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Item 1. Financial Statements

2023-05-03 compared with 2022-11-03 · 235 added, 444 removed, 491 unchanged (58% of the section changed)

1 unchanged sentence

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (unaudited)

(Thousands of dollars)

September 30,

CONSOLIDATED BALANCE SHEETS

(Thousands of dollars, except share amounts) March 31,

2023 December 31,

5 unchanged sentences

Prepaid expenses 30,983 34,697

Assets held for sale 7,538 15,453

Total current assets 801,841 972,325

33 unchanged sentences

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

September 30, Nine Months Ended

September 30,

(Thousands of dollars, except per share amounts) 2023 2022

3 unchanged sentences

Total revenue from sales to customers 839,968 871,374

Gain (Loss) on derivative instruments 115,191 ( 59,164 ) ( 308,654 ) ( 499,794 )

Loss on derivative instruments – ( 320,777 )

Gain on sale of assets and other income 1,748 2,364

9 unchanged sentences

Accretion of asset retirement obligations 11,157 11,876

Impairment of assets — — — 171,296

Other operating (income) expense ( 27,129 ) ( 32,791 ) 115,726 58,616

Other operating expense 11,988 105,942

Total costs and expenses 544,920 595,085

1 unchanged sentence

Other income (loss)

Other income (expense) 18,301 ( 1,593 ) 21,114 ( 11,459 )

Other expenses ( 73 ) ( 2,495 )

Interest expense, net ( 28,855 ) ( 37,277 )

3 unchanged sentences

Income (loss) from continuing operations 214,035 ( 64,935 )

Loss from discontinued operations, net of income taxes ( 422 ) ( 706 ) ( 1,916 ) ( 600 )

Income (loss) from discontinued operations, net of income taxes 279 ( 551 )

Net income (loss) including noncontrolling interest 214,314 ( 65,486 )

15 unchanged sentences

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended

September 30, Nine Months Ended

September 30,

(Thousands of dollars) 2023 2022

Net income (loss) including noncontrolling interest $ 214,314 $ ( 65,486 )

Other comprehensive (loss) income, net of tax

Net (loss) gain from foreign currency translation ( 102,266 ) ( 31,308 ) ( 135,791 ) 6,534

Other comprehensive income, net of tax

Net gain from foreign currency translation 3,669 18,020

Retirement and postretirement benefit plans 1,098 3,336

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

Other comprehensive (loss) income ( 99,101 ) ( 26,655 ) ( 126,117 ) 21,159

Other comprehensive income 4,767 21,356

Comprehensive income (loss) including noncontrolling interest 219,081 ( 44,130 )

3 unchanged sentences

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Nine Months Ended

September 30,

CONSOLIDATED STATEMENTS OF CASH FLOWS

( UNAUDITED )

Three Months Ended

(Thousands of dollars) 2023 2022

2 unchanged sentences

Adjustments to reconcile net income (loss) to net cash provided by continuing operations activities

Loss from discontinued operations 1,916 600

(Income) loss from discontinued operations ( 279 ) 551

Depreciation, depletion and amortization 195,670 164,124

3 unchanged sentences

Deferred income tax (benefit) expense 49,042 ( 20,253 )

Contingent consideration payment ( 123,965 ) —

Mark to market loss on contingent consideration 3,938 98,126

Mark to market loss (gain) on crude contracts ( 138,707 ) 228,497

Mark to market loss on derivative instruments – 188,509

Long-term non-cash compensation 8,536 17,288

Impairment of assets — 171,296

(Gain) from sale of assets ( 18,871 ) —

Net (increase) decrease in noncash working capital ( 59,874 ) 117,330

Net increase in noncash working capital ( 75,031 ) ( 80,922 )

Other operating activities, net ( 7,110 ) ( 12,512 )

2 unchanged sentences

Property additions and dry hole costs ( 345,319 ) ( 244,908 )

( 800,868 ) ( 541,324 )

Acquisition of oil and gas properties 1

( 125,602 ) ( 22,906 )

Proceeds from sales of property, plant and equipment ( 2,129 ) 270,038

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

Net cash required by investing activities ( 345,319 ) ( 244,908 )

