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): January 30, 2008

 

 

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))

 

 

 

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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 January 30, 2008, Murphy Oil Corporation issued a news release announcing its earnings for the fourth quarter and year that ended on December 31, 2007. The full text of this news release is attached hereto as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits

 

(c)

Exhibits

 

99.1

A news release dated January 30, 2008 announcing earnings for the fourth quarter and year that ended on December 31, 2007 is attached hereto as Exhibit 99.1.

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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.

 

Date: January 30, 2008

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Exhibit Index

 

99.1		News release dated January 30, 2008, as issued by Murphy Oil Corporation.

Exhibit 99.1

MURPHY OIL ANNOUNCES PRELIMINARY QUARTERLY

AND ANNUAL EARNINGS

EL DORADO, Arkansas, January 30, 2008 – Murphy Oil Corporation (NYSE: MUR) announced today that net income in the fourth quarter of 2007, which included several unusual items that in combination reduced net income by $40.1 million ($0.21 per diluted share), was $206.1 million ($1.07 per diluted share). Net income in the fourth quarter 2006 was $88.4 million ($0.47 per diluted share). The unusual items in the 2007 period included a $59.5 million non-cash charge, net of taxes, to reduce the carrying value of certain refining and marketing inventories built during 2007 (associated with the December 1 acquisition of the remaining 70% of the Milford Haven, Wales refinery) to first of year prices under the Company’s last-in first-out (LIFO) accounting method, a $14.5 million after-tax charge to settle work commitments on two properties offshore Eastern Canada, and a $33.9 million income tax benefit in Canada related to an enacted Federal tax rate reduction. The fourth quarter of 2006 included an after-tax charge of $25.1 million for an educational assistance contribution commitment, which was mostly offset by income tax benefits, primarily associated with settlement of prior year matters, of approximately $12.0 million, and after-tax income of $10.2 million associated with a favorable Canadian court ruling.

For the year of 2007, net income totaled $766.5 million, $4.01 per diluted share, compared to $644.7 million, $3.41 per diluted share, for 2006.

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Page Two

The 2006 fourth quarter and full year results have been adjusted to reflect the adoption, as of January 1, 2007, of FASB Staff Position No. AUG AIR-1, Accounting for Planned Major Maintenance Activities. Net income in the fourth quarter and year of 2006 increased by $0.8 million and $6.4 million, respectively, for this change in accounting principle.

Fourth Quarter 2007 vs. Fourth Quarter 2006

The net income improvement in the fourth quarter of 2007 compared to the same period of 2006 was caused by much higher earnings for the Company’s exploration and production operations mostly attributable to both higher oil and natural gas sales prices and production levels. The exploration and production improvement was partially offset by unfavorable refining and marketing results and higher net costs of corporate activities.

Reviewing quarterly results by type of business, the Company’s income contribution from exploration and production operations was $268.2 million in the fourth quarter of 2007 compared to $91.1 million in the same quarter of 2006. Better earnings in 2007 were primarily caused by higher oil and natural gas sales prices and higher hydrocarbon sales volumes compared to 2006. In addition, in 2007 the Company had lower exploration expenses and a $33.9 million income tax benefit due to a reduction in the Canadian Federal tax rate.

The Company’s crude oil and gas liquids production averaged 113,341 barrels per day in the fourth quarter of 2007 compared to 83,105 barrels per day in the 2006 quarter. The 36% production improvement in the just completed quarter was primarily attributable to Kikeh oil production, offshore Sabah Malaysia, which started up in the third quarter 2007. Partially

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Page Three

offsetting Kikeh was lower allocated oil production in the 2007 period at West Patricia, offshore Sarawak, Malaysia, plus lower volumes in the Gulf of Mexico, the United Kingdom, Hibernia and Terra Nova. Crude oil sales volumes averaged 103,498 barrels per day in the fourth quarter of 2007 compared to 84,066 barrels per day in the 2006 quarter. Natural gas sales volumes were 71 million cubic feet per day in the 2007 fourth quarter compared to 56 million cubic feet per day in the 2006 quarter. Higher natural gas sales volumes in the fourth quarter 2007 were primarily due to improved Gulf of Mexico production, including the addition of the Mondo NW field which came onstream in July 2007.

