Murphy 2023 capex plan targets 14% production growth

Feb. 6, 2023
Murphy Oil Corp., Houston, plans to spend between $875 million and $1.025 billion on capital projects this year with the goal of increasing total production by 14%.

Murphy Oil Corp., Houston, plans to spend between $875 million and $1.025 billion on capital projects this year with the goal of increasing total production by 14%.

The midpoint is slightly below 2022’s number, which came in at a little more than $1 billion. But president chief executive officer Roger Jenkins and his team said Jan. 26 their outlook is heavily weighted toward the first of half of the year, when Murphy plans to spend about $685 million.

Onshore projects in the Eagle Ford, Tupper Montney, and Kaybob Duvernay are slated to receive roughly $455 million in investments—with $325 million going to the Eagle Ford, where the company plans to bring online 35 wells this year—while sites in the Gulf of Mexico are in line for $335 million and offshore Canada will get $30 million.

“Along with supporting an increased quarterly dividend to our valued shareholders, Murphy is positioned for another successful year with capital spending primarily allocated to high-returning, oil-weighted Gulf of Mexico and Eagle Ford Shale assets,” Jenkins said in a statement, adding that his team’s financial plans call for three-quarters of adjusted free cash flow to go to reducing debts, which totaled $1.8 billion as of Dec. 31.

The 2023 plans seek to build on a year in which Murphy generated net income of $965 million and grew its oil production volumes 29% to an average of 167,000 boe/d thanks to, among other things, completing the initial development of its Khaleesi, Mormont, and Samurai fields in the Gulf of Mexico. For the fourth quarter, the company posted a profit of $221 million on total revenues of $975 million, increases from $204 million and $739 million, respectively, in the last 3 months of 2021.

Production for the period was nearly 174,000 boe/d and is forecast to grow to 175,500-183,500 boe/d in the current quarter. For the year, the target is 179,500 boe/d, split evenly between offshore and onshore. Oil production is forecast to climb 10% to about 99,000 boe/d.