Buoyed by a surge in crude oil prices, Murphy Oil Corp. of El Dorado announced a full-year 2016 loss of $276 million Wednesday afternoon, declaring that it had survived “one of our industry’s worst commodity price collapses.”
The annual results, which included a fourth-quarter loss of $64 million, or 37 cents per diluted share of stock, represented a significant rebound from 2015’s staggering net loss of $2.27 billion. The publicly traded oil and natural gas exploration and production giant touted a year of success in oil output (176 million barrels of oil equivalent per day), capital investments of $605 million excluding acquisitions, and reductions in expenses while generating $1.2 billion in case from divesting non-core assets.
The company, which reported a $16.2 million loss in the third quarter, beating analysts’ expectations, cut lease operating expenses by 15 percent for the year and reduced selling and general expenses by 14 percent, according to a quarterly report filed with the Securities & Exchange Commission. The yearly loss represented $1.60 per diluted share.
“2016 was a year of improving the company’s North American onshore portfolio while surviving one of our industry’s worst commodity price collapses,” said Roger W. Jenkins, the company’s president and chief executive officer. In a statement, Jenkins noted the sale of the non-core assets, including Murphy’s Montney and Syncrude operations in British Columbia and Alberta. “The company is now set up with a solid balance sheet, ample liquidity and stabilized production levels while maintaining our top quartile dividend yield within cash flow.”
At the end of the year, Murphy had $2.8 billion in outstanding fixed-rate note debt and $984 million in cash and liquid investments. For 2017, it plans capital expenditures of $890 million, with 65 percent of that allocated to onshore “unconventional” operations in the Eagle Ford shale play in Texas and the Kaybob Duvernay fields of Canada.
“Our focus in 2017 is threefold,” Jenkins stated. “First, allocating a majority of capital toward developing locations in the highest-return areas in our onshore portfolio. Second, investing in selective offshore projects” that deliver top results. “Third, covering all costs, including our dividend, within cash flow which will maintain our solid balance sheet.”
In August, the Murphy board of directors reduced its quarterly cash stock dividend to 25 cents from 35 cents, reflecting continued low oil prices. Crude markets have rallied since the summer.
Murphy will hold a conference call at 10 a.m. CST Thursday to discuss fourth-quarter results. The call can be accessed on MurphyOil.com or by dialing 1-800-263-8506. The reservation number for the call is 8515016, according to a company news release.
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