Earnings drop at Murphy Oil

Petroleum News Alaska Staff

Profits were sliced by more than half at Murphy Oil Corp. in the third quarter. The company reported net income of $41.7 million, down 54 percent from the $90.1 million the El Dorado, Ark., company made in the same period a year ago.

The big hit was in exploration and production, where higher exploration expenses teamed with lower prices to cut E&P earnings to $26.7 million from $82 million. Increased exploration expenses, $45.5 million in the recent quarter compared with $20.9 million a year ago, contributed to that.

Better margins pushed refining and marketing profits to $19.6 million from $12.9 million, a gain of 52 percent. Liquids production averaged 64,779 barrels a day, up 5 percent from 61,852 a year earlier, but the average price per barrel dropped nearly $4 a barrel to $23.37. Natural gas sales volume rose 39 percent to a record figure of 295 million cubic feet daily due to production from the Ladyfern field in Canada. But the average gas price dropped 34 percent to $2.75 per thousand cubic feet.

Revenues slid to $1.14 billion from $1.25 billion a year earlier, a drop of 9 percent.

Murphy executives expect profits to decline further in the fourth quarter.

Murphy is a leaseholder on Alaska’s North Slope. It is a minority owner of the Northstar field with operator BP Exploration (Alaska) Inc.