Murphy Oil Corporation 2012 Analyst Day

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  • 1. 2012 Analyst Day El Dorado, Arkansas May 8, 2012M U R P H Y O I L C O R P O R AT I O N
  • 2. Agenda  Financial Overview  Kevin Fitzgerald - Executive VP & CFO  Exploration & Production  Roger Jenkins – Executive VP, Exploration & Production  Sam Algar – VP, Worldwide Exploration  Break  Downstream  Tom McKinlay – Executive VP, Worldwide Downstream  Wrap UpMURPHY OIL CORPORATION
  • 3. Financial Overview Kevin Fitzgerald Executive Vice President & CFO May 8, 2012MURPHY OIL CORPORATION
  • 4. Cautionary Note Cautionary Note to U.S. Investors - The United States Security and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved and probable reserves. We use certain terms in this presentation, such as reserve estimates, that the SEC’s rules strictly prohibit us from including in filings with the SEC. This presentation contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management’s current views concerning future events or results, are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements include, but are not limited to, the volatility and level of crude oil and natural gas prices, the level and success rate of our exploration programs, our ability to maintain production rates and replace reserves, political and regulatory instability, and uncontrollable natural hazards. For further discussion of risk factors, see Murphy’s 2011 Annual Report on Form 10-K on file with the U.S. Securities and Exchange Commission. Murphy undertakes no duty to publicly update or revise any forward-looking statements.MURPHY OIL CORPORATION
  • 5. First Quarter 2012 ($ Millions)) Net Income $ 290 Cash Flow 730 Capital Expenditures 740 Long-term Debt 250 Stockholders’ Equity 9,119 L/T Debt as % of Capital Employed 2.7%MURPHY OIL CORPORATION 2
  • 6. Financial Strength / Liquidity  Liquidity sources  Cash flow  $3.4 billion in 2012 at $95.00 WTI and $3.00 Henry Hub  Assumes mid-year conversion of Milford Haven refinery to a terminal  Revolver  $1.5 billion committed facility maturing in June 2016  Long term bond market  Maintain investment grade rating (BBB, Baa3)  Preparing to access market - $500 million for 10 yearsMURPHY OIL CORPORATION 3
  • 7. Historically Low Debt $ MM Debt/Cap % 2,500 50.0 Ninian Low Contract Kikeh WCSB Prices Drilling 45.0 2,000 40.0 35.0 1,500 30.0 25.0 1,000 20.0 15.0 500 10.0 5.0 0 0.0 1970 1975 1980 1985 1990 1995 2000 2005 2010 LTD Debt/CapMURPHY OIL CORPORATION 4
  • 8. Financial Projections 2012 2013 2014 2015 Oil Price Assumption – WTI ($/bbl) 95.00 95.00 95.00 95.00 Brent Assumption ($/bbl) 110.00 105.00 100.00 95.00 Natural Gas Price Assumption – HH ($/mcf) 3.00 3.50 4.00 4.10 Oil and Gas Production – mboe/d 193 200 250 260 Cash Flow from Operations ($MM) 3,400 3,500 4,300 4,200 Capital Expenditures ($MM) 3,700 3,800 4,000 3,300 Free Cash Flow ($MM) (300) (300) 300 900 Total Long Term Debt ($MM) 950 1,450 1,350 750MURPHY OIL CORPORATION 5
  • 9. CASH FLOW vs. CAPEX E&P AND DOWNSTREAM $MM 4,000 3,000 2,000 3,700 3,500 3,400 2,900 1,000 500 200 0 E&P 2012 DS 2012 Total 2012 Cash Flow CAPEXMURPHY OIL CORPORATION 6
  • 10. Capital Expenditures 2012 CAPEX BY SEGMENT E&P DS $MM 5% E&P 3,500 Downstream 200 Total 3,700 95%MURPHY OIL CORPORATION 7
  • 11. Capital Expenditures Exploration & Production $MM 2012 E&P CAPEX BY TYPE Exploration 400 Exploration Development Development 3,100 Total 3,500 11% Major Dev. Projects $MM Eagle Ford 985 Kikeh, Kakap, Siakap 800 Sarawak 515 89% Seal 215 Syncrude 165 Montney 140MURPHY OIL CORPORATION 8
  • 12. Capital Expenditures Exploration & Production 2012 E&P CAPEX BY REGION $MM Other Malaysia 1,450 6% U.S. 1,200 U.S. Canada 650 34% Other 200 Malaysia 41% Total 3,500 Canada 19%MURPHY OIL CORPORATION 9
  • 13. Capital Expenditures Downstream 2012 DS CAPEX BY TYPE UK Refining & Retail US Marketing $MM 15% Marketing 170 (incl Ethanol) UK Refining & Retail 30 Total 200 85%MURPHY OIL CORPORATION 10
  • 14. Conclusion  Operating groups continued goal to live within cash flow  Financial flexibility within Capex programs  Sufficient liquidity/access to markets to take advantage of multiple opportunitiesMURPHY OIL CORPORATION 11
  • 15. Exploration & Production Roger Jenkins President Sam Algar Vice President - Worldwide Exploration May 8, 2012MURPHY OIL CORPORATION 1
