What changed in this filing

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Item 9A. Controls and Procedures

2023-02-27 compared with 2022-02-25 · 509 added, 551 removed, 1975 unchanged (35% of the section changed)

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Certain information regarding executive officers of the Company is included on page 29 of this Form 10-K report.

Other information required by this item is incorporated by reference to the Registrant’s definitive Proxy Statement for the Annual Meeting of Stockholders on May 11, 2022 under the captions “Election of Directors” and “Committees.”

Murphy Oil has adopted a Code of Ethical Conduct, which can be found under the Corporate Governance and Responsibility tab at www.murphyoilcorp.com.

Stockholders may also obtain, free of charge, a copy of the Code of Ethical Conduct for Executive Management by writing to the Company’s Secretary at 9805 Katy Fwy, Suite G-200, Houston, TX 77024.

Other information required by this item is incorporated by reference to the Registrant’s definitive Proxy Statement for the Annual Meeting of Stockholders on May 10, 2023 under the captions “Election of Directors” and “The Board and Committees.”

Murphy Oil has adopted a Code of Ethical Conduct for Executive Management, which can be found under the Corporate Governance tab at www.murphyoilcorp.com.

Stockholders may also obtain, free of charge, a copy of the Code of Ethical Conduct for Executive Management by writing to the Corporate Secretary at 9805 Katy Fwy, Suite G-200, Houston, TX 77024.

Any future amendments to or waivers of the Company’s Code of Ethical Conduct for Executive Management will be posted on the Company’s Website.

EXECUTIVE COMPENSATION

Information required by this item is incorporated by reference to Murphy’s definitive Proxy Statement for the Annual Meeting of Stockholders on May 11, 2022 under the captions “Compensation Discussion and Analysis” and “Compensation of Directors” and in various compensation schedules.

Information required by this item is incorporated by reference to Murphy’s definitive Proxy Statement for the Annual Meeting of Stockholders on May 10, 2023 under the captions “Compensation Discussion and Analysis” and “How Are We Compensated” and in various compensation schedules.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information required by this item is incorporated by reference to Murphy’s definitive Proxy Statement for the Annual Meeting of Stockholders on May 11, 2022 under the captions “Security Ownership of Certain Beneficial Owners,” “Security Ownership of Management,” and “Equity Compensation Plan Information.”

Information required by this item is incorporated by reference to Murphy’s definitive Proxy Statement for the Annual Meeting of Stockholders on May 10, 2023 under the caption “Our Stockholders” and in the “Equity Compensation Plan Information”.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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Exhibit 3.1 to Form 10-K for the year ended December 31, 2010

3.2 By-Laws of Murphy Oil Corporation, as amended effective February 3, 2016

Exhibit 3.2 to Form 8-K filed February 5, 2016

3.2 By-Laws of Murphy Oil Corporation, as amended effective August 5 , 20 2 0

Exhibit 3.2 to Form 10-Q filed August 6, 2020

4.1 Indenture dated as of May 4, 1999 between Murphy Oil Corporation and SunTrust Bank, Nashville, N.A., as trustee

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4.5 Second Supplemental Indenture dated as of November 30, 2012, between Murphy Oil Corporation and U.S.

Bank National Association, as trustee, relating to 3.70% Notes due 2022 and 5.125% notes due 2042

Bank National Association, as trustee, relating to 5.125% N otes due 2042

Exhibit 4.1 to Form 8-K filed November 30, 2012

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Exhibit 4.9 to Form 10-K filed on February 27, 2020

10.1 Credit Agreement dated as of November 28, 2018 among Murphy Oil Corporation, Murphy Exploration & Production Company – International, and Murphy Oil Company Ltd., as borrowers, JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto

Exhibit 10.4 to Form 10-K for the year ended December 31, 2018

10.2 Murphy Oil Corporation 2017 Annual Incentive Plan

Exhibit A to definitive proxy statement filed March 28, 2016

4.10 Sixth Supplemental Indenture dated as of March 5, 2021, between Murphy O i l Corporation and U.S.

Bank National Association, as trustee, and Wells Fargo Bank, National Association as series trustee, relating to 6.375% Notes due 2028

Exhibit 4.2 to Form 8-K files March 5, 2021

*10.1 New Credit Agreement dated as of November 17, 2022 among Murphy Oil Corporation, Murphy Exploration & Production Company – International , and Murphy Oil Company Ltd., as borrowers, JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto

10.2 Murphy Oil Corporation Annual Incentive Plan

Exhibit 10.3 to Form 10-K filed on February 25, 2022

10.3 Murphy Oil Corporation 2012 Long-Term Incentive Plan

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Exhibit 10.8 to Form 10-K filed on February 27, 2020

10.6 Form of employee stock option (2012 Long-Term Plan)

Exhibit 99.1 to Form 10-K for the year ended December 31, 2013

10.7 Form of employee performance-based restricted stock unit grant agreement (2012 Long-Term Plan)

10.5 Form of employee stock option (2012 Long-Term Incentive Plan)

Exhibit 99.1 to Form 10-K for the year ended December 31, 2013

10.8 Form of stock appreciation right (2012 Long-Term Plan)

Exhibit 99.3 to Form 10-Q filed May 7, 2014

10.9 Form of employee time-based restricted stock unit grant agreement (2012 Long-Term Plan)

Exhibit 99.1 to Form 10-Q filed May 7, 2014

10.10 Form of employee time-based restricted stock unit-cash grant agreement (2012 Long-Term Plan)

10.6 Form of stock appreciation right (2012 Long-Term Incentive Plan)

Exhibit 99.3 to Form 10-Q filed May 7, 2014

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Exhibit 10.15 to Form 10-K filed on February 27, 2020

10.13 Form of employee performance-based restricted stock unit – stock settled grant agreement (2018 Long-Term Plan)

10.9 Form of employee performance-based restricted stock unit – stock settled grant agreement (2018 Long-Term Incentive Plan)

Exhibit 10.14 to Form 10-K for the year ended December 31, 2018

10.14 Form of employee performance-based restricted stock unit – stock settled grant agreement (2018 Long-Term Plan)

10.10 Form of employee performance-based restricted stock unit – stock settled grant agreement (2018 Long-Term Incentive Plan)

Exhibit 10.17 to Form 10-K filed on February 27, 2020

10.15 Form of employee time-based restricted stock unit – stock settled 3-year grant agreement (2018 Long-Term Plan)

10.11 Form of employee time-based restricted stock unit – stock settled 3-year grant agreement (2018 Long-Term Incentive Plan)

Exhibit 10.15 to Form 10-K for the year ended December 31, 2018

10.16 Form of employee time-based restricted stock unit – stock settled 5-year grant agreement (2018 Long-Term Plan)

10.12 Form of employee time-based restricted stock unit – stock settled 5-year grant agreement (2018 Long-Term Incentive Plan)

Exhibit 10.16 to Form 10-K for the year ended December 31, 2018

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Exhibit A to definitive proxy statement filed March 23, 2018

10.24 Form of non-employee director restricted stock unit award (2013 NED Plan)

Exhibit 99.2 to Form 10-Q filed November 6, 2013

10.25 Murphy Oil Corporation 2018 Stock Plan for Non-Employee Directors

Exhibit A to definitive proxy statement filed March 23, 2018

10.20 First Amendment to the 2018 Stock Plan for Non-Employee Directors

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Exhibit 10.20 to Form 10-K for the year ended December 31, 2018

10.23 Murphy Oil Corporation 2021 Stock Plan for Non-Employee Directors

Exhibit A to definitive proxy statement filed March 26, 2021

10.24 Form of non-employee director restricted stock unit award – stock settled grant agreement (2021 NED Plan)

Exhibit 10.26 to Form 10-K filed on February 27, 2020

Exhibit 10.27 to Form 10-Q filed on August 5, 2021

10.25 Murphy Oil Corporation Non-Qualified Deferred Compensation Plan for Non-Employee Directors

Exhibit 10.6 to Form 10-K for the year ended December 31, 2015

10.31 Tax Matters Agreement dated as of August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc.

Exhibit 10.1 to Form 8-K filed September 5, 2013

10.32 Employee Matters Agreement dated as of August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc.

Exhibit 10.3 to Form 8-K filed September 5, 2013

10.26 Trademark License Agreement dated as of August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc.

Exhibit 10.4 to Form 8-K filed September 5, 2013

10.27 Form of non-employee director restricted stock unit award – stock settled grant agreement (2018 NED Plan)

Exhibit 10.26 to Form 10-K filed on February 27, 2020

*10.28 First Amendment to the New Credit Agreement dated as of December 16, 2022 among Murphy Oil Corporation, Murphy Exploration & Production Company – International and Murphy Oil Company Ltd., as borrowers, JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto

*21.1 Subsidiaries of Murphy Oil Corporation

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*99.3 McDaniel independent audit report for Canada Onshore and Offshore proved crude oil and natural gas reserves

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Labels Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase

101.INS Inline XBRL Instance Document

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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/s/ ELISABETH W.

KELLER /s/ DAVID R.

Keller, Director David R.

Looney, Executive Vice President

KELLER /s/ THOMAS J.

Keller, Director Thomas J.

Mireles, Executive Vice President

and Chief Financial Officer

(Principal Financial Officer)

/s/ CHRISTOPHER D.

Christopher D.

Vice President and Controller

(Principal Accounting Officer)

Table of Conten ts

REPORT OF MANAGEMENT – CONSOLIDATED FINANCIAL STATEMENTS

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KPMG LLP has performed an audit of the Company’s internal control over financial reporting, and their opinion thereon can be found on page 66.

Table of Conten ts

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Estimated oil and gas reserves used in the depletion of producing oil and gas properties

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For the year ended

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December 31, 2022, the Company recorded depreciation, depletion, and amortization expense of $776.8 million.

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In addition, we read and considered the report of the Company’s third-party petroleum reserve specialists in connection with our evaluation of the Company’s proved oil and gas reserve estimates.

Evaluation of the realizability of deferred tax assets

As discussed in Note I to the consolidated financial statements, the Company had gross deferred tax assets of $1,147.1 million, which includes a deferred tax asset for U.S.

net operating losses of $577.5 million, as of December 31, 2021.

A valuation allowance is provided for deferred tax assets if it is more likely than not that all or a portion of these deferred tax assets will not be realized in a future period, which is dependent upon the generation of taxable income.

We identified the evaluation of the realizability of deferred tax assets as a critical audit matter.

The evaluation of the realizability of deferred tax assets, especially those related to U.S.

net operating loss carryforwards, required subjective auditor judgment to assess the application of tax laws and the projections of future taxable income over the periods in which those temporary differences become deductible.

Changes in assumptions regarding future taxable income could have a significant impact on the Company’s evaluation of the realizability of the deferred tax assets.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s evaluation of the realizability of deferred tax assets, including controls related to the application of tax laws and the development of projections of future taxable income.

We evaluated the assumptions used in the development of projected future taxable income by comparing such assumptions to estimated oil and gas reserve quantities developed by the Company, by comparing projected cost estimates to historical actual costs, and by comparing future commodity prices used in the determination of projected future taxable income to external sources.

We also evaluated the Company’s history of realizing deferred tax assets by evaluating the expiration of net operating loss carryforwards and testing the reversal pattern of taxable temporary differences.

We involved income tax professionals with specialized skills and knowledge who assisted in assessing the Company’s application of tax laws.

Assessment of recoverability of property, plant, and equipment related to oil and gas properties

As described in Note A to the consolidated financial statements, the Company reviews their oil and gas properties for triggering events that would indicate potential impairment.

The Company analyzes

Table of Conten ts

indicators for possible triggers of impairment such as a significant reduction in sales prices for oil or natural gas, unfavorable revisions of oil or natural gas reserves, changes to contracts, environmental regulations, tax law or other regulatory changes.

If a triggering event is identified in relation to one or more properties, an undiscounted cash flow analysis is required to quantitatively evaluate recoverability.

The Company compares estimated future net cash flows expected in connection with the property to the carrying amount of the property to determine if the carrying amount is recoverable or if further quantitative analysis is required.

We identified the assessment of recoverability of property, plant, and equipment related to oil and gas properties as a critical audit matter.

There is a high degree of subjectivity in performing procedures due to the uncertainty associated with future commodity prices and estimated oil and gas reserves used in the Company’s assessment.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company’s property, plant, and equipment process for oil and gas properties including controls over the Company’s triggering event assessment process and oil and gas reserve estimation process.

We compared future commodity price assumptions to publicly available market information.

We assessed the competence, capabilities, and objectivity of the Company’s internal petroleum reserve engineers, who estimated the oil and gas reserves, and the third-party reserve specialists engaged by the Company to evaluate the estimated proved oil and gas reserves.

We have served as the Company’s auditor since 1952.

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February 27, 2023

Table of Conten ts

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

To the Stockholders and the Board of Directors

Murphy Oil Corporation:

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February 27, 2023

Table of Conten ts

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

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Assets held for sale Note E

15,453 327,736

Total current assets 972,325 880,910

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Other accrued liabilities 443,585 360,859

Liabilities associated with assets held for sale Note E

Total current liabilities 1,257,834 1,164,326

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See Notes to Consolidated Financial Statements, page 72.

Table of Conten ts

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

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Revenues and other income

Revenue from sales to customers $ 2,801,215 1,751,709 2,817,111

Revenue from production $ 4,038,451 $ 2,801,215 $ 1,751,709

Sales of purchased natural gas 181,689 — —

Total revenue from sales to customers 4,220,140 2,801,215 1,751,709

(Loss) Gain on derivative instruments ( 320,410 ) ( 525,850 ) 202,661

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Transportation, gathering and processing 212,711 187,028 172,399

Costs of purchased natural gas 171,991 — —

Exploration expenses, including undeveloped lease amortization 133,197 69,044 86,479

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Impairment of assets — 196,296 1,206,284

Other (benefit) expense 21,052 16,274 38,117

Other operating expense 137,518 21,052 16,274

Total costs and expenses 2,345,952 2,017,846 3,329,650

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Other income (loss)

Interest income and other (loss) ( 16,771 ) ( 17,303 ) ( 22,520 )

Other income (expense) 14,310 ( 16,771 ) ( 17,303 )

Interest expense, net ( 150,759 ) ( 221,773 ) ( 169,423 )

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Income (Loss) from continuing operations 1,140,797 48,753 ( 1,255,294 )

Income (loss) from discontinued operations, net of income taxes ( 1,225 ) ( 7,151 ) 1,064,487

Loss from discontinued operations, net of income taxes ( 2,078 ) ( 1,225 ) ( 7,151 )

Net income (loss) including noncontrolling interest 1,138,719 47,528 ( 1,262,445 )

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See Notes to Consolidated Financial Statements, page 72.

Table of Conten ts

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

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Other comprehensive income (loss), net of tax

Net gain (loss) from foreign currency translation 12,116 29,241 66,600

Net (loss) gain from foreign currency translation ( 106,335 ) 12,116 29,241

Retirement and postretirement benefit plans 99,360 59,816 ( 57,617 )

Deferred loss on interest rate hedges reclassified to interest expense — 1,690 1,204

Other comprehensive income (loss) 73,622 ( 27,172 ) 35,626

Comprehensive income (loss) 121,150 ( 1,289,617 ) 1,288,928

Other comprehensive (loss) income ( 6,975 ) 73,622 ( 27,172 )

Comprehensive income (loss) including noncontrolling interest 1,131,744 121,150 ( 1,289,617 )

Comprehensive income (loss) attributable to noncontrolling interest 173,672 121,192 ( 113,668 )

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See Notes to Consolidated Financial Statements, page 72.

