INVESTOR UPDATE
DECEMBER 2019
ROGER W. JENKINS
PRESIDENT& CHIEF EXECUTIVE OFFICER
Cautionary Statement & Investor Relations Contacts
Cautionary Note to U.S. Investors - The United States Securities and Exchange Commission (SEC) requires oil and natural gas companies, in their filings with the SEC, to disclose proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We may use certain terms in this presentation, such as "resource", "gross resource", "recoverable resource", "net risked PMEAN resource", "recoverable oil", "resource base", "EUR" or "estimated ultimate recovery" and similar terms that the SEC's rules prohibit us from including in filings with the SEC. The SEC permits the optional disclosure of probable and possible reserves in our filings with the SEC. Investors are urged to consider closely the disclosures and risk factors in our most recent Annual Report on Form 10-K filed with the SEC and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K that we file, available from the SEC's website.
Forward-Looking Statements - This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified through the inclusion of words such as "aim", "anticipate", "believe", "drive", "estimate", "expect", "expressed confidence", "forecast", "future", "goal", "guidance", "intend", "may", "objective", "outlook", "plan", "position", "potential", "project", "seek", "should", "strategy", "target", "will" or variations of such words and other similar expressions. These statements, which express management's current views concerning future events or results, are subject to inherent risks and uncertainties. Factors that could cause one or more of these future events or results not to occur as implied by any forward-looking statement include, but are not limited to: increased volatility or deterioration in the success rate of our exploration programs or in our ability to maintain production rates and replace reserves; reduced customer demand for our products due to environmental, regulatory, technological or other reasons; adverse foreign exchange movements; political and regulatory instability in the markets where we do business; natural hazards impacting our operations; any other deterioration in our business, markets or prospects; any failure to obtain necessary regulatory approvals; any inability to service or refinance our outstanding debt or to access debt markets at acceptable prices; and adverse developments in the U.S. or global capital markets, credit markets or economies in general. For further discussion of factors that could cause one or more of these future events or results not to occur as implied by any forward-looking statement, see "Risk Factors" in our most recent Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (SEC) and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K that we file, available from the SEC's website and from Murphy Oil Corporation's website at http://ir.murphyoilcorp.com. Murphy Oil Corporation undertakes no duty to publicly update or revise any forward-looking statements.
Non-GAAP Financial Measures - This presentation refers to certain forward looking non-GAAP measures such as future "Free Cash Flow" and future "EBITDA". Definitions of these measures are included in the appendix.
Kelly Whitley | Bryan Arciero | Megan Larson | ||
VP, Investor Relations & Communications | Sr. Investor Relations Advisor | Sr. Investor Relations Analyst | ||
281-675-9107 | 281-675-9339 | 281-675-9470 | ||
kelly_whitley@murphyoilcorp.com | bryan_arciero@murphyoilcorp.com | megan_larson@murphyoilcorp.com | ||
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 1 | |
NYSE: MUR | |||
Agenda
01 COMPANY UPDATE
02 ONSHORE PORTFOLIO UPDATE
03 OFFSHORE PORTFOLIO UPDATE
04 EXPLORATION UPDATE
05 LOOKING AHEAD
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 2 | |
NYSE: MUR | |||
Murphy Overview
A History of Excellence
- Long corporate history, IPO 1956
- Global offshore and North American onshore portfolio
- Oil-weightedassets drive high margins
- Exploration renaissance in focus areas
- Consistent cash flows from long-term offshore assets
- Growing unconventional assets in North American onshore
- Low leverage with appropriate liquidity and strong balance sheet
- History of shareholder-focused dividend policy
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 3 | |
NYSE: MUR | |||
Murphy at a Glance
Post-Transaction Reserves*
By Area | By Product Mix | |||||||
27% | ||||||||
37% | 38% | 62% | ||||||
760 | ||||||||
Liquids- | 54% | |||||||
MMBOE | ||||||||
Weighted | ||||||||
36% | 8% | |||||||
US Onshore | Canada Onshore | NA Offshore | Crude oil | NGLs | Natural gas | |||
3Q 2019 Production | ||||||||
By Area | By Product Mix | |||||||
26% | ||||||||
34% | 66% | |||||||
44% | 192 | |||||||
Liquids- | ||||||||
MBOEPD | ||||||||
Weighted | 59% | |||||||
29% | 7% | |||||||
US Onshore | Canada Onshore | NA Offshore | Crude oil | NGLs | Natural gas | Office | Exploration | Production |
* Based on internal estimates as of January 1, 2019 using year-end SEC pricing. Includes MP GOM (excluding non-controlling interest) and LLOG asset acquisitions and Malaysia divestiture, and excludes Brunei (asset held for sale).
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 4 | |
NYSE: MUR | |||
Value-Adding Transformation
2016 | 2018 | 2019 |
Acquired Kaybob | Transaction | Acquired LLOG |
Duvernay & | with Petrobras | Gulf of Mexico Assets |
Placid Montney | Gulf of Mexico | $1.375 BN |
$206 MM | $795 MM |
2014 - 2015 | 2016 - 2017 | 2018 - 2019 |
Stabilizing & Rebuilding; | Reshaping Portfolio; | |
Repositioning Portfolio Post-Spin; | ||
Strengthening Balance Sheet | Growing Oil-Weighted Assets | |
Streamlining Assets | ||
Without Issuing Equity | with Free Cash Flow Generation | |
2014 | 2016 | 2016 | 2017 | 2019 |
Sell-Down | Divested | Divested | Divested | Divested |
30% Malaysia | Montney | Syncrude | Heavy Oil | Malaysia |
$2.0 BN | Midstream | $730 MM | $51 MM | $2.127 BN |
$412 MM |
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 5 | |
NYSE: MUR | |||
Achieving Premium Oil-Weighted Realizations
>112,000BBLS/Day94%SOLDSOLD 3Q 2019At Premium
to $56.45 WTI
Sales Volumes & Differentials
Eagle Ford | North America | 3Q 2019 Total Company | |||
Shale | Offshore | Other | |||
Brent | 32% | Mars | |||
>$2/BBL | >$4/BBL | 6% | +$4.01/BBL | ||
Premium to WTI | +$5.55/BBL | ||||
4% | |||||
3Q 2019 | |||||
Differentials | |||||
vs | |||||
HLS | $56.45 WTI | ||||
EBITDA/BOE | $35/BOE | $37/BOE | +$5.50/BBL | 22% | MEH |
+$4.57/BBL | |||||
3Q 2019 | 36% | ||||
FIELD-LEVEL |
NOTE: Premium to WTI excludes transportation costs
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 6 | |
NYSE: MUR | |||
Eagle Ford Shale and Gulf of Mexico Deliver Strong Operating Cash Flows
Achieving High Operating Margins
- Generating >$50/BBL margins
- Allocating >75% of capital to Eagle Ford Shale and Gulf of Mexico
- Operating efficiencies result in low OPEX
- Timely hedging mitigates cash flow risk
3Q 2019 Operating Margins $/BBL
Eagle Ford Shale | Gulf of Mexico |
$70
$62
$60$59
$50
$40
$52
$52
$30
$20
$10 | $10 | ||||||||||
$7 | |||||||||||
$0 | |||||||||||
Operating margin | Opex | Avg realized price | |||||||||
NOTE: Operating margin calculated as price realizations less operating expenses WTI $56.45/BBL in 3Q 2019.
