Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Q3 2020 Earnings Presentation
45 slides from Murphy Oil's earnings presentation, Nov 5, 2020
Slide 1: Third Quarter Earnings Conference Call & Webcast
2020 THIRD QUARTER EARNINGS CONFERENCE CALL & WEBCAST NOVEMBER 5, 2020 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com 0 NYSE: MUR
Slide 2: Cautionary Statement & Investor Relations Contacts
Cautionary Statement & Investor Relations Contacts Cautionary Note to US Investors – The United States Securities and Exchange Commission (SEC) requires oil and natural gas companies, in their filings with the SEC, to disclose proved reserves that a company has demonstrated by actual production or c
Slide 3: Executing Our Strategy in 2020
Executing Our Strategy in 2020 Targeting flatter production profile to support debt reduction in oil price recovery Employ Foresight, Talent and Financial Discipline to Maintaining strong liquidity through commodity price cycles Deliver Inspired Energy Solutions Benefiting shareholders with lo
Slide 4: 3Q 2020 Update
3Q 2020 Update Production & Pricing Update 3Q 2020 Production 3Q 2020 Production 153 MBOEPD, 63% Liquids by Area • Includes 12 MBOEPD of shut-ins due to significant 36% Onshore Canada 55,000 BOEPD Gulf of Mexico storm season vs 4.8 MBOEPD guidance Total Offshore • Partially offset by stronger onshor
Slide 5: 3Q 2020 Financial Results
3Q 2020 Financial Results 3Q 2020 Results 3Q 2020 ($MM Except Per Share) • Net loss $244 MM Net Income Attributable to Murphy • Adjusted net loss $24 MM Income (loss) ($244) 3Q 2020 Adjustments $/Diluted share ($1.59) • One-off income adjustments after-tax include: Adjusted Income from Cont. Ops. •
Slide 6: 3Q 2020 Cash Flow Results
3Q 2020 Cash Flow Results 3Q 2020 Cash Flow from Continuing Operations Cash Flow Attributable to Murphy ($MM) 3Q 2020 • Reduced by $28 MM working capital increase Net cash provided by continuing operations $209 • Improved by $12 MM non-cash long-term compensation Property additions and dry hole cost
Slide 7: Balance Sheet Stability
Balance Sheet Stability Solid Foundation for Commodity Price Cycles Maturity Profile* • $1.6 BN senior unsecured credit facility matures Nov 2023, $200 MM currently drawn Total Bonds Outstanding $BN $2.8 • All debt is unsecured, senior credit facility not Weighted Avg Fixed Coupon 5.9% subject to se
Slide 8: Environment, Safety and Governance
Environment, Safety and Governance www.murphyoilcorp.com NYSE: MUR 7
Slide 9: Committed to Benefitting All Stakeholders
Committed to Benefitting All Stakeholders Environmental Management Protecting Our People Expert and Independent Board 4 IOGP* recordable spills YTD 2020, equaling Strong COVID-19 response Board members have long-term industry, rate of 2.1 BBLS per MMBOE operating and HSE expertise • Gulf of Mexico I
Slide 10: 2020 Sustainability Report Highlights
2020 Sustainability Report Highlights Aligned to the TCFD framework Sustainability Report Reported to SASB disclosure topics and metrics Disclosure Framework Included TCFD and SASB content indices Environment Social Governance Expanded GHG and air quality disclosures Outlined workforce development a
Slide 11: Current Environment
Current Environment www.murphyoilcorp.com NYSE: MUR 10
Slide 12: Adapting to a New Energy Landscape
