MUR - Earnings call transcript Q1 2022

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Kelly Whitley

Good morning, everyone, and thank you for joining us on our First Quarter Earnings Call today.

Joining us is Roger Jenkins, President and Chief Executive Officer; along with David Looney, Executive Vice President and Chief Financial Officer; and Tom Mireles, Senior Vice President, Technical Services. Eric Hambly, our Executive Vice President of Operations is currently attending a Harvard University executive program. In the interim Molly Smith, Vice President, Drilling and Completions has temporarily assumed his responsibilities. Please refer to the informational slides we have placed on the Investor Relations section of our website as you follow along with our webcast today. numbers, interest financial Mexico. in production to are call, non-controlling exclude the today’s reserves amounts and adjusted Throughout Gulf of X, will mind made in Private Securities as please of Act the Slide comments of Reform the XXXX. defined that by during considered be some call Litigation forward-looking statements this keep

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

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

Roger Jenkins

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

X, a Turning Murphy proposition. deliver continues value to strong to Slide

producing excellence ongoing are long-term sustainable execution Our our a from proves we company. that areas three

competitive Our ahead recently the King’s oil achievement continually first and in Samurai April. Quay of from Mormont, most advantage is Khaleesi, system production floating schedule with of reinforced the

to reduction strong as to realized able with year, flow returns this generate our cash higher been prices our accelerate debt quarterly as oil dividend we’ve well shareholder through raises goals. increase continue We

goal. ownership highlights start of company’s XXXX, our meaningful level remains and Since the personal strategic execute explore. reduction of Board, success. priorities interests we’ve in three Lastly, our the Slide on our management long-term focused Murphy X, of debt delever increased

pricing. goal forecasts we in to of $XXX $X at million up million. of an the this only the $XX $XXX million is barrel guidance this week to through of per this reduction, for redemption step an barrel production optionality we targeting and Now WTI Monday the having achieved believe assuming per achievable Overall, debt with year. billion on $XX $XXX additional for year Longer-term, XXXX first announcement to price of have current

reductions. additional to debt target our overall We for review accelerated continue

credit external upgraded recognized Moody’s efforts a S&P. our BaX by delevering received being agencies, and to recently as from Additionally, by are Murphy’s outlook positive

reached oil, early XX Shale slightly milestone the well. in Ford coming Montney Eagle flowing two online schedule. operated of Tupper that been for the real Shale, quarter. with are our anticipate the Eagle operated Quay announced early field first wells to our enhancing quarter the levels wells significant team online in have next are wells I’m far in a of floating April, high ahead five of Samurai In imminently. uptime wells leading we indications Completions field Mormont, progressing exceeding King’s currently As pleased as already project Khaleesi, with time, we first two, ongoing production this remaining though, the Ford onshore completion And expectations. flowing with we production system, to from the well XX the of flow in XX wells wells methods our we has

liquids barrel anticipate and quarter first for per to XXX,XXX guidance from We to outperformance oil for X, is an assets. of Officer, average this of wells of quarter. David XX% from financial XXXX, prices for program, I’m produced Chief turn WTI On are oil our high Mexico. expiration of $XX a the for for include per a conduct. XX of back NGL, our update per total year, Slide more the advancing expiration. priority see quarter third we’re Our drill we the this also well, of exploration weighted plans been revenue in the is Tulum pricing strong by to that of oil and with an end regulator, additional on range benchmark leading over X period the This $XX realized with Block than $XXX due offshore million. expiration our are a barrel later our working to partners granting to now operated equivalent recognize Financial we pleased I’ll ahead Gulf call the in Looney. the with Overall, our Mexico We’ve day which Murphy in two barrels

David Looney

Thank Slide mark-to-market a X, of we diluted non-cash and net for mark-to-market $X.XX everyone. contingent million reported $XX Roger, derivatives a morning, the you, on quarter, on and included $XXX loss good loss item million after-tax $XXX loss million first per certain consideration. share, a or net non-cash adjustments loss

also million in $XX CapEx made in to $XXX Mexico closed our or and quarter net the our adjusted we million to in dry from reasons. crude a of $XXX including income and interest Cash income positive impacts flow adjusted goods. $XX net an also non-controlling a unavoidable a for significantly of mentioned, services $XX XXXX first diluted specific for our the $XXX result, After working As guidance just of were original country operations of the CapEx million due as for share. million million per $X.XX $XXX we reported In changes. tubular Slide was including Most totaled reported $XXX accounting XXXX. hole $XXX payments inflation total the of costs million, and fracing of adjusted cash million we few million, million. editions capital reduction achieved quarter, net X, above acquisitions for total property quarter two and we Gulf accrued contingent oil related

the additional result decision paying Tupper to was intensity, drill in costs the to We for expiration impact drilling the completions Ford higher adjust in account laterals. standby the Brazil. to also off longer scope which is the for CapEx non-operated The of of Montney rigs quarter our made Eagle the Shale and already remaining work during in

range full guidance the CapEx $XXX by establishing year new XXXX, of raised a of our X% to million. we’ve For $XXX million midpoint the

