MUR - Earnings call transcript Q1 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the Murphy Oil Corporation First Quarter 2018 Earnings Conference Call. I would now like to turn the conference over to Kelly Whitley, Vice President, Investor Relations and Communications. Please go ahead.

Kelly L. Whitley

Good morning, everyone, and thank you for joining us on our call today. With me are Roger Jenkins, President and Chief Executive Officer, and new to the Murphy team, David Looney, Executive Vice President and Chief Financial Officer. informational of have follow our our today. the Investor on along to webcast sections Relations website refer slides posted we the with Please as you during that as statements in the Reform the Please considered Litigation defined some Securities of in will be mind comments keep made Act this Private call forward-looking of XXXX.

to no occur variety projections results the attained. A or of cause assurances exist differ. will be may that given can such, that As these will that factors events be actual

discussion file Murphy further update XX-K duty XXXX over statements. factors, Annual Report Murphy's Roger call For the forward-looking publicly to on see with I Jenkins. risk on to turn will or any Form takes on revise SEC. now the no

Roger W. Jenkins

listening Thank you, to today. Kelly. Good call morning, for thanks our everyone, and

at level was income barrels Capital XX end liquids. quarter high per at highest day, adjusted expenditures We the million. our quarter achieved First our in equivalents of million, the was guidance $XXX XX% first quarters. for $XX XXX,XXX of production

Our activity of the to the allocated with first American quarter program capital drilling the majority front-end XXXX our plays. in North unconventional for in loaded, is

We expect XXXX first for our of million to $XX the in about the year. of half XXXX capital spend

pricing offshore countercyclical turning by strategic participating exploration of been of In creating selling EBITDAX asset approximately at oil-weighted competitive value margins, $XX shareholders. on operating high highly base, to first Brent, has price seen barrel pipeline-constrained entries decades. plays our receives focused to cash drilling pricing. portfolio economic Our production cash are have focused We're diverse through the diversified and our average our quarter, we delivers we with dividend shareholders returning over pricing. our comprising quarter not that cost for small is full Brent/Malaysia per price, to projects to Murphy returned commitments, XX% sold, the a Crude oil with and move. sales no This volume primarily average XX% WTI, operate our XX-year exposure the a was of Since with Oil which X%. XXXX barrel year LLS per to offshore oil-weighted our a well very $XX with policy. always over increase minimal we've has premium weighted generating first long-term We're premium in in a XX% equivalent. first a lowest in flow low-cost weighted quarter, oil NGLs comprising that represents in our In for of

receiving premium our a to are LLS a near and position very barrels for Brent barrels premium $X are us. WTI now weighted $X Our to WTI, strong

in strong group. one coupled top unique netback TSR price number allowed an for quartile us per XXXX, Boe barrel cost which to the is of with near Our achieve a $XX position structure peer EBITDA our

this our XXXX Moving per first on Boe nearly EBITDA was quarter barrel. $XX a

is for wide. advantage expected differential differentials significant to for we of WTI are us Our and this a to as year the spread remainder from Brent remain the to expect last

with XXX,XXX in our production Boes guidance Eagle by quarter, our see Shale X,XXX range Because equivalent to to the the strong for Ford differentials XXX,XXX our high easy Coast from our barrel We also of the now day access increased position. with low-end production performance LLS per per of Gulf we've guidance at XXXX first full-year day.

in online production at additional well bringing two Shale. and high-margin stable We've $XX account strong work million, Ford wells quarter. the working first we'll quarter in into field, with solidifying increased and exploration guidance Tupper maintaining non-budgeted Eagle morning. with We're Montney are levels Our be a taking our our this David, our our wells by to introduce seven reallocate CapEx annual asset second production increased to to Medusa capital into very exploration like that levels our Ford the program of I Montney production now to strong I'd you Financial for able performance our due million Tupper Chief maiden in all our from on asset. turn our unchanged financials. fronts voyage discuss $XX on guidance new to asset, Officer, to his continued Looney, Eagle David interest