Table of Conten ts

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

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Depreciation, depletion and amortization 776,817 795,105 987,239

Impairment of assets 196,296 1,206,284 —

Mark to market loss on derivative instruments 112,113 69,310 33,364

Deferred income tax expense (benefit) 286,079 ( 4,146 ) ( 278,042 )

Mark to market (gain) loss on derivative instruments ( 214,788 ) 112,113 69,310

Mark to market loss (gain) on contingent consideration 78,285 63,147 ( 13,783 )

Long-term non-cash compensation 89,246 63,382 46,558

Unsuccessful exploration well costs and previously suspended exploration costs 82,085 17,339 21,099

Accretion of asset retirement obligations 46,243 46,613 42,136

Amortization of undeveloped leases 13,300 18,925 26,743

Previously suspended exploration costs 17,339 21,099 12,840

Deferred income tax (benefit) expense ( 4,146 ) ( 278,042 ) 28,530

Loss (income) from discontinued operations 1,225 7,151 ( 1,064,487 )

Net decrease (increase) in noncash working capital 118,457 ( 32,027 ) ( 16,887 )

Other operating activities, net ( 53,821 ) ( 35,080 ) ( 59,508 )

Loss from discontinued operations 2,078 1,225 7,151

Gain from sale of assets ( 17,899 ) — —

Impairment of assets — 196,296 1,206,284

Noncash restructuring expense — — 17,565

Other operating activities, net ( 34,193 ) ( 53,821 ) ( 35,080 )

Net (increase) decrease in noncash working capital ( 65,728 ) 118,457 ( 32,027 )

Net cash provided by continuing operations activities 2,180,244 1,422,163 802,708

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Property additions and dry hole costs 1

Proceeds from sales of property, plant and equipment 270,503 13,750 20,382

Property additions for King's Quay FPS ( 17,734 ) ( 112,961 ) ( 100,202 )

( 985,461 ) ( 650,235 ) ( 759,809 )

Acquisition of oil and natural gas properties 1

( 128,538 ) ( 20,244 ) —

Property additions for King's Quay FPS — ( 17,734 ) ( 112,961 )

Proceeds from sales of property, plant and equipment 4,528 270,503 13,750

Net cash required by investing activities ( 1,109,471 ) ( 417,710 ) ( 859,020 )

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Retirement of debt ( 647,707 ) ( 876,358 ) ( 12,225 )

Debt issuance, net of cost 541,913 ( 613 ) 542,394

Repayment of revolving credit facility ( 400,000 ) ( 365,000 ) ( 250,000 )

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Cash dividends paid ( 128,219 ) ( 77,204 ) ( 95,989 )

Early redemption of debt cost ( 39,335 ) — ( 26,626 )

Contingent consideration paid ( 81,742 ) — —

Withholding tax on stock-based incentive awards ( 17,631 ) ( 5,209 ) ( 7,094 )

Issue costs of debt facility ( 14,353 ) — —

Early redemption of debt cost ( 8,295 ) ( 39,335 ) —

Capital lease obligation payments ( 636 ) ( 803 ) ( 695 )

Repurchase of common stock — — ( 499,924 )

Debt issuance, net of cost — 541,913 ( 613 )

Net cash (required) provided by financing activities ( 1,081,621 ) ( 794,513 ) 39,711

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Operating activities ( 14,500 ) — —

Investing activities — 4,494 2,022,034

Financing activities — — ( 4,914 )

Net cash provided by discontinued operations — 3,292 2,090,903

Net cash (required) by discontinued operations ( 14,500 ) — —

Cash from discontinued operations 2

Effect of exchange rate changes on cash and cash equivalents ( 3,873 ) 638 2,009

Net increase in cash and cash equivalents 210,578 3,846 ( 53,163 )

Net (decrease) increase in cash and cash equivalents ( 29,221 ) 210,578 3,846

Cash and cash equivalents at beginning of period 521,184 310,606 306,760

Cash and cash equivalents at end of period $ 491,963 $ 521,184 $ 310,606

1 Net cash provided by discontinued operations are not part of the cash flow reconciliation.

1 Certain prior-period amounts have been reclassified to conform to the current period presentation.

2 Cash previously classified as held-for-sale

See Notes to Consolidated Financial Statements, page 72.

Table of Conten ts

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

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Cumulative Preferred Stock – par $ 100 , authorized 400,000 shares, none issued

Common Stock – par $ 1.00 , authorized 450,000,000 shares at December 31, 2021, 2020 and 2019, issued 195,100,628 at December 31, 2021, 195,100,628 shares at December 31, 2020 and 195,089,269 at December 31, 2019

Common Stock – par $ 1.00 , authorized 450,000,000 shares at December 31, 2022, 2021 and 2020, issued 195,100,628 at December 31, 2022, 2021 and 2020

Balance at beginning of year 195,101 195,101 195,089

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Exercise of stock options, including income tax benefits ( 13,193 ) ( 1,674 ) ( 156 )

Fair value increase in common controlled assets — — ( 24,519 )

Balance at end of year 893,578 926,698 941,692

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Cash dividends ( 128,219 ) ( 77,204 ) ( 95,989 )

Sale and leaseback gain recognized upon adoption of ASC 842, net of tax impact — — 114,712

Balance at end of year 6,055,498 5,218,670 5,369,538

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Balance at beginning of year ( 527,711 ) ( 601,333 ) ( 574,161 )

Foreign currency translation gains (losses), net of income taxes 12,116 29,241 66,600

Foreign currency translation (losses) gains, net of income taxes ( 106,335 ) 12,116 29,241

Retirement and postretirement benefit plans, net of income taxes 99,360 59,816 ( 57,617 )

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Exercise of stock options 8,433 1,326 —

Purchase of treasury shares — — ( 499,924 )

Balance at end of year – 39,633,309 of Common Stock in 2022, 40,637,578 shares of Common Stock in 2021 and 41,502,003 shares of Common Stock in 2020

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Distributions to noncontrolling interest owners ( 183,038 ) ( 137,517 ) ( 43,673 )

Acquisition closing adjustments — — ( 6,604 )

Balance at end of year 154,119 163,485 179,810

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Intercompany accounts and transactions are eliminated.

USE OF ESTIMATES – Preparing the financial statements of the Company in accordance with U.S.

generally accepted accounting principles (GAAP) requires management to make a number of estimates and assumptions that affect the reporting of amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities.

Actual results may differ from the estimates.

REVENUE RECOGNITION – Revenues from sales of crude oil, natural gas liquids and natural gas are recorded when deliveries have occurred and legal ownership of the commodity transfers to the customer;

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note A – Significant Accounting Policies (Contd.)

Note A – Significant Accounting Policies (Continued)

ACCOUNTS RECEIVABLE – At December 31, 2022 and 2021, the Company’s accounts receivable primarily consisted of amounts owed to the Company by customers for sales of crude oil and natural gas and operating costs related to joint venture partners working interest share.

Trade accounts receivable are recorded at the invoiced amount and do not bear interest.

The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses on these receivables.

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In certain cases, a determination of whether a drilled exploratory well has found proved reserves cannot be made immediately.

This is generally due to the need for major capital expenditure to produce and/or evacuate the hydrocarbon(s) found.

The determination of whether to make such capital expenditure is usually dependent on whether further exploratory or appraisal wells find a sufficient quantity of additional reserves.

This is generally due to the need for a major capital expenditure to produce and/or evacuate the hydrocarbon(s) found.

The determination of whether to make such a capital expenditure is usually dependent on whether further exploratory or appraisal wells find a sufficient quantity of additional reserves.

The Company continues to capitalize exploratory well costs in “Property, plant and equipment” when the well has found a sufficient quantity of reserves to justify its completion as a producing well and the Company is making sufficient progress assessing the reserves and the economic and operating viability of the project.

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If an impairment occurs, the carrying value of the impaired asset is reduced to fair value.

In 2021 and 2020, the Company recognized pretax noncash impairment charges of $ 196.3 million and $ 1,206.3 million, respectively, to reduce the carrying values at select properties.

In 2021, the Company recorded an impairment charge of $ 171.3 million for Terra Nova due to the status, including agreements with the partners, of operating and production plans and $ 25.0 million for assets reported as Assets held for sale in the Consolidated Balance Sheets.

There were no impairments recognized in 2022.

In 2021, the Company recognized pretax noncash impairment charges of $ 196.3 million to reduce the carrying values at select properties.

In 2021, the Company recorded an impairment charge of $ 171.3 million for Terra Nova due to the status, including agreements with the partners, of operating and production plans and a $ 25.0 million impairment charge for assets reported as Assets held for sale in the Consolidated Balance Sheets.

See also Note D for further discussion of impairment charges.

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Actual costs of asset retirements such as dismantling oil and natural gas production facilities and site restoration are charged against the related liability.

Any difference between costs incurred upon settlement of an asset retirement obligation and the recorded liability is recognized as a gain or loss in the Company’s earnings.

Any difference between costs incurred upon settlement of an ARO and the recorded liability is recognized as a gain or loss in the Company’s earnings.

See Note H for further discussion.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note A – Significant Accounting Policies (Contd.)

Note A – Significant Accounting Policies (Continued)

Depreciation and depletion of producing oil and natural gas properties are recorded based on units of production.

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Operating leases are presented on the Consolidated Balance Sheet as “Operating lease assets” with the corresponding lease liabilities presented in “Operating lease liabilities” and “Non-current operating lease liabilities”.

Finance lease assets (related to Brunei) are presented on the Consolidated Balance Sheet within Property, plant and equipment with the corresponding liabilities presented in Current maturities of long-term debt and Long-term debt.

Finance lease assets (related to Brunei) are presented on the Consolidated Balance Sheet within “Property, plant and equipment” with the corresponding liabilities presented in “Current maturities of long-term debt, finance lease” and “Long-term debt, including finance lease obligation”.

Generally, lease liabilities are recognized at commencement and based on the present value of the future minimum lease payments to be made over the lease term.

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Where implicit lease rates are not determinable, the minimum lease payments are discounted using the Company’s collateralized incremental borrowing rates.

Operating leases are expensed according to their nature and recognized in Lease operating expenses, Selling and general expenses or capitalized in the Consolidated Financial Statements.

Operating leases are expensed according to their nature and recognized in LOE, Selling and general expenses or capitalized in the Consolidated Financial Statements.

Finance leases are depreciated with the relevant expenses recognized in “Depreciation, depletion and amortization” and “Interest expense, net” on the Consolidated Statement of Operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note A – Significant Accounting Policies (Contd.)

Note A – Significant Accounting Policies (Continued)

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES – The fair value of a derivative instrument is recognized as an asset or liability in the Company’s Consolidated Balance Sheets.

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Equity-Settled Awards – The fair value of awarded stock options, restricted stock units and other stock-based compensation that are settled with Company shares is determined based on a combination of management assumptions and the market value of the Company’s common stock.

The Company uses a Monte Carlo valuation model to determine the fair value of performance-based restricted stock units that are equity settled and expense is recognized over the three -year vesting period.

The Company uses a Monte Carlo valuation model to determine the fair value of performance-based restricted stock units (PSUs) that are equity settled and expense is recognized over the three -year vesting period.

The fair value of time-lapse restricted stock units is determined based on the price of Company stock on the date of grant and expense is recognized over the vesting period.

3 unchanged sentences

Stock option expense is recognized on a straight-line basis over the respective vesting period of two or three years .

The Company estimates the number of stock options and performance-based restricted stock units that will not vest and adjusts its compensation expense accordingly.

The Company estimates the number of stock options and PSUs that will not vest and adjusts its compensation expense accordingly.

Differences between estimated and actual vested amounts are accounted for as an adjustment to expense when known.

Cash-Settled Awards – The Company accounts for stock appreciation rights (SAR), cash-settled restricted stock units (CRSU) and phantom stock units as liability awards.

Expense associated with these awards are recognized over the vesting period based on the latest available estimate of the fair value of the awards, which is generally determined using a Black-Scholes method for SAR, a Monte Carlo method for performance-based CRSU, and the period-end price of the Company’s common stock for time-based CRSU and phantom units.

When SAR are exercised and when CRSU and phantom units settle, the Company adjusts previously recorded expense to the final amounts paid out in cash for these awards.

Cash-Settled Awards – The Company accounts for stock appreciation rights (SARs), cash-settled restricted stock units (CRSU) and phantom stock units as liability awards.

Expense associated with these awards is recognized over the vesting period based on the latest available estimate of the fair value of the awards, which is generally determined using a Black-Scholes method for SAR, a Monte Carlo method for performance-based CRSU, and the period-end price of the Company’s common stock for time-based CRSU and phantom units.

When SARs are exercised and when CRSU and phantom units settle, the Company adjusts previously recorded expense to the final amounts paid out in cash for these awards.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note A – Significant Accounting Policies (Contd.)

Note A – Significant Accounting Policies (Continued)

PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS – The Company recognizes the funded status (the difference between the fair value of plan assets and the projected benefit obligation) of its defined benefit and other postretirement benefit plans in the Consolidated Balance Sheets.

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Dilutive securities are not included in the computation of diluted income (loss) per share when a net loss occurs as the inclusion would have the effect of reducing the diluted loss per share .

USE OF ESTIMATES – In preparing the financial statements of the Company in conformity with U.S.

generally accepted accounting principles (GAAP), management has made a number of estimates and assumptions related to the reporting of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities.

Actual results may differ from the estimates.

Note B – New Accounting Principles and Recent Accounting Pronouncements

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Compensation-Retirement Benefits-Defined Benefit Plans-General.

In August 2018, the Financial Accounting Standards Board (FASB) issued ASU 2018-14 which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.

In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-14 which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.

For public companies, the amendments in this ASU are effective for fiscal years ending after December 15, 2020, with early adoption permitted and is to be applied on a retrospective basis to all periods presented.

1 unchanged sentence

Financial Instruments – Credit Losses.

In June 2016, the FASB issued Accounting Standards Update (ASU) 2016-13 which replaces the impairment model for most financial assets, including trade receivables, from the incurred loss methodology to a forward-looking expected loss model that will result in earlier recognition of credit losses.

In June 2016, the FASB issued ASU 2016-13 which replaces the impairment model for most financial assets, including trade receivables, from the incurred loss methodology to a forward-looking expected loss model that will result in earlier recognition of credit losses.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, with early adoption permitted and is to be applied on a modified retrospective basis.

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Nature of Goods and Services

The Company explores for and produces crude oil, natural gas and natural gas liquids (collectively oil and gas) in select basins around the globe.

The Company’s revenue from sales of oil and gas production activities are primarily subdivided into two key geographic segments:

The Company explores for and produces crude oil, natural gas and natural gas liquids (collectively oil and natural gas) in select basins around the globe.

The Company’s revenue from sales of oil and natural gas production activities is primarily subdivided into two key geographic segments:

Additionally, revenue from sales to customers is generated from three primary revenue streams:

crude oil and condensate, natural gas liquids and natural gas.

For operated oil and gas production where the non-operated working interest owner does not take-in-kind its proportionate interest in the produced commodity, the Company acts as an agent for the working interest owner and recognizes revenue only for its own share of the commingled production.

For operated oil and natural gas production where the non-operated working interest owner does not take-in-kind its proportionate interest in the produced commodity, the Company acts as an agent for the working interest owner and recognizes revenue only for its own share of the commingled production.

The exception to this is the reporting of the noncontrolling interest in MP GOM as prescribed by U.S.

- In the United States, the Company primarily produces oil and gas from fields in the Eagle Ford Shale area of South Texas and in the Gulf of Mexico.

Revenue is generally recognized when oil and gas are transferred to the customer at the delivery point.

- In the United States, the Company primarily produces oil and natural gas from fields in the Eagle Ford Shale area of South Texas and in the Gulf of Mexico.

Revenue is generally recognized when oil and natural gas is transferred to the customer at the delivery point.

Revenue recognized is largely index based with price adjustments for floating market differentials.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note C – Revenue from Contracts with Customers (Contd.)

Note C – Revenue from Contracts with Customers (Continued)

For the years ended December 31, 2022, 2021 and 2020 the Company recognized $ 4,220.1 million, $ 2,801.2 million and $ 1,751.7 million, respectively, from contracts with customers for the sales of oil, natural gas liquids and natural gas.

3 unchanged sentences

United States Onshore $ 856,219 $ 626,136 $ 353,311

Offshore 1,478,993 940,265 1,477,816

2,229,658 1,478,993 940,265

Canada Onshore 131,400 119,799 93,591

4 unchanged sentences

United States Onshore 64,015 50,189 22,504

Offshore 44,411 19,749 26,968

60,424 44,411 19,749

Canada Onshore 18,338 16,375 8,921

2 unchanged sentences

United States Onshore 64,037 39,803 20,132

Offshore 81,944 49,300 46,259

161,160 81,944 49,300

Canada Onshore 312,629 245,900 170,635

Total natural gas revenue 537,826 367,647 240,067

Total revenue from contracts with customers 1

2,801,215 1,751,709 2,817,111

Gain (loss) on crude contracts ( 525,850 ) 202,661 ( 856 )

Revenue from production 4,038,451 2,801,215 1,751,709

Sales of purchased natural gas

United States Offshore 204 — —

Canada Onshore 181,485 — —

Total sales of purchased natural gas 181,689 — —

Total revenue from sales to customers 4,220,140 2,801,215 1,751,709

(Loss) gain on crude contracts ( 320,410 ) ( 525,850 ) 202,661

Gain on sale of assets and other income

2 unchanged sentences

1 Includes revenue attributable to noncontrolling interest in MP GOM.

2 Gain on sale of Malaysia operations of $ 985.4 million in 2019 is reported in discontinued operations.

In 2022, the Company included additional line items on the face of the Consolidated Statements of Operations to report sales of purchased natural gas and costs of purchased natural gas.

