Murphy Oil(US:MUR)2025-05-08 14:02Financial Data and Key Metrics Changes - In the first quarter, the company generated $636 million in revenue with an average realized oil price of $72 per barrel, natural gas liquids price of nearly $26 per barrel, and natural gas price of $2.67 per 1,000 cubic feet [10][11] - The company produced 157,000 barrels of oil equivalent per day, with 78,500 barrels of oil per day, experiencing approximately 6,000 barrels of oil equivalent per day of production impacts due to non-operated unplanned downtime [9][10] - Shareholder returns totaled $147 million through $100 million of share repurchases and $47 million of dividends [7][8] Business Line Data and Key Metrics Changes - The Eagle Ford Shale asset produced 25,000 barrels of oil equivalent per day, with 83% liquids, and the company drilled the longest lateral in its history at 13,976 feet [14] - The Tupper Montney produced 340 million cubic feet per day, with five wells brought online as planned, and the company achieved a 30% increase in initial production rates compared to historical performance [15][16] - Offshore assets produced a combined 71,000 barrels of oil equivalent per day, with 83% oil, and the company progressed workovers impacted by winter weather [18] Market Data and Key Metrics Changes - The company anticipates production of 177,000 to 185,000 barrels of oil equivalent per day for the second quarter of 2025, representing a 15% increase over first-quarter production [25] - Full-year production is expected to be toward the lower end of the range of 174,500 to 182,500 barrels of oil equivalent per day due to first-quarter impacts [26] Company Strategy and Development Direction - The company remains focused on operational excellence, multi-basin portfolio expansion, and capital returns to shareholders, with a commitment to allocate a minimum of 50% of adjusted free cash flow to shareholder returns [5][8] - The company plans to drill two operated exploration wells in the Gulf of America in the second half of the year, targeting lower-risk opportunities near existing infrastructure [21] - The company is excited about its international priorities, particularly in offshore Vietnam and Cote D'Ivoire, with significant resource potential [20][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational turnaround and highlighted the importance of balancing investments in high-return projects while protecting the balance sheet [32] - The company is monitoring oil price environments closely and is prepared to adjust capital spending if prices remain low [36] - Management emphasized the potential for significant value creation from recent discoveries in Vietnam and ongoing development projects [22][36] Other Important Information - The company has repurchased 22% of its total shares outstanding since 2013 and has returned over $4 billion to shareholders through buybacks and dividends [8] - The acquisition of the Pioneer floating production storage and offloading vessel is expected to reduce annual net operating expenses by approximately $50 million, achieving a two-year payback [12] Q&A Session Summary Question: How does the company plan to manage capital allocation in a lower oil price environment? - Management indicated that while they are maintaining the 2025 capital plan, they are prepared to identify opportunities to reduce spending if oil prices remain below $55 per barrel [32][34] Question: What is the impact of the recent discovery in Vietnam on the development plan? - Management stated that the recent discovery will likely lead to a capital-efficient project with production processed from the Loch Da Hong A platform, expected to come online in 2026 [38] Question: What is the status of the Khaleesi II and Marmalade III workovers? - Management reported that the Khaleesi II workover is a routine fix for a failed safety valve, while the Marmalade III involves a more complex sidetrack and new completion [80] Question: How does the company view its OCTG exposure and procurement strategy? - Management noted that onshore wells have flat total costs year-over-year, with some pressure on tubular goods expected in the second half of 2025 [46][49] Question: What are the expectations for production growth in the second half of the year? - Management expressed confidence in achieving production guidance, with the bulk of the onshore program online and performing well [54]