MUR - Earnings call transcript Q4 2019

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Operator

Good morning, ladies and gentlemen, and welcome to the Murphy Oil Corporation Fourth Quarter 2019 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Kelly Whitley, Vice President, Investor Relations and Communications. Please go ahead.

Kelly Whitley

Good morning, and thank you everyone for joining us on our fourth quarter earnings call today. Eric Jenkins, President Chief Mike and Vice Offshore; Roger Looney, Officer; McFadyen, are President, President, Vice Vice Executive Chief and me President Executive and David Executive Onshore. With Executive Hambly, Financial Officer;

Gulf are Please interest call on Investor Mexico. refer and production of as follow numbers, Relations placed webcast in our amounts website the along our reserves to with slides adjusted of today. have non-controlling informational you the the to we exclude section Throughout financial today's

Slide call forward-looking some Private during defined X, of mind the of that the Act please keep will in XXXX. comments made Securities in statements this Litigation Reform considered be as

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

of on Report Murphy update discussion forward-looking XXXX further the Form no statements. XX-K risk or duty factors, Murphy's SEC. file to publicly with any takes see Annual For revise on

now will to turn Jenkins. I over the call Roger

Roger Jenkins

you, listening oil-weighted On volumes as to and return a the we our our thanks shareholders. for successfully corporate flow, producing growing cash value Kelly. return higher assets transform generating and the for plan course company executed our to today. X throughout of Slide everyone, within call Good realizations long-term capital Thank 'XX of we morning, for to continue

the saw for million XXX,XXX free assets in day Texas and our and to barrels to be are generated Mexico we averaged of all be to as top continues a XXXX. sold production asset production year WTI, operator. result, in significant five premium Ford Gulf increases Practically a and Mexico we flow of total production oil of XX% of at Our cash Gulf Intermediate, a equivalent Shale oil, West our $XXX Eagle per with proud from

an continue Ford Gulf ahead proceeds than from in and potential with ongoing We of a million transformed in Eagle to promising addition use of we with We Mexico. Canada buyback great through and more program. Murphy return of as and programs shareholders $XXX Malaysia exploration significant Brazil develop believe assets Gulf share to our from to sale funds quarterly the our the these company as Mexico, of our Mexico upside assets dividend Shale,

capital Most a of XX% importantly, with our King's more Capital for including million approximately regarding ownership full regarding Quay announced our future we floating in agreements XXXX results. today the reviewing the we've the in and fourth system and memorandum executed quarter understanding detail production project working of reimbursement plan $XXX Partners, definitive historical discuss to are spent and after in ArcLight capital XXXX full-year

day X,XXX quarter and per well three Slide X, Gulf, are a This Nova the in operated at of and second barrel XX% equivalent at a in due of down unplanned Terra Mexico. equivalent field quarter offshore well complete non-operated liquid malfunction X,XXX X,XXX until the unplanned volume, included Neidermeyer our one barrels remains equivalents with in impact impacts production field five-day to the as production downtime subsea the by XXXX. repairs resulted downtime averaged XXX,XXX of well equivalents as in day barrel fourth per day Canada, per equipment barrel Gulf on

than and the Regarding a in safety previously address to to production barrel Nova, results impact for Murphy updates XXXX. XXXX offshore day for Canada per approximately drydock XXXX field equivalents equipment of Terra of more forecasted to This the we net throughout all down X,XXX work. remain first X,XXX the in announced complete quarter and

Tilden work due Tilden wells day as and in quarter. wells, as forecast X,XXX on we by below below the fourth the New but production Shale in well East to producing well Catarina, a Ford historical barrel used rate Eagle impacted workovers per quarter was the high negatively wells equivalent performing

XXXX XXX,XXX of of XX% part from specifically volumes per liquids, than to Malaysian XX% an full-year of grew averaged 'XX weighted due per oil gassier assets, the Mexico Overall, was production XXX,XXX sale oil Gulf comprised addition day, in equivalents of equivalents day, full-year to more production.

our remain X, the in Malaysia sizable XXXX of Gulf Slide with reserve Mexico of properties offsetting the mid-year. purchase assets partially base of sale

equivalents XXXX were maintain nearly reserves years. proved life total of reserve liquids. Our with day at And per year-end $XXX we million XX XX%

XX% is XX% was of just Additionally, ratio XXXX. our reserve development three-year proved one-year BOE. F&D while $XX per we increased cost under from our Overall, in total to replacement classification reserves XXX%, organic our

David on I'll now to over call the his commentary information. Looney for turn the financial

David Looney

good and everyone. Roger, you Thank morning

For $XX loss position approximately XX on were for this oil of largely a mark-to-market have a year. would day close of $XXX a XX,XXX business fourth averaged at large loss loss, which quarter yesterday non-cash the results million barrels impacted Murphy's significantly our the recent and last we days or of a a million quarter this in $XX $X.XX result on the the this negative fourth prices fact of hedges, Naturally, loss, out completely $XX.XX mark-to-market share. decline over wiped the in oil by a as million; positive recorded we net has per

items, in earnings this The due referred mark-to-market million loss the out $XXX for totaled million per all which $X.XX adjusted in $XX loss adjusted However, value back to extinguishment also of when a or only earned not in debt, of tax. consideration other you early we above, a after of but to and adjust earnings the share. approximately diluted three loss mark-to-market contingent a few non-cash the increase

