Murphy Oil Corp (MUR)

A. Company Overview

Murphy Oil Corporation is a globally recognized oil and gas exploration and production company, primarily engaged in the exploration, production, and sale of hydrocarbons, including crude oil, natural gas, and natural gas liquids. The company operates in diverse geographic regions, comprising both onshore and offshore operations. Originally incorporated in Louisiana in 1950 as Murphy Corporation, it underwent a reincorporation in Delaware in 1964 to adopt its current name, Murphy Oil Corporation. In 2013, the company streamlined its operations by separating its U.S. downstream business from its oil and gas exploration and production activities. The corporate headquarters of Murphy Oil is situated in Houston, Texas.

The company’s operational structure is designed around three main geographic segments: the United States, Canada, and various international locations categorized as the “other” segment. The Corporate segment encompasses interest income, risk management, and administrative costs not allocated to the exploration and production segments. As part of its operations, Murphy Oil exercises ongoing vigilance over its environmental impact, specifically monitoring greenhouse gas emissions and various other social and environmental factors associated with its business activities.

B. Exploration and Production Activities

Murphy Oil’s exploration and production activities span several key regions known for hydrocarbon resources. The company is particularly active in the United States and Canada while also exploring opportunities worldwide.

United States Operations

In the United States, Murphy's exploration and production activities primarily occur in the Gulf of Mexico and the Eagle Ford Shale in South Texas. In 2023, the company produced an average of 108,084 barrels per day of crude oil and natural gas liquids alongside approximately 96 million cubic feet of natural gas daily. This accounted for a significant portion—94%—of the company’s total worldwide oil and natural gas liquid production, and 20.6% of its global natural gas production.

Offshore Production

Murphy Oil holds rights to approximately 600,000 gross acres in the Gulf of Mexico, where around 73% of its U.S. hydrocarbon production is derived from just ten major fields, such as St. Malo, Samurai, and Khaleesi. The company reported an average production of 79,397 barrels of crude oil and natural gas liquids and 70 million cubic feet of natural gas daily from Gulf of Mexico operations in 2023. As of year-end 2023, proved reserves in this area totaled 132.3 million barrels of oil and natural gas liquids, alongside 100.7 billion cubic feet of natural gas.

Onshore Production

In the Eagle Ford Shale, Murphy Oil maintains approximately 133,000 gross acres, yielding 28,641 barrels of oil and liquids per day along with 25.7 million cubic feet of natural gas daily. The company's proved reserves for this onshore business stood at 130 million barrels of liquids and 192.4 billion cubic feet of natural gas by the end of 2023.

Canadian Operations

In Canada, Murphy Oil's operations involve a mix of onshore and offshore assets. The company has working interests in significant play areas like Tupper Montney and Kaybob Duvernay, in addition to offshore assets at Hibernia and Terra Nova. In 2023, Murphy sold a portion of its working interests in Kaybob Duvernay, and its total daily production from Canadian onshore activities averaged 3,618 barrels of liquids and 370 million cubic feet of natural gas.

Offshore Canada

Murphy Oil operates non-operated interests in offshore Canada with a working interest in the Hibernia and Terra Nova fields. Production figures showed an average of 2,780 barrels of oil per day for Hibernia and 240 barrels for Terra Nova following its life extension project in late 2023. Total proved reserves for offshore Canada were recorded at approximately 22.3 million barrels of liquids and 14.8 billion cubic feet of natural gas.

International Operations

Murphy Oil has extended its reach outside North America, holding significant interests in Brazil, Brunei, Mexico, Vietnam, and Côte d’Ivoire. In Brazil, the company operates with non-operated interests in the Sergipe-Alagoas and Potiguar Basins, while in Brunei, it maintains an 8.051% working interest in Block CA-1.

Mexico

In the deep-water Salina Basin off the coast of Mexico, Murphy holds a 40% working interest and acts as the operator of Block 5, covering approximately 623,000 gross acres. While recent exploration wells did not yield commercial hydrocarbons, operations continue for future development potential.

Vietnam

In Vietnam, Murphy controls interests in several blocks totaling 7.3 million gross acres and has active plans to drill exploratory wells in 2024. Total proved reserves for the country by the end of 2023 amounted to around 12.1 million barrels of liquids and 2.8 billion cubic feet of natural gas.

Côte d’Ivoire

New explorations in Côte d’Ivoire were advanced in 2023 when Murphy signed Production Sharing Contracts (PSCs) for five offshore blocks in the Tano Basin, positioning itself as the operator and set to undertake seismic reprocessing for the discovery and development phases.

C. Proved Reserves

As of December 31, 2023, Murphy Oil reported a total of proved reserves of crude oil, natural gas liquids, and natural gas. The figures indicate a notable year-over-year increase primarily driven by extensions and discoveries in several areas, particularly in Onshore Canada and the Gulf of Mexico.

Breakdown of Proved Reserves

Murphy’s proved reserves statistics account for developed and undeveloped reserves accrued in various geographic areas, reflecting ongoing exploration and active operational strategies to enhance resource recovery. The company's capital spending initiatives aim for continued conversion of proved undeveloped reserves to productive outputs in a sustainable manner, projecting an annual investment of $450 million to $700 million for reserve development.

D. Sustainability Initiatives

Murphy Oil acknowledges the importance of sustainability in its operations and actively pursues strategies to reduce greenhouse gas emissions. The company has set ambitious goals to reduce its emissions intensity by 15% to 20% by 2030. Moreover, commitments to eliminate routine flaring have been endorsed, illustrating a proactive approach to environmental stewardship.