  • 16. Since We Last Met  220% Reserve Replacement, Lower F&D, Higher R/P  Remained Oil Weighted: 73% - Production, 75% - Reserves  NA Onshore Oil - Exceeding Expectations  Sanctioned 6 Offshore Oil Projects - De-Risked Block H FLNG  Back to Normal Pace of Exploration  New Completions at Kikeh – Problem Resolved  Slowed NA Dry Gas – Shift Capital to Oil  Improved Rigor in Production Forecasting ProcessMURPHY OIL CORPORATION 2
  • 17. Since We Last Met 350 Last Year 300 250 260 250 Δ Recalibration 200 MBOEPD 193 200 150 100 50 - 2012 2013 2014 2015MURPHY OIL CORPORATION 3
  • 18. Agenda  Upstream Strategy  North America Dry Gas  Ongoing Oil Projects  Oil Focused Exploration Program  Operations, Reserves, and Production  ConclusionsMURPHY OIL CORPORATION 4
  • 19. UPSTREAM STRATEGYMURPHY OIL CORPORATION 5
  • 20. Murphy Strategic Objectives Maintain Conduct Reduce Oil-Weighted Impactful Expl & Dev Resource Base Exploration Cycle Time RESULT: Invest Rationalize with GROWTH IN & Strengthen Discipline VALUE & Portfolio SCALEMURPHY OIL CORPORATION 6
  • 21. Building on a Strong Foundation 2011 Production Mix  9 Oil Projects In Execution Phase 26% Oil  Global Business 58% Oil Indexed Gas 16% Gas  Production Growth Resumes  680 MMBOE Risked Exploration 2015 Production Mix Portfolio 20%  Flexible, Substantial NA Land Oil 11% Position Oil Indexed Gas 69% Gas  Brent Priced AdvantageMURPHY OIL CORPORATION 7
  • 22. Oil Weighted Long Range Plan 300 260 250 250 200 200 193 Oil-Indexed SK Gas NA Dry Gas MBOEPD 150 80% Oil-Weighted 100 73% Oil-Weighted 50 Oil - 2012 2013 2014 2015MURPHY OIL CORPORATION 8
  • 23. Visible, Valuable Growth Production - MBOEPD 300  More Wells, Less 250 Volatility 200 US 150 Canada 100  90% Of Growth Is Oil 50 M’sia - Oil & 2012 2013 2014 2015 Oil Indexed: 73% 77% 81% 80%  Sanctioned New Projects Capital 2012 – 2015 On Track 37% Ongoing Projects 26% New  Consistent Exploration Projects Base and New Venture Activity 17% Exploration 20%MURPHY OIL CORPORATION 9
  • 24. NORTH AMERICA DRY GAS – VALUE-DRIVEN FLEXIBILITYMURPHY OIL CORPORATION 10
  • 25. Montney – Quality Gas Resource  Facilities- On Time- On Budget R21 R20 R19 R18 R17 R16 R15 R14 R13 T79  First Quartile Well Costs British Columbia Alberta T78Groundbirch Tupper West  Opex = $ 0.65/MCF T77  DD&A = $2.50/MCF T76 Brassey Tupper T75  EUR = 4.0 BCF/ Well Murphy Acreage T74 Sundown – 156,000 Acres  Total Resource = T730 Miles 6 1,700 - 3,500 BCF X AECO PriceMURPHY OIL CORPORATION 11
  • 26. NA Dry Gas – Montney Flexibility Montney Net Production - MMCFD 250  Curtailing 30 MMCFD for 200 150 50 28 Remainder of 2012 44 100 50 208 130 137 123  Drilling for Land Retention 0 Only 2012 2013 2014 2015 Minimum Flexibility Curtailment  Activity Driven by Price Signal Montney Wells To Be Drilled 25  Further Slowdown Possible in 20 Outer Years - Absent Price 15 Support 10 7 6 15 5 14 8 8 8 0 2012 2013 2014 2015MURPHY OIL CORPORATION 12
  • 27. ONGOING OIL PROJECTSMURPHY OIL CORPORATION 13
  • 28. NORTH AMERICA ONSHOREMURPHY OIL CORPORATION 14
  • 29. NA Onshore – Sustainable Growth Production – MBOEPD 125  Proven Capability 100 Montney 75 Canada  A Business of Scale 50 Other 25 US -  $1.7 Billion Spend Per Year 2012 2013 2014 2015 Oil: 48% 58 % 65% 67% Capital 2012 – 2015  Seal & Eagle Ford: 13% New  De-Risked, Long Life Assets Projects 6% Exploration Base  Reorganized Team 7% Ongoing Delivering Results 74% ProjectsMURPHY OIL CORPORATION 15
  • 30. Eagle Ford – Premier Resource KARNES 216,000 Net Acres N TILDEN  60 % Oil 61 Producing Wells 10 Drilling Rigs 13 Facilities 2 Dedicated Frac Crews 42 MMBOE Booked TILDEN NUECES CATARINA Murphy Acreage Murphy Gas Well Oil Murphy Oil Well Oil Condensate 0 10 mi Drilled Gas MURPHY OIL CORPORATION 16
  • 31. EFS: De-Risked by Industry xx 800,000 BOEPD Source: Bentek, a Platts CompanyMURPHY OIL CORPORATION 17
  • 32. EFS Production 12 2012 Production Mix 11 Yearly Average Production 50 6% Net MBOEPD 10 40 30 13% 9 20 10Net MBOEPD 8 0 2011 2012 2013 2014 2015 81% 7 6 Oil Associated Gas Dry Gas 5 4  2012 Guidance: 3 15,450 BOEPD 2  December Rate: 1 25,275 BOEPD 0 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 MURPHY OIL CORPORATION 18
  • 33. Karnes – Continues to Exceed Expectations 1000 Current Guidance 500 MBBL EUR New Type Curve 500 730 MBBL EUR Gross BOPD 100 31 Wells Producing 14,440 Net Acres Drees 1H JOG 1H Bellah 1H Schendel A 1H Schendel C 1 H Wilson 1H Schendel B-1 JOG E-1 Cannon-1 CEF-1 Dove E-1 Dove W-1 10 0 3 6 9 12 15 18 21 24 27 30 Months180 Locations on 80 Acre Spacing MURPHY OIL CORPORATION 19
