What changed in this filing

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Item 1A. Risk Factors

2023-02-27 compared with 2022-02-25 · 205 added, 11 removed, 30 unchanged (88% of the section changed)

Risk Factors - Continued

climate change-focused review of regulations and other executive actions promulgated, issued or adopted during the prior Presidential administration.

increased frequency and severity of storms, droughts, and floods and other climatic events.

If such effects were to occur, our operations could be adversely affected.

Although the Company maintains insurance for such risks as described elsewhere in this Form 10-K report, due to policy deductibles and possible coverage limits, weather-related risks to our operations are not fully insured.

In addition, certain customer and supplier assets, such as storage terminals, processing facilities, refineries and pipelines, are located in areas that may be prone to severe weather events, including hurricanes, winter storms, floods and major tropical storms.

Severe weather events that significantly affect facilities belonging to such customers or suppliers may reduce demand for our products and interrupt our ability to bring products to market and may therefore materially and adversely affect our results of operations, cash flows and financial condition, even if our own facilities escape significant damage.

Murphy is subject to numerous environmental, health and safety laws and regulations, and such existing and any potential future laws and regulations may result in material liabilities and costs.

The Company’s operations are subject to various international, foreign, national, state, provincial and local environmental, health and safety laws, regulations, governmental actions and permit requirements, including related to the generation, storage, handling, use, disposal and remediation of petroleum products, wastewater and hazardous materials;

the emission and discharge of such materials to the environment, including GHG emissions;

wildlife, habitat and water protection;

the placement, operation and decommissioning of production equipment;

the health and safety of our employees, contractors and communities where our operations are located, including indigenous communities;

and the causes and impacts of climate change.

The laws, regulations, governmental actions and permit requirements are subject to frequent change and have tended to become stricter over time and at times may be motivated by political considerations.

They can impose permitting and financial assurance obligations, as well as operational controls and/or siting constraints on our business, and can result in additional capital and operating expenditures.

It is possible in the future, certain regulatory bodies such as the Railroad Commission of Texas may enact regulation that bans or reduces flaring for U.S.

Onshore operations and certain regulatory bodies in Canada may decide to revoke permits or pause the issuance of permits as a result of non-compliance with, or litigation related to, environmental, health and safety laws and regulations.

Compliance with such regulations could result in capital investment which would reduce the Company’s net cash flows and profitability.

Murphy also could be subject to strict liability for environmental contamination in various jurisdictions where it operates, including with respect to its current or former properties, operations and waste disposal sites, or those of its predecessors.

Contamination has been identified at some locations, and the Company has been required, and in the future may be required, to investigate, remove or remediate previously disposed wastes;

or otherwise clean up contaminated soil, surface water or groundwater, address spills and leaks from pipelines and production equipment, and perform remedial plugging operations.

In addition to significant investigation and remediation costs, such matters can result in fines and also give rise to third-party claims for personal injury and property or other environmental damage.

The Company’s onshore North America oil and natural gas production is dependent on a technique known as hydraulic fracturing whereby water, sand and certain chemicals are injected into deep oil and natural gas bearing reservoirs in North America.

This process occurs thousands of feet below the surface and creates fractures in the rock formation within the reservoir which enhances migration of oil and natural gas to the wellbore.

The Company primarily uses this technique in the Eagle Ford Shale in South Texas and in Kaybob Duvernay and Tupper Montney in Western Canada.

Texas law imposes permitting, disclosure, disposal and well construction requirements on hydraulic fracturing operations, as well as public disclosure of certain information regarding the components used in the hydraulic fracturing process.

Regulations in the provinces of British Columbia and Alberta also govern various aspects of hydraulic fracturing activities under their jurisdictions.

It is possible that Texas, other states in which we may conduct fracturing in the future, the U.S., Canadian provinces and certain municipalities may adopt further laws or regulations which could render the process unlawful, less effective or drive up its costs.

If any such action is taken in the future, the Company’s production levels could be adversely affected, or its costs of drilling and completion could be increased.

Once new laws and/or regulations have been enacted and adopted, the costs of compliance are appraised.

