MUR - Earnings call transcript Q2 2024

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Operator

Good morning, ladies and gentlemen, and welcome to the Murphy Oil Corporation Second Quarter 2024 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

Thank you, operator, and good morning, everyone, and thank you for joining us on our second quarter earnings call today.

Joining us is Roger Jenkins, Chief Executive Officer; along with Eric Hambly, President and Chief Operating Officer; and Tom Mireles, Executive Vice President and Chief Financial Officer.

informational of have follow our our today. the Investor on along to webcast section Relations website refer slides placed we the with Please as you to numbers, Mexico. of amounts Throughout the reserves, call, interest in production are today's adjusted exclude noncontrolling Gulf financial X. Slide be mind Private will Securities Act XXXX. forward-looking Please Litigation this keep comments during defined some Reform that in statements the as of made call considered the in of

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

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

to I Jenkins. Roger will now Roger turn over call the

Roger Jenkins

Thank return. for priorities morning, today to you, our call I'd thanks and Slide corporate reiterate our everyone, explore to and on execute, listening X. like delever, Good of Kelly.

$X our to goal we also in committed progress barrels as quarter repurchases. framework exceeded long-term Murphy achieving our remains allocation million As volumes equivalent through while XX% of market notes in our $XX program. we the senior to debt produced second repurchased We continue per with open onshore capital quarter, fully second the guidance we offshore oil billion. well delivering day XXX,XXX of

we and with key quarter, Gulf by We second the contracts also quarter. results. advanced very non-operated we our a in during Ocotillo field facilities are pleased at and the of the awarding pipeline in development Lac Vietnam Da Vang discovery the well Also project Mexico, the well during drilled

preparing the quarter. operated are to the spud Turn two in first third exploration wells to of Vietnam

fourth our to priority return. Looking of

share. third price an of million shares through quarter August at average Year-to-date, the continued of repurchased repurchase an per or share repurchased of we've million X. X.X our repurchased shares plus $XX in program Our in stock $XX.XX $XXX million with additional million quarter second XX the shares

As announce to remain move I'm Board of current focused excited to that a we shareholder capital now Murphy to revision allows a to our with our framework our returns, billion. that $X.X approved today level debt allocation on X.X progressing has us

Slide to committed The XX% adjusted minimum flow $X adjusted to flow will free long-term to of on cash free allocate debt now focused of will a shareholders our X. as remaining our sheet to target. goal be Moving remain we Murphy buybacks. billion long-term cash balance allocated

increase our Board million. Our authorization share by to has elected $XXX also repurchase

of we've the utilized we highlight giving shares balance in free launching When X, $X.XX achieving to ago few all year-end approximately years XXXX, of million million most top that further cash back we and look by one than savings impressively, fortified nearly and $XXX $X in debt top, you E&P. repurchased by of X our today like shares increased the repurchase flow million As of have sheet have to sheet in $XXX adjusted billion, our framework billion interest of more expense capital allocation annual to dividend and if balance us years August not I'd $XX we've reduced significantly the XX%. since remaining. also today, past the

in premium with price Murphy per XXX,XXX second of of of barrel NGL NCI. gas equivalent Slide $XX with quarter, realized On XX,XXX again WTI barrels realized produced generated feet. barrel cubic was our to a slight pricing more than the the average X,XXX per We In an $X.XX million X. and was revenue nearly Overall, $XXX day realized excluding quarter, oil. our $XX of while per barrels we nat a per

an our to financial Mireles, Tom over update CFO, our for call the on results. turn now I'll Tom?

Thomas Mireles

share diluted the everyone. and with noncontrolling morning, second net generated $XXX in million of We and $X.XX million million income share. Murphy the Thank million $XXX reported EBITDA of of net income $X.XX excluding adjusted Slide accrued $XXX X. Roger, interest. CapEx, in good quarter quarter $XXX diluted per or per you, adjusted or of

shareholder continued a CapEx we plan. allocation strong the mentioned, X framework our just a executing million first XXXX, what or front-loaded supporting framework, have share, and while outstanding. as repurchased of to have part price dividend framework capital now average Murphy X.X. we of the Since million we $XXX per will forward shares when we we million XXX more Roger shares than As stock accomplish announced August $XX.XX seeing look at of an I and with have enhanced returns

billion with maintained X. XX. Slide $X.X liquidity Murphy available June of as strong

senior long-term second of a of senior the XXXX transactions open XXXX over million million market our repurchased of notes quarter, notes. debt total and During of we $XX comprised $XX.X through $XX.X million

of $X.XX XXXX. As next billion of debt our with years had long-term away we outstanding June X over maturity in December XX,

X. Slide

sustainability and positive report annual stewardship, Murphy's communities. and our was released included governance strong oversight sixth on Our impacts and disclosures environmental ongoing this people week regarding

Greater been have being awards a parents our recognized a for organizations, row. including a with by variety for as partnership year working third We for Houston the a from of named Place Best efforts in

of Additionally, -- responsible companies by one were America's in Newsweek. most we XXXX named by

discuss turn operational With that, Eric I'll and President Hambly, Chief to updates. over Operating to our our it Officer,

