Murphy Oil(MUR) - 2023 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents Murphy Oil Corporation's unaudited consolidated financial statements and notes for Q1 2023 and comparative periods Consolidated Balance Sheets Consolidated Balance Sheet Highlights (Thousands of dollars) | Item | March 31, 2023 | December 31, 2022 | Change | % Change | | :-------------------------------- | :------------- | :---------------- | :----- | :------- | | Total Assets | $10,188,529 | $10,308,952 | $(120,423) | -1.17% | | Total Liabilities | $4,883,861 | $5,160,059 | $(276,198) | -5.35% | | Total Equity | $5,304,668 | $5,148,893 | $155,775 | 3.03% | | Cash and cash equivalents | $312,383 | $491,963 | $(179,580) | -36.51% | | Total current assets | $801,841 | $972,325 | $(170,484) | -17.53% | | Total current liabilities | $1,028,013 | $1,257,834 | $(229,821) | -18.27% | Consolidated Statements of Operations Consolidated Statements of Operations Highlights (Three Months Ended March 31, Thousands of dollars, except per share amounts) | Item | 2023 | 2022 | Change | % Change | | :------------------------------------ | :--------- | :--------- | :--------- | :------- | | Total revenues and other income | $841,716 | $552,961 | $288,755 | 52.22% | | Total costs and expenses | $544,920 | $595,085 | $(50,165) | -8.43% | | Operating income (loss) | $296,796 | $(42,124) | $338,920 | 804.60% | | Net income (loss) attributable to Murphy | $191,644 | $(113,336) | $304,980 | 269.10% | | Basic EPS | $1.23 | $(0.73) | $1.96 | 268.49% | | Diluted EPS | $1.22 | $(0.73) | $1.95 | 267.12% | | Cash dividends per common share | $0.275 | $0.15 | $0.125 | 83.33% | - Total revenues and other income increased significantly by 52.22% due to the absence of derivative instrument losses in 2023, which were $320.8 million in 2022[12] Consolidated Statements of Comprehensive Income Consolidated Statements of Comprehensive Income (Loss) Highlights (Three Months Ended March 31, Thousands of dollars) | Item | 2023 | 2022 | Change | % Change | | :------------------------------------------------ | :--------- | :--------- | :--------- | :------- | | Net income (loss) including noncontrolling interest | $214,314 | $(65,486) | $279,800 | 427.26% | | Other comprehensive income | $4,767 | $21,356 | $(16,589) | -77.68% | | Comprehensive income (loss) attributable to Murphy | $196,411 | $(91,980) | $288,391 | 313.54% | - Comprehensive income attributable to Murphy significantly improved from a loss of $91.98 million in Q1 2022 to an income of $196.41 million in Q1 2023, primarily driven by the increase in net income[14] Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, Thousands of dollars) | Item | 2023 | 2022 | Change | % Change | | :-------------------------------------- | :--------- | :--------- | :--------- | :------- | | Net cash provided by operating activities | $279,776 | $338,330 | $(58,554) | -17.31% | | Net cash required by investing activities | $(345,319) | $(244,908) | $(100,411) | 41.00% | | Net cash required by financing activities | $(114,655) | $(133,932) | $19,277 | -14.39% | | Net decrease in cash and cash equivalents | $(179,580) | $(40,597) | $(138,983) | 342.35% | - Net cash provided by operating activities decreased by 17.31% primarily due to contingent consideration payments and lower revenue, partially offset by lower derivative losses[17][131] - Net cash required by investing activities increased by 41.00% due to higher property additions and dry hole costs[17][132] Consolidated Statements of Stockholders' Equity Consolidated Statements of Stockholders' Equity Highlights (Three Months Ended March 31, Thousands of dollars) | Item | 2023 | 2022 | Change | % Change | | :-------------------------------- | :--------- | :--------- | :--------- | :------- | | Retained Earnings (End of Period) | $6,204,217 | $5,082,034 | $1,122,183 | 22.08% | | Net income (loss) attributable to Murphy | $191,644 | $(113,336) | $304,980 | 269.10% | | Cash dividends paid | $(42,925) | $(23,300) | $(19,625) | 84.23% | | Total Equity (End of Period) | $5,304,668 | $4,204,290 | $1,100,378 | 26.17% | - Retained earnings and total equity saw significant increases, driven by net income attributable to Murphy, despite higher cash dividends paid[19] Notes to Consolidated Financial Statements Note A – Nature of Business and Interim Financial Statements Murphy Oil Corporation is an international oil and natural gas exploration and production company, with unaudited interim financial statements prepared under GAAP - Murphy Oil Corporation is an international oil and natural gas exploration and production company with primary operations in the U.S. and Canada[22] - The company holds a 0.5% interest in two non-consolidated variable interest entities (VIEs), Delta House, with a maximum exposure to loss of $3.1 million as of March 31, 2023[23] Note B – New Accounting Principles and Recent Accounting Pronouncements No new accounting principles were adopted or recent accounting pronouncements affected the Company during the reporting period - No new accounting principles were adopted, and no recent accounting pronouncements affected the Company[26] Note C – Revenue from Contracts with Customers Revenue from crude oil, NGLs, and natural gas sales decreased from $871.4 million in Q1 2022 to $840.0 million in Q1 2023, recognized at the point of transfer - Revenue from sales to customers decreased from $871.4 million in Q1 2022 to $840.0 million in Q1 2023[32] Revenue from Sales to Customers (Thousands of dollars) | Revenue Stream | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :----------------------------- | :-------------------------------- | :-------------------------------- | | Total crude oil and condensate revenue | $672,117 | $702,846 | | Total natural gas liquids revenue | $26,362 | $35,531 | | Total natural gas revenue | $97,752 | $96,151 | | Revenue from production | $796,231 | $834,528 | | Sales of purchased natural gas | $43,737 | $36,846 | | Total revenue from sales to customers | $839,968 | $871,374 | - The Company has several long-term, fixed-price natural gas contracts in Canada extending to Q4 2027 and NGL contracts to Q3 2023[39] Note D – Property, Plant and Equipment Capitalized exploratory well costs increased to $196.5 million as of March 31, 2023, primarily due to additions for the Oso-1 well in the Gulf of Mexico Capitalized Exploratory Well Costs (Thousands of dollars) | Item | March 31, 2023 | March 31, 2022 | | :------------------------------------------ | :------------- | :------------- | | Beginning balance at January 1 | $171,860 | $179,481 | | Additions pending determination of proved reserves | $24,685 | $3,698 | | Capitalized exploratory well costs charged to expense | $0 | $(10,473) | | Balance at March 31 | $196,545 | $172,706 | - Capital well additions of $24.7 million in Q1 2023 were primarily for the Oso-1 well in the Gulf of Mexico, which was temporarily suspended[43] - As of March 31, 2023, $156.3 million of exploratory well costs capitalized for more than one year are primarily located in Vietnam ($97.2 million), U.S. ($37.0 million), and Mexico ($14.7 million)[45] Note E – Financing Arrangements and Debt As of March 31, 2023, the Company had an $800 million revolving credit facility with no outstanding borrowings and was in compliance with all covenants - The Company has an $800 million revolving credit facility (RCF) expiring November 17, 2027[47] - As of March 31, 2023, there were no outstanding borrowings under the RCF, but $30.3 million in outstanding letters of credit reduced borrowing capacity[47] - The Company was in compliance with all RCF covenants as of March 31, 2023[47] Note F – Other Financial Information This note provides supplementary cash flow disclosures, with net noncash operating working capital decreasing by $75.0 million in Q1 2023 Net (Increase) Decrease in Operating Working Capital (Thousands of dollars) | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | (Increase) in