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 7 | |
NYSE: MUR | |||
Long History of Benefitting Shareholders
Free Cash Flow $MM 2019E
- $6.3 Billion
Returned to Shareholders
Since 1961
- $4.4 Billion
Returned to Shareholders
In last 10 years
$500
$0
-$500
-$1,000
Note: FCF = 2019E Median Consensus Cash Flow from Operations less Annual CAPEX (12/3/2019)
Source: FactSet
Peer Group: APA, CHK, CNX, COG, DVN, ECA, HES, MRO, MTDR, NBL, RRC, SM, SWN, WLL, XEC
Dividend Yield 2019E
4%
2%
0%
Source: FactSet at 12/3/2019
Peer Group: APA, CHK, CNX, COG, DVN, ECA, HES, MRO, MTDR, NBL, RRC, SM, SWN, WLL, XEC
Note: No dividend paid by CHK, CNX, MTDR, SWN, WLL
- $1.6 Billion
in Share Repurchases
2012 - 1H 2019
Cash Paid to Shareholders $MM 1997 - 2019E | ||||||||||||||||||||||
$1,000 | ||||||||||||||||||||||
$800 | ||||||||||||||||||||||
$600 | ||||||||||||||||||||||
$400 | ||||||||||||||||||||||
$200 | ||||||||||||||||||||||
$0 | ||||||||||||||||||||||
97 | 98 | 99 | 00 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19E |
Dividends | Special Dividends | Repurchases |
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 8 | |
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Executing Our 2019 Plan
PRODUCING | GENERATING | INCREASING | TRANSFORMING | BUILDING | ||||||||
Oil-Weighted | High Margin | Capital Returns | Portfolio for | Profitable | ||||||||
Assets | Realizations | to Shareholders | Future Value | Production | ||||||||
Produced 192 MBOEPD, | 94% oil volumes sold at | Completed $500 MM | Successfully bid on 3 | Brought GOM Dalmatian | ||||||||
~60% Oil | premium to WTI | share buyback program | blocks in Brazil's Sergipe- | well online at >5,000 | ||||||||
Alagoas Basin | BOEPD gross | |||||||||||
Produced highest oil | Adjusted EBITDA $438 MM | Delivered 5% | ||||||||||
volumes since 1Q 20151 | highest since 4Q 2014 | dividend yield | Farmed in to 3 blocks in | Completed multiple GOM | ||||||||
Brazil's Potiguar Basin | workover and tie-back | |||||||||||
Increased Eagle Ford Shale | >$24 adj. EBITDA/BOE | Returned >$620 MM to | projects, first oil 4Q 2019 | |||||||||
oil production >22% from | shareholders YTD 2019 | Positioned to produce over | ||||||||||
2Q 2019 | >$36 EBITDA/BOE | 200 MBOEPD in 4Q 2019 | ||||||||||
US & Canada offshore2 | Benefitted shareholders | |||||||||||
Lowered LOE/BOE by | within cash flow | |||||||||||
13% from 2Q 2019 to <$8 | Added oil hedges with 2020 | including sale proceeds | ||||||||||
average price >$53 WTI | ||||||||||||
1 Excluding Syncrude and heavy oil | ||||||||||||
2 Field level | ||||||||||||
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 9 | ||||||||||
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Onshore Portfolio Update
Concentrated Onshore Assets with Repeatable Results
Oil-Weighted Platform
Across North America
Kaybob Duvernay
11 MBOEPD at 3Q 2019, 58% oil, 69% liquids ~80 total producing wells online
Eagle Ford Shale
51 MBOEPD at 3Q 2019, 80% oil, 91% liquids ~1,005 total producing wells online
Well-Positioned for Natural Gas
Tupper Montney
269 MMCFD at 3Q 2019
~250 total producing wells online
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 11 | |
NYSE: MUR | |||
Significant Running Room in the Eagle Ford Shale
Significant Development Across ~125,000 Net Acres
- 500+ MMBOE total resource potential
- Conservative inter-well spacing, type curves account for parent/child relationship
- Completion designs optimized by pad & well
- Long life asset at low end of cost curve
- Remote operating center with big data focus
Long-Term Plan Well Cadence*
200 | 5 | ||
150 | 4 | Number | |
Online | |||
3 | |||
Wells | 100 | Rigsof | |
2 | |||
50 | 1 | ||
0 | 0 |
2019E | 2020E | 2021E | 2022E | 2023E | |
Wells Online | Rigs Per Year | ||||
* As of December 31, 2018
Eagle Ford Shale Acreage
KARNES |
Atascosa |
Karnes |
La Salle |
Dimmit |
TILDEN |
CATARINA |
McMullen |
Murphy Acreage
Area | Net Acres | Reservoir | Inter-Well Spacing (ft) | Gross Remaining Wells* |
Lower EFS | 300 | 121 | ||
Karnes | 10,918 | Upper EFS | 700 | 159 |
Austin Chalk | 700 | 108 | ||
Lower EFS | 500 | 388 | ||
Tilden | 64,737 | Upper EFS | 500 | 140 |
Austin Chalk | 600 | 100 | ||
Lower EFS | 450 | 292 | ||
Catarina | 47,653 | Upper EFS | 600 | 354 |
Austin Chalk | 800 | 149 | ||
Total | 123,308 | 1,811 | ||
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 12 | |
NYSE: MUR | |||
Eagle Ford Shale
Well Delivery Update
2019 Well Delivery Plan
- 91 wells online
3Q 2019 51 MBOEPD, 80% Oil, 91% Liquids
- >15% increase in volumes from 2Q 2019
- 25 wells online, 91% liquids
- 15 Catarina - 11 Lower EFS, 4 Upper EFS
- 10 Tilden - Lower EFS
4Q 2019, 18 Wells Online
- 8 Tilden - Lower EFS
- 10 Catarina - 9 Lower EFS, 1 Upper EFS
Consistently Increasing EURs
- Improved well targeting
- Optimized completion design
- Resulting in higher oil cut and IP rates
Achieving Lower OPEX
- <$7/BOE 3Q 2019
- >18% reduction from 2Q 2019
Eagle Ford Shale Acreage
Wilson | KARNES | |
Atascosa | ||
Karnes | ||
Zavala | Frio | |
TILDEN | ||
CATARINA | ||
Dimmit | ||
La Salle | Bee | |
Live Oak | ||
McMullen |
Murphy Acreage
EUR per Well MBOE by Year
750
584
500 | 499 | 528 | |||||||||
250 | 429 | ||||||||||
2016 | 2017 | 2018 | 2019 | ||||||||
Interquartile Range | Median | ||||||||||
NOTE: EFS = Eagle Ford Shale | NOTE: Interquartile range shows difference between 75th and 25th percentile of well EURs |
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 13 | |
NYSE: MUR | |||
Eagle Ford Shale
Well Outperformance in Tilden and Catarina
Tilden - 10 Tyler Ranch Wells Online | Tilden New Well Performance Cum MBOE | |||||||||
• 10 Lower EFS wells with avg 7,100' lateral | 80 | |||||||||