Purchases of natural gas are reported on a gross basis when Murphy takes control of the product and has risks and rewards of ownership.

Sales of natural gas are reported when the contractual performance obligations are satisfied.

This occurs at the time the product is delivered to a third party purchaser at the contractually determinable price.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note C – Revenue from Contracts with Customers (Continued)

Contract Balances and Asset Recognition

5 unchanged sentences

For the periods presented, the Company did not identify any assets to be recognized associated with the costs to obtain a contract with a customer.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note C – Revenue from Contracts with Customers (Contd.)

Performance Obligations

The Company recognizes oil and gas revenue when it satisfies a performance obligation by transferring control over a commodity to a customer.

The Company recognizes oil and natural gas revenue when it satisfies a performance obligation by transferring control over a commodity to a customer.

Judgment is required to determine whether some customers simultaneously receive and consume the benefit of commodities.

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Natural Gas and NGL Q1 2023 Deliveries from dedicated acreage in Eagle Ford As produced

Natural Gas and NGL Q2 2023 Deliveries from dedicated acreage in Eagle Ford As produced

Canada Natural Gas Q4 2023 Contracts to sell natural gas at USD index pricing 25 MMCFD

Canada Natural Gas Q4 2023 Contracts to sell natural gas at CAD fixed prices 38 MMCFD

Canada Natural Gas Q4 2022 Contracts to sell natural gas at USD fixed pricing 20 MMCFD

Canada Natural Gas Q4 2024 Contracts to sell natural gas at USD index pricing 31 MMCFD

Canada Natural Gas Q4 2023 1

Contracts to sell natural gas at CAD fixed prices 38 MMCFD

Canada Natural Gas Q4 2024 Contracts to sell natural gas at USD index pricing 31 MMCFD

Canada Natural Gas Q4 2024 Contracts to sell natural gas at CAD fixed prices 100 MMCFD

Canada Natural Gas Q4 2024 1

Contracts to sell natural gas at CAD fixed prices 34 MMCFD

Canada Natural Gas Q4 2024 Contracts to sell natural gas at CAD fixed prices 34 MMCFD

Canada Natural Gas Q4 2024 Contracts to sell natural gas at USD fixed pricing 15 MMCFD

Canada Natural Gas Q4 2026 Contracts to sell natural gas at USD index pricing 49 MMCFD

Canada NGL Q3 2023 Contracts to sell natural gas liquids at CAD pricing 952 MMCFD

1 These contracts are scheduled to commence after the balance sheet date, during Q1 2022.

Canada NGL Q3 2023 Contracts to sell natural gas liquids at CAD pricing 952 BOEPD

Fixed price contracts are accounted for as normal sales and purchases for accounting purposes.

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Note D – Property, Plant and Equipment

The Company’s property, plant and equipment assets for the respective periods are presented as follows.

December 31, 2022 December 31, 2021

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2 Includes $ 18,319 in 2022 and $ 22,543 in 2021 related to administrative assets and support equipment.

In March 2021, the King’s Quay FPS was sold to ArcLight Capital Partners, LLC (ArcLight) for proceeds of $ 267.7 million, which reimburses the Company for previously incurred capital expenditures.

In 2019, the Company completed a divestiture of its two subsidiaries conducting Malaysian operations, Murphy Sabah Oil Co., Ltd.

and Murphy Sarawak Oil Co., Ltd., in a transaction with PTT Exploration and Production Public Company Limited (PTTEP) which was effective January 1, 2019.

Total cash consideration received upon closing was $ 2.0 billion.

A gain on sale of $ 985.4 million was recorded as part of discontinued operations on the Consolidated Statement of Operations in 2019.

Murphy was entitled to receive a $ 100.0 million bonus payment contingent upon certain future exploratory drilling results prior to October 2020;

however, the results were not achieved.

In 2019, the Company acquired strategic deepwater Gulf of Mexico assets from LLOG Exploration Offshore L.L.C.

and LLOG Bluewater Holdings, L.L.C., (LLOG).

Under the terms of the transaction, Murphy paid cash consideration of $ 1,236.2 million and has an obligation to pay additional contingent consideration of up to $ 200 million in the event that certain revenue thresholds are exceeded between 2019 and 2022;

and $ 50.0 million following first oil from certain development projects.

The revenue threshold was not exceeded for 2019 or 2020;

however, the threshold was met in 2021.

In 2018, the Company, through a subsidiary, acquired all of the Gulf of Mexico producing assets from Petrobras America Inc.

(PAI), a subsidiary of Petrobras.

Under the terms of the transaction, Murphy paid cash consideration of $ 780.7 million and has an obligation to pay additional contingent consideration of up to $ 150.0 million if certain price and production thresholds are exceeded beginning in 2019 through 2025;

and $ 50.0 million carry for PAI development costs in the St.

Malo Field if certain enhanced oil recovery projects are undertaken.

The price and production thresholds were not exceeded for 2019 and 2020;

however, the thresholds were met in 2021.

As of December 31, 2021, Murphy had completely funded the carried interest.

During the first quarter of 2021, the Company recorded an impairment charge of $ 171.3 million for Terra Nova due to the status, including agreements with the partners, of operating and production plans.

During the third quarter of 2022, the Company completed the disposition of its 62.5 % operated working interest of the Thunder Hawk field for a purchase price of $ 20.0 million less closing adjustments of $ 23.1 million, resulting in a total net payment to the buyer of $ 3.1 million.

Additionally, the buyer assumed the asset retirement obligations of approximately $ 47.9 million.

A $ 17.9 million gain on sale was recorded in the period related to the sale.

In September 2022, the Company completed the disposition of the Block CA-2 asset in Brunei for contingent consideration valued at approximately $ 8.7 million.

No gain or loss was recorded related to this sale.

In 2021, the Company sold its interest in the King’s Quay FPS to ArcLight Capital Partners, LLC (ArcLight) for proceeds of $ 267.7 million, which reimburses the Company for previously incurred capital expenditures.

In August 2022, the Company acquired an additional working interest of 3.37 % in the Lucius field for a purchase price of $ 78.5 million, net of closing adjustments.

In June 2022, the Company acquired an additional working interest of 11.0 % in the Kodiak field for a purchase price of $ 50.0 million, net of closing adjustments.

In 2021, the Company recorded an impairment charge of $ 171.3 million for Terra Nova due to the status, including agreements with the partners, of operating and production plans.

Subsequently, the Company acquired an additional 7.525 % working interest at Terra Nova following a commercial agreement to sanction an asset life extension project.

In the fourth quarter of 2021, the Company recorded an impairment charge of $ 25.0 million for assets reported as Assets held for sale in the Consolidated Balance Sheet.

In 2020, declines in future oil and natural gas prices (principally driven by reduced demand in response to the COVID-19 pandemic and increased supply in the first quarter of 2020 from foreign oil producers) led to impairments in certain of the Company’s U.S.

Offshore and Other Foreign properties.

The Company recorded pretax noncash impairment charges of $ 1,206.3 million to reduce the carrying values of certain properties to their estimated fair values at the time of impairment.

The fair values were determined by internal discounted cash flow models using estimates of future production, prices, costs and discount rates believed to be consistent with those used by principal market participants in the applicable region.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note D - Property, Plant and Equipment (Contd.)

The Company also recorded an impairment charge of $ 25.0 million for assets reported as Assets held for sale in the Consolidated Balance Sheet.

The following table reflects the recognized before tax impairments for the three years ended December 31, 2022.

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Under FASB guidance exploratory well costs should continue to be capitalized when the well has found a sufficient quantity of reserves to justify its completion as a producing well and the Company is making sufficient progress assessing the reserves and the economic and operating viability of the project.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note D - Property, Plant and Equipment (Continued)

At December 31, 2022, 2021 and 2020, the Company had total capitalized drilling costs pending the determination of proved reserves of $ 171.9 million, $ 179.5 million and $ 181.6 million, respectively.

4 unchanged sentences

Additions pending the determination of proved reserves 33,440 16,725 3,999

Reclassifications to proved properties based on the determination of proved reserves — — ( 61,096 )

( 7,915 ) — —

Capitalized exploration well costs charged to expense ( 33,146 ) ( 18,860 ) ( 39,709 )

Ending balance at December 31 $ 171,860 $ 179,481 $ 181,616

The capitalized well costs charged to expense during 2021 and 2020 principally represent charges for asset impairments (see above).

The capitalized well costs charged to expense during 2019 included the CM-1X and the CT-1X wells in Vietnam Block 11-2/11.

The wells were originally drilled in 2017.

The capitalized well costs charged to expense during 2022 represent expenditures related to the Cutthroat-1 exploration well in block SEAL-M-428 in the Sergipe-Alagoas Basin offshore Brazil and Hoffe Park #1 (Mississippi Canyon 122) in the Gulf of Mexico.

The following table provides an aging of capitalized exploratory well costs based on the date the drilling was completed for each individual well and the number of projects for which exploratory well costs has been capitalized.

10 unchanged sentences

$ 171,860 9 8 $ 179,481 14 8 $ 181,616 11 5

Of the $ 166.2 million of exploratory well costs capitalized more than one year at December 31, 2021, $ 93.1 million is in Vietnam, $ 45.0 million is in the U.S., $ 7.9 million is in Brunei, $ 15.3 million is in Mexico, and $ 4.8 million is in Canada.

Of the $ 156.3 million of exploratory well costs capitalized more than one year at December 31, 2022, $ 96.3 million is in Vietnam, $ 37.1 million is in the U.S., $ 15.5 million is in Mexico, $ 4.7 million is in Canada and $ 2.7 million is in Brunei.

In all geographical areas, either further appraisal or development drilling is planned and/or development studies/plans are in various stages of completion.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note E – Assets Held for Sale and Discontinued Operations

In September 2022, the Company sold its share of Brunei Block CA-2 to Petronas Carigali Brunei Ltd (see Note D for additional information).

Additionally, in December 2022, the Company’s former headquarters office building in El Dorado, Arkansas was sold.

There were no remaining assets held for sale on the Consolidated Balance Sheet as of December 31, 2022.

As of December 31, 2021, assets held for sale included the carrying value of the net property, plant and equipment of Brunei Block CA-2 and the Company’s former headquarters office building in El Dorado, Arkansas.

The following table presents the carrying value of the major categories of assets and liabilities that are reflected as held for sale on the Company’s Consolidated Balance Sheets at December 31, 2022 and 2021.

As of December 31, 2021, these include the net property, plant equipment of the CA-2 project in Brunei and the Company’s office building in El Dorado, Arkansas.

The Company’s CA-1 asset in Brunei is no longer being marketed for sale.

As of December 31, 2020, the balance also included $ 250.1 million for the King’s Quay Floating Production System (FPS), which was sold in March 2021 (see Note D ).

( Thousands of dollars )

Current assets

Cash $ — 10,185

Inventories — 406

Property, plant and equipment, net $ — $ 15,453

Deferred income taxes and other assets — 9,441

Total current assets associated with assets held for sale $ — $ 15,453

Current liabilities

Accounts payable — 5,306

Other accrued liabilities — 45

Current maturities of long-term debt (finance lease) — 737

Taxes payable — 1,510

Asset retirement obligation — 261

Long-term debt (finance lease) — 6,513

Total current liabilities associated with assets held for sale $ — 14,372

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note E - Assets Held for Sale and Discontinued Operations (Continued)

The Company has accounted for its former Malaysian exploration and production operations and its former U.K.

3 unchanged sentences

2022 2021 2020

$ 795 4,090 1,364,943

Revenues $ — $ 795 $ 4,090

Costs and expenses

Lease operating expense — — 127,138

Depreciation, depletion and amortization — — 33,697

Other costs and expenses (benefits) 2,020 11,241 81,538

Total income from discontinued operations before taxes ( 1,225 ) ( 7,151 ) 1,122,570

Income tax expense — — 58,083

Income from discontinued operations $ ( 1,225 ) ( 7,151 ) 1,064,487

1 2019 includes a $ 985.4 million gain on sale of the Malaysia operations.

Other costs and expenses 2,078 2,020 11,241

Loss from discontinued operations $ ( 2,078 ) $ ( 1,225 ) $ ( 7,151 )

Note F – Inventories

4 unchanged sentences

Inventories $ 54,513 $ 54,198

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note G – Financing Arrangements and Debt

As of December 31, 2021, the Company has a $ 1.6 billion revolving credit facility (RCF).

The RCF is a senior unsecured guaranteed facility which expires in November 2023.

At December 31, 2021, the Company had no outstanding borrowings under the RCF and $ 31.4 million of outstanding letters of credit, which reduces the borrowing capacity of the RCF.

At December 31, 2021, the interest rate in effect on borrowings under the facility would have been 1.78 %.

At December 31, 2021, the Company was in compliance with all covenants related to the RCF.

In March 2021, the Company issued $ 550.0 million of new notes that bear interest at a rate of 6.375 % and mature on July 15, 2028.

The Company incurred transaction costs of $ 8.1 million on the issuance of these new notes and the Company will pay interest semi-annually on January 15 and July 15 of each year.

The proceeds of the $ 550.0 million notes, along with cash on hand, were used to redeem and cancel $ 259.3 million of the Company’s 4.00 % notes due June 2022 and $ 317.1 million of the Company’s 4.95 % notes due December 2022 (originally issued as 3.70 % notes due 2022;

collectively the 2022 Notes).

The cost of the debt extinguishment of $ 36.9 million is included in Interest expense, net on the Consolidated Statement of Operations for the year ended December 31, 2021.

The cash costs of $ 34.2 million are shown as a financing activity on the Consolidated Statement of Cash Flows for the year ended December 31, 2021.

In August 2021, the Company redeemed $ 150.0 million aggregate principal amount of its 6.875 % senior notes due 2024 (2024 Notes).

The cost of the debt extinguishment of $ 3.5 million is included in Interest expense, net on the Consolidated Statement of Operations for the year ended December 31, 2021.

The cash costs of $ 2.6 million are shown as a financing activity on the Consolidated Statement of Cash Flows for the year ended December 31, 2021.

In December 2021, the Company redeemed an additional $ 150.0 million aggregate principal amount of the 2024 Notes.

The cost of the debt extinguishment of $ 3.4 million is included in Interest expense, net on the Consolidated Statement of Operations for the year ended December 31, 2021.

The cash costs of $ 2.6 million are shown as a financing activity on the Consolidated Statement of Cash Flows for the year ended December 31, 2021.

Long-term debt consisted of the following as of December 31, 2022 and 2021:

1 unchanged sentence

Notes payable

4.00 % notes, due June 2022

4.95 % notes, due December 2022 ¹

6.875 % notes, due August 2024

5 unchanged sentences

6.375 % notes, due July 2028

451,934 550,000

7.05 % notes, due May 2029

7 unchanged sentences

Total debt including current maturities 1,823,139 2,466,068

Senior Unsecured Revolving Credit Facility — 200,000

Current maturities ( 687 ) ( 654 )

1 unchanged sentence

1 Coupon rate may fluctuate 25 basis points if rating is periodically downgraded or upgraded by S&P and Moody’s.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note G - Financing Arrangements and Long-Term Debt (Contd.)

The amount of long-term debt repayable over each of the next five years and thereafter are as follows:

nil in 2022, nil in 2023, $ 242.4 million in 2024, $ 548.7 million in 2025, nil in 2026 and $ 1.69 billion thereafter.

nil in 2023, nil in 2024, $ 248.7 million in 2025, nil in 2026, $ 543.2 million in 2027 and $ 1.04 billion thereafter.

The Company also has a shelf registration statement on file with the U.S.

Securities and Exchange Commission that permits the offer and sale of debt and/or equity securities through October 15, 2024.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note G - Financing Arrangements and Debt (Continued)

In November 2022, the Company entered into a $ 800 million revolving credit facility (RCF) and the previous revolving credit facility has been terminated effective November 2022.

The RCF is a senior unsecured guaranteed facility which expires on November 17, 2027, unless the outstanding principal amount of the Company’s 5.75 %, 2025 (2025 Notes) as at February 15, 2025 exceeds $ 50.0 million, in which case, the RCF will expire on that date.

On the date the Company achieves certain credit ratings (Investment Grade Ratings Date), certain covenants will be modified as set forth in the RCF.

