Murphy Oil Corp Q3 2024 10-Q Filed

TL;DR

Murphy Oil's Q3 2024 10-Q is in. Check financials and ops vs. last year.

AI Summary

Murphy Oil Corporation filed its 10-Q for the period ending September 30, 2024. The company reported revenues and operational details for the third quarter and the first nine months of the year, comparing them to the same periods in 2023. Specific financial figures and operational metrics are detailed within the filing.

Why It Matters

This filing provides investors with an update on Murphy Oil's financial performance and operational activities for the third quarter of 2024, crucial for understanding the company's current standing and future prospects.

Risk Assessment

Risk Level: medium — The oil and gas industry is subject to significant price volatility and regulatory changes, impacting financial performance.

Key Numbers

• 2024 Q3 — Reporting Period (Third quarter of 2024)
• 2023 Q3 — Comparison Period (Third quarter of 2023)
• 2024-01-01 to 2024-09-30 — Year-to-Date Period (First nine months of 2024)
• 2023-01-01 to 2023-09-30 — Comparison Year-to-Date (First nine months of 2023)

Key Players & Entities

• MURPHY OIL CORP (company) — Filer
• 20240930 (date) — Period of Report
• 20241107 (date) — Filing Date
• HOUSTON (location) — Business Address City

FAQ

Key Financial Figures

• $1.00 — ange on which registered Common Stock, $1.00 Par Value MUR New York Stock Exchange

Filing Documents

• mur-20240930.htm (10-Q) — 1722KB
• mur-20240930xex311.htm (EX-31.1) — 10KB
• mur-20240930xex312.htm (EX-31.2) — 10KB
• mur-20240930xex321.htm (EX-32.1) — 6KB
• mur-20240930_g1.jpg (GRAPHIC) — 160KB
• 0000717423-24-000038.txt ( ) — 9064KB
• mur-20240930.xsd (EX-101.SCH) — 58KB
• mur-20240930_cal.xml (EX-101.CAL) — 106KB
• mur-20240930_def.xml (EX-101.DEF) — 231KB
• mur-20240930_lab.xml (EX-101.LAB) — 712KB
• mur-20240930_pre.xml (EX-101.PRE) — 473KB
• mur-20240930_htm.xml (XML) — 1366KB

– Financial Information

Part I – Financial Information

Financial Statements

Item 1. Financial Statements 2 Consolidated Balance Sheets 2 Consolidated Statements of Operations 3 Consolidated Statements of Comprehensive Income 4 Consolidated Statements of Cash Flows 5 Consolidated Statements of Stockholders' Equity 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7 Note A – Basis of Presentation 7 Note B – New Accounting Principles and Recent Accounting Pronouncements 7 Note C – Revenue from Contracts with Customers 7 Note D – Property, Plant and Equipment 10 Note E – Financing Arrangements and Debt 11 Note F – Other Financial Information 13 Note G – Asset Retirement Obligations 13 Note H – Employee and Retiree Benefit Plans 13 Note I – Incentive Plans 14 Note J – Earnings Per Share 16 Note K – Income Taxes 16 Note L – Financial Instruments and Risk Management 17 Note M – Accumulated Other Comprehensive Loss 19 Note N – Environmental and Other Contingencies 20 Note O – Common Stock Issued and Outstanding 21 Note P – Business Segments 22 Note Q – Leases 23

Management's Discussion and Analysis of Financial Condition and Results of

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 41

Controls and Procedures

Item 4. Controls and Procedures 41

– Other Information

Part II – Other Information 42

Legal Proceedings

Item 1. Legal Proceedings 42

Risk Factors

Item 1A. Risk Factors 42

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 42

Other Information

Item 5. Other Information 43

Exhibits

Item 6. Exhibits 43 Signature 44 1 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Thousands of dollars, except share amounts) September 30, 2024 December 31, 2023 ASSETS Current assets Cash and cash equivalents $ 271,223 $ 317,074 Accounts receivable, net 263,110 343,992 Inventories 51,048 54,454 Prepaid expenses 44,234 36,674 Total current assets 629,615 752,194 Property, plant and equipment, at cost less accumulated depreciation, depletion and amortization of $ 13,758,462 in 2024 and $ 13,135,385 in 2023 8,189,942 8,225,197 Operating lease assets 859,706 745,185 Deferred income taxes – 435 Deferred charges and other assets 37,156 43,686 Total assets $ 9,716,419 $ 9,766,697 LIABILITIES AND EQUITY Current liabilities Current maturities of long-term debt, finance lease $ 748 $ 723 Accounts payable 429,832 446,891 Income taxes payable 21,778 21,007 Other taxes payable 34,321 29,339 Operating lease liabilities 253,336 207,840 Other accrued liabilities 144,818 140,745 Total current liabilities 884,833 846,545 Long-term debt, including finance lease obligation 1,279,324 1,328,352 Asset retirement obligations 929,965 904,051 Deferred credits and other liabilities 278,831 309,605 Non-current operating lease liabilities 620,058 551,845 Deferred income taxes 318,233 276,646 Total liabilities $ 4,311,244 $ 4,217,044 Equity Cumulative Preferred Stock, par $ 100 , authorized 400,000 shares, none issued $ – $ – Common Stock, par $ 1.00 , authorized 450,000,000 shares, issued 195,100,628 shares in 2024 and 195,100,628 shares in 2023 195,101 195,101 Capital in excess of par value 835,655 880,297 Retained earnings 6,766,706 6,546,079 Accumulated other comprehensive loss ( 552,707 ) ( 521,117 ) Treasury stock ( 1,995,018 ) ( 1,737,566 ) Murphy Shareholders' Equity 5,249,737 5,362,794 Noncontrolling interest 155,438 186,859 Total equity 5,405,175 5,549,653 Total liabilities and equity $ 9,716

