Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Q1 2022 Earnings Presentation
45 slides from Murphy Oil's earnings presentation, May 4, 2022
Slide 1: First Quarter 2022 Earnings Conference Call & Webcast
2022 FIRST QUARTER EARNINGS CONFERENCE CALL & WEBCAST MAY 4, 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: Progressing Strategic Priorities
Progressing Strategic Priorities DELEVER EXECUTE EXPLORE • Increased debt reduction goal to • Achieved first oil at King’s Quay FPS • Progressed Tulum-1EXP drilling plans $600 – 650 MM in FY 2022* in April with high uptime on two wells in offshore Mexico in 2H 2022 • Announced redemption of $200 MM
Slide 5: Oil Production Drives High Revenue
1Q 2022 Production, Pricing and Revenue Update Oil Production Drives High Revenue 1Q 2022 Production 1Q 2022 Revenue by Area by Area Onshore Canada Eagle Ford Shale $100 MM Eagle Ford Shale $200 MM 29,700 BOEPD 13% 21% 26% 34% Onshore Canada 48,400 BOEPD 141 $764 MM MBOEPD Offshore 45% 62,900 BOEPD
Slide 6: Advancing Goals Through Cash Flow Generation
Financial Results Advancing Goals Through Cash Flow Generation Financial Results Net Income Attributable to Murphy ($MM Except Per Share) 1Q 2022 • Net loss $113 MM; adjusted net income $113 MM Income (loss) ($113) $/Diluted share ($0.73) One-Off Non-Cash Income Adjustments After-Tax Adjusted Income
Slide 7: 2022 Capital Allocation Plan
2022 Capital Allocation Plan Prioritizing Capital To Support Free Cash Flow Capital Plan Supports Further Delevering, Enhanced Accrued CAPEX by Quarter $MM Shareholder Returns 1,000 900 • 1Q 2022 accrued CAPEX of $301 MM vs. $270 MM guide 800 700 • Impacted by inflation, scope changes and additional
Slide 8: Strengthening Balance Sheet
Financial Results Strengthening Balance Sheet Solid Foundation for Commodity Price Cycles Long-Term Debt Profile* • $481 MM of cash and cash equivalents at Total Bonds Outstanding $BN $2.47 Mar 31, 2022 • Announced redemption of $200 MM of 6.875% Weighted Avg Fixed Coupon 6.2% Notes due 2024 to occu
Slide 9: Ongoing Sustainability Initiatives
Ongoing Sustainability Initiatives Reducing Greenhouse Gas Emissions • Displaced 1.4 MM gallons of diesel with natural gas in drilling and completions • Reduced flaring locations, eliminating ~20% of FY 2022 emissions in Kaybob Duvernay Increasing Water Recycling • Pumped 1.3 MMBBL of recycled water
Slide 10: Onshore Portfolio Update
ONSHORE PORTFOLIO UPDATE www.murphyoilcorp.com NYSE: MUR 9
Slide 11: Eagle Ford Shale
Eagle Ford Shale Delivering Stable Base Production Through Targeted Program 1Q 2022 30 MBOEPD, 85% Liquids Eagle Ford Shale Acreage • 9 gross non-operated wells online – 5 gross Karnes, Wilson KARNES 4 gross Tilden Atascosa Karnes 2Q 2022 Well Delivery Schedule Zavala Frio • 23 operated wells online
Slide 12: Tupper Montney
Tupper Montney Adapting Development Plans to Maintain Well Delivery Schedule 1Q 2022 242 MMCFD Tupper Montney Acreage 2Q 2022 Well Delivery Schedule H H • 10 wells online H H H H H H H H H H H H H H H H H H H H H FY 2022 Capital Plan H H H H H H H H H H H H H H H H • 20 operated wells online H H H H
Slide 13: Kaybob Duvernay
Kaybob Duvernay Maintaining Production With Strong New Well Performance 1Q 2022 7 MBOEPD, 70% Liquids Kaybob Duvernay Acreage • 3 operated wells online in Two Creeks Kaybob North H Kaybob H • New oil production 4% above type curve H East H H H H H • Avg 800 BOEPD IP30, 95% liquids H H H H D H H H H
Slide 14: Offshore Portfolio Update
OFFSHORE PORTFOLIO UPDATE www.murphyoilcorp.com NYSE: MUR 13
Slide 15: Gulf of Mexico
Gulf of Mexico Development and Tiebacks Drive Future Free Cash Flow Gulf of Mexico Assets 1Q 2022 59 MBOEPD, 80% Oil • $1 MM net workover at Marmalard 300 #1 Dalmatian S. Hoffe Park VK DD (Mississippi Canyon 300) Silver Dollar FY 2022 Capital Plan Silver Dollar West Medusa Delta House • ~80% of spen
Slide 16: Khaleesi, Mormont, Samurai Field Development Details
Khaleesi, Mormont, Samurai Field Development Details Khaleesi, Mormont, Samurai Fields Field Development Project • Achieved first oil at King’s Quay FPS April 2022, ahead of schedule and on budget • 97% uptime King’s Quay FPS • 2 wells currently producing 30 MBOEPD gross, 89% oil Export Laterals • T
Slide 17: Exploration Update
EXPLORATION UPDATE www.murphyoilcorp.com NYSE: MUR 16
Slide 18: 2022 Exploration Update
2022 Exploration Update Progressing Plans in Targeted Basins Mexico – Operated, 40% WI Exploration Focus Areas • First additional exploration period approved by regulator in Block 5 • Targeting drilling Tulum-1EXP well in 2H 2022 • Progressing permitting and regulatory approvals Gulf of Mexico • Pre
Slide 19: Looking Ahead
LOOKING AHEAD www.murphyoilcorp.com NYSE: MUR 18
Slide 20: 2022 Production Plan
