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Murphy Oil Corporation Announces Third Quarter 2021 Results and Full Year 2021 Update

11/04/2021

Achieves 2021 Long-Term Debt Reduction Goal of $300 Million Following Recent Bond Notice of Redemption, Lowers 2021 CAPEX Midpoint $20 Million to $680 Million

HOUSTON--(BUSINESS WIRE)-- Murphy Oil Corporation (NYSE: MUR) today announced its financial and operating results for the third quarter ended September 30, 2021, including net income attributable to Murphy of $108 million, or $0.70 net income per diluted share. Adjusted net income, which excludes discontinued operations and other one-off items, was $37 million, or $0.24 net income per diluted share.

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

Highlights for the third quarter include:

  • Generated adjusted earnings before interest, tax, depreciation, amortization and exploration expenses of $312 million, or $21.95 per barrel of oil equivalent
  • Advanced debt reduction goal with redemption of $150 million of 6.875 percent senior notes due 2024
  • Finalized Terra Nova asset life extension project agreement with partners and government, increasing Murphy’s working interest to 18 percent from 10.475 percent
  • Maintained schedule of major projects in the Gulf of Mexico ahead of first oil in the first half of 2022 with drilling Khaleesi #3 and spudding Samurai #4, with no timing impacts from Hurricane Ida
  • Transported the King’s Quay floating production system successfully, safely and on schedule to the Texas coast from South Korea

Subsequent to the third quarter:

  • Reduced 2021 capital expenditures guidance midpoint by $20 million down to $680 million, with a range of $675 to $685 million
  • Continued delevering by announcing the redemption of $150 million of 6.875 percent senior notes due 2024 to occur on December 2, thereby achieving $300 million long-term debt reduction goal and 17 percent total debt reduction for 2021

“Our team continues to successfully execute our major Gulf of Mexico projects as planned, while maintaining consistent onshore production volumes, enabling us to capitalize on rising oil prices and generate excess cash to achieve our goal of reducing long-term debt by $300 million in the second half of this year,” said Roger W. Jenkins, President and Chief Executive Officer. “By strengthening our balance sheet through significant debt reduction, the company will close out the year well-positioned to navigate all commodity price cycles as we continue our exploration program with spudding the non-operated Cutthroat well in Brazil in fourth quarter 2021.”

“Prior to Hurricane Ida at the end of August, our Gulf of Mexico assets were performing above guidance. Our offshore facilities did not experience significant damage, and due to our preparations, five days after evacuation we were able to redeploy personnel safely with no incidents and, shortly thereafter, resumed drilling. This enabled our team to complete planned maintenance while awaiting downstream functionality, thereby reducing our operated planned downtime for fourth quarter 2021,” said Jenkins. “Today, all hurricane-related production issues have been resolved with the exception of one field, which produces about 1 thousand barrels of oil equivalent per day.”

THIRD QUARTER 2021 RESULTS

The company recorded net income, attributable to Murphy, of $108 million, or $0.70 net income per diluted share, for the third quarter 2021. This includes a realized after-tax loss of $91 million and an unrealized after-tax gain on crude oil derivative contracts of $44 million. Adjusted net income, which excludes both the results of discontinued operations and certain other items that affect comparability of results between periods, was $37 million, or $0.24 net income per diluted share for the same period. The adjusted net income from continuing operations adjusts for the following after-tax items: a $54 million gain on asset retirement obligations due to the multi-year deferral of expected abandonment expenditures at Terra Nova in offshore Canada, the previously mentioned $44 million non-cash mark-to-market gain on derivative instruments and a $22 million non-cash mark-to-market loss on contingent consideration. Details for third 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 $288 million, or $20 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 $312 million, or $22 per BOE sold. Details for third quarter EBITDA and EBITDAX reconciliations can be found in the attached schedules.

Third quarter production averaged 155 thousand barrels of oil equivalent per day (MBOEPD) with 52 percent oil and 59 percent liquids. Approximately 12.8 MBOEPD of Gulf of Mexico production was shut-in due to Hurricane Ida during the quarter. Production downtime following the significant storm was extended as a result of damage and power loss at third-party downstream facilities, including oil terminals, natural gas processing plants and refineries, causing them to remain offline for several weeks. Gulf of Mexico production volumes steadily ramped up as third-party facilities returned to operations with approximately 1 MBOEPD expected to remain offline for repairs through first quarter 2022.

Details for third quarter results can be found in the attached schedules.

FINANCIAL POSITION

Murphy had approximately $2.1 billion of liquidity as of September 30, 2021, comprised of the $1.6 billion senior unsecured credit facility and approximately $505 million of cash and cash equivalents.

On August 16, 2021, Murphy redeemed $150 million of its 6.875 percent senior notes due 2024 for a redemption price of 101.719 percent. Total debt of $2.6 billion as of the end of third quarter 2021 consists of long-term, fixed-rate notes with a weighted average maturity of 7.5 years and a weighted average coupon of 6.3 percent.

Subsequent to quarter end, the company announced it will redeem an additional $150 million of its 6.875 percent senior notes due 2024. Following this redemption, Murphy will have achieved its long-term debt reduction goal of $300 million for the second half of 2021, as well as reduced total debt by $530 million, or 17 percent, since year-end 2020, after achieving $230 million total debt reduction in first quarter 2021.

OPERATIONS SUMMARY

Onshore

The onshore business produced approximately 95 MBOEPD with 40 percent liquids volumes in the third quarter. No wells were brought online across Murphy’s onshore assets during the quarter.

Eagle Ford Shale – Third quarter production averaged 37 MBOEPD with 70 percent oil volumes.

Tupper Montney – In the third quarter, natural gas production averaged 292 million cubic feet per day (MMCFD).

Kaybob Duvernay – Production averaged 7 MBOEPD with 71 percent liquids volumes during the third quarter.

Offshore

Excluding noncontrolling interest, the offshore business produced 60 MBOEPD for the third quarter, comprised of 82 percent oil, which was negatively impacted by 12.8 MBOEPD of shut-in production as a result of Hurricane Ida.

Gulf of Mexico – During the quarter, production averaged 56 MBOEPD, consisting of 81 percent oil. Murphy brought Calliope #1 (Mississippi Canyon 609) online in August prior to the hurricane.

Murphy’s major projects continue to advance on schedule, with the Khaleesi, Mormont, Samurai project expected to achieve first oil in the first half of 2022 through the King’s Quay floating production system, and the non-operated St. Malo waterflood project scheduled to complete in 2023. Murphy drilled Khaleesi #3 and spud Samurai #4 in the third quarter, while the King’s Quay floating production system safely reached shoreside in Texas after sailing from South Korea. Additionally, the final producer well of the non-operated St. Malo waterflood campaign was brought online in August prior to the hurricane.

Canada – Production averaged 4 MBOEPD in the third quarter, comprised of 100 percent oil.

