Murphy Oil Reports Q2 2026 Results: Full Earnings Call Transcript

Murphy Oil (NYSE: MUR ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

Access the full call at Summary Murphy Oil reported a significant discovery in Côte d’Ivoire, with the Bubal well encountering oil in both the Turonian and Cenomanian reservoirs, marking it as a potential growth driver despite requiring further appraisal work. 55 billion, focusing on high-value opportunities like the Bubal appraisal and Eagle Ford development to drive organic growth. Second quarter production averaged 169,000 barrels of oil equivalent per day, with strong performance in Tupper Montney and Eagle Ford, and a positive free cash flow of $110 million was generated.

Murphy Oil plans to maintain a strong balance sheet and dividend payments, with potential share buybacks if the stock price falls below intrinsic value. Future exploration and development plans include continued appraisal in Côte d’Ivoire, potential developments in Vietnam, and exploration activities in the Gulf of Mexico and West Africa. Full Transcript Fern, Operator Good morning, my name is Fern and I will be your conference operator today. All lines have been placed on mute to prevent any background noise.

After the presentation, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you.

I will now turn it over to Atif Riaz, Vice President of Investor Relations and Treasurer. Atif Riaz, Vice President of Investor Relations and Treasurer Thank you, Fern. Good morning and welcome to our second quarter 2026 earnings conference call. Joining me today are Eric Hambly, President and CEO, Tom Morales, Executive Vice President and CFO, and Chris Larino, Senior Vice President of Operations.

Yesterday, after market close, we issued our second quarter earnings release, slide presentation, and a stockholder update. These documents can be found on Murphy Oil's website and we will reference them today throughout our call. S. securities laws.

No assurances can be given that these events will occur or that the projections will be attained. A variety of factors exist that may cause actual results to differ. For further discussion of risk factors, please refer to our most recent annual report filed with the SEC. Murphy Oil takes no duty to publicly update or revise any forward-looking statements except as required by law.

Throughout today's call, production numbers, reserves, and financial amounts are adjusted to exclude noncontrolling interest in the Gulf of Mexico. I will now turn the call over to Eric for opening remarks. Eric Hambly, President and Chief Executive Officer Thank you, Atif, and thanks to everyone for joining us. We released detailed earnings materials yesterday, so I will keep my comments focused this morning.

I want to spend most of my time on the key developments in the quarter, including what we learned through our exploration and appraisal program, how those learnings are shaping our capital allocation, and why we believe these investments strengthen Murphy Oil's long-term outlook. The most important development this quarter was the Bubal discovery in Côte d’Ivoire. Just as important as the result itself is the disciplined exploration process that led us here.

We entered Côte d’Ivoire with a clear thesis and a three-well exploration strategy, and although the first two wells were noncommercial, we remained confident in Bubal's prospectivity and continued to execute the plan. That patience and technical conviction paid off, as the well encountered oil in both the Turonian and Cenomanian reservoirs. Now we want to be very clear about where we are in the process. While Bubal has the potential to become a significant growth driver for Murphy Oil, there is still important appraisal work ahead.

The next step is to understand the scale, quality, continuity, and economics of the resource. That work is now underway with the Bubal West-1X, which we spud in July to begin appraisal of the Turonian reservoir. It is the first of up to five potential appraisal wells. I emphasize potential because this will be a staged, data-driven process over the next 18 to 24 months, with each well determining the scope and direction of the remaining appraisal program.

An 18 to 24 month appraisal program may sound lengthy, but this is how we protect value in our business. Value can be destroyed long before a development well is ever drilled by misunderstanding the resource, overbuilding the project, or committing capital too early. Appraisal helps us avoid those mistakes by giving us the technical confidence to right-size the development and make disciplined capital decisions. Hai Su Vang in Vietnam exemplifies the importance of that discipline.

Hai Su Vang-4X was a dry hole, and based on the new data, we have reduced our resource estimate. There is no sugarcoating it. This is not the outcome we were hoping for. However, the appraisal program gave us critical insights, allowing us to now calibrate the field development plan before we commit significant capital in the coming years.

Following the Hai Su Vang resource estimate revision, I want to emphasize two important points. First, even at the revised estimate, Hai Su Vang remains a material 200 to 300 million barrel oil equivalent opportunity, approximately two to three times the size of Lac Da Vang. And second, our Vietnam peak production outlook of 30,000 to 50,000 barrels of oil equivalent per day remains unchanged. We may come closer to the lower end based just on what we know today, but the final outcome will depend on what additional tieback opportunities we identify as we move forward.

