Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Q4 2021 Earnings Presentation
52 slides from Murphy Oil's earnings presentation, Jan 27, 2022
Slide 1: Fourth Quarter 2021 Earnings Conference Call & Webcast
2021 FOURTH QUARTER EARNINGS CONFERENCE CALL & WEBCAST JANUARY 27, 2022 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 0
Slide 2: Cautionary Statement and Investor Relations Contacts
Cautionary Statement and 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
Slide 3: Why Murphy Oil?
Why Murphy Oil? Sustainable oil and natural gas assets that are safely operated with low carbon emissions intensity in three operating areas across North America High-potential exploration portfolio with industry-leading offshore capabilities Strong generator of free cash flow with capital allocatio
Slide 4: 4Q 2021 Progress on Strategic Priorities
4Q 2021 Progress on Strategic Priorities DELEVER EXECUTE EXPLORE • Redeemed $150 MM of 2024 • Transported King’s Quay FPS to • Prepared to spud non-op Cutthroat Senior Notes in 4Q 2021 final Gulf of Mexico location to exploration well in Brazil prepare for first oil in 2Q 2022 • Achieved long-term d
Slide 5: FY 2021 Progress on Strategic Priorities
FY 2021 Progress on Strategic Priorities DELEVER EXECUTE EXPLORE • Redeemed $300 MM of 2024 • Maintained schedule for major operated • Prepared to spud non-op Senior Notes offshore projects with first oil in 2Q 2022 Cutthroat exploration well in Brazil • Achieved record-low G&A expenses of • Reduced
Slide 6: 4Q 2021 Production, Pricing and Revenue Update
4Q 2021 Production, Pricing and Revenue Update Oil Production Drives High Revenue 4Q 2021 Production 4Q 2021 Revenue by Area by Area Onshore Canada Eagle Ford Shale $104 MM Eagle Ford Shale $193 MM 33,400 BOEPD 15% 22% 28% 35% Onshore Canada 52,100 BOEPD 150 $699 MM MBOEPD Offshore 43% 64,700 BOEPD
Slide 7: FY 2021 Production, Pricing and Revenue Update
FY 2021 Production, Pricing and Revenue Update Strong Execution Stabilizes Portfolio Results FY 2021 Production FY 2021 Revenue by Area by Area Onshore Canada Eagle Ford Shale $382 MM Eagle Ford Shale $714 MM 35,500 BOEPD 15% 23% 28% 33% Onshore Canada 52,700 BOEPD 158 $2.6 BN MBOEPD Offshore 57% 44
Slide 8: Maintaining Proved Reserves With Minimal Capital
2021 Proved Reserves Maintaining Proved Reserves With Minimal Capital • Total proved reserves 699 MMBOE at YE 2021 vs 697 MMBOE at YE 2020 2021E Proved Reserves By Area • Achieved 102% total reserve replacement • Proved developed reserves 58% 25% • Liquids-weighting improved to 45% • 41% at YE 2020
Slide 9: Advancing Goals Through Cash Flow Generation
Financial Results Advancing Goals Through Cash Flow Generation Financial Results Net Income Attributable to Murphy 4Q 2021 FY 2021 ($MM Except Per Share) • Net income $168 MM; adjusted net income $62 MM in 4Q 2021 Income (loss) $168 ($74) • Net loss $74 MM; adjusted net income $200 MM in FY 2021 $/D
Slide 10: Strengthening Balance Sheet
Financial Results Strengthening Balance Sheet Solid Foundation for Commodity Price Cycles Long-Term Debt Profile* • $521 MM of cash and cash equivalents at Total Bonds Outstanding $BN $2.46 Dec 31, 2021 • Net debt of $1.9 BN Weighted Avg Fixed Coupon 6.2% • Redeemed $300 MM of 6.875% Notes due 2024
Slide 11: 2021 Sustainability Highlights
2021 Sustainability Highlights Progressing Long-Term Goals With Sustainable Operations Progressing Environmental Goals • Achieved lowest carbon emissions intensity in corporate history – in-line with top quartile of peers • On track to achieve our 15-20% emissions intensity reduction by 2030 from 20