Worldwide crude oil, condensate and natural gas liquids sales prices averaged $76.11 per barrel for the 2007 fourth quarter compared to $46.24 per barrel in the 2006 quarter. North American natural gas sales prices averaged $7.27 per thousand cubic feet (MCF) in the 2007 fourth quarter compared to $6.71 per MCF in the 2006 quarter. Exploration expenses were $82.1 million in the 2007 fourth quarter compared to $89.8 million in the 2006 quarter. The lower exploratory costs in the 2007 quarter were mostly caused by lower dry holes in the U.S., but this was partially offset by settlement of work commitments for the Cortland and Empire leases on the Scotian Shelf, offshore Canada, and higher geophysical costs offshore Malaysia. Dry holes during the fourth quarter 2007 included Robusto in the Gulf of Mexico and Tomani in Block H Malaysia. Production and depreciation expenses were up in 2007 compared to 2006 mostly due to Kikeh production and higher average costs in most producing areas.

Including the aforementioned after-tax LIFO charge of $59.5 million, the Company’s refining and marketing operations generated a loss of $27.4 million in the fourth quarter of 2007 compared to a profit of $29.3 million in the 2006 quarter. Excluding the LIFO charge, earnings in the 2007 period were slightly above 2006 levels.

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Page Four

Corporate activities resulted in after-tax costs of $34.7 million in the 2007 fourth quarter compared to costs of $32.0 million in the 2006 quarter. The 2007 period had higher foreign exchange losses and higher net interest expense, with the latter variance related to both higher average outstanding debt and lower levels of interest capitalized to development projects. In addition, the 2007 period included lower costs for an educational assistance program known as the El Dorado Promise. Foreign exchange losses after taxes were $6.5 million in the 2007 period compared to $2.3 million in the same period of 2006.

Year 2007 vs. Year 2006

Income from the Company’s exploration and production and the refining and marketing businesses was higher for the full-year 2007 compared to the same period in 2006, but these improvements were partially offset by higher after-tax costs of corporate activities in 2007.

The Company’s exploration and production operations earned $657.1 million in 2007 and $616.8 million in 2006. The improved earnings in this business in 2007 were attributable to higher oil and natural gas sales prices, lower exploration expenses and a $33.9 million income tax benefit caused by a Canadian Federal rate reduction, partially offset by lower oil and natural gas sales volumes and higher expenses associated with production and depreciation. Exploration expenses of $203.1 million in 2007 were down from $219.2 million in 2006, with the reduction mostly due to lower charges in the current year for dry hole and geophysical expenses in Malaysia, but partially offset by higher costs in Canada for dry holes, seismic, lease amortization and work commitments.

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Page Five

Crude oil and gas liquids production averaged 91,522 barrels per day in 2007 compared to 87,817 barrels per day in 2006. The Kikeh field, offshore Sabah Malaysia, commenced production in August 2007, more than one month ahead of schedule and the field averaged 11,658 net barrels per day for the full year. Net production at Kikeh was about 40,000 barrels per day in December. Lower U.S. oil production in 2007 was primarily due to volume declines at the Medusa and Front Runner fields in the Gulf of Mexico. Oil production offshore Canada was higher in 2007 due to approximately six months of downtime for repairs at the Terra Nova field in 2006. Although oil production volumes increased in 2007, oil sales volumes were 2,640 barrels per day lower in the current year due to timing of oil sales transactions. Natural gas sales were 61 million cubic feet per day in 2007 compared to 75 million cubic feet per day in 2006. The gas sales volume decline in 2007 was primarily caused by lower natural gas production for fields onshore south Louisiana and in the Gulf of Mexico. Oil sales prices averaged $62.05 per barrel in 2007 compared to $51.62 per barrel in 2006. North American natural gas was sold for $7.19 per MCF in 2007, down from $7.57 per MCF in 2006.

