MURPHY OIL CORP - FORM 8-K - EX-99.1

Attached files

file	filename
8-K - 8-K - MURPHY OIL CORP	d769678d8k.htm

Exhibit 99.1

MURPHY OIL ANNOUNCES PRELIMINARY SECOND QUARTER 2014 EARNINGS

EL DORADO, Arkansas, July 30, 2014 – Murphy Oil Corporation (NYSE: MUR) announced today that net income was $129.4 million ($0.72 per diluted share) in the 2014 second quarter, down from $402.6 million ($2.12 per diluted share) in the second quarter 2013. Income from continuing operations in the 2014 second quarter was $142.7 million ($0.79 per diluted share) compared to $259.9 million ($1.37 per diluted share) earned in the second quarter a year ago.

Adjusted earnings, which exclude both the results of discontinued operations and certain other items that affect comparability of results between periods, in the second quarter of 2014 was $161.7 million ($0.90 per diluted share). This was a decrease of $100.0 million ($0.48 per diluted share) compared to the prior year’s quarter. Adjusted earnings were lower in the 2014 quarter compared to the prior year primarily due to higher exploration expenses, higher extraction costs in Malaysia associated with several new field start ups, lower realized oil and natural gas sales prices for Sarawak production, unfavorable effects in the U.S. from commodity contracts, and higher financing costs. Realized Sarawak oil and gas prices in the current quarter were unfavorably impacted by larger revenue sharing payments required under the production sharing contracts.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for continuing operations totaled $792.3 million in the second quarter 2014, down from $850.7 million in the second quarter of 2013. EBITDA per barrel of oil equivalent sold was $40.20 in the 2014 quarter compared to $44.95 in the 2013 quarter. EBITDA was lower in 2014 mostly due to higher exploration costs, increased revenue sharing in Malaysia and the effects of oil commodity contracts.

Second quarter 2014 highlights were as follows:

•

Set a quarterly production record from continuing operations of over 210,000 barrels of oil equivalent per day (boepd)

•

Produced an Eagle Ford Shale (EFS) quarterly record of 52,814 net boepd up 6% from first quarter 2014 and 33% from second quarter 2013

•

Achieved first production at the Dalmatian project in the Gulf of Mexico (GOM) with both wells performing above expectations

•

Reduced lease operating expenses per barrel of oil equivalent (boe) for global operations by 8% in the first half of 2014 compared to the first half of 2013

•

Added 100 million boe of proved reserves at mid-year and remain on track for reserve replacement in excess of 150% for the fourth straight year

•

Initiated a $125 million share repurchase of Company Common stock approved by our Board of Directors on May 14, 2014, bringing our total stock repurchases since October 2012 to approximately 18 million shares

Roger W. Jenkins, President and Chief Executive Officer, commented, “We continue to make progress on three fronts: profitable production and reserves growth, execution at EFS, and lowering operating expenses. Production growth in the second half of the year is supported by completing all of the Siakap North-Petai well work, full start up of the Dalmatian field, the addition of 97 new EFS wells through mid-year, completion of Syncrude unplanned maintenance, further progress in the start up efforts at the non-operated Kakap-Gumusut field, and the addition of 7 wells through the first half of this year in our Sarawak oil projects. We are pleased with all facets of EFS execution, especially supply cost reductions and well downspacing results. Once again we will more than replace our production in 2014 and our overall operating expenses continue to trend down this year even with the initial start up of several fields.”

Operations Summary

Production

Second quarter production averaged 210,191 boepd. This was approximately 3% below our guidance of 217,000 boepd for the quarter. The shortfall for the quarter was primarily attributed to the global offshore business in Malaysia with lower oil and gas volumes related to a well operational delay on Kikeh, continued unplanned downtime at a third party methanol plant that processes Kikeh associated gas, a rig mobilization delay at a Sarawak oil platform, and various downtime events at shallow- and deep-water facilities.

Based on production levels in the just completed second quarter as well as early in the third quarter, the Company is now revising its projected full year 2014 production to a range of 220,000 to 225,000 barrels of oil per day (bopd). Several factors led to this reduction, including slower than expected recovery at Syncrude following unscheduled maintenance downtime in the second quarter, an unplanned short-term outage at the Kikeh production facility, and revisions for further risking of production through third-party operated facilities. The mid-point of the new range would represent an 8% increase from 2013 production levels.

