MUR - Murphy Oil: Lining Up Growth Projects

2024-05-02 21:40:46 ET

Summary

• Murphy Oil is a smaller offshore operator with a conservative balance sheet that focuses on offshore risk management.
• The company plans to repurchase stock to address the stock price discount and provide downside protection.
• The unpredictability of offshore production overshadows the excellent quarterly results, but management believes this will change over time.
• The long-term strategy will change with greater shareholder returns and the large amount of acreage awarded for the Tano Basin Project.
• The previously stalled Vietnam project is moving towards production, and now more exploration wells have been announced.

Murphy Oil ( MUR ) generally keeps a conservative balance sheet while operating offshore. As an offshore operator, this company is one of the smaller offshore operators. This latest article will focus (in contrast to the last article ) on the latest changes due to lower debt levels and new projects. The projects offshore tend to be large and so risk management is a big deal. A significant number of offshore operations also means that management will report "lumpy" growth rather than smooth growth because production increases tend to take years to happen, and those increases tend to be large when they do happen....

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