital Expenditure Guidance

Area

Percent of Total
CAPEX

Gulf of Mexico

46

US Onshore

24

Canada Onshore

14

Exploration

11

Canada Offshore

1

Other

4

For 2021, Murphy has allocated approximately $325 million, or 46 percent, of capital to the Gulf of Mexico for both development drilling and field development projects. These projects include activities related to the previously sanctioned Khaleesi / Mormont and Samurai developments, and the St. Malo waterflood project. The non-operated Kodiak #3 well (Mississippi Canyon 727), Lucius #9 well (Keathley Canyon 919), Lucius #3 well (Keathley Canyon 918) are scheduled to be complete and placed online in the first half of 2021.

Canada offshore spending comprises 1 percent of the budget, with approximately $5 million earmarked to support Hibernia.

The company forecasts total 2021 offshore production volumes to average 72 MBOEPD, with Gulf of Mexico production of 68 MBOEPD. Canada offshore production is forecast at 4 MBOEPD, noting that non-operated Terra Nova continues to remain offline for repairs.

Murphy plans to spend $170 million in the Eagle Ford Shale, which is 17 percent lower than in 2020. This capital includes $115 million for drilling and bringing online 19 operated wells in the company’s Karnes and Catarina acreage, as well as drilling 2 and bringing online 53 non-operated wells during the year, primarily in Karnes. Murphy’s Eagle Ford Shale budget also includes $55 million for field development.

The company has also allocated $95 million to its Canada onshore business in the Kaybob Duvernay, Tupper Montney and Placid Montney. Approximately $85 million is allocated to the newly sanctioned Tupper Montney development to drill 10 operated wells and bring online 14 operated wells. The remaining amount is primarily allocated to Kaybob Duvernay for field development.

2021 Onshore Wells Online

 

 

1Q 2021

 

2Q 2021

 

3Q 2021

 

4Q 2021

 

2021 Total

Eagle Ford Shale

 

16

 

3

 

-

 

-

 

19

Kaybob Duvernay

 

-

 

-

 

-

 

-

 

-

Tupper Montney

 

4

 

5

 

5

 

-

 

14

Non-Op Eagle Ford Shale

 

-

 

20

 

33

 

-

 

53

Non-Op Placid Montney

 

-

 

-

 

-

 

-

 

-

Note: All well counts are shown gross. Eagle Ford Shale non-operated working interest averages 18 percent.

North American onshore production for 2021 is forecast to remain flat at approximately 87 MBOEPD. Annual average production in the Eagle Ford Shale is expected at approximately 30 MBOEPD, while the Kaybob Duvernay is planned to produce 7 MBOEPD. Non-operated Placid Montney production is projected to remain flat at nearly 2 MBOEPD. Tupper Montney production is forecast to increase to approximately 288 MMCFD (48 MBOEPD).

Approximately $75 million is allocated to the 2021 exploration program in the Gulf of Mexico, offshore Mexico and Brazil, with the majority of spending allocated to drilling. Other capital of approximately $30 million, or 4 percent of budget, primarily consists of capitalized interest.

Detailed guidance for the first quarter and full year 2021 is contained in the following schedule.

“Our major Gulf of Mexico projects continue to move forward, with the drilling campaign for Khaleesi, Mormont and Samurai launching early this year, along with drilling meaningful exploration wells in Brazil and Gulf of Mexico,” stated Jenkins. “Further, I am pleased with sanctioning the low cost, capital efficient Tupper Montney development. Over the past few years, we have seen great improvement in all facets of these operations, including reductions in operating expenses and drilling and completions costs, as well as stronger base production performance. When coupled with the macro improvements of higher Canadian natural gas prices and production debottlenecking in the area, the Tupper Montney now competes with premiere shale assets in North America.”

CONFERENCE CALL AND WEBCAST SCHEDULED FOR JANUARY 28, 2021

Murphy will host a conference call to discuss fourth quarter 2020 financial and operating results on Thursday, January 28, 2021, at 9:00 a.m. ET. The call can be accessed either via the Internet through the Investor Relations section of Murphy Oil’s website at http://ir.murphyoilcorp.com or via the telephone by dialing toll free 1-888-886-7786, reservation number 95330576.

FINANCIAL DATA

Summary financial data and operating statistics for fourth quarter 2020, 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, a reconciliation of EBITDA and EBITDAX between periods, as well as guidance for the first quarter and full year 2021, are also included.

1In accordance with GAAP, Murphy reports the 100 percent interest, including a 20 percent noncontrolling interest (NCI), in its subsidiary, MP Gulf of Mexico, LLC (MP GOM). The GAAP financials include the NCI portion of revenue, costs, assets and liabilities and cash flows. Unless otherwise noted, the financial and operating highlights and metrics discussed in this news release, but not the accompanying schedules, exclude the NCI, thereby representing only the amounts attributable to Murphy.

ABOUT MURPHY OIL CORPORATION

As an independent oil and natural gas exploration and production company, Murphy Oil Corporation believes in providing energy that empowers people by doing right always, staying with it and thinking beyond possible. Murphy challenges the norm, taps into its strong legacy and uses its foresight and financial discipline to deliver inspired energy solutions. The company sees a future where it is an industry leader who is positively impacting lives for the next 100 years and beyond. Additional information can be found on the company’s website at www.murphyoilcorp.com.

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: macro conditions in the oil and gas industry, including supply/demand levels, actions taken by major oil exporters and the resulting impacts on commodity prices; increased volatility or 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; the impact on our operations or market of health pandemics such as COVID-19 and related government responses; other natural hazards impacting our operations or markets; 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; or 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 U.S. Securities and Exchange Commission (“SEC”) and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K that we file, available from the SEC’s website and from Murphy Oil Corporation’s website at http://ir.murphyoilcorp.com. Murphy Oil Corporation undertakes no duty to publicly update or revise any forward-looking statements.

NON-GAAP FINANCIAL MEASURES

This news release contains certain non-GAAP financial measures that management believes are useful 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. 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 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 formation tests to be economically and legally producible under existing economic and operating conditions. We may use certain terms in this news release, such as “resource”, “gross resource”, “recoverable resource”, “net risked PMEAN resource”, “recoverable oil”, “resource base”, “EUR” or “estimated ultimate recovery” and similar terms that the SEC’s rules prohibit us from including in filings with the SEC. 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 filed with the SEC and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K that we file, available from the SEC’s website and from Murphy Oil Corporation’s website at http://ir.murphyoilcorp.com.