David R. Looney

the good one Thank $X.XX million you, income ago. Roger, per of the to year $XX everyone. share share first in continuing and million XXXX or morning per Consolidated to diluted of diluted or operations from compared included same results in quarter quarter $X.XX $XXX

billion, net $XX or $XX year. income XXXX due $X.XX total employed net comparable reform, of a adjusted million hedge gains of of a amounted oil with At while crude from to capital a net U.S. less the including or loss leases, $X.X last along with $XX of of debt varies million exchange tax slightly $XXX per of quarter foreign million loss contracts. in and share income XX, the a credit billion. adjusted XXXX an million capital our Our $X.X income open the amounted million of versus first on XX% $XX at XXXX, XX% Murphy's capital debt quarter associated mark-to-market total was to diluted employed, to clarification primarily than profit March in The

and our due borrowings now cash first impacts of I offset facility. in additional million with of Operating $XXX at quarter credit had billion cash our first of and associated As Eagle over Worldwide will the totaled XXXX, $X.X some expenses under quarter expenses the Kodiak XX, outstanding through March invested we nuances were to full Ford quarter-end. balances workover walk frac expenses XXXX results. year the Shale. at no up revolving for

expected of respect that drive of solid scheduled boe quarters and offshore higher to LOE. several LOE per year, slightly onshore third are in routine in our the plays at offsetting second made maintenance facilities is the with company-wide to this being our Looking ahead, progress

notwithstanding due netbacks, are excellent the offshore still our impacts And the projects, our record expect for boe. group, as able the LOE usual highest of per per boe properties portfolio margin partially range our in Canada. be properties to these top some $X already why boe However, a and year The provision TSR at are in XXXX once current a mentioned. to these maintenance $X $XXX crude offset of deferred to still per EBITDA in the a major we of by full benefit taxes in our again provision in tax reason one income small Roger has Malaysia was of net million we both to and

which Additionally, payment even million for after flow the this a million withholding in at $XXX review Canada lowering of due million had operations. effect present quarter, payment. of tax cash will one-time now the the $XXX of in $XX U.S. repatriation to our the to Roger of one-time a came the company's

Roger W. Jenkins

Thank We're David. X. on you, slide

online using completion brought six which the that resulted significantly our in all Lower Eagle X Ford we wells These in in During wells Shale, Ford Gen IPXXs Shale Eagle are area. of area. Tilden the quarter, technique, the completed in wells wells higher in previous which than

the For bring than on seven XX which we of originally guided. to includes wells, additional operated more XXXX, plan remainder Catarina wells

dramatically Our drilling has improved XXXX. since performance

drilling approximately pressure been structural service and drilling penetration to to X,XXX and foot a XXX% These to in we've to We day costs. this by cost increased led with rate by per $XXX have cost almost play. improvements over reduction have able upward our feet lowered maintain our XX% even

America. drilling were North Slide was dry $XXX, that per $XXX our itself our gas approximately For plays our costs while to quarter per continues cost natural first foot below XXXX in Tupper the at to XX, be cost one example, Montney of prove XXXX foot. lowest

wells. moving we in The to AECO CAD We're or spot approximately the average This XX continuing unhedged second of production over project Murphy's X.XX Dawn, XX During first AECO through at planned strategy. outstanding brought XX,XXX three drilling spot during were We're Coast a as Chicago have in to feet. are of access quarter, of transportation market was strong off and approximately Montney West our X.XX five East as be MCF, to the pad marketing our an the drilled with AECO of well the continues to Coast realizations our expected of cost Emerson, decision price long-term well means physical current wells now AECO group second of expansion per and hedge the consecutive pricing. best continuing a well the measured due cycle natural achieved our price over All pricing. well a combination Tupper In days that of online wells a our gas returns per quarter. prices. ahead of to breakeven in $XX gaining quarter. These four this competitive quarter, the MCF. netbacks including five to CAD an pacesetter exposed at do play Tupper foot with investment the an EUR Midwest BCF remaining through with job will depth just the FEED to full per to progress our to not Malin, as XX% XXXX in

we current year, the We while combined, Duvernay and XXX%. MCF. expect Montney XX% On breakeven prices per In by Kaybob production than the assets, production quarter project our have X.XX Placid grew asset, from Tupper cost better on CAD structure Kaybob particular AECO increased last XX with this area. approaching the to Kaybob of first slide Duvernay Duvernay

apart unconventional approximately from X% the royalty More American for quarter. sets importantly, was for which the us first this asset, other plays, North

we quarter, wells appraisal XX in X Kaybob drilled Saxon X areas. online, East wells first with and the about our During including Simonette, the wells first pacesetters,

well see to our XXXX. continue above We upon high production expectations initial entry rates in

