Core Insights - Murphy Oil Corporation (MUR) reported second-quarter 2025 adjusted net earnings of 27 cents per share, exceeding the Zacks Consensus Estimate of 21 cents by 28.6%, but down 66.7% from 81 cents in the same quarter last year [1][8] - Revenues for Murphy Oil reached $695.6 million, surpassing the Zacks Consensus Estimate of $638 million by 8.9% [2] - The company produced 190,000 barrels of oil equivalent per day (BOE/D) in Q2 2025, exceeding the guidance range of 177,000-185,000 BOE/D, driven by strong performance in the Eagle Ford Shale and Tupper Montney region [3][8] Financial Performance - Total costs and expenses were $603.4 million, a decrease of 2.5% from $618.5 million a year ago, attributed to lower lease operating costs and exploration expenses [4] - Murphy Oil returned $193 million to shareholders in the first half of 2025, including $100 million in share repurchases and $93 million in dividends [4][8] - As of June 30, 2025, the company had cash and cash equivalents of $379.6 million, down from $423.6 million at the end of 2024, with long-term debt totaling $1.48 billion [7] Share Repurchase and Acquisitions - The board of directors authorized a share repurchase program allowing the company to repurchase up to $1.1 billion of its common stock, with $550.1 million remaining available as of June 30, 2025 [5][8] - In July 2025, Murphy Oil completed a small acquisition in the Eagle Ford Shale for $23 million and signed a rig contract for a three-well exploration program in Côte d'Ivoire [6] Future Guidance - For Q3 2025, Murphy Oil expects production to be in the range of 185,000-193,000 BOE/D, with 47% expected to be oil [9] - The company reiterated its 2025 capital expenditures guidance of $1.13-$1.28 billion, with Q3 capital expenditure projected at $260 million [9]

Financial Data and Key Metrics Changes - The company reported a sequential increase in production to 190,000 barrels of oil equivalents per day, exceeding the high end of guidance due to strong new well productivity from Eagle Ford Shale and Tuppermani assets [7] - Second quarter capital expenditures (CapEx) were $251 million, and total company lease operating expenses (LOE) were $11.8 per barrel of oil equivalent, both better than quarterly guidance [8] - The company achieved over $700 million in cumulative cash cost savings since 2019 through a reduction in general and administrative expenses and bond interest expenses [9] Business Line Data and Key Metrics Changes - The Eagle Ford Shale showed exceptional performance with a 30% increase in oil production on a two-month cumulative basis compared to past activity [38] - The company completed 10 wells in the Eagle Ford Shale and a four-well pad in Kaybob Duvernay early in the third quarter [8] - The Gulf Of America workover program is nearing completion, with the last significant planned workover expected to be online in August [31] Market Data and Key Metrics Changes - The company is focused on maintaining a competitive cost structure, with expected operating expenses in the $10 to $12 per barrel range for 2025 [9][90] - The company has a long-term diversification strategy in place to support its Montney asset, which remains profitable even at low AECO prices [64] Company Strategy and Development Direction - The company is committed to high-impact exploration and appraisal activities across three continents, testing resource potentials ranging from 500 million to over 1 billion barrels of oil equivalent [10] - The acquisition of the Pioneer FPSO is expected to lower costs and enhance future development potential in the Chinook field [20] - The company plans to prioritize share repurchases over further debt reduction, given its proximity to the net debt target of $1 billion [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the exploration and appraisal program, highlighting significant volumes being tested and the potential for substantial resource discoveries [15][16] - The company anticipates that the appraisal well in Vietnam will provide confidence in a larger resource base, potentially supporting a 30,000 to 50,000 barrel per day business by the 2030s [42] - Management acknowledged challenges in offshore Canada but remains focused on improving uptime and production performance [87] Other Important Information - The company has signed a rig contract for its Cote D'Ivoire program, which is expected to test significant resource potential [17] - The company is evaluating the impact of the new tax legislation on its future cash tax position, with potential benefits estimated at $40 million to $50 million in outer years [51][52] Q&A Session Summary Question: Can you detail the near-term exploration program? - Management highlighted excitement about the exploration and appraisal program, with significant volumes being tested and a focus on upcoming wells in the Gulf Of America and Vietnam [15][16] Question: What is the strategy around the Chinook development well? - The acquisition of the FPSO is expected to lower costs and enhance the economic viability of the Chinook field, with plans to drill a high-rate development well in 2026 [20][21] Question: How is the Gulf Of America production performing? - Management confirmed that operational challenges have been addressed, and production is expected to improve as workover activities are completed [30][31] Question: What is the company's perspective on return of capital? - Management indicated a preference for share repurchases over debt reduction, especially if oil prices decline [34] Question: Can you expand on the Vietnam appraisal well? - The appraisal well aims to test for continuity of the reservoir and potentially deeper oil, with expectations of significant resource potential [41][42] Question: What changes have been made in Karnes completions? - Adjustments in completion design, including stage spacing and proppant loading, have contributed to improved well performance [101]

Financial Data and Key Metrics Changes - The second quarter production increased to 190,000 barrels of oil equivalents per day, exceeding guidance due to strong well productivity [6][7] - Capital expenditures (CapEx) for the second quarter were $251 million, with lease operating expenses at $11.8 per barrel of oil equivalent, both better than guidance [7][8] - Cumulative cash cost savings since 2019 exceeded $700 million, with over 50% reductions in general and administrative expenses and bond interest [8] Business Line Data and Key Metrics Changes - The Eagle Ford Shale and Tuppermani assets contributed significantly to production increases, with 10 new wells brought online in the Eagle Ford Shale [6][7] - The company completed its 2025 onshore well program, indicating strong operational execution across its multi-basin portfolio [6][7] Market Data and Key Metrics Changes - The Gulf Of America workover program is nearing completion, with expectations for operating expenses to range between $10 to $12 per barrel for 2025 [8] - The company is focused on maintaining a competitive cost structure, with a significant reduction in cash costs since 2019 [8] Company Strategy and Development Direction - The company is prioritizing high-impact exploration and appraisal activities across three continents, targeting over 500 million barrels of oil equivalent in resource potential [9][10] - The acquisition of the Pioneer FPSO is expected to enhance the economic viability of the Chinook field, with plans to drill a high-rate development well in 2026 [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in