Operations at the Terra Nova field have remained offline since December 2019. During the third quarter, the partner group finalized an agreement to advance the Terra Nova asset life extension project, which is expected to extend production life by approximately 10 years. As part of this agreement, the Government of Newfoundland and Labrador will provide royalty and financial support up to $164 million (C$205 million) total to the partner group, which will contribute on a matching basis. Murphy’s working interest has increased to 18 percent from 10.475 percent, while Suncor as operator now holds 48 percent and Cenovus owns the remaining 34 percent. Work began on the floating production storage and offloading vessel in the third quarter 2021 and it will remain offline throughout 2022 with an anticipated return to operations in fourth quarter 2022. Murphy’s future net investment in the project is approximately $60 million, after adjusting for government funding and exiting partners.

EXPLORATION

Gulf of Mexico – Chevron U.S.A. Inc. drilled an exploration well at Silverback (Mississippi Canyon 35) and reached a measured depth of 23,240 feet. The operator plugged and abandoned the well and is evaluating the results. Murphy has fully expensed the well.

COMMODITY HEDGES

Murphy 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 third quarter, Murphy added hedges to protect cash flow with the execution of West Texas Intermediate (WTI) costless collars, resulting in a total 23 thousand barrels of oil per day (MBOPD) hedged for full year 2022 with a weighted average put price of $62.65 per barrel and average call price of $74.77 per barrel.

For the remainder of 2021, the company has 45 MBOPD hedged with WTI fixed price swaps at an average price of $42.77 per barrel, while 20 MBOPD of full-year 2022 production is hedged at an average price of $44.88 per barrel.

Murphy continues to maintain its natural gas price risk protection with fixed price forward sales contracts for physical delivery at the AECO hub in Canada for calendar years 2021 through 2024. Details for the current hedge positions can be found in the attached schedules.

CAPITAL EXPENDITURE AND PRODUCTION GUIDANCE

Production for fourth quarter 2021 is estimated to be in the range of 145.5 to 153.5 MBOEPD. This includes 4.5 MBOEPD of Gulf of Mexico facility downtime that occurred in October and 2.2 MBOEPD of net planned non-operated Gulf of Mexico downtime to occur later in the quarter. Murphy is reducing its 2021 capital expenditures (CAPEX) guidance midpoint by $20 million down to $680 million, with a range of $675 to $685 million. Due to production impacts from the hurricane, full year 2021 production guidance has been revised to a range of 156.5 to 158.5 MBOEPD, with the low end of original guidance now set as the midpoint. Full year production is forecast to be comprised of approximately 55 percent oil and 62 percent total liquids volumes. Both production and CAPEX guidance ranges exclude Gulf of Mexico noncontrolling interest (NCI).

Revised CAPEX by Quarter ($ MMs)

1Q 2021A*

2Q 2021A

3Q 2021A

4Q 2021E

FY 2021E

$230

$198

$103

$149

$680

Accrual CAPEX, based on midpoint of guidance range and excluding NCI
* Excludes King’s Quay CAPEX of $17 million, includes $20 million Lucius working interest acquisition

“This year’s focus on delevering the balance sheet could only have been achieved with continuous capital discipline,” said Jenkins. “I am especially proud to maintain the low end of our original production guidance, exceed our original oil production volumes, and achieve our debt reduction goals – all accomplished with less capital, including our Lucius working interest acquisition in the first quarter, and despite experiencing a major hurricane that struck the most significant Gulf Coast location in the oil and natural gas industry.”

CONFERENCE CALL AND WEBCAST SCHEDULED FOR NOVEMBER 4, 2021

Murphy will host a conference call to discuss third quarter 2021 financial and operating results on Thursday, November 4, 2021, at 9:00 a.m. EDT. 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 88455077.

FINANCIAL DATA

Summary financial data and operating statistics for third quarter 2021, 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 fourth 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.

MURPHY OIL CORPORATION

SUMMARIZED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

September 30,

 

September 30,

(Thousands of dollars, except per share amounts)

2021

 

2020

 

2021

 

2020

Revenues and other income

 

 

 

 

 

 

 

Revenue from sales to customers

$

687,549

 

 

425,324

 

 

$

2,038,905

 

 

1,311,627

 

(Loss) gain on derivative instruments

 

(59,164

)

 

(5,290

)

 

 

(499,794

)

 

319,502

 

Gain on sale of assets and other income

 

2,315

 

 

1,831

 

 

 

21,217

 

 

6,006

 

Total revenues and other income

 

630,700

 

 

421,865

 

 

 

1,560,328

 

 

1,637,135

 

Costs and expenses

 

 

 

 

 

 

 

Lease operating expenses

 

130,131

 

 

124,491

 

 

 

403,708

 

 

478,283

 

Severance and ad valorem taxes

 

11,670

 

 

6,781

 

 

 

32,215

 

 

22,645

 

Transportation, gathering and processing

 

44,588

 

 

41,322

 

 

 

137,196

 

 

126,779

 

Exploration expenses, including undeveloped lease amortization

 

24,517

 

 

12,092

 

 

 

49,840

 

 

61,686

 

Selling and general expenses

 

27,210

 

 

28,509

 

 

 

85,826

 

 

104,381

 

Restructuring expenses

 

 

 

4,982

 

 

 

 

 

46,379

 

Depreciation, depletion and amortization

 

189,806

 

 

231,603

 

 

 

615,372

 

 

769,151

 

Accretion of asset retirement obligations

 

12,198

 

 

10,778

 

 

 

34,854

 

 

31,213

 

Impairment of assets

 

 

 

219,138

 

 

 

171,296

 

 

1,206,284

 

Other (benefit) expense

 

(32,791

)

 

20,224

 

 

 

58,616

 

 

(2,957

)

Total costs and expenses

 

407,329

 

 

699,920

 

 

 

1,588,923

 

 

2,843,844

 

Operating income (loss) from continuing operations

 

223,371

 

 

(278,055

)

 

 

(28,595

)

 

(1,206,709

)

Other income (loss)

 

 

 

 

 

 

 

Interest income and other (loss)

 

(1,593

)

 

(5,177

)

 

 

(11,459

)

 

(10,107

)

Interest expense, net

 

(46,925

)

 

(45,182

)

 

 

(178,399

)

 

(124,877

)

Total other loss

 

(48,518

)

 

(50,359

)

 

 

(189,858

)

 

(134,984

)

Income (loss) from continuing operations before income taxes

 

174,853

 

 

(328,414

)

 

 

(218,453

)

 

(1,341,693

)

Income tax expense (benefit)

 

36,838

 

 

(62,584

)

 

 

(62,498

)

 

(248,890

)

Income (loss) from continuing operations

 

138,015

 

 

(265,830

)

 

 

(155,955

)

 

(1,092,803

)

(Loss) from discontinued operations, net of income taxes

 

(706

)

 

(778

)

 

 

(600

)

 

(6,907

)

Net income (loss) including noncontrolling interest

 