Slide 12: Onshore Portfolio Update
ONSHORE PORTFOLIO UPDATE www.murphyoilcorp.com NYSE: MUR 11
Slide 13: Eagle Ford Shale: Solid 2021 Underpinned By Ongoing D&C Improvements
Eagle Ford Shale Solid 2021 Underpinned By Ongoing D&C Improvements 4Q 2021 33 MBOEPD, 69% Oil, 85% Liquids Eagle Ford Shale Acreage • 4 operated Catarina wells online in 4Q 2021 Wilson KARNES • 2 Upper EFS, 1 Lower EFS, 1 Austin Chalk Atascosa Karnes FY 2021 36 MBOEPD, 72% Oil, 87% Liquids Zavala F
Slide 14: Eagle Ford Shale: Strong Catarina Well Performance
Eagle Ford Shale Strong Catarina Well Performance Offers Potential to De-Risk Portfolio Achieving Strong Catarina Results Eagle Ford Shale – Austin Chalk Peer Acreage • 4 wells online in Catarina in 4Q 2021, 84% oil weighting • 2 Upper EFS wells, 1 Austin Chalk well in-line with type curves • 1 Lowe
Slide 15: Tupper Montney: Continual Improvement Drives Stronger Well Performance
Tupper Montney Continual Improvement Drives Stronger Well Performance Tupper Montney Acreage 4Q 2021 263 MMCFD, 100% Natural Gas FY 2021 259 MMCFD, 100% Natural Gas H H H H H • Total 14 operated wells online H H H H H H H H H H H H H H H H H H H H H H H Record-High IP30 Rates in 2021 H H H H H H H H
Slide 16: Offshore Portfolio Update
OFFSHORE PORTFOLIO UPDATE www.murphyoilcorp.com NYSE: MUR 15
Slide 17: Gulf of Mexico: Major Projects Drive Future Free Cash Flow
Gulf of Mexico Major Projects Drive Future Free Cash Flow 4Q 2021 61 MBOEPD, 80% Oil, 86% Liquids Khaleesi / Mormont / Samurai Project Update • Calliope #1 (Mississippi Canyon 609) back online • Began completions on 7-well project in 4Q 2021 after hurricane in 3Q 2021 • Avg 40-45 days / well • Compl
Slide 18: Advancing Terra Nova Asset Life Extension Project
Offshore Canada Advancing Terra Nova Asset Life Extension Project Terra Nova Field, Offshore Canada Terra Nova FPSO • Suncor 48% (Op), Cenovus 34%, LABRADOR Murphy 18% QUEBEC • Partner group advancing asset life extension (ALE) project • Will extend production life by ~10 years • Government of Newfo
Slide 19: Exploration Update
EXPLORATION UPDATE www.murphyoilcorp.com NYSE: MUR 18
Slide 20: 2022 Exploration Plan: Sergipe-Alagoas Basin, Brazil
2022 Exploration Plan 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 id
Slide 21: 2022 Capital Plan
2022 CAPITAL PLAN www.murphyoilcorp.com NYSE: MUR 20
Slide 22: 2022 Capital Allocation Plan
2022 Capital Allocation Plan Prioritizing Capital To Support Free Cash Flow Optionality FY 2022 CAPEX Disciplined Capital Plan Supports Further By Area Delevering, Enhanced Shareholder Returns 3% 9% • FY 2022 guidance $840 – $890 MM Offshore • ~60% of spend is in 1H 2022 16% US Onshore ~$865 MM 47%
Slide 23: 2022 Production Plan
2022 Production Plan Major Project Execution Drives Production Ramp FY 2022E Production Strong Execution Ability Strengthens By Area Production Profile • 1Q 2022 production 136 – 142 MBOEPD 19% • 53% oil, 60% liquids volumes 44% Offshore • Includes planned downtime of: ~168 Canada Onshore • 2.7 MBOE
Slide 24: 2022 North America Onshore Plan
2022 North America Onshore Plan Balancing Investments for Free Cash Generation 2022 Onshore Capital Budget $360 MM 2022 Wells Online 35 ~95 MBOEPD Forecast for FY 2022 30 • ~30% oil weighting, 34% liquids 25 • ~8% production increase from FY 2021 20 15 $220 MM Eagle Ford Shale 10 • 27 operated wells
Slide 25: 2022 Offshore Plan