• 500' well spacing | 60 | |||||||||
• Average IP30 of 1,300 BOEPD | 40 | |||||||||
20 | ||||||||||
0 | ||||||||||
0 | 10 | 20 | 30 | 40 | 50 | 60 | 70 | 80 | 90 | |
Days Online | ||||||||||
Tyler Ranch Average LEFS | Tyler Ranch LEFS Average Type Curve | |||||||||
Catarina - 11 Stumberg Wells Online | Catarina New Well Performance Cum MBOE |
• 9 Lower EFS wells with avg 7,800' lateral
80
- 350' well spacing
- Lower EFS wells peak IP 1,400 BOEPD average
- 2 Upper EFS wells with avg 8,800' lateral
- 1,200' well spacing
- Performing to type curve
60
40
20
0
0 | 10 | 20 | 30 | 40 | 50 | 60 | 70 | 80 | 90 |
Days Online |
Stumberg Average LEFS | Stumberg LEFS Average Type Curve | |||||
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 14 | ||||
NYSE: MUR | ||||||
Kaybob Duvernay
Scalable Assets For Future Growth
Oil-Weighted Production from Low Cost | Kaybob Duvernay Acreage |
Assets |
Kaybob North
• | Approaching completion of retention drilling | Kaybob East | ||||||||
• | Optimizing development plan and lateral lengths | Two Creeks | ||||||||
• Continuing outperformance with high rate wells | Simonette | |||||||||
• | Targeting $6.5 MM per well drilling and | Kaybob West | ||||||||
completions costs | ||||||||||
Inter-Well | Remaining | Saxon | ||||||||
Area | Net Acres | Spacing (ft) | Wells | |||||||
Two Creeks | 34,336 | 984 | 123 | |||||||
Kaybob East | 36,400 | 984 | 182 | |||||||
Kaybob West | 25,760 | 984 | 119 | |||||||
Kaybob North | 31,360 | 984 | 129 | 0 | Miles | 10 | ||||
Simonette | 29,715 | 984 | 82 | Battery | ||||||
Saxon | 12,746 | 984 | 37 | Murphy Acreage | Facility | Pipeline | ||||
Total | 170,317 | 672 |
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 15 | |
NYSE: MUR | |||
Kaybob Duvernay
Well Delivery Update
2019 Well Delivery Plan Complete
- 10 wells online in Kaybob Duvernay
3Q 2019 Results
- Kaybob Duvernay: 11 MBOEPD, 69% liquids
- >18% increase in volumes from 2Q 2019
Kaybob Duvernay Land Retention Plan
- Drilling 16 wells in 2019, completions in 2020
2019 Online Wells
Area | Pad | Wells Online | IP30 | Liquids |
(BOEPD) | ||||
Simonette | 08-03 | 3 | 1,400* | 86% |
Kaybob North | 05-23 | 2 | 1,054 | 86% |
Two Creeks | 05-19 | 2 | 651* | 91% |
Two Creeks | 16-29 | 2 | 858* | 91% |
Kaybob North | 16-25 | 1 | 834* | 85% |
Strong Results in Kaybob Duvernay
- Recent well performance mirrors Tilden Lower EFS
- Leveraged learnings to optimize completions design, resulting in EUR improvement
- High-gradinglocations across contiguous acreage
- Drilled pacesetter well: 12.5 days, $2.4 MM
- In line with Eagle Ford Shale drilling rates
- 9,700' lateral length
2019 Kaybob New Well Performance vs Eagle Ford Shale - Tilden LEFS
Cum MBOE
120
100
80
60
40
20
0
0 | 30 | 60 | 90 | 120 | 150 | 180 |
Days Online |
2019 Kaybob Wells Average | Tyler Ranch LEFS Average Type Curve | ||||
* Well volumes constrained due to current facility limitations. | |||||
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 16 | |||
NYSE: MUR | |||||
Canada Onshore
Tupper Montney Update
2019 Well Delivery Plan Complete
- 8 wells online
3Q 2019 45 MBOEPD, 100% Natural Gas
- >20% increase in volumes from 2Q 2019
- New wells trending in line with 18 BCF type curve
Mitigating AECO Exposure | ||
3Q 2019 Tupper Montney Natural Gas Sales | ||
Dawn Price Exposure | AECO Price Exposure | |
Malin Price Exposure | 4% | |
53% | ||
7% |
Chicago Price Exposure
15%
22%
Hedged
Successful AECO Price Mitigation
- Realized 3Q 2019 C$1.61/MCF* vs AECO realized average of C$0.99/MCF
- Projected FY19 C$2.26/MCF* vs AECO realized average of C$1.71/MCF
- C$0.27 transportation cost to AECO not subtracted
Tupper Montney Natural Gas Realizations 3Q 2019 $CAD/MCF
* C$0.27 of transportation cost not subtracted
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 17 | |
NYSE: MUR | |||
Offshore Portfolio Update
Gulf of Mexico
Free Cash Flow Generating Assets
Revitalized Portfolio
- Top 5 Gulf of Mexico operator by production
- Achieves high margin EBITDA/BOE
- Generating ongoing synergies from acquisitions
- Long runway for further development projects
PRODUCING ASSETS
Asset | Operator | Murphy WI1 |
Cascade | Murphy | 80% |
Chinook | Murphy | 53% |
Clipper | Murphy | 80% |
Cottonwood | Murphy | 80% |
Dalmatian | Murphy | 56% |
Front Runner | Murphy | 50% |
Habanero | Shell | 27% |
Kodiak | Kosmos | 48% |
Lucius | Anadarko | 9% |
Marmalard | Murphy | 27% |
Marmalard East | Murphy | 70% |
Medusa | Murphy | 48% |
Neidermeyer | Murphy | 53% |
Powerball | Murphy | 75% |
Son of Bluto II | Murphy | 27% |
St. Malo | Chevron | 20% |
Tahoe | W&T | 24% |
Thunder Hawk | Murphy | 50% |
Gulf of Mexico Assets
Neidermeyer | Dalmatian |
VK DD
Delta House | Marmalard | |
Son of Bluto II | ||
Calliope | ||
Powerball | Medusa |
Nearly Headless Nick | ||
EW | Kodiak | MC DC |
Ourse | ||
Habanero | ||
Front Runner |
Khaleesi/Mormont
Samurai
GB | GC | AT LL | ||||||||||||||||||||||||||||
KC | WR | LU HE | ||||||||||||||||||||||||||||
Cascade/Chinook | Cascade | |||||||||||||||||||||||||||||
Chinook | ||||||||||||||||||||||||||||||
Lucius | St. Malo | |||||||||||||||||||||||||||||
Murphy Assets | Offshore Platform | FPSO |
Note: Anadarko is a wholly-owned subsidiary of Occidental Petroleum 1Excluding noncontrolling interest
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 19 | |
NYSE: MUR | |||
Gulf of Mexico
3Q 2019 Update
3Q 2019 Production 78 MBOEPD, 85% Liquids
- Operated production exceeded guidance
Dalmatian DC4 #2 Well
- Well drilled and completed, online 3Q 2019
- Online rate ~5,400 BOEPD gross
Nearly Headless Nick
- Completing well tie-in activities, online 4Q 2019
Medusa Rig Program
