Business Wire | Aug 6, 2020 06:01AM EDT

Murphy Oil Corporation Announces Second Quarter 2020 Operating and Financial Results

Aug. 06, 2020

HOUSTON--(BUSINESS WIRE)--Aug. 06, 2020--Murphy Oil Corporation (NYSE: MUR) today announced its financial and operating results for the second quarter ended June 30, 2020, including a net loss attributable to Murphy of $317 million, or $2.06 net loss per diluted share. Adjusted net loss, which excludes discontinued operations and other one-off items, was $110 million, or $0.71 net loss per diluted share.

Unless otherwise noted, the financial and operating highlights and metrics discussed in this commentary exclude noncontrolling interest. 1

Significant items include:

* Produced 168 thousand barrels of oil equivalent per day, including 58 percent or 98 thousand barrels of oil per day * Improved average lease operating expenses by 22 percent from the first quarter 2020 to less than $9 per barrel of oil equivalent in the second quarter, or approximately $7 per barrel of oil equivalent excluding workover expenses * Received $109 million of cash crude oil hedge settlements for the quarter * Lowered expected full year G&A by approximately 40 percent to a range of $130 million to $140 million compared to full year 2019 including the impact of the previously announced office closures, restructuring and a 30 percent office headcount reduction * Reduced the full year 2020 capital expenditure budget an additional $40 million, to a range of $680 million to $720 million, or a more than 50 percent reduction from the original 2020 guidance * Initiated crude oil hedge positions for 2021, resulting in a total of 15 thousand barrels of oil per day hedged at an average price of $42.93 per barrel

SECOND QUARTER 2020 FINANCIAL RESULTS

The company recorded a net loss, attributable to Murphy, of $317 million, or $2.06 net loss per diluted share, for the second quarter 2020. Adjusted net loss, which excludes both the results of discontinued operations and certain other items that affect comparability of results between periods, was $110 million, or $0.71 net loss per diluted share for the same period. The adjusted loss from continuing operations excludes the following after-tax items: a $146 million non-cash mark-to-market loss on crude oil derivative contracts, a $32 million charge for restructuring expenses, a $16 million non-cash asset impairment charge, and a $12 million non-cash mark-to-market loss on liabilities associated with future contingent consideration. Details for second quarter results can be found in the attached schedules.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations attributable to Murphy was $125 million, or $8 per barrel of oil equivalent (BOE) sold. Adjusted earnings before interest, tax, depreciation, amortization and exploration expenses (EBITDAX) from continuing operations attributable to Murphy was $154 million, or $10 per BOE sold. Details for second quarter adjusted EBITDA and EBITDAX reconciliations can be found in the attached schedules.

Second quarter production averaged 168 thousand barrels of oil equivalent per day (MBOEPD) with 58 percent oil and 65 percent liquids. Volumes were negatively impacted by a total of 17.5 MBOEPD for the second quarter, of which approximately 16 MBOEPD were the result of shut-ins due to market prices as previously disclosed, in addition to nearly 1.6 MBOEPD as the result of Tropical Storm Cristobal in the Gulf of Mexico. Production volumes from the shut-in wells came back online in June. Details for second quarter production can be found in the attached schedules.

"The second quarter was difficult not only for our industry, but also our company. As we endured the economic fallout from the global pandemic and the unprecedented oil price collapse, we made the decision to shut in wells, primarily at a single offshore facility. Absent these shut-ins, our assets performed very well and production volumes would have been essentially flat with first quarter 2020. I am proud of our team's ability to manage uptime and performance despite the unique challenges presented by recent events. Our field employees continue to follow strict safety protocols, and have kept COVID-19 absent from our operations," stated Roger W. Jenkins, President and Chief Executive Officer of Murphy Oil Corporation.

PROTECTING THE COMPANY'S FINANCIAL POSITION

As of June 30, 2020, Murphy had approximately $1.6 billion of liquidity, comprised of $1.4 billion undrawn under the $1.6 billion senior unsecured credit facility and approximately $146 million of cash and cash equivalents.

At the end of second quarter 2020, Murphy had outstanding debt of $2.8 billion in long-term, fixed-rate notes and $170 million drawn under its senior unsecured credit facility. The fixed-rate notes had a weighted average maturity of 7.3 years and a weighted average coupon of 5.9 percent. Overall, approximately 80 percent of total fixed-rate notes are due in 2024 or later.

COMMODITY HEDGE POSITIONS MITIGATE CASH FLOW VOLATILITY

The company employs commodity derivative instruments to manage certain risks associated with commodity price volatility and underpin capital spending associated with certain assets. Subsequent to quarter-end, Murphy opportunistically layered on hedges to protect cash flow with the execution of WTI fixed prices swaps, resulting in a total 15 MBOPD hedged for full year 2021 at an average price of $42.93 per barrel.

Details for the current hedge positions can be found in the attached schedules.

FURTHER REDUCING CAPTIAL EXPENDITURES

Murphy has continued to rework its remaining 2020 capital plans given ongoing macroeconomic conditions and low commodity prices. As a result, the company's full year budget has been reduced a further $40 million at the midpoint, to a range of $680 million to $720 million, or more than a 50 percent reduction from original guidance. Note that CAPEX guidance excludes Gulf of Mexico noncontrolling interest (NCI) and King's Quay floating production system (FPS) construction spending. For second quarter 2020, Murphy accrued a total $174 million of CAPEX, including approximately $33 million for the King's Quay FPS which, along with previous King's Quay expenditures, will be reimbursed at close of the transaction, which is anticipated to occur in the third quarter.

"This quarter, we made meaningful reductions to right-size our cost structure, capital spending and quarterly dividend. With our capital program significantly weighted towards the first half of 2020, this sets the company up to generate free cash flow, after the dividend, for the remainder of the year based on current strip prices. As I look ahead, we are in the early stages of benefiting from our new low-cost structure with the reduction in force and office closures finalized just last month, and we look forward to executing our business plans in a streamlined setting going forward," Jenkins added.