Eric Hambly

per We of barrels and we non-operated X in the exceeded wells day. performance, XX% to in XX Slide wells Eagle oil per second the by XX. in oil barrels due brought from and of liquids quarter. day well Catarina online the stronger during gross Murphy operated equivalent with Ford Tilden produced guidance Shale XX,XXX quarter equivalent X,XXX

non-operated operated We and in gross are in third the wells Tilden quarter. on bring track to X on X

average. are I'm this Catarina the activities our recent we And compared pleased to at results completions historical performance seen have Murphy's across great Our also year. wells showing XXXX

increased while lateral foot completed Our XX%. per by is completion lateral day has per foot cost completed down our XX%, nearly approximately

we've Ecocell on cost installing XX% our Additionally, our by Patterson-UTI drilling diesel reduced after rig.

production XXXX day, feet quarter due in conjunction achieved Tupper quarter, in our well to Montney, XXXX. Tupper processing guidance of cubic XX the we of as completed XX second performance. we average and the wells peak by feet the brought feet Slide million produced per plant an XX, our quarter program. per XXX nearly with cubic million of sanctioning in exceeding high online rate reaching primarily XXX per day gross expansion day record capacity plant Montney thereby fourth in of Also cubic during we the a million

IPXX We continue top among Main XX than and since performance of optimized our design X XXX% XXX% particular, Tupper completion Tupper in more seeing on since approximately wells Montney our average XXXX. IPXX great XXXX wells Murphy's has well rate increased from are our area Overall, XXXX our rates. in based

peak length. for of Ford in normalized an the the company Kaybob performance average Duvernay rate X,XXX slightly our highest with program X,XXX above Murphy forward delivery with day produced which look recent Overall, tier quarter, has rates per in Duvernay our further to our of well ranks peers liquids, I three our We're asset of seeing equivalent oil mirrored oil barrels for guidance. XX% history of day. In when This results. Shale operated online Eagle for the Slide seeing XXXX. completes Kaybob during quarter, second XX. wells our in top wells some well and per lateral was barrels among the which Catarina brought also

Mexico of well in the We XX% Gulf progressed operated second produced program of oil brought an day Lucius non-operated of Slide we from quarter per barrels volumes. equivalent quarter average #XX. Khaleesi XX. Mexico Gulf our well in as online XX,XXX second #X with Murphy the the oil the and

oil third in #X on the average Terra production also track We quarter. In per equivalent come XXX% to which Nova drilled well, barrels the online by with the additional during of produced oil. an was X,XXX we've impacted day operated is downtime offshore Canada, Mormont quarter. Non-operated of

pleased the well quarter. completed well our will our third we in it in we valve the in subsea is while progressing, third quarter. operated in XXXX come workover. workover the of The completion of are online operated and we quarter, second The online the Neidermeyer that Gulf as repair program and forecast we brought nearing Early the the advance #X sidetrack Kodiak XX. Slide safety #X operating I'm Mexico operations later project Dalmatian #X partner

Our Neidermeyer XXXX. cost the included million of workover third expenses, forecast million the $XX included $XX are which for totaled the We quarter, for the our quarter of which well. lease expenses expenses operating sidetrack workover of in second

Slide the second drilling achieving have oil In development Vietnam, been late award on we quarter, wells the we by our XXXX. development and lock-to-bong our remain In to progressing first project. pipeline for facilities begin XX. field our contracts remaining contracts look in and year-end plans expect forward awarded for to in schedule XXXX. We XXXX major we and

forward group partner advancing this our announce determine well the operating and a of currently encountered drilling is the of recently the Slide results exploration we next two exploration completed non-operated net Mexico hydrocarbons. #X Gulf Also found evaluating steps, well, Ocotillo and across where completed excited look XX, XXX program I'm #X approximately to we to at pay The discovery to we during quarter, feet for the Orange zones. noncommercial partner the non-operated project. year, our and

preparing the quarter. exploration late partner, the $XX operating Su potential million move to in XX-X/XX look and the net and exploration XX. the a We're plugged third in then well well. Slide wells rig program, Our forward begin wells seeing abandoned results forecast sizable Vietnam. business Hai exploration XXXX to the costs the drill Block create in total to the We in in well of plan and Block Vang XX to drilling spud provide Vang they in we will and The for as Da our these Vietnam the more quarter. approximately to fourth Lac

XX. Slide

in are seismic across anticipate opportunities to data at the From exploration progress we current by types the addition Our final in to work our our evaluation, XXXX. year-end available the submit track acreage plan continues multiple recent we our data continue discovery, as discoveries by announced d'Ivoire for begin additional will available nearby exploration in receiving undeveloped evaluation reprocessing Murphy a an development pleased program operators. or field XXXX preparations At year-end on by likely PON ] other will [indiscernible] for and to XXXX. XXXX. remains [ becomes Côte

Slide XX.

