Core Insights - Murphy Oil Corp is often perceived as a low-key exploration and production (E&P) company after exiting the refining business in 2011, but it is actively pursuing production growth [1] Group 1 - The company has been executing on a production growth strategy, indicating a more dynamic operational approach than commonly assumed [1]

Summary of Murphy Oil (MUR) 2025 Conference Call Company Overview - **Company**: Murphy Oil Corporation (MUR) - **CEO**: Eric Hambly, who has been with the company for approximately 20 years and took over as CEO in January 2025 [2][3] Key Industry Insights - **Exploration and Development**: Murphy Oil has a strong focus on both onshore and offshore operations, with significant international exploration capabilities. The company has a large inventory of shale locations and is actively pursuing exploration and appraisal programs, particularly in Vietnam [4][5] - **Vietnam Projects**: The company announced a world-class discovery in Vietnam shortly after Hambly became CEO, indicating a promising future in the region [2][5] Financial Highlights - **Capital Expenditure**: For 2025, Murphy Oil has earmarked a capital budget of approximately $1.2 billion, with 85% allocated for development activities. The company aims to maintain a capital program between $1.1 billion and $1.3 billion in typical years [10][11] - **Oil Price Sensitivity**: The company can comfortably cover its dividend and capital program with oil prices in the $60 range. However, if prices fall to $55 per barrel for an extended period, adjustments to the capital program may be necessary to protect the balance sheet [10][11] Operational Updates - **Gulf of America**: Murphy Oil is actively working on several wells in the Gulf of America, including new development wells and workovers. The company plans to drill two exploration wells in the third quarter of 2025 [14][15] - **St. Malo Waterflood Project**: The project is expected to contribute to production levels over time, with water injection already underway [17][18] - **Chinook Field**: The company purchased an FPSO for over $100 million, which will enhance the economics of the Chinook development project. A new development well is planned for 2026, with potential production rates of up to 15,000 barrels per day [26][28] Exploration Opportunities - **Hai Su Long Discovery**: The discovery well flowed at 10,000 barrels per day, with an estimated resource of 170 million barrels of oil equivalent. An appraisal well is planned to further assess the structure [46][48] - **Pink Camel Field**: Estimated resources of 30 million to 60 million barrels of oil equivalent, with plans for development tied back to existing infrastructure [51][53] - **Cote D'Ivoire Exploration**: Murphy Oil plans to start a three-well drilling program in Cote D'Ivoire, targeting significant resource potential with a mean estimate of over 400 million barrels [58][60] Cost Management - **Cost Structure**: The company has already streamlined its cost structure significantly since 2020, reducing general and administrative expenses from $243 million in 2019 to approximately $110 million in recent years [7][8] - **Offshore Costs**: While some costs are stable, there are increases in tubular goods and major subsea projects, with cost increases of 30% to 50% noted for subsea projects compared to previous years [36][38] Strategic Outlook - **Long-term Vision**: Murphy Oil aims to differentiate itself from peers through its exploration capabilities and strategic investments in high-potential regions like Vietnam and Cote D'Ivoire. The company is optimistic about its future growth and exploration success [4][5][62] Conclusion - **Overall Sentiment**: The company is confident in its operational performance and strategic direction, with a focus on maintaining a strong balance sheet while pursuing growth opportunities in both existing and new markets [71]

Financial Performance & Capital Allocation - Murphy reduced debt by $50 million YTD 2024 and plans to call $79 million of senior notes in 4Q 2024, aiming for a long-term debt goal of ~$1 billion[23] - The company repurchased $194 million of stock in 3Q 2024 (5.4 million shares at an average price of $36.12/share) and $300 million YTD 2024 (8.0 million shares at an average price of $37.46/share), with $650 million remaining under share repurchase authorization[23] - Murphy issued $600 million of 6.000% Senior Notes due 2032 and tendered $521 million of long-term debt in 4Q 2024[25] - Since the capital allocation framework was announced, the company has returned over $4.1 billion to shareholders since 2012[40, 45] Production & Operations - 3Q 2024 production was 185 MBOEPD, with offshore workovers completed as planned and progress on new well programs, along with Eagle Ford Shale well program delivery[12, 23] - FY 2024 production is guided at 180-182 MBOEPD, with 90 MBOPD or 50% oil and 55% liquids volumes, and a CAPEX of $920 million - $1.02 billion[62] - The company forecasts 98 MBOEPD for FY 2024 from North America Onshore, with 25% oil volumes and 30% liquids volumes[63] - Total offshore production in 3Q 2024 was 75 MBOEPD, with 81% oil[80] Exploration & Development - The company spud the Hai Su Vang-1X exploration well in Vietnam in 3Q 2024, with a gross resource potential of 170 MMBOE – 430 MMBOE[20, 93] - Murphy initiated construction of the Lac Da Vang platform in Vietnam in 4Q 2024, targeting first oil in FY 2026, with an estimated gross recoverable resource of 100 MMBOE[23, 85, 87] - The company holds ~1.5 million gross acres in the Tano Basin, Côte d'Ivoire, and is reprocessing seismic data, with final data expected in 4Q 2024[98]