In addition, prior to Investment Grade Ratings Date, the Company will be required to comply with a maximum consolidated leverage ratio of 3.50 x, and a minimum consolidated interest coverage ratio of 2.50 x.

From and after the Investment Grade Ratings Date, the Company will be required to comply with a maximum ratio of consolidated total debt to consolidated total capitalization of 60%.

Borrowings under the RCF bear interest at rates based on either the “Alternate Base Rate”, the “Adjusted Term Secured Overnight Financing Rate (SOFR) Rate”, or the “Adjusted Daily Simple SOFR Rate”, respectively, plus the “Applicable Rate”.

The “Alternate Base Rate” of interest is the highest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus ½ of 1% and (c) the Adjusted Term SOFR Rate for a one month Interest Period as published two U.S.

Government Securities Business Days prior to such day (or if such day is not a U.S.

Government Securities Business Day, the immediately preceding U.S.

Government Securities Business Day) plus 1 %.

The “Adjusted Term SOFR Rate” of interest is equal to (a) the Term SOFR Rate for such Interest Period, plus (b) 0.10 %.

The “Adjusted Daily Simple SOFR Rate” of interest is equal to (a) the Daily Simple SOFR, plus (b) 0.10 %.

The “Applicable Rate” of interest means, for any day, the applicable rate per annum based upon the ratings of Moody’s and S&P, respectively.

The Company incurred $ 14.4 million in transaction costs and recorded the amount to “Deferred charges and other assets” in the Consolidated Balance Sheets, which is being amortized to interest expense over the term of the RCF.

At December 31, 2022, the Company had no outstanding borrowings under the RCF and $ 57.6 million of outstanding letters of credit, which reduces the borrowing capacity of the RCF.

At December 31, 2022, the interest rate in effect on borrowings under the facility would have been 6.96 %.

At December 31, 2022, the Company was in compliance with all covenants related to the RCF.

In November 2022, the Company redeemed $ 200.0 million aggregate principal amount of its 5.750 % senior notes due 2025 (2025 Notes).

The cost of debt extinguishment of $ 3.9 is included in “Interest expense, net” on the Consolidated Statement of Operations for the year ended December 31, 2022.

The cash costs of $ 2.9 million are shown as a financing activity on the Consolidated Statement of Cash Flows for the year ended December 31, 2022.

In September and October 2022, the Company paid a total of $ 7.2 million to complete the open market repurchases of $ 9.2 million aggregate principal amount of its 6.125 % senior notes due 2042 (2042 Notes).

There were no additional cash costs related to the September and October 2022 debt extinguishment on the 2042 Notes for the year ended December 31, 2022.

In August 2022, the Company redeemed the remaining $ 42.4 million of its 6.875 % senior notes due in 2024 (2024 Notes) and tendered $ 100.0 million and $ 98.1 million aggregate principal amount of its 2025 Notes and 6.375 % senior notes due 2028 (2028 Notes), respectively.

The total cost of the debt extinguishment of $ 4.0 million is included in “Interest expense, net” on the Consolidated Statement of Operations for the year ended December 31, 2022.

The debt extinguishment on the 2025 and 2028 Notes had cash costs of $ 2.0 million and is shown as a financing activity on the Consolidated Statement of Cash Flows for the year ended December 31, 2022.

In June 2022, the Company redeemed $ 200.0 million aggregate principal amount of its 6.875 % 2024 Notes.

The cost of the debt extinguishment of $ 4.3 million is included in “Interest expense, net” on the Consolidated Statement of Operations for the year ended December 31, 2022.

The cash costs of $ 3.4 million are shown as a financing activity on the Consolidated Statement of Cash Flows for the year ended December 31, 2022.

In March 2021, the Company issued $ 550.0 million of new notes that bear interest at a rate of 6.375 % and mature on July 15, 2028.

The Company incurred transaction costs of $ 8.1 million on the issuance of these new notes and the Company will pay interest semi-annually on January 15 and July 15 of each year.

collectively the 2022 Notes).

The cost of the debt extinguishment of $ 36.9 million is included in “Interest expense, net” on the Consolidated Statement of Operations for the year

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note G - Financing Arrangements and Debt (Continued)

ended December 31, 2021.

The cash costs of $ 34.2 million are shown as a financing activity on the Consolidated Statement of Cash Flows for the year ended December 31, 2021.

In August 2021, the Company redeemed $ 150.0 million aggregate principal amount of its 2024 Notes.

The cost of the debt extinguishment of $ 3.5 million is included in Interest expense, net” on the Consolidated Statement of Operations for the year ended December 31, 2021.

The cash costs of $ 2.6 million are shown as a financing activity on the Consolidated Statement of Cash Flows for the year ended December 31, 2021.

In December 2021, the Company redeemed an additional $ 150.0 million aggregate principal amount of the 2024 Notes.

The cost of the debt extinguishment of $ 3.4 million is included in “Interest expense, net” on the Consolidated Statement of Operations for the year ended December 31, 2021.

The cash costs of $ 2.6 million are shown as a financing activity on the Consolidated Statement of Cash Flows for the year ended December 31, 2021.

Note H – Asset Retirement Obligations

The asset retirement obligations liabilities (ARO) recognized by the Company at December 31, 2022 and 2021 are related to the estimated costs to dismantle and abandon its producing oil and natural gas properties and related equipment.

A reconciliation of the beginning and ending aggregate carrying amount of the asset retirement obligation for 2021 and 2020 is shown in the following table.

A reconciliation of the beginning and ending aggregate carrying amount of the ARO for 2022 and 2021 is shown in the following table.

(Thousands of dollars) 2022 2021

Balance at beginning of year $ 971,893 $ 849,956

Accretion expense 46,613 42,136

Accretion 46,243 46,613

Liabilities incurred 46,449 54,439

12 unchanged sentences

The components of income (loss) from continuing operations before income taxes for each of the three years presented and income tax expense (benefit) attributable thereto were as follows.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note I – Income Taxes (Continued)

( Thousands of dollars )

13 unchanged sentences

Total $ 309,464 $ ( 5,862 ) $ ( 293,741 )

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note I – Income Taxes (Contd.)

The following table reconciles income taxes based on the U.S.

4 unchanged sentences

statutory tax rate $ 304,555 $ 9,007 $ ( 325,299 )

Alberta tax rate reduction and tax impact of deemed repatriation of foreign invested earnings (U.S.

tax reform) — — ( 17,019 )

Foreign income (loss) subject to foreign tax rates different than the U.S.

2 unchanged sentences

tax benefit on certain foreign upstream investments — ( 8,916 ) —

Increase in deferred tax asset valuation allowance related to other foreign exploration expenditures 4,814 7,707 10,927

Change in deferred tax asset valuation allowance related to other foreign exploration expenditures 24,748 4,814 7,707

Tax effect on income attributable to noncontrolling interest ( 36,471 ) ( 25,450 ) 23,712

1 unchanged sentence

Total $ 309,464 $ ( 5,862 ) $ ( 293,741 )

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note I – Income Taxes (Continued)

An analysis of the Company’s deferred tax assets and deferred tax liabilities at December 31, 2022 and 2021 showing the tax effects of significant temporary differences follows.

17 unchanged sentences

In management’s judgment, the net deferred tax assets in the preceding table are more likely than not to be realized based on the consideration of deferred tax liability reversals and future taxable income.

The valuation allowance for deferred tax assets relate primarily to tax assets arising in foreign tax jurisdictions that in the judgment of management at the present time are more likely than not to be unrealized.

The valuation allowance for deferred tax assets relates primarily to tax assets arising in foreign tax jurisdictions that in the judgment of management at the present time are more likely than not to be unrealized.

The valuation allowance increased $ 24.7 million in 2022, related all to non-U.S.

Subsequent reductions of the valuation allowance are expected to be reported as reductions of tax expense assuming no offsetting change in the deferred tax asset.

The Company has an estimated U.S.

The Company has an U.S.

net operating loss of $ 2.1 billion at year-end 2022 with a corresponding deferred tax asset of $ 442.7 million.

1 unchanged sentence

net operating loss being carried forward will more likely than not be utilized in future periods prior to expirations in 2036 and 2037.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note I – Income Taxes (Contd.)

Other Information

7 unchanged sentences

A reconciliation of the beginning and ending amount of the consolidated liability for unrecognized income tax benefits during the three years presented is shown in the following table.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note I – Income Taxes (Continued)

( Thousands of dollars )

2 unchanged sentences

Additions for tax positions related to current year 77 71 3,042

Settlements due to lapse of time — — ( 821 )

Additions for tax positions related to prior year 948 — —

Settlements with taxing authorities — — ( 2,748 )

2 unchanged sentences

The Company accounts for any applicable interest and penalties on uncertain tax positions as a component of income tax expense.

The Company also had other recorded liabilities as of December 31, 2021, 2020 and 2019 for interest and penalties of $ 0.3 million, $ 0.3 million and $ 0.1 million, respectively, associated with uncertain tax positions.

Income tax expense for the years ended December 31, 2021, 2020 and 2019 included net benefits for interest and penalties of nil , $ 0.1 million and $ 0.1 million, respectively, associated with uncertain tax positions.

The Company also had other recorded liabilities of $ 0.3 million as of December 31, 2022, 2021 and 2020, respectively, for interest and penalties associated with uncertain tax positions.

Income tax expense for the years ended December 31, 2022, 2021 and 2020 included net benefits for interest and penalties of nil , nil and $ 0.1 million, respectively, associated with uncertain tax positions.

In 2023, the Company currently expects to add between $ 0.1 million and $ 1.0 million to the provision for uncertain tax positions.

12 unchanged sentences

In the fourth quarter of 2020, under the provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Company received a refund of its remaining outstanding AMT credit balance of approximately $ 18.5 million.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note J – Incentive Plans

4 unchanged sentences

The Company currently has outstanding incentive awards issued to certain employees under the Annual Incentive Plan (AIP), the 2012 Long-Term Incentive Plan (2012 Long-Term Plan), the 2018 Long-Term Incentive Plan (2018 Long-Term Plan) and the 2020 Long-Term Incentive Plan (2020 Long-Term Plan).

The 2017 AIP authorizes the Executive Compensation Committee (the Committee) to establish specific performance goals associated with annual cash awards that may be earned by officers, executives and certain other employees.

Cash awards under the 2017 Annual Incentive Plan are determined based on the Company’s actual financial and operating results as measured against the performance goals established by the Committee.

the 2017 AIP expired on December 31, 2021 and has been replaced with the 2022 Annual Incentive Plan, effective January 1, 2022.

The AIP authorizes the Compensation Committee (the Committee) to establish specific performance goals associated with annual cash awards that may be earned by officers, executives and certain other employees.

Cash awards under the AIP are determined based on the Company’s actual financial and operating results as measured against the performance goals established by the Committee.

The 2020 Long-Term Plan authorizes the Committee to make grants of the Company’s common stock to employees.

These grants may be in the form of stock options (nonqualified or incentive), stock appreciation rights (SAR), restricted stock, restricted stock units (RSU), performance units, performance shares, dividend equivalents and other stock-based incentives.

These grants may be in the form of stock options (nonqualified or incentive), SARs, restricted stock, restricted stock units (RSUs), performance units, performance shares, dividend equivalents and other stock-based incentives.

The 2020 Long-Term Plan expires in 2030.

A total of 5 million shares are issuable during the life of the 2020 Long-Term Plan.

A total of 5 million shares are issuable during the

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note J – Incentive Plans (Continued)

life of the 2020 Long-Term Plan.

Shares issued pursuant to awards granted under this Plan may be shares that are authorized and unissued or shares that were reacquired by the Company, including shares purchased in the open market.

1 unchanged sentence

Based on awards made to date, 2.9 million shares are available for grant under the 2020 Long-Term Plan at December 31, 2022.

At the Company’s annual stockholders’ meeting held on May 12, 2021, shareholders approved the replacement of the 2018 Stock Plan for Non-Employee Directors (2018 NED Plan) with the 2021 Stock Plan for Non-Employee Directors (2021 NED Plan).

The 2021 NED Plan permits the issuance of restricted stock, restricted stock units and stock options or a combination thereof to the Company’s Non-Employee Directors.

The Company currently has outstanding incentive awards issued to Directors under the 2021 NED Plan and the 2018 NED Plan.

All awards on or after May 12, 2021, were made under the 2021 NED Plan.

The Stock Plan for Non-Employee Directors (2021 NED Plan) permits the issuance of restricted stock, restricted stock units and stock options or a combination thereof to the Company’s Non-Employee Directors.

The Company currently has outstanding incentive awards issued to Directors under the 2021 NED Plan and the 2018 Stock Plan for Non-Employee Directors (2018 NED Plan).

The Company generally expects to issue treasury shares to satisfy future stock option exercises and vesting of restricted stock and restricted stock units.

2 unchanged sentences

2022 2021 2020

Compensation charged against income (loss) before income tax benefit $ 43,660 24,812 50,170

Compensation charged against income before income tax benefit $ 74,587 $ 43,660 $ 24,812

Related income tax benefit recognized in income 12,710 7,196 2,672

3 unchanged sentences

Equity-Settled Awards

PERFORMANCE-BASED RESTRICTED STOCK UNITS – Performance-based restricted stock units (PSUs) to be settled in Common shares were granted in 2021 under the 2020 Long-Term Plan and 2020 and 2019 under the

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note J – Incentive Plans (Contd.)

2018 Long-Term Plan.

PERFORMANCE-BASED RESTRICTED STOCK UNITS – Performance-based restricted stock units (PSUs) to be settled in Common shares were granted in 2021 and 2022 under the 2020 Long-Term Plan and 2020 under the 2018 Long-Term Plan.

Each grant will vest if the Company achieves specific performance objectives at the end of the designated performance period.

Additional shares may be awarded if performance objectives are exceeded.

If performance goals are not met, PSUs will not vest, but recognized compensation cost associated with the stock award would not be reversed.

For PSUs, the performance conditions are based on the Company’s total shareholder return ( 80 % weighting), compared to an industry peer group of companies, and the EBITDA divided by Average Capital Employed (ACE) metric ( 20 % weighting) for PSU awards beginning in 2020, over the performance period.

If performance goals are not met, PSUs will not vest, but the recognized compensation cost associated with the stock award would not be reversed.

During the performance period, PSUs are subject to transfer restrictions and are subject to forfeiture if a grantee terminates for reasons other than retirement, disability or death.

14 unchanged sentences

The assumptions used in the valuation of the performance awards granted in 2022, 2021 and 2020 are presented in the following table.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note J – Incentive Plans (Continued)

2022 2021 2020

Fair value per share at grant date $ 37.77 - $ 47.37

$ 16.03 $ 21.51

Expected volatility 79.00 % - 81.00 %

74.00 % 39.00 %

Risk-free interest rate 1.39 % - 2.85 %

0.18 % 1.40 %

Stock beta 1.195 - 1.200

Expected life 3.0 years 3.0 years 3.0 years

TIME-BASED RESTRICTED STOCK UNITS – Time-based restricted stock units (RSUs) have been granted to the Company’s Non-Employee Directors (NED) under the 2018 NED Plan and 2021 NED Plan and to certain employees under the 2012 Long-Term Plan, 2018 Long-Term Plan and 2020 Long-Term Plan.

TIME-BASED RESTRICTED STOCK UNITS – Time-based RSUs have been granted to the Company’s Non-Employee Directors (NED) under the 2018 NED Plan and 2021 NED Plan and to certain employees under the 2012 Long-Term Plan, 2018 Long-Term Plan and 2020 Long-Term Plan.

The fair value of the time-based restricted stock units awarded in 2022, 2021 and 2020 are presented in the following table.

2 unchanged sentences

Closing Stock Price at Grant Date $ 32.84 $ 13.14 - $ 23.58

$ 22.59 $ 21.68

Long-Term Incentive Plan , 2

Average High/Low Stock Price at Grant Date $ 12.30 $ 21.68 $ 28.16

1 Under the 2018 NED Plan, the RSUs granted in 2019 vest on the third anniversary of the date of grant and the RSUs granted in 2020 vest on the first anniversary of the date of grant.

Average Low/High Stock Price at Grant Date $ 29.80 - $ 49.86

1 Under the 2021 NED Plan, RSUs granted in 2021 are scheduled to vest in February 2022.

1 unchanged sentence

The RSUs granted under the 2018 and 2020 Long-Term Plan generally vest on the third anniversary of the date of grant.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note J – Incentive Plans (Contd.)

Changes in RSUs outstanding for each of the last three years are presented in the following table.

6 unchanged sentences

Outstanding at end of year 1,227,792 1,451,438 1,383,043

STOCK OPTIONS – In 2018, the Company ceased the inclusion of stock options and stock appreciation rights as a part of the long-term incentive compensation mix.

