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

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Eric Hambly: I’d have to look at that to get into the details, but I wouldn’t view it as a large obligation. It’s been relatively minor, and we’ve been able to manage it within our optimal capital allocation framework. So yes, I don’t have a very clear answer for you right now. I wouldn’t expect it to be significant. Paul, every company you cover has drilling obligations in the Eagle Ford.

Paul Cheng: Understand. I just want to see that whether we’re going to see the next several years that you’re also going to drill a fair bit in item because of the obligation or not?

Roger Jenkins: Well, as Eric said, we don’t see that as that as an issue to hit the volumes for the CapEx we have. But I can see and understand your question on that, we appreciate it. Thank you, Paul.

Operator: Your next question comes from Neal Dingmann with Truist Securities.

Neal Dingmann: Roger, I’ll try to just keep mine to 1 or 2 to keep things moving along the day.

Roger Jenkins: No, you got to get in here.

Neal Dingmann: You got to get through 4 compete. Roger, my question has obviously done a fantastic job on the list made the more months summarize fuel development. Could you just remind us, I assume the plans are there just to try to keep that production relatively flat on Kings K? And if so, does that — will that entail just what a well, 1 or 2 wells a year? Or how should we sort of think about over the next 1 to 2 to 3 years, how do you want us to think about that play?

Roger Jenkins: Thank you, Neal. Thanks for that question on our great asset now the largest asset in our company, an incredible asset. The way to think about it is Samurai 5 is a great deal for us. We now think that Sari could be near 100 million barrel discovery from exploration out there, very proud of it. We’ll have 3 wells there. Of course, we already have 2 there and then we have the other wells in the other field at Clesormont. Each of these have recompletion uphole and different ways to add perforations and deferring things around technology to add additional zones. There’s a lot of zones in these wells through all those efforts, which would be just through OpEx and some de minimis CapEx will allow it to be added. To keep this slide, there’s not a plan today of an additional well in the next 3-year period that we’re advertising to remain flat. There is some in wellbore things to be done that are de minimis capital to keep it flat with the same resource base.

Neal Dingmann: Great to hear. And then just a follow-up. You did a good job on looking again on Slide 28, where you show remarkable 60-plus years in the Eagle Ford and Duvernay inventory. I’m just wondering, would you all consider — I mean, again, just I don’t know, maybe pay debt down quicker or even include pop that shareholder return quicker. Would you all consider divesting any of the assets given obviously, there’s a high need by many of your peers for inventory and what appears to be the market not giving you, I don’t think, full credit for that position.

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