SEC Filing - Murphy Oil Corporation

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Correspondence Letter

200 Peach Street (71730)

P O Box 7000

El Dorado, AR 71731-7000

(870) 862-6411

FAX (870) 864-6371

September 24, 2012

Securities and Exchange Commission

Mr. Karl Hiller, Branch Chief

Division of Corporation Finance

100 F Street, N.E.

Washington, DC 20549

Re:

Murphy Oil Corporation

Form 10-K for the Fiscal Year Ended December 31, 2011

Filed February 28, 2012

File No. 1-08590

Dear Mr. Hiller:

This letter is Murphy Oil Corporation’s response to your staff comment letter dated September 7, 2012. For ease of review, the staff comments from that letter are included below in bold text, which are then followed by our response.

Form 10-K for the Fiscal Year ended December 31, 2011

Business, page 1

Exhibit 13 – Annual Report to Security Holders (incorporated by reference)

Exploration and Production Statistical Summary, page 5

We note that you have combined amounts pertaining to crude oil and natural gas liquids in disclosing production quantities and average sales prices on page 5 of Exhibit 13; also in disclosing reserve information on pages 8 and F-48 of the Form 10-K. Please explain how you determined that the requirements of Item 1204 of Regulation S-K, to disclose production and prices by final product sold, of oil, gas, and other products, also the requirements of FASB ASC 932-235-50-4, to separately disclose reserves of natural gas liquids if significant, did not preclude these combined presentations. As part of response, submit details of the production and sale quantities of natural gas liquids and their impact on revenues by geographic location for all periods; also a schedule showing the information on page F-48 for crude oil and natural gas liquids separately.

LOGO

Securities and Exchange Commission

Karl Hiller, Branch Chief

Division of Corporation Finance

September 24, 2012

Page 2

Murphy Oil has concluded that total production and sales volumes of natural gas liquids (NGLs), as well as revenues and proved reserves of NGLs, are all immaterial in relation to the Company’s total oil metrics. Over the last five years, NGLs production has averaged 0.4% of total oil production from continuing operations. Murphy sells the vast majority of its natural gas in an unprocessed, wet state, and therefore, the Company realizes the value of the higher BTU content of the wet gas in its realized natural gas price. The Company sells relatively small quantities of NGLs in the market. Murphy carries no NGLs in its proved oil reserves table at each year-end. As requested, see the Attachment for total NGLs production volumes, sales volumes and proved reserves. Also, in the Attachment are splits between crude oil and condensate and NGLs revenue. Murphy will continue to monitor its NGLs production and sales volumes and if these become significant to overall oil volumes, the Company will separately disclose these amounts in future filings.

In connection herewith, Murphy Oil Corporation acknowledges that:

•

the company is responsible for the adequacy and accuracy of the disclosure in the filing;

•

staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filings; and

•

the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

We hope this letter will satisfy your request for further information. Please direct any further inquiries to my attention.

Sincerely,

/s/ Kevin G. Fitzgerald

Kevin G. Fitzgerald

Executive Vice President and Chief Financial Officer

JWE/rs

Attachments

c:	John Cannarella, Staff Accountant – SEC

Kimberly Calder, Assistant Chief Accountant – SEC

ATTACHMENT

EXPLORATION AND PRODUCTION STATISTICAL SUMMARY


	2011		2010		2009		2008		2007		2006		2005
Net crude oil and condensate production – barrels per day
United States		17,139		20,109		17,051		10,667		12,989		20,983		25,777
Canada – light		32		—		—		41		28		110		160
heavy		7,264		5,988		6,813		8,484		11,524		12,613		11,806
offshore		9,204		11,497		12,357		16,826		18,871		14,896		23,124
synthetic		13,498		13,273		12,855		12,546		12,948		11,701		10,593
Malaysia		47,342		66,897		76,322		57,403		20,367		11,298		13,503
United Kingdom		2,407		3,261		3,341		4,837		5,255		7,095		7,955
Republic of the Congo		4,989		5,820		1,743		—		—		—		—
Net natural gas liquids production – barrels per day
United States		9		5		2		1		—		129		120
Canada		51		43		18		5		568		333		403
Malaysia		1,209		—		—		—		—		—		—
United Kingdom		16		34		20		32		26		51		37

Continuing operations		103,160		126,927		130,522		110,842		82,576		79,209		93,478
Discontinued operations		—		—		1,317		7,412		8,946		8,608		7,871