North America Onshore

In the Eagle Ford Shale, second quarter production, which was comprised of 90% liquids, averaged 52,814 boepd net, up from 49,634 boepd in the prior quarter as we brought 53 new wells on line. We are operating eight drilling rigs and four completion spreads across the play and expect to bring on a total of 200 wells (including non-operated locations) this year. Downspacing across the play continues to deliver expected results and we are testing the further upside potential in the Upper Eagle Ford Shale zone which could yield 600+ additional well locations beyond the 1,500+ locations remaining to be drilled in the Lower Eagle Ford Shale. We are in advanced stages of negotiating two separate pipeline arrangements in our Karnes and Tilden areas of the EFS to transport up to 28,000 bopd net to market. This will reduce our exposure to trucking operations and improve overall reliability while maintaining our price advantage through the segregation of our premium quality crude oil in these dedicated systems.

In the Tupper area in Western Canada, we are moving forward with our plan to “drill to fill” our existing gas plant capacity with three rigs in operation to deliver 20 wells online by year-end. We have completed 7 new wells using our new completion and choke management strategies and we are seeing positive results. We expect this new strategy will yield EUR (Estimated Ultimate Recovery) increases in the play. We are currently processing approximately 60 million cubic feet per day (mmcfd) of third party gas in the Montney.

Global Offshore

In the Gulf of Mexico, we started up both high rate Dalmatian wells this quarter with better than planned results. The two wells, where we hold a 70% working interest, have the capability to deliver a combined rate in excess of 20,000 boepd gross with approximately 50% liquids. A third well is planned to be added to the project in Dalmatian South in Desoto Canyon Block 134 by early 2016. We will also add a fourth development well for Dalmatian at Desoto Canyon Block 4. We are moving forward with our expansion plans at Medusa in Mississippi Canyon where we operate with a 60% working interest. This development consists of drilling two wells later this year with a subsea tieback to the Medusa facility and first production in 2015.

In Malaysia, we were set back in our Kikeh field development plans by a previously reported rig fire earlier this year and a single well operational delay. The operational challenges are now resolved and the well work continues to plan. At Siakap North-Petai, where we hold a 32% working interest, we have completed the final two production wells with the field now flowing at approximately 33,000 bopd gross. Final commissioning of the Kakap-Gumusut main project, where we have a 14% working interest, progressed in the second quarter and we now see this field starting up late in the third quarter. In shallow water offshore Sarawak, we incurred a delay with mobilization of a jack-up rig resulting in a longer than planned platform shut-in at the beginning of the second quarter. This work has been completed and we have since brought three new wells online with above plan rates. We expect to add 9 more wells through the end of this year in our Sarawak oil developments.

Exploration

In the GOM, drilling operations continue on the Titan prospect in Desoto Canyon Block 178 as a small oil accumulation was encountered in the original wellbore in the planned objective and costs have been suspended. We are currently sidetracking the well to test a 130 million barrel gross mean prospect in an adjacent fault block.

In other exploration drilling, the Hon Khoai prospect in Vietnam and the Serai-1 well and associated sidetrack testing the Bawang Putih prospect in Indonesia were plugged and abandoned as dry holes with a total of $16.5 million expensed in the second quarter. The Indonesia wells will carry an expense of approximately $7.9 million in the third quarter.

We expect to spud the Urca prospect in Mississippi Canyon Block 697, where we hold a 50% working interest as operator, in the third quarter. This lower Miocene sub-salt structure has a pre-drill gross mean resource size of 130 million barrels.

We completed 2D and 3D seismic programs in Vietnam and Namibia, respectively, in the second quarter and are currently processing the data. We are advancing our plan to acquire seismic across Block EPP 43 in the Ceduna basin offshore Australia starting in the fourth quarter.

Earnings Conference Call

The public is invited to access the Company’s conference call to discuss second quarter 2014 results on Thursday, July 31 at 12:00 p.m. CDT either via the Internet through the Investor Relations section of Murphy Oil’s Web site at http://ir.murphyoilcorp.com or via the telephone by dialing 1-877-329-7568. The telephone reservation number for the call is 9711325. Replays of the call will be available through the same address on Murphy Oil’s Web site, and a recording of the call will be available through August 4 by calling 1-888-203-1112 and referencing reservation number 9711325. A replay of the conference call will also be available on the Murphy Web site for 30 days after the event and via Thomson StreetEvents for their service subscribers.

Financial Data

Summary financial data and operating statistics for the second quarter of 2014 with comparisons to 2013 are contained in the following tables. Additionally, a schedule indicating the impacts of items affecting comparability of earnings between periods and a schedule comparing EBITDA between periods are included with these tables as well as guidance for the third quarter.