2 unchanged sentences

Repayment of revolving credit facility ( 100,000 ) –

Retirement of debt ( 446,032 ) ( 726,358 )

Debt issuance, net of cost — 541,913

Early redemption of debt cost ( 5,419 ) ( 36,756 )

Distributions to noncontrolling interest ( 9,679 ) ( 39,884 )

3 unchanged sentences

Capital lease obligation payments ( 139 ) ( 158 )

Issue costs of debt facility ( 17 ) –

Net cash required by financing activities ( 114,655 ) ( 133,932 )

Cash Flows from Discontinued Operations

Operating activities ( 14,500 ) —

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

Effect of exchange rate changes on cash and cash equivalents 618 ( 87 )

Net (decrease) increase in cash and cash equivalents ( 55,186 ) 194,461

Net decrease in cash and cash equivalents ( 179,580 ) ( 40,597 )

Cash and cash equivalents at beginning of period 491,963 521,184

Cash and cash equivalents at end of period $ 312,383 $ 480,587

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

See Notes to Consolidated Financial Statements, page 7 .

MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three Months Ended

September 30, Nine Months Ended

September 30,

(Thousands of dollars)

2022 2021 2022 2021

(Thousands of dollars except number of shares) 2023 2022

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

Common Stock – par $ 1.00 , authorized 450,000,000 shares, issued 195,100,628 shares at September 30, 2022 and 195,100,628 shares at September 30, 2021

Common Stock – par $ 1.00 , authorized 450,000,000 shares, issued 195,100,628 shares at March 31, 2023 and 195,100,628 shares at March 31, 2022

Balance at beginning of period 195,101 195,101

16 unchanged sentences

Retirement and postretirement benefit plans, net of income taxes 1,098 3,336

Deferred loss on interest rate hedges reclassified to interest expense, net of income taxes — — — 1,690

Balance at end of period ( 529,919 ) ( 506,355 )

17 unchanged sentences

NATURE OF BUSINESS – Murphy Oil Corporation is an international oil and natural gas exploration and production company that conducts its business through various operating subsidiaries.

The Company primarily produces oil and natural gas in the United States and Canada and conducts oil and natural gas exploration activities worldwide.

The Company primarily produces oil and natural gas in the United States (U.S.) and Canada and conducts oil and natural gas exploration activities worldwide.

In connection with the LLOG Exploration Offshore L.L.C.

and LLOG Bluewater Holdings, L.L.C., (LLOG) acquisition, we hold a 0.5 % interest in two variable interest entities (VIEs), Delta House Oil and Gas Lateral LLC and Delta House Floating Production System (FPS) LLC (collectively Delta House).

and LLOG Bluewater Holdings, L.L.C.

(LLOG) acquisition, we hold a 0.5 % interest in two variable interest entities (VIEs), Delta House Oil and Gas Lateral LLC and Delta House Floating Production System (FPS) LLC (collectively Delta House).

These VIEs have not been consolidated as Murphy is not considered the primary beneficiary.

These non-consolidated VIEs are not material to our financial position or results of operations.

As of September 30, 2022, our maximum exposure to loss was $ 3.2 million (excluding operational impacts), which represents our net investment in Delta House.

As of March 31, 2023, our maximum exposure to loss was $ 3.1 million (excluding operational impacts), which represents our net investment in Delta House.

We have not provided any financial support to Delta House other than amounts previously required by our membership interest.

INTERIM FINANCIAL STATEMENTS – In the opinion of Murphy’s management, the unaudited financial statements presented herein include all accruals necessary to present fairly the Company’s financial position at September 30, 2022 and December 31, 2021, and the results of operations, cash flows and changes in stockholders’ equity for the interim periods ended September 30, 2022 and 2021, in conformity with accounting principles generally accepted in the United States of America (U.S.).

In preparing the financial statements of the Company in conformity with accounting principles generally accepted in the U.S., 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.

INTERIM FINANCIAL STATEMENTS – In the opinion of Murphy’s management, the unaudited financial statements presented herein include all accruals necessary to present fairly the Company’s financial position at March 31, 2023 and December 31, 2022, and the results of operations, statements of operations, cash flows and changes in stockholders’ equity for the interim periods ended March 31, 2023 and 2022, in conformity with U.S generally accepted accounting principles (GAAP).