Samurai we XXX,XXX evaluation Mexico XX% I barrels ongoing XX% pay we to impacts scope further Gulf to million field of to guidance X, cash have weighting. to an of with the cash continue Slide debt liquids of high quarterly our to oil million. level Beyond and the year, we’re position oil towards $XXX target also day and additional in With payout prices, and forecast to just reviewing Overall, per of dividend addition mentioned, the our intend the of direct which of maintaining previous XXX,XXX with $XXX for a production of completions. oil remains in reduction, ultimate impact due of cash our from million zones XX, historical we equivalent March returning levels. And a $XXX high excess to flow totaled equivalents strong. as

targets to in operational much January our first announce quarter the first and forecast from executed higher With we achieved in execution, redemption with I’ll this reach As stated, company we’ve project, debt the turn with and is will steps now in we’re on for than to the often first that, year financial it prices delivering. XXXX achieved great and our this in Roger. strong Samurai new Mormont, With $XXX production position reduction June. back of which million ongoing over focused first in be announced targets the Khaleesi, week, earlier

Roger Jenkins

Slide you, Thank X, increasingly been on Murphy’s David. focused operating sustainably.

completion XXXX. water million well. frac XXXX of operators has Duvernay gas XX% Our team and while water replaced first achieved at natural Kaybob offset volumes operations of recycling the emissions Meanwhile, by quarter also reduction of have industry’s as in of fuel average for water diesel utilizing recycling with total footprint reducing in gallons and drilling improved recycled over XX% an X has

designated, has state for by place Lastly, Houston XXXX partnership. that I’m parents Murphy the pleased best in to been a Greater working

Nine liquids, with Slide Turning Shale XX% non-operating in five now gross XX. barrels for to XX,XXX equivalent operational quarter brought plan. Ford wells on the Eagle per are four the barrels wells area. produced day X,XXX online Karnes equivalents just and updates Murphy a day Tilden our wells in above with over

has an through for outstanding reviewing data remain job completions Murphy’s intensity time in team as our deliveries enhanced the done real and this Our year. well wells. completions completion on schedule year

very in measurable wells Montney, initial cubic on a could higher for six in To-date, work first Slide the produced well The to wells with the quarter, have the second has million less payout Eagle the these company Murphy XX pleased than OpEx. are feet we sought launched selected first with campaign opportunities. in and day XX XX Ford in impact quarter, that prices and quarter. Tupper capitalize of over XXX a targeting month ways achieve we early the The on results. began oil Shale producing

quarter We’re this and second advancing evaluate our come adjust our well costs. to rather. drill cadence higher slightly team The well to in on recoveries schedule online the XX development to wells to longer with permits enhanced well plan and laterals, leading plans quarter existing

play. achieving wells scheduled St. On in this oil, later Slide announced Murphy-operated The Additionally, while full royalty wells day AECO with year assets also per a the at Project impact price XX,XXX this far other far as guidance, in floating in barrels simply is year XX% seen per of This Kaybob liquids Mexico, X,XXX remainder oil of unconventional we’ve April, quarter King’s the AECO XX, during our and plan equivalent there quarter, for in for producing XX, assumed of two for barrels the is our Quay which price projects, our play. in estimate so unheard three area C$X.XX XX% we Slide AECO produced the results Gulf rate is and X%, we’ll seen quarter, with schedule producing XXXX system are the our of combined oil volume XX approximately Duvernay the key us day capital development is great work equivalent type with our The an activity Murphy And barrels as Slide produced X,XXX above day. FPSO came per acreage On XX% tieback early IPXX a company. wells at just on the advancing per oil content this growth equivalent This for our American be the of price uptime, year. of. last first allow oil and major equivalent on Malo these ahead of wells estimate spending year on Waterflood barrels our for These ongoing. oil day year, and online curves. for per retain assuming below budget. when Duvernay We’ve royalty Kaybob solid significant XX% significant XXXX, day oil for XX% produce production designating plans non-operated to current is XXX approximately in our is which any approximately North the production to barrels rise of in XX,XXX completions overall, with achieved of and

well Samurai The we drill field. the evaluate imminently, encountered as main well third last plan XX well additional well well year, our further. targets drilling the This In to seven is four successful remaining four completions year, of in to Samurai well. pay while to in averaging zones for targets. nearly the above include per project, prior the XX zones primarily a the in very main days This wells anticipated flow pay objectives continue on above feet sidetrack was and the three plan the found as XXX of our these field,

in our completions evaluation zone. As a of this for the increased and result, plan well development we’ve additional capital