THIRD QUARTER 2020 PRODUCTION GUIDANCE

With the revised capital budget, Murphy anticipates production volumes of approximately 153 MBOEPD to 163 MBOEPD for the third quarter. This guidance range is primarily impacted by two major factors - assumed storm downtime of nearly 5 MBOEPD, and repairs at Delta House facility totaling 8 MBOEPD - as well as planned maintenance at a non-operated Gulf of Mexico field, resulting in 1,200 BOEPD of third quarter downtime.

OPERATIONS SUMMARY

North American Onshore

The North American onshore business produced approximately 90 MBOEPD in the second quarter.

Eagle Ford Shale - Production averaged 38 MBOEPD with 74 percent oil volumes in the second quarter. As planned, early in the quarter Murphy brought online 11 operated wells in Karnes, comprised of nine new wells and two refracs. The five non-operated Karnes wells scheduled to come online were delayed to the third quarter. An additional three non-operated wells are scheduled to come online, for a total of eight non-operated wells to come online in the third quarter. Drilling and completions costs have improved considerably since 2019, with the average cost reduced to approximately $5 million per well for the first half of 2020. No further operated activity is planned for 2020.

Tupper Montney - Natural gas production averaged 237 MMCFD for the quarter. No activity occurred in the second quarter, and none is planned for the remainder of 2020.

Kaybob Duvernay - Second quarter production averaged nearly 11 MBOEPD. One well was brought online during the quarter as planned, with production from the remaining four new wells deferred to the third quarter due to market pricing. No drilling and completions activity is planned for the remainder of 2020.

Placid Montney - Produced 2 MBOEPD in the second quarter through Murphy's non-operated position. As planned, six non-operated wells were brought online in April, and shut in for May and June due to low commodity prices. Production from these new wells resumed in July.

Global Offshore

The offshore business produced 78 MBOEPD for the second quarter, comprised of 80 percent oil. This excludes production from discontinued operations and noncontrolling interest. Gulf of Mexico production in the quarter averaged 72 MBOEPD, consisting of 78 percent oil. Canada offshore production averaged 6 MBOEPD, comprised of 100 percent oil.

Gulf of Mexico - The second well in the Front Runner rig program, A7 (Green Canyon 338), was completed and brought online during the second quarter. As previously disclosed, the planned third well in the program has been postponed as part of Murphy's revised capital budget due to ongoing low commodity prices.

Also in the quarter, the Dalmatian DC 134 #2 (De Soto Canyon 134) and Cascade 4 (Walker Ridge 250) well workovers were completed and the wells returned to production for total net workover costs of approximately $20 million, representing nearly 15 percent of total operating expenses for the quarter.

Murphy's operating partner in Kodiak #3 (Mississippi Canyon 727) drilled the well to total depth in the second quarter, with completion delayed until prices recover. Additionally, the non-operated St. Malo waterflood project continues to progress, and the producer well PN005 (Walker Ridge 678) was spud during the quarter.

The King's Quay FPS transaction documentation is progressing, with the logistical effects of COVID-19 delaying closing, which is now targeted for the third quarter. During the second quarter, construction on the FPS with Hyundai Heavy Industries achieved the significant milestone of 1 million man-hours with zero Lost Time Incidents.

Canada Offshore - As previously announced, non-operated Terra Nova is expected to remain offline for the year.

EXPLORATION

Gulf of Mexico - The non-operated Mt. Ouray well (Green Canyon 767) was drilled in the second quarter for $7.8 million cost net to Murphy as 20 percent working interest owner. The well has been classified as a dry hole.

CONFERENCE CALL AND WEBCAST SCHEDULED FOR AUGUST 6, 2020

Murphy will host a conference call to discuss second quarter 2020 financial and operating results on Thursday, August 6, 2020, at 9:00 a.m. EDT. The call can be accessed either via the Internet through the Investor Relations section of Murphy Oil's website at http://ir.murphyoilcorp.com or via the telephone by dialing toll free 1-888-886-7786, reservation number 90315402.

FINANCIAL DATA

Summary financial data and operating statistics for second quarter 2020, with comparisons to the same period from the previous year, are contained in the following schedules. Additionally, a schedule indicating the impacts of items affecting comparability of results between periods, a reconciliation of EBITDA and EBITDAX between periods, as well as guidance for the third quarter 2020, are also included.

1 In accordance with GAAP, Murphy reports the 100 percent interest, including a 20 percent noncontrolling interest (NCI), in its subsidiary, MP Gulf of Mexico, LLC (MP GOM). The GAAP financials include the NCI portion of revenue, costs, assets and liabilities and cash flows. Unless otherwise noted, the financial and operating highlights and metrics discussed in this news release, but not the accompanying schedules, exclude the NCI, thereby representing only the amounts attributable to Murphy.

ABOUT MURPHY OIL CORPORATION

As an independent oil and natural gas exploration and production company, Murphy Oil Corporation believes in providing energy that empowers people by doing right always, staying with it and thinking beyond possible. It challenges the norm, taps into its strong legacy and uses its foresight and financial discipline to deliver inspired energy solutions. Murphy sees a future where it is an industry leader who is positively impacting lives for the next 100 years and beyond. Additional information can be found on the company's website at www.murphyoilcorp.com.

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified through the inclusion of words such as "aim", "anticipate", "believe", "drive", "estimate", "expect", "expressed confidence", "forecast", "future", "goal", "guidance", "intend", "may", "objective", "outlook", "plan", "position", "potential", "project", "seek", "should", "strategy", "target", "will" or variations of such words and other similar expressions. These statements, which express management's current views concerning future events or results, are subject to inherent risks and uncertainties. Factors that could cause one or more of these future events or results not to occur as implied by any forward-looking statement include, but are not limited to: macro conditions in the oil and gas industry, including supply/demand levels, actions taken by major oil exporters and the resulting impacts on commodity prices; increased volatility or deterioration in the success rate of our exploration programs or in our ability to maintain production rates and replace reserves; reduced customer demand for our products due to environmental, regulatory, technological or other reasons; adverse foreign exchange movements; political and regulatory instability in the markets where we do business; the impact on our operations or market of health pandemics such as COVID-19 and related government responses; other natural hazards impacting our operations or markets; any other deterioration in our business, markets or prospects; any failure to obtain necessary regulatory approvals; any inability to service or refinance our outstanding debt or to access debt markets at acceptable prices; or adverse developments in the U.S. or global capital markets, credit markets or economies in general. For further discussion of factors that could cause one or more of these future events or results not to occur as implied by any forward-looking statement, see "Risk Factors" in our most recent Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K that we file, available from the SEC's website and from Murphy Oil Corporation's website at http://ir.murphyoilcorp.com. Murphy Oil Corporation undertakes no duty to publicly update or revise any forward-looking statements.

