Murphy Oil (MUR) 2025 Conference Transcript

Summary of Murphy Oil (MUR) 2025 Conference Call Company Overview - Company: Murphy Oil Corporation (MUR) - CEO: Eric Hambly, who has been with the company for approximately 20 years and took over as CEO in January 2025 [2][3] Key Industry Insights - Exploration and Development: Murphy Oil has a strong focus on both onshore and offshore operations, with significant international exploration capabilities. The company has a large inventory of shale locations and is actively pursuing exploration and appraisal programs, particularly in Vietnam [4][5] - Vietnam Projects: The company announced a world-class discovery in Vietnam shortly after Hambly became CEO, indicating a promising future in the region [2][5] Financial Highlights - Capital Expenditure: For 2025, Murphy Oil has earmarked a capital budget of approximately $1.2 billion, with 85% allocated for development activities. The company aims to maintain a capital program between $1.1 billion and $1.3 billion in typical years [10][11] - Oil Price Sensitivity: The company can comfortably cover its dividend and capital program with oil prices in the $60 range. However, if prices fall to $55 per barrel for an extended period, adjustments to the capital program may be necessary to protect the balance sheet [10][11] Operational Updates - Gulf of America: Murphy Oil is actively working on several wells in the Gulf of America, including new development wells and workovers. The company plans to drill two exploration wells in the third quarter of 2025 [14][15] - St. Malo Waterflood Project: The project is expected to contribute to production levels over time, with water injection already underway [17][18] - Chinook Field: The company purchased an FPSO for over $100 million, which will enhance the economics of the Chinook development project. A new development well is planned for 2026, with potential production rates of up to 15,000 barrels per day [26][28] Exploration Opportunities - Hai Su Long Discovery: The discovery well flowed at 10,000 barrels per day, with an estimated resource of 170 million barrels of oil equivalent. An appraisal well is planned to further assess the structure [46][48] - Pink Camel Field: Estimated resources of 30 million to 60 million barrels of oil equivalent, with plans for development tied back to existing infrastructure [51][53] - Cote D'Ivoire Exploration: Murphy Oil plans to start a three-well drilling program in Cote D'Ivoire, targeting significant resource potential with a mean estimate of over 400 million barrels [58][60] Cost Management - Cost Structure: The company has already streamlined its cost structure significantly since 2020, reducing general and administrative expenses from $243 million in 2019 to approximately $110 million in recent years [7][8] - Offshore Costs: While some costs are stable, there are increases in tubular goods and major subsea projects, with cost increases of 30% to 50% noted for subsea projects compared to previous years [36][38] Strategic Outlook - Long-term Vision: Murphy Oil aims to differentiate itself from peers through its exploration capabilities and strategic investments in high-potential regions like Vietnam and Cote D'Ivoire. The company is optimistic about its future growth and exploration success [4][5][62] Conclusion - Overall Sentiment: The company is confident in its operational performance and strategic direction, with a focus on maintaining a strong balance sheet while pursuing growth opportunities in both existing and new markets [71]