The Company’s refining and marketing operations generated record annual income of $205.7 million in 2007, up from $110.6 million in 2006. The improved results in 2007 were caused mostly by lower hurricane-related costs in 2007 at the Meraux, Louisiana refinery, plus the beneficial effects of an operational Meraux refinery throughout 2007 (the refinery was shut down for the first five months of 2006 as a result of damage caused by Hurricane Katrina in August 2005). Partially offsetting these impacts was a $59.5 million after-tax non-cash LIFO charge in the U.K. in the fourth quarter 2007, and a $24.0 million after-tax charge related to closing 55 retail gasoline stations in the U.S. and Canada.

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Page Six

Corporate after-tax costs were $96.3 million in 2007 compared to $82.7 million in 2006. Costs were higher in 2007 than 2006 mostly due to higher net interest expense and higher foreign exchange losses, partially offset by lower costs in the current year associated with an educational assistance program. The 2007 period included an after-tax foreign exchange charge of $13.8 million, while the effect on 2006 from foreign exchange was a charge of $7.9 million, as both periods were adversely affected by a weaker U.S. dollar compared to other foreign currencies.

Claiborne P. Deming, President and Chief Executive Officer, commented, “Murphy has recently completed several important transactions. First, we acquired the remaining 70% interest in the Milford Haven, Wales refinery on December 1, which provided a significant boost to the size and strength of our refining operations. This acquisition allows us to now fully control this meaningful U.K. operating asset. Additionally, we acquired over 41,700 acres in British Columbia in an area known as Tupper. This acreage adds mass to our existing natural gas-bearing holdings in the area, and we are actively developing the first phase of Tupper, with first production scheduled in the last quarter of this year. In the OCS lease sale in October, we obtained 26 blocks in the De Soto Canyon and Lloyd Ridge areas, which will become a focal point in future Gulf of Mexico exploration plans. Also in November, we announced the

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Page Seven

acquisition of acreage in the Browse Basin offshore Northwestern Australia, which builds nicely on our presence in Southeast Asia. During the quarter we drilled a natural gas discovery at Biris in Block H Malaysia. This discovery adds to the resource base in that area and moves us closer to a critical commercial development. We have also completed the sale of all our Berkana Energy shares with a gain of about $45 million to be recorded in the first quarter 2008.

“Crude oil prices have eased a bit in January and we have experienced very tight refining margins into the new year. We anticipate total worldwide production in the first quarter 2008 of 125,000 barrels of oil equivalent per day, and sales volumes during the quarter should average 142,000 barrels of oil equivalent per day. We currently expect earnings in the first quarter to be in the range of $1.80 to $2.00 per diluted share, including the gain on sale of Berkana. Total exploration expenses are expected to range between $70 million and $80 million during the quarter. Results could vary based on commodity prices, drilling results and timing of crude oil and natural gas sales.”

The public is invited to access the Company’s conference call to discuss fourth quarter 2007 results on Thursday, January 31 at 12:00 p.m. CT 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 1-800-240-5318. The telephone reservation number for the call is 11106097. 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 February 5 by calling 1-800-405-2236. Audio downloads of the conference will be available on Murphy’s website through February 29, 2008.

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Page Eight

Summary financial data and operating statistics for the fourth quarter and year of 2007 with comparisons to 2006 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.