STOCK OPTIONS – In 2017, the Company ceased the inclusion of stock options and SARs as a part of the long-term incentive compensation mix.

Prior to 2017, the Committee fixed the option price of each option granted at no less than fair market value (FMV) on the date of the grant and fixed the option term at no more than seven years from such date.

7 unchanged sentences

Treasury yield curve in effect at the time of grant.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note J – Incentive Plans (Continued)

Changes in stock options outstanding during the last three years are presented in the following table.

1 unchanged sentence

Outstanding at December 31, 2019 2,920,410 43.93

Exercised ( 57,500 ) 17.57

Forfeited ( 1,016,685 ) 48.29

Outstanding at Exercised ( 47,000 ) 17.57

Outstanding at Forfeited ( 825,010 ) 54.85

Outstanding at December 31, 2020 2,048,400 40.14

11 unchanged sentences

Options Outstanding Options Exercisable

Range of Exercise

Prices per Option No.

Exercisable Price No.

in Years Aggregate

$ 17.00 to $ 30.99

28.51 13,000 1.1 $ 188,565 13,000 1.1 $ 188,565

$ 31.00 to $ 50.99

546,000 0.1 — 546,000 0.1 —

1,319,500 1.0 $ 3,097,563 1,319,500 1.0 $ 3,097,563

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note J – Incentive Plans (Contd.)

The total intrinsic value of options exercised during 2022 was $ 10.9 million.

2 unchanged sentences

Cash-Settled Awards

The Company has granted phantom stock-based incentive awards to be settled in cash to certain employees in the form of Stock Appreciation Rights (SARs), Performance-based restricted stock units (CPSUs), Time-based restricted stock units (CRSUs) and Phantom units.

The Company has granted phantom stock-based incentive awards to be settled in cash to certain employees in the form of SARs, Performance-based restricted stock units (CPSUs), CRSUs and Phantom units.

SAR awards have terms similar to stock options.

CPSU terms are similar to other performance-based restricted stock awards (PSUs).

CPSU terms are similar to other performance-based restricted stock awards.

CRSUs generally settle on the third anniversary of the date of grant.

11 unchanged sentences

tax qualified plans meet the funding requirements of federal laws and regulations.

Contributions to foreign plans are based on local laws and tax regulations.

Contributions to foreign plans are based on local laws and

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note K – Employee and Retiree Benefit Plans (Continued)

tax regulations.

The Company also sponsors other postretirement benefits such as health care and life insurance benefit plans, which are not funded, that cover most retired U.S.

9 unchanged sentences

The tables that follow provide a reconciliation of the changes in the plans’ benefit obligations and fair value of assets for the years ended December 31, 2022 and 2021 and a statement of the funded status as of December 31, 2022 and 2021.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note K – Employee and Retiree Benefit Plans (Contd.)

Benefits Other

11 unchanged sentences

Benefits paid ( 47,504 ) ( 38,866 ) ( 4,694 ) ( 4,041 )

Curtailments — ( 7,596 ) — ( 6,023 )

Special termination benefits — 8,434 — —

Plan amendments — — — ( 5,002 )

14 unchanged sentences

Fund Status and net plan liability recognized at December 31 $ ( 212,129 ) $ ( 328,078 ) $ ( 67,679 ) $ ( 96,133 )

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note K – Employee and Retiree Benefit Plans (Continued)

At December 31, 2022, amounts included in “Accumulated other comprehensive loss” (AOCL) in the Consolidated Balance Sheets, before reduction for associated deferred income taxes, which have not been recognized in net periodic benefit expense are shown in the following table.

3 unchanged sentences

Net actuarial gain (loss) $ ( 194,735 ) $ 42,129

Prior service cost ( 2,920 ) 5,002

Prior service (credit) cost ( 2,181 ) 4,470

$ ( 196,916 ) $ 46,599

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note K – Employee and Retiree Benefit Plans (Contd.)

The table that follows includes projected benefit obligations, accumulated benefit obligations and fair value of plan assets for plans where the accumulated benefit obligation exceeded the fair value of plan assets.

16 unchanged sentences

Amortization of prior service cost (credit) ( 684 ) 591 640 ( 532 ) — —

Amortization of transitional (asset) liability 231 — — ( 587 ) — —

Recognized actuarial (gain) loss 15,867 20,565 22,828 ( 28 ) ( 29 ) ( 31 )

4 unchanged sentences

The preceding tables in this note include the following amounts related to foreign benefit plans.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note K – Employee and Retiree Benefit Plans (Continued)

Benefits Other

7 unchanged sentences

The following table provides the weighted-average assumptions used in the measurement of the Company’s benefit obligations at December 31, 2022 and 2021 and net periodic benefit expense for 2022 and 2021.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note K – Employee and Retiree Benefit Plans (Contd.)

Benefit Obligations Net Periodic Benefit Expense

7 unchanged sentences

Discount rate 5.30 % 2.54 % 5.41 % 2.86 % 3.13 % 2.24 % 2.86 % 2.51 %

Expected return on plan assets 4.25 % 4.43 % — — 4.25 % 4.43 % — —

Rate of compensation increase 3.50 % 3.04 % — — 3.00 % 3.04 % — —

The discount rates used for determining the plan obligations and expense are based on the universe of high-quality corporate bonds that are available within each country.

Cash balance interest credit rate 3.20 % 1.89 % — — — — — —

Expected return on plan assets — — — — 6.24 % 4.25 % — —

The discount rates used for determining the plan obligations and expense are based on high-quality corporate bonds that are available within each country.

Cash flow analyses are performed in which a spot yield curve is used to discount projected benefit payment streams for the most significant plans.

2 unchanged sentences

Expected compensation increases are based on anticipated future averages for the Company.

The plan’s cash balance interest accumulation rate is the greater of the annual yield on 10-year treasury constant maturities or 1.89 %.

Benefit payments, reflecting expected future service as appropriate, which are expected to be paid in future years from the assets of the plans or by the Company, are shown in the following table.

11 unchanged sentences

During 2023, the Company currently expects to make contributions of $ 31.1 million to its domestic defined benefit pension plans, $ 1.1 million to its foreign defined benefit pension plans and $ 4.8 million to its domestic postretirement benefits plan.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note K – Employee and Retiree Benefit Plans (Continued)

PLAN INVESTMENTS – Murphy Oil Corporation maintains an Investment Policy Statement (Statement) that establishes investment standards related to its funded domestic qualified retirement plan.

5 unchanged sentences

Asset allocations are rebalanced on a periodic basis throughout the year to bring assets to within an acceptable range of target levels.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note K – Employee and Retiree Benefit Plans (Contd.)

The weighted average asset allocation for the Company’s funded pension benefit plans at December 31, 2022 and 2021 are presented in the following table.

5 unchanged sentences

The Company’s weighted average expected return on plan assets was 6.2 % in 2022 and the return was determined based on an assessment of actual long-term historical returns and expected future returns for a portfolio with investment characteristics similar to that maintained by the plans.

The 4.0 % expected return was based on a weighted average expected future equity securities return of 3.4 % and a fixed income securities return of 0.6 %.

The 6.2 % expected return was comprised of the weighted average expected future equity securities return of 7.9 % and a fixed income securities return of 4.6 %.

There is also an average expected investment expense of 0.6 %.

Over the last 10 years, the return on funded retirement plan assets has averaged 3.4 %.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note K – Employee and Retiree Benefit Plans (Continued)

At December 31, 2022, the fair value measurements of retirement plan assets within the fair value hierarchy are included in the table that follows.

15 unchanged sentences

fixed income 85,190 35,661 49,528 —

International commingled trust fund — — — —

Emerging market mutual fund — — — —

Cash and equivalents 18,719 18,719 — —

10 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note K – Employee and Retiree Benefit Plans (Contd.)

Note K – Employee and Retiree Benefit Plans (Continued)

At December 31, 2021, the fair value measurements of retirement plan assets within the fair value hierarchy are included in the table that follows.

10 unchanged sentences

small/midcap 73,222 73,222 — —

Hedged funds and other alternative strategies 42,040 — — 42,040

International commingled trust fund 76,095 987 55,433 19,675

Emerging market commingled equity fund 32,058 10,480 21,578 —

Other alternative strategies 47,248 — — 47,248

International equity 47,546 47,546 — —

Emerging market equity 14,937 14,937 — —

Fixed income securities:

fixed income 92,231 36,888 55,343 —

International commingled trust fund 9,456 — 9,456 —

Cash and equivalents 8,951 8,951 — —

8 unchanged sentences

Total $ 611,302 $ 289,966 $ 238,482 $ 82,854

The definition of levels within the fair value hierarchy in the tables above is included in Note P – Assets and Liabilities Measured at Fair Value .

The definition of levels within the fair value hierarchy in the tables above is included in Note P .

For domestic plans, U.S.

2 unchanged sentences

For commercial paper securities, the prices received generally utilize observable inputs in the pricing methodologies.

Other alternative strategies funds consist of three investments.

One of these investments is valued quarterly based on net asset value and permits withdrawals after a 45 -day notice, another investment is valued annually based on net asset value and permits withdrawals semi-annually after a 90 -day notice, and the third investment is also valued quarterly based on net asset values and has a two-year lock-up period and a 95 -day notice following the lock-up period.

Other alternative strategies funds consist of two investments.

One of these investments is valued annually based on net asset value and permits withdrawals annually after a 90 -day notice and the other investment is also valued quarterly based on net asset values and has a three-year lock-up period and a 95 -day notice following the lock-up period.

For foreign plans, the equity securities funds are comprised of U.K.

6 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note K – Employee and Retiree Benefit Plans (Contd.)

Note K – Employee and Retiree Benefit Plans (Continued)

The effects of fair value measurements using significant unobservable inputs on changes in Level 3 plan assets are outlined below:

22 unchanged sentences

For accounting purposes, the Company has not designated commodity and foreign currency derivative contracts as hedges, and therefore, it recognizes all gains and losses on these derivative contracts in its Consolidated Statements of Operations.

Certain interest rate derivative contracts were previously accounted for as hedges and the gain or loss associated with recording the fair value of these contracts was deferred in AOCL and amortized to Interest expense over time.

In 2021, the Company redeemed all of the remaining notes due 2022, which were associated with the interest rate derivative contracts, and expensed the remainder of the previously deferred loss on the interest rate swap of $ 2.1 million to Interest expense in the Consolidated Statement of Operations.

In 2021, the Company redeemed all of the remaining notes due 2022, which were associated with the interest rate derivative contracts, and expensed the remainder of the previously deferred loss on the interest rate swap of $ 2.1 million to “Interest expense, net” in the Consolidated Statement of Operations.

Commodity Price Risks

The Company has entered into crude oil swaps and collar contracts.

Under the swaps contracts, which mature monthly, the Company pays the average monthly price in effect and receives the fixed contract price on a notional amount of sales volume, thereby fixing the price for the commodity sold.

Under the collar contracts, which also mature monthly, the Company purchased a put option and sold a call option with no net premiums paid to or received from counterparties.

Upon maturity, collar contracts require payments by the Company if the NYMEX average closing price is above the ceiling price or payments to the Company if the NYMEX average closing price is below the floor price.

At December 31, 2021, volumes per day associated with outstanding crude oil derivative contracts and the weighted average prices for these contracts are as follows:

During 2022, the Company had crude oil swaps and collar contracts.

Under the swaps contracts, which matured monthly, the Company paid the average monthly price in effect and received the fixed contract price on a notional amount of sales volume, thereby fixing the price for the commodity sold.

Under the collar contracts, which also matured monthly, the Company purchased a put option and sold a call option with no net premiums paid to or received from counterparties.

Upon maturity, collar contracts required payments by the Company if the NYMEX average closing price is above the ceiling price or payments to the Company if the NYMEX average closing price is below the floor price.

At December 31, 2022, the Company does no t have any outstanding crude oil derivative contracts.

At December 31, 2021, the Company had 20,000 barrels per day in NYMEX West Texas Intermediate (WTI) swap contracts at a price per barrel of $ 44.88 and 25,000 barrels per day in NYMEX WTI collar contracts with an average ceiling price per barrel of $ 75.20 and an average floor price per barrel of $ 63.24 , both maturing ratably during 2022.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note L – Financial Instruments and Risk Management (Contd.)

NYMEX WTI swap contracts:

Volume per day (Bbl):

Price per Bbl:

NYMEX WTI collar contracts:

Volume per day (Bbl):

Price per Bbl:

Average Ceiling:

Average Floor:

Note L – Financial Instruments and Risk Management (Continued)

Foreign Currency Exchange Risks

7 unchanged sentences

Balance Sheet Location 2022 2021

Commodity swaps Accounts receivable $ — 13,050

Accounts payable ( 239,882 ) ( 89,842 )

Deferred credits and other liabilities — ( 12,833 )

Commodity swaps Accounts payable — ( 239,882 )

Commodity collars Accounts receivable — 4,280

13 unchanged sentences

The Company controls credit risk on derivatives through credit approvals and monitoring procedures and believes that such risks are minimal because counterparties to the majority of transactions are major financial institutions.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note M – Earnings Per Share

4 unchanged sentences

Basic method 155,276,533 154,290,741 153,507,109

Dilutive stock options 1

Dilutive stock options and restricted stock units ¹ 2,198,305 — —

Diluted method 157,474,838 154,290,741 153,507,109

1 Due to a net loss recognized by the Company for the year ended December 31, 2021 and 2020, no unvested stock awards were included in the computation of diluted earnings per share because the effect would have been antidilutive.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note M - Earnings Per Share (Continued)

The following table reflects certain options to purchase shares of common stock that were outstanding during the three years ended December 31, 2022 but were not included in the computation of dilutive earnings per share because the incremental shares from the assumed conversion were antidilutive.

7 unchanged sentences

2022 2021 2020

Net decrease (increase) in operating working capital, excluding cash and cash equivalents:

Decrease (increase) in accounts receivable ¹ $ 8,056 164,613 ( 232,037 )

Decrease in inventories 12,809 5,953 10,258

Decrease in prepaid expenses 2,003 7,178 4,650

Net (increase) decrease in operating working capital, excluding cash and cash equivalents:

(Increase) decrease in accounts receivable ¹ $ ( 137,228 ) $ 8,056 $ 164,613

(Increase) decrease in inventories ( 1,534 ) 12,809 5,953

(Increase) decrease in prepaid expenses ( 3,413 ) 2,003 7,178

Increase (decrease) in accounts payable and accrued liabilities ¹ 69,854 95,166 ( 208,740 )

Increase (decrease) in income taxes payable 6,593 423 ( 1,031 )

Net decrease (increase) in noncash operating working capital $ 118,457 ( 32,027 ) ( 16,887 )

Net (increase) decrease in noncash operating working capital $ ( 65,728 ) $ 118,457 $ ( 32,027 )

Supplementary disclosures:

9 unchanged sentences

Note O – Accumulated Other Comprehensive Loss

The components of Accumulated other comprehensive loss on the Consolidated Balance Sheets at December 31, 2021 and December 31, 2020 and the changes during 2021 and 2020 are presented net of taxes in the following table.

The components of AOCL on the Consolidated Balance Sheets at December 31, 2022 and December 31, 2021 and the changes during 2022 and 2021 are presented net of taxes in the following table.

( Thousands of dollars )

12 unchanged sentences

Balance at December 31, 2022 $ ( 418,230 ) $ ( 116,456 ) $ — $ ( 534,686 )

1 Reclassifications before taxes of $ 23,503 and $ 17,694 are included in the computation of net periodic benefit expense in 2021 and 2020, respectively.

1 Reclassifications before taxes of $ 15.3 million and $ 23.5 million are included in the computation of net periodic benefit expense in 2022 and 2021, respectively.

See Note K for additional information.

Related income taxes of $ 3,782 and $ 4,496 are included in income tax expense in 2021 and 2020, respectively.

2 Reclassifications before taxes of $ 2,140 and $ 1,525 are included in Interest expense in 2021 and 2020, respectively.

Related income taxes of $ 450 and $ 321 are included in income tax expense in 2021 and 2020, respectively.

Related income taxes of $ 3.3 million and $ 3.8 million are included in income tax expense in 2022 and 2021, respectively.

2 Reclassifications before taxes of nil and $ 2.1 million are included in Interest expense in 2022 and 2021, respectively.

Related income taxes of nil and $ 0.5 million are included in Income tax expense in 2022 and 2021, respectively.

See Note L for additional information.

