Murphy Oil Corporation · NYSE:MUR
Murphy Oil — Q3 2022 Earnings Presentation
46 slides from Murphy Oil's earnings presentation, Nov 3, 2022
Slide 1: Third Quarter 2022 Earnings Conference Call & Webcast
2022 THIRD QUARTER EARNINGS CONFERENCE CALL & WEBCAST NOVEMBER 3, 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 • Reduced debt by $240 MM through redemption of • Production continuing to exceed • Received all permits in advance of spudding remaining senior notes due 2024 and partial expectations from six wells in Khaleesi, operated Tulum-1EXP well in of
Slide 5: Oil Production Drives High Revenue
3Q 2022 Production, Pricing and Revenue Update Oil Production Drives High Revenue 3Q 2022 Production 3Q 2022 Revenue by Area by Area Onshore Canada Eagle Ford Shale $134 MM Eagle Ford Shale $287 MM 39,300 BOEPD 13% 21% 27% Onshore Canada 37% 70,300 BOEPD 188.5 $1.1 BN MBOEPD Offshore 42% 60% 78,900
Slide 6: Positive Response to Sustainability Reporting Approach
Positive Response to Sustainability Reporting Approach Increased Disclosures in Sustainability Report to Align With Internationally Recognized Frameworks by the Institutional Shareholder Services Group of Conducted Annual Sustainability and Governance Outreach Companies (ISS) With Shareholders Focus
Slide 7: Advancing Goals Through Cash Flow Generation
Financial Results Advancing Goals Through Cash Flow Generation Financial Results Net Income Attributable to Murphy ($MM Except Per Share) 3Q 2022 • Net income $528 MM; adjusted net income $290 MM Income (loss) $528 $/Diluted share $3.36 One-Off Non-Cash Income Adjustments After-Tax Adjusted Income f
Slide 8: Strengthening Balance Sheet
Financial Results Strengthening Balance Sheet Solid Foundation for Commodity Price Cycles Long-Term Debt Profile* • $466 MM of cash and cash equivalents at Sept 30, 2022 Total Bonds Outstanding $BN $2.0 • Achieved $248 MM of long-term debt reduction: Weighted Avg Fixed Coupon 6.14% • Tendered $198 M
Slide 9: Major Project Execution, Enhanced Well Design Drive Oil Production Increase
2022 Production Plan Major Project Execution, Enhanced Well Design Drive Oil Production Increase Well Design Enhancements, Top-Tier Execution FY 2022E Revised Production By Area Achieve Higher Rates Across Assets • Enhanced Eagle Ford Shale completions design, longer 21% Tupper Montney laterals supp
Slide 10: Prioritizing Capital To Support Free Cash Flow
2022 CAPEX Plan Prioritizing Capital To Support Free Cash Flow FY 2022 Accrued CAPEX Variances $MM Capital Plan Supports Further Delevering, Enhanced $5 $10 Shareholder Returns $20 $40 • Raising FY 2022 accrued CAPEX guidance to $975 – $1.025 BN, excluding acquisitions $1,000 • $40 MM for Gulf of Me
Slide 11: Onshore Portfolio Update
ONSHORE PORTFOLIO UPDATE www.murphyoilcorp.com NYSE: MUR 10
Slide 12: Eagle Ford Shale
Eagle Ford Shale Enhancing Portfolio and Production Through Strong Execution, Improved Completions 3Q 2022 39 MBOEPD, 87% Liquids Eagle Ford Shale Acreage • 4 operated wells online in Catarina • 3 non-operated wells online in Tilden KARNES 4Q 2022 Well Delivery Schedule TILDEN • 4 non-operated wells
Slide 13: Tupper Montney: Record-High Production Results
Tupper Montney 2022 Wells Achieved Fast Payout 3Q 2022 376 MMCFD Net, 395 MMCFD Gross Tupper Montney Acreage • 5 wells online • Activity complete for FY 2022 Realizing Record-High Production Results • Achieved record-high gross production peak of Alberta 415 MMCFD BC • Fast well payouts, resulting i
Slide 14: Tupper Montney Royalty Structure Impacting Production Results
Tupper Montney Royalty Structure Impacting Production Results Complex, Backward-Looking Royalty Calculation Royalty Rate and Production Impact • Based on government-determined posted minimum price (PMP) 30% 70 • Royalty rate increases after royalty credit consumed • Based on well depth and lateral l