- Well workover complete, rig demobilized
King's Quay Floating Production System
- Construction underway
- Pursuing sell-down opportunities
St. Malo Waterflood Project Sanctioned
Front Runner SPAR
• Forecast to increase total EUR by 30 - 35 MMBOE1 net to Murphy
1 Contingent resources
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 20 | |
NYSE: MUR | |||
Gulf of Mexico
Project Execution Update
Short Term Project Update
- Working through planning and engineering
- 3 tie-back projects
- 1 well workover
Long Term Project Update
- Khaleesi / Mormont subsea engineering and construction contracts to be awarded in near-term
- Samurai pre-FEED work ongoing
- Contracts bid jointly with Khaleesi / Mormont
Short Term Projects
Planning & | Drilling & | |||
Project | Engineering | Completions | Subsea Tie-In | First Oil |
Dalmatian DC4 #2 | ✔ | ✔ | ✔ | ✔ |
Nearly Headless | ✔ | ✔ | ✔ | 4Q 2019 |
Nick | ||||
Medusa | ✔ | ✔ | n/a | 4Q 2019 |
Cottonwood | Ongoing | 1Q 20201 | n/a | 2Q 2020 |
Calliope | Ongoing | ✔ | 3Q 2020 | 4Q 2020 |
Ourse | Ongoing | 3Q 20202 | 1H 2021 | 2H 2021 |
Son of Bluto II | Ongoing | 2H 20212 | 2H 2021 | 4Q 2021 |
Long Term Projects
Planning & | Drilling & | |||||
Project | Engineering | Completions | Subsea Tie-In | First Oil | ||
Khaleesi / Mormont | Ongoing | 4Q 2020 - 4Q 20212 | 2021 | 1H 2022 | ||
Samurai | Ongoing | 4Q 2020 - 4Q 2021 | 2021 | 1H 2022 | ||
St. Malo Waterflood | Ongoing | 2Q 2020 - 2Q 2021 | 2022 | 2023 | ||
1 | Well workover. No drilling/completions activities. | |||||
2 | Completion only. Well previously drilled. Khaleesi / Mormont 4 of 5 wells previously drilled. |
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 21 | |
NYSE: MUR | |||
Gulf of Mexico
Short Cycle Capital Projects Deliver Accelerated Returns
Gulf of Mexico Short Cycle Projects
Completions | ||
New Wells | & Tie-Backs | Workovers |
Dalmatian DC4 #2 | Nearly Headless Nick | Cottonwood |
Son of Bluto II | Ourse | |
Calliope | ||
21 | $7.50CAPEX | >80 | |
MMBOE | /BBL | % IRR | |
Total Net | Average | ||
Resources | Project |
WTI $55/BBL, 2019-2023
Net CAPEX $MM
50
40
30
20
10
0
2019Q2 | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q2 | 2020Q3 | 2020Q4 | 2021 FY | ||||||||
Dalmatian | Cottonwood | NHN | SOB II | Calliope | Ourse | ||||||||||
Development Timeline
2019 | 2020 |
Dalmatian | Son of Bluto II |
Nearly Headless Nick | Ourse |
Calliope | |
Cottonwood | |
Net Production MBOEPD
12 | |||||||||||||||||||
10 | |||||||||||||||||||
8 | Production Generated through 2040 | ||||||||||||||||||
6 | |||||||||||||||||||
4 | |||||||||||||||||||
2 | |||||||||||||||||||
0 | |||||||||||||||||||
4Q 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | |||||||||
Dalmatian | Cottonwood | Nearly Headless Nick | Son of Bluto II | Calliope | Ourse | ||||||||||||||
Production volumes may vary based on timing and performance
Production volumes, reserves and financial amounts exclude non-controlling interest
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 22 | |
NYSE: MUR | |||
Gulf of Mexico
Investing in Long Term High-Margin Projects
Khaleesi / Mormont | ||||||||||||||
• Gross resource ~165 MMBOE, 90% liquids | Development Timeline | |||||||||||||
• 7 development wells planned - 4 previously drilled | ||||||||||||||
• IRR >30%, NPV >$300 MM | 2019 | 2020 | 2021 | 2022 | ||||||||||
Samurai | Subsea Development | |||||||||||||
• Gross resource ~60 MMBOE, 90% liquids | Drilling & Completion | 1H 2022 | ||||||||||||
• Potential upside ~15 MMBOE | ||||||||||||||
First Oil | ||||||||||||||
• 4 development wells planned | ||||||||||||||
• IRR >35%, NPV >$200 MM | ||||||||||||||
WTI $55/BBL, 2019-2023 | ||||||||||||||
Net CAPEX $MM | Net Production MBOEPD | |||||||||||||
300 | 25 | |||||||||||||
250 | 20 | Production Generated through 2042 | ||||||||||||
200 | 15 | |||||||||||||
150 | 10 | |||||||||||||
100 | 5 | |||||||||||||
50 | 0 | |||||||||||||
0 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | |||
Khaleesi / Mormont | Samurai | |||||||||||||
2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||
Khaleesi / Mormont | Samurai | Production volumes may vary based on timing and performance | ||||||||||||
Production volumes, reserves and financial amounts exclude non-controlling interest | ||||||||||||||
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 23 | ||||||||||||
NYSE: MUR | ||||||||||||||
Gulf of Mexico
Generating Long Term Free Cash Flow
Capital Commitments Support Long Term Growth | 2019 - 2023 Estimated Gulf of Mexico Production MBOEPD |
• Sanctioned St. Malo waterflood project 3Q 2019 | |
• Maintaining $325 MM average CAPEX 2019 - 2023 assuming | 85 | 85 | |||||||||
King's Quay sell down | 90 | ||||||||||
• | Affirming 2019 CAPEX guidance | 9 | 4 | ||||||||
80 | |||||||||||
• Producing 85 MBOEPD average from 2019 - 2023 | |||||||||||
14 | |||||||||||
• Delivering sustainable cash flow from large inventory of | |||||||||||
70 | |||||||||||
development projects | |||||||||||
60 | 58 | ||||||||||
Gulf of Mexico CAPEX | |||||||||||
Short-Cycle Tiebacks | 2019-2023 | 50 | |||||||||
St. Malo | 40 | ||||||||||
Waterflood | |||||||||||
10% | |||||||||||
26% | 30 | ||||||||||
$325 MM | 20 | ||||||||||
32% | |||||||||||
Major Projects | Average | ||||||||||
10 | |||||||||||
Development Projects, | - | ||||||||||
32% | Rig Programs & Workovers | ||||||||||
2019E Annualized | Base | Dev. Projects, | Major Projects | Short-Cycle | 2019-2023 | ||||||
Production | Production | Rig Programs | Tiebacks | Average | |||||||
& Workovers |
CAPEX from Major Projects include Samurai and Khaleesi / Mormont
St. Malo waterflood CAPEX includes $50 MM carry for Petrobras Americas Inc.