Hydraulic fracturing operations subject the Company to operational risks inherent in the drilling and production of oil and natural gas.

These risks include underground migration or surface spillage due to releases of oil,

Risk Factors - Continued

natural gas, formation water or well fluids, as well as any related surface or groundwater contamination, including from petroleum constituents or hydraulic fracturing chemical additives.

Ineffective containment of surface spillage and surface or groundwater contamination resulting from hydraulic fracturing operations, including from petroleum constituents or hydraulic fracturing chemical additives, could result in environmental pollution, remediation expenses and third-party claims alleging damages, which could adversely affect the Company’s financial condition and results of operations.

In addition, hydraulic fracturing requires significant quantities of water;

the wastewater from oil and natural gas operations is often disposed of through underground injection.

Certain increased seismic activities have been linked to underground water injection.

Any diminished access to water for use in the hydraulic fracturing process, any inability to properly dispose of wastewater, or any further restrictions placed on wastewater, could curtail the Company’s operations or otherwise result in operational delays or increased costs.

In addition, BOEM and BSEE have regulations applicable to lessees in federal waters that impose various safety, permitting and certification requirements applicable to exploration, development and production activities in the Gulf of Mexico, and also require lessees to have substantial U.S.

assets and net worth or post bonds or other acceptable financial assurance that the regulatory obligations will be met.

These include, in the Gulf of Mexico, well design, well control, casing, cementing, real-time monitoring, and subsea containment, among other items.

Under applicable requirements, BOEM evaluates the financial strength and reliability of lessees and operators active on the OCS.

If the BOEM determines that a company does not have the financial ability to meet its decommissioning and other obligations, that company will be required to post additional financial security as assurance.

In addition, various executive orders by the current presidential administration and the Department of Interior over the course of 2021 regarding a temporary suspension of normal-course issuance of permits for fossil fuel development on federal lands and a pause on new oil and gas leases on public lands and offshore waters, and the Secretary of Interior’s related review of permitting and leasing practices, could adversely impact Murphy’s operations.

Despite the pauses on oil and gas leases in 2021, in August 2022, the Inflation Reduction Act was passed by the U.S.

Congress and included provisions which required the Department of Interior to hold previously announced offshore lease sales in the Gulf of Mexico and Alaska within two years.

These developments demonstrate the uncertainty regarding the current presidential administration’s approach to oil and gas leasing and permitting.

For further details, see “Risk Factors – General Risk Factors – Murphy’s operations and earnings have been and will continue to be affected by domestic and worldwide political developments.”

Risk Factors - Continued

We face various risks associated with increased activism against, or change in public sentiment for, oil and gas exploration, development, and production activities and sustainability considerations, including climate change and the transition to a lower carbon economy.

Opposition toward oil and gas drilling, development, and production activity has been growing globally.

Companies in the oil and gas industry are often the target of activist efforts from both individuals and nongovernmental organizations and other stakeholders regarding safety, human rights, climate change, environmental matters, sustainability, and business practices.

Anti‑development activists are working to, among other things, delay or cancel certain operations such as offshore drilling and development.

Activism may continue to increase regardless of whether the current presidential administration in the U.S.

is perceived to be following, or actually follows, through on the current president’s campaign commitments to promote decreased fossil fuel exploration and production in the U.S, including as a result of the administration’s environmental and climate change executive orders described earlier in this 10-K.

Our need to incur costs associated with responding to these initiatives or complying with any resulting new legal or regulatory requirements resulting from these activities that are substantial and not adequately provided for, could have a material adverse effect on our business, financial condition and results of operations.

In addition, a change in public sentiment regarding the oil and gas industry could result in a reduction in the demand for our products or otherwise affect our results of operations or financial condition.

While the Company has been named a co-defendant with other oil and gas companies in lawsuits related to climate change, these lawsuits have not resulted in, and are not currently expected to result in, material liability for the Company.

Depending on the evolution of laws, regulations and litigation outcomes relating to climate change, there can be no guarantee that climate change litigation will not in the future materially adversely affect our results of operations, cash flows and financial condition.

