UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 26, 2004
MURPHY OIL CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 1-8590 | 71-0361522 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| 200 Peach Street P.O. Box 7000, El Dorado, Arkansas |
71731-7000 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code 870-862-6411
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition
The following information is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition.”
On October 26, 2004, Murphy Oil Corporation issued a press release announcing its earnings for the third quarter that ended on September 30, 2004. The full text of this press release is attached hereto as Exhibit 99.1.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MURPHY OIL CORPORATION | ||
| By: | /s/ John W. Eckart | |
| John W. Eckart | ||
| Controller | ||
Date: October 26, 2004
Exhibit Index
99.1 Press release dated October 26, 2004, as issued by Murphy Oil Corporation.
Exhibit 99.1
MURPHY OIL ANNOUNCES QUARTERLY EARNINGS
EL DORADO, Arkansas, October 26, 2004 – Murphy Oil Corporation (NYSE: MUR) announced today that net income in the third quarter of 2004 was $118.7 million, $1.27 per share, compared to net income of $68.7 million, $.74 per share, in the third quarter of 2003. Net income in the current period included income from discontinued operations of $2.9 million, $.03 per share, associated with the sale of most conventional oil and gas assets in Western Canada in the second quarter 2004. Income from discontinued operations in the third quarter of 2003 was $1.9 million, $.02 per share. Income from continuing operations in the 2004 third quarter was $115.8 million, $1.24 per share, compared to $66.8 million, $.72 per share, in the same period of 2003. The 2004 income from continuing operations includes a $24.6 million gain on sale of the “T” Block field in the U.K. North Sea and a dry hole on the Todak #1 exploration well in Block K, Malaysia.
For the nine months of 2004, net income totaled $566.8 million, $6.07 per share, compared to $235.5 million, $2.54 per share, for the 2003 period. Continuing operations earned $364.6 million, $3.90 per share, in 2004 and $222 million, $2.40 per share, in 2003. Income from discontinued operations was $202.2 million, $2.17 per share, in the nine months of 2004, while the same period in 2003 totaled $20.5 million, $.22 per share. Income from discontinued operations in 2004 includes a gain on asset sale of $169.2 million.
Third Quarter 2004 vs. Third Quarter 2003
Reviewing quarterly results by type of business, the Company’s income contribution from continuing exploration and production operations was $118.6 million in the third quarter of 2004 compared to $65.6 million in the same quarter of 2003. The earnings improvement in 2004 was primarily caused by higher oil and natural gas sales prices and a $24.6 million after-tax gain on sale of the “T” Block field in the U.K. North Sea. These favorable variances were partially offset by lower natural gas sales volumes, higher exploration expenses and uninsured expenses of $2.6 million to repair damages from Hurricane Ivan in the Gulf of Mexico. The 2003 third quarter included an $11.4 million income tax benefit in Malaysia and a $2.3 million after-tax charge for impairment of assets in the Gulf of Mexico. The Company’s worldwide crude oil and condensate sales prices averaged $40.12 per barrel for the current quarter compared to $25.53 per barrel in the third quarter of 2003. Total crude oil and gas liquids production from continuing operations was 88,445 barrels per day in the third quarter of 2004 compared to 78,436 barrels per day in the 2003 quarter, with the net increase primarily attributable to production at the Medusa and Habanero fields in the deepwater Gulf of Mexico, both of which commenced production in the fourth quarter of 2003. Hurricane Ivan and other tropical storms reduced U.S. production by about 3,600 barrels of oil per day and eight million cubic feet of natural gas per day in the third quarter 2004. Crude oil sales volumes from continuing operations averaged 81,927 barrels per day in the third quarter of 2004 compared to 81,299 barrels per day in the 2003 period. Virtually no sales occurred in Ecuador in the 2004 third quarter while the Company realigns its transportation and marketing arrangements to resolve a dispute with the operator. The Company expects to make up this underlift position in Ecuador over the next several months. North American natural gas sales prices averaged $6.00 per thousand cubic feet (MCF) in the most recent quarter compared to $4.93 per MCF in the same quarter of 2003. Natural gas sales volumes from continuing operations were 99 million cubic feet per day in the third quarter 2004 compared to 106 million cubic feet per
day in the third quarter of 2003. The decline in natural gas sales was primarily due to sale of natural gas properties in Western Canada in the second quarter 2004 and downtime for tropical storms in the Gulf of Mexico in the third quarter 2004. Exploration expenses were $70.2 million in the 2004 quarter compared to $44.6 million in the same period of 2003, with the increase primarily due to higher dry hole costs offshore Eastern Canada and higher dry hole and seismic costs in Malaysia.
The Company’s refining and marketing results generated a profit of $18.7 million in the most recent quarter compared to $4.9 million in the 2003 quarter. The improvement was due to significantly better margins in North America and the United Kingdom in the current quarter, and higher crude runs in the 2004 period. The Company’s Meraux refinery was off-line most of the third quarter 2003 for repair of fire damages and a turnaround.