X,XXX of the barrels we approximately Mexico of of downtime. production Mexico For day XXXX, X,XXX to day X,XXX day as onshore Gulf barrels with of per XX% of per oil planned barrels of $XXX.X downtime day planned XX,XXX well and volumes. potential total million equivalent of equivalent of equivalent oil forecast Gulf oil per oil equivalent downtime per quarter of of range This barrels as assumes storm oil third

approximately third spending the $XXX of in forecast accrued Murphy CapEx million quarter.

to a XXX,XXX For this with Currently, full XXX,XXX we the volumes. XX% to of to equivalent the total barrels single of zone oil Gulf well at in in operational In the an Samurai maintaining are we for was Mexico. range expect oil of operated of impacts due to our particular, production altered lower maximize year guidance be the recovery. per to development XXXX, day field field end plan

commencing Additionally, operations sidetrack at the from workover. the extended delayed #X planned the well dalmation well Neidermeyer rig

accrued CapEx We also excluding range of maintained to $XXX ]. our NCM $X.XX million [ billion,

I that, will Roger. with And it back turn to

Roger Jenkins

our Eric. strategy you, unchanged. Effective Thank remains at year-end,

we'll of of weighting. and always executing now day billion With oil approximately achieve long-term Murphy to to goal XX% equivalent XX% with our the we reaching that enabling average XXX,XXX production per barrels to be exception than mid-XX. X.X flows, XXX,XXX $X term, allocation of more forecast Longer capital approximately framework our and cash us one our plan reinvest debt

success. free Murphy as towards flow returns to continues investments ample and accretive well exploration allocate further to share supporting as generate any cash

to of outlook achieving the consistent pleased part committed past that this with improvements remain spring. agency the as this with rating and achieved plan, Additionally, we're metrics rating, we investment are

Turning to XX.

of Board As importantly, call Most the another today, of we us we by which and repurchase up increased share sets half revising our quarter, Murphy's capital our $X an had our for billion In allocation debt second support goal. accelerating framework maintaining returns our shareholder year. long-term exciting authorization. good close our this,

preparing we to and while We where Mexico onshore across Gulf in going a have program projects. quarter continue have expanded third been an with a exploration, advancing of Mexico guidance exploration exciting well solid our plan Vietnam the launch our In all long-term discovery workover development of program well. our as portfolio a exceeding executing we production and assets Gulf

your efforts second out we ongoing we'll over of to close, success. turn In to morning. their look I achieve the it and that, we questions support will look forward to I'd for as Murphy's our to like thank employees 'XX. half operator close this our With back what forward to

Operator

Neil [Operator Your Instructions] from comes Dingmann Securities. Trust first question

Neal Dingmann

shareholder X.X see that plan. nice Roger, investor Was accelerate to question your current decision nice My this. the the you discussions a simply And Is you is these a potential quarter. do was It around stepped-up more question first accretive or decision How you a on two? behind decide always this to interesting decide by lot accelerate. -- to now decision price this decision acquisitions. the and the return the my wanted or potential see stock acts then when of driven behind just just exercise? a between return,

Roger Jenkins

so you probably a thing One of of Neil. meets, second Board, our lot all Thank much, we our when on have about of Board ownership E&P.

little of it's when bit about So different a returns. we a matter meet

This is idea with have. his to leading just balance sheet believe I We started my investor wasn't successful. benchmarking it a we Tom do framework from this, were team outreach. and our with

and We you're balance lot markets also sheet. to the credit see leading a of today. openness

billion our that changed. and $X goal. equity You bit a still have that price a And and this year been maintaining we're hasn't pricing, of dislocation

of want couple I quarters, From I emphasize says one two will, today allocating more now, a day if it and you or to start go out enough. minimum it XX%. we of ahead about pushed the -- very can't key move a and framework probably X ago, returns. this, years within And disclosure just original of and to and It's deal decided thing

So minimum over dislocation. if we'll see It's continue we to minimum. it's been always go price and

your We're back we be review And we on be formula, M&A would that well. M&A, opportunities. adjusted debt about continue our that As to of the pull that flow with we as of associated have cash M&A. question to excited could and on

in the which what Gulf you in strive non-operated where to is or Mexico. improve competition a and business do. of operate lot usually of have We execute We need better, we

people discussions a any sheet metric that. I and of hasn't about benchmarking you felt forward glad well, meetings is same never changed. for of the we reach still M&A that I mean it of balance rest and M&A And doing will excited with sheet, the forefront leading been and that balance still We're just and had on Also, a moved the possibilities, think and year. did the like having type I through billion. great a say,

and do may But may You you we do that close it. now moved that. this, off

Neal Dingmann

can of -- on guide that's .And second activity just guide year. the production just you the to, a the then about of maybe the oil both change question Was little or just onshore? the offshore talk for due I remainder impacted guess, a just in how for and Gulf remainder year,

Roger Jenkins

going is onshore the Eric and Go to Well, today. question handle Eric. offshore ahead,