MURPHY OIL CORPORATION

SUMMARIZED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

(Thousands of dollars, except per share amounts)

2020

 

2019

 

2020

 

2019

Revenues and other income

 

 

 

 

 

 

 

Revenue from sales to customers

$

440,082

 

 

 

756,984

 

 

 

1,751,709

 

 

 

2,817,111

 

 

(Loss) gain on crude contracts

(116,841

)

 

 

(122,019

)

 

 

202,661

 

 

 

(856

)

 

Gain on sale of assets and other income

6,965

 

 

 

2,515

 

 

 

12,971

 

 

 

12,798

 

 

Total revenues and other income

330,206

 

 

 

637,480

 

 

 

1,967,341

 

 

 

2,829,053

 

 

Costs and expenses

 

 

 

 

 

 

 

Lease operating expenses

121,793

 

 

 

188,720

 

 

 

600,076

 

 

 

605,180

 

 

Severance and ad valorem taxes

5,881

 

 

 

10,987

 

 

 

28,526

 

 

 

47,959

 

 

Transportation, gathering and processing

45,620

 

 

 

47,567

 

 

 

172,399

 

 

 

176,315

 

 

Exploration expenses, including undeveloped lease amortization

24,793

 

 

 

19,535

 

 

 

86,479

 

 

 

95,105

 

 

Selling and general expenses

35,862

 

 

 

56,478

 

 

 

140,243

 

 

 

232,736

 

 

Restructuring expenses

3,615

 

 

 

 

 

 

49,994

 

 

 

 

 

Depreciation, depletion and amortization

218,088

 

 

 

328,572

 

 

 

987,239

 

 

 

1,147,842

 

 

Accretion of asset retirement obligations

10,923

 

 

 

10,682

 

 

 

42,136

 

 

 

40,506

 

 

Impairment of assets

 

 

 

 

 

 

1,206,284

 

 

 

 

 

Other (benefit) expense

19,231

 

 

 

11,675

 

 

 

16,274

 

 

 

38,117

 

 

Total costs and expenses

485,806

 

 

 

674,216

 

 

 

3,329,650

 

 

 

2,383,760

 

 

Operating (loss) income from continuing operations

(155,600

)

 

 

(36,736

)

 

 

(1,362,309

)

 

 

445,293

 

 

Other income (loss)

 

 

 

 

 

 

 

Interest and other income (loss)

(7,196

)

 

 

(4,386

)

 

 

(17,303

)

 

 

(22,520

)

 

Interest expense, net

(44,546

)

 

 

(74,180

)

 

 

(169,423

)

 

 

(219,275

)

 

Total other loss

(51,742

)

 

 

(78,566

)

 

 

(186,726

)

 

 

(241,795

)

 

(Loss) income from continuing operations before income taxes

(207,342

)

 

 

(115,302

)

 

 

(1,549,035

)

 

 

203,498

 

 

Income tax (benefit) expense

(44,851

)

 

 

(24,036

)

 

 

(293,741

)

 

 

14,683

 

 

(Loss) income from continuing operations

(162,491

)

 

 

(91,266

)

 

 

(1,255,294

)

 

 

188,815

 

 

(Loss) income from discontinued operations, net of income taxes

(244

)

 

 

36,855

 

 

 

(7,151

)

 

 

1,064,487

 

 

Net (loss) income including noncontrolling interest

(162,735

)

 

 

(54,411

)

 

 

(1,262,445

)

 

 

1,253,302

 

 

Less: Net (loss) income attributable to noncontrolling interest

9,201

 

 

 

17,313

 

 

 

(113,668

)

 

 

103,570

 

 

NET (LOSS) INCOME ATTRIBUTABLE TO MURPHY

$

(171,936

)

 

 

(71,724

)

 

 

(1,148,777

)

 

 

1,149,732

 

 

 

 

 

 

 

 

 

 

(LOSS) INCOME PER COMMON SHARE – BASIC

 

 

 

 

 

 

 

Continuing operations

$

(1.11

)

 

 

(0.71

)

 

 

(7.43

)

 

 

0.52

 

 

Discontinued operations

 

 

 

0.24

 

 

 

(0.05

)

 

 

6.49

 

 

Net (loss) income

$

(1.11

)

 

 

(0.47

)

 

 

(7.48

)

 

 

7.01

 

 

 

 

 

 

 

 

 

 

(LOSS) INCOME PER COMMON SHARE – DILUTED

 

 

 

 

 

 

 

Continuing operations

$

(1.11

)

 

 

(0.70

)

 

 

(7.43

)

 

 

0.52

 

 

Discontinued operations

 

 

 

0.24

 

 

 

(0.05

)

 

 

6.46

 

 

Net (loss) income

$

(1.11

)

 

 

(0.46

)

 

 

(7.48

)

 

 

6.98

 

 

Cash dividends per Common share

0.125

 

 

 

0.25

 

 

 

0.625

 

 

 

1.00

 

 

Average Common shares outstanding (thousands)

 

 

 

 

 

 

 

Basic

153,599

 

 

 

154,007

 

 

 

153,507

 

 

 

163,992

 

 

Diluted

153,599

 

 

 

154,915

 

 

 

153,507

 

 

 

164,812

 

 

MURPHY OIL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

(Thousands of dollars)

2020

 

2019

 

2020

 

2019

Operating Activities

 

 

 

 

 

 

 

Net (loss) income including noncontrolling interest

$

(162,735

)

 

 

(54,411

)

 

 

(1,262,445

)

 

 

1,253,302

 

 

Adjustments to reconcile net (loss) income to net cash (required) provided by continuing operations activities:

 

 

 

 

 

 

 

Loss (income) from discontinued operations

244

 

 

 

(36,855

)

 

 

7,151

 

 

 

(1,064,487

)

 

Depreciation, depletion and amortization

218,088

 

 

 

328,572

 

 

 

987,239

 

 

 

1,147,842

 

 

Previously suspended exploration costs

12,844

 

 

 

(61

)

 

 

21,099

 

 

 

12,840

 

 

Amortization of undeveloped leases

4,792

 

 

 

6,293

 

 

 

26,743

 

 

 

27,973

 

 

Accretion of asset retirement obligations

10,923

 

 

 

10,682

 

 

 

42,136

 

 

 

40,506

 

 

Impairment of assets

 

 

 

 

 

 

1,206,284

 

 

 

 

 

Deferred income tax (benefit) expense

(46,294

)

 

 

(22,067

)

 

 

(278,042

)

 

 

28,530

 

 

Mark to market (gain) loss on contingent consideration

15,693

 

 

 

8,160

 

 

 

(13,783

)

 

 

8,672

 

 

Mark to market (gain) loss of crude contracts

173,773

 

 

 

133,440

 

 

 

69,310

 

 

 

33,364

 

 

Noncash restructuring expense

 

 

 

 

 

 

17,565

 

 

 

 

 

Long-term non-cash compensation

11,358

 

 

 

16,391

 

 

 

46,558

 

 

 

76,958

 

 

Net decrease (increase) in noncash operating working capital

(5,766

)

 

 

(57,144

)

 

 

(32,027

)

 

 

(16,887

)

 

Other operating activities, net

(8,243

)

 

 

2,878

 

 

 

(35,080

)

 

 

(59,508

)

 

Net cash provided by continuing operations activities

224,677

 

 

 

335,878

 

 

 

802,708

 

 

 

1,489,105

 

 

Investing Activities

 

 

 

 

 

 

 

Property additions and dry hole costs

(111,084

)

 

 

(248,560

)

 

 

(759,809

)

 

 

(1,244,069

)

 

Property additions for King's Quay FPS

(38,025

)

 

 