For further details on risks related to legal proceedings more generally, see “Risk Factors - General Risk Factors - Lawsuits against Murphy and its subsidiaries could adversely affect its operating results.”

Financial Risk Factors

Capital financing may not always be available to fund Murphy’s activities;

and interest rates could impact cash flows.

Murphy usually must spend and risk a significant amount of capital to find and develop reserves before revenue is generated from production.

Although most capital needs are funded from operating cash flow, the timing of cash flows from operations and capital funding requirements may not always coincide, and the levels of cash flow generated by operations may not fully cover capital funding requirements, especially in periods of low commodity prices.

Therefore, the Company maintains financing arrangements with lending institutions to meet certain funding needs.

The Company periodically renews these financing arrangements based on foreseeable financing needs or as they expire.

In November 2022, the Company entered into an $800 million revolving credit facility (RCF).

The RCF is a senior unsecured guaranteed facility and will expire in November 2027.

As of December 31, 2022, the Company had no outstanding borrowings under the RCF.

See Note G for further details on the RCF.

The Company’s ability to obtain additional financing is affected by a number of factors, including the market environment, our operating and financial performance, investor sentiment, our ability to incur additional debt in compliance with agreements governing our outstanding debt, and the Company’s credit ratings.

A ratings downgrade could materially and adversely impact the Company’s ability to access debt markets, increase the borrowing cost under the Company’s credit facility and the cost of any additional indebtedness we incur, and potentially require the Company to post additional letters of credit or other forms of collateral for certain obligations.

Murphy partially manages this risk through borrowing at fixed rates wherever possible;

however, rates when refinancing or raising new capital are determined by factors outside of the Company’s control.

Risk Factors - Continued

Further, changes in investors’ sentiment or view of risk of the exploration and production industry, including as a result of concerns over climate change, could adversely impact the availability of future financing.

Specifically, certain financial institutions (including certain investment advisors and sovereign wealth, pension and endowment funds), in response to concerns related to climate change and the requests and other influence of environmental groups and similar stakeholders, have elected to shift some or all of their investments away from fossil fuel-related sectors, and additional financial institutions and other investors may elect to do likewise in the future.

As a result, fewer financial institutions and other investors may be willing to invest in, and provide capital to, companies in the oil and gas sector, which, in turn, could adversely impact our cost of capital.

In 2022, the Company undertook several actions to reduce overall debt.

Murphy plans to continue with the Company’s deleveraging initiatives, but there can be no assurance that these efforts will be successful and, if not, the Company’s financial conditions and prospects could be adversely affected.

See Note G for information regarding the Company’s outstanding debt as of December 31, 2022.

Murphy’s operations could be adversely affected by changes in foreign exchange rates.

The Company’s worldwide operational scope exposes it to risks associated with foreign currencies.

Most of the Company’s business is transacted in U.S.

dollars, and therefore the Company and most of its subsidiaries are U.S.

dollar functional entities for accounting purposes.

However, the Canadian dollar is the functional currency for all Canadian operations.

This exposure to currencies other than the U.S.

dollar functional currency can lead to impacts on consolidated financial results from foreign currency translation.

On occasions, the Canadian business may hold assets or incur liabilities denominated in a currency which is not Canadian dollars which could lead to exposure to foreign exchange rate fluctuations.

See also Note L for additional information on derivative contracts.

The costs and funding requirements related to the Company’s retirement plans are affected by several factors.

A number of actuarial assumptions impact funding requirements for the Company’s retirement plans.

The most significant of these assumptions include return on assets, long-term interest rates and mortality.

If the actual results for the plans vary significantly from the actuarial assumptions used, or if laws regulating such retirement plans are changed, Murphy could be required to make more significant funding payments to one or more of its retirement plans in the future and/or it could be required to record a larger liability for future obligations in its Consolidated Balance Sheet.

Murphy has limited control over supply chain costs.