X, cash to to returned our through within flow Murphy’s shareholders Slide operate is quarterly cash of excess dividend. strategy key with a component

see again completed slide, we for achieved cash the with XXXX year. the can flow the full-year even on earlier you positive As the transactions in significant

flow. while I resulted cash after in working quarter million. will operations free change $XX resulting from in from hole in cash note and is million being in a fourth capital $XXX additions that at totaled the lower came million, cash by this operations For that $X costs dry $XXX property positive million considering a

billion fiscal total year of approximately the In property on funded flow free thereby $X.X period. cash operations of of $X.X additions, from whole million achieving XXXX XX-month for the billion $XXX cash

of As extended announced quarter, share in and and we the quarter on debt XXXX. X.XXX% notes million XXXX, maturity of profile an tender million October our million senior aggregate we completed the Also the $XXX to of during program buyback call, due XXXX. of repurchase notes $XXX our third due $XXX in used senior proceeds with issuance

EBITDAX and the quarter. strength by exemplified of X.X financial our annualized debt further balance end at stable Our to are the fourth adjusted ratio times sheet net of

on oil weighted continues tightening oil our a across to to of Gulf were at focusing Coast quarter, Slide is XX% with differentials pay assets premium volumes off for strategy even high-margin X, markets. the Murphy sold of the again WTI

per Eagle of core and EBITDA $XX $XX year-in North strong and continue with quarter level are drive Ford in and American field and respectively. strong results per year-out. to Our offshore assets flow These clearly BOE cash Shale the continue assets to barrel our generate top-notch

and Murphy cash equity $X free the all through shareholders executed be key X, repurchases share along last has of of of we issuances. Slide with year. In returned cash done only can strategy share through billion generation, its our million cash with flow since have program quarterly such tenet nearly programs no year-after-year. through a dividends accomplished Murphy strategic to as $XXX longstanding to which XXXX is buyback return shareholders This dividend, continual

With that, turn back to it I'll over Roger.

Roger Jenkins

Thank David. you,

financial as incorporated our stability. which governance, we operations our as proud X overall supports very begin year our in Slide XXth of we're entity strict internal

several continually experience tremendous have far back members support safety Murphy with in in ago, ranks report their issues, environmental in Board one highest scores Our with and HSE environmental issuing tied annual safety Murphy and operations above industry, XX% the targets as creating peer compensation in XXXX. recognized namely committee sustainability our responses by our establishing years government of crafts and to and ISS performance plan guidance to is XXXX, average. HSE and is particularly first incentive as

with in compensation. member environment, Board to spill effects XX, with change, proud and some remain is of the company's safety Directors tied of focused tracks and on the of which internal leadership HSE targets, on Murphy our of monitors partnership variety instant Committee operational a along a the are Slide environmental other On rates climate

a to emissions scalability With frac of the XX% XXXX. our XXX% sustainable produced for deals such greenhouse our as are asset, in operations portfolio, reducing Montney pumps to beyond encouraged portfolio. of recycling we emissions, proposing testing think gas Tupper significantly our possible reduction long-term fueled of our new anticipate onshore XXXX water from Teams natural gas at our with across

XX% This from Ford quarter, production more Now coming an fourth production of of the equivalents Eagle quarter with of than increase to With level early XX% XX,XXX barrel averaged Slide represents Shale. the XX oil. fourth in wells moving online addition 'XX. the XX,

the new wells last decline no in not now as of rig locations, adjusting that of ample occurred runway timing activity in to given year anticipate over methods. wells production and XXX the However refining to well our months online quarter, the provides is placed first two for been have onshore The and XXXX team XX drive efficiencies, days. completion drilling the completion program will

per in addition result, considerably Along medium to to XXXX. with average than performance tightening a since improve $X our inter-quartile million that to overall our EUR less well. cost well As improved continues range the

the on the more than acquiring remained asset, in across now Duvernay flat Kaybob have X,XXX oil. in Slide production XX, day per quarter fourth equivalents with at acreage since essentially the we wells 'XX, XX operation XX%

at the achievements expectations days completing at cost year, XX,XXX had well well XX%, drilling we've than to-date about operational lateral drilling fastest less the more performance area to-date in longest the For several feet. well $X.X in drilling than million, our XX nearly and and lowest with exceeded the

greenhouse achieved bi-fuel of As area. the is emissions diesel XX% Kaybob begun has improvement continual and for a gas process reduce Duvernay, this part emissions this already to Murphy its in reduction costs using in our

been our an excited of per we XXX our the day XXXX Tupper results well positive XX, trending asset Bcf Mcf. We're type cubic produced average trend an with Overall, from during Montney flow XX about they've cash quarter. price Bcf XX aligned realized CADX.XX of the Slide feet in curves, free previous as XXXX with in generated million increase and per XXXX.