137,309

 

 

(266,608

)

 

 

(156,555

)

 

(1,099,710

)

Less: Net income (loss) attributable to noncontrolling interest

 

28,853

 

 

(23,055

)

 

 

85,509

 

 

(122,869

)

NET INCOME (LOSS) ATTRIBUTABLE TO MURPHY

$

108,456

 

 

(243,553

)

 

$

(242,064

)

 

(976,841

)

 

 

 

 

 

 

 

 

INCOME (LOSS) PER COMMON SHARE – BASIC

 

 

 

 

 

 

 

Continuing operations

$

0.70

 

 

(1.58

)

 

$

(1.57

)

 

(6.31

)

Discontinued operations

 

 

 

(0.01

)

 

 

 

 

(0.05

)

Net income (loss)

$

0.70

 

 

(1.59

)

 

$

(1.57

)

 

(6.36

)

 

 

 

 

 

 

 

 

INCOME (LOSS) PER COMMON SHARE – DILUTED

 

 

 

 

 

 

 

Continuing operations

$

0.70

 

 

(1.58

)

 

$

(1.57

)

 

(6.31

)

Discontinued operations

 

 

 

(0.01

)

 

 

 

 

(0.05

)

Net income (loss)

$

0.70

 

 

(1.59

)

 

$

(1.57

)

 

(6.36

)

Cash dividends per Common share

$

0.125

 

 

0.125

 

 

 

0.375

 

 

0.500

 

Average Common shares outstanding (thousands)

 

 

 

 

 

 

 

Basic

 

154,439

 

 

153,596

 

 

 

154,239

 

 

153,480

 

Diluted

 

155,932

 

 

153,596

 

 

 

154,239

 

 

153,480

 

MURPHY OIL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

September 30,

September 30,

(Thousands of dollars)

2021

 

2020

 

2021

 

2020

Operating Activities

 

 

 

 

 

 

 

Net income (loss) including noncontrolling interest

$

137,309

 

 

(266,608

)

 

$

(156,555

)

 

(1,099,710

)

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

 

 

 

 

 

 

 

Loss from discontinued operations

 

706

 

 

778

 

 

 

600

 

 

6,907

 

Depreciation, depletion and amortization

 

189,806

 

 

231,603

 

 

 

615,372

 

 

769,151

 

Dry hole and previously suspended exploration costs

 

17,266

 

 

578

 

 

 

17,899

 

 

8,255

 

Amortization of undeveloped leases

 

4,990

 

 

7,181

 

 

 

13,872

 

 

21,951

 

Accretion of asset retirement obligations

 

12,198

 

 

10,778

 

 

 

34,854

 

 

31,213

 

Impairment of assets

 

 

 

219,138

 

 

 

171,296

 

 

1,206,284

 

Deferred income tax (benefit) expense

 

36,046

 

 

(63,846

)

 

 

(65,149

)

 

(231,748

)

Mark to market loss (gain) on contingent consideration

 

28,434

 

 

14,053

 

 

 

105,111

 

 

(29,476

)

Mark to market loss (gain) on derivative instruments

 

(55,863

)

 

69,385

 

 

 

228,497

 

 

(104,463

)

Noncash restructuring expense

 

 

 

 

 

 

 

 

17,565

 

Long-term non-cash compensation

 

16,762

 

 

12,440

 

 

 

42,080

 

 

35,200

 

Net decrease (increase) in noncash working capital

 

90,765

 

 

(27,596

)

 

 

117,330

 

 

(26,261

)

Other operating activities, net

 

(73,418

)

 

768

 

 

 

(33,924

)

 

(26,837

)

Net cash provided by continuing operations activities

 

405,001

 

 

208,652

 

 

 

1,091,283

 

 

578,031

 

Investing Activities

 

 

 

 

 

 

 

Property additions and dry hole costs

 

(118,916

)

 

(111,124

)

 

 

(564,230

)

 

(648,725

)

Proceeds from sales of property, plant and equipment

 

675

 

 

 

 

 

270,038

 

 

 

Property additions for King's Quay FPS

 

 

 

(23,301

)

 

 

(17,734

)

 

(74,936

)

Net cash required by investing activities

 

(118,241

)

 

(134,425

)

 

 

(311,926

)

 

(723,661

)

Financing Activities

 

 

 

 

 

 

 

Borrowings on revolving credit facility

 

 

 

80,000

 

 

 

165,000

 

 

450,000

 

Repayment of revolving credit facility

 

 

 

(50,000

)

 

 

(365,000

)

 

(250,000

)

Retirement of debt

 

(150,000

)

 

 

 

 

(726,358

)

 

(12,225

)

Debt issuance, net of cost

 

(61

)

 

 

 

 

541,913

 

 

(613

)

Early redemption of debt cost

 

(2,579

)

 

 

 

 

(36,756

)

 

 

Distributions to noncontrolling interest

 

(25,642

)

 

(11,273

)

 

 

(100,880

)

 

(43,673

)

Cash dividends paid

 

(19,306

)

 

(19,200

)

 

 

(57,896

)

 

(76,790

)

Withholding tax on stock-based incentive awards

 

(1,078

)

 

153

 

 

 

(4,973

)

 

(7,094

)

Proceeds from term loan and other loans

 

 

 

(371

)

 

 

 

 

 

Capital lease obligation payments

 

(272

)

 

(178

)

 

 

(643

)

 

(514

)

Net cash (required) provided by financing activities

 

(198,938

)

 

(869

)

 

 

(585,593

)

 

59,091

 

Effect of exchange rate changes on cash and cash equivalents

 

(855

)

 

773

 

 

 

697

 

 

(585

)

Net increase (decrease) in cash and cash equivalents

 

86,967

 

 

74,131

 

 

 

194,461

 

 

(87,124

)

Cash and cash equivalents at beginning of period

 

418,100

 

 

145,505

 

 

 

310,606

 

 

306,760

 

Cash and cash equivalents at end of period

$

505,067

 

 

219,636

 

 

$

505,067

 

 

219,636

 

MURPHY OIL CORPORATION

SCHEDULE OF ADJUSTED INCOME (LOSS) (unaudited)

 

Three Months Ended

 

Nine Months Ended

September 30,

 

September 30,

(Millions of dollars, except per share amounts)

2021

 

2020

 

2021

 

2020

Net income (loss) attributable to Murphy (GAAP)

$

108.5

 

 

(243.6

)

 

$

(242.1

)

 

(976.8

)

Discontinued operations loss

 

0.7

 

 

0.8

 

 

 

0.6

 

 

6.9

 

Income (loss) from continuing operations

 

109.2

 

 

(242.8

)

 

 

(241.5

)

 

(969.9

)

Adjustments (after tax):

 

 

 

 

 

 

 

Mark-to-market (gain) loss on derivative instruments

 

(44.1

)

 

54.8

 

 

 

180.5

 

 

(82.5

)