(86,565

)

 

 

(112,961

)

 

 

(100,202

)

 

Acquisition of oil and gas properties

 

 

 

634

 

 

 

 

 

 

(1,212,315

)

 

Proceeds from sales of property, plant and equipment

13,750

 

 

 

1,310

 

 

 

13,750

 

 

 

20,382

 

 

Net cash required by investing activities

(135,359

)

 

 

(333,181

)

 

 

(859,020

)

 

 

(2,536,204

)

 

Financing Activities

 

 

 

 

 

 

 

Borrowings on revolving credit facility

 

 

 

150,000

 

 

 

450,000

 

 

 

1,725,000

 

 

Repayment of revolving credit facility

 

 

 

(150,000

)

 

 

(250,000

)

 

 

(2,050,000

)

 

Cash dividends paid

(19,199

)

 

 

(38,232

)

 

 

(95,989

)

 

 

(163,669

)

 

Distributions to noncontrolling interest

 

 

 

(30,648

)

 

 

(43,673

)

 

 

(128,158

)

 

Early retirement of debt

 

 

 

(521,332

)

 

 

(12,225

)

 

 

(521,332

)

 

Withholding tax on stock-based incentive awards

 

 

 

 

 

 

(7,094

)

 

 

(6,991

)

 

Debt issuance, net of cost

 

 

 

542,394

 

 

 

(613

)

 

 

542,394

 

 

Capital lease obligation payments

(181

)

 

 

(178

)

 

 

(695

)

 

 

(688

)

 

Loss on early extinguishment of debt

 

 

 

(26,626

)

 

 

 

 

 

(26,626

)

 

Repurchase of common stock

 

 

 

(93,986

)

 

 

 

 

 

(499,924

)

 

Net cash (required) provided by financing activities

(19,380

)

 

 

(168,608

)

 

 

39,711

 

 

 

(1,129,994

)

 

Cash Flows from Discontinued Operations 1

 

 

 

 

 

 

 

Operating activities

 

 

 

(578

)

 

 

(1,202

)

 

 

73,783

 

 

Investing activities

 

 

 

36,832

 

 

 

4,494

 

 

 

2,022,034

 

 

Financing activities

 

 

 

 

 

 

 

 

 

(4,914

)

 

Net cash provided by discontinued operations

 

 

 

36,254

 

 

 

3,292

 

 

 

2,090,903

 

 

Cash from discontinued operations

18,438

 

 

 

36,832

 

 

 

18,438

 

 

 

2,120,397

 

 

Effect of exchange rate changes on cash and cash equivalents

2,594

 

 

 

940

 

 

 

2,009

 

 

 

3,533

 

 

Net increase (decrease) in cash and cash equivalents

90,970

 

 

 

(128,139

)

 

 

3,846

 

 

 

(53,163

)

 

Cash and cash equivalents at beginning of period

219,636

 

 

 

434,899

 

 

 

306,760

 

 

 

359,923

 

 

Cash and cash equivalents at end of period

$

310,606

 

 

 

306,760

 

 

 

310,606

 

 

 

306,760

 

 

 

1 Net cash provided by discontinued operations is not part of the cash flow reconciliation.

MURPHY OIL CORPORATION

SCHEDULE OF ADJUSTED INCOME (LOSS) (unaudited)

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

(Millions of dollars, except per share amounts)

2020

 

2019

 

2020

 

2019

Net (loss) income attributable to Murphy (GAAP)

$

(171.9

)

 

 

(71.7

)

 

 

(1,148.8

)

 

 

1,149.7

 

 

Discontinued operations loss (income)

0.2

 

 

 

(36.9

)

 

 

7.2

 

 

 

(1,064.5

)

 

(Loss) income from continuing operations

(171.7

)

 

 

(108.6

)

 

 

(1,141.6

)

 

 

85.2

 

 

Adjustments (after tax):

 

 

 

 

 

 

 

Impairment of assets

 

 

 

 

 

 

854.2

 

 

 

 

 

Mark-to-market (gain) loss on crude oil derivative contracts

137.3

 

 

 

105.5

 

 

 

54.8

 

 

 

26.4

 

 

Restructuring expenses

2.8

 

 

 

 

 

 

38.3

 

 

 

 

 

Unutilized rig charges

2.3

 

 

 

 

 

 

12.7

 

 

 

 

 

Mark-to-market (gain) loss on contingent consideration

12.4

 

 

 

6.5

 

 

 

(10.9

)

 

 

6.9

 

 

Inventory loss

2.8

 

 

 

 

 

 

6.6

 

 

 

 

 

(Gain) loss on extinguishment of debt

 

 

 

25.4

 

 

 

(4.2

)

 

 

25.4

 

 

Retirement obligation (gains) losses

(2.2

)

 

 

 

 

 

(2.2

)

 

 

 

 

Seal insurance proceeds

 

 

 

 

 

 

(1.3

)

 

 

(6.2

)

 

Foreign exchange (gains) losses

2.8

 

 

 

 

 

 

1.1

 

 

 

5.9

 

 

Business development transaction costs

 

 

 

 

 

 

 

 

 

19.3

 

 

Write-off of previously suspended exploration wells

 

 

 

 

 

 

 

 

 

13.2

 

 

Impact of tax reform

 

 

 

(4.2

)

 

 

 

 

 

(17.2

)

 

Tax benefits on investments in foreign areas

 

 

 

 

 

 

 

 

 

(15.0

)

 

Total adjustments after taxes

158.2

 

 

 

133.2

 

 

 

949.1

 

 

 

58.7

 

 

Adjusted (loss) income from continuing operations attributable to Murphy

$

(13.5

)

 

 

24.6

 

 

 

(192.5

)

 

 

143.9

 

 

 

 

 

 

 

 

 

 

Adjusted (loss) income from continuing operations per average diluted share

$

(0.09

)

 

 

0.16

 

 

 

(1.25

)

 

 

0.87

 

 

Non-GAAP Financial Measures

Presented above is a reconciliation of Net (loss) income to Adjusted (loss) income from continuing operations attributable to Murphy. Adjusted (loss) income 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) income is a non-GAAP financial measure and should not be considered a substitute for Net (loss) income as determined in accordance with accounting principles generally accepted in the United States of America.

Amounts shown above as reconciling items between Net (loss) income and Adjusted (loss) income are presented net of applicable income taxes based on the estimated statutory rate in the applicable tax jurisdiction. The pretax and income tax impacts for adjustments shown above are as follows by area of operations and exclude the share attributable to non-controlling interests.

