Murphy Oil(US:MUR)2025-11-05 22:00Financial Performance - Murphy Oil Corporation reported a net loss from continuing operations of $7.8 million for Q3 2025, a significant decrease from a net income of $151.7 million in Q3 2024, primarily due to higher impairment expenses of $115.0 million and lower revenues from production of $32.2 million [118]. - For the nine months ended September 30, 2025, net income from continuing operations was $116.1 million, a decrease of $308.1 million compared to the same period in 2024, largely due to lower revenues from production of $268.5 million [121]. - Revenue from production for Q3 2025 was $721.0 million, down from $753.2 million in Q3 2024, while total revenues and other income decreased to $721.8 million from $754.1 million [128]. - For the nine months ended September 30, 2025, revenues from production decreased by $268.5 million to $2,076.8 million compared to $2,345.3 million in 2024, largely due to lower crude oil prices and production issues [136]. - The Corporate segment reported a loss of $18.6 million for the three months ended September 30, 2025, a favorable variance of $15.1 million compared to the same period in 2024 [150]. Production and Operations - Total hydrocarbon production for Q3 2025 was 206,936 barrels of oil equivalent per day, an 8% increase compared to Q3 2024, driven by higher production in the Eagle Ford Shale and Tupper Montney [120]. - For the nine months ended September 30, 2025, total hydrocarbon production was 189,035 barrels of oil equivalent per day, a 2% increase compared to the same period in 2024 [124]. - For the three months ended September 30, 2025, total net crude oil and condensate production increased to 100,065 barrels per day, up from 94,078 barrels per day in 2024, representing a growth of approximately 6.3% [131]. - Total net hydrocarbons produced, including noncontrolling interest, reached 206,936 barrels per day for the three months ended September 30, 2025, compared to 191,273 barrels per day in 2024, indicating an increase of about 8.2% [131]. - Net natural gas production for the three months ended September 30, 2025, was 563,319 thousand cubic feet per day, compared to 522,286 thousand cubic feet per day in 2024, marking an increase of about 7.9% [133]. - The company reported a total net natural gas liquids production of 12,984 barrels per day for the three months ended September 30, 2025, up from 10,147 barrels per day in 2024, reflecting a growth of approximately 27.5% [133]. Expenses and Costs - Lease operating expenses for Q3 2025 were $184.4 million, a decrease from $222.9 million in Q3 2024, attributed to lower workover costs and production handling fees [128]. - For the three months ended September 30, 2025, lease operating expenses decreased by $38.5 million compared to the same period in 2024, while transportation, gathering, and processing expenses increased by $0.6 million [138]. - For the nine months ended September 30, 2025, lease operating expenses decreased by $111.8 million, and transportation, gathering, and processing expenses decreased by $6.4 million compared to the same period in 2024 [139]. - Depreciation, depletion, and amortization (DD&A) for the three months ended September 30, 2025, increased by $59.3 million compared to the same period in 2024, primarily due to higher sales volumes in the Eagle Ford Shale [141]. - DD&A for the nine months ended September 30, 2025, increased by $87.4 million, mainly driven by higher sales volumes in the Eagle Ford Shale and higher rates at U.S. Offshore [142]. Impairment and Exploration - The impairment expense during the quarter was related to the Dalmatian field in the Gulf of America, resulting from reserve reductions [119]. - The Company impaired assets for $115.0 million related to the partial write-down of the Dalmatian field in the Gulf of America for the three and nine months ended September 30, 2025 [143]. - Exploration expenses for the three months ended September 30, 2025, increased by $1.3 million compared to the same period in 2024, due to higher geological and geophysical costs [145]. - Exploration expenses for the nine months ended September 30, 2025, decreased by $61.0 million compared to the same period in 2024, primarily due to no dry holes recorded in 2025 [146]. Liquidity and Financial Position - The company paid down $50.0 million of debt under the revolving credit facility and returned $46.4 million to shareholders through a quarterly dividend of $0.325 per share [121]. - The Company's primary sources of liquidity include cash on hand, net cash from continuing operations, and available borrowing capacity under its senior unsecured revolving credit facility [152]. - As of September 30, 2025, the company had $150.0 million of outstanding borrowings under the senior unsecured RCF [203]. - A 10% increase in the average interest rate would have increased the quarterly interest expense by approximately $0.3 million [203]. - Actual results may vary due to changes in the amount of variable rate debt outstanding [203]. Pricing and Market Conditions - As of September 30, 2025, the West Texas Intermediate (WTI) crude oil price was $62.37 per barrel, reflecting a 2% decrease from $60.98 at the end of October 2025 [126]. - The average price of WTI crude oil for the three months ended September 30, 2025, was $64.93 per barrel, down from $75.10 per barrel in 2024, reflecting a decrease of approximately 13.5% [132]. - The average price for natural gas (NYMEX) for the three months ended September 30, 2025, was $3.03 per MMBTU, an increase from $2.09 per MMBTU in 2024, representing a rise of approximately 45% [132]. - The average price for natural gas liquids in the United States - Onshore for the three months ended September 30, 2025, was $18.57 per barrel, slightly down from $19.05 per barrel in 2024 [132]. - The company experienced a decrease in production revenues from Canada - Oil, which fell to $53.3 million for the three months ended September 30, 2025, down from $101.1 million in 2024, a decline of approximately 47.3% [135].