NON-GAAP FINANCIAL MEASURES

This news release contains certain non-GAAP financial measures that management believes are useful tools for internal use and the investment community in evaluating Murphy Oil Corporation's overall financial performance. These non-GAAP financial measures are broadly used to value and compare companies in the crude oil and natural gas industry. Not all companies define these measures in the same way. In addition, these non-GAAP financial measures are not a substitute for financial measures prepared in accordance with GAAP and should therefore be considered only as supplemental to such GAAP financial measures. Please see the attached schedules for reconciliations of the differences between the non-GAAP financial measures used in this news release and the most directly comparable GAAP financial measures.

MURPHY OIL CORPORATION

SUMMARIZED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Three Months Ended Six Months Ended June 30, June 30,

(Thousands of dollars, 2020 2019 2020 2019except per share amounts)

Revenues and other income

Revenue from sales to $ 285,745 680,436 886,303 1,309,790 customers

(Loss) gain on crude (75,880 ) 57,916 324,792 57,916 contracts

Gain on sale of assets 1,677 5,598 4,175 6,790 and other income

Total revenues and other 211,542 743,950 1,215,270 1,374,496 income

Costs and expenses

Lease operating expenses 144,644 137,132 353,792 268,828

Severance and ad valorem 6,442 13,072 15,864 23,169 taxes

Transportation, gathering 41,090 34,901 85,457 74,443 and processing

Exploration expenses,including undeveloped 29,468 30,674 49,594 63,212 lease amortization

Selling and general 39,100 57,532 75,872 120,892 expenses

Restructuring expenses 41,397 - 41,397 -

Depreciation, depletion 231,446 264,302 537,548 493,708 and amortization

Accretion of asset 10,469 9,897 20,435 19,237 retirement obligations

Impairment of assets 19,616 - 987,146 -

Other (benefit) expense 22,007 25,437 (23,181 ) 55,442

Total costs and expenses 585,679 572,947 2,143,924 1,118,931

Operating (loss) incomefrom continuing (374,137 ) 171,003 (928,654 ) 255,565 operations

Other income (loss)

Interest and other income (5,171 ) (8,968 ) (4,930 ) (13,716 )(loss)

Interest expense, net (38,598 ) (54,096 ) (79,695 ) (100,165 )

Total other loss (43,769 ) (63,064 ) (84,625 ) (113,881 )

(Loss) income fromcontinuing operations (417,906 ) 107,939 (1,013,279 ) 141,684 before income taxes

Income tax (benefit) (94,773 ) 9,115 (186,306 ) 19,937 expense

(Loss) income from (323,133 ) 98,824 (826,973 ) 121,747 continuing operations

(Loss) income fromdiscontinued operations, (1,267 ) 24,418 (6,129 ) 74,264 net of income taxes

Net (loss) incomeincluding noncontrolling (324,400 ) 123,242 (833,102 ) 196,011 interest

Less: Net (loss) incomeattributable to (7,216 ) 30,970 (99,814 ) 63,557 noncontrolling interest

NET (LOSS) INCOME $ (317,184 ) 92,272 (733,288 ) 132,454 ATTRIBUTABLE TO MURPHY



(LOSS) INCOME PER COMMON SHARE - BASIC

Continuing operations $ (2.05 ) 0.40 (4.74 ) 0.34

Discontinued operations (0.01 ) 0.15 (0.04 ) 0.44

Net (loss) income $ (2.06 ) 0.55 (4.78 ) 0.78



(LOSS) INCOME PER COMMON SHARE - DILUTED

Continuing operations $ (2.05 ) 0.40 (4.74 ) 0.34

Discontinued operations (0.01 ) 0.14 (0.04 ) 0.43

Net (loss) income $ (2.06 ) 0.54 (4.78 ) 0.77

Cash dividends per Common 0.125 0.25 0.375 0.50 share

Average Common shares outstanding (thousands)

Basic 153,581 168,538 153,429 170,556

Diluted 153,581 169,272 153,429 171,433

MURPHY OIL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Three Months Ended Six Months Ended June 30, June 30,

(Thousands of dollars) 2020 2019 2020 2019

Operating Activities

Net (loss) incomeincluding $ (324,400 ) 123,242 (833,102 ) 196,011 noncontrolling interest

Adjustments toreconcile net (loss)income to net cash (required) provided bycontinuing operationsactivities:

Loss (income) from 1,267 (24,418 ) 6,129 (74,264 )discontinued operations

Depreciation, depletion 231,446 264,302 537,548 493,708 and amortization

Previously suspended 7,580 (350 ) 7,677 12,901 exploration costs

Amortization of 7,292 7,105 14,770 15,150 undeveloped leases

Accretion of asset 10,469 9,897 20,435 19,237 retirement obligations

Impairment of assets 19,616 - 987,146 -

Deferred income tax (86,529 ) 2,412 (167,902 ) 18,001 (benefit) expense

Mark to market (gain)loss on contingent 15,622 15,360 (43,529 ) 28,890 consideration

Mark to market (gain) 184,454 (50,831 ) (173,848 ) (50,831 )loss of crude contracts

Noncash restructuring 17,565 - 17,565 - expense

Long-term non-cash 12,955 22,367 22,760 44,755 compensation

Net decrease (increase)in noncash operating (106,492 ) 93,139 1,335 (5,366 )working capital

Other operating (14,123 ) (23,979 ) (27,605 ) (42,761 )activities, net

Net cash (required)provided by continuing (23,278 ) 438,234 369,379 655,431 operations activities