 

Three Months Ended
December 31, 2020

 

Year Ended
December 31, 2020

(Millions of dollars)

Pretax

 

Tax

 

Net

 

Pretax

 

Tax

 

Net

Exploration & Production:

 

 

 

 

 

 

 

 

 

 

 

United States

$

19.2

 

 

(4.0

)

 

 

15.2

 

 

1,040.5

 

 

(219.8

)

 

 

820.7

 

Canada

(1.7

)

0.4

(1.3

)

Other International

 

 

 

 

 

 

 

39.7

 

 

 

 

 

39.7

 

Total E&P

19.2

 

 

(4.0

)

 

 

15.2

 

 

1,078.5

 

 

(219.4

)

 

 

859.1

 

Corporate:

180.6

 

 

(37.6

)

 

 

143.0

 

 

114.7

 

 

(24.7

)

 

 

90.0

 

Total adjustments

$

199.8

 

 

(41.6

)

 

 

158.2

 

 

1,193.2

 

 

(244.1

)

 

 

949.1

 

MURPHY OIL CORPORATION

SCHEDULE OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION

AND AMORTIZATION (EBITDA)

(unaudited)

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

(Millions of dollars, except per barrel of oil equivalents sold)

2020

 

2019

 

2020

 

2019

Net (loss) income attributable to Murphy (GAAP)

$

(171.9

)

 

 

(71.7

)

 

 

(1,148.8

)

 

 

1,149.7

 

 

Income tax (benefit) expense

(44.9

)

 

 

(24.0

)

 

 

(293.7

)

 

 

14.7

 

 

Interest expense, net

44.5

 

 

 

74.2

 

 

 

169.4

 

 

 

219.3

 

 

Depreciation, depletion and amortization expense ¹

207.6

 

 

 

310.1

 

 

 

932.6

 

 

 

1,076.5

 

 

EBITDA attributable to Murphy (Non-GAAP)

$

35.3

 

 

 

288.6

 

 

 

(340.5

)

 

 

2,460.2

 

 

Impairment of assets ¹

 

 

 

 

 

 

1,072.5

 

 

 

 

 

Mark-to-market (gain) loss on crude oil derivative contracts

173.8

 

 

 

133.5

 

 

 

69.3

 

 

 

33.4

 

 

Restructuring expenses

3.6

 

 

 

 

 

 

50.0

 

 

 

 

 

Accretion of asset retirement obligations

10.9

 

 

 

10.7

 

 

 

42.1

 

 

 

40.5

 

 

Unutilized rig charges

2.8

 

 

 

 

 

 

16.0

 

 

 

 

 

Mark-to-market (gain) loss on contingent consideration

15.7

 

 

 

8.2

 

 

 

(13.8

)

 

 

8.7

 

 

Inventory loss

3.5

 

 

 

 

 

 

8.3

 

 

 

 

 

Discontinued operations loss (income)

0.2

 

 

 

(36.9

)

 

 

7.2

 

 

 

(1,064.5

)

 

Retirement obligation (gains) losses ¹

(2.8

)

 

 

 

 

 

(2.8

)

 

 

Seal insurance proceeds

 

 

 

 

 

 

(1.7

)

 

 

(8.0

)

 

Foreign exchange (gains) losses

3.2

 

 

 

 

 

 

0.7

 

 

 

6.4

 

 

Business development transaction costs

 

 

 

 

 

 

 

 

 

24.4

 

 

Write-off of previously suspended exploration wells

 

 

 

 

 

 

 

 

 

13.2

 

 

Adjusted EBITDA attributable to Murphy (Non-GAAP)

$

246.2

 

 

 

404.1

 

 

 

907.3

 

 

 

1,514.3

 

 

 

 

 

 

 

 

 

 

Total barrels of oil equivalents sold from continuing operations attributable to Murphy (thousands of barrels)

13,711

 

 

 

17,617

 

 

 

60,189

 

 

 

63,128

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA per barrel of oil equivalents sold

$

17.96

 

 

 

22.94

 

 

 

15.07

 

 

 

23.99

 

 

Non-GAAP Financial Measures

Presented above is a reconciliation of Net (loss) income to Earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA. Management believes EBITDA and adjusted EBITDA 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 adjusted EBITDA are non-GAAP financial measures and should not be considered a substitute for Net (loss) income or Cash provided by operating activities as determined in accordance with accounting principles generally accepted in the United States of America.

Presented above is adjusted EBITDA per barrel of oil equivalent sold. Management believes adjusted EBITDA per barrel of oil equivalent sold is important information because it is used by management to evaluate the Company’s profitability of one barrel of oil equivalent sold in that period. Adjusted EBITDA per barrel of oil equivalent sold is a non-GAAP financial metric.

1 Depreciation, depletion, and amortization expense used in the computation of EBITDA excludes the portion attributable to the non-controlling interest. Impairment of assets and retirement obligation gains used in the computation of Adjusted EBITDA exclude the portion attributable to the non-controlling interest.

MURPHY OIL CORPORATION

SCHEDULE OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION

AND AMORTIZATION AND EXPLORATION (EBITDAX)

(unaudited)

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

(Millions of dollars, except per barrel of oil equivalents sold)

2020

 

2019

 

2020

 

2019

Net (loss) income attributable to Murphy (GAAP)

$

(171.9

)

 

 

(71.7

)

 

 

(1,148.8

)

 

 

1,149.7

 

 

Income tax (benefit) expense

(44.9

)

 

 

(24.0

)

 

 

(293.7

)

 

 

14.7

 

 

Interest expense, net

44.5

 

 

 

74.2

 

 

 

169.4

 

 

 

219.3

 

 

Depreciation, depletion and amortization expense ¹

207.6

 

 

 

310.1

 

 

 

932.6

 

 

 

1,076.5

 

 

EBITDA attributable to Murphy (Non-GAAP)

35.3

 

 

 

288.6

 

 

 

(340.5

)

 

 

2,460.2

 

 

Exploration expenses

24.8

 

 

 

19.5

 

 

 

86.5

 

 

 

95.1

 

 

EBITDAX attributable to Murphy (Non-GAAP)

60.1

 

 

 

308.1

 

 

 

(254.0

)

 

 

2,555.3

 

 

Impairment of assets ¹

 

 

 

 

 

 

1,072.5

 

 

 

 

 

Mark-to-market (gain) loss on crude oil derivative contracts

173.8

 

 

 

133.5

 

 

 

69.3

 

 

 

33.4

 

 

Restructuring expenses

3.6

 

 

 

 

 

 

50.0

 

 

 

 

 

Accretion of asset retirement obligations

10.9

 

 

 

10.7

 

 

 

42.1

 

 

 

40.5

 

 

Unutilized rig charges

2.8

 

 

 

 

 

 

16.0

 

 

 

 

 

Mark-to-market (gain) loss on contingent consideration

15.7

 

 

 

8.2

 

 

 

(13.8

)

 

 

8.7

 

 

Inventory loss

3.5

 

 

 

 

 

 

8.3

 

 

 

 

 

Discontinued operations loss (income)

0.2

 

 

 

(36.9

)

 

 

7.2

 

 

 

(1,064.5

)

 

Retirement obligation (gains) losses ¹

(2.8

)

 

 

 

 

 

(2.8

)

 

 

 

 

Seal insurance proceeds

 

 

 

 

 

 

(1.7

)

 

 

(8.0

)

 

Foreign exchange (gains) losses

3.2

 

 

 

 

 

 

0.7

 

 

 

6.4

 

 

Business development transaction costs

 

 

 

 

 

 

 

 

 

24.4

 

 

Adjusted EBITDAX attributable to Murphy (Non-GAAP)

$

271.0

 

 

 

423.6

 

 

 

993.8

 

 

 

1,596.2

 

 

 

 

 

 

 

 

 

 

Total barrels of oil equivalents sold from continuing operations attributable to Murphy (thousands of barrels)

13,711

 

 

 

17,617

 

 

 

60,189

 

 

 

63,128

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDAX per barrel of oil equivalents sold

$

19.77

 

 

 

24.04

 

 

 

16.51

 

 

 

25.29

 

 

Non-GAAP Financial Measures

Presented above is a reconciliation of Net (loss) income to Earnings before interest, taxes, depreciation and amortization, and exploration expenses (EBITDAX) and adjusted EBITDAX. Management believes EBITDAX and adjusted 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. EBITDAX and adjusted EBITDAX are non-GAAP financial measures and should not be considered a substitute for Net (loss) income or Cash provided by operating activities as determined in accordance with accounting principles generally accepted in the United States of America.

