Murphy Oil Q1 2025 slides: Vietnam discoveries and Pioneer FPSO acquisition highlight growth

Introduction & Market Context

Murphy Oil Corporation (NYSE:MUR) presented its first quarter 2025 earnings results on May 8, 2025, highlighting strategic acquisitions and international discoveries amid challenging financial performance. The company’s stock closed at $21.00 on May 7, near its 52-week low of $18.95, with aftermarket trading showing a further decline of 0.71% to $20.85.

The presentation, delivered by President and CEO Eric M. Hambly, emphasized the company’s progress on strategic priorities despite reporting negative free cash flow for the quarter, continuing a trend of financial challenges after missing earnings expectations in Q4 2024.

Quarterly Performance Highlights

Murphy Oil reported Q1 2025 production of 157 MBOEPD (thousand barrels of oil equivalent per day), with revenue totaling $636 million. The company’s production mix was diversified across its asset portfolio, with offshore operations contributing the largest share at 45% of production and 66% of revenue.

As shown in the following production and revenue breakdown chart:

The company achieved realized pricing of $72.20/BBL for oil, $25.67/BBL for natural gas liquids, and $2.67/MCF for natural gas during the quarter. Production was impacted by approximately 6 MBOEPD due to various operational issues.

Despite these challenges, Murphy Oil continued its shareholder return program, returning $147 million to shareholders in Q1 2025, including $100 million in stock repurchases (3.6 million shares) and $47 million in quarterly dividends. The company has been steadily reducing its share count, which has decreased from 186 million in 2013 to 142.7 million in Q1 2025.

Murphy Oil highlighted its key strategic priorities and achievements for the quarter in this comprehensive overview:

However, the company’s free cash flow showed significant deterioration, with Q1 2025 free cash flow at -$44.9 million compared to $174.1 million in Q1 2024. Similarly, adjusted free cash flow was -$108 million in Q1 2025 versus $80 million in Q1 2024.

Strategic Initiatives

A centerpiece of Murphy Oil’s strategic initiatives was the acquisition of the Pioneer FPSO (Floating Production, Storage and Offloading) vessel for $104 million net. The company expects this acquisition to deliver compelling returns with a two-year payback period independent of oil prices.

The following slide details the strategic benefits of this acquisition:

The Pioneer FPSO acquisition is expected to reduce annual net operating costs by approximately $50 million, increase offshore net proved reserves by 5% (approximately 160 MMBOE), and enhance returns for future development projects.

In Vietnam, Murphy Oil announced its second oil discovery at the Lac Da Hong-1X (Pink Camel) exploration well, encountering 106 feet of net oil pay from one reservoir. This discovery follows the company’s earlier Hai Su Vang-1X (Golden Sea Lion) discovery in the region.

The company provided this detailed overview of the Lac Da Hong-1X discovery:

Murphy Oil also reported progress on its Lac Da Vang (Golden Camel) field development project in Vietnam, achieving 1 million work hours with zero Lost Time Injuries on the platform construction. The project is targeting first oil in Q4 2026.

Operational Updates

In the Eagle Ford Shale, Murphy Oil reported production of 25 MBOEPD with 67% oil and 83% liquids. The company drilled its longest Eagle Ford Shale lateral in company history at 13,976 feet in Catarina and plans to bring 24 operated wells online in Q2 2025.

The following slide details the Eagle Ford Shale operations and future development plans:

In the Tupper Montney, Murphy Oil reported production of 340 MMCFD net (100% natural gas) and drilled its two longest Tupper Montney laterals in company history at 13,881 feet and 13,602 feet. The company effectively mitigated AECO price exposure, achieving a realized price of US$2.38/MCF compared to the US$1.51/MCF AECO average.

The company’s offshore operations delivered 71 MBOEPD in Q1 2025, with 83% oil content. Gulf of America production accounted for 62 MBOEPD (81% oil), while offshore Canada contributed 9 MBOEPD (100% oil).

Forward-Looking Statements

For Q2 2025, Murphy Oil provided guidance of 177-185 MBOEPD with 48% oil and 53% liquids volumes, along with $300 million in accrued capital expenditures. The company maintained its full-year 2025 guidance of 174.5-182.5 MBOEPD (50% oil, 55% liquids) and $1,135-$1,285 million in accrued capital expenditures.

The company’s near-term strategy for 2025-2026 focuses on generating low, single-digit production growth from existing assets while progressing high-impact projects in Vietnam and Côte d’Ivoire. Murphy Oil continues to target a long-term debt goal of $1.0 billion, allocating a minimum of 50% of adjusted free cash flow to share repurchases.

The following slide outlines the company’s near-term strategic priorities:

Looking further ahead, Murphy Oil’s long-term strategy emphasizes offshore growth while maintaining onshore investment optionality. The company plans to allocate approximately 10-15% of annual capital expenditures to exploration in the long term.

Despite the optimistic outlook presented in the slides, Murphy Oil faces challenges in reversing the negative free cash flow trend seen in Q1 2025. The company’s stock performance reflects investor concerns, trading near 52-week lows despite the strategic initiatives and international discoveries highlighted in the presentation.

Full presentation:

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