Sign in

You're signed outSign in or to get full access.

MO

MURPHY OIL CORP (MUR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025: Adjusted EPS $0.56, GAAP EPS $0.50; adjusted EPS beat Street ($0.49) while revenue of $665.7M modestly missed ($668.9M); adjusted EBITDA $338.6M beat ($340.4M est) largely on production mix and cost control despite weather/downtime headwinds . Values retrieved from S&P Global.*
  • Production averaged 157 MBOEPD (78.5 MBOPD), down from 175 in Q4 and 185 in Q3, driven by non‑operated downtime (Gulf of America), offshore Canada logistics, and delayed well timing from winter storms .
  • Guidance maintained: FY 2025 CAPEX $1.135–$1.285B and production 174.5–182.5 MBOEPD; management now expects full‑year volumes toward the low end due to Q1 impacts; Q2 production guided up to 177–185 MBOEPD as new onshore/Gulf wells come online .
  • Capital allocation credible: repurchased $100M (3.6M shares) in Q1; liquidity ~$1.5B; FPSO acquisition (BW Pioneer) reduces annual operating costs by ~$50–$60M with a ~2‑year payback, aiding cash flow and offshore returns .

What Went Well and What Went Wrong

  • What Went Well

    • Vietnam exploration success: Lac Da Hong-1X (Pink Camel) discovery encountered 106 feet net oil pay; flow tested ~2,500 BOPD of 38° API oil; management: “This discovery enhances the value of Murphy's growing Vietnam business” .
    • FPSO acquisition: BW Pioneer purchase drives direct operating cost reduction (~$50–$60M/yr) and 2‑year payback; CFO: “reduces our annual net operating expenses by approximately $50 million” .
    • Capital returns and discipline: $100M buybacks in Q1; ongoing commitment to allocate ≥50% of adjusted FCF to shareholders while maintaining ~$1.0B long‑term debt goal .

  • What Went Wrong

    • Production headwinds: 6 MBOEPD impacts in Q1 from non‑operated downtime (Gulf of America), offshore Canada curtailments, and winter storms delaying Mormont #4 and Samurai #3 timing .
    • Cost profile elevated near term: LOE per BOE excluding NCI rose to $13.74/BOE in Q1; management expects normalization to ~$10–$12/BOE in 2H 2025 post workovers .
    • Q4 comparison weak: prior quarter (Q4 2024) missed Street on EPS and revenue amid downtime and a less successful Eagle Ford completion design, heightening scrutiny of execution consistency . Values retrieved from S&P Global.*

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Total Revenues & Other Income ($USD Millions)$758.3 $671.0 $665.7
Revenue from Production ($USD Millions)$753.2 $669.6 $672.7
GAAP Diluted EPS ($)$0.93 $0.34 $0.50
Adjusted Diluted EPS ($)$0.74 $0.35 $0.56
EBITDA (Non‑GAAP, $USD Millions)$378.3 $314.7 $316.6
Adjusted EBITDA ($USD Millions)$397.3 $321.4 $338.6

Actual vs Consensus (S&P Global)

MetricQ3 2024 ActualQ3 2024 Consensus*Q4 2024 ActualQ4 2024 Consensus*Q1 2025 ActualQ1 2025 Consensus*
Primary EPS ($)$0.74 $0.64*$0.35 $0.57*$0.56 $0.49*
Revenue ($USD Millions)$753.2 $740.9*$669.6 $734.3*$665.7 $668.9*
EBITDA ($USD Millions)$408.5 $409.4*$351.2 $393.4*$349.8 $340.4*

Values retrieved from S&P Global.*

Segment/Geographic Revenue

Segment ($USD Millions)Q3 2024Q4 2024Q1 2025
United States (E&P)$597.0 $572.2 $509.5
Canada (E&P)$157.9 $95.9 $165.7
Other (International)$(0.8) $3.2 $0.0
Total E&P Revenues$754.1 $671.3 $675.2

Key KPIs and Balance Sheet

KPIQ3 2024Q4 2024Q1 2025
Net Production excl. NCI (MBOEPD)185 175 157
LOE per BOE excl. NCI ($/BOE)$11.99 $13.60 $13.74
Accrued CAPEX ($USD Millions)$211 $186 $403 (incl. $104M FPSO)
Cash & Cash Equivalents ($USD Millions)$271.2 $423.6 $392.9
Total Debt ($USD Millions)$1,279.3 $1,274.5 $1,480.0 (incl. $200M revolver)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Net Production (ex‑NCI, MBOEPD)FY 2025174.5–182.5 174.5–182.5; toward lower end Maintained; skew lower end
Accrued CAPEX ($USD Millions)FY 2025$1,135–$1,285 $1,135–$1,285 Maintained
Net Production (ex‑NCI, MBOEPD)Q2 2025—177–185 (48% oil) New quarterly guide
CAPEX by Quarter ($USD Millions)FY 2025$425 / $280 / $275 / $230 $403 / $300 / $260 / $247 Slightly lowered Q1A; updated E
Dividend per Share ($)Quarterly$0.300 (Q4) $0.325 (declared Apr 2, 2025) Raised