  • 34. Tilden – Major Growth Area Current GuidanceGross BOPD 380 MBO EUR: 380 MBO & 343 MMCF Months 69,500 Acres  2,650 BOPD & 380 MCFD 100% W.I.  870 Locations @ 80-Acre Spacing  Except 5,200 Acres at 50% W.I.  Drilling 81 Wells This Year 11 Wells ProducingMURPHY OIL CORPORATION 20
  • 35. Reduced Choke Production  Preserves Reservoir Energy FOCUS AREA  Reduces Formation Murphy Oil Well Damage Drilled 0 10 mi Rate Comparison of Average Well  Enhances Frac Flow 600 500 MUR Competition Performance 400Gross BOEPD 300  Benchmarked 230 Wells 200 100 0 Month 3 Avg Month 6 Avg Month 12 Avg MURPHY OIL CORPORATION 21
  • 36. Continuous D&C Improvements Drilling Days 40  2012: 20+ Additional Wells - 32% 30 No Budget Increase 20  Drilling Records Set in Each 10 County 0 2011 2012  Fit for Purpose Rigs Frac Cost/Stage $M 340 320 16% 300 Current Target D&C Target D&C 280 D&C Costs Year End 2013 ($MM) ($MM) ($MM) 260 Karnes 8.3 7.9 7.1 240 Tilden 7.9 7.6 6.8 Catarina 7.2 6.9 6.2 2011 2012MURPHY OIL CORPORATION 22
  • 37. EFS Innovations  Down Spacing Pilots in 2012  Karnes (Drilling Now)  Tilden (3rd Quarter)  Catarina (3rd Quarter)  Frac Optimization Ongoing:  Hybrid vs. Slick Water Less  Short Slick Water Water  5-Cluster Slick Water  Additional Optimization Tests:  Packers PlusTM  Zipper FracsMURPHY OIL CORPORATION 23
  • 38. EFS Oil & Gas Marketing April Net Back Prices Oil $/Bbl Rich Gas $/Mcf KARNES Karnes 110.21 5.46 Tilden 115.48 5.46 Catarina 112.76 5.27CATARINA TILDEN Valero Energy Transfer Pipeline Harbor Island Crude Oil Pipeline Barge Terminal Crude Oil Trucks Crude Oil Truck Station NUECES Gas Pipeline Refinery Flint Hills Murphy Acreage 0 10 miMURPHY OIL CORPORATION 24
  • 39. Eagle Ford Summary Production – MBOEPD  Low Cost Entry with 50 Attractive Returns 40 Other Catarina  EURs Increasing 30 Tilden 20  D&C Costs Improving 10 Karnes  Moving from 10 to 12 Rigs - 2012 2013 2014 2015  Early Days for Technology Oil: 81% 86% 86% 86%  275 MMBOE Resource  Significant Downspacing PotentialMURPHY OIL CORPORATION 25
  • 40. Canada Seal Lake Murphy 100% Lands Polymer Murphy 50% W.I. Lands Thermal Successful Strat Wells CSS Pilot  70 HZ Wells in 2012 VSD Pilot CADOTTE NORTH  Increased Operated Production by 20% to 8,500 BOPD  Successful Polymer Pilot CLIFFDALE EAST  Successful 16 Well Strat WEST CENTRAL Program SOUTH  Cyclic Steam Pilot- Q4 2012  Vertical Steam Pilot – Q3 SOUTH 2013 HARMONMURPHY OIL CORPORATION 26
  • 41. Well Pad Producer Seal Polymer Update Injector  Injection Started Oct 2010600  Response July 2011 Start of Polymer Injection500400  Incremental Production -300 Targeted range of response 380 BOPD from 4 Wells200100  Commercial Polymer Project 0  Phase 1: Q2 2012 Mar-11 Apr-11 Mar-12 Jun-11 Sep-11 Jan-11 Feb-11 Jul-11 Aug-11 Jan-12 Feb-12 Oct-10 Nov-10 Dec-10 May-11 Oct-11 Nov-11 Dec-11  Phase 2: Q4 2012 Pilot Oil Production - BOPDMURPHY OIL CORPORATION 27
  • 42. Seal Resources 5,850 STOIIP MMSTB Polymer / Thermal Type of Recovery Primary Polymer Thermal Total TBD 2,555 500-700 1,000-1300 1,295 – 1,795 5,850 Identified STOIIP MMSTB MMSTB MMSTB MMSTB MMSTB 200-300 45-75 190-370 50-450 485-1195 EUR Range MMSTB MMSTB MMSTB MMSTB MMSTB 210 45 110 365 YE11 Resource MMSTB MMSTB MMSTB MMSTB  Reserve Group Focus- Resource Increased by 105%  Current Proven Reserves: 20 MMBOE  Focus on Polymer and Thermal EORMURPHY OIL CORPORATION 28
  • 43. Seal- Long Term Oil GrowthMBOEPD 20 Thermal  5+ Billion Barrels in Place 18 Polymer 16 Primary Drilling  Reallocation of Dry Gas 14 Capital 12 10 8  Working Plan to 6 Accelerate Production 4 2  Major Resource Adds - Ahead 2012 2013 2014 2015MURPHY OIL CORPORATION 29
  • 44. Southern Alberta - New Play  150,000 Acres  Low Entry Costs  Current Focus Kanai - Lower Banff 3 Forks Focus Wells  2012 Plan  Lower Costs  Enhanced Fracs  Longer LateralsMURPHY OIL CORPORATION 30
  • 45. S. Alberta Kainai Reserve GR Murphy Lands 5m Murphy Exshaw Focus Lower Mississippian Murphy Three Forks Focus Banff Fm KAINAI Upper Exshaw Kainai 14-5 Middle Exshaw Original Focus Testing Lower Exshaw 14-5 Recent Focus Devonian Three Forks 15-21 Kainai 15-21 350 BOPD IP Stettler Fm Cum Prod: 0 6 mi 24,000 BBLsMURPHY OIL CORPORATION 31
  • 46. Southern Alberta - The Prize Lower Banff Middle Exshaw Lower Exshaw Upper Three Forks BTM Summary  The Prize – 130 MMBO Net  Oil in the System  160 Acre Spacing  42 Degree API  250 BOPD, 250 MBO per Well  Search Continues for Perfect Zone  22% ROR  Upside in Longer Laterals and Frac Design  Resource Could DoubleMURPHY OIL CORPORATION 32