Investing Activities

Property additions and (182,767 ) (374,831 ) (537,601 ) (645,169 )dry hole costs

Property additions for (30,339 ) - (51,635 ) - King's Quay FPS

Acquisition of oil and - (1,226,261 ) - (1,226,261 )gas properties

Proceeds from sales ofproperty, plant and - 16,816 - 16,816 equipment

Net cash required by (213,106 ) (1,584,276 ) (589,236 ) (1,854,614 )investing activities

Financing Activities

Borrowings on revolving 200,000 1,075,000 370,000 1,075,000 credit facility

Repayment of revolving (200,000 ) - (200,000 ) - credit facility

Cash dividends paid (19,198 ) (42,105 ) (57,590 ) (85,503 )

Distributions to (1 ) (50,339 ) (32,400 ) (68,776 )noncontrolling interest

Early retirement of (8,655 ) - (12,225 ) - debt

Withholding tax onstock-based incentive (153 ) - (7,247 ) (6,991 )awards

Debt issuance, net of - - (613 ) - cost

Proceeds from term loan 371 500,000 371 500,000 and other loans

Capital lease (168 ) (175 ) (336 ) (335 )obligation payments

Repurchase of common - (299,924 ) - (299,924 )stock

Net cash (required)provided by financing (27,804 ) 1,182,457 59,960 1,113,471 activities

Cash Flows fromDiscontinued Operations ^1

Operating activities - (1,197 ) (1,202 ) 122,272

Investing activities - (23,360 ) 4,494 (49,798 )

Financing activities - (2,367 ) - (4,914 )

Net cash provided by - (26,924 ) 3,292 67,560 discontinued operations

Cash transferred fromdiscontinued operations - 2,485 - 48,565 to continuingoperations

Effect of exchange ratechanges on cash and 1,940 863 (1,358 ) 3,268 cash equivalents

Net increase (decrease)in cash and cash (262,248 ) 39,763 (161,255 ) (33,879 )equivalents

Cash and cashequivalents at 407,753 286,281 306,760 359,923 beginning of period

Cash and cashequivalents at end of $ 145,505 326,044 145,505 326,044 period

^1 Net cash provided by discontinued operations is not part of the cash flowreconciliation.

MURPHY OIL CORPORATION

SCHEDULE OF ADJUSTED INCOME (LOSS)

(unaudited)

Three Months Ended Six Months Ended June 30, June 30,

(Millions of dollars, except per 2020 2019 2020 2019share amounts)

Net (loss) income attributable to $ (317.1 ) 92.3 (733.2 ) 132.5 Murphy (GAAP)

Discontinued operations loss (income) 1.2 (24.5 ) 6.1 (74.3 )

(Loss) income from continuing (315.9 ) 67.8 (727.1 ) 58.2 operations

Adjustments (after tax):

Impairment of assets 15.6 - 708.3 -

Mark-to-market (gain) loss on crude 145.8 (40.2 ) (137.3 ) (40.2 )oil derivative contracts

Mark-to-market (gain) loss on 12.3 12.1 (34.4 ) 22.8 contingent consideration

Restructuring expenses 31.6 - 31.6 -

Unutilized rig charges 3.5 - 6.3 -

(Gain) loss on extinguishment of debt (4.2 ) - (4.2 ) -

Inventory loss - - 3.8 -

Foreign exchange (gains) losses 1.5 2.7 (2.5 ) 5.1

Business development transaction - 6.2 - 16.0 costs

Write-off of previously suspended - - - 13.2 exploration wells

Impact of tax reform - (13.0 ) - (13.0 )

Total adjustments after taxes 206.1 (32.2 ) 571.6 3.9

Adjusted (loss) income fromcontinuing operations attributable to $ (109.8 ) 35.6 (155.5 ) 62.1 Murphy



Adjusted (loss) income fromcontinuing operations per average $ (0.71 ) 0.21 (1.01 ) 0.36 diluted share

Non-GAAP Financial Measures

Presented above is a reconciliation of Net (loss) income to Adjusted (loss) income from continuing operations attributable to Murphy. Adjusted (loss) income excludes certain items that management believes affect the comparability of results between periods. Management believes this is important information to provide because it is used by management to evaluate the Company's operational performance and trends between periods and relative to its industry competitors. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company's financial results. Adjusted (loss) income is a non-GAAP financial measure and should not be considered a substitute for Net (loss) income as determined in accordance with accounting principles generally accepted in the United States of America.

Amounts shown above as reconciling items between Net (loss) income and Adjusted (loss) income are presented net of applicable income taxes based on the estimated statutory rate in the applicable tax jurisdiction. The pretax and income tax impacts for adjustments shown above are as follows by area of operations and exclude the share attributable to non-controlling interests.

Three Months Ended Six Months Ended June 30, 2020 June 30, 2020

(Millions of dollars) Pretax Tax Net Pretax Tax Net

Exploration & Production:

United States $ 39.8 (8.3 ) 31.5 815.6 (171.3 ) 644.3

Other International - - - 39.7 - 39.7

Total E&P 39.8 (8.3 ) 31.5 855.3 (171.3 ) 684.0

Corporate: 221.9 (47.3 ) 174.6 (141.0 ) 28.6 (112.4 )

Total adjustments $ 261.7 (55.6 ) 206.1 714.3 (142.7 ) 571.6

MURPHY OIL CORPORATION

SCHEDULE OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION

AND AMORTIZATION (EBITDA)

(unaudited)

Three Months Ended Six Months Ended June 30, June 30,

(Millions of dollars, except per 2020 2019 2020 2019barrel of oil equivalents sold)

Net (loss) income attributable to $ (317.1 ) 92.3 (733.2 ) 132.5 Murphy (GAAP)

Income tax (benefit) expense (94.8 ) 9.1 (186.3 ) 19.9

Interest expense, net 38.6 54.1 79.7 100.2

Depreciation, depletion and 219.1 246.0 505.3 458.1 amortization expense ^1

EBITDA attributable to Murphy $ (154.2 ) 401.5 (334.5 ) 710.7 (Non-GAAP)