In preparing the financial statements of the Company in conformity with GAAP, management has made 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.

Consolidated financial statements and notes to consolidated financial statements included in this Form 10-Q report should be read in conjunction with the Company’s 2022 Form 10-K report, as certain notes and other pertinent information have been abbreviated or omitted in this report.

Financial results for the three-month and nine-month periods ended September 30, 2022, are not necessarily indicative of future results.

Financial results for the three-month period ended March 31, 2023 are not necessarily indicative of future results.

Note B – New Accounting Principles and Recent Accounting Pronouncements

Accounting Principles Adopted

Income Taxes .

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, which removes certain exceptions for investments, intraperiod allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes.

The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

Implementation on a prospective or retrospective basis varies by specific topics within the ASU.

The Company adopted this guidance in the first quarter of 2021 and it did not have a material impact on its consolidated financial statements.

Recent Accounting Pronouncements

None affecting the Company.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)

Note C – Revenue from Contracts with Customers

6 unchanged sentences

The exception to this is the reporting of the noncontrolling interest in MP Gulf of Mexico, LLC (MP GOM) as prescribed by ASC 810-10-45.

- 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 (GOM).

- In the U.S., 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 are transferred to the customer at the delivery point.

1 unchanged sentence

Canada - In Canada, contracts include long-term floating commodity index priced and natural gas physical forward sales fixed-price contracts.

For the offshore business in Canada, contracts are based on index prices and revenue is recognized at the time of vessel load, based on the volumes on the bill of lading and point of custody transfer.

For the offshore business in Canada, contracts are based on index prices and revenue is recognized at the time

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note C – Revenue from Contracts with Customers (Continued)

of vessel load, based on the volumes on the bill of lading and point of custody transfer.

The Company also purchases natural gas in Canada to meet certain sales commitments.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)

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

Disaggregation of Revenue

The Company reviews performance based on two key geographical segments and between onshore and offshore sources of revenue within these geographies.

For the three-month periods ended September 30, 2022, and 2021, the Company recognized $ 1,166 million and $ 687.5 million, respectively, from total revenue from sales to customers, from sales of oil, natural gas liquids and natural gas.

For the nine-month periods ended September 30, 2022, and 2021, the Company recognized $ 3,234.0 million and $ 2,038.9 million, respectively, from total revenue from sales to customers, from sales of oil, natural gas liquids and natural gas.

For the three-month periods ended March 31, 2023, and 2022, the Company recognized $ 840.0 million and $ 871.4 million, respectively, from total revenue from sales to customers, from sales of oil, natural gas liquids and natural gas.

Three Months Ended

September 30, Nine Months Ended

September 30,

(Thousands of dollars) 2023 2022

5 unchanged sentences

Offshore 16,130 28,832

4,867 — 18,503 —

Total crude oil and condensate revenue 672,117 702,846

13 unchanged sentences

Sales of purchased natural gas

United States

Offshore — — 181 —

Onshore 43,737 36,846

1 unchanged sentence

Total revenue from sales to customers 839,968 871,374

Gain (Loss) on derivative instruments 115,191 ( 59,164 ) ( 308,654 ) ( 499,794 )

Loss on derivative instruments – ( 320,777 )

Gain on sale of assets and other income 1,748 2,364

Total revenues and other income $ 841,716 $ 552,961

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.

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

Contract Balances and Asset Recognition

As of September 30, 2022, and December 31, 2021, receivables from contracts with customers, net of royalties and associated payables, on the balance sheet from continuing operations, were $ 210.1 million and $ 169.8 million, respectively.

As of March 31, 2023, and December 31, 2022, receivables from contracts with customers, net of royalties and associated payables, on the balance sheets from continuing operations, were $ 205.2 million and $ 201.1 million, respectively.

Payment terms for the Company’s sales vary across contracts and geographical regions, with the majority of the cash receipts required within 30 days of billing.

Based on a forward-looking expected loss model in accordance with ASU 2016-13, the Company did

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)

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

not recognize any impairment losses on receivables or contract assets arising from customer contracts during the reporting periods.

