EDGAR 10-K Filing

Company CIK: 717423
Filing Year: 2025
Filename: 717423_10-K_2025_0000717423-25-000006.json

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ITEM 1. BUSINESS
Item 1. BUSINESS
Summary
Murphy Oil Corporation is a global oil and natural gas exploration and production company, with both onshore and offshore operations and properties. As used in this report, the terms Murphy, Murphy Oil, we, our, its and Company may refer to Murphy Oil Corporation or any one or more of its consolidated subsidiaries.
The Company was originally incorporated in Louisiana in 1950 as Murphy Corporation. It was reincorporated in Delaware in 1964, at which time it adopted the name Murphy Oil Corporation. In 2013, the United States (U.S.) refining and marketing business was separated from Murphy Oil Corporation’s oil and natural gas exploration and production business. For reporting purposes, Murphy’s exploration and production activities are subdivided into three geographic segments, including the U.S., Canada and all other countries. Additionally, the Corporate segment includes interest income, interest expense, foreign exchange effects, corporate risk management activities and administrative costs not allocated to the exploration and production segments. The Company’s corporate headquarters are located in Houston, Texas.
As part of the Company’s underlying operations, the Company is continually monitoring its greenhouse gas (GHG) emissions and impact on the environment as well as other social and environmental aspects of its business. See “Sustainability” on page 9.
In addition to the following information about each business activity, data about Murphy’s operations, properties and business segments, including revenues by class of products and financial information by geographic area, are provided on pages 31 through 43, 75 through 79, 100 through 104, and 106 through 121 of this Form 10-K report.
Interested parties may obtain the Company’s public disclosures filed with the Securities and Exchange Commission (SEC), including Form 10-K, Form 10-Q, Form 8-K and other documents, by accessing the Investor Relations section of Murphy Oil Corporation’s Website at www.murphyoilcorp.com.
Exploration and Production
The Company produces crude oil and condensate (collectively, crude oil), natural gas and natural gas liquids (NGLs) primarily in the U.S. and Canada and explores for crude oil, natural gas and NGLs in targeted areas worldwide.
During 2024, Murphy’s principal exploration and production activities were conducted in the U.S. by wholly-owned Murphy Exploration & Production Company - USA and its subsidiaries, in Canada by wholly-owned Murphy Oil Company Ltd. and its subsidiaries, and in Brazil, Brunei, Côte d’Ivoire and Vietnam by wholly-owned Murphy Exploration & Production Company - International and its subsidiaries. Murphy’s operations and production in 2024 were in the U.S., Canada and Brunei.
Unless otherwise indicated, all references to the Company’s U.S. Offshore and total oil, natural gas and NGLs production, sales volumes, and proved reserves include a noncontrolling interest in MP Gulf of Mexico, LLC (MP GOM; see further details below).
Murphy’s worldwide 2024 production on a barrel of oil equivalent basis (six thousand cubic feet of natural gas equals one barrel of oil) was 184,293 barrels of oil equivalent per day (BOEPD), a decrease of 4.3% compared to 2023.
For further details on business execution, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” starting on page 31. For further details on 2024 production and sales volume see pages 35 to 36.
United States
In the U.S., Murphy produces crude oil, natural gas and NGLs primarily from fields in the Gulf of America and in the Eagle Ford Shale area of South Texas. The Company produced 93,184 barrels (BBL) of crude oil and NGLs (collectively, liquids) per day and approximately 82 million cubic feet (MMCF) of natural gas per day in the U.S. in
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2024. These amounts represented 89.5% of the Company’s total worldwide liquids and 17.1% of worldwide natural gas production volumes.
Offshore
The Company holds rights to approximately 580 thousand gross acres in the Gulf of America. During 2024, approximately 72% of total U.S. hydrocarbon production was produced at fields in the Gulf of America, of which approximately 90% was derived from ten fields, including the operated Khaleesi, Mormont, Cascade and Chinook, Samurai, Marmalard, Dalmatian and Powerball fields, as well as the non-operated St. Malo, Kodiak and Lucius fields. Total average daily production in the Gulf of America in 2024 was 67,591 BBL of liquids and 57 MMCF of natural gas. At December 31, 2024, Murphy had total proved reserves for Gulf of America fields of 123.2 million BBL of liquids and 93.2 billion cubic feet of natural gas.
Onshore
The Company holds rights to approximately 133 thousand gross acres in South Texas in the Eagle Ford Shale unconventional oil and natural gas play. During 2024, approximately 28% of total U.S. hydrocarbon production was produced in the Eagle Ford Shale. Total 2024 production in the Eagle Ford Shale area was 25,521 BBL of liquids per day and 24.9 MMCF per day of natural gas. At December 31, 2024, the Company’s proved reserves for the U.S. Onshore business totaled 136.1 million BBL of liquids and 195.7 billion cubic feet of natural gas.
Canada
In Canada, the Company holds working interests in Tupper Montney (100% working interest), Kaybob Duvernay and two non-operated offshore assets - the Hibernia and Terra Nova fields, located offshore Newfoundland and Labrador in the Jeanne d’Arc Basin. During 2023, the Company sold a portion of its working interest in Kaybob Duvernay and the entire 30% non-operated working interest in Placid Montney.
Onshore
Murphy has approximately 139 thousand gross acres of Tupper Montney mineral rights located in northeast British Columbia. In addition, the Company holds a 70% working interest in Kaybob Duvernay lands in Alberta. The Company has approximately 166 thousand gross acres of Kaybob Duvernay mineral rights. Daily production in 2024 in Canada Onshore averaged 3,465 BBL of liquids and 399 MMCF of natural gas. Total Canada Onshore proved liquids and natural gas reserves at December 31, 2024, were approximately 21.4 million BBL and 2.2 trillion cubic feet, respectively.
Offshore
The Company holds a non-operated interest in approximately 133 thousand gross acres offshore Canada. Murphy has a 6.5% working interest in Hibernia Main, a 4.3% working interest in Hibernia South Extension and an 18.0% working interest in Terra Nova. Oil production in 2024 was 7,251 BBL of oil per day for the two offshore Canadian fields. Terra Nova resumed production during the fourth quarter of 2023, following the completion of the asset life extension project. Total proved reserves for Canada Offshore at December 31, 2024 were approximately 20.8 million BBL of liquids and 14.0 billion cubic feet of natural gas.
Brazil
The Company holds a 20% non-operated working interest in nine blocks in the offshore regions of the Sergipe-Alagoas Basin (SEAL) in Brazil (SEAL-M-351, SEAL-M-428, SEAL-M-430, SEAL-M-501, SEAL-M-503, SEAL-M-505, SEAL-M-573, SEAL-M-575 and SEAL-M-637). Murphy has a 100% working interest in three blocks in the Potiguar Basin (POT-M-857, POT-M-863 and POT-M-865).
Murphy’s total acreage position in Brazil as of December 31, 2024 is approximately 2.5 million gross acres, offsetting several major discoveries. There are no well commitments.
Brunei
The Company has a working interest of 8.051% in Block CA-1 as of December 31, 2024. Oil production in 2024 was 219 BBL of oil per day for Brunei.
Total proved reserves for our Jagus East discovery in Block CA-1 at December 31, 2024 were approximately 0.2 million BBL of liquids and 172 MMCF of natural gas. Block CA-1 covers 2 thousand gross acres.
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Vietnam
The Company holds an interest in 7.3 million gross acres, consisting of 65% working interest in Blocks 144 & 145, and a 40% interest in Block 15-1/05 and Block 15-2/17. The Company is the operator of each of the three Production Sharing Contracts (PSCs).
Block 15-1/05 contains the Lac Da Vang (Golden Camel) discovered field in the Cuu Long Basin where, in 2023, the Company received government approval of the field development plan, and the Board of Directors of the Company (the Board) sanctioned the project. Development activity is in progress, with first oil planned in 2026. The Lac Da Trang-1X (White Camel) exploration well was drilled in April 2019 and the Company anticipates drilling the Lac Da Hong-1X (Pink Camel) exploration well in 2025.
In Block 15-2/17, the Company completed its geological and geophysical commitment work, which included 3D seismic reprocessing. In the fourth quarter 2024, the Company drilled an oil discovery at the Hai Su Vang-1X (Golden Sea Lion) exploration well, which encountered approximately 370 feet of net pay from two reservoirs. Additional evaluation is ongoing and future appraisal drilling will be conducted.
In Blocks 144 & 145, the Company acquired 2D seismic in 2013 and undertook seabed surveys in 2015 and 2016. The Company has sought an extension to complete the remaining seismic commitment.
Total proved reserves for Lac Da Vang (Golden Camel) field development in Vietnam at December 31, 2024 were approximately 12.0 million BBL of liquids and 2.8 billion cubic feet of natural gas.
Côte d’Ivoire
During the second quarter of 2023, Murphy signed PSCs as operator for five deepwater blocks in the Tano Basin offshore Côte d’Ivoire, Africa. The five blocks have a total area of 1.5 million gross acres, with Murphy holding a 90% working interest in four blocks and an 85% working interest in the fifth block. Société Nationale d’Opérations Pétrolières de la Côte d’Ivoire holds the remaining working interest for each block.
Commitments for the initial exploration periods across the five blocks consist of seismic reprocessing. Block CI-103 includes the Paon discovery, appraised with multiple wells by a previous operator. The PSC for this block also includes a commitment to submit a field development plan for this discovery by the end of 2025.
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Proved Reserves
Total proved reserves for crude oil, natural gas and NGLs as of December 31, 2024 are presented in the following table:
Proved Reserves
All Products Crude
Oil Natural Gas
Liquids Natural Gas 4
Proved Developed Reserves: (MMBOE) (MMBBL) (BCF)
United States 218.9 164.1 21.9 196.8
Onshore 104.9 68.3 15.1 128.9
Offshore 1
114.0 95.8 6.8 67.9
Canada 217.1 20.4 2.2 1,167.2
Onshore 200.6 6.2 2.2 1,153.2
Offshore 16.5 14.2 - 14.0
Other 0.2 0.2 - 0.2
Total proved developed reserves 436.2 184.7 24.1 1,364.2
Proved Undeveloped Reserves:
United States 88.5 61.1 12.2 92.1
Onshore 63.7 43.2 9.5 66.8
Offshore 2
24.8 17.9 2.7 25.3
Canada 191.8 17.3 2.3 1,032.7
Onshore 185.2 10.7 2.3 1,032.7
Offshore 6.6 6.6 - -
Other 12.5 12.0 - 2.8
Total proved undeveloped reserves 292.8 90.4 14.5 1,127.6
Total proved reserves 3
729.0 275.1 38.6 2,491.8
1 Includes proved developed reserves of 14.4 million barrels of oil equivalent (MMBOE), consisting of 13.2 million barrels (MMBBL) of oil, 0.5 MMBBL of NGLs and 4.2 billion cubic feet (BCF) of natural gas, attributable to the noncontrolling interest in MP GOM.
2 Includes proved undeveloped reserves of 1.5 MMBOE, consisting of 1.3 MMBBL of oil, 0.1 MMBBL of NGLs and 0.8 BCF of natural gas, attributable to the noncontrolling interest in MP GOM.
3 Includes proved reserves of 15.9 MMBOE, consisting of 14.5 MMBBL of oil, 0.6 MMBBL of NGLs and 5 BCF of natural gas, attributable to the noncontrolling interest in MP GOM.
4 Includes proved natural gas reserves to be consumed in operations as fuel of 67.9 BCF, 36.0 BCF and 2.8 BCF for the U.S., Canada and Other, respectively, with 1.1 BCF of this attributable to the noncontrolling interest in MP GOM.
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Murphy Oil’s 2024 total proved reserves and proved undeveloped reserves are reconciled from 2023 as presented in the table below:
(Millions of oil equivalent barrels) 1
Total
Proved
Reserves Total Proved
Undeveloped
Reserves
Beginning of year 739.5 314.0
Revisions of previous estimates 14.3 11.5
Extensions and discoveries 31.4 30.1
Improved recovery 11.3 -
Conversions to proved developed reserves - (62.8)
Production (67.5) -
End of year 2
729.0 292.8
1 For purposes of these computations, natural gas sales volumes are converted to equivalent barrels of oil using a ratio of six thousand cubic feet (MCF) of natural gas to one barrel of oil.
2 Includes 15.9 MMBOE and 1.5 MMBOE for total proved and proved undeveloped reserves, respectively, attributable to the noncontrolling interest in MP GOM.
Production of 67.5 MMBOE was not fully offset by extensions of 10.5 MMBOE in the Eagle Ford Shale, 12.1 MMBOE in Canada Onshore, 5.5 MMBOE in the Gulf of America, and 3.3 MMBOE in Canada Offshore as well as performance and price related increases of 6.3 MMBOE in Canada, 7.0 MMBOE in the Eagle Ford Shale and 12.5 MMBOE in the Gulf of America.
Murphy’s total proved undeveloped reserves at December 31, 2024 decreased 21.2 MMBOE from a year earlier. The proved undeveloped reserves reported in the table as extensions and discoveries during 2024 were predominantly attributable to four areas: the Gulf of America, the Eagle Ford Shale in South Texas, Tupper Montney in Onshore Canada and Offshore Canada. The U.S. and Canadian assets had active development work ongoing during the year and new drilling locations were sanctioned in the Gulf of America. The majority of proved undeveloped reserves associated with revisions of previous estimates was the result of performance adjustments in Tupper Montney and the Eagle Ford Shale and positive price revisions in Tupper Montney from decreased royalty rates and decelerated royalty incentive payouts arising from lower commodity prices. The majority of the proved undeveloped reserves migration to the proved developed category are attributable to drilling in Tupper Montney, the Gulf of America, and the Eagle Ford Shale. Other proved undeveloped increases resulted from sanctioned development plans for the non-operated Zephyrus field.
The Company spent approximately $670 million in 2024 to convert proved undeveloped reserves to proved developed reserves. In the next three years, the Company expects to spend a range of approximately $650 million to $800 million per year to move current undeveloped proved reserves to the developed category. The anticipated level of spending in 2025 primarily includes drilling and development in the Gulf of America, Eagle Ford Shale, Tupper Montney, Kaybob and Vietnam areas.
At December 31, 2024, proved reserves are included for several development projects, including oil developments in the Eagle Ford Shale in South Texas, Gulf of America, Kaybob Duvernay in Canada Onshore and Lac Da Vang (Golden Camel) in Vietnam; as well as natural gas developments in Tupper Montney in Canada Onshore. Total proved undeveloped reserves associated with various development projects at December 31, 2024 were approximately 292.8 MMBOE, which represents 40% of the Company’s total proved reserves.
Certain development projects have proved undeveloped reserves that will take more than five years to bring to production. Projects in deepwater fields in the Gulf of America and Canada Offshore include five undeveloped locations that exceed this five-year window. Total reserves associated with the five locations amount to less than 1% of the Company’s total proved reserves at year-end 2024. The development of certain reserves extends beyond five years due to limited well slot availability, thus making it necessary to wait for depletion of other wells prior to initiating further development of these locations or behind-pipe completions with significant capital costs that categorize them as undeveloped.
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Murphy Oil’s Reserves Processes and Policies
All estimates of reserves are made in compliance with SEC Rule 4-10 of Regulation S-X, which states that “proved oil and natural gas reserves are those quantities of oil and natural gas which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible -from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations.” Proved reserves estimates will generally be revised only as additional geologic or engineering data become available or as economic conditions change. Moreover, estimates of proved reserves may be revised as a result of future operations, effects of regulation by governmental agencies or geopolitical or economic risks. Therefore, the proved reserves included in this report are estimates only and should not be construed as being exact quantities, and if recovered, could be more or less than the estimated amounts.
Murphy has established both internal and external controls for estimating proved reserves that follow the guidelines set forth by the SEC for oil and gas reporting. Crude oil, natural gas and NGLs reserve estimates are developed or reviewed by Qualified Reserves Estimators (QREs). QREs are technical professionals embedded within the asset teams. QRE qualification generally requires a minimum of five years of practical experience in petroleum engineering or petroleum production geology, with at least three years of such experience being in the estimation and evaluation of reserves, and either a bachelors or advanced degree in petroleum engineering, geology or other discipline of engineering or physical science from a college or university of recognized stature, or the equivalent thereof from an appropriate government authority or professional organization. Larger business units of the Company also employ Regional Reserves Coordinators who coordinate and provide oversight of the reserve submissions to senior management and the Corporate Reserves group. Murphy provides annual training to all Company reserves estimators to ensure SEC requirements associated with reserves estimation and Form 10-K reporting are fulfilled.
Proved reserves are consolidated and reported through the Corporate Reserves group. Murphy’s General Manager Corporate Reserves (Reserves General Manager) leads the Corporate Reserves group that also includes Corporate Reserve engineers and support staff, all of which are independent of the Company’s oil and natural gas operational management and technical personnel. The Reserves General Manager joined Murphy in 2020 and has more than 32 years of industry experience. He has a Bachelor of Science in Mechanical Engineering and is also a licensed Professional Engineer in the State of Texas. The Reserves General Manager reports to the Executive Vice President and Chief Financial Officer and makes annual presentations to the Board about the Company’s reserves. The Reserves Manager and the Corporate Reserve engineers review and discuss reserves estimates directly with the Company’s technical staff in order to make every effort to comply with the rules and regulations of the SEC.
The Reserves General Manager coordinates and oversees the third-party audits which are performed annually. In 2024, third party audits were conducted for proved reserves covering 71.6% of total proved reserves. All audits conducted during this period were within the established +/- 10.0% tolerance.
Ryder Scott Company (“Ryder Scott”) performed audits for certain reserve estimates of Murphy’s U.S. fields as of December 31, 2024. The Ryder Scott summary report is filed as an exhibit to this Annual Report on Form 10-K. The team lead for Ryder Scott has over 22 years of industry experience, joining Ryder Scott over 19 years ago. He is a registered Professional Engineer in the State of Texas.
McDaniel & Associates (“McDaniel”) performed audits for certain reserve estimates of our Canadian fields as of December 31, 2024. The McDaniel summary report is filed as an exhibit to this Annual Report on Form 10-K. The two technical advisors for McDaniel both have over 18 years of experience in the estimation and evaluation of reserves with McDaniel. Both are registered Professional Engineers with the Association of Professional Engineers and Geoscientists of Alberta.
Netherland, Sewell & Associates, Inc. (“NSAI”) performed audits for certain reserve estimates of our Gulf of America fields as of December 31, 2024. The NSAI summary report is filed as an exhibit to this Annual Report on Form 10-K. The team lead for NSAI has over 20 years of industry experience, joining NSAI over 15 years ago.
To ensure accuracy and security of reported reserves, the proved reserves estimates are coordinated in industry-standard software with access controls for approved users. In addition, Murphy complies with internal controls concerning the various business processes related to reserves.
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More information regarding Murphy’s estimated quantities of proved reserves of crude oil, natural gas and NGLs for the last three years are presented by geographic area on pages 108 through 115 of this Form 10-K report. Murphy currently has no oil and natural gas reserves from non-traditional sources. Murphy has not filed and is not required to file any estimates of its total proved oil or natural gas reserves on a recurring basis with any federal or foreign governmental regulatory authority or agency other than the SEC. Annually, Murphy reports gross reserves of properties operated in the U.S. to the U.S. Department of Energy; such reserves are derived from the same data from which estimated proved reserves of such properties are determined.
Crude oil and NGLs production and sales, and natural gas sales by geographic area with weighted average sales prices for each of the three years ended December 31, 2024 are shown on page 34 of this Form 10-K report.
Production expenses for the last three years in U.S. dollars per equivalent barrel are discussed beginning on page 37 of this Form 10-K report.
Supplemental disclosures relating to oil and natural gas producing activities are reported on pages 106 through 121 of this Form 10-K report.
Acreage and Well Count
At December 31, 2024, Murphy held leases, concessions, contracts or permits on developed and undeveloped acreage as shown by geographic area in the following table. “Gross” acres are those in which all or part of the working interest is owned by Murphy. “Net” acres are the portions of the gross acres attributable to Murphy’s interest.
Developed Undeveloped Total
Area (Thousands of acres)
Gross Net Gross Net Gross Net
United States Onshore 111 97 22 21 133 118
Offshore
56 25 524 269 580 294
Total United States 167 122 546 290 713 412
Canada Onshore 132 108 173 136 305 244
Offshore 105 12 28 1 133 13
Total Canada 237 120 201 137 438 257
Brunei 2 - - - 2 -
Brazil - - 2,453 1,110 2,453 1,110
Côte d’Ivoire - - 1,489 1,332 1,489 1,332
Vietnam - - 7,324 4,571 7,324 4,571
Totals 406 242 12,013 7,440 12,419 7,682
Certain acreage held by the Company will expire in the next three years.
