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MURPHY OIL CORP (MUR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered production above guidance (189.7 MBOEPD vs 177–185 MBOEPD guided) with strong well productivity in Eagle Ford and Tupper Montney; adjusted EPS was $0.27 and GAAP diluted EPS $0.16 .
  • Results beat S&P Global consensus: adjusted/normalized EPS $0.27 vs $0.17*, revenue $695.6M vs $632.2M*, and EBITDA $365.0M vs $303.5M*; cost discipline reduced LOE to $11.80/BOE, down sequentially from Q1 .
  • Guidance maintained: FY 2025 production 174.5–182.5 MBOEPD and CAPEX $1,135–$1,285M; Q3 guide set at 185–193 MBOEPD and exploration expense $40M; dividend declared at $0.325 per share .
  • Near-term catalysts: GoM exploration wells (Cello #1 in Q3; Banjo #1 in Q4), Hai Su Vang appraisal well in Vietnam (result expected Q4), and a three-well Côte d’Ivoire program starting Q4; management is prioritizing buybacks over debt reduction given valuation and macro .

What Went Well and What Went Wrong

What Went Well

  • Sequential production beat: 189.7 MBOEPD, +20.6% q/q, above guidance high-end; oil 89.5 MBOPD also exceeded guidance .
  • Cost improvement: LOE reduced to $11.80/BOE, $1.94 lower than Q1 on higher volumes, EFS cost reductions, and lower offshore workovers; H2 LOE guided to $10–$12/BOE .
  • Strong well performance: 24 operated Eagle Ford wells; Karnes County pads delivered some of the highest IPs in EFS history (avg 2,123 BOEPD per well); Tupper Montney 10 wells averaged 19.2 MMCFD 30-day IP, top-20 performers .
    “It’s an exciting time at Murphy as we look ahead to significant exploration and appraisal catalysts in the second half of the year” — Eric Hambly, CEO .

What Went Wrong

  • Commodity prices pressured earnings: realized oil prices fell $7.89/barrel q/q (to $64.31), gas down $0.79/MCF q/q (to $1.88), contributing to GAAP diluted EPS decline to $0.16 (vs $0.50 in Q1 and $0.83 in Q2 2024) .
  • Non-operated offshore Canada downtime: average 5.6 MBOEPD in Q2, below guide by 2.1 MBOEPD, with lower Terra Nova uptime expected to persist in H2 .
  • Free cash flow softness: FCF $17.8M and adjusted FCF negative ($39.8M) on elevated capex and macro pricing; sequential adjusted EBITDA ($334.9M) tracked below prior-year levels .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Total Revenues and Other Income ($USD Millions)$802.8 $665.7 $695.6
Revenue from Production ($USD Millions)$797.5 $672.7 $683.1
GAAP Diluted EPS ($)$0.83 $0.50 $0.16
Adjusted Diluted EPS ($)$0.81 $0.56 $0.27
Adjusted EBITDA ($USD Millions)$395.6 $338.6 $334.9
Cash from Operations ($USD Millions)$467.7 $300.7 $358.1
Free Cash Flow ($USD Millions)$174.4 $(27.2) $17.8
LOE ($/BOE, excl. NCI)$15.09 $13.74 $11.80
Net Production (BOEPD, excl. NCI)180,579 157,220 189,677

Segment Performance (Q2 2025 vs Q2 2024)

SegmentRevenues Q2 2024 ($MM)Income Q2 2024 ($MM)Revenues Q2 2025 ($MM)Income Q2 2025 ($MM)
United States (E&P)$679.5 $185.7 $553.5 $86.5
Canada (E&P)$119.0 $8.9 $128.3 $10.5
Other (E&P)$4.3 $(10.1) $2.9 $(7.3)
Corporate—$(27.7) $10.9 $(55.9)

Key Operating KPIs (Q2 2025)