Production volumes, sales volumes, reserves and financial amounts exclude non-controlling interest, unless otherwise stated.
2019E Annualized Production assumes full year impact of acquired assets in LLOG transaction. Production from Major Projects includes St. Malo waterflood, Samurai and Khaleesi / Mormont.
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 24 | |
NYSE: MUR | |||
Exploration Update
Exploration Strategy Overview
Focused & Meaningful
- Four primary exploration areas
- 3 to 5 exploration wells per year
- ~$100 MM/year
Reduced Risk
- Proven oil provinces
- Targeting appropriate working interest
- Leveraging strategic partnerships
Strategic Themes
- Consistent US Gulf of Mexico program
- Field extension and exploration in Vietnam
- Company-makingpotential from Brazil and Mexico
- Targeting <$12/BBL full-cycle finding and development cost
Exploration Core Focus Areas
GULF OF MEXICO
VIETNAM
BRAZIL
AUSTRALIA
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 26 | |
NYSE: MUR | |||
Exploration Update
Increasing Position in Sergipe-Alagoas Basin, Brazil
Asset Overview
Sergipe-Alagoas Basin
- Murphy 20%, ExxonMobil 50% (Op), Enauta Energia S.A. 30%
- Hold WI in 6 blocks, spanning ~1.1 MM acres
- >1.2 BN BOE reserves discovered nearby
- Successfully bid on 3 adjacent blocks in 3Q 2019
- Blocks SEAL-M-505,SEAL-M-575 and SEAL-M-637
- Added ~560,000 acres to position
Continuing to Evaluate Data
- Progressing seismic program and interpretation
- Providing long-term exploration upside
BRAZIL
Current WI Block
3Q Bid Block
Petrobras-Operated Block
Discovered Field
351 | ||
428 | 430 | |
501 | 503 | 505 |
573 | 575 | |
637 |
Kilometers
0 | 50 | |
All blocks begin with SEAL-M
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 27 | |
NYSE: MUR | |||
Exploration Update
Entering Potiguar Basin, Brazil
Asset Overview
- Murphy 30% WI, Wintershall Dea 70% (Op)
- Farm-inagreement to 3 blocks signed 3Q 2019
- Blocks POT-W-857,POT-W-863 and POT-W-865
- Total ~774,000 gross acres
- Proven oil basin in proximity to Pitu oil discovery
- Independent to Murphy's position in Sergipe- Alagoas Basin
- 3D seismic program in progress
Potiguar Basin
Murphy WI Block | ||||||||
Other Block | ||||||||
Discovered Field | ||||||||
Kilometers | ||||||||
Petrobras/BP/ | ||||||||
0 | 50 | |||||||
GALP/IBV | ||||||||
Petrobras/BP/ | ||||||||
GALP | ||||||||
Petrobras/BP/ | Petrobras | Petrobras/BP/ | ||
GALP/IBV | GALP | |||
Petrobras/ | Petrobras/ | |||
BP/GALP | BP/GALP | |||
POT-W-857 | Petrobras/ | POT-W-863POT-W-865 | ||
Pitu | Shell | |||
Shell | Petrobras/ | ||||||||||||||||||||||||||||||||||||
Shell | |||||||||||||||||||||||||||||||||||||
BRAZIL
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 28 | |
NYSE: MUR | |||
Exploration Update
Salinas-Sureste Basin, Mexico
Block 5 Overview
- Increased working interest to 40% at low cost
- Murphy 40% (Op), Petronas 30%, DEA 30%
- 34 leads / prospects
- Mean to upward gross resource potential:
- 800 MMBO - 2,000 MMBO
- Planning additional exploration program in 2020
Cholula 1-EXP Highlights
- ~$12 MM net drilling costs
- Drilled to total depth (TD) of 8,825 feet
- Discovered 185 feet net hydrocarbon pay
- Validates block potential
- De-risksUpper Miocene play in SE corner of Block 5
- ~200 MMBOE of resources within tie-back distance
Salinas-Sureste Basin
Block 5
Cholula
MEXICO
Kilometers
0 60
Murphy WI Block | Other Blocks | Discovery | |||||||
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 29 | |||||||
NYSE: MUR | |||||||||
Vietnam Update
Cuu Long Basin, Vietnam
Asset Overview
- Murphy 40% (Op), PVEP 35%, SKI 25%
- >400 MMBOE remaining resource potential on initial block (15-1/05)
Block 15-1/05 - Lac Da Vang (LDV) Field
- Received Prime Minister approval for LDV field outline development plan
- Commenced front-end engineering design work
- Continuing post-well analysis of LDT-1X discovery well
- Potential to add bolt-on resources to LDV field development
Block 15-2/17
- Received Prime Minister approval on production sharing contract
- Formal contract signed 4Q 2019
Cuu Long Basin
VIETNAM
Block 15-2/17
Miles
010
Murphy WI Block
Block 15-1/05
LDT Discovery | |
LDN Discovery | LDV |
Discovery | |
HSB Discovery
Murphy Block Discovery | Other Discovery / Producing Field |
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 30 | |
NYSE: MUR | |||
Looking Ahead
Executing 2019 Goals
POST-MALAYSIA TARGETS | ACHIEVING GOALS | ||||
$300 | ACCOMPLISHING | $ | Oct. 2019 | ||
SHARE | 500 | Completed | |||
MILLION | REPURCHASE | ||||
MILLION | |||||
200 | DELIVERING 4Q 2019 | 202 | On Track | ||
4Q 2019 | |||||
PRODUCTION RATE | |||||
MBOEPD | MBOEPD | ||||
68% | GENERATING | 67 | As of 3Q 2019 | ||
LIQUIDS-WEIGHTED | % | ||||
PRODUCTION | |||||
>95% | REALIZING SALES | >94% | As of 3Q 2019 | ||
VOLUMES AT | |||||
PREMIUM TO WTI | |||||
All while maintaining our cash position 2018 - 2019
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 32 | |
NYSE: MUR | |||
Executing on Long-Term Plan
Maintaining >65% Liquids Production Weighting
- Plan flexible to maintain cash flow / CAPEX parity including dividend
Annual Average Capital Spend
2019 - 2023
Exploration
US Onshore - Focusing on Oil-Weighted Growth
Canada Onshore - Scalable Based on Market Conditions
- Focused on lease retention
NA Offshore - Maintaining Current Production
- Consistent free cash flow business
- Short-cycletiebacks and development projects at existing facilities
- St. Malo waterflood, Khaleesi / Mormont and Samurai projects included
Canada Onshore | 7% | US Onshore |
15%
$1.4 BN 52%
26%
WH Offshore
Exploration - Dedicated Strategy
• CAPEX ~$100 MM per year, flexible as needed | |||
• Ongoing plan of 3-5 wells annually | |||
Production volumes, sales volumes, reserves and financial amounts exclude non-controlling | |||
interest, unless otherwise stated | |||
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 33 | |
NYSE: MUR | |||
Positioning Company for Long-Term Value Creation
TRANSFORMING | PRODUCING | RAMPING | ||||
Portfolio by adding oil-weighted, | Oil-weighted assets that | High value Eagle Ford Shale | ||||
high-margin assets | realize premium pricing | production | ||||
EXECUTING | OFFERING | FOCUSING | ||||
Short cycle Gulf of Mexico field | Investors exploration upside | On shareholder priorities | ||||
development projects | ||||||
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 34 | |
NYSE: MUR | |||
INVESTOR UPDATE
DECEMBER 2019
ROGER W. JENKINS
PRESIDENT& CHIEF EXECUTIVE OFFICER
Appendix
Non-GAAP Financial Measure Definitions & Reconciliations
The following list of Non-GAAP financial measure definitions and related reconciliations is intended to satisfy the requirements of Regulation G of the Securities Exchange Act of 1934, as amended. This information is historical in nature. Murphy undertakes no obligation to publicly update or revise any Non-GAAP financial measure definitions and related reconciliations.