Turning in Block X explore. to priorities XX, the approval of strategic received Murphy the additional quarter, regulatory our in exploration In Mexico. point on period when third an first to Slide exploration

in necessary is hydrocarbons. the and as exploration partner found well participated of Murphy permits no the abandoned Tulum group is year well well plugged ahead well. operators progressing The the the Earlier later Brazil, this and to operator. year, the We’re drilling results, we expensed evaluating and this approvals in which

ahead, Looking a mentioned Gulf million XX, previously, advancing is to is half operated as first our $XXX mid-X.X% our forecast year, revising in drill occur David million of of while in year, Gulf earmarked CapEx the wells plans In with the the for we’re major XX% of the projects. XXXX. approximately range Mexico $XXX CapEx Slide the to two our spending higher XX% for of the of in

equivalent day, approximately quarter forecast range production barrels XXX,XXX plan non-operated This per barrels shore equivalent day. at liquids. downtime per XXX,XXX at is XXXX was offshore on downtime primarily equivalent barrels Second X,XXX per X,XXX production of XX% of and reduced day, to operated by

delevering net XX, long-term continue day through first to prices, come XX% reduction Murphy with forecast to X% project, quarter we Khaleesi, and with of equivalent equivalent XXXX, CAGR We XX% to continue along to the barrels of As we We at with XXXX. our onshore – in goals an at XXXX, average of optionality well production production in today’s prices rather remains day our Samurai average year full XXX,XXX per XXXX for through an liquids conservative higher a guidance Slide billion barrels XX% XXXX. total increase plans, our well each of project of On of online to production maintain strategy accelerate as focused full average Mormont, XXX,XXX delivering strip. oil from on $X higher significantly delevering XXX,XXX execution $XXX of liquids. than comprised XX% weighting production rather this a million including average oil per quarter

resources. this Additionally, X in company per potential debt another risk plan oil excess will to reduction dividend offshore production equivalent net increases direct we our period approximately billion maintained day. Overall, barrels provided enhancing of Exploration shareholders, remains the barrels portfolio and equivalent of our flow point a focal goals at is that has toward simultaneously. cash our XX,XXX while payouts program with accomplishing

day average produces XXXX which term we target grade per volume to our look as plan XX% a while barrels approximately XXXX, corporate rating. weighting, oil an you portfolio forecast As remains equivalent, XXX,XXX intact we current our annual investment longer

we everyone generating unchanged as Samurai, cash then shareholders will dividends investments. for flow resulting maintain and During home strategy a used ample Slide in flow, additional and which for On looking cash the forecast generate production period, returns our while ongoing top dividends. forward remaining bring of plans production XXXX, and wells quarterly continues end Furthermore, send metrics be The on day. to this three important, is a point onshore to at pillar significant accretive returns wells, buybacks through environmental through be XX, Khaleesi, time through Mormont, advance strategy the and and without our as these continue we our cash further is from as at our the and goals, our we execution work reduction to safely support completing safety debt execution focus tier key to shareholder of issues. well execution remain

some the my as program, exploration I he most for CFO, of ill thanks drill Looney, the opportunity Mexico, continue few company David Lastly, forward to I COVID service closing, to past our this to relieved like me, extend year. March deepest to target look later with to glad in I’d retirement. our and the in thank we best XXXX we I offshore in In the very thank have. to the over Beth, any when times now questions let – David was in our to and industry. And Directors ever that. call over all our I our company and wish Murphy in their Thank turn David I’ll difficult of be wife, And you of might take operator for Board his the to you. years.

Operator

Thank you. and with now from comes Arun Jayaram the Ladies ahead. Please Instructions] begin will session. go question-and-answer [Operator question first JPMorgan. we gentlemen, Your

Arun Jayaram

free billion reduction flow. we over I you next a from cash morning. debt around XXXX, JPMorgan. the over Yes. flow for David, Roger, get priorities I XXXX, know to Good of of Jayaram from our two wanted we $X.X Arun some model thoughts cash free uses when But years is get priority. clearly run pre-dividend.

then David, per dividend in the of XXXX of if pre XXXX cash could And the And there’s of on during your asset $X.XX including packages, terms quarter COVID on return, $X.XX go through wondering and what to through, we block was the priorities XXXX restoring to per was note I share go XXXX the that which would obviously, the today. potential level. so some comments to your buckets levels, in maybe is And dividend Petrobras kind the be. you

if thought could go bit where refinement dividends that give wondering to. us little So you more the a would on