Impairment of assets ^1 19.6 - 886.0 -

Mark-to-market (gain) loss on crude 184.5 (50.8 ) (173.8 ) (50.8 )oil derivative contracts

Mark-to-market (gain) loss on 15.7 15.4 (43.5 ) 28.9 contingent consideration

Restructuring expenses 41.4 - 41.4 -

Accretion of asset retirement 10.5 9.9 20.4 19.2 obligations

Unutilized rig charges 4.5 - 8.0 -

Discontinued operations loss 1.2 (24.4 ) 6.1 (74.3 )(income)

Inventory loss - - 4.8 -

Foreign exchange (gains) losses 1.4 3.0 (3.3 ) 5.6

Business development transaction - 7.8 - 20.3 costs

Write-off of previously suspended - - - 13.2 exploration wells

Adjusted EBITDA attributable to $ 124.6 362.4 411.6 672.8 Murphy (Non-GAAP)



Total barrels of oil equivalentssold from continuing operations 15,242 14,269 32,312 27,766 attributable to Murphy (thousandsof barrels)



Adjusted EBITDA per barrel of oil $ 8.17 25.40 12.74 24.23 equivalents sold

Non-GAAP Financial Measures

Presented above is a reconciliation of Net (loss) income to Earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA. Management believes EBITDA and adjusted EBITDA are important information to provide because they are used by management to evaluate the Company's operational performance and trends between periods and relative to its industry competitors. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company's financial results. EBITDA and adjusted EBITDA are non-GAAP financial measures and should not be considered a substitute for Net (loss) income or Cash provided by operating activities as determined in accordance with accounting principles generally accepted in the United States of America.

Presented above is adjusted EBITDA per barrel of oil equivalent sold. Management believes adjusted EBITDA per barrel of oil equivalent sold is important information because it is used by management to evaluate the Company's profitability of one barrel of oil equivalent sold in that period. Adjusted EBITDA per barrel of oil equivalent sold is a non-GAAP financial metric.

1 Depreciation, depletion, and amortization expense used in the computation of EBITDA and impairment of assets used in the computation of Adjusted EBITDA exclude the portion attributable to the non-controlling interest.

MURPHY OIL CORPORATION

SCHEDULE OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION

AND AMORTIZATION AND EXPLORATION (EBITDAX)

(unaudited)

Three Months Ended Six Months Ended June 30, June 30,

(Millions of dollars, except per 2020 2019 2020 2019barrel of oil equivalents sold)

Net (loss) income attributable to $ (317.1 ) 92.3 (733.2 ) 132.5 Murphy (GAAP)

Income tax (benefit) expense (94.8 ) 9.1 (186.3 ) 19.9

Interest expense, net 38.6 54.1 79.7 100.2

Depreciation, depletion and 219.1 246.0 505.3 458.1 amortization expense ^1

EBITDA attributable to Murphy (154.2 ) 401.5 (334.5 ) 710.7 (Non-GAAP)

Exploration expenses 29.5 30.7 49.6 63.2

EBITDAX attributable to Murphy (124.7 ) 432.2 (284.9 ) 773.9 (Non-GAAP)

Impairment of assets ^1 19.6 - 886.0 -

Mark-to-market (gain) loss on crude 184.5 (50.8 ) (173.8 ) (50.8 )oil derivative contracts

Mark-to-market (gain) loss on 15.7 15.4 (43.5 ) 28.9 contingent consideration

Restructuring expenses 41.4 - 41.4 -

Accretion of asset retirement 10.5 9.9 20.4 19.2 obligations

Unutilized rig charges 4.5 - 8.0 -

Discontinued operations loss 1.2 (24.4 ) 6.1 (74.3 )(income)

Inventory loss - - 4.8 -

Foreign exchange (gains) losses 1.4 3.0 (3.3 ) 5.6

Business development transaction - 7.8 - 20.3 costs

Adjusted EBITDAX attributable to $ 154.1 393.1 461.2 722.8 Murphy (Non-GAAP)



Total barrels of oil equivalentssold from continuing operations 15,242 14,269 32,312 27,766 attributable to Murphy (thousandsof barrels)



Adjusted EBITDAX per barrel of oil $ 10.11 27.55 14.27 26.03 equivalents sold

Non-GAAP Financial Measures

Presented above is a reconciliation of Net (loss) income to Earnings before interest, taxes, depreciation and amortization, and exploration expenses (EBITDAX) and adjusted EBITDAX. Management believes EBITDAX and adjusted EBITDAX are important information to provide because they are used by management to evaluate the Company's operational performance and trends between periods and relative to its industry competitors. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company's financial results. EBITDAX and adjusted EBITDAX are non-GAAP financial measures and should not be considered a substitute for Net (loss) income or Cash provided by operating activities as determined in accordance with accounting principles generally accepted in the United States of America.

Presented above is adjusted EBITDAX per barrel of oil equivalent sold. Management believes adjusted EBITDAX per barrel of oil equivalent sold is important information because it is used by management to evaluate the Company's profitability of one barrel of oil equivalent sold in that period. Adjusted EBITDAX per barrel of oil equivalent sold is a non-GAAP financial metric.

1 Depreciation, depletion, and amortization expense used in the computation of EBITDA and impairment of assets used in the computation of Adjusted EBITDA exclude the portion attributable to the non-controlling interest.