overcoming operational challenges in the Gulf Of America, with production expected to stabilize as workover activities conclude [31][32] - The company is likely to prioritize share repurchases over further debt reduction, contingent on oil price movements [34][35] Other Important Information - The appraisal well in Vietnam aims to test for continuity of reservoir and deeper oil, with potential to develop a 30,000 to 50,000 barrel per day business by the 2030s [45][46] - The company is monitoring the Western Canadian natural gas market, anticipating improvements due to the ramp-up of the LNG Canada facility [65][66] Q&A Session Summary Question: Can you detail the near-term exploration program? - The company plans to spud two wells in the Gulf Of America and an important appraisal well in Vietnam, with significant resource potential [16][17] Question: What is the strategy around the Chinook development well? - The acquisition of the FPSO allows for lower costs and enhanced development potential, with plans to drill a high-rate well in 2026 [21][22] Question: How is the Gulf Of America production performing? - Production has improved, and the backlog of workover activities is nearly resolved, with expectations for continued stability [31][32] Question: What is the perspective on return of capital? - The company is more likely to prioritize share repurchases over debt reduction, depending on oil price trends [34][35] Question: How do you view the Eagle Ford inventory? - Recent performance improvements in Karnes County wells have increased confidence in the remaining inventory, with expectations for continued strong results [41][42] Question: What is the outlook for offshore Canada? - There have been some disappointments with uptime at Terra Nova, affecting production guidance, but the facilities perform well when operational [87][88]

Financial Performance & Capital Allocation - The company returned over $190 million to shareholders in the first half of 2025, including $46 million in 2Q 2025[6] - The company is targeting long-term debt of $1 billion[8, 24] - The board authorized a share repurchase program of $550 million[11] - The company is allocating a minimum of 50% of adjusted free cash flow to share buybacks and potential dividend increases[6, 8, 81] Production & Operations - Second quarter 2025 production reached 190 MBOEPD (thousands of barrels of oil equivalent per day)[5, 19, 20] - Eagle Ford Shale production was 39 MBOEPD, representing 21% of total production[19, 36] - Offshore production was 72 MBOEPD, accounting for 38% of total production[19, 46] - Onshore Canada production was 79 MBOEPD, making up 41% of total production[19, 41] Exploration & Development - The company is progressing with the Lac Da Vang (Golden Camel) project in Vietnam, targeting first oil in 4Q 2026, with an estimated gross recoverable resource of 100 MMBOE (millions of barrels of oil equivalent)[53, 80, 83] - The company plans to spud the Civette well in Côte d'Ivoire in 4Q 2025, with a mean to upward gross resource potential of 440 MMBOE – 1,000 MMBOE[71]

Core Insights - Murphy Oil reported a revenue of $695.57 million for the quarter ended June 2025, reflecting a decrease of 13.4% year-over-year, while EPS was $0.27 compared to $0.81 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $638.47 million by 8.94%, and the EPS also surpassed the consensus estimate of $0.21 by 28.57% [1] Financial Performance - The company experienced a decline in revenue from exploration and production in the United States, reporting $553.5 million, which is an 18.5% decrease year-over-year, while revenue from Canada increased by 7.8% to $128.3 million [4] - Total revenue from sales to customers was $683.07 million, down 14.7% year-over-year, and revenue from production specifically was also down 14.4% [4] Production Metrics - Murphy Oil's total net crude oil and condensate production was 95.6 thousand barrels per day, exceeding the analyst estimate of 91.47 thousand barrels per day [4] - The company reported net natural gas liquids production of 10.77 thousand barrels per day, surpassing the average estimate of 9.71 thousand barrels per day [4] - Total net hydrocarbons production was 196.32 KBOE/D, which is higher than the estimated 184.57 KBOE/D [4] Stock Performance - Over the past month, Murphy Oil's shares have returned -7.9%, contrasting with the Zacks S&P 500 composite's +0.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Murphy Oil (MUR) reported quarterly earnings of $0.27 per share, exceeding the Zacks Consensus Estimate of $0.21 per share, but down from $0.81 per share a year ago, representing an earnings surprise of +28.57% [1] - The company posted revenues of $695.57 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 8.94%, but down from $802.77 million year-over-year [2] - Murphy Oil shares have declined approximately 21.2% year-to-date, contrasting with the S&P 500's gain of 7.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.43 on revenues of $669.94 million, and for the current fiscal year, it is $1.68 on revenues of $2.65 billion [7] - The estimate revisions trend for Murphy Oil was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently in the bottom 27% of over 250 Zacks industries, suggesting potential challenges for stocks within this sector [8]

Part I [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents Murphy Oil Corporation's unaudited consolidated financial statements and detailed notes for the periods ended June 30, 2025 and 2024 [Consolidated Balance Sheets](index=2&type=section&id=Consolidated%20Balance%20Sheets) - Total assets increased by **$172 million** from December 31, 2024, to June 30, 2025, primarily driven by an increase in property, plant, and equipment[7](index=7&type=chunk) - Long-term debt increased by **$200.4 million**, while total current liabilities decreased by **$33.5 million**[7](index=7&type=chunk) | (Thousands of dollars) | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------ | :---------------- | | **ASSETS** | | | | Total current assets | $762,125 | $785,279 | | Total assets | $9,839,515 | $9,667,479 | | **LIABILITIES AND EQUITY** | | | | Total current liabilities | $909,297 | $942,814 | | Long-term debt | $1,474,959 | $1,274,502 | | Total liabilities | $4,482,335 | $4,325,636 | | Total equity | $5,357,180 | $5,341,843 | [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) - Net income attributable to Murphy decreased significantly for both the three-month and six-month periods ended June 30, 2025, compared to 2024, primarily due to **lower revenues and higher costs**[8](index=8&type=chunk) - Cash dividends per common share increased from **$0.300 to $0.325** for the three-month period and from **$0.600 to $0.650** for the six-month period[8](index=8&type=chunk) | (Thousands of dollars, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues and other income | $695,570 | $802,771 | $1,361,281 | $1,599,183 | | Total costs and expenses | $603,359 | $618,449 | $1,125,176 | $1,260,804 | | Operating income from continuing operations | $92,211 | $184,322 | $236,105 | $338,379 | | Net income attributable to Murphy | $22,280 | $127,739 | $95,316 | $217,741 | | Net income per common share – Basic | $0.16 | $0.84 | $0.66 | $1.43 | | Cash dividends per common share | $0.325 | $0.300 | $0.650 | $0.600 | [Consolidated Statements of Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) - Other comprehensive income saw a significant positive swing in 2025, primarily driven by **net gains from foreign