Total liquids produced		103,160		126,927		131,839		118,254		91,522		87,817		101,349

Net crude oil and condensate sold – barrels per day
United States		17,139		20,109		17,051		10,667		12,989		20,983		25,777
Canada – light		32		—		—		41		28		110		160
heavy		7,264		5,988		6,813		8,484		11,524		12,613		11,806
offshore		9,079		11,343		12,455		16,690		18,839		15,360		22,443
synthetic		13,498		13,273		12,855		12,546		12,948		11,701		10,593
Malaysia		47,817		68,975		72,575		61,907		16,018		11,986		13,818
United Kingdom		2,242		4,177		2,445		5,691		5,105		6,678		8,247
Republic of the Congo		3,959		5,428		973		—		—		—		—
Net natural gas liquids sold – barrels per day
United States		9		5		2		1		—		129		120
Canada		51		43		18		5		568		333		403
Malaysia		275		—		—		—		—		—		—
United Kingdom		57		—		—		48		113		—		56

Continuing operations		101,422		129,341		125,187		116,080		78,132		79,893		93,423
Discontinued operations		—		—		1,162		7,774		9,470		10,349		9,821

Total liquids sold		101,422		129,341		126,349		123,854		87,602		90,242		103,244

Weighted average sales prices
Crude oil and condensate – dollars per barrel
United States	$	103.92		76.31		60.08		95.74		65.57		57.30		47.48
Canada – light		87.28		—		—		70.77		50.98		58.26		52.47
heavy		57.00		49.89		40.45		59.05		32.84		25.87		21.30
offshore		110.02		76.87		58.19		96.69		69.83		62.55		51.37
synthetic		102.94		77.90		61.49		100.10		74.35		63.23		58.12
Malaysia		90.05		60.97		55.51		87.83		74.58		51.78		46.16
United Kingdom		111.29		77.95		61.31		90.48		68.38		64.30		52.83
Natural gas liquids – dollars per barrel
United States		47.52		23.17		4.11		41.80		—		43.34		35.09
Canada		98.67		75.48		64.24		67.11		56.24		48.00		40.90
Malaysia		105.59		—		—		—		—		—		—
United Kingdom		64.98		—		—		53.02		50.43		—		34.77

ATTACHMENT (CONTD.)

Summary of Proved Crude Oil and Condensate Reserves Based on Year-End Prices for 2008 and Average Prices for 2009 - 2011


																									Republic
				Total –						United												United			of the
	Total			by product						States			Canada						Malaysia			Kingdom			Congo			Ecuador
(Millions of barrels)	Oil			Oil			Synthetic Oil			Oil			Oil			Synthetic Oil			Oil			Oil			Oil			Oil
Proved developed and undeveloped crude oil and condensate reserves:
December 31, 2008		173.6			173.6			0.0			26.8			24.3			0.0			100.7			17.0			0.0			4.8
Synthetic reserves presented as proved under SEC rules		131.6			0.0			131.6			0.0			0.0			131.6			0.0			0.0			0.0			0.0
Revisions of previous estimates		5.8			3.2			2.6			5.0			7.2			2.6			(4.9	)		(4.1	)		0.0			0.0
Improved recovery		31.0			31.0			0.0			0.0			0.0			0.0			31.0			0.0			0.0			0.0
Extensions and discoveries		23.9			23.9			0.0			0.8			3.3			0.0			11.2			0.0			8.6			0.0
Production		(48.2	)		(43.5	)		(4.7	)		(6.2	)		(7.0	)		(4.7	)		(27.9	)		(1.2	)		(0.7	)		(0.5	)
Sales of properties		(4.3	)		(4.3	)		0.0			0.0			0.0			0.0			0.0			0.0			0.0			(4.3	)

December 31, 2009		313.4			183.9			129.5			26.4			27.8			129.5			110.1			11.7			7.9			0.0
Revisions of previous estimates		22.5			18.0			4.5			3.5			5.4			4.5			4.4			0.4			4.3			0.0
Improved recovery		5.8			5.8			0.0			0.0			1.0			0.0			4.8			0.0			0.0			0.0
Extensions and discoveries		12.6			12.6			0.0			4.1			5.0			0.0			3.5			0.0			0.0			0.0
Production		(46.3	)		(41.5	)		(4.8	)		(7.4	)		(6.4	)		(4.8	)		(24.4	)		(1.2	)		(2.1	)		0.0