Presented above is adjusted EBITDAX per barrel of oil equivalent sold. Management believes adjusted EBITDAX per barrel of oil equivalent sold is important information because it is used by management to evaluate the Company’s profitability of one barrel of oil equivalent sold in that period. Adjusted EBITDAX per barrel of oil equivalent sold is a non-GAAP financial metric.

1 Depreciation, depletion, and amortization expense used in the computation of EBITDAX excludes the portion attributable to the non-controlling interest. Impairment of assets and retirement obligation gains used in the computation of Adjusted EBITDAX exclude the portion attributable to the non-controlling interest.

MURPHY OIL CORPORATION

FUNCTIONAL RESULTS OF OPERATIONS (unaudited)

 

 

Three Months Ended
December 31, 2020

Three Months Ended
December 31, 2019

(Millions of dollars)

Revenues

Income
(Loss)

Revenues

Income
(Loss)

Exploration and production

 

 

 

 

United States 1,2

$

341.2

 

 

(2.6

)

 

632.7

 

 

98.4

 

 

Canada

100.6

 

 

 

 

123.2

 

 

3.2

 

 

Other

 

 

(12.6

)

 

3.7

 

 

(18.1

)

 

Total exploration and production

441.8

 

 

(15.2

)

 

759.6

 

 

83.5

 

 

Corporate

(111.6

)

 

(147.3

)

 

(122.1

)

 

(174.8

)

 

Revenue/income from continuing operations

330.2

 

 

(162.5

)

 

637.5

 

 

(91.3

)

 

Discontinued operations, net of tax 3

 

 

(0.2

)

 

 

 

36.9

 

 

Total revenues/net income (loss) including noncontrolling interest

$

330.2

 

 

(162.7

)

 

637.5

 

 

(54.4

)

 

Net (loss) income attributable to Murphy

 

(171.9

)

 

 

(71.7

)

 

 

Year Ended
December 31, 2020

Year Ended
December 31, 2019

(Millions of dollars)

Revenues

Income
(Loss)

Revenues

Income
(Loss)

Exploration and production

 

 

 

 

United States 1,2

$

1,411.8

 

(1,014.3

)

 

2,367.0

 

518.4

 

 

Canada

345.8

 

(35.0

)

 

447.0

 

(4.3

)

 

Other 2

1.8

 

(85.6

)

 

11.6

 

(53.5

)

 

Total exploration and production

1,759.4

 

(1,134.9

)

 

2,825.6

 

460.6

 

 

Corporate

207.9

 

(120.3

)

 

3.5

 

(271.8

)

 

Revenue/income from continuing operations

1,967.3

 

(1,255.2

)

 

2,829.1

 

188.8

 

 

Discontinued operations, net of tax 3

 

(7.2

)

 

 

1,064.5

 

 

Total revenues/net income (loss) including noncontrolling interest

$

1,967.3

 

(1,262.4

)

 

2,829.1

 

1,253.3

 

 

Net (loss) income attributable to Murphy

 

(1,148.8

)

 

 

1,149.7

 

 

1 Includes results attributable to a noncontrolling interest in MP Gulf of Mexico, LLC (MP GOM).

2 Includes impairment charges of $1,152.5 million and $39.7 million for the United States and Other for the year ended December 31, 2020.

3 Malaysia is reported as discontinued operations in current and comparative periods effective January 1, 2019.

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (unaudited)

THREE MONTHS ENDED DECEMBER 31, 2020, AND 2019

 

(Millions of dollars)

United

States 1

Canada

Other

Total

Three Months Ended December 31, 2020

 

 

 

 

Oil and gas sales and other operating revenues

$

341.2

 

 

100.6

 

 

 

 

441.8

 

 

Lease operating expenses

90.4

 

 

31.0

 

 

0.4

 

 

121.8

 

 

Severance and ad valorem taxes

5.6

 

 

0.3

 

 

 

 

5.9

 

 

Transportation, gathering and processing

32.3

 

 

13.3

 

 

 

 

45.6

 

 

Restructuring expenses

1.2

 

 

 

 

 

 

1.2

 

 

Depreciation, depletion and amortization

159.9

 

 

51.9

 

 

0.8

 

 

212.6

 

 

Accretion of asset retirement obligations

9.5

 

 

1.5

 

 

 

 

11.0

 

 

Exploration expenses

 

 

 

 

Dry holes and previously suspended exploration costs

12.8

 

 

 

 

 

 

12.8

 

 

Geological and geophysical

 

 

 

 

1.9

 

 

1.9

 

 

Other exploration

0.7

 

 

0.1

 

 

4.5

 

 

5.3

 

 

 

13.5

 

 

0.1

 

 

6.4

 

 

20.0

 

 

Undeveloped lease amortization

2.4

 

 

0.1

 

 

2.3

 

 

4.8

 

 

Total exploration expenses

15.9

 

 

0.2

 

 

8.7

 

 

24.8

 

 

Selling and general expenses

8.0

 

 

3.9

 

 

1.6

 

 

13.5

 

 

Other

20.5

 

 

0.2

 

 

0.4

 

 

21.1

 

 

Results of operations before taxes

(2.1

)

 

(1.7

)

 

(11.9

)

 

(15.7

)

 

Income tax provisions (benefits)

0.5

 

 

(1.7

)

 

0.7

 

 

(0.5

)

 

Results of operations (excluding Corporate segment)

$

(2.6

)

 

 

 

(12.6

)

 

(15.2

)

 

 

 

 

 

 

Three Months Ended December 31, 2019

 

 

 

 

Oil and gas sales and other operating revenues

$

632.7

 

 

123.2

 

 

3.7

 

 

759.6

 

 

Lease operating expenses

153.2

 

 

35.3

 

 

0.2

 

 

188.7

 

 

Severance and ad valorem taxes

10.6

 

 

0.4

 

 

 

 

11.0

 

 

Transportation, gathering and processing

37.4

 

 

10.2

 

 

 

 

47.6

 

 

Depreciation, depletion and amortization

260.1

 

 

61.4

 

 

0.6

 

 

322.1

 

 

Accretion of asset retirement obligations

9.2

 