Adapting to a New Energy Landscape Solidifying Structure to Remain Competitive Ensuring Long-Term Resilience Operating in Multiple Basins Portfolio streamlined through accretive, oil- Maintained total liquidity of $1.6 BN, Portfolio diversification across multiple weighted, high-margin transactions
Slide 13: Onshore Portfolio Update
Onshore Portfolio Update www.murphyoilcorp.com NYSE: MUR 12
Slide 14: Eagle Ford Shale
Eagle Ford Shale 2020 Well Delivery and Capital Plan Update Eagle Ford Shale Acreage 2020 Budget $200 MM KARNES • 25 operated, 8 non-operated wells online Wilson • No operated activity planned for 2H 2020 Atascosa Karnes 3Q 2020 35 MBOEPD, 71% Oil, 87% Liquids Zavala Frio TILDEN • 8 non-operated Kar
Slide 15: Kaybob Duvernay
Kaybob Duvernay 2020 Well Delivery and Capital Plan Update Kaybob Duvernay Acreage 2020 Budget $100 MM Kaybob North • 16 operated wells online Kaybob East • 10 non-operated wells online at Placid Montney 3Q 2020 13 MBOEPD, 67% Oil, 77% Liquids Simonette • 4 operated wells online, deferred from 2Q 20
Slide 16: Tupper Montney
Tupper Montney 2020 Well Delivery and Capital Plan Update 2020 Budget $15 MM • 4 wells drilled in 1Q 2020, to be completed in 2021 • No further work planned for 2020 Mitigating AECO Exposure 3Q 2020 Tupper Montney Natural Gas Sales 3Q 2020 235 MMCFD, 100% Natural Gas Generates Positive Free Cash For
Slide 17: Offshore Portfolio Update
Offshore Portfolio Update www.murphyoilcorp.com NYSE: MUR 16
Slide 18: Gulf of Mexico
Gulf of Mexico Short-Term Projects Execution Update Operated Tieback and Workover Projects 2020 Budget $285 MM Drilling & 3Q 2020 59 MBOEPD, 80% Oil, Project Completions Subsea Tie-In First Oil 86% Liquids Front Runner rig program 2 wells ✔ n/a ✔ • Record-breaking storm season Cascade 4 workover ✔ n
Slide 19: Gulf of Mexico
Gulf of Mexico Major Projects Capital Drives Future Production King’s Quay Floating Production Major Projects Net CAPEX $MM 120 System 100 • Fabrication progressing on schedule, 80 despite COVID-19 limitations 60 • Construction ~77% complete 40 • On track to receive first oil 1H 2022 20 Khaleesi / M
Slide 20: Exploration Update
Exploration Update www.murphyoilcorp.com NYSE: MUR 19
Slide 21: Exploration Update
Exploration Update Progressing Plans 2020 Budget $60 MM Exploration Focus Areas Gulf of Mexico • Drilling Highgarden (Green Canyon 895) non-operated, 20% WI Mexico – Operated, 40% WI • Cholula appraisal program approved by CNH • 3-year discretionary appraisal program, includes OFFSHORE MEXICO up to
Slide 22: Looking Ahead
Looking Ahead www.murphyoilcorp.com NYSE: MUR 21
Slide 23: Dialing in on Future Plans
Dialing in on Future Plans Guiding Focusing Our Priorities for 4Q 2020 Going Forward • Net production 146 – 154 MBOEPD for 4Q 2020, • Dynamic plan to maintain cash flow / CAPEX parity with including: dividend, supported by hedging program in NA onshore • Storm impact of 8.2 MBOEPD from hurricanes •
Slide 24: Third Quarter Earnings Conference Call & Webcast
2020 THIRD QUARTER EARNINGS CONFERENCE CALL & WEBCAST NOVEMBER 5, 2020 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com 23 NYSE: MUR
Slide 25: Appendix
Appendix 1 Non-GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 4Q 2020 Guidance 4 Current Hedging Positions 5 Environmental, Social and Governance 6 Acreage Maps www.murphyoilcorp.com NYSE: MUR 24
