Murphy posts third-quarter net loss of $244 million
Murphy Oil Corp. has reaffirmed its full-year 2020 capital budget guidance of $680-720 million, excluding Gulf of Mexico NCI and King’s Quay floating production system (FPS) construction spending and expects production volumes of 146,000-154,000 boe/d in this year’s fourth quarter.
The guidance is primarily affected by two factors—Gulf of Mexico storm downtime of 8,200 boe/d due to impacts from hurricanes Delta and Zeta, as well as 6,400 boe/d of planned downtime.
Guidance was provided as part of the operator’s third quarter results, in which it posted a net loss attributable to Murphy of $244 million. Adjusted net loss, which excludes discontinued operations and other one-off items, was $24 million. Adjusted earnings before interest, taxes, depreciation and amortization from continuing operations attributable to Murphy was $249 million. Adjusted earnings before interest, tax, depreciation, amortization and exploration expenses from continuing operations attributable to Murphy was $262 million.
Third-quarter production averaged 153,000 boe/d with 56% oil and 63% liquids. Offshore production was negatively impacted by the hurricane season, resulting in 12,400 boe/d of storm-related downtime, compared to 4,800 boe/d as guided. Storm downtime was partially offset by stronger performance in the onshore business.
As of Sept. 30, Murphy had $1.6 billion of liquidity, comprised of $1.4 billion undrawn under the $1.6 billion senior unsecured credit facility and $220 million of cash and cash equivalents.
At the end of the quarter, Murphy had outstanding debt of $2.8 billion in long-term, fixed-rate notes. The company also had $200 million drawn under its senior unsecured credit facility.
The company incurred $120 million of CAPEX for the quarter, including $19 million for the King’s Quay FPS construction. The total CAPEX figure excludes Gulf of Mexico noncontrolling interest. Murphy incurred a total $663 million of CAPEX for the 9 months ended Sept. 30, including $81 million for King’s Quay.
North American onshore
The North American onshore business produced 90,000 boe/d in the quarter. No operated drilling and completions activity is planned across the onshore business for the remainder of 2020.
Eagle Ford production averaged 35,000 boe/d with 71% oil volumes in the quarter. Eight non-operated Karnes wells came online. Murphy’s operating partner plans to drill four Karnes wells in fourth-quarter 2020, with completions anticipated in early 2021.
Tupper Montney natural gas production averaged 235 MMcfd for the quarter. No drilling or completions activity occurred in the third quarter.
Kaybob Duvernay production averaged 13,000 boe/d in the quarter. Four wells were brought online.
Murphy’s non-operated Placid Montney position produced 3,000 boe/d in the quarter. Six non-operated wells resumed production in July after being shut in for May and June due to low commodity prices.
Global offshore
The offshore business produced 63,000 boe/d in the quarter, comprised of 82% oil. This excludes production from discontinued operations and noncontrolling interest. Gulf of Mexico production in the quarter averaged 59,000 boe/d, consisting of 80% oil. Canada offshore production averaged 4,000 boe/d, comprised of 100% oil.
The non-operated Highgarden well (Gulf of Mexico, Green Canyon 895) was spud in the quarter for an estimated $11 million cost net to Murphy as a 20% working interest owner. Drilling was delayed due to an active Gulf of Mexico storm season.