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 25, 2005
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 25, 2005, Murphy Oil Corporation issued a press release announcing its earnings for the third quarter that ended on September 30, 2005. The full text of this press release is attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits
| (c) | Exhibits |
| 99.1 | A news release dated October 25, 2005 announcing earnings for the third quarter that ended on September 30, 2005 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 25, 2005
Exhibit Index
| 99.1 | Press release dated October 25, 2005, as issued by Murphy Oil Corporation. |
Exhibit 99.1
MURPHY OIL ANNOUNCES QUARTERLY EARNINGS
EL DORADO, Arkansas, October 25, 2005 – Murphy Oil Corporation (NYSE: MUR) announced today that net income in the third quarter of 2005 was $231 million, $1.23 per diluted share, compared to net income of $118.7 million, $.63 per diluted share, in the third quarter of 2004. Net income in the current period included income from discontinued operations of $8.6 million, $.05 per share, related to an adjustment of prior-year income taxes associated with the gain on the sale of most of the Company’s conventional oil and gas assets in Western Canada in the second quarter 2004. Income from discontinued operations in the third quarter of 2004 was $2.9 million, $.01 per share.
Income from continuing operations in the 2005 third quarter was $222.4 million, $1.18 per diluted share, compared to $115.8 million, $.62 per diluted share, in the same period of 2004, which included a $24.6 million after-tax gain on sale of the “T” Block field in the U.K. North Sea. The 2005 period’s income from continuing operations included pretax costs of $34.1 million ($21.3 million after taxes) associated with hurricanes that occurred in the U.S. during the just completed quarter. These costs are net of anticipated insurance recoveries. The components of these costs include $13.8 million for incremental insurance expenses; $3.0 million for uninsured losses within the Company’s insurance deductibles; $8.9 million of voluntary costs for Company donations and additional employee salaries; $5.1 million for depreciation and salaries for the temporarily idled Meraux refinery; and $3.3 million for other incremental expenses incurred that are not covered by insurance policies. The Company anticipates that additional costs related to Hurricane Katrina will be recorded in future periods.
For the nine months of 2005, net income totaled $691.9 million, $3.69 per diluted share, compared to $566.8 million, $3.04 per diluted share, for the 2004 period. Continuing operations earned $683.3 million, $3.64 per diluted share, in 2005 and $364.6 million, $1.95 per diluted share, in 2004. Income from discontinued operations was $8.6 million, $.05 per diluted share, in the nine months of 2005, while the same period in 2004 totaled $202.2 million, $1.09 per diluted share. Income from discontinued operations in 2004 included a $169.2 million after-tax gain on sale of assets in Western Canada.
Third Quarter 2005 vs. Third Quarter 2004
Reviewing quarterly results by type of business, the Company’s income contribution from continuing exploration and production operations was $204.6 million in the third quarter of 2005 compared to $118.6 million in the same quarter of 2004. The earnings improvement in 2005 was primarily caused by higher oil and natural gas sales prices, higher oil sales volumes, lower dry hole costs, and business interruption insurance recoveries of $4.9 million after taxes related to prior-year hurricanes. These were partly offset by lower natural gas sales volumes, higher hurricane-related costs in 2005 of $9 million ($11.6 million in 2005 compared to $2.6 million in 2004) and an after-tax gain of $24.6 million in the 2004 period from sale of the “T” Block field in the U.K. North Sea.
The Company’s worldwide crude oil and condensate sales prices averaged $53.15 per barrel for the current quarter compared to $40.12 per barrel in the third quarter of 2004. Total crude oil and gas liquids production from continuing operations was 94,151 barrels per day in the third quarter of 2005 compared to 88,445 barrels per day in the 2004 quarter, with the net increase primarily attributable to production at the Front Runner field in the
deepwater Gulf of Mexico, which began in the fourth quarter of 2004, and higher heavy oil production from the Seal area in Western Canada. Oil production in the United Kingdom and offshore Eastern Canada was lower in the 2005 period due to downtime for maintenance. Hurricanes Katrina and Rita and tropical storms reduced U.S. production by approximately 11,800 barrels of oil per day and 21 million cubic feet of natural gas per day in the 2005 third quarter, while 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 93,910 barrels per day in the third quarter of 2005 compared to 81,927 barrels per day in the 2004 period. Virtually no sales occurred in Ecuador in the 2004 third quarter while the Company was in the process of realigning its transportation and marketing arrangements. While sales have occurred in Ecuador in 2005, the Company continues to pursue settlement of its under sold position from the 2004 period with the other owners in Block 16. North American natural gas sales prices averaged $8.54 per thousand cubic feet (MCF) in the 2005 third quarter compared to $6.00 per MCF in the same quarter of 2004. Natural gas sales volumes from continuing operations were 70 million cubic feet per day in the third quarter 2005 compared to 99 million cubic feet per day in the third quarter of 2004. The decline in natural gas sales volumes was primarily due to the sale of properties on the continental shelf in the Gulf of Mexico in the second quarter 2005, and more natural gas production lost from hurricanes in the Gulf of Mexico in the third quarter 2005 compared to the 2004 period.