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MURPHY OIL CORPORATION

FUNCTIONAL RESULTS OF OPERATIONS (Unaudited)

(Millions of dollars)

 

		Three Months Ended December 31, 2007							Three Months Ended December 31, 2006*
		Revenues				Income			Revenues			Income
Exploration and production
United States		$	129.8			38.9			93.8			(5.4	)
Canada			276.9			106.6			215.0			84.4
United Kingdom			25.6			9.7			40.1			16.0
Malaysia			309.4			119.0			47.3			(10.3	)
Ecuador			27.3			4.2			32.5			11.5
Other			1.6			(10.2	)		0.4			(5.1	)
			770.6			268.2			429.1			91.1
Refining and marketing
North America			4,365.8			24.8			2,717.4			22.2
United Kingdom			511.3			(52.2	)		238.0			7.1
			4,877.1			(27.4	)		2,955.4			29.3
			5,647.7			240.8			3,384.5			120.4
Intersegment transfers elimination			(39.4	)		—			(27.6	)		—
			5,608.3			240.8			3,356.9			120.4
Corporate			1.3			(34.7	)		6.9			(32.0	)
Total revenues/net income		$	5,609.6			206.1			3,363.8			88.4
		Twelve Months Ended December 31, 2007							Twelve Months Ended December 31, 2006*
		Revenues				Income			Revenues			Income
Exploration and production
United States		$	429.8			98.2			626.9			212.4
Canada			1,003.3			370.2			792.4			330.6
United Kingdom			146.7			47.6			180.6			60.7
Malaysia			435.7			148.2			219.6			(5.9	)
Ecuador			126.1			28.5			122.7			38.4
Other			4.5			(35.6	)		3.7			(19.4	)
			2,146.1			657.1			1,945.9			616.8
Refining and marketing
North America			15,050.9			230.4			11,441.8			77.5
United Kingdom			1,357.9			(24.7	)		1,019.7			33.1
			16,408.8			205.7			12,461.5			110.6
			18,554.9			862.8			14,407.4			727.4
Intersegment transfers elimination			(130.4	)		—			(118.3	)		—
			18,424.5			862.8			14,289.1			727.4
Corporate			14.3			(96.3	)		18.3			(82.7	)
Total revenues/net income		$	18,438.8			766.5			14,307.4			644.7

 

*	Results for 2006 have been adjusted to reflect the adoption of FSP AUG AIR-1, Accounting for Planned Major Maintenance Activities. Net income for the three-month and twelve-month periods ended December 31, 2006 increased by $0.8 million and $6.4 million, respectively.

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MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (Unaudited)

THREE MONTHS ENDED DECEMBER 31, 2007 AND 2006

 

(Millions of dollars)		United States				Canada			United King- dom		Malaysia			Ecuador		Other			Synthetic Oil – Canada		Total
Three Months Ended December 31, 2007
Oil and gas sales and other revenues		$	129.8			168.4			25.6		309.4			27.3		1.6			108.5		770.6
Production expenses			20.8			28.3			1.3		46.6			9.0		—			48.3		154.3
Depreciation, depletion and amortization			23.5			40.9			3.1		36.9			10.5		.2			7.4		122.5
Accretion of asset retirement obligations			1.1			1.3			.5		1.5			—		.1			.2		4.7
Exploration expenses
Dry holes			9.5			—			—		20.0			—		—			—		29.5
Geological and geophysical			8.6			1.8			.5		1.1			—		2.4			—		14.4
Other			.8			22.1			—		—			—		2.9			—		25.8
			18.9			23.9			.5		21.1			—		5.3			—		69.7
Undeveloped lease amortization			4.1			7.9			—		—			—		.4			—		12.4
Total exploration expenses			23.0			31.8			.5		21.1			—		5.7			—		82.1
Selling and general expenses			6.1			5.2			.9		.6			.1		5.8			.2		18.9
Minority interest			—			(.1	)		—		—			—		—			—		(.1	)
Results of operations before taxes			55.3			61.0			19.3		202.7			7.7		(10.2	)		52.4		388.2
Income tax provisions			16.4			3.9			9.6		83.7			3.5		—			2.9		120.0
Results of operations (excluding corporate overhead and interest)		$	38.9			57.1			9.7		119.0			4.2		(10.2	)		49.5		268.2
Three Months Ended December 31, 2006
Oil and gas sales and other revenues		$	93.8			147.2			40.1		47.3			32.5		.4			67.8		429.1
Production expenses			20.2			21.1			5.1		8.6			7.1		—			32.0		94.1
Depreciation, depletion and amortization			14.8			25.7			5.5		11.7			7.4		.1			5.7		70.9
Accretion of asset retirement obligations			.8			1.1			.4		.6			—		.2			.1		3.2
Exploration expenses
Dry holes			47.0			.2			—		21.9			—		—			—		69.1
Geological and geophysical			.2			(.3	)		—		11.7			—		.1			—		11.7
Other			2.1			.1			.1		.1			—		.8			—		3.2
			49.3			—			.1		33.7			—		.9			—		84.0
Undeveloped lease amortization			4.5			.9			—		—			—		.4			—		5.8
Total exploration expenses			53.8			.9			.1		33.7			—		1.3			—		89.8
Net costs associated with hurricanes			.2			—			—		—			—		—			—		.2
Selling and general expenses			14.2			3.9			1.0		2.4			.1		3.8			.2		25.6
Results of operations before taxes			(10.2	)		94.5			28.0		(9.7	)		17.9		(5.0	)		29.8		145.3
Income tax provisions (benefits)			(4.8	)		29.1			12.0		.6			6.4		.1			10.8		54.2
Results of operations (excluding corporate overhead and interest)		$	(5.4	)		65.4			16.0		(10.3	)		11.5		(5.1	)		19.0		91.1

