Murphy Oil Corporation (NYSE:MUR) Q4 2022 Earnings Call Transcript

Page 7 of 10

Roger Jenkins: Thanks, Paul for that question. I appreciate you probably didn’t have it a couple of questions. The room was ahead of you, you got to get more. As you look across our production from ’23 onwards, as I look at our onshore business, as you just mentioned and Eric greatly answered about our increase in the Montney — so when you look across our onshore business today, this year, as we just disclosed this morning, 89,000 barrels a day, that’s creeping up 90, 110, 112, primarily around the Montney and maintaining the Montney and toward the end of the program, increased close to 40 in the Eagle Ford at this time. So that — so the onshore is growing. Our offshore business is a very solid business as we disclosed today.

We look to maintain this business between $90,000 and $100,000 through — from now through ’27. But in 2024, ’25 and ’26 as we put on all these projects that we mentioned this morning and have the success of Terranova coming back on, which is an incredible project for us, but really get close to 100 in that business through ’25 and ’26, leading to this 180,190 210, 21000, 210 type business. Real proud of it. It makes enormous free cash flow, Paul.

Paul Cheng: And the final one, I want to go back to the earlier question on Eagle Ford. And I think Eric is saying that the reason why the production is lower because we are drilling the well in the Titan right? And if that’s the case, that I mean, why go back and drill the Titan, — why not concentrate on Kings and ? I mean — that means that — we already finished most of the best well over there or I mean what’s the reason behind?

Eric Hambly: This is Eric, so excited to answer your question, Paul. I’m — I’ll let him do it. He’s right in notes. He’s going to Craig.

Roger Jenkins: Go ahead, Eric. I don’t want to hold that back, that energy.

Eric Hambly: Paul, we have under our lease agreements with the owners of acreage there in the Tilden area. Some of our leases have some ongoing drilling commitments that every year or 2 or 3, you have to drill another well or 4. And our program in 2023 is oriented toward fulfilling those obligations. But also, as we highlighted earlier, we really would like to see how well they perform with our enhanced completion design. So we might be able to see a larger amount of top-tier performing wells there, but it’s primarily around fulfilling our obligations and maintaining our leases.

Roger Jenkins: Well, on top of that, Paul, if you look at many companies you cover, there’s a lot of rigs moving into Tilden, — there’s a lot of activity because that’s through the Permian, and we’ve been doing a long time in the Montney, 10,000-foot laterals are becoming very common. And then companies are working together more in the Tilden area because it’s an underdrilled area in the Eagle Ford to add these longer laterals, which the industry believes will be higher production. Our corns in Catarina can’t be extended in that way. And if there’s a game plan, very sophisticated, planned out plan to have offset frac impacts and how we move from Karnes to Catarina and now Tilden, and it’s a game plan that allows us to maintain this 30 to 35 for a very long time and grow it to any level we want to make a lot of money in the business.

So just a year, we’re going back to Tilden, I personally believe that our — all the great work we did on technology around fracking will succeed there as well. And it’s clear to me by the rig count and what’s going on that others believe that as well.

Paul Cheng: Right. Great. Eric, I just want to — one follow-up on the obligation. For the next several years, do you also have a 3 large obligation that you have to drill in Q2?

Page 7 of 10