  • 47. Southern Alberta vs. Eagle Ford Wells 600 Kainai 14-5 500 EFS Tilden 400Gross BOPD 300 200 100 EFS Catarina 0 1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101 106 111 116 Days 5 per. Mov. Avg. (Kainai ) Kainai 14-5 EFS Tilden 5 per. Mov. Avg. (Jambers #1H) 5 per. Mov. Catarina EFS Avg. (Briggs #2H) MURPHY OIL CORPORATION 33
  • 48. Muskwa - New Area Murphy Lands Murphy Well  Targeting the Muskwa Competitor Well Shale  Equivalent to Duvernay Fm  Total Acres to Date: 168,000  Low Entry Cost  Murphy 4-1-109 Well IP 200 BOPD  IP = 150 BOPD Cum Prod 30.2 MBBL  Put Well on Pump  Evaluating 4 - 1 - 109 Well 0 Miles 6MURPHY OIL CORPORATION 34
  • 49. INTERNATIONAL & OFFSHOREMURPHY OIL CORPORATION 35
  • 50. International/Offshore – Pillar for Growth Production – MBOEPD 175  $1.7 Billion Spend Per 150 Other Year 125 GoM 100 Srwk 75 50  Malaysia – Attractive for 25 Sabah Continued Investment - Oil & 2012 2013 2014 2015 Oil Indexed: 89% 90 % 92% 90% Capital 2012 – 2015  Back to Work in GOM 33% 40% Exploration  Malaysia FLNG – New Projects Significant New Project Base 27%MURPHY OIL CORPORATION 36
  • 51. Kikeh Yearly World Class Deepwater Field Production  140 MM BBLs Recovered To Date 40% 60%  The Kikeh Issue - Sand/Fines Migration Upon Planned Water Deeper Reservoirs Shallow Reservoirs Production (9 wells) (11 wells)  Resolved With Gravel Pack (GP) Completions Well Types  8 New Gravel Packed Wells 2 4 8  3 of 8 Produce Water as Planned - No Sand / Fines 8 No Sand Control New GP Wells  Field Producing with Forecasted Old Screen Completions Shut In Water CutsMURPHY OIL CORPORATION 37
  • 52. Kikeh: Robust, Will Continue to Deliver  State-of-the-Art Reservoir Monitoring  Continuously Updated Simulation (1.7 mil cells, 593 layers) Sand 452m Shale  90+ Well Penetrations Tie452m Wells Model to Reality  Waterflood is Working  Partner - NOC Technical Collaboration  Highly Experienced Team MURPHY OIL CORPORATION 38
  • 53. Kikeh Field Performance  Sand/Fines Control Process  100% Success 100 Gravel Pack Completions 90  Key Issues 80  Rig Schedule 70Gross MBOPD 60  Execution 50  GP Refinement 40 30 20  Total Field Recovery 10 0 Maintained Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 MURPHY OIL CORPORATION 39
  • 54. Sarawak Oil Projects Moving Forward 30 Future Fields 25 Existing  Utilizes Existing InfrastructureNet MBOPD 20 15 10  Progressing on 5 Schedule 0 2003 2006 2009 2012 2015 2018 2021 2024 2027 Sanctioned Oil Projects Resource Levels Net First Oil Status MMBOE Serendah & Patricia 25 Q2 2013 Construction and Drilling South Acis 23 Q3 2013 Construction Permas & Endau 12 Q4 2013 FEED Work MURPHY OIL CORPORATION 40
  • 55. Dalmatian Development  3 Well Subsea Development to Petronius  55 MMBOE Recoverable Dalmatian Gross, MBOEPD20 Resource15  40% Oil Mix105  Robust Economics0 2015 2017 2019 2021 2023 2025 2027 2029  Path Forward  DOCD Approval June 2012  Project Sanction June 2012  Completions Mid 2013  First Oil Q1 2015 MURPHY OIL CORPORATION 41
  • 56. Medusa Subsea Development  Murphy 60% W.I.  Existing Completions Exceeding Expectations  3 Well Subsea Net MBOEPD Development10  16-27 MMBOE Recoverable 5  Spud 1st Well Q2 2013  1st Oil Q2 2015 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027MURPHY OIL CORPORATION 42
  • 57. SK Gas – Major Oil Indexed Project  Consistent Steady Production 300 250  Facility Upgrade 2012 Gross MMCFD 200  Working to Increase Rate 150  $7.00+/MCF Gas 100 50 P P 0 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 P 300 250 Phase 1 Phase 2 Phase 3 P PGross MMCFD 200 150 PP P P P 100 PP 50 PP P 0 P -- Phase 1 Successful Delineation P - Phase 2 Successful Delineation 2009 2011 2013 2015 2017 2019 2021 2023 2025 P Phase 3 Successful Delineation MURPHY OIL CORPORATION 43
  • 58. Long Term Oil Indexed Growth Malaysia FLNG Block H Gross Risked Resources: ~2,200 BCF 300 250 Discovered Drill Ready Prospects Leads Discovered 910 BCF 635 BCF 260 BCF 425 BCF 200MMCFD 150 100 Murphy Net Entitlement = ~1,150 BCF 50 0 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040  De-Risked by Recent Exploration Success  Sanction 2013  Award FEED Q3 2012  First Gas Planned 2016/17MURPHY OIL CORPORATION 44
  • 59. EXPLORATIONMURPHY OIL CORPORATION 45
  • 60. Exploration Value Creation  Proven Track Record in Value Creation Through Exploration  Last 3 Years: 9 Discoveries (39% Success)  13 Successful Delineation Wells in Malaysia (81% Success)  Sanctioned 4 Projects with 88 MM Net BOE 10 Exploration Efficiency - Value Creation per Dollar Invested 9 2001 - 2010 8 7 6 5 4 MURPHY 3 2 1 0 Woodmac, 2012 PEER GROUP APC, APA, BG, BHP, BP, CVX, COP, ENI, XOM, HES, Maersk, MRO, NXY, NBL, OXY, OGX, OMV, Petrobras, PETRONAS, Repsol YPF, RWE Dea, STO, RDS, Statoil, TLM, Total, TLW, Wintershall, WPLMURPHY OIL CORPORATION 46