Impairment of assets

 

 

 

145.9

 

 

 

128.0

 

 

854.2

 

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

 

22.4

 

 

11.1

 

 

 

83.0

 

 

(23.3

)

Asset retirement obligation (gains) losses

 

(53.6

)

 

 

 

 

(53.6

)

 

 

Early redemption of debt cost

 

2.7

 

 

 

 

 

31.9

 

 

 

Unutilized rig charges

 

2.5

 

 

4.1

 

 

 

6.7

 

 

10.4

 

Charges related to Kings Quay transaction

 

 

 

 

 

 

3.9

 

 

 

Foreign exchange (gains) losses

 

(2.0

)

 

0.8

 

 

 

(1.1

)

 

(1.7

)

Restructuring expenses

 

 

 

3.9

 

 

 

 

 

35.5

 

(Gain) loss on extinguishment of debt

 

 

 

 

 

 

 

 

(4.2

)

Inventory loss

 

 

 

 

 

 

 

 

3.8

 

Seal insurance proceeds

 

 

 

(1.3

)

 

 

 

 

(1.3

)

Total adjustments after taxes

 

(72.1

)

 

219.3

 

 

 

379.3

 

 

790.9

 

Adjusted income (loss) from continuing operations attributable to Murphy

$

37.1

 

 

(23.5

)

 

$

137.8

 

 

(179.0

)

 

 

 

 

 

 

 

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

$

0.24

 

 

(0.15

)

 

$

0.89

 

 

(1.17

)

Non-GAAP Financial Measures

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

Amounts shown above as reconciling items between Net income (loss) and Adjusted income (loss) 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

 

Nine Months Ended

September 30, 2021

September 30, 2021

(Millions of dollars)

Pretax

 

Tax

 

Net

 

Pretax

 

Tax

 

Net

Exploration & Production:

 

 

 

 

 

 

 

 

 

 

 

United States

$

31.6

 

 

(6.6

)

 

25.0

 

 

$

118.5

 

(24.9

)

 

93.6

Canada

 

(71.8

)

 

18.2

 

 

(53.6

)

 

 

99.5

 

(25.1

)

 

74.4

Total E&P

 

(40.2

)

 

11.6

 

 

(28.6

)

 

 

218.0

 

(50.0

)

 

168.0

Corporate:

 

(55.2

)

 

11.7

 

 

(43.5

)

 

 

267.4

 

(56.1

)

 

211.3

Total adjustments

$

(95.4

)

 

23.3

 

 

(72.1

)

 

$

485.4

 

(106.1

)

 

379.3

MURPHY OIL CORPORATION

SCHEDULE OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION

AND AMORTIZATION (EBITDA)

(unaudited)

 

Three Months Ended

Nine Months Ended

 

September 30,

 

September 30,

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

2021

 

2020

 

2021

 

2020

Net income (loss) attributable to Murphy (GAAP)

$

108.5

 

 

(243.6

)

 

$

(242.1

)

 

(976.8

)

Income tax expense (benefit)

 

36.8

 

 

(62.6

)

 

 

(62.5

)

 

(248.9

)

Interest expense, net

 

46.9

 

 

45.2

 

 

 

178.4

 

 

124.9

 

Depreciation, depletion and amortization expense ¹

 

182.8

 

 

219.7

 

 

 

588.4

 

 

725.1

 

EBITDA attributable to Murphy (Non-GAAP)

$

375.0

 

 

(41.3

)

 

$

462.2

 

 

(375.7

)

Mark-to-market (gain) loss on derivative instruments

 

(55.9

)

 

69.3

 

 

 

228.5

 

 

(104.5

)

Impairment of assets ¹

 

 

 

186.5

 

 

 

171.3

 

 

1,072.5

 

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

 

28.4

 

 

14.0

 

 

 

105.1

 

 

(29.5

)

Asset retirement obligation (gains) losses

 

(71.8

)

 

 

 

 

(71.8

)

 

 

Accretion of asset retirement obligations ¹

 

10.8

 

 

10.8

 

 

 

30.8

 

 

31.2

 

Unutilized rig charges

 

3.2

 

 

5.2

 

 

 

8.5

 

 

13.2

 

Foreign exchange (gains) losses

 

(2.8

)

 

0.8

 

 

 

(1.5

)

 

(2.5

)

Discontinued operations loss

 

0.7

 

 

0.8

 

 

 

0.6

 

 

6.9

 

Restructuring expenses

 

 

 

5.0

 

 

 

 

 

46.4

 

Inventory loss

 

 

 

 

 

 

 

 

4.8

 

Seal insurance proceeds

 

 

 

(1.7

)

 

 

 

 

(1.7

)

Adjusted EBITDA attributable to Murphy (Non-GAAP)

$

287.6

 

 

249.4

 

 

$

933.7

 

 

661.1

 

 

 

 

 

 

 

 

 

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

 

14,219

 

 

14,166

 

 

 

43,536

 

 

46,478

 

 

 

 

 

 

 

 

 

Adjusted EBITDA per barrel of oil equivalents sold

$

20.23

 

 

17.61

 

 

$

21.45

 

 

14.22

 

1 Depreciation, depletion, and amortization expense, impairment of assets and accretion of asset retirement obligations used in the computation of Adjusted EBITDA exclude the portion attributable to the non-controlling interest (NCI).

Non-GAAP Financial Measures

Presented above is a reconciliation of Net income (loss) 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 income (loss) 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.

MURPHY OIL CORPORATION

SCHEDULE OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION

AND AMORTIZATION AND EXPLORATION (EBITDAX)

(unaudited)

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

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

2021

 

2020

 

2021

 

2020

Net income (loss) attributable to Murphy (GAAP)

$

108.5

 

 

(243.6

)

 

$

(242.1

)

 

(976.8

)

Income tax expense (benefit)

 

36.8

 

 

(62.6

)

 

 

(62.5

)

 

(248.9

)

Interest expense, net

 

46.9

 

 

45.2

 

 

 

178.4

 

 

124.9

 

Depreciation, depletion and amortization expense ¹

 

182.8

 

 

219.7

 

 

 

588.4

 

 

725.1

 

EBITDA attributable to Murphy (Non-GAAP)

 

375.0

 

 

(41.3

)

 

 

462.2

 

 

(375.7

)

Exploration expenses

 

24.5

 

 

12.1

 

 

 

49.8

 

 

61.7

 

EBITDAX attributable to Murphy (Non-GAAP)

 

399.5

 

 

(29.2

)

 

 

512.0

 

 

(314.0

)

Mark-to-market (gain) loss on derivative instruments

 

(55.9

)

 

69.3

 

 

 

228.5

 

 

(104.5

)

Impairment of assets ¹

 

 

 

186.5

 

 

 

171.3

 

 

1,072.5

 

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

 

28.4

 

 

14.0

 

 

 

105.1

 

 

(29.5

)