The Company has not entered into any revenue contracts that have financing components as of September 30, 2022.

Based on a forward-looking expected loss model in accordance with ASU 2016-13, the Company did not recognize any impairment losses on receivables or contract assets arising from customer contracts during the reporting periods.

The Company has not entered into any revenue contracts that have financing components as of March 31, 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note C – Revenue from Contracts with Customers (Continued)

The Company does not employ sales incentive strategies such as commissions or bonuses for obtaining sales contracts.

8 unchanged sentences

The underlying reason for entering a fixed price contract is generally unrelated to anticipated future prices or other observable data and serves a particular purpose in the Company’s long-term strategy.

As of September 30, 2022, the Company had the following sales contracts in place which are expected to generate revenue from sales to customers for a period of more than 12 months starting at the inception of the contract:

Current Long-Term Contracts Outstanding at September 30, 2022

As of March 31, 2023, the Company had the following sales contracts in place which are expected to generate revenue from sales to customers for a period of more than 12 months starting at the inception of the contract:

Current Long-Term Contracts Outstanding at March 31, 2023

Location Commodity End Date Description Approximate Volumes

2 unchanged sentences

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 2024 Contracts to sell natural gas at CAD fixed prices 100 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 34 MMCFD

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

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

Canada Natural Gas Q4 2024 Contracts to sell natural gas at CAD index prices 28 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 BOED

Canada Natural Gas Q4 2027 Contracts to sell natural gas at CAD index prices 10 MMCFD

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

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

1 unchanged sentence

Exploratory Wells

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)

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

As of September 30, 2022, the Company had total capitalized exploratory well costs for continuing operations pending the determination of proved reserves of $ 181.5 million.

The following table reflects the net changes in capitalized exploratory well costs during the nine-month periods ended September 30, 2022 and 2021.

Under Financial Accounting Standards Board 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.

As of March 31, 2023, the Company had total capitalized exploratory well costs for continuing operations pending the determination of proved reserves of $ 196.5 million.

The following table reflects the net changes in capitalized exploratory well costs during the three-month periods ended March 31, 2023 and 2022.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note D – Property, Plant and Equipment (Continued)

(Thousands of dollars) 2023 2022

2 unchanged sentences

Capitalized exploratory well costs charged to expense – ( 10,473 )

Balance at September 30 $ 181,461 186,623

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.

There were no hydrocarbons found in this well.

Balance at March 31 $ 196,545 $ 172,706

Capital well additions of $ 24.7 million are primarily related to Oso-1 well (Atwater Valley 138) in the Gulf of Mexico.

In the first quarter of 2023, drilling of the Oso-1 well was temporarily suspended prior to reaching the objective.

The Company plans to return to the well in the third quarter of 2023.

There were no capitalized well costs charged to expense for the three months ended March 31, 2023.

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 have been capitalized.

The projects are aged based on the last well drilled in the project.

September 30,

(Thousands of dollars) Amount No.

6 unchanged sentences

$ 196,545 9 8 $ 172,706 13 7

Of the $ 172.6 million of exploratory well costs capitalized more than one year at September 30, 2022, $ 95.5 million is in Vietnam, $ 54.9 million is in the U.S., $ 15.5 million is in Mexico, $ 2.8 million is in Brunei, and $ 3.9 million is in Canada.

Of the $ 156.3 million of exploratory well costs capitalized more than one year at March 31, 2023, $ 97.2 million was in Vietnam, $ 37.0 million was in the U.S., $ 14.7 million was in Mexico, $ 4.7 million was in Canada, and $ 2.7 million was 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.

There were no impairments in the first nine months of 2022.

In 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 partners, of operating and production plans at end of the first quarter 2021.

Later in 2021, the Company sanctioned an asset life extension project and acquired an additional 7.525 % working interest at Terra Nova following a commercial agreement to extend the life of the field.

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 $ 22.2 million, resulting in a total net payment to the buyer of $ 2.2 million.

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

An $ 18.8 million gain on sale was recorded in the period related to the sale.

Also in the third quarter, the Company completed the disposition of the CA-2 asset in Brunei for contingent consideration valued at approximately $ 8.7 million.