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management’s current views concerning future events or results, including Murphy’s plans to divest its U.K. downstream operations, are subject to inherent risks and uncertainties. Factors that could cause one or more of these forecasted events not to occur include, but are not limited to, a failure to obtain necessary regulatory approvals, a deterioration in the business or prospects of Murphy or its U.K. refining and marketing business, adverse developments in Murphy or its U.K. refining and marketing business’ markets, adverse developments in the U.S. or global capital markets, credit markets or economies in general, or a failure to execute a sale of the U.K. downstream operations on acceptable terms or in the timeframe contemplated. Factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements include, but are not limited to, the volatility and level of crude oil and natural gas prices, the level and success rate of our exploration programs, our ability to maintain production rates and replace reserves, customer demand for our products, adverse foreign exchange movements, political and regulatory instability, and uncontrollable natural hazards. For further discussion of risk factors, see Murphy’s 2013 Annual Report on Form 10-K on file with the U.S. Securities and Exchange Commission. Murphy undertakes no duty to publicly update or revise any forward-looking statements.

This news release also contains certain historical non-GAAP measures of financial performance that management believes are good tools for internal use and the investment community in evaluating Murphy Oil Corporation’s overall financial performance. These non-GAAP measures are broadly used to value and compare companies in the crude oil and natural gas industry. Please see the attached schedules for reconciliations of the differences between non-GAAP measures used in this news release and the most directly comparable GAAP financial measures.

The Securities and Exchange Commission requires oil and 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. The SEC permits the optional disclosure of probable and possible reserves; however, we have not disclosed the Company’s probable and possible reserves in our

filings with the SEC. We use the term “gross mean resources” in this news release. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized. The SEC guidelines strictly prohibit us from including these estimates in 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 and in other reports on file with the SEC, available from Murphy Oil Corporation’s offices or Web site at http://ir.murphyoilcorp.com.

####

MURPHY OIL CORPORATION

SUMMARIZED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Thousands of dollars, except per share amounts)


	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013*			2014			2013*
Revenues	$	1,349,021			1,331,986			2,635,421			2,622,924

Costs and expenses
Lease operating expenses		285,865			251,775			548,120			588,998
Severance and ad valorem taxes		28,893			20,334			55,219			35,397
Exploration expenses		134,812			88,772			273,278			197,265
Selling and general expenses		95,000			86,904			187,026			168,371
Depreciation, depletion and amortization		458,993			381,384			855,242			744,526
Accretion of asset retirement obligations		12,327			11,961			24,392			23,857
Impairment of assets		—			21,587			—			21,587
Interest expense		33,769			29,593			66,655			56,621
Interest capitalized		(5,053	)		(14,478	)		(13,921	)		(27,866	)
Other expense		(178	)		—			636			—

		1,044,428			877,832			1,996,647			1,808,756

Income from continuing operations before income taxes		304,593			454,154			638,774			814,168
Income tax expense		161,925			194,265			326,820			371,596

Income from continuing operations		142,668			259,889			311,954			442,572
Income (loss) from discontinued operations, net of income taxes		(13,256	)		142,755			(27,289	)		320,671

Net income	$	129,412			402,644			284,665			763,243

Income (loss) per Common share—Basic
Continuing operations	$	0.80			1.38			1.73			2.33
Discontinued operations		(0.08	)		0.75			(0.15	)		1.69

Net income	$	0.72			2.13			1.58			4.02

Income (loss) per Common share—Diluted
Continuing operations	$	0.79			1.37			1.72			2.32
Discontinued operations		(0.07	)		0.75			(0.15	)		1.68

Net income	$	0.72			2.12			1.57			4.00

Cash dividends per Common share	$	0.3125			0.3125			0.625			0.625
Average Common shares outstanding (thousands)
Basic		178,500			189,002			180,004			189,754
Diluted		180,045			189,945			181,328			190,702

*	Reclassified to conform to current presentation.

MURPHY OIL CORPORATION

SUMMARIZED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(Thousands of dollars)


	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013¹			2014			2013¹
Operating Activities
Net income	$	129,412			402,644			284,665			763,243
Adjustments to reconcile net income to net cash provided by operating activities
Loss (income) from discontinued operations		13,256			(142,755	)		27,289			(320,671	)
Depreciation, depletion and amortization		458,993			381,384			855,242			744,526
Impairment of assets		—			21,587			—			21,587
Amortization of deferred major repair costs		1,572			2,425			4,313			4,415
Dry hole costs		39,918			40,294			127,827			81,305
Amortization of undeveloped leases		24,934			16,662			37,764			32,052
Accretion of asset retirement obligations		12,327			11,961			24,392			23,857
Deferred and noncurrent income tax charges (benefits)		(5,045	)		47,419			18,122			72,745
Pretax loss from disposition of assets		5,016			266			4,997			224
Net (increase) decrease in operating working capital other than cash and cash equivalents		29,776			(232,761	)		48,449			(131,812	)
Other—net		19,133			(8,591	)		22,106			(22,487	)