Roger Jenkins

billion paying shareholders know, as capital out dividends about we’re our and may you since for And XXXX we’ve long. that returns, dividend dividend buybacks paid to you Arun, new since through over been not the longstanding Thank $X to XXXX. question,

next easily well delever well step in to IG sheet. year. and opportunity that doing first for, plans. using and down following long-term. lifetime be mean you’re de-levering, we’re can really once have doing Our to those in that accomplished because our in greatly paying pricing current we I’m in model the JPMorgan by a execution Because is we’re sure greatly our just debt that we balance notes And With the our

able to to a two delevering paid be annual that an to simply of that the in do will that increase. increase that We’re need we that. and toward going year to The for X% I to dividend. on reached, way looking But is and increasing it be is look it’s Arun, flow cash while continue clearly, advise to is, we’re to This about will basis. while our was our row delevering, at Until X% XXXX, of free same complicated our be dividend to want dividend. quarters about dividend level simultaneously to forward do done continue in

a to Our year. need up last last $X.XX that in what to to annualized just $X.XXX quarterly know. as increase will per annualized on share keep increase you we that year And was will basis, be order with did

were down goal flow where first we we aware calculate we’ll to model doing delever and this year in things a to ability percent cash be are your much naturally, consistent at that. to once that. and free can Petrobras, and So on XXXX, continue last And question as those you is larger that lifetime a process. fully of up in keep last we of hopefully And plan then involving that IG, and we’ll dividends simultaneously that time, when reach buybacks for evaluate rapid

as if our right. and be that, very accurately And you at ability process, must things say, of I’m lot great see and that. that. a that doing would to would we you our good been we can quality using understand preferential that We’ve the I M&A, and be any valuable as know. accomplished share have preferential, fit. And that about to right have And it plan sure alter in Arun, would We And reviewing not company views hurt pursue we want reviewing we’ll that. that a very

Arun Jayaram

Yes, fair enough.

on or Montney, one given give the us this But Okay. as commodity prices. and move largely situation Roger, an potential down volume anticipated, you update your think permit the expectations about the on wondering could just allocation tweak you stands regarding impacts to where you capital get you if the was to industry and year your from royalties Tupper any I plan higher I to the on wanted update did Tupper. BC future in as

Roger Jenkins

the Montney. resource Thanks, anywhere. about we’re highest a in wells wells this say of Arun, of question and do must the overall the the are Montney rate two that that flowing And probably that I the We there. significant seen have we’ve quarter wells some best ever two ever some

a for it’s good naturally. really So us asset

vast to that to wells two, increase permits. wells longer, off drilled by experienced the a capital. give go close and be half years, unchanged some to basis. We achieve there, we to around BC with in effective. speaking toward ministry the my more or in Canada required more to regular going array the of that how in of will be very forward We’re and planned, pad being hats And because this slight like XX over the gas we albeit contact them caused in XX progress my a year we’re approvals. had able to of execute the which our We I team. Canada on second believe a moved year be of oil to

the year, today. improvements the the the we okay anticipate still time believe our to of forward Montney capital we’re So we’ll long-term year, of way able our execute second budgeting. half around And are this in still plans be for toward

Arun Jayaram

and your your luck in golf future Thanks, there’s lot in a endeavors, future production. of fishing best Roger, and David, of

Roger Jenkins

Arun, talk Thanks, it. you to appreciate Arun. soon. I Thanks, Thanks.

Operator

Scotia comes with ahead. Bank. from Your Please next Paul Cheng question go

Paul Cheng

morning. you, Thank good

Roger Jenkins

Paul. morning, Good

Paul Cheng

wishes David. Good morning, David and have your hope golfing. best of Roger a lot you a and lot fun doing of in first And retirement

Roger Jenkins

Thanks Paul.

Paul Cheng

– this is That maybe for David.

XXXX You compared into your going that say XXXX water – XXXX on payments. how project. speed to that the the and idea factor to inflation is Any

we payment, the an what for think That’s XXX, I be XXX changing a deal say is XXXX. environment several first the you see to about or and terms for under maybe that question. And given XXX XXX going maybe And contingency been that for how for for is next the to for for or the XXXX. previously looking maybe you’ve remind years? new us liability can the also remaining the XXX

Roger Jenkins

I’m that. glad. Dave’s to Thanks a going lot of retire have after to questions, Paul.

David Looney

Thank both address you. Those I’ll Thank good were good exactly. Paul. very the first. Very Yes, questions. inflation point. you, question

think our the we’ve You’re correct. XXXX if provided XXXX, XXXX. XXXX, we to real the And XXXX, been based we’ve and then for seen Obviously, our fashion some look guidance the XXXX this that XXXX on it. today that onshore have a had saying average completion seen had you built to inflation million, for mean, year, while in inflationary the for impacts XXXX, small a what we’ve plan our issues. where with I obviously $XXX and amount deal increased and drilling certainly at CapEx going We similar into into

number So just for you XXXX, basically three that that average year $XX we tweaked or a X% bit that. say – up million is give XXXX probably something a XXXX, if like about we or to higher, little that I’ll

you the not look huge when So increase period. at three year spreading that a over

properties. put deals XXXX upfront on triggers, would the kickers for to us, the payment in were in if look we did most whereby them split additional they it of a we for those amount question year, cash XXXX that any So the we revenue if out given make exceeded both but that the we in XX-XX because part, really a revenues have did sellers of well revenue did deals, would certain contingent on again, saying, at and with the pay great so the payment, contingent have worked we standpoint will. We the in payments, not from you

the obviously time payments. negotiated the of transactions But you million information out if year, lot the we had we’ve these good first either deals structure of this in contingent point was the example, pay contingent when the XXXX. on we have and seen Petrobras do for payment in deals today’s a prices it’s the that Certainly, we oil payment at basically, place the carrying production I I would the year. a and $XX that under would March to So, deal was we’ve XXXX of high structured. our are would the about and deals XXXX you put in look XX-Ks final end that, payment towards next the the of prices into make this fully and expect XXXX. in tell factor year, way of levels, at to That’s