No gain or loss was recorded related to this sale.

During the first quarter of 2021, the King’s Quay FPS was sold to ArcLight Capital Partners, LLC (ArcLight) for proceeds of $ 267.7 million, which reimbursed 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 $ 77.1 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 $ 48.5 million, net of closing adjustments.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)

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

In the second quarter of 2021, the Company acquired an additional 3.5 % working interest in the Lucius field for a purchase price of $ 22.5 million, net of closing adjustments.

Note E – Assets Held for Sale and Discontinued Operations

The Company has accounted for its former U.K.

refining and marketing and Malaysian exploration and production operations as discontinued operations for all periods presented.

The results of operations associated with discontinued operations for the three-month and nine-month periods ended September 30, 2022 and 2021 were as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

(Thousands of dollars) 2022 2021 2022 2021

Revenues $ — 144 $ 10 801

Costs and expenses

Other costs and expenses 422 850 1,926 1,401

Loss before taxes ( 422 ) ( 706 ) ( 1,916 ) ( 600 )

Income tax expense — — — —

Loss from discontinued operations $ ( 422 ) ( 706 ) $ ( 1,916 ) ( 600 )

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

The remaining balance of assets held for sale on the Consolidated Balance Sheet as of September 30, 2022 consists only of the Company’s former headquarters office building in El Dorado, Arkansas.

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

(Thousands of dollars) September 30,

2022 December 31,

Current assets

Property, plant, and equipment, net 7,538 15,453

Total current assets associated with assets held for sale $ 7,538 15,453

Note F – Financing Arrangements and Debt

As of September 30, 2022, the Company had a $ 1.6 billion revolving credit facility (RCF).

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

At September 30, 2022, the Company had no outstanding borrowings under the RCF and $ 53.9 million of outstanding letters of credit, which reduce the borrowing capacity of the RCF.

At September 30, 2022, the interest rate in effect on borrowings under the facility was 4.84 %.

At September 30, 2022 and 2021, the Company was in compliance with all covenants related to the RCF.

In September 2022, the Company paid $ 5.5 million to complete an open market repurchase of $ 7.1 million aggregate principal amount of its 6.125 % senior notes due 2042 (2042 Notes).

There were no additional cash costs related to the September 2022 debt extinguishment on the 2042 Notes for the three months and nine months ended September 30, 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 5.750 % and 6.375 % senior notes due 2025 and 2028 (2025 Notes and 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 three months and nine months ended September 30, 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 three months and nine months ended September 30, 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 nine months ended September 30, 2022.

The cash costs of $ 3.4 million are shown as a financing activity on the Consolidated Statement of Cash Flows for the nine months ended September 30, 2022.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)

Note F – Financing Arrangements and Debt (Contd.)

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, beginning July 15, 2021.

The proceeds of the $ 550.0 million notes, along with cash on hand, were used to redeem $ 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 nine months ended September 30, 2021.

The cash costs of $ 34.2 million are shown as a financing activity on the Consolidated Statement of Cash Flows for the nine months ended September 30, 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 nine months ended September 30, 2021.

The cash costs of $ 2.6 million are shown as a financing activity on the Consolidated Statement of Cash Flows for the nine months ended September 30, 2021.

There were no impairments in the three months ended March 31, 2023 or 2022.

Note E – Financing Arrangements and Debt

As of March 31, 2023, the Company had an $ 800 million revolving credit facility (RCF).

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 % senior notes due 2025 (2025 Notes) as at February 15, 2025 exceeds $ 50.0 million, in which case, the RCF will expire on that date.

At March 31, 2023, the Company had no outstanding borrowings under the RCF and $ 30.3 million of outstanding letters of credit, which reduce the borrowing capacity of the RCF.

At March 31, 2023, the interest rate in effect on borrowings under the RCF would have been 7.40 %.

At March 31, 2023, the Company was in compliance with all covenants related to the RCF.

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

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

On October 31, 2022, the Company issued a notice of partial redemption with respect to $ 200.0 million aggregate principal amount of its 5.750 % 2025 Notes.

The Company will redeem the 2025 Notes at the applicable redemption price set forth in the indenture governing the 2025 Notes, plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

The redemption date of the 2025 Notes will be November 30, 2022.