MURPHY OIL CORPORATION

FUNCTIONAL RESULTS OF OPERATIONS (unaudited)

Three Months Ended Three Months June 30, 2020 Ended June 30, 2019

(Millions of dollars) Revenues Income Revenues Income (Loss) (Loss)

Exploration and production

United States ^1,2 $ 228.3 (143.1 ) 576.7 133.0

Canada 59.2 (19.5 ) 102.0 (5.9 )

Other - (9.0 ) 3.1 (3.4 )

Total exploration and production 287.5 (171.6 ) 681.8 123.7

Corporate (76.0 ) (151.6 ) 62.2 (24.9 )

Revenue/income from continuing operations 211.5 (323.2 ) 744.0 98.8

Discontinued operations, net of tax ^3 - (1.2 ) - 24.4

Total revenues/net income (loss) $ 211.5 (324.4 ) 744.0 123.2 including noncontrolling interest

Net (loss) income attributable to Murphy (317.1 ) 92.3

Six Months Ended Six Months Ended June 30, 2020 June 30, 2019

(Millions of dollars) Revenues Income Revenues Income (Loss) (Loss)

Exploration and production

United States ^1,2 $ 739.8 (839.1 ) 1,077.5 249.2

Canada 148.9 (26.4 ) 228.9 1.6

Other ^2 1.8 (61.3 ) 6.0 (31.7 )

Total exploration and production 890.5 (926.8 ) 1,312.4 219.1

Corporate 324.8 99.8 62.1 (97.4 )

Revenue/income from continuing operations 1,215.3 (827.0 ) 1,374.5 121.7

Discontinued operations, net of tax ^3 - (6.1 ) - 74.3

Total revenues/net income (loss) $ 1,215.3 (833.1 ) 1,374.5 196.0 including noncontrolling interest

Net income attributable to Murphy (733.2 ) 132.5

1 Includes results attributable to a noncontrolling interest in MP Gulf of Mexico, LLC (MP GOM).

2 Includes impairment charges of $19.6 million for the United States for the three months ended June 30, 2020 and $947.4 million and $39.7 million for the United States and Other for the six months ended June 30, 2020.

3 Malaysia is reported as discontinued operations in current and comparative periods effective January 1, 2019.

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (unaudited)

THREE MONTHS ENDED JUNE 30, 2020, AND 2019

United(Millions of dollars) Canada Other Total States ^1

Three Months Ended June 30, 2020

Oil and gas sales and other operating $ 228.3 59.2 - 287.5 revenues

Lease operating expenses 116.8 27.4 0.5 144.7

Severance and ad valorem taxes 6.1 0.4 - 6.5

Transportation, gathering and processing 31.5 9.6 - 41.1

Depreciation, depletion and amortization 175.8 49.7 0.5 226.0

Accretion of asset retirement obligations 9.1 1.3 - 10.4

Impairments of assets 19.6 - - 19.6

Exploration expenses

Dry holes and previously suspended 7.6 - - 7.6 exploration costs

Geological and geophysical 8.0 0.1 0.5 8.6

Other exploration 2.9 0.1 3.0 6.0

18.5 0.2 3.5 22.2

Undeveloped lease amortization 4.8 - 2.4 7.2

Total exploration expenses 23.3 0.2 5.9 29.4

Selling and general expenses 7.6 5.4 2.3 15.3

Other 24.2 (1.2 ) 0.1 23.1

Results of operations before taxes (185.7 ) (33.6 ) (9.3 ) (228.6 )

Income tax provisions (benefits) (42.6 ) (14.1 ) (0.3 ) (57.0 )

Results of operations (excluding Corporate $ (143.1 ) (19.5 ) (9.0 ) (171.6 )segment)



Three Months Ended June 30, 2019

Oil and gas sales and other operating $ 576.7 102.0 3.1 681.8 revenues

Lease operating expenses 99.7 36.9 0.6 137.2

Severance and ad valorem taxes 12.8 0.3 - 13.1

Transportation, gathering and processing 27.7 7.2 - 34.9

Depreciation, depletion and amortization 201.2 56.8 1.3 259.3

Accretion of asset retirement obligations 8.4 1.5 - 9.9

Exploration expenses

Dry holes and previously suspended (0.2 ) - - (0.2 )exploration costs

Geological and geophysical 15.4 - 2.4 17.8

Other exploration 2.8 0.1 3.1 6.0

18.0 0.1 5.5 23.6

Undeveloped lease amortization 5.9 0.4 0.9 7.2

Total exploration expenses 23.9 0.5 6.4 30.8

Selling and general expenses 12.9 6.1 6.1 25.1

Other 27.9 0.2 0.1 28.2

Results of operations before taxes 162.2 (7.5 ) (11.4 ) 143.3

Income tax provisions (benefits) 29.2 (1.6 ) (8.0 ) 19.6

Results of operations (excluding Corporate $ 133.0 (5.9 ) (3.4 ) 123.7 segment)

1 Includes results attributable to a noncontrolling interest in MP GOM.

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (unaudited)

SIX MONTHS ENDED JUNE 30, 2020, AND 2019

United(Millions of dollars) Canada Other Total States ^1

Six Months Ended June 30, 2020

Oil and gas sales and other operating $ 739.8 148.9 1.8 890.5 revenues

Lease operating expenses 295.0 58.0 0.8 353.8

Severance and ad valorem taxes 15.2 0.7 - 15.9

Transportation, gathering and processing 66.1 19.4 - 85.5

Depreciation, depletion and amortization 423.3 101.7 1.0 526.0

Accretion of asset retirement obligations 17.7 2.7 - 20.4

Impairment of assets 947.4 - 39.7 987.1

Exploration expenses

Dry holes and previously suspended 7.7 - - 7.7 exploration costs

Geological and geophysical 9.3 0.1 4.2 13.6

Other exploration 3.7 0.3 9.5 13.5

20.7 0.4 13.7 34.8

Undeveloped lease amortization 9.9 0.2 4.6 14.7

Total exploration expenses 30.6 0.6 18.3 49.5

Selling and general expenses 11.3 9.8 3.9 25.0

Other (21.5 ) (1.0 ) (1.1 ) (23.6 )

Results of operations before taxes (1,045.3 ) (43.0 ) (60.8 ) (1,149.1 )

Income tax provisions (benefits) (206.2 ) (16.6 ) 0.5 (222.3 )

Results of operations (excluding $ (839.1 ) (26.4 ) (61.3 ) (926.8 )Corporate segment)