Exploration expenses were $32.9 million in the 2005 quarter compared to $70.2 million in the same period of 2004, with the decline primarily due to less dry hole costs offshore Malaysia and Eastern Canada in the 2005 period. This was partially offset by higher 3-D seismic costs offshore Malaysia in 2005.
The Company’s refining and marketing operations generated a profit of $32 million in the most recent quarter compared to a profit of $18.7 million in the 2004 quarter. The earnings improved due to higher profits in the U.K in the 2005 period, partially offset by lower profits in North America. Murphy’s downstream business incurred after-tax costs related to hurricanes of $13.9 million in the just completed quarter ($22.1 million before income taxes). The Company’s Meraux, Louisiana, refinery experienced flooding during Hurricane Katrina and was shut down for the last 34 days of the quarter. This refinery was also shut down most of the third quarter in 2004 for turnaround.
The after-tax costs of the corporate functions were $14.2 million in the 2005 quarter compared to costs of $21.5 million in the 2004 quarter. The 2005 period included after-tax costs for foreign exchange of $2.7 million, while the 2004 period included costs of $8.2 million for foreign exchange. In addition, the Company incurred less net interest expense due to lower average debt and a higher portion of interest costs being capitalized in the 2005 period. Higher administrative expenses in 2005 partially offset lower net foreign exchange and interest expenses.
First Nine Months 2005 vs. First Nine Months 2004
Income from both the exploration and production and refining and marketing businesses was significantly higher in the first nine months of 2005 compared to the same period in 2004. The Company’s exploration and production continuing operations earned $619.4 million in the nine months of 2005 and $359.6 million in the same period of 2004. The primary reasons for the improved earnings in this business in 2005 were higher oil and natural gas sales prices, higher oil sales volumes, and a $106.8 million after-tax gain on sale of mature oil and gas properties on the continental shelf of the Gulf of Mexico. After-tax costs associated with hurricanes were $5.6 million higher in the 2005 period compared to 2004. Exploration expenses were $143.2 million in 2005 compared to $142.5 million in
2004. Crude oil and gas liquids production from continuing operations for the nine months of 2005 averaged 104,588 barrels per day compared to 93,632 barrels per day in 2004. The higher production in 2005 was primarily attributable to start-up of the Front Runner field in late 2004. Oil production also increased in Malaysia and the heavy oil area in Canada but declined in the U.K. following sale of the “T” Block field in 2004. Natural gas sales from continuing operations were 96 million cubic feet per day in 2005 compared to 115 million cubic feet per day in 2004, with the decline mostly caused by the sale of properties on the continental shelf of the Gulf of Mexico in the second quarter 2005. Crude oil and condensate sales prices averaged $45.15 per barrel in the 2005 period compared to $34.84 per barrel in 2004. North American natural gas was sold for $7.37 per MCF in 2005, up from $6.04 per MCF in 2004.
The Company’s refining and marketing operations generated a profit of $93.9 million in the first nine months of 2005 compared to a profit of $51.8 million in 2004. The improved current year result was based on better margins in both the North American and U.K. businesses in 2005. The 2005 results included net-of-tax hurricane related costs of $13.9 million. Both nine month periods were affected by some third quarter downtime at the Meraux refinery, with 2005 related to damages caused by Hurricane Katrina and 2004 related to a turnaround.
Corporate after-tax costs were $30.0 million in the first nine months of 2005 compared to $46.8 million in the 2004 period. The Company had lower net interest expense in the 2005 period due to a combination of lower average debt levels and higher interest capitalized on development projects. The 2005 period included after-tax foreign exchange charges of $2.4 million, while 2004 included after-tax foreign exchange charges of $7.8 million. Higher administrative expenses in 2005, primarily related to employee compensation costs, partially offset lower interest and foreign exchange expenses.
