Murphy Oil Corporation (NYSE:MUR) Q4 2016 Earnings Conference Call - Final Transcript

Jan 26, 2017 • 11:00 am ET

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Murphy Oil Corporation (NYSE:MUR) Q4 2016 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day ladies and gentlemen and welcome to the Murphy Oil Corporation Fourth Quarter 2016 Earnings Conference Call. Today's conference is being recorded.

I would now like to turn the conference over to Mrs. Kelly Whitley, Vice President of Investor Relations and Communications. Please go ahead.

Executive
Kelly Whitley

Good morning, everyone, and thank you for joining us on our call today. With me are Roger Jenkins, President & Chief Executive Officer; and John Eckart, Executive Vice President and Chief Financial Officer. Please refer to the informational slides we have placed on the investor relations section of our website as you follow along with our webcast today. John will begin by providing a review of fourth quarter financial results highlighting our balance sheet and strong liquidity position, followed by Roger with fourth quarter highlights and operational update and outlook after which questions will be taken.

Please keep in mind that some of the comments made during this call will be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as such 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 discussions of risk factors, see Murphy's 2015 Annual Report on Form 10-K on file with the SEC. Murphy takes no duty to publicly update or revise any forward-looking statements.

I will now turn the call over to John for his comments.

Executive
John Eckart

Thank you, Kelly, and good morning to all. Murphy's fourth quarter results from continuing operations were a loss of $62.8 million or $0.36 per diluted share. The fourth quarter of '16 results from continuing operations included a $24.2 million after-tax charge associated with an expected cash settlement during 2017 for a contractually required redetermination of working interest in the Kakap Gumusut field offshore Sabah, Malaysia. The redetermination settlement is expected to reduce the companies networking interest in the Kakap field, and this ending the approval of Petranoss.

Adjusted earnings, which adjust our GAAP numbers for various items that affect comparability of results between periods was a loss of $26.9 million or $0.16 per share in this quarter. Our schedule of adjusted loss is included as part of our earnings release and amounts in this schedule are recorded on an after-tax basis. The Company's average realized price for its crude oil production was $47.75 per barrel in the fourth quarter of '16. Realized natural gas sales prices in North America averaged $2.19 per mcf in the quarter, while realized oil index natural gas prices offshore Sarawak averaged $3.23 per mcf.

At this time, we have WTI crude oil hedges of 22,000 barrels per day at $50.41 per barrel for 2017. We have Canadian natural gas hedges for 2017 that total 124 million cubic feet per day at AECO, and the average price of these are CAD2.97 per mcf. We have hedges for '18 through '20 of 59 million cubic feet per day also at AECO, and an