Murphy Oil Corporation Announces First Quarter 2018 Financial and Operating Results

Murphy Oil Corporation (NYSE: MUR) today announced its financial and
operating results for the first quarter ended March 31, 2018, including
income from continuing operations of $169 million, or $0.97 per diluted
share.

Financial highlights for the first quarter include:

• Generated adjusted income of $40 million
• Achieved annualized EBITDA to average capital employed of 20 percent
• Realized competitive EBITDAX per barrel of oil equivalent sold of
  $26.70
• Returned 16 percent of operating cash flow to shareholders through
  dividend
• Preserved balance sheet yielding 30 percent net debt to total capital
  employed
• Maintained approximately $2.0 billion of liquidity, with no borrowings
  on credit facility

Operating highlights for the first quarter include:

• Produced 168,000 BOEPD, on track to achieve full year production
  guidance
• Increased Kaybob Duvernay production 92 percent, year-over-year,
  delivering eight wells: five wells in the oil window with average IP30
  rates of approximately 1,000 BOEPD and three wells in the gas
  condensate window with average early production potential of
  approximately 2,000 BOEPD
• Expanded exploration footprint in the Gulf of Mexico and Brazil with
  co-venturer groups

FIRST QUARTER 2018 RESULTS

Murphy recorded income from continuing operations of $169 million, or
$0.97 per diluted share, for the first quarter 2018. The company
reported adjusted income, which excludes both the results of
discontinued operations and certain other items that affect
comparability of results between periods, of $40 million, or $0.23 per
diluted share. The adjusted income excludes the following items:
after-tax gain of $120 million associated with 2017 U.S. tax reform and
a $12 million after-tax gain on foreign exchange, partially offset by a
mark-to-market after-tax loss on crude oil derivative contracts of $11
million. Net cash provided from continuing operations was $279 million.
This includes a one-time cash payment of $35 million for a Canadian tax
withholding associated with repatriating cash from Canada to the U.S.
The tax expense associated with the repatriation of cash was recorded in
2017. Details for first quarter results can be found in the attached
schedules.

Earnings before interest, taxes, depreciation and amortization (EBITDA)
totaled $373 million, or $24.78 per barrel of oil equivalent (BOE) sold.
Earnings before interest, taxes, depreciation, amortization and
exploration expenses (EBITDAX) totaled $402 million, or $26.70 per BOE
sold. Details for first quarter EBITDA and EBITDAX reconciliation can be
found in the attached schedules.

Production in the first quarter 2018 averaged 168,000 barrels of oil
equivalent per day (BOEPD). Offshore production exceeded guidance
primarily driven by Gulf of Mexico wells at Kodiak and Habanero coming
back online with production levels above expectations, as well as higher
uptime across all offshore assets (3,000 BOEPD). Onshore production in
the Tupper Montney also exceeded production guidance primarily due to
wells performing above expectation (900 BOEPD). This was partially
offset by lower U.S. onshore production in the Eagle Ford Shale (1,500
BOEPD) due to the continued recovery of shut-in wells from offset
operators’ frac operations as well as underperformance of wells in the
Midland Basin (800 BOEPD).

“Over the course of the first quarter, we had strong production results
from our offshore assets in Malaysia and the Gulf of Mexico and our
onshore Canadian assets in the Tupper Montney and Kaybob Duvernay. We
were also able to achieve competitive margins across our oil-weighted
assets for the U.S. and Malaysia operating areas. We continue to
maintain our key balance sheet metrics while delivering on our 2018
plans. Our diverse, high margin portfolio coupled with the recent
improvement in oil prices allows Murphy to generate free cash flow above
our dividend this year,” stated Roger W. Jenkins, President and Chief
Executive Officer.

FINANCIAL POSITION

As of March 31, 2018, the company had $2.8 billion of outstanding
long-term, fixed-rate notes and $939 million in cash and cash
equivalents. The fixed-rate notes have a weighted average maturity of
8.5 years and a weighted average coupon of 5.5 percent. The next senior
note maturity for the company is in 2022. There were no borrowings on
the $1.1 billion unsecured senior credit facility at quarter end.