2022 Offshore Plan Focused on Executing Major Projects 2022 Offshore Capital Budget $405 MM Development and Tieback Projects • $265 MM for major projects in Gulf of Mexico • Drilling Dalmatian #1 (Desoto Canyon 90) • $65 MM for development and tie-back projects development well, online FY 2023 in Gu
Slide 26: 2022 Exploration Plan
2022 Exploration Plan Focusing on Core Growth Areas Targeting ~200 MMBOE Net Resources in FY 2022 Program • $75 MM 2022 CAPEX Cutthroat-1, Sergipe-Alagoas Basin, Brazil US GULF OF MEXICO • Murphy 20% WI, non-operated • >2.8 BN BOE discovered in basin • Material opportunities identified on Murphy WI
Slide 27: Looking Ahead
LOOKING AHEAD www.murphyoilcorp.com NYSE: MUR 26
Slide 28: Disciplined Strategy Leads to Long-Term Value at Conservative Prices
Disciplined Strategy Leads to Long-Term Value at Conservative Prices 2022 2023 2024 2025 2026 2027 2028 • Achieving < $1.4 BN debt by 2024* • Realizing average annual production of ~195 MBOEPD with • Reinvesting ~40% of operating cash flow to ~50% average oil weighting based on current portfolio, ma
Slide 29: Focused on Targeted Priorities
Focused on Targeted Priorities DELEVER EXECUTE EXPLORE • Establishing FY 2022 goal of $300 MM • Progress major operated projects in the • Focus on drilling non-op Cutthroat well long-term debt reduction Gulf of Mexico ahead of first oil in in Brazil 2Q 2022 • Plan allows for long-term debt reduction
Slide 30: Fourth Quarter Earnings Conference Call & Webcast
2021 FOURTH QUARTER EARNINGS CONFERENCE CALL & WEBCAST JANUARY 27, 2022 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 29
Slide 31: Appendix
Appendix 1 Non-GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 1Q 2022 Guidance 4 Current Hedging Positions 5 Supplemental Information 6 Acreage Maps www.murphyoilcorp.com NYSE: MUR 30
Slide 32: 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 33: 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, depletion and amortization (DD&A). Murphy defines EBITDAX as net income (loss) attributable to Murphy before interest, taxes, DD&A and exploration expen
Slide 34: 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, depletion and amortization (DD&A), impairment expense, discontinued operations, foreign exchange gains and losses, mark-to-market gains and losses
Slide 35: 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, depletion and amortization (DD&A), exploration expense, impairment expense, discontinued operations, foreign exchange gains and losses, mark-to-
Slide 36: 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 37: 1Q 2022 Guidance
1Q 2022 Guidance Oil NGLs Gas Total Producing Asset (BOPD) (BOPD) (MCFD) (BOEPD) US – Eagle Ford Shale 20,600 4,100 23,300 28,600 – Gulf of Mexico excluding NCI1 45,500 3,500 55,800 58,300 Canada – Tupper Montney – – 243,200 40,500 – Kaybob Duvernay and Placid Montney 4,600 900 16,100 8,200 – Offsho
Slide 38: Current Hedging Positions – Oil
Current Hedging Positions – Oil United States Volumes Price Commodity Type (BBL/D) (BBL) Start Date End Date WTI Fixed Price Derivative Swap 20,000 $44.88 1/1/2022 12/31/2022 Volumes Put Price Call Price Commodity Type (BBL/D) (BBL) (BBL) Start Date End Date WTI Derivative Collar 25,000 $63.24 $75.2
Slide 39: Current Hedging Positions – Natural Gas
Current Hedging Positions – Natural Gas Montney, Canada Volumes Price Commodity Type (MMCF/D) (MCF) Start Date End Date Natural Gas Fixed Price Forward Sales at AECO 186 C$2.36 1/1/2022 1/31/2022 Natural Gas Fixed Price Forward Sales at AECO 176 C$2.34 2/1/2022 4/30/2022 Natural Gas Fixed Price Forw
Slide 40: North America Onshore