X,XXX per day. areas different above in have We wells with three equivalents at barrel IPXX rates or flow

and basis. cost new in and lowered equivalents be with Our X,XXX are competitive are Since per Duvernay XXXX, in the Eagle XX% costs completion the Ford early now entering exceeding production costs drilling day. by our rates Shale a we've foot per to in area on barrel proven Saxon the

completed now drilling Shale and costs and pacesetter Duvernay and $XXX lateral. $XXX per just current drilling $XXX mentioned. have completion Ford in in Our to completion per cost levels the foot wells and Eagle between $XXX compared between costs These a

recently and $X million the achieving of cost vision in we is now broken total Our million threshold. $X.X per well sight have

of minimum wells and development Slide going mode, into in move plan. continue XX, to infrastructure XXXX, region. a online XX we ensure that we're miles XX build market quarter, original per access, order bring to in pipelines drill our in first wells XX as constructed to we nearly As the

Our development the to derisked concentrated other the already will we will of Kaybob play. activity areas the and West be area continue appraise in

quarter activity drilling first the derisk us area, we to and able in another East, Simonette were at XX% to Our XX%. derisk approximately during allowed that Kaybob of

we field. is both, Mexico, strong quarter and capacity the takeaway on to at on and in rate out first resumed And We We're per our production accelerating the XX,XXX Kodiak work rates workover the XXXX will non-operating at quarter especially business. of first that In Gulf now field a over offshore due services, of Kodiak, Slide as at which in to quarter, our wells during labor in Medusa equivalent available day. carried XX, Habanero including seeing well at plan, number of execute barrels producing region. a our at a gross our well. readily

Our continue quarter. be delivering Malaysia of stable, this approximately business, cash-flow-generating $XXX assets to million free cash

project, decline offset third field, in gas which bring now quarter. it of expect this DTU is Kikeh Our and complete XX-year-old-plus on approximately natural the line to XX% will the

expect in most we FLNG Samurai expected the this Middle discovery Miocene increased in field largest XX a and for cost on the to project The million with as of only the we first we our for objective. year. project will play, environment to in appraisal gross of company some barrels development with has basis plan access net in production spud high test continued cost In partners experienced block new million. XXXX. Slide sole Rotan BHP, progress on a field in Also, well, in low to our Lease well two commerciality In half exploration. The means also continue from approximately this Mexico, of to service offshore of our XX% the partner the LDV partner. Gulf data were bidder recently able H, second Block holder track barrels we $XX on working which and Samurai the the we're a upside of remains Vietnam, to Sale declare Gulf Murphy million the Our XX% previous of XX, Mexico, in XXX. new interest with on in XXX for with our an blocks

and a In farmed-in this Highgarden is Sergipe-Alagoas our block. companies three-way of In Miocene addition, progressing group of to a blocks, adjacent of the Vietnam, existing focused with interest We're working within acreage joining we bidder Block the fits play. operator XX. we of become operator working against interest AMPX exploration acreage cost structure supported the mentioned. co-venture XX% the which our low our In as lower that slide the as was Brazil, high additions our a salt. an successful XX-X appropriate approvals to prospect, This risk, opportunity. in we're two strategy pursuing group On exploration in to increase Basin,

the these fit one focused wells. three equivalent exploration our company. These net costs. of than barrels year, of well million an less XXX any into to will approximately in to additional exploration remainder at the meaningful net For expose our be be we'll $XX strategy for of well and us million and resource wells drilling Success

with within growth $XXX more portfolio after receives Production shareholders $XXX to cash dividend. The moving long-term, current shareholder-focused plan dividend million diversified our measured returns of premium generating over flow. five-year production cash provides of our to slide million Now, XX, paying our pricing, flow policy. cash from also strategy than oil-weighted