Slide 15: Offshore Portfolio Update
OFFSHORE PORTFOLIO UPDATE www.murphyoilcorp.com NYSE: MUR 14
Slide 16: Gulf of Mexico: Development and Tiebacks Drive Future Free Cash Flow
Gulf of Mexico Development and Tiebacks Drive Future Free Cash Flow Gulf of Mexico Assets 3Q 2022 76 MBOEPD, 80% Oil Development and Tieback Projects Hoffe Park Dalmatian S. VK DD • Drilled successful Dalmatian #1 (Desoto Canyon 90) Silver Dollar Silver Dollar West development well, online FY 2023 M
Slide 17: Khaleesi, Mormont, Samurai Field Development Details
Khaleesi, Mormont, Samurai Field Development Details On Track for Completing Initial Phase by Year-End 2022 Khaleesi, Mormont, Samurai Fields Field Development Project • Achieved first oil at King’s Quay FPS April 2022, industry-leading 96% facility uptime • Completions progressing on final well of
Slide 18: Exploration Update
EXPLORATION UPDATE www.murphyoilcorp.com NYSE: MUR 17
Slide 19: Salina Basin, Mexico: Block 5 Overview and Tulum-1EXP
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 Cholula • 800 MMBO – 2,000 MMBO • Proven oil basin in proximity to multiple oil discoverie
Slide 20: Gulf of Mexico: Oso-1EXP
2022 Exploration Plan Gulf of Mexico Gulf of Mexico Exploration Area Oso-1EXP (Atwater Valley 138) • Murphy 33% (Op), Anadarko* 33%, Hoffe Park Dalmatian S. VK DD Ridgewood 33% Silver Dollar Silver Dollar West • Executed partnership agreement in 3Q 2022 Medusa Delta House • Preparing to spud in 4Q 2
Slide 21: Looking Ahead
LOOKING AHEAD www.murphyoilcorp.com NYSE: MUR 20
Slide 22: Capital Allocation Priorities
Capital Allocation Priorities Framework1 Allows for Long-Term Debt Reduction, Shareholder Returns Beyond Quarterly Dividend Initial $300 MM Share Repurchase Program2 Authorized by Board Murphy 1.0 – Long-Term Debt > $1.8 BN Adjusted Free Cash Flow Formula • Allocate adjusted FCF to long-term debt re
Slide 23: Progressing Strategic Priorities
Progressing Strategic Priorities DELEVER EXECUTE EXPLORE • Reduced debt by $240 MM through redemption of • Production continuing to exceed • Received all permits in advance of spudding remaining senior notes due 2024 and partial expectations from six wells in Khaleesi, operated Tulum-1EXP well in of
Slide 24: Third Quarter Earnings Conference Call & Webcast
2022 THIRD QUARTER EARNINGS CONFERENCE CALL & WEBCAST NOVEMBER 3, 2022 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 23
Slide 25: Appendix
Appendix 1 Non-GAAP Definitions and Reconciliations 2 Glossary of Abbreviations 3 4Q 2022 Guidance 4 Current Hedging Positions 5 Supplemental Information 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, depletion and amortization (DD&A). Murphy defines EBITDAX as net income (loss) attributable to Murphy before interest, taxes, DD&A and exploration expen
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, depletion and amortization (DD&A), impairment expense, discontinued operations, foreign exchange gains and losses, mark-to-market gains and losses
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, depletion and amortization (DD&A), exploration expense, impairment expense, discontinued operations, foreign exchange gains and losses, mark-to-
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 2022 Guidance
4Q 2022 Guidance Oil NGLs Gas Total Producing Asset (BOPD) (BOPD) (MCFD) (BOEPD) US – Eagle Ford Shale 23,500 5,100 27,800 33,200 – Gulf of Mexico excluding NCI1 68,000 5,600 70,500 85,400 Canada – Tupper Montney – – 296,100 49,400 – Kaybob Duvernay and Placid Montney 3,500 700 12,600 6,300 – Offsho
Slide 32: 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 10/1/2022 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.
