Falling prices knock Murphy Oil to loss of $73.8M in quarter

Graphs showing Murphy Oil Corp. second quarter information.
Graphs showing Murphy Oil Corp. second quarter information.

Murphy Oil Corp. on Wednesday reported a net loss for its 2015 second quarter as crude oil prices cut into the company's revenue.

The El Dorado-based company posted a loss of $73.8 million, or 42 cents per share, in the quarter, down from a profit of $129.4 million, or 72 cents per share, a year ago.

Murphy Oil blamed the loss on steep drops in oil prices. Brent crude and the West Texas Intermediate oil prices fell 44 percent during the quarter compared with the second quarter of 2014.

Revenue for the quarter was $738.3 million, down from $1.4 billion a year ago.

Crude oil prices have been on the decline since mid-2014 because of an oversupplied global market.

Excluding discontinued operations, Murphy Oil's second-quarter loss was $83.1 million, or 48 cents per share, down from last year's adjusted profit of $244.8 million, or $1.38 per share.

Roger Jenkins, president and chief executive officer of Murphy Oil, said in the earnings release that the company reduced its workforce by 7 percent in the second quarter.

"We remain focused on organizational efficiency, capital allocation and reducing operating expenses," he said in the release.

Phil Flynn, energy analyst with Prices Futures Group, said falling oil prices mean that energy companies will be looking to recoup their losses in other ways.

"Management is basically really battening the hatches and making significant cuts, which isn't going to be good if you're working for Murphy Oil," Flynn said.

Flynn said the second quarter had been challenging for the industry but that he expects oil prices to rebound.

"There's going to be slicing and dicing in a lot of these companies in jobs and capital spending," he said. "It's a very difficult time for the energy industry."

On Tuesday, Murphy Oil named Kelly Whitley as its new vice president for investor relations. Whitley will replace Barry Jeffery, who has held the position since 2013. Jeffery will become the vice president for insurance, security and risk, according to a news release.

Jenkins said in the news release that the changes are to increase efficiency and reduce expenses.

"To this end, we have recently restructured our organization and have combined the roles of insurance, risk management and security," he said.

Murphy Oil delivered 36 new wells in the Eagle Ford Shale in Texas in the second quarter. The company has reduced capital spending in the Eagle Ford Shale by 46 percent.

The company also completed the sale of the remaining United Kingdom refining and processing assets.

Analysts expected Murphy Oil to record a loss of 55 cents per share for the second quarter on the basis of a survey of 17 analysts by Thomson Reuters.

Murphy Oil shares rose 11 cents Wednesday to close at $34.23. The company released its quarterly financial results after the markets closed.

Murphy Oil will hold a conference call today at noon to discuss its second-quarter earnings. The call can be accessed by calling 1 (888) 296-4174 and using pass code 5679022 or online at http://ir.murphyoilcorp.com.

Business on 07/30/2015

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