Note G – Other Financial Information

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note F – Other Financial Information

Additional disclosures regarding cash flow activities are provided below.

Nine Months Ended

September 30,

Three Months Ended

(Thousands of dollars) 2023 2022

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

(Increase) decrease in accounts receivable ¹ $ ( 130,792 ) 75,100

(Increase) in accounts receivable $ ( 3,976 ) $ ( 117,928 )

(Increase) decrease in inventories ( 9,296 ) ( 4,541 )

(Increase) in prepaid expenses ( 8,561 ) ( 6,682 )

Increase in accounts payable and accrued liabilities ¹ 61,139 40,687

(Increase) decrease in prepaid expenses 3,813 ( 515 )

Increase (decrease) in accounts payable and accrued liabilities ¹ ( 63,800 ) 40,426

Increase (decrease) in income taxes payable ( 1,772 ) 1,636

Net (increase) decrease in noncash operating working capital $ ( 59,874 ) 117,330

Net (increase) in noncash operating working capital $ ( 75,031 ) $ ( 80,922 )

Supplementary disclosures:

4 unchanged sentences

Asset retirement costs capitalized $ 2,396 $ 3,889

$ 29,327 36,300

Decrease in capital expenditure accrual 34,853 31,301

1 Excludes receivable/payable balances relating to mark-to-market of derivative instruments and contingent consideration relating to acquisitions.

2 2021 Excludes non-cash capitalized cost offset by Terra Nova impairment of $ 74.4 million and a gain in other operating income of $ 71.8 million following a commercial agreement to sanction an asset life extension project at Terra Nova in the third quarter of 2021, which extended the life of Terra Nova by approximately 10 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)

Note H – Employee and Retiree Benefit Plans

(Increase) decrease in capital expenditure accrual 15,973 ( 49,352 )

1 Excludes payable balances relating to mark-to-market of derivative instruments and contingent consideration relating to acquisitions.

Note G – Employee and Retiree Benefit Plans

The Company has defined benefit pension plans that are noncontributory and cover most full-time employees.

3 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 meet the requirements of local laws and tax regulations.

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

1 unchanged sentence

the life insurance benefits are noncontributory.

The table that follows provides the components of net periodic benefit expense for the three-month and nine-month periods ended September 30, 2022 and 2021.

Three Months Ended September 30,

Pension Benefits Other Postretirement Benefits

(Thousands of dollars) 2022 2021 2022 2021

Service cost $ 2,129 1,770 $ 292 328

Interest cost 5,163 4,258 574 521

Expected return on plan assets ( 7,999 ) ( 6,038 ) — —

Amortization of prior service cost (credit) 582 155 ( 133 ) —

Recognized actuarial loss (gain) 3,822 5,269 ( 77 ) ( 8 )

Net periodic benefit expense $ 3,697 5,414 $ 656 841

Nine Months Ended September 30,

The table that follows provides the components of net periodic benefit expense for the three-month periods ended March 31, 2023 and 2022.

Three Months Ended March 31,

Pension Benefits Other Postretirement Benefits

6 unchanged sentences

Net periodic benefit expense $ 4,519 $ 3,656 $ 92 $ 656

The components of net periodic benefit expense, other than the service cost, are recorded in Other income (expense) in the Consolidated Statements of Operations.

During the nine-month period ended September 30, 2022, the Company made contributions of $ 30.7 million to its defined benefit pension and postretirement benefit plans.

The components of net periodic benefit expense, other than the service cost, are recorded in “Other expenses” in the Consolidated Statements of Operations.

During the three-month period ended March 31, 2023, the Company made contributions of $ 9.5 million to its defined benefit pension and postretirement benefit plans.

Remaining funding in 2023 for the Company’s defined benefit pension and postretirement plans is anticipated to be $ 27.6 million.

Note I – Incentive Plans

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note H – Incentive Plans

The costs resulting from all share-based and cash-based incentive plans are recognized as an expense in the Consolidated Statements of Operations using a fair value-based measurement method over the periods that the awards vest.

The Annual Incentive Plan (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.

The Annual Incentive Plan (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.