Eric Hambly

earlier Neil, call Thanks Okay. very our in much. the toward original the our be us impacts that we to end range. annual highlighted driving of lower guidance are production

we are which oil driving type zones, X,XXX we in change per producing produced Samurai rates. to to going half order year have day. is negative the production produce one that field of from on maximize equivalent in wells the instantaneous time did of forward. them at have in We of field been issues well rate Samurai in and the Main there and based from the elected It for last the two what ultimate learned a about recovery. a it a barrels does significant us we a

impact was #X that took The sidetrack the did that other a we bit operation. longer Neidermeyer a to well complete little that on

subsea #X it Dalmatian moved the on slightly our of was is later timing job, it to the guidance. rig online repair well. well safety ESG earlier So that the than that delayed because came And that online valve

us it that affect little So bit. does a

the minute explain If later year. head give will as what you toward I'll kind a me here, happen we of in

a a coming less the online. quarter of we'll range a quarter of due in is Mormont driven the third being then online fourth The offline. It's see have barrels being the X quarter. well X,XXX by most online. X,XXX DCX online to little for will the total It's well growth we'll of full versus quarter, bit factors. currently day. a in increase in come in of #X downtime. The the Kodiak number fourth business, probably That to quarter storm And our instead production So offshore the

X,XXX barrels some offset we'll limited our have a wells fourth of -- come onshore to day business, number offshore rest X,XXX our the quarter. in the will our we in by growth in nice be by a partially about onshore So that and business, which typical very is offset to in online see since the of decline year business.

Roger Jenkins

and a Neil, we're quarter, Also, to in we right have there's be big that the the third have mind there keep we no way well. operator. And for guidance, that's in account hurricanes, higher. season, offshore for make as And an it sure we would Hurricane number

Operator

from comes Arun JPMorgan. from next question Jayaram Your

Arun Jayaram

if give end that the Vietnam. maybe on on the update exploration like give sounds the program an quarter, wondering -- of program? by was well third the first the before us but spudding just an the I It of be you end could in you'll just update

Roger Jenkins

I'll add bit dig high a to Eric, the details. level, in

So a that a million-barrel Vietnam for been we're developing. there, in we field going while. big We've have project XXX

were government we which the were deepwater shallow Vietnam very and Tom in a to water of We ran days. a Malaysia, brought their was I Eric more in old career. both business by because their in parts guy at successful of

here going for up that chose about the will help who and lower-risk have a that's of us big couple Vietnam, prospects wells build of walk in to Vietnam, we picture here. exciting drill couple for of in high-level you in a kind basin Eric so through of business in go a and and possibly to have the to that ones big many are lots a us, row very we And

Eric Hambly

going in working wells with Thanks, in those they're Vietnam. to well come in use the just third wanted very will rig operator about rig Roger. to exploration when quarter. expect And another The excited our us, done, we're drill we currently we're to spud Vietnam. that to the late our I to that is highlight

XX, on prospect Hai The that project. Vang that Su XXX we'll as a nice-looking Vang upward prospect. will a the geology Da sizable will barrels. our very It's Where of XXX volume targeting development Block to be mean of to prospect, first well Lac million same million XX the start drilling we're test type

play complete to million-barrel to exciting move XX-X/XX, will well that forward and Vang prospect, Block After we that's XX drill that. well looking we'll to stratigraphic million a very targeting where So exploration the us. for Lac Da another the XXX

Overall, really business for up potential to Vietnam these in exciting us have some a materiable, the wells really sizable, Vietnam prove in with success.

to looking forward So them.

As -- and you too. area, a looking to exploration is our tenet our these focus great know, are core prospects for of be us

Arun Jayaram

Great.

XX, million As Slide you day is BOE X-year XX,XXX $XXX my just on of at offshore. help BOEs in XX deliver the us the highlight CAGR drivers which growth will barrels growth -- some to pardon XXXX, follow-up Can think Roger, XXXX? Slide us me, you'll X% but of program, the about volumes start just Vietnam, year? of getting next you some about drivers, growth some Obviously, in help per think

Roger Jenkins

lot millions our with putting Samurai wells been a barrels of field, successful nice million field of a very barrels still both in on remaining has Samurai We're over there today, which at of reserves XX today.

Mormont a put well the at drilling nice one. on field. We're We Khaleesi

more to go. We have two

rates not flowing have are year. level, this nice for a Terra improve through of achieved their average will be just trying at And we're wells. We of necessarily a times. is do have a full Nova several we've those to We're the get to of they X-year gist operations But the can which that's had hopeful a things back there. that full XX%. deal, very bit what year that Eric that and this a ran workover litany year high-rate

many on come pretty have the beyond we flow opportunities that as will put high they whole and for -- opportunities that's rate. a in at these you wells and many year But

on So upward that's how that's going that to march run.