The after-tax costs of the corporate functions were $21.5 million in the 2004 quarter compared to $3.7 million in the 2003 quarter. Losses on foreign exchange increased net after-tax costs in the 2004 period by $8.2 million, while the 2003 period included foreign currency gains of $5.4 million, net of taxes. Higher administrative expenses were the other primary reasons for increased costs in 2004.
Nine Months 2004 vs. Nine Months 2003
Income from both the exploration and production and refining and marketing businesses improved significantly in the nine months of 2004 compared to the same period in 2003. The Company’s exploration and production continuing operations earned $359.6 million in the nine months of 2004 and $221.6 million in the same period of 2003. Higher oil and natural gas sales prices and sales volumes in 2004 were the primary reasons for better earnings in this business. Exploration expenses were $142.5 million in 2004 compared to $88.1 million in 2003, with the increase mostly due to higher costs for dry holes offshore Eastern Canada and Malaysia. Crude oil and gas liquids production from continuing operations for the nine months of 2004 averaged 93,632 barrels per day compared to 74,244 barrels per day in 2003. The higher production in 2004 was primarily attributable to start-up of the Medusa and Habanero fields in late 2003 and a full nine months of production at the West Patricia field in Malaysia. Natural gas sales from continuing operations were up from 111 million cubic feet per day in 2003 to 115 million cubic feet per day in 2004. Crude oil and condensate sales prices averaged $34.84 per barrel in the 2004 period compared to $26.00 per barrel in 2003. North American natural gas was sold for $6.04 per MCF in 2004, up from $5.37 in 2003.
The Company’s refining and marketing operations generated a profit of $51.8 million in 2004 compared to a profit of $1.7 million in 2003. The improved current year result was based on better margins in both the North American and U.K. businesses in 2004. The 2003 U.S. results were unfavorably affected by a fire and planned turnaround at the Meraux refinery.
Corporate after-tax costs were $46.8 million in the first nine months of 2004 compared to $1.3 million in the 2003 period. The 2004 period included after-tax foreign exchange charges of $7.8 million, while 2003 included net foreign exchange benefits of $5.4 million. The 2003 period included a benefit on U.S. tax settlements of $20.1 million. Higher net interest and administrative expenses were also components of the increased costs in the 2004 period. The Company sold most of its conventional oil and gas assets in Western Canada in the second quarter of 2004 for cash proceeds of $582.7 million, which generated an after-tax gain in discontinued operations of $169.2 million. The operating results of these sold assets have also been reported as discontinued operations for all periods presented.
Claiborne P. Deming, President and Chief Executive Officer, commented, “The Company continued its successful drilling activities in Malaysia in the third quarter of 2004
as an oil discovery was made at the Senangin #1 well in Block K, 8.5 miles outboard of the Kikeh field, and a natural gas discovery occurred at Pertang #1 in Block PM 311. The Todak #1 exploratory well, drilled in Block K in 5,765 feet of water, found noncommercial quantities of hydrocarbon in multiple thinly developed reservoirs and was plugged and abandoned. As the Todak structure extends over 30 miles, additional technical review is being undertaken prior to any future exploration on the structure. Drilling costs for Todak through September have been expensed in the third quarter 2004, while the drilling costs remaining to finish the well will be charged off in the fourth quarter. We purchased Canadian heavy oil properties at Seal in Northern Alberta during the third quarter of 2004. Current production from the acquired properties is about 2,750 barrels per day, and we will undertake a development drilling program in the fourth quarter. We anticipate total worldwide production in the fourth quarter of 111,000 barrels of oil equivalent per day. This production is reduced by about 10,800 barrels of oil equivalent per day while storm repairs are completed in the Gulf of Mexico. We currently expect earnings in the fourth quarter to be in the range of $1.30 to $1.70 per share. Results could vary based on commodity prices, drilling results and timing of oil sales.”
The public is invited to access the Company’s conference call to discuss third quarter 2004 results on Wednesday, October 27, at 11:00 a.m. CDT either via the Internet through the Investor Relations section of Murphy Oil’s website at http://www.murphyoilcorp.com/ir or via the telephone by dialing 1-800-257-3401. The telephone reservation number for the call is 11012230. Replays of the call will be available through the same address on Murphy Oil’s website, and a recording of the call will be available through October 31 by calling 1-800-405-2236.
Summary financial data and operating statistics for the third quarter and nine months of 2004 with comparisons to 2003 are contained in the attached tables.
The forward-looking statements reflected in this release are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. No assurance can be given that the results discussed herein will be attained, and certain important factors that may cause actual results to differ materially are contained in Murphy’s January 15, 1997 Form 8-K report on file with the U.S. Securities and Exchange Commission.
