Murphy Oil (MUR) Q3 2026 Earnings Report

The call was strongly constructive, with production exceeding the high end of guidance, $515 million of quarterly operating cash flow, successful Chinook 8 and Lac Da Vang startups, a 26% reduction in Eagle Ford well costs, and multiple growth and exploration opportunities. The main negatives were concentrated in the still-uncertain size and development requirements of Bubale, the unresolved 2027 appraisal capital range, and temporary Gulf of Mexico production offsets from weather, workovers, and maintenance. Highlights significantly outweighed the lowlights.

At $80 Brent, Lac Da Vang and Chinook are expected to generate approximately $1 billion of combined free cash flow over the next 5 years; Lac Da Vang production is probably 3 thousand to 5 thousand barrels a day net to us next year, with an exit rate of 7 thousand-12 thousand-barrel-a-day at exit of 2027 and peak production of 10 thousand to 15 thousand barrels a day net to us probably in 2028 or 2029. Eagle Ford capital is expected to increase from the plus or minus $300 million mark in the last 1 to 2 years to around $500 million, somewhere in that ballpark, in 2027, while exploration is expected to be in the 10-15% of our total capital program. Bubale appraisal is expected to start sometime in the second quarter of next year, with 5 to 6 locations that make sense today, wells likely in the $80-100 million range per location or a $110 million-type range per location with an extensive evaluation program, and an appraisal program over the next 18 to 24 months. Operating expenses are expected to be in the $10 to $12 per barrel range for 2027; Hai Su Vang is on track for a project sanction at the end of, let's say, the fourth quarter of 2027; the Gulf program is likely to test 1 hub-scale prospect; and an exploration well in Mauritania is probably not something we do until perhaps 2029 or that kind of time frame.