The key takeaway is that we now have greater clarity around our opportunity set, with many compelling projects competing for capital. That brings me to our revised capital program and how we're thinking about investments going forward. 55 billion. This is not about chasing activity or reacting to price.

It's a deliberate decision to fund specific high-value opportunities now in front of us, with almost all of the increase supporting Murphy Oil's organic growth. Roughly $190 million relates to Bubal, including $100 million of incremental spend on the discovery well and $90 million for the first appraisal well. Another $70 million is going into the Eagle Ford, which is expected to add approximately 5,000 to 6,000 barrels of oil equivalent per day in 2027. I want to take a minute to talk about the Eagle Ford decision because it highlights the key role this asset plays in our portfolio.

As our offshore opportunity set expands, we can fund part of that growth through near-term, high-return production and cash flow. Eagle Ford is one of our best assets to do that. It is flexible, oil-weighted, and capable of efficiently translating capital into production. Going forward, we expect the Eagle Ford to become an increasingly important source of cash flow and financial flexibility across the business.

This is the strength of our multi-basin portfolio in action, not a change in capital discipline. Our ability to fund growth through our base business while maintaining financial strength was evident this quarter. 5 billion of liquidity. Even with the revised capital program, at current commodity prices we expect to generate positive free cash flow for the full year.

Operationally, second quarter production averaged 169,000 barrels of oil equivalent per day, above the midpoint of our guidance, led by stronger performance at Tupper Montney and continued outperformance in the Eagle Ford. In the Gulf of Mexico, Chinook No. 8 is now through drilling after reaching a total depth of 26,000 ft and remains on track to come online in the fourth quarter. Lac Da Vang is also on schedule for first oil in the fourth quarter, with the pipeline, topsides, and FSO milestones now complete.

As we look ahead, years of capital discipline and technical rigor are beginning to translate into a portfolio with multiple exciting pathways to growth. This is the Murphy Oil model in action: identify the opportunity, test it with discipline, develop it safely and efficiently, and fund it through resilient cash flow and financial strength. This full-cycle capability and track record across geographies, asset types, and development stages sets Murphy Oil apart and positions us to convert the opportunity ahead into lasting shareholder value. With that, we are ready to take your questions.

OPERATOR We will now begin the question-and-answer session. At this time I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. Please stand by while we compile the Q&A roster. P.

Morgan Securities. Your line is open. Please go ahead. P.

Morgan Eric, good morning. Appreciate the comments in the shareholder letter. Exploration, as is investing, can be humbling, but did want to maybe get your thoughts on next steps at HSV. What needs to happen in terms of kind of moving to that FID decision in 2027?

And can you give us a little bit of an update on how you are thinking about kind of the development options for HSV? Eric Hambly, President and Chief Executive Officer Aaron, thanks for that. Great question. Obviously we're disappointed that the 4X well was a dry hole, but I will say that we're still very excited about what is a very significant development for us.

You know, a 200 to 300 million barrel field in shallow water will have very attractive economics. I would have loved for it to be larger. We now have a lot of confidence in the size of the resource and are gaining increasing knowledge about how we're going to develop the field in terms of the well count, well spacing, and the type of facility concept. It's something we'll be evolving over the coming year or so.

We're looking at a number of options for the development. One option would be an FPSO. The other option would be a processing platform with a series of wellhead platforms tied to an FSO, similar to our Lac Da Vang project. Those are things that we will assess as we plan a development of the field over the coming 12 months or so.

We're going to work closely with our partners on a series of approvals required to achieve an approved field development in Vietnam. And after we do that, we will take the project to our board for a final investment decision. As we highlighted in our letter, we're targeting that in the fourth quarter of 2027, and I think we're well on track to do that. Really happy with this significant discovery that will help us build a really material business in Vietnam.

And yeah, I think we're going to create a lot of value for our shareholders. And I don't think we're getting a lot of recognition of that value creation today. And we're happy to demonstrate our ability to continue to execute, developing projects 40% faster than the industry. P.

Morgan Great, great. And maybe my follow-up: you've spud now Bubal West in July. Looks like you'll be appraising the Turonian. Maybe just give us a sense of what your concept is for this appraisal well and what will be the governor of the next in the development or the appraisal program, which could include up to five wells.