 

1.5

 

 

 

 

10.7

 

 

Exploration expenses

 

 

 

 

Geological and geophysical

(2.3

)

 

0.1

 

 

6.8

 

 

4.6

 

 

Other exploration

2.3

 

 

0.2

 

 

6.4

 

 

8.9

 

 

 

 

 

0.3

 

 

13.2

 

 

13.5

 

 

Undeveloped lease amortization

5.1

 

 

0.3

 

 

0.9

 

 

6.3

 

 

Total exploration expenses

5.1

 

 

0.6

 

 

14.1

 

 

19.8

 

 

Selling and general expenses

21.4

 

 

8.7

 

 

5.2

 

 

35.3

 

 

Other

14.7

 

 

0.8

 

 

0.4

 

 

15.9

 

 

Results of operations before taxes

121.0

 

 

4.3

 

 

(16.8

)

 

108.5

 

 

Income tax provisions (benefits)

22.6

 

 

1.1

 

 

1.3

 

 

25.0

 

 

Results of operations (excluding Corporate segment)

$

98.4

 

 

3.2

 

 

(18.1

)

 

83.5

 

 

1 Includes results attributable to a noncontrolling interest in MP GOM.

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (unaudited)

YEAR ENDED DECEMBER 31, 2020, AND 2019

 

(Millions of dollars)

United

States 1

Canada

Other

Total

Year Ended December 31, 2020

 

 

 

 

Oil and gas sales and other operating revenues

$

1,411.8

 

 

345.8

 

 

1.8

 

 

1,759.4

 

 

Lease operating expenses

476.9

 

 

121.6

 

 

1.6

 

 

600.1

 

 

Severance and ad valorem taxes

27.2

 

 

1.3

 

 

 

 

28.5

 

 

Transportation, gathering and processing

127.7

 

 

44.7

 

 

 

 

172.4

 

 

Restructuring expenses

1.2

 

 

 

 

 

 

1.2

 

 

Depreciation, depletion and amortization

749.4

 

 

213.2

 

 

2.3

 

 

964.9

 

 

Accretion of asset retirement obligations

36.6

 

 

5.6

 

 

 

 

42.2

 

 

Impairment of assets

1,152.5

 

 

 

 

39.7

 

 

1,192.2

 

 

Exploration expenses

 

 

 

 

Dry holes and previously suspended exploration costs

21.1

 

 

 

 

 

 

21.1

 

 

Geological and geophysical

9.4

 

 

0.1

 

 

6.0

 

 

15.5

 

 

Other exploration

5.0

 

 

0.5

 

 

17.6

 

 

23.1

 

 

 

35.5

 

 

0.6

 

 

23.6

 

 

59.7

 

 

Undeveloped lease amortization

17.2

 

 

0.4

 

 

9.2

 

 

26.8

 

 

Total exploration expenses

52.7

 

 

1.0

 

 

32.8

 

 

86.5

 

 

Selling and general expenses

24.6

 

 

17.1

 

 

7.1

 

 

48.8

 

 

Other

21.5

 

 

(2.3

)

 

1.8

 

 

21.0

 

 

Results of operations before taxes

(1,258.5

)

 

(56.4

)

 

(83.5

)

 

(1,398.4

)

 

Income tax provisions (benefits)

(244.2

)

 

(21.4

)

 

2.1

 

 

(263.5

)

 

Results of operations (excluding Corporate segment)

$

(1,014.3

)

 

(35.0

)

 

(85.6

)

 

(1,134.9

)

 

 

 

 

 

 

Year Ended December 31, 2019

 

 

 

 

Oil and gas sales and other operating revenues

$

2,367.0

 

 

447.0

 

 

11.6

 

 

2,825.6

 

 

Lease operating expenses

461.5

 

 

142.4

 

 

1.3

 

 

605.2

 

 

Severance and ad valorem taxes

46.6

 

 

1.4

 

 

 

 

48.0

 

 

Transportation, gathering and processing

140.8

 

 

35.5

 

 

 

 

176.3

 

 

Depreciation, depletion and amortization

878.7

 

 

243.0

 

 

3.5

 

 

1,125.2

 

 

Accretion of asset retirement obligations

34.4

 

 

6.1

 

 

 

 

40.5

 

 

Exploration expenses

 

 

 

 

Dry holes and previously suspended exploration costs

(0.2

)

 

 

 

13.1

 

 

12.9

 

 

Geological and geophysical

13.8

 

 

0.1

 

 

14.9

 

 

28.8

 

 

Other exploration

7.8

 

 

0.5

 

 

17.3

 

 

25.6

 

 

 

21.4

 

 

0.6

 

 

45.3

 

 

67.3

 

 

Undeveloped lease amortization

23.1

 

 

1.3

 

 

3.6

 

 

28.0

 

 

Total exploration expenses

44.5

 

 

1.9

 

 

48.9

 

 

95.3

 

 

Selling and general expenses

74.3

 

 

30.0

 

 

22.5

 

 

126.8

 

 

Other

52.2

 

 

(6.1

)

 

1.3

 

 

47.4

 

 

Results of operations before taxes

634.0

 

 

(7.2

)

 

(65.9

)

 

560.9

 

 

Income tax provisions (benefits)

115.6

 

 

(2.9

)

 

(12.4

)

 

100.3

 

 

Results of operations (excluding Corporate segment)

$

518.4

 

 

(4.3

)

 

(53.5

)

 

460.6

 

 

1 Includes results attributable to a noncontrolling interest in MP GOM.

MURPHY OIL CORPORATION

PRODUCTION-RELATED EXPENSES

(unaudited)

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

(Dollars per barrel of oil equivalents sold)

2020

 

2019

 

2020

 

2019

Continuing operations

 

 

 

 

 

 

 

United States – Eagle Ford Shale

 

 

 

 

 

 

 

Lease operating expense

$

9.49

 

 

8.11

 

 

9.08

 

 

8.70

 

Severance and ad valorem taxes

1.97

 

 

2.32

 

 

2.06

 

 

2.82

 

Depreciation, depletion and amortization (DD&A) expense

28.07

 

 

24.83

 

 

26.22

 

 

24.19

 

 

 

 

 

 

 

 

 

United States – Gulf of Mexico

 

 

 

 

 

 

 

Lease operating expense 1

$

9.65

 

 

13.84

 

 

11.95

 

 

10.89

 

DD&A expense

12.27

 

 

17.47

 

 

13.48

 

 

16.43

 

 

 

 

 

 

 

 

 

Canada – Onshore

 

 

 

 

 

 

 

Lease operating expense

$

4.83

 

 

5.73

 

 

4.63

 

 

5.49

 

Severance and ad valorem taxes

0.07

 

 

0.07

 

 

0.07

 

 

0.07

 

DD&A expense

9.91

 

 

10.59

 

 

9.93

 

 

10.94

 

 

 

 

 

 

 

 

 

Canada – Offshore

 

 

 

 

 

 

 

Lease operating expense 2

$

22.44

 

 

9.76

 

 

17.86

 

 

14.95

 

DD&A expense

14.12

 