####
MURPHY OIL CORPORATION
FUNCTIONAL RESULTS OF OPERATIONS (Unaudited)
(Millions of dollars)
| Three Months Ended September 30, 2004 |
Three Months Ended September 30, 2003* |
||||||||||||
| Revenues |
Income |
Revenues |
Income |
||||||||||
| Exploration and production |
|||||||||||||
| United States |
$ | 104.4 | 33.0 | 45.3 | (.2 | ) | |||||||
| Canada |
154.1 | 52.8 | 123.4 | 43.0 | |||||||||
| United Kingdom |
81.0 | 42.8 | 27.5 | 10.0 | |||||||||
| Ecuador |
.4 | (.1 | ) | 9.5 | 3.7 | ||||||||
| Malaysia |
53.4 | (7.0 | ) | 40.7 | 10.9 | ||||||||
| Other |
.9 | (2.9 | ) | .5 | (1.8 | ) | |||||||
| 394.2 | 118.6 | 246.9 | 65.6 | ||||||||||
| Refining and marketing |
|||||||||||||
| North America |
1,752.1 | 12.9 | 910.7 | 3.8 | |||||||||
| United Kingdom |
172.9 | 5.8 | 119.6 | 1.1 | |||||||||
| 1,925.0 | 18.7 | 1,030.3 | 4.9 | ||||||||||
| 2,319.2 | 137.3 | 1,277.2 | 70.5 | ||||||||||
| Intersegment transfers elimination |
(20.5 | ) | — | (29.1 | ) | — | |||||||
| 2,298.7 | 137.3 | 1,248.1 | 70.5 | ||||||||||
| Corporate |
(7.9 | ) | (21.5 | ) | 1.2 | (3.7 | ) | ||||||
| Revenues/income from continuing operations |
2,290.8 | 115.8 | 1,249.3 | 66.8 | |||||||||
| Discontinued operations, net of taxes |
— | 2.9 | — | 1.9 | |||||||||
| Total revenues/net income |
$ | 2,290.8 | 118.7 | 1,249.3 | 68.7 | ||||||||
| Nine Months Ended September 30, 2004 |
Nine Months Ended September 30, 2003* |
||||||||||||
| Revenues |
Income |
Revenues |
Income |
||||||||||
| Exploration and production |
|||||||||||||
| United States |
$ | 367.4 | 117.2 | 145.9 | 15.4 | ||||||||
| Canada |
445.1 | 170.9 | 345.4 | 122.8 | |||||||||
| United Kingdom |
161.1 | 72.4 | 177.1 | 76.5 | |||||||||
| Ecuador |
30.5 | 6.6 | 25.6 | 10.0 | |||||||||
| Malaysia |
122.9 | (.4 | ) | 40.7 | .1 | ||||||||
| Other |
2.5 | (7.1 | ) | 2.8 | (3.2 | ) | |||||||
| 1,129.5 | 359.6 | 737.5 | 221.6 | ||||||||||
| Refining and marketing |
|||||||||||||
| North America |
4,504.0 | 29.8 | 2,686.4 | (4.1 | ) | ||||||||
| United Kingdom |
477.7 | 22.0 | 358.0 | 5.8 | |||||||||
| 4,981.7 | 51.8 | 3,044.4 | 1.7 | ||||||||||
| 6,111.2 | 411.4 | 3,781.9 | 223.3 | ||||||||||
| Intersegment transfers elimination |
(78.1 | ) | — | (54.4 | ) | — | |||||||
| 6,033.1 | 411.4 | 3,727.5 | 223.3 | ||||||||||
| Corporate |
1.5 | (46.8 | ) | 3.4 | (1.3 | ) | |||||||
| Revenues/income from continuing operations |
6,034.6 | 364.6 | 3,730.9 | 222.0 | |||||||||
| Discontinued operations, net of taxes |
— | 202.2 | — | 20.5 | |||||||||
| Revenues/income before cumulative effect of accounting change |
6,034.6 | 566.8 | 3,730.9 | 242.5 | |||||||||
| Cumulative effect of accounting change, net of taxes |
— | — | — | (7.0 | ) | ||||||||
| Total revenues/net income |
$ | 6,034.6 | 566.8 | 3,730.9 | 235.5 | ||||||||
| * | Restated to conform to current presentation. |
MURPHY OIL CORPORATION
CONTINUING OIL AND GAS OPERATING RESULTS (Unaudited)
| (Millions of dollars) |
United States |
Canada |
United Kingdom |
Ecuador |
Malaysia |
Other |
Synthetic Oil – Canada |
Total | |||||||||||||||
| Three Months Ended September 30, 2004 |
|||||||||||||||||||||||
| Oil and gas sales and other revenues |
$ | 104.4 | 107.8 | 81.0 | .4 | 53.4 | .9 | 46.3 | 394.2 | ||||||||||||||
| Production expenses |
17.7 | 9.0 | 4.1 | .3 | 7.1 | — | 17.9 | 56.1 | |||||||||||||||
| Cost to repair storm damage |
2.6 | — | — | — | — | — | — | 2.6 | |||||||||||||||
| Depreciation, depletion and amortization |
15.0 | 23.3 | 6.4 | .1 | 8.2 | .1 | 2.7 | 55.8 | |||||||||||||||
| Accretion of asset retirement obligations |
.9 | .8 | .6 | — | — | .1 | .1 | 2.5 | |||||||||||||||