accounts receivable | $(3,976) | $(117,928) | | (Increase) decrease in inventories | $(9,296) | $(4,541) | | (Increase) decrease in prepaid expenses | $3,813 | $(515) | | Increase (decrease) in accounts payable and accrued liabilities | $(63,800) | $40,426 | | Increase (decrease) in income taxes payable | $(1,772) | $1,636 | | Net (increase) in noncash operating working capital | $(75,031) | $(80,922) | - Cash income taxes paid, net of refunds, were $3.3 million in Q1 2023, up from $0.1 million in Q1 2022[51] - Interest paid, net of capitalized amounts, decreased to $19.4 million in Q1 2023 from $40.2 million in Q1 2022[51] Note G – Employee and Retiree Benefit Plans Net periodic benefit expense for pension benefits increased to $4.5 million in Q1 2023, while other postretirement benefits decreased to $0.1 million Net Periodic Benefit Expense (Thousands of dollars) | Component | Pension Benefits 2023 | Pension Benefits 2022 | Other Postretirement Benefits 2023 | Other Postretirement Benefits 2022 | | :-------------------------------- | :-------------------- | :-------------------- | :--------------------------------- | :--------------------------------- | | Service cost | $1,650 | $2,129 | $132 | $292 | | Interest cost | $8,507 | $5,243 | $874 | $574 | | Expected return on plan assets | $(8,194) | $(8,138) | – | – | | Amortization of prior service cost (credit) | $155 | $600 | $(133) | $(133) | | Recognized actuarial loss (gain) | $2,401 | $3,822 | $(781) | $(77) | | Net periodic benefit expense | $4,519 | $3,656 | $92 | $656 | - The Company contributed $9.5 million to its defined benefit pension and postretirement plans in Q1 2023, with an anticipated $27.6 million remaining for 2023[55] Note H – Incentive Plans Murphy recognizes costs from share-based and cash-based incentive plans, with Q1 2023 compensation charged against income before tax benefit at $11.2 million 2020 Long-Term Incentive Plan Awards Granted (January 31, 2023) | Type of Award | Number of Awards Granted | Grant Date Fair Value | | :---------------------- | :----------------------- | :-------------------- | | Performance Based RSUs | 409,160 | $60.46 | | Time Based RSUs | 499,220 | $43.27 | | Cash Settled RSUs | 123,230 | $43.27 | Share-Based Plan Compensation (Thousands of dollars) | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :---------------------------------------- | :-------------------------------- | :-------------------------------- | | Compensation charged against income before tax benefit | $11,196 | $13,962 | | Related income tax benefit recognized in income | $1,581 | $2,272 | Note I – Earnings Per Share Basic and diluted earnings per common share are calculated using net income attributable to Murphy, with Q1 2023 basic shares at 155.9 million Weighted-Average Shares Outstanding (Thousands) | Method | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Basic method | 155,857 | 154,916 | | Dilutive stock options and restricted stock units | 1,532 | – | | Diluted method | 157,389 | 154,916 | Note J – Income Taxes The Company's effective income tax rate for Q1 2023 was 20.1%, slightly below the U.S. statutory rate, primarily due to noncontrolling interest income Effective Income Tax Rate | Period | 2023 | 2022 | | :-------------------------- | :----- | :----- | | Three months ended March 31 | 20.1% | 20.7% | - The effective tax rate for Q1 2023 was below the U.S. statutory rate of 21% due to no tax on noncontrolling interest in MP GOM, offset by higher foreign tax rates and non-benefited foreign exploration expenses[65] - The earliest open years for audit in major taxing jurisdictions are U.S. – 2016; Canada – 2016; and Malaysia – 2016[67] Note K – Financial Instruments and Risk Management Murphy uses derivative instruments for risk management; in Q1 2023, there were no outstanding derivative contracts, a significant change from $320.8 million in losses in Q1 2022 - The Company did not have any outstanding crude oil or foreign currency