# Dear Fellow Shareholder

_Source: `DeepSeekOCR_Ardian_pruned_1k/energy-oil-gas-e-p/NYSE_MUR_2019/NYSE_MUR_2019.mmd` · pages 2-8_

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Dear Fellow Shareholder,

We have often used the word "transformed" over the past couple of years, as Murphy has taken deliberate steps to align its assets into a streamlined portfolio. In particular, the Malaysia divestiture and Gulf of Mexico acquisition in 2019 were key opportunities that, in hindsight, were particularly well-timed for the company and will allow us to strategically capitalize on our abilities going forward.

We begin our 70th incorporated year as a Western Hemisphere focused company that continues to grow while generating positive free cash flow over and above our capital expenditures. This allows us to return cash to you, the shareholder, through our longstanding dividend program, supplemented by timely share repurchases. We are pleased with the balanced combination of assets in the portfolio today, along with our differentiated exploration program, and look forward to purposefully operating as an industry leader, delivering inspired energy solutions.

## Looking Toward a Sustainable Future

A key tenet of Murphy's strategy is to operate safely and sustainably, and we task all our employees with thinking beyond possible and proposing ideas to become better stewards of our environment. We have several initiatives focused on sustainability, including recycling the majority of produced water at our Tupper Montney acreage, reducing greenhouse gas emissions using natural gas-fueled frac pumps, with the potential for scalability across our onshore acreage, and overall monitoring of emissions through various systems. With our new portfolio, we anticipate a 50 percent reduction in emissions from 2018 to 2020. Additionally, our Lost Time Incident Rate for 2019 fell 47 percent from the prior year, while our environmental spill performance was our best year on record, with an improvement of 73 percent from 2018.

We are proud of the steps taken thus far and embrace the opportunity to continually improve and minimize effects on the environment. Our 2020 Sustainability Report will have further detail and additional disclosures, including our vision of being a committed partner to the countries in which we operate.

## Pledging Commitment in our Communities

Murphy understands the responsibility that comes with operating globally and, as we state in our purpose, believes in providing energy that empowers people. Our legacy of contributing to educational programs and institutions is seen not only with the El Dorado Promise scholarship program in Arkansas, but also our more than 50-year partnership with the United Way in the United States and Canada.

Our employees are encouraged and enabled to lead various campaigns and remain engaged in positively impacting lives by supporting social development programs around the world. Additionally, we consistently work within our local communities on smaller projects, such as beach and park cleanups, and events to support first responders and local St. Jude's programs.

## Delivering Financial Discipline

By continuing our strategy of maintaining balance sheet strength and capital discipline, our staunch dividend yield is preserved, and excess cash flow is returned to shareholders quarter after quarter. Following the transactions in mid-2019, we reduced outstanding debt with a portion of sales proceeds, along with successfully refinancing certain notes and preserving long-term liquidity.

Overall, our total debt reduction for the year leaves us with a formidable net debt to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ratio of 1.6 times.

## Executing in Global Offshore

Mid-year, we completed the acquisition of Gulf of Mexico assets, adding reserves and significant production. This also grew the bench of future projects, which will contribute to maintaining volumes with our long-term, distinct deepwater operating expertise. Given their locations, our attractive properties achieve strong margins at premium prices and, as a result of the added production, generate significant free cash flow.

During the year, we executed a series of new wells, tiebacks and workovers in the Gulf of Mexico. Multiple significant projects were also sanctioned, including the Khaleesi, Mormont and Samurai field developments and the St. Malo waterflood – all of which will generate additional cash flow to investors over the next 10 years as they become operational.

Murphy also had a successful year with drilling three exploration wells located in the US Gulf of Mexico, Vietnam and offshore Mexico. The Cholula–IEXP well in the Salinas Basin of Block 5 offshore Mexico will be further delineated in the second half of 2020.

Proved Reserves
MMBOE

![](images/2_0.jpg)

Organic Reserve Replacement %
%

![](images/2_1.jpg)

"Our strong reserve base of 800 MMBOE with 57 percent proved developed reserves provides a significant runway for cash flow generation, with nearly 12 years average reserve life."