Asset retirement obligation (gains) losses

 

(71.8

)

 

 

 

 

(71.8

)

 

 

Accretion of asset retirement obligations ¹

 

10.8

 

 

10.8

 

 

 

30.8

 

 

31.2

 

Unutilized rig charges

 

3.2

 

 

5.2

 

 

 

8.5

 

 

13.2

 

Foreign exchange (gains) losses

 

(2.8

)

 

0.8

 

 

 

(1.5

)

 

(2.5

)

Discontinued operations loss

 

0.7

 

 

0.8

 

 

 

0.6

 

 

6.9

 

Restructuring expenses

 

 

 

5.0

 

 

 

 

 

46.4

 

Inventory loss

 

 

 

 

 

 

 

 

4.8

 

Seal insurance proceeds

 

 

 

(1.7

)

 

 

 

 

(1.7

)

Adjusted EBITDAX attributable to Murphy (Non-GAAP)

$

312.1

 

 

261.5

 

 

$

983.5

 

 

722.8

 

 

 

 

 

 

 

 

 

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

 

14,219

 

 

14,166

 

 

 

43,536

 

 

46,478

 

 

 

 

 

 

 

 

 

Adjusted EBITDAX per barrel of oil equivalents sold

$

21.95

 

 

18.46

 

 

$

22.59

 

 

15.55

 

1 Depreciation, depletion, and amortization expense, impairment of assets and accretion of asset retirement obligations used in the computation of adjusted EBITDAX exclude the portion attributable to the non-controlling interest (NCI).

Non-GAAP Financial Measures

Presented above is a reconciliation of Net income (loss) 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 income (loss) 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.

MURPHY OIL CORPORATION

FUNCTIONAL RESULTS OF OPERATIONS (unaudited)

Three Months Ended

 

Three Months Ended

 

September 30, 2021

 

September 30, 2020

 

 

 

Income

 

 

 

Income

(Millions of dollars)

Revenues

 

(Loss)

 

Revenues

 

(Loss)

Exploration and production

 

 

 

 

United States 1,2

$

565.2

 

168.1

 

$

330.8

 

(172.6

)

Canada

 

124.6

 

73.9

 

 

96.3

 

(8.6

)

Other

 

 

(5.2

)

 

 

(11.7

)

Total exploration and production

 

689.8

 

236.8

 

 

427.1

 

(192.9

)

Corporate

 

(59.1

)

(98.8

)

 

(5.2

)

(72.9

)

Continuing operations

 

630.7

 

138.0

 

 

421.9

 

(265.8

)

Discontinued operations, net of tax

 

 

(0.7

)

 

 

(0.8

)

Total including noncontrolling interest

$

630.7

 

137.3

 

$

421.9

 

(266.6

)

Net income (loss) income attributable to Murphy

 

108.5

 

 

(243.6

)

 

Nine Months Ended

 

Nine Months Ended

 

September 30, 2021

 

September 30, 2020

 

 

 

Income

 

 

 

Income

(Millions of dollars)

Revenues

 

(Loss)

 

Revenues

 

(Loss)

Exploration and production

 

 

 

 

United States 1,2

$

1,704.4

 

481.8

 

$

1,070.6

 

(1,011.7

)

Canada 2

 

349.2

 

(37.7

)

 

245.2

 

(35.0

)

Other 2

 

 

(22.5

)

 

1.8

 

(73.0

)

Total exploration and production

 

2,053.6

 

421.6

 

 

1,317.6

 

(1,119.7

)

Corporate

 

(493.3

)

(577.6

)

 

319.5

 

26.9

 

Continuing operations

 

1,560.3

 

(156.0

)

 

1,637.1

 

(1,092.8

)

Discontinued operations, net of tax

 

 

(0.6

)

 

 

(6.9

)

Total including noncontrolling interest

$

1,560.3

 

(156.6

)

$

1,637.1

 

(1,099.7

)

Net loss attributable to Murphy

 

(242.1

)

 

(976.8

)

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

2 For the three months ended September 30, 2021, income (loss) includes no impairment charges (2020: $205.1 million). For the nine months ended September 30, 2021, income (loss) includes impairment charge of $171.3 million in Canada for Terra Nova due to the status of agreements with the partners as of March 31, 2021 (2020: U.S. impairment charge of $1,152.5 million, Other impairment charge $39.7 million).

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (unaudited)

THREE MONTHS ENDED SEPTEMBER 30, 2021, AND 2020

 

(Millions of dollars)

United
States 1

Canada

Other

Total

Three Months Ended September 30, 2021

 

 

 

 

Oil and gas sales and other operating revenues

$

565.2

 

124.6

 

 

689.8

 

Lease operating expenses

 

96.7

 

33.4

 

0.1

 

130.2

 

Severance and ad valorem taxes

 

10.8

 

0.8

 

 

11.6

 

Transportation, gathering and processing

 

28.4

 

16.2

 

 

44.6

 

Depreciation, depletion and amortization

 

147.0

 

39.7

 

0.1

 

186.8

 

Accretion of asset retirement obligations

 

9.3

 

2.9

 

 

12.2

 

Exploration expenses

 

 

 

 

Dry holes and previously suspended exploration costs

 

17.3

 

 

 

17.3

 

Geological and geophysical

 

 

 

0.3

 

0.3

 

Other exploration

 

1.3

 

0.1

 

0.5

 

1.9

 

 

 

18.6

 

0.1

 

0.8

 

19.5

 

Undeveloped lease amortization

 

3.1

 

0.1

 

1.8

 

5.0

 

Total exploration expenses

 

21.7

 

0.2

 

2.6

 

24.5

 

Selling and general expenses

 

4.2

 

4.0

 

1.2

 

9.4

 

Other ²

 

39.1

 

(71.7

)

2.0

 

(30.6

)

Results of operations before taxes

 

208.0

 

99.1

 

(6.0

)

301.1

 

Income tax provisions (benefits)

 

39.9

 

25.2

 

(0.8

)

64.3

 

Results of operations (excluding Corporate segment)

$

168.1

 

73.9

 

(5.2

)

236.8

 

 

 

 

 

 

Three Months Ended September 30, 2020

 

 

 

 

Oil and gas sales and other operating revenues

$

330.8

 

96.3

 

 

427.1

 

Lease operating expenses

 

91.5

 

32.6

 

0.4

 

124.5

 

Severance and ad valorem taxes

 

6.4

 

0.3

 

 

6.7

 

Transportation, gathering and processing

 

29.3

 

12.0

 

 

41.3

 

Depreciation, depletion and amortization

 

166.2

 

59.6

 

0.5

 

226.3

 

Accretion of asset retirement obligations

 

9.4

 

1.4

 

 

10.8

 

Impairment of assets

 

205.1

 

 

 

205.1

 

Exploration expenses

 

 

 

 

Dry holes and previously suspended exploration costs

 

0.6

 

 

 

0.6

 

Geological and geophysical

 

0.1

 

 

(0.1

)

 

Other exploration

 

0.6

 

0.1

 

3.6

 

4.3

 

 

 

1.3

 

0.1

 

3.5

 

4.9

 

Undeveloped lease amortization

 

4.9

 

0.1

 

2.3

 

7.3

 

Total exploration expenses

 

6.2

 

0.2

 

5.8

 

12.2

 

Selling and general expenses

 

5.3

 

3.4

 

1.6

 

10.3

 

Other

 

22.5

 

(1.5

)

2.5

 

23.5

 

Results of operations before taxes

 

(211.1

)

(11.7

)

(10.8

)

(233.6

)

Income tax (benefits) provisions

 

(38.5

)

(3.1

)

0.9

 

(40.7

)

Results of operations (excluding Corporate segment)

$

(172.6

)

(8.6

)

(11.7

)

(192.9

)

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

2 For the three months ended September 30, 2021, Canada includes $71.8 million of income related to the deferral of an asset retirement obligation at Terra Nova.