KPIValue
Oil production, net (BOPD)89,530
Total production, net (BOEPD)189,677
Accrued CAPEX ($MM)$250.8
Onshore production (BOEPD)~118,000 (31% liquids)
Offshore production (BOEPD, excl. NCI)~72,000 (82% oil)
Wells online (Q2 2025)EFS: 24 op; Tupper: 5; Non-op EFS: 10
Weighted avg oil price (U.S. Offshore, $/bbl)$64.48
Weighted avg gas price (Canada, $/MCF)$1.65

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Net Production (ex-NCI, BOEPD)Q3 2025—185,000–193,000 New Q3 guide
Exploration Expense ($MM)Q3 2025—$40 New Q3 guide
Total Net Production (ex-NCI, BOEPD)FY 2025174,500–182,500 174,500–182,500 Maintained; trending to midpoint
CAPEX (ex-NCI, $MM)FY 2025$1,135–$1,285 $1,135–$1,285 Maintained; reaffirmed midpoint
CAPEX plan ($MM)2025 Quarterlies1Q $403; 2Q $300E; 3Q $260E; 4Q $247E; FY $1,210E 1Q $403; 2Q $251A; 3Q $260E; 4Q $296E; FY $1,210E Timing shift, higher 4Q
LOE ($/BOE)H2 2025—$10–$12 expected New qualitative range
Dividend per share ($)Quarterly$0.325 (Q1 declared) $0.325 (declared Aug 6, payable Sep 2) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q4 2024; Q-1: Q1 2025)Current Period (Q2 2025)Trend
Gulf of America workovers & productionBacklog noted; Samurai #3 delay; Mormont #4 in progress Samurai #3 completed; Khaleesi #2 completed in Q3; Marmalard #3 targeted Aug; production above guide Improving execution; backlog largely resolved
Eagle Ford inventory and completionsMixed EFS performance in Q4; prep for 2025 program Karnes wells exceed historical IPs; infill Lower EF wells performing; 30% higher two-month cumulative oil Positive performance momentum
Tupper Montney programPlant capacity achieved in 2024; 2025 plan for 10 wells 10-well program with +50% proppant; 30-day IP ~19.2 MMCFD; plant at capacity in May/June Strong execution; design changes working
Vietnam (LDV development; HSV appraisal)LDV-A construction started; HSV discovery ~370’ net pay LDV on schedule for 2H26; HSV appraisal to spud Q3; result Q4 Advancing; near-term appraisal catalyst
Côte d’Ivoire explorationSeismic reprocessing completed Rig contracted; three-well program starts Q4; Sievet prospect tests cloud play type Moving to drilling; high-impact optionality
Capital allocation (delever vs buybacks)Net debt lowest in a decade; new notes/RCF; Murphy 3.0 buybacks Bias to repurchases over debt reduction; consider paying down $200M revolver opportunistically More buyback skew near term
Canadian macro (AECO/LNG Canada)—Realized gas $0.44/MCF over AECO via diversification; LNG Canada first cargo ramps demand Supportive for AECO and pricing

Management Commentary

  • “Delivered sequential increase in production to 190,000 BOEPD and 90,000 BOPD; production outperformed high-end of guidance on strong new well productivity” .
  • “Operating expenses in the second quarter were $11.80 per BOE… lower than in the first quarter… we anticipate operating expenses in the $10 to $12 per BOE range during the second half of 2025” .
  • On exploration pipeline: “Testing more than 500–1,000 million BOE in gross unrisked resource potential… key catalysts for the company” .
  • On capital returns: “We currently expect to use available adjusted Free Cash Flow for share repurchases rather than bond repayments” .

