Market Overview

Murphy Oil Closes Gulf of Mexico Joint Venture, Provides Updated Guidance and Announces New Unsecured Credit Facility


Murphy Oil Corporation (NYSE:MUR) announced today that its wholly owned
subsidiary, Murphy Exploration & Production Company - USA, has closed
the previously announced strategic deep water Gulf of Mexico joint
venture with Petrobras America Inc. ("PAI"), a subsidiary of Petrobras
(NYSE:PBR) for net cash consideration of approximately $795 million.
The transaction has an effective date of October 1, 2018.

Murphy's net cash consideration, after adjustments provided for in the
contract, of approximately $795 million is funded by $470 million of
cash-on-hand with the remaining $325 million being drawn on the
company's new senior credit facility.

Under the terms of the transaction, both companies contributed all their
current producing Gulf of Mexico assets to the joint venture company, MP
Gulf of Mexico, LLC ("MPGOM"). MPGOM will be owned 80 percent by Murphy
and 20 percent by PAI, with Murphy overseeing the operations. The
company expects to account for the PAI share of this transaction as a
noncontrolling interest.


  • Increasing total Gulf of Mexico production to approximately 60,000 net
    barrels of oil equivalent per day at closing, net to
    Murphy's interest
  • Providing high-margin production with Gulf Coast prices
  • Accelerating activity in the oil-weighted Eagle Ford Shale with cash
    flow generated from new joint venture assets

"We are excited to close this transformational joint venture and form a
strategic partnership with Petrobras. Our newly expanded Gulf of Mexico
portfolio is consistent with Murphy's long-term vision of increasing
profitable oil-weighted production in an area where we have a long
history of success. We plan to allocate a portion of the cash flow
generated by the joint venture to accelerate further high-value
oil-weighted activity in our Eagle Ford Shale asset," stated Roger W.
Jenkins, Murphy Oil President and Chief Executive Officer.


As a result of the transaction and other operational events, Murphy is
providing updated fourth quarter and full year production guidance. The
company expects fourth quarter production to be approximately 176,000
barrels of oil equivalent per day (BOEPD) and full year production to be
approximately 171,000 BOEPD, net to Murphy's interest.

Following the November 30, 2018 closing of the joint venture, average
fourth quarter production in the Gulf of Mexico will increase by
approximately 13,000 BOEPD, net to Murphy's interest. Across several of
the company's assets, fourth quarter production was impacted by recent
unplanned events, including severe storms in non-operated offshore
Canada (2,000 BOEPD); third-party processing, facility de-bottlenecking
start-up delays in Malaysia (1,500 BOEPD); and non-operated facility
downtime in the Gulf of Mexico (1,500 BOEPD).

In conjunction with the previously announced plan to accelerate activity
in the Eagle Ford Shale, full year capital expenditures are being
increased by approximately $48 million to $1.23 billion. In order to
jump-start activity for 2019, the company plans to drill ten and
complete eight additional wells in 2018.


Murphy also announced today the closing of its new $1.6 billion
five-year senior unsecured revolving credit facility. Effective November
28, 2018, the new revolving credit facility replaces the previous $1.1
billion unsecured facility.

The new revolving credit facility has enhanced terms that are more
consistent with investment grade-rated companies. Murphy intends to use
this credit facility for working capital, capital expenditures,
acquisitions, the issuance of letters of credit and general corporate

"The new credit facility allows for additional financial flexibility
should we need to access capital as we execute on our business plan
through the commodity price cycles. The attractive pricing and relaxed
covenants place Murphy in a position of significant strength with
increased liquidity following the closing of our Gulf of Mexico joint
venture," stated Jenkins.


For financial reporting purposes, beginning with the fourth quarter 2018
earnings release and 2018 10-K, with respect to the Gulf of Mexico joint
venture, Murphy expects to report 100 percent of the joint venture's
production, revenues, and costs (including the 20 percent noncontrolling
interest in MPGOM held by PAI) in accordance with accounting for
noncontrolling interests as prescribed by ASC 810-10-45. The production
numbers reflected in the body of this press release, however, only
reflect Murphy's 80 percent interest in MPGOM volumes attributable to
Murphy's economic interest.


Murphy Oil Corporation is a global independent oil and natural gas
exploration and production company. The company's diverse resource base
includes offshore production in Southeast Asia, Canada and Gulf of
Mexico, as well as North America onshore plays in the Eagle Ford Shale,
Kaybob Duvernay and Montney. Additional information can be found on the
company's website at


This news release 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 or results, are subject to inherent risks and
uncertainties. Factors that could cause one or more of these future
events or results not to occur as implied by any forward-looking
statement include, but are not limited to, increased volatility or
deterioration in the level of crude oil and natural gas prices,
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, natural hazards impacting our operations, 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, and adverse developments in the U.S. or global capital markets,
credit markets or economies in general. 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 "Risk
Factors" in our most recent Annual Report on Form 10-K filed with the
U.S. Securities and Exchange Commission (SEC) and any subsequent
Quarterly Report on Form 10-Q or Current Report on Form 8-K that we
file, available from the SEC's website and from Murphy Oil Corporation's
website at
Murphy Oil Corporation undertakes no duty to publicly update or revise
any forward-looking statements.

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