Murphy Oil Q1 Earnings Call Highlights

Key Points

• Murphy Oil beat production guidance in Q1 2026, with output above the high end of its range thanks to strong onshore Eagle Ford and offshore Gulf of Mexico performance. The company also generated $429 million of cash flow and $47 million of adjusted net income, aided by higher late-quarter oil prices.
• The company kept its 2026 capital budget at $1.2 billion to $1.3 billion, but management said spending could move higher if non-operated Eagle Ford opportunities or an appraisal well in Côte d'Ivoire materialize. Murphy expects meaningful future volume additions from Chinook #8 in the Gulf and the Lac Da Vang project in Vietnam.
• Exploration remains a major focus, with ongoing drilling in Côte d'Ivoire and appraisal work in Vietnam, while Murphy also builds out new international prospects in Cameroon and Morocco. Management reiterated that shareholder returns through dividends and buybacks remain part of the plan, though timing may be opportunistic based on commodity prices and valuation.

Murphy Oil NYSE: MUR reported first-quarter 2026 results that management said reflected stronger-than-expected production, higher oil pricing late in the quarter and continued progress across its exploration and appraisal portfolio.

President and CEO Eric Hambly said the company generated $429 million of cash flow and adjusted net income of $47 million during the quarter. The adjusted earnings figure included $67 million of exploration expense related to two unsuccessful wells in Côte d'Ivoire. Hambly said Murphy’s unhedged, oil-weighted portfolio allowed the company to benefit as prices rose during the quarter, though he cautioned that March pricing was not representative of the entire period.

“Prices rose roughly 50% from January to March,” Hambly said. Murphy’s average realized oil price for the full quarter was $72 per barrel, while realized prices exceeded $90 per barrel in March, he said.

Hambly said geopolitical developments, particularly in the Middle East, contributed to volatility in energy markets during the quarter. While Murphy has no direct exposure to the region, he said the broader market environment affected realized pricing and reinforced the company’s focus on financial discipline.

Production Tops Guidance on Onshore and Offshore Strength

Murphy said first-quarter production came in above the high end of its guidance range, with outperformance split roughly evenly between onshore and offshore operations.

In the Eagle Ford, production exceeded expectations by nearly 3,000 barrels of oil equivalent per day, supported by 15 new wells brought online during the quarter. Hambly said longer laterals and continued improvements in drilling and completions helped drive strong well performance.

In the Gulf of Mexico, Murphy also outperformed by about 3,000 barrels of oil equivalent per day, driven by high facility uptime and efficient execution of planned maintenance.

Chris Lorino, senior vice president of operations, said Eagle Ford performance has benefited from capital efficiency gains, longer laterals and lower costs per foot. He said the company continues to see upside in the Catarina area, including “a really great shallow decline” and additional running room for longer laterals.

Hambly said Murphy had previously framed the Eagle Ford as a 30,000 to 35,000 barrel-per-day net asset over the medium term, but the company exceeded that range last year and is guiding to about 38,000 barrels per day in 2026. He said Murphy has not yet decided whether to allow production to decline back toward the prior range or hold it closer to current levels in future budgets.

Capital Budget Maintained, With Flexibility Around Opportunities

Murphy is maintaining its 2026 capital guidance range of $1.2 billion to $1.3 billion. Hambly said the capital program is front-loaded, with spending concentrated in the first half of the year due to onshore drilling and completions activity and exploration and appraisal work in Vietnam and Côte d'Ivoire.

Hambly said he is confident Murphy can stay within its guided capital range based on the portion of the program under the company’s control. However, he noted that non-operated opportunities in the Eagle Ford could arise, and a successful Bubale exploration well in Côte d'Ivoire could lead Murphy to drill an immediate appraisal well. Such a well is not included in the current capital range and could push spending to the high end or potentially above it, he said.

Looking ahead to 2027, Hambly declined to provide formal guidance but said Murphy expects meaningful volume additions from the Chinook #8 well in the Gulf of Mexico, which is expected to come online in the second half of 2026, and from the Lac Da Vang, or Golden Camel, field in Vietnam, which is expected to start up in the fourth quarter of 2026 and ramp through 2027. He clarified that the recently sanctioned Banjo and Cello projects are expected to contribute about 4,000 barrels per day net in 2028, not 2027.

Exploration Focus Remains on Côte d'Ivoire, Vietnam and New International Entries

Murphy said drilling is continuing at the Bubale exploration well in Côte d'Ivoire. Hambly said the well’s primary objective is a Cenomanian target, with a secondary, shallower Turonian objective. He said drilling progress has been slower than hoped because of hard rock in part of the Turonian section, but he said the well has not yet reached its primary objective.

“We just don’t have a definitive result to talk about as we’re actively drilling it,” Hambly said.

In Vietnam, Murphy is finishing operations on the HSV-3X appraisal well at the Hai Su Vang, or Golden Sea Lion, field and plans to move next to HSV-4X, the final well in the appraisal program. Hambly said the results will help define the field’s potential and guide development planning. Potential development concepts include an FSO with processing or wellhead platforms, or an FPSO, either newly built or redeployed.

Murphy also discussed the LDT North, or White Camel North, prospect in Vietnam, which Hambly said targets the same age reservoir as the Lac Da Trang discovery. The company estimates a mean to upward gross recoverable resource range of 40 million to 80 million barrels of oil equivalent. If successful, Hambly said the prospect would most likely be tied back to the infrastructure being developed for Lac Da Vang, though a larger result could potentially anchor an additional hub.

The company is also building an international exploration portfolio that includes Cameroon and Morocco. Hambly said Cameroon offers shallow- and deepwater exposure, proven source rock systems and newly reprocessed seismic data that indicates prospectivity. He described Morocco as more frontier and higher risk, with planned seismic reprocessing intended to help de-risk the opportunity.

Shareholder Returns Framework Remains, Timing May Be Opportunistic

Murphy executives said the company’s shareholder return framework remains intact, including its commitment to a competitive dividend and share repurchases. Hambly said Murphy has paid a dividend since 1961 and wants to be a consistent repurchaser of its stock, but the company may be opportunistic about timing given commodity price volatility.

“If we think that our share price is really cheap, then we’ll probably move more quickly,” Hambly said. “If we think our share price is a little higher in the range, we may be a little more patient.”

Hambly said Murphy still intends to buy back stock, occasionally raise its dividend and use part of its cash flow to support the balance sheet. He said the company can also build cash to affect net debt, given limitations around reducing long-term debt.

Tom Mireles, executive vice president and CFO, said Murphy is seeing more constructive pricing in the U.S. Gulf, including stronger differentials for some crudes benchmarked to WTI. He said those differentials typically lag by about one month, meaning Murphy would begin benefiting from them going forward from April.

Hambly closed the call by saying the quarter tested Murphy’s strategy amid rapid price movement and uncertainty. He said the company’s balance sheet positions it to remain resilient in weaker markets while participating if prices remain strong.

About Murphy Oil NYSE: MUR

Murphy Oil Corporation is an independent upstream oil and gas company engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids. The company's operations encompass conventional onshore and offshore reservoirs, with an emphasis on liquids-rich properties and deepwater assets. Through a combination of proprietary technologies and strategic joint ventures, Murphy Oil seeks to optimize recovery rates and manage its portfolio to balance long-term resource development with operational flexibility.

Murphy Oil's exploration and production activities are geographically diversified.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.