Net cash provided by continuing operations		729,292			540,535			1,455,166			1,268,984
Net cash provided (used) by discontinued operations		(5,488	)		207,348			4,517			400,026

Net cash provided by operating activities		723,804			747,883			1,459,683			1,669,010

Investing Activities
Property additions and dry holes		(844,326	)		(888,490	)		(1,840,544	)		(1,853,902	)
Proceeds from sale of assets		3,063			130			3,089			130
Purchases of investment securities²		(132,059	)		(142,876	)		(372,861	)		(373,196	)
Proceeds from maturity of investment securities²		76,690			228,530			320,331			358,915
Investing activities of discontinued operations
Sales proceeds		—			70,653			—			282,202
Property additions and other		(4,226	)		(40,539	)		(9,092	)		(122,807	)
Other—net		(9,271	)		(408	)		(13,007	)		1,718

Net cash required by investing activities		(910,129	)		(773,000	)		(1,912,084	)		(1,706,940	)

Financing Activities
Borrowings of notes payable		371,000			199,989			850,000			461,978
Purchase of treasury stock		(125,000	)		(250,000	)		(375,000	)		(250,000	)
Proceeds from exercise of stock options		—			1,347			—			2,628
Withholding tax on stock-based incentive awards		(465	)		(1,629	)		(6,784	)		(8,966	)
Cash dividends paid		(56,053	)		(59,704	)		(112,126	)		(119,376	)
Other		(984	)		(2,633	)		(1,224	)		(2,724	)

Net cash provided (required) by financing activities		188,498			(112,630	)		354,866			83,540

Effect of exchange rate changes on cash and cash equivalents		10,301			(4,932	)		8,466			(18,500	)

Net increase (decrease) in cash and cash equivalents		12,474			(142,679	)		(89,069	)		27,110
Cash and cash equivalents at beginning of period		648,612			1,117,105			750,155			947,316

Cash and cash equivalents at end of period	$	661,086			974,426			661,086			974,426

¹	Reclassified to conform to current presentation.

²	Represents cash invested in Canadian government securities with maturities greater than 90 days at the date of acquisition.

MURPHY OIL CORPORATION

SCHEDULE OF ADJUSTED EARNINGS

(Unaudited)

(Millions of dollars, except per share amounts)


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2014		2013			2014			2013
Net income	$	129.4		402.6			284.7			763.2
Discontinued operations (income) loss		13.3		(142.7	)		27.3			(320.6	)

Income from continuing operations		142.7		259.9			312.0			442.6
Impairments of properties		—		15.9			—			15.9
Mark-to-market loss on crude oil derivative contracts		11.8		—			23.7			—
Foreign exchange (gains) losses		7.2		(16.2	)		4.1			(12.2	)
Oil Insurance Limited dividend		—		—			(3.3	)		—
Expenses associated with spin-off of MUSA		—		2.1			—			2.8

Adjusted earnings	$	161.7		261.7			336.5			449.1

Adjusted earnings per diluted share	$	0.90		1.38			1.86			2.35

Non-GAAP Financial Measures

Presented above is a reconciliation of Net income to Adjusted earnings. Adjusted earnings excludes certain items that management believes affect the comparability of earnings between periods. Management believes this is important information to provide because it is used by management to evaluate the Company’s operational performance and trends between periods and relative to its industry competitors. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company’s financial results. Adjusted earnings is a non-GAAP financial measure and should not be considered a substitute for Net income as determined in accordance with accounting principles generally accepted in the United States of America.

Note:

Amounts shown above as reconciling items between Net income and Adjusted earnings are presented net of applicable income taxes.

MURPHY OIL CORPORATION

SCHEDULE OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION

AND AMORTIZATION (EBITDA)

(Unaudited)

(Millions of dollars, except per barrel of oil equivalents sold)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
Income from continuing operations	$	142.7			259.9			312.0			442.6
Income tax expense		161.9			194.3			326.8			371.6
Interest expense		33.8			29.6			66.6			56.6
Interest capitalized		(5.1	)		(14.5	)		(13.9	)		(27.9	)
Depreciation, depletion and amortization expense		459.0			381.4			855.2			744.5

Earnings before interest, taxes, depreciation and amortization (EBITDA)	$	792.3			850.7			1,546.7			1,587.4

Total barrels of oil equivalents sold from continuing operations (thousands of barrels)		19,710.2			18,925.3			37,755.5			37,323.7

EBITDA per barrel of oil equivalents sold	$	40.20			44.95			40.97			42.53

Non-GAAP Financial Measures

Presented above is a reconciliation of Income from continuing operation to Earnings before interest, taxes, depreciation and amortization (EBITDA). Management believes EBITDA is important information to provide because it is used by management to evaluate the Company’s operational performance and trends between periods and relative to its industry competitors. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company’s financial results. EBITDA is a non-GAAP financial measure and should not be considered a substitute for Net income or Cash provided by operating activities as determined in accordance with accounting principles generally accepted in the United States of America.