  • 61. Exploration Drilling – More Coming  Limited Recent Exploration Drilling  Ramping Back-Up in 2012-13  First 3 Wells of 2012 Discoveries 20 Wells Yet to be Drilled Wildcat Dry Holes Wildcat Discoveries 15 Key Discoveries Exploration Wells 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YearMURPHY OIL CORPORATION 47
  • 62. 2012-13 Exploration Program Iraq 2-4 Wells GOM 2-4 Wells Malaysia 5-7 Wells Cameroon Brunei 1-2 Wells 2-5 Wells Congo 1-3 Wells Technically Grounded, Value Driven Indonesia 2 Wells Up to 30 Wells; Oil / LNG-Scale Gas Focus Australia Leveraging Operational Expertise – Partner of Choice 1-3 Wells Balance - Frontier & Lower Risk Proven Plays 5 Billion BOE Gross; 500 Million BOE Risked Net 2012-2013 Portfolio MURPHY OIL CORPORATION 48
  • 63. Exploration Program 2012 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Block H Buluh-1MALAYSIA Block H/P Bunga Lili-1 Block H Block P JulongBRUNEI CA-1 East-1 Jagus East-1 CA-2 C. Dohuk & Linnava-1 GaliIRAQ Baranan Baranan-1CAMEROON Ntem MPNCONGO MPN/MPS MPN MPS WA-423-P Eupheme-1AUSTRALIA ACP/36 NTP/80 Bassett DeepINDONESIA Semai II Semai II DalmatianGOM Multiple South Exact Timing Discovery Rig ContractedWells Shown by Spud Date TBDMURPHY OIL CORPORATION 49
  • 64. MALAYSIA - Block H  2 Discoveries for 2012  Buluh-1  Bunga Lili-1  4 Discoveries/4 Wells Gas Field Block H  Results Matched Low Risk Prospects Higher Risk Leads Pre-drill Predictions BULUH  Multiple Low Risk Hanks Lookalike Prospects ROTAN Remain Bemban Rotan W Tembusu N& S Bates  Total Resource Bunga Lili North ~1.5 - 2 TCFSaraca DOLFIN Bunga Lili South BUNGA LILI 0 5 km MURPHY OIL CORPORATION 50
  • 65. BRUNEI First Discovery Made  CA-1  Julong East-1 Discovery  2013 Appraisal BLOCK CA-1 (5% W.I.)  Jagus East  2012 Exploration Julong BLOCK K  Additional Prospects East-1 KIKEH KAKAP -BLOCK CA-2 (30% W.I.) GUMUSUT  CA-2 Saga Jagus East  Re-processing Seismic to Jati Semerak Locate Sand  3 Lower Risk Prospects Identified Oil Discovery  Late 2012 / 2013 Drilling Prospects 0 20 km MURPHY OIL CORPORATION 51
  • 66. IRAQ Drilling Next to GiantsPeshkabir-1 Tawke Ber Bahr Sheik Adi  Surrounded by Giant Oil Swara Tika Discoveries in Same Plays Atrush Shaikan  First Well, Linnava-1, Drilling Linnava-1 Jebel Simrit  WI 50% Oil Discovery 0 25km  Resource Range  100-600-1500 MMBBLMURPHY OIL CORPORATION 52
  • 67. CONGO – Extending Proven Plays  Cretaceous Carbonate Oil Fields Nearby  Play Unexplored in Deep Water  New Seismic Defines Multiple Prospects  100-350 MMBO Each Yombo Loango 110 305 Zatchi 226  Pre-Salt Structures Underlie Carbonates MPN W. SouthMurphy - 85% Prospect  Q3 2012 Well Firm Yanga 164 Sendji 263  W Africa Rig Firm Q3 2013+ Kitina 91 Tchendo W South Prospect 62 Moho Nord N’Kossa Likouala Cretaceous 358/2 TCF 127 4-Way Closure Moho 100 MPS 0 10 20 30 40 50 0 50 km Murphy - 50% Kilometers Oil Discovery - MMBO Cretaceous Prospect Pre-Salt Structure Pre-Salt Prospect Tertiary Prospect MURPHY OIL CORPORATION 53
  • 68. CAMEROON– Ghana Play Extension Aseng Complex 143 MMBO  Extending Play from Ghana to Cameroon CameroonGas Condensate  Ntem - 50% WI & OilProspects/Leads Operatorship  3D Seismic Shot In-House  Multiple 100+ MMBO Prospects  First Wells 2012 / 13 Ntem  Room to Grow in Play Equatorial Seal Rock Guinea Okume Complex 320 MMBO 0 40 km Cretaceous Source RockMURPHY OIL CORPORATION 54
  • 69. GoM – Back to Action LEGEND  Focus on Proven Plays Murphy HBP  Miocene Amplitudes  Norphlet Murphy Leases  Sub-Salt Structures Murphy Facilities  Securing Long Term Rig ContractOil Prospect  Multiple Prospects 2 - 4 Wells in 2012 - 13; First in July Dalmatian South Hornet EGOM Play Area Mid - Lwr. Miocene Subsalt Play Trifecta Mustang Skyhawk Photo Deep Finish Blue Titanium Samurai MURPHY OIL CORPORATION 55
  • 70. Gulf of Mexico Prospects Vito Skyhawk Gunflint Photo Finish 3-way Against Salt 65 - 200 MMBO 3-way Against Salt 90 - 350 MMBO Samurai-1 Subsalt 4-way 50 - 100 MMBO Photo Finish Skyhawk SamuraiMURPHY OIL CORPORATION 56
  • 71. AUSTRALIA Testing the Largest Undrilled Structures  Bonaparte Basin 0 50 km NTP/80  NTP/80 Fulmar Fulmar Prospect  Permian Reservoirs Petrel Frigate  Anticlinal Trap  1.5 to 4 TCF Bonaparte FLNG 1.5 TCF  Drill 2013 Tern ACP/36  Browse Basin Prospect 0 50 km  ACP/36 Bassett Deep Poseidon/ Kronos ~7 TCF Prelude ~2.5 TCF  Jurassic Plover Reservoir Torosa 11.5 TCF  Tilted Fault Block Trap Brecknock  Multi TCF Calliance 4TCF 5.3 TCF Icthys  Drill 2012/13 ~13 TCFMURPHY OIL CORPORATION 57