currency translation**, contrasting with losses in 2024[9](index=9&type=chunk) | (Thousands of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income including noncontrolling interest | $35,124 | $156,262 | $124,542 | $270,920 | | Other comprehensive income (loss) | $91,097 | $(15,910) | $90,294 | $(50,528) | | Comprehensive income attributable to Murphy | $113,377 | $111,829 | $185,610 | $167,213 | [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) - Net cash provided by continuing operations activities decreased by **$207.7 million** in the first six months of 2025 compared to 2024[10](index=10&type=chunk) - Net cash required by investing activities increased by **$162.55 million**, largely due to property additions and acquisition of oil and natural gas properties[10](index=10&type=chunk) | (Thousands of dollars) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :----------------------------- | :----------------------------- | | Net cash provided by continuing operations activities | $658,731 | $866,443 | | Net cash required by investing activities | $(679,426) | $(516,876) | | Net cash required by financing activities | $(22,355) | $(334,271) | | Net (decrease) increase in cash and cash equivalents | $(43,938) | $16,545 | [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) - Murphy Shareholders' Equity decreased by **$125.194 million** from June 30, 2024, to June 30, 2025, primarily due to **treasury stock repurchases and cash dividends paid**, partially offset by net income and foreign currency translation gains[12](index=12&type=chunk) | (Thousands of dollars) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :----------------------------- | :----------------------------- | | Common Stock | $195,101 | $195,101 | | Capital in Excess of Par Value | $841,833 | $826,861 | | Retained Earnings | $6,775,193 | $6,672,275 | | Accumulated Other Comprehensive Loss | $(537,778) | $(571,645) | | Treasury Stock | $(2,075,823) | $(1,798,872) | | Murphy Shareholders' Equity | $5,198,526 | $5,323,720 | | Noncontrolling Interest | $158,654 | $178,828 | | Total Equity | $5,357,180 | $5,502,548 | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [Note A – Basis of Presentation](index=7&type=section&id=Note%20A%20%E2%80%93%20Basis%20of%20Presentation) - The unaudited financial statements conform to U.S. GAAP, including all necessary adjustments for fair presentation as of June 30, 2025, and December 31, 2024, and for interim periods[15](index=15&type=chunk) - These interim financial statements should be read with the Company's 2024 Form 10-K report, and interim results are not necessarily indicative of future results[16](index=16&type=chunk) [Note B – New Accounting Principles and Recent Accounting Pronouncements](index=8&type=section&id=Note%20B%20%E2%80%93%20New%20Accounting%20Principles%20and%20Recent%20Accounting%20Pronouncements) - The Company adopted **ASU 2023-07 Segment Reporting** in Q4 2024, requiring additional segment disclosures for interim periods, with no material impact on consolidated financial statements[17](index=17&type=chunk) - New ASUs on Expense Disaggregation and Income Tax Disclosures are expected to impact disclosures only, with **no impact on results of operations, cash flows, or financial condition**[18](index=18&type=chunk)[19](index=19&type=chunk) [Note C – Revenue from Contracts with Customers](index=8&type=section&id=Note%20C%20%E2%80%93%20Revenue%20from%20Contracts%20with%20Customers) - Murphy explores and produces crude oil, natural gas, and natural gas liquids in the U.S. and Canada, with revenue primarily from these three streams[20](index=20&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) - The Company holds long-term fixed-price natural gas contracts in Canada and dedicated acreage contracts for natural gas and NGLs in the U.S. Eagle Ford Shale, extending up to **Q2 2030**[31](index=31&type=chunk) Total Revenue from Sales to Customers (Thousands of dollars) | (Thousands of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue from sales to customers | $683,065 | $801,007 | $1,355,795 | $1,595,855 | [Note D – Property, Plant and Equipment](index=11&type=section&id=Note%20D%20%E2%80%93%20Property%2C%20Plant%20and%20Equipment) - Capitalized exploratory well costs increased significantly to **$110.5 million** at June 30, 2025, from **$43.0 million** in 2024, with major additions in Vietnam and the Gulf of America[33](index=33&type=chunk)[34](index=34&type=chunk) - Murphy purchased a Floating Production Storage and Offloading (FPSO) vessel for **$125.0 million** in Q1 2025 to support Gulf of America operations[39](index=39&type=chunk) - No asset impairments were recorded in the three or six months ended June 30, 2025, contrasting with a **$34.5 million impairment** in Q1 2024 related to the Calliope field[40](index=40&type=chunk) Capitalized Exploratory Well Costs (Thousands of dollars) | (Thousands of dollars) | 2025 | 2024 | | :--------------------- | :--------- | :--------- | | Beginning balance at January 1 | $72,055 | $49,118 | | Additions pending proved reserves | $38,469 | $20,391 | | Charged to expense | — | $(26,471) | | Balance at June 30 | $110,524 | $43,038 | [Note E – Financing Arrangements and Debt](index=12&type=section&id=Note%20E%20%E2%80%93%20Financing%20Arrangements%20and%20Debt) - As of June 30, 2025, Murphy had a **$1.35 billion revolving credit facility (RCF)** expiring in October 2029, with **$200.0 million** outstanding borrowings and **$0.4 million** in letters of credit[42](index=42&type=chunk) - The interest rate on RCF borrowings was **6.67%** at June 30, 2025, and the Company was in compliance with all RCF covenants[42](index=42&type=chunk) [Note F – Other Financial Information](index=13&type=section&id=Note%20F%20%E2%80%93%20Other%20Financial%20Information) Net Decrease in Non-Cash Working Capital (Thousands of dollars) | (Thousands of dollars) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :----------------------------- | :----------------------------- | | Net decrease in non-cash working capital | $7,905 | $1,126 | Supplementary Disclosures (Thousands of dollars) | (Thousands of dollars) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :----------------------------- | :----------------------------- | | Net cash income taxes paid | $423 | $3,236 | | Interest paid, net | $44,577 | $38,262 | | Asset retirement costs capitalized | $9,427 | $16,175 | | (Increase) decrease in capital expenditure accrual | $22,748 | $(24,780) | [Note G – Asset Retirement Obligations](index=13&type=section&id=Note%20G%20%E2%80%93%20Asset%20Retirement%20Obligations) - Asset retirement obligations (ARO) relate to estimated costs to dismantle and abandon oil and natural gas properties[45](index=45&type=chunk) - Total ARO increased to **$1,050.2 million** at June 30, 2025, from **$949.3 million** at June 30, 2024, with a significant increase in the current portion of liability[46](index=46&type=chunk) Asset Retirement Obligations Reconciliation (Thousands of dollars) | (Thousands of dollars) | June 30, 2025 | June 30, 2024 | | :--------------------- | :------------ | :------------ | | Balance at beginning of year | $1,008,884 | $914,763 | | Accretion | $28,477 | $25,827 | | Liabilities incurred | $5,428 | $14,199 | | Revisions of previous estimates | $3,999 | $1,995 | | Liabilities settled | $(6,359) | $(2,925) | | Changes due to translation of foreign currencies | $9,784 | $(4,541) | | Balance at end of period | $1,050,213 | $949,318 | | Current portion of liability | $(70,104) | $(25,622) | | Non-current