EL DORADO, Arkansas, January 28, 2015 -
Murphy Oil Corporation (NYSE: MUR) announced today that net income
was $375.2 million ($2.10 per diluted share) in the 2014 fourth
quarter, up from $75.4 million ($0.40 per diluted share) in the
fourth quarter 2013. Income from continuing operations in the
2014 fourth quarter was $442.0 million ($2.48 per diluted share)
compared to $180.5 million ($0.96 per diluted share) earned in the
fourth quarter a year ago. Net income for the full year
of 2014 was $905.6 million ($5.03 per diluted share), down from
$1,123.5 million ($5.94 per diluted share) in 2013. Net
income from continuing operations for the full year of 2014 was
$1,025.0 million ($5.69 per diluted share), up from $888.1 million
($4.69 per diluted share) in 2013.
Adjusted earnings, which exclude both the results
of discontinued operations and certain other items that affect
comparability of results between periods, in the fourth quarter of
2014 was $69.0 million ($0.39 per diluted share). This
was a decrease of $56.8 million ($0.28 per diluted share)
compared to the prior year's quarter.
Earnings before interest, taxes, depreciation and
amortization (EBITDA) for continuing operations totaled
$802.3 million in the fourth quarter 2014, up from
$631.7 million in the fourth quarter of 2013. EBITDA per
barrel of oil equivalent (boe) sold was $34.58 in the 2014 quarter
compared to $32.94 in the 2013 quarter.
Fourth quarter and Full Year 2014
highlights were as follows:
-
Closed the sale of 20% of our Malaysia
business on December 18, 2014. We are scheduled to close the
remaining 10% portion of the sale by the end of this month.
-
Ended 2014 with a net debt to total
capitalization ratio of 13.5% which includes $1.65 billion of
cash and invested cash located across our business.
-
Set a new quarterly production record
of 258,868 barrels of oil equivalent per day (boepd).
-
Set a new annual production record of
225,973 boepd up 10% from 2013.
-
Recorded total proved reserves
replacement of over 180% in 2014, which included the recognition of
the 20% sale of our Malaysia business.
-
Achieved first oil at three new
deepwater fields at Siakap North-Petai and Kakap-Gumusut main
project in Malaysia and at Dalmatian in the Gulf of Mexico
(GOM).
-
Sanctioned the Block H floating
liquefied natural gas (LNG) project offshore Sabah Malaysia.
-
Repurchased $375 million of Company
Common stock, authorized an additional $500 million share
repurchase and increased the regular dividend by 12% to $1.40 per
share in August.
-
Completed the sale of the U.K. retail
gasoline business and initiated decommissioning of the Milford
Haven refinery process units.
Roger W. Jenkins, President and Chief Executive
Officer, commented, "We continued to make progress in portfolio
optimization in 2014. I am pleased to reach closure on the
first phase of the sell-down of our Malaysia assets. This
sale marks the value of our long-term Malaysian business and our
strong relationship with our new partner, Pertamina, as well as
PETRONAS. We continue to grow and replace production with
contributions from the Eagle Ford Shale, and new fields in the Gulf
of Mexico and Malaysia. The recent collapse in commodity
prices is a concern for our business and our industry.
Murphy's balance sheet and cash position post the Malaysia
sell down positions us to manage the current lower price
environment. We expect to lower capital expenditures by some
33% from 2014 levels, including a 46% reduction in the Eagle Ford
Shale, as we look ahead to 2015. Our goal is to reduce
capital expenditures as much as possible to commitment only levels,
protect our balance sheet and evaluate opportunities that emerge
over the coming year."
Operations Summary
Production
Fourth quarter production set a new quarterly
record, averaging 258,868 boepd. This production level was
higher than our guidance of 250,000 boepd for the quarter and was
primarily attributed to higher than planned oil production from the
GOM and offshore Canada and higher than planned gas production from
the Montney and Sarawak.
North America Onshore
In the Eagle Ford Shale (EFS), fourth quarter
production, which was comprised of 90% liquids, averaged 64,280
boepd net, up from 60,563 boepd in the third quarter. The
full year average production for the EFS was 56,874 boepd, up from
39,073 boepd in 2013. We have reduced our rig count in EFS
from a high of eight in September to five today, and we plan to be
at four rigs by the middle of March as we release contracted rigs
due to capital constraints caused by falling commodity prices.
We are now using two completion spreads, down from three in
December, and expect to average 1.6 spreads this year.
Production in the first quarter of 2015 is estimated to
average 62,000 boepd with the outlook for the full year at 57,000
boepd based on the planned lower rig and completion spread count
and capital expenditures 46% lower than in 2014. We continue
to see positive results with our downspacing and staggered well
testing across the play. Our current focus is on managing
capital expenditures and operating expenses. The long term
value of our EFS position is bolstered by our early entry into the
play at an average lease cost of $2,055 per acre.
At the Tupper gas fields in Western Canada, fourth
quarter production was 186 million cubic feet per day (mmcfd) up
from 146 mmcfd in the third quarter as we added eight new wells.
We currently have three rigs and one completion spread in
operation, but will drop all three rigs by the middle of February
as we pare capital spending across the company. We have seen
excellent well results utilizing our new completion and choke
management strategies which should lead to improved estimated
ultimate recovery going forward.