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MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (Unaudited)

TWELVE MONTHS ENDED DECEMBER 31, 2007 AND 2006

 

(Millions of dollars)		United States			Canada			United King- dom		Malaysia			Ecuador		Other			Synthetic Oil – Canada		Total
Twelve Months Ended December 31, 2007
Oil and gas sales and other revenues		$	429.8		651.9			146.7		435.7			126.1		4.5			351.4		2,146.1
Production expenses			80.4		104.4			23.5		73.7			36.6		—			144.4		463.0
Depreciation, depletion and amortization			74.5		157.3			20.7		57.9			39.2		.7			26.5		376.8
Accretion of asset retirement obligations			4.0		4.8			2.0		4.0			—		.6			.7		16.1
Exploration expenses
Dry holes			41.5		7.8			—		17.9			.3		(.4	)		—		67.1
Geological and geophysical			29.5		10.3			.5		15.2			—		12.2			—		67.7
Other			5.1		22.4			.3		—			—		7.3			—		35.1
			76.1		40.5			.8		33.1			.3		19.1			—		169.9
Undeveloped lease amortization			17.5		14.2			—		—			—		1.5			—		33.2
Total exploration expenses			93.6		54.7			.8		33.1			.3		20.6			—		203.1
Impairment of long-lived assets			2.6		—			—		—			—		—			—		2.6
Selling and general expenses			31.4		17.7			3.7		9.0			.8		17.5			.8		80.9
Minority interest			—		(.5	)		—		—			—		—			—		(.5	)
Results of operations before taxes			143.3		313.5			96.0		258.0			49.2		(34.9	)		179.0		1,004.1
Income tax provisions			45.1		79.7			48.4		109.8			20.7		.7			42.6		347.0
Results of operations (excluding corporate overhead and interest)		$	98.2		233.8			47.6		148.2			28.5		(35.6	)		136.4		657.1
Twelve Months Ended December 31, 2006
Oil and gas sales and other revenues		$	626.9		522.4			180.6		219.6			122.7		3.7			270.0		1,945.9
Production expenses			79.3		102.6			18.4		32.7			29.7		—			120.5		383.2
Depreciation, depletion and amortization			85.2		97.1			22.1		47.2			27.3		.5			17.6		297.0
Accretion of asset retirement obligations			3.0		4.1			1.8		.8			—		.6			.5		10.8
Exploration expenses
Dry holes			56.4		.2			—		52.5			1.5		.4			—		111.0
Geological and geophysical			24.0		.6			—		46.5			—		2.0			—		73.1
Other			6.6		.6			.2		.3			—		4.9			—		12.6
			87.0		1.4			.2		99.3			1.5		7.3			—		196.7
Undeveloped lease amortization			17.3		3.7			—		—			—		1.5			—		22.5
Total exploration expenses			104.3		5.1			.2		99.3			1.5		8.8			—		219.2
Net costs associated with hurricanes			1.9		—			—		—			—		—			—		1.9
Selling and general expenses			30.0		11.4			3.7		9.8			.9		12.3			.8		68.9
Results of operations before taxes			323.2		302.1			134.4		29.8			63.3		(18.5	)		130.6		964.9
Income tax provisions			110.8		72.4			73.7		35.7			24.9		.9			29.7		348.1
Results of operations (excluding corporate overhead and interest)		$	212.4		229.7			60.7		(5.9	)		38.4		(19.4	)		100.9		616.8