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 37 | |
NYSE: MUR | |||
4Q 2019 Guidance
Producing Asset | Liquids | Gas | Total | |
(BOPD) | (MCFD) | (BOEPD) | ||
US - Eagle Ford Shale | 48,300 | 31,300 | 53,500 | |
Gulf of Mexico excluding NCI1 | 72,700 | 73,600 | 85,000 | |
Gulf of Mexico including NCI | 84,800 | 78,700 | 98,000 | |
Canada - Tupper Montney | - | 264,000 | 44,000 | |
Kaybob Duvernay and Placid Montney | 6,700 | 22,500 | 10,500 | |
Offshore | 8,400 | - | 8,400 | |
Other | 600 | - | 600 | |
4Q Production Volume (BOEPD) excluding NCI 2 | 198,000 - 206,000 | |||
4Q Production Volume (BOEPD) including NCI | 210,700 - 219,300 | |||
4Q Exploration Expense ($MM) | $21 | |||
Full Year 2019 CAPEX ($BN) excluding NCI 3 | $1.35 - $1.45 | |||
Full Year 2019 Production (BOEPD) excluding NCI 4 | 174,000 - 178,000 | |||
1 Excludes Noncontrolling Interest of MP GOM of 12,100 BOPD liquids and 5,100 MCFD gas 2 Excludes Noncontrolling Interest of MP GOM of 13,000 BOEPD
3 Excludes Noncontrolling Interest of MP GOM of $48 MM and $20 MM for assets held for sale 4 Excludes Noncontrolling Interest of MP GOM of 12,600 BOEPD
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 38 | |
NYSE: MUR | |||
2019 Hedging Positions
United States | |||||
Commodity | Type | Volumes | Price | Start Date | End Date |
(BBL/D) | (BBL) | ||||
WTI | Fixed Price Derivative Swap | 35,000 | $60.51 | 10/1/2019 | 12/31/2019 |
WTI | Fixed Price Derivative Swap | 45,000 | $56.42 | 1/1/2020 | 12/31/2020 |
Montney, Canada | |||||
Commodity | Type | Volumes | Price | Start Date | End Date |
(MMCF/D) | (MCF) | ||||
Natural Gas | Fixed Price Forward Sales at | 59 | C$2.81 | 10/1/2019 | 10/31/2019 |
AECO | |||||
Natural Gas | Fixed Price Forward Sales at | 97 | C$2.71 | 11/1/2019 | 3/31/2020 |
AECO | |||||
Natural Gas | Fixed Price Forward Sales at | 59 | C$2.81 | 4/1/2020 | 12/31/2020 |
AECO | |||||
* As of October 30, 2019
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 39 | |
NYSE: MUR | |||
Current Financial Position
As of September 30, 2019
• $2.8 BN total debt, excluding capital leases | Note Maturity Profile $MM |
• | Total liquidity $2.0 BN | 2,000 | |||||||||||||||||||||||||||||
• | Approximately $435 MM of cash and cash | ||||||||||||||||||||||||||||||
equivalents | |||||||||||||||||||||||||||||||
• Undrawn $1.6 BN unsecured senior credit facility | 1,500 | ||||||||||||||||||||||||||||||
• 33% total debt to cap | |||||||||||||||||||||||||||||||
• | 28% net debt to cap | ||||||||||||||||||||||||||||||
1,000 | |||||||||||||||||||||||||||||||
Maturity Profile* | |||||||||||||||||||||||||||||||
Total Bonds Outstanding $BN | $2.8 | 500 | |||||||||||||||||||||||||||||
Weighted Avg Fixed Coupon | 5.5% | 10 Year | |||||||||||||||||||||||||||||
Weighted Avg Years to Maturity | 7.0 | 20 Year | 30 Year | ||||||||||||||||||||||||||||
0 | >2046 | ||||||||||||||||||||||||||||||
2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | ||||
Notes | Undrawn RCF | ||||||||||||||||||||||||||||||
* As of September 30, 2019 | |||||||||||||||||||||||||||||||
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 40 | |||||||||||||||||||||||||||||
NYSE: MUR | |||||||||||||||||||||||||||||||
Effective Governance Underpins Long-Term Financial Strength
Expert and Independent Board | ESG Oversight |
75%
ISS Governance
Score
Long-term industry, operating, and HSE expertise
Separate CEO and Chairman
12 out of 13 directors are independent
Board of Directors elected with average vote of 99% over past 5 years
Health, Safety and Environmental Committee established in 1993
- Worldwide HSE policy and management system applied to every employee, contractor and partner
Safety and environmental metrics in annual incentive plan performance since 2008
Climate change oversight
- Emissions forecasting in long-term planning
- Developed guiding principles for climate change
vs peer average
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 41 | |
NYSE: MUR | |||
Mitigating Risk Through Sustainable Environmental Operations
Safe Operations | Spills Management | GHG Emissions Reduction | ||
0.32 average TRIR over past 4 years (vs | Zero International Oil and Gas Producers | 28% reduction from 2015 to 2018 |
0.4 average for US E&P companies*) | (IOGP) recordable spills 1H 2019 | |
50% reduction with 2018-2019 acquisition | ||
Eagle Ford Shale well work 5 years lost | Gulf of Mexico spill free since 2014 | and divestment activity |
time accident free | ||
Asset integrity focus across life-cycle, | Long-term reductions with natural gas- | |
Vietnam seven years recordable free | leading to significant reduction in spills | fueled frac pumps in onshore Canada |
operations |
A proud member of
The Environmental Partnership
Incident rate, spills rate, and emissions targets drive continual improvement
* Company reported data, sourced from Bloomberg
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 42 | |
NYSE: MUR | |||
Employee and Community Investments Support Stable Operations
Everywhere We Work | North America | International | ||
Competitive employee benefits
- Comprehensive health care coverage
- Retirement savings plans
- Education assistance program
Global Learning Management System
- ~300 professional development courses and more than 125 technical courses
El Dorado Promise
- Tuition scholarship provided to El Dorado High School graduates
- College enrollment rate surpasses state and national levels
United Way
- Partners for more than 50 years
- Over $13 MM contributed in past 20 years
Process for new country entry
- Includes assessment of ESG risks
Social impact assessments
Community consultation processes
Prioritizing local suppliers
Threshold investment targets for local content
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 43 | |
NYSE: MUR | |||
Non-GAAP Reconciliation
ADJUSTED EARNINGS
Murphy defines Adjusted Earnings as net income attributable to Murphy1 adjusted to exclude discontinued operations and certain other items that affect comparability between periods.