portion of liability | $980,109 | $923,696 | [Note H – Employee and Retiree Benefit Plans](index=14&type=section&id=Note%20H%20%E2%80%93%20Employee%20and%20Retiree%20Benefit%20Plans) - Murphy sponsors mostly funded defined benefit pension plans and unfunded other postretirement benefits for U.S. employees[47](index=47&type=chunk) - The Company contributed **$18.6 million** to its defined benefit pension and postretirement plans in the first six months of 2025, with an anticipated **$12.3 million** remaining for the year[50](index=50&type=chunk) Total Net Periodic Benefit Expense (Thousands of dollars) | (Thousands of dollars) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :----------------------------- | :----------------------------- | | Pension Benefits | $7,332 | $9,468 | | Other Postretirement Benefits | $(795) | $(56) | | Total Net Periodic Benefit Expense | $6,537 | $9,412 | [Note I – Incentive Plans](index=14&type=section&id=Note%20I%20%E2%80%93%20Incentive%20Plans) - Shareholders approved the **2025 Long-Term Incentive Plan** in May 2025, replacing the 2020 plan and authorizing up to **3.885 million shares** for stock-based awards[53](index=53&type=chunk)[54](index=54&type=chunk) Awards Granted Under 2020 Long-Term Plan (Six Months Ended June 30, 2025) | Type of Award | Number of Awards Granted | | :------------------------ | :----------------------- | | Performance-based RSUs (TSR) | 520,150 | | Performance-based RSUs (ROACE) | 129,990 | | Time-based RSUs (Stock-Settled) | 470,440 | | Time-based RSUs (Cash-Settled) | 771,390 | Compensation Charged Against Income (Six Months Ended June 30) (Thousands of dollars) | (Thousands of dollars) | 2025 | 2024 | | :--------------------- | :------ | :------ | | Compensation charged against income before tax benefit | $20,758 | $19,987 | [Note J – Net Income (Loss) Per Common Share](index=16&type=section&id=Note%20J%20%E2%80%93%20Net%20Income%20%28Loss%29%20Per%20Common%20Share) - Net income attributable to Murphy serves as the numerator for both basic and diluted EPS calculations[60](index=60&type=chunk) - Both basic and diluted weighted-average shares outstanding decreased significantly in 2025 compared to 2024, indicating **share repurchases**[61](index=61&type=chunk) Weighted-Average Shares Outstanding (Weighted-average shares) | (Weighted-average shares) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic method | 142,720,904 | 152,153,401 | 143,502,425 | 152,408,912 | | Diluted method | 143,215,614 | 153,143,584 | 144,143,851 | 153,479,678 | [Note K – Income Taxes](index=16&type=section&id=Note%20K%20%E2%80%93%20Income%20Taxes) - The effective tax rate for Q2 2025 was **3.0%**, significantly lower than **17.2%** in Q2 2024, primarily due to noncontrolling interest income tax exclusion, a Canada tax credit, and Canadian tax losses[63](index=63&type=chunk) - The effective tax rate for the six months ended June 30, 2025, was **21.4%**, above the U.S. statutory rate, due to higher foreign tax rates, U.S. state tax, and stock-based compensation, partially offset by noncontrolling interest tax exclusion and Canada tax credit[65](index=65&type=chunk) - The 'One Big Beautiful Bill Act' (OBBBA) was signed into law on July 4, 2025, reinstating bonus depreciation and immediate expensing of R&E expenditures, with the Company evaluating its financial statement impact[68](index=68&type=chunk) Effective Income Tax Rates | Period | 2025 | 2024 | | :--------------------- | :---- | :---- | | Three months ended June 30, | 3.0% | 17.2% | | Six months ended June 30, | 21.4% | 18.7% | [Note L – Financial Instruments and Risk Management](index=17&type=section&id=Note%20L%20%E2%80%93%20Financial%20Instruments%20and%20Risk%20Management) - Murphy uses derivative instruments to manage commodity price, foreign currency, and interest rate risks, not for speculative purposes, and does not designate them as accounting hedges[69](index=69&type=chunk)[70](index=70&type=chunk) - The Company recognized a gain of **$10.8 million** on derivative instruments for the three months ended June 30, 2025, compared to no gain or loss in the prior year[74](index=74&type=chunk) Outstanding Natural Gas Derivative Contracts (June 30, 2025) | Area | Commodity | Volumes MMCF/d | Price/MCF | Start Date | End Date | | :------------ | :---------- | :------------- | :-------- | :--------- | :--------- | | United States | Natural Gas | 60 | $3.65 | 7/1/2025 | 9/30/2025 | | United States | Natural Gas | 60 | $3.74 | 10/1/2025 | 12/31/2025 | Fair Value of Derivative Instruments (Thousands of dollars) | Type of Derivative Contract | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Commodity swaps | $(337) | $(1,707) | [Note M – Accumulated Other Comprehensive Loss](index=19&type=section&id=Note%20M%20%E2%80%93%20Accumulated%20Other%20Comprehensive%20Loss) - Accumulated other comprehensive loss improved by **$90.294 million** during the six months ended June 30, 2025, primarily due to **foreign currency translation gains**[86](index=86&type=chunk) Changes in Accumulated Other Comprehensive Loss (Thousands of dollars) | (Thousands of dollars) | Foreign Currency Translation Gains (Losses) | Retirement and Postretirement Benefit Plan Adjustments | Total | | :--------------------- | :------------------------------------------ | :----------------------------------------------------- | :---------- | | Balance at December 31, 2024 | $(516,324) | $(111,748) | $(628,072) | | Net other comprehensive income (loss) | $88,555 | $1,739 | $90,294 | | Balance at June 30, 2025 | $(427,769) | $(110,009) | $(537,778) | [Note N – Environmental and Other Contingencies](index=20&type=section&id=Note%20N%20%E2%80%93%20Environmental%20and%20Other%20Contingencies) - Murphy's operations are subject to extensive federal, state, local, and foreign environmental, health, and safety laws and regulations, including those related to climate change and GHG emissions[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) - The U.S. EPA published final rules in 2024 regulating methane and VOC emissions, though a methane waste charge rule was disapproved by Congress in March 2025[91](index=91&type=chunk) - The Company believes costs related to known environmental and legal matters will not materially adversely affect its net income, financial condition, or liquidity in future periods[92](index=92&type=chunk)[95](index=95&type=chunk) [Note O – Common Stock Issued and Outstanding](index=21&type=section&id=Note%20O%20%E2%80%93%20Common%20Stock%20Issued%20and%20Outstanding) - The Company repurchased **3.6 million shares** for **$100.0 million** during the six months ended June 30, 2025, under its **$1.1 billion** share repurchase program, with **$550.1 million** remaining available[98](index=98&type=chunk) Common Stock Outstanding Activity (Number of shares) | (Number of shares outstanding) | June 30, 2025 | June 30, 2024 | | :----------------------------- | :------------ | :------------ | | Beginning of period | 145,845,124 | 152,748,642 | | Restricted stock awards | 494,071 | 1,102,501 | | Treasury shares purchased | (3,613,450) | (2,634,595) | | End of period | 142,725,745 | 151,216,548 | [Note P – Business Segments](index=22&type=section&id=Note%20P%20%E2%80%93%20Business%20Segments) - Murphy's business segments are categorized by geographic operations: United States, Canada, and Other, with revenues attributed to the country of sale[99](index=99&type=chunk) - U.S. E&P segment income decreased significantly in both periods, while Canada E&P segment income