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS These notes are an integral part of the financial statements of Murphy Oil Corporation and Consolidated Subsidiaries (the Company or Murphy) on pages 2 through 6 of this Form 10-Q report. Note A – Basis of Presentation The unaudited financial statements presented herein, in the opinion of Murphy's management, include all accruals necessary to present fairly the Company's financial position as at September 30, 2024 and December 31, 2023, and the results of operations, statements of operations, cash flows and changes in stockholders' equity for the interim periods ended September 30, 2024 and 2023, in conformity with U.S. generally accepted accounting principles (GAAP). In preparing the financial statements of the Company in conformity with GAAP, management has made a number of estimates and assumptions that affect the reporting of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities. Actual results may differ from the estimates. Consolidated financial statements and notes to consolidated financial statements included in this Form 10-Q report should be read in conjunction with the Company's 2023 Form 10-K report, as certain notes and other pertinent information have been abbreviated or omitted in this report. Financial results for the three-month and nine-month periods ended September 30, 2024 are not necessarily indicative of future results. Note B – New Accounting Principles and Recent Accounting Pronouncements Accounting Principles Adopted None affecting the Company. Recent Accounting Pronouncements Expense Disaggregation Disclosures. In November 2024 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard becomes effective for annual reporting periods beginning after

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note C – Revenue from Contracts with Customers (Continued) The Company explores for and produces crude oil, natural gas and natural gas liquids (collectively oil and natural gas) in select basins around the globe. The Company's revenue from sales of oil and natural gas production activities are primarily divided into two key geographic segments: the United States (U.S.) and Canada. Additionally, revenue from sales to customers is generated from three primary revenue streams: crude oil and condensate, natural gas liquids (NGL), and natural gas. For operated oil and natural gas production where the non-operated working interest owner does not take in kind its proportionate interest in the produced commodity, the Company acts as an agent for the working interest owner and recognizes revenue only for its own share of the commingled production. The exception to this is the reporting of the noncontrolling interest (NCI) in MP Gulf of Mexico, LLC (MP GOM) as prescribed by GAAP. U.S. - In the U.S., the Company primarily produces oil and natural gas from fields in the Eagle Ford Shale area of South Texas and in the Gulf of Mexico. Revenue is generally recognized when oil and natural gas are transferred to the customer at the delivery point. Revenue recognized is largely index-based with price adjustments for floating market differentials. Canada - In Canada, contracts include long-term floating commodity index priced and natural gas physical forward sales fixed-price contracts. For the offshore business in Canada, contracts are based on index prices and revenue is recognized at the time of vessel load based on the volumes on the bill of lading and point of custody transfer. The Company also purchases natural gas in Canada to meet certain sales commitments. Disaggregation of Revenue The Company reviews performance based on two key geographical segments and between onshore and offshore sources of revenue within the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note C - Revenue from Contracts with Customers (Continued) The Company's revenues and other income for the three-month and nine-month periods ended September 30, 2024 and 2023 were as follows. Three Months Ended September 30, Nine Months Ended September 30, (Thousands of dollars) 2024 2023 2024 2023 Net crude oil and condensate revenue United States - Onshore $ 161,965 $ 207,448 $ 450,463 $ 514,614 United States - Offshore 1 399,940 568,721 1,382,071 1,549,872 Canada - Onshore 20,852 20,610 54,305 61,868 Canada - Offshore 80,226 22,272 178,327 63,273 Other ( 795 ) 3,442 3,414 7,086 Total crude oil and condensate revenue 662,188 822,493 2,068,580 2,196,713 Net natural gas liquids revenue United States - Onshore 8,134 9,953 23,281 24,763 United States - Offshore 1 9,812 10,908 29,523 37,078 Canada - Onshore 2,402 2,539 5,434 7,519 Total natural gas liquids revenue 20,348 23,400 58,238 69,360 Net natural gas revenue United States - Onshore 4,265 6,035 11,893 15,623 United States - Offshore 1 12,311 18,377 35,700 55,311 Canada - Onshore 54,057 75,584 170,871 204,949 Total natural gas revenue 70,633 99,996 218,464 275,883 Revenue from production 753,169 945,889 2,345,282 2,541,956 Sales of purchased natural gas Canada - Onshore – 7,877 3,742 64,628 Total sales of purchased natural gas – 7,877 3,742 64,628 Total revenue from sales to customers 753,169 953,766 2,349,024 2,606,584 (Loss) on derivative instruments ( 1,344 ) – ( 1,344 ) – Gain on sale of assets and other income 6,506 5,879 9,834 9,365 Total revenues and other income $ 758,331 $ 959,645 $ 2,357,514 $ 2,615,949 1 Includes revenue attributable to noncontrolling interest in MP GOM. Contract Balances and Asset Recognition As of September 30, 2024, and December 31, 2023, receivables from contracts with customers, net of royalties and associated payables, on the balance sheet from continuing operations, were $