Six Months Ended June 30, 2019

Oil and gas sales and other operating $ 1,077.5 228.9 6.0 1,312.4 revenues

Lease operating expenses 192.1 75.9 0.9 268.9

Severance and ad valorem taxes 22.6 0.6 - 23.2

Transportation, gathering and processing 59.3 15.2 - 74.5

Depreciation, depletion and amortization 365.1 116.3 2.3 483.7

Accretion of asset retirement obligations 16.2 3.0 - 19.2

Exploration expenses

Dry holes and previously suspended (0.1 ) - 13.1 13.0 exploration costs

Geological and geophysical 15.9 - 7.9 23.8

Other exploration 4.0 0.2 7.1 11.3

19.8 0.2 28.1 48.1

Undeveloped lease amortization 12.8 0.7 1.7 15.2

Total exploration expenses 32.6 0.9 29.8 63.3

Selling and general expenses 30.2 13.7 11.7 55.6

Other 58.5 0.4 0.4 59.3

Results of operations before taxes 300.9 2.9 (39.1 ) 264.7

Income tax provisions (benefits) 51.7 1.3 (7.4 ) 45.6

Results of operations (excluding $ 249.2 1.6 (31.7 ) 219.1 Corporate segment)

1 Includes results attributable to a noncontrolling interest in MP GOM.

MURPHY OIL CORPORATION

PRODUCTION-RELATED EXPENSES

(unaudited)

Three Months Six Months Ended Ended June 30, June 30,

(Dollars per barrel of oil equivalents sold) 2020 2019 2020 2019

Continuing operations

United States - Eagle Ford Shale

Lease operating expense $ 8.11 8.26 9.35 10.33

Severance and ad valorem taxes 1.76 3.16 2.10 3.10

Depreciation, depletion and amortization (DD&A) 25.21 23.56 25.12 23.71expense



United States - Gulf of Mexico

Lease operating expense ^1 $ 11.72 10.63 13.54 9.37

DD&A expense 11.74 17.03 14.39 15.45



Canada - Onshore

Lease operating expense $ 4.49 6.15 4.47 6.02

Severance and ad valorem taxes 0.09 0.07 0.07 0.07

DD&A expense 9.33 10.87 9.50 10.95



Canada - Offshore

Lease operating expense $ 11.36 15.91 15.16 16.73

DD&A expense 10.05 14.31 11.00 13.98



Total oil and gas continuing operations

Lease operating expense ^2 $ 8.87 8.93 10.21 8.93

Severance and ad valorem taxes 0.39 0.85 0.46 0.77

DD&A expense 14.19 17.21 15.52 16.40



Total oil and gas continuing operations - excluding noncontrolling interest

Lease operating expense $ 8.61 8.86 9.90 8.94

Severance and ad valorem taxes 0.42 0.92 0.49 0.83

DD&A expense 14.38 17.24 15.64 16.50

1 For the three months and six months ended June 30, 2020, lease operating expense (LOE) per barrel of oil equivalents (BOE) sold for the U.S. Gulf of Mexico excluding cost associated with well workovers is $8.44 and $9.35, respectively. Workovers for the three months ended June 30, 2020 primarily relate to Dalmatian. Workovers for the six months ended June 30, 2020 include Dalmatian and Cascade.

2 For the three months and six months ended June 30, 2020, total LOE per BOE excluding cost associated with well workovers is $7.09 and $7.89, respectively.

MURPHY OIL CORPORATION

OTHER FINANCIAL DATA

(unaudited)

Three Months Six Months Ended Ended June 30, June 30,

(Millions of dollars) 2020 2019 2020 2019

Capital expenditures for continuing operations

Exploration and production

United States $ 159.7 1,541.3 405.1 1,746.8

Canada 10.0 60.0 118.2 155.7

Other 6.0 23.1 26.9 64.4

Total 175.7 1,624.4 550.2 1,966.9



Corporate 3.9 3.1 7.4 5.6

Total capital expenditures - continuing 179.6 1,627.5 557.6 1,972.5operations^ 1



Charged to exploration expenses ^2

United States 18.5 18.0 20.7 19.8

Canada 0.2 0.1 0.4 0.2

Other 3.5 5.5 13.7 28.1

Total charged to exploration expenses - 22.2 23.6 34.8 48.1continuing operations



Total capitalized $ 157.4 1,603.9 522.8 1,924.4

1 For the three months and six months ended June 30, 2020, includes noncontrolling interest (NCI) capital expenditures of $5.2 million and $15.5 million, respectively. Also, for the three months and six months ended June 30, 2020, includes capital expenditures associated with the Kings Quay project of $32.7 million and $61.4 million.

2 Excludes amortization of undeveloped leases of $7.2 million for each of the three months ended June 30, 2020 and 2019. Excludes amortization of undeveloped leases of $14.7 million and $15.2 million for the six months ended June 30, 2020 and 2019, respectively.

MURPHY OIL CORPORATION

CONSOLIDATED BALANCE SHEETS

(unaudited)

(Millions of dollars) June 30, December 31, 2020 2019

ASSETS

Current assets

Cash and cash equivalents $ 145.5 306.8

Accounts receivable 372.5 426.7

Inventories 59.7 76.1

Prepaid expenses 61.3 40.9

Assets held for sale 124.3 123.9

Total current assets 763.4 974.3

Property, plant and equipment, at cost 8,891.4 9,969.7

Operating lease assets 779.6 598.3

Deferred income taxes 290.0 129.3

Deferred charges and other assets 29.6 46.9

Total assets $ 10,754.0 11,718.5

LIABILITIES AND EQUITY

Current liabilities

Accounts payable 366.2 602.1

Income taxes payable 18.6 19.0

Other taxes payable 17.0 18.6

Operating lease liabilities 103.3 92.3

Other accrued liabilities 151.8 197.4

Liabilities associated with assets held for sale 13.7 13.3

Total current liabilities 670.7 942.8

Long-term debt, including capital lease obligation 2,956.4 2,803.4

Asset retirement obligations 844.5 825.8

Deferred credits and other liabilities 628.9 613.4

Non-current operating lease liabilities 697.7 521.3

Deferred income taxes 182.3 207.2

Total liabilities 5,980.5 5,913.9

Equity

Common Stock, par $1.00 195.1 195.1

Capital in excess of par value 931.4 949.4

Retained earnings 5,823.4 6,614.3

Accumulated other comprehensive loss (690.3 ) (574.2 )

Treasury stock (1,691.1 ) (1,717.2 )