derivative contracts in Q1 2023[70][72] Gain (Loss) on Derivative Instruments (Thousands of dollars) | Type of Derivative Contract | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Commodity swaps | $0 | $(156,359) | | Commodity collars | $0 | $(164,418) | - Contingent consideration liabilities related to prior Gulf of Mexico acquisitions (LLOG and PAI) were $25.0 million at March 31, 2023, down from $192.7 million at December 31, 2022, with $171.7 million paid in Q1 2023[82] Note L – Accumulated Other Comprehensive Loss Accumulated other comprehensive loss decreased to $(529.9) million at March 31, 2023, primarily due to foreign currency translation gains and benefit plan adjustments Components of Accumulated Other Comprehensive Loss (Thousands of dollars) | Component | Balance at Dec 31, 2022 | Net Other Comprehensive Income (Loss) Q1 2023 | Balance at Mar 31, 2023 | | :-------------------------------- | :---------------------- | :------------------------------------------ | :---------------------- | | Foreign Currency Translation Gains (Losses) | $(418,230) | $3,669 | $(414,561) | | Retirement and Postretirement Benefit Plan Adjustments | $(116,456) | $1,098 | $(115,358) | | Total | $(534,686) | $4,767 | $(529,919) | Note M – Environmental and Other Contingencies Murphy's operations are subject to extensive environmental regulations, but no material adverse effects from legal proceedings or remediation costs are anticipated - The Company is subject to numerous environmental, health, and safety laws and regulations, including those related to climate change and GHG emissions[90][92] - Murphy is not aware of any environmental legal proceedings likely to exceed the $1.0 million disclosure threshold[91] - The Company believes that costs related to known or currently unidentified environmental sites are not expected to have a material adverse effect on its future net income, cash flows, or liquidity[94] Note N – Business Segments Murphy operates primarily through its E&P segment, which reported total income of $242.7 million in Q1 2023, an increase from $231.4 million in Q1 2022 Business Segment Performance (Millions of dollars) | Segment | Income (Loss) Q1 2023 | Income (Loss) Q1 2022 | | :-------------------------- | :-------------------- | :-------------------- | | United States E&P | $226.0 | $252.9 | | Canada E&P | $21.9 | $22.7 | | Other E&P | $(5.2) | $(44.2) | | Total Exploration and Production | $242.7 | $231.4 | | Corporate | $(28.7) | $(296.3) | | Continuing operations | $214.0 | $(64.9) | - Corporate segment loss significantly reduced from $(296.3) million in Q1 2022 to $(28.7) million in Q1 2023, primarily due to the absence of derivative instrument losses[98] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section analyzes Murphy Oil Corporation's Q1 2023 financial performance, highlighting improved net income, increased production, and cash flow dynamics Summary - Crude oil and natural gas benchmark prices decreased in Q1 2023 compared to Q1 2022, with WTI crude oil averaging $76.13/barrel (down from $94.29/barrel in Q1 2022)[100][102] - The Company produced 179.7 thousand barrels of oil equivalent per day (MBOEPD) in Q1 2023, a 20% increase from 149.9 MBOEPD in Q1 2022[103][104][119] - Net income from continuing operations was $214.0 million in Q1 2023, a significant improvement from a net loss of $64.9 million in Q1 2022, primarily due to the absence of derivative losses[103][104] Results of Operations Exploration and Production (Overview) The E&P segment reported an overall income of $242.7 million in Q1 2023, an increase from $231.4 million in Q1 2022 E&P Income (Loss) by Geographic Segment (Millions of dollars) | Segment | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :-------------------- | :-------------------------------- | :-------------------------------- | | United States | $226.0 | $252.9 | | Canada | $21.9 | $22.7 | | Other | $(5.2) | $(44.2) | | Total | $242.7 | $231.4 | Other Key Performance Metrics