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (unaudited)

NINE MONTHS ENDED SEPTEMBER 30, 2021, AND 2020

 

(Millions of dollars)

United
States 1

Canada

Other

Total

Nine Months Ended September 30, 2021

 

 

 

 

Oil and gas sales and other operating revenues

$

1,704.4

 

349.2

 

 

2,053.6

 

Lease operating expenses

 

303.3

 

100.0

 

0.4

 

403.7

 

Severance and ad valorem taxes

 

30.6

 

1.6

 

 

32.2

 

Transportation, gathering and processing

 

90.5

 

46.7

 

 

137.2

 

Depreciation, depletion and amortization

 

476.6

 

128.0

 

1.1

 

605.7

 

Accretion of asset retirement obligations

 

27.5

 

7.4

 

 

34.9

 

Impairment of assets

 

 

171.3

 

 

171.3

 

Exploration expenses

 

 

 

 

Dry holes and previously suspended exploration costs

 

17.9

 

 

 

17.9

 

Geological and geophysical

 

2.7

 

 

1.3

 

4.0

 

Other exploration

 

4.2

 

0.2

 

9.6

 

14.0

 

 

 

24.8

 

0.2

 

10.9

 

35.9

 

Undeveloped lease amortization

 

7.9

 

0.2

 

5.8

 

13.9

 

Total exploration expenses

 

32.7

 

0.4

 

16.7

 

49.8

 

Selling and general expenses

 

15.0

 

12.0

 

4.7

 

31.7

 

Other ²

 

133.5

 

(67.7

)

(1.2

)

64.6

 

Results of operations before taxes

 

594.7

 

(50.5

)

(21.7

)

522.5

 

Income tax provisions (benefits)

 

112.9

 

(12.8

)

0.8

 

100.9

 

Results of operations (excluding Corporate segment)

$

481.8

 

(37.7

)

(22.5

)

421.6

 

 

 

 

 

 

Nine Months Ended September 30, 2020

 

 

 

 

Oil and gas sales and other operating revenues

$

1,070.6

 

245.2

 

1.8

 

1,317.6

 

Lease operating expenses

 

386.5

 

90.6

 

1.2

 

478.3

 

Severance and ad valorem taxes

 

21.6

 

1.0

 

 

22.6

 

Transportation, gathering and processing

 

95.4

 

31.4

 

 

126.8

 

Depreciation, depletion and amortization

 

589.5

 

161.3

 

1.5

 

752.3

 

Accretion of asset retirement obligations

 

27.1

 

4.1

 

 

31.2

 

Impairment of assets

 

1,152.5

 

 

39.7

 

1,192.2

 

Exploration expenses

 

 

 

 

Dry holes and previously suspended exploration costs

 

8.3

 

 

 

8.3

 

Geological and geophysical

 

9.4

 

0.1

 

4.1

 

13.6

 

Other exploration

 

4.3

 

0.4

 

13.1

 

17.8

 

 

 

22.0

 

0.5

 

17.2

 

39.7

 

Undeveloped lease amortization

 

14.8

 

0.3

 

6.9

 

22.0

 

Total exploration expenses

 

36.8

 

0.8

 

24.1

 

61.7

 

Selling and general expenses

 

16.6

 

13.2

 

5.5

 

35.3

 

Other

 

1.0

 

(2.5

)

1.4

 

(0.1

)

Results of operations before taxes

 

(1,256.4

)

(54.7

)

(71.6

)

(1,382.7

)

Income tax (benefits) provisions

 

(244.7

)

(19.7

)

1.4

 

(263.0

)

Results of operations (excluding Corporate segment)

$

(1,011.7

)

(35.0

)

(73.0

)

(1,119.7

)

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

2 For the nine months ended September 30, 2021, Canada includes $71.8 million of income related to the deferral of an asset retirement obligation at Terra Nova.

MURPHY OIL CORPORATION

PRODUCTION-RELATED EXPENSES

(unaudited)

 

Three Months Ended

Nine Months Ended

 

September 30,

 

September 30,

(Dollars per barrel of oil equivalents sold)

2021

 

2020

 

2021

 

2020

Continuing operations

 

 

 

 

 

 

 

United States – Eagle Ford Shale

 

 

 

 

 

 

 

Lease operating expense

$

8.85

 

8.11

 

$

8.50

 

8.97

Severance and ad valorem taxes

 

3.00

 

2.04

 

 

2.95

 

2.08

Depreciation, depletion and amortization (DD&A) expense

 

27.01

 

27.09

 

 

28.02

 

25.72

 

 

 

 

 

 

 

 

United States – Gulf of Mexico

 

 

 

 

 

 

 

Lease operating expense 1

$

11.13

 

10.16

 

$

10.55

 

12.60

Severance and ad valorem taxes

 

0.08

 

 

 

0.08

 

DD&A expense

 

9.16

 

12.33

 

 

9.63

 

13.82

 

 

 

 

 

 

 

 

Canada – Onshore

 

 

 

 

 

 

 

Lease operating expense

$

5.59

 

4.73

 

$

6.02

 

4.56

Severance and ad valorem taxes

 

0.17

 

0.05

 

 

0.11

 

0.07

DD&A expense

 

6.87

 

10.78

 

 

7.93

 

9.94

 

 

 

 

 

 

 

 

Canada – Offshore

 

 

 

 

 

 

 

Lease operating expense

$

13.25

 

20.30

 

$

12.72

 

16.71

DD&A expense

 

11.53

 

12.58

 

 

13.08

 

11.48

 

 

 

 

 

 

 

 

Total oil and gas continuing operations

 

 

 

 

 

 

 

Lease operating expense

$

8.69

 

8.23

 

$

8.74

 

9.61

Severance and ad valorem taxes

 

0.78

 

0.45

 

 

0.70

 

0.45

DD&A expense

 

12.67

 

15.31

 

 

13.33

 

15.45

 

 

 

 

 

 

 

 

Total oil and gas continuing operations – excluding noncontrolling interest

 

 

 

 

 

 

 

Lease operating expense 2

$

8.51

 

8.13

 

$

8.53

 

9.36

Severance and ad valorem taxes

 

0.82

 

0.48

 

 

0.74

 

0.49

DD&A expense

 

12.84

 

15.51

 

 

13.51

 

15.60

1 For the nine months ended September 30, 2021, 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 $9.05 (2020: $9.49), respectively. Workovers for the nine months ended September 30, 2021 principally relate to St. Malo (2020: Cascade and Dalmatian).

