Murphy Oil(MUR) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Murphy Oil Corporation reported net income of $139 million for Q3 2024, translating to$0.93 per diluted share, with adjusted net income of $111 million or$0.74 per diluted share [11] - The company generated $397 million in adjusted EBITDA during the quarter, with$211 million in accrued CapEx, excluding non-controlling interest [11][12] - Year-to-date, Murphy has repurchased $300 million of stock, reducing long-term debt by$50 million [11][12] Business Line Data and Key Metrics Changes - In the Eagle Ford Shale, Murphy produced an average of 32,000 barrels of oil equivalent per day in Q3 2024, with 72% oil and 86% liquids volumes [15] - The Tupper Montney asset produced an average of 429 million net cubic feet per day, exceeding guidance by approximately 11 million cubic feet per day [17] - In the Gulf of Mexico, production averaged 67,000 barrels of oil equivalent per day, with 79% oil [18] Market Data and Key Metrics Changes - Murphy realized an oil price of nearly $76 per barrel, with NGL prices at nearly$22 and natural gas at $1.47 per 1,000 cubic feet [10] - The company achieved a realized price of$1.35 per 1,000 cubic feet for natural gas, compared to an AECO average of $0.50 per 1,000 cubic feet [17] Company Strategy and Development Direction - The corporate priorities include deleveraging, executing operations, exploring new opportunities, and returning capital to shareholders [5] - Murphy aims to allocate a minimum of 50$1 billion long-term debt target while reinvesting approximately 50% of cash flow in high-returning offshore projects [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to withstand commodity price volatility due to a strengthened balance sheet [12] - The outlook for Q4 2024 includes production forecasts of 181,500 to 189,500 barrels of oil equivalent per day, with a tightening guidance range for the full year to 180,000 to 182,000 barrels [26][27] - Management highlighted the excitement around the Vietnam exploration program and the potential for significant business development in the region [39][40] Other Important Information - Murphy has initiated construction of the Loc Duvang production platform in Vietnam and is progressing with its field development plan [21][22] - The company has a robust sustainability report detailing ongoing environmental stewardship and governance [14] Q&A Session Summary Question: Plans for 2025 operations and oil price impact - Management indicated that the aspiration is to maintain oil-weighted low CAGR growth while spending approximately $1.1 billion in CapEx annually, with production expected to be similar or slightly higher than 2024 [35][36] Question: Cost and potential upside of Vietnam wells - The Hai Su Hong prospect targets a mean of 170 million barrels of oil equivalent, with significant potential for material business development in Vietnam [38][39] Question: Consolidation opportunities in the current market - Management is open to evaluating M&A opportunities, particularly in offshore areas, while focusing on maintaining a strong balance sheet and maximizing free cash flow [45][54] Question: Performance issues with Terra Nova - Management expressed disappointment with Terra Nova's performance, averaging about 55% uptime, and indicated that they are working with partners to improve operations [57][59] Question: Onshore drilling plans and production growth - Management confirmed a shift to a more consistent drilling schedule in Eagle Ford, which is expected to smooth out well delivery and increase production [92][93]