El Dorado-based Murphy Oil Corp. reported net income of $94 million, or 54 cents a share, for the third quarter of 2018, the company said Wednesday, up from a loss of $66 million, or minus 38 cents a share, reported for the same period in 2017.
Murphy reported revenue of $675 million for the third quarter of 2018, up from $498 million for the same period in 2017.
The company out-performed analysts' expectations. Zacks Equity Research analysts expected the company to report earnings of 36 cents per share after the stock market close Wednesday. Analysts anticipated third-quarter revenues of $641 million.
Murphy also achieved an oil price realization of more than $69 a barrel, which is the highest quarterly year-to-date realization, and noted production of 169 thousand barrels of oil equivalent per day.
Production exceeded expectations due to activity in Tupper Montney offshore Canada and Sarawak natural gas in Malaysia. Additionally, higher than forecasted volumes for the scheduled turnaround in the non-operated Hibernia Field offshore Canada, drove outperformance in production.
Roger W. Jenkins, Murphy Oil president and chief executive officer, said with three-quarters of the year behind the company, production is exceeding the high end of its guidance range.
"We continue to benefit from a diverse, oil-weighted portfolio that generates high cash per barrel metrics, driving over a 20 percent return on cash flow to capital employed," Jenkins said in comments released with the quarterly report. "Our high price realizations, competitive cash returns, long-standing dividend policy and successful exploration program along with our recently announced accretive Gulf of Mexico joint venture will continue to reward our shareholders over the long-term."
Murphy announced in October an agreement to form a new joint venture company with Petrobras America, a subsidiary of Petrobras, a Brazilian multinational corporation. Murphy will own 80 percent of the venture.
Murphy increased production in Kaybob Duvernay in Canada by more than two and a half times, year-over-year, marking the sixth consecutive quarter for increases.
Also, exploration in the Gulf of Mexico confirmed the presence of high-quality reservoir sands and oil resources. As a result, Murphy increased its expectation from the area to 90 million barrels of oil equivalent.
Jenkins said he was pleased with the lease operating expense across North American onshore business during the third quarter, which was just over $6 per barrel of oil equivalent.
"As part of our long-term strategy, we plan to continue increasing production, while spending within cash flow, across our North American onshore assets," Jenkins said. "In the Eagle Ford Shale, we are executing our field development plan with over 1,800 locations remaining in our undrilled inventory. In the Kaybob Duvernay we are growing production and lowering costs, while adding deep inventory of future quality locations in the Tupper Montney, we are consistently achieving our targets."
Murphy Oil shares rose 64 cents to close Wednesday at $31.83.
Murphy Oil will hold a conference call at 10 a.m. today to discuss its quarterly earnings. The call will be available online in the investor relations section of its website at http://www.murphyoilcorp.com/.
Business on 11/08/2018
Print Headline: Murphy Oil gains $94M, up from '17 third quarter