Operator

question comes from from next Neil Mehta Sachs. Your Goldman

Neil Mehta

a Western Canadian first questions I think environment where you there's we're will. we for for I had for are I AECO, guess here. of Canada if multiyear challenging from in a couple you, gas is, an outlook interesting prices the

until of the environment, we on a to But environment. profile way it holding get change a producers into your of perspective the production makes U.S. just are better the into some price gas back your to better cadence molecules monetize sense

Roger Jenkins

we a XXX little infrastructure Great the big question. U.S. day. players -- a million making the than different an ] that Well, in have a We're handle and [ can plant gas-only only

business. So it's an enormous not multi-Bcf

as many C industry, benchmarked competitors the and times America type We your other have, exchange. a in of the North in AECO for lowest adjusted for by breakeven and dollar

low very have we extremely prices. So breakeven

We wells. have hellacious

We to our this into pipelines have plant. commitments

we it's a Canada us that, want there future over to And haul. to so economically, do far, see with and a LNG shown long

we're both that known into differentiating We well relationships in Eric, in well our LNG to have us known and with, to I all we're Tom systems. lived peers, in are to key KL deliver very gas Asia,

it's that animal we to and breakeven Western the different There in plant to that's pipes with there have at continue go make also us built flow LNG free little one But more a I situation. hedging our on are multiple understand that for need question, this how being Canada. and pretty outlets We're in at assets we but good better now, time. To thing, continue in with have, we with our there. cash our right commitments low the

coverage 'XX of netbacks, of we're today into at net the forward have have the our netbacks look if actually you business is. because there you as while we for and your Canada, sales and I in some highest gas imagine looking would well. forward list, So probably selling

not So really today. below, winning They are that's for with forward hedging. hedging a market. but at It's not of adjusted times sales little the been we're It's molecules.

here see you to look the of to So the back have in that. filing today

$X.XX get don't puts that much. AECO a the us we in too And --

differentiation forward gas on on shape think, have probably sales, based pretty we're level, [indiscernible] U.S different and actually. and I good We

Neil Mehta

we operator operations? that our Terra just follow-up the the owner, context your recognized is here, not and optimal as And then small far an to a to away are from in then getting the of perspective you but to Nova alluded how And portfolio. you're just

Roger Jenkins

on too that. it, I'll emotional opine about Neil. let Eric

Eric Hambly

operator's Thanks, the performance the frustrated a with bit Roger. quarter. in second We're

fairly us can Terra You second impact it see and quarter underperforming had a to in Nova. significant at oil

interest We I and and owner feel that and the that as guidance we to a operator XX% and work with ownership. We obviously, are working having Suncor Synovus, can offer extent they in partner. assistance large make continued later production that expecting operations. and through will have net a obviously we're X,XXX issues steady type barrel we improvement larger-than-expected ultimately, they to have downtime get to this year, an And with non-operated us rate. the their a and day

confident a they'll It's get than I'm we'd So there. just little like. slower

Operator

comes from Carlos Escalante question Next Wolfe Research. from

Carlos Andres E. Escalante

it? Roger I'd and to framework into team with I doing shift quarter. out Murphy the start are X.X your you current guess guys question like on the my

between free allocated latter curious and your of one cash You growth adjusted And the at you dividend expense and generally, And X.X growth the the do increases. part you you point earlier, buyback where that buyback just that of dividend framework. guess, cite does how about policy the and of about for entered other? how think XX% you've I dividend of I potential wonder the managing and to specifically now this share work flow Murphy What's are? are at

Roger Jenkins

question. for you that good question. Thank Very

of one-off dividend see want buybacks. X.X frameworks, this is a can If I -- you be increases. the Murphy what is in focus change That in primarily we would policy. really this say when me and tell buyback build you today or a dividend I dividend that you these

life through dividend, been in We dollars returned my a XXXX, have dividend. dividend paying long-term billions entire we've a since to been shareholders player of

dividends publications. slide free you then you're numerous which get sure that's if in underneath our the look out shared at this cash So flow I'm to back and for familiar, to and adjusted slides you framework, formal

difference. So a we see that as

We're typical We on see this free buybacks not the at we our policy. dividend. trying to increase every about of our cash flow changing that focused XX% dividend really and time to be of year. have and a dividend adjusted minimum

business a make a share, type we of our and in then per that, So we regime, of every company of will we're the want share in. to ever per per And be ever dividend to per share that cash share, use increase then it our framework, our EPS, hopefully year, focus stated will increases. this be our be using buy price increasing to But is a successful want this do type in while. back going buybacks, when year, be this and mistake, a management no for and for dividend regime dividend right be at We we is dividend and we'll that company. dividend beginning stock increasing but we're and of the flow that a increaser, cash team that's to now flow be buyback we our to increasing will

Carlos Andres E. Escalante

as once then you forward oil clear where as line point? my threshold. being What hit day Eric, sustaining then of sight question going capital on at do equivalent your you of your you second And see sustaining perhaps, to and barrels you XXXX, do capital projects. ask on your on And once XXX,XXX what see XXXX, you you have reach per that that

Roger Jenkins

ahead, Go That's... Eric.