| Exploration expenses |
|||||||||||||||||||||||
| Dry holes |
7.6 | 23.2 | — | — | 19.0 | — | — | 49.8 | |||||||||||||||
| Geological and geophysical |
1.8 | .5 | — | — | 12.1 | .5 | — | 14.9 | |||||||||||||||
| Other |
.8 | .1 | .1 | — | .1 | .3 | — | 1.4 | |||||||||||||||
| 10.2 | 23.8 | .1 | — | 31.2 | .8 | — | 66.1 | ||||||||||||||||
| Undeveloped lease amortization |
3.0 | .7 | — | — | — | .4 | — | 4.1 | |||||||||||||||
| Total exploration expenses |
13.2 | 24.5 | .1 | — | 31.2 | 1.2 | — | 70.2 | |||||||||||||||
| Selling and general expenses |
4.1 | 2.3 | .9 | .2 | 1.1 | 2.2 | .2 | 11.0 | |||||||||||||||
| Income tax provisions (benefits) |
17.9 | 12.2 | 26.1 | (.1 | ) | 12.8 | .2 | 8.3 | 77.4 | ||||||||||||||
| Results of operations (excluding corporate overhead and interest) |
$ | 33.0 | 35.7 | 42.8 | (.1 | ) | (7.0 | ) | (2.9 | ) | 17.1 | 118.6 | |||||||||||
| Three Months Ended September 30, 2003* |
|||||||||||||||||||||||
| Oil and gas sales and other revenues |
$ | 45.3 | 96.7 | 27.5 | 9.5 | 40.7 | .5 | 26.7 | 246.9 | ||||||||||||||
| Production expenses |
10.7 | 9.9 | 3.6 | 3.7 | 5.1 | — | 16.5 | 49.5 | |||||||||||||||
| Depreciation, depletion and amortization |
8.8 | 23.7 | 5.2 | 1.9 | 9.8 | .1 | 2.4 | 51.9 | |||||||||||||||
| Accretion of asset retirement obligations |
.8 | .6 | .6 | — | .1 | .1 | .1 | 2.3 | |||||||||||||||
| Impairment of properties |
3.0 | — | — | — | — | — | — | 3.0 | |||||||||||||||
| Exploration expenses |
|||||||||||||||||||||||
| Dry holes |
12.8 | 3.0 | (.1 | ) | — | 13.3 | — | — | 29.0 | ||||||||||||||
| Geological and geophysical |
1.2 | 4.1 | — | — | 5.2 | .4 | — | 10.9 | |||||||||||||||
| Other |
.6 | — | — | — | — | .1 | — | .7 | |||||||||||||||
| 14.6 | 7.1 | (.1 | ) | — | 18.5 | .5 | — | 40.6 | |||||||||||||||
| Undeveloped lease amortization |
3.1 | .8 | .1 | — | — | — | — | 4.0 | |||||||||||||||
| Total exploration expenses |
17.7 | 7.9 | — | — | 18.5 | .5 | — | 44.6 | |||||||||||||||
| Selling and general expenses |
4.6 | 5.6 | .7 | .2 | .6 | 1.6 | .1 | 13.4 | |||||||||||||||
| Income tax provisions (benefits) |
(.1 | ) | 14.2 | 7.4 | — | (4.3 | ) | — | (.6 | ) | 16.6 | ||||||||||||
| Results of operations (excluding corporate overhead and interest) |
$ | (.2 | ) | 34.8 | 10.0 | 3.7 | 10.9 | (1.8 | ) | 8.2 | 65.6 | ||||||||||||
| Nine Months Ended September 30, 2004 |
|||||||||||||||||||||||
| Oil and gas sales and other revenues |
$ | 367.4 | 320.5 | 161.1 | 30.5 | 122.9 | 2.5 | 124.6 | 1,129.5 | ||||||||||||||
| Production expenses |
56.6 | 27.2 | 15.8 | 13.8 | 18.2 | — | 55.4 | 187.0 | |||||||||||||||
| Cost to repair storm damage |
2.6 | — | — | — | — | — | — | 2.6 | |||||||||||||||
| Depreciation, depletion and amortization |
51.0 | 72.6 | 21.9 | 5.2 | 21.6 | .1 | 8.0 | 180.4 | |||||||||||||||
| Accretion of asset retirement obligations |
2.7 | 2.1 | 2.0 | — | .1 | .3 | .3 | 7.5 | |||||||||||||||
| Exploration expenses |
|||||||||||||||||||||||
| Dry holes |
40.7 | 23.1 | — | — | 36.5 | .1 | — | 100.4 | |||||||||||||||
| Geological and geophysical |
5.7 | 1.7 | — | — | 15.1 | 1.2 | — | 23.7 | |||||||||||||||
| Other |
4.0 | 1.7 | .4 | — | .1 | .5 | — | 6.7 | |||||||||||||||
| 50.4 | 26.5 | .4 | — | 51.7 | 1.8 | — | 130.8 | ||||||||||||||||
| Undeveloped lease amortization |
9.4 | 1.9 | — | — | — | .4 | — | 11.7 | |||||||||||||||
| Total exploration expenses |
59.8 | 28.4 | .4 | — | 51.7 | 2.2 | — | 142.5 | |||||||||||||||
| Selling and general expenses |
14.2 | 8.0 | 2.4 | .5 | 3.5 | 6.5 | .5 | 35.6 | |||||||||||||||
| Income tax provisions |
63.3 | 54.1 | 46.2 | 4.4 | 28.2 | .5 | 17.6 | 214.3 | |||||||||||||||