North America Onshore Eagle Ford Shale Operated Well Locations Inter-Well Remaining Area Net Acres Reservoir Spacing (ft) Wells Lower EFS 300 108 Karnes 10,092 Upper EFS 1,000 151 Austin Chalk 1,100 106 Lower EFS 630 231 Tilden 64,770 Upper EFS 1,200 51 Austin Chalk 1,200 86 Lower EFS 560 234 Catari
Slide 41: Peer Acreage: Eagle Ford Shale
Eagle Ford Shale Peer Acreage www.murphyoilcorp.com NYSE: MUR 40
Slide 42: Peer Acreage: Kaybob Duvernay
Kaybob Duvernay Peer Acreage KAYBOB EAST Crescent Point PARAMOUNT MUR DVRN Rights Paramount Repsol PCC CENOVUS XTO KAYBOB WEST Crescent Pointl KEYERA Chevron Fox Creek SIMONETTE Kiwetinohk SAXON PCC Cenovus ENERGY TRANSFER KAYBOB Open Crown - DVRN KIWENTINOHK CHEVRON Other Leased - DVRN JV Area XTO
Slide 43: Peer Acreage: Tupper Montney
Tupper Montney Peer Acreage Advantage Montney ARC Montney Birchcliff Montney Ovintiv Montney Dawson Creek Tourmaline Montney Shell Montney Other Competitor Montney Open Crown - Montney Murphy Montney Dry Gas Limit TCPL Pipeline Murphy Pipeline Battery Facility 0 Miles 10 www.murphyoilcorp.com NYSE:
Slide 44: Peer Acreage: Placid Montney
Placid Montney Peer Acreage ARC CNRL HALO KAYBOB EAST MUR MONT Rights ARC Cenovus TANGLE PARAMOUNT CNRL SPARTAN Halo DELTA CREEK Kiwetinohk Open Crown - Mont KAYBOB WEST Other Leased - Mont KEYERA Fox Paramount SIMONETTE Creek Spartan Delta SAXON Tangle Creek XTO Condensate ENERGY TRANSFER Non-Opera
Slide 45: Gulf of Mexico: Murphy Blocks
Gulf of Mexico Murphy Blocks PRODUCING ASSETS Gulf of Mexico Assets Asset Operator Murphy WI1 Dalmatian S. Calliope Murphy 29% Hoffe Park VK DD Cascade Murphy 86% Silver Dollar Chinook Murphy 86% Silver Dollar West Clipper Murphy 80% Medusa Delta House Cottonwood Murphy 80% Dalmatian Murphy 56% Blan
Slide 46: Gulf of Mexico Exploration Update
Exploration Update Gulf of Mexico Interests in 126 Gulf of Mexico OCS Blocks Gulf of Mexico Exploration Area • ~725,000 total gross acres, 58 exploration blocks Dalmatian S. Hoffe Park VK DD • ~1 BBOE gross resource potential Silver Dollar • 20 key prospects Silver Dollar West Medusa Delta House • L
Slide 47: 2022 Exploration Plan: Northwest Borneo Basin, Brunei
2022 Exploration Plan Northwest Borneo Basin, Brunei Brunei Assets Asset Overview • Shell 86.949% (Op), Murphy 8.051%, Petronas 5% • Block CA-1 reclassified as not held for sale Jagus SubThrust-1X (Block CA-1) Block CA1 Julong East • Drilled discovery well in 2021, $2.8 MM net cost • Evaluating seis
Slide 48: 2022 Exploration Plan: Salina Basin, Mexico
2022 Exploration Plan Salina Basin, Mexico Block 5 Overview Salina Basin • Murphy 40% (Op), Petronas 30%, Block 5 Wintershall Dea 30% • 34 leads / prospects Tulum 1-EXP • Mean to upward gross resource potential Block 5 Cholula • 800 MMBO – 2,000 MMBO Batopilas • Proven oil basin in proximity to mult
Slide 49: 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 ~775 M Discovered Field gross acres Petrobras/BP/ Kilometers • Proven oil basin in proximity to Pitu GALP/IBV 0 50 oil discovery
Slide 50: 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 DISCOVER
Slide 51: Exploration Update: Cuu Long Basin, Vietnam Block 15-2/17
Exploration Update Cuu Long Basin, Vietnam Asset Overview Cuu Long Basin 5 • Murphy 40% (Op), PVEP 35%, SKI 25% BLOCK 15-02/17 HAI SU BAC HAI SU VANG Block 15-2/17 • 3-year primary exploration period ends HAI SU DEN PHUONG 4Q 2022 15-2 DONG • Seeking extension due to COVID-19 HAI SU TRANG HAI SU HON
Slide 52: Fourth Quarter Earnings Conference Call & Webcast
2021 FOURTH QUARTER EARNINGS CONFERENCE CALL & WEBCAST JANUARY 27, 2022 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 51