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note C – Revenue from Contracts with Customers (Continued) each unit of measure of the specified commodity is considered to represent a distinct performance obligation that is satisfied at a point in time upon the transfer of control of the commodity. For contracts with market or index-based pricing, which represent the majority of sales contracts, the Company has elected the allocation exception and allocates the variable consideration to each single performance obligation in the contract. As a result, there is no price allocation to unsatisfied remaining performance obligations for delivery of commodity product in subsequent periods. The Company has entered into several long-term, fixed-price contracts in Canada. The underlying reason for entering a fixed price contract is generally unrelated to anticipated future prices or other observable data and serves a particular purpose in the Company's long-term strategy. As of September 30, 2024, the Company had the following sales contracts in place which are expected to generate revenue from sales to customers for a period over 12 months starting at the inception of the contract: Long-Term Contracts Outstanding at September 30, 2024 Location Commodity End Date Description Approximate Volumes U.S. Natural Gas and NGL Q2 2030 Deliveries from dedicated acreage in Eagle Ford As produced Canada Natural Gas Q4 2024 Contracts to sell natural gas at USD index pricing 31 MMCFD Canada Natural Gas Q4 2024 Contracts to sell natural gas at CAD fixed pricing 124 MMCFD Canada Natural Gas Q4 2024 Contracts to sell natural gas at USD fixed pricing 25 MMCFD Canada Natural Gas Q4 2024 Contracts to sell natural gas at CAD index pricing 28 MMCFD Canada Natural Gas Q4 2025 Contracts to sell natural gas at USD index pricing 25 MMCFD Canada Natural Gas Q4 2025 Contracts to sell natural gas at CAD fixed pricing 40 MMCFD Canada Natural Gas Q4 2026 Contracts to sell natural

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note D – Property, Plant and Equipment (Continued) Capital additions of $ 28.5 million are mainly for Ocotillo #1 (Mississippi Canyon 40) exploratory well in the Gulf of Mexico and Hai Su Vang #1 (Block 15/2-17) and Lac Da Hong #1 (Block 15-1/05) exploratory wells in Vietnam. Capitalized well costs charged to dry hole expense of $ 26.5 million for the nine months ended September 30, 2024 were related to the Hoffe Park #1 (Mississippi Canyon 166) exploratory well in the Gulf of Mexico. The preceding table excludes well costs of $ 43.0 million and $ 81.7 million incurred and expensed directly to dry hole for the nine months ended September 30, 2024 and 2023, respectively. In 2024, these costs primarily include $ 25.8 million for the Orange #1 (Mississippi Canyon 216) and $ 11.8 million for the Sebastian #1 (Mississippi Canyon 387) exploration wells in the Gulf of Mexico. In 2023, the amount primarily includes $ 80.3 million for the Chinook #7 (Walker Ridge 425) exploration well in the Gulf of Mexico. The following table provides an aging of capitalized exploratory well costs based on the date the drilling was completed for each individual well and the number of projects for which exploratory well costs have been capitalized. The projects are aged based on the last well drilled in the project. September 30, 2024 2023 (Thousands of dollars) Amount No. of Wells No. of Projects Amount No. of Wells No. of Projects Aging of capitalized well costs: Zero to one year $ 28,552 3 3 $ – – – One to two years – – – 38,817 1 1 Two to three years – – – 2,698 1 1 Three years or more 22,547 3 3 143,962 4 3 $ 51,099 6 6 $ 185,477 6 5 Of the $ 22.5 million of exploratory well costs capitalized more than one year at September 30, 2024, $ 15.1 million was in Vietnam, $ 4.7 million was in Canada, and $ 2.7 million was in Brunei. In all geographical areas, either further appraisal or development drilling is planned and/o

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