You calculate the revenues on year. an annual basis and March you make the the of revenue adjusted payments following in

probably So had. transaction, is prices payment we $XX with in it to current would or the an of levels, the in would quarter expect all of the again have would of look looking year could transaction, million $XXX particular the in payment agreement we year LLOG range $XX obligation structure. would million additional and the be of year out so under next respect at the to production extinguish LLOG would first original fiscal Petrobras you calculation the at the that deal March next another at because again, we the be Similarly, actually that under that that folks, if final million to max XXXX year of

Samurai production forecast that And in on for finalized to those obligations you Khaleesi, And in what at it together additional LLOG Quay that happened specific to So we be based Mormont, and is expect current would extinguished have those to oil the current roll be payments we’re facility make that agreed at XXXX, properties. today production. there’ll effectively XXXX levels that the two of payments those regardless again, is deal or to pricing that we March we no be of that related again, related looking would all field. payment King’s if XX. There first with a then

year One second in to a those would was up payments, that’ll $XX another show made which and the quarter, April, just from in be that likewise was similar there of million. April million $XX payment

entirety the answers payments. question. your So all Hope that’s the contingent that of

Roger Jenkins

forward that. receives of these contingent party further the color deals, at the that add in to other didn’t proud the revenue deal that to contingent when these curves did like were little it. I’d have quite When Paul, piece And payments. time set of pay of a We we’re these we payment, which we upfront.

these the So did both revenue line We with other we’re would that time. sharing up deals, not know of in at party. XX-XX above go all the

getting because of make a of piece well projects glad we but the it ago. that payments, on to did, glad and very pay by on and done in two $XXX up because roost we’re We’re M&A it we’ve it the didn’t lot and we’re a these contingent payments, money oil we’re came making years the front

So that’s deals share the we the in the but It way as are Paul. party, structured. favorably other turned for reward in that well,

Paul Cheng

great. Okay,

the in question first Just a weather production final what is if impact quick, quarter real curtailment Eagle Ford that’s any.

Roger Jenkins

In the year? first of this quarter

Paul Cheng

Yes,

Roger Jenkins

none. We had

Paul Cheng

None.

you. Thank Okay.

Roger Jenkins

Paul. minimis you, level, de Thank Our Paul.

Operator

Truist Securities. comes Dingmann Please Your go question with ahead. from next Neal

Neal Dingmann

under to four Maybe a quick for feel you. my for Dave just good you. five makes keep try And or questions. I’ll one

to flow what comment on go to – on profit just talk that. obviously? up. taxes, see could bit you a see expect cash Maybe you just Nice cash Just on little on continuing the to

David Looney

if But we’re prices to, NOL level above at $XX current will expecting average. stay we’re through then NOL XXXX, oil be shield does as in for year a now as burn Yes, there Obviously We amount very – question. the lot. billion, it out our around paying long taxes good. really Neal. $X.X we on would Very, of this the with cash Thanks you a should excessive, perhaps talking small the about.

that towards XXXX. future at tax we’re perspective. today’s the as do current the Canada things and a they’re of to So end prices, But you have the paying minimis look generally with from out cash we’re pretty amounts de probably into good

Neal Dingmann

expected you about couple David, discontinue. then about, might I talk a just little it next Could just what on pricing And just bit we of looks the you [indiscernible] Could know kind here? Okay. barrels. talk see price, like quarters

Roger Jenkins

is Dave Neal, got catch breath. his

Let him matter. this notes on, dip. get in let wore my Paul to me Hang me down. do

you if XX% Sweet, best our a way which about to at XX% to is a that differential XX,XXX barrels and say, I which day. from would is Louisiana XX% year, crude is XX,XXX Heavy oil look and Mars. think MEH, HLS, the for a is company the talk Shale. our EagleFord total let’s perspective be is

Of pricing FPSO have course, cascade Coast in very have strong Chinook with along with that our and there print the Gulf. East Canada we we

So MEH Mars forecasting, the at year. we originally negative we’re a year, dip $X.XX probably for for HLS a $X.XX to had for And positive same. $X the about the

and our that XX of Gulf non-Mars at we overcome barrels being Coast easily. XX% with So Mars, can

fact, And realized of a very great Coast back we Gulf in the WTI, first when barrels. we basis we have results we ahead of strong realized matter rolling, were were had our because a with really As quarter.