5 unchanged sentences

Share awards that have been canceled, expired, forfeited or otherwise not issued under an award shall not count as shares issued under the Plan.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)

Note I – Incentive Plans (Contd.)

During the first nine months of 2022, the Committee granted the following awards from the 2020 Long-Term Plan:

During the three months ended March 31, 2023, the Committee granted the following awards from the 2020 Long-Term Plan:

2020 Long-Term Incentive Plan

1 unchanged sentence

Performance Based RSUs 1

580,600 February 1, 2022 $ 47.37 Monte Carlo

Performance Based RSUs 1

15,100 July 1, 2022 $ 37.77 Monte Carlo

Time Based RSUs 2

273,400 February 1, 2022 $ 32.12 Average Stock Price

409,160 January 31, 2023 $ 60.46 Monte Carlo

Time Based RSUs 2

5,000 July 1, 2022 $ 29.80 Average Stock Price

499,220 January 31, 2023 43.27 Average Stock Price

Cash Settled RSUs 3

674,300 February 1, 2022 $ 32.12 Average Stock Price

123,230 January 31, 2023 43.27 Average Stock Price

1 Performance based RSUs are scheduled to vest over a three year performance period.

2 unchanged sentences

The Company also has a Stock Plan for Non-Employee Directors that permits the issuance of restricted stock, restricted stock units and stock options or a combination thereof to the Company’s Non-Employee Directors.

The 2021 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.

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

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

During the first nine months of 2022, the Committee granted the following awards to Non-Employee Directors:

During the three months ended March 31, 2023, the Committee granted the following awards to Non-Employee Directors:

2021 Stock Plan for Non-Employee Directors

5 unchanged sentences

The employee receives net shares, after applicable withholding obligations, upon each stock option exercise.

The actual income tax benefit realized from the tax deductions related to stock option exercises of the share-based payment arrangements were immaterial for the nine-month period ended September 30, 2022.

The actual income tax benefit realized from the tax deductions related to stock option exercises of the share-based payment arrangements were immaterial for the three-month period ended March 31, 2023.

Amounts recognized in the financial statements with respect to share-based plans are shown in the following table:

Nine Months Ended

September 30,

Three Months Ended

(Thousands of dollars) 2023 2022

1 unchanged sentence

Related income tax benefit recognized in income 1,581 2,272

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note H – Incentive Plans (Continued)

Certain incentive compensation granted to the Company’s named executive officers, to the extent their total compensation exceeds $ 1.0 million per executive per year, is not eligible for a U.S.

income tax deduction under the Tax Cuts and Jobs Act (2017 Tax Act).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)

Note J – Earnings Per Share

Net income (loss) attributable to Murphy was used as the numerator in computing both basic and diluted income per Common share for the three-month and nine-month periods ended September 30, 2022 and 2021.

Note I – Earnings Per Share

Net income (loss) attributable to Murphy was used as the numerator in computing both basic and diluted income per Common share for the three-month periods ended March 31, 2023 and 2022.

The following table reports the weighted-average shares outstanding used for these computations.

Three Months Ended September 30, Nine Months Ended

September 30,

Three Months Ended

(Weighted-average shares) 2023 2022

2 unchanged sentences

Diluted method 157,388,566 154,916,004

1 Due to a net loss recognized by the Company for the nine-month period ended September 30, 2021, no unvested stock awards were included in the computation of diluted earnings per share because the effect would have been antidilutive.

The following table reflects certain options to purchase shares of common stock that were outstanding during the periods presented but were not included in the computation of diluted shares above because the incremental shares from the assumed conversion were antidilutive.

Three Months Ended September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Antidilutive stock options excluded from diluted shares — 1,316,222 163,800 1,502,758

Weighted average price of these options $ — $ 34.42 $ 49.65 $ 34.97

Note K – Income Taxes

1 Due to a net loss recognized by the Company for the three-month period ended March 31, 2022, no unvested stock awards were included in the computation of diluted earnings per share because the effect would have been antidilutive.

Note J – Income Taxes

The Company’s effective income tax rate is calculated as the amount of income tax expense (benefit) divided by income (loss) from continuing operations before income taxes.

