• Accomplished 2023 Debt Reduction Goal of $500 Million,
• Repurchased $150 Million of Shares in Accordance With Capital Allocation Framework,
• Increased Dividend 9 Percent Annualized in 2024,
• Achieved 139 Percent Total Reserve Replacement Ratio
• With Preliminary Proved Reserves of 724 MMBOE

Murphy Oil Corporation today announced its financial and operating results for the fourth quarter ended December 31, 2023, including net income attributable to Murphy of $116 million, or $0.75 net income per diluted share. Excluding discontinued operations and other items affecting comparability between periods, adjusted net income attributable to Murphy was $140 million, or $0.90 adjusted net income per diluted share.

For full year 2023, the company recorded net income attributable to Murphy of $662 million, or $4.22 net income per diluted share. Murphy reported adjusted net income, which excludes both the results of discontinued operations and other items affecting comparability between periods, of $709 million, or $4.52 adjusted net income per diluted share.

Unless otherwise noted, the financial and operating highlights and metrics discussed in this commentary exclude noncontrolling interest (NCI). (1)

Highlights for the fourth quarter include:

• Produced 185 thousand barrels of oil equivalent per day (MBOEPD), with 94 thousand barrels of oil per day (MBOPD), or 51 percent oil volumes
• Retired $250 million of senior notes due 2027, 2028 and 2029 through a tender offer
• Repurchased $75 million, or 1.7 million shares, at an average price of $43.42 per share
• Named apparent high bidder on eight exploration blocks in the Gulf of Mexico Federal Lease Sale 261
• Acquired 8 percent working interest in the non-operated Zephyrus discovery in the Gulf of Mexico for $13 million after closing adjustments
• Resumed operations at the non-operated Terra Nova field in offshore Canada with production expected to ramp up through first quarter 2024

Highlights for full year 2023 include:

• Achieved $500 million debt reduction goal for 2023, resulting in $1.7 billion of total debt reduction and $84 million in annual interest expense savings since year-end 2020
• Repurchased $150 million of shares with $450 million remaining under the share repurchase authorization
• Increased quarterly cash dividend by 10 percent to $0.275 per share, or $1.10 per share annualized
• Drilled a discovery at the Longclaw #1 operated exploration well in Green Canyon 433 in the Gulf of Mexico
• Sanctioned the Lac Da Vang field development project in Vietnam
• Enhanced exploration portfolio with signing production sharing contracts for five blocks in Côte d’Ivoire
• Produced 186 MBOEPD with 98 MBOPD, or 52 percent oil volumes
• Realized 139 percent total reserve replacement with nearly 11-year reserve life and 724 million barrels of oil equivalent (MMBOE) preliminary total proved reserves at year-end 2023
• Ranked in top quartile of ISS Governance QualityScore in 2023

“We had a strong year of production and excellent execution, generating ample free cash flow to advance our capital allocation framework. This allowed us to return $150 million to shareholders through buybacks and retire $500 million of debt, resulting in a nearly 60 percent decrease in debt since year-end 2020,” said Roger W. Jenkins, President and Chief Executive Officer. “Our ongoing financial stewardship has given us momentum going into 2024, beginning with an increase to our longstanding dividend and restoring it to its 2016 level.”

FOURTH QUARTER 2023 RESULTS

The company recorded net income attributable to Murphy of $116 million, or $0.75 net income per diluted share, for the fourth quarter 2023. Adjusted net income, which excludes both the results of discontinued operations and certain other items that affect comparability of results between periods, was $140 million, or $0.90 per diluted share for the same period. Adjustments to net income totaled $28 million before tax. 

Earnings before interest, taxes, depreciation and amortization (EBITDA) attributable to Murphy were $375 million. Earnings before interest, tax, depreciation, amortization and exploration expenses (EBITDAX) attributable to Murphy were $457 million. Adjusted EBITDA attributable to Murphy was $414 million. Adjusted EBITDAX attributable to Murphy was $496 million.

Fourth quarter production averaged 185 MBOEPD and included 51 percent oil volumes, or 94 MBOPD. Production for the quarter was in-line with guidance, with slightly lower Gulf of Mexico and Eagle Ford Shale production partially offset by lower realized royalty rates in the Tupper Montney asset.

Accrued capital expenditures (CAPEX) for fourth quarter 2023 totaled $219 million, excluding NCI and acquisition-related CAPEX. Details for fourth quarter production and CAPEX can be found in the attached schedules.

FULL YEAR 2023 RESULTS

The company recorded net income attributable to Murphy of $662 million, or $4.22 net income per diluted share, for full year 2023. Adjusted net income, which excludes both the results of discontinued operations and certain other items that affect comparability of results between periods, was $709 million, or $4.52 per diluted share for the same period. Adjustments to net income were primarily attributable to a $17 million write-off of a previously suspended exploration well and $17 million of asset retirement obligation losses, with the remainder totaling $18 million before tax.

EBITDA attributable to Murphy was $1.8 billion. EBITDAX attributable to Murphy was $2.0 billion. Adjusted EBITDA attributable to Murphy was $1.9 billion. Adjusted EBITDAX attributable to Murphy was $2.1 billion. 

Production for full year 2023 averaged 186 MBOEPD and included 52 percent oil volumes, or 98 MBOPD. Accrued CAPEX for full year 2023 totaled $1,008 million, excluding NCI and $60 million of acquisition-related CAPEX.

CAPITAL ALLOCATION FRAMEWORK

Murphy had approximately $1.1 billion of liquidity on December 31, 2023, with no borrowings on the $800 million senior unsecured credit facility and $317 million of cash and cash equivalents, inclusive of NCI.

In 2023, Murphy executed $500 million of debt reduction transactions through the redemption of the remaining $250 million of senior notes due 2025, as well as the aggregate tender offer of $250 million of senior notes due 2027, 2028 and 2029.

At the end of the fourth quarter, Murphy’s total debt was reduced to $1.3 billion, and consisted of long-term, fixed-rate notes with a weighted average maturity of 8.1 years and a weighted average coupon of 6.2 percent.

During the fourth quarter, Murphy repurchased $75 million, or 1.7 million shares, at an average price of $43.42 per share. This brings the 2023 total share repurchases to $150 million, or 3.4 million shares, at an average price of $43.96 per share, reflecting a 2 percent total reduction in share count for the year. As of year-end 2023, Murphy had $450 million remaining under the share repurchase authorization and 152.7 million shares outstanding.

“I am pleased our ongoing debt reduction efforts are enhancing our balance sheet and extending our debt maturity profile, with the next tranche of senior notes not due until December 2027,” said Jenkins. “Since announcing our capital allocation framework in August 2022, we have reduced long-term debt by approximately $950 million, repurchased $150 million of shares and increased the quarterly dividend by 20 percent. This is an incredible accomplishment and reflects Murphy’s steady commitment to enhance shareholder value.”

YEAR-END 2023 PROVED RESERVES

After producing 68 MMBOE for the year, Murphy’s preliminary year-end 2023 proved reserves were 724 MMBOE, consisting of 36 percent oil and 41 percent liquids. Total reserve replacement was 139 percent in 2023.

The company maintained a consistent reserve life of nearly 11 years with 57 percent proved developed reserves.

OPERATIONS SUMMARY

Onshore

In the fourth quarter of 2023, the onshore business produced approximately 100 MBOEPD, which included 30 percent liquids volumes.

Eagle Ford Shale – Fourth quarter production averaged 31 MBOEPD with 71 percent oil volumes and 86 percent liquids volumes. Three non-operated wells were brought online in Tilden during the quarter as planned.

Tupper Montney – Natural gas production averaged 386 million cubic feet per day (MMCFD) in the fourth quarter, with no new wells brought online.

Kaybob Duvernay – During the fourth quarter, production averaged 4 MBOEPD with 69 percent liquids volumes.

Offshore

Excluding NCI, in the fourth quarter of 2023, the offshore business produced approximately 84 MBOEPD, which included 82 percent oil.

Gulf of Mexico – Production averaged approximately 81 MBOEPD, consisting of 81 percent oil during the fourth quarter. As planned, Murphy brought online the Dalmatian #1 (Desoto Canyon 90) well and drilled and completed the Marmalard #3 (Mississippi Canyon 255) well during the quarter.

Canada – In the fourth quarter, production averaged nearly 4 MBOEPD, consisting of 100 percent oil. The asset life extension project was completed for the non-operated Terra Nova floating, production, storage and offloading vessel, and production from the field resumed during the quarter with volumes expected to ramp up over the coming months.

EXPLORATION

Gulf of Mexico – During the quarter, Murphy concluded drilling the Oso #1 (Atwater Valley 138) exploration well. The well encountered non-commercial hydrocarbons and has been plugged and abandoned. Approximately $62 million of the net well cost before tax was expensed in the fourth quarter. Murphy, as operator, holds a 33.34 percent working interest in the well.

(1) In accordance with GAAP, Murphy reports the 100 percent interest, including a 20 percent noncontrolling interest (NCI), in its subsidiary, MP Gulf of Mexico, LLC (MP GOM). The GAAP financials include the NCI portion of revenue, costs, assets and liabilities and cash flows. Unless otherwise noted, the financial and operating highlights and metrics discussed in this news release, but not the accompanying schedules, exclude the NCI, thereby representing only the amounts attributable to Murphy.