Company Overview - Murphy Oil shares have increased by approximately 0.8% over the past month, underperforming the S&P 500 index [1] - The most recent earnings report indicated a downward trend in estimates, with a consensus estimate shift of -38.8% [2] Performance Metrics - Murphy Oil has an average Growth Score of C, a Momentum Score of F, and a Value Score of B, placing it in the top 40% for the value investment strategy [3] - The aggregate VGM Score for Murphy Oil is C, which is relevant for investors not focused on a single strategy [3] Outlook - The overall trend for estimates has been downward, leading to a Zacks Rank of 5 (Strong Sell) for Murphy Oil, indicating expectations of below-average returns in the coming months [4] Industry Comparison - Murphy Oil is part of the Zacks Oil and Gas - Exploration and Production - United States industry, where competitor Coterra Energy has seen a gain of 7.4% over the past month [5] - Cabot, another player in the industry, reported revenues of $1.9 billion for the last quarter, reflecting a year-over-year increase of +32.9% [5] - Cabot's expected earnings for the current quarter are $0.55 per share, representing a year-over-year change of +48.7%, with a Zacks Rank of 3 (Hold) [6]

Group 1 - The article focuses on analyzing oil and gas companies, specifically Murphy Oil, to identify undervalued opportunities in the sector [1] - The analysis includes a breakdown of the companies' balance sheets, competitive positions, and development prospects [1] - The author emphasizes the cyclical nature of the oil and gas industry, highlighting the need for patience and experience in navigating it [2] Group 2 - The author has a beneficial long position in Murphy Oil shares, indicating a personal investment interest [3] - The article is presented as an independent opinion, with no compensation received from the companies mentioned [3] - The content is part of a service that offers more detailed analysis to members, suggesting a tiered access to information [1]

Core Viewpoint - Murphy Oil Corporation reported first-quarter 2025 adjusted net earnings of 56 cents per share, exceeding the Zacks Consensus Estimate of 48 cents by 16.7%, but down 34.1% from 85 cents in the same quarter last year [1] Revenue Summary - Murphy Oil's revenues for the first quarter of 2025 were $665.7 million, slightly below the Zacks Consensus Estimate of $668 million by 0.3% [2] Operational Highlights - The company produced 157,220 barrels of oil equivalent per day (BOE/D) in Q1 2025, a decrease from 169,615 BOE/D in Q1 2024, with 49.9% of the production being oil [3] - The decline in production was attributed to winter storm activity and unplanned downtime in the Gulf of America, falling short of the expected production range of 159,000-167,000 BOE/D [3][4] Cost and Expense Management - Total costs and expenses were $521.8 million, down 18.8% from $642.4 million a year ago, primarily due to lower lease operating expenses and a reduction in selling and general expenses [4] Financial Condition - As of March 31, 2025, the company had cash and cash equivalents of $392.9 million, down from $423.6 million as of December 31, 2024, with total liquidity of $1.5 billion [6] - Long-term debt increased to $1.48 billion from $1.27 billion as of December 31, 2024, while net cash provided by continuing operational activities was $300.7 million, compared to $398.8 million in Q1 2024 [6] Capital Allocation and Share Repurchase - The company repaid nearly 35% of its long-term debt since adopting its capital allocation framework in Q3 2022 and repurchased $100 million worth of stock, equating to 3.6 million shares [5] - As of March 31, 2025, Murphy Oil had $550 million remaining under its share repurchase authorization [5] 2025 Guidance - For Q2 2025, Murphy Oil expects production in the range of 177,000-185,000 BOE/D, with 50% expected to be oil [7] - The company reiterated its 2025 capital expenditures guidance of $1.13-$1.28 billion and anticipates exploration expenses of $17 million for Q2 2025 [7][8]