2 For the nine months ended September 30, 2021, total LOE per BOE excluding NCI and costs associated with Gulf of Mexico well workovers was $7.93 (2020: $7.86), respectively.

MURPHY OIL CORPORATION

OTHER FINANCIAL DATA

(unaudited)

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

(Millions of dollars)

2021

 

2020

 

2021

 

2020

Capital expenditures for continuing operations

 

 

 

 

 

 

 

Exploration and production

 

 

 

 

 

 

 

United States

$

111.4

 

 

116.6

 

 

$

473.8

 

521.7

Canada

 

(5.2

)

 

(1.6

)

 

 

67.1

 

116.6

Other

 

0.4

 

 

5.8

 

 

 

15.1

 

32.7

Total

 

106.6

 

 

120.8

 

 

 

556.0

 

671.0

 

 

 

 

 

 

 

 

Corporate

 

3.9

 

 

1.9

 

 

 

12.7

 

9.3

Total capital expenditures - continuing operations 1,2

 

110.5

 

 

122.7

 

 

 

568.7

 

680.3

 

 

 

 

 

 

 

 

Charged to exploration expenses 3

 

 

 

 

 

 

 

United States

 

18.6

 

 

1.3

 

 

 

24.8

 

22.0

Canada

 

0.1

 

 

0.1

 

 

 

0.2

 

0.5

Other

 

0.8

 

 

3.5

 

 

 

10.9

 

17.2

Total charged to exploration expenses - continuing operations

 

19.5

 

 

4.9

 

 

 

35.9

 

39.7

 

 

 

 

 

 

 

 

Total capitalized

$

91.0

 

 

117.8

 

 

$

532.8

 

640.6

1 For the three and nine months ended September 30, 2021, total capital expenditures include noncontrolling interest (NCI) capital expenditures of $7.6 million (2020: $2.3 million) and $20.6 million (2020: $17.8 million), respectively.

2 For the nine months ended September 30, 2021, total includes capital expenditures associated with the King’s Quay project of $18.0 million (2020: $80.7 million). King’s Quay was sold to ArcLight Capital Partners, LLC (ArcLight) on March 17, 2021 for proceeds of $267.7 million which reimburses the Company for previously incurred capital expenditures.

3 For the three and nine months ended September 30, 2021, charges to exploration expense exclude amortization of undeveloped leases of $5.0 million (2020: $7.3 million) and $13.9 million (2020: $22.0 million), respectively.

MURPHY OIL CORPORATION

CONSOLIDATED BALANCE SHEETS

(unaudited)

 

(Millions of dollars)

September 30,
2021

 

December 31,
2020

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

505.1

 

 

310.6

 

Accounts receivable

186.7

 

 

262.0

 

Inventories

57.4

 

 

66.1

 

Prepaid expenses

40.6

 

 

33.9

 

Assets held for sale

41.0

 

 

327.7

 

Total current assets

830.7

 

 

1,000.3

 

Property, plant and equipment, at cost

8,112.1

 

 

8,269.0

 

Operating lease assets

918.7

 

 

927.7

 

Deferred income taxes

442.2

 

 

395.3

 

Deferred charges and other assets

27.1

 

 

28.6

 

Total assets

$

10,330.9

 

 

10,620.9

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities

 

 

 

Current maturities of long-term debt, finance lease

$

0.6

 

 

 

Accounts payable

615.4

 

 

407.1

 

Income taxes payable

18.0

 

 

18.0

 

Other taxes payable

27.0

 

 

22.5

 

Operating lease liabilities

157.3

 

 

103.8

 

Other accrued liabilities

316.2

 

 

150.6

 

Liabilities associated with assets held for sale

 

 

14.4

 

Total current liabilities

1,134.6

 

 

716.3

 

Long-term debt, including finance lease obligation

2,613.7

 

 

2,988.1

 

Asset retirement obligations

797.6

 

 

816.3

 

Deferred credits and other liabilities

723.7

 

 

680.6

 

Non-current operating lease liabilities

781.1

 

 

845.1

 

Deferred income taxes

166.1

 

 

180.3

 

Total liabilities

6,216.9

 

 

6,226.7

 

Equity

 

 

 

Common Stock, par $1.00

195.1

 

 

195.1

 

Capital in excess of par value

921.2

 

 

941.7

 

Retained earnings

5,069.6

 

 

5,369.5

 

Accumulated other comprehensive loss

(580.2

)

 

(601.3

)

Treasury stock

(1,656.2

)

 

(1,690.7

)

Murphy Shareholders' Equity

3,949.5

 

 

4,214.3

 

Noncontrolling interest

164.4

 

 

179.8

 

Total equity

4,113.9

 

 

4,394.1

 

Total liabilities and equity

$

10,330.9

 

 

10,620.9

 

MURPHY OIL CORPORATION

PRODUCTION SUMMARY

(unaudited)

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

Barrels per day unless otherwise noted

2021

 

2020

 

2021

 

2020

Continuing operations

 

 

 

 

 

 

 

 

Net crude oil and condensate

 

 

 

 

 

 

 

United States

Onshore

26,193

 

 

24,851

 

 

26,552

 

 

27,945

 

 

Gulf of Mexico 1

53,011

 

 

56,517

 

 

61,905

 

 

67,377

 

Canada

Onshore

4,963

 

 

9,595

 

 

5,598

 

 

8,106

 

 

Offshore

3,779

 

 

4,428

 

 

4,016

 

 

5,136

 

Other

 

299

 

 

 

 

243

 

 

114

 

Total net crude oil and condensate - continuing operations

88,245

 

 

95,391

 

 

98,314

 

 

108,678

 

Net natural gas liquids

 

 

 

 

 

 

 

 

United States

Onshore

5,847

 

 

5,489

 

 

5,043

 

 

5,459

 

 

Gulf of Mexico 1

3,459

 

 

3,521

 

 

4,296

 

 

5,131

 

Canada

Onshore

1,085

 

 

1,513

 

 

1,159

 

 

1,311

 

Total net natural gas liquids - continuing operations

10,391

 

 

10,523

 

 

10,498

 

 

11,901

 

Net natural gas – thousands of cubic feet per day

 

 

 

 

 

 

 

United States

Onshore

31,478

 

 

27,520

 

 

27,750

 

 

29,054

 

 