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 included 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, “Although we continued to benefit from strong crude oil, natural gas and finished product prices, the third quarter 2005 proved to be quite a challenge. Hurricane Katrina in particular took a toll on our business and our people. The Meraux refinery suffered extensive flooding following the levee breaks near New Orleans and, as a result, a crude oil tank leaked into areas surrounding the refinery. We have essentially completed clean-up of public lands and we will now turn our attention to cleaning private properties. It appears that the refinery will remain shut down for repairs through the first quarter of next year. In the Gulf of Mexico we still have widespread shut-ins due to extensive damage to various pipelines used to carry both oil and natural gas to shore. We anticipate all of these fields to start back up in the fourth quarter. Although we have been through a difficult time, I am extremely grateful to our employees for generously giving their time to help others, including many in our company, who were displaced by the hurricane. In addition, the level of commitment and effort exhibited by our employees since the hurricane makes me very proud to work for this company. We anticipate total worldwide production in the fourth quarter 2005 of 101,000 barrels of oil equivalent per day. This production estimate reflects lost volumes projected at 23,000 barrels of oil equivalent per day in the quarter while hurricane repairs to third party infrastructure are completed in the Gulf of Mexico. We currently expect earnings in the fourth quarter to be in the range of $.70 to $1.00 per diluted share. Results could vary based on commodity prices, drilling results, timing of oil sales, and timing and amount of hurricane-related costs.”
The public is invited to access the Company’s conference call to discuss third quarter 2005 results on Wednesday, October 26 at 12:00 p.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 1-800-257-6607. The telephone reservation number for the call is 11041913. 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 30 by calling 1-800-405-2236.
Summary financial data and operating statistics for the third quarter and nine months of 2005 with comparisons to 2004 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, 2005 |
Three Months Ended September 30, 2004* |
||||||||||||
| Revenues |
Income |
Revenues |
Income |
||||||||||
| Exploration and production |
|||||||||||||
| United States |
$ | 168.0 | 71.3 | 104.4 | 33.0 | ||||||||
| Canada |
227.8 | 98.2 | 154.1 | 52.8 | |||||||||
| United Kingdom |
40.6 | 15.2 | 81.0 | 42.8 | |||||||||
| Ecuador |
30.3 | 13.3 | .4 | (.1 | ) | ||||||||
| Malaysia |
62.4 | 10.6 | 53.4 | (7.0 | ) | ||||||||
| Other |
.8 | (4.0 | ) | .9 | (2.9 | ) | |||||||
| 529.9 | 204.6 | 394.2 | 118.6 | ||||||||||
| Refining and marketing |
|||||||||||||
| North America |
2,512.2 | 11.2 | 1,752.1 | 12.9 | |||||||||
| United Kingdom |
292.0 | 20.8 | 172.9 | 5.8 | |||||||||
| 2,804.2 | 32.0 | 1,925.0 | 18.7 | ||||||||||
| 3,334.1 | 236.6 | 2,319.2 | 137.3 | ||||||||||
| Intersegment transfers elimination |
(16.5 | ) | — | (17.8 | ) | — | |||||||
| 3,317.6 | 236.6 | 2,301.4 | 137.3 | ||||||||||
| Corporate |
(.7 | ) | (14.2 | ) | (7.9 | ) | (21.5 | ) | |||||
| Revenues/income from continuing operations |
3,316.9 | 222.4 | 2,293.5 | 115.8 | |||||||||