Murphy Shareholders' Equity 4,568.5 5,467.5

Noncontrolling interest 204.9 337.2

Total equity 4,773.5 5,804.6

Total liabilities and equity $ 10,754.0 11,718.5

MURPHY OIL CORPORATION

PRODUCTION SUMMARY

(unaudited)

Three Months Ended Six Months Ended June 30, June 30,

Barrels per day unless otherwise 2020 2019 2020 2019noted

Continuing operations

Net crude oil and condensate

United States Onshore 27,986 33,145 29,510 29,532

Gulf of Mexico 67,002 61,062 72,866 61,055 ^1

Canada Onshore 7,872 5,943 7,353 6,199

Offshore 5,852 6,685 5,495 7,304

Other - 448 172 477

Total net crude oil andcondensate - continuing 108,712 107,283 115,396 104,567 operations

Net natural gas liquids

United States Onshore 5,303 5,977 5,444 5,641

Gulf of Mexico 5,219 3,118 5,944 2,940 ^1

Canada Onshore 1,018 1,073 1,209 1,083

Total net natural gas liquids - 11,540 10,168 12,597 9,664 continuing operations

Net natural gas - thousands of cubic feet per day

United States Onshore 27,697 32,209 29,830 30,752

Gulf of Mexico 68,717 39,029 75,333 29,356 ^1

Canada Onshore 259,108 249,367 262,978 252,120

Total net natural gas - 355,522 320,605 368,141 312,228 continuing operations

Total net hydrocarbons -continuing operations including 179,506 170,885 189,350 166,269 NCI ^2,3

Noncontrolling interest

Net crude oil and condensate - (10,719 ) (11,160 ) (11,370 ) (11,669 )barrels per day

Net natural gas liquids - barrels (443 ) (458 ) (501 ) (506 )per day

Net natural gas - thousands of (4,059 ) (4,507 ) (4,575 ) (4,203 )cubic feet per day ^2

Total noncontrolling interest (11,839 ) (12,369 ) (12,634 ) (12,876 )

Total net hydrocarbons -continuing operations excluding 167,667 158,516 176,716 153,394 NCI ^2,3

Discontinued operations

Net crude oil and condensate - - 21,556 - 23,744 barrels per day

Net natural gas liquids - barrels - 529 - 636 per day

Net natural gas - thousands of - 93,382 - 97,465 cubic feet per day ^2

Total discontinued operations - 37,649 - 40,624

Total net hydrocarbons produced 167,667 196,165 176,716 194,018 excluding NCI ^2,3

1 Includes net volumes attributable to a noncontrolling interest in MP GOM.

2 Natural gas converted on an energy equivalent basis of 6:1.

3 NCI - noncontrolling interest in MP GOM.

MURPHY OIL CORPORATION

PRICE SUMMARY

(unaudited)

Three Months Six Months Ended Ended June 30, June 30,

2020 2019 2020 2019

Weighted average Exploration and Production sales prices ^1

Continuing operations

Crude oil and condensate - dollars per barrel

United States Onshore $ 21.42 64.17 $ 34.59 $ 61.41

Gulf of 24.77 65.79 37.00 62.62 Mexico ^2

Canada ^3 Onshore 16.09 51.83 26.09 50.78

Offshore 20.48 69.23 35.28 65.84

Other - 73.05 63.51 70.50

Natural gas liquids - dollars per barrel

United States Onshore 8.03 15.98 9.45 16.55

Gulf of 7.29 15.78 7.85 18.36 Mexico ^2

Canada ^3 Onshore 13.78 28.41 15.04 31.81

Natural gas - dollars per thousand cubic feet

United States Onshore 1.62 2.50 1.74 2.68

Gulf of 1.71 2.60 1.87 2.58 Mexico ^2

Canada ^3 Onshore 1.49 1.26 1.55 1.71

1 Effective September 30, 2019, weighted average realized prices are reported excluding transportation, gathering and processing costs. Comparative periods are conformed to current presentation.

2 Prices include the effect of noncontrolling interest share for MP GOM.

3 U.S. dollar equivalent.

MURPHY OIL CORPORATION

COMMODITY HEDGE POSITIONS (unaudited)

AS OF AUGUST 5, 2020

Price Remaining Period Commodity Type Volumes (USD/Area (Bbl/d) Bbl) Start End Date Date

United WTI ^1 Fixed price derivative 45,000 $56.42 7/1/ 12/31/States swap 2020 2020

United WTI ^1 Fixed price derivative 15,000 $42.93 1/1/ 12/31/States swap 2021 2021

Volumes Price Remaining Period (MMcf/ (CAD/Area Commodity Type d) Mcf) Start End Date Date

Montney Natural Fixed price forward 59 C$2.81 7/1/ 12/31/ Gas sales at AECO 2020 2020

Montney Natural Fixed price forward 25 C$2.62 1/1/ 12/31/ Gas sales at AECO 2021 2021

1 West Texas Intermediate

MURPHY OIL CORPORATION

THIRD QUARTER 2020 GUIDANCE

Oil NGLs Gas Total BOPD BOPD MCFD BOEPD

Production - net

U.S. - Eagle Ford Shale 24,400 4,600 26,200 33,400

- Gulf of Mexico excluding NCI 52,100 5,000 60,900 67,300

Canada - Tupper Montney - - 238,400 39,700

- Kaybob Duvernay and Placid Montney 8,800 1,000 25,000 14,000

- Offshore 3,600 - - 3,600



Total net production (BOEPD) - 153,000 to 163,000excluding NCI ^1



Exploration expense ($ millions) $25



FULL YEAR 2020 GUIDANCE

Capital expenditures - excluding NCI $680 to $720($ millions)^ 2



^1 Excludes noncontrolling interest of MP GOM of 10,000 BOPD of oil, 700 BOPDof NGLs, and 5,000 MCFD gas

^2 Excludes noncontrolling interest of MP GOM of $41 MM.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200806005233/en/

CONTACT: Investor Contacts: Kelly Whitley, kelly_whitley@murphyoilcorp.com, 281-675-9107 Megan Larson, megan_larson@murphyoilcorp.com, 281-675-9470