Eric Hambly

to XXX,XXX The way X% cash barrel get move and when we of XXXX we X% around may our day that of view we year. reinvesting range, is to on, sort year operating think XXX,XXX, longer-term flow about our about to that anticipate a from

be $XX barrel a have CapEx. you a that world, anticipate we If $X something that, would year around billion of

Roger Jenkins

assume thing we build we we one that have exploration. successful you that is plans, I add just Thank to never long-range might our when

framework, free fund successful in the exploration. of why So using see likely the we the allocation reasons exploration one to our to buybacks adjusted capital our to so if development. build we're we success, fund go that we part capital future, can doesn't flow do the use an that share increase sheet that in of have that to cash That's cash within would balance on cash material

increase massive zero these think a I to time, said things probably we'd So business little But somewhere, applies. if a obviously. we our success, about capital our bit what that. current of earlier make discovery you of exploration If fund with then kind take

Operator

comes question Paul Cheng from Scotiabank. next from Your

Paul Cheng

the I to the can initially, I and for now actual be quarter. the third I? delay Two XX%. you is say And because Eric. think workover us targeting and First, quarter the tell done will spending are is questions. you Eric, May expense the happened of second what and essentially you by another XX% thought think, that with that I XX%

to higher we us is Can the much So [indiscernible] going you that thought. than tell what happened up there? initially be

that terms can XXX,XXX biggest second It the think, there's And both you're talk G&A us that, a Tom. as question, tell look operation by because factor, of appears you're barrels about balance, that in is expense. in and where in some XXX,XXX your still showing you are if quite at day. and targeting you XXXX other one-off for the And per U.S. I we risk you see risk what also credit Can a achieving to I see that? benefit those?

Roger Jenkins

questions, Paul, answer three all. but That's them we'll

Eric Hambly

the I'll about Neidermeyer well. Okay. be talking

sidetrack. go we a as the just This Just that upper stage anticipated. completion escalated planned back fairly completion high sidetrack in is some a context. workover longer than We bit rate the a a And simple and very into originally it a operation little well. took

concerning the on quarter. the longer operations our It well. rate took XX or production of for estimate. just production days particularly It So so average wasn't anything impacts alarming missing or out than rate from the high

workover in expense, if look guide. quarter second fact, you was very close our our at And to it

second Neidermeyer we impacts And following expense a the in DCX effectively money So anticipated of production. drifting the and then workover that the bit, the workover into little that bit activity the third quarter. and We quarter a done do impacts timing quarter which bit being the a of third as the well. the it well, see the little well drifted spending into little

question. part first I that think your addressed of I

Paul Cheng

Sure. it that to it thought third thought workover not you're because in expense maybe have wrong, thought quarter, I Because supposed workover original expense the plan I you before. I quarter third is always have

Eric Hambly

were into quarter, We Yes. can expect timing cost our I at might just look expense. The have drift of look to reiterate, workover $XX.XX. quarter the from our year, drifting for volumes Gulf with program BOE wrapping we business thing at $XX believe of One up. a LOE of expenses also down into second Mexico with BOE take just you $XX our the In range second workovers, moved the onshore we and if exclude the do you year workover if third $XX.XX, business, higher this our the the to may we was in expect production But we the second to the rest quarter. operating overall that. some per slightly half

correctly predicting here, If have for in are that long-term I about our our things talk business a of can production The activity the bit to new me your question are production business range and exactly cause variability main wells second the our come you of a drivers Those the primarily rates in around rate. to our non-operated online. offshore us range. give little

The a do tried we quite best are and to of that royalty our gas a prices has and by large BOEs swing challenging pretty variation the predict, become other can the we've is bit. thing bit driven little the to volumes can Montney effect

in royalty the out point that to want overall money the low. very, very do is I

around and on move do communicated It's they little the us a range. affects production that of one we reasons range. our bit, So

Thomas Mireles

understood to I just I other to Okay. And wanted sure question. Was that reference your make in the Paul, income?

Paul Cheng

No. expense and a million like other in credit G&A million the you self-expense in result release, down looking And is small item, income. in U.S., is a at break when credit. $X press your Canada. when the I'm then at $XX expense the then the When I'm line And by E&P looking your U.S.

those? what related seems one-off, wondering like it unusual So is that that

Roger Jenkins

industry-leading Paul, you're about, sure, low. be something very Paul. at We G&A not can't find much, this can -- to... It We'll have is might we what And our talking pretty -- time.

Thomas Mireles

Let's that. dig into

Roger Jenkins

and you Dig Kelly back. call into with and get that

Operator

from comes Mariani question Leo ROTH. next from Your

Leo Mariani

the from touch your Ford here. little at on bit base Eagle for fourth quarter looking to the quarters. the of it of year, slipped Kind like a Ford prior guide in maybe Eagle wells that -- some Wanted the looks here

as when a that a might happening wanted result, in be do it we XQ Just here? Or be expect all peak get Ford see And to production what It to some sense XQ, was then there. of to going maintenance-related is as the year? like for or sounds it you issues. Eagle