XX% XX Gulf fourth at for six liquids. in Slide months portfolio per business expanded of this day our XX,XXX now generated Mexico in Murphy Mexico of equivalents business newly on is quarter this and Gulf the

completing quarter, wells after Throughout online brought the we workover activities. tie-in and three

Additionally, we've understanding production Quay memorandum as regarding the a mentioned system. executed of our floating King's earlier, I

currently XXXX. type our along back-to-back drilling well ship a a we're rig drill the Front at subsea projects conducting two planned a platform in the first workovers, program as moving of as Runner in as XX, Slide Gulf, are have three-well

detail sustain as volumes additional production previously will bring projects the slide to we in others rate online listed long-term these As disclosed. along with our

progressing are under Samurai major Khaleesi projects and Our budget. as subsea long-term at well construction contracts with and awarded nicely recently Mormont / engineering

XX, downtime, quarter declines Slide XXX,XXX the on forecast per for anticipate based the to allocated we Eagle Production day XXX,XXX billion that and X,XXX day is for of XXX,XXX to offline. $X.X $X.X at is of our first more including XXXX with the XXXX, for Shale Ford our natural approximately of Nova planned the associated Terra of equivalents of equivalents oil and per capital amount remaining than accounting to of offshore. in XXX,XXX budget plan of XX% full-year billion, $X.X billion to assets production

one flow Malo annual cash assets This in cash allocation This cover to adjust us allows expected and is XXXX as generate parity program, for years. longstanding to excess approximately times X.X near-term us in dividend flow production CapEx capital continue focus to our protected. the in as to And our our to new cash XXXX dedication uplift St. putting required our is is project capital EBITDA our impacted plan ensure net primary with the Gulf the acquired led to debt there capital three our waterflood, in ratios. dividend we maintain to project to flow together our

five-year equivalent. as Slide in quarters discussed average production XX,XXX previous XX, approximately the Gulf achieves our plan we of of Mexico

the will wells is combination non-operated million generates they six plan detailed the rigs, year. of full-year production a equivalents this billion total online workovers with flow $XXX per The throughout XX,XXX XXXX, day project approximately as Overall, XXXX cash year. operated of in and For platform of of and coming generate $X tiebacks our operating five earlier average CapEx slide.

disciplined We're of $XXX guidance, Eagle approximately to excited be based on to our allocation. our Shale. capital budget in the the after spending more midpoint is we program XX% onshore continue CapEx allocated our our to XXXX Slide million robust with the being maintain last expected having approach decreased few significantly as to years Ford in XX,

be primarily were year this online Catarina areas. in coming focused wells our operated XX The and Karnes

through-out average Karnes scheduled to and online County. In gross the primarily an addition, wells interest non-operated come we have XX% year, working in XX

of Eagle Ford equivalents years. brings of Over that XX,XXX reaching the back fourth production in planned, level per the This as XXXX, was several weighted steadily course growth meaningful our to Shale a average oil over experienced we've us quarter increased not day.

In year. to with operated million performing well Kaybob across The to bring in Duvernay, is the we online results exceptional $XXX drilling extraordinarily we the plan fulfill wells and efficiencies completion spend as in carry Duvernay board early our Kaybob drilling achieved. XX

lower at In Tupper gas we're approximately a these this as placed carbon limited to as within in coal free The our our bring part portfolio wells global CADX.XX long-term natural wells Montney, requirements of level AECO future. million free replacement is cash prices. spend generate of cash resource flow and spend prolific for $XX a a in capital online this well allocating large five at

XXXX to four our exploration enabling to nicely XX, plan million $XXX of over resources. barrel spend into we our target million us program long-term of equivalents wells, and approximately Slide goals, fits drill $XXX

US Gulf, the well. Monterey a we the the interest of in On XX% working non-op side hold

called Brazil well our Mexico prospects, mature continue - well to is Batopilas. expected Mexico. by ongoing. strategic our two well are in sub-salt as plan in far and the in prospect as about ever by to We're second future to spud quarter. is the This well wells plant first, Both targeting Mexico; followed program prospect first excited well several most as new planning in Cholula plans we late In Appraisal spud we

in Our well partner XXXX. early expects spud the first to

billion about XX, look able all dividend, after plans over X.X% free oil be Slide XX% to next of of spend. with in the $X.X average of capital this approximately our We'll CAGR, as weighting. expect our you being capital years, allocating production achieve maintaining $X.X program cash to be believe delivering while this on generate I at XXXX, year annually while billion by highest we'll few approximately to X% X.X% the

asset annual is five next equivalents have XX% of Mexico the XX% production will and Over maintain Ford Shale production years, day, Eagle per currently XX,XXX forecasted CAGR. to Gulf our of to about average

our exploration, a planned to spend As year. million annual and drill $XXX sure us this is we meaningful allows of three multi-year agree capital which wells five per to program. I'm of you'll