The Company often experiences pressure on its operating and capital expenditures in periods of strong crude oil and natural gas prices because an increase in exploration and production activities due to high oil and natural gas sales prices generally leads to higher demand for, and consequently higher costs for, goods and services in the oil and gas industry.

In addition, periods of inflationary pressure in the wider economy, as seen during 2022, can also lead to a similar increase in the cost of goods and services for the Company.

Murphy has a dedicated procurement department focused on managing supply chain and input costs.

Murphy also has certain transportation, processing and production handling services costs fixed through long-term contracts and commitments and therefore is partly protected from increasing price of services.

However, from time to time, Murphy will seek to enter new commitments, exercise options to extend contracts and retender contracts for rigs and other industry services which could expose Murphy to the impact of higher prices.

Risk Factors - Continued

The Company is exposed to credit risks associated with (i) sales of certain of its products to customers, (ii) joint venture partners and (iii) other counterparties.

Murphy is exposed to credit risk in three principle areas:

• Accounts receivable credit risk from selling its produced commodity to customers;

• Joint venture partners related to certain oil and natural gas properties operated by the Company.

These joint venture partners may not be able to meet their financial obligation to pay for their share of capital and operating costs as they become due;

• Counterparty credit risk related to forward price commodity hedge contracts to protect the Company’s cash flows against lower oil and natural gas prices.

To mitigate these risks the Company:

• Actively monitors the credit worthiness of all its customers, joint venture partners and forward commodity hedge counterparties;

• Given the inherent credit risks in a cyclical commodity price business, the Company has increased the focus on its review of joint venture partners, the magnitude of potential exposure and planning suitable actions should a joint venture partner fail to pay its share of capital and operating expenditures.

The inability of a purchaser of the Company’s produced commodity, a joint venture partner of the Company, or counterparty in a forward price commodity hedge to meet their respective payment obligations to the Company could have an adverse effect on Murphy’s future earnings and cash flows.

General Risk Factors

We face various risks related to health epidemics, pandemics and similar outbreaks, which may have material adverse effects on our business, financial position, results of operations and/or cash flows.

As the COVID-19 pandemic has evolved from its emergence in early 2020, so has its global impact.

In 2020 the spread of COVID-19 led to disruption in the global economy and weakness in demand in crude oil, natural gas liquids and natural gas, which applied downward pressure on global commodity prices.

The combination of vaccine availability and the relaxation of government-imposed lockdowns in 2021 led to a rebound in global economic activity in 2021, which continued throughout 2022.

However, the future impact of COVID-19, or that of any other pandemic, cannot be predicted and any resurgence of disease may cause additional volatility in commodity prices.

See Risk Factors, “Price Risk Factors – Volatility in the global prices of crude oil, natural gas liquids and natural gas can significantly affect the Company’s operating results.”

If significant portions of our workforce are unable to work effectively, including because of illness, quarantines, government actions, facility closures or other restrictions in connection with the COVID-19 or other pandemic, our operations will likely be impacted and decrease our ability to produce oil, natural gas liquids and natural gas.

We may be unable to perform fully on our commitments and our costs may increase as a result of the COVID-19 outbreak.

These cost increases may not be fully recoverable or adequately covered by insurance.

The COVID-19 or other pandemic could also cause disruption in our supply chain;

cause delay, or limit the ability of vendors and customers to perform, including in making timely payments to us;

and cause other unpredictable events.

We continue to work with our stakeholders (including customers, employees, suppliers, financial and lending institutions and local communities) to address the COVID-19 pandemic responsibly.

We continue to monitor the situation, to assess further possible implications to our business, supply chain and customers, and to take actions in an effort to mitigate adverse consequences.

The Company continues to exercise financial discipline in managing costs and capital expenditures.

We cannot predict the ongoing impact of the COVID-19 or other pandemic.

The extent to which the COVID-19 or other health pandemics or epidemics may impact our results will depend on future developments, including, among other factors, the duration and spread of the virus and its variants, availability, acceptance and effectiveness of vaccines along with related travel advisories, quarantines and restrictions, the recovery time of

Risk Factors - Continued

the disrupted supply chains and industries, the impact of labor market interruptions, and the impact of government interventions.