Scheduled expirations in 2025 includes 1,090 thousand net acres in Côte d’Ivoire, 304 thousand net acres in Vietnam, 75 thousand net acres in Brazil, 5 thousand net acres in U.S. Offshore and 1 thousand net acres in Canada Onshore.
Acreage currently scheduled to expire in 2026 includes 4,267 thousand net acres in Vietnam, 241 thousand net acres in Côte d’Ivoire, 25 thousand net acres in U.S. Offshore, 6 thousand net acres in Canada Offshore and 1 thousand net acres in Canada Onshore.
Scheduled expirations in 2027 includes 75 thousand net acres in Brazil and 7 thousand net acres in U.S. Offshore.
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As used in the three tables that follow, “gross” wells are the total wells in which all or part of the working interest is owned by Murphy, and “net” wells are the total of the Company’s fractional working interests in gross wells expressed as the equivalent number of wholly-owned wells. An “exploratory” well is drilled to find and produce crude oil or natural gas in an unproved area and includes delineation wells which target a new reservoir in a field known to be productive or to extend a known reservoir beyond the proved area. A “development” well is drilled within the proved area of an oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.
The following table shows the number of oil and natural gas wells producing or capable of producing at December 31, 2024:
Oil Wells Natural Gas Wells
Gross Net Gross Net
United States
Onshore 1,221 971 30 5
Offshore
81 37 13 5
Total United States 1,302 1,008 43 10
Canada Onshore 19 13 356 340
Offshore 50 5 - -
Total Canada 69 18 356 340
Totals 1,371 1,026 399 350
Murphy’s net wells drilled and completed in the last three years are shown in the following table:
United States Canada Other Totals
Productive Dry Productive Dry Productive Dry Productive Dry
Exploration 0.3 0.8 - - - - 0.3 0.8
Development 23.9 - 15.3 - - - 39.2 -
Exploration - 1.3 - - - - - 1.3
Development 34.1 - 15.1 - - - 49.2 -
Exploration - - - - - 0.6 - 0.6
Development 29.1 - 22.1 - - - 51.2 -
Murphy’s drilling wells in progress at December 31, 2024 are shown in the following table. The year-end well count includes wells awaiting various completion operations.
Exploration Development Total
Gross Net Gross Net Gross Net
United States
Onshore - - 22.0 11.2 22.0 11.2
Offshore
- - 1.0 0.3 1.0 0.3
Canada Onshore - - 5.0 5.0 5.0 5.0
Offshore - - - - - -
Other
- - 1.0 0.4 1.0 0.4
Totals - - 29.0 16.9 29.0 16.9
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Sustainability
Environment and Climate Change
We understand that our industry, and the use of our products, create emissions - which raise climate change concerns. At the same time, access to affordable and reliable energy is essential to improving the world’s quality of life and the functioning of the global economy. We believe that as the energy economy transitions, oil and natural gas will continue to play a vital role in the long-term energy mix.
We are committed to reducing our Scope 1 and 2 GHG emissions and are focused on understanding and mitigating our climate change risks. To guide our climate change strategy, Murphy has adopted a climate change position, and we are setting meaningful emissions reduction goals for our operated assets. The Company has established a Scope 1 and 2 GHG emissions intensity reduction target of 15% to 20% by 2030 from our 2019 level, excluding our discontinued and divested Malaysia operations. In addition, we have endorsed the goal of eliminating routine flaring by 2030, under the current World Bank definition of routine flaring.
Murphy recognizes that emissions are only one element of our total environmental footprint. Protecting natural resources is also an important factor in our overall sustainability efforts. See our 2024 Sustainability Report, located on the Company’s website, for details, which is not incorporated by reference hereto.
Further, we are subject to various international, foreign, national, state, provincial and local environmental, health and safety laws and regulations, including related to the generation, storage, handling, use, disposal and remediation of petroleum products, wastewater and hazardous materials; the emission and discharge of such materials to the environment, including GHG emissions; wildlife, habitat and water protection; the placement, operation and decommissioning of production equipment; and the health and safety of our employees, contractors and communities where our operations are located.
U.S. Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). CERCLA and similar state statutes impose joint and several liabilities, without regard to fault or legality of the conduct, on current and past owners or operators of a site where a release occurred and anyone who disposed or arranged for the disposal of a hazardous substance released at the site. Although CERCLA generally exempts “petroleum” from regulation, in the course of our operations, we may and could generate wastes that may fall within CERCLA’s definition of hazardous substances and may have disposed of these wastes at disposal sites owned and operated by others.
Water discharges. The U.S. Clean Water Act and analogous state laws impose restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of produced water and other oil and natural gas wastes, into regulated waters. The U.S. Oil Pollution Act (OPA) imposes certain duties and liabilities on the owner or operator of a facility, vessel or pipeline that is a source of or that poses the substantial threat of an oil discharge, or the lessee or permittee of the area in which a discharging offshore facility is located. OPA assigns joint and several liability, without regard to fault, to each liable party for oil removal costs and a variety of public and private damages. OPA also requires owners and operators of offshore oil production facilities to establish and maintain evidence of financial responsibility to cover costs that could be incurred in responding to an oil spill.
U.S. Bureau of Ocean Energy Management (BOEM) and the U.S. Bureau of Safety and Environmental Enforcement (BSEE) requirements. BOEM and BSEE have regulations applicable to lessees in federal waters that impose various safety, permitting and certification requirements applicable to exploration, development and production activities in the Gulf of America and also require lessees to have substantial U.S. assets and net worth or post bonds or other acceptable financial assurance that the regulatory obligations will be met. These include, in the Gulf of America, well design, well control, casing, cementing, real-time monitoring and subsea containment, among other items. Under applicable requirements, BOEM evaluates the financial strength and reliability of lessees and operators active on the U.S. Outer Continental Shelf, including the Gulf of America. If the BOEM determines that a company does not have the financial ability to meet its decommissioning and other obligations, that company will be required to post additional financial security as assurance.
Air emissions and climate change. The U.S. Clean Air Act and comparable state laws and regulations govern emissions of various air pollutants through the issuance of permits and other authorization requirements. Since 2009, the U.S. Environmental Protection Agency (EPA) has been monitoring and regulating GHG emissions,
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including carbon dioxide and methane, from certain sources in the oil and natural gas sector due to their association with climate change. In addition, international climate efforts have resulted in commitments from many countries to reduce GHG emissions and have called for parties to eliminate certain fossil fuel subsidies and pursue further action on non-carbon dioxide GHGs.
Murphy is currently required to report GHG emissions from its U.S. operations in the Gulf of America and onshore in South Texas and from its Canadian onshore business in British Columbia and Alberta. In Canada, Murphy is subject to GHG regulations and resultant carbon pricing programs specific to the jurisdiction of operation. Any limitations or further regulation of GHG, such as a cap and trade system, technology mandate, emissions tax, or expanded reporting requirements, could cause the Company to restrict operations, curtail demand for hydrocarbons generally, and/or cause costs to increase. Examples of cost increases include costs to operate and maintain facilities, install pollution emission controls and administer and manage emissions trading programs.
On March 8, 2024, the EPA published its final rules imposing new and stricter requirements for methane monitoring, reporting, and emissions control at certain oil and natural gas facilities. Further, the EPA amended its GHG Reporting Rule on May 14, 2024 to modify certain calculation methodologies, changes to the general reporting structure, and EPA’s treatment of advanced measurement technologies. Ultimately, both new rules will impact how much reporters owe under the new methane waste emissions charge (WEC) established under the Inflation Reduction Act (IRA) in 2022 and finalized in November 2024.
In January 2025, however, President Trump signed a series of executive orders that call upon the EPA to submit a report on the continuing applicability of its endangerment finding for GHGs under the Clean Air Act, direct federal executive departments and agencies to initiate a regulatory freeze for certain rules that have not taken effect, pending review by the newly appointed agency head, direct federal agencies to identify and exercise emergency authorities to facilitate conventional energy production, transportation, and refining, and mandate a review of existing regulations that may burden domestic energy development. The methane WEC’s relationship to the IRA also means that the methane WEC’s implementation may be subject to further acts of the U.S. Congress. Thus, the future of the new methane and waste emission charge rules, as well as the regulation of GHGs by the U.S. federal government, may be subject to change in the near-term.
Endangered and threatened species. The U.S. Endangered Species Act was established to protect endangered and threatened species. If a species is listed as threatened or endangered, restrictions may be imposed on activities adversely affecting that species’ habitat. Similar protections are offered to migratory birds, under the Migratory Bird Treaty Act, and marine mammals under the Marine Mammal Protection Act.
As noted above, Murphy is subject to various laws and regulatory regimes governing similar matters in other jurisdictions in which it operates. More specifically, Murphy’s operations in Canada are subject to and conducted under Canadian laws and regulations that address many of the same environmental, health and safety issues as those in the U.S., including, without limitation, pollution and contamination, air quality and emissions, water discharges and other health and safety concerns.
Health and Safety
Murphy’s commitment to safety is strong, and so are our actions to protect our workforce and communities. Our employees are our most valuable asset. Murphy strives to achieve incident-free operations through continuous improvement processes managed by the Company’s Health, Safety, Environment (HSE) Management System, which engages all personnel, contractors and partners associated with Murphy operations and facilities and provides a consistent method for integrating HSE concepts into our procedures and programs. We work hard to build a culture of safety across our organization, with regular training, exercise drills and key targeted safety initiatives.
Safety. The Company is subject to the requirements of the U.S. Occupational Safety and Health Act (OSHA) and comparable foreign and state laws that regulate the protection of the health and safety of workers. In addition, the OSHA hazard communication standard requires that certain information regarding hazardous materials used or produced in Murphy’s operations be maintained and provided to employees, state and local government authorities and citizens. In Canada, the Company is subject to Federal Occupational Health and Safety Legislation, the provincially-administered Occupational Health and Safety Act (Alberta), the Workers Compensation Act (British Columbia) and the Workplace Hazardous Materials Information System.
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Environmental, Social and Governance (ESG) Disclosure
Our annual sustainability report is informed by internationally recognized ESG reporting frameworks and standards, including Sustainability Accounting Standards Board, Task Force on Climate-related Financial Disclosures (TCFD), Global Reporting Initiative, Ipieca and American Petroleum Institute.
As this is an area of continual improvement across our industry, we strive to update our disclosures in line with operating developments and with emerging best practice ESG reporting standards. In 2024, we published our sixth annual sustainability report, located on the Company’s website, which is not incorporated by reference hereto.
Human Capital Management
At Murphy, we believe in providing energy that empowers people, and that is what our 750 employees do every day. As of December 31, 2024, we had 482 office-based employees and 268 field employees, all of whom are guided by our mission, vision, values and behaviors. Together with the Executive Leadership Team, the Vice President, Human Resources and Administration, who reports directly to our President and Chief Executive Officer (CEO), is responsible for developing and executing our human capital management strategy. This includes the attraction, recruitment, development and engagement of talent to deliver on our strategy, the design of employee compensation, health and welfare benefits, and talent programs. We focus on the following factors in order to implement and develop our human capital strategy:
•Employee Compensation Programs
•Employee Performance and Feedback
•Talent Development and Training
•Health and Welfare Benefits
•Employee Engagement
The Board receives related updates from the Vice President, Human Resources and Administration on a regular basis including the review of compensation, benefits, succession and talent development.
Employee Compensation Programs
Our purpose, to provide energy that empowers people, includes tying a portion of our employees’ pay to performance in a variety of ways, including incentive compensation and performance-based bonus programs, while maintaining the best interest of stockholders. We benchmark for market practices and regularly review our compensation and hiring acceptance rates against the market to ensure competitiveness to attract and retain the best talent. We believe our current practices align our employees’ compensation with the interests of our stockholders and support our focus on cash flow generation, capital return and environmental stewardship. To enhance employee understanding of their total remuneration package extended by Murphy, we introduced Total Reward Statements for employees in the U.S., Canada and Vietnam. For further details on the Company’s compensation framework, please see the Compensation Discussion and Analysis section of the forthcoming Proxy Statement relating to the Annual Meeting of Stockholders on May 14, 2025.
Employee Performance and Feedback
We are committed to efforts to enhance our employees’ professional growth and development through feedback that utilizes our internal performance management system (Murphy Performance Management - MPM). The purpose of the MPM process is to show our commitment to the development of all employees and to better align rewards with Company and individual performance. The goals of the MPM process are the following:
•Drive behavior to align with the Company’s mission, vision, values and behaviors;
•Develop employee capabilities through effective feedback and coaching; and
•Maintain a process that is consistent throughout the organization to measure employee performance that is tied to the Company’s and stockholders’ interests.
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All employees’ performance is evaluated at least annually through self-assessments that are reviewed in discussions with supervisors. Employees’ performance is evaluated on various key performance indicators set annually, including behaviors that support our mission, vision, values and contributions toward executing our Company’s goals and business strategy.
Talent Development and Training
Employees are able to participate in continuous training and development, with the goal of equipping them for success and providing increased opportunities for growth. Through our digital platform, My Murphy Learning, employees have access to LinkedIn Learning with more than 10,600 courses, Continuing Education Unit credit and certification opportunities, and access to expert instructors. We also administer mandatory compliance training for our employees through My Murphy Learning with 100% utilization. Finally, we provide a tuition reimbursement program for those who choose to acquire additional knowledge to increase their effectiveness in their present position or to prepare for career advancement.
To enhance employees’ commitment to and understanding of the Company’s Scorecard, we introduced a training course entitled, Understanding Your Annual Incentive Plan, which covers all metrics in our scorecard. This training opportunity, in particular, enhanced the business acumen of our employee base, as well as brought renewed focus to how we measure success.
We strive to empower our leadership with programs that offer career advancement for experienced and emerging leaders. In 2024, over 50 managers participated in a leadership program, from a top-rated institution, addressing focus areas such as strategic agility, decision making, building high-performing teams and enhancing trust. Furthermore, we implemented a refreshed and expanded Technical Career Map to enhance the development of 125 engineering and geoscience employees.
We encourage employee engagement and solicit feedback through internal surveys, focus groups and our employee-led Ambassador program to gain insights into workplace experiences. Employees are provided opportunities to raise suggestions and collaborate with leadership to improve programs and increase their alignment with Murphy’s mission, vision, values and behaviors.
To monitor the effectiveness of our human capital investment and development programs, we track voluntary turnover. This data is shared on a regular basis with our Executive Leadership Team, who use it, in addition to other pertinent data, to develop our human capital strategy. In 2024, our voluntary employee turnover rate, including retirements, was 7%.
Health and Welfare Benefits
We believe that doing our part to aid in maintaining the health and welfare of our employees is a critical element of Murphy’s success. As such, we provide our employees and their families with a comprehensive set of subsidized benefits that are competitive and aligned with Murphy’s mission, vision, values and behaviors. We also believe that the well-being of our employees is enhanced when they can give back to their local communities or charities through programs like the Company Matching Gift Program, the “Impact - Murphy Makes a Difference” Program, or on their own with a Company match for donations.
Finally, we offer an Employee Assistance Program that provides confidential assistance to employees and their immediate family members for mental and physical well-being, as well as legal and financial issues. We also maintain an Ethics Hotline that is available to all our employees to report, anonymously if desired, any matter of concern. Communications to the hotline, which is facilitated by an independent third party, are routed to appropriate functions, Human Resources, Law or Compliance, for investigation and resolution.
Employee Engagement
At Murphy, we strive for excellence in our people and our work. We believe that having employees who reflect a broad range of backgrounds, experiences and perspectives contributes to a more productive, engaged workforce and a more enriching environment for everyone. This belief underlies Murphy’s commitment to fostering an inclusive workplace where the most talented want to work and where our employees understand our culture of belonging. In furtherance of that commitment, Murphy, through its policies and its actions, requires strict compliance with all anti-harassment and anti-discrimination laws and does not tolerate harassment or discrimination of any kind based on any protected characteristic.
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The Board receives updates on employee composition and recruiting, hiring, promotion, and retention of employees from the Vice President, Human Resources and Administration on a regular cadence. As of December 31, 2024, our U.S. and international workforce was comprised of approximately 24% females, and our U.S. workforce was comprised of approximately 33% of minority groups (as defined by the U.S. Equal Employment Opportunity Commission).
We also support interest-based groups such as sports, hobbies, and charity volunteering in our communities. In 2024, we increased the number of employee-led, self-directed Employee Resource Groups with the introduction of ASPIRE (Asian and Pacific Islander Women) and VIPER (Veteran Integration and Purpose). Participation is voluntary, with membership and programming open to all Murphy employees.
Website Access to SEC Reports
Murphy Oil’s internet address is http://www.murphyoilcorp.com. The information contained on the Company’s Website is not part of, or incorporated into, this report on Form 10-K.
The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available on Murphy’s Website, free of charge, as soon as reasonably practicable after such reports are filed with, or furnished to, the SEC. You may also access these reports at the SEC’s Website at http://www.sec.gov.

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ITEM 1A. RISK FACTORS
Item 1A. RISK FACTORS
The Company faces risks in the normal course of business and through global, regional and local events that could have an adverse impact on its reputation, operations, and financial performance. The Board exercises oversight of the Company’s enterprise risk management program, which includes strategic, operational and financial matters, as well as compliance and legal risks. The Board receives updates annually on the risk management processes.
The following are some important factors that could cause the Company’s actual results to differ materially from those projected in any forward-looking statements. If any of the events or circumstances described in any of the following risk factors occurs, our business, results of operations and/or financial condition could be materially and adversely affected, and our actual results may differ materially from those contemplated in any forward-looking statements we make in any public disclosures.
Price Risk Factors
Volatility in the global prices of crude oil, natural gas and NGLs can significantly affect the Company’s operating results, cash flows and financial condition.
Among the most significant variable factors impacting the Company’s results of operations are the sales prices for crude oil and natural gas that it produces. Many of the factors influencing prices of crude oil and natural gas are beyond our control. These factors include:
•worldwide and domestic supplies of, and demand for, crude oil, natural gas and NGLs;
•the ability of the members of the Organization of the Petroleum Exporting Countries (OPEC) and certain non-OPEC members, for example, Russia, to agree to maintain or adjust production levels;
•the production levels of non-OPEC countries, including, amongst others, production levels in the shale plays in the U.S.;
•political instability or armed conflict in oil and natural gas producing regions, such as the Russia-Ukraine conflict and Israeli-Palestinian conflict;
•the level of drilling, completion and production activities by other exploration and production companies, and variability therein, in response to market conditions;
•changes in weather patterns and climate, including those that may result from climate change;
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Item 1A. Risk Factors - Continued
•natural disasters such as hurricanes and tornadoes, including those that may result from climate change;
•the price, availability and the demand for and of alternative and competing forms of energy, such as nuclear, hydroelectric, wind or solar;
•the effect of conservation efforts and focus on climate-change;
•technological advances affecting energy consumption and energy supply;
•increased activism against, or change in public sentiment for, oil and natural gas exploration, development, and production activities and considerations including climate change and the transition to a lower carbon economy;
•the occurrence or threat of epidemics or pandemics, such as the outbreak of COVID-19, or any government response to such occurrence or threat which may lower the demand for hydrocarbon fuels;
•domestic and foreign governmental regulations, taxes and other actions, including tariffs, economic sanctions and further legislation requiring, subsidizing or providing tax benefits for the use or generation of alternative energy sources and fuels; and
•general economic conditions worldwide, including inflationary conditions and related governmental policies and interventions.
West Texas Intermediate (WTI) crude oil prices averaged $75.72 per BBL in 2024, compared to $77.62 in 2023 and $94.23 in 2022. Certain U.S. and Canadian crude oils are priced from oil indices other than WTI, and these indices are influenced by different supply and demand forces than those that affect WTI prices. The most common crude oil indices used to price the Company’s crude include Mars, WTI Houston (MEH), Heavy Louisiana Sweet (HLS) and Brent.