2022 Production Plan Major Project Execution Drives Production Ramp FY 2022 CAPEX FY 2022E Production Capital Plan Drives High Exit Rates By Area By Area • FY 2022 revised guidance $900 – $950 MM 10% 2% 20% • ~65% of spend is in 1H 2022 14% ~168 44% • Prioritizing major Gulf of Mexico projects, tota
Slide 21: 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 • Accelerating debt reduction goal to $600 MM • Realizing average annual production of ~195 MBOEPD with – $650 MM in FY 2022* ~50% average oil weighting based on current portfolio, DELEVER • Optio
Slide 22: Focused on FY 2022 Targeted Priorities
Focused on FY 2022 Targeted Priorities DELEVER EXECUTE EXPLORE • Increased debt reduction goal to • Achieved first oil at King’s Quay FPS in • Progress drilling plans for Tulum-1EXP $600 – 650 MM in FY 2022*, with April 2022 in offshore Mexico in 2H 2022 $200 MM redeemed in June 2022 • Continue well
Slide 23: First Quarter Earnings Conference Call & Webcast
2022 FIRST QUARTER EARNINGS CONFERENCE CALL & WEBCAST MAY 4, 2022 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 22
Slide 24: Appendix
Appendix 1 Non-GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 2Q 2022 Guidance 4 Current Hedging Positions 5 Supplemental Information 6 Acreage Maps www.murphyoilcorp.com NYSE: MUR 23
Slide 25: 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 26: 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 27: 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 28: 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 29: 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 30: 2Q 2022 Guidance
2Q 2022 Guidance Oil NGLs Gas Total Producing Asset (BOPD) (BOPD) (MCFD) (BOEPD) US – Eagle Ford Shale 26,000 4,100 29,500 35,000 – Gulf of Mexico excluding NCI1 53,300 4,300 61,800 67,900 Canada – Tupper Montney – – 281,200 46,900 – Kaybob Duvernay and Placid Montney 4,300 800 14,800 7,600 – Offsho
Slide 31: 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 4/1/2022 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 32: 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 176 C$2.34 4/1/2022 4/30/2022 Natural Gas Fixed Price Forward Sales at AECO 205 C$2.34 5/1/2022 5/31/2022 Natural Gas Fixed Price Forw
Slide 33: 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 34: Peer Acreage: Eagle Ford Shale
Eagle Ford Shale Peer Acreage www.murphyoilcorp.com NYSE: MUR 33
Slide 35: Peer Acreage: Kaybob Duvernay
Kaybob Duvernay Peer Acreage HALO GMT HITIC KAYBOB EAST Crescent Murphy Point Paramount Repsol XTO PARAMOUNT Crescent Pointl Chevron PCC CENOVUS Kiwetinohk KAYBOB WEST PCC Cenovus KEYERA GMT Fox Creek SIMONETTE Hitic SAXON Halo CHEVRON ENERGY TRANSFER Open Crown KAYBOB Other Leased KIWENTINOHK JV Ar
Slide 36: Peer Acreage: Tupper Montney
Tupper Montney Peer Acreage Advantage Montney ARC Montney Birchcliff Montney Ovintiv Montney Dawson Creek Tourmaline Montney Shell Montney Other Competitors Open Crown Murphy Dry Gas Limit TCPL Pipeline Murphy Pipeline Battery Facility 0 Miles 10 www.murphyoilcorp.com NYSE: MUR 35
Slide 37: Peer Acreage: Placid Montney
Placid Montney Peer Acreage ARC CNRL KAYBOB EAST HALO Murphy ARC Cenovus HAWTHORNE PARAMOUNT CNRL ENERGY Halo I3 Energy KAYBOB WEST Kiwetinohk Open Crown KEYERA Fox Creek Other Leased SIMONETTE I3 SAXON Paramount Spartan Delta Hawthorne Energy Condensate ENERGY TRANSFER SPARTAN Limit KAYBOB XTO DELT
Slide 38: Gulf of Mexico Murphy Blocks
Gulf of Mexico Murphy Blocks Gulf of Mexico Assets PRODUCING 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 39: Sergipe-Alagoas Basin, Brazil
2022 Exploration Plan Sergipe-Alagoas Basin, Brazil Sergipe-Alagoas Basin Asset Overview • 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 351 • Material opportunitie
Slide 40: Salina Basin, Mexico
2022 Exploration Plan Salina Basin, Mexico Salina Basin Block 5 Overview • Murphy 40% (Op), Petronas 30%, Wintershall Dea 30% Block 5 • 34 leads / prospects • Mean to upward gross resource potential Tulum-1EXP • 800 MMBO – 2,000 MMBO Block 5 • Proven oil basin in proximity to multiple oil discoverie
Slide 41: Gulf of Mexico Exploration Area
Exploration Update Gulf of Mexico Gulf of Mexico Exploration Area Interests in 113 Gulf of Mexico OCS Blocks Hoffe Park VK DD • ~650,000 total gross acres Silver Dollar • 69 exploration blocks Silver Dollar West Medusa Delta House • ~1 BBOE gross resource potential • 20 key prospects Blanco Creek Ca
Slide 42: 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 43: Cuu Long Basin, Vietnam: Block 15-1/05
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 LAC DA VANG LAC DA TRANG (LDV) retainment / development area DISCOVER
Slide 44: 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 HONG HAI SU TRAN
Slide 45: First Quarter Earnings Conference Call & Webcast
2022 FIRST QUARTER EARNINGS CONFERENCE CALL & WEBCAST MAY 4, 2022 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 44