 

12.30

 

 

12.01

 

 

13.07

 

 

 

 

 

 

 

 

 

Total oil and gas continuing operations

 

 

 

 

 

 

 

Lease operating expense 3

$

8.39

 

 

10.09

 

 

9.34

 

 

8.95

 

Severance and ad valorem taxes

0.41

 

 

0.59

 

 

0.44

 

 

0.71

 

DD&A expense

15.03

 

 

17.56

 

 

15.36

 

 

16.98

 

 

 

 

 

 

 

 

 

Total oil and gas continuing operations – excluding noncontrolling interest

 

 

 

 

 

 

 

Lease operating expense

$

8.21

 

 

9.76

 

 

9.10

 

 

8.81

 

Severance and ad valorem taxes

0.43

 

 

0.62

 

 

0.47

 

 

0.76

 

DD&A expense

15.14

 

 

17.60

 

 

15.49

 

 

17.05

 

1 For the year ended December 31, 2020, lease operating expense (LOE) per barrel of oil equivalents (BOE) sold for the U.S. Gulf of Mexico excluding cost associated with well workovers was $9.52. Workovers for the year ended December 31, 2020 included Dalmatian and Cascade. There were no significant Gulf of Mexico workovers in the fourth quarter 2020.

2 For the quarter and year ended December 31, 2020, Canada Offshore LOE per BOE excluding the costs associated with the Terra Nova life extension project was $6.38 and $5.24.

3 For the year ended December 31, 2020, total LOE per BOE excluding cost associated with Gulf of Mexico well workovers was $7.91. There were no significant Gulf of Mexico workovers in the fourth quarter 2020.

MURPHY OIL CORPORATION

OTHER FINANCIAL DATA

(unaudited)

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

(Millions of dollars)

2020

 

2019

 

2020

 

2019

Capital expenditures for continuing operations

 

 

 

 

 

 

 

Exploration and production

 

 

 

 

 

 

 

United States

$

129.1

 

 

248.2

 

 

650.8

 

 

2,290.5

 

Canada

5.3

 

 

88.7

 

 

121.9

 

 

290.3

 

Other

7.9

 

 

25.7

 

 

40.6

 

 

102.4

 

Total

142.3

 

 

362.6

 

 

813.3

 

 

2,683.2

 

 

 

 

 

 

 

 

 

Corporate

4.0

 

 

6.5

 

 

13.3

 

 

15.0

 

Total capital expenditures - continuing operations 1

146.3

 

 

369.1

 

 

826.6

 

 

2,698.2

 

 

 

 

 

 

 

 

 

Charged to exploration expenses 2

 

 

 

 

 

 

 

United States

13.5

 

 

 

 

35.5

 

 

21.4

 

Canada

0.1

 

 

0.3

 

 

0.6

 

 

0.6

 

Other

6.4

 

 

13.2

 

 

23.6

 

 

45.3

 

Total charged to exploration expenses - continuing operations

20.0

 

 

13.5

 

 

59.7

 

 

67.3

 

 

 

 

 

 

 

 

 

Total capitalized

$

126.3

 

 

355.6

 

 

766.9

 

 

2,630.9

 

1 For the three months and year ended December 31, 2020, includes noncontrolling interest (NCI) capital expenditures of $3.9 million and $21.7 million, respectively. Also, for the three months and year ended December 31, 2020, includes capital expenditures associated with the King’s Quay project of $12.0 million and $92.8 million, respectively. King’s Quay is classified as held for sale in the December 31, 2020 unaudited balance sheet.

2 Excludes amortization of undeveloped leases of $4.8 million and $6.3 million for each of the three months ended December 31, 2020 and 2019. Excludes amortization of undeveloped leases of $26.8 million and $28.0 million for the years ended December 31, 2020 and 2019, respectively.

MURPHY OIL CORPORATION

CONDENSED BALANCE SHEETS (unaudited)

 

(Millions of dollars)

December 31, 2020

 

December 31, 2019

Assets

 

 

 

Cash and cash equivalents

$

310.6

 

 

306.8

 

Assets held for sale

327.7

 

 

123.9

 

Other current assets

362.0

 

 

543.7

 

Property, plant and equipment – net

8,269.0

 

 

9,969.7

 

Other long-term assets

1,351.5

 

 

774.4

 

Total assets

$

10,620.8

 

 

11,718.5

 

 

 

 

 

Liabilities and Equity

 

 

 

Liabilities associated with assets held for sale

$

14.4

 

 

13.3

 

Other current liabilities

701.9

 

 

929.5

 

Long-term debt

2,988.1

 

 

2,803.4

 

Other long-term liabilities

2,522.3

 

 

2,167.7

 

Total equity 1,2

4,394.1

 

 

5,804.6

 

Total liabilities and equity

$

10,620.8

 

 

11,718.5

 

1 Includes noncontrolling interest of $179.8 million and $337.2 million as of December 31, 2020 and December 31, 2019, respectively.

2 Number of shares of Common Stock, $1.00 par value, outstanding at December 31, 2020 was 153,598,625.

MURPHY OIL CORPORATION

PRODUCTION SUMMARY

(unaudited)

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

Barrels per day unless otherwise noted

2020

 

2019

 

2020

 

2019

Continuing operations

 

 

 

 

 

 

 

 

Net crude oil and condensate

 

 

 

 

 

 

 

United States

Onshore

21,875

 

 

 

38,500

 

 

 

26,420

 

 

 

34,578

 

 

 

Gulf of Mexico 1

56,648

 

 

 

74,409

 

 

 

64,680

 

 

 

66,823

 

 

Canada

Onshore

7,241

 

 

 

5,812

 

 

 

7,888

 

 

 

6,329

 

 

 

Offshore

4,170

 

 

 

7,257

 

 

 

4,893

 

 

 

6,543

 

 

Other

 

 

 

 

569

 

 

 

85

 

 

 

469

 

 

Total net crude oil and condensate - continuing operations

89,934

 

 

 

126,547

 

 

 

103,966

 

 

 

114,742

 

 

Net natural gas liquids

 

 

 

 

 

 

 

 

United States

Onshore

4,620

 

 

 

6,056

 

 

 

5,248

 

 

 

5,731

 

 

 

Gulf of Mexico 1

4,522

 

 

 

7,037

 

 

 

4,978

 

 

 

4,894

 

 

Canada

Onshore

1,325

 

 

 

1,457

 

 

 

1,315

 

 

 

1,263

 

 

Total net natural gas liquids - continuing operations

10,467

 

 

 

14,550

 

 

 

11,541

 

 

 

11,888

 

 

Net natural gas – thousands of cubic feet per day

 

 

 

 

 

 

 

United States

Onshore

24,799

 

 

 

32,145

 

 

 

27,985

 

 

 

30,692

 

 

 

Gulf of Mexico 1

60,909

 

 

 

75,922

 

 

 

66,105

 

 

 

52,068

 

 

Canada

Onshore

255,933

 

 

 

283,670

 

 

 

260,683

 

 

 

271,355

 

 

Total net natural gas - continuing operations

341,641

 

 