Now coming had Mars SPR no cheaper any you crew to exported. off barrels in forecasted SPR Mexico was Euro we with this has This the where did recently, the good the at while to Gulf course as And of of would anticipate. gone hardly refineries if negative market, negatives therefore, shipped up there’s in now market. than dip to all current the with a

board that in SPR, reductions the barrels. with we pleased the the we have for while EU very the Coast year, negative our end as being positive today So here the word see Euros we up the further. drip on about very of it. we’re across slow replacement And of can about we’re $X that about And pleased Gulf in

Neal Dingmann

lastly, ahead sounds you’re a – just really bit remiss, you that. a really running I I didn’t glad looks to Okay. And like it like That’s of Roger, nice then Quay on setup. schedule. hear I King’s bit look a ask

there What us it’s that So not far it? after talk just that? the there as initial just it. additional I these only mean, more than about you satisfied on, give is come is upside beyond perspective is you’re now future Is all can as capacity wells maybe verifying capacity looking and what – Maybe there? with how even

Roger Jenkins

but well. extremely the collaboration you, And just Great industry facility. tell and than that. question. project better are probably Thank so wells It’s my a XX% well cannot how the XX% not just teams for incredible, with incredible Neal result. and execution, much start XX% done uptime, pre-commissioning the you have doing installation, teams, the in production a to the It’s for new big our us,

running, XX,XXX it wells barrel fill it’s And to for can the the that pay out is is because that have we into XX,XXX can plate, it’s you in happy a can to got and all there day down able I debottlenecking and We be inside be to some Samurai that look but the deal day. know we’ll Samurai. them. you a plate of that and I should get team be but this uptime, additional done. great extremely border there, infrastructure, some great more We debottlenecking find well. doing it’s for a barrels very course, found as there. future but to on, still field, hope, deal inside us that’s anticipate things to facility you have very great tell we a that results, up team, our wells at pay if powerful pleased tieback, lay when very great fortunate we’re sell facilities and This are at feel name extremely a the looking one get we with of

Neal Dingmann

No, for all you, there. I’m the looking upside Roger. Thank

Roger Jenkins

Thank you.

Operator

Neil question Please from next go ahead. Goldman Your Sachs. comes Mehta with

Neil Mehta

updates for team, this morning, thanks morning. and the all Good

of question around could about? to Brazil, what about be you just are the we as first here, update see it excited company? from how Obviously, we Roger, The context exploration if the portfolio that out was as should Brazil, of in put got but relates talk you broader you And exploration. the the

Roger Jenkins

question. that Very of it’s good one Because key for you our Thank question. priorities.

just let in address Brazil. First, me

disappointed didn’t and hydrocarbons. about high quality very the that find we’re Block, that calendar overall well, and very reservoirs thick, very results. enthusiastic prospects thick, the We Of Cutthroat course, remain with

impact to to a So to very have retain have horizon at a opportunities that ample ask, different multiple this that that a and exactly question. tied are exploration we all. at with go X.X a long that with now opportunities to high we related in That’s position and It’s play. have depth acreage Brazil a in sourced well way that, acres aren’t large different that are there there not remaining way million

similar proven. an on from portfolio with like that’s risk think I we overall a perspective to to drive exploration, our

capital, ahead on your lifetime delever not the dividend, business do the step. and left now. have you’re very money first exploration opportunity maintain in a a little when That’s capital. And you while specific oil exploration to that production with your your We’re trying extensive balance be slight simultaneous you’re once a really for CAGR of sheet increasing your with over

So wells, several in different in in can the go involved in common big scheme of things, when ways. you’re things

the we’ve in the two world Exxon successful Chevron been of two exploration most wells in the Over U.S. the and both in of with super majors two biggest Mobil. years, last

the very proud work. didn’t them, be to with We’re but prospects working

us. permitting. down historically a Gulf. be the are on is drilling to the very offshore, have with one since one Mexico advantage do East We nice phase because – We’re well GOM card can fastest working time, MP Cascade/Chinook working sub by enjoy. in venture lay we operator, of we now well, drilling And very forward operation Central operated and the by the in working joint year through next And early, similar wells operated execution. these we’ll high control to salt this a industry And time, another is greatly period, moving very we’ll opportunities, and of that moving never we property And Mexico, real execution. have what We Gulf look a in we’re of our we of prospects have. the our saw we year, well. we a which this us, in problems into on couple being course, great they’re excited have be about. when Gulf bought on we our calling won’t operate permitting smaller an from we’ll well the we control We partners we And into in of sub where

of and around Mexico, in basin. planned enter outboard people we’ve in by And us other is another [indiscernible] shell the have success well us. We’re that that seen of north

are the control control, those with control make does we best. we CapEx. We stage that operation into a three opportunities, to moving We control the Murphy but with So the really nice value permitting. what regulatory. We ability the control