The average New York Mercantile Exchange (NYMEX) natural gas sales price was $2.24 per million British Thermal Units (MMBTU) in 2024, compared to $2.53 in 2023 and $6.38 in 2022. The Company also has exposure to the Canadian benchmark natural gas price, Alberta Energy Company (AECO), which averaged C$1.46 per MCF in 2024, compared to C$2.64 in 2023 and C$5.31 in 2022. The Company has entered into certain forward fixed price contracts as detailed in the “Outlook” section beginning on page 51 and spot contracts providing exposure to other market prices at specific sales points such as Malin (Oregon, U.S.) and Dawn (Ontario, Canada).
Lower prices, should they occur, will materially and adversely affect our results of operations, cash flows and financial condition. Lower oil and natural gas prices could reduce the amount of oil and natural gas that the Company can economically produce, resulting in a reduction in the proved oil and natural gas reserves we could recognize, which could impact the recoverability and carrying value of our assets. The Company cannot predict how changes in the sales prices of oil and natural gas will affect the results of operations in future periods.
Lower oil and natural gas prices adversely affect the Company in several ways:
•Lower sales value for the Company’s oil and natural gas production reduces cash flows and net income.
•Lower cash flows may cause the Company to reduce its capital expenditure program, thereby potentially restricting its ability to grow production and add proved reserves.
•Lower oil and natural gas prices could lead to impairment charges in future periods, therefore reducing net income.
•Reductions in oil and natural gas prices could lead to reductions in the Company’s proved reserves in future years. Low prices could make a portion of the Company’s proved reserves uneconomic, which in turn could lead to the removal of certain of the Company’s year-end reported proved oil reserves in future periods. These reserve reductions could be significant.
•Lower oil and natural gas prices could lead to an inability to access, renew, or replace credit facilities, and could also impair access to other sources of funding as these mature, potentially negatively impacting our liquidity.
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Item 1A. Risk Factors - Continued
•Lower prices for oil and natural gas could cause the Company to lower its dividend because of lower cash flows.
See Note K for additional information on the derivative instruments used to manage certain risks related to commodity prices.
Murphy’s commodity price risk management may limit the Company’s ability to fully benefit from potential future price increases for oil and natural gas.
The Company, from time to time, enters into various contracts to protect its cash flows against lower oil and natural gas prices. To the extent that the Company enters into these contracts and in the event that prices for oil and natural gas increase in future periods, the Company will not fully benefit from the price improvement on all production. See Note K for additional information on the derivative instruments used to manage certain risks related to commodity prices.
Operational Risk Factors
Murphy operates in highly competitive environments which could adversely affect it in many ways, including its profitability, cash flows and its ability to grow.
Murphy operates in the oil and natural gas industry and experiences competition from other oil and natural gas companies, which include major integrated oil companies, independent producers of oil and natural gas, and state-owned foreign oil companies. Many of the major integrated and state-owned oil companies and some of the independent producers that compete with the Company have substantially greater resources than Murphy.
In addition, the oil industry as a whole competes with other industries in supplying energy requirements around the world. Within the industry, Murphy competes for, among other things, valuable acreage positions, exploration licenses, drilling equipment and talent.
Exploration drilling results can significantly affect the Company’s operating results.
The Company drills exploratory wells which subject its exploration and production operating results to exposure to dry hole expense, which has in the past, and may in the future, adversely affect our results of operations. The Company plans to continue assessing exploration activities as part of its overall strategy. In 2024, the Company participated in four exploration wells. The Hai Su Vang-1X (Golden Sea Lion), Block 15/2-17 exploration well, located in offshore Vietnam, and the non-operated Ocotillo #1 (Mississippi Canyon 40) exploration well, located in the Gulf of America, resulted in commercial discoveries while the Sebastian #1 (Mississippi Canyon 387) and non-operated Orange #1 (Mississippi Canyon 216) wells, located in the Gulf of America, did not encounter commercial hydrocarbons. Additionally, the Company expensed previously suspended costs associated with the Hoffe Park #1 (Mississippi Canyon 166) well which was determined to be non-commercial. The Company has budgeted $145 million for its 2025 exploration program, which includes drilling two wells in Vietnam, two wells in the Gulf of America, and one well in Côte d’Ivoire.
If Murphy cannot replace its oil and natural gas reserves, it may not be able to sustain or grow its business.
Murphy continually depletes its oil and natural gas reserves as production occurs. To sustain and grow its business, the Company must successfully replace the oil and natural gas it produces with additional reserves. Therefore, it must create and maintain a portfolio of good prospects for future reserves additions and production. The Company must find, acquire or develop, and produce reserves at a competitive cost to be successful in the long-term. Murphy’s ability to operate profitably in the exploration and production business, therefore, is dependent on its ability to find (and/or acquire), develop and produce oil and natural gas reserves at costs that are less than the realized sales price for these products.
Murphy’s proved reserves are based on the professional judgment of its engineers and may be subject to revision.
Proved reserves of crude oil, natural gas and NGLs included in this report on pages 106 through 115 have been prepared according to the SEC guidelines by qualified company personnel or qualified independent engineers based on an unweighted average of crude oil, natural gas and NGL prices in effect at the beginning of each month of the respective year as well as other conditions and information available at the time the estimates were prepared. Estimation of reserves is a subjective process that involves professional judgment by engineers about volumes to be recovered in future periods from underground oil and natural gas reservoirs. Estimates of economically
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Item 1A. Risk Factors - Continued
recoverable crude oil, natural gas and NGL reserves and future net cash flows depend upon a number of variable factors and assumptions, and consequently, different engineers could arrive at different estimates of reserves and future net cash flows based on the same available data and using industry accepted engineering practices and scientific methods. In 2024, 71.6% of the proved reserves were audited by third-party auditors.
Murphy’s actual future oil and natural gas production may vary substantially from its reported quantity of proved reserves due to a number of factors, including:
•Oil and natural gas prices which are materially different from prices used to compute proved reserves;
•Operating and/or capital costs which are materially different from those assumed to compute proved reserves;
•Future reservoir performance which is materially different from models used to compute proved reserves; and
•Governmental regulations or actions which materially impact operations of a field.
The Company’s proved undeveloped reserves represent significant portions of total proved reserves. As of December 31, 2024, and including noncontrolling interests, approximately 33% of the Company’s crude oil proved reserves, 38% of NGL proved reserves and 45% of natural gas proved reserves are undeveloped. The ability of the Company to reclassify these undeveloped proved reserves to the proved developed classification is generally dependent on the successful completion of one or more operations, which might include further development drilling, construction of facilities or pipelines and well workovers.
The discounted future net revenues from our proved reserves as reported on pages 119 and 120 should not be considered as the market value of the reserves attributable to our properties. As required by U.S. generally accepted accounting principles (GAAP), the estimated discounted future net revenues from our proved reserves are based on an unweighted average of the oil and natural gas prices in effect at the beginning of each month during the year. Actual future prices and costs may be materially higher or lower than those used in the reserves computations.
In addition, the 10% discount factor that is required to be used to calculate discounted future net revenues for reporting purposes under GAAP is not necessarily the most appropriate discount factor based on our cost of capital, the risks associated with our business and the risk associated with the industry in general.
Murphy is reliant on certain third party infrastructure to develop projects and operations.
The Company relies on the availability and capacity of infrastructure, such as transportation and processing facilities, and equipment that are often owned and operated by others. These third-party systems, facilities, and equipment may not always be available to the Company and, if available, may not be available at a price that is acceptable to the Company. The unavailability or high cost of such equipment or infrastructure could adversely affect our ability to establish and execute exploration and development plans within budget and on a timely basis, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Our inability to access appropriate equipment and infrastructure in a timely manner and on acceptable terms may hinder our access to oil and natural gas markets or delay our oil and natural gas production.
Murphy is sometimes reliant on joint venture partners for operating assets, and/or funding development projects and operations.
Certain of the Company’s major oil and natural gas producing properties are operated by others. Therefore, Murphy does not fully control all activities at certain of its revenue generating properties. During 2024, approximately 21% of the Company’s total production was at fields operated by others, while at December 31, 2024, approximately 14% of the Company’s total proved reserves were at fields operated by others.
Some of Murphy’s development projects entail significant capital expenditures and have long development cycle times. As a result, the Company’s partners must be able to fund their share of investment costs through the development cycle, through cash flow from operations, external credit facilities, or other sources, including financing arrangements. Murphy’s partners are also susceptible to certain of the risk factors noted herein,
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Item 1A. Risk Factors - Continued
including, but not limited to, commodity prices, fiscal regime changes, government project approval delays, regulatory changes, credit downgrades and regional conflict. If one or more of these factors negatively impacts a project operator’s or partners’ cash flows or ability to obtain adequate financing, or if an operator of our projects fails to adequately perform operations or fulfill its obligations under the applicable agreements, it could result in a delay or cancellation of a project, resulting in a reduction of the Company’s reserves and production, which negatively impacts the timing and receipt of planned cash flows and expected profitability.
Murphy’s business is subject to operational hazards, severe weather events, physical security risks and risks normally associated with the exploration and production of oil and natural gas, which could become more significant as a result of climate change.
The Company operates in a variety of locales, including urban, remote, and sometimes inhospitable, areas around the world. The occurrence of an event, including but not limited to acts of nature such as hurricanes, floods, earthquakes (and other forms of severe weather), mechanical equipment failures, industrial accidents, fires, explosions, acts of war, civil unrest, piracy and acts of terrorism could result in the loss of hydrocarbons and associated revenues, environmental pollution or contamination, personal injury (including death), and property damages for which the Company could be deemed to be liable and which could subject the Company to substantial fines and/or claims for punitive damages. This risk extends to actions and operational hazards of other operators in the industry, which may also impact the Company.
The location of many of Murphy’s key assets causes the Company to be vulnerable to severe weather, including hurricanes, tropical storms and extreme temperatures. Many of the Company’s offshore fields are in the Gulf of America, where hurricanes and tropical storms can lead to shutdowns and damages. The U.S. hurricane season runs from June through November. Moreover, scientists have predicted that increasing concentrations of GHG in the earth’s atmosphere may produce climate changes that increase significant weather events, such as increased frequency and severity of storms, droughts, floods and other climatic events. If such effects were to occur, our operations could be adversely affected. Although the Company maintains insurance for such risks, due to policy deductibles and possible coverage limits, weather-related risks to our operations are not fully insured. In addition, the physical effects of climate change may generally result in reduced availability of relevant insurance coverage on the market. For additional details on insurance, see “Risk Factors - General Risk Factors - Murphy’s insurance may not be adequate to offset costs associated with certain events, and there can be no assurance that insurance coverage will continue to be available in the future on terms that justify its purchase.”
In addition, certain customer and supplier assets, such as storage terminals, processing facilities, refineries and pipelines, are located in areas that may be prone to severe weather events, including hurricanes, winter storms, floods and major tropical storms, all of which may be exacerbated by climate change. Severe weather events that significantly affect facilities belonging to such customers or suppliers may reduce demand for our products and interrupt our ability to bring products to market and may therefore materially and adversely affect our results of operations, cash flows and financial condition, even if our own facilities escape significant damage.
Hydraulic fracturing operations subject the Company to operational risks inherent in the drilling and production of oil and natural gas.
The Company’s onshore North America oil and natural gas production is dependent on a technique known as hydraulic fracturing whereby water, sand and certain chemicals are injected into deep oil and natural gas bearing reservoirs in North America. This process occurs thousands of feet below the surface and creates fractures in the rock formation within the reservoir which enhances migration of oil and natural gas to the wellbore.
The risks associated with hydraulic fracturing operations include, but are not limited to, underground migration or surface spillage due to releases of oil, natural gas, formation water or well fluids, as well as any related surface or groundwater contamination, including from petroleum constituents or hydraulic fracturing chemical additives. Ineffective containment of surface spillage and surface or groundwater contamination resulting from hydraulic fracturing operations, including from petroleum constituents or hydraulic fracturing chemical additives, could result in environmental pollution, remediation expenses, and third-party claims alleging damages, which could adversely affect the Company’s financial condition and results of operations. In addition, hydraulic fracturing requires significant quantities of water; the wastewater from oil and natural gas operations is often disposed of through underground injection. Certain increased seismic activities have been linked to underground water injection. Any diminished access to water for use in the hydraulic fracturing process, any inability to properly
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Item 1A. Risk Factors - Continued
dispose of wastewater, or any further restrictions placed on wastewater, could curtail the Company’s operations due to regulatory initiatives or natural constraints such as drought or otherwise result in operational delays or increased costs.
Murphy is subject to numerous environmental, health and safety laws and regulations, and such existing and any potential future laws and regulations may result in material liabilities and costs.
The Company’s operations are subject to various international, foreign, national, state, provincial and local environmental, health and safety laws, regulations, governmental actions and permit requirements, including related to the generation, storage, handling, use, disposal and remediation of petroleum products, wastewater and hazardous materials; the emission and discharge of such materials to the environment, including methane and other GHG emissions; wildlife, habitat and water protection; water access, use and disposal; the placement, operation and decommissioning of production equipment; the health and safety of our employees, contractors and communities where our operations are located, including indigenous communities; and the causes and impacts of climate change. The laws, regulations, governmental actions and permit requirements are subject to frequent change and have tended to become stricter over time and at times may be motivated by political considerations. They can impose permitting and financial assurance obligations, as well as operational controls and/or siting constraints on our business, and can result in additional capital and operating expenditures. For example, in March 2024, the U.S. EPA published its final rule regulating methane and volatile organic compounds emissions in the oil and gas industry which, among other things, requires periodic inspections to detect leaks (and subsequent repairs), places stringent restrictions on venting and flaring of methane, and establishes a program whereby third parties can monitor and report large methane emissions to the U.S. EPA. In November 2024, the U.S. EPA published its final rule implementing a charge on large emitters of waste methane from the oil and gas sector. The charge, referred to as the WEC, is a component of the Biden Administration’s Methane Emissions Reduction Program to limit methane emissions from the oil and gas industry under the IRA of 2022. In addition, it is possible in the future that certain regulatory bodies such as the Railroad Commission of Texas may enact regulation that bans or reduces flaring for U.S. Onshore operations, and certain regulatory bodies in Canada may decide to revoke permits or pause the issuance of permits as a result of non-compliance with, or litigation related to, environmental, health and safety laws and regulations. Compliance with such regulations could result in capital investment or operating costs which would reduce the Company’s net cash flows and profitability.
Murphy also could be subject to strict liability for environmental contamination in various jurisdictions where it operates, including with respect to its current or former properties, operations and waste disposal sites, or those of its predecessors. Contamination has been identified at some locations, and the Company has been required, and in the future may be required, to investigate, remove or remediate previously disposed wastes; or otherwise clean up contaminated soil, surface water or groundwater, address spills and leaks from pipelines and production equipment, and perform remedial plugging operations. In addition to significant investigation and remediation costs, such matters can result in fines and also give rise to third-party claims for personal injury and property or other environmental damage.
The Company primarily uses hydraulic fracturing in the Eagle Ford Shale in South Texas and in Kaybob Duvernay and Tupper Montney in Western Canada. Texas law imposes permitting, disclosure, disposal and well construction requirements on hydraulic fracturing operations, as well as public disclosure of certain information regarding the components used in the hydraulic fracturing process. Regulations in the provinces of British Columbia and Alberta also govern various aspects of hydraulic fracturing activities under their jurisdictions. It is possible that Texas, other states in which we may conduct fracturing in the future, the U.S., Canadian provinces and certain municipalities may adopt further laws or regulations which could render the process unlawful, less effective or drive up its costs. If any such action is taken in the future, the Company’s production levels could be adversely affected, or its costs of drilling and completion could be increased. Once new laws and/or regulations have been enacted and adopted, the costs of compliance are appraised.
In addition, the BOEM and the BSEE have regulations applicable to lessees in federal waters that impose various safety, permitting and certification requirements applicable to exploration, development and production activities in the Gulf of America, and also require lessees to have substantial U.S. assets and net worth or post bonds or other acceptable financial assurance that the regulatory obligations will be met. These include, in the Gulf of America, well design, well control, casing, cementing, real-time monitoring, and subsea containment, among other items. Under applicable requirements, BOEM evaluates the financial strength and reliability of
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Item 1A. Risk Factors - Continued
lessees and operators active on the U.S. Outer Continental Shelf. If the BOEM determines that a company does not have the financial ability to meet its decommissioning and other obligations, that company will be required to post additional financial security as assurance.
In addition, various executive orders by the Biden Administration and the Department of Interior over the course of 2021 regarding a temporary suspension of normal-course issuance of permits for fossil fuel development on federal lands and a pause on new oil and natural gas leases on public lands and offshore waters, and the Secretary of the Interior’s overhaul of permitting and leasing regulations and rates, finalized in April 2024, could adversely impact Murphy’s operations. These developments demonstrate the uncertainty regarding the regulation of oil and natural gas related to shifts in political power in the U.S. For further details, see “Risk Factors - General Risk Factors - Murphy’s operations and earnings have been and will continue to be affected by domestic and worldwide political developments.”
We face various risks associated with increased activism against, or change in public sentiment for, oil and natural gas exploration, development, and production activities and sustainability considerations, including climate change and the transition to a lower carbon economy.
Opposition toward oil and natural gas drilling, development, and production activity has been growing globally. Companies in the oil and natural gas industry are often the target of activist efforts from both individuals and nongovernmental organizations and other stakeholders regarding safety, human rights, climate change, environmental matters, sustainability, and business practices. Anti-development activists are working to, among other things, delay or cancel certain operations such as offshore drilling and development or onshore hydraulic fracking.
Activism may continue to increase regardless of the U.S. Administration’s environmental and climate change executive orders described earlier in this Form 10-K report. Our need to incur costs associated with responding to these initiatives or complying with any new legal requirements resulting from these activities that are substantial and not adequately provided for could have a material adverse effect on our business, financial condition and results of operations. In addition, a change in public sentiment regarding the oil and natural gas industry could result in a reduction in the demand for our products or otherwise affect our results of operations or financial condition.
We may face increased scrutiny from investors and other stakeholders related to our sustainability activities, including the goals, targets and objectives we announce, our methodologies and timelines for pursuing them and related disclosures. If our sustainability practices do not meet investor or other stakeholder expectations and standards, which continue to evolve, our reputation, our ability to attract or retain employees and our attractiveness as an investment or business partner could be negatively affected. Similarly, our failure or perceived failure to pursue or fulfill our sustainability-focused goals, targets and objectives, to comply with ethical, environmental or other standards, regulations or expectations or to satisfy various reporting standards with respect to these matters, within the timelines we announce, or at all, could adversely affect our business or reputation, as well as expose us to government enforcement actions and private litigation.
While the Company has been named a co-defendant with other oil and natural gas companies in lawsuits related to climate change, these lawsuits have not resulted in, and are not currently expected to result in, material liability for the Company. Depending on the evolution of laws, regulations and litigation outcomes relating to climate change, there can be no guarantee that climate change litigation will not in the future materially adversely affect our results of operations, cash flows and financial condition. For further details on risks related to legal proceedings more generally, see “Risk Factors - General Risk Factors - Lawsuits against Murphy and its subsidiaries could adversely affect its operating results.”
Financial Risk Factors
Capital financing may not always be available to fund Murphy’s activities; and interest rates could impact cash flows.
Murphy usually must spend and risk a significant amount of capital to find and develop reserves before revenue is generated from production. Although most capital needs are funded from operating cash flow, the timing of cash flows from operations and capital funding requirements may not always coincide, and the levels of cash flow generated by operations may not fully cover capital funding requirements, especially in periods of low commodity prices. Therefore, the Company maintains financing arrangements with lending institutions to meet
PART I
Item 1A. Risk Factors - Continued
certain funding needs. The Company periodically renews these financing arrangements based on foreseeable financing needs or as they expire. During the fourth quarter of 2024, the Company entered into a credit agreement governing a $1.35 billion revolving credit facility (RCF). The RCF is a senior unsecured guaranteed facility and will expire in October 2029. As of December 31, 2024, the Company had no outstanding borrowings under the RCF. See Note F for further details on the RCF.
The Company’s ability to obtain additional financing is affected by a number of factors, including the market environment, our operating and financial performance, investor sentiment, our ability to incur additional debt in compliance with agreements governing our outstanding debt, and the Company’s credit ratings. A ratings downgrade could materially and adversely impact the Company’s ability to access debt markets, increase the borrowing cost under the Company’s credit facility and the cost of any additional indebtedness we incur, and potentially require the Company to post additional letters of credit or other forms of collateral for certain obligations. Murphy partially manages this risk through borrowing at fixed rates wherever possible; however, rates when refinancing or raising new capital are determined by factors outside of the Company’s control.
