Murphy Oil (MUR) Q4 2023 earnings summary

Executive summary

• FY 2023 production averaged 186 MBOEPD, including 98 MBOPD of oil; preliminary proved reserves reached 724 MMBOE with 139% reserve replacement.

• 2024 priorities included debt reduction, development execution, exploration and shareholder returns; production guidance was 180–188 MBOEPD and CAPEX guidance was $920 MM–$1.02 BN.

Financial highlights

• Q4 net income was $116 MM, or $0.75/diluted share; adjusted net income was $140 MM, or $0.90/diluted share. FY net income was $662 MM, or $4.22/diluted share; adjusted net income was $709 MM, or $4.52/diluted share.

• Q4 EBITDA was $375 MM and adjusted EBITDA was $414 MM; adjusted EBITDAX was $496 MM. FY EBITDA was $1.807 BN, adjusted EBITDA was $1.901 BN and adjusted EBITDAX was $2.1 BN.

• Production revenue was $788 MM in Q4 and $3.2 BN for FY 2023; Q4 realized prices before hedges were $79.27/BBL oil, $20.83/BBL NGL and $2.12/MCF gas.

• Accrued CAPEX was $219 MM in Q4 and $1.008 BN for FY 2023, excluding NCI and acquisition-related CAPEX.

• FY debt reduction was $500 MM; total debt reduction since YE 2020 reached $1.7 BN, with $84 MM in annual interest expense savings.

Outlook and guidance

• FY 2024 production guidance is 180–188 MBOEPD, including 96 MBOPD of oil and 106 MBOEPD of liquids; Q1 guidance is 163–171 MBOEPD, including 89 MBOPD of oil.

• FY production guidance includes 2 MBOEPD of annualized Gulf of Mexico storm downtime and reflects the 2023 divestiture of 1.5 MBOEPD in non-core onshore Canada assets; Q1 guidance includes 13 MBOEPD of Gulf of Mexico downtime and 2 MBOEPD of onshore downtime.

• FY 2024 CAPEX guidance is $920 MM–$1.02 BN, with ~60% planned in 1H and ~85% allocated to development; ~80% of development capital is operated.

• CAPEX plans include $320 MM for Eagle Ford, $130 MM for onshore Canada, $300 MM for Gulf of Mexico, $120 MM for exploration and $45 MM for other offshore development; asset plans also cite $90 MM for Tupper Montney, $40 MM for Kaybob Duvernay and $370 MM offshore.

• Plans target $300 MM of debt reduction and a $1.0 BN debt goal; repurchases target 25% of adjusted FCF until that goal, while long-term targets include 210–220 MBOEPD, >50% oil weighting and ~45% reinvestment of operating cash flow.