6 unchanged sentences

Level 3 inputs are unobservable inputs which reflect assumptions about pricing by market participants.

The fair value measurements for these assets and liabilities at December 31, 2021 and 2020 are presented in the following table.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note P – Assets and Liabilities Measured at Fair Value (Contd.)

Note P – Assets and Liabilities Measured at Fair Value (Continued)

The fair value measurements for these assets and liabilities at December 31, 2022 and 2021 are presented in the following table.

December 31, 2022 December 31, 2021

2 unchanged sentences

Commodity collars $ — $ — $ — $ — $ — $ 4,280 $ — $ 4,280

Commodity swaps — — — — — 13,050 — 13,050

$ — 4,280 — 4,280 — 13,050 — 13,050

Nonqualified employee savings plan $ 15,135 $ — $ — $ 15,135 $ 16,962 $ — $ — $ 16,962

3 unchanged sentences

$ 15,135 $ — $ — $ 15,135 $ 16,962 $ 259,415 $ 196,151 $ 472,528

The fair value of the commodity (WTI crude oil) swaps in 2021 and 2020 was based on active market quotes for WTI crude oil.

The fair value of commodity (WTI crude oil) collars in 2021 was determined using an option pricing model based on inputs that include (i) the contracted notional volumes, (ii) independent active market price quotes, (iii) the applicable estimated risk-free rate yield curve and (iv) the implied rate of volatility inherent in the collar contract.

The before tax income effect of changes in fair value of crude oil derivative contracts is recorded in Gain (loss) on derivative instruments in the Consolidated Statements of Operations.

The nonqualified employee savings plan is an unfunded savings plan through which participants seek a return via phantom investments in equity securities and/or mutual funds.

1 unchanged sentence

The income effect of changes in the fair value of the nonqualified employee savings plan is recorded in “Selling and general expenses” in the Consolidated Statements of Operations.

The Company’s contingent consideration liabilities with PAI and LLOG are measured at fair value on a recurring basis and are categorized as Level 3 in the fair value hierarchy.

The contingent consideration liabilities are valued using a Monte Carlo simulation model, which used the following assumptions as of December 31, 2021:

As of December 31, 2022, there were no outstanding commodity (WTI crude oil) swaps and collars contracts subject to fair value measurement.

The liabilities associated with these contracts have been finalized as of December 31, 2022 and were based on realized WTI pricing.

The commodity swaps and collars liability as of December 31, 2022 was $ 19.6 million and $ 2.3 million, respectively, and recorded as “Accounts payable” in the Consolidated Balance Sheet.

The fair value of the commodity (WTI crude oil) swaps in 2021 was based on active market quotes for WTI crude oil.

The before tax income effect of changes in fair value of crude oil derivative contracts is recorded in “(Loss) Gain on derivative instruments” in the Consolidated Statements of Operations.

In 2019, the Company acquired strategic deepwater Gulf of Mexico assets from LLOG Exploration Offshore L.L.C.

and LLOG Bluewater Holdings, L.L.C., (LLOG).

Under the terms of the transaction, in addition to the consideration paid, Murphy has an obligation to pay additional contingent consideration of up to $ 200 million in the event that certain revenue thresholds are exceeded between 2019 and 2022;

and $ 50 million following first oil from certain development projects.

The revenue threshold was not exceeded for 2019 or 2020;

however, the threshold was met in 2021 and 2022.

In 2018, the Company, through a subsidiary, acquired Gulf of Mexico producing assets from Petrobras America Inc.

(PAI), a subsidiary of Petróleo Brasileiro S.A.

Under the terms of the transaction, in addition to the consideration paid, Murphy has an obligation to pay additional contingent consideration of up to $ 150 million if certain price and production thresholds are exceeded beginning in 2019 through 2025;

and $ 50 million carry for PAI development costs in the St.

Malo Field if certain enhanced oil recovery projects are undertaken.

The price and production thresholds were not exceeded for 2019 and 2020;

however, the thresholds were met in 2021 and 2022.

As of December 31, 2021, Murphy had completely funded the carried interest.

As at December 31, 2022, the Company’s liabilities with PAI and LLOG were based on realized inputs of volumes and pricing as a result of contractual thresholds and time durations being achieved.

As a result, the related liability as at December 31, 2022, of $ 192.7 million, is no longer subject to fair value measurement.

The liability is included in “Other accrued liabilities” in the Consolidated Balance Sheets and the changes in fair value of the contingent consideration during 2022 were recorded in “Other income (expense)” in the Consolidated Statements of Operations.

For 2021 the Company’s contingent consideration liabilities with PAI and LLOG were measured at fair value on a recurring basis and were categorized as Level 3 in the fair value hierarchy as at

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note P – Assets and Liabilities Measured at Fair Value (Continued)

December 31, 2021.

The contingent consideration liabilities were valued using a Monte Carlo simulation model, which used the following assumptions as of December 31, 2021:

(i) the remaining expected life of 1 year for LLOG and 4 years for PAI, (ii) West Texas Intermediate forward strip pricing with historical volatility of 9.9 % and (iii) a risk-free interest rate of 1.49 %.

The income effect of changes in the fair value of the contingent consideration is recorded in Other (income) expense in the Consolidated Statements of Operations.

The Company offsets certain assets and liabilities related to derivative contracts when the legal right of offset exists.

10 unchanged sentences

Current and long-term debt $ ( 1,823,139 ) $ ( 1,668,216 ) $ ( 2,466,068 ) $ ( 2,666,773 )

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note P – Assets and Liabilities Measured at Fair Value (Contd.)

Fair Values – Nonrecurring

An impairment charge of $ 171.3 million was triggered when the operator at Terra Nova provided notice of abandonment in the first quarter of 2021, before a commercial resolution in the third quarter of 2021 led Murphy to acquire an additional 7.525 % in a commercial settlement with the other partners.

There was no impairment expense incurred in 2022.

In 2021, an impairment charge of $ 171.3 million was triggered when the operator at Terra Nova provided notice of abandonment in the first quarter of 2021, before a commercial resolution in the third quarter of 2021 led Murphy to acquire an additional 7.525 % in a commercial settlement with the other partners.

The commercial resolution would have meant the Terra Nova impairment charge was not required.

In the fourth quarter of 2021, a further impairment charge of $ 25 million was recorded on non-core assets.

Offshore and Other Foreign properties.

The Company recorded pretax noncash impairment charges of $ 1,206.3 million to reduce the carrying values to their estimated fair values at select properties.

The fair value information associated with these impaired properties is presented in the following table

Years Ended December 31,

The fair value information associated with the 2021 impaired properties is presented in the following table.

Year Ended December 31,

Impairment Total

2 unchanged sentences

Impaired proved properties

CA Offshore $ — — 156,185 327,481 171,296

Other Foreign — — 25,739 43,739 18,000

Corporate — — 36,994 43,994 7,000

Impaired proved properties

Offshore $ — $ — $ 156,185 $ 327,481 $ 171,296

3 unchanged sentences

The Company has operating, production handling and transportation service agreements for oil and/or natural gas operations in the U.S.

and Western Canada.

Onshore and Gulf of Mexico transportation contracts require minimum monthly payments through 2045, while the Western Canada processing contracts call for minimum monthly payments through 2051.

and Western Canada, future required minimum annual payments for the next five years are $ 221.4 million in 2022, $ 168.1 million in 2023, $ 114.4 million in 2024, $ 89.8 million in 2025 and $ 82.4 million in 2026.

and Canada Onshore.

Onshore and Gulf of Mexico transportation contracts require minimum monthly payments through 2045, while the Canada Onshore processing contracts call for minimum monthly payments through 2051.

and Canada Onshore, future required minimum annual payments for the next five years are $ 295.4 million in 2023, $ 118.8 million in 2024, $ 91.2 million in 2025, $ 82.2 million in 2026 and $ 69.0 million in 2027.

Under certain circumstances, the Company is required to pay additional amounts depending on the actual hydrocarbon quantities processed under the agreement.

Total costs incurred under these service arrangements were $ 151.8 million in 2021, $ 107.6 million in 2020, and $ 117.7 million in 2019.

Commitments for capital expenditures were approximately $ 520.1 million at December 31, 2021, including $ 392.4 million for costs to develop deepwater U.S.

Gulf of Mexico fields including fields acquired as part of the MP GOM and LLOG transactions, $ 84.7 million for Canada, $ 24.9 million for Other Foreign, and $ 18.1 million for work at Eagle Ford Shale.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note Q - Commitments (Continued)

costs incurred under these service arrangements were $ 216.4 million in 2022, $ 151.8 million in 2021 and $ 107.6 million in 2020.

Commitments for capital expenditures were approximately $ 282.4 million at December 31, 2022, including $ 200.9 million for costs to develop deepwater U.S.

Gulf of Mexico fields, $ 46.6 million for Eagle Ford Shale, $ 33.8 million for Canada and $ 1.1 million for Other Foreign.

Note R – Environmental and Other Contingencies

10 unchanged sentences

restrictions on drilling and/or production;

laws and regulations intended for the promotion of safety and the protection and/or remediation of the environment;

laws, regulations and government action intended for the promotion of safety and the protection and/or remediation of the environment including in connection with the purported causes or potential impacts of climate change;

governmental support for other forms of energy;

and laws and regulations affecting the Company’s relationships with employees, suppliers, customers, stockholders and others.

Governmental actions are often motivated by political considerations and may be taken without full consideration of their consequences or may be taken in response to actions of other governments.

It is not practical to attempt to predict the likelihood of such actions, the form the actions may take or the effect such actions may have on the Company.

ENVIRONMENTAL MATTERS – Murphy and other companies in the oil and natural gas industry are subject to numerous federal, state, local and foreign laws and regulations dealing with the environment.

Violation of federal or state environmental laws, regulations and permits can result in the imposition of significant civil and criminal penalties, injunctions and construction bans or delays.

A discharge of hazardous substances into the environment could, to the extent such event is not insured, subject the Company to substantial expense, including both the cost to comply with applicable regulations and claims by neighboring landowners and other third parties for any personal injury and property damage that might result.

Item 103 of SEC Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that the Company reasonably believes will exceed a specified threshold.

Pursuant to recent SEC amendments to this item, the Company will be using a threshold of $ 1.0 million for such proceedings.

Given the factors involved in various government actions, including political considerations, it is difficult to predict their likelihood, the form they may take, or the effect they may have on the Company.

ENVIRONMENTAL MATTERS – Murphy and other companies in the oil and natural gas industry are subject to numerous federal, state, local and foreign laws and regulations dealing with the environment and protection of health and safety.

The principal environmental, health and safety laws and regulations to which Murphy is subject address such matters as 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;

and the health and safety of our employees, contractors and communities where our operations are located.

These laws and regulations also generally require permits for existing operations, as well as the construction or development of new operations and the decommissioning facilities once production has ceased.

Violation of federal or state environmental, health and safety laws, regulations and permits can result in the imposition of significant civil and criminal penalties, injunctions and construction bans or delays.

A discharge of hazardous substances into the environment could, to the extent such event is not adequately insured, subject the Company to substantial expense, including both the cost to comply with applicable regulations and claims by neighboring landowners and other third parties for any personal injury and property damage that might result.

In addition, Item 103 of SEC Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that the Company reasonably believes will exceed a specified threshold.

Pursuant to recent SEC amendments to this item, the Company will be using a threshold of $ 1.0 million for such proceedings and the Company is not aware of environment legal proceedings likely to exceed this $ 1.0 million threshold.

There continues to be an increase in regulatory oversight of the oil and gas industry at the federal level, with a focus on climate change and GHG emissions (including methane emissions).

For example, the Inflation Reduction Act of 2022 contains provisions that impose fees for excess methane emissions from petroleum and natural gas facilities.

In addition, there have been a number of executive orders issued that address climate change, including creation of climate-related task forces, directives to federal agencies to procure carbon-free electricity, and a goal of a carbon pollution-free power sector by 2035 and a net-zero emissions U.S.

economy by 2050.

Executive orders have also been issued related to oil and gas activities on federal lands, infrastructure and environmental justice.

In addition, an international climate agreement (the Paris Agreement) was agreed to at the 2015 United Nations Framework Convention on Climate Change in Paris, France.

The Paris Agreement entered into force in November 2016.

Although the U.S.

officially withdrew from the Paris Agreement on November 4, 2020, the U.S.

has since rejoined the Paris Agreement, which became effective for the U.S.

on February 19, 2021.

The Company currently owns or leases, and has in the past owned or leased, properties at which hazardous substances have been or are being handled.

Hazardous substances may have been disposed of or released on or under the properties owned or leased by the Company or on or under other locations where these wastes have been taken for disposal.

Hazardous substances may have been disposed of or released on

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note R - Environmental and Other Contingencies (Continued)

or under the properties owned or leased by the Company or on or under other locations where these wastes have been taken for disposal.

In addition, many of these properties have been operated by third parties whose treatment and disposal or release of hydrocarbons or other wastes were not under Murphy’s control.

10 unchanged sentences

However, based on information currently available to the Company, the amount of future investigation and remediation costs incurred at known or currently unidentified sites is not expected to have a material adverse effect on the Company’s future net income, cash flows or liquidity.

LEGAL MATTERS – Murphy and its subsidiaries are engaged in a number of other legal proceedings, all of which Murphy considers routine and incidental to its business.

LEGAL MATTERS – Murphy and its subsidiaries are engaged in a number of other legal proceedings (including litigation related to climate change), all of which Murphy considers routine and incidental to its business.

Based on information currently available to the Company, the ultimate resolution of environmental and legal matters referred to in this note is not expected to have a material adverse effect on the Company’s net income, financial condition or liquidity in a future period.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note S – Common Stock Issued and Outstanding

7 unchanged sentences

822,614 831,871 651,905

Treasury shares purchased — — ( 20,697,542 )

End of year 155,467,319 154,463,050 153,598,625

5 unchanged sentences

The Company’s management evaluates segment performance based on income (loss) from operations, excluding interest income and interest expense.

The Company has several customers that purchase a significant portion of its oil and natural gas production.

During the years 2021, 2020 and 2019, sales to Chevron represented approximately 30 %, 24 %, and 25 % of the Company’s total sales revenue.

During the years 2020 and 2019, sales to Phillips 66 represented approximately 18 %, and 17 % of the Company’s total sales revenue.

Customers that accounted for 10% or more of the Company’s sales revenue for each of the below three years ended December 31, are shown below.

2022 2021 2020

Chevron Corporation 19 % 30 % 24 %

ExxonMobil Corporation 12 % N/A N/A

Phillips 66 N/A N/A 18 %

Due to the quantity of active oil and natural gas purchasers in the markets where it produces hydrocarbons, the Company does not foresee any difficulty with selling its hydrocarbon production at fair market prices.

Assets held for sale as of December 31, 2021 include the net property, plant and equipment of the CA-2 project in Brunei and the Company’s office building in El Dorado, Arkansas (see Note 2).

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued

Note T - Business Segments (Continued)

No assets were held for sale as of December 31, 2022.

Assets held for sale as of December 31, 2021 include the net property, plant and equipment of the Brunei Block CA-2 and the Company’s office building in El Dorado, Arkansas (see Note E ).

and Malaysian operations have been reported as discontinued operations for all periods presented in these consolidated financial statements.

The Company completed the sale of its Malaysian assets in 2019.

Information about business segments and geographic operations is reported in the following tables.

1 unchanged sentence

Corporate and other activities, including interest income, other gains and losses (including foreign exchange gains/losses and realized/unrealized gains/losses on crude oil contracts), interest expense and unallocated overhead, are shown in the tables to reconcile the business segments to consolidated totals.

As used in the table on the following page, certain long-lived assets at December 31, exclude investments, noncurrent receivables, deferred tax assets, and other intangible assets.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued

Note T - Business Segments (Contd.)

Exploration and Production

12 unchanged sentences

Significant noncash charges (credits)

Impairment of assets — 171.3 18.0 189.3 7.0 — 196.3

Depreciation, depletion and amortization 617.0 141.5 5.4 763.9 12.9 — 776.8

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued

Note T - Business Segments (Contd.)

Note T - Business Segments (Continued)

Exploration and Production

12 unchanged sentences

Significant noncash charges (credits)

Impairment of assets 1,152.5 — 39.7 1,192.2 14.1 — 1,206.3

Depreciation, depletion and amortization 749.4 213.2 2.3 964.9 22.3 — 987.2

11 unchanged sentences

2020 6,395.7 1,702.5 170.8 8,269.0

1 Certain long-lived assets at December 31 exclude investments, right-of-use operating lease assets, non-current receivables, deferred tax assets and other intangible assets.