| Discontinued operations, net of taxes |
— | 8.6 | — | 2.9 | |||||||||
| Total revenues/net income |
$ | 3,316.9 | 231.0 | 2,293.5 | 118.7 | ||||||||
| Nine Months Ended September 30, 2005 |
Nine Months Ended September 30, 2004* |
||||||||||||
| Revenues |
Income |
Revenues |
Income |
||||||||||
| Exploration and production |
|||||||||||||
| United States |
$ | 717.5 | 321.1 | 367.4 | 117.2 | ||||||||
| Canada |
577.1 | 232.2 | 445.1 | 170.9 | |||||||||
| United Kingdom |
129.4 | 52.9 | 161.1 | 72.4 | |||||||||
| Ecuador |
73.3 | 25.8 | 30.5 | 6.6 | |||||||||
| Malaysia |
185.4 | 22.5 | 122.9 | (.4 | ) | ||||||||
| Other |
2.6 | (35.1 | ) | 2.5 | (7.1 | ) | |||||||
| 1,685.3 | 619.4 | 1,129.5 | 359.6 | ||||||||||
| Refining and marketing |
|||||||||||||
| North America |
6,399.6 | 62.6 | 4,504.0 | 29.8 | |||||||||
| United Kingdom |
622.5 | 31.3 | 477.7 | 22.0 | |||||||||
| 7,022.1 | 93.9 | 4,981.7 | 51.8 | ||||||||||
| 8,707.4 | 713.3 | 6,111.2 | 411.4 | ||||||||||
| Intersegment transfers elimination |
(42.2 | ) | — | (53.8 | ) | — | |||||||
| 8,665.2 | 713.3 | 6,057.4 | 411.4 | ||||||||||
| Corporate |
16.5 | (30.0 | ) | 1.5 | (46.8 | ) | |||||||
| Revenues/income from continuing operations |
8,681.7 | 683.3 | 6,058.9 | 364.6 | |||||||||
| Discontinued operations, net of taxes |
— | 8.6 | — | 202.2 | |||||||||
| Total revenues/net income |
$ | 8,681.7 | 691.9 | 6,058.9 | 566.8 | ||||||||
| * | Restated to conform to current presentation. |
MURPHY OIL CORPORATION
CONTINUING OIL AND GAS OPERATING RESULTS (Unaudited)
| (Millions of dollars) |
United States |
Canada |
United King- dom |
Ecuador |
Malaysia |
Other |
Synthetic Oil — Canada |
Total | ||||||||||||||
| Three Months Ended September 30, 2005 |
||||||||||||||||||||||
| Oil and gas sales and other revenues |
$ | 168.0 | 158.4 | 40.6 | 30.3 | 62.4 | .8 | 69.4 | 529.9 | |||||||||||||
| Production expenses |
13.9 | 14.7 | 4.2 | 3.7 | 9.9 | — | 25.1 | 71.5 | ||||||||||||||
| Net costs associated with hurricanes* |
7.6 | 2.1 | .7 | — | .1 | — | 1.1 | 11.6 | ||||||||||||||
| Depreciation, depletion and amortization |
19.7 | 27.9 | 4.8 | 5.0 | 12.8 | .1 | 3.4 | 73.7 | ||||||||||||||
| Accretion of asset retirement obligations |
.6 | .9 | .4 | — | .1 | .2 | .1 | 2.3 | ||||||||||||||
| Exploration expenses |
||||||||||||||||||||||
| Dry holes |
(.1 | ) | — | 3.9 | — | (.3 | ) | .4 | — | 3.9 | ||||||||||||
| Geological and geophysical |
2.7 | 2.5 | — | — | 16.7 | .1 | — | 22.0 | ||||||||||||||
| Other |
.6 | .1 | — | — | — | .9 | — | 1.6 | ||||||||||||||
| 3.2 | 2.6 | 3.9 | — | 16.4 | 1.4 | — | 27.5 | |||||||||||||||
| Undeveloped lease amortization |
4.3 | .8 | — | — | — | .3 | — | 5.4 | ||||||||||||||
| Total exploration expenses |
7.5 | 3.4 | 3.9 | — | 16.4 | 1.7 | — | 32.9 | ||||||||||||||
| Selling and general expenses |
7.4 | 1.8 | .9 | .1 | 1.1 | 2.6 | .2 | 14.1 | ||||||||||||||
| Income tax provisions |
40.0 | 36.1 | 10.5 | 8.2 | 11.4 | .2 | 12.8 | 119.2 | ||||||||||||||
| Results of operations (excluding corporate overhead and interest) |
$ | 71.3 | 71.5 | 15.2 | 13.3 | 10.6 | (4.0 | ) | 26.7 | 204.6 | ||||||||||||
| 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 | ||||||||||||||
| Net costs associated with hurricanes* |
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 | ||||||||||
| Nine Months Ended September 30, 2005 |
||||||||||||||||||||||
| Oil and gas sales and other revenues |