CAGR which approximately plan, of today's leading full-year a approximately current conservative XX%, production EBITDA XX%. strong of to price Our full-year deck delivers is CAGR a compared prices, to

with capital slide hit we're with Looking over EBITDA XX while XXXX of in to this a $XX off over on production start a We're expect to EBITDA ahead Finishing in $X.X continuing of off over approach takeaways targets XXXX. to plan. maintaining good course our just with to allocation. disciplined WTI today, the price an cumulative billion years, of we assumed generated $X generate billion two of

We our portfolio us which across achieve strong exploration oil-weighted also time. implementing focused our margins reducing cash We're diverse costs our our policy. a shareholders cash company. at drives dividend EBITDA Our a helps remain new returning for on high business, great strategy to through

creating laid financial multi-year and prepared for we've With up and Thank has our to management open out value resilience questions. plan these of well-positioned in our and that, us that's remarks our our for goals today prudent continue Our end you. shareholders. achieve to we the

Operator

Thank you.

please Singer first question go ahead. Sachs. Brian from is Brian, Your from Goldman

Brian Singer

Thank you. Good morning.

Roger W. Jenkins

Brian. Morning,

Brian Singer

are talk for we the to planning you out you the drill? Can as next come pick that the wanted type it's Gulf you're I be Mexico, steps the have looking unique. successful costs of on you exploration are if about very Vietnam, in that of offshore, that here, with points the prospects that the to And and should what for? down times made the Mexico in certainly cycle

Roger W. Jenkins

of Thank well, with well you, our appreciate Starting I that question. probably Brian. with We're the a off today. Samurai that finished way third we are well. over the drilling

very expect to metrics per dollar net, cost net $XX We barrels us, And to and well a really that well TD nice basis. million mid-June. for nice a barrel mean it's on in

development. a larger upside not by back in that we to are infrastructure, should have production, If So, mean this and big a lot real put years in we'll production our what our the in large infrastructure lot in put partner very there, that that lot region happened into now upside our a there's There's another nearby probably successful we're pretty development other into frontrunner, also including the of tops. gets that's is a there, two and probably into If party successful play a of success and basis. be a is barrels, mode. own the a there's in thing wells of But a partner this it would that structure also in there. facilities larger three-and-a-half-year-type this of and

more of opportunity take of discovery but opportunity lots here, slightly course smaller development, time. big and it'll So, for a we've for

of moved that's fast we King I with and three comfortable So, third years, quarter. is the in on a at we pretty look Actually, well even bigger If Cake, feel a that. cycle project time. this spud to

of barrel, use. well. around tieback to at a incredible a expect as opportunity resolve that all economic, a the We again X the for, us, opportunity, smaller very, this looking measures XX well returns this, we is to $XX Gulf, to be Mexico XX% finished And structure. the months would too, well F&D very be for but is a would big we're Again, cycle, price typical with fitting of full an mid-September. years that be in size

too opportunity seen that similar of in This best-looking an in very, Mexico, to XXXX. long of size. infrastructure with starting – big our something a is I've attributes, probably Gulf sorry. December be that Talos range there, discovery on One positive, to in not And is be to looking results I'm our probably has structures time we southwest rather, is again in at a side. of the four-year and the until year have project. of Miocene over will It this coming of of southeast the three, And many very Gulf will March the time and we'll spud the there which

and we this quarter. there days we're without simple third well the new Samurai, Vietnam, drilling is So, very At have Cake in King a course. new and of at a infrastructure area the

know, really As to would later that get XX That's of you now. this visible. do we – are of very level. in XXX enormous FPSOs much Gulf that in a by similar we which area, top have granite And in area a there. in put why Vietnam development in timeframes, Sarawak. And big small many this We It fractured probably the the be similar of to In than should upside seen those sand Gulf, the FSOs by upside in an online to very active power two-year of brought which our probably development play two PetroVietnam. seen close They're have the is never with little on developed an seen many, infrastructure. to Sarawak, call and are early on has whole These active area these this in we're water we LDV four today. XXXX probably million what probably sanctioned million in very this is have map our a when will they very barrel to a there's area, similar discoveries platforms, longer Malaysia, and thing, Mexico.