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MURPHY OIL CORPORATION

SUMMARIZED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, except twelve months in 2006)

(Thousands of dollars, except per share amounts)

 

		Three Months Ended December 31,							Twelve Months Ended December 31,
		2007				2006*			2007			2006*
Revenues		$	5,609,608			3,363,784			18,438,851			14,307,387
Costs and expenses
Crude oil and product purchases			4,594,522			2,633,968			14,882,618			11,214,235
Operating expenses			385,313			302,553			1,311,785			1,093,213
Exploration expenses			82,028			89,832			203,063			219,238
Selling and general expenses			55,991			89,383			229,300			228,543
Depreciation, depletion and amortization			152,821			97,318			489,837			384,063
Accretion of asset retirement obligations			4,783			3,231			16,244			10,921
Impairment of long-lived assets			—			—			40,708			—
Net costs associated with hurricanes			3,000			3,311			3,000			109,244
Interest expense			23,046			13,287			75,493			52,549
Interest capitalized			(6,217	)		(13,161	)		(49,881	)		(43,073	)
Minority interest			(124	)		56			(548	)		56
			5,295,163			3,219,778			17,201,619			13,268,989
Income before income taxes			314,445			144,006			1,237,232			1,038,398
Income tax expense			108,327			55,636			470,703			393,729
Net income		$	206,118			88,370			766,529			644,669
Net income per Common share
Basic		$	1.09			0.47			4.08			3.46
Diluted			1.07			0.47			4.01			3.41
Cash dividends per Common share		$	0.1875			0.15			0.675			0.525
Average Common shares outstanding (thousands)
Basic			188,970			186,541			188,028			186,105
Diluted			192,094			189,426			191,141			189,158

 

*	Results for 2006 have been adjusted to reflect the adoption of FSP AUG AIR-1, Accounting for Planned Major Maintenance Activities. Net income for the three-month and twelve-month periods ended December 31, 2006 increased by $813 and $6,390, respectively.

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MURPHY OIL CORPORATION

SUMMARIZED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited except twelve months in 2006)

(Thousands of dollars)

 