EBITDA attributable to Murphy significantly increased to $463.6 million in Q1 2023, with Adjusted EBITDA rising to $477.5 million Key Performance Metrics (Millions of dollars, except per barrel of oil equivalents sold) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :---------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net income (loss) attributable to Murphy (GAAP) | $191.6 | $(113.3) | | EBITDA attributable to Murphy (Non-GAAP) | $463.6 | $63.6 | | Adjusted EBITDA attributable to Murphy (Non-GAAP) | $477.5 | $361.3 | | Total barrels of oil equivalents sold (thousands) | 15,541 | 12,565 | | Adjusted EBITDA per barrel of oil equivalents sold (Non-GAAP) | $30.72 | $28.75 | - Adjusted EBITDA per barrel of oil equivalents sold increased to $30.72 in Q1 2023 from $28.75 in Q1 2022[112] Oil and Gas Operating Results (Detailed Table) This section details oil and gas operating revenues and expenses by geographic segment for Q1 2023 and Q1 2022, including sales and exploration costs Oil and Gas Operating Results (Millions of dollars) | Item | US 2023 | Canada 2023 | Other 2023 | Total 2023 | US 2022 | Canada 2022 | Other 2022 | Total 2022 | | :------------------------------------ | :------ | :---------- | :--------- | :--------- | :------ | :---------- | :--------- | :--------- | | Oil and gas sales and other operating revenues | $682.3 | $112.1 | $3.6 | $798.0 | $707.4 | $129.3 | $0 | $836.7 | | Sales of purchased natural gas | $0 | $43.7 | $0 | $43.7 | $0 | $36.8 | $0 | $36.8 | | Lease operating expenses | $162.6 | $36.8 | $0.6 | $200.0 | $99.9 | $36.9 | $0 | $136.8 | | Total exploration expenses | $3.7 | $0.2 | $6.4 | $10.3 | $6.5 | $0.2 | $40.9 | $47.6 | | Results of operations before taxes | $282.3 | $29.5 | $(4.4) | $307.4 | $310.6 | $30.3 | $(43.8) | $297.1 | Exploration and Production (Q1 2023 vs 2022 Analysis) U.S. E&P earnings decreased by $26.9 million, Canadian E&P earnings were slightly unfavorable, and other international E&P operations significantly improved, reducing losses by $39.0 million - U.S. E&P earnings decreased by $26.9 million, primarily due to lower realized prices and higher lease operating expenses, partially offset by a $93.4 million reduction in other operating expense from lower contingent consideration adjustments[115] - Canadian E&P earnings were down $0.8 million, mainly due to lower revenues from pricing and sales volumes at Kaybob Duvernay and Hibernia, partially offset by lower selling and general expenses[116] - Other international E&P operations improved by $39.0 million, reducing losses from $44.2 million to $5.2 million, driven by $34.5 million lower exploration expenses[117] Corporate (Q1 2023 vs 2022 Analysis) Corporate loss significantly reduced to $28.7 million in Q1 2023 from $296.3 million in Q1 2022, primarily due to the absence of derivative instrument losses - Corporate loss decreased by $267.6 million, from $296.3 million in Q1 2022 to $28.7 million in Q1 2023[118] - The favorable variance was principally due to no losses on derivative instruments in Q1 2023 (compared to $320.8 million loss in Q1 2022)[118] - Other contributing factors included lower interest expense ($8.4 million) and favorable G&A ($8.4 million), partially offset by lower income tax benefit ($72.0 million)[118] Production Volumes and Prices Total hydrocarbon production increased by 20% to 179,745 BOEPD in Q1 2023, while average crude oil and natural gas prices decreased by 22% and 14.4%, respectively Production Volumes (Barrels per day unless otherwise noted) | Commodity | Q1 2023 | Q1 2022 | Change | % Change | | :------------------------------------------ | :------ | :------ | :----- | :------- | | Net crude oil and condensate | 100,987 | 83,560 | 17,427 | 20.86% | | Net natural gas liquids | 11,325 | 9,342 | 1,983 | 21.23% | | Net natural gas (thousands of cubic feet per day) | 404,595 | 341,710 | 62,885 | 18.40% | | Total net hydrocarbons (BOEPD) | 179,745 | 149,854 | 29,891 | 19.95% | Weighted Average