Q&A Highlights

  • Exploration schedule: Cello #1 (Q3) and Banjo #1 (Q4) in GoM; Hai Su Vang appraisal spuds Q3 with results Q4; Côte d’Ivoire program begins Q4 (Sievet prospect first) .
  • Chinook development: Acquisition of Pioneer FPSO lowers costs and enables a high-rate (order of ~15 MBOPD) 2026 development well; potential adds 20–30 MMBbl EUR and extends field life into ~2040 .
  • GoM operations: Workover backlog largely cleared; Marmalard #3 expected online in August; production outperformed guide .
  • Return of capital: Preference for buybacks over further debt reduction; may address $200M revolver over time .
  • Terra Nova uptime: Persistent mechanical downtime reduces Canadian offshore volumes; wells strong when up .
  • LOE sustainability: Company-level LOE expected to run $10–$12/BOE; normalized Q2 LOE would have been $9.07/BOE excluding offshore workovers .
  • Completions: Karnes Turner pad optimized with lower fluid/proppant loading; improved outcomes likely to inform future designs .

Estimates Context

  • Q2 2025 vs S&P Global consensus: adjusted/normalized EPS $0.27 vs $0.17* (beat), revenue $695.6M vs $632.2M* (beat), EBITDA $365.0M vs $303.5M* (beat). The beat was driven by higher-than-expected volumes (EFS/Tupper) and lower LOE, partially offset by weaker realized prices .
  • Prior periods for context: Q1 2025 EPS $0.56 vs $0.49*, revenue $665.7M vs $668.9M* (slight miss), EBITDA $349.8M vs $340.4M* (in line) .
  • FY 2025 consensus: EPS $1.28*, revenue $2.73B*, EBITDA $1.44B*; given production trending to midpoint and cost improvements, street may raise H2 volume/LOE assumptions while keeping commodity-price sensitivities conservative .

Values retrieved from S&P Global.*

MetricQ2 2024Q1 2025Q2 2025FY 2025
Primary EPS Consensus Mean ($)$0.732*$0.488*$0.167*$1.278*
Revenue Consensus Mean ($USD Millions)$796.8*$668.9*$632.2*$2,728.7*
EBITDA Consensus Mean ($USD Millions)$428.6*$340.4*$303.5*$1,442.3*
Primary EPS - # of Estimates17*16*14*15*
Revenue - # of Estimates6*6*5*7*

Key Takeaways for Investors

  • Beat on adjusted EPS, revenue, and EBITDA versus consensus; production outperformance and LOE reduction were the core drivers despite weaker pricing—supportive for near-term estimate revisions higher on volumes/costs .
  • Sequential operational momentum in Eagle Ford and Tupper Montney (top-tier IPs) plus GoM workovers largely completed set a stronger H2 operating base; monitor Terra Nova uptime risk .
  • Guidance intact with trajectory improved to the midpoint; Q3 production guide 185–193 MBOEPD and exploration expense $40M indicate sustained activity and volume delivery near current levels .
  • Capital allocation skewing to buybacks over debt reduction given macro/valuation; $550M remaining authorization and 142.7M shares outstanding provide flexibility .
  • High-impact catalysts over the next 3–6 months (Cello, Banjo, HSV appraisal, Côte d’Ivoire Sievet) can drive narrative/stock; operator control and PSC terms in Côte d’Ivoire amplify potential value .
  • Hedging/diversification strategies support realized gas above AECO; LNG Canada ramp adds structural tailwind for Western Canadian gas pricing .
  • Watch pricing beta: sustained lower oil/gas prices can compress GAAP earnings/FCF, but Murphy’s cost actions and balanced onshore/offshore portfolio mitigate some downside .

Appendix: Additional Data Points

  • Liquidity ~$1.5B (including $1.15B undrawn RCF and $380M cash); total debt $1.48B; $200M drawn on revolver .
  • Return of capital: $46M Q2 dividend; $193M returned 1H25 ($100M buybacks; $93M dividends) .
  • Q3 2025 production by area (ex-NCI): EFS 45 MBOEPD; GoM 57 MBOEPD; Tupper 75.3 MBOEPD; Kaybob 6.4 MBOEPD; Offshore Canada 5 MBOEPD .
  • Fixed price positions: US gas swaps 60 MMCFD at $3.65 (Q3) and $3.74 (Q4); Canada fixed forward 40–50 MMCFD at C$2.75 (2025) and C$3.03 (2026) .