Murphy Oil(US:MUR)2024-05-02 20:19Financial Data and Key Metrics Changes - In Q1 2024, the company reported net income of $90 million or $0.59 per diluted share, and adjusted net income of $131 million or $0.85 per diluted share [37] - Adjusted EBITDA reached $405 million, driven by strong production and realized prices, with accrued CapEx of $264 million [37][38] - The company maintained strong liquidity with $1.1 billion as of March 31, including over $300 million in cash and equivalents [38] Business Line Data and Key Metrics Changes - Total production in Q1 2024 was 170,000 barrels equivalent per day, exceeding guidance, with Gulf of Mexico production at 73,000 barrels of oil equivalent per day [33][43] - Eagle Ford Shale wells produced 29,000 barrels of oil equivalent per day, with 86% liquids volumes, and are expected to peak in Q3 2024 [63][108] - Tupper Montney produced 348 million cubic feet per day, with 13 wells either producing or coming online soon [41] Market Data and Key Metrics Changes - The company achieved a slight premium to WTI with realized prices of $78 per barrel for oil, $23 per barrel for NGL, and $2.12 per thousand cubic feet for natural gas [58] - The company is progressing its exploration plans in Vietnam and has contracted a rig for drilling in Q3 2024 [34][69] Company Strategy and Development Direction - The company aims for a $300 million debt reduction goal in 2024, leading to a total long-term bond debt of $1 billion by year-end 2024 [19][60] - The capital allocation framework will transition to Murphy 3.0, focusing on increasing shareholder returns to 50% of adjusted free cash flow later this year [36][92] - The company is committed to maintaining a low growth plan while enhancing shareholder value through stock buybacks and dividends [96] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the debt reduction goal and emphasized the importance of stock buybacks to enhance shareholder value [94][96] - The outlook for Gulf of Mexico production is positive, with expectations of increased production as workovers and new wells come online [76][108] - Management highlighted the potential for exploration success in Vietnam and Côte d'Ivoire, with ongoing seismic reprocessing and drilling plans [70][69] Other Important Information - The company repurchased $50 million of stock in Q1 2024 at an average price of $39.25 per share [56] - The company has reduced total debt by $1.7 billion since 2020, with a focus on maintaining investment-grade metrics [57][73] Q&A Session Summary Question: What is the outlook for shareholder returns and debt repayment? - Management confirmed plans to repay $300 million in debt and increase shareholder returns through stock buybacks and dividends as part of Murphy 3.0 [94][96] Question: Can you provide details on the Gulf of Mexico production and the Neidermeyer well? - Management explained that the Neidermeyer well's workover became a sidetrack, with expectations for it to return to full capacity in early Q3 [114][116] Question: What are the drivers behind the increased CapEx guidance for Q2? - Management indicated that the increase is primarily due to the timing of the North America Onshore drilling completion program and some seismic spending being moved to Q2 [82][84]