Eric Hambly

Okay. very much, Leo. Thanks

bit than program, Eagle actually little earlier been well Our has delivering normal. operated a the Ford

minor bit our non-operated little a program. change in had have We of

altered. So the net have overall cadence slightly may very of just wells

the characterize overall at all. impact I wouldn't as negative

schedule. think I fact, In delivering we're, on ahead slightly of average,

and exceeding and So of in into seen bit of well than We've be bit will expected. that across expectations decline quarter. Ford well most Eagle a Peak with quarter heading rates our higher earlier our of wells a performance little based for fourth the a earlier the see bit the combined delivery the timing. little third production timing on

Leo Mariani

the which talked coming in where do of next years? just up helpful. will LOE, few second year couple and years, in with year you these just get in heavier I of should wells overall of is similar Or mean, a that to you That's then some day. the over a come like driving the overall dropping? a with and -- to versus that LOE out kind in wanted down at a workover perhaps of sense Gulf I more and be it majority on take in look see. years I some workovers step to this the next was you of quite the you activity the think year of one-off it's can came your half the do this end down of look Okay. nice couple be year, it's maybe just is And respect If LOE last activity back this sounds your of next bit and think at as you LOE, 'XX about the

Eric Hambly

quite outlier, a expect is limited significant our this workover going year Yes. in business and have outlier, our forward. activity I very to Definitely, an offshore activity workover

our second than And fields. restarting. operating That our or Mexico Gulf driven was is to excluding pretty second Nova Terra by at other of Nova look other most is year which quarter you operating of $XX.XX. a If has quarter prior fields workovers our 'XX, that Terra expense higher bit compares LOE $XX.XX. of minor difference,

about little of drive or does it bit talking So $X.XX a the so. variance. But again, we're

Leo Mariani

seems know are given back a looking be is there helpful. do non-op then guys the size, like just on more this in I nearby folks That's as Gulf, it would that the Ocotillo that you Okay. infrastructure tieback subsea that But to still And to? work well. could a just tie you

Eric Hambly

operates well. the of the well, by field. a That's correct. I are nearby partner with it the be Oxy. back working And We facility group operate there. and of the Ocotillo that don't we for operated will plan to tied anticipate development a

Operator

Charles Rice. next Johnson from Meade Our from comes question

Charles Meade

want give there I'm a in wondering to the maybe both like your Q&A, you hellacious And when if comment kind It up. Roger, in wells And you could detail. have unifying little I you've overarching the team looks back your to great go you to the there is in Or you happy Rog, whole think I of in earlier and said coincidence? I'm that a just results there? some had Tupper. some theme Kaybob more wondering, is Canada.

Roger Jenkins

ever top doing we've we've go some of the or been had. is No, script, out, we in which the have commentary you back so wells well, guess, Eric's if to in I

there lessons reorganization based wells. between We operating our and X-year the Eagle continue been really to some on in team delivering Ford learned or our improve one record and our now of and just execution fracking X- Houston

of a Tupper some came wells back And -- that we new development did there. old XX that Main there with industry-leading got an Tupper part ago. went incredible some -- older got and might in there, and there years wells is we I have fracking

breakeven benchmark Murphy all American you back cetera. against is adjusted lowest to price et AECO, there North gas If

and like great a our Ford wells run Ford. we in we've sought peers, some fracking the many which take our driven a been many of dormant. X's and by to prove Shale drill go the Eagle We new public Catarina, and peers Just and ideas a and Kaybob Montney have the up is good place major acreage that's wells exactly where wanted Duvernay area new in to another after Eagle Catarina. It's take

and have NGL. we of Eagle that a barrel Duvernay makes $X So another in oil Ford less just higher business much

are wells and the Vietnam along or project out proves very company onshore ocean have it business these our economic, with a with we to So or in all locations up long-term our just the opportunities there. not run big opportunities go exploration we're big giant future and and a

or wanted to second wells basis Dan, just and operators So on in ground operator we Kaybob in shows highlight that top the X haven't willing there Slide to on a best X in we're years, that, and the the in put productivity Montney. XX we're

there, getting was Charles. I So that's what at

Charles Meade

saw information. our XXXX, we briefly, completions in this completions made And completion our we've learnings went Just a we our had in tremendous and Montney, style Kaybob, we it the for adjustments we that for results. do add to when And fundamentally and Kaybob in use Ford some localizing different from improvements in the to get took year, to applied and Tupper, have expect completion so in more cost we see as to but a benefits optimized I and and forward execute we're well same type of those potentially exceptional on results, minor saw Kaybob, timing even able efficiently going to and Eagle well. design we there completely really it

Roger Jenkins

word got Mr. Johnson I founder, the thing. more morning. of your this one Charles,

[indiscernible]. today. about Thinking was a guys He that. about guy you Sorry legend

Charles Meade

whole me appreciated Roger, by thank I that and by saying you. the firm. that comfortable is feel

to of your guys ahead, little some for what seismic you know maybe or a the are if respect about to maybe pay or to the kind 'XX, The it's I could in questions initially further expect this the into get and question a compare have a submit wasn't Côte with whether have And that -- a there planning you peering follow-up ocean. developed, in picture but I Rob, the also decisions to And that later you us referenced they about you this development d'Ivoire sort you you all new is about the can of offer back expect but opportunities know just have bit to reservoir maybe resolve that plan going I'm of connectivity will your to bear insight that year. that maybe, bigger if or to on seismic mineralization new paint on any reasons maybe curious inform. field seismic.