$ | 717.5 | 414.1 | 129.4 | 73.3 | 185.4 | 2.6 | 163.0 | 1,685.3 | |||||||||||||
| Production expenses |
64.7 | 42.8 | 12.2 | 14.6 | 27.1 | — | 67.7 | 229.1 | ||||||||||||||
| Net costs associated with hurricanes* |
7.6 | 2.1 | .7 | — | .1 | — | 1.1 | 11.6 | ||||||||||||||
| Depreciation, depletion and amortization |
72.5 | 91.2 | 18.3 | 14.4 | 39.0 | .2 | 9.4 | 245.0 | ||||||||||||||
| Accretion of asset retirement obligations |
2.6 | 2.6 | 1.2 | — | .2 | .4 | .4 | 7.4 | ||||||||||||||
| Exploration expenses |
||||||||||||||||||||||
| Dry holes |
16.5 | (.7 | ) | 3.8 | — | 21.4 | 23.0 | — | 64.0 | |||||||||||||
| Geological and geophysical |
15.4 | 4.1 | — | — | 33.0 | 1.7 | — | 54.2 | ||||||||||||||
| Other |
4.1 | .4 | .3 | — | — | 2.7 | — | 7.5 | ||||||||||||||
| 36.0 | 3.8 | 4.1 | — | 54.4 | 27.4 | — | 125.7 | |||||||||||||||
| Undeveloped lease amortization |
14.1 | 2.3 | — | — | — | 1.1 | — | 17.5 | ||||||||||||||
| Total exploration expenses |
50.1 | 6.1 | 4.1 | — | 54.4 | 28.5 | — | 143.2 | ||||||||||||||
| Selling and general expenses |
16.8 | 6.2 | 2.6 | .6 | 5.1 | 7.9 | .5 | 39.7 | ||||||||||||||
| Income tax provisions |
182.1 | 87.5 | 37.4 | 17.9 | 37.0 | .7 | 27.3 | 389.9 | ||||||||||||||
| Results of operations (excluding corporate overhead and interest) |
$ | 321.1 | 175.6 | 52.9 | 25.8 | 22.5 | (35.1 | ) | 56.6 | 619.4 | ||||||||||||
| Nine Months 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 | ||||||||||||||
| Net costs associated with hurricanes* |
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 | |||||||||||
| * | Certain additional hurricane-related insurance costs have been allocated to non-U.S. reporting segments. |
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, |
||||||||||||
| 2005 |
2004* |
2005 |
2004* |
||||||||||
| Revenues |
$ | 3,316,919 | 2,293,455 | 8,681,733 | 6,058,874 | ||||||||
| Costs and expenses |
|||||||||||||
| Crude oil and product purchases |
2,546,896 | 1,732,904 | 6,302,891 | 4,428,926 | |||||||||
| Operating expenses |
210,605 | 171,035 | 641,035 | 519,471 | |||||||||
| Exploration expenses |
32,863 | 70,118 | 143,168 | 142,476 | |||||||||
| Net costs associated with hurricanes |
34,054 | 3,350 | 34,054 | 3,350 | |||||||||
| Selling and general expenses |
41,091 | 33,622 | 117,855 | 97,497 | |||||||||
| Depreciation, depletion and amortization |
93,769 | 75,594 | 307,562 | 238,504 | |||||||||
| Accretion of asset retirement obligations |
2,271 | 2,575 | 7,403 | 7,549 | |||||||||
| Interest expense |
12,238 | 13,858 | 35,775 | 42,325 | |||||||||
| Interest capitalized |
(10,834 | ) | (6,017 | ) | (27,156 | ) | (15,083 | ) | |||||
| 2,962,953 | 2,097,039 | 7,562,587 | 5,465,015 | ||||||||||
| Income from continuing operations before income taxes |
353,966 | 196,416 | 1,119,146 | 593,859 | |||||||||
| Income tax expense |
131,567 | 80,643 | 435,801 | 229,255 | |||||||||
| Income from continuing operations |
222,399 | 115,773 | 683,345 | 364,604 | |||||||||
| Discontinued operations, net of tax |
8,549 | 2,950 | 8,549 | 202,231 | |||||||||
| Net income |
$ | 230,948 | 118,723 | 691,894 | 566,835 | ||||||||
| Per Common share - Basic |
|||||||||||||
| Continuing operations |
$ | 1.20 | .63 | 3.71 | 1.98 | ||||||||
| Discontinued operations |
.05 | .02 | .05 | 1.10 | |||||||||
| Net income |
$ | 1.25 | .65 | 3.76 | 3.08 | ||||||||
| Per Common share - Diluted |
|||||||||||||
| Continuing operations |
$ | 1.18 | .62 | 3.64 | 1.95 | ||||||||