  • 72. Murphy Global Exploration  Ramping Up Exploration Drilling in 2012-13  Up to 30 Wells by End 2013  5 Billion BOE Gross, 500 MMBOE Net Risked  Oil or Oil Indexed Gas Focus  Multiple Impactful Prospects  Iraq, Congo, Cameroon, Australia  Balanced With Smaller, Lower Risk Prospects  Malaysia, GoM  Continuing to Grow Acreage in Focused AreasMURPHY OIL CORPORATION 58
  • 73. OPERATIONS, RESERVES & PRODUCTIONMURPHY OIL CORPORATION 59
  • 74. Murphy – A Proven Operator  HSE  First Ever - Flow Capture Permit  No Lost Time Accidents 3 Years in Congo  TRIR in Malaysia 0.22 YTD  Industry Leading Uptime  GOM  Canada Gas Plants  Kikeh FPSO - No 1 in the World  Cycle Time  Iraq Drilling  SK Oil Projects - On TimeMURPHY OIL CORPORATION 60
  • 75. Production Volatility To Improve Operated Well Count  Doubled Well Count in 750 Two Years Offshore 500  Operate 82% of Wells NA Onshore 250  Resource Plays – Step Change 0 2 Years Ago 1 Year Ago Today End 2012 Facilities 2012 Average Production By Well 175 4.0Production MBOEPD 150 3.5 Gross MBOEPD Offshor Onshor 3.0 125 e e Operated Net 2.5 100 2.0 75 1.5 50 1.0 25 0.5 0 0.0 GoM EFS Montney SK Gas Kikeh Seal West Pat 2011 2012 Kikeh FPSO Msia LNG Methanol Plant Montney Other Facilities MURPHY OIL CORPORATION 61
  • 76. 2012 Worldwide Production Kikeh - SS Wells 225,000 EFS - Wells Terra Nova - Return Seal - Wells Guidance = 193,000 BOEPD 200,000 175,000BOEPD Syncrude - TAR Medusa - PL Shut-In Terra Nova - Offline 150,000 125,000 100,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Actual ForecastMURPHY OIL CORPORATION 62
  • 77. Reserves – Continue to Grow & Replace Total Proved – 534 MMBOE  65% Oil  65% North America Resource Play Deepwater 28% 27%  67% Developed Conventional  220% Replacement Syncrude 17% 24% 3.4 BBOE 3.3 BBOE 2.8 BBOE Heavy Oil Contingent (Unconventional) 4% Contingent (Conventional) Possible Probable Proved Reserves YE 2009 YE 2010 YE 2011MURPHY OIL CORPORATION 63
  • 78. Low Risk Non-Proved Resource Total Non-Proved – 2.9 BBOE 75% Oil Weighted Seal Msia Oil EFS Oil 12% 11% 54% Low Risk – Existing & Assoc Gas Msia Gas Development Areas 15% 10% Syncrude North America 11% Dry Gas 38% NA Onshore Oil 25% Other Oil Projects 3.4 BBOE 16% 3.3 BBOE 2.8 BBOE Contingent (Unconventional) Contingent (Conventional) Possible Probable Proved Reserves YE 2009 YE 2010 YE 2011MURPHY OIL CORPORATION 64
  • 79. Upside Potential 350 Guidance Capacity Forecast 300 250 MBOEPD 200 150 250 260 100 193 200 50 0 2012 2013 2014 2015MURPHY OIL CORPORATION 65
  • 80. Value Proposition – NAV  Based on 2P/2C Resource Malaysia Oil Malaysia Malaysia Gas  Incremental Resource Upside of 80% East On- Canada Syncrude Coast Shore  Based on Long-term $95/Bbl Brent, $4.25/MMBTU HH Upside Eagle EFS USA GOM Ford RiskedExploration 2012 - 2015 Portfolio  Discounted at 10% After-Tax 0 5 10 15 20 25 30 35 $/Share MURPHY OIL CORPORATION 66
  • 81. Conclusions  Strong Oil Weighted Production Growth Ahead  NA Gas Growth on Hold  New Production Forecasting Process in Place – Consistency to Improve  NA Onshore Oil – Source of Near-term Growth with Upside  Exploration – Back to Normal Activity Levels  Kikeh – New Completion Success; Long Term Project  Value Ahead in Malaysia Oil-Indexed Gas  Oil Weighted, De-Risked Resource BaseMURPHY OIL CORPORATION 67
  • 82. Downstream Business Tom McKinlay Executive VP, World Wide Downstream May 8, 2012MURPHY OIL CORPORATION 1
  • 83. Agenda  Refining  Renewable Energy  UK Marketing  US MarketingMURPHY OIL CORPORATION 2
  • 84. RefiningMURPHY OIL CORPORATION 3
  • 85. Milford Haven Refinery Highlights  Continued Focus on Safety and Operational Excellence  Zero Incident Rate for Last 12 Month Period  Consistently High Crude Rates - Demonstrated 135,000+ Bbl/D  Improved Operating Margin Capture ~$1.00/Bbl vs Q1 2011  EBITDA: 2011 - $(15.16) MM; 2012 YTD - $20.44 MM  Operations Supporting the Sales Process  Aided by the Dedication and Goodwill of our Team Milford Haven 12 Month Rolling Incident Rates 1.60 TRIR LTIR 1.20 Industry TRIR Avg 0.80 0.40 Industry LTIR Avg 0.00MURPHY OIL CORPORATION Industry Average Source: OSHA 4
  • 86. Renewable EnergyMURPHY OIL CORPORATION 5