MURPHY OIL CORPORATION

FUNCTIONAL RESULTS OF OPERATIONS (Unaudited)

(Millions of dollars)


	Three Months Ended						Three Months Ended
	June 30, 2014						June 30, 2013
	Revenues			Income			Revenues			Income
Exploration and production
United States	$	507.3			101.7			444.2			122.9
Canada		262.8			52.9			316.8			51.7
Malaysia		583.0			172.3			554.7			213.5
Other		(0.2	)		(126.1	)		(0.4	)		(97.9	)

Total exploration and production		1,352.9			200.8			1,315.3			290.2
Corporate and other		(3.9	)		(58.1	)		16.7			(30.3	)

Revenue/income from continuing operations		1,349.0			142.7			1,332.0			259.9
Discontinued operations, net of tax		—			(13.3	)		—			142.7

Total revenues/net income	$	1,349.0			129.4			1,332.0			402.6


	Six Months Ended						Six Months Ended
	June 30, 2014						June 30, 2013
	Revenues			Income			Revenues			Income
Exploration and production
United States	$	992.8			204.8			853.1			216.7
Canada		560.5			120.5			577.6			65.0
Malaysia		1,075.8			334.6			1,114.7			418.7
Other		(0.2	)		(248.5	)		68.9			(178.3	)

Total exploration and production		2,628.9			411.4			2,614.3			522.1
Corporate and other		6.5			(99.4	)		8.6			(79.5	)

Revenue/income from continuing operations		2,635.4			312.0			2,622.9			442.6
Discontinued operations, net of tax		—			(27.3	)		—			320.6

Total revenues/net income	$	2,635.4			284.7			2,622.9			763.2

Note:

Corporate and other above includes unallocated administrative expenses, interest income and net interest expense, the impacts of foreign exchange, and income taxes associated with these income and expense items.

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (Unaudited)

THREE MONTHS ENDED JUNE 30, 2014 AND 2013


	United		Canada
(Millions of dollars)	States		Conventional			Synthetic		Malaysia		Other			Total
Three Months Ended June 30, 2014
Oil and gas sales and other revenues	$	507.3		173.7			89.1		583.0		(0.2	)		1,352.9
Lease operating expenses		81.6		39.7			60.8		103.7		—			285.8
Severance and ad valorem taxes		26.5		1.2			1.2		—		—			28.9
Depreciation, depletion and amortization		188.6		62.4			12.3		192.4		1.2			456.9
Accretion of asset retirement obligations		4.3		1.6			2.3		4.2		—			12.4
Exploration expenses
Dry holes		0.7		—			—		—		39.2			39.9
Geological and geophysical		1.3		0.1			—		—		37.9			39.3
Other		2.4		0.2			—		—		28.1			30.7

		4.4		0.3			—		—		105.2			109.9
Undeveloped lease amortization		18.7		5.0			—		—		1.2			24.9

Total exploration expenses		23.1		5.3			—		—		106.4			134.8

Selling and general expenses		24.6		7.2			0.2		5.0		19.0			56.0
Other expenses		0.5		—			—		—		(0.7	)		(0.2	)

Results of operations before taxes		158.1		56.3			12.3		277.7		(126.1	)		378.3
Income tax provisions		56.4		12.5			3.2		105.4		—			177.5

Results of operations (excluding corporate overhead and interest)	$	101.7		43.8			9.1		172.3		(126.1	)		200.8

Three Months Ended June 30, 2013
Oil and gas sales and other revenues	$	444.2		200.1			116.7		554.7		(0.4	)		1,315.3
Lease operating expenses		64.9		51.5			57.8		68.9		8.7			251.8
Severance and ad valorem taxes		18.2		0.9			1.2		—		—			20.3
Depreciation, depletion and amortization		137.7		85.9			14.0		139.7		1.4			378.7
Accretion of asset retirement obligations		3.3		1.5			2.5		3.4		1.3			12.0
Impairment of properties		—		21.6			—		—		—			21.6
Exploration expenses
Dry holes		—		(0.1	)		—		0.8		39.6			40.3
Geological and geophysical		0.4		(0.7	)		—		0.8		19.7			20.2
Other		3.1		0.3			—		—		8.2			11.6