Financial Data and Key Metrics Changes - In the first quarter, the company generated $636 million in revenue with an average realized oil price of $72 per barrel, natural gas liquids price of nearly $26 per barrel, and natural gas price of $2.67 per 1,000 cubic feet [10][11] - The company produced 157,000 barrels of oil equivalent per day, with 78,500 barrels of oil per day, experiencing approximately 6,000 barrels of oil equivalent per day of production impacts due to non-operated unplanned downtime [9][10] - Shareholder returns totaled $147 million through $100 million of share repurchases and $47 million of dividends [7][8] Business Line Data and Key Metrics Changes - The Eagle Ford Shale asset produced 25,000 barrels of oil equivalent per day, with 83% liquids, and the company drilled the longest lateral in its history at 13,976 feet [14] - The Tupper Montney produced 340 million cubic feet per day, with five wells brought online as planned, and the company achieved a 30% increase in initial production rates compared to historical performance [15][16] - Offshore assets produced a combined 71,000 barrels of oil equivalent per day, with 83% oil, and the company progressed workovers impacted by winter weather [18] Market Data and Key Metrics Changes - The company anticipates production of 177,000 to 185,000 barrels of oil equivalent per day for the second quarter of 2025, representing a 15% increase over first-quarter production [25] - Full-year production is expected to be toward the lower end of the range of 174,500 to 182,500 barrels of oil equivalent per day due to first-quarter impacts [26] Company Strategy and Development Direction - The company remains focused on operational excellence, multi-basin portfolio expansion, and capital returns to shareholders, with a commitment to allocate a minimum of 50% of adjusted free cash flow to shareholder returns [5][8] - The company plans to drill two operated exploration wells in the Gulf of America in the second half of the year, targeting lower-risk opportunities near existing infrastructure [21] - The company is excited about its international priorities, particularly in offshore Vietnam and Cote D'Ivoire, with significant resource potential [20][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational turnaround and highlighted the importance of balancing investments in high-return projects while protecting the balance sheet [32] - The company is monitoring oil price environments closely and is prepared to adjust capital spending if prices remain low [36] - Management emphasized the potential for significant value creation from recent discoveries in Vietnam and ongoing development projects [22][36] Other Important Information - The company has repurchased 22% of its total shares outstanding since 2013 and has returned over $4 billion to shareholders through buybacks and dividends [8] - The acquisition of the Pioneer floating production storage and offloading vessel is expected to reduce annual net operating expenses by approximately $50 million, achieving a two-year payback [12] Q&A Session Summary Question: How does the company plan to manage capital allocation in a lower oil price environment? - Management indicated that while they are maintaining the 2025 capital plan, they are prepared to identify opportunities to reduce spending if oil prices remain below $55 per barrel [32][34] Question: What is the impact of the recent discovery in Vietnam on the development plan? - Management stated that the recent discovery will likely lead to a capital-efficient project with production processed from the Loch Da Hong A platform, expected to come online in 2026 [38] Question: What is the status of the Khaleesi II and Marmalade III workovers? - Management reported that the Khaleesi II workover is a routine fix for a failed safety valve, while the Marmalade III involves a more complex sidetrack and new completion [80] Question: How does the company view its OCTG exposure and procurement strategy? - Management noted that onshore wells have flat total costs year-over-year, with some pressure on tubular goods expected in the second half of 2025 [46][49] Question: What are the expectations for production growth in the second half of the year? - Management expressed confidence in achieving production guidance, with the bulk of the onshore program online and performing well [54]