| Results of operations (excluding corporate overhead and interest) |
$ | 117.2 | 128.1 | 72.4 | 6.6 | (.4 | ) | (7.1 | ) | 42.8 | 359.6 | ||||||||||||
| Nine Months September 30, 2003* |
|||||||||||||||||||||||
| Oil and gas sales and other revenues |
$ | 145.9 | 271.8 | 177.1 | 25.6 | 40.7 | 2.8 | 73.6 | 737.5 | ||||||||||||||
| Production expenses |
27.4 | 27.1 | 24.4 | 10.7 | 5.1 | — | 45.8 | 140.5 | |||||||||||||||
| Depreciation, depletion and amortization |
26.3 | 69.0 | 23.2 | 4.5 | 10.3 | .2 | 6.7 | 140.2 | |||||||||||||||
| Accretion of asset retirement obligations |
2.4 | 1.8 | 2.3 | — | .2 | .3 | .3 | 7.3 | |||||||||||||||
| Impairment of properties |
3.0 | — | — | — | — | — | — | 3.0 | |||||||||||||||
| Exploration expenses |
|||||||||||||||||||||||
| Dry holes |
32.2 | 3.0 | (.1 | ) | — | 13.3 | (.1 | ) | — | 48.3 | |||||||||||||
| Geological and geophysical |
7.0 | 4.3 | — | — | 12.7 | .4 | — | 24.4 | |||||||||||||||
| Other |
2.9 | .4 | .4 | — | .5 | .2 | — | 4.4 | |||||||||||||||
| 42.1 | 7.7 | .3 | — | 26.5 | .5 | — | 77.1 | ||||||||||||||||
| Undeveloped lease amortization |
8.5 | 2.4 | .1 | — | — | — | — | 11.0 | |||||||||||||||
| Total exploration expenses |
50.6 | 10.1 | .4 | — | 26.5 | .5 | — | 88.1 | |||||||||||||||
| Selling and general expenses |
12.5 | 10.5 | 2.3 | .4 | 2.8 | 4.8 | .4 | 33.7 | |||||||||||||||
| Income tax provisions (benefits) |
8.3 | 47.3 | 48.0 | — | (4.3 | ) | .2 | 3.6 | 103.1 | ||||||||||||||
| Results of operations (excluding corporate overhead and interest) |
$ | 15.4 | 106.0 | 76.5 | 10.0 | .1 | (3.2 | ) | 16.8 | 221.6 | |||||||||||||
| * | Reclassified to conform to current presentation. |
MURPHY OIL CORPORATION
SUMMARIZED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Thousands of dollars, except per share amounts)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||
| 2004 |
2003* |
2004 |
2003* |
||||||||||
| Revenues |
$ | 2,290,753 | 1,249,302 | 6,034,592 | 3,730,860 | ||||||||
| Costs and expenses |
|||||||||||||
| Crude oil and product purchases |
1,730,202 | 884,693 | 4,404,644 | 2,629,125 | |||||||||
| Operating expenses |
174,385 | 126,540 | 522,821 | 421,035 | |||||||||
| Exploration expenses |
70,118 | 44,644 | 142,476 | 88,091 | |||||||||
| Selling and general expenses |
33,622 | 30,169 | 97,497 | 86,291 | |||||||||
| Depreciation, depletion and amortization |
75,594 | 67,648 | 238,504 | 183,949 | |||||||||
| Impairment of properties |
— | 3,488 | — | 3,488 | |||||||||
| Accretion of asset retirement obligations |
2,575 | 2,364 | 7,549 | 7,325 | |||||||||
| Interest expense |
13,858 | 14,455 | 42,325 | 42,688 | |||||||||
| Interest capitalized |
(6,017 | ) | (10,027 | ) | (15,083 | ) | (29,675 | ) | |||||
| 2,094,337 | 1,163,974 | 5,440,733 | 3,432,317 | ||||||||||
| Income from continuing operations before income taxes |
196,416 | 85,328 | 593,859 | 298,543 | |||||||||
| Income tax expense |
80,643 | 18,541 | 229,255 | 76,544 | |||||||||
| Income from continuing operations |
115,773 | 66,787 | 364,604 | 221,999 | |||||||||
| Discontinued operations, net of tax |
2,950 | 1,950 | 202,231 | 20,529 | |||||||||
| Income before cumulative effect of change in accounting principle |
118,723 | 68,737 | 566,835 | 242,528 | |||||||||
| Cumulative effect of change in accounting principle |
— | — | — | (6,993 | ) | ||||||||
| Net income |
$ | 118,723 | 68,737 | 566,835 | 235,535 | ||||||||
| Per Common share - Basic |
|||||||||||||
| Continuing operations |
$ | 1.26 | .73 | 3.96 | 2.42 | ||||||||
| Discontinued operations |
.03 | .02 | 2.20 | .22 | |||||||||
| Cumulative effect of change in accounting principle |