		3.5		(0.5	)		—		1.6		67.5			72.1
Undeveloped lease amortization		7.2		5.3			—		—		4.2			16.7

Total exploration expenses		10.7		4.8			—		1.6		71.7			88.8

Selling and general expenses		19.5		4.9			0.2		0.1		14.5			39.2

Results of operations before taxes		189.9		29.0			41.0		341.0		(98.0	)		502.9
Income tax provisions (benefits)		67.0		7.6			10.7		127.5		(0.1	)		212.7

Results of operations (excluding corporate overhead and interest)	$	122.9		21.4			30.3		213.5		(97.9	)		290.2

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (Unaudited)

SIX MONTHS ENDED JUNE 30, 2014 AND 2013


	United		Canada
(Millions of dollars)	States		Conventional			Synthetic		Malaysia		Other			Total
Six Months Ended June 30, 2014
Oil and gas sales and other revenues	$	992.8		353.9			206.6		1,075.8		(0.2	)		2,628.9
Lease operating expenses		158.1		80.5			124.5		185.0		—			548.1
Severance and ad valorem taxes		50.4		2.5			2.3		—		—			55.2
Depreciation, depletion and amortization		356.7		130.2			26.4		335.4		2.3			851.0
Accretion of asset retirement obligations		8.4		3.1			4.6		8.3		—			24.4
Exploration expenses
Dry holes		7.5		—			—		—		120.3			127.8
Geological and geophysical		15.8		0.2			—		—		53.4			69.4
Other		4.1		0.5			—		—		33.7			38.3

		27.4		0.7			—		—		207.4			235.5
Undeveloped lease amortization		25.4		9.9			—		—		2.5			37.8

Total exploration expenses		52.8		10.6			—		—		209.9			273.3

Selling and general expenses		47.6		15.1			0.5		8.4		36.1			107.7
Other expenses		0.5		0.1			—		—		—			0.6

Results of operations before taxes		318.3		111.8			48.3		538.7		(248.5	)		768.6
Income tax provisions		113.5		27.0			12.6		204.1		—			357.2

Results of operations (excluding corporate overhead and interest)	$	204.8		84.8			35.7		334.6		(248.5	)		411.4

Six Months Ended June 30, 2013
Oil and gas sales and other revenues	$	853.1		355.5			222.1		1,114.7		68.9			2,614.3
Lease operating expenses		142.4		94.0			112.5		155.5		84.6			589.0
Severance and ad valorem taxes		31.1		1.8			2.5		—		—			35.4
Depreciation, depletion and amortization		268.1		167.4			27.7		273.6		2.6			739.4
Accretion of asset retirement obligations		6.6		3.0			5.2		6.7		2.4			23.9
Impairment of properties		—		21.6			—		—		—			21.6
Exploration expenses
Dry holes		0.7		30.4			—		1.2		49.0			81.3
Geological and geophysical		13.1		(0.6	)		—		1.1		46.1			59.7
Other		4.6		0.6			—		—		19.0			24.2

		18.4		30.4			—		2.3		114.1			165.2
Undeveloped lease amortization		13.3		10.6			—		—		8.2			32.1

Total exploration expenses		31.7		41.0			—		2.3		122.3			197.3

Selling and general expenses		35.6		11.3			0.4		0.6		28.7			76.6

Results of operations before taxes		337.6		15.4			73.8		676.0		(171.7	)		931.1
Income tax provisions		120.9		4.8			19.4		257.3		6.6			409.0

Results of operations (excluding corporate overhead and interest)	$	216.7		10.6			54.4		418.7		(178.3	)		522.1

MURPHY OIL CORPORATION

PRODUCTION-RELATED EXPENSES

(Dollars per barrel of oil equivalents sold)


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2014		2013			2014		2013
United States – Eagle Ford Shale
Lease operating expense		9.79		10.09			10.33		13.28
Severance and ad valorem taxes		5.48		4.99			5.41		4.96
Depreciation, depletion and amortization (DD&A) expense		27.96		30.10			28.44		31.35
United States – Gulf of Mexico and other
Lease operating expense		16.89		18.43			16.83		17.41
Severance and ad valorem taxes		0.05		0.08			0.06		0.07
DD&A expense		26.45		18.79			25.15		21.32
Canada – Conventional operations
Lease operating expense		11.22		11.45			10.92		10.59
Severance and ad valorem taxes		0.36		0.20			0.35		0.20
DD&A expense		17.59		19.09			17.64		18.86
Canada – Synthetic oil operations
Lease operating expense		69.68		48.84			59.16		48.89
Severance and ad valorem taxes		1.33		1.06			1.09		1.10
DD&A expense		14.10		11.88			12.54		12.04
Malaysia
Lease operating expense – Sarawak		9.73		3.84	*		9.80		8.02	*
– Block K		14.88		11.47			15.03		10.86
DD&A expense – Sarawak		19.76		10.69			19.41		10.89
– Block K		25.87		21.44			25.15		21.07
Total Oil and Gas Operations
Lease operating expense		14.50		13.30			14.52		15.78
Severance and ad valorem taxes		1.47		1.07			1.46		0.95
DD&A expense		23.18		20.01			22.54		19.81