Eric Hambly, President and Chief Executive Officer Yeah, thanks for that. As we featured before, we drilled the discovery well in a position where the Turonian and the Cenomanian cross. There was one location where we could test both reservoirs. We were fortunate to be able to find oil in both Turonian and Cenomanian.

And that leaves us with a need to understand the lateral extent of the field, the variability in reservoir quality and thickness across two different reservoir intervals, and also importantly, learn how much of those structures are oil filled. The next well that we moved to, the Bubal West-1X, is moving down dip in the Turonian. The main objective of the well is to test for continuity and variability of reservoir sands and also hopefully determine, to prove, a deeper oil level than is proven at the base of the Bubal-1X well.

We're very intentionally targeting the well to give us high confidence that we have a resource in the Turonian that is in line with or in excess of the volume we need to have a commercial development. As we sit today, we think what we found is commercial, but we don't have high confidence because we have one penetration and two reservoirs—very large reservoirs to test, very large lateral extent—and we're hoping this well gives us high confidence that we'll be able to then move forward with the development as quickly as possible while we continue to assess and appraise the full size and value of the field. P. Morgan Great.

Thanks, Eric. OPERATOR Thank you. Fern, Operator Your next question is from the line of Neil Mesh with Goldman Sachs. Your line is now open.

Please go ahead. Neil Mesh, Analyst at Goldman Sachs Yeah, Eric, want you to unpack a little bit of the decision to pull forward activity in the Eagle Ford. You alluded to it a little bit in your comments, but maybe you talk about why you thought this was the right environment and what kind of incremental returns you're going to get on the incremental CapEx associated with the $70 million acceleration. Eric Hambly, President and Chief Executive Officer Yeah, thanks for that.

Before I get just into the Eagle Ford, I want to back up a bit and talk about how we've been thinking about our overall company business. 3 billion range and that any additional spending to develop something like Bubal would likely be additive or largely additive. And I would say where we sit today that is still true. So as we look forward and think we want to maintain our Canadian onshore business effectively flat, maintain the scale of our Gulf of Mexico business relatively flat through the rest of this decade, we look at an additional need for CapEx for appraising and developing Bubal.

And the place that we found was most optimal to help provide part of that is through accelerating our Eagle Ford. If you look at our Eagle Ford business, we've had increasingly strong well performance over the last few years, generating strong free cash flows even in periods of fairly low oil price in the past couple years. And so the reliability of it and the flexibility of it, we look at and say this is a great place to invest a little bit more. That'll generate more free cash flow next year and likely through the end of the decade that'll help us fund the appraisal of Bubal.

And then as we move into additional volume growth out of Vietnam, we'll have even stronger cash flows. So it's the best place to find oily production and we can do it scalably. And we've had very strong returns and increasing well performance from Eagle Ford. So it's kind of the go-to place to do it.

And I think you'll see us, as we highlighted in our materials, increase spending this year, which leads to increased free cash flow next year. And while we haven't formulated a plan that we've released for 2028 through 2030, I think you'll see us increasingly lean into that if it allows us to continue to generate more free cash flow. So really about creating shareholder value. I think it's nice to be able to generate incremental oily production growth in the short run, but the primary reason is it's free cash flow generative and can help us fund what we think is an exciting opportunity in Cote d'Ivoire.

Neil Mesh, Analyst at Goldman Sachs Yeah, Eric, as the follow-up. So the new capex plan is 1,516 in accrued capex for this year. You know, any advice on what we should put in as a placeholder for 27? I know there's a lot of moving pieces, but just any thoughts on the market there so we, you know, can calibrate accordingly?

Eric Hambly, President and Chief Executive Officer Yeah, that's a fair question. We don't have a number to give you for next year's capex, but I'll talk just about how I think about it. I think that you should expect us to increase slightly more in the Eagle Ford than in the past, with that alone, without any change to investing in Cote d'Ivoire. That would likely put our typical capital program toward the high end of our kind of previous 12 to 13 range, maybe slightly above.

That's still something we're going to work on. And then spending on Bubal is likely additive to that. So we'll probably see a higher capex in 27 than you've seen from us recently. I don't know the number.

And importantly, I want to kind of go back to the comment we made about the appraisal program. We're drilling a well, Bubal West 1X. Now, depending on what we find, we may have no appraisal program or a limited appraisal program. We're going to learn from every well.

And next year's capital spending will be materially driven by what we continue to find. If we keep finding more oil at Bubal, we'll likely keep spending.