Changes in U.S.

and international tax rules and regulations, or interpretations thereof, may materially and adversely affect our cash flows, results of operations and financial condition.

We are subject to income- and non-income-based taxes in the United States under federal, state and local jurisdictions and in the foreign jurisdictions in which we operate.

Tax laws, regulations and administrative practices in various jurisdictions may be subject to significant change, with or without advance notice, due to economic, political and other conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes.

Our tax liabilities could be affected by numerous factors, such as changes in tax, accounting and other laws, regulations, administrative practices, principles and interpretations, the mix and level or earnings in a given taxing jurisdiction or our ownership or capital structure.

For example, on August 16, 2022, the United States enacted the Inflation Reduction Act of 2022, which is highly complex, subject to interpretation and contains significant changes to U.S.

tax law, including, but not limited to, a 15% corporate book minimum tax for taxpayers with adjusted financial statement income in excess of $1 billion and a 1% excise tax on certain stock repurchases made after December 31, 2022.

Department of the Treasury and the IRS are expected to release further regulations and interpretive guidance implementing the legislation contained in the Inflation Reduction Act of 2022, but the details and timing of such regulations are subject to uncertainty at this time.

The tax provisions of the Inflation Reduction Act of 2022 that may apply to us are generally effective in 2023 or later and therefore tax impacts to us in 2022 were immaterial.

We continue to analyze the potential impact of the Inflation Reduction Act of 2022 on our consolidated financial statements and to monitor guidance to be issued by the U.S.

Department of the Treasury.

However, it is possible that the enactment of changes in the U.S.

corporate tax system, including in connection with the Inflation Reduction Act of 2022, could have a material effect on our consolidated cash taxes in the future.

Murphy’s Information Technology environment may be exposed to cyber threats.

The oil and gas industry has become increasingly dependent on digital technologies to conduct exploration, development, and production activities.

We are no exception to this trend.

As a company, we depend on these technologies to estimate quantities of oil and natural gas reserves, process and record financial and operating data, analyze seismic and drilling information, communicate internally and externally, and conduct many other business activities.

Maintaining the security of our technology and preventing breaches is critical to our business operation.

We rely on our information systems, and our cybersecurity training and policies, to protect and secure intellectual property, strategic plans, customer information, and personally identifiable information, such as employee information.

A failure of our cyber infrastructure or a successful or undetected cyberattack has the potential to halt business operations, impair our reputation, weaken our competitive advantage, and/or adversely impact our financial condition.

Given the increasing global threats from cybercrime, the Company’s approach to mitigate cybersecurity risk focuses on three key elements:

• People - Security awareness education and readiness-testing throughout the year for employees and contractors;

• Process - Incorporating “cyber awareness” in our day to day processes and maturing key controls such as recurring internal and external cyber risk assessments, physical and digital asset protection, and security vulnerability remediation via preventative and detective measures;

• Technology - Investing in industry aligned security technology and threat intelligence capabilities.

As the sophistication of cyber threats continues to evolve, we may be required to dedicate additional resources to continue to modify or enhance our security measures, or to investigate and remediate any vulnerabilities to cyber-attacks.

Risk Factors - Continued

Murphy’s operations and earnings have been and will continue to be affected by domestic and worldwide political developments.

From time to time, some governments intervene in the market for crude oil and natural gas produced in their countries through such actions as setting prices, determining rates of production, and controlling who may buy and sell the production.

Murphy is exposed to regulation, legislation and policies enacted by the federal government.

As an example, following the election and inauguration of the current U.S.

president in January 2021, the U.S.

Secretary of the Interior issued Order No.

3395 on January 20, 2021.

This order served to potentially impact the timing of issuance of oil and gas leases, lease amendments and extension, and drilling permits on federal lands and offshore waters.

However, following this notice, the Department of Interior has continued to approve permits and Murphy has not experienced a delay in project approvals.

An extension or permanency of this regime could impact the options available to Murphy for future development, reserves available for production and hence future cash flows and profitability.