— | — | — | (.08 | ) | ||||||||
| Net income |
$ | 1.29 | .75 | 6.16 | 2.56 | ||||||||
| Per Common share - Diluted |
|||||||||||||
| Continuing operations |
$ | 1.24 | .72 | 3.90 | 2.40 | ||||||||
| Discontinued operations |
.03 | .02 | 2.17 | .22 | |||||||||
| Cumulative effect of change in accounting principle |
— | — | — | (.08 | ) | ||||||||
| Net income |
$ | 1.27 | .74 | 6.07 | 2.54 | ||||||||
| Cash dividends per Common share |
$ | .225 | .20 | .625 | .60 | ||||||||
| Average Common shares outstanding (thousands) |
|||||||||||||
| Basic |
92,006 | 91,850 | 91,972 | 91,800 | |||||||||
| Diluted |
93,568 | 92,848 | 93,366 | 92,613 | |||||||||
| * | Reclassified to conform to current presentation. |
MURPHY OIL CORPORATION
SUMMARIZED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(Thousands of dollars)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||
| 2004 |
2003* |
2004 |
2003* |
||||||||||
| Operating Activities |
|||||||||||||
| Income from continuing operations |
$ | 115,773 | 66,787 | 364,604 | 221,999 | ||||||||
| Adjustments to reconcile income from continuing operations to net cash provided by operating activities |
|||||||||||||
| Depreciation, depletion and amortization |
75,594 | 67,648 | 238,504 | 183,949 | |||||||||
| Provisions for major repairs |
7,515 | 4,857 | 22,692 | 20,687 | |||||||||
| Expenditures for major repairs and asset retirement obligations |
(5,711 | ) | (34,365 | ) | (14,700 | ) | (60,558 | ) | |||||
| Dry holes |
49,774 | 28,917 | 100,370 | 48,282 | |||||||||
| Amortization of undeveloped leases |
4,097 | 3,957 | 11,705 | 10,927 | |||||||||
| Impairment of properties |
— | 3,488 | — | 3,488 | |||||||||
| Accretion of asset retirement obligations |
2,575 | 2,364 | 7,549 | 7,325 | |||||||||
| Deferred and noncurrent income tax charges (benefits) |
49,075 | (10,967 | ) | 96,765 | (5,327 | ) | |||||||
| Pretax (gains) losses from dispositions of assets |
(39,099 | ) | (10,353 | ) | (69,900 | ) | (59,651 | ) | |||||
| Net (increase) decrease in operating working capital other than cash and cash equivalents |
60,919 | 36,932 | 59,071 | 43,039 | |||||||||
| Other |
(5,553 | ) | 11,088 | (6,817 | ) | 5,416 | |||||||
| Net cash provided by continuing operations |
314,959 | 170,353 | 809,843 | 419,576 | |||||||||
| Net cash provided by discontinued operations |
528 | 33,803 | 60,800 | 123,712 | |||||||||
| Net cash provided by operating activities |
315,487 | 204,156 | 870,643 | 543,288 | |||||||||
| Investing Activities |
|||||||||||||
| Property additions and dry holes |
(332,990 | ) | (239,352 | ) | (731,138 | ) | (656,702 | ) | |||||
| Proceeds from sale of assets |
18,867 | 8,864 | 59,538 | 77,899 | |||||||||
| Other - net |
849 | 180 | (453 | ) | 260 | ||||||||
| Investing activities of discontinued operations: |
|||||||||||||
| Sales proceeds |
— | — | 582,675 | — | |||||||||
| Other |
3,910 | (12,615 | ) | (9,619 | ) | (48,500 | ) | ||||||
| Net cash required by investing activities |
(309,364 | ) | (242,923 | ) | (98,997 | ) | (627,043 | ) | |||||
| Financing Activities |
|||||||||||||
| Increase (decrease) in notes payable |
(43 | ) | 78,201 | (27,592 | ) | 227,689 | |||||||
| Decrease in nonrecourse debt of a subsidiary |
(16,071 | ) | (6,247 | ) | (36,970 | ) | (30,699 | ) | |||||
| Proceeds from exercise of stock options and employee stock purchase plan |
291 | 531 | 2,178 | 2,879 | |||||||||
| Cash dividends paid |
(20,701 | ) | (18,372 | ) | (57,496 | ) | (55,090 | ) | |||||
| Other |
— | — | — | (72 | ) | ||||||||
| Net cash provided by (used in) financing activities |
(36,524 | ) | 54,113 | (119,880 | ) | 144,707 | |||||||
