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MURPHY OIL CORP (MUR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered diluted EPS of $0.34 and adjusted diluted EPS of $0.35 on total revenues and other income of $0.671B; production averaged 175 MBOEPD with 85 MBOPD, impacted by ~10.8 MBOEPD downtime across operated and non‑operated assets .
  • Management raised the quarterly dividend 8% to $0.325/share (annualized $1.30) and outlined 2025 guidance: CAPEX $1.135B–$1.285B and production 174.5–182.5 MBOEPD; Q1 2025 production guided to 159–167 MBOEPD on planned downtime and ramp schedule .
  • Strategic and operational positives: Hai Su Vang-1X oil discovery in Vietnam with facility-constrained flow test of 10,000 BOPD of 37° oil (GOR 1,100 scf/bbl); lowest net debt in over a decade ($850MM) and expanded $1.35B credit facility, plus $600MM notes issuance and debt redemption .
  • Near-term stock catalysts: execution on Gulf of Mexico workovers (Samurai #3, Khaleesi), LDV platform/FSO build, Vietnam exploration/appraisal timing, and buyback cadence under Murphy 3.0; note subsequent FPSO acquisition with ~$60MM annual OPEX savings (payback ~2 years) reaffirms 2025 CAPEX plan .

What Went Well and What Went Wrong

What Went Well

  • Hai Su Vang-1X discovery and strong test: “We achieved a facility-constrained flow rate of 10,000 barrels of oil per day… high-quality, 37-degree oil… GOR ~1,100 scf/bbl,” with appraisal planned Q3 2025 .
  • Balance sheet and liquidity strengthened: $600MM 6.000% 2032 notes issued, $600MM redeemed (2027/2028/2029), new $1.35B unsecured facility; net debt ~ $850MM and net debt/total capital ~13% .
  • Capital returns and framework: Entered Murphy 3.0; repurchased $300MM of stock in 2024 and announced dividend increase to $0.325/share for 2025 .

What Went Wrong

  • Q4 production underperformed guidance due to: Samurai #3 rig delay, Khaleesi safety valve issue, late-season hurricane downtime, and an Eagle Ford completion design miss on a four-well pad (~1.9 MBOEPD impact) .
  • Elevated operating costs expected in Q1 2025 given concentrated workover activity and downtime; management guided LOE to $15–$16/boe in Q1 before normalizing to $10–$12/boe thereafter .
  • Non-cash asset impairment of $28.4MM in Q4 and continued exploration expense; adjusted EBITDA ($321MM) and EBITDAX ($337MM) below prior quarters on downtime and realized prices .

Financial Results

Key Metrics (Q2–Q4 2024)

MetricQ2 2024Q3 2024Q4 2024
Total revenues and other income ($USD Millions)$802.771 $758.331 $670.960
Revenue from production ($USD Millions)$797.510 $753.169 $669.574
Diluted EPS ($)$0.83 $0.93 $0.34
Adjusted diluted EPS ($)$0.81 $0.74 $0.35
EBITDA ($USD Millions)$388.7 $378.3 $314.7
Adjusted EBITDA ($USD Millions)$395.6 $397.3 $321.4
Production (MBOEPD)181 185 175
Oil (MBOPD)91 88 85
Accrued CAPEX ($USD Millions)$292 $211 $186

Segment Breakdown (Q4 2023 vs Q4 2024 E&P)

Segment (E&P)Revenues Q4 2023 ($MM)Revenues Q4 2024 ($MM)Income (Loss) Q4 2023 ($MM)Income (Loss) Q4 2024 ($MM)
United States$726.1 $572.2 $199.8 $102.9
Canada$106.6 $95.9 $6.8 $(3.5)
Other$3.9 $3.2 $(15.5) $(14.0)
Total E&P$844.1 $671.3 $191.1 $85.4

KPIs and Operating Metrics

KPIQ2 2024Q3 2024Q4 2024
LOE per boe – total oil & gas (ex-NCI) ($/boe)$15.09 $11.99 $13.12
Weighted Avg Oil Price – U.S. Offshore ($/bbl)$81.67 $75.65 $69.92
Weighted Avg Gas Price – Canada Onshore ($/mcf)$1.37 $1.34 $1.69
Weighted Avg NGL Price – U.S. Offshore ($/bbl)$22.77 $22.50 $23.91
Liquidity ($B)$1.1 (as of 6/30/24) $1.1 (as of 9/30/24) ~$1.8 (as of 12/31/24)
Total Debt ($B)$1.28 (6/30/24) $1.28 (9/30/24) $1.27 (12/31/24)
Cash & Equivalents ($MM)$334 (6/30/24) $271 (9/30/24) $424 (12/31/24)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Production (BOEPD)Q4 2024181.5–189.5 Actual: 175 Miss (below guide due to downtime)
Production (BOEPD)Q1 2025N/A159–167 (ex-NCI) New
Production (BOEPD)FY 2025N/A174.5–182.5 (ex-NCI) New
CAPEX ($MM)FY 2025N/A$1,135–$1,285 (ex-NCI); quarterly phasing $425/$280/$275/$230 New
Exploration Expense ($MM)Q1 2025N/A$26 New
Dividend ($/share)2025$0.300 quarterly $0.325 quarterly Raised 8%

