Murphy Oil posts smaller loss amid decrease in revenues
- Business & Finance
U.S.-based oil & gas company Murphy Oil narrowed its net loss during the fourth quarter of 2016 amid decrease in revenues.
Murphy Oil incurred a net loss of $63.9 million for the fourth quarter of 2016, compared to a net loss of $587.1 million in the same period of 2015.
The company reported an adjusted loss, which excludes both the results of discontinued operations and certain other items that affect comparability of results between periods, of $27 million.
Murphy’s revenues for the quarter decreased to $505.8 million from $658.1 million in the prior-year quarter.
Production in the fourth quarter 2016 averaged 168 thousand barrels of oil equivalent per day (Mboepd). The company noted that stronger production compared to previous quarterly guidance is attributed to shorter downtime and better well performance following the planned Kikeh and Sarawak turnarounds, in addition to stronger well results from new wells brought online in the Catarina area of the Eagle Ford Shale.
The offshore business produced over 81 Mboepd for the fourth quarter with 73 percent liquids and operating expenses just below $9.00 per boe.
The company expanded its exploration portfolio by farming into a successfully drilled prospect in the Gulf of Mexico as well as capturing a block in Mexico’s deepwater bid round.
Namely, during the fourth quarter, Murphy reached an agreement with Chevron to participate in drilling Hoffe Park, a Gulf of Mexico Mississippi Canyon prospect in Block 166, with a 25 percent working interest. Chevron drilled the well late in the fourth quarter and successfully encountered hydrocarbons. The well operations have been suspended pending determination of the appraisal plan for the discovery.
In Mexico’s round, Murphy won the operatorship over Block 5 with a 30 percent working interest. The block is located in the deepwater Salinas basin.
Three-fold focus for 2017
Murphy is planning 2017 capital expenditures to be $890 million. Approximately 65 percent of the total capital is being allocated towards the onshore unconventional businesses, while offshore expenditures are focused on short-cycle projects that maintain existing assets and other activities expected to increase value-added production in future years. Field development and development drilling accounts for 85 percent of the annual capital expenditures.
Roger W. Jenkins, Murphy Oil President and Chief Executive Officer, said: “Our focus in 2017 is three-fold. First, allocating a majority of capital toward developing locations in the highest return areas in our onshore portfolio. Second, investing in selective offshore projects that deliver top quartile finding and development metrics. Third, covering all costs, including our dividend, within cash flow which will maintain our solid balance sheet.”
Offshore Energy Today Staff