Sales Prices | Commodity | Q1 2023 | Q1 2022 | Change | % Change | | :-------------------------------- | :------ | :------ | :----- | :------- | | Crude oil and condensate ($/barrel) | $73.80 | $95.17 | $(21.37) | -22.45% | | Natural gas liquids ($/barrel) (U.S.) | $24.23 | $40.76 | $(16.53) | -40.56% | | Natural gas ($/MCF) | $2.68 | $3.13 | $(0.45) | -14.38% | - Increased production was primarily from the Gulf of Mexico (Khaleesi, Mormont, Samurai project) and Canada Onshore (Tupper Montney new wells)[119][120][122] Financial Condition Cash Provided by Operating Activities Net cash provided by operating activities decreased by $58.5 million to $279.8 million in Q1 2023, primarily due to contingent consideration payments and lower revenue - Net cash provided by continuing operating activities decreased by $58.5 million (17.31%) to $279.8 million in Q1 2023[131] - Key factors for the decrease included $124.0 million in contingent consideration payments, $38.3 million lower revenue from production, and $63.2 million higher lease operating expenses[131] - This decrease was partially offset by $132.3 million lower realized losses on derivative instruments[131] Cash Required by Investing Activities Net cash required by investing activities increased by $100.4 million to $345.3 million in Q1 2023, driven by higher capital expenditures in E&P - Net cash required by investing activities increased by $100.4 million (41.0%) to $345.3 million in Q1 2023[132] Total Capital Expenditures (Millions of dollars) | Segment | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Exploration and production | $329.7 | $299.4 | | Corporate | $6.3 | $5.3 | | Total capital expenditures | $336.0 | $304.7 | - The increase in capital expenditures was primarily due to development drilling activities at Eagle Ford Shale, Samurai, St. Malo fields, and Oso exploration drilling[135] Cash Required by Financing Activities Net cash required by financing activities decreased by $19.3 million to $114.7 million in Q1 2023, mainly due to contingent consideration payments and cash dividends - Net cash required by financing activities decreased by $19.3 million (14.39%) to $114.7 million in Q1 2023[136] - Key uses of cash included $47.7 million for contingent consideration payments, $42.9 million for cash dividends ($0.275 per share), and $9.7 million for distributions to non-controlling interests[136] Working Capital Working capital resulted in a net liability of $226.2 million at March 31, 2023, an improvement of $59.3 million from December 31, 2022 - Working capital liability improved by $59.3 million, from $285.5 million at December 31, 2022, to $226.2 million at March 31, 2023[138] - The improvement was mainly driven by a $225.5 million decrease in other accrued liabilities (contingent consideration and incentive payments) and a $26.9 million decrease in accounts payable (due to no commodity derivative contracts outstanding)[138] - This was partially offset by a $179.6 million lower cash balance and $19.0 million higher operating lease liabilities[138] Capital Employed Total capital employed increased to $6,960.5 million at March 31, 2023, with long-term debt at 26.2% and shareholders' equity at 73.8% Capital Employed (Millions of dollars) | Item | March 31, 2023 Amount | March 31, 2023 % | December 31, 2022 Amount | December 31, 2022 % | | :---------------------- | :-------------------- | :--------------- | :----------------------- | :------------------ | | Long-term debt | $1,823.0 | 26.2% | $1,822.4 | 26.7% | | Murphy shareholders' equity | $5,137.6 | 73.8% | $4,994.8 | 73.3% | | Total capital employed | $6,960.5 | 100.0% | $6,817.2 | 100.0% | - Approximately $100.0 million of cash and cash equivalents were held outside the U.S. as of March 31, 2023, with the majority in Canada, U.K., Mexico, and Brunei[141] Accounting changes and recent accounting pronouncements - Refer to Note B to the Consolidated Financial Statements for details on accounting changes and recent