REGIONAL OPERATIONS SUMMARY

North American Onshore

The North American onshore business produced 92 thousand barrels of oil
equivalent per day (MBOEPD) in the first quarter, with 47 percent
liquids.

Eagle Ford Shale – Production in the quarter averaged 43 MBOEPD,
with 88 percent liquids. During the quarter, the company brought six
operated wells online, all of which were in the Tilden area in the Lower
Eagle Ford Shale with average initial production rates over 30 days
(IP30 rate) exceeding 700 BOEPD. By employing Gen 5.0 completions in the
Tilden area, IP30 rates have improved 115 percent over the past six
years.

“In the first quarter, we had planned limited well delivery, as a result
of focusing our drilling activity on a ten well pad in the Karnes area.
These ten wells are part of the 22 operated wells we expect to bring
online in the second quarter. The ten well pad at Karnes is important to
learnings in the area as we were able to test a staggered lateral
completion style that we believe could be beneficial for future pads.
With the wells recently being placed on production, early indications
are positive and we look forward to giving more conclusive results in
the coming quarters,” stated Jenkins. “Our first quarter production was
temporarily affected by a large number of our best Catarina wells being
shut in for offset fracs from peers in the area. All of these wells have
recently been brought back online,” Jenkins added.

Tupper Montney – Natural gas production in the quarter averaged
240 million cubic feet per day (MMCFD). The company drilled the
remaining three wells on a five well pad, with all five wells expected
to be brought online in the second quarter.

Full cycle break-even costs, with a ten percent rate of return, continue
to decrease and are currently C$1.90 AECO per thousand cubic feet (MCF).
As a result of long-term forward sales contracts and other marketing
agreements, Murphy achieved strong first quarter netbacks in the Tupper
Montney of C$2.20 per MCF, consisting of a blended sales price of C$2.47
per MCF less C$0.27 per MCF of transportation costs. Furthermore, the
company continues to significantly reduce its future multi-year exposure
to AECO prices through a combination of forward sales contracts and
market diversification to the Malin, Chicago, Emerson and Dawn markets.

Kaybob Duvernay – Production increased 92 percent from first
quarter 2017, averaging near 5,500 BOEPD with 70 percent liquids. During
the first quarter, the company continued appraising the play by drilling
12 wells and bringing online eight wells, including Murphy’s first wells
in the Simonette area. The IP30 rates at the 15-16 two well pad averaged
985 BOEPD with 70 percent liquids, and one well at 01-12 averaged 900
BOEPD IP30 with 80 percent liquids. The 12-29 two well pad in the Kaybob
East area flowed at an average of 1,040 BOEPD with 80% liquids. The 16-3
three well pad in the Saxon area was placed online just prior to quarter
end, with the wells flowing above expectations.

“Our appraisal of the Kaybob Duvernay is paying off. Since entering the
play in 2016, we have meaningfully reduced drilling and completion
costs, with recent pacesetter wells averaging below the $8.0 million
mark. We are well on our way to achieving planned drilling and
completions costs of $6.5 million per well that have average lateral
lengths of approximately 9,000 feet. Currently, production rates are
exceeding our expectations,” commented Jenkins.

Global Offshore

The offshore business produced over 75 MBOEPD for the first quarter,
with 72 percent liquids.

Malaysia & Brunei – Production in the quarter averaged over
51 MBOEPD, with 63 percent liquids. Block K and Sarawak averaged over 31
thousand barrels of liquids per day, while Sarawak natural gas
production averaged 107 MMCFD. The company continues to progress the
Kikeh DTU gas lift project with expected startup in the third quarter
2018, as well as preparing for the production startup of Block H FLNG in
2020.