positioned shareholder our the well Murphy quartile after enter percentile we top as another in shareholder as performance, year year a group over years. future off our the XX, Slide compared corporation return XX total of is XXth coming past total Oil peer for three return the to achieved we've ranking

newly Our dividend our deliver transformed free ability exploration continued has portfolio to flow upside competitive cash above yield. a with

value create one positions unique return the dividend into made to flow ability we especially companies Murphy and strategic the cash shift And long-term to shareholders a have with I continued free focused closing, successfully generate exploration to -- today. for shareholders feel upside us for programs. our a monumental we dividends Hemisphere select Western to In significant we've transform company. This as creation. Oil be I'm proud of our

oil capital a continue generate profitable We're to margin in operating the this keen weighted growth, all while allocating our we're future. on assets to high ways doing keeping eye to sustainably

that I'd turn call With Thank operator you. to and to at like that questions for time. over the

Operator

Sachs. is from [Operator first question Brian Singer go Goldman ahead. Please Instructions] from The

Brian Singer

upside Shale, you the you one what Ford EURs Eagle you've expect in is I question talk of the you would EUR production versus push as drilled higher expectations growth if fourth could you first that oil Slide XXXX a from What slides, seen wondered to And XX, quarter? BOE the achieving the a perspective. to on risks in day that the total XXXX. wells do My downside versus XXXX path highlighted to XX,XXX or in see - are from your in and

Roger Jenkins

technology Also improving our see sure Well had the problems more some fourth last had will weighted be We same Karnes Brian, our a just area that to see less totally we with team is that the not trajectory slightly we've Tilden and on we this frac in different in of improvements I'm has made. in program Catarina continuation year great quarter. past. than year where and the this and in

long-term level the it EUR area would were Tilden limited with reserves have undeveloped issue purchase plan in in the some to with very is drilling well the nice very nothing is all, very wrong it the their and actively in But these is lower area wells. nice of new Ford wells allocation performing proven maintain long-term wells idea very large fourth wells quarter. a BPX, was that of for we number went Eagle after Karnes at Chalk and Austin our then our Tilden in partner a some we of over above an which capital and And have the down Shale that level up we plan. back it BHP the The

So a allocation more are for we replacing than typical years that risk totally core drilling core they prior this into we're several and different Tilden drilled of Tilden year and our haven't capital where years. profile in

confidence in the months because program of very last we non-operated in the have achieving this spend of had very Eagle and that into two and a year today in limited non-operated the large we in So, significance own program quarter which fourth in Ford, our Brian.

Brian Singer

separately the seeing and on on you that questions realize there? the of downtime offshore. the risking about downtime seen to the risks and trend couple But guidance XXXX you're recently? some what operating of particularly volatility talk normal anywhere, offshore. given here we've in part the the in how is downside versus can you then is, side second cost then upside And Can talk you're And

Roger Jenkins

time. this a there's and environment. you happened downtime for We've of to Well, have or typically events There's in year have from to with X% associated curves downtime unplanned on that offshore the in types production our planned in downtown years allowance downtime mechanical such time total compared malfunction business. unplanned - two on allowance, wells happen that to predict of to new of prior in Actually situations downtime our subsea unplanned and we have on the less Brian bigger XXXX, hard occasion, assets. What’s as the are downtime downtime. these picture

if line from place these that difficult said an apparatus have what time Those and and to for six perspective we've seen do that spool it. very and is that to this predicted. normally in hydraulic normally the you But we months a this level one-off I what crowd repair this own better and or at our of downtown we confidently had rare occurrence. today, carrying and broke, And system will umbilical we outside earlier benchmarked we and up into understand subsea we power overall As that have we believe and have are assets and we as events.

can't Gulf that a in systems risk time are seven entire inside over bid is for the Gulf we downtime in when And XXX-day excuse it's appropriately Also period zero well. recall never include production, the for Gulf barrels of that completely have is - pipeline X% different year a in different operation. production the off. off areas because a me typically have hurricane the been as Brian good I a day our all feel I

situation into in month in October went there put as for other and go we've Terra and counter the put your we that and as And barrel if Nova dry-dock asset and a was that six zero. ahead until supposed due unknown the May to risk return produce a in to significant is this,

XX. have would at our this production, that prior as information, only happened new December So of discussions changed

manage six of the Brian. long than think go we that that our Gulf you have the with of a comfortable lower new lot that and systems and we have. we experience purchased in in I now have we data a and learning can we months that subsea and put feel we So what downtime well, zero, with And

Brian Singer

Thanks.