		Three Months Ended December 31,							Twelve Months Ended December 31,
		2007				2006*			2007			2006*
Operating Activities
Net income		$	206,118			88,370			766,529			644,669
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation, depletion and amortization			152,821			97,318			489,837			384,063
Impairment of long-lived assets			—			—			40,708			—
Amortization of deferred major repair costs			6,213			4,255			22,107			17,720
Expenditures for asset retirements			(8,397	)		(191	)		(13,039	)		(3,328	)
Dry holes			29,482			69,159			67,052			111,044
Amortization of undeveloped leases			12,404			5,749			33,215			22,466
Accretion of asset retirement obligations			4,783			3,231			16,244			10,921
Deferred and noncurrent income tax charges			70,908			15,865			102,507			33,091
Pretax (gains) losses from dispositions of assets			398			(10,329	)		(634	)		(9,388	)
Net decrease (increase) in noncash operating working capital excluding acquisition of Milford Haven refinery			350,806			50,361			151,167			(255,970	)
Other			(140	)		27,274			64,727			20,190
Net cash provided by operating activities			825,396			351,062			1,740,420			975,478
Investing Activities
Property additions and dry holes			(669,749	)		(307,526	)		(1,949,219	)		(1,191,670	)
Acquisition of Milford Haven refinery, including inventory			(348,292	)		—			(348,292	)		—
Proceeds from maturity of investment securities			59,821			—			—			—
Proceeds from sale of assets			2,885			4,047			21,636			23,843
Expenditures for major repairs			(5,345	)		(2,771	)		(14,649	)		(12,776	)
Other - net			13,080			(2,422	)		4,011			(10,839	)
Net cash required by investing activities			(947,600	)		(308,672	)		(2,286,513	)		(1,191,442	)
Financing Activities
Increase in notes payable			17,046			53,655			685,369			237,644
Decrease in nonrecourse debt of a subsidiary			(17	)		—			(4,903	)		(4,667	)
Proceeds from exercise of stock options and employee stock purchase plan			7,787			9,510			41,624			24,864
Excess tax benefits related to exercise of stock options			9,736			4,699			30,805			11,756
Cash dividends paid			(35,552	)		(28,106	)		(127,353	)		(98,162	)
Other			—			—			(760	)		—
Net cash provided by (used in) financing activities			(1,000	)		39,758			624,782			171,435
Effect of exchange rate changes on cash and cash equivalents			7,246			(8,111	)		51,628			2,586
Net increase (decrease) in cash and cash equivalents			(115,958	)		74,037			130,317			(41,943	)
Cash and cash equivalents at beginning of period			789,665			469,353			543,390			585,333
Cash equivalents at December 31		$	673,707			543,390			673,707			543,390

 

*	Amounts for 2006 have been adjusted to reflect the adoption of FSP AUG AIR-1, Accounting for Planned Major Maintenance Activities.

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MURPHY OIL CORPORATION

OTHER FINANCIAL DATA

(Unaudited, except for December 31, 2006)

(Millions of dollars)

 

							Dec. 31, 2007			Dec. 31, 2006
Total current assets							$	2,909.7		$	2,107.1
Total current liabilities								2,137.9			1,311.1
Total assets								10,565.0			7,483.2	1
Long-term debt
Notes payable								1,513.8			833.1
Nonrecourse debt								3.1			7.2
Stockholders’ equity								5,066.2			4,121.3	1
1Balances have been adjusted to reflect the adoption of FSP AUG AIR-1, Accounting for Planned Major Maintenance Activities.
		Three Months Ended December 31,					Twelve Months Ended December 31,
		2007			2006		2007			2006
Capital expenditures
Exploration and production
United States		$	82.5		45.9			319.1			199.0
Canada			295.2		41.7			577.7			182.9
Malaysia			109.3		156.5			662.2			605.2
Other			62.3		19.3			221.7			95.7
			549.3		263.4			1,780.7			1,082.8
Refining and marketing
North America			124.2		37.5			321.7			163.6
United Kingdom			242.0		4.9			250.7			9.8
			366.2		42.4			572.4			173.4
Corporate			1.2		1.8			4.2			6.3
Total capital expenditures			916.7		307.6			2,357.3			1,262.5
Charged to exploration expenses 2
United States			18.9		49.3			76.1			87.0
Canada			23.9		–			40.5			1.4
Malaysia			21.1		33.7			33.1			99.3
Other			5.8		1.0			20.2			9.0
Total charged to exploration expenses			69.7		84.0			169.9			196.7
Total capitalized		$	847.0		223.6			2,187.4			1,065.8
2Excludes amortization of undeveloped leases of		$	12.4		5.8			33.2			22.5

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MURPHY OIL CORPORATION

STATISTICAL SUMMARY

 