 

391,737

 

 

 

354,773

 

 

 

354,115

 

 

Total net hydrocarbons - continuing operations including NCI 2,3

157,341

 

 

 

206,387

 

 

 

174,636

 

 

 

185,649

 

 

Noncontrolling interest

 

 

 

 

 

 

 

 

Net crude oil and condensate – barrels per day

(7,841

)

 

 

(11,255

)

 

 

(9,962

)

 

 

(11,226

)

 

Net natural gas liquids – barrels per day

(335

)

 

 

(539

)

 

 

(416

)

 

 

(507

)

 

Net natural gas – thousands of cubic feet per day 2

(2,968

)

 

 

(4,059

)

 

 

(3,843

)

 

 

(3,965

)

 

Total noncontrolling interest

(8,671

)

 

 

(12,471

)

 

 

(11,019

)

 

 

(12,394

)

 

Total net hydrocarbons - continuing operations excluding NCI 2,3

148,671

 

 

 

193,916

 

 

 

163,617

 

 

 

173,255

 

 

Discontinued operations

 

 

 

 

 

 

 

 

Net crude oil and condensate – barrels per day

 

 

 

 

 

 

 

 

 

12,215

 

 

Net natural gas liquids – barrels per day

 

 

 

 

 

 

 

 

 

325

 

 

Net natural gas – thousands of cubic feet per day 2

 

 

 

 

 

 

 

 

 

50,758

 

 

Total discontinued operations

 

 

 

 

 

 

 

 

 

21,000

 

 

Total net hydrocarbons produced excluding NCI 2,3

148,671

 

 

 

193,916

 

 

 

163,617

 

 

 

194,255

 

 

1 Includes net volumes attributable to a noncontrolling interest in MP GOM.

2 Natural gas converted on an energy equivalent basis of 6:1.

3 NCI – noncontrolling interest in MP GOM.

MURPHY OIL CORPORATION

PRICE SUMMARY

(unaudited)

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

2020

 

2019

 

2020

 

2019

Weighted average Exploration and Production sales prices

 

 

 

 

 

 

 

Continuing operations

 

 

 

 

 

 

 

 

Crude oil and condensate – dollars per barrel

 

 

 

 

 

 

 

 

United States

Onshore

$

40.26

 

 

57.18

 

 

$

36.54

 

 

$

59.45

 

 

Gulf of Mexico 1

42.94

 

 

58.94

 

 

39.15

 

 

61.09

 

Canada 2

Onshore

39.52

 

 

51.32

 

 

32.42

 

 

50.29

 

 

Offshore

45.54

 

 

64.75

 

 

39.40

 

 

64.91

 

Natural gas liquids – dollars per barrel

 

 

 

 

 

 

 

 

United States

Onshore

14.81

 

 

14.56

 

 

11.67

 

 

14.60

 

 

Gulf of Mexico 1

15.61

 

 

13.57

 

 

10.84

 

 

15.10

 

Canada 2

Onshore

23.23

 

 

22.49

 

 

18.54

 

 

26.04

 

Natural gas – dollars per thousand cubic feet

 

 

 

 

 

 

 

 

United States

Onshore

2.63

 

 

2.34

 

 

1.95

 

 

2.47

 

 

Gulf of Mexico 1

2.46

 

 

2.39

 

 

2.04

 

 

2.43

 

Canada 2

Onshore

2.32

 

 

1.89

 

 

1.79

 

 

1.60

 

1 Prices include the effect of noncontrolling interest share for MP GOM.

2 U.S. dollar equivalent.

MURPHY OIL CORPORATION

COMMODITY HEDGE POSITIONS (unaudited)

AS OF JANUARY 26, 2021

 

 

 

Commodity

 

Type

 

Volumes
(Bbl/d)

 

Price
(USD/Bbl)

 

Remaining Period

Area

 

 

 

 

 

Start Date

 

End Date

United States

 

WTI ¹

 

Fixed price derivative swap

 

45,000

 

 

$42.77

 

1/1/2021

 

12/31/2021

United States

 

WTI ¹

 

Fixed price derivative swap

 

20,000

 

 

$44.88

 

1/1/2022

 

12/31/2022

1 West Texas Intermediate

 

 

 

 

 

 

Volumes
(MMcf/d)

 

Price
(CAD/Mcf)

 

Remaining Period

Area

 

Commodity

 

Type

 

 

 

Start Date

 

End Date

Montney

 

Natural Gas

 

Fixed price forward sales at AECO

 

160

 

 

C$2.54

 

1/1/2021

 

1/31/2021

Montney

 

Natural Gas

 

Fixed price forward sales at AECO

 

203

 

 

C$2.55

 

2/1/2021

 

5/31/2021

Montney

 

Natural Gas

 

Fixed price forward sales at AECO

 

212

 

 

C$2.55

 

6/1/2021

 

12/31/2021

Montney

 

Natural Gas

 

Fixed price forward sales at AECO

 

222

 

 

C$2.41

 

1/1/2022

 

12/31/2022

Montney

 

Natural Gas

 

Fixed price forward sales at AECO

 

192

 

 

C$2.36

 

1/1/2023

 

12/31/2023

Montney

 

Natural Gas

 

Fixed price forward sales at AECO

 

147

 

 

C$2.41

 

1/1/2024

 

12/31/2024

MURPHY OIL CORPORATION

FIRST QUARTER 2021 GUIDANCE

 

 

Oil
BOPD

 

NGLs
BOPD

 

Gas
MCFD

 

Total
BOEPD

Production – net

 

 

 

 

 

 

 

U.S. – Eagle Ford Shale

20,600

 

 

4,300

 

 

23,400

 

 

28,800

 

– Gulf of Mexico excluding NCI

50,900

 

 

5,800

 

 

68,500

 

 

68,100

 

Canada – Tupper Montney

 

 

 

 

245,600

 

 

40,900

 

– Kaybob Duvernay and Placid Montney

6,100

 

 

1,200

 

 

21,000

 

 

10,800

 

– Offshore

4,400

 

 

 

 

 

 

4,400

 

 

 

 

 

 

 

 

 

Total net production (BOEPD) - excluding NCI 1

149,000 to 157,000

 

 

 

 

 

 

 

 

Exploration expense ($ millions)

$15

 

 

 

 

 

 

 

 

FULL YEAR 2021 GUIDANCE

Total net production (BOEPD) - excluding NCI 2

155,000 to 165,000

Capital expenditures – excluding NCI ($ millions) 3

$675 to $725

 

 

¹ Excludes noncontrolling interest of MP GOM of 8,400 BOPD of oil, 600 BOPD of NGLs, and 5,000 MCFD gas.

² Excludes noncontrolling interest of MP GOM of 8,400 BOPD of oil, 600 BOPD of NGLs, and 4,700 MCFD gas.

³ Excludes noncontrolling interest of MP GOM of $43 MM.

 

Kelly Whitley, kelly_whitley@murphyoilcorp.com, 281-675-9107
Megan Larson, megan_larson@murphyoilcorp.com, 281-675-9470

Source: Murphy Oil Corporation

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