Earnings Call Themes & Trends

TopicQ3 2024 (Prev)Q4 2024 (Prev)Q1 2025 (Current)Trend
Capital allocation (buybacks/dividend)Entered Murphy 3.0; buybacks above 50% of adj. FCF 8% dividend increase; $300M FY buybacks $100M Q1 buybacks; ≥50% adj. FCF to returns Consistent, opportunistic repurchases
Gulf of America operations/workoversOBM seismic; several workovers planned Elevated workover costs; Samurai #3 delay Khaleesi-2 safety valve fix Q2; Marmalard-3 sidetrack Q3; LOE normalizing in 2H Near-term resolution, cost normalization
Vietnam (LDV development & exploration)LDV platform construction started HSV-1X discovery 10,000 BOPD test; appraisal planned Q3 ’25 LDH-1X discovery (106’ pay, 2,500 BOPD); LDV FSO construction, first oil 4Q26 Momentum building; derisking
Canada Montney strategyPrice diversification lifted realized pricing Plant capacity reached; marketing mix detail 10-well program online; ~500 MMCFD capacity; short-cycle add if pricing durable Strong execution; optionality tied to LNG
FPSO acquisition economics——~$50–$60M annual OpEx savings; 2‑yr payback Structural cost edge offshore
Macro/costs/tariffs——Onshore well costs broadly flat YoY; OCTG +3–5% risk; rigs/diesel down; limited tariff exposure Mixed inputs, net stable costs

Management Commentary

  • CEO on Vietnam success: “This discovery enhances the value of Murphy's growing Vietnam business... coupled with our nearby Lac Da Vang development and our recent Hai Su Vang discovery.”
  • CFO on FPSO value: “This transaction creates tremendous value... reduces our annual net operating expenses by approximately $50 million, thereby achieving a 2‑year payback.”
  • CEO on capital plan flexibility at lower oil prices: identified cuts to Eagle Ford, Kaybob, Montney and GOM development if <$55/bbl; commitment to LDV and high‑impact exploration despite volatility .

Q&A Highlights

  • Capital flexibility: If sustained <$55/bbl, MUR would trim late‑year onshore/GOM activity with limited impact to 2025 volumes but more to 2026; LDV and Vietnam/Côte d’Ivoire exploration likely proceed given long‑term value .
  • Gulf workovers: Khaleesi‑2 safety valve fix targeted Q2; Marmalard‑3 sidetrack targeted Q3; LOE trend to ~$10–$12/BOE in 2H 2025 .
  • Cost outlook: Onshore well costs effectively flat vs 2024; OCTG exposure modest; offshore rigs/diesel down; most equipment in‑country, limited tariff sensitivity .
  • Canada Montney optionality: Plant at ~500 MMCFD; short‑cycle wells could keep capacity higher if AECO/LNG signals prove durable; strong well economics ($5–$5.5M/well; IPs 17–25 MMCFD) .
  • Buybacks: Will be opportunistic but balanced to protect “industry‑leading balance sheet” amid lower FCF at low oil prices .

Estimates Context

  • Q1 2025: Adjusted EPS $0.56 vs $0.49 consensus (beat); revenue $665.7M vs $668.9M consensus (slight miss); EBITDA $349.8M vs $340.4M consensus (beat). Values retrieved from S&P Global.*
  • Prior quarters: Q4 2024 missed on EPS and revenue vs consensus; Q3 2024 beat both EPS and revenue. Values retrieved from S&P Global.*

Near‑term estimate revisions should reflect:

  • Higher Q2 volume trajectory (177–185 MBOEPD) as onshore wells and Samurai/Mormont contribute .
  • Lower full‑year production skew (toward low end) from Q1 impacts and workover timing .
  • Structural offshore OpEx reduction from FPSO acquisition supporting margin resilience .

Key Takeaways for Investors

  • Near‑term production snapback: Q2 guide 177–185 MBOEPD and resumed Gulf wells set up sequential improvement after Q1 downtime; watch LOE normalization in H2 .
  • Cost tailwinds offshore: FPSO ownership lowers OpEx by ~$50–$60M annually, enhancing project IRRs and cash generation through the cycle .
  • Exploration as catalyst: LDH discovery adds to HSV momentum; LDV development on track for 4Q26 first oil; Côte d’Ivoire program in 4Q25 offers high‑impact optionality .
  • Capital returns remain credible: $100M buybacks in Q1 and dividend raised to $0.325; policy of ≥50% adjusted FCF to shareholders intact while preserving balance sheet strength .
  • Guidance intact but conservative: FY production maintained with lower‑end bias; expect Street to modestly trim FY volumes while raising Q2/Q3 run‑rates .
  • Risk management: Onshore well costs stable, limited tariff exposure, diversified gas marketing; optional trims identified for lower oil environments to protect FCF/dividend .
  • Trade setup: Favor catalysts from Q2 production step‑up and LDV/HSV updates; stock could re‑rate on demonstrated LOE normalization and sustained execution in Gulf/Vietnam .
Notes: 
- All consensus figures marked with * are Values retrieved from S&P Global.