Roger Jenkins

we'll don't over do think rigs. figured that of course that is we long have increase to need As will really the have haul, the we increasing that, discuss service. like of Brian, there day rates situation, to be a increase But plans. I for rates cost on into different providers in be I our the that to going

are increase. that are have subsea issue on We we is below continue which ships incredible large budget about a overcoming and most seeing equipment day installation, that drill efficiency real overtaking in the to on and any of rate subsea

and and time. about this day, the on just location it's simultaneous the for - type have not businesses dual work Khaleesi/Mormont of days at And operations. either about at concerned our of set is these completion in simultaneously costs rigs drilling activity of end I'm we As at up the involving,

I day it efficiency equipment, in eating the our see becomes other As in and we rate currently, business. offshore increase when up I lower bid

Operator

Jayaram next is from Arun Please question The ahead. at go JPMorgan.

Arun Jayaram

morning, broad you wondering sir. Yes Roger, if Quay yeah of King's the was I on could I was wondering the - could if structure elaborate good monetization. you

was the this a an was have what to help why guys balance like? wondering maybe strong very get You us I with good sheet. strategic And terms done. could objective look important

Roger Jenkins

just I of this flow our thing these the is focus parity. cash situation of know One done type was on it done Malaysia in ability about, would was all about strategic consider mid-stream we've way. CapEx strongest situations to an

facility of way. done the was Thunder All the Gulf Hawk in this

else. for plan. is a a business very continuation just by major long our done way mid-stream of We've someone of being owned that this a is and operated this All by time

sheet rates our in folks It and participating because very into will be credit St. coming is Waterflood up business. you a balance allocation, project, which paying we've We of cannot Malo significant that became well. different disclose rate our other which long-term it's across matter a to this capital brought risks performing may this I be very as consider balancing mid-stream makes if would our good that the facility. lower, you we're rate,

of one financially I'm our still disclose will will over the maintain amount as happy and financially of we mid-stream we capital I the with three that as for capital million will. to that particular years the project - growth partner and had out in And and all well. very next I want that what naturally we for we we rate decided have And that that And form project, you CAGR. can't do tell the would what take a pay sought on in $XXX if future but part help with us, that the And that that significant and of yet the to ownership it financial

our seen our probably from financials. this when the And none overall line, But this OpEx our overall stream of the we in company on be a plan sub-none or cash and rate remain feel further is we'll the will say in this player higher I of not have. an long-range comes perspective, I than would also that flow

So that, I'm Arun. comfortable with all

Arun Jayaram

help the your And was potentially Mexico well wondering CapEx I mention to oil as XXXX if the and your is as impact Eagle was the I the activity in higher us you Gulf will wondering, the think on in price could for could LOE thoughts if guidance of Roger my also dividend? XXXX? cover workover model, Ford the breakeven you on the how about follow-up,

Roger Jenkins

From perspective, about be an as had this OpEx year to OpEx workover. the we same I anticipate our

the nearly our a Chinook we operating $X by expense in workover impacted Our was well. in conducted manner quarter at OpEx that an fourth single

came at XX,XXX per Of barrels online course all that equivalent day, oil. - wells almost

the within the about quite are in but year, quarterly in workovers, work done anticipate is driver a could would major working have month I lower as you here typical. I of the these have see usually a XX that days And workovers have OpEx being one for of interest and or two wells in increases don't differentiating our we total we

in should So total and overall our the a that as OpEx quarter, but Mexico a could be Gulf company bounce for of be around the business our year sustained.

Arun Jayaram

Okay.

Roger Jenkins

midpoint CapEx, not on to hit goal of from our flow time, of is our spending above is that that cash year, it's use this not a oil - go are midpoint. goal you do also flow basis, goal. have for events perspective, that we're which the way we in last I this and take and of the we're statement, range accrual And that under cash at take course, only on and all cash course could clearly goal will we which goal the From a at guidance through place, above our cannot price the now that

guidance we'd strip we probably strip, impacts to if you end get today problem, midpoint probably virus need in dividend. our billion at $XX there's order If no CapEx on the cover recent at oil go the the the to look that looked $X.X the we with in pricing, of to would but and middle to the of have low achieve the of $X.XX in current

to as opportunities us there later that it's cover impact we hedging be it; timing But earlier we helping is disclose cut our do when that our available company in have the is of course, some as that our we regard various have and what said. not preferred David And should that mentioned some to production to goal a to if in it is goal I included of parts need time. to, and in mindful of this, at

very to And only that, achievable. talking which world the at all. million $XX problem for $XX year, a average the you're million, It handle CapEx of is WTI I is $XX not So XX in still about Arun. think

Operator

Mariani KeyBanc. Please The from question from is go next ahead. Leo

Leo Mariani

on wanted down well Eagle roughly Ford you about I Eagle fourth a here, the just production in guys be to XX% looking workover to follow-up quarter XQ. timing. noticed the lot little know bit had I first a some it guidance, your at talked Ford versus certainly looks quarter, downtime you

you sort then whether sense this to quarter a could production of, of kind workovers wanted bit production, first on directionality little in and or that the the impacting quarter, bit you ongoing the just steady just the maybe throughout also are should to fourth speak here? a in of get the there Eagle not a a XQ maybe some Just me on mentioned help of the out XQ, of, we of and 'XX, year. XX,XXX ramp I Ford so see cadence know little kind pretty in