December 31, 2010		308.0			178.8			129.2			26.6			32.8			129.2			98.4			10.9			10.1			0.0
Revisions of previous estimates		20.8			16.0			5.2			2.4			3.1			5.2			8.0			8.1			(6.0	)		0.0
Improved recovery		14.2			14.2			0.0			0.0			0.0			0.0			10.7			3.5			0.0			0.0
Extensions and discoveries		43.9			43.9			0.0			32.6			6.7			0.0			4.6			0.0			0.0			0.0
Production		(37.2	)		(32.7	)		(4.9	)		(6.3	)		(6.0	)		(4.9	)		(17.3	)		(0.9	)		(1.8	)		0.0

December 31, 2011		349.7			220.2			129.5			55.3			36.6			129.5			104.4			21.6			2.3			0.0

Proved developed crude oil and condensate reserves:
December 31, 2009		270.0			150.3			119.7			18.3			26.2			119.7			90.0			11.7			4.1			0.0
December 31, 2010		248.3			129.2			119.1			15.8			28.6			119.1			66.5			10.9			7.4			0.0
December 31, 2011		238.5			118.0			120.5			20.8			32.6			120.5			57.2			5.1			2.3			0.0

Proved undeveloped crude oil and condensate reserves:
December 31, 2009		43.4			33.6			9.8			8.1			1.6			9.8			20.1			0.0			3.8			0.0
December 31, 2010		59.7			49.6			10.1			10.8			4.2			10.1			31.9			0.0			2.7			0.0
December 31, 2011		111.2			102.2			9.0			34.5			4.0			9.0			47.2			16.5			0.0			0.0

ATTACHMENT (CONTD.)

Summary of Proved Natural Gas Liquids (NGL) Reserves Based on Year-End Prices for 2008 and Average Prices for 2009 - 2011


													Republic
				United							United		of the
	Total			States		Canada		Malaysia			Kingdom		Congo		Ecuador
(Millions of barrels)	NGL			NGL		NGL		NGL			NGL		NGL		NGL
Proved developed and undeveloped NGL reserves:
December 31, 2008		—			—		—		—			—		—		—
Revisions of previous estimates		—			—		—		—			—		—		—
Improved recovery		—			—		—		—			—		—		—
Extensions and discoveries		—			—		—		—			—		—		—
Production		—			—		—		—			—		—		—

December 31, 2009		—			—		—		—			—		—		—
Revisions of previous estimates		—			—		—		—			—		—		—
Improved recovery		—			—		—		—			—		—		—
Extensions and discoveries		—			—		—		—			—		—		—
Production		—			—		—		—			—		—		—

December 31, 2010		—			—		—		—			—		—		—
Revisions of previous estimates		.4			—		—		.4			—		—		—
Improved recovery		—			—		—		—			—		—		—
Extensions and discoveries		—			—		—		—			—		—		—
Production		(.4	)		—		—		(.4	)		—		—		—

December 31, 2011		—			—		—		—			—		—		—

Proved developed NGL reserves:
December 31, 2009		—			—		—		—			—		—		—
December 31, 2010		—			—		—		—			—		—		—
December 31, 2011		—			—		—		—			—		—		—

Proved undeveloped NGL reserves:
December 31, 2009		—			—		—		—			—		—		—
December 31, 2010		—			—		—		—			—		—		—
December 31, 2011		—			—		—		—			—		—		—

ATTACHMENT (CONTD.)

Murphy Oil Corporation

Oil Revenues

Three Years Ended December 31, 2011


	2011				2010				2009
	Crude oil and				Crude oil and				Crude oil and
(Millions of dollars)	Condensate		NGLs		Condensate		NGLs		Condensate		NGLs
United States	$	648.6		0.2		557.6		0.0		374.8		0.0
Canada – Conventional		503.8		1.8		387.4		1.2		365.2		0.4
Canada – Syncrude		506.6		—		378.6		—		288.5		—
Malaysia		1,572.4		10.6		1,531.1		—		1,478.4		—
United Kingdom		91.1		1.3		118.8		—		54.7		—
Republic of the Congo		148.8		—		156.7		—		24.5		—

Total	$	3,471.3		13.9		3,130.2		1.2		2,586.1		0.4