Murphy Oil Corporation
) posted third-quarter 2013 earnings of $1.34 per share from
continuing operation, below the Zacks Consensus Estimate of $1.49
by 10.1%. However, the reported number jumped 24.1% from the
year-ago profit level of $1.08 buoyed by higher crude oil
Earnings, including the discontinued operation, were $1.51 per
share, increasing 30.2% from $1.16 a year ago. On Aug 30, Murphy
Oil completed the spin-off of its U.S. downstream subsidiary,
Murphy Oil USA, Inc. ("Murphy USA"). Hence, its U.S. downstream
unit was reported as discontinued operations for all periods
presented, and are excluded from Murphy Oil`s net income after
the separation date.
The company's top line came in at $2,957.9 million that missed
the Zacks Consensus Estimate of $5,375.0 million. However, the
reported figure improved 11.8% from the year-ago number of
Murphy Oil's total worldwide production was 207,281 barrels of
oil equivalents per day (Boe/d), up 14.2% year over year,
primarily attributable to a rise in oil production at the Eagle
Ford Shale in the U.S.
The company produced 138,075 barrels of crude oil, condensate and
gas liquids per day (b/d), up 30.5% from the year-ago level of
$105,796 b/d, on the back of higher contribution from the Eagle
Ford Shale area. This was accompanied by increased production in
both Canada and Malaysia, with the improvements attributable to
more uptime at the Terra Nova field, offshore Newfoundland, and
field start-ups at Kakap under the early production system and at
Serendah, offshore Sabah and Sarawak.
Natural gas sales volumes decreased 8.7% year over year to 415.2
million cubic feet per day. This was primarily due to the impact
of deferred development drilling operations at the Tupper area in
British Columbia and a decline in sales at the Kikeh field in
The company sold crude oil and gas liquids worldwide at an
average price of $96.80 per barrel, up 0.7% year over year. North
American natural gas sales prices increased 14.9% year over year
to $3.00 per thousand cubic feet (Mcf). Natural gas produced at
offshore Sarawak, Malaysia was sold at $6.69 per Mcf on average,
down from $7.59 per Mcf in the prior-year quarter.
Murphy Oil's exploration expenses were $147.8 million, up 57.2%
year over year mainly due to a dry hole drilled at the Eboni
deepwater prospect offshore Cameroon. Additionally, higher
seismic acquisition costs for prospective areas in Southeast Asia
also added to the cost.
Murphy Oil's cash balance as of Sep 30, 2013 was $1,033.9 million
versus $816.7 million a year ago. As of Sep 30, 2013, long-term
debt was $2,583.2 million versus $2,245.2 million as of Dec 31,
Net cash provided by operating activities during the third
quarter was $1,009.5 million, higher than $754.1 million in the
year-ago comparable period.
Total capital expenditure from continuing operations was $994.1
million versus $1,190.0 million in the third quarter 2012.
For fourth-quarter 2013, Murphy Oil anticipates total worldwide
production to average 199,000 Boe/d and sales volumes to likely
average 191,000 Boe/d. The company also estimates total
exploration expense to range between $50 million and $150 million
for the fourth quarter 2013.
Other Company Releases
Occidental Petroleum Corporation
) reported third-quarter 2013 adjusted earnings of $1.97 per
share, surpassing the Zacks Consensus Estimate by 6 cents.
Quarterly earnings also jumped 15.9% from the year-ago figure
primarily due to an increase in the top line and lower interest
expenses as well as operating expenses.
) reported adjusted third quarter 2013 earnings of $1.18 per
share, lagging the Zacks Consensus Estimate of $1.45. The
underperformance was mostly due to lower production resulting
from various asset sales.
Marathon Oil Corporation
) is slated to release its third-quarter earnings on Nov. 4. The
Zacks Consensus Estimate is 78 cents.
We appreciate Murphy Oil's effort toward expansion of its
domestic as well as international assets backed by a strong
financial position. The company has made significant drilling
activities in Eagle Ford Shale and has tested success. In
addition, Murphy Oil is strengthening its presence in Asia,
Africa and Australia. We believe these steps will improve the
company's reserves, which will subsequently boost forthcoming
However, we are cautious about stringent drilling regulations and
volatile commodity pricing, which may to some extent challenge
the company's future performance.
El Dorado, Ark.-based Murphy Oil Corporation is an oil and gas
exploration and production company with refining and marketing
operations in the U.S. The company currently has a Zacks Rank #3
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