Roger Jenkins

Eric you, to have Leo. that for take going I'm

Eric Hambly

on Eagle work activity, XXX but a we repair downtime fourth rate XXX have quarter, a level So of a rate of wells. more XX, barrel we more sort to in work the barrel wells similar lift more artificial to day did well higher of day across typical some we to when routine saw XX we the related have Ford, instead happen from of higher wells have the XX, wells, than impact

did on So did about in a sort Catarina that of and an rates. September bit returned online those, one have but normal of come work some now that we wells all those production in We that bit. was went fair sand new wells downtime some has out abnormal out to had clean have

probably workover we're that as of in normal. or into the field impact XXX The head sort XXX from a day from in lingering that line So is seeing rest barrels of about January. like activity of Catarina, we

Tilden day, barrels In barrels highlighted earlier. of and wells X,XXX by about the of our impacted day. our forecast, will prior XXXX and Those Roger part in through is expectations exceeded per wells, a that East XXXX the year. a quarter XXX wells but little impact impact early the underperformed which from over decline from that The

at of we are part So the early year. seeing the overhang a little

October year, and quarter mostly the in in like been coming the in what a online new program going year, Ford this wrapping Karnes cadence first drilling operated our waiting first more of has delivery quarter of later And We well. online for in expected the our Eagle then little the in natural and of decline of a bit execution XXXX. quarter very it up, online. the last second with have coming wells part well of wells that looked in resembles well our have program to We our our completion September do

later quarter year rest strong of of the more But saw slightly second the new quarter and a late then in wells the of non-operated push big contributing in ramp-up then fourth push So you quarter and it's higher Karnes in IP in and for of wells XXXX. wells quarter in the Karnes a with third second Catarina XXXX.

Leo Mariani

back like growth weighted sounds Eagle it's the it So certainly 'XX in Ford here. half pretty on

Roger Jenkins

to that going harder capital, to common Murphy. When load that always way, It it to a you in It's is the the become be Shale. year spending end will way. at do just not Leo. of We're front-end thing stop which

Eric Hambly

XX Our the the end in year in wells at program coming very online late has Karnes. XXXX of

have in a well steady delivery we to compared XXXX. So XXXX, more

on we with instead So decline. a should downward year a the trend natural high exit of on

bit little program. our this year of different a So look

Leo Mariani

And know how sort just you wanted the little of you of talked I a I to know, said years know that thinking kind I follow-up about kind the bit the guys BOE is of on it guess, terms in the of next of XXXX Mexico. couple the in 'XX. outlook. the CapEx, you about comes you down like for day high guys of I mean, sounds Gulf per XX,XXX here, into that are

slides kind some at tie-in I your But of as schedules. looked the and seeing of

looked like get to a the of in it there lot until sense, 'XX. wanted weren't on the Just year a Gulf coming late wells in in

Khaleesi a you in and we to lot expect say go then to 'XX should of can come Mormont go 'XX is up Gulf anything production So little in that? sort a and on down bit

Roger Jenkins

interest more Very averaging just confident year, this significant profitable non-op the large guidance. one capital high in which Gulf, when with gifts. be couple is chart would positive of are the a in this, next incredible Kodiak enjoy probably we The fields wells in see nearly, also not wells, on of I deliver the but much them so this of decline over not production a This you high pretty wells highlighted here. say of years would watermark prior to rate below it's working there, our these

coming on the and Lucius as and And well. we in wells - Kodiak also and both in at and this St. list non-op here as Malo significant have

production highlighted but about So less and confident our long-term very goal of this XX CapEx not profile is the here, end planning the the period. non-op towards of

Leo Mariani

So, on other that the number just slides of help yes, like some to a it are back to there fill that. in sounds of is wells going

that Okay sense. makes

Roger Jenkins

wells And with working we wells these here. with are deal are Leo, high-rate various high these interest, very production, but

Leo Mariani

a maybe I lastly those up a some get more targets testing Slide just we I the terms wells? in guess that at year in thought to 'XX sense Batopilas you little And of early wanted in in XX, get be to would On the going or trying what well these if just you're to just color of see kind potentially prospects in guess gross Brazil, on exploration. the are the later recoverable be what of of on bit your coming

Roger Jenkins

well of we what mean opportunity, I you'd Well, - XX to targeting do those in many, mean, we many always exploration Mexico, plus to we're type disclose not there. I million here. the typically requires of and a matters anticipate in be type these barrel the partner approvals have Gulf are therefore

area lot there you flat a is and need a had structure position with and - last had well. an thicker work we to good off opportunity come year who in also In that Mexico, and the we of a all our was into ideal disclosed, reservoir that done oil in in if of will, bit did very level that spots of was to wells, that one a nearby of the water Cholula and Cholula the the discovery well not we've seismic crestal there have a response with zone, a structure seismic

that in area XXX will, to in same door, of that's next if we're pretty of things nearby depth barrel-type it, are area. and opportunity these well identical that And that you that the large derisking age million kind from

