Murphy Oil Corporation (NYSE:MUR) Q2 2023 Earnings Call Transcript - Page 3 of 8 - InvestingChannel

Murphy Oil Corporation (NYSE:MUR) Q2 2023 Earnings Call Transcript

We won’t be part of that process. It will depend on the gas commercial rate. Obviously, the country here wants us to have a viable field development plan, their words. So for it to be viable, there’ll have to be a price that we can make the type of returns that were needed with all the different aspects we have in our company. So that’s one process well put by you. We have a team working on that, our Kingsey team, our development team under Eric and managing that. And then we have work in the seismic. So the seismic has been shot. There’s 3D seismic owned by the government throughout all the area. It doesn’t have to be shot from scratch. There will be some modernization of that seismic through reprocessing that will be ongoing. And a few months here, we’ll be receiving that data in and have ample time to make our decisions about drilling.

We’re really excited to have a look alike to the major field to our east. There’s a very nice prospect in 502. There’s shallow water in 102 that would be similar to what we have in Vietnam, and we’re successful in shallow water Malaysia and many prospects in 709. There’s been oil and different things discovered here. It’s always good to get a new data set and look forward, but really like this because we have a possible development with exploration on the other side in Vietnam, we have exploration with the development. And we’re transposing older to be done Canada today to get into those two opportunities and go forward with our real expertise, which is offshore development.

Devin McDermott: Great. Thanks, Roger. Helpful detail. And I wanted to shift over sticking with offshore, but to the Gulf of Mexico. And if we look at your plans here over the next few quarters, you have a series of tiebacks through the back half of this year and early 2024, kind of concluding with St. Malo and Lucius. After that, do you have further tieback opportunities or development opportunities that you’re evaluating now for 2024? And can you kind of put this all together for us as you think about the cadence and outlook for production into next year and investment next year in the Gulf of Mexico?

Roger Jenkins: I’m going to have Eric walk you through that, Devin.

Eric Hambly: Thanks, Devin. It’s always nice to talk about our plans here in the Gulf of Mexico. We, as you may have noticed, we’ve done a really tremendous job with our King’s Quay development with the Khaleesi-Mormont Samurai fields. We have highlighted on previous calls and discussion that with the performance that we saw from the fields in the first year or so, we were expecting that, that field development would remain on a plateau production of around 30,000 net BOE per day well into 2025. Recently, we’ve been producing those fields closer to 40,000 net BOE per day. If we continue to maintain those type of rates, then the plateau period may shorten up just a bit. So in conjunction with the normal type of development of that field, we’re monitoring the field performance and then evaluating other opportunities for further development.

At this time, we’re looking at potentially a number of future wells or zone change workovers in the Khaleesi-Mormont Samurai field that would extend that plateau. We haven’t formed a budget yet for ’24, but we’re evaluating those things and likely to have a well or two in that area show up. As you pointed out, we’re getting onto the Dalmatian DC 90 #1 well here in this quarter, third quarter, and then we’ll have a Marmalard #3 well. As you move into 2024, early, we’ll have some Lucious non-operated wells come online. And then the Sao Malo Waterflood project, the remaining scope there is to complete two previously drilled injectors and install facilities related to water injection and should see water injection by late in 2024, which will support flattening and potentially increasing volumes from St. Malo for years to come, so quite a bit going on there.

And as always, we continue to work through our portfolio with excellent subsurface work and by our teams and try to identify any other opportunities we may have in the Gulf of Mexico. And we’re likely to see those continue to have tieback or new well opportunities 1, 2, 3 a year. for the foreseeable future, which is why we have communicated sort of a long-range view of maintaining our offshore oil volumes pretty steady out for the next five or six years.

Devin McDermott: Great. Thank you.

Roger Jenkins: Thanks Devin, I appreciate the call.

Operator: The next question in the queue comes from Leo Mariani with ROTH MKM. Your line is open.

Roger Jenkins: Good morning, Leo.

Leo Mariani: Hey good morning, everyone. I was hoping to drill down a little bit more on sort of the share buybacks here. I guess that something you guys announced a while back. As you’ve obviously pointed out, you’ve got lower CapEx in the second half of the year and production is higher here. So, you haven’t done anything yet, but it sounds like maybe this is something that we should expect in the near future. I would imagine that the blackout period on that might be over, maybe as soon as tomorrow. So are you guys kind of prepared to start to get after the share buyback here given that we’re kind of a month in the second half of the year?

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