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Business Interest Sale Pushes Murphy Oil to 2Q Profit

2 min read

Murphy Oil Corp. of El Dorado announced a second-quarter profit on Wednesday, reporting net income of nearly $3 million, or 2 cents per diluted share, after a preliminary loss of nearly $200 million in the first quarter of 2016.

The $2.9 million profit was attributed mostly to the sale of Murphy’s interest in Syncrude, an oil-sands producer in Canada, and Montney natural gas processing and pipeline assets, also in Canada. The energy giant realized $1.15 billion in net proceeds in those transactions.

The publicly traded company (NYSE: MUR) used that cash to reduce outstanding borrowing by $971 million and to provide $207 million in funding for a joint venture with affiliates of the Athabasca Oil Corp. in the Kaybob Duvernay and Montney oilfields of Canada.

Murphy, which weathered a bad year for oil in 2015 with a net loss of $2.27 billion, or $13 a share, also said it had paid off the entire amount owned on its revolving credit fund and finished the second quarter with total debts of $2.46 billion and $399 million in cash on hand.

“We continued progressing our 2015 repositioning efforts as we closed the Syncrude non-core asset sale, along with the Montney processing assets, and entered into a new North American unconventional play and further strengthened our balance sheets,” President and CEO Roger Jenkins said in a statement. “We will continue to focus on costs and capital allocation” while maintaining “our original capital plan with adjust production levels accounting for asset purchases and sales.”

The company said its earnings before interest, taxes, depreciation and amortization from continuing operations totaled $158 million, or $10 per barrel of oil equivalent. It said those results were hampered by a 21 percent decrease in revenue realized from crude oil and a 44 percent decrease in North American natural gas realizations compared to second-quarter results from 2015.

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