North America – Production in the quarter for the Gulf of
Mexico and East Coast Canada averaged 24 MBOEPD, with 91 percent
liquids. The non-operated Kodiak well resumed production during the
quarter with rates exceeding expectations. The well achieved gross rates
over 25 MBOEPD, with net rates more than 6,100 BOEPD. The non-operated
Habanero well was also brought back online during the quarter and is
producing above expectations.

EXPLORATION

Gulf of Mexico Exploration – During the first quarter, Murphy
farmed into the Highgarden prospect (GC 895). At the March 2018 Gulf of
Mexico lease sale, Murphy and it’s co-venturer were also the high bidder
for two blocks with Miocene prospects, one at GC 939 and the other at MC
599.

Brazil Exploration – During the first quarter, Murphy and its
co-venturers, ExxonMobil and QGEP, were the successful bidders on blocks
430 and 573 in the Sergipe-Alagoas basin, with no well commitments.
These two blocks are strategically located next to the company’s
existing four block position.

“We continue to execute on our focused exploration strategy by
increasing our acreage in plays where we envision adding low-cost
resources with meaningful upside. In the Gulf of Mexico, we are excited
to get back to work as we recently spud our operated Samurai (GC 432)
appraisal well with our new partner BHP. This well is consistent with
our strategy of pursuing oil-weighted, lower risk opportunities with
competitive returns and low finding and development costs,” commented
Jenkins.

PRODUCTION AND CAPITAL EXPENDITURE GUIDANCE

Production for the second quarter 2018 is estimated to be in the range
of 166 to 169 MBOEPD, with updated full year 2018 production guidance in
the range of 167 to 170 MBOEPD. The low end of the full year production
guidance is being increased by 1,000 BOEPD from the previous guidance.

Full year capital expenditure guidance is being increased by five
percent from $1.06 billion to $1.11 billion. Approximately
three-quarters of the additional capital is attributable to the
increased working interest to drill the Samurai appraisal well,
increased working interest in Vietnam and workovers at the Medusa field
in the Gulf of Mexico.

“We are pleased with our first quarter production where our offshore
fields delivered high-margin results for our company. We are increasing
the midpoint of our annual guidance after our strong first quarter
results. In the second quarter, we look forward to delivering 22
operated wells in the Eagle Ford Shale as well as re-igniting our
exploration program in the Gulf of Mexico. Also, following spring
break-up, we will be resuming our drilling and completions activities in
the Duvernay,” stated Jenkins.

Details for production can be found in the attached schedules.

CONFERENCE CALL AND WEBCAST SCHEDULED FOR MAY 3, 2018

Murphy will host a conference call to discuss first quarter 2018
financial and operating results on Thursday, May 3, 2018, at 11:00 a.m.
ET. The call can be accessed either via the Internet through the
Investor Relations section of Murphy Oil’s website at http://ir.murphyoilcorp.com
or via the telephone by dialing toll free 1-888-886-7786, reservation
number 18948426.

FINANCIAL DATA

Summary financial data and operating statistics for first quarter 2018,
with comparisons to the same period from the previous year, are
contained in the following schedules. Additionally, a schedule
indicating the impacts of items affecting comparability of results
between periods and schedules comparing EBITDA and EBITDAX between
periods are included with these schedules as well as guidance for the
second quarter and full year 2018.

ABOUT MURPHY OIL CORPORATION

Murphy Oil Corporation is a global independent oil and natural gas
exploration and production company. The company’s diverse resource base
includes offshore production in Southeast Asia, Canada and Gulf of
Mexico, as well as North America onshore plays in the Eagle Ford Shale,
Kaybob Duvernay and Montney. Additional information can be found on the
company’s website at http://www.murphyoilcorp.com.