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Our exploration acreage position continues to prudently increase, as we maintain our approach of low-cost entries with strategic partners and appropriate working interests. This past year, we executed a farm-in to three blocks in the Potiguar Basin in Brazil and successfully bid on three additional blocks in Sergipe-Alagoas Basin, bringing the total to 12 blocks in Brazil. As operator, Murphy also acquired additional working interests in Block 5 offshore Mexico, bringing our total to 40 percent working interest. In Vietnam, we increased our acreage footprint with the signing of a production sharing contract for Block 15–2/17, which is adjacent to our current successful efforts in Vietnam.

Overall, by maintaining a conservative approach, our exploration plan generates additional long-term upside for shareholders.

## Developing Onshore Assets

Murphy's onshore production grew in 2019 with additional producing wells in the Eagle Ford Shale, as well as the advancement of our appraisal and retention drilling program in the Kaybob Duvernay. In the Eagle Ford Shale, we improved drilling and completions efficiencies throughout the year, achieving an average cost of less than $6 million per well. Murphy's median 30-day initial production oil rates have also improved considerably, up more than 18 percent from the prior year and, more importantly, 50 percent since 2016.

The operations team realized several accomplishments in onshore Canada during the year, as they applied strategic learnings from the Eagle Ford Shale across business lines. In the Kaybob Duvernay, Murphy reduced drilling and completions costs, and drilled the longest lateral to-date and fastest well from spud to total depth.

Our Tupper Montney well results have been improving, with our estimated ultimate recovery increasing over 30 percent from 2018. This asset achieved positive free cash flow for 2019 due to our hedging and market diversification strategy. Overall, our limited spend into this large resource is well placed in our portfolio as part of a global requirement for natural gas as a coal replacement long-term in a lower carbon world.

## Regenerating Our Reserves

Contributions from assets generated a sizeable 172 percent organic reserve replacement ratio as we produced 173 thousand barrels of oil equivalent per day. Our strong reserve base of 800 million barrels of oil equivalent with 57 percent proved developed reserves provides a significant runway for cash flow generation, with nearly 12 years average reserve life. Consistent with our strategy, we maintained 57 percent liquids weighting in our proved reserves.

## Positioning Our Company for Long-term Value Creation

Our focus at the beginning of this new decade remains on our highly profitable assets, along with numerous projects to maintain our long-term production base. Through the additional cash flow we expect to generate, we will continue supporting our shareholders by returning excess cash through the ongoing quarterly dividend, along with preserving the strong balance sheet through future debt reductions.

## Expressing Sincere Gratitude

I sincerely appreciate the efforts over the last 20 years of our former Malaysia staff as they leaned into the challenge of developing a profitable asset that we were proud to operate, and I wish them well in their new opportunities. I would also like to thank all our employees for staying with it as they navigated the transitions that have steered this company toward a streamlined portfolio, along with the backing and leadership of our Board of Directors in turning this vision into a reality. Most of all, thank you to our steadfast shareholders for supporting Murphy Oil Corporation as we continue to positively impact lives by working toward an inspiring future.

![](images/3_0.jpg)

Roger W. Jenkins
President and Chief Executive Officer

Note: Unless otherwise noted, the production, reserves and financial metrics discussed in this Shareholder Letter and accompanying information exclude the noncontrolling interest in MP Gulf of Mexico, LLC (MP GOM), thereby representing only the amounts attributable to Murphy.

"We are proud of the steps taken thus far and embrace the opportunity to continually improve and minimize effects on the environment."

![](images/3_1.jpg)

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# UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8590

![](images/4_0.jpg)

# MURPHY OIL CORPORATION
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)
300 Peach Street, P.O. Box 7000,
El Dorado, Arkansas
(Address of principal executive offices)

71-0361522
(I.R.S. Employer Identification Number)
71731-7000
(Zip Code)

(870) 862-6411

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

<table><tr><td>Title of each class</td><td>Trading Symbol</td><td>Name of each exchange on which registered</td></tr><tr><td>Common Stock, \(1.00 Par Value</td><td>MUR</td><td>New York Stock Exchange</td></tr></table>

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T ( \( §232.405 \)  of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

Aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter (as of June 30, 2019) – $2,748,431,387.

Number of shares of Common Stock, $1.00 Par Value, outstanding at January 31, 2020 was 153,169,317.

Documents incorporated by reference:

Portions of the Registrant's definitive Proxy Statement relating to the Annual Meeting of Stockholders on May 13, 2020 have been incorporated by reference in Part III herein.