		Three Months Ended December 31,				Twelve Months Ended December 31,
		2007		2006		2007		2006
Net crude oil, condensate and gas liquids produced – barrels per day		113,341		83,105		91,522		87,817
United States		12,752		14,253		12,989		21,112
Canada – light		623		487		596		443
– heavy		12,494		11,781		11,524		12,613
– offshore		15,930		17,410		18,871		14,896
– synthetic		13,194		13,202		12,948		11,701
United Kingdom		5,794		7,248		5,281		7,146
Malaysia		43,792		10,128		20,367		11,298
Ecuador		8,762		8,596		8,946		8,608
Net crude oil, condensate and gas liquids sold – barrels per day		103,498		84,066		87,602		90,242
United States		12,752		14,253		12,989		21,112
Canada – light		623		487		596		443
– heavy		12,494		11,781		11,524		12,613
– offshore		14,946		16,440		18,839		15,360
– synthetic		13,194		13,202		12,948		11,701
United Kingdom		2,446		6,544		5,218		6,678
Malaysia		37,716		11,506		16,018		11,986
Ecuador (1)		9,327		9,853		9,470		10,349
Net natural gas sold – thousands of cubic feet per day		70,868		56,449		61,082		75,262
United States		53,614		38,091		45,139		56,810
Canada		10,969		10,726		9,922		9,752
United Kingdom		6,285		7,632		6,021		8,700
Total net hydrocarbons produced – equivalent barrels per day (2)		125,152		92,513		101,702		100,361
Total net hydrocarbons sold – equivalent barrels per day (2)		115,309		93,474		97,782		102,786

 

(1)	The twelve months ended December 31, 2006 includes settlement with nonoperator partners of 2,337 barrels per day for Block 16 crude oil withheld from the Company in 2004.

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

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MURPHY OIL CORPORATION

STATISTICAL SUMMARY (Continued)

 

		Three Months Ended December 31,					Twelve Months Ended December 31,
		2007			2006		2007		2006
Weighted average sales prices
Crude oil, condensate and NGL – dollars per barrel (1)
United States		$	83.75		50.41		65.57		57.30
Canada (2) – light			66.30		48.46		50.98		50.45
– heavy (3)			33.95		24.72		32.84		25.87
– offshore			86.52		57.70		69.83		62.55
– synthetic			89.39		55.88		74.35		63.23
United Kingdom			89.09		57.97		68.38		64.30
Malaysia (4)			89.11		44.49		74.58		51.78
Ecuador (5)			31.38		28.02		36.47		33.79
Natural gas – dollars per thousand cubic feet
United States (1)		$	7.39		6.87		7.38		7.76
Canada (2)			6.69		6.16		6.34		6.49
United Kingdom (2)			9.50		7.16		7.54		7.34
Refinery inputs – barrels per day			205,905		174,087		185,988		125,382
North America			148,662		140,419		146,232		91,626
United Kingdom			57,243		33,668		39,756		33,756
Petroleum products sold – barrels per day			496,124		412,828		457,770		385,271
North America			442,200		378,260		416,668		350,601
Gasoline			309,367		274,518		298,833		266,353
Kerosine			2,976		2,904		1,685		2,269
Diesel and home heating oils			108,493		77,745		91,344		62,196
Residuals			14,084		15,407		15,422		11,696
Asphalt, LPG and other			7,280		7,686		9,384		8,087
United Kingdom			53,924		34,568		41,102		34,670
Gasoline			18,979		12,673		14,356		12,425
Kerosine			5,566		3,576		4,020		3,619
Diesel and home heating oils			19,975		13,466		14,785		11,803
Residuals			4,259		2,797		3,728		3,825
LPG and other			5,145		2,056		4,213		2,998

 

(1)	Includes intracompany transfers at market prices.

(2)	U.S. dollar equivalent.

(3)	Includes the effect of the Company's hedging program in 2006.

(4)	Prices are net of payments under the terms of the production sharing contracts for Blocks SK 309 and K.

(5)

All prices are net of legislated revenue sharing with the Ecuadorian government, and the twelve-month 2006 price was adversely affected by the settlement with nonoperator partners of crude oil production owed to the Company since 2004. In October 2007, the government of Ecuador raised its portion of revenue sharing above a base price from 50% to 99%.