Financial Data and Key Metrics Changes - Murphy generated $636 million in revenue for Q1 2025, with an average realized oil price of $72 per barrel, natural gas liquids price of nearly $26 per barrel, and natural gas price of $2.67 per 1,000 cubic feet [10][11] - The company produced 157,000 barrels of oil equivalent per day in Q1 2025, which included 78,500 barrels of oil per day [8][10] - Shareholder returns totaled $147 million in Q1 2025, comprising $100 million in share repurchases and $47 million in dividends [6][7] Business Line Data and Key Metrics Changes - Eagle Ford Shale produced 25,000 barrels of oil equivalent per day in Q1 2025, with 83% liquids [14] - Tupper Montney produced 340 million cubic feet per day in Q1 2025, with five wells brought online as planned [15] - Offshore assets produced a combined 71,000 barrels of oil equivalent per day in Q1 2025, with 83% oil [17] Market Data and Key Metrics Changes - The company experienced approximately 6,000 barrels of oil equivalent per day of production impacts due to non-operated unplanned downtime in the Gulf of America and production curtailments in offshore Canada [9] - The average realized oil price of $72 per barrel reflects market conditions impacting revenue generation [10] Company Strategy and Development Direction - Murphy remains focused on operational excellence, multi-basin portfolio expansion, and capital returns to shareholders, with a commitment to allocate a minimum of 50% of adjusted free cash flow to shareholder returns [5][7] - The company plans to drill two operated exploration wells in the Gulf of America in the second half of 2025, targeting lower-risk opportunities near existing infrastructure [19] - Murphy's exploration strategy includes significant international projects in Vietnam and Côte d'Ivoire, with a focus on high-impact growth opportunities [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in operational improvements and the ability to deliver production guidance for Q2 2025, anticipating production of 177,000 to 185,000 barrels of oil equivalent per day [22][53] - The company is monitoring oil price volatility and is prepared to adjust capital spending if prices remain low, while maintaining a disciplined approach to capital allocation [29][30] Other Important Information - Murphy achieved 1,000,000 work hours with no lost time injuries on the Loch Da Bong field development project [5][18] - The acquisition of the Pioneer floating production storage and offloading vessel for $104 million is expected to reduce annual net operating expenses by approximately $50 million [12][13] Q&A Session Summary Question: How does the company plan to manage capital allocation in a lower oil price environment? - Management indicated that they will maintain the 2025 capital plan while monitoring the oil price environment, with potential adjustments to spending if prices fall below $55 per barrel [29][30] Question: What is the impact of the recent discovery in Vietnam on the development plan? - The recent discovery is expected to be developed with a wellhead platform tied into the existing production facility, potentially accelerating development timelines [35][102] Question: What is the status of the Khaleesi II and Marmalade III workovers? - The Khaleesi II workover is addressing a failed safety valve, while the Marmalade III involves a more complex sidetrack and new completion [40][76] Question: How does the company view its OCTG exposure and procurement strategy? - Management noted that onshore well costs are expected to remain flat year-over-year, with some pressure on tubular goods anticipated in the second half of 2025 [44][45] Question: What are the expectations for production growth in 2025? - Management expressed confidence in achieving production guidance, with significant contributions expected from onshore wells coming online in the second half of the year [52][53] Question: How does the company plan to approach exploration in Côte d'Ivoire? - The company is excited about the exploration prospects in Côte d'Ivoire, with significant resource potential and favorable fiscal terms [94]

2025 FIRST QUARTER EARNINGS CONFERENCE CALL AND WEBCAST MAY 8, 2025 ERIC M. HAMBLY PRESIDENT AND CHIEF EXECUTIVE OFFICER 1 www.murphyoilcorp.com NYSE: MUR Cautionary Statement 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 conclusive formation tests to be economically and legally producible under existing econ ...

Core Insights - Murphy Oil reported revenue of $665.71 million for Q1 2025, a year-over-year decline of 16.4% and a slight miss of 0.31% against the Zacks Consensus Estimate of $667.76 million [1] - The company's EPS for the same period was $0.56, down from $0.85 a year ago, but exceeded the consensus estimate of $0.48 by 16.67% [1] Financial Performance - Revenue from exploration and production in Canada was $165.70 million, surpassing the three-analyst average estimate of $158.14 million, reflecting a year-over-year increase of 21% [4] - Revenue from exploration and production in the United States was $509.50 million, compared to the average estimate of $494.29 million, showing a year-over-year decline of 22.8% [4] - Total revenue from sales to customers was $672.73 million, exceeding the three-analyst average estimate of $653.43 million, but representing a 15.4% decline compared to the previous year [4] Production Metrics - Total net crude oil and condensate production was 84.26 thousand barrels per day, below the estimated 85.84 thousand barrels per day [4] - Total net natural gas liquids production was 8.41 thousand barrels per day, compared to the estimated 9.16 thousand barrels per day [4] - Total net natural gas production was 424.23 million cubic feet per day, slightly below the estimated 426.47 million cubic feet per day [4] Stock Performance - Murphy Oil's shares returned +7% over the past month, while the Zacks S&P 500 composite increased by +10.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]