Slide 26: Non-GAAP Financial Measure Definitions and Reconciliations
Non-GAAP Financial Measure Definitions and Reconciliations The following list of Non-GAAP financial measure definitions and related reconciliations is intended to satisfy the requirements of Regulation G of the Securities Exchange Act of 1934, as amended. This information is historical in nature. Mu
Slide 27: Non-GAAP Reconciliation: EBITDA and EBITDAX
Non-GAAP Reconciliation EBITDA and EBITDAX Murphy defines EBITDA as net income (loss) attributable to Murphy1 before interest, taxes, depreciation and amortization (DD&A). Murphy defines EBITDAX as net income (loss) attributable to Murphy before interest, taxes, depreciation and amortization (DD&A)
Slide 28: Non-GAAP Reconciliation: Adjusted EBITDA
Non-GAAP Reconciliation ADJUSTED EBITDA Murphy defines Adjusted EBITDA as net income (loss) attributable to Murphy1 before interest, taxes, depreciation and amortization (DD&A), impairment expense, discontinued operations, foreign exchange gains and losses, mark-to-market gains and losses on crude o
Slide 29: Non-GAAP Reconciliation: Adjusted EBITDAX
Non-GAAP Reconciliation ADJUSTED EBITDAX Murphy defines Adjusted EBITDAX as net income (loss) attributable to Murphy1 before interest, taxes, depreciation and amortization (DD&A), exploration expense, impairment expense, discontinued operations, foreign exchange gains and losses, mark-to-market gain
Slide 30: Glossary of Abbreviations
Glossary of Abbreviations BBL: Barrels (equal to 42 US gallons) EBITDAX: Income from continuing operations MM: Millions before taxes, depreciation, depletion and BCF: Billion cubic feet amortization, net interest expense, and MMBOE: Millions of barrels of oil equivalent BCFE: Billion cubic feet equi
Slide 31: 4Q 2020 Guidance
4Q 2020 Guidance Oil NGLs Gas Total Producing Asset (BOPD) (BOPD) (MCFD) (BOEPD) US – Eagle Ford Shale 21,200 4,600 25,000 30,00 – Gulf of Mexico excluding NCI1 50,900 5,300 61,000 66,400 Canada – Tupper Montney – – 225,000 37,500 – Kaybob Duvernay and Placid Montney 7,000 1,400 22,400 12,100 – Offs
Slide 32: Current Hedging Positions
Current Hedging Positions United States Volumes Price Commodity Type (BBL/D) (BBL) Start Date End Date WTI Fixed Price Derivative Swap 45,000 $56.42 10/1/2020 12/31/2020 WTI Fixed Price Derivative Swap 18,000 $43.31 1/1/2021 12/31/2021 Montney, Canada Volumes Price Commodity Type (MMCF/D) (MCF) Star
Slide 33: Eagle Ford Shale Peer Acreage
Eagle Ford Shale Peer Acreage Murphy OIL EOG Lewis/BP ConocoPhillips Marathon EP Energy Ensign CONDENSATE Ovintiv Callon Chesapeake Sanchez BP GAS Equinor Sundance www.murphyoilcorp.com NYSE: MUR 32
Slide 34: Eagle Ford Shale: Murphy Spacing vs Peers
Eagle Ford Shale Murphy Spacing vs Peers Karnes Typical Murphy Spacing LEFS ~250-500’ EOG Offset Spacing LEFS ~250’ to 500’ DVN Offset Spacing LEFS ~250’ to 500’ COP Offset Spacing LEFS ~250’ to 600’ CHK Offset Spacing LEFS ~350’ to 1000’ MRO Offset Spacing LEFS ~250’ to 600’ Catarina Typical Murphy
Slide 35: Kaybob Duvernay Peer Acreage
Kaybob Duvernay Peer Acreage SHELL KAYBOB EAST DVRN Rights 70/30 MUR/ATH Paramount PARAMOUNT Repsol XTO OVINTIV CENOVUS Shell Chevron KAYBOB WEST Ovintiv KEYERA Cenovus SIMONETTE Fox Creek Open Crown - DVRN Other Leased - DVRN SAXON JV Area CHEVRON SEMCAMS Battery KAYBOB Facility XTO PLACID REPSOL 6