Further, changes in investors’ sentiment or view of risk of the exploration and production industry, including as a result of concerns over climate change, could adversely impact the availability of future financing. Specifically, certain financial institutions (including certain investment advisors and sovereign wealth, pension and endowment funds), in response to concerns related to climate change and the requests and other influence of environmental groups and similar stakeholders, have elected to shift some or all of their investments away from fossil fuel-related sectors, and additional financial institutions and other investors may elect to do likewise in the future. As a result, fewer financial institutions and other investors may be willing to invest in, and provide capital to, companies in the oil and natural gas sector, which, in turn, could adversely impact our cost of capital.
Since 2022, the Company undertook several actions to reduce overall debt. Murphy plans to continue with the Company’s deleveraging initiatives, but there can be no assurance that these efforts will be successful and, if not, the Company’s financial conditions and prospects could be adversely affected. See Note F for information regarding the Company’s outstanding debt as of December 31, 2024.
We may be unable to meet our capital allocation framework of returning a percentage of adjusted free cash flow to shareholders through share repurchases and potential dividend increases, which could decrease expected returns on an investment in our common stock.
Our capital allocation framework includes returning a percentage of adjusted free cash flow to shareholders through share repurchases and potential dividend increases. We may, from time to time, redeem, repurchase, retire or otherwise acquire our outstanding debt through privately negotiated transactions, open market purchases, redemptions, tender offers or otherwise, but we are under no obligation to do so. There can be no assurance that we will seek to do any of the foregoing or that we will be able to do any of the foregoing on terms acceptable to us or at all.
In connection with our capital allocation framework, the Board authorized a share repurchase program, as described in this Form 10-K report. Share repurchases and dividends are authorized and determined by the Board at its sole discretion and depend upon a number of factors, including available liquidity, market conditions, applicable legal requirements and other factors. We can provide no assurance that we will make share repurchases or pay dividends in accordance with our capital allocation framework, or at all. Any elimination of, or downward revision in, our share repurchase program, dividend payment plans, or capital allocation framework could have an adverse effect on the market price of our common stock.
Meeting our capital allocation framework strategy requires us to generate consistent adjusted free cash flow and have available capital in the years ahead in an amount sufficient to enable us to maintain a conservative capital structure and liquidity position and invest in organic and inorganic growth, as well as to return a significant portion of the cash generated to shareholders through share repurchases and potential dividend increases. The amount of adjusted free cash flow returned in any quarter during the year may vary and may be more or less than our capital allocation framework. We may not meet this goal if we use our available cash to satisfy other priorities, if we have insufficient funds available to repurchase shares or pay dividends, or if the Board determines to change or discontinue share repurchases or dividend payments.
PART I
Item 1A. Risk Factors - Continued
Murphy’s operations could be adversely affected by changes in foreign exchange rates.
The Company’s worldwide operational scope exposes it to risks associated with foreign currencies. Most of the Company’s business is transacted in U.S. dollars, and therefore the Company and most of its subsidiaries are U.S. dollar functional entities for accounting purposes. However, the Canadian dollar is the functional currency for all Canadian operations. This exposure to currencies other than the U.S. dollar functional currency can lead to impacts on consolidated financial results from foreign currency translation. On occasions, the Canadian business may hold assets or incur liabilities denominated in a currency which is not Canadian dollars which could lead to exposure to foreign exchange rate fluctuations. The Company operates in various regions around the world which inherently introduces exposure to changes in foreign exchange rates when transacting in local currencies. See also Note K for additional information on derivative contracts.
The costs and funding requirements related to the Company’s retirement plans are affected by several factors.
A number of actuarial assumptions impact funding requirements for the Company’s retirement plans. The most significant of these assumptions include return on assets, long-term interest rates and mortality. If the actual results for the plans vary significantly from the actuarial assumptions used, or if laws regulating such retirement plans are changed, Murphy could be required to make more significant funding payments to one or more of its retirement plans in the future and/or it could be required to record a larger liability for future obligations in its Consolidated Balance Sheet.
Murphy has limited control over supply chain costs.
The Company often experiences pressure on its operating and capital expenditures in periods of strong crude oil and natural gas prices because an increase in exploration and production activities due to high oil and natural gas sales prices generally leads to higher demand for, and consequently higher costs for, goods and services in the oil and natural gas industry. In addition, periods of inflationary pressure in the wider economy, as seen during 2022, can also lead to a similar increase in the cost of goods and services for the Company. Murphy has a dedicated department focused on managing supply chain and input costs. Murphy also has certain transportation, processing and production handling services costs fixed through long-term contracts and commitments and therefore is partly protected from the increasing price of services. However, from time to time, Murphy will seek to enter new commitments, exercise options to extend contracts and retender contracts for rigs and other industry services which could expose Murphy to the impact of higher prices.
The Company is exposed to credit risks associated with (i) sales of certain of its products to customers, (ii) joint venture partners and (iii) other counterparties.
Murphy is exposed to credit risk in three principal areas:
•Accounts receivable credit risk from selling its produced commodity to customers;
•Joint venture partners related to certain oil and natural gas properties operated by the Company that may not be able to meet their financial obligation to pay for their share of capital and operating costs as they become due; and
•Counterparty credit risk related to forward price commodity hedge contracts to protect the Company’s cash flows against lower oil and natural gas prices.
The inability of a purchaser of the Company’s produced commodity, a joint venture partner of the Company, or counterparty in a forward price commodity hedge to meet their respective payment obligations to the Company could have an adverse effect on Murphy’s future earnings and cash flows.
General Risk Factors
We face various risks related to health epidemics, pandemics and similar outbreaks, which may have material adverse effects on our business, financial position, results of operations and/or cash flows.
The future impact of any health epidemic, pandemic (such as COVID-19) or similar outbreak cannot be predicted, and any resurgence of disease may cause additional volatility in commodity prices. See “Risk Factors - Price Risk Factors - Volatility in the global prices of crude oil, natural gas and NGLs can significantly affect the Company’s operating results.”
PART I
Item 1A. Risk Factors - Continued
If significant portions of our workforce are unable to work effectively, including because of illness, quarantines, government actions, facility closures or other restrictions in connection with an epidemic, pandemic or similar outbreak, our operations will likely be impacted and our ability to produce oil, natural gas and NGLs will likely decrease. We may be unable to perform fully on our commitments, and our costs may increase as a result of such epidemic, pandemic or similar outbreak. These cost increases may not be fully recoverable or adequately covered by insurance.
In addition, an epidemic, pandemic or similar outbreak could also cause disruption in our supply chain; cause delay or limit the ability of vendors and customers to perform, including in making timely payments to us; and cause other unpredictable events.
We cannot predict the impact of an epidemic, pandemic or similar outbreak. The extent to which any such epidemics, pandemics or similar outbreaks may impact our results will depend on future developments, including, among other factors, the duration and spread of the virus and its variants, availability, acceptance and effectiveness of vaccines along with related travel advisories, quarantines and restrictions, the recovery time of the disrupted supply chains and industries, the impact of labor market interruptions, and the impact of government interventions.
Changes in U.S. and international tax rules and regulations, or interpretations thereof, may materially and adversely affect our cash flows, results of operations and financial condition.
We are subject to income- and non-income-based taxes in the U.S. under federal, state and local jurisdictions and in the foreign jurisdictions in which we operate. Tax laws and regulations, or their interpretation, and administrative practices in various jurisdictions may be subject to significant change, with or without advance notice, due to economic, political and other conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes. Our tax liabilities could be affected by numerous factors, such as changes in tax, accounting and other laws, regulations, administrative practices, principles and interpretations, the mix and level of earnings in a given taxing jurisdiction or our ownership or capital structure. In recent years, multiple domestic and international tax proposals have been introduced that, if enacted into law would impose greater tax burdens on certain multinational enterprises. For example, the Organization for Economic Co-operation and Development (OECD) continues to advance proposals or guidance in international taxation, including the establishment of model rules for a new 15% global minimum tax on certain multinational enterprises, also known as Pillar Two. Many countries have implemented or are in the process of implementing these model rules. While we do not currently expect that Pillar Two will have a material impact on our results of operations, we continue to monitor the impact as countries implement legislation and the OECD provides additional guidance. In addition, the IRA, enacted in the U.S. on August 16, 2022, imposes several new taxes that were effective in 2023, including, but not limited to, a 15% corporate book minimum tax for taxpayers with adjusted financial statement income exceeding an average of $1 billion over a three-year testing period and a 1% excise tax on certain stock repurchases made after December 31, 2022. We continue to analyze the potential impact of the IRA on our consolidated financial statements and to monitor guidance issued by the U.S. Department of the Treasury. It is possible that further changes may be enacted to U.S. and international tax rules and regulations, including the U.S. corporate tax system, which could have a material effect on our consolidated cash taxes in the future.
We face continued competition for talent to support our operations.
The success of our operations is dependent upon our ability to hire, develop, and retain qualified and experienced personnel. The oil and natural gas industry has experienced increased merger and acquisition activity, causing Murphy and industry peers to face heightened competition from other industries for highly sought after and transferable skill sets. In addition, changes in public sentiment towards oil and natural gas exploration, development, and production activities, along with considerations such as climate change and the transition to a lower carbon economy, may make it more difficult for us to attract such qualified personnel.
Due to significant shifts in demographics impacting the industry, such as an aging workforce and decreased enrollment in relevant fields, Murphy and industry peers are experiencing challenges in sourcing and developing a pipeline of talent for the foreseeable future, which could place our oil and natural gas exploration, development, and production activities at risk. Furthermore, the cost to attract and retain technical talent has increased in recent years due to competition and may continue to increase if the pool of available talent
PART I
Item 1A. Risk Factors - Continued
continues to shrink due to these demographic shifts. If there is a significant decrease in the availability of qualified talent, our operations, cash flows, and financial condition may be materially and adversely impacted.
Murphy’s sensitive information, operational technology systems and critical data may be exposed to cyber threats.
The oil and natural gas industry has become increasingly dependent on digital technologies to conduct exploration, development, and production activities. We are no exception to this trend. As a company, we depend on these technologies to estimate quantities of oil and natural gas reserves, process and record financial and operating data, analyze seismic and drilling information, communicate internally and externally, and conduct many other business activities.
Maintaining the security of our technology and data and preventing breaches is critical to our business operation. We rely on our information systems, and our cybersecurity training and policies, to protect and secure intellectual property, strategic plans, customer information, and personally identifiable information of both our employees and our customers.
A digital infrastructure failure or a successfully executed, undetected cyberattack could significantly disrupt business operations. For example, it might lead to downtime, revenue loss, diversion of management or work force attention, and increased costs for remediation. Additionally, the compromise, theft, or unauthorized release of critical data could damage our reputation, weaken our competitive edge, negatively impact our financial stability and expose us to legal risk in multiple jurisdictions. Due to the nature of cyberattacks, breaches to our systems could go undetected for a prolonged period of time. Nevertheless, even if we successfully defend our own digital infrastructure, we also rely on our customers and suppliers, with whom we may share data and services, to protect their digital infrastructure and services from cybersecurity incidents.
As the sophistication of cyber threats continues to evolve, including through the use of artificial intelligence, we may be required to dedicate additional resources to continue to modify or enhance our security measures, or to investigate and remediate any discovered vulnerabilities to cyberattacks. In addition, laws and regulations governing, or proposed to govern, cybersecurity, data privacy and protection and the unauthorized disclosure of confidential or protected information, including legislation in domestic and international jurisdictions, pose increasingly complex compliance challenges and potentially elevate costs, and any failure to comply with these laws and regulations could result in significant penalties and legal liability. Additionally, new regulations or legislation may affect our current uses of protected information and require us to modify how we collect, protect, process or disclose such information.
We are incorporating artificial intelligence technologies into our processes and these technologies may present business, compliance, and reputational risks.
Our business increasingly utilizes artificial intelligence (“AI”), machine learning, and automated decision making to improve our internal processes. Issues in the development and use of AI, combined with an uncertain regulatory environment, may result in new or enhanced governmental or regulatory scrutiny, litigation, confidentiality or security risks, reputational harm, liability or other adverse consequences to our business operations, all of which could adversely affect our business, financial condition and results of operations.
The use of AI can lead to unintended consequences, including the unauthorized use or disclosure of confidential and proprietary information, or generating content that appears correct but is factually inaccurate, misleading, or otherwise flawed, which could expose us to risks related to inaccuracies or errors in the output of such technologies. It is not possible to predict all of the risks related to the use of AI, machine learning and automated decision making, and developments in the regulatory frameworks governing the use of such technologies and in related stakeholder expectations may adversely affect our ability to develop and use such technologies or subject us to liability.
Murphy’s operations and earnings have been and will continue to be affected by domestic and worldwide political developments.
From time to time, some governments intervene in the market for crude oil and natural gas produced in their countries through such actions as setting prices, determining rates of production, and controlling who may buy and sell the production.
PART I
Item 1A. Risk Factors - Continued
Murphy is exposed to regulation, legislation and policies enacted by policy makers, regulators or other parties to delay or deny necessary licenses and permits to produce or transport crude oil and natural gas. As an example, the Biden Administration pursued initiatives related to environmental, health and safety standards applicable to the oil and natural gas industry. These included an executive order in January 2021 that directed the Secretary of the Interior to halt indefinitely new oil and natural gas leases on federal lands and offshore waters pending a since-completed review by the Secretary of the Interior of federal oil and natural gas permitting and leasing practices; however, a June 2021 preliminary injunction in the U.S. District Court for the Western District of Louisiana barred the implementation of the pause in new federal oil and natural gas leases. This executive order also set forth other initiatives and goals, including procurement of carbon pollution-free electricity, elimination of fossil fuel subsidies, a carbon pollution-free power sector by 2035 and a net-zero emissions U.S. economy by 2050. Another executive order from January 2021 called for a climate change-focused review of regulations and other executive actions promulgated, issued or adopted during the prior presidential administration. In August 2022, the IRA of 2022 was passed by the U.S. Congress and included provisions which required the Department of Interior to hold previously announced offshore lease sales in the Gulf of America and Alaska within two years. However, on December 14, 2023, the Secretary of the Interior approved the 2024-2029 National Outer Continental Shelf Oil and Gas Leasing Program, which contemplates only three potential oil and natural gas lease sales in the Gulf of America through 2029. These developments demonstrate the uncertainty that can arise from the U.S. Administration’s approach to oil and natural gas leasing and permitting.
In March 2024, the SEC adopted rules requiring disclosure of a wide range of climate change-related information, including, among other things, companies’ climate change risk management; short-, medium-, and long-term climate-related financial risks; and disclosure of Scope 1 and Scope 2 emissions. Similar laws and regulations regarding climate change-related disclosures have been proposed or enacted in other jurisdictions, including California and the European Union. The SEC’s climate disclosure rules have been stayed pending legal challenges, but implementation of the rules as finalized could be costly and time consuming. On February 11, 2025, the SEC notified the U.S. Court of Appeals of a statement issued by the SEC’s Acting Chairman regarding, among other things, the fact that the majority of current SEC Commissioners had previously voted against adopting the rules, and requested that the U.S. Court of Appeals not schedule the case for argument to provide time for the SEC to deliberate and determine the appropriate next steps in the cases.
These actions and any future changes to applicable environmental, health and safety, regulatory and legal requirements promulgated by the U.S. Administration and Congress may restrict our access to additional acreage and new leases in the Gulf of America or lead to limitations or delays on our ability to secure additional permits to drill and develop our acreage and leases or otherwise lead to limitations on the scope of our operations, or may lead to increases to our compliance costs. The potential impacts of these changes on our future financial condition, results of operations or cash flows cannot be predicted.
Prices and availability of crude oil, natural gas and refined products could be influenced by political factors and by various governmental policies to restrict or increase petroleum usage and supply. Other governmental actions that could affect Murphy’s operations and earnings include expropriation, tax law changes, royalty increases, redefinition of international boundaries, preferential and discriminatory awarding of oil and natural gas leases, restrictions on drilling and/or production, tariffs, restraints and controls on imports and exports, safety, and relationships between employers and employees. For example, the Trump Administration has proposed additional tariffs on Canada and Mexico. Such tariffs may put upwards pressure on the prices of goods and services across the jurisdictions in which we operate, which could reduce our ability to offer competitive pricing to potential customers. We cannot predict what changes to trade policy will be made by the Trump Administration, the U.S. Congress or other governments, including whether existing tariff policies will be maintained or modified or whether the entry into new bilateral or multilateral trade agreements will occur, nor can we predict the effects that any such changes would have on our business. Changes in trade policy have resulted and could again result in reactions from trading partners, including adopting responsive trade policies making it more difficult or costly for us to conduct business across the jurisdictions in which we operate. Such changes in trade policy or in laws and policies governing foreign trade, and any resulting negative sentiments as a result of such changes, could materially and adversely affect our business, financial condition, results of operations and liquidity. Governments could also initiate regulations concerning matters such as currency fluctuations, currency conversion, protection and remediation of the environment, and concerns over the possibility of global warming caused by the production and use of hydrocarbon energy. As of December 31, 2024, 1.7% of the Company’s proved reserves, as defined by the SEC, were located in countries other than the U.S. and Canada.
PART I
Item 1A. Risk Factors - Continued
A number of non-governmental entities routinely attempt to influence industry members and government energy policy in an effort to limit industry activities, such as hydrocarbon production, drilling and hydraulic fracturing with the desire to minimize the emission of GHGs such as carbon dioxide, which may harm air quality, and to restrict hydrocarbon spills, which may harm land and/or groundwater.
Additionally, because of the numerous countries in which the Company operates, certain other risks exist, including the application of the U.S. Foreign Corrupt Practices Act and other similar anti-corruption compliance statutes in the jurisdictions in which we operate.
It is not possible to predict the actions of governments, including the U.S. Administration, and hence the impact on Murphy’s future operations and earnings.
Murphy’s insurance may not be adequate to offset costs associated with certain events, and there can be no assurance that insurance coverage will continue to be available in the future on terms that justify its purchase.
Murphy maintains insurance against certain, but not all, hazards that could arise from its operations. The Company maintains liability insurance sufficient to cover its share of gross insured claim costs up to approximately $500 million per occurrence and in the annual aggregate. Generally, this insurance covers various types of third-party claims related to personal injury, death and property damage, including claims arising from “sudden and accidental” pollution events. The Company also maintains insurance coverage for property damage and well control with a limit of $450 million per occurrence ($850 million for Gulf of America claims), all or part of which could apply to certain sudden and accidental pollution events. These policies have deductibles ranging from $10 million to $25 million. The occurrence of an event that is not insured or not fully insured could have a material adverse effect on the Company’s financial condition and results of operations in the future.
Murphy could face long-term challenges to the fossil fuels business model reducing demand and price for hydrocarbon fuels.
Murphy’s business model may come under more pressure from changing environmental and social trends and the related global demands for non-fossil fuel energy sources. This demand in alternative forms of energy may cause the price of our products to become more volatile and decline. Further, a reduction in demand for fossil fuels could adversely impact the availability of future financing. As part of Murphy’s strategy review process, the Company reviews hydrocarbon demand forecasts and assesses the impact on its business model, plans and future estimates of reserves. In addition, the Company evaluates other lower-carbon technologies that could complement our existing assets, strategy and competencies as part of its long-term capital allocation strategy. The Company also has significant natural gas reserves which emit lower carbon compared to crude oil and NGLs.
The issue of climate change has caused considerable attention to be directed towards initiatives to reduce global GHG emissions. International agreements such as the Paris Agreement and subsequent yearly “conferences of the parties” have resulted in commitments from many countries to reduce GHG emissions and have called for parties to eliminate certain fossil fuel subsidies and pursue further action on non-carbon dioxide GHGs, in addition to calls for transitioning away from fossil fuels and a pledge to achieve near-zero methane emissions by a specified future date. In addition, presidential administrations could issue various executive orders that may result in additional laws, rules and regulations in the area of climate change.
It is possible that international agreements, presidential executive orders, and other such initiatives, including foreign, federal, and state laws, rules, or regulations related to GHG emissions and climate change, may reduce the demand for crude oil and natural gas globally. In addition to regulatory risk, other market and social initiatives such as public and private efforts that aim to subsidize the development of non-fossil fuel energy sources, may reduce the competitiveness of carbon-based fuels, such as oil and natural gas. While the magnitude of any reduction in hydrocarbon demand is difficult to predict, such a development could adversely impact the Company and other companies engaged in the exploration and production business. With or without renewable-energy subsidies, the unknown pace and strength of technological advancement of non-fossil-fuel energy sources creates uncertainty about the timing and pace of effects on our business model. The Company continually monitors global climate change initiatives and plans accordingly based on its assessment of the effects of such initiatives on its business.