In the event leasing delays or cancellations alter Murphy’s plans in the Gulf of Mexico, the Company believes it will be able to re-focus activities and allocate capital to other areas.

The Company does not hold any onshore federal lands in the U.S.

In addition, the current presidential administration has pursued other initiatives related to environmental, health and safety standards applicable to the oil and gas industry.

These include an executive order in January 2021 that directed the Secretary of the Interior to halt indefinitely new oil and gas leases on federal lands and offshore waters pending a since-completed review by the Secretary of the Interior of federal oil and gas permitting and leasing practices;

however, a June 2021 preliminary injunction in the U.S.

District Court for the Western District of Louisiana barred the current presidential administration from implementing the pause in new federal oil and gas leases.

This executive order also set forth other initiatives and goals, including procurement of carbon pollution-free electricity, elimination of fossil fuel subsidies, a carbon pollution-free power sector by 2035 and a net-zero emissions U.S.

economy by 2050.

Another executive order from January 2021 called for a climate change-focused review of regulations and other executive actions promulgated, issued or adopted during the prior presidential administration.

In August 2022, the Inflation Reduction Act was passed by the U.S.

Congress and included provisions which required the Department of Interior to hold previously announced offshore lease sales in the Gulf of Mexico and Alaska within two years.

These developments demonstrate the uncertainty regarding the current presidential administration’s approach to oil and gas leasing and permitting.

In March 2022, the SEC proposed rules requiring disclosure of a range of climate change-related information, including, among other things, companies’ climate change risk management;

short- medium- and long-term climate-related financial risks;

and disclosure of Scope 1, Scope 2 and (for certain companies) Scope 3 emissions.

The SEC’s proposed climate disclosure rules have not yet been finalized, but implementation of the rules as proposed could be costly and time consuming.

These actions and any future changes to applicable environmental, health and safety, regulatory and legal requirements promulgated by the current presidential administration and Congress may restrict our access to additional acreage and new leases in the U.S.

2 unchanged sentences

Prices and availability of crude oil, natural gas and refined products could be influenced by political factors and by various governmental policies to restrict or increase petroleum usage and supply.

Other governmental actions that could affect Murphy’s operations and earnings include expropriation, tax changes, royalty increases, redefinition of international boundaries, preferential and discriminatory awarding of oil and natural gas leases, restrictions on drilling and/or production, restraints and controls on imports and exports, safety, and relationships between employers and employees.

Other governmental actions that could affect Murphy’s operations and earnings include expropriation, tax law changes, royalty increases, redefinition of international boundaries, preferential and discriminatory awarding of oil and natural gas leases, restrictions on drilling and/or production, restraints and controls on imports and exports, safety, and relationships between employers and employees.

Governments could also initiate regulations concerning matters such as currency fluctuations, currency conversion, protection and remediation of the environment, and concerns over the possibility of global warming caused by the production and use of hydrocarbon energy.

As of December 31, 2022, 0.1% of the Company’s proved reserves, as defined by the SEC, were located in countries other than the U.S.

A number of non-governmental entities routinely attempt to influence industry members and government energy policy in an effort to limit industry activities, such as hydrocarbon production, drilling and hydraulic fracturing with the desire to minimize the emission of greenhouse gases such as carbon dioxide, which may harm air quality, and to restrict hydrocarbon spills, which may harm land and/or groundwater.

Risk Factors - Continued

fracturing with the desire to minimize the emission of GHG such as carbon dioxide, which may harm air quality, and to restrict hydrocarbon spills, which may harm land and/or groundwater.

Additionally, because of the numerous countries in which the Company operates, certain other risks exist, including the application of the U.S.

5 unchanged sentences

Generally, this insurance covers various types of third-party claims related to personal injury, death and property damage, including claims arising from “sudden and accidental” pollution events.

The Company also maintains insurance coverage for property damage and well control with an additional limit of $450 million per occurrence ($875 million for Gulf of Mexico claims), all or part of which could apply to certain sudden and accidental pollution events.

The Company also maintains insurance coverage for property damage and well control with an additional limit of $450 million per occurrence ($850 million for U.S.