*	2013 affected by favorable adjustment associated with finalization of gas liquids processing fees retroactive to the beginning of this production.

MURPHY OIL CORPORATION

OTHER FINANCIAL DATA

(Unaudited, except for December 31, 2013)

(Millions of dollars)


	June 30,		Dec. 31,
	2014		2013
Total current assets	$	3,134.9		3,508.6
Total current liabilities		2,850.5		3,224.0
Total assets		17,873.9		17,509.5
Long-term debt		3,786.5		2,936.6
Stockholders’ equity		8,398.9		8,595.7


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2014		2013			2014		2013
Capital expenditures—continuing operations
Exploration and production
United States	$	555.2		487.0			1,096.3		999.9
Canada		97.6		98.6			176.8		239.6
Malaysia		211.2		347.0			366.4		570.0
Other		102.6		61.9			213.6		151.0

		966.6		994.5			1,853.1		1,960.5

Corporate		2.5		2.8			3.2		6.6

Total capital expenditures—continuing operations		969.1		997.3			1,856.3		1,967.1

Charged to exploration expenses*
United States		4.4		3.5			27.4		18.4
Canada		0.3		(0.5	)		0.7		30.4
Malaysia		—		1.6			—		2.3
Other		105.2		67.5			207.4		114.1

Total charged to exploration expenses		109.9		72.1			235.5		165.2

Total capitalized—continuing operations	$	859.2		925.2			1,620.8		1,801.9

*Excludes amortization of undeveloped leases of	$	24.9		16.7			37.8		32.1

MURPHY OIL CORPORATION

STATISTICAL SUMMARY


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Net crude oil and condensate produced – barrels per day		130,750		131,758		131,159		128,910
Continuing operations		130,750		130,791		131,159		127,604
United States – Eagle Ford Shale		42,382		34,261		41,573		29,710
– Gulf of Mexico and other		11,561		10,631		11,605		12,658
Canada – light		48		162		38		195
– heavy		7,533		10,920		7,763		9,726
– offshore		7,991		9,641		8,416		9,443
– synthetic		9,576		13,000		11,624		12,710
Malaysia – Sarawak		17,876		6,674		18,528		5,983
– Block K		33,783		44,268		31,612		45,855
Republic of the Congo		—		1,234		—		1,324
Discontinued operations – United Kingdom		—		967		—		1,306
Net crude oil and condensate sold – barrels per day		137,852		133,897		132,639		132,538
Continuing operations		137,852		132,942		132,639		131,285
United States – Eagle Ford Shale		42,382		34,261		41,573		29,710
– Gulf of Mexico and other		11,561		10,631		11,605		12,658
Canada – light		48		162		38		195
– heavy		7,533		10,920		7,763		9,726
– offshore		8,887		10,145		9,374		9,050
– synthetic		9,576		13,000		11,624		12,710
Malaysia – Sarawak		19,617		6,517		20,081		6,644
– Block K		38,248		47,306		30,581		47,190
Republic of the Congo		—		—		—		3,402
Discontinued operations – United Kingdom		—		955		—		1,253
Net natural gas liquids produced – barrels per day¹		8,583		3,759		7,389		2,316
United States – Eagle Ford Shale		5,383		2,099		4,844		1,173
– Gulf of Mexico and other		2,399		1,033		1,747		524
Canada		24		—		23		—
Malaysia – Sarawak		777		627		775		619
Net natural gas liquids sold – barrels per day¹		7,886		3,209		7,174		1,770
United States – Eagle Ford Shale		5,383		2,099		4,844		1,173
– Gulf of Mexico and other		2,399		1,033		1,747		524
Canada		24		—		23		—
Malaysia – Sarawak		80		77		560		73
Net natural gas sold – thousands of cubic feet per day		425,148		431,302		412,686		440,562
Continuing operations		425,148		430,913		412,686		438,919
United States – Eagle Ford Shale		30,295		19,906		28,895		20,535
– Gulf of Mexico and other		51,311		31,871		42,543		35,074
Canada		134,828		169,166		141,360		180,420
Malaysia – Sarawak		161,343		167,447		161,501		158,316
– Block K		47,371		42,523		38,387		44,574
Discontinued operations – United Kingdom		—		389		—		1,643
Total net hydrocarbons produced – equivalent barrels per day²		210,191		207,401		207,329		204,653
Total net hydrocarbons sold – equivalent barrels per day²		216,596		208,990		208,594		207,735

¹	U.S. and Canada NGLs were included in the wet natural gas stream during early 2013.