PART I
Item 1A. Risk Factors - Continued
Lawsuits against Murphy and its subsidiaries could adversely affect its operating results.
The Company or certain of its consolidated subsidiaries are involved in numerous legal proceedings, including lawsuits for alleged personal injuries, environmental and/or property damages, climate change and other business-related matters. Certain of these claims may take many years to resolve through court and arbitration proceedings or negotiated settlements. In the opinion of management and based upon currently known facts and circumstances, the currently pending legal proceedings are not expected, individually or in the aggregate, to have a material adverse effect upon the Company’s operations or financial condition.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. UNRESOLVED STAFF COMMENTS
The Company had no unresolved comments from the staff of the SEC as of December 31, 2024.

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ITEM 2. PROPERTIES
Item 2. PROPERTIES
Descriptions of the Company’s oil and natural gas properties are included in “Item 1” of this Form 10-K report beginning on page 1. Information required by the Securities Exchange Act Industry Guide No. 2 can be found in the “Supplemental Oil and Natural Gas Information” section of this Annual Report on Form 10-K on pages 106 to 121 and in Note D beginning on page 77.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. LEGAL PROCEEDINGS
Discussion of the Company’s legal proceedings are included in Note Q beginning on page 98.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
PART I
Information about our Executive Officers
The present corporate office, length of service in office, and age at February 1, 2025, for each of the Company’s executive officers are reported in the following listing. Executive officers are elected annually but may be removed from office at any time by the Board.
Eric M. Hambly - Age 50; President and Chief Executive Officer since January 2025. Mr. Hambly served as President and Chief Operating Officer from February 2024 to December 2024. Mr. Hambly also served as Executive Vice President, Operations from 2020 to 2024 and Executive Vice President, Onshore from 2018 to 2020.
Thomas J. Mireles - Age 52; Executive Vice President and Chief Financial Officer since 2022. Mr. Mireles was Senior Vice President, Technical Services from 2018 to 2022. Mr. Mireles also served as the Senior Vice President, Eastern Hemisphere of Murphy Exploration & Production Company from 2016 to 2018.
E. Ted Botner - Age 60; Executive Vice President, General Counsel and Corporate Secretary since February 2024. Mr. Botner served as Senior Vice President, General Counsel and Corporate Secretary from 2020 to 2024. He also served as Vice President, Law and Corporate Secretary from 2015 to 2020 and Manager, Law and Corporate Secretary from 2013 to 2015.
Daniel R. Hanchera - Age 67; Senior Vice President, Business Development since 2022. Mr. Hanchera served as Senior Vice President, Business Development of Murphy Exploration & Production Company from 2014 to 2022. He also served as Vice President, Business Development and Planning of Murphy Exploration & Production Company from 2009 to 2014.
John B. Gardner - Age 56; Vice President, Marketing and Supply Chain since 2022. Mr. Gardner was Vice President and Treasurer from 2015 to 2022 and served as Treasurer from 2013 to 2015.
Leyster L. Jumawan - Age 48; Vice President, Corporate Planning and Treasurer since 2022. Mr. Jumawan was Assistant Treasurer from 2017 to 2022.
Maria A. Martinez - Age 50; Vice President, Human Resources and Administration since 2018. Ms. Martinez was Vice President, Human Resources of Murphy Exploration & Production Company from 2013 to 2018.
Meenambigai Palanivelu - Age 51; Vice President, Sustainability since 2023. Ms. Palanivelu was Director, Sustainability from 2020 to 2023. Ms. Palanivelu also served as the General Manager, Planning and Performance from 2019 to 2020 and General Manager, Finance Operating Model Program Management Office from 2017 to 2019.
Louis W. Utsch - Age 59; Vice President, Tax since 2018.
Paul D. Vaughan - Age 58, Vice President and Controller since 2022. Mr. Vaughan was Vice President and Controller, U.S., Central and South America of Murphy Exploration & Production Company from 2017 to 2022.
Kelly L. Whitley - Age 59; Vice President, Investor Relations and Communications since 2015.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The Company’s common stock is traded on the New York Stock Exchange using “MUR” as the trading symbol. There were 1,873 stockholders of record as of December 31, 2024. Information on dividends per share by quarter for 2024 and 2023 are reported on page 122 of this Form 10-K report. Dividends are authorized and determined by the Board at its sole discretion and depend upon a number of factors, including available liquidity, market conditions, applicable legal requirements and other factors.
Issuer Purchases of Equity Securities
The Board has authorized a share repurchase program whereby the Company can repurchase up to $1,100.0 million of its common stock. Pursuant to the share repurchase program, the Company may repurchase shares through open market purchases, privately negotiated transactions and other means in accordance with federal securities laws. This repurchase program has no time limit and may be suspended or discontinued completely at any time without prior notice as determined by the Company at its discretion and dependent upon a variety of factors.
During the three months ended December 31, 2024, the Company did not repurchase any shares of its common stock. Since the inception of the share repurchase program through the end of the fourth quarter of 2024, the Company has repurchased 11.4 million shares of its common stock in open-market transactions. As of December 31, 2024, the Company had $650.1 million of its common stock remaining available to repurchase under the program.
Subsequent to year end, as of February 25, 2025, the Company repurchased 3.4 million shares of its common stock in open-market transactions for $95.1 million, excluding taxes and fees. As of this date, the Company had $555.0 million of its common stock remaining available to repurchase under the program.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Continued
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The following graph presents a comparison of cumulative five-year shareholder returns (including the reinvestment of dividends) as if a $100 investment was made on December 31, 2019 in the Company, the Standard & Poor’s 500 Stock Index (S&P 500 Index), the S&P Oil & Gas Exploration & Production Select Industry Index (XOP Index) and the Company’s peer group. XOP Index reports a comprehensive view of the oil and natural gas exploration and production segment of the S&P Total Market Index, which is more comparable for the Company than the S&P 500 Index. Our peer group for 2024 is presented in the table below. Civitas Resources Inc., EOG Resources Inc. and Magnolia Oil & Gas Corporation were added to Murphy’s peer group in 2024. Callon Petroleum Company, Hess Corporation and PDC Energy Inc. were removed from Murphy’s peer group in 2024. This performance information is “furnished” by the Company and is not considered as “filed” with this Form 10-K report and it is not incorporated into any document that incorporates this Form 10-K report by reference. The companies in the peer group include:
APA Corporation Kosmos Energy Ltd. Range Resources Corporation
Civitas Resources Inc.
Magnolia Oil & Gas Corporation
SM Energy Company
Coterra Energy Inc. Marathon Oil Corporation 1
Southwestern Energy Company 1
Devon Energy Corporation Matador Resources Company
Talos Energy Inc.
EOG Resources Inc.
Ovintiv Inc.
2019 2020 2021 2022 2023 2024
Murphy Oil Corporation 100 47 104 176 179 131
Peer Group 100 64 132 201 191 180
S&P 500 Index 100 118 152 125 158 197
XOP Index 100 65 121 192 192 181
1 Marathon Oil Corporation and Southwestern Energy Company were acquired in 2024 and therefore have been excluded from the above table and graph of cumulative total return.
PART II

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. RESERVED

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read together with the consolidated financial statements and accompanying notes to consolidated financial statements, which are included in Item 8 of this Annual Report on Form 10-K. This MD&A includes forward-looking statements that involve certain risks and uncertainties. See “Forward-Looking Statements” at the end of this section and “Risk Factors” under Item 1A. Discussion and analysis of 2022 results and year-over-year comparisons between 2023 and 2022 are not included in this Form 10-K and can be found in “Item 7” of the 2023 Annual Report on Form 10-K available via the SEC’s website at www.sec.gov and on our website at www.murphyoilcorp.com.
Murphy Oil Corporation is a worldwide oil and natural gas exploration and production company with both onshore and offshore operations and properties. The Company produces crude oil, natural gas and NGLs primarily in the U.S. and Canada and explores for crude oil, natural gas and NGLs in targeted areas worldwide. A more detailed description of the Company’s significant assets can be found in “Item 1” of this Form 10-K report.
The analysis and discussion in this section includes amounts attributable to a noncontrolling interest (NCI) in MP GOM, unless otherwise noted.
Significant Company financial and operational highlights during 2024 were as follows:
•Generated net income of $486.5 million ($407.2 million excluding NCI and net cash provided by operating activities of $1,729.0 million;
•Produced 184 thousand BOEPD (177 thousand BOEPD excluding NCI);
•Issued $600.0 million of 6.000% senior notes due 2032, and used proceeds to redeem an aggregate $600.0 million of senior notes due 2027, 2028 and 2029;
•Entered into a new five-year, $1.35 billion senior unsecured credit facility, representing a 69% increase from previous facility size;
•Advances made under the capital allocation framework1:
◦Repurchased $50.0 million of long-term debt;
◦Repurchased 8.0 million shares of common stock under the share repurchase program for $300.0 million ($302.7 million including excise taxes and fees);
•Achieved 84% (83% excluding NCI) total proved reserve replacement with year-end proved reserves of 729.0 million MMBOE (713.1 MMBOE excluding NCI);
•Drilled an oil discovery at Hai Su Vang-1X (Golden Sea Lion) in offshore Vietnam and encountered approximately 370 feet of net oil pay from two reservoirs; and
•Drilled a discovery at the non-operated Ocotillo #1 exploration well in Mississippi Canyon 40 in the Gulf of America and found 100 feet of net pay across two zones.
1 Details of the capital allocation framework can be found as part of the Company’s Form 8-K filed on August 4, 2022 and Form 8-K filed on August 8, 2024. The Company’s Board of Directors has authorized a share repurchase program whereby the Company can repurchase up to $1,100.0 million of the Company’s common stock.
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
Murphy’s continuing operations generate revenue by producing crude oil, natural gas and NGLs in the U.S. and Canada and then selling these products to customers. The Company’s revenue is affected by the prices of crude oil, natural gas and NGLs. In order to make a profit and generate cash in its exploration and production business, revenue generated from the sales of oil and natural gas produced must exceed the combined costs of producing these products and expenses related to exploration, administration and capital borrowing from lending institutions and note holders.
For the year ended December 31, 2024, the Company’s net income from continuing operations was $489.3 million, a decrease of $235.9 million compared to 2023. Lower net income from continuing operations was largely driven by lower revenues and other income ($431.7 million), higher lease operating expenses ($152.7 million), and higher impairment expense ($62.9 million), partially offset by lower income tax expense ($117.6 million), lower exploration expenses ($101.2 million), higher other income ($79.5 million), lower other operating expense ($35.5 million) and lower transportation, gathering and processing costs ($22.2 million). Lower revenues from production were primarily driven by mechanical and weather downtime in the Gulf of America, timing and performance of new wells at Eagle Ford Shale and lower average oil and natural gas prices, partially offset by wells brought back online at the non-operated Terra Nova field in the fourth quarter of 2023. Higher lease operating expenses were primarily due to workovers in the Gulf of America and higher production activity in Canada at the Terra Nova field, partially offset by lower production handling fees in the Gulf of America. Higher impairment expense is due to impairment of the Calliope and Nearly Headless Nick fields in the Gulf of America. The decrease in income tax expense is primarily driven by lower overall income, in addition to an income tax deduction for prior years’ Australia exploration spend. Exploration expenses in the current period was primarily due to dry hole expense recorded for multiple wells in the Gulf of America, including Sebastian #1 (Mississippi Canyon 387), non-operated Orange #1 (Mississippi Canyon 216), and for previously suspended exploration costs related to an expired lease at Hoffe Park #1 (Mississippi Canyon 166). Higher other income related to unrealized foreign exchange gains and interest income on several outstanding joint interest receivables. Lower other operating expense in 2024 is primarily driven by lower non-operated Terra Nova field start-up costs, contingency adjustments and asset retirement obligations (ARO) revisions. Lower interest expense was due to lower debt levels. Lower transportation, gathering and processing expenses related to lower production in the U.S.
For the year ended December 31, 2024, total hydrocarbon production was 184,293 BOEPD, a decrease of 4% compared to 2023. The decrease was principally due to lower production in the U.S., primarily in the Gulf of America due to downtime for wells awaiting workovers and in the Eagle Ford Shale due to timing and performance of new wells and partially offset by the restart of production at the non-operated Terra Nova field in Canada in the first quarter of 2024.
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
Results of Operations
Murphy’s Net income (loss) by type of business and geographic segment is presented below:
(Millions of dollars)
2024 2023 2022
Exploration and production
United States $ 561.9 $ 905.1 $ 1,521.9
Canada 49.0 41.6 134.2
Other International (12.5) (65.5) (77.0)
Total exploration and production
598.4 881.2 1,579.1
Corporate and other (109.1) (156.0) (438.3)
Income from continuing operations
489.3 725.2 1,140.8
Loss from discontinued operations 1
(2.8) (1.5) (2.1)
Net income including noncontrolling interest
486.5 723.7 1,138.7
Net income attributable to noncontrolling interest
79.3 62.1 173.7
Net income attributable to Murphy
$ 407.2 $ 661.6 $ 965.0
1 The Company has presented its former U.K., Malaysia and U.S. refining and marketing operations as discontinued operations in its consolidated financial statements.
E&P Continuing Operations: 2024 vs 2023
The following section of Exploration and Production (E&P) continuing operations excludes the Corporate segment, unless otherwise noted.
Please also refer to “Schedule 6 - Results of Operations for Oil and Natural Gas Producing Activities” in the Supplemental Oil and Natural Gas Information section for additional supporting tables.
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
The following is a summarized statement of operations for E&P continuing operations:
(Millions of dollars) 2024 2023 2022
Revenues and other income
Revenue from production
$ 3,014.9 $ 3,376.6 $ 4,038.5
Sales of purchased natural gas
3.7 72.2 181.7
Other income
6.0 8.0 26.7
Total revenues and other income
3,024.6 3,456.8 4,246.9
Costs and Expenses
Lease operating expenses 937.0 784.4 679.3
Severance and ad valorem taxes 39.2 42.8 57.0
Transportation, gathering and processing 210.8 233.0 212.7
Costs of purchased natural gas 3.1 51.7 172.0
Depreciation, depletion and amortization 856.9 850.5 763.9
Impairments of assets 62.9 - -
Accretion of asset retirement obligations 52.4 46.0 46.2
Total exploration expenses, including undeveloped lease amortization
133.5 234.8 133.1
Selling and general expenses 23.8 37.7 44.5
Other 0.3 56.9 141.8
Results of operations before taxes 704.7 1,119.0 1,996.4
Income tax provisions
106.3 237.8 417.3
Results of operations (excluding Corporate segment) 1
$ 598.4 $ 881.2 $ 1,579.1
1 Includes results attributable to a noncontrolling interest in MP GOM.
Pricing
The following table contains the weighted average sales prices for the three years ended December 31, 2024:
(Weighted average sales prices)
2024 2023 2022
Crude oil and condensate - dollars per barrel
United States - Onshore $ 75.77 $ 76.96 $ 96.00
United States - Offshore 1
76.36 77.38 94.21
Canada - Onshore 2
67.49 72.84 89.88
Canada - Offshore 2
82.22 84.20 107.47
Other 2
77.59 86.60 94.37
Natural gas liquids - dollars per barrel
United States - Onshore 20.20 19.69 33.85
United States - Offshore 1
23.37 21.94 36.01
Canada - Onshore 2
34.14 35.87 55.65
Natural gas - dollars per thousand cubic feet
United States - Onshore 1.90 2.26 6.04
United States - Offshore 1
2.40 2.78 6.97
Canada - Onshore 2
1.59 2.06 2.76
1 Prices include the effect of noncontrolling interest in MP GOM.
2 U.S. dollar equivalent.
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
The following table contains benchmark prices relevant to the Company for the three years ended December 31, 2024:
(Average price for the period) 2024 2023 2022
Oil and NGLs
WTI ($/BBL) $ 75.72 $ 77.62 $ 94.23
Natural gas
NYMEX ($/MMBTU) 2.24 2.53 6.38
AECO (C$/MCF) 1.46 2.64 5.31
Production Volumes
The following table contains hydrocarbons produced during the three years ended December 31, 2024. For further discussion on volumes, please see “Revenues from Production” section on page 37.
(Barrels per day unless otherwise noted) 2024 2023 2022
Net crude oil and condensate
United States - Onshore
21,151 24,070 24,437
United States - Offshore 1
63,047 73,473 65,411
Canada - Onshore
2,868 2,937 4,005
Canada - Offshore
7,251 3,020 2,812
Other 219 250 700
Total net crude oil and condensate
94,536 103,750 97,365
Net natural gas liquids
United States - Onshore
4,442 4,617 5,181
United States - Offshore 1
4,544 5,924 4,597
Canada - Onshore
597 681 903
Total net natural gas liquids
9,583 11,222 10,681
Net natural gas - thousands of cubic feet per day
United States - Onshore
25,028 25,863 29,050
United States - Offshore 1
57,228 70,239 63,380
Canada - Onshore
398,786 369,906 310,230
Total net natural gas
481,042 466,008 402,660
Total net hydrocarbons - including NCI 2,3
184,293 192,640 175,156
Noncontrolling interest
Net crude oil and condensate - barrels per day (6,358) (6,210) (7,452)
Net natural gas liquids - barrels per day (199) (220) (280)
Net natural gas - thousands of cubic feet per day (1,942) (2,089) (2,468)
Total noncontrolling interest 2,3
(6,881) (6,778) (8,143)
Total net hydrocarbons - excluding NCI 2,3
177,412 185,862 167,013
Estimated total proved net hydrocarbon reserves
- million equivalent barrels 3,4
729.0 739.5 715.4
1 Includes net volumes attributable to a noncontrolling interest in MP GOM.
2 Natural gas converted on an energy equivalent basis of 6:1.
3 NCI - noncontrolling interest in MP GOM.
4 December 31, 2024, 2023 and 2022, include 15.9 MMBOE, 15.5 MMBOE and 18.2 MMBOE, respectively, relating to
noncontrolling interest.
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
Sales Volumes
The following table contains hydrocarbons sold during the three years ended December 31, 2024. For further discussion on volumes, please see “Revenues from Production” section on page 37.
(Barrels per day unless otherwise noted) 2024 2023 2022
Net crude oil and condensate
United States - Onshore
21,151 24,070 24,437
United States - Offshore 1
63,612 73,373 64,840
Canada - Onshore
2,868 2,937 4,005
Canada - Offshore
6,445 2,559 3,002
Other 230 349 663
Total net crude oil and condensate
94,306 103,288 96,947
Net natural gas liquids
United States - Onshore
4,443 4,617 5,181
United States - Offshore 1
4,543 5,924 4,597
Canada - Onshore
597 681 903
Total net natural gas liquids
9,583 11,222 10,681
Net natural gas - thousands of cubic feet per day
United States - Onshore
25,028 25,863 29,050
United States - Offshore 1
57,228 70,239 63,380
Canada - Onshore
398,786 369,906 310,230
Total net natural gas
481,042 466,008 402,660
Total net hydrocarbons - including NCI 2,3
184,063 192,178 174,738
Noncontrolling interest
Net crude oil and condensate - barrels per day (6,438) (6,200) (7,369)
Net natural gas liquids - barrels per day (198) (220) (280)
Net natural gas - thousands of cubic feet per day (1,942) (2,089) (2,468)
Total noncontrolling interest 2,3
(6,960) (6,768) (8,060)
Total net hydrocarbons - excluding NCI 2,3
177,103 185,410 166,678
1 Includes net volumes attributable to a noncontrolling interest in MP GOM.
2 Natural gas converted on an energy equivalent basis of 6:1.
3 NCI - noncontrolling interest in MP GOM.
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
Revenues from Production
The Company’s production revenues by country and product were as follows:
(Millions of dollars) 2024 2023 2022
Revenues from production
United States - Oil $ 2,364.3 $ 2,748.5 $ 3,085.9
United States - Natural gas liquids 71.7 80.6 124.4
United States - Natural gas
67.8 92.7 225.3
Canada - Oil 264.8 156.7 249.2
Canada - Natural gas liquids 7.4 8.9 18.3
Canada - Natural Gas
232.3 278.2 312.6
Other - Oil
6.6 11.0 22.8
Total revenues from production
$ 3,014.9 $ 3,376.6 $ 4,038.5
Revenues from production in 2024 decreased by $361.7 million compared to 2023. Revenue was lower in the Gulf of America, mostly driven by downtime for workovers, hurricane-related downtime and timing of new wells. Eagle Ford Shale revenues decreased due to timing and performance of wells brought online. These decreases were partially offset by wells brought back online in the fourth quarter of 2023 at non-operated Terra Nova. Lower pricing across all products also contributed to the decrease during the period.