if run questions. that a of it, through your that's So, answers

Brian Singer

just wells off, Can helpful. timing to production A, that Eagle My the there Ford. were is were know how associated terms something temporarily other trajectory? the to, talk scope the some consider? of scale in that regards there, then year. really would either or the follow-up production increasing acreage, is looks or That's trajectory with And with the you limitations I also, through to that but activity issues you

Roger W. Jenkins

Yeah.

we've Eagle touting Our profile is a been this time. production for flattish some Ford – as business now

We are year free in David, least. million of cash probably, $XXX at believe, I there this

David R. Looney

Yes.

Roger W. Jenkins

conservative in less the around very we prices, strip than At today. see probably $X

of I rest business the a XX,XXX or So, us Eagle of would anticipate business for be kind the Ford for will year. that XX,XXX the

this weeks Ford. picture a from. of Catarina, that OpEx paralleled the wells. – nine water a our if production a sand ever Drilled in high And there, best of came other best the very This in and to company, impact our an In wells you to Just there, impacted unique wells our out is to produced that us of we've had great went had ago. big to toe Chesapeake, got had our it's off to caused could happened Houston closely and a of toe and of we recover that four is L-shaped our we in a point wells that that had circumstance it Eagle to five us. and level operator, very a couple with next and best and nearby I we reviewed and acreage the

not recovered. the end our off. killed our us wells Austin causing County, of those in the have wells went door, wells, Chalk spectrum in Samurai, some water next on we to Now the wells. produce in partner the of the take Karnes play, the BHP in other And and and best did They're best

we capital to us Montney fixed for capital there, down well two really right allocation, that for quite money the of trying the primarily asset today that exploration getting first allocation we there we storm $XX in it's had but wells we the commitments. us perfect that we the prolific And there Medusa, about produce Brian, what which now, our are increased required fixing the much for back taking to certain a do, note a knocked had, we the that Canada first capital option and then And And real number our the moved we're a that did we honor was it's a we limited quarter of frankly. quarter. our us of flowed but And pretty toward And also from rest discussed late Montney. and well that that to million the and So, very workover as today same the in now quarter have from just is is in quarter we we we we And regulatory our lot was adding and and weighted because moved we're all well a to three. days. had have at seven which cap there wells, in have so because partnerships. information a nice latest

this time, add lot at a of capital to add to continuing Shale. we're unlikely probably Eagle without So, Ford into

so. mentioned, a at proud are cost in well the bottom of, it's to foot have originally, the of we that wells, doing doing earlier Ford. go-to spend and Eagle for We're far. the by we're our arrangement wells thought And other market. side, Shale capital the big previously cash well extremely we greatly at as we per But do are to costs same very drilling All coming I we have place us us, than there, down. probably and which these course, on our Duvernay is carry Of the for commitments have

parity and of and you to But to in well. get have of conventional me. lot flow So, over our try do CapEx a for well there a because have dividend, work as we our the offshore follow not here, as we things cash post business lot good the Brian, if too going much in business us

Brian Singer

Thank you very much. Appreciate it.

Roger W. Jenkins

you. Thank

Operator

you. Thank

from next go JPMorgan. question ahead. Please from Jayaram is Arun Your

Arun Jayaram

Good I this get exploration versus data, the of on how you could you progress set do if years where exploration little couple, you're bit, front, active as was next ago. morning. interpretation, at more your Roger, two, as wondering a comment you your assess you on a three team,