Neil Mehta

positive argue towards with investment And taken and moving about actions capital the grade grade the you progression did follow-up just here. the would agencies the we Moody’s conversations you’re Thanks, help ratings improve to of to talk cost Roger. Can by see as business. would having we investment as of the

Roger Jenkins

he his and to Neil. Thanks, that matter caught David, on me it’s is breathe now. going relieve

David Looney

Thank of great needless very and three all of sheet, from debt in they’re strengthening et rating you. agencies we’re the Yes, say, with contact pleased a doing cetera. the we’re regular a to those I what reduction, moving with of getting, question, in the course, continue Neil. do they always balance they no do Obviously, ultimate we feeling we’re the it’s perspective Obviously But direction all will, we and great deleveraging our kind it. if of and over is have we’re things, control when what program. that you think we think

As earlier with particular the on meaningful Roger coming Samurai to that’s online, well. coming had seeing about Mormont, increased production agencies talked the from that Khaleesi, project as

area. the grade in does combination upgrades of things a us spot being potentially really really the to get So those investment perspective just all put the good into think from I well-positioned of

Neil Mehta

you, Thank guys.

Roger Jenkins

you. Thank

Operator

Rice. Meade comes Your next go ahead. Please from Charles with Johnson question

Charles Meade

Roger. morning, Good

Roger Jenkins

morning, Charles. Good

Charles Meade

again And cross Yes, I congratulations path David, good retirement. somewhere. your on hope our morning.

David Looney

you. Likewise, Charles, thank

Charles Meade

it that or it a for whether And just something sounded Yes. reading I’m little the about what new it foot some stringer saw more that development bit Roger, if Samurai guys the ask you pay zone. in – well. It’s you I XX like was was in the that, more that, upper like this you this a you was want zone just release, imagining me, or to not saw. clear

You wouldn’t mentioning it. be

own a the this So may its – a field sense can And there pay the – this And – kind you down of magnitude what it there sense earlier, is but can be? this like is there development or subsea zone? you maybe relative recognize could – from a is line. of be I is sounds known the somewhere give this us of, give us offset are production

Roger Jenkins

working. that tried which nice we were found Charles. clear well to be We in pay Thanks for actually to really zones, Great. feet a release now question, XXX the little above this

minutes we me of this before how let to a Samurai and through Samurai main just in zones. is a year two So few deeper additional two this pay segment going very there’s wells drill in in pleased hadn’t found We whole well been you area. the development development, year, take with walk last last the with objective explored

had, instead lower for two fields with time some on of very at and of of were were zones the upper exploring that in an and the we pay in area another in well. mapping top we three that seen region. found of successful very in part that nice that We formation the some Also we finding amplitude well. So pay,

in previously this in objectives prior budget part XXX in our plan feet. that and We drill of zone and deeper was part of well. pleased of we the found our lower the in upper well. in shallow the of the and a for also very found and in CapEx, but to this is to both So found well, year, pay that Samurai plan explore a cheaper year nice the drilling sands the to did This deeper things, three-well of that, quality of objectives the sidetrack and anything more high very upper not excessive area the again, or like well those the

likely in in field million on then will development So get to range. million overall that one plus had wells two this top XX we a and probably view the add sanctioned XX field. of on that the Murphy’s barrel And size

sidetrack pay about of subsurface excited of and get great you and really very it this approved on by you team year. a that capital on in excited about it’s a identify with zones, field top very job nice it, like million and XX drill finding barrel the we’re this, to infrastructure top our put laying to So

pleased it very, very and us. very about We’re for it’s big deal

Charles Meade

Thank That’s color. you, additional Roger. helpful

Roger Jenkins

Charles. you, Thank

Operator

Please comes Read Fargo. question from Wells next with Your go Roger ahead.

Roger Jenkins

Roger. morning, Good

Roger Read

to Hey, doing? good both side. [Technical all How flow and of I sheet questions morning. follow-up you kind guess, are on cash balance Difficulty] on,

it think I’m You does payout obvious from or they think standpoint, level standpoint, financial idea restoring an talked to the Board maybe just a earlier Murphy commodity it, give think production, about just other curious, about Like us benefits can the of the question a base should what IG standpoint? a about would then And a debt? about? relative it Roger the would that or the yield and had will and think cost about want be price do else to payout of achieving what lower anything we operating the an eye you besides to a rating, was, of be you a I there is from of dividend