Slide 33: Current Fixed Price Contracts – Natural Gas
Current Fixed Price Contracts – Natural Gas Tupper Montney, Canada Volumes Price Commodity Type (MMCF/D) (MCF) Start Date End Date Natural Gas Fixed Price Forward Sales at AECO 247 C$2.34 10/1/2022 10/31/2022 Natural Gas Fixed Price Forward Sales at AECO 266 C$2.36 11/1/2022 12/31/2022 Natural Gas F
Slide 34: 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 35: Eagle Ford Shale Peer Acreage
Eagle Ford Shale Peer Acreage www.murphyoilcorp.com NYSE: MUR 34
Slide 36: Kaybob Duvernay Peer Acreage
Kaybob Duvernay Peer Acreage HALO GMT HITIC KAYBOB EAST Murphy Crescent Paramount Point Whitecap Crescent Point Chevron PARAMOUNT Kiwetinohk PCC CENOVUS Cenovus PCC KAYBOB WEST GMT Hitic KEYERA Halo SIMONETTE Open Crown Other Leased SAXON Battery CHEVRON PGI PROCESSING Facility KAYBOB KIWENTINOHK Wh
Slide 37: Tupper Montney Peer Acreage
Tupper Montney Peer Acreage Advantage Montney ARC Montney Birchcliff Montney Ovintiv Montney Tourmaline Montney Shell Montney Other Competitors Open Crown Murphy TCPL Pipeline Murphy Pipeline Battery Facility 0 Miles 10 www.murphyoilcorp.com NYSE: MUR 36
Slide 38: Placid Montney Peer Acreage
Placid Montney Peer Acreage ARC KAYBOB EAST CNRL HALO Murphy PARAMOUNT ARC Cenovus HWN CNRL ENERGY RIDGEBACK Halo HWN Energy KAYBOB WEST I3 Energy Kiwetinohk KEYERA SIMONETTE Open Crown I3 SAXON Other Leased Paramount PGI PROCESSING Ridgeback SPARTAN KAYBOB Spartan Delta DELTA KIWETINOHK Whitecap No
Slide 39: 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 80% Silver Dollar Chinook Murphy 86% Silver Dollar West Clipper Murphy 80% Medusa Delta House Dalmatian Murphy 56% Front Runner Murphy 50% Ko
Slide 40: Interests in 116 Gulf of Mexico OCS Blocks
Exploration Update Gulf of Mexico Gulf of Mexico Exploration Area Interests in 116 Gulf of Mexico OCS Blocks • ~650,000 total gross acres Hoffe Park Dalmatian S. VK DD • 70 exploration blocks Silver Dollar West Silver Dollar • ~1 BBOE gross unrisked mean resource Medusa Delta House potential Kodiak
Slide 41: Salina Basin, Mexico: Block 5 Overview
Exploration Update Salina Basin, Mexico Salina Basin Block 5 Overview Block 5 • Murphy 40% (Op), Petronas 30%, Wintershall Dea 30% • 34 leads / prospects Tulum-1EXP • Mean to upward gross resource potential Cholula • 800 MMBO – 2,000 MMBO • Proven oil basin in proximity to multiple oil discoveries C
Slide 42: Sergipe-Alagoas Basin, Brazil: Asset Overview
Exploration Update Sergipe-Alagoas Basin, Brazil Sergipe-Alagoas Basin Asset Overview • ExxonMobil 50% (Op), Enauta Energia S.A. 30%, BRAZIL Murphy 20% • Hold WI in 9 blocks, spanning >1.6 MM acres • >2.8 BN BOE discovered in basin 351 • >1.2 BN BOE in deepwater since 2007 Cutthroat-1 • Material opp
Slide 43: Potiguar Basin, Brazil: Asset Overview
Exploration Update Potiguar Basin, Brazil Potiguar Basin Asset Overview • Murphy 100% (Op) Murphy WI Block Other Block • Assumed Wintershall DEA’s 70% WI position Discovered Field at no cost Kilometers 0 50 • Hold WI in 3 blocks, spanning ~775 M gross acres Petrobras • Proven oil basin in proximity
Slide 44: Cuu Long Basin, Vietnam: Block 15-1/05
Development Update Cuu Long Basin, Vietnam Cuu Long Basin Asset Overview LAC DA TRANG BLOCK 15-01/05 NORTH WEST SU TU VANG • Murphy 40% (Op), PVEP 35%, SKI 25% LAC DA TRANG Block 15-1/05 WEST • Received approval of the Lac Da Vang LAC DA VANG LAC DA TRANG DISCOVERY (LDV) retainment / development are
Slide 45: Cuu Long Basin, Vietnam: Block 15-2/17
Exploration Update Cuu Long Basin, Vietnam Cuu Long Basin Asset Overview 5 BLOCK 15-02/17 • Murphy 40% (Op), PVEP 35%, SKI 25% HAI SU BAC HAI SU VANG Block 15-2/17 HAI SU DEN • 2-year exploration extension to 4Q 2024 PHUONG DONG 15-2 • 1 well commitment HAI SU HONG HAI SU TRANG • 2 drill-worthy pros
Slide 46: Third Quarter Earnings Conference Call & Webcast
2022 THIRD QUARTER EARNINGS CONFERENCE CALL & WEBCAST NOVEMBER 3, 2022 ROGER W. JENKINS PRESIDENT & CHIEF EXECUTIVE OFFICER www.murphyoilcorp.com NYSE: MUR 45