Roger W. Jenkins

Well, lot we things in company. a changed our have of

look on. two exploration We've If part an opportunities. of is privately-held totally tiebacks, we you published success in slides really strategy, XX% back a acreage In today on have about has exploration a strategy alliance look just Mexico, it company things formed Gulf new going different into our and our smaller four expanded it's at we about amplitude, rate that places. one We and the the area. with of number certain a that an focusing that

with And Let's Lake area, our call sets is tiebacks them half, Gulf bottom team there. Charles, larger it, up prospects Canyon and Mississippi Tampa, as concentrated all the work between focusing in divide low-salt Middle type we'll Louisiana and take Miocene the and with well. the and data you on

of history for time. Houston with long a in very So, preferred to drilling be change. producing to this in us, There's choice and we their that do We're some in which not do deepwater successful and another and executing of a and new we're partner firms our do deliver globally enormous are operate has that's long-term to that to access working and very, party due they prospects seismic, they operator an a that been operator. to going and

not is data enormous was amount post in into very XD XD others. an we're what's how again, the changed This attacking acreage well on the commitment can data of Mexico. with that's we that front. by and boom but The this without these in the plays, a purchase on were in Mexico, So, and at exploration shoot data data Murphy place when seismic there's going time exploration you misses taking to commitments to that world over oil that that look past, XD led some making you probably all In only leasing data. inexpensively

into better and we of now, bigger block seismic Murphy purchased and XD the processed have XD. we've XD. tieback go but had the here. vintage data, some XD, So, And in better now and and reshot And history best with that looking prospects and bigger are better to that's the have probably

have, of In different that a Mexico. the drape collapse data thing top, which a has in that shale the new this had is on Vietnam, in closest Wash you with the Granite great during type the fractured in. So, that of region can successful the more has play, the lot sandstone shot structure, of play total of a datasets, very a which offshore great been a we've probably lots success plays, is

reshooting XD seismic of there outcome better a add type Basin and with a Vulcan the in nice different in And actually have that's there. instrumental all So, really prospects to data. we then, our basins to were great in in data. of team We Australia, total coverage also of our

the data it the entry, from cheaper So, answers prior is data just collapse. was in your That than of year's. there's The data now more the And was. degrees much available. data the A XXX used shot lot is in question.

Arun Jayaram

is, It us in for. the understand, an just we're Samurai, what I Can That's great. like stage looking What XQ. by of end of you of appraisal about there? And just kind sound at the be will the well. you And this found the results well? remind discovery set

Roger W. Jenkins

shallower around found to zones Miocene years one of a and Middle ago in well. in we was so, prolific almost I There with upper that discovery. group time, was And the pay. main section particular be through MXX the that well out series one that Yeah. at of the the XXX tight of feet probably region part of then, or the a and guess, drilled is that faulted zones of up MXX our discovered partnership zones We of eight called MX,

So, after a discovered structure. that and working we does lot new of partner, zone off this work exist on original seismic with our

and structure years zones after And up Green both four-way largest we and were will one are the well. too. now one drilled been our here ago. find other to were be hit. most sale then, region will drilling sought in delineating about new found MXX, this have And hydrocarbon the lease drilling discovery. years we'll in take Canyon. missing the So, that will have It's then the a there's and block hit, And in deeper the also for structures than And we three in different wells choices – either this, zone, that that

Arun Jayaram

with sequential in wells give be, the Karnes like bit, a can the would coming in the you're trends have Ford? us Eagle you to to help with Great. But just I what production Final allocation Eagle question the could in Roger, think quarterly Ford, how just look – some a play back Eagle us could capital Ford? sense little going some the more little out XQ.

Roger W. Jenkins

going count well Kelly is to with for – the go the you. well

Kelly L. Whitley

Arun, by completing we're operated so Murphy. looking XX Sure. are a wells that of at total

in have to the wells. so to Karnes Tilden those And have wells. wells. in going And are third and quarter, there's are two quarter, the in X Catarina, of be fourth quarter, we're second the going And we're XX Tilden have Catarina going XX to XX. XX then, to going of those we're

going have cadence, quarter. quarter in online all think that it's I so you to the third that second the XX% we're those that and to look when well going to are wells the of at note important the come And in about

I that production. kind of think So the drives

steady Eagle drive and And then, neighborhood are first, fairly going fourth the third our that's quarter Ford production eddy. So, think, the to in in to of... I be, second quarters

Roger W. Jenkins

XX,XXX.

Kelly L. Whitley

XX,XXX. Yeah.