  • 87. Ethanol Plants HANKINSON, ND  Running at 120+ mmgpy Rates  Best-in-Class Production  Increasing to 135+ mmgpy  Co-product Development  Advantaged by Corn Supply HEREFORD, TX  Running at 104+ mmgpy Rates  115+ mmgpy Target in 2013  Full 12 Months Operations  Advantaged by Local DemandMURPHY OIL CORPORATION 6
  • 88. UK MarketingMURPHY OIL CORPORATION 7
  • 89. UK Marketing Today Murco % of Total Stations  Operates 457 Stations in the UK Supermarkets 16%  233 Company, 224 Branded BP 14%  Sells ~185 mmgpy 5% Shell  Has 2.0% of UK Market Share 10% Esso  Sells ~$145 Million of Texaco Merchandise Each Year % of Total Fuel Sold 2% Total Murco Jet 41% GB Oils Other 12% 15%MURPHY OIL CORPORATION Source: Energy Institute, DECC, Forecourt Trader (06/2011) 8
  • 90. UK Marketing Retail EBITDA £25 £20 £15£ Millions £10 £5 £0 2006 2007 2008 2009 2010 2011 Retail Company Stations Retail Dealer Stations MURPHY OIL CORPORATION 9
  • 91. US MarketingMURPHY OIL CORPORATION 10
  • 92. Gasoline Demand Trends  Consumers are Driving 49 Billion Fewer Miles per Year from Peak in 2007  Automobile Efficiencies Impacting Demand 9400 260 Vehicle Miles Traveled (Billions) 9200 250Gasoline Demand (MB/D) 9000 240 8800 230 8600 220 8400 8200 210 8000 200 Gasoline Demand (MB/D) Vehicle Miles Traveled BillionsMURPHY OIL CORPORATION Source: PIRA, (VMT Peak 1/2007, Base 12/2011) 11
  • 93. US RetailMURPHY OIL CORPORATION 12
  • 94. Murphy USA Overview Opened First Retail Store in 1996 Operating Sites 1,400 Operate 1,137 sites in 23 states 1,175* 1,200  1,007 Murphy USAs on Walmart Lots  130 Murphy Express Stores 1,000 Provide 3% of Total US Retail 800 Gasoline (5% in Mkt Area) 600 We serve ~1.6 Million Customers 400 Every Day 200 Historically Strong Growth Model 0  91% Fee-owned Real Estate  100% Company Operated *By End 2012MURPHY OIL CORPORATION 13
  • 95. US Retail Safety Murphy USA 12 Month Rolling Incident Rates 3.50 3.00 Industry TRIR Avg 2.50 2.00 1.50 Industry 1.00 LTIR Avg 0.50 0.00 TRIR LTIR  Industry Leading Performance  Received National Liberty Mutual Award for OSHA Recordable Rate Significantly Lower Than National AverageMURPHY OIL CORPORATION Industry Average Source: OSHA 14
  • 96. 2011 Gasoline Market Share 0% - 2% US Market Share ~3% 3% - 6% (5% Mkt Area) 7% - 14% TN OKMURPHY OIL CORPORATION Source: EIA, Internal Calculations 15
  • 97. Murphy USA’s Model Crude Refineries/ Product SupplyOil Fields Marketing Secondary Pipeline/ Commodity & Primary Customer Vessel Terminal Distribution Markets Distribution / Trucking WholesaleMURPHY OIL CORPORATION Booz & Company March 2011 16
  • 98. Murphy USA  Low Price, High Volume Fuel Seller  Low Cost Fuel Supplier  Low Cost Operator  Low Price Niche Merchandising  Relationship with #1 Retailer Walmart  Attractive BusinessMURPHY OIL CORPORATION 17
  • 99. High Revenue Business$ Billion 18 16 14 12 10 8 6 4 2 0 Barnes & Noble Nordstrom Starbucks Murphy USA Southwest 2011 MURPHY OIL CORPORATION Source: Company Reports 18
  • 100. Fuel Volume vs. Publicly-Traded Peers 2011 Fuel Sales/Store/Month (000 Gallons) 300 250 200 150 100 50 0 Murphy Caseys Delek Couche Pantry Susser Sunoco Valero Tesoro Marathon USA TardMURPHY OIL CORPORATION Source: Company Reports 19
  • 101. Midstream Supports Low Cost Model  Integrated Midstream  Scale and Assets Reduce Unit Costs  Pipeline History and Terminal Position Creates Supply Advantage  Product Supply  Ensures Lowest Cost of Product and Security of Supply  Maximizes Geographic Arbitrage Opportunities  Best Buy Distribution System  Tactical Direction and Contract Management Creates Optimal Supply LogisticsMURPHY OIL CORPORATION 20
  • 102. Product Distribution System Murphy Terminals  Third-Party Terminals Pipelines ▬ Colonial ▬ Plantation ▬ Explorer ▬ TEPPCO ▬ MagellanMURPHY OIL CORPORATION 21
  • 103. Low Operating Expenses 2011 Murphy USA vs. NACS Top Quartile Operating Expenses Per Store Month ($000)$60 $51.8$50$40 $30.2$30 $26.7$20 $12.6$10 $8.6 $8.5 $7.5 $3.7 $3.6 $4.8 $2.0 $1.0 $1.0 $1.8$0 Wages Credit Maintenance Utilities Supplies Other Total Card Murphy USA NACs MURPHY OIL CORPORATION Source: NACs and Internal Data 22
  • 104. US Retail Merchandise Contribution Merchandise Sales Merchandise Margin Billion Per Year Million Per Year $2.2$2.2 $300 $2.0 $270$2.0 $259$1.8 $1.8 $250 $214$1.6 $1.3 $200$1.4 $178 $1.2$1.2 $152 $150$1.0 $0.9 $120$0.8 $100$0.6$0.4 $50$0.2$0.0 $0 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011* *2011 included nonrecurring adjustment of $(8.4)MMMURPHY OIL CORPORATION 23