increased[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) Segment Income (Loss) - Including NCI (Millions of dollars) | (Millions of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $86.5 | $185.7 | $194.4 | $320.2 | | Canada | $10.5 | $8.9 | $52.0 | $28.3 | | Other | $(7.3) | $(10.1) | $(18.5) | $(20.9) | | Total E&P | $89.7 | $184.5 | $227.9 | $327.6 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of Murphy Oil Corporation's financial condition and results of operations for the periods ended June 30, 2025 and 2024 [Overview](index=27&type=section&id=Overview) - Murphy is an independent oil and natural gas company with onshore and offshore operations, focusing on value creation and exploration globally[106](index=106&type=chunk) - Net income from continuing operations for Q2 2025 decreased by **$123.1 million** YoY to **$33.8 million**, primarily due to lower revenues and higher DD&A, partially offset by lower lease operating and exploration expenses[107](index=107&type=chunk)[108](index=108&type=chunk) - Total hydrocarbon production increased by **5% to 196,315 BOE per day** in Q2 2025, driven by higher production in Eagle Ford Shale and Tupper Montney, despite lower offshore production[109](index=109&type=chunk) - WTI crude oil price was **$65.11 per barrel** at June 30, 2025, and increased to **$69.26** by end of July 2025[116](index=116&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) - E&P segment income decreased by **$94.8 million** for the three months and **$99.7 million** for the six months ended June 30, 2025, compared to 2024[117](index=117&type=chunk) Net Income Attributable to Murphy (Millions of dollars) | (Millions of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Exploration and production | $89.7 | $184.5 | $227.9 | $327.6 | | Corporate and other | $(55.9) | $(27.7) | $(104.1) | $(55.2) | | Net income attributable to Murphy | $22.3 | $127,7 | $95.3 | $217.7 | E&P Continuing Operations Summary (Millions of dollars) | (Millions of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues and other income | $684.7 | $802.8 | $1,359.9 | $1,599.2 | | Total Cost and Expenses | $577.4 | $577.9 | $1,075.1 | $1,191.4 | | Results of operations before taxes | $107.3 | $224.9 | $284.8 | $405.4 | [Pricing](index=31&type=section&id=Pricing) - Crude oil and condensate prices decreased across all regions for both three-month and six-month periods in 2025 compared to 2024, while natural gas prices generally increased[119](index=119&type=chunk) Weighted Average Sales Prices (Crude oil and condensate – dollars per barrel) | Area | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States - Onshore | $64.00 | $80.71 | $66.84 | $78.76 | | United States - Offshore | $64.48 | $81.67 | $68.23 | $79.61 | | Canada - Onshore | $59.94 | $72.25 | $61.73 | $70.24 | | Canada - Offshore | $64.76 | $84.34 | $70.39 | $85.25 | Weighted Average Sales Prices (Natural gas – dollars per thousand cubic feet) | Area | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States - Onshore | $2.75 | $1.59 | $3.03 | $1.77 | | United States - Offshore | $3.47 | $2.00 | $3.89 | $2.32 | | Canada - Onshore | $1.65 | $1.37 | $1.96 | $1.68 | [Production Volumes](index=32&type=section&id=Production%20Volumes) - Total net crude oil and condensate production decreased for both periods in 2025 compared to 2024, primarily in U.S. Offshore[121](index=121&type=chunk) - Total net natural gas production increased for both periods in 2025, largely driven by Canada Onshore and U.S. Onshore[121](index=121&type=chunk) Total Net Hydrocarbons Produced (BOE per day, including NCI) | Period | 2025 | 2024 | | :-------------------- | :------ | :------ | | Three Months Ended June 30, | 196,315 | 187,847 | | Six Months Ended June 30, | 179,935 | 182,259 | [Sales Volumes](index=33&type=section&id=Sales%20Volumes) - Total net crude oil and condensate sales volumes decreased for the six-month period but slightly increased for the three-month period in 2025 compared to 2024[123](index=123&type=chunk) - Total net natural gas sales volumes increased for both periods in 2025, primarily from Canada Onshore[123](index=123&type=chunk) Total Net Hydrocarbons Sold (BOE per day, including NCI) | Period | 2025 | 2024 | | :-------------------- | :------ | :------ | | Three Months Ended June 30, | 198,230 | 186,898 | | Six Months Ended June 30, | 181,179 | 183,024 | [Revenues from Production](index=34&type=section&id=Revenues%20from%20Production) - Total production revenues decreased by **$114.4 million** (QoQ) and **$236.3 million** (YoY) primarily due to lower crude oil prices and decreased oil production in the Gulf of America[125](index=125&type=chunk)[126](index=126&type=chunk) - These decreases were partially offset by higher natural gas prices and increased production from new wells in the Eagle Ford Shale and Gulf of America[125](index=125&type=chunk)[126](index=126&type=chunk) Revenues from Production (Millions of dollars) | (Millions of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States - Oil | $509.2 | $647.6 | $971.0 | $1,270.6 | | Canada - Oil | $58.3 | $62.9 | $147.5 | $131.6 | | United States - Natural gas | $24.8 | $13.9 | $52.7 | $31.0 | | Canada - Natural gas | $68.1 | $50.6 | $142.4 | $116.8 | | Total revenue from production | $683.0 | $797.5 | $1,355.8 | $1,592.1 | [Lease Operating and Transportation, Gathering and Processing Expenses](index=35&type=section&id=Lease%20Operating%20and%20Transportation%2C%20Gathering%20and%20Processing%20Expenses) - Lease operating expenses decreased by **$44.1 million** (QoQ) and **$73.3 million** (YoY) due to lower workover expenses, cost-savings initiatives, and lower operating costs from the FPSO purchase[127](index=127&type=chunk)[128](index=128&type=chunk) Total Lease Operating Expenses (Millions of dollars) | Period | 2025 | 2024 | | :-------------------- | :------ | :------ | | Three Months Ended June 30, | $215.5 | $259.6 | | Six Months Ended June 30, | $420.6 | $493.9 | Total Transportation, Gathering and Processing Expenses (Millions of dollars) | Period | 2025 | 2024 | | :-------------------- | :------ | :------ | | Three Months Ended June 30, | $54.0 | $53.5 | | Six Months Ended June 30, | $102.9 | $110.0 | [Depreciation, Depletion and Amortization Expenses](index=36&type=section&id=Depreciation%2C%20Depletion%20and%20Amortization%20Expenses) - DD&A increased by **$44.7 million** (QoQ) and **$28.2 million** (YoY), primarily due to higher sales volumes in U.S. and Canada Onshore areas and higher rates in U.S. Offshore[130](index=130&type=chunk)[131](index=131&type=chunk) Total DD&A (Millions of dollars) | Period | 2025 | 2024 | | :-------------------- | :------ | :------ | | Three Months Ended June 30, | $257.6 | $212.9 | | Six Months Ended June 30, | $449.4 | $421.2 | [Impairment of Assets](index=36&type=section&id=Impairment%20of%20Assets) - No asset impairments were recorded in the three or six months ended June 30, 2025, or the three months ended June 30, 2024[132](index=132&type=chunk) - A **$34.5 million impairment** was recorded in the six months ended June 30, 2024, related to the Calliope field due to operational issues and reserve reduction[132](index=132&type=chunk) [Exploration Expenses](index=36&type=section&id=Exploration%20Expenses) - Exploration expenses decreased by **$32.4 million** (QoQ) and **$62.3 million** (YoY), primarily due to lower dry hole costs in 2025, contrasting with significant dry hole costs in 2024 for Gulf of America exploration wells[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) Total