Roger Jenkins

question. good Really Charles. Thanks,

here. ultra-deepwater discoveries to also both in the size this shore big connect ENI from to going west I by of the us bookended on and us two by description XD east think the big

prospect prospect another marine there the We by announcement situation ENI, stop in which have very situation. because a big different a same type with near the they're right is

], didn't Estepan by [ properly What's is great data the of amount is is there there prior gas a [ market good owners. upon its changed changed and blackouts the Cote almost delineated probably Palms ] Cote discovery in what's d'Ivore they want possibly, d'Ivoire, be their supplier to the to changed rolling have their we what's electric gas to want then. an here want neighbors, gas and

gas done. with things that they want our calling offshore, an was oil we Murphy, operate a and which requested working and gas with big from scratch They we're is this that rich them, field. request. It's rim and their card

around in subsurface So with our It the and not gas market to change concern the bring the development super at we [ a has ability majors compartmentalization, how changed. market successful is blocks. PON and in ] that's got And we type the bear we've all. low-cost a the There's fast to that we're an reason of been that's why alternative very exploration internationally. that's world,

a many, what's opportunities. major to many they have on of level going a high to us, not because are important as and there, super of Charles. because are kind And That's things important

Operator

Our final from question Josh Silverstein from comes UBS.

Joshua Silverstein

some Just to wanted the follow the Montney. of up on on questions

deep base. a resource have You guys

foreseeable You like? the bring that for up you this additional some to plant capacity there phase is of Do capacity asset is the against capacity of future? have? next forward kind that mentioned the for build kind just you're What the you Or at of this there. up level flat just look some inventory

Eric Hambly

cash with our free of Josh. building multiyear pleased the we've in asset. Yes. and that to plan in Thanks, had production here while Okay. flow able generating on We're performance execute Montney the really

capacity. against up are We

term, the production over we consider what do to we plant commissioning need would we a online that's engineering, do. expect permitting, coming from and construction keep X-year decision the to We that from capital years If plant effectively near of allocate to significant were And to expansion a under just that full for or in to to approximately type is pipeline capacity. also there, a to process the additional an and of growth anticipate to being commit a cycle. full

switch since a have that evaluate not plants have the more. many so bringing on pretty something a do recognize decide is such if expanding it's and a we do decades increasing easy of We lot rate we there. large we so potential an line the be forward and And value that with the resource flip a it. to it consider, we model, remaining will time it, of there's signaled gas, evaluate we that X-year we well since suddenly

very Bcf of a in that are also we're XX fact the We X.X producing Bcf conscious market.

strengthens, is to So capacity. watch if would supported different with as happening AECO perhaps bit totally with the been what we we're seen market. different LNG volumes by reasonable to increase be happens a what takeaway the grows sort would X.X in significant a AECO to that added And be prices. X.X Bcf of additional market of than Bcf, we've a past the what And of going in it and AECO sidelines that little on that's

and evaluating So carefully and it's we something that, we're of could sort watching do.

gas selling our interest potential the them. to also through that's that the future partners participating have Phase something of are of possibility in We in a may LNG to opportunity that if involved some of is in X Canada, LNG

Joshua Silverstein

the want what XX% which get free you're curious helpful. kind cash XXXX. if That's that cash zero And capital debt maybe in can on a position sheet you run to just in to goes the you you scenarios buybacks, of return net of hold, and it. then I'm still I Got base level to of at level basically to that you flow the even framework. balance think mean,

a want that cash around is million, guys to you had to beforehand? comfort that you have million $XXX guys that build there? you to for continue relative of Or Do the $XXX kind level

Roger Jenkins

little that. a right. you color Josh. All on Thanks, I'll give

maintain Our level million. try business, our we to $XXX do million, of to $XXX roughly cash base run

that we corporation. needs around the for the Just have

see target, we road give reduction. and where to it down $X our flexibility, us the more past the us few we we'll on a get as that more putting we move more cash that lead years As to debt we have are do and billion start once to will debt balance sheet,

we we can have exploration Do that success fund.

-- or that's So additional buybacks.

So a accumulating XXXX that types that at, those then. to away cash, be point, more when are we the make look pushing just to quarters we'll then at into that debt we're We options time. But at we'd our target. decisions on those to we think point, right our of few getting from looking start the forward

Operator

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

Roger Jenkins

And a appreciate to stands for of as the good to and with everyone, and our call. A had usual, lot calling clarifications. help further standing in our questions. their management team respond Thanks, analysts. Meg investors today. by Kelly We team investors our by good and those. We

take quarter. and have great another care So day Thanks. a you in and see

Operator

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

Murphy Oil (MUR) 8 Aug 242024 Q2 Earnings call transcript