Slide 36: Tupper Montney Peer Acreage
Tupper Montney Peer Acreage Advantage Montney Crown Land Arc Montney Crown Land Birchcliff Montney Crown Land Ovintiv Montney Crown Land Tourmaline Montney Crown Land Dawson Creek Shell Montney Crown Land Other Competitor Montney Crown Land Open Crown - Montney Murphy Montney Land Dry Gas Limit TCPL
Slide 37: Placid Montney Peer Acreage
Placid Montney Peer Acreage MONT Rights 70/30 MUR/ATH Cequence KAYBOB EAST Cenovus Hammerhead HAMMERHEAD PARAMOUNT Chevron TANGLE CNRL CNRL CREEK CENOVUS Delphi Ovintiv KAYBOB WEST Open Crown - Mont Other Leased - Mont KEYERA SIMONETTE Fox Creek CHEVRON Paramount SAXON Tangle Creek XTO Condensate SE
Slide 38: Gulf of Mexico
Gulf of Mexico Murphy Blocks PRODUCING ASSETS Gulf of Mexico Assets Asset Operator Murphy WI1 Cascade Murphy 80% Dalmatian Neidermeyer Chinook Murphy 80% VK DD Clipper Murphy 80% Marmalard Delta House Cottonwood Murphy 80% Son of Bluto II Dalmatian Murphy 56% Calliope Front Runner Murphy 50% Powerba
Slide 39: Exploration Update: Gulf of Mexico
Exploration Update Gulf of Mexico Interests in 104 Gulf of Mexico OCS Blocks Gulf of Mexico Exploration Area • ~600,000 total gross acres, 38 exploration Dalmatian S. blocks Delta House VK DD Hoffe Park • ~1 BBOE gross resource potential Discovery / Project Area Whydah / Leibniz • Discoveries – Samu
Slide 40: Exploration Update: Salina Basin, Mexico
Exploration Update Salina Basin, Mexico Block 5 Overview Salina Basin • Murphy 40% (Op), Petronas 30%, Wintershall Dea 30% Block 5 • 34 leads / prospects • Mean to upward gross resource potential Block 5 Cholula • 800 MMBO – 2,000 MMBO Batopilas Chinwol • Proven oil basin in proximity to multiple oi
Slide 41: Exploration Update: Sergipe-Alagoas Basin, Brazil
Exploration Update Sergipe-Alagoas Basin, Brazil Asset Overview Sergipe-Alagoas Basin • ExxonMobil 50% (Op), Enauta Energia S.A. 30%, Murphy 20% BRAZIL • Hold WI in 9 blocks, spanning >1.6 MM acres • >2.8 BN BOE discovered in basin • >1.2 BN BOE in deepwater since 2007 • Material opportunities ident
Slide 42: Exploration Update: Potiguar Basin, Brazil
Exploration Update Potiguar Basin, Brazil Potiguar Basin Asset Overview • Wintershall Dea 70% (Op), Murphy 30% Murphy WI Block Other Block • Hold WI in 3 blocks, spanning ~774 M Discovered Field gross acres Petrobras/BP/ Kilometers 0 50 GALP/IBV • Proven oil basin in proximity to Pitu Petrobras/BP/
Slide 43: Development Update: Cuu Long Basin, Vietnam
Development Update Cuu Long Basin, Vietnam Asset Overview Cuu Long Basin BLOCK 15-01/05 LAC DA TRANG • Murphy 40% (Op), PVEP 35%, SKI 25% NORTH WEST SU TU VANG LAC DA TRANG Block 15-1/05 WEST • Received approval of the Lac Da Vang (LDV) LAC DA VANG LAC DA TRANG retainment/development area DISCOVERY
Slide 44: Exploration Update: Cuu Long Basin, Vietnam
Exploration Update Cuu Long Basin, Vietnam Asset Overview Cuu Long Basin 15 1 • Murphy 40% (Op), PVEP 35%, SKI 25% BLOCK 15-02/17 HAI SU BAC HAI SU VANG Block 15-2/17 • Secured legacy seismic data and maturing HAI SU DEN PHUONG inventory 15-2 DONG • Signed joint operating agreement with partners HAI
Slide 45: Third Quarter Earnings Conference Call & Webcast
2020 THIRD QUARTER EARNINGS CONFERENCE CALL & WEBCAST NOVEMBER 5, 2020 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com 44 NYSE: MUR