Murphy reports $14.4M decline

Weak oil prices blamed for loss

Correction: The headline is incorrect. It should read, 'Murphy reports $14.4M loss.’

Murphy Oil Corp. on Wednesday reported a loss in net income during its 2015 first quarter as weak oil prices trimmed the company's revenue.

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Arkansas Democrat-Gazette

Graphs showing Murphy Oil Corp. first quarter information.

Murphy Oil recorded a loss of $14.4 million, or 8 cents per share, for the first quarter, down from a profit of $155 million, or 85 cents per share, during the same period in 2014.

The El Dorado-based company's earnings were helped by a $199.5 million after-tax gain on a 10 percent sale of its Malaysian assets.

Excluding results from discontinued operations, Murphy Oil had a first-quarter loss of $198.5 million, or $1.11 per share -- a $373.3 million decline from the same period a year ago.

The drop in profit is attributed to a 50 percent drop in oil prices and 44 percent decrease in natural gas prices.

Crude prices have fallen since mid-2014 as a result of an oversupplied global oil market. Oil and natural gas companies have been cutting spending and jobs in response to the price collapse.

Prices got a lift Wednesday, soaring to more than a four-month high after a weekly government report showed crude stores in Cushing, Okla., declined for the first time since November.

Oil inventories in Cushing dropped more than 500,000 barrels to 61.7 million barrels, according to the Energy Information Administration.

Total U.S. stockpiles rose 1.9 million to 490.9 million barrels, according to the agency. A year ago, there were 399.4 million barrels in stock.

The drawdown of inventories in Cushing is the result of energy companies reducing their investments and shutting down drilling rigs, said Phil Flynn, an energy analyst with Price Futures Group.

"I definitely think oil has put in a major bottom after the price crash and I think prices are going to go up," said Flynn, who expects crude prices to reach between $70 and $80 a barrel by the end of the year.

West Texas Intermediate for June delivery rose 2.7 percent to finish at $58.58 a barrel on the New York Mercantile Exchange.

Brent crude for June contract settlement rose $1.20 to $65.84 on the ICE Futures Europe Exchange in London.

Low crude prices are causing many energy companies to post large declines -- as much as 50 and 60 percent -- in profit, including putting some balance sheets in the red, during the current earnings season.

Murphy Oil has already cut its capital spending for the year by 33 percent, including a 46 percent reduction in the Eagle Ford Shale in Texas, because of lower crude prices.

The company said Wednesday that it had reduced its rig count in the Eagle Ford Shale from seven to four rigs, as planned.

Analysts expected Murphy Oil to record a loss of 64 cents per share for the first quarter, said Carlos Newall, an equity research associate for Raymond James and Associates.

Shares of Murphy Oil rose 1.6 percent on Wednesday to close at $49.19. The company released its quarterly financial results after the market closed.

Murphy Oil reported $921.7 million in revenue during the period that ended March 31, compared with $1.2 billion during the same quarter in 2014.

Murphy Oil completed the sale of 30 percent of its Malaysian oil and gas assets for about $2 billion during the quarter.

"We remain focused on allocating capital and reducing operating expenditures," Roger Jenkins, president and chief executive officer, said in a statement.

"Looking ahead, Murphy is well positioned with a solid balance sheet and cash positions to carry out our capital plans and evaluate opportunities that will enhance our business," he said in the statement.

Murphy Oil will hold a conference call today at noon to discuss its first quarter earnings. The call can be accessed by calling 1-800-481-9591 and using pass code 3382523 or online at http://ir.murphyoilcorp.com.

Business on 04/30/2015

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