Natural gas is purchased and subsequently sold to third parties in order to provide operational flexibility and cost mitigation for transportation commitments. “Sales of purchased natural gas” is included in “Total revenues and other income” and “Costs of purchased natural gas” is included in “Costs and Expenses” in the summarized statement of operations for E&P continuing operations on page 33. Sales of purchased natural gas during 2024 were $3.7 million.
Lease Operating and Transportation, Gathering and Processing Expenses
The Company’s total lease operating expenses and transportation, gathering and processing expenses by geographic area were as follows:
(Millions of dollars) (Dollars per equivalent barrel)
2024 2023 2022 2024 2023 2022
Lease operating expenses
United States - Onshore
$ 141.9 $ 150.3 $ 137.6 $ 13.02 $ 12.48 $ 10.94
United States - Offshore
608.0 480.4 385.1 21.38 14.46 13.19
Canada - Onshore 132.6 140.3 139.5 5.18 5.89 6.75
Canada - Offshore 52.9 11.5 15.6 22.43 12.30 14.20
Other 1.6 1.9 1.5 18.52 14.94 6.25
Total lease operating expenses $ 937.0 $ 784.4 $ 679.3 $ 13.91 $ 11.18 $ 10.65
Transportation, gathering and processing
United States - Onshore
$ 9.6 $ 12.7 $ 18.4 $ 0.88 $ 1.05 $ 1.47
United States - Offshore
121.3 144.3 123.8 4.27 4.34 4.24
Canada - Onshore 75.5 72.2 65.3 2.95 3.03 3.16
Canada - Offshore 4.4 3.8 5.2 1.85 4.12 4.76
Total transportation, gathering and processing $ 210.8 $ 233.0 $ 212.7 $ 3.13 $ 3.32 $ 3.34
Lease operating expenses and transportation, gathering and processing expenses in 2024 increased by $152.6 million and decreased by $22.2 million, respectively, compared to 2023. Higher lease operating expenses were primarily due to workover costs in the Gulf of America, particularly at the Samurai and Neidermeyer fields, and the restart of the non-operated Terra Nova field in Canada Offshore in the first quarter of 2024. These were
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
partially offset by lower production handling fees and lower overall volumes. Lower transportation, gathering and processing expenses were primarily due to lower volumes.
Depreciation, Depletion and Amortization Expense
The Company’s depreciation, depletion and amortization expense by geographic area was as follows:
(Millions of dollars) (Dollars per equivalent barrel)
2024 2023 2022 2024 2023 2022
Depreciation, depletion and amortization expense
United States - Onshore
$ 319.9 $ 316.7 $ 321.4 $ 29.36 $ 26.29 $ 25.55
United States - Offshore
389.3 389.3 295.6 13.69 11.72 10.12
Canada - Onshore 123.5 133.4 128.1 4.82 5.60 6.20
Canada - Offshore 22.5 8.8 13.4 9.55 9.47 12.25
Other 1.7 2.3 5.4 20.13 18.05 22.19
Total depreciation, depletion and amortization expense
$ 856.9 $ 850.5 $ 763.9 $ 12.72 $ 12.12 $ 11.98
Depreciation, depletion and amortization expense (DD&A) in 2024 increased by $6.4 million compared to 2023. Higher DD&A was primarily the result of higher volumes at the non-operated Terra Nova field in Canada Offshore and higher rates at Eagle Ford Shale and in the Gulf of America, and was partially offset by lower volumes in the Gulf of America and lower rates and volumes at Kaybob Duvernay.
Impairment of Assets
In 2024 the Company recorded impairment costs for two assets in the Gulf of America, totaling $62.9 million. In the first quarter of 2024, the Company recognized an impairment expense of $34.5 million for the Calliope field. In the fourth quarter of 2024, an impairment expense of $28.4 million was recorded for the Nearly Headless Nick field. Both fields were impaired as a result of operational issues that led to reserve reductions.
There were no impairments recorded in 2023.
Exploration Expenses
The Company’s exploration expenses were as follows:
(Millions of dollars) 2024 2023 2022
Exploration expenses
Dry holes and previously suspended exploration costs $ 73.2 $ 169.8 $ 82.1
Geological and geophysical 27.2 26.1 10.4
Other exploration 23.5 28.0 27.3
Undeveloped lease amortization 9.6 10.9 13.3
Total exploration expenses
$ 133.5 $ 234.8 $ 133.1
Exploration expenses in 2024 decreased by $101.3 million compared to 2023. In 2024, dry holes and previously suspended exploration costs primarily related to the Sebastian #1 (Mississippi Canyon 387) exploration well, the non-operated Orange #1 (Mississippi Canyon 216) exploration well, and the previously suspended exploration well at Hoffe Park #1 (Mississippi Canyon 166) in the Gulf of America. In 2023, dry holes and previously suspended exploration costs related to previously suspended exploration costs for the Cholula-1EXP well in offshore Mexico and dry hole costs for the Chinook #7 (Walker Ridge 425) exploration well and the non-operated Oso #1 (Atwater Valley 138) exploration well in the Gulf of America, both of which encountered non-commercial hydrocarbons.
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
Other Expenses
Other expenses were $0.3 million in 2024, a decrease of $56.6 million compared to 2023. Other expenses were lower primarily due to the absence of other operating expenses in Canada related to the non-operated Terra Nova life extension project, lower asset retirement adjustments, no contingent consideration adjustments in the current period and higher interest income received in 2024.
Income Taxes
Income taxes were $106.3 million in 2024, a decrease of $131.5 million compared to 2023. Lower income taxes were primarily the result of lower pretax income, and an income tax deduction for prior years’ Australia exploration spend (see Note H).
Corporate: 2024 vs 2023
Corporate activities include interest expense and income, foreign exchange effects, realized and unrealized gains/losses on derivative instruments (forward swaps to hedge the price of oil sold) and corporate overhead not allocated to E&P. Realized and unrealized losses on derivative instruments result from increases in market oil and natural gas prices relating to future periods whereby the swap contracts provided the Company with a fixed price.
Corporate activities reported a loss of $109.1 million in 2024, a favorable variance of $46.9 million compared to 2023. The favorable variance was primarily due to foreign exchange gain of $45.4 million in 2024 compared to foreign exchange loss of $10.7 million in 2023, primarily as a result of unrealized exchange rate changes relating to our Canadian subsidiary. Interest charges are lower in 2024 primarily due to lower overall debt levels. The lower income tax benefit was the result of a lower current period loss before income tax.
Financial Condition
The Company’s primary sources of liquidity are cash on hand, net cash provided by continuing operations activities and available borrowing capacity under its senior unsecured RCF, as described below. The Company’s liquidity requirements, both in the short-term (2025) and long-term (beyond 2025), consist primarily of capital expenditures, debt maturity, retirement and interest payments, working capital requirements, dividend payments, and, as applicable, share repurchases. The Company may, from time to time, redeem, repurchase or otherwise acquire its outstanding notes through open market purchases, tender offers or pursuant to the terms of such securities. The Company believes that the primary sources of liquidity described above will be adequate to fund its liquidity needs over the next 12 months.
Cash Flows
The following table presents the Company’s cash flows for the periods presented.
(Millions of dollars) 2024 2023 2022
Net cash provided by (required by):
Net cash provided by continuing operations activities $ 1,729.0 $ 1,748.8 $ 2,180.2
Net cash required by investing activities
(908.2) (998.7) (1,109.4)
Net cash required by financing activities
(716.5) (923.7) (1,081.6)
Net cash required by discontinued operations
- - (14.5)
Effect of exchange rate changes on cash and cash equivalents 2.2 (1.2) (3.9)
Net (decrease) increase in cash and cash equivalents
$ 106.5 $ (174.8) $ (29.2)
Cash Provided by Continuing Operations Activities
Net cash provided by continuing operations activities in 2024 was $19.8 million lower compared to 2023. The decrease was primarily attributable to lower revenue from production ($361.7 million) and higher lease
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
operating expenses costs ($152.6 million), partially offset by a decrease due to timing of non-cash working capital ($174.2 million) settlements, no contingent consideration payments related to prior Gulf of America acquisitions in 2024 (2023: $139.6 million), lower exploration expenses ($101.2 million), and changes in other operating activities, net ($56.4 million) primarily due to decreased expenditures for asset retirements.
Payments of contingent consideration in 2023 are shown both in “Operating Activities” and “Financing Activities” in the Company’s Consolidated Statements of Cash Flows; amounts considered as financing activities are those amounts paid up to the original estimated contingent consideration liability included in the purchase price allocation, at the time of acquisition. Any contingent consideration paid above the original estimated liability, included in the purchase price, are considered operating activities.
During 2023, the Company paid a total of $199.8 million in contingent consideration, of which $139.6 million is shown in “Operating Activities” and $60.2 million is shown in “Financing Activities” in the Company’s Consolidated Statements of Cash Flows. As of the end of the second quarter of 2023, the Company had no further obligation payable for contingent consideration relating to prior Gulf of America acquisitions. See Note O for further details.
The total reductions of operating cash flows for interest paid (which excludes “Early redemption of debt cost” reported in “Financing Activities”) during the two years ended December 31, 2024, and 2023 were $78.8 million and $108.9 million, respectively. Cash interest paid in 2024 was primarily due to interest payments on outstanding debt. Some of these payments related to accelerated interest payments due to the early redemption, in part, of the 5.875% senior notes due 2027 (2027 Notes), the 6.375% senior notes due 2028 (2028 Notes), and the 7.05% senior notes due 2029 (2029 Notes) in the aggregate redemption amount of $650.1 million. In 2023, cash interest paid was higher than 2024, primarily due to higher debt levels in 2023 and accelerated interest payments due to the early redemption, in whole or in part, of the 5.75% senior notes due 2025 (2025 Notes), the 2027 Notes, the 2028 Notes, and the 2029 Notes for an aggregate redemption amount of $498.2 million.
Cash Required by Investing Activities
Net cash required by investing activities in 2024 was $90.5 million lower compared to 2023. The decrease was primarily due to lower property additions and dry hole costs ($157.9 million) and lower acquisition capital ($35.6 million), partially offset by the absence of proceeds from the sale of certain non-core operated Kaybob Duvernay assets and all of the non-operated Placid Montney assets ($102.9 million).
A reconciliation of “Property additions and dry hole costs” in the Consolidated Statements of Cash Flows to total capital expenditures for continuing operations follows.
Year Ended December 31,
(Millions of dollars) 2024 2023 2022
Property additions and dry hole costs per cash flow statements
$ 908.2 $ 1,066.0 $ 985.5
Geophysical and other exploration expenses 44.8 46.0 30.6
Acquisition of oil and natural gas properties per the cash flow statements
- 35.6 128.5
Capital expenditure accrual changes and other 11.8 (9.5) 38.6
Total capital expenditures $ 964.8 $ 1,138.1 $ 1,183.2
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
Total accrual basis capital expenditures are shown below.
Year Ended December 31,
(Millions of dollars) 2024 2023 2022
Capital Expenditures
Exploration and production $ 935.7 $ 1,114.0 $ 1,161.5
Corporate 29.1 24.1 21.7
Total capital expenditures 964.8 1,138.1 1,183.2
Total capital expenditures excluding proved property acquisitions 964.8 1,111.0 1,054.7
Total capital expenditures excluding proved property acquisitions and NCI $ 952.8 $ 1,040.8 $ 1,028.8
Lower capital expenditures in 2024 compared to 2023 were primarily attributable to lower development expenditures at Eagle Ford Shale, Tupper Montney, and non-operated Terra Nova and lower exploration expenses in the Gulf of America, partially offset by higher exploration and development costs in offshore Vietnam.
Capital expenditures in 2024 primarily relate to development drilling and field development activities in the Gulf of America, primarily related to the Mormont, Khaleesi, Lucius, St. Malo and Samurai fields ($306.9 million), at Eagle Ford Shale ($291.8 million), at Tupper Montney and Kaybob Duvernay ($116.3 million), at other international locations ($45.1 million), and at non-operated Hibernia ($18.2 million). In addition, total exploration costs were $153.9 million.
Exploration costs in 2024 were primarily comprised of activities in the Gulf of America related to the Sebastian #1 (Mississippi Canyon 387), Orange #1 (Mississippi Canyon 216), and non-operated Oso #1 (Atwater Valley 138) exploration wells. Sebastian #1 and Orange #1 encountered non-commercial hydrocarbons during 2024. Non-operated Oso #1 encountered non-commercial hydrocarbons in 2023, and operations completed in 2024. Additional exploratory costs relate to oil discoveries, including the non-operated Ocotillo #1 (Mississippi Canyon 40) exploration well in the Gulf of America and the Hai Su Vang-1X (Golden Sea Lion), Block 15/2-17 exploration well in Vietnam, as well as other ongoing projects.
Cash Required by Financing Activities
Net cash required by financing activities in 2024 decreased by $207.2 million compared to 2023. In 2024, cash used in financing activities was principally for the repurchase of common shares ($301.4 million, excluding excise tax). In addition, the Company completed a refinancing transaction whereby new senior notes due 2032 were issued in the aggregate amount of $600.0 million and the proceeds were used for the aggregate repayment and repurchase of $600.0 million of its 2027 Notes, 2028 Notes and 2029 Notes. The Company also repurchased $50.0 million of its 2027 Notes, paid cash dividends to shareholders of $1.20 per share ($180.0 million), and distributed funds to the noncontrolling interest in MP GOM ($118.6 million).
Liquidity
At December 31, 2024, the Company had approximately $1.8 billion of liquidity consisting of $423.6 million in cash and cash equivalents and $1,349.6 million available on its committed senior unsecured RCF with a major banking consortium.
The Company’s $1.35 billion senior unsecured RCF expires in October 2029. As of December 31, 2024, the Company had no outstanding borrowings under the RCF and $0.4 million of outstanding letters of credit, which reduce the borrowing capacity of the senior unsecured RCF. Borrowings under the RCF are subject to certain interest rates. Please refer to Note F for further details. At December 31, 2024, the interest rate in effect on borrowings under the facility would have been 6.68%. At December 31, 2024, the Company was in compliance with all covenants related to the RCF.
Cash and invested cash are maintained in several operating locations outside the U.S. As of December 31, 2024, cash and cash equivalents held outside the U.S. included U.S. dollar equivalents of approximately $95.2 million (2023: $149 million), the majority of which was held in Canada ($58.5 million), Vietnam ($8.7 million) and Brunei ($8.5 million). In addition, approximately $7.8 million and $6.4 million of cash was held in the U.K. and Mexico, respectively. In certain cases, the Company could incur cash taxes or other costs should these cash balances be
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
repatriated to the U.S. in future periods. Canada currently collects a 5% withholding tax on any earnings repatriated to the U.S. See Note H for further information regarding potential tax expense that could be incurred upon distribution of foreign earnings back to the U.S.
Working Capital
(Millions of dollars) December 31, 2024 December 31, 2023
Working capital
Total current assets $ 785.3 $ 752.2
Total current liabilities 942.8 846.5
Net working capital liability
$ (157.5) $ (94.3)
As of December 31, 2024, net working capital had an unfavorable decrease of $63.2 million compared to December 31, 2023. The decrease was primarily attributable to lower accounts receivable ($71.5 million), higher operating lease liabilities ($45.4 million), higher current ARO liabilities ($37.4 million), and higher accounts payable ($25.3 million), partially offset by a higher cash balance ($106.5 million). Lower accounts receivable were primarily due to lower sales volumes for crude oil and natural gas, and lower pricing received for all crude oil, natural gas and NGLs. Higher operating lease liabilities are primarily due to an extension of an existing drilling ship lease in the Gulf of America. Higher current ARO liabilities are primarily due to certain Gulf of America obligations to be completed in 2025. Higher accounts payable are due to the timing of payments for certain drilling activities and ongoing workover projects.
Capital Employed
A summary of capital employed as of December 31, 2024 and 2023 follows.
December 31, 2024 December 31, 2023
(Millions of dollars) Amount % Amount %
Capital employed
Long-term debt $ 1,274.5 19.7 % $ 1,328.4 19.9 %
Murphy shareholders' equity 5,194.3 80.3 % 5,362.8 80.1 %
Total capital employed $ 6,468.8 100.0 % $ 6,691.2 100.0 %
As of December 31, 2024, long-term debt decreased by $53.9 million compared to December 31, 2023, as a result of the repurchase of the 2027 Notes and 2028 Notes. The Company also completed a refinancing transaction whereby it issued $600.0 million of 2032 Notes, and used all of the proceeds to complete the repurchase and redemption, in whole or in part, of the 2027 Notes, 2028 Notes, and 2029 Notes. As of December 31, 2024, the fixed-rate notes had a weighted average maturity of 9.3 years and a weighted average coupon of 6.1%. Refer to Note F for additional details.
Murphy’s shareholders’ equity decreased by $168.5 million in 2024 primarily due to cash dividends paid ($180.0 million), shares repurchased ($302.7 million, including excise tax), and foreign currency translation losses ($134.7 million), partially offset by net income earned ($407.2 million). A summary of transactions in stockholders’ equity accounts is presented in the “Consolidated Statements of Stockholders’ Equity" on page 70 of this Form 10-K report.
Other Balance Sheet Activity - Long-Term Assets and Liabilities
Other significant changes in Murphy’s balance sheet at the end of 2024, compared to 2023 are discussed below.
Property, plant and equipment, net of depreciation decreased $170.5 million principally due to DD&A expense and foreign exchange rates applicable for the Canadian assets, substantially offset by capital expenditures in the year. Capital expenditures are discussed above in the “Cash Required by Investing Activities” section.
Murphy had commitments for capital expenditures of approximately $417.0 million at December 31, 2024 (2023: $209.8 million). This amount includes $220.0 million for Other Offshore, primarily related to approved expenditures for capital projects relating to interests in Vietnam for the Lac Da Vang (Golden Camel) field development project, $112.2 million at Eagle Ford Shale, primarily at the Karnes field, $53.6 million relating to
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
Gulf of America interests, primarily at the Mormont and non-operated St. Malo fields, and $31.2 million relating to interests in Canada Onshore, primarily at Kaybob Duvernay.
Operating lease assets increased $32.4 million principally due to lease extensions in the Gulf of America, partially offset by the depreciation of these assets.
Long-term ARO liabilities increased $56.8 million primarily due to accretion, additions and revisions related to Gulf of America and Eagle Ford Shale operations.
Non-current operating lease liabilities decreased $14.5 million primarily due to 2024 annual payments reducing operating lease liabilities for drilling rig and vessel commitments.
Deferred income tax liabilities increased $59.1 million due to utilization of the net operating loss, partially offset by other capital-related tax effect s.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
Other Key Performance Metrics
The Company uses other operational performance and income metrics to review operational performance. Management uses adjusted net income, earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA internally to evaluate the Company’s operational performance and trends between periods and relative to its industry competitors. Adjusted net income excludes certain items that management believes affects the comparability of results between periods. Management believes this information may be useful to investors and analysts to gain a better understanding of the Company’s financial results. Adjusted net income, EBITDA, and adjusted EBITDA are non-GAAP financial measures and should not be considered a substitute for net income (loss) or cash provided by operating activities as determined in accordance with GAAP.
The following table reconciles reported net income attributable to Murphy to adjusted net income from continuing operations attributable to Murphy.