Exploration Expenses (Millions of dollars) | Period | 2025 | 2024 | | :-------------------- | :------ | :------ | | Three Months Ended June 30, | $10.4 | $42.8 | | Six Months Ended June 30, | $24.9 | $87.2 | [Income Taxes](index=37&type=section&id=Income%20Taxes) - Income taxes decreased by **$22.8 million** (QoQ) and **$20.9 million** (YoY) for the periods ended June 30, 2025, primarily due to lower net income[136](index=136&type=chunk) [Corporate](index=37&type=section&id=Corporate) - The Corporate segment reported a loss of **$55.9 million** in Q2 2025, an unfavorable variance of **$28.2 million** YoY, mainly due to higher unrealized foreign exchange losses of **$39.8 million** related to the Canadian subsidiary[138](index=138&type=chunk) - For the six months ended June 30, 2025, the Corporate segment loss was **$104.1 million**, an unfavorable variance of **$48.9 million** YoY, primarily due to higher unrealized foreign exchange losses of **$50.0 million**[139](index=139&type=chunk) [Financial Condition](index=37&type=section&id=Financial%20Condition) - Murphy's primary liquidity sources are cash on hand, net cash from continuing operations, and available borrowing capacity under its senior unsecured RCF[140](index=140&type=chunk) - The Company believes these sources will be adequate to fund liquidity needs for the next 12 months and foreseeable future, including capital expenditures, debt service, working capital, dividends, and share repurchases[140](index=140&type=chunk) [Cash Flows](index=37&type=section&id=Cash%20Flows) Net Cash Provided (Required) by Activities (Millions of dollars) | (Millions of dollars) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash provided by continuing operations activities | $658.7 | $866.4 | | Net cash required by investing activities | $(679.4) | $(516.9) | | Net cash required by financing activities | $(22.4) | $(334.3) | | Net (decrease) increase in cash and cash equivalents | $(43.9) | $16.5 | [Cash Provided by Continuing Operations Activities](index=37&type=section&id=Cash%20Provided%20by%20Continuing%20Operations%20Activities) - Net cash provided by continuing operations activities decreased by **$207.7 million** for the six months ended June 30, 2025, primarily due to lower revenue from production, partially offset by lower lease operating expenses[142](index=142&type=chunk)[143](index=143&type=chunk) [Cash Required by Investing Activities](index=38&type=section&id=Cash%20Required%20by%20Investing%20Activities) - Net cash required by investing activities increased by **$162.6 million** for the six months ended June 30, 2025, mainly due to the **$125.0 million FPSO purchase** and higher development drilling in Eagle Ford Shale[144](index=144&type=chunk) - 2025 capital expenditures primarily focus on development drilling and field development in the Gulf of America (**$248.1 million**), Eagle Ford Shale (**$230.2 million**), Tupper Montney/Kaybob Duvernay (**$92.0 million**), and Vietnam (**$29.6 million**), with **$57.2 million** for exploration[148](index=148&type=chunk) Total Capital Expenditures (Millions of dollars) | (Millions of dollars) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Exploration and production | $671.4 | $556.3 | | Corporate | $7.0 | $8.4 | | Total capital expenditures | $678.4 | $564.7 | [Cash Required by Financing Activities](index=39&type=section&id=Cash%20Required%20by%20Financing%20Activities) - Net cash required by financing activities decreased by **$311.9 million** for the six months ended June 30, 2025, primarily due to net borrowings on the RCF (**$200.0 million**), offsetting share repurchases (**$102.6 million**), dividends (**$93.4 million**), and noncontrolling interest distributions (**$18.2 million**)[149](index=149&type=chunk) - In 2024, financing activities included **$105.9 million** for share repurchases, **$91.5 million** for dividends, **$61.2 million** for noncontrolling interest distributions, and **$50.0 million** for debt repurchases[150](index=150&type=chunk) [Liquidity](index=39&type=section&id=Liquidity) - As of June 30, 2025, Murphy had approximately **$1.5 billion** in liquidity, comprising **$379.6 million** in cash and cash equivalents and **$1,149.6 million** available on its **$1.35 billion** senior unsecured RCF[151](index=151&type=chunk)[152](index=152&type=chunk) - Approximately **$112.4 million** of cash and cash equivalents were held outside the U.S., mainly in Canada, Vietnam, Mexico, and the U.K., which could incur repatriation taxes[153](index=153&type=chunk) [Working Capital](index=39&type=section&id=Working%20Capital) - Net working capital liability improved by **$10.4 million** as of June 30, 2025, primarily due to lower current operating lease obligations and other accrued liabilities, and higher prepaid expenses[154](index=154&type=chunk)[155](index=155&type=chunk) - This improvement was partially offset by lower cash and equivalents, higher accounts payable, and higher current asset retirement obligations[154](index=154&type=chunk)[155](index=155&type=chunk) Working Capital (Millions of dollars) | (Millions of dollars) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total current assets | $762.1 | $785.3 | | Total current liabilities | $909.3 | $942.8 | | Net working capital liability | $(147.2) | $(157.5) | [Capital Employed](index=40&type=section&id=Capital%20Employed) - Total capital employed increased by **$204.7 million**, with long-term debt increasing by **$200.5 million** due to RCF drawdowns, and Murphy shareholders' equity increasing by **$4.2 million**[157](index=157&type=chunk)[158](index=158&type=chunk) Capital Employed (Millions of dollars) | (Millions of dollars) | June 30, 2025 | % | December 31, 2024 | % | | :-------------------- | :------------ | :---- | :---------------- | :---- | | Long-term debt | $1,475.0 | 22.1% | $1,274.5 | 19.7% | | Murphy shareholders' equity | $5,198.5 | 77.9% | $5,194.3 | 80.3% | | Total capital employed | $6,673.5 | 100.0% | $6,468.8 | 100.0% | [Critical Accounting Estimates](index=40&type=section&id=Critical%20Accounting%20Estimates) - No significant changes to critical accounting estimates have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024[159](index=159&type=chunk) [Accounting Changes and Recent Accounting Pronouncements](index=40&type=section&id=Accounting%20Changes%20and%20Recent%20Accounting%20Pronouncements) - Refer to Note B for details on the impact or potential impact of recent accounting pronouncements on financial position and results of operations[160](index=160&type=chunk) [Other Key Performance Metrics](index=41&type=section&id=Other%20Key%20Performance%20Metrics) - Management uses non-GAAP financial measures like adjusted net income, EBITDA, and EBITDAX to evaluate operational performance and trends, excluding certain items for comparability[162](index=162&type=chunk) Adjusted Net Income from Continuing Operations Attributable to Murphy (Non-GAAP, Millions of dollars) | (Millions of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income from continuing operations attributable to Murphy (GAAP) | $21.0 | $128.3 | $94.6 | $219.2 | | Total adjustments, after taxes | $17.5 | $(4.1) | $24.6 | $35.8 | | Adjusted net income from continuing operations attributable to Murphy (Non-GAAP) | $38.5 | $124.2 | $119.2 | $255.0 | Adjusted EBITDAX Attributable to Murphy (Non-GAAP, Millions of dollars) | (Millions of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | EBITDAX attributable to Murphy (Non-GAAP) | $309.6 | $431.4 | $640.7 | $818.6 | | Adjusted EBITDAX attributable to Murphy (Non-GAAP) | $345.2 | $438.3 | $698.3 | $861.8 | Adjusted Free Cash Flow (Non-GAAP, Millions of dollars) | (Millions of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Free cash flow (Non-GAAP) | $17.8 | $174.4 | $(27.2) | $348.4 | | Adjusted free cash flow (Non-GAAP) | $(39.8) | $90.4 | $(147.9) | $170.4 | [Outlook](index=44&type=section&id=Outlook) - Production for Q3 2025 is expected to average **185.0 to 193.0 thousand BOE per day** (excluding NCI)[175](index=175&type=chunk) - Capital expenditures for 2025 are projected between **$1,135 million and $1,285 million** (excluding NCI), including **$104 million** for the BW Pioneer FPSO acquisition[176](index=176&type=chunk) - Upcoming exploration and development activities include drilling Cello 1 and Banjo 1 in the Gulf of America (Q3/Q4 2025), a three-well exploration program in Côte d'Ivoire (Q4 2025), and an appraisal well in Vietnam (Q3 2025)[176](index=176&type=chunk) - The Company plans to fund its capital program primarily through operating cash flow and available cash, allocating surplus cash to shareholder returns and debt reduction, favoring share repurchases under current market conditions[177](index=177&type=chunk)[178](index=178&type=chunk) Forward Fixed Price Delivery Contracts (Natural Gas) | Area | Commodity | Type | Volumes (MMCF/d) | Price/MCF | Start Date | End Date | | :------------ | :---------- | :----------------------- | :--------------- | :-------- | :--------- | :--------- | | Canada | Natural Gas | Fixed price forward sales | 40 | C$2.75 | 7/1/2025 | 12/31/2025 | | Canada | Natural Gas | Fixed price forward sales | 50 | C$3.03 | 1/1/2026 | 12/31/2026 | | United States | Natural Gas | Fixed price derivative swap | 60 | $3.65 | 7/1/2025 | 9/30/2025 | | United States | Natural Gas | Fixed price derivative swap | 60 | $3.74 | 10/1/2025 | 12/31/2025 | [Forward-Looking Statements](index=46&type=section&id=Forward-Looking%20Statements) - This section contains forward-looking statements regarding future operating results, production, reserves, costs, cash flows, and capital allocation, which are subject to inherent risks and uncertainties[183](index=183&type=chunk) - Factors that could cause actual results to differ materially include macro conditions in the oil and natural gas industry, geopolitical concerns, exploration success rates, customer demand, foreign exchange movements, political and regulatory instability, and adverse developments in capital markets or economies[183](index=183&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Murphy Oil Corporation is exposed to market risks from commodity prices, foreign currency, and interest rates, managed with derivatives, with specific sensitivities outlined - Murphy is exposed to market risks from crude oil, natural gas, petroleum product prices, foreign currency exchange rates, and interest rates, using derivatives to manage these risks[185](index=185&type=chunk) - A **10% increase** in benchmark commodity prices for outstanding natural gas derivative contracts would increase the net payable by approximately **$4.1 million**[186](index=186&type=chunk) - A **10% increase** in the average interest rate on the **$200.0 million** outstanding RCF borrowings would increase quarterly interest expense by approximately **$0.3 million**[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) The Company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The principal executive and financial officers concluded that the Company's disclosure controls and procedures were **effective** as of June 30, 2025[190](index=190&type=chunk) - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting during the quarter ended June 30, 2025[191](index=191&type=chunk) Part II – Other Information [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) Murphy Oil Corporation is involved in routine legal proceedings, including climate change litigation, not expected to materially impact financial condition - Murphy is engaged in routine legal proceedings, including litigation related to climate change[192](index=192&type=chunk) - The ultimate resolution of these legal matters is not expected to materially adversely affect the Company's net income, financial condition, or liquidity[192](index=192&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) The Company's oil and natural gas operations involve inherent risks, with no new factors identified beyond the 2024 Form 10-K report - The Company's oil and natural gas operations are subject to various risks and uncertainties[193](index=193&type=chunk) - No new risk factors have been identified beyond those previously disclosed in the 2024 Form 10-K report[193](index=193&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025[194](index=194&type=chunk) [Item 6. Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, incentive plans, and certifications - Exhibits include corporate governance documents (Certificate of Incorporation, By-Laws), the 2025 Long-Term Incentive Plan, and Sarbanes-Oxley Act certifications[196](index=196&type=chunk) - The filing also includes Inline XBRL documents for interactive data[196](index=196&type=chunk) Signature - The report was duly signed on behalf of Murphy Oil Corporation by Paul D. Vaughan, Vice President and Controller, on August 6, 2025[198](index=198&type=chunk)[199](index=199&type=chunk)

[Second Quarter 2025 Financial and Operating Results](index=1&type=section&id=Second%20Quarter%202025%20Financial%20and%20Operating%20Results) This report summarizes Murphy Oil's Q2 2025 financial and operational performance, shareholder returns, and future guidance [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Murphy Oil reported a net income of **$22.3 million** and adjusted net income of **$38.5 million** for Q2 2025, maintaining strong liquidity of approximately **$1.5 billion** Q2 2025 Key Financial Metrics (attributable to Murphy) | Metric | Value (Millions USD) | | :--- | :--- | | Net Income | $22.3 | | Adjusted Net Income (Non-GAAP) | $38.5 | | Adjusted EBITDA (Non-GAAP) | $334.9 | | Net Cash from Continuing Operations | $358.1 | | Free Cash Flow (Non-GAAP) | $17.8 | | Accrued Capital Expenditures (CAPEX) | $250.8 | - The company's liquidity as of June 30, 2025, was approximately **$1.5 billion**, consisting of **$1.15 billion** undrawn from its credit facility and **$380 million** in cash and cash equivalents[4](index=4&type=chunk) - Total debt stood at **$1.48 billion**, comprised of long-term fixed-rate notes with a weighted average maturity of 8.9 years and a weighted average coupon of 6.1%, plus **$200 million** drawn on the credit facility[5](index=5&type=chunk) [Operational Highlights](index=1&type=section&id=Operational%20Highlights) Q2 2025 total production reached **189,677 BOEPD**, exceeding guidance, driven by strong onshore and offshore performance and strategic project advancements Q2 2025 Production Summary (Excluding NCI) | Category | Production Volume | | :--- | :--- | | Total Production | 189,677 BOEPD | | Oil Production | 89,530 BOPD | Q2 2025 Production by Area | Area | Total Production (BOEPD) | Oil Production (BOPD) | | :--- | :--- | :--- | | **Onshore** | **118,000** | **31,000** | | Eagle Ford Shale | 39,000 | 29,000 | | Tupper Montney | 75,000 | — | | Kaybob Duvernay | 4,000 | 2,000 | | **Offshore (excl. NCI)** | **72,000** | **59,000** | | Gulf of America | 66,000 | 53,000 | | Canada | 6,000 | 6,000 | - Operational progress includes the completion of the Samurai 3 and Khaleesi 2 workovers in the