| Discontinued operations |
.05 | .01 | .05 | 1.09 | |||||||||
| Net income |
$ | 1.23 | .63 | 3.69 | 3.04 | ||||||||
| Cash dividends per Common share |
$ | .1125 | .1125 | .3375 | .3125 | ||||||||
| Average Common shares outstanding (thousands) |
|||||||||||||
| Basic |
184,355 | 184,012 | 184,083 | 183,945 | |||||||||
| Diluted |
188,069 | 187,137 | 187,740 | 186,731 | |||||||||
* 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, |
||||||||||||
| 2005 |
2004 |
2005 |
2004 |
||||||||||
| Operating Activities |
|||||||||||||
| Income from continuing operations |
$ | 222,399 | 115,773 | 683,345 | 364,604 | ||||||||
| Adjustments to reconcile income from continuing operations to net cash provided by operating activities |
|||||||||||||
| Depreciation, depletion and amortization |
93,769 | 75,594 | 307,562 | 238,504 | |||||||||
| Provisions for major repairs |
7,671 | 7,515 | 27,310 | 22,692 | |||||||||
| Expenditures for major repairs and asset retirement obligations |
(2,451 | ) | (5,711 | ) | (30,249 | ) | (14,700 | ) | |||||
| Dry holes |
3,921 | 49,774 | 63,992 | 100,370 | |||||||||
| Amortization of undeveloped leases |
5,412 | 4,097 | 17,519 | 11,705 | |||||||||
| Accretion of asset retirement obligations |
2,271 | 2,575 | 7,403 | 7,549 | |||||||||
| Deferred and noncurrent income tax charges |
16,303 | 49,075 | 20,077 | 96,765 | |||||||||
| Pretax gains from dispositions of assets |
(6,247 | ) | (39,099 | ) | (178,171 | ) | (69,900 | ) | |||||
| Net (increase) decrease in operating working capital other than cash and cash equivalents |
(39,886 | ) | 60,919 | (142,380 | ) | 59,071 | |||||||
| Other |
14,191 | (5,553 | ) | (6,688 | ) | (6,817 | ) | ||||||
| Net cash provided by continuing operations |
317,353 | 314,959 | 769,720 | 809,843 | |||||||||
| Net cash provided by discontinued operations |
— | 528 | — | 60,800 | |||||||||
| Net cash provided by operating activities |
317,353 | 315,487 | 769,720 | 870,643 | |||||||||
| Investing Activities |
|||||||||||||
| Property additions and dry holes |
(304,728 | ) | (332,990 | ) | (881,130 | ) | (731,138 | ) | |||||
| Proceeds from sale of assets |
13,208 | 18,867 | 173,629 | 59,538 | |||||||||
| Proceeds from maturities of marketable securities |
— | — | 17,892 | — | |||||||||
| Other - net |
1,037 | 849 | (5,222 | ) | (453 | ) | |||||||
| Investing activities of discontinued operations: |
|||||||||||||
| Sales proceeds |
— | — | — | 582,675 | |||||||||
| Other |
— | 3,910 | — | (9,619 | ) | ||||||||
| Net cash required by investing activities |
(290,483 | ) | (309,364 | ) | (694,831 | ) | (98,997 | ) | |||||
| Financing Activities |
|||||||||||||
| Decrease in notes payable |
(9,832 | ) | (43 | ) | (29,065 | ) | (27,592 | ) | |||||
| Decrease in nonrecourse debt of a subsidiary |
— | (16,071 | ) | (4,193 | ) | (36,970 | ) | ||||||
| Proceeds from exercise of stock options and employee stock purchase plan |
18,394 | 291 | 18,731 | 2,178 | |||||||||
| Cash dividends paid |
(20,808 | ) | (20,701 | ) | (62,305 | ) | (57,496 | ) | |||||
| Other |
— | — | (1,052 | ) | — | ||||||||
| Net cash used in financing activities |
(12,246 | ) | (36,524 | ) | (77,884 | ) | (119,880 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents |
9,298 | 38,521 | (875 | ) | 50,938 | ||||||||
| Net increase (decrease) in cash and cash equivalents |
23,922 | 8,120 | (3,870 | ) | 702,704 | ||||||||
| Cash and cash equivalents at beginning of period |