  • 105. Segment Performance 2011 % Volume Change vs. Previous Year 30% 25% 20% 22% 15% 16% 10% 5% 5% 4% 0.3% 0% -4% -5% Cigarettes Beverage Beer Murphy Convenience Store Industry IndustryMURPHY OIL CORPORATION Source: Altria MSAi, ACN and Coke / Pepsi National Account Reporting 24
  • 106. Merchandise Sales Comps Merchandise Sales/ Store/ Week ($000)4540353025201510 5 0 Tesoro Delek Caseys Couche Pantry Sunoco Valero - US Susser Murphy Marathon Tard USAMURPHY OIL CORPORATION Source: Company Reports 25
  • 107. 2011 Walmart PromotionMURPHY OIL CORPORATION 26
  • 108. Walmart’s Partner of Choice Walmart Supercenters with Murphy USAs Murphy State USA Walmart % AR 52 68 76% TX 210 308 68% LA 54 80 68% MS 37 60 62% TN 65 107 61% AL 56 92 61% OK 44 76 58% GA 65 134 49% FL 84 178 47% MO 44 101 44% SC 32 72 44% IA 21 49 43% KY 32 76 42% IN 32 87 37% NC 43 125 34% OH 40 127 31% MI 23 79 29% IL 25 107 23% MN 7 48 15% VA 3 84 4%MURPHY OIL CORPORATION 27
  • 109. “We Are Murphy USA” We Employ More Than 7,000 People US National Managers Meeting Orlando, FL 2012MURPHY OIL CORPORATION 28
  • 110. A Committed Team Store Manager 60% Turnover  Circle of Stars Program 40% 29% 23%  Effective On-line 20% Recruitment Process 0% 2007 2008 2009 2010 2011 2012*  Daily Electronic Store *Projected Annual Communications  Exceptional TeamMURPHY OIL CORPORATION 29
  • 111. Connecting with our Customers  Murphy USA Mobile App  Re-launched in March – Expecting 250,000+ Downloads This Year  Provides Real-time Pricing and Location Information for Murphy USA & Competitors  Innovative GPS Technology to Match to In- station Merchandise & Fuel DiscountsMURPHY OIL CORPORATION 30
  • 112. The Way ForwardMURPHY OIL CORPORATION 31
  • 113. US Retail Financial Performance 2006-2011 Key Financial Indicators ($Millions) 2006 2007 2008 2009 2010 2011 Total Margin 454 511 812 535 707 849 Operating Expense 270 306 339 340 384 404 Admin and G&A 27 30 54 61 66 76 Total Operating Cost 297 336 393 401 450 480 Operating Income (Loss) 157 175 419 134 257 369 EBITDA 156 164 408 130 255 363 EBITDA per Site 0.17 0.17 0.41 0.13 0.24 0.33 After-tax Cash Flow 124 128 278 111 186 273MURPHY OIL CORPORATION 32
  • 114. US Retail First Quarter Comparison $35 $33 10 Actual EBITDA Actual CPG Fuel Margin $30 9 $25 $24 8 7 $20EBTIDA (Millions) $14 6 $15 $14 CPG 5 $9 $10 $7 $8 $6 4 $4 $5 3 $- 2 $(5) $(2) 1 $(6) $(10) 0 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Avg. GC $ 0.60 $ 0.95 $ 1.04 $ 1.32 $ 1.70 $ 1.63 $ 2.43 $ 1.21 $ 2.05 $ 2.60 $ 2.98 Spot Price MURPHY OIL CORPORATION Source: GC Spot Price: EIA 33
  • 115. 1Q Performance vs. Peers YoY 1Q12 Volume % Increase / (Decrease) 1Q12 Fuel Gross Margin (CPG) 8% 14 6% 12 4% 2% 10 0% 8 -2% -4% 6 -6% 4 -8% 2 - Valero (a) MUSA Marathon Delek YoY 1Q09 Volume % Increase / (Decrease) 1Q09 Fuel Gross Margin (CPG) 6% 14 5% 4% 12 3% 10 2% 1% 8 0% 6 -1% -2% 4 -3% 2 -4% -5% - Pantry Valero (a) Marathon MUSA Susser MUSA Marathon Pantry Valero (a) Susser Source: Publicly available information, as of 5/3/12.MURPHY OIL CORPORATION (a) U.S. operations only. Note: Valero Gross Margin CPG understated relative to peer group due to credit card fees included in COGS. 34
  • 116. 2011 Competitor CompsOperating statistics (LTM)# of Retail Locations 1,128 5,715 1,677 1,649 541Fuel Volumes (MM Gallons) 3,715 3,672 1,416 1,889 768Retail Fuel Volume/Store 3,333 894 858 1,157 1,430(000 Gallons)Average Fuel Margin (¢/Gallon) 15.6¢ 15.9¢ 15.9¢ 17.5¢ 16.5¢Merchandise Sales ($MM) $2,115 $6,343 $1,779 $1,779 $863Merchandise Sales/Store/Week ($000) $36 $21 $20 $21 $31EBITDA per Store ($000) $326 $131 $164 $133 $263Total EBITDA $363 $747 $275 $275 $142EBITDA Multiple (TEV/EBITDA) ?? 10.8x 8.9x 5.4x 5.5xReal Estate % Ownership 91% 30% 99% 26% 45%ROIC 13% 17% 10% 1% 6% Fuel 68% 26% 24% 30% 38% 74% 76% 70% Merchandise 32% 62%MURPHY OIL CORPORATION Source: Company Reports, Capital IQ 35
  • 117. Growth Avenues  Walmart Cross Promotion & New Site Growth  Opportunities with Third Parties  Growth Outside the Walmart PadMURPHY OIL CORPORATION 36
  • 118. In Summary  Low Cost Model  From the Refinery Gate Direct to the Customer  Exceptionally Efficient Operation  High Volume Business  Strong Relationship with Walmart  Established Fuel Discount Program  Strong Cross-promotional History  Advantaged and Growing High-Traffic Locations  Platform for Growth  Refinery Divestment Opens New Markets  Good Returns in Both Rural and Urban Environments  Actively Evaluating Parallel Growth StrategiesMURPHY OIL CORPORATION 37
  • 119. 2012 Analyst Day El Dorado, Arkansas May 8, 2012M U R P H Y O I L C O R P O R AT I O N