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Murphy cuts budget by 62%

By  Wednesday, 27 January 2016 21:37
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Sarawak gas project operator, US-based Murphy Oil Corp., reported net loss of US$2.27 billion for 2015, plus cuts budget by more than half.

The company plans to reduce capital expenditure this year to $825.0 million, approximately 62% lower than the $2.19 billion spent in 2015.

About 45% will be allocated towards offshore spending, 41% towards Eagle Ford Shale and 14% for onshore work in Canada.

Production for Q1 2016 is estimated in the range of 190,000-194,000 boe/d with full year production to be between 180,000-185,000 boe/d.

"We remain focused on driving down operating and G&A costs across all segments of our business,” said Roger W. Jenkins, president and CEO of Murphy. “The cost reductions better positions the company to weather the anticipated ‘lower for longer’ commodity price environment."  

Murphy’s net income loss in Q4 2015 was $587.1 million and production averaged nearly 200,800 boe/d, slightly ahead of the 199,000 boe/d guidance. This is primarily due to higher production in Malaysia for Sarawak natural gas and higher natural gas production from the Montney area in Western Canada.

Gas production from Sarawak in Q4 2015 was 134 MMcf/d and full year output was over 121 MMcf/d. The Murphy operated Senyum well in Malaysia, however, failed to encounter hydrocarbons and was expensed as a dry hole during the quarter at a cost of $12.3 million.

Up in Brunei, the offshore Keratau well, which was drilled and completed in early Q4, found commercial hydrocarbons, adding to the group’s resources in the Kelidang field.

Jenkins said despite the major decline in oil prices, 2015 was a good year operationally for Murphy. “We increased our proved reserves even with the inclusion of the 10% sell down of our Malaysian assets.

“The company's year-end 2015 reserves to production ratio is 10.2, up from 9.2 a year ago. Our base production and type curves onshore in the Eagle Ford Shale and Montney continue to show strong performance to our original plans,” he added.

Murphy is a global explorer with preliminary proved reserves of 774 MMboe, from a diverse resources base. This includes offshore production in Southeast Asia, Canada and the Gulf of Mexico, plus North American onshore plays in the Eagle Ford Shale and Montney.

Last year, Murphy sold a portion of its Malaysian assets to PT Pertamina Malaysia Eksplorasi Produksi for $2 billion. The company also extended cooperation with PetroVietnam and SK Innovation Co., to farm-in with 35% interest in the 15-1/05 production-sharing contract (PSC), located in the oil prone Cuu Long basin, offshore Vietnam. 

In Malaysia, Murphy partners Shell in the deepwater Gumusut-Kakap field development, plus operates Block H in the Rotan field, along with PETRONAS. A floating liquefied natural gas (FLNG) vessel is currently being constructed for the Rotan field, which is expected to start production in 2018.

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