accounting pronouncements[142] Outlook - The NYMEX WTI forward curve prices for the remainder of 2023 and 2024 were lower at $74.52 and $70.76 per barrel, respectively, as of May 1, 2023[142] - Production for Q2 2023 is expected to average between 173.0 and 181.0 MBOEPD, excluding noncontrolling interest[142] - Capital expenditure spend for 2023 is projected to be between $875.0 million and $1,025.0 million, primarily funded by operating cash flow and available cash[143] Forward Fixed-Price Delivery Contracts (as of May 1, 2023) | Area | Commodity | Type | Volumes (MMcf/d) | Price/Mcf | Remaining Period Start Date | End Date | | :----- | :---------- | :----------------------- | :--------------- | :-------- | :-------------------------- | :--------- | | Canada | Natural Gas | Fixed price forward sales | 250 | C$2.35 | 4/1/2023 | 12/31/2023 | | Canada | Natural Gas | Fixed price forward sales | 162 | C$2.39 | 1/1/2024 | 12/31/2024 | | Canada | Natural Gas | Fixed price forward sales | 25 | US$1.98 | 4/1/2023 | 10/31/2024 | | Canada | Natural Gas | Fixed price forward sales | 15 | US$1.98 | 11/1/2024 | 12/31/2024 | Forward-Looking Statements - The report contains forward-looking statements regarding future operating results, production, reserves, costs, cash flows, and capital allocation decisions, which are subject to inherent risks and uncertainties[146] - Key risk factors include macro conditions in the oil and gas industry, commodity price volatility, reduced customer demand, adverse foreign exchange movements, and political/regulatory instability[146] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Murphy Oil Corporation is exposed to market risks from interest rates, commodity prices, and foreign currency exchange rates, with no derivative contracts in place as of March 31, 2023 - The Company is exposed to market risks from interest rates, commodity prices (crude oil, natural gas, petroleum products), and foreign currency exchange rates[148] - As of March 31, 2023, there were no derivative commodity contracts or foreign exchange contracts in place[149] ITEM 4. CONTROLS AND PROCEDURES The Company's disclosure controls and procedures were effective as of March 31, 2023, with no material changes in internal control over financial reporting during the quarter - The Company's disclosure controls and procedures were effective as of March 31, 2023[151] - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2023[152] PART II – OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is involved in routine legal proceedings, with no material adverse effect expected on net income, financial condition, or liquidity from their resolution - The Company is engaged in routine legal proceedings, including litigation related to climate change[154] - The ultimate resolution of these legal matters is not expected to materially adversely affect the Company's net income, financial condition, or liquidity[154] ITEM 1A. RISK FACTORS The Company's oil and natural gas operations involve inherent risks and uncertainties, with no new risk factors identified beyond the 2022 Form 10-K disclosures - The Company's operations are subject to various risks and uncertainties inherent in the oil and natural gas business[155] - No new risk factors have been identified that were not previously disclosed in the 2022 Form 10-K report[155] ITEM 6. EXHIBITS This section lists exhibits filed with the Form 10-Q report, including Sarbanes-Oxley Act certifications and Inline XBRL documents - The exhibit index includes certifications required by Rule 13a-14(a) pursuant to Section 302 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002[163] - Inline XBRL documents (Instance, Schema, Calculation, Definition, Labels, Presentation Linkbase) and the Cover Page Interactive Data File are also included[163] SIGNATURE - The report was duly signed on behalf of Murphy Oil Corporation by Paul D. Vaughan, Vice President and Controller (Chief Accounting Officer), on May 3, 2023[159][160]