very and there's to large Batopilas And similar that Talos is two range have discovery what zone in XXX barrel in to of add-on salt. the $XXX and is equivalents very can we add do it's well easily So Miocene a now, a we large Mexico small to structure underneath Miocene right well the Gulf. size of Northeast businesses tieback one the million a in middle million above we

something there XXX And our quite which we those opportunities, anticipate so about not go it. can those we hopeful basin, the And and above the for of and you we're say like all course, be that's you large. be to to that the size can those disclosing Sergipe-Alagoas large opportunities, partner with of that and with have

time. then Again region wells, a have Brazil type typical Mexico in beyond of well disclosure that the in very in the in excited Gulf for wells, very in about. XX, treat with we're limited of we're touching opportunity big a a expense good Gulf its at bit of, these future And and fact. us this close - in the to But XXX

Operator

question Please ahead. next Gail is Stephens. Gail open. from go The Nicholson is your from line

ahead with your may You question. go

Gail Nicholson

was I on Sorry. mute, I apologize. Roger. Good morning,

Roger Jenkins

morning. Good

Gail Nicholson

appreciate and about Two fully online it once the - of and of the how production in questions, I talk in post system? the of, doesn't longevity market the really comes Malo the scope how forward the kind timeframe. that Can looks think 'XX then volumes 'XX how you just, benefit St. long those

Roger Jenkins

here. Gail going this Mike's to you handle right that for morning,

Michael K. McFadyen

early 'XX range Malo portfolio of $XXX on XX NPV, kind to oil. million $XX adds barrels adds in over late at day barrels million share St. offshore our 'XX reserves rate NPV a net to it XX% and and X,XXX an return of peaks, of our about to significant XX% comes million $XXX with flat about production

So a it's portfolio. significant our offshore good and comes on for time at

Roger Jenkins

a last long time. for very And

Michael K. McFadyen

Yes.

Roger Jenkins

Well into XXXX.

Gail Nicholson

in provide Can guys healthy had And just are some you then Gulf of very some on GOM differentials. how Mexico XXXX? differentials you guys on XXXX viewing color

Roger Jenkins

XXXX are diffs parts major 'XX. than hasn't much better an think differential been Yes, lower The of from were perspective been the really picture that was forecasted has than a IMO Gulf in in impact. that I they the

mark Today, as of are the of purchased older would over our to assets Petrobras, dollar some this we better all is fact. see in year-to-date, production, forecasted and clearly where be that's feels. off in our Mars Medusa business well Mars XX% and $X.XX $X much we than diff the shops in negative, these thought. that to positive, originally be And front-runner the February diffs below Gulf of be our these It's we as of Mexico, about from

margin around this soon all now working very, the $X and the there be some high business is dalmatian HLS good four, and clearly I Kodiak about range in was in we Gulf, and very and quarter positive non-op positive XXX around and our LLOG that. we there, crudes field that feel well we're bought a our In of have XX%, over the

have Houston, liquids represents Ford. And been of a coming we this in XXX Another two which for the which nice crew. XX% in Eagle MEH is situation Eric's Magellan East positive mark out, or basis old about us WTI to XXX our business

overall, I price positioned are transportation So and to of our at you look the still company, where and believe located. when barrels we're and realized our be

more the advantage why And unique and added it's because and we competitive these to have, Ford that will our nature always of where we Eagle business. capital deals peer, we so be We positive we're to Gulf any selling the our about almost happy barrels a allocate very business think

have you have advantage. prices, If you'll the always higher

Operator

Please Paul Instructions] Bank. [Operator go And from next Cheng Scotia is from question ahead.

Paul Cheng

in to assume is the areas? If adjust Ford or in you CapEx Eagle you also should have it we only will adjust that other

Roger Jenkins

time. again as I'd this not prefer No, disclose to this at

We're nor to do can delayed, will, high We we have different plan trying the Eagle the and if make the payments we our seeing that some in our are that at are Vietnam naturally the in part we reductions some plan, costs exploration we of schedule this to in workovers which and Gulf, Ford end and if feel need not year. it. that field allocation milestone development very at adjust we tie-backs approval be some return of to capital and our you do those comfortable change where that do can do we'll I rig it time. make

Paul Cheng

to And identify is you Nice. going in - next the next Brazil well already guys have early what you're drill year year?

Roger Jenkins

that I that? again, Paul is Where missed

Paul Cheng

In Brazil...

Roger Jenkins

in super go project as and monitor have similar on - you I partner idea large course, We idea And there a time, over there. it we're you could but think we disclosure a back well. would disclosure good and of a with large another their good have anticipate of here dealing

Paul Cheng

related So anything target you maybe give not peak point? a were at drill or be able a to - us this

Roger Jenkins

the end imagine, would it the We of will, as get I will nice one. year, we towards but be

Paul Cheng

the Are early talking you we beginning the say of next What... when year. first about quarter? And

Roger Jenkins

'XX schedule Yes. sir. with plan partners, early Yes, anticipate permits involved is I have. this blocks involving to they the The of rig other some there be our in And that at time. and well it

Paul Cheng

to understand trying well, I'm when... a that XX talking days about we are And XX,

Roger Jenkins

XX. so, would I imagine yes, probably

Paul Cheng

days. XX

the quarter result. the So for probably sometime in second

Roger Jenkins

Yes, possible. That's Paul.