| Effect of exchange rate changes on cash and cash equivalents |
38,521 | 1,497 | 50,938 | 11,202 | |||||||||
| Net increase in cash and cash equivalents |
8,120 | 16,843 | 702,704 | 72,154 | |||||||||
| Cash and cash equivalents at January 1 |
947,009 | 220,268 | 252,425 | 164,957 | |||||||||
| Cash equivalents at September 30 |
$ | 955,129 | 237,111 | 955,129 | 237,111 | ||||||||
| * | Reclassified to conform to current presentation. |
MURPHY OIL CORPORATION
OTHER FINANCIAL DATA
(Unaudited, except for December 31, 2003)
(Millions of dollars)
| Sept. 30, 2004 |
Dec. 31, 2003 | ||||
| Working capital |
$ | 842.2 | 228.5 | ||
| Total assets |
5,602.1 | 4,712.6 | |||
| Long-term debt |
|||||
| Notes payable |
1,032.2 | 1,061.4 | |||
| Nonrecourse debt |
14.9 | 28.9 | |||
| Stockholders’ equity |
2,490.2 | 1,950.9 | |||
| Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||
| 2004 |
2003 |
2004 |
2003 | ||||||
| Capital expenditures - continuing operations |
|||||||||
| Exploration and production |
|||||||||
| United States |
$ | 49.6 | 71.4 | 160.1 | 228.2 | ||||
| Canada |
174.6 | 42.8 | 272.6 | 117.0 | |||||
| Malaysia |
82.5 | 81.4 | 200.4 | 145.0 | |||||
| Other |
6.3 | 11.0 | 20.6 | 40.9 | |||||
| 313.0 | 206.6 | 653.7 | 531.1 | ||||||
| Refining and marketing |
|||||||||
| North America |
33.6 | 43.2 | 101.4 | 148.3 | |||||
| United Kingdom |
2.1 | 1.0 | 5.4 | 5.3 | |||||
| 35.7 | 44.2 | 106.8 | 153.6 | ||||||
| Corporate |
.5 | .2 | 1.1 | .8 | |||||
| Total capital expenditures |
349.2 | 251.0 | 761.6 | 685.5 | |||||
| Charged to exploration expenses2 |
|||||||||
| United States |
10.2 | 14.6 | 50.4 | 42.1 | |||||
| Canada |
23.8 | 7.1 | 26.5 | 7.7 | |||||
| Malaysia |
31.2 | 18.5 | 51.7 | 26.5 | |||||
| Other international |
.9 | .4 | 2.2 | .8 | |||||
| Total charged to exploration expenses |
66.1 | 40.6 | 130.8 | 77.1 | |||||
| Total capitalized |
$ | 283.1 | 210.4 | 630.8 | 608.4 | ||||
1 Reclassified to conform to current presentation. |
|||||||||
| 2 Excludes amortization of undeveloped leases of |
$ | 4.1 | 4.0 | 11.7 | 11.0 | ||||
MURPHY OIL CORPORATION
STATISTICAL SUMMARY
| Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||
| 2004 |
20031 |
2004 |
20031 | ||||||
| Net crude oil, condensate and gas liquids produced – barrels per day |
88,428 | 84,871 | 97,713 | 81,065 | |||||
| Continuing operations |
88,445 | 78,436 | 93,632 | 74,244 | |||||
| Crude oil and condensate |
|||||||||
| United States |
16,886 | 3,828 | 19,484 | 3,617 | |||||
| Canada |
|||||||||
| – light |
120 | 356 | 182 | 737 | |||||
| – heavy |
4,663 | 5,188 | 4,567 | 4,392 | |||||
| – offshore |
23,390 | 26,700 | 26,715 | 28,408 | |||||
| – synthetic |
12,048 | 12,009 | 11,976 | 10,604 | |||||
| United Kingdom |
10,701 | 11,494 | 11,293 | 15,460 | |||||
| Ecuador |
7,808 | 5,365 | 7,781 | 3,950 | |||||
| Malaysia |
12,088 | 12,712 | 10,705 | 6,168 | |||||
| Natural gas liquids |
|||||||||
| United States |
177 | 183 | 173 | 157 | |||||
| Canada |
481 | 459 | 489 | 587 | |||||
| United Kingdom |
83 | 142 | 267 | 164 | |||||
| Discontinued operations |
(17 | ) | 6,435 | 4,081 | 6,821 | ||||
| Net crude oil, condensate and gas liquids sold – barrels per day |
81,910 | 87,734 | 96,019 | 80,128 | |||||
| Continuing operations |
81,927 | 81,299 | 91,938 | 73,307 | |||||
| Crude oil and condensate |
|||||||||
| United States |
16,886 | 3,828 | 19,484 | 3,617 | |||||
| Canada |
|||||||||
| – light |
120 | 356 | 182 | 737 | |||||
| – heavy |
4,663 | 5,188 | 4,567 | 4,392 | |||||
| – offshore |
24,313 | 29,119 | 27,816 | 28,948 | |||||
| – synthetic |
12,048 | 12,009 | 11,976 | 10,604 | |||||
