Murphy Oil's Q4 2024: Contradictory Insights on Eagle Ford Completions, Gulf Production, and Workover Costs

These are the key contradictions discussed in Murphy Oil's latest 2024Q4 earnings call, specifically including: Eagle Ford well completion design, Gulf of Mexico production growth expectations, and workover expenses.



Production and Capital Expenditure:
- Murphy Oil Corporation reported a production of 175,000 barrels of oil equivalent per day in Q4 2024, with a significant impact of 11,000 barrels of oil equivalent per day due to operational issues and downtime.
- The company plans to maintain low single-digit production growth, with a full-year production forecast of 174,500 to 182,500 barrels of oil equivalent per day.
- The reduced production was due to late season hurricanes, mechanical issues, and delays in development plans, while the growth is expected to come from increased onshore drilling and offshore development efforts.

Financial Performance:
- Murphy recorded a net income of $50 million or $0.34 per diluted share and an adjusted net income of $51 million or $0.35 per diluted share.
- The company generated adjusted EBITDA of $321 million with accrued CapEx of $186 million, excluding noncontrolling interest.
- The earnings were impacted by a $19 million interest expense related to senior note redemption and a $28 million asset impairment in the Gulf of Mexico.

Capital Allocation and Strategic Investments:
- Murphy's 2025 CapEx is forecast to be in the range of $1.135 billion to $1.285 billion, with approximately 60% directed towards offshore assets.
- The company plans to increase spending in Vietnam due to the Lac Da Vang build development project, allocating $110 million in 2025.
- These investments are expected to contribute to long-term growth and high-return projects, supporting Murphy's strategic priorities in offshore development and exploration.

Exploration and Discovery:
- Murphy drilled an oil discovery at the Hai Su Vang-1X exploration well in Vietnam, with an estimated gross resource potential of 170 million to 430 million barrels of oil equivalent.
- The company plans to drill an appraisal well in the third quarter of 2025 to establish the size of the resource and plans to initiate a 3-well exploration program in Côte d'Ivoire beginning in the fourth quarter.
- The exploration activities are expected to support Murphy's growth strategy and potential future developments in Vietnam and Côte d'Ivoire.