Paul Cheng

not days? going the stream on And that next I saying be in coming when the Ford it. for to may you're Wonder have XXX that any Eagle missed well you're that

Roger Jenkins

time a from we have that's flowing on some going well October in the Saturday. early wells No, no, put and we're no, to

been a long time. So it's

Paul Cheng

I see, I for... but see. Oh that And

Roger Jenkins

capital Shale That we impacts in that front-end typical of for and quarter. burned allocation program EUR, got loaded our fourth above our the we overstated production

rigs there. pretty on there that we're And top what and here with planned good We've of right doing issue on pad about a guidance our starting the XX-well have project. front-end Now feel significant we're and of at quick a bringing drilling three we been end year. long-term loaded the

Paul Cheng

So to the stream? see first quarter, we going not are any why on well coming

Roger Jenkins

Erik of play the Paul. put what We're as we're a are, Shale and trying in we're It's that in earlier quarter rare we to - We wells starting significant I'm Saturday hard a back to and been you'll but find and is adding well not on in XXX to days a a cadence this while, starting throughout say the and wells it's clicking described building, have morning. call.

Paul Cheng

think you you is and the some that what your the talking anomaly were the guys East okay. in is give you that in fourth the what Tilden was fourth us CapEx adjust use? East or you - the you're do quarter can Tilden, about? performance the quarter forecast an final well forecast already one And corporate forecast still, And And from have well that me,

Roger Jenkins

you, Eric will for answer Paul. that

Eric Hambly

Sure, Paul.

wells, brought those the eight for somewhere their Tilden exact our XXX average East IPXXs number, with They're not but per the the So in day forecast. online we line wells. around wells BOE basically were

So started they we a see decline. that for really XX steepening after good about to days look

and into we gap total will there, will like and the forecast always heading as the do. BOE of the - mentioned, per current prior the was for day, be about expect year performance as that declines through our but between prior the the January I the wells eight decline production So wells gap it X,XXX expectation

Operator

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

Pavel Molchanov

little Western this the the Hemisphere the in afterthought play. bit kind of you've intro exploration be Vietnam a asset But and point. of, a reshaped of your, pure it's to have feels made One point is it at still you an base like you

what for curious logic is I'm retaining So assets? those the

Roger Jenkins

in upside significant those assets. There's

field a there there been them be feed, unique approval bringing were slow. significant be plan - if development you we're there not the government through doing have - allocation And we'll having and have we that rushing we'll very online, the so situation. capital discovery We It's with currently government our will. a

with a have building of upside, with the type our all that's sleeper cash and going free with a next is business our added We block well involving and significant and capital of but and there us we of drilled by having for series be business, but a another us will flexibility free all of forward. different type a drilling has allows us just cash parts risk allocation limited for commitment, we prospects couple years a are one first at jack-ups that of this flow. low definitely It significant flow and of this year, particular slowed time the CAGAR business in allows been

very discovery will it. there our a being into - So position, very what position, about here a and long there, a excited plan nice we've be inexpensive unique Vietnam, disclosed put entry like have very range it's very inside

capital for about large this we a day. read there being not Just reasons year that all those every

Pavel Molchanov

international revisiting ago on And if or one now, any the efforts I you five I'm was it think first, you I of kind emerging do drilling in a to course, curious, made of basis. think, headlines recall, have we're I the in to geography? if question, Suriname then interest exploration E&Ps Suriname, in seeing that. do more One six seemingly some of that daily that opportunities fizzled way years

Roger Jenkins

just time. focus information We to and in but have in wells we added all Brazil of and America, totally the and Portiguar we're a another focused Gulf ago, block data in which so work. years trying Mexico global we more Those is more which focus, we drilling which significant in many - totally recently interested you Hemisphere We're we're have a play, on explore, been segment having a opportunities in Basin. proper the as different know, we in where different in and were in basins on South we've Mexico offshore

Just mean there poker because price wanted we of haven't there doesn't we haven't do. above and the to what looked participated, it was we

would like but you business forward. And make see an occasion look perspective will work we're in development a those the in someone's agreement to places of limiting that on very in. some also to, to And it to sounds day unable that in prefer you when you going be a that we agreed simple, country agreements different at

in shareholder and found that but region, can not add an there, value. we we're participate So like opportunity we against look significant this we haven't where working would to

Operator

There you. Thank are further no questions...

Roger Jenkins

Okay.

our end We more everyone listening have we'll in, quarterly see no We appreciate so today. today result. you that call you questions for Thank at our will and and much. next

Operator

thank and Ladies We for and gentlemen, you you this your concludes our we call for participation disconnect today. ask that lines. please

Murphy Oil (MUR) 30 Jan 202019 Q4 Earnings call transcript