Year Ended December 31,
(Millions of dollars)
2024 2023 2022
Net income attributable to Murphy (GAAP) 1
$ 407.2 $ 661.6 $ 965.0
Discontinued operations loss 2.8 1.5 2.1
Net income from continuing operations attributable to Murphy
410.0 663.1 967.1
Adjustments:
Impairment of assets 62.9 - -
Write-off of previously suspended exploration well
26.1 17.1 22.7
Foreign exchange (gain) loss
(45.4) 10.9 (23.0)
Refinancing and early redemption of debt costs (non-cash)
3.7 - 10.3
Mark-to-market loss (gain) on derivative instruments
1.7 - (214.7)
Asset retirement obligation losses
- 16.9 30.8
Mark-to-market loss on contingent consideration
- 7.1 78.3
(Gain) on sale of assets - - (14.5)
Total adjustments, before taxes
49.0 52.0 (110.1)
Income tax (benefit) expense related to adjustments (8.3) (6.4) 23.8
Tax (benefit) on investments in foreign areas
(34.0) - -
Total adjustments after taxes 6.7 45.6 (86.3)
Adjusted net income from continuing operations attributable to Murphy (Non-GAAP) $ 416.7 $ 708.7 $ 880.8
Net income from continuing operations per average diluted share (GAAP)
$ 2.72 $ 4.23 $ 6.14
Adjusted net income from continuing operations attributable to Murphy per average diluted share (Non-GAAP)
$ 2.76 $ 4.52 $ 5.59
1 Excludes amounts attributable to a noncontrolling interest in MP GOM.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
The following table reconciles reported net income attributable to Murphy to EBITDA attributable to Murphy and adjusted EBITDA attributable to Murphy.
Year Ended December 31,
(Millions of dollars)
2024 2023 2022
Net (loss) income attributable to Murphy (GAAP) 1
$ 407.2 $ 661.6 $ 965.0
Income tax expense 78.3 195.9 309.5
Interest expense, net 105.9 112.4 150.8
Depreciation, depletion and amortization expense 1
833.1 836.7 748.2
EBITDA attributable to Murphy (Non-GAAP) 1,424.5 1,806.6 2,173.5
Impairment of assets 1
62.9 - -
Accretion of asset retirement obligations 1
46.9 41.0 40.9
Foreign exchange (gain) loss
(45.4) 10.8 (23.0)
Write-off of previously suspended exploration well 26.1 17.1 22.7
Discontinued operations loss
2.8 1.5 2.1
Mark-to-market loss (gain) on derivative instruments
1.7 - (214.7)
Mark-to-market loss on contingent consideration
- 7.1 78.3
Asset retirement obligation losses
- 16.9 30.8
Gain on sale of assets 1
- - (14.5)
Adjusted EBITDA attributable to Murphy (Non-GAAP) $ 1,519.5 $ 1,901.0 $ 2,096.1
1 Excludes amounts attributable to a noncontrolling interest in MP GOM.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
Environmental, Health and Safety Matters
Murphy faces various environmental, health and safety risks that are inherent in exploring for, developing and producing hydrocarbons. To help manage these risks, the Company has established a robust health, safety and environmental governance program comprised of a worldwide policy, guiding principles, annual goals and a management system incorporating oversight at each business unit, senior leadership and board levels. The Company strives to minimize these risks by continually improving its processes through design, operation and implementation of a comprehensive asset integrity plan, auditing and assessments, and through emergency and oil spill response planning to address any credible risks. These plans are presented to, reviewed and approved by a Health, Safety, Environment and Corporate Responsibility Committee consisting of certain members of the Board.
The oil and natural gas industry is subject to numerous international, foreign, national, state, provincial and local environmental, health and safety laws and regulations. Murphy allocates a portion of both its capital expenditures and its general and administrative budget toward compliance with existing and anticipated environmental, health and safety laws and regulations. These requirements affect virtually all operations of the Company and increase Murphy’s overall cost of business, including its capital costs to construct, maintain and upgrade equipment and facilities as well as operating costs for ongoing compliance.
The principal environmental, health and safety laws and regulations to which Murphy is subject address such matters as the generation, storage, handling, use, disposal and remediation of petroleum products, wastewater and hazardous materials; the emission and discharge of such materials to the environment, including methane and other GHG emissions; wildlife, habitat and water protection; the placement, operation and decommissioning of production equipment; and the health and safety of our employees, contractors and communities where our operations are located. These laws and regulations also generally require permits for existing operations, as well as the construction or development of new operations and the decommissioning facilities once production has ceased. Violations can give rise to sanctions including significant civil and criminal penalties, injunctions, construction bans and delays.
Further information on environmental, health and safety laws and regulations applicable to Murphy are contained in the “Business” section beginning page 9.
Climate Change and Emissions
The world’s population and standard of living are growing steadily along with the demand for energy. Murphy recognizes that this may generate increasing amounts of GHG, which could raise important climate change concerns. Murphy works to assess the Company’s governance, strategy, risk identification, and management and measurement of climate risks and opportunities in order to remain in alignment with the TCFD framework. While oversight of the TCFD framework has undergone changes, including relating to the role of the International Financial Reporting Standards Foundation in overseeing the framework, the TCFD framework continues to inform climate-related reporting practices. Murphy’s disclosures related to its alignment with the TCFD framework are included in the Company’s 2024 Sustainability Report issued on August 7, 2024, which is not incorporated by reference hereto.
Other Matters
Impact of inflation - In 2024, many countries worldwide continued to experience moderate inflation, including countries where the Company operates (this follows a sustained period of relatively low inflation prior to 2021). The Company’s revenues, capital and operating costs are influenced to a larger extent by specific price changes in the oil and natural gas industry and allied industries rather than by changes in general inflation. Crude oil prices generally reflect the balance between supply and demand, with crude oil prices being particularly sensitive to OPEC and certain non-OPEC members’ production levels and/or attitudes of traders concerning supply and demand in the future. Costs for oil field goods and services are usually affected by the worldwide prices for crude oil.
To combat impacts of inflation and/or supply and demand factors, Murphy has dedicated personnel in marketing and procurement departments, focused on managing supply chain and input costs. Murphy also has certain transportation, processing and production handling services costs fixed through long-term contracts and commitments and therefore is partly protected from the increasing price of services. However, from time to time,
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
Murphy will seek to enter new commitments, exercise options to extend contracts and retender contracts for rigs and other industry services which could expose Murphy to the impact of higher costs. Murphy continues to strive toward safely executing our work in an ever-increasingly efficient manner to mitigate possible inflationary pressures in our business.
Natural gas prices are also affected by supply and demand, which are often affected by the weather and by the fact that delivery of natural gas can be restricted to specific geographic areas. Natural gas is also impacted by demand for lower carbon emissions.
As a result of the overall volatility of oil and natural gas prices, it is not possible to predict the Company’s future cost of oil field goods and services.
Critical Accounting Estimates - In preparing the Company’s consolidated financial statements in accordance with GAAP, management must make a number of estimates and assumptions related to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Application of certain of the Company’s accounting policies requires significant estimates. The most significant of these accounting policies and estimates are described below.
Oil and natural gas proved reserves - Oil and natural gas proved reserves are defined by the SEC as those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations before the time at which contracts providing the right to operate expire (unless evidence indicates that renewal is reasonably certain). Proved developed reserves of oil and natural gas can be expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared with the cost of a new well, or through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.
Although the Company’s engineers are knowledgeable of and follow the guidelines for reserves as established by the SEC, the estimation of reserves requires the engineers to make a significant number of assumptions based on professional judgment. SEC rules require the Company to use an unweighted average of the oil and natural gas prices in effect at the beginning of each month of the year for determining quantities of proved reserves. These historical prices often do not approximate the average price that the Company expects to receive for its oil and natural gas production in the future. The Company often uses significantly different oil and natural gas prices and reserve assumptions when making its own internal economic property evaluations. Changes in oil and natural gas prices can lead to a decision to start up or shut in production, which can lead to revisions to reserves quantities.
Estimated reserves are subject to future revision, certain of which could be substantial, based on the availability of additional information, including reservoir performance, new geological and geophysical data, additional drilling, technological advancements, price changes and other economic factors. Reserves revisions inherently lead to adjustments of the Company’s depreciation rates and the timing of settlement of ARO liabilities. Downward reserves revisions can also lead to significant impairment expense. The Company cannot predict the type of oil and natural gas reserves revisions that will be required in future periods.
The Company’s proved reserves of crude oil, natural gas and NGLs are presented on pages 106 to 115 of this Form 10-K report. Murphy’s estimations for proved reserves were generated through the integration of available geoscience, engineering, and economic data (including hydrocarbon prices, operating costs, and development costs), and commercially available technologies, to establish “reasonable certainty” of economic producibility. As defined by the SEC, reasonable certainty of proved reserves describes a high degree of confidence that the quantities will be recovered. In estimating proved reserves, Murphy uses familiar industry-accepted methods for subsurface evaluations, including performance, volumetric, and analog-based studies.
Where appropriate, Murphy includes reliable geologic and engineering technology to estimate proved reserves. Reliable geologic and engineering technology is a method or combination of methods that are field-tested and have been demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation. This integrated approach increases the quality of and confidence in Murphy’s proved reserves estimates. It was utilized in certain undrilled acreage at distances
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
greater than the directly offsetting development spacing areas, and in certain reservoirs developed with the application of improved recovery techniques. Murphy utilized a combination of 3D seismic interpretation, core analysis, wellbore log measurements, well test data, historic production and pressure data, and commercially available seismic processing and numerical reservoir simulation programs. Reservoir parameters from analogous reservoirs were used to strengthen the reserves estimates when available.
See further discussion of proved reserves and changes in proved reserves during the three years ended December 31, 2024 beginning on pages 4 and 106 of this Form 10-K report.
Property, Plant and Equipment - impairment of long-lived assets - The Company continually monitors its long-lived assets recorded in “Property, plant and equipment” in the Consolidated Balance Sheet to ensure that they are fairly presented. The Company must evaluate its property, plant and equipment for potential impairment when circumstances indicate that the carrying value of an asset may not be recoverable from undiscounted future net cash flows.
A significant amount of judgment is involved in performing these evaluations since the results are based on estimated future events. Such events include a projection of future oil and natural gas sales prices, an estimate of the amount of oil and natural gas that will be produced from a field, the timing of this future production, future costs to produce the oil and natural gas, future capital, operating and abandonment costs and future inflation levels.
The need to test a long-lived asset for impairment can be based on several factors, including, but not limited to, a significant reduction in sales prices for oil and/or natural gas, unfavorable revisions of oil or natural gas reserves, or other changes to contracts, environmental, health and safety laws and regulations, tax laws or other regulatory changes. All of these factors must be considered when evaluating a property’s carrying value for possible impairment.
Due to the volatility of world oil and natural gas markets, the actual sales prices for oil and natural gas have often been different from the Company’s projections.
Estimates of future oil and natural gas production and sales volumes are based on a combination of proved and risked probable reserves. Although the estimation of reserves and future production is uncertain, the Company believes that its estimates are reasonable; however, there have been cases where actual production volumes were higher or lower than projected and the timing was different than the original projection. The Company adjusts reserves and production estimates as new information becomes available.
The Company generally projects future costs by using historical costs adjusted for both assumed long-term inflation rates and known or expected changes in future operations. Although the projected future costs are considered to be reasonable, at times, costs have been higher or lower than originally estimated.
In 2024, the Company recognized pretax non-cash impairment charges of $62.9 million to reduce the carrying values at select properties. In the first quarter of 2024, the Company recognized $34.5 million related to the Calliope field, in the Gulf of America, and in the fourth quarter of 2024, the Company recognized $28.4 million related to the Nearly Headless Nick field, in the Gulf of America. Both of the impairment charges were due to subsurface issues that led to reserve reductions. There were no impairments recognized in 2023.
See also Note D for further discussion of impairment charges.
Income taxes - The Company is subject to income and other similar taxes in all areas in which it operates. When recording income tax expense, certain estimates are required because: (a) income tax returns are generally filed months after the close of its annual accounting period; (b) tax returns are subject to audit by taxing authorities and audits can often take years to complete and settle; (c) future events often impact the timing of when income tax expenses and benefits are recognized by the Company; and (d) changes to regulations may be subject to different interpretations and require future clarification from issuing authorities or others.
The Company has deferred tax assets mostly relating to U.S. net operating losses, liabilities for dismantlement, retirement benefit plan obligations and net deferred tax liabilities relating to tax and accounting basis differences for property, plant and equipment.
The Company routinely evaluates all deferred tax assets to determine the likelihood of their realization and reduces such assets to the expected realizable amount by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. In assessing the need for valuation allowances,
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
we consider all available positive and negative evidence. Positive evidence includes projected future taxable income and assessment of future business assumptions, a history of utilizing tax assets before expiration, significant proven and probable reserves and reversals of taxable temporary differences. Negative evidence includes losses in recent years.
As of December 31, 2024 the Company had a U.S. deferred tax asset associated with net operating losses of $289.6 million. In reviewing the likelihood of realizing this asset, the Company considered the reversal of taxable temporary differences, carryforward periods and future taxable income estimates based on projected financial information which, based on currently available evidence, we believe to be reasonably likely to occur. Certain estimates and assumptions are used in the estimation of future taxable income, including (but not limited to) (a) future commodity prices for crude oil, natural gas and NGLs, (b) estimated reserves for crude oil, natural gas and NGLs, (c) expected timing of production, (d) estimated lease operating costs and (e) future capital requirements. In the future, the underlying actual assumptions utilized in estimating future taxable income could be different and result in different conclusions about the likelihood of the future utilization of our net operating loss carryforwards.
Accounting for retirement and postretirement benefit plans - Murphy and certain of its subsidiaries maintain defined benefit retirement plans covering certain full-time employees. The Company also sponsors health care and life insurance benefit plans covering most retired U.S. employees. The expense associated with these plans is estimated by management based on a number of assumptions and with consultation assistance from qualified third-party actuaries. The most important of these assumptions for the retirement plans involve the discount rate used to measure future plan obligations and the expected long-term rate of return on plan assets. For the retiree medical and insurance plans, the most important assumptions are the discount rate for future plan obligations and the health care cost trend rate. Discount rates are based on the universe of high-quality corporate bonds that are available within each country. Cash flow analyses are performed in which a spot yield curve is used to discount projected benefit payment streams for the most significant plans. The discounted cash flows are used to determine an equivalent single rate, which is the basis for selecting the discount rate within each country. Expected plan asset returns are based on long-term expectations for asset portfolios with similar investment mix characteristics. Anticipated health care cost trend rates are determined based on prior experience of the Company and an assessment of near-term and long-term trends for medical and drug costs.
Based on bond yields as of December 31, 2024, the Company has used a weighted average discount rate of 5.63% at year-end 2024 for the primary U.S. plans. This weighted average discount rate is 0.5% higher than prior year, which decreased the Company’s recorded liabilities for retirement plans compared to a year ago. The Company assumed a return on plan assets of 7.60% for the primary U.S. plan and periodically reconsiders the appropriateness of this and other key assumptions. The Company’s retirement and postretirement plan (health care and life insurance benefit plans) expenses in 2025 are expected to be $5.3 million lower than in 2024 primarily due to the decrease in the benefit obligations at December 31, 2024 compared to the prior year, which decreases the interest cost recognized in net periodic benefit costs.
In 2024, the Company paid $35.5 million into various retirement plans and $13.0 million into postretirement plans. In 2025, the Company is expecting to fund payments of approximately $26.4 million into various retirement plans and $4.2 million for postretirement plans. The Company could be required to make additional and more significant funding payments to retirement plans in future years. Future required payments and the amount of liabilities recorded on the balance sheet associated with the plans could be unfavorably affected if the discount rate declines, the actual return on plan assets falls below the assumed return, or the health care cost trend rate increase is higher than expected.
Recent Accounting Pronouncements
See Note B in our Consolidated Financial Statements regarding the impact or potential impact of recent accounting pronouncements upon our financial position and results of operations.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
Contractual obligations and guarantees - The Company is obligated to make future cash payments under borrowing arrangements, operating leases, purchase obligations primarily associated with existing capital expenditure plans and other long-term liabilities. Total payments due after 2024 under such contractual obligations and arrangements are shown in the table below. Amounts are undiscounted and therefore may differ to those presented in the financial statements.
(Millions of dollars) Amount of Obligations
Total 2025 2026 - 2027 2028 - 2029 After 2029
Debt, excluding interest $ 1,284.8 $ - $ 78.9 $ 266.2 $ 939.7
Operating and finance leases 1,009.6 291.7 192.5 118.0 407.4
Capital expenditures, drilling rigs and other ¹ 1,294.4 469.8 339.2 160.2 325.2
Other long-term liabilities, including debt interest ² 2,618.0 197.2 262.0 194.9 1,963.9
Total $ 6,206.8 $ 958.7 $ 872.6 $ 739.3 $ 3,636.2
1 Capital expenditures, drilling rigs and other includes $25.3 million, $13.7 million, $7.3 million and $1.1 million, in 2025 for approved capital projects in non-operated interests in the Gulf of America, U.S. Onshore, Canada Offshore and Other Offshore, respectively. Capital expenditures, drilling rigs and other includes $4.7 million in 2026 for approved capital projects in non-operated interests in the Gulf of America.
Also includes $73.1 million (2025), $138.4 million (2026 - 2027), $114.0 million (2028 - 2029) and $256.5 million (After 2029) for pipeline transportation commitments in Canada.
Also includes $3.6 million (2025), $7.1 million (2026 - 2027), $7.1 million (2028 - 2029) and $17.2 million (After 2029) for long-term take or pay commitments relating to natural gas processing in Canada.
Also includes approximately $7.2 million (2025), $25.5 million (2026 - 2027), $25.3 million (2028 - 2029) and $120.0 million (After 2029) for Other Offshore for the purpose of supporting future development activities in Vietnam.
2 Other long-term liabilities, including debt interest, includes future cash outflows for ARO liabilities.
The Company has entered into agreements to lease production facilities for various producing oil fields as well as other arrangements that require future payments as described in the following section. The Company’s share of the contractual obligations under these leases and other arrangements has been included in the table above.
In the normal course of its business, the Company is required under certain contracts with various governmental authorities and others to provide letters of credit that may be drawn upon if the Company fails to perform under those contracts. Total outstanding letters of credit were $189.7 million as of December 31, 2024.
Material off-balance sheet arrangements - Certain U.S. transportation contracts require minimum monthly payments through 2045, while Canada Onshore transportation and processing contracts call for minimum monthly payments through 2051. Future required minimum annual payments under these arrangements are included in the contractual obligation table above.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
Outlook
The oil and natural gas industry is impacted by global commodity pricing. As a result, the prices for the Company’s primary products are often volatile and are affected by the levels of supply and demand for energy. As discussed in the “Results of Operations” section on revenues, on page 37, lower average crude oil price during 2024 directly impacted the Company’s product sales revenue.
As of close on February 25, 2025, forward price curves for existing forward contracts for the remainder of 2025 and 2026 are shown in the table below:
2025 2026
WTI ($/BBL)
67.60 64.93
NYMEX ($/MMBTU)
4.44 4.21
AECO (US$ Equivalent/MCF)
1.49 2.21
In 2024, liquids from continuing operations represented approximately 56% of total hydrocarbons produced on a barrels of oil equivalent basis. In 2025, the Company’s ratio of hydrocarbon production represented by liquids is expected to be 57%. If the prices for crude oil and natural gas are lower in 2025 or beyond, this will have an unfavorable impact on the Company’s operating profits; likewise, if prices are higher, this will have a favorable impact. The Company, from time to time, may choose to use a variety of commodity hedge instruments to reduce commodity price risk, including forward sale fixed financial swaps and long-term fixed-price physical commodity sales.
The Company currently expects average daily production in 2025 to be between 181,100 and 189,100 BOEPD (including a noncontrolling interest of 6,600 BOEPD). If significant price declines occur, the Company will review the option of production curtailments to avoid incurring losses on certain produced barrels.
Similar to the overall inflation and higher interest rates in the wider economy, the oil and natural gas industry and the Company are observing higher costs for goods and services used in E&P operations. Murphy continues to manage input costs through its dedicated procurement department focused on managing supply chain and other costs to deliver cash flow from operations.
We cannot predict what impact economic factors (including, but not limited to, inflation, global conflicts and possible economic recession) may have on future commodity pricing. Lower prices, should they occur, will result in lower profits and operating cash flows.
The Company’s capital expenditure spend for 2025 is expected to be between $1,135 million and $1,285 million, excluding noncontrolling interest. Capital and other expenditures are routinely reviewed and planned capital expenditures may be adjusted to reflect differences between budgeted and forecast cash flow during the year. Capital expenditures may also be affected by asset purchases or sales, which often are not anticipated at the time a budget is prepared. The Company will primarily fund its capital program in 2025 using operating cash flow and available cash. If oil and/or natural gas prices weaken, actual cash flow generated from operations could be reduced such that capital spending reductions are required and/or borrowings under available credit facilities might be required during the year to maintain funding of the Company’s ongoing development projects.