Adjusted Earnings is used by management to evaluate the company's operational performance and trends between periods and relative to its industry competitors.
Adjusted Earnings, as reported by Murphy, may not be comparable to similarly titled measures used by other companies and it should be considered in conjunction with net income, cash flow from operations and other performance measures prepared in accordance with generally accepted accounting principles (GAAP). Adjusted Earnings has certain limitations regarding financial assessments because it excludes certain items that affect net income. Adjusted Earnings should not be considered in isolation or as a substitute for an analysis of Murphy's GAAP results as reported.
$ Millions, except per share amounts | Three Months Ended - Sept 30, 2019 | Three Months Ended - Sept 30, 2018 | ||||||
Net income attributable to Murphy (GAAP) | 1,089.0 | 93.9 | ||||||
Discontinued operations loss (income) | (953.4) | (37.8) | ||||||
Income from continuing operations | 135.6 | 56.1 | ||||||
Mark-to-market (gain) loss on crude oil derivative contracts | (38.9) | (20.6) | ||||||
Mark-to-market (gain) loss on contingent consideration | (22.4) | - | ||||||
Business development transaction costs | 3.3 | - | ||||||
Tax benefits on investments in foreign areas | (15.0) | - | ||||||
Write-off of previously suspended exploration wells | - | 4.5 | ||||||
Foreign exchange losses (gains) | 0.8 | - | ||||||
Ecuador arbitration settlement | - | (20.5) | ||||||
Brunei working interest income | - | (16.0) | ||||||
Seal insurance proceeds | (6.2) | (7.0) | ||||||
Adjusted Income (loss) attributable to Murphy (Non-GAAP) | 57.2 | (3.5) | ||||||
Adjusted income (loss) from continuing operations per diluted share | 0.36 | (0.02) | ||||||
1 'Attributable to Murphy' represents the economic interest of Murphy excluding a 20% noncontrolling interest in MP GOM. | ||||||||
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 44 | ||||||
NYSE: MUR | ||||||||
Non-GAAP Reconciliation
EBITDA and EBITDAX
Murphy defines EBITDA as income from continuing operations attributable to Murphy1 before interest, taxes, depreciation and amortization (DD&A). Murphy defines EBITDAX as income from continuing operations attributable to Murphy before interest, taxes, depreciation and amortization (DD&A) and exploration expense.
Management believes that EBITDA and EBITDAX provides useful information for assessing Murphy's financial condition and results of operations and it is a widely accepted financial indicator of the ability of a company to incur and service debt, fund capital expenditure programs, and pay dividends and make other distributions to stockholders.
EBITDA and EBITDAX, as reported by Murphy, may not be comparable to similarly titled measures used by other companies and it should be considered in conjunction with net income, cash flow from operations and other performance measures prepared in accordance with generally accepted accounting principles (GAAP). EBITDA and EBITDAX have certain limitations regarding financial assessments because they excludes certain items that affect net income and net cash provided by operating activities. EBITDA and EBITDAX should not be considered in isolation or as a substitute for an analysis of Murphy's GAAP results as reported.
$ Millions | Three Months Ended - Sept 30, 2019 | Three Months Ended - Sept 30, 2018 |
Net income (loss) attributable to Murphy (GAAP) | 1,089.0 | 93.9 |
Income tax expense (benefit) | 18.8 | 17.8 |
Interest expense, net | 44.9 | 44.2 |
DD&A expense | 308.3 | 197.5 |
EBITDA attributable to Murphy (Non-GAAP) | 1,461.0 | 353.4 |
Exploration expense | 12.4 | 21.7 |
EBITDAX attributable to Murphy (Non-GAAP) | 1,473.4 | 375.1 |
Total barrels of oil equivalents sold from continuing operations attributable to | 17,745 | 11,232 |
Murphy (thousands of barrels) | ||
EBITDAX per BOE (Non-GAAP) | 83.03 | 33.39 |
1 'Attributable to Murphy' represents the economic interest of Murphy excluding a 20% noncontrolling interest in MP GOM.
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 45 | |
NYSE: MUR | |||
Non-GAAP Reconciliation
ADJUSTED EBITDA
Murphy defines Adjusted EBITDA as income from continuing operations attributable to Murphy1 before interest, taxes, depreciation and amortization (DD&A), impairment expense, foreign exchange gains and losses, mark-to-market loss on crude oil derivative contracts, accretion of asset retirement obligations and certain other items that management believes affect comparability between periods.
Adjusted EBITDA is used by management to evaluate the company's operational performance and trends between periods and relative to its industry competitors.
Adjusted EBITDA may not be comparable to similarly titled measures used by other companies and it should be considered in conjunction with net income, cash flow from operations and other performance measures prepared in accordance with generally accepted accounting principles (GAAP). Adjusted EBITDA has certain limitations regarding financial assessments because it excludes certain items that affect net income and net cash provided by operating activities. Adjusted EBITDA should not be considered in isolation or as a substitute for an analysis of Murphy's GAAP results as reported.