507,733 | 947,009 | 535,525 | 252,425 | |||||||||
| Cash equivalents at September 30 |
$ | 531,655 | 955,129 | 531,655 | 955,129 | ||||||||
MURPHY OIL CORPORATION
OTHER FINANCIAL DATA
(Unaudited, except for December 31, 2004)
(Millions of dollars)
| Sept. 30, 2005 |
Dec. 31, 2004 | ||||
| Total current assets |
$ | 1,915.5 | 1,629.4 | ||
| Total current liabilities |
1,333.0 | 1,205.0 | |||
| Total assets |
6,243.4 | 5,458.2 | |||
| Long-term debt |
|||||
| Notes payable |
597.9 | 597.7 | |||
| Nonrecourse debt |
11.6 | 15.6 | |||
| Stockholders’ equity |
3,311.9 | 2,649.2 | |||
| Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||
| 2005 |
2004 |
2005 |
2004 | ||||||
| Capital expenditures |
|||||||||
| Exploration and production |
|||||||||
| United States |
$ | 31.4 | 49.6 | 144.9 | 160.1 | ||||
| Canada |
86.8 | 174.6 | 187.9 | 272.6 | |||||
| Malaysia |
135.2 | 82.5 | 346.2 | 200.4 | |||||
| Other |
30.1 | 6.3 | 86.2 | 20.6 | |||||
| 283.5 | 313.0 | 765.2 | 653.7 | ||||||
| Refining and marketing |
|||||||||
| North America |
32.5 | 33.6 | 95.3 | 101.4 | |||||
| United Kingdom |
9.9 | 2.1 | 68.0 | 5.4 | |||||
| 42.4 | 35.7 | 163.3 | 106.8 | ||||||
| Corporate |
2.4 | .5 | 14.3 | 1.1 | |||||
| Total capital expenditures |
328.3 | 349.2 | 942.8 | 761.6 | |||||
| Charged to exploration expenses* |
|||||||||
| United States |
3.2 | 10.2 | 36.0 | 50.4 | |||||
| Canada |
2.6 | 23.8 | 3.8 | 26.5 | |||||
| Malaysia |
16.4 | 31.2 | 54.4 | 51.7 | |||||
| Other international |
5.3 | .9 | 31.5 | 2.2 | |||||
| Total charged to exploration expenses |
27.5 | 66.1 | 125.7 | 130.8 | |||||
| Total capitalized |
$ | 300.8 | 283.1 | 817.1 | 630.8 | ||||
| * Excludes amortization of undeveloped leases of |
$ | 5.4 | 4.1 | 17.5 | 11.7 | ||||
MURPHY OIL CORPORATION
STATISTICAL SUMMARY
| Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||
| 2005 |
2004 |
2005 |
2004 | ||||||
| Net crude oil, condensate and gas liquids produced – barrels per day |
94,151 | 88,428 | 104,588 | 97,713 | |||||
| Continuing operations |
94,151 | 88,445 | 104,588 | 93,632 | |||||
| Crude oil and condensate |
|||||||||
| United States |
22,298 | 16,886 | 29,077 | 19,484 | |||||
| Canada – light |
140 | 120 | 156 | 182 | |||||
| – heavy |
10,343 | 4,663 | 10,876 | 4,567 | |||||
| – offshore |
20,640 | 23,390 | 23,544 | 26,715 | |||||
| – synthetic |
11,782 | 12,048 | 10,394 | 11,976 | |||||
| United Kingdom |
6,692 | 10,701 | 8,324 | 11,293 | |||||
| Ecuador |
8,115 | 7,808 | 7,770 | 7,781 | |||||
| Malaysia |
13,683 | 12,088 | 13,863 | 10,705 | |||||
| Natural gas liquids |
|||||||||
| United States |
54 | 177 | 152 | 173 | |||||
| Canada |
392 | 481 | 410 | 489 | |||||
| United Kingdom |
12 | 83 | 22 | 267 | |||||
| Discontinued operations |
— | (17 | ) | — | 4,081 | ||||
| Net crude oil, condensate and gas liquids sold – barrels per day |
93,910 | 81,910 | 105,723 | 96,019 | |||||
| Continuing operations |
93,910 | 81,927 | 105,723 | 91,938 | |||||
| Crude oil and condensate |
|||||||||
| United States |
22,298 | 16,886 | 29,077 | 19,484 | |||||
| Canada – light |
140 | 120 | 156 | 182 | |||||
| – heavy |
10,343 | 4,663 | 10,876 | 4,567 | |||||
| – offshore |
21,359 | 24,313 | 23,414 | 27,816 | |||||
| – synthetic |
11,782 | 12,048 | 10,394 | 11,976 | |||||
| United Kingdom |
6,967 | 10,412 | 8,435 | 11,501 | |||||
| Ecuador |
7,160 | 147 | 7,663 | 4,502 | |||||
| Malaysia |
13,415 | 12,617 | 15,071 | 11,082 | |||||
| Natural gas liquids |