The Company plans to utilize surplus cash (not planned to be used by operations, investing activities, dividends or payment to noncontrolling interests), in accordance with the Company’s capital allocation framework designed to allow for additional shareholder returns and debt reduction. Details of the framework can be found in the “Capital Allocation Framework” section of the Company’s Form 8-K filed on August 4, 2022 and Form 8-K filed on August 8, 2024. The Board has authorized a share repurchase program whereby the Company can repurchase up to $1,100 million of the Company’s common stock. As of December 31, 2024, the Company had $650.1 million of its common stock remaining available to repurchase under the program.
Subsequent to year end, as of February 25, 2025, the Company repurchased 3.4 million shares of its common stock in open-market transactions for $95.1 million, excluding taxes and fees. As of this date, the Company had $555.0 million of its common stock remaining available to repurchase under the program.
In addition, subsequent to the balance sheet date, on January 30, 2025, the Board of Directors declared a quarterly cash dividend on the Common Stock of Murphy Oil Corporation of $0.325 per share, or $1.30 per
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
share on an annualized basis. The dividend is payable on March 3, 2025, to stockholders of record as of February 18, 2025.
The Company continues to monitor the impact of commodity prices on its financial position and is currently in compliance with the covenants related to the RCF (see Note F).
As of February 25, 2025, the Company has entered into forward fixed-price delivery contracts to manage risk associated with certain future oil and natural gas sales prices, as follows:
Volumes
(MMCF/d) Price/MCF Remaining Period
Area Commodity Type Start Date End Date
Canada Natural Gas Fixed price forward sales 40 C$2.75 1/1/2025 12/31/2025
Canada Natural Gas Fixed price forward sales 50 C$3.03 1/1/2026 12/31/2026
Volumes
(MMCF/d) Price/MCF Remaining Period
Area Commodity Type Start Date End Date
United States Natural Gas Fixed price derivative swap 40 US$3.58 2/1/2025 6/30/2025
United States Natural Gas Fixed price derivative swap 60 US$3.65 7/1/2025 9/30/2025
United States Natural Gas Fixed price derivative swap 60 US$3.74 10/1/2025 12/31/2025
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
Forward-Looking Statements
This Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified through the inclusion of words such as “aim”, “anticipate”, “believe”, “drive”, “estimate”, “expect”, “expressed confidence”, “forecast”, “future”, “goal”, “guidance”, “intend”, “may”, “objective”, “outlook”, “plan”, “position”, “potential”, “project”, “seek”, “should”, “strategy”, “target”, “will” or variations of such words and other similar expressions. These statements, which express management’s current views concerning future events, results and plans, are subject to inherent risks, uncertainties and assumptions (many of which are beyond our control) and are not guarantees of performance. In particular, statements, express or implied, concerning the Company’s future operating results or activities and returns or the Company's ability and decisions to replace or increase reserves, increase production, generate returns and rates of return, replace or increase drilling locations, reduce or otherwise control operating costs and expenditures, generate cash flows, pay down or refinance indebtedness, achieve, reach or otherwise meet initiatives, plans, goals, ambitions or targets with respect to emissions, safety matters or other ESG (environmental/social/governance) matters, make capital expenditures or pay and/or increase dividends or make share repurchases and other capital allocation decisions are forward-looking statements. Factors that could cause one or more of these future events, results or plans not to occur as implied by any forward-looking statement, which consequently could cause actual results or activities to differ materially from the expectations expressed or implied by such forward-looking statements, include, but are not limited to: macro conditions in the oil and natural gas industry, including supply/demand levels, actions taken by major oil exporters and the resulting impacts on commodity prices; geopolitical concerns; increased volatility or deterioration in the success rate of our exploration programs or in our ability to maintain production rates and replace reserves; reduced customer demand for our products due to environmental, regulatory, technological or other reasons; adverse foreign exchange movements; political and regulatory instability in the markets where we do business; the impact on our operations or market of health pandemics such as COVID-19 and related government responses; other natural hazards impacting our operations or markets; any other deterioration in our business, markets or prospects; any failure to obtain necessary regulatory approvals; any inability to service or refinance our outstanding debt or to access debt markets at acceptable prices; or adverse developments in the U.S. or global capital markets, credit markets, banking system or economies in general, including inflation and trade policies. For further discussion of factors that could cause one or more of these future events or results not to occur as implied by any forward-looking statement, see “Item 1A. Risk Factors”, which begins on page 13 of this Annual Report on Form 10-K. Investors and others should note that we may announce material information using SEC filings, press releases, public conference calls, webcasts and the investors page of our website. We may use these channels to distribute material information about the Company; therefore, we encourage investors, the media, business partners and others interested in the Company to review the information we post on our website. The information on our website is not part of, and is not incorporated into, this report. Murphy Oil Corporation undertakes no duty to publicly update or revise any forward-looking statements.
PART II

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risks associated with prices of crude oil, natural gas and petroleum products, foreign currency exchange rates and interest rates. As described in Note K, Murphy periodically makes use of derivative financial and commodity instruments to manage risks associated with existing or anticipated transactions.
Commodity Price Risk
There were commodity transactions in place as of December 31, 2024, covering certain future U.S. natural gas sales volumes in 2025. A 10% increase in the respective benchmark price of these commodities would have increased the net payable associated with these derivative contracts by approximately $2.5 million, while a 10% decrease would have decreased the recorded payable by a similar amount, resulting in a receivable.
Foreign Exchange Risk
There were no derivative foreign exchange contracts in place as of December 31, 2024.
Interest Rate Risk
At December 31, 2024, long-term debt was $1,274.5 million. The fixed-rate notes have a weighted average coupon of 6.1%. The Company’s RCF provides for variable interest rate borrowings; however, we did not have any borrowings outstanding as of December 31, 2024 and, therefore, no related exposure to interest rate risk.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required by this item appears on pages 66 through 123 of this Form 10-K report.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. CONTROLS AND PROCEDURES
Under the direction of its principal executive officer and principal financial officer, controls and procedures have been established by the Company to ensure that material information relating to the Company and its consolidated subsidiaries is made known to the officers who certify the Company’s financial reports and to other members of senior management and the Board of Directors.
Based on their evaluation, with the participation of the Company’s management, as of December 31, 2024, the principal executive officer and principal financial officer of Murphy Oil Corporation have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were effective to ensure that the information required to be disclosed by Murphy Oil Corporation in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.
Murphy’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Management has conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024. KPMG LLP, an independent registered public accounting firm, has made an independent assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 and their report is included on page 65 of this Form 10-K report.
There were no changes in the Company’s internal controls over financial reporting that occurred during the fourth quarter of 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II

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ITEM 9B. OTHER INFORMATION
Item 9B. OTHER INFORMATION
During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Certain information regarding executive officers of the Company is included on page 28 of this Form 10-K report. Other information required by this item is incorporated by reference to the Registrant’s definitive Proxy Statement for the Annual Meeting of Stockholders on May 14, 2025 under the captions “Election of Directors” and “The Board and Committees.”
Murphy Oil has adopted a Code of Ethical Conduct for Executive Management, which can be found under the Corporate Governance tab at ir.murphyoilcorp.com. Stockholders may also obtain, free of charge, a copy of the Code of Ethical Conduct for Executive Management by writing to the Corporate Secretary at 9805 Katy Fwy, Suite G-200, Houston, TX 77024. Any future amendments to or waivers of the Code of Ethical Conduct for Executive Management will be posted on the Company’s Website.
Murphy Oil has also adopted an insider trading policy governing the purchase, sale, and/or other dispositions of our securities by our directors, officers, employees and contractors and consultants who have access to material nonpublic information, as well as the Company itself, that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing standards applicable to us. A copy of our insider trading policy, including any amendments thereto, is filed as Exhibit 19.1 to this Form 10-K.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. EXECUTIVE COMPENSATION
Information required by this item is incorporated by reference to Murphy’s definitive Proxy Statement for the Annual Meeting of Stockholders on May 14, 2025 under the captions “Compensation Discussion and Analysis” and “How We Are Compensated” and in various compensation schedules.
As required by U.S. federal securities laws, the Company implemented its incentive-based compensation recoupment (clawback) policy providing for the recovery of erroneously awarded incentive-based compensation received by current or former executive officers. We have filed our written recoupment policy as Exhibit 97.1 to this Form 10-K report and as of December 31, 2024, there have been no accounting restatements requiring compensation recoupment.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information required by this item is incorporated by reference to Murphy’s definitive Proxy Statement for the Annual Meeting of Stockholders on May 14, 2025 under the caption “Our Stockholders” and in the “Equity Compensation Plan Information”.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information required by this item is incorporated by reference to Murphy’s definitive Proxy Statement for the Annual Meeting of Stockholders on May 14, 2025 under the caption “Election of Directors”.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Our independent registered public accounting firm is KPMG LLP, Houston, TX, Auditor Firm ID: 185.
Information required by this item is incorporated by reference to Murphy’s definitive Proxy Statement for the Annual Meeting of Stockholders on May 14, 2025 under the caption “Audit Committee Report”.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) 1. Financial Statements - The consolidated financial statements of Murphy Oil Corporation and consolidated subsidiaries are located or begin on the pages of this Form 10-K report as indicated below.
Page No.
Report of Management - Consolidated Financial Statements
Report of Management - Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements
(KPMG LLP , Houston, TX, Auditor Firm ID: 185)
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting (KPMG LLP, Houston, TX, Auditor Firm ID: 185)
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income (Loss)
Consolidated Statements of Cash Flows
Consolidated Statements of Stockholders’ Equity
Notes to Consolidated Financial Statements
Note A - Significant Accounting Policies
Note B - New Accounting Principles and Recent Accounting Pronouncements
Note C - Revenue from Contracts with Customers
Note D - Property, Plant and Equipment
Note E - Inventories
Note F - Financing Arrangements and Debt
Note G - Asset Retirement Obligations
Note H - Income Taxes
Note I - Incentive Plans
Note J - Employee and Retiree Benefit Plans
Note K - Financial Instruments and Risk Management
Note L - Net Income (Loss) Per Common Share
Note M - Other Financial Information
Note N - Accumulated Other Comprehensive Loss
Note O - Assets and Liabilities Measured at Fair Value
Note P - Commitments
Note Q - Environmental and Other Contingencies
Note R - Common Stock Issued and Outstanding
Note S - Business Segments
Note T - Leases
Note U - Subsequent Event
Supplemental Oil and Gas Information (unaudited)
Supplemental Quarterly Information (unaudited)
PART IV
2. Financial Statement Schedules
Schedule II - Valuation Accounts and Reserves
All other financial statement schedules are omitted because either they are not applicable, or the required information is included in the consolidated financial statements or notes thereto.
3. Exhibits - The following is an index of exhibits that are hereby filed as indicated by asterisk (*), that are considered furnished rather than filed, or that are incorporated by reference. Exhibits other than those listed have been omitted since they either are not required or are not applicable.
Exhibit
No. Incorporated by Reference to the Indicated Filing by
Murphy Oil Corporation
2.1 Purchase and sale agreement dated as of April 19, 2019 between LLOG Bluewater Holdings, LLC and LLOG Exploration Offshore, LLC, as seller, and Murphy Exploration & Production Company - USA, as purchaser.
Exhibit 2.1 to Form 8-K filed June 5, 2019
2.2 First Amendment to Purchase and Sale Agreement dated as of May 31, 2019 among Murphy Exploration & Production Company - USA, LLOG Exploration Offshore, L.L.C. and LLOG Bluewater Holdings, L.L.C.
Exhibit 2.2 to Form 8-K filed June 5, 2019
2.3 Contribution Agreement dated as of October 10, 2018 among Murphy Exploration & Production Company - USA, Petrobras America Inc. and MP Gulf of Mexico, LLC
Exhibit 2.1 to Form 10-K filed February 27, 2019
3.1 Certificate of Incorporation of Murphy Oil Corporation, as amended effective May 11, 2005
Exhibit 3.1 to Form 10-K filed February 28, 2011
3.2 By-Laws of Murphy Oil Corporation, as amended effective August 5, 2020
Exhibit 3.2 to Form 10-Q filed August 6, 2020
4.1 Indenture dated as of May 4, 1999 between Murphy Oil Corporation and SunTrust Bank, Nashville, N.A., as trustee
Exhibit 4.2 to Form 10-K filed March 16, 2005
4.2 Supplemental Indenture dated as of May 4, 1999 between Murphy Oil Corporation and SunTrust Bank, Nashville, N.A., as trustee, relating to 7.05% Notes due 2029
Exhibit 4.2 to Form 10-K filed March 16, 2005
4.3 Indenture dated as of May 18, 2012 between Murphy Oil Corporation and U.S. Bank National Association, as trustee
Exhibit 4.1 to Form 8-K filed May 18, 2012
4.4 Second Supplemental Indenture dated as of November 30, 2012, between Murphy Oil Corporation and U.S. Bank National Association, as trustee, relating to 5.125% Notes due 2042
Exhibit 4.1 to Form 8-K filed November 30, 2012
4.5 Fifth Supplemental Indenture dated as of November 27, 2019, between Murphy Oil Corporation and U.S. Bank National Association, as trustee, and Wells Fargo Bank, National Association, as series trustee, relating to 5.875% Notes due 2027
Exhibit 4.2 to Form 8-K filed November 27, 2019
4.6 Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
Exhibit 4.9 to Form 10-K filed February 27, 2020
4.7 Sixth Supplemental Indenture dated as of March 5, 2021, between Murphy Oil Corporation and U.S. Bank National Association, as trustee, and Wells Fargo Bank, National Association as series trustee, relating to 6.375% Notes due 2028
Exhibit 4.2 to Form 8-K filed March 5, 2021
4.8 Seventh Supplemental Indenture dated as of October 3, 2024,between Murphy Oil Corporation and Regions Bank, as trustee, relating to 6.000% Notes due 2032
Exhibit 4.2 to Form 8-K filed October 3, 2024
10.1 Murphy Oil Corporation Annual Incentive Plan
Exhibit 10.3 to Form 10-K filed February 25, 2022
10.2 Murphy Oil Corporation 2018 Long-Term Incentive Plan
Exhibit B to definitive proxy statement filed March 23, 2018
10.3
Amendment to the Murphy Oil Corporation 2018 Long-Term Incentive Plan
Exhibit 10.15 to Form 10-K filed February 27, 2020
PART IV
10.4
Form of employee performance-based restricted stock unit - stock settled grant agreement (2018 Long-Term Incentive Plan)
Exhibit 10.14 to Form 10-K filed February 27, 2019
10.5
Form of employee performance-based restricted stock unit - stock settled grant agreement (2018 Long-Term Incentive Plan)
Exhibit 10.17 to Form 10-K filed February 27, 2020
10.6
Form of employee time-based restricted stock unit - stock settled 3-year grant agreement (2018 Long-Term Incentive Plan)
Exhibit 10.15 to Form 10-K filed February 27, 2019
10.7
Form of employee time-based restricted stock unit - stock settled 5-year grant agreement (2018 Long-Term Incentive Plan)
Exhibit 10.16 to Form 10-K filed February 27, 2019
10.8 Murphy Oil Corporation 2020 Long-Term Incentive Plan
Exhibit A to definitive proxy statement filed March 30, 2020
10.9 Form of employee performance-based restricted stock unit - stock settled grant agreement (2020 LTI Plan)
Exhibit 10.21 to Form 10-K filed February 26, 2021
10.10 Form of employee time-based restricted stock unit - stock settled 3-year grant agreement (2020 LTI Plan)
Exhibit 10.22 to Form 10-K filed February 26, 2021
10.11 Form of employee time-based restricted stock unit - stock settled 5-year grant agreement (2020 LTI Plan)
Exhibit 10.23 to Form 10-K filed February 26, 2021
10.12 Form of employee time-based restricted stock unit - cash settled 3-year grant agreement (2020 LTI Plan)
Exhibit 10.24 to Form 10-K filed February 26, 2021
10.13 Form of employee time-based restricted stock unit - cash settled 5-year grant agreement (2020 LTI Plan)
Exhibit 10.25 to Form 10-K filed February 26, 2021
10.14 Murphy Oil Corporation 2018 Stock Plan for Non-Employee Directors
Exhibit A to definitive proxy statement filed March 23, 2018
10.15
First Amendment to the 2018 Stock Plan for Non-Employee Directors
Exhibit 10.1 to Form 8-K filed April 25, 2018
10.16
Second Amendment to the 2018 Stock Plan for Non-Employee Directors
Exhibit 10.24 to Form 10-K filed February 27, 2020
10.17
Form of non-employee director restricted stock unit award - stock settled grant agreement (2018 NED Plan)
Exhibit 10.20 to Form 10-K filed February 27, 2019
10.18 Form of non-employee director restricted stock unit award - stock settled grant agreement (2018 NED Plan)
Exhibit 10.26 to Form 10-K filed February 27, 2020
10.19 Murphy Oil Corporation 2021 Stock Plan for Non-Employee Directors
Exhibit A to definitive proxy statement filed March 26, 2021
10.20 Form of non-employee director restricted stock unit award - stock settled grant agreement (2021 NED Plan)
Exhibit 10.27 to Form 10-Q filed August 5, 2021
10.21 Murphy Oil Corporation Non-Qualified Deferred Compensation Plan for Non-Employee Directors
Exhibit 10.6 to Form 10-K filed February 26, 2016
10.22 Trademark License Agreement dated as of August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc.
Exhibit 10.4 to Form 8-K filed September 5, 2013
10.23
Form of employee performance-based restricted stock unit (2020 LTI Plan)
Exhibit 10.30 to Form 10-K filed February 23, 2024
10.24
Form of employee time-based restricted stock unit - A (2020 LTI Plan)
Exhibit 10.31 to Form 10-K filed February 23, 2024
10.25
Form of employee time-based restricted stock unit - B (2020 LTI Plan)
Exhibit 10.32 to Form 10-K filed February 23, 2024
10.26
Form of employee time-based restricted stock unit - C (2020 LTI Plan)
Exhibit 10.33 to Form 10-K filed February 23, 2024
10.27
Form of employee time-based restricted stock unit - D (2020 LTI Plan)
Exhibit 10.34 to Form 10-K filed February 23, 2024
10.28
Form of non-employee director elective restricted stock unit (2021 NED Plan)
Exhibit 10.35 to Form 10-Q filed May 2, 2024
10.29
Severance Protection Agreement dated as of August 7, 2013 between Murphy Oil Corporation and Roger W. Jenkins
Exhibit 10.1 to Form 8-K filed August 9, 2013
PART IV
10.30
Amendment to Severance Protection Agreement dated as of August 7, 2013, between Murphy Oil Corporation and Roger W. Jenkins
Exhibit 10.1 to Form 10-Q filed May 2, 2019
10.31
Credit Agreement, dated as of October 7, 2024, among Murphy Oil Corporation, Murphy Exploration & Production Company - International and Murphy Oil Company Ltd., as borrowers, JPMorgan Chase Bank N.A., as administrative agent, and the lenders party thereto
Exhibit 10.1 to Form 8-K filed October 7, 2024
*10.32
Form of Severance Protection Agreement
*10.33
First Amendment to the New Credit Agreement dated as of February 6, 2025 among Murphy Oil Corporation, Murphy Exploration & Production Company - International and Murphy Oil Company Ltd., as borrowers, JPMorgan Chase Bank, N.A., as administrative agent and the lenders party hereto
*19.1
Murphy Oil Corporation Insider Trading Policy
*21.1 Subsidiaries of Murphy Oil Corporation
*23.1 Consent of Independent Registered Public Accounting Firm
*23.2 Consent of Ryder Scott Company, L.P.
*23.3 Consent of McDaniel & Associates Consultants Ltd.
*23.4
Consent of Netherland, Sewell & Associates, Inc.
*31.1 Certification required by Rule 13a-14(a) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.2 Certification required by Rule 13a-14(a) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*32.1 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97.1
Murphy Oil Corporation Compensation Recoupment Policy
Exhibit 10.29 to Form 10-K filed February 23, 2024
*99.1
Ryder Scott independent reserves audit report for MP GOM JV
*99.2
McDaniel independent reserves audit report for Canada Onshore proved crude oil and natural gas reserves
*99.3
Netherland, Sewell & Associates, Inc. independent reserves audit report U.S. Gulf of Mexico
101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)