Murphy Oil Corporation (NYSE:MUR) Q2 2023 Earnings Call Transcript - Page 4 of 8 - InvestingChannel

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

Roger Jenkins: Yes, we are, Leo. We’re very excited about doing that. And you framed exactly what we’re talking to our Board about just this week, and our formula is working. The Canadian proceeds closing will enhance it and get us back as we’ve said a lot this morning, and I appreciate the call from everyone. It’s really a movement of some older locations forward and into Cote d’Ivoire with the development and into Vietnam with the development plus exploration. We’re very excited about returning to shareholders. We’ve been a major dividend player across our history. We’ve doubled our dividend in the last couple of years. And now, we’re ready to execute share buybacks, as we feel our shares undervalued, and I look forward to doing that throughout the year, and there’ll be open periods.

And Tom and his team are working on various ways of executing buybacks. We see it from peers, and we’ll be able to do it too, and we look forward to doing it. And really are setting up. We have strong production this quarter, some of the highest guided oil maybe we’ve had, and I don’t know when, the highest third quarter production forecast we’ve ever had with hurricane season a long time, capital decreasing, capital decreasing significantly, abandonments behind us, contingent payments behind us, and we look forward to a real strong second half of the year of rewarding shareholders at Murphy.

Leo Mariani: Okay. That’s helpful. And then, just wanted to turn to the exploration side here. So, I guess you’re bigotspudregial OSO in the near future. I just want to get a sense, if you guys have kind of an estimate of how long they’ll take, once you kind of start redrilling. Is that kind of a couple of months to decision? And looking at 2024 exploration, you did mention two wells in Vietnam, also should be expecting anything else next year on the exploration front, maybe another well in the Gulf. And I think, I’ve heard you guys say in the past that, probably don’t drill anything else in Brazil or Mexico in ’24. So, I just wanted to get a high-level sense of what could be on the docket exploration-wise in the next 18 months here.

Roger Jenkins: It’s a two-part answer. I’m going to let Eric handle the drilling his team, he manages the drilling at the company. He’ll talk about the OSO time, and then I’ll talk about the 24 plans.

Eric Hambly: Yes. Thanks, very much. On OSO, just to clarify, we’re not redrilling the well. We’re going back to drill the well with some enhanced equipment, a managed pressure drilling system, which will allow us to drill the bottom section of the well, but we’re reusing a lot of the well we’ve already drilled. So, I just want to clarify, it’s not a complete redrill. We’re going to start that work in the third quarter, and we should have complete that activity kind of by the middle of the fourth quarter.

Roger Jenkins: Okay. As the rest of our program, yes, we’re looking to drill two wells in Vietnam. We do not have our budget prepared, do not have it approved by our Board. We’re likely to do that. I would imagine, we would drill a couple of wells in the Gulf of Mexico. I’m not sure that are working interest. We have ample opportunities. We have opportunities with some other partners. And so, we’ll probably have a four-well program, a couple of wells in the Gulf, couple in Vietnam, and that will probably do it because, again, we’re trying to honor our framework at the end of the deck, our capital at the end of the deck. We want to, as you just asked, talk get buying back stock and rewarding our shareholders while we’re undervalued, and we’re interested in that, too. So, that’s kind of what we’re thinking about that, Leo. Thank you.

Leo Mariani: Okay. That’s helpful. So, it sounds like probably nothing on the docket for Brazil or Mexico in ’24?

Roger Jenkins: That’s right.

Leo Mariani: Okay. Thank you.

Roger Jenkins: Thank you.

Operator: The next question in the queue comes from Arun Jayaram with JPMorgan. Please proceed.

Arun Jayaram: Hey Roger, I wanted to get some thoughts or details on your technical team and what type of experience does your team have in work in West Africa, Cote d’Ivoire? And maybe just give us some insights on how the exploration team is situated here at Murphy and Houston.

Roger Jenkins: Thanks, Arun, for that question. We’ve worked everywhere in the world. We had a year ago business in Gabon. We had a development, a very unique development in Democrat Republic of Congo. All of our executive team have worked internationally. Murphy is an international player. This is a far easier drilling than an OSO well, much shallower, much more simple execution. We’ve executed wells like that throughout the world. We have a technical team on the drilling side. It’s great experienced internationally. And then our development, development is a development. This is around the same water depth as King’s Key this isn’t very anything difficult for us. On the exploration side, naturally, a major company like Anadarko is a very successful exploration company in a great company.

There personnel from Anadarko that work in different other offshore entities today, including Murphy. But we have a very experienced team, both through exploration and of course, executive management and our development team that’s very experienced working internationally. Tom, Eric and I have lived and worked and traveled internationally, our entire careers, and this is really just not really much to the execution for us, Arun. We are greatly experienced and able to execute globally on just about anything in the ocean. I can’t think of the thing we can’t do in the ocean.

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