$ Millions, except per BOE amounts | Three Months Ended - Sept 30, 2019 | Three Months Ended - Sept 30, 2018 | |||||
EBITDA attributable to Murphy (Non-GAAP) | 1,461.0 | 353.4 | |||||
Discontinued operations loss (income) | (953.4) | (37.8) | |||||
Mark-to-market (gain) loss on crude oil derivative contracts | (49.2) | (26.0) | |||||
Accretion of asset retirement obligations | 10.6 | 6.5 | |||||
Business development transaction costs | 4.1 | - | |||||
Write-off of previously suspended exploration wells | - | 4.5 | |||||
Seal insurance proceeds | (8.0) | (9.7) | |||||
Foreign exchange losses (gains) | 0.8 | (1.0) | |||||
Mark-to-market (gain) loss on contingent consideration | (28.4) | - | |||||
Ecuador arbitration settlement | - | (26.0) | |||||
Brunei working interest income | - | (16.0) | |||||
Adjusted EBITDA attributable to Murphy (Non-GAAP) | 437.5 | 247.9 | |||||
Total barrels of oil equivalents sold from continuing operations attributable to Murphy | 17,745 | 11,232 | |||||
(thousands of barrels) | |||||||
Adjusted EBITDA per BOE (Non-GAAP) | 24.65 | 22.07 | |||||
1 'Attributable to Murphy' represents the economic interest of Murphy excluding a 20% noncontrolling interest in MP GOM. | |||||||
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 46 | |||||
NYSE: MUR | |||||||
Glossary of Abbreviations
BBL: Barrels (equal to 42 US gallons)
BCF: Billion cubic feet
BCFE: Billion cubic feet equivalent
BN: Billions
BOE: Barrels of oil equivalent (1 barrel of oil or 6,000 cubic feet of natural gas)
BOEPD: Barrels of oil equivalent per day
BOPD: Barrels of oil per day
CAGR: Compound annual growth rate
D&C: Drilling & completion
DD&A: Depreciation, depletion & amortization
EBITDA: Income from continuing operations before taxes, depreciation, depletion and amortization, and net interest expense
EBITDAX: Income from continuing operations before taxes, depreciation, depletion and amortization, net interest expense, and exploration expenses
EFS: Eagle Ford Shale
EUR: Estimated ultimate recovery
F&D: Finding & development
G&A: General and administrative expenses
GOM: Gulf of Mexico
LOE: Lease operating expense
MBOE: Thousands barrels of oil equivalent
MBOEPD: Thousands of barrels of oil equivalent per day
MCF: Thousands of cubic feet
MCFD: Thousands cubic feet per day
- Millions
MMBOE: Millions of barrels of oil equivalent
MMCF: Millions of cubic feet
MMCFD: Millions of cubic feet per day
NA: North America
NGL: Natural gas liquid
ROR: Rate of return
R/P: Ratio of reserves to annual production
TCF: Trillion cubic feet
TCPL: TransCanada Pipeline
TOC: Total organic content
WI: Working interest
WTI: West Texas Intermediate (a grade of crude oil)
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 47 | |
NYSE: MUR | |||
Positioned for Investor Value Creation
4.3% Dividend Yield
Longstanding & Competitive
$/BOE 1P Total Reserves
$25 $20 $15
$10 | Median $7.90 |
$5$4.85
$0
Note: Calculated based on Market Cap (12/3/2019, in $Millions) Divided by Total Proved Reserves (MMBOE, 12/31/18);
Source: FactSet
Peer Group: APA, CLR, CXO, DVN, ECA, FANG, HES, MRO, NBL, PE, PXD, WPX, XEC
$/BOE 1P Oil Reserves
28% Net Debt to Cap
At September 30, 2019
$45
$30
$15 $9.00
$0
Median $14.95
1.3x Net Debt / EBITDAX*
At September 30, 2019
* 3Q 2019 annualized adjusted EBITDAX
Note: Calculated based on Market Cap (12/3/2019), in $Millions) Divided by Total Proved Oil Reserves (MMBOE, 12/31/18);
Source: FactSet
Peer Group: APA, CLR, CXO, DVN, ECA, FANG, HES, MRO, NBL, PE, PXD, WPX, XEC
Value Per Flowing Oil Barrel
$150
$100
Median $55.01
$50$32.64
$0
Note: Calculated based on Market Cap (12/3/2019, in $Millions) Divided by 3Q 2019 Oil Production (MBOPD)
Source: FactSet
Peer Group: APA, CLR, CXO, DVN, ECA, FANG, HES, MRO, NBL, PE, PXD, WPX, XEC
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 48 | |
NYSE: MUR | |||
Eagle Ford Shale
Peer Acreage
OIL
CONDENSATE
GAS
Murphy
EOG
Lewis/BP ConocoPhillips
Marathon EP Energy
Pioneer
Encana
Carrizo Chesapeake
Sanchez
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 49 | |
NYSE: MUR | |||
Eagle Ford Shale
Murphy Spacing vs Peers
Karnes Typical Murphy Spacing
LEFS ~250-500'
EOG Offset Spacing
LEFS ~250' to 500'
DVN Offset Spacing
LEFS ~250' to 500'
COP Offset Spacing
LEFS ~250' to 600'
Murphy
BP
CHK Offset Spacing
LEFS ~350' to 1000'
MRO Offset Spacing
LEFS ~250' to 600'
Catarina Typical Murphy Spacing
LEFS ~300' to 600'
Tilden Typical Murphy Spacing
LEFS ~350' to 800'
CHK Offset Spacing
LEFS ~300' to 800'
SE Offset Spacing
LEFS ~ 250' to 300'
Chesapeake
Conoco
Devon
Encana
EOG
Equinor (Statoil)
Inpex (Gulftex)
Magnolia
Marathon
Pioneer
Sanchez
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 50 | |
NYSE: MUR | |||
Kaybob Duvernay
Peer Acreage
SHELL | KAYBOB EAST | |
PARAMOUNT | ||
ENCANA | CENOVUS | |
KAYBOB WEST | ||
KEYERA
SIMONETTE
SAXON
Fox Creek
CHEVRON
SEMCAMS
KAYBOB
XTO
PLACID
REPSOL
6 Miles
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 51 | |
NYSE: MUR | |||
Tupper Montney
Peer Acreage
Dawson
Creek
Other Competitor Montney Land
Open Crown - Montney
Murphy Montney Land
0 | Miles | 10 |
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 52 | |
NYSE: MUR | |||
Placid Montney
Peer Acreage
KAYBOB EAST | |||
HAMMERHEAD | TANGLE | PARAMOUNT | |
CREEK | CNRL | CENOVUS | |
ENCANA | KAYBOB WEST | ||
KEYERA | |||
SIMONETTE | |||
Fox Creek |
SAXON CHEVRON
Condensate SEMCAMS
KAYBOB
Limit
DELPHIXTO
PLACID
Dry Gas
Limit | 6 Miles |
HAMMERHEAD
MONT
MONT
TANGLE CREEK
December 2019 | w w w . m u r p h y o i l c o r p . c o m | 53 | |
NYSE: MUR | |||
INVESTOR UPDATE
DECEMBER 2019
ROGER W. JENKINS
PRESIDENT& CHIEF EXECUTIVE OFFICER
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Disclaimer
Murphy Oil Corporation published this content on 05 December 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 December 2019 11:45:09 UTC