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are generally identified through the
inclusion of words such as “aim”, “anticipate”, “believe”, “drive”,
“estimate”, “expect”, “expressed confidence”, “forecast”, “future”,
“goal”, “guidance”, “intend”, “may”, “objective”, “outlook”, “plan”,
“position”, “potential”, “project”, “seek”, “should”, “strategy”,
“target”, “will” or variations of such words and other similar
expressions. These statements, which express management’s current views
concerning future events or results, are subject to inherent risks and
uncertainties. Factors that could cause one or more of these future
events or results not to occur as implied by any forward-looking
statement include, but are not limited to, increased volatility or
deterioration in the level of crude oil and natural gas prices,
deterioration in the success rate of our exploration programs or in our
ability to maintain production rates and replace reserves, reduced
customer demand for our products due to environmental, regulatory,
technological or other reasons, adverse foreign exchange movements,
political and regulatory instability in the markets where we do
business, natural hazards impacting our operations, any other
deterioration in our business, markets or prospects, any failure to
obtain necessary regulatory approvals, any inability to service or
refinance our outstanding debt or to access debt markets at acceptable
prices, and adverse developments in the U.S. or global capital markets,
credit markets or economies in general. For further discussion of
factors that could cause one or more of these future events or results
not to occur as implied by any forward-looking statement, see “Risk
Factors” in our most recent Annual Report on Form 10-K filed with the
U.S. Securities and Exchange Commission (SEC) and any subsequent
Quarterly Report on Form 10-Q or Current Report on Form 8-K that we
file, available from the SEC’s website and from Murphy Oil Corporation’s
website at http://ir.murphyoilcorp.com.
Murphy Oil Corporation undertakes no duty to publicly update or revise
any forward-looking statements.

NON-GAAP FINANCIAL MEASURES

This news release contains certain non-GAAP financial measures that
management believes are good tools for internal use and the investment
community in evaluating Murphy Oil Corporation’s overall financial
performance. These non-GAAP financial measures are broadly used to value
and compare companies in the crude oil and natural gas industry,
although not all companies define these measures in the same way. In
addition, these non-GAAP financial measures are not a substitute for
financial measures prepared in accordance with GAAP, and should
therefore be considered only as supplemental to such GAAP financial
measures. Please see the attached schedules for reconciliations of the
differences between the non-GAAP financial measures used in this news
release and the most directly comparable GAAP financial measures.

Non-GAAP Financial Measures

Presented above is a reconciliation of Net income to Adjusted income
(loss). Adjusted income (loss) excludes certain items that management
believes affect the comparability of results between periods. Management
believes this is important information to provide because it is used by
management to evaluate the Company's operational performance and trends
between periods and relative to its industry competitors. Management
also believes this information may be useful to investors and analysts
to gain a better understanding of the Company's financial results.
Adjusted income (loss) is a non-GAAP financial measure and should not be
considered a substitute for Net income (loss) as determined in
accordance with accounting principles generally accepted in the United
States of America.

Non-GAAP Financial Measures

Presented above is a reconciliation of Net income to Earnings before
interest, taxes, depreciation and amortization (EBITDA) and Earnings
before interest, taxes, depreciation, amortization, and exploration
expenses (EBITDAX). Management believes EBITDA and EBITDAX are important
information to provide because they are used by management to evaluate
the Company's operational performance and trends between periods and
relative to its industry competitors. Management also believes this
information may be useful to investors and analysts to gain a better
understanding of the Company's financial results. EBITDA and EBITDAX are
non-GAAP financial measures and should not be considered a substitute
for Net loss or Cash provided by operating activities as determined in
accordance with accounting principles generally accepted in the United
States of America.

Presented above is EBITDA per barrel of oil equivalents sold and EBITDAX
per barrel of oil equivalents sold. Management believes EBITDA per
barrel of oil equivalents sold and EBITDAX per barrel of oil equivalents
sold are important information because they are used by management to
evaluate the Company’s profitability of one barrel of oil equivalent
sold in that period. EBITDA per barrel of oil equivalent sold and
EBITDAX per barrel of oil equivalent sold are non-GAAP financial metrics.

¹ The Company sold the Seal area heavy oil field in January
2017.

² Natural gas converted on an energy equivalent basis of 6:1.

¹ U.S. dollar equivalent.

² The Company sold the Seal area heavy oil field in January
2017.

³ Prices are net of payments under the terms of the
respective production sharing contracts.

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