Gulf of Mexico claims), all or part of which could apply to certain sudden and accidental pollution events.

These policies have deductibles ranging from $10 million to $25 million.

1 unchanged sentence

Murphy could face long-term challenges to the fossil fuels business model reducing demand and price for hydrocarbon fuels.

As environmental and social trends change towards less carbon intensive energy sources, Murphy’s business model may come under more pressure from changing global demands for non-fossil fuel energy sources.

As part of Murphy’s strategy review process, the Company reviews hydrocarbon demand forecasts and assesses the impact on its business model and plans.

Murphy’s business model may come under more pressure from changing environmental and social trends and the related global demands for non-fossil fuel energy sources.

This demand in alternative forms of energy may cause the price of our products to become more volatile and decline.

Further, a reduction in demand for fossil fuels could adversely impact the availability of future financing.

As part of Murphy’s strategy review process, the Company reviews hydrocarbon demand forecasts and assesses the impact on its business model and, plans and future estimates of reserves.

In addition, the Company evaluates other lower-carbon technologies that could complement our existing assets, strategy and competencies as part of its long-term capital allocation strategy.

The Company also has significant natural gas reserves which emit lower carbon compared to oil and liquids.

The issue of climate change has caused considerable attention to be directed towards initiatives to reduce global GHG emissions.

The Paris Agreement and COP26 have resulted in commitments from many countries to reduce GHG emissions and have called for parties to eliminate certain fossil fuel subsidies and pursue further action on non-carbon dioxide GHGs.

The Paris Agreement and subsequently yearly “conferences of the parties” to the Paris Agreement have resulted in commitments from many countries to reduce GHG emissions and have called for parties to eliminate certain fossil fuel subsidies and pursue further action on non-carbon dioxide GHGs.

Most recently, in November 2022, the international community gathered in Egypt at the 27th Conference of the Parties on the UN Framework Convention on Climate Change (COP27), during which multiple announcements were made, including the EPA’s announcement of more stringent revisions to previously proposed methane emissions rules for the oil and gas sector.

The previously proposed rules and EPA’s November 2022 revisions, establish requirements for methane emissions from existing and modified oil and gas sources and impose additional requirements for new sources.

In addition, the federal government could issue various executive orders that may result in additional laws, rules and regulations in the area of climate change.

It is possible that the Paris

Risk Factors - Continued

Agreement, COP26, government executive orders and other such initiatives, including foreign, federal and state laws, rules or regulations related to greenhouse gas emissions and climate change, may reduce the demand for crude oil and natural gas globally.

It is possible that the Paris Agreement, COP27, government executive orders and other such initiatives, including foreign, federal and state laws, rules or regulations related to GHG emissions and climate change, may reduce the demand for crude oil and natural gas globally.

In addition to regulatory risk, other market and social initiatives such as public and private initiatives that aim to subsidize the development of non-fossil fuel energy sources, may reduce the competitiveness of carbon-based fuels, such as oil and gas.

2 unchanged sentences

The Company continually monitors the global climate change agenda initiatives and plans accordingly based on its assessment of such initiatives on its business.

Risk Factors - Continued

Lawsuits against Murphy and its subsidiaries could adversely affect its operating results.

The Company or certain of its consolidated subsidiaries are involved in numerous legal proceedings, including lawsuits for alleged personal injuries, property damages and other business-related matters.

The Company or certain of its consolidated subsidiaries are involved in numerous legal proceedings, including lawsuits for alleged personal injuries, environmental and/or property damages, climate change and other business-related matters.

Certain of these claims may take many years to resolve through court and arbitration proceedings or negotiated settlements.

3 unchanged sentences

Securities and Exchange Commission as of December 31, 2022.

Descriptions of the Company’s oil and natural gas properties are included in Item 1 of this Form 10-K report beginning on page 1.

Information required by the Securities Exchange Act Industry Guide No.

2 can be found in the Supplemental Oil and Gas Information section of this Annual Report on Form 10-K on pages 110 to 125 and in Note D beginning on page 80.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors