Murphy Oil Corporation

Murphy Oil CorporationMurphy Oil’s Eagle Ford Shale operations expand into eight counties in South Texas.  The company entered the unconventional resources arena later than many of its competitors, but came in at a great time to capitalize on the Eagle Ford Shale.  The company quickly assembled more than 200,000 acres and now expects resource potential on its properties will reach almost 900 million barrels of oil equivalent.  The company will be operating in the Eagle Ford for many years to come as it develops its Tilden, Catarina, Nueces, and Tilden 2 projects across South Texas

Murphy Oil Corporation (NYSE: MUR) is a closely held integrated company that has expanded into unconventional resources over the past few years.. The company headquarters is in El Dorado, AR. The company’s reserves are located across the world, but expected growth is being driven by the Eagle Ford Shale and the Montney Shale in Canada. The company was founded in Louisiana with a majority timber and banking interest, but that changed with the discovery of the Caddo Field in Louisiana. The company later moved to Arkansas.

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Murphy Oil Eagle Ford Shale Quarterly Commentary

April 30, 2014

Murphy’s first quarter production in the Eagle Ford Shale averaged 49,634 net boe/d, which was up from 41,904 net boe/d in the fourth quarter. The company brought 44 wells on line and recovered from weather issues experienced in the fourth quarter of 2013.  In the first quarter, eight drilling rigs were running and three wells were completed across the play.  Murphy is implementing 40 acre downspacing on a go forward basis in its main Karnes and Tilden development areas and has good running room across the Eagle Ford with over 1,750 prosective drilling locations.

January 30, 2013
Murphy Oil surpassed 25,000 boe/d at the end of 2012 and annualized production averaged 15,000 boe/d. Murphy has 10 rigs and 3 frack crews working around the clock. The company has drilled 216 wells to date and has brought 163 to production. Total time spent to drill and case wells is averaging 11-13 days across the play. Roger Jenkins, COO stated “There’s many places to unload the trucks, many depots, many options. We’re doing very well with our crude. Murphy’s land situation is not a condensate one. For black oil, 41, 42 degree API, we’ve been getting a $13 positive margin to WTI there for some time. And people want our crude in that area and we’re doing very well with the marketing quality of crude because we have very little condensate in our business.”

The company will continue to push downspacing to 80-acres across all three areas operated in the Eagle Ford. Testing down to as little as 40-acres per well might take place late in 2013. Watch for test results from the company’s first Pearsall Shale well near the end of the first quarter of 2013. Two horizontal Pearsall wells are planned in Atascosa County in the first half of the year.

Pad drilling is expect to push operational costs down.

May 3, 2012

Murphy currently has 14 rigs contracted in North America, 10 in the Eagle Ford and 4 in Canada waiting on spring break-up. Three of these rigs will be back to work at Seal, and the other rig will float between the Montney, South Alberta, and their new oil play in the Muskwa.

In the Eagle Ford Shale, Murphy now has 10 rigs running and are looking to add 2 more by year end. They are operating 2 dedicated frac spreads and are looking to add a third crew shortly. The company has stepped up the pace here based on strong results and redeployment of capital from dry gas areas, and now expect to drill 43 more wells budgeted and complete an additional 34. To date, Murphy has drilled 87 wells in the play and have 18 awaiting completion. Current net production today is 11,800 barrels of oil equivalent. With their revised outlook, they should average approximately 15,000 barrels of oil equivalent to date net for the year. They have lots to do in the Eagle Ford with over 2,000 oilier locations yet to drill.

January 25, 2011

Extraction expenses rose in 2011 due to well workover expenses at the Kikeh field and higher production at onshore fields in the Eagle Ford Shale area in the U.S. and the Montney area of Western Canada….. Activity in our North American resource plays ramped up as we accelerated oil developments in the Eagle Ford Shale of South Texas and the Seal heavy oil project in northern Alberta.

Murphy exited the year near 9,000 barrels of oil per day net as we ramped up our rig count from 3 to 6 over the year. We now have 7 rigs running, and we’ll add 2 more by early March and average 8 for the year. To date, we have drilled 56 wells, with 9 awaiting fracs. Well results continue to be encouraging and are trending better than our planned type curve for the play. Costs are falling with improved service contract terms as well as improved efficiencies in drilling and completion operations. Further improvements in cost are expected as gas rigs and equipment stand down across industry this year.

A total of $3 billion will be spent largely on development projects in 2012. $1 billion is slated for the U.S., primarily in the Eagle Ford Shale; a further $700 million in Canada, of which $200 million is for Seal heavy oil development; and $300 million is budgeted for Montney. Total Eagle Ford spend will range $1-1.2 billion per year.

November 2, 2011

Production expenses rose in 2011 due to an ongoing well workover program at the Kikeh field and higher production at onshore fields in the Eagle Ford Shale area in the U.S. and the Montney area of Western Canada.

Activities on the Company’s North American resource acreage will be further expanded in coming months with the addition of two rigs in the Eagle Ford Shale oil window.

July 27, 2011

“…Our Eagle Ford Shale presence and production volumes continue to grow. We had a record production day of 7,200 barrels of oil equivalent in this area in July and we added over 20,000 acres in the heart of the play in the second quarter. We are proud to partner with Walmart U.S. to offer a 10-cent per gallon discount opportunity to retail customers at the majority of our gasoline stations beginning in July and continuing through September 30……”

May 4, 2011

“…In the Eagle Ford Shale, we are stepping up activity with 4 rigs working now and plan to get to 7 rigs by year end. Last December, we sanctioned a project in the Karnes area of the play. 2 of the 4 rigs are active there. To date, we have drilled 24 wells, with 15 producing and 9 awaiting fracs. Well results continue to be very encouraging and are trending better than our tight curve for wells in the play.

We have a dedicated frac crew, which completed 6 wells in the first quarter and will continue to knock off 3 to 5 wells a month going forward. The region has been hampered by takeaway capacity, and we expect this to improve as infrastructure projects move forward into next year..…”