Note U – Leases

Nature of Leases

The Company has entered into various operating leases such as a natural gas processing plant, floating production storage and off-take vessels, buildings, marine vessels, vehicles, drilling rigs, pipelines and other oil and gas field equipment.

Remaining lease terms range from 1 year to 19 years, some of which may include options to extend leases for multi-year periods and others which include options to terminate the leases within 1 month.

Remaining lease terms range from 1 year to 20 years, some of which may include options to extend leases for multi-year periods and others which include options to terminate the leases within 1 year.

Options to extend lease terms are at the Company’s discretion.

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note U – Leases (Contd.)

Note U – Leases (Continued)

Related Expenses

12 unchanged sentences

Exploration expenses 10,019 902

Operating lease Impairment of assets — 6,565

Operating lease 2

8 unchanged sentences

1 Variable lease expenses.

For the year ended December 31, 2021 and 2020, includes variable lease expenses of $ 25.8 million and $ 21.8 million, primarily related to additional volumes processed at a natural gas processing plant.

For the years ended December 31, 2022 and 2021, includes variable lease expenses of $ 32.2 million and $ 25.8 million, respectively, primarily related to additional volumes processed at a natural gas processing plant.

2 Short-term leases due within 12 months.

For the year ended December 31, 2021, includes $ 56.9 million in Lease operating expense, $ 30.2 million for Transportation, gathering and processing, $ 2.1 million in Selling and general expense, $ 0.2 million in Other operating expense, $ 28.9 million in Property, plant and equipment, net and $ 11.1 million in Asset retirement obligations relating to short-term leases due within 12 months.

For the year ended December 31, 2022, includes $ 62.8 million in LOE, $ 31.5 million for “Transportation, gathering and processing”, $ 8.8 million for “Exploration expenses, including undeveloped lease amortization”, $ 0.7 million in “Selling and general expenses”, $ 0.1 million in “Other operating expense”, $ 125.4 million in “Property, plant and equipment, net” and $ 11.2 million in “Asset retirement obligations” relating to short-term leases due within 12 months.

Expenses primarily relate to drilling rigs and other oil and natural gas field equipment.

For the year ended December 31, 2020, includes $ 73.9 million in Lease operating expense, $ 22.9 million in Transportation, gathering, and processing, $ 3.3 million in Selling general expense, $ 2.5 million in Other operating expense, and $ 25.0 million in Property, plant and equipment, net relating to short-term leases due within 12 months.

For the year ended December 31, 2021, includes $ 56.9 million in LOE, $ 30.2 million in “Transportation, gathering and processing”, $ 2.1 million in “Selling and general expenses", $ 0.2 million in “Other operating expense”, $ 28.9 million in “Property, plant and equipment, net” and $ 11.1 million in “Asset retirement obligations” relating to short-term leases due within 12 months.

Expenses primarily relate to drilling rigs and other oil and natural gas field equipment.

15 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note U – Leases (Contd.)

Note U – Leases (Continued)

Lease Term and Discount Rate

15 unchanged sentences

Operating leases ¹ $ 262,669 $ 95,500

1 For the year ended December 31, 2021, includes $ 90.3 million related to an offshore drilling rig with a lease term of 16 months.

December 31, 2020, includes $ 268.8 million related to a 5 -year lease for the Cascade/Chinook FPSO in the U.S.

Gulf of Mexico and $ 168.4 million related to a 20-year lease for a gas plant expansion in Canada.

1 For the year ended December 31, 2022, ROU assets obtained in exchange for lease liabilities primarily includes $ 254.0 million related to an extension of the lease of an existing offshore drilling rig by 24 months.

December 31, 2021, includes $ 90.3 million related to an offshore drilling rig with a lease term of 16 months.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

1 unchanged sentence

Note V – Restructuring Charges

In 2020, the Company announced that it was closing its headquarters office in El Dorado, Arkansas, its office in Calgary, Alberta, and consolidating all worldwide staff activities to its existing office location in Houston, Texas.

In 2020, the Company announced that it was closing its headquarters office in El Dorado, Arkansas, its office in Calgary, Alberta, and consolidated all worldwide staff activities to its existing office location in Houston, Texas.

As a result of this decision, certain directly attributable costs and charges have been recognized and reported as Restructuring charges as part of net loss during the year ended December 31, 2020.

These costs include severance, relocation, IT costs, pension curtailment charges and a write-off of the right of use asset lease associated with the Canada office.

Further, the office building in El Dorado is classified as held for sale as of December 31, 2020 and 2021.

These costs include severance, relocation, information technology costs, pension curtailment charges and a write-off of the right of use asset lease associated with the Calgary office.

Restructuring charges are primarily reported in the Corporate segment.

5 unchanged sentences

Restructuring charges $ 49,994

The following table represents a reconciliation of the liability associated with the Company’s restructuring activities at December 31, 2020 and 2021, which is reflected in Other accrued liabilities on the Consolidated Balance Sheet:

(Thousands of dollars)

Restructuring accruals $ 32,430

2020 Utilizations ( 25,500 )

Liability at December 31, 2020 6,930

2021 Utilizations ( 4,757 )

Liability at December 31, 2021 $ 2,173

The liability associated with the Company’s restructuring activities at December 31, 2022 and 2021 is nil and $ 2.2 million, respectively, which is reflected in “Other accrued liabilities” on the Consolidated Balance Sheets.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED)

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED)

The following unaudited schedules are presented in accordance with required disclosures about Oil and Natural Gas Producing Activities to provide users with a common base for preparing estimates of future cash flows and comparing reserves among companies.

11 unchanged sentences

Reported quantities are subject to future revisions, some of which may be substantial, as additional information becomes available from reservoir performance, new geological and geophysical data, additional drilling, technological advancements, price changes and other economic factors.

Murphy’s estimations for proved reserves were generated through the integration of available geoscience, engineering, and economic data and commercially available technologies to establish “reasonable certainty” of economic producibility.

Murphy’s estimations for proved reserves were generated through the integration of available geoscience, engineering, and economic data (including hydrocarbon prices, operating costs, and development costs) and commercially available technologies to establish “reasonable certainty” of economic producibility.

Estimates are presented in millions of barrels of oil equivalents and dollars and billions of cubic feet with one decimal;

19 unchanged sentences

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) – Continued

Schedule 7 also presents the principal reasons for change in the standardized measure of discounted future net cash flows for each of the three years ended December 31, 2022.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) – Continued

Schedule 1 – Summary of Total Proved Equivalent Reserves Based on Average Prices for 2019 – 2022

( Millions of barrels of oil equivalent )

States Canada Malaysia and Other

States Canada Other

Proved developed and undeveloped reserves:

2 unchanged sentences

Extensions and discoveries 150.3 19.5 130.7 —

Purchases of properties 76.2 76.2 — —

Sales of properties ( 1.7 ) ( 1.7 ) — —

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Extensions and discoveries 109.4 18.2 91.3 —

Purchases of properties 7.4 1.6 5.8 —

Sales of properties ( 0.7 ) — ( 0.7 ) —

2 unchanged sentences

Revisions of previous estimates ( 23.6 ) 29.0 ( 52.8 ) 0.2

Improved recovery 5.3 5.3 — —

Extensions and discoveries 80.1 20.6 59.5 —

16 unchanged sentences

3 Includes proved undeveloped reserves of 3.2 MMBOE, consisting of 2.8 MMBBL oil, 0.1 MMBBL NGLs and 1.4 BCF natural gas attributable to the noncontrolling interest in MP GOM.

4 Totals within the tables may not add as a result of rounding.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) – Continued

Schedule 1 – Summary of Total Proved Equivalent Reserves Based on Average Prices for 2019 – 2022 (Continued)

2022 Comments for Proved Equivalent Reserves Changes

Revisions of previous estimates - The equivalent reserves revisions in 2022 resulted predominantly from increased royalty rates and accelerated royalty incentive payouts due to higher commodity prices in Tupper Montney.

These negative revisions were partially offset by positive well performance in the U.S.

Gulf of Mexico.

Extensions and discoveries - In 2022, proved equivalent reserves were added for drilling and expansion activities predominantly in Canada at Tupper Montney and Kaybob Duvernay as well as in the U.S.

at the Gulf of Mexico and the Eagle Ford Shale.

Purchases and sales of properties - In 2022, the Company acquired incremental working interest in two producing fields in the U.S.

Gulf of Mexico and divested working interest in one field in the U.S.

Gulf of Mexico and a portion Eagle Ford Shale.

2021 Comments for Proved Equivalent Reserves Changes

Revisions of previous estimates - The equivalent reserves revisions in 2021 resulted predominantly from accelerated royalty incentive payouts due to higher commodity prices in Tupper Montney.

These negative revisions were partially offset by positive revisions in the U.S.

from higher commodity prices, which partially reversed the 2020 capital allocation reduction, and improved well performance in the U.S.

from higher commodity prices, which partially reversed the 2020 capital expenditure reduction and improved well performance in the U.S.

Gulf of Mexico.

4 unchanged sentences

2020 Comments for Proved Equivalent Reserves Changes

Revisions of previous estimates - The negative reserves revisions in 2020 resulted predominantly from lower crude oil prices and lower capital allocation to Onshore shale properties over the next 5 years causing the removal of numerous proved undeveloped locations, partially offset by improved well performance in the Gulf of Mexico.

Revisions of previous estimates - The negative reserves revisions in 2020 resulted predominantly from lower crude oil prices and lower capital expenditures for onshore shale properties over the next 5 years causing the removal of numerous proved undeveloped locations, partially offset by improved well performance in the Gulf of Mexico.

The 2020 negative equivalents revision in the U.S.

was primarily attributable to lower capital allocation in the Eagle Ford Shale, and the negative revision in Canada was primarily attributable to the Kaybob Duvernay.

was primarily attributable to lower capital expenditures in the Eagle Ford Shale and the negative revision in Canada was primarily attributable to the Kaybob Duvernay.

Lower commodity prices also resulted in negative equivalents revisions in the U.S offshore and Canada offshore.

4 unchanged sentences

Purchases and sales of properties - In 2020, the Company divested partial working interest in an undeveloped well in the Gulf of Mexico.

2019 Comments for Proved Equivalent Reserves Changes

Revisions of previous estimates - The positive Canadian equivalents reserves revisions in 2019 resulted from improved performance in the Tupper Montney asset which offset reserves reductions from deferrals of capital expenditures at Kaybob Duvernay.

The 2019 negative equivalents revision in the U.S.

was primarily attributable to changes in well performance in the Eagle Ford Shale, primarily the Tilden area.

Extensions and discoveries - In 2019, proved equivalent reserves were added in the U.S.

for drilling activities in both the Eagle Ford Shale and in Canada at Kaybob Duvernay.

Proved equivalent reserves were also added for drilling activities in both the U.S.

offshore and Canada offshore.

Purchases and sales of properties - In 2019, the Company acquired deepwater Gulf of Mexico producing assets from LLOG.

In addition, the Company acquired incremental ownership in the Chinook field in the Gulf of Mexico and partial ownership in the Jagus East field in Brunei (which is now held for sale).

The Company’s Malaysia assets were divested in 2019.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) – Continued

Schedule 2 – Summary of Proved Crude Oil Reserves Based on Average Prices for 2019 – 2022

( Millions of barrels )

States Canada Malaysia and Other

States Canada Other

Proved developed and undeveloped crude oil reserves:

2 unchanged sentences

Extensions and discoveries 19.6 14.5 5.1 —

Purchases of properties 56.3 56.3 — —

Sales of properties ( 1.5 ) ( 1.5 ) — —

3 unchanged sentences

Extensions and discoveries 14.1 13.5 0.6 —

Purchases of properties 6.4 1.3 5.2 —

Production ( 34.9 ) ( 31.5 ) ( 3.3 ) ( 0.1 )

1 unchanged sentence

Revisions of previous estimates 23.4 19.9 3.3 0.2

Improved recovery 4.7 4.7 — —

Extensions and discoveries 18.9 16.1 2.8 —

Purchases of properties 4.2 4.2 — —

Sales of properties ( 3.6 ) ( 3.6 ) — —

Production ( 35.5 ) ( 32.7 ) ( 2.5 ) ( 0.3 )

10 unchanged sentences

December 31, 2022 ³ 94.6 69.2 25.3 0.1

1 Includes total proved reserves of 16.6 MMBO for Total and United States attributable to the noncontrolling interest in MP GOM.

2 Includes proved developed reserves of 14.6 MMBO for Total and United States attributable to the noncontrolling interest in MP GOM.

3 Includes proved undeveloped reserves of 2.0 MMBO for Total and United States attributable to the noncontrolling interest in MP GOM.

1 Includes total proved reserves of 16.5 MMBBL for Total and United States attributable to the noncontrolling interest in MP GOM.

2 Includes proved developed reserves of 13.7 MMBBL for Total and United States attributable to the noncontrolling interest in MP GOM.

3 Includes proved undeveloped reserves of 2.8 MMBBL for Total and United States attributable to the noncontrolling interest in MP GOM.

4 Totals within the tables may not add as a result of rounding.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) – Continued

Schedule 2 – Summary of Proved Crude Oil Reserves Based on Average Prices for 2019 – 2022 (Continued)

2022 Comments for Proved Crude Oil Reserves Changes

Revisions of previous estimates - The positive crude oil reserves revisions in 2021 resulted predominantly from impacts of higher commodity prices in the U.S., which partially reversed the 2020 capital allocation reductions, and improved well performance in the U.S.

Revisions of previous estimates - The positive crude oil reserves revisions in 2022 resulted predominantly from improved well performance in the U.S.

Gulf of Mexico and impacts of higher commodity prices in the U.S.

Extensions and discoveries - In 2022, proved oil reserves were added for drilling and expansion activities predominantly in the U.S.

in the Gulf of Mexico and the Eagle Ford Shale.

Purchases and sales of properties - In 2022, the Company acquired incremental working interest in two producing fields in the U.S.

Gulf of Mexico and divested working interest in one field in the U.S.

Gulf of Mexico and a portion of the Eagle Ford Shale.

2021 Comments for Proved Crude Oil Reserves Changes

Revisions of previous estimates - The positive crude oil reserves revisions in 2021 resulted predominantly from impacts of higher commodity prices in the U.S., which partially reversed the 2020 capital expenditure reductions and improved well performance in the U.S.

Gulf of Mexico.

1 unchanged sentence

at the Eagle Ford Shale and the Gulf of Mexico.

Purchases and sales of properties - In 2021, the Company acquired incremental working interest in Terra Nova offshore Canada and in the U.S.

Purchases and sales of properties - In 2021, the Company acquired incremental working interest in Terra Nova offshore Canada and one field in the U.S.

Gulf of Mexico.

2020 Comments for Proved Crude Oil Reserves Changes

Revisions of previous estimates - The negative crude oil reserves revisions in 2020 resulted predominantly from lower crude oil prices and lower capital allocation to Onshore shale properties over the next 5 years causing the removal of numerous proved undeveloped locations, partially offset by improved well performance in the Gulf of Mexico.

Revisions of previous estimates - The negative crude oil reserves revisions in 2020 resulted predominantly from lower crude oil prices and lower capital expenditures for onshore shale properties over the next 5 years causing the removal of numerous proved undeveloped locations, partially offset by improved well performance in the Gulf of Mexico.

The 2020 negative oil revision in the U.S.

was primarily attributable to lower capital allocation in the Eagle Ford Shale, and the negative revision in Canada was primarily attributable to the Kaybob Duvernay.

was primarily attributable to lower capital expenditures in the Eagle Ford Shale and the negative revision in Canada was primarily attributable to the Kaybob Duvernay.

Lower commodity prices also resulted in negative oil reserves revisions in the U.S offshore and Canada offshore.

3 unchanged sentences

Purchases and sales of properties - In 2020, the Company divested partial working interest in an undeveloped well in the Gulf of Mexico.

2019 Comments for Proved Crude Oil Reserves Changes

Revisions of previous estimates – The 2019 negative crude oil revision in the U.S.

was primarily attributable to changes in well performance in the Eagle Ford Shale, primarily in the Tilden area.

The negative Canadian oil reserves revisions in 2019 resulted from deferrals of capital expenditures at Kaybob Duvernay.

Extensions and discoveries – In 2019, proved oil reserves were added in the U.S.

for drilling activities both in the Eagle Ford Shale and in Canada at Kaybob Duvernay.

Proved oil reserves were also added for drilling activities in both the U.S.

offshore and Canada offshore.

Purchases and sales of properties – In 2019, the Company acquired deepwater Gulf of Mexico producing assets from LLOG.