Gulf of America and advancing the Lac Da Vang field development in Vietnam, which is on schedule for first oil in H2 2026[10](index=10&type=chunk)[11](index=11&type=chunk) - Subsequent to the quarter, Murphy closed a **$23 million** acquisition in the Eagle Ford Shale and signed a rig contract for a three-well exploration program in Côte d'Ivoire[6](index=6&type=chunk) [Shareholder Returns](index=2&type=section&id=Shareholder%20Returns) Murphy returned **$46 million** to shareholders in Q2 2025 through dividends, contributing to **$193 million** in total capital returned for H1 2025 H1 2025 Return of Capital | Category | Amount (Millions USD) | | :--- | :--- | | Share Repurchases | $100 | | Dividends | $93 | | **Total** | **$193** | - The company had **$550 million** remaining under its share repurchase authorization as of June 30, 2025[3](index=3&type=chunk) - A quarterly dividend of **$0.325 per share** (**$1.30 per share annualized**) was declared[6](index=6&type=chunk) [2025 Guidance](index=4&type=section&id=2025%20Guidance) Murphy Oil reaffirmed its full-year 2025 CAPEX guidance at **$1,210 million** midpoint and expects full-year production within the **174,500 to 182,500 BOEPD** range Full Year 2025 Guidance (Excluding NCI) | Metric | Guidance Range | | :--- | :--- | | Total Net Production | 174,500 to 182,500 BOEPD | | Capital Expenditures | $1,135 to $1,285 Million | Q3 2025 Guidance (Excluding NCI) | Metric | Guidance | | :--- | :--- | | Total Net Production | 185,000 to 193,000 BOEPD | | Exploration Expense | $40 Million | 2025 Onshore Wells Online Plan (Gross) | Area | 2025E Total | | :--- | :--- | | Eagle Ford Shale | 34 | | Kaybob Duvernay | 4 | | Tupper Montney | 10 | | Non-Op Eagle Ford Shale | 18 | [Financial Statements and Schedules](index=8&type=section&id=Financial%20Statements%20and%20Schedules) This section presents detailed consolidated financial statements, non-GAAP reconciliations, and comprehensive operational data, including segment performance and hedging positions [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 total revenues were **$695.6 million**, resulting in net income attributable to Murphy of **$22.3 million** or **$0.16 per diluted share** Income Statement Summary (in thousands USD) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $695,570 | $802,771 | | Total Costs and Expenses | $618,449 | $603,359 | | Income from Continuing Operations | $33,822 | $156,905 | | Net Income Attributable to Murphy | $22,280 | $127,739 | | Diluted EPS | $0.16 | $0.83 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from continuing operations was **$358.1 million** in Q2 2025, with **$309.6 million** used in investing and **$60.5 million** in financing activities Cash Flow Summary (in thousands USD) | Category | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Cash from Continuing Operations | $358,050 | $467,652 | | Net Cash from Investing Activities | ($309,641) | ($267,791) | | Net Cash from Financing Activities | ($60,513) | ($190,063) | | Net Change in Cash | ($13,283) | $10,189 | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were **$9.84 billion**, with **$1.47 billion** in long-term debt and **$5.20 billion** in shareholders' equity Balance Sheet Summary (in thousands USD) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $379,631 | $423,569 | | Total Assets | $9,839,515 | $9,667,479 | | Long-term debt | $1,474,959 | $1,274,502 | | Total Liabilities | $4,482,335 | $4,325,636 | | Murphy Shareholders' Equity | $5,198,526 | $5,194,250 | [Non-GAAP Reconciliations](index=11&type=section&id=Non-GAAP%20Reconciliations) Q2 2025 non-GAAP reconciliations show adjusted net income of **$38.5 million**, adjusted EBITDA of **$334.9 million**, and free cash flow of **$17.8 million** Q2 2025 Non-GAAP Reconciliation Summary (in millions USD) | Metric | GAAP Value | Adjustments | Non-GAAP Value | | :--- | :--- | :--- | :--- | | Net Income Attributable to Murphy | $22.3 | $16.2 | $38.5 (Adjusted Net Income) | | Net Income Attributable to Murphy | $22.3 | $312.6 | $334.9 (Adjusted EBITDA) | | Net Cash from Continuing Ops | $358.1 | ($340.3) | $17.8 (Free Cash Flow) | [Segment and Operational Data](index=14&type=section&id=Segment%20and%20Operational%20Data) Q2 2025 segment data shows the US as the primary revenue contributor, with total production at **189,700 BOEPD** and reduced lease operating expenses Q2 2025 Revenue and Income by Geography (in millions USD) | Region | Revenues | Income (Loss) | | :--- | :--- | :--- | | United States | $553.5 | $86.5 | | Canada | $128.3 | $10.5 | | Other | $2.9 | ($7.3) | Production-Related Expenses per BOE (excl. NCI) | Expense Category | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Lease operating expense | $11.80 | $15.09 | | Severance and ad valorem taxes | $0.62 | $0.64 | | DD&A expense | $14.28 | $12.52 | Q2 Average Realized Prices | Commodity | Region | 2025 | 2024 | | :--- | :--- | :--- | :--- | | Crude Oil ($/bbl) | U.S. Offshore | $64.48 | $81.67 | | Natural Gas ($/Mcf) | U.S. Onshore | $2.75 | $1.59 | [Hedging Positions](index=20&type=section&id=Hedging%20Positions) Murphy holds fixed-price forward sales contracts for Canadian natural gas and derivative swaps for US natural gas to mitigate price volatility Natural Gas Hedge Positions | Area | Type | Volume (MMCF/d) | Price | Period | | :--- | :--- | :--- | :--- | :--- | | Canada | Fixed price forward sales | 40 | C$2.75/MCF | H2 2025 | | Canada | Fixed price forward sales | 50 | C$3.03/MCF | Full Year 2026 | | United States | Fixed price derivative swap | 60 | US$3.65/MCF | Q3 2025 | | United States | Fixed price derivative swap | 60 | US$3.74/MCF | Q4 2025 |

Core Viewpoint - Murphy Oil Corporation (MUR) is expected to report its second-quarter 2025 results on August 6, with a prior earnings surprise of 16.7% in the last quarter [1] Group 1: Factors Impacting Q2 Results - Quarterly earnings are anticipated to benefit from increased production in both domestic and international assets, along with new wells added in the first and second quarters [2] - The overall financial performance and free cash flow have improved due to production increases from a diverse, low breakeven North American portfolio, allowing for enhanced shareholder returns through stock repurchases [3] - A five-year agreement with BW Offshore finalized in March 2025 is expected to increase offshore net proved reserves by 5% and reduce annual net operating costs by $50 million [4] - Increased capital investments are likely to further enhance offshore operations and contribute positively to second-quarter performance [4] - Ongoing debt-reduction initiatives are expected to lower capital servicing expenses, thereby improving margins [5] Group 2: Q2 Expectations - The Zacks Consensus Estimate for earnings is set at 21 cents per share, reflecting a year-over-year decrease of 74.1%, while revenues are estimated at $638.47 million, indicating a decrease of 20.5% year over year [6] - Quarterly production, excluding NCI, is anticipated to be between 177,000 and 185,000 barrels of oil equivalent per day (MBOEPD), with 48% expected to be oil [7] - The Zacks Consensus Estimate for production is pegged at 184.57 MBOEPD [7] Group 3: Earnings Prediction - The current model does not predict an earnings beat for Murphy Oil, with an Earnings ESP of 0.00% and a Zacks Rank of 3 [8][9] - Despite the positive factors, the combination of metrics does not indicate a likelihood of an earnings surprise this quarter [8]

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]