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Capital allocation (Murphy 3.0), buybacksEntered Murphy 3.0; repurchases accelerated; debt target maintained 2024 buybacks $300MM; 2025 returns continue; dividend up Shareholder returns increasing
Gulf of Mexico workovers/downtimeQ2: Samurai development change; Q3: non-op downtime and workovers Q4: Samurai #3 rig delay; Khaleesi safety valve; late-season hurricane downtime Near-term resolving by Q2 2025
Vietnam LDV project & HSV discoveryLDV awards; HSV spud in Q3 HSV flow test 10 kbopd; LDV platform/FSO progressing; appraisal in Q3 2025 Positive momentum
Tupper Montney marketing/capacityRecord peak 496 MMCFD; AECO hedges; sales diversification ~36% volumes hedged; only ~17% exposed to AECO; plant at capacity, optional capex to smooth throughput Stable/optimized
Terra Nova reliability (Canada offshore)Q2/Q3: downtime noted Operator improved reliability; higher expected runtime in Q1 2025 Improving
Offshore cost structure & breakevensNoted rig rate stability; subsea cost variance emerging Subsea trees/tieback costs up; breakevens up ~$2/bbl Slight inflation
Production trajectory >200 MBOEPDQ2/Q3 reiterated long-term plan Path via high-rate GOM wells and LDV ramp 2026–2029 Maintained

Management Commentary

  • “We… reached our lowest net debt in more than a decade at approximately $850 million at year-end 2024.” — Eric Hambly .
  • “We achieved a facility-constrained flow rate of 10,000 barrels of oil per day… 37-degree oil… GOR of 1,100 scf/bbl.” — Eric Hambly .
  • “Through our focus on delevering, we have achieved our lowest net debt… with a strong net debt to total capital ratio of only 13 percent.” — CFO Tom Mireles .
  • “Our 2025 plans… include drilling Cello #1 and Banjo #1 near Delta House… estimated net cost of $18 million each.” — Eric Hambly .
  • “First oil [LDV] in late 2026 with ongoing development through 2029.” — Eric Hambly .

Q&A Highlights

  • CAPEX scope and optionality: 2025 plan includes LDV full development; excludes PON and HSV development costs pending appraisal/FD approvals; LDV ~$110MM net in 2025, exploration ~$10MM (LDH-1X) and HSV appraisal ~$20MM net .
  • Q4 volume shortfall explained: Samurai #3 rig delays, Khaleesi safety valve work, non-op hurricane downtime, Eagle Ford completion design miss; normalization expected by end of Q2 2025 .
  • Eagle Ford strategy: steadier rig program; 35 operated wells in 2025; future plan reduces well count ~10% while completing ~9% more rock, lowering capital ~6% .
  • Operating cost outlook: Q1 LOE guided to $15–$16/boe, normalizing to $10–$12/boe from Q2 as volumes recover .
  • Long-term production path: high-rate Gulf of Mexico wells and LDV ramp to support >200 MBOEPD late decade; optionality to flex onshore spend .

Estimates Context

  • S&P Global (Capital IQ) consensus estimates for Q4 2024 EPS and revenue were unavailable due to API request limits at the time of retrieval; therefore, comparisons vs. Wall Street consensus are not provided here. Values would normally be retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term execution risk centered on Gulf of Mexico workover timing; Samurai #3 and Khaleesi fixes should lift volumes into Q2–Q3, normalizing LOE/boe and supporting back-half 2025 production ramp .
  • Vietnam upside is material: HSV test indicates high-quality reservoir; appraisal in Q3 2025 sets size and timing, with LDV development on track for late-2026 first oil; multi-basin optionality de-risks growth .
  • Balance sheet and liquidity position enable buybacks under Murphy 3.0 and dividend growth; $1.35B facility and extended maturities reduce refinancing risk amid commodity volatility .
  • Gas price risk mitigated: diversified marketing and AECO fixed-price contracts reduce exposure; Montney at capacity with optional capex to optimize throughput pending durable price signals .
  • Offshore portfolio shows incremental cost inflation (subsea) but rig rates stable; breakeven creep manageable (~$2/bbl) within high-return tiebacks and near-infrastructure exploration .
  • Subsequent FPSO acquisition reduces annual OPEX by ~$60MM (two-year payback), enhancing Wilcox trend returns and reinforcing 2025 CAPEX guidance .
  • Watch for Q1 2025 trough (159–167 MBOEPD) and back-half recovery to 174.5–182.5 MBOEPD; trade around cadence of workover completions and exploration milestones (GOM, Vietnam, Côte d’Ivoire) .