In addition, the Company acquired incremental ownership in the Chinook field in the Gulf of Mexico.

The Company’s Malaysia assets were divested in 2019.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) – Continued

Schedule 3 – Summary of Proved Natural Gas Liquids (NGL) Reserves Based on Average Prices for 2019 – 2022

( Millions of barrels )

States Canada Malaysia and Other

States Canada Other

Proved developed and undeveloped NGL reserves:

2 unchanged sentences

Extensions and discoveries 2.8 2.7 0.1 —

Purchase of properties 5.2 5.2 — —

Sales of properties ( 0.1 ) ( 0.1 ) — —

Production ( 4.2 ) ( 3.7 ) ( 0.5 ) —

2 unchanged sentences

Extensions and discoveries 2.5 2.4 0.1 —

Purchases of properties 0.1 0.1 — —

Production ( 3.8 ) ( 3.4 ) ( 0.4 ) —

1 unchanged sentence

Revisions of previous estimates 4.4 3.9 0.5 —

Improved recovery 0.2 0.2 — —

Extensions and discoveries 2.5 1.9 0.6 —

Purchases of properties 0.3 0.3 — —

Sales of properties ( 0.2 ) ( 0.2 ) — —

Production ( 3.9 ) ( 3.6 ) ( 0.3 ) —

14 unchanged sentences

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) – Continued

Schedule 3 – Summary of Proved Natural Gas Liquids (NGL) Reserves Based on Average Prices for 2019 – 2022 (Continued)

2022 Comments for Proved Natural Gas Liquids Reserves Changes

Revisions of previous estimates - The positive NGL reserves revisions in 2021 resulted predominantly from impacts of higher commodity prices, which partially reversed the 2020 capital allocation reductions, and improved well performance in the U.S.

Revisions of previous estimates - The positive NGL reserves revisions in 2022 resulted predominantly from improved well performance in the U.S.

Gulf of Mexico and the Eagle Ford Shale as well as in Canada at Kaybob Duvernay.

Extensions and discoveries - In 2022, proved NGL reserves were added for drilling and expansion activities predominantly in the U.S.

at the Gulf of Mexico and the Eagle Ford Shale as well as in Canada at Tupper Montney and Kaybob Duvernay.

Purchases and sales of properties - In 2022, the Company acquired incremental working interest in two producing fields in the U.S.

Gulf of Mexico and divested working interest in one field in the U.S.

Gulf of Mexico and a portion of the Eagle Ford Shale.

2021 Comments for Proved Natural Gas Liquids Reserves Changes

Revisions of previous estimates - The positive NGL reserves revisions in 2021 resulted predominantly from impacts of higher commodity prices, which partially reversed the 2020 capital expenditure reductions and improved well performance in the U.S.

Gulf of Mexico.

4 unchanged sentences

2020 Comments for Proved Natural Gas Liquids Reserves Changes

Revisions of previous estimates - The negative NGL reserves revisions in 2020 resulted predominantly from lower crude oil prices and lower capital allocation to Onshore shale properties over the next 5 years causing the removal of numerous proved undeveloped locations, partially offset by improved well performance in the Gulf of Mexico.

Revisions of previous estimates - The negative NGL reserves revisions in 2020 resulted predominantly from lower crude oil prices and lower capital expenditures for onshore shale properties over the next 5 years causing the removal of numerous proved undeveloped locations, partially offset by improved well performance in the Gulf of Mexico.

The 2020 negative NGL revision in the U.S.

4 unchanged sentences

Purchases and sales of properties - In 2020, the Company divested partial working interest in an undeveloped well in the Gulf of Mexico.

2019 Comments for Proved Natural Gas Liquids Reserves Changes

Revisions of previous estimates – The negative 2019 NGL proved reserves revision in the U.S.

was primarily due to midstream elections in the Eagle Ford Shale resulting in lower NGL yields.

The negative Canadian NGL reserves revisions in 2019 resulted from deferrals of capital expenditures at Kaybob Duvernay.

Extensions and discoveries – In 2019, proved NGL reserves were added in the U.S.

for drilling activities in both the Eagle Ford Shale and in Canada at Kaybob Duvernay area in onshore Canada.

Proved NGL reserves were also added for drilling activities in the U.S.

Purchases and sales of properties – In 2019, the Company acquired deepwater Gulf of Mexico producing assets from LLOG.

In addition, the Company acquired incremental ownership in the Chinook field in the Gulf of Mexico.

The Company’s Malaysia assets were divested in 2019.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) – Continued

Schedule 4 – Summary of Proved Natural Gas Reserves Based on Average Prices for 2019 – 2022

( Billions of cubic feet )

States Canada Malaysia and Other

States Canada Other

Proved developed and undeveloped natural gas reserves:

2 unchanged sentences

Extensions and discoveries 767.2 14.0 753.2 —

Purchases of properties 88.3 88.3 — —

Sales of properties ( 0.7 ) ( 0.7 ) — —

3 unchanged sentences

Extensions and discoveries 556.7 13.5 543.2 —

Purchases of properties 5.4 1.5 3.9 —

Sale of properties ( 4.4 ) — ( 4.4 ) —

Production ( 134.2 ) ( 32.8 ) ( 101.4 ) —

1 unchanged sentence

Revisions of previous estimates ( 309.8 ) 30.7 ( 340.5 ) —

Improved recovery 2.6 2.6 — —

Extensions and discoveries 352.4 15.7 336.7 —

9 unchanged sentences

December 31, 2022 2,4

1,183.1 254.1 928.8 0.2

Proved undeveloped natural gas reserves:

8 unchanged sentences

and Canada, respectively, with 0.8 BCF attributable to the noncontrolling interest in MP GOM.

5 Totals within the tables may not add as a result of rounding.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) – Continued

Schedule 4 – Summary of Proved Natural Gas Reserves Based on Average Prices for 2019 – 2022 (Continued)

2022 Comments for Proved Natural Gas Reserves Changes

Revisions of previous estimates - The negative natural gas reserves revisions in 2022 resulted predominantly from increased royalty rates and accelerated royalty incentive payouts due to higher commodity prices in Canada at Tupper Montney.

Extensions and discoveries - In 2022, proved natural gas reserves were added for drilling and expansion activities predominantly in Canada at Tupper Montney as well as in the U.S.

at the Gulf of Mexico and the Eagle Ford Shale.

Purchases and sales of properties - In 2022, the Company acquired incremental working interest in two producing fields in the U.S.

Gulf of Mexico and divested working interest in one field in the U.S.

Gulf of Mexico and a portion of the Eagle Ford Shale.

2021 Comments for Proved Natural Gas Reserves Changes

Revisions of previous estimates - The negative natural gas reserves revisions in 2021 resulted predominantly from accelerated royalty incentive payouts due to higher commodity prices at Tupper Montney.

4 unchanged sentences

2020 Comments for Proved Natural Gas Reserves Changes

Revisions of previous estimates - The negative natural gas reserves revisions in 2020 resulted predominantly from lower crude oil prices and lower capital allocation to Onshore shale properties over the next 5 years causing the removal of numerous proved undeveloped locations, partially offset by improved well performance in the Gulf of Mexico.

Revisions of previous estimates - The negative natural gas reserves revisions in 2020 resulted predominantly from lower crude oil prices and lower capital expenditures for onshore shale properties over the next 5 years causing the removal of numerous proved undeveloped locations, partially offset by improved well performance in the Gulf of Mexico.

The 2020 negative natural gas revision in the U.S.

was primarily attributable to lower capital allocation in the Eagle Ford Shale which offset positive natural gas revisions in the Gulf of Mexico.

was primarily attributable to lower capital expenditures in the Eagle Ford Shale which offset positive natural gas revisions in the Gulf of Mexico.

The negative revision in Canada was primarily attributable to the Kaybob Duvernay.

2 unchanged sentences

Purchases and sales of properties - In 2020, the Company divested partial working interest in an undeveloped well in the Gulf of Mexico.

2019 Comments for Proved Natural Gas Reserves Changes

Revisions of previous estimates – In 2019, the positive natural gas revisions in Canada resulted from improved performance in the Tupper Montney asset and adjustments relating to royalties.

The positive revision for natural gas reserves in the Eagle Ford Shale was primarily attributable to producing well performance.

Extensions and discoveries – In 2019, proved natural gas reserves were added in the U.S.

for development drilling activities in both the Eagle Ford Shale and in Canada at Tupper Montney and Kaybob Duvernay.

Proved natural gas reserves were also added for drilling activities in both the U.S.

offshore and Canada offshore.

Purchases and sales of properties – In 2019, the Company acquired deepwater Gulf of Mexico producing assets from LLOG.

In addition, the Company acquired incremental ownership in the Chinook field in the Gulf of Mexico.

The Company’s Malaysia assets were divested in 2019.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) – Continued

Schedule 5 – Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development Activities

7 unchanged sentences

Exploration costs 42.2 0.8 70.3 113.3

31.7 0.4 30.1 62.2

Development costs 704.9 208.5 4.3 917.7

513.2 102.4 3.7 619.3

Total costs incurred 877.4 209.3 74.6 1,161.3

10 unchanged sentences

Exploration costs 31.7 0.4 30.1 62.2

34.3 ( 0.4 ) 24.7 58.6

Development costs 513.2 102.4 3.7 619.3

609.2 120.8 6.8 736.8

Total costs incurred 573.6 82.4 33.8 689.8

Charged to expense

Dry hole expense 17.3 — — 17.3

Geophysical and other costs 13.1 0.4 19.3 32.8

7 unchanged sentences

Exploration costs 34.3 ( 0.4 ) 24.7 58.6

44.8 6.4 67.4 118.6

Development costs 609.2 120.8 6.8 736.8

979.0 281.8 21.6 1,282.4

Total costs incurred 650.2 120.9 38.8 809.9

5 unchanged sentences

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

Schedule 5 – Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development Activities – Continued

2 Includes noncash asset retirement costs as follows:

Exploration costs $ — — — —

Development costs 23.7 29.3 1.4 54.4

$ 23.7 29.3 1.4 54.4

Exploration costs $ — — — —

Development costs 12.8 1.9 — 14.7

$ 12.8 1.9 — 14.7

Exploration costs $ — — — —

Development costs 75.8 3.8 — 79.6

$ 75.8 3.8 — 79.6

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) – Continued

Schedule 6 – Results of Operations for Oil and Natural Gas Producing Activities 1

4 unchanged sentences

Natural gas sales 225.3 312.6 — 537.9

Sales of purchased natural gas 0.2 181.5 — 181.7

Total oil and natural gas revenues 3,435.8 761.6 22.8 4,220.2

5 unchanged sentences

Transportation, gathering and processing 142.2 70.5 — 212.7

Costs of purchased natural gas 0.2 171.8 — 172.0

Exploration costs charged to expense 38.8 0.8 80.2 119.8

2 unchanged sentences

Accretion of asset retirement obligations 36.5 9.6 0.1 46.2

Impairment of assets — 171.3 18.0 189.3

Selling and general expenses 20.4 21.9 2.2 44.5

14 unchanged sentences

Transportation, gathering and processing 126.5 60.5 — 187.0

Restructuring expenses 1.2 — — 1.2

Exploration costs charged to expense 30.4 0.4 19.3 50.1

12 unchanged sentences

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

Schedule 6 – Results of Operations for Oil and Gas Producing Activities 1 – Continued

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) – Continued

Schedule 6 – Results of Operations for Oil and Natural Gas Producing Activities 1 (Continued)

( Millions of dollars )

10 unchanged sentences

Transportation, gathering and processing 127.7 44.7 — 172.4

Restructuring expenses 1.2 — — 1.2

Exploration costs charged to expense 35.5 0.6 23.6 59.7

2 unchanged sentences

Accretion of asset retirement obligations 36.6 5.6 — 42.2

Impairment of assets 1,152.5 — 39.7 1,192.2

Selling and general expenses 24.6 17.1 7.1 48.8

7 unchanged sentences

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) – Continued

Schedule 7 – Standardized Measure of Discounted Future Net Cash Flows Relating to

1 unchanged sentence

( Millions of dollars )

States Canada Malaysia & Other Total

States Canada Other Total

December 31, 2022

25 unchanged sentences

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) – Continued

Schedule 7 – Standardized Measure of Discounted Future Net Cash Flows Relating to

18 unchanged sentences

1 Includes noncontrolling interest in MP GOM.

2 The average prices used for 2021 were $ 66.56 per barrel for NYMEX crude oil (WTI), and $ 3.60 per Mcf for natural gas (Henry Hub).The average prices used for 2020 were $ 39.57 per barrel for NYMEX crude oil (WTI), and $ 1.98 per Mcf for natural gas (Henry Hub).

2 The average prices used for 2022 were $ 93.67 per barrel for NYMEX crude oil (WTI) and $ 6.36 per MCF for natural gas (Henry Hub).

The average prices used for 2021 were $ 66.56 per barrel for NYMEX crude oil (WTI) and $ 3.60 per MCF for natural gas (Henry Hub).

The average prices used for 2020 were $ 39.57 per barrel for NYMEX crude oil (WTI) and $ 1.98 per MCF for natural gas (Henry Hub).

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL OIL GAS INFORMATION (UNAUDITED) – Continued

SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) – Continued

Schedule 8 – Capitalized Costs Relating to Oil and Natural Gas Producing Activities

43 unchanged sentences

Income (loss) from continuing operations ( 267.0 ) ( 26.9 ) 138.0 204.7 48.8

Net income including noncontrolling interest ( 508.7 ) ( 324.4 ) ( 266.6 ) ( 162.7 ) ( 1,262.4 )

Net income attributable to Murphy ( 416.1 ) ( 317.2 ) ( 243.5 ) ( 171.9 ) ( 1,148.8 )

Net income (loss) including noncontrolling interest ( 266.8 ) ( 27.0 ) 137.3 204.0 47.5

Net income (loss) attributable to Murphy ( 287.4 ) ( 63.1 ) 108.4 168.4 ( 73.7 )

Income (loss) from continuing operations per Common share ²

6 unchanged sentences

1 Revenue from contracts with customers, “Income (Loss) from continuing operations before income taxes”, “Income (Loss) from continuing operations” and “Net income (loss) including noncontrolling interest” include results attributable to the noncontrolling interest in MP GOM.

2 2020 results include impairment charges of $ 1,206.3 million as a result of declines in future oil and natural gas prices at the time of impairment (principally driven by reduced demand in response to the COVID-19 pandemic - see Risk Factors).

3 The sum of quarterly net income (loss) per share may not agree with total year net income (loss) per share as each quarterly computation is based on the weighted average of common shares outstanding.

2 The sum of quarterly income (loss) from continuing operations per share and net income (loss) per share may not agree with total year net income (loss) per share as each quarterly computation is based on the weighted average of common shares outstanding.

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

2 unchanged sentences

January 1 Charged

to Expense Deductions Other 1

Balance at December 31

to Expense Deductions Other Balance at December 31

Deducted from asset accounts:

7 unchanged sentences

Deferred tax asset valuation allowance 103.1 3.3 — — 106.4

1 The amount in 2019 for deferred tax asset valuation allowance is primarily associated with utilization of foreign tax credit carryforwards.

GLOSSARY ABBREVIATIONS

two-dimensional images created by bouncing sound waves off underground rock formations that are used to determine the best places to drill for hydrocarbons

three-dimensional images created by bouncing sound waves off underground rock formations that are used to determine the best places to drill for hydrocarbons

10 unchanged sentences

working interest

right to drill and produce oil and gas on the leased acreage, as well as the obligation to pay costs

right to drill and produce oil and natural gas on the leased acreage, as well as the obligation to pay costs

ARO - Asset Retirement Obligation

2 unchanged sentences

BOEPD - Barrel of oil equivalent per day

DE&I - Diversity, Equity and Inclusion

ESG - Environmental, Social and Governance

FASB - Financial Accounting Standards Board

Generally Accepted Accounting Principles

GHG - Greenhouse gas

GK - Gumusut/Kakap

LOE - Lease operating expense

MCF - Thousand cubic feet

MMBBL - Million barrels of oil

MMBOE - Million barrels of oil equivalent

3 unchanged sentences

NCI - Noncontrolling interest

NGL - Natural gas liquids

NYMEX - New York Mercantile Exchange

2 unchanged sentences

QRE - Qualified Reserve Estimators

RCF - Revolving Credit Facility

Securities and Exchange Commission

SOFR - Secured Overnight Financing Rate

TGP - Transmission, gathering and processing

WTI - West Texas Intermediate

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 9A. Controls and Procedures