Arun Jayaram

lot. Okay. Thanks a

Roger W. Jenkins

it. Appreciate you. Thank

Operator

you. Thank

from Your Please Raymond next Molchanov Pavel question James. ahead. is go from

Pavel S. Molchanov

taking the Thanks guys. for question,

Roger W. Jenkins

problem. No

Pavel S. Molchanov

Alagoas that So, part the consortium blocks won of in Basin are that Brazil. guys you

think XXX. Block and XXX Block I

commitments not do have You I as understand. any well

not you're that rate, to what's a the of spending particular those given plan tied blocks? for So, kind

Roger W. Jenkins

There's no in in There's well commitment Mexico, in and Gulf Brazil. none one Vietnam. commitments the anywhere well in one

doesn't about really good really in frankly. wells me in So, project have quite talk I have this partner company. friend, don't a want commitment it a many real lot a that our whole to

all the across a shot We've there today, seismic. we're to be And big so, there, acreage. probably partner prospects by exploration shoot XD we're very project near, very, but And to pleased have whole by, a have this and being But in there, a and we're discoveries to very, about our I to tight very ExxonMobil going seismic very being going be prospects There's close big have many geologically. talking cadence many at there a partner and through that's big this it's it, very lot Brazil executed going it. drilling big not pleased time.

Pavel S. Molchanov

more allocation, cover your your Understood. the To If And about price ago, in getting your surplus targets a dividend have beyond on pricing, at years couple you'll haircut of extent share stack. would full flow budget you be strip to you've payout. and CapEx the cash terms back dividend then, capital look current resuming we more than the based EBITDA that where and dividend, the maybe you inclined to the or for you was inclined would buyback? be CapEx it before talked more

Roger W. Jenkins

back. any buying that's so any issue we're the not didn't why we at Well, bottom,

policy. that. So, we companies do long-term only hope reduced. didn't remember of policy was a XXXX, the any not dividend issue It And will that. one people our to was I in

to now, naturally, level. right at some consider we'll wouldn't go see back and to I look jumping that we harder think at us level. I back

adjusted positively like Of which the I've to net we level, good I And right have but tax. impacted adjusted everything board. jump good It's to And net we a to tax. And income that this to we've in have deserve that, out, back making business a that start, rolled primarily that received that we before while our later on being income up making see course, just retained $XX of there always years and that a it's a back income, here. earned from into discussion that are income to our we earnings million with is mankind. will the year. off we bit income went adjusting basis by from discussed we get of in account ago wouldn't used

dividend, step. making to income make every we'll to make year. before of for on cover that. to processes, to So, the That's something it. clearly and making of be looking back a to doing the that forward rest making year. the we We're sure And And our studying and need cash first have little And these get we pull XXX the it's bit we Sure. we're that to backwardation up our that the and levels way net plus the of focuses do call. one need

Pavel S. Molchanov

All right. Appreciate the color.

Roger W. Jenkins

Thanks.

Operator

you. Thank

Your next Read Roger Wells question from is from Fargo. please Roger, ahead. go

Roger D. Read

morning. you. Good morning, Good Thank Roger. Yeah.

Roger W. Jenkins

you How Hey, Roger. doing? are

Roger D. Read

towards the getting end we're Well, season. earnings of

bit better. So, doing little a

Roger W. Jenkins

about Roger. that, You're right

Roger D. Read

then? roughly Were sort fund back going about the your the $XX next or that projects projects returns, queue understand oil the Just this, ranking maybe year, we the of there. projects to the were things they Just have that anything's and of when ones laying Hey, look beginning to more X%. prices the just little rise, to you're last million, projects or curious these trying either that maybe of CapEx of are you better? since can the the I'm if help end on budget of to here. in kind come fore up are kind because come were of out changed

Roger W. Jenkins

we our five a one is as exploration opportunities XX%, that we four, going effect. it's at them sometimes wells, XX%, way factor do in that of may if to world. XX%, something that doing across those we a The And to are chance like, the be about have well, budget XXX%, we well put of sometimes commitment do

the by, year so us goes as Then that. much exploration. for So, that solidify capital we gives

that a took the we to exploration, prior to because piece and XX%, call our of in answer do delineation able to opportunity five Samurai's look to other the to move. of take one with really area. a prior over BHP four, want out we we we companies that our left. make other very lot but And a had of drilled And And some around a success back up go then of partnership in And on XX% that, wanting be partners we at the through information decision, from wanted partner sought and my in group, that it's that good bit drove were CapEx pay then we our after that some So, there. that area.