Roger Jenkins

that now would and in prior – all, you It said Board. that earlier do to our pre-COVID where way $X.XX course, anticipate this To way was our we an If of it our our history. for was of through basis remain the I and the dividend quarterly very of structure years we’re rapidly I great I’d today question. to the get Naturally getting level it ago approved $X.XX, questions, and mean, back the in to proud type annualized Roger, like question, with beyond on before Thanks uptime dividend, was. $X from group, $X.XX. have prior were beyond, COVID, cut of we’re of level that our cost be executing, prices company we to looking it moving

once we’re and to increase with to back delevering Our down. thought XXXX, to beyond a get XXXX, XXXX were of once and paying where consistent buybacks, this we COVID continue our in Board timeframe, before lifetime in we is $X.XX a

portion next payer lot and where back in we and is, the will we’ll want to of how we dividend be get and in our to our we’re we our creation. up very, that status consistent get March, company the trying that that’s So very we’re you’re in and in notes again, you dividend are program and lieu more get see well-positioned us, into our a around than would where similar assets then executing dividend is we then go to on very, be EV and our pay to means continue same this have, payer yield continue in is a of the One to we and that to our yield shape pay IG and specific position value we require consistent additional to headed focus a year, Roger. see equity a multiple to buyback down think keep to is EV. increases where throughout big going and the And continue the which more simultaneously year want to equitizing, dividend of good is we’re get XXXX, equitizing that you And year, stopping. the with performing, if to how long-term. then debt, it And And improve for dividend things status. buyback of very doing we then the and that two when

never talk company’s had we power debt continue unsecured, revolver security And me, type in our that. be to the address a secured for feel IG, have We’ve David I’ll advantages. about you I’ll at let that any lot of but gives more And let David can we’ve never to history. still we it On other Murphy. IG, beyond a when offered

David Looney

great Roger, up. Glad Yes. brought you question. it

as as whether in knows has think highlight other Murphy is, projects whether or as facility oriented you local oriented would be in grade balance been investment I everyone they the thing in strong get investment of you well position before ahead that company and here a renegotiating be years it some then grade the as the grade were always it know, referenced. important as overall of we maturity into the be a globally just et helps XXXX grade very of Roger obviously involved strong very, there whether means obvious XXXX cost lot from entities, if cetera. as reasons to for some is et government sheet us with we referenced very financial But well we’re I and that just for investment the things cetera. of looking issues, are et cetera, you et a obviously return of in an Murphy’s timeframe, always someone And for counterparties bonding capital when bank perspective cetera, get referenced those company, situations And et always investment backing. been rating As a the a cetera, happened the a XXXX, international, to

So multiple run we it’s way the globe. just that effects us has given across a really our business business given the way and out for – the it our lays add-on

Roger Read

Thanks, guys. great. That’s

Roger Jenkins

Thank Roger. you,

Operator

[Operator next Instructions] with Your ahead. question go Please Mariani Leo comes from KeyBanc.

Roger Jenkins

Good morning, Leo. morning. Good

Leo Mariani

is basis Quay peak you Good talk could morning. on to rate I going King’s here little you about to be that think was are facility what those to the net seven on attached Murphy. bit a a wells hoping all the

this the we year, where to peaks out of net as thing you the So do towards get think Murphy? end

Roger Jenkins

thank I question great project think originally our our plans that are for Leo, there. about you

wells going time today. in let’s can around a X,XXX is we XX,XXX are XX,XXX XX,XXX kind We seven say early is is Our barrels net net make the of to think where day.

on, That’s with Mexico. We ownership do of the the that’s a days of pleased the have different in five but we’re are fields. on in And early Gulf course, with XX% think where headed. where in today. we of the have wells Samurai facility we’re we we’re of where XX/XX, just kind specific of XX.XX% royalty Khaleesi, we we Mormont the very are And of two

Leo Mariani

Okay.

sounds definitely certainly trending above little this point. it like bit So a expectations, at

Roger Jenkins

sure. would for I Yes. agree with that

Leo Mariani

completions. does maybe it some kind chosen the these the a came bit things it sounds on intense It provide of more Is you And earlier are all have a of little kind recently tell? little look more curves? can cited, early XX, like bit wells these Eagle Ford, time online, I Okay. you just think here to the above you color of first obviously a then some of little trending but too like

Roger Jenkins

for question She’s that Leo. top handle of Molly you, that have I’ll matter. on

Molly Smith

to Thanks, glad question. I’d address I’m that. great you asked our Leo. onshore. That’s a like

we XX-well these As have turn they earlier, online do are above curves. and performing type you mentioned, are

We this we lines Ford have excited more also Shale. this six for on turn quarter. So turning in about And Ford online Catarina we making still very addition, Eagle in in we are are result. XX more Eagle –

have QX. well. wells going to in coming in we six third as quarter more online have even Ford coming Eagle more We Shale And line

we’re very very it’s but very wells been online higher earlier – is and excited the early, it coming So about at results.

Leo Mariani

Okay. Thank you.

Roger Jenkins

Okay.

We call our and they’ll Appreciate to Thank questions, back just for next you a it. IR quarter. it’s and here our Today, their with listening and appreciate out. team, everyone no And more be been today. queue. we’ll much. thanks help callers everyone have long attendance be it. today We so appreciate Any in you glad in get

Operator

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

Murphy Oil (MUR) 4 May 222022 Q1 Earnings call transcript