| United Kingdom |
10,412 | 9,257 | 11,501 | 14,738 | |||||
| Ecuador |
147 | 4,823 | 4,502 | 4,001 | |||||
| Malaysia |
12,617 | 15,962 | 11,082 | 5,379 | |||||
| Natural gas liquids |
|||||||||
| United States |
177 | 183 | 173 | 157 | |||||
| Canada |
481 | 459 | 489 | 587 | |||||
| United Kingdom |
63 | 115 | 166 | 147 | |||||
| Discontinued operations |
(17 | ) | 6,435 | 4,081 | 6,821 | ||||
| Net natural gas sold – thousands of cubic feet per day |
98,858 | 203,162 | 157,172 | 220,703 | |||||
| Continuing operations |
98,919 | 106,055 | 115,307 | 111,224 | |||||
| United States |
81,531 | 85,071 | 94,525 | 82,220 | |||||
| Canada |
13,424 | 14,754 | 14,205 | 20,521 | |||||
| United Kingdom |
3,964 | 6,230 | 6,577 | 8,483 | |||||
| Discontinued operations |
(61 | ) | 97,107 | 41,865 | 109,479 | ||||
| Total net hydrocarbons produced – equivalent barrels per day2 |
104,904 | 118,731 | 123,908 | 117,849 | |||||
| Total net hydrocarbons sold – equivalent barrels per day2 |
98,386 | 121,594 | 122,214 | 116,912 | |||||
| 1 | Reclassified to conform to current presentation. |
| 2 | Natural gas converted on an energy equivalent basis of 6:1. |
MURPHY OIL CORPORATION
STATISTICAL SUMMARY (Continued)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||
| 2004 |
2003 |
2004 |
2003 |
||||||||
| Weighted average sales prices |
|||||||||||
| Crude oil and condensate – dollars per barrel (1) |
|||||||||||
| United States |
$ | 37.70 | 23.88 | (3) | 34.21 | 24.43 | (3) | ||||
| Canada (2) |
|||||||||||
| – light |
40.49 | 23.33 | 36.02 | 27.64 | |||||||
| – heavy |
23.25 | 13.23 | (3) | 20.07 | 12.80 | (3) | |||||
| – offshore |
40.16 | 27.08 | (3) | 35.30 | 26.70 | (3) | |||||
| – synthetic |
41.83 | 23.95 | (3) | 37.99 | 25.33 | (3) | |||||
| United Kingdom |
42.52 | 28.80 | 35.98 | 29.43 | |||||||
| Ecuador |
30.51 | 21.40 | 24.73 | 23.42 | |||||||
| Malaysia |
45.99 | 27.66 | 40.36 | 27.66 | |||||||
| Natural gas liquids – dollars a barrel (1) |
|||||||||||
| United States |
$ | 29.94 | 22.14 | 27.95 | 23.17 | ||||||
| Canada (2) |
31.21 | 23.55 | 29.05 | 24.27 | |||||||
| United Kingdom |
29.67 | 20.19 | 26.91 | 22.32 | |||||||
| Natural gas – dollars per thousand cubic feet |
|||||||||||
| United States (1) |
$ | 6.17 | 4.94 | (3) | 6.16 | 5.48 | (3) | ||||
| Canada (2) |
4.98 | 4.85 | (3) | 5.24 | 4.95 | (3) | |||||
| United Kingdom (2) |
3.73 | 2.28 | 4.13 | 3.11 | |||||||
| Refinery inputs – barrels per day |
173,677 | 72,484 | 175,469 | 123,400 | |||||||
| North America |
138,483 | 39,356 | 138,816 | 88,738 | |||||||
| United Kingdom |
35,194 | 33,128 | 36,653 | 34,662 | |||||||
| Petroleum products sold – barrels per day |
353,538 | 255,662 | 334,477 | 252,754 | |||||||
| North America |
317,835 | 220,543 | 297,697 | 218,105 | |||||||
| Gasoline |
210,707 | 167,752 | 204,324 | 155,084 | |||||||
| Kerosine |
721 | 293 | 3,193 | 4,572 | |||||||
| Diesel and home heating oils |
78,098 | 34,070 | 67,547 | 38,825 | |||||||
| Residuals |
13,953 | 4,629 | 13,180 | 10,575 | |||||||
| Asphalt, LPG and other |
14,356 | 13,799 | 9,453 | 9,049 | |||||||
| United Kingdom |
35,703 | 35,119 | 36,780 | 34,649 | |||||||
| Gasoline |
9,711 | 14,112 | 11,730 | 11,879 | |||||||
| Kerosine |
2,349 | 1,725 | 2,477 | 2,383 | |||||||
| Diesel and home heating oils |
14,366 | 13,596 | 14,456 | 13,754 | |||||||
| Residuals |
3,441 | 3,748 | 4,098 | 3,785 | |||||||
| LPG and other |
5,836 | 1,938 | 4,019 | 2,848 | |||||||
| (1) | Includes intracompany transfers at market prices. |
| (2) | U.S. dollar equivalent. |
| (3) | Includes the effect of the Company’s 2003 hedging program. |