Murphy Oil Corporation Q3 FY2025 earnings call

• Production and Costs: Achieved 200,000 BOE/day, oil production 94,000 BOPD; operating costs $9.39/BOE, 20% lower than prior quarter; CapEx $164M, below guidance.
• International Projects: Lac Da Vang field development in Vietnam started drilling first development well; Hai Su Vang 2X Appraisal Well spudded; Civette exploration well in Cote d'Ivoire on track to spud by year-end.
• Operational Improvements: Onshore, Eagle Ford and Tupper Montney saw strong performance with lower costs and higher production; offshore workover spend reduced, leading to lower operating expenses.

Total production was 200,000 barrels of oil equivalents per day, with oil production at 94,000 barrels per day. Operating costs averaged $9.39 per BOE, 20% less than the prior quarter. Capital expenditures totaled $164 million, below guidance. Onshore, Eagle Ford and Tupper Montney showed strong performance with improved capital efficiency and low breakevens. Offshore, exploration and development projects like Lac Da Vang (Golden Camel) and Hai Su Vang 2X were progressing.

2026 CapEx plan under consideration, with flexibility based on commodity prices. If oil price is $60 or higher, base plan maintained; lower sustained prices may lead to capital plan adjustments. Offshore investments like Chinook 8 well expected to proceed. 2026 CapEx expected in $1.1B-$1.3B range. 4Q OpEx guided $10-$12 per barrel, driven by lower production modeling.

Commodity price volatility could impact capital plans. High operating expenses from non-operated host facilities in Dalmatian field led to impairment. Potential shut-ins in Montney due to low gas prices.

Q: Details on West Africa exploration program, especially Civette well and prospect re-sequencing A: Civette well to spud in Dec 2025, similar geology to Calao discovery; pivoted from Kobus to Bubale for lower cost, higher success chance.

Q: Down cycle playbook and 2026 CapEx A: Monitoring commodity markets, flexible capital program; offshore projects like Vietnam appraisal and Cote d'Ivoire program likely proceed in most price scenarios; 2026 CapEx expected in $1.1B-$1.3B range.

Q: Operational improvements and corporate breakeven A: Onshore wells showing 50%-100% above historical performance with CapEx neutral or savings; breakevens as low as $35 or less in Catarina program.

Q: Vietnam appraisal well and impairment A: HSV-2X well to determine reservoir continuity; impairment in Dalmatian field due to high operating expenses from non-operated host facility, no impact on other assets.

Q: U.S. onshore guide and Eagle Ford decline A: 4Q Eagle Ford decline due to typical shale well decline after high initial rates; Tupper Montney production down due to decline and higher royalties.

Q: Operating expenses and Montney shut-ins A: Lower offshore workover spend and high onshore production led to low 3Q OpEx; 4Q OpEx guided $10-$12/barrel due to lower production modeling; Montney modeled with typical decline and higher royalties.

Q: Buyback and Montney shut-ins A: Less active in share repurchase with current commodity prices; Montney shut-ins considered based on gas price levels.