²	Natural gas converted on an energy equivalent basis of 6:1.

MURPHY OIL CORPORATION

STATISTICAL SUMMARY (Continued)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Weighted average sales prices
Crude oil and condensate – dollars per barrel
United States – Eagle Ford Shale		95.88		101.38		96.65		103.07
– Gulf of Mexico and other		101.88		103.92		101.06		106.55
Canada¹ – light		97.69		85.92		96.31		83.64
– heavy		61.34		49.90		56.21		39.87
– offshore		109.42		102.47		108.42		106.39
– synthetic		102.77		98.64		98.42		96.53
Malaysia – Sarawak²		88.17		94.23		95.32		98.45
– Block K²		91.61		89.97		97.16		91.35
Republic of the Congo²		—		—		—		112.89
Discontinued operations – United Kingdom		—		101.40		—		108.58
Natural gas liquids – dollars per barrel
United States – Eagle Ford Shale		27.70		27.06		30.36		27.06
– Gulf of Mexico and other		32.69		31.69		34.67		31.69
Canada¹		96.63		—		82.65		—
Malaysia – Sarawak²		78.46		101.84		86.60		104.10
Natural gas – dollars per thousand cubic feet
United States – Eagle Ford Shale		4.30		4.18		4.43		3.92
– Gulf of Mexico and other		4.46		4.52		4.68		3.89
Canada¹		3.80		3.40		3.83		3.19
Malaysia – Sarawak²		5.32		6.98		5.87		7.03
– Block K		0.23		0.24		0.24		0.24
Discontinued operations – United Kingdom		—		12.47		—		12.32

¹	U.S. dollar equivalent.

²	Prices are net of payments under the terms of the respective production sharing contracts.

MURPHY OIL CORPORATION

STATISTICAL SUMMARY (Continued)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
Refining and Marketing – Discontinued Operations
U.K. refining and marketing – operating unit margin per barrel of petroleum products sold	$	(1.72	)		(0.27	)		(1.15	)		(0.16	)
U.K. petroleum products sold – barrels per day		72,217			137,517			99,783			127,950
Gasoline		25,090			49,103			35,449			46,819
Kerosine		6,732			15,370			12,409			15,238
Diesel and home heating oils		27,612			51,103			34,817			46,592
Residuals		7,227			16,869			8,723			14,795
LPG and other		5,556			5,072			8,385			4,506
U.K. refinery inputs – barrels per day		52,321			133,220			85,752			124,542
Milford Haven, Wales – crude oil		50,279			130,324			82,741			121,417
– other feedstocks		2,042			2,896			3,011			3,125
U.K. refinery yields – barrels per day		52,321			133,220			85,752			124,542
Gasoline		22,381			47,292			31,931			43,875
Kerosine		7,201			17,058			11,985			16,266
Diesel and home heating oils		18,427			48,626			28,239			44,637
Residuals		4,837			15,309			8,040			13,731
LPG and other		(2,761	)		1,757			3,137			2,952
Fuel and loss		2,236			3,178			2,420			3,081

MURPHY OIL CORPORATION

THIRD QUARTER 2014 GUIDANCE


	Liquids			Gas
	BOPD			MCFD
Production – net
U.S. – Eagle Ford Shale		54,500			36,000
– Gulf of Mexico		17,000			58,500
Canada – Seal heavy		7,000			4,000
– Montney		—			141,000
– Offshore		8,500			—
– Synthetic		13,500			—
Malaysia – Block K		33,500			17,000
– Sarawak		21,500			160,500
Total net production (BOEPD)			225,000
Total net sales (BOEPD)			218,000
Expected realized oil prices:
Malaysia – Block K	$	89.96
– Sarawak	$	84.13
Exploration expense range ($ millions)	$	65 - $125

FULL YEAR 2014 GUIDANCE


Total production (BOEPD)			220,000 to 225,000

MURPHY OIL CORP - FORM 8-K - EX-99.1 - July 31, 2014

Attached files

MURPHY OIL CORP Reports