Gulf of Mexico 1

46,339

 

 

53,046

 

 

63,557

 

 

67,850

 

Canada

Onshore

309,709

 

 

260,895

 

 

277,077

 

 

262,279

 

Total net natural gas - continuing operations

387,526

 

 

341,461

 

 

368,384

 

 

359,183

 

Total net hydrocarbons - continuing operations including NCI 2,3

163,224

 

 

162,824

 

 

170,209

 

 

180,443

 

Noncontrolling interest

 

 

 

 

 

 

 

 

Net crude oil and condensate – barrels per day

(7,546

)

 

(9,298

)

 

(8,834

)

 

(10,674

)

Net natural gas liquids – barrels per day

(243

)

 

(327

)

 

(322

)

 

(443

)

Net natural gas – thousands of cubic feet per day 2

(2,331

)

 

(3,269

)

 

(3,498

)

 

(4,137

)

Total noncontrolling interest

(8,178

)

 

(10,170

)

 

(9,739

)

 

(11,807

)

Total net hydrocarbons - continuing operations excluding NCI 2,3

155,046

 

 

152,654

 

 

160,470

 

 

168,636

 

 

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

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2021

 

2020

 

2021

 

2020

Weighted average Exploration and Production sales prices

 

 

 

 

 

 

 

Continuing operations

 

 

 

 

 

 

 

 

Crude oil and condensate – dollars per barrel

 

 

 

 

 

 

 

 

United States

Onshore

$

69.30

 

 

37.83

 

 

$

64.16

 

 

$

35.56

 

 

Gulf of Mexico 1

68.93

 

 

40.82

 

 

64.44

 

 

38.08

 

Canada 2

Onshore

63.76

 

 

36.65

 

 

58.70

 

 

30.29

 

 

Offshore

72.64

 

 

43.81

 

 

68.93

 

 

37.85

 

Natural gas liquids – dollars per barrel

 

 

 

 

 

 

 

 

United States

Onshore

30.37

 

 

13.39

 

 

24.29

 

 

10.78

 

 

Gulf of Mexico 1

34.71

 

 

14.71

 

 

27.17

 

 

9.43

 

Canada 2

Onshore

45.12

 

 

19.97

 

 

37.05

 

 

16.95

 

Natural gas – dollars per thousand cubic feet

 

 

 

 

 

 

 

 

United States

Onshore

3.85

 

 

1.78

 

 

3.23

 

 

1.76

 

 

Gulf of Mexico 1

4.09

 

 

2.01

 

 

3.28

 

 

1.91

 

Canada 2

Onshore

2.47

 

 

1.74

 

 

2.33

 

 

1.62

 

 

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 NOVEMBER 2, 2021

 

 

 

 

 

 

 

Volumes
(MMcf/d)

 

Price/Mcf

 

Remaining Period

Area

 

Commodity

 

Type

 

 

 

Start Date

 

End Date

Montney

 

Natural Gas

 

Fixed price forward sales

 

196

 

 

C$2.55

 

10/1/2021

 

12/31/2021

Montney

 

Natural Gas

 

Fixed price forward sales

 

186

 

 

C$2.36

 

1/1/2022

 

1/31/2022

Montney

 

Natural Gas

 

Fixed price forward sales

 

176

 

 

C$2.34

 

2/1/2022

 

4/30/2022

Montney

 

Natural Gas

 

Fixed price forward sales

 

205

 

 

C$2.34

 

5/1/2022

 

5/31/2022

Montney

 

Natural Gas

 

Fixed price forward sales

 

247

 

 

C$2.34

 

6/1/2022

 

10/31/2022

Montney

 

Natural Gas

 

Fixed price forward sales

 

266

 

 

C$2.36

 

11/1/2022

 

12/31/2022

Montney

 

Natural Gas

 

Fixed price forward sales

 

269

 

 

C$2.35

 

1/1/2023

 

3/31/2023

Montney

 

Natural Gas

 

Fixed price forward sales

 

250

 

 

C$2.35

 

4/1/2023

 

12/31/2023

Montney

 

Natural Gas

 

Fixed price forward sales

 

162

 

 

C$2.39

 

1/1/2024

 

12/31/2024

Montney

 

Natural Gas

 

Fixed price forward sales

 

45

 

 

US$2.05

 

10/1/2021

 

12/31/2022

Montney

 

Natural Gas

 

Fixed price forward sales

 

25

 

 

US$1.98

 

1/1/2023

 

10/31/2024

Montney

 

Natural Gas

 

Fixed price forward sales

 

15

 

 

US$1.98

 

11/1/2024

 

12/31/2024

 

 

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

 

 

10/1/2021

 

12/31/2021

United States

 

WTI ¹

 

Fixed price derivative swap

 

20,000

 

 

$44.88

 

 

1/1/2022

 

12/31/2022

 

 

 

 

 

 

Volumes
(Bbl/d)

 

Average
Put
(USD/Bbl)

 

Average
Call
(USD/Bbl)

 

Remaining Period

Area

 

Commodity

 

Type

 

 

 

 

Start Date

 

End Date

United States

 

WTI ¹

 

Derivative collars

 

23,000

 

 

$62.652

 

 

$74.774

 

 

1/1/2022

 

12/31/2022

1 West Texas Intermediate

MURPHY OIL CORPORATION

FOURTH QUARTER 2021 GUIDANCE

 

 

Oil

 

NGLs

 

Gas

 

Total

BOPD

BOPD

MCFD

BOEPD

Production – net

 

 

 

 

 

 

 

U.S. – Eagle Ford Shale

22,600

 

 

5,100

 

 

27,200

 

 

32,200

 

– Gulf of Mexico excluding NCI

50,500

 

 

3,400

 

 

49,800

 

 

62,200

 

Canada – Tupper Montney

 

 

 

 

258,600

 

 

43,100

 

– Kaybob Duvernay and Placid Montney

4,500

 

 

1,000

 

 

16,600

 

 

8,300

 

– Offshore

3,400

 

 

 

 

 

 

3,400

 

Other

300

 

 

 

 

 

 

300

 

 

 

 

 

 

 

 

 

Total net production (BOEPD) - excluding NCI 1

145,500 to 153,500

 

 

 

 

 

 

 

 

Exploration expense ($ millions)

$32

 

 

 

 

 

 

 

 

FULL YEAR 2021 GUIDANCE

Total net production (BOEPD) - excluding NCI 2

156,500 to 158,500

Capital expenditures – excluding NCI ($ millions) 3

$675 to $685

 

 

¹ Excludes noncontrolling interest of MP GOM of 8,400 BOPD of oil, 200 BOPD of NGLs, and 2,300 MCFD gas.

² Excludes noncontrolling interest of MP GOM of 8,700 BOPD of oil, 300 BOPD of NGLs, and 3,200 MCFD gas.

³ Excludes noncontrolling interest of MP GOM of $25 MM.

 

Investor Contacts:
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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