capital had the pull on we it had went when do to a ones a working we're then, we're So, a do, to our – the going ones pick we interest on not had and pressure problem well, regulatory increase up. Medusa, delineation-type be At going out our issue, well, abandoned. casing a

to in we'd more the would also So capital zone didn't abandon plan. which but into, have we that we're slightly recomplete abandonment expensive. we going be our And have another can well,

Shell, quarter, went well we completed So, days the or just And this and platforms Medusa to nice shut rate at in had a due downstream the flowing Eastern time. well. very to from some ahead planned shutting about taking early two three very, been Mexico, in in it long was has of Gulf be that's the at constrain a but place for in a with flow known of

very these very, we those So quarter in Eagle drivers to from the capital Montney first added the also back allocation problems additional good. we due wanted, Ford we production then, And to big had of and some to our Eagle are two the get are capital it. opportunities level the some to to Ford

those the – have great development too. part going and That's be into to take then us clearly well, Samurai in allows And So we capital original these you as or up say, we and interest do. by the and be high increase a opportunity us an and all well the increase very, to June, Vietnam, over wells this a in exploration PetroVietnam. out you with May the but I'm well. of that capital a pay this, to exploration Medusa well, formed for is have operatorship we also, round there, another will very need working That's that all that to to nice wells do to this, opportunity a of do you what block, operator of our

good So a It's in our for really us handling more wasn't regulatory value great well, add a that it of list all exploration but this the $XX matter million and really, a solidifying company turned well is a about into positions things. Gulf. and

Roger D. Read

outlook questions. you for And that. Gulf Okay. second of Brent? us longer-term – trends out, $XX more question, assuming $XX you across Mexico? you of price for just the mostly want, One, kind then service but cost similar them kind And thinking of as you laid WTI. in basic Thanks Are what give see the just two then lower maybe a

Roger W. Jenkins

range we hedging some there. this long do used have lay obviously, we call Well, our plan it in I but mean, prices are LRP, our for year over, a in

Our current below plans strip. are

in over, really third WTI our I $XX $XX, at backwardation And $X. to compared today in and think two we're that. good take it the we conservatism looking probably normally a to position it's the of quarter probably quarter, about $XX bit Brent, fourth there, but quarter, $X that,

and that on So, And next we're pretty your conservative think on still pretty positioned question, that. well Roger? I what was

Roger D. Read

Service cost.

Roger W. Jenkins

cost, along really No, pretty keep we service well. and are crying everybody rolling about is

it I on what mindboggling business of a cost in know Ford and going script, Ford continue Eagle our chance in for cost foot the probably up in look there's at really Eagle we of XX% the – XX execute the think said mean XX% there's to if of in first the thought drilling as I you And there. in we're it's to we really so drill. XX% drilled the lower, the we on is day, completions. to versus well end XXXX we had per slightly what positioned. quarter But we I wells the continue

teams for and job. Eagle Our our a Ford procurement done management have great team

the that's it. be of go with positioned might rig rest rates so. I could just up oil company of have And company. really, year. It – million. We it, all it not savings we're through America yesterday, for But, it to seeing million now. be Roger, This with do, a $XX And $XX would our calculated afford really rates, rig good completion one frac if around some the to can we North some probably around on nicely prices incredible it tied for us brought we

Roger D. Read

that's Well, you. hear. good to Thank

Operator

you. Thank

Roger W. Jenkins

Thank you soon. you and see

Operator

There Roger call closing to remarks. the are phone lines. our over to Jenkins for further any turn no from questions would back like I now

Roger W. Jenkins

thanks back with IR if have everything. look for get to we need you And you our any And in next quarter today. in team the seeing you questions. forward it. calling Appreciate everyone and Appreciate

Operator

disconnect your this thank Ladies and your participating lines. concludes ask you you today. call gentlemen, that conference for and please We

Murphy Oil (MUR) 3 May 182018 Q1 Earnings call transcript