Murphy Oil (MUR) Reports Narrower-than-Expected Q3 Loss

Murphy Oil Corporation (NYSE:MUR) reported third-quarter 2016 loss of 18 cents per share, narrower than both the Zacks Consensus Estimate of a loss of 21 cents and the year-ago loss of 72 cents.

On a GAAP basis, however, the company recorded net loss of 9 cents per share, while in the year-ago quarter, the figure had been a loss of $9.26.

The variance between the adjusted and GAAP figures was primarily due to a mark-to-market loss on crude oil derivative contracts, foreign exchange gains, and income tax benefits from investment in foreign areas.

Revenues

In the quarter under review, Murphy Oil’s revenues came in at $500.5 million, surpassing the Zacks Consensus Estimate of $487 million by 2.8%. On a year-over-year basis, however, quarterly revenues tumbled 30%. The year-over-year top-line deterioration was primarily due to lower exploration and production revenues from the company’s U.S. and global operations.

MURPHY OIL Price, Consensus and EPS Surprise

Highlights of the Release

Murphy Oil produced approximately 169,800 barrels of oil equivalent per day (BOE/d) in the third quarter exceeding the high end of production guidance

Total hydrocarbon sales volume was 169,977 BOE/d in the quarter, down 18.1% from 207,661 BOE/d a year ago.

Murphy Oil’s total costs and expenses decreased 83.4% year over year to $517.3 million.

Interest expenses amounted to $40.1 million, up 25.3% from $32 million a year ago.

Financial Condition

Murphy Oil had cash and cash equivalents of $753.1 million as of Sep 30, 2016, compared with $283.2 million as of Dec 31, 2015.

Long-term debt was $2,973.9 million as of Sep 30, 2016, compared with $3,040.6 million as of Dec 31, 2015.

Net cash from operating activities in the second quarter was $166.9 million, 56.2% lower than $381.3 million in the year-ago period.

In the reported quarter, the company’s total capital expenditure was $171.7 million, compared with $526.4 million in the year-ago quarter.

Guidance

Murphy Oil expects fourth-quarter 2016 and full-year total production of 162,000–164,000 BOE/d and 174,000–175,000 BOE/d, respectively. Total sales for the fourth quarter are expected in the range of 149,000–151,000 BOE/d.

The company projects total exploration expense of $28 million in the fourth quarter.

Capital expenditure is projected to be around $620 million for the full year, excluding $206.7 million associated with the acquisitions of the Kaybob Duvernay and Montney oil plays completed earlier in 2016.

Upcoming Peer Releases

Devon Energy Corporation (NYSE:DVN) is scheduled to report on Nov 1, after the market closes. The Zacks Consensus Estimate stands at 5 cents. The stock carries a Zacks Rank #2 (Buy).

Comstock Resources Inc. (NYSE:CRK) is scheduled to report on Nov 8, before the market opens. The Zacks Consensus Estimate is a loss of $2.14. The stock carries a Zacks Rank #2.

W&T Offshore Inc. (NYSE:WTI) is scheduled to report on Nov 2, after the market closes. The Zacks Consensus Estimate stands at a loss of 43 cents. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Zacks Rank

Murphy Oil Corporation currently carries a Zacks Rank #3 (Hold).

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