Murphy Oil Corporation announced its financial and operating results for the first quarter ended March 31, 2021, including a net loss attributable to Murphy of $ 287 million, or $ 1.87 net loss per diluted share.
Murphy Oil was once based in El Dorado. The offices were moved to Houston last year.
Excluding total after-tax charges of $ 297 million, mainly comprising $ 128 million of non-cash asset impairments on the untapped Terra Nova asset, $ 121 million of non-cash unrealized mark-to-market losses on crude oil derivative contracts and $ 29 million prepayment cost of debt, adjusted net income was $ 10 million, or $ 0.06 of net income per diluted share.
Highlights of the first trimester include:
– Issuance of $ 550 million of 6.375% senior notes due 2028 and use of the proceeds and cash to redeem $ 576 million of senior notes due 2022.
– Monetization of the King’s Quay floating production system and full repayment of borrowings under the $ 1.6 billion senior unsecured credit facility.
– Total debt reduction of $ 233 million, or 8%, for the quarter starting at the end of 2020.
– Production of 155,000 barrels of oil equivalent per day, above the midpoint of forecasts, with 88,000 barrels of oil per day.
– Acquired additional direct interests in the untapped Lucius field for $ 20 million, with payout expected in about a year.
– Announcement of changes to the compensation program, including the establishment of a free cash flow measure and the addition of a measure to reduce greenhouse gas emissions to the annual incentive plan of the business.
After the first quarter, drilling began:
– The first well in the Khaleesi, Mormont, Samurai drilling program in the Gulf of Mexico, remaining on track for first oil in mid-2022.
– The unexploited Silverback exploration well in the Gulf of Mexico, which will test a trend of opening games near existing assets operated by Murphy.
“Murphy has got off to a great start to the year, completing strategic financial transactions that have delivered our balance sheet and broadened our maturity profile. I am particularly proud of our operational achievements across all of our assets, with a marked improvement in oil production despite the severe winter storm in February. We remain in full execution on all of our Gulf of Mexico projects. In addition, I am proud to see our exploration opportunities progress, with wells starting now in the Gulf of Mexico and later this year in Brazil, ”said Roger W. Jenkins, President and CEO.
The company recorded a net loss, attributable to Murphy, of $ 287 million, or $ 1.87 million per diluted share, for the first quarter of 2021. This includes an after-tax loss realized on crude oil derivative contracts of $ 48 million. Adjusted net income, which excludes both results from discontinued operations and certain other items that affect the comparability of results between periods, was $ 10 million, or 6 cents of net income per diluted share for the same period.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations attributable to Murphy was $ 255 million, or $ 18.65 per barrel of oil equivalent (BOE) sold. Adjusted earnings before interest, taxes, depreciation, amortization and exploration expenses (EBITDA) from continuing operations attributable to Murphy was $ 267 million, or $ 19.51 per BOE sold.
First quarter production averaged 155,000 barrels of oil equivalent per day (MBOEPD) with 57 percent oil and 63 percent liquids.
During the first quarter, Murphy issued $ 550 million of 6.375% senior notes due 2028. The proceeds, together with cash on hand, were used to redeem $ 259 million of senior notes due in June 2022 and $ 317 million in senior notes due December 2022, for a total of $ 576 million.
Overall, Murphy has reduced its total debt by $ 233 million, or 8%, as of the end of 2020. Total debt of $ 2.756 billion consists of long-term fixed rate notes with a weighted average maturity of 7.7 years and a weighted average coupon of 6.3 percent.
Murphy had approximately $ 1.8 billion in cash, comprising the $ 1.6 billion senior unsecured credit facility and approximately $ 231 million in cash and cash equivalents, at the end of the first quarter .
“As announced in March, we sold our 50% interest in the King’s Quay floating production system for proceeds of $ 268 million, which was used to fully repay the borrowings on our credit facility. This transaction, in conjunction with our senior note offering and repurchase earlier in the month, enabled us to achieve significant debt reduction in the first quarter, completing the first step of our delivery target and establishing the way for further cuts later this year with commodity prices, ”Jenkins said.