Global Offshore
In Malaysia, we announced last quarter that we had
signed a sale and purchase agreement to sell 30% of our oil and gas
assets for $2 billion, subject to customary closing costs and
adjustments. The first phase, which closed on December 18,
2014, covered two-thirds of the transaction or 20% of our business
and we are scheduled to close on the remaining 10% by the end of
January 2015. Production offshore Sabah averaged 46,455 boepd
for the fourth quarter with 85% liquids. The Kakap-Gumusut
main project declared first oil in October 2014. The project
has demonstrated excellent performance with production ramping up
over the fourth quarter and into this year. The floating LNG
project in Block H continues to progress on schedule. In
shallow water offshore Sarawak, gas production for the fourth
quarter was 177 mmcfd and liquids production was 23,147 bopd.
Drilling continues at the South Acis field where we delivered
two oil wells and drilled four water injectors during the fourth
quarter. These production levels include a reduction in the
Malaysia business of 20% following the December 18, 2014 closing
date.
In the GOM, production for the quarter was 32,378
boepd with 65% liquids. We continue to progress our two well
expansion project at Medusa in Mississippi Canyon. The first
subsea well has been drilled to plan and we continue drilling the
second well. First production from the new wells via a subsea
tieback to the Medusa facility is expected by mid-year. At
the non-operated Kodiak development, drilling continues on the
initial well with first oil targeted for the first half of
2016.
Exploration
In the GOM, we are currently drilling the operated
Urca prospect in Mississippi Canyon Block 697 where we farmed
down from 50% to a 35% working interest. This lower Miocene
structure has a pre-drill gross mean resource size of 130 million
barrels.
In Australia, we spud the first of three wells in
the Perth Basin on January 22, 2015 where we operate with a 40%
working interest. We are testing a total of 280 million
barrels of gross mean resource across the three wells in a
structural, fault-bounded play. The seismic program across
Block EPP43 in the Ceduna basin is now over 40% complete and
we expect the program to finish up early in the second quarter of
this year.
2015 Guidance
Details for first quarter and full year 2015
guidance can be found in the attached tables. Capital
expenditures for 2015 are expected to be approximately $2.3
billion, 33% lower than the 2014 capital program, which includes a
46% reduction in the EFS, adjusted for the Malaysia sell-down.
Production for the first quarter is estimated at 221,000
boepd with full year 2015 production to be in the range of 195,000
to 207,000 boepd.
Earnings Conference Call
The public is invited to access the Company's
conference call to discuss fourth quarter 2014 results on Thursday,
January 29 at 12:00 p.m. CST either via the Internet through the
Investor Relations section of Murphy Oil's Web site at
http://ir.murphyoilcorp.com or via the telephone by dialing
1-888-812-8569. The telephone reservation number for the call
is 7572173. Replays of the call will be available through the
same address on Murphy Oil's Web site, and a recording of
the call will be available through February 2 by calling
1-888-203-1112 and referencing reservation number 7572173. A
replay of the conference call will also be available on the Murphy
Web site for 30 days after the event and via Thomson
StreetEvents for their service subscribers.
Financial Data
Summary financial data and operating statistics
for the fourth quarter and full year of 2014 with comparisons to
2013 are contained in the following tables. Additionally, a
schedule indicating the impacts of items affecting comparability of
earnings between periods and a schedule comparing EBITDA between
periods are included with these tables as well as guidance for the
first quarter.
This press release contains
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. These statements, which
express management's current views concerning future events or
results are subject to inherent risks and
uncertainties. Factors that could cause one or more of these
forecasted events not to occur include, but are not limited to, a
failure to obtain necessary regulatory approvals, a deterioration
in the business or prospects of Murphy, adverse developments in
Murphy business' markets, adverse developments in the U.S. or
global capital markets, credit markets or economies in
general. Factors that could cause actual results to differ
materially from those expressed or implied in our forward-looking
statements include, but are not limited to, the volatility and
level of crude oil and natural gas prices, the level and success
rate of our exploration programs, our ability to maintain
production rates and replace reserves, customer demand for our
products, adverse foreign exchange movements, political and
regulatory instability, and uncontrollable natural hazards.
For further discussion of risk factors, see both Murphy's 2013
Annual Report on Form 10-K and Form 10-Q for the quarterly
period ended September 30, 2014, on file with the U.S. Securities
and Exchange Commission. Murphy undertakes no duty to
publicly update or revise any forward-looking statements.
This news release also contains
certain historical non-GAAP measures of financial performance that
management believes are good tools for internal use and the
investment community in evaluating Murphy Oil Corporation's overall
financial performance. These non-GAAP measures are broadly
used to value and compare companies in the crude oil and natural
gas industry. Please see the attached schedules for
reconciliations of the differences between non-GAAP measures used
in this news release and the most directly comparable GAAP
financial measures.
The Securities and Exchange
Commission requires oil and gas companies, in their filings with
the SEC, to disclose proved reserves that a company has
demonstrated by actual production or conclusive formation tests to
be economically and legally producible under existing economic and
operating conditions. The SEC permits the optional disclosure
of probable and possible reserves; however, we have not disclosed
the Company's probable and possible reserves in our filings with
the SEC. We use the term "gross mean resources" in this news
release. These estimates are by their nature more speculative
than estimates of proved, probable and possible reserves and
accordingly are subject to substantially greater risk of being
actually realized. The SEC guidelines strictly prohibit us
from including these estimates in filings with the SEC.
Investors are urged to consider closely the disclosures and risk
factors in our most recent annual report on Form 10-K and in other
reports on file with the SEC, available from Murphy Oil
Corporation's offices or Web site at
http://ir.murphyoilcorp.com.
For further information
contact Barry Jeffery, Vice President, Investor Relations at
870-864-6501.
4Q
Schedules accessible at link below.
Earn4 Schedules
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Murphy Oil Corp via Globenewswire
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