|||||||||
| United States |
54 | 177 | 152 | 173 | |||||
| Canada |
392 | 481 | 410 | 489 | |||||
| United Kingdom |
— | 63 | 75 | 166 | |||||
| Discontinued operations |
— | (17 | ) | — | 4,081 | ||||
| Net natural gas sold – thousands of cubic feet per day |
69,544 | 98,858 | 96,160 | 157,172 | |||||
| Continuing operations |
69,544 | 98,919 | 96,160 | 115,307 | |||||
| United States |
57,190 | 81,531 | 78,947 | 94,525 | |||||
| Canada |
9,351 | 13,424 | 10,591 | 14,205 | |||||
| United Kingdom |
3,003 | 3,964 | 6,622 | 6,577 | |||||
| Discontinued operations |
— | (61 | ) | — | 41,865 | ||||
| Total net hydrocarbons produced – equivalent barrels per day1,2 |
105,742 | 104,904 | 120,615 | 123,908 | |||||
| Total net hydrocarbons sold – equivalent barrels per day1,2 |
105,501 | 98,386 | 121,750 | 122,214 | |||||
| 1 | Natural gas converted on an energy equivalent basis of 6:1. |
| 2 | Continuing operations only. |
MURPHY OIL CORPORATION
STATISTICAL SUMMARY (Continued)
| Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||
| 2005 |
2004 |
2005 |
2004 | ||||||||
| Weighted average sales prices |
|||||||||||
| Crude oil and condensate – dollars per barrel (1) |
|||||||||||
| United States |
$ | 55.38 | 37.70 | 46.56 | 34.21 | ||||||
| Canada (2) – light |
56.15 | 40.49 | 50.75 | 36.02 | |||||||
| – heavy |
29.78 | (3) | 23.25 | 20.47 | (3) | 20.07 | |||||
| – offshore |
59.33 | 40.16 | 50.45 | 35.30 | |||||||
| – synthetic |
63.99 | 41.83 | 57.42 | 37.99 | |||||||
| United Kingdom |
61.27 | 42.52 | 51.66 | 35.98 | |||||||
| Ecuador |
45.99 | 30.51 | 35.06 | 24.73 | |||||||
| Malaysia |
47.65 | (4) | 45.99 | 44.96 | (4) | 40.36 | |||||
| Natural gas liquids – dollars a barrel (1) |
|||||||||||
| United States |
$ | 38.24 | 29.94 | 34.35 | 27.95 | ||||||
| Canada (2) |
42.23 | 31.21 | 39.15 | 29.05 | |||||||
| United Kingdom |
— | 29.67 | 34.77 | 26.91 | |||||||
| Natural gas – dollars per thousand cubic feet |
|||||||||||
| United States (1) |
$ | 8.65 | 6.17 | 7.46 | 6.16 | ||||||
| Canada (2) |
7.87 | 4.98 | 6.68 | 5.24 | |||||||
| United Kingdom (2) |
4.47 | 3.73 | 4.93 | 4.13 | |||||||
| Refinery inputs – barrels per day |
145,315 | 173,677 | 167,809 | 175,469 | |||||||
| North America |
105,454 | 138,483 | 135,325 | 138,816 | |||||||
| United Kingdom |
39,861 | 35,194 | 32,484 | 36,653 | |||||||
| Petroleum products sold – barrels per day |
363,284 | 353,538 | 358,247 | 334,477 | |||||||
| North America |
322,860 | 317,835 | 323,790 | 297,697 | |||||||
| Gasoline |
243,352 | 210,707 | 226,565 | 204,324 | |||||||
| Kerosine |
2,329 | 721 | 6,269 | 3,193 | |||||||
| Diesel and home heating oils |
48,947 | 78,098 | 62,697 | 67,547 | |||||||
| Residuals |
13,800 | 13,953 | 19,023 | 13,180 | |||||||
| Asphalt, LPG and other |
14,432 | 14,356 | 9,236 | 9,453 | |||||||
| United Kingdom |
40,424 | 35,703 | 34,457 | 36,780 | |||||||
| Gasoline |
14,004 | 9,711 | 11,552 | 11,730 | |||||||
| Kerosine |
2,506 | 2,349 | 2,228 | 2,477 | |||||||
| Diesel and home heating oils |
18,227 | 14,366 | 15,576 | 14,456 | |||||||
| Residuals |
3,545 | 3,441 | 3,013 | 4,098 | |||||||
| LPG and other |
2,142 | 5,836 | 2,088 | 4,019 | |||||||
| (1) | Includes intracompany transfers at market prices. |
| (2) | U.S. dollar equivalent. |
| (3) | Includes the effect of the Company’s 2005 hedging program. |
| (4) | Price is net of a payment under the terms of the production sharing contract for Block SK 309. |