For the three-month and nine-month periods ended September 30, 2022 and 2021, the Company’s effective income tax rates were as follows:

Three months ended September 30, 21.7 % 21.1 %

Nine months ended September 30, 21.2 % 28.6 %

The effective tax rate for the three-month period ended September 30, 2022, was above the U.S.

statutory tax rate of 21% primarily due to several factors, including:

the effects of income generated in foreign tax jurisdictions, certain of which have income tax rates higher than the U.S.

Federal rate;

state tax expense;

and certain expenses, including exploration and other expenses in certain foreign jurisdictions, for which no income tax benefits are currently available.

These impacts were partially offset by no tax applied to the pre-tax income of the noncontrolling interest in MP GOM.

The effective tax rate for the three-month period ended September 30, 2021, was above the statutory tax rate of 21% primarily due to income generated in Canada, which has a higher tax rate, offset by no tax applied to the pre-tax income of the noncontrolling interest in MP GOM, which has the impact of decreasing the effective tax rate on income.

The effective tax rate for the nine-month period ended September 30, 2022, was above the U.S.

statutory tax rate of 21% primarily due to several factors, including:

the effects of income generated in foreign tax jurisdictions, certain of which have income tax rates higher than the U.S.

Federal rate;

state tax expense;

and certain expenses, including exploration and other expenses in certain foreign jurisdictions, for which no income tax benefits are currently available.

These impacts were mostly offset by no tax applied to the pre-tax income of the noncontrolling interest in MP GOM.

The effective tax rate for the nine-month period ended September 30, 2021, was above the statutory tax rate of 21% primarily due to no tax applied to the pretax income of the noncontrolling interest in MP GOM, which has the impact of increasing the effective tax rate on an overall loss.

For the three-month periods ended March 31, 2023 and 2022, the Company’s effective income tax rates were as follows:

Three months ended March 31, 20.1 % 20.7 %

The effective tax rate for the three-month period ended March 31, 2023, was below the U.S.

statutory tax rate of 21% primarily due to no tax applied to the pre-tax income of the noncontrolling interest in MP GOM, offset by the effects of income generated in foreign tax jurisdictions, certain of which have income tax rates higher than the U.S.

Federal rate and certain expenses, including exploration and other expenses in certain foreign jurisdictions, for which no income tax benefits are currently available.

The effective tax rate for the three-month period ended March 31, 2022, was below the statutory tax rate of 21% primarily due to exploration expenses in certain foreign jurisdictions in which no income tax benefit is currently available, offset by no tax applied to the pre-tax income of the noncontrolling interest in MP GOM.

The Company’s tax returns in multiple jurisdictions are subject to audit by taxing authorities.

These audits often take years to complete and settle.

Although the Company believes that recorded liabilities for unsettled issues are adequate, additional gains

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)

Note K– Income Taxes (Contd.)

or losses could occur in future years from resolution of outstanding unsettled matters.

Additionally, the Company could be required to pay amounts into an escrow account as any matters are identified and appealed with the relevant taxing authorities.

As of September 30, 2022, the earliest years remaining open for audit and/or settlement in our major taxing jurisdictions are as follows:

United States – 2016;

Although the Company believes that recorded liabilities for unsettled issues are adequate, additional gains or losses could occur in future years from resolution of outstanding unsettled matters.

Additionally, the Company has paid amounts into escrow, and may from time to time pay more amounts into escrow, in order to continue tax disputes with the relevant taxing authorities.

As of March 31, 2023, the earliest years remaining open for audit and/or settlement in our major taxing jurisdictions are as follows:

Canada – 2016;

2 unchanged sentences

The Company believes current recorded liabilities are adequate.

Note L – Financial Instruments and Risk Management

Murphy uses derivative instruments, such as swap and zero-cost commodity price collar contracts, to manage certain risks related to commodity prices, foreign currency exchange rates and interest rates.

Note K – Financial Instruments and Risk Management

Murphy, at times, uses derivative instruments, to manage certain risks related to commodity prices, foreign currency exchange rates and interest rates.

The use of derivative instruments for risk management is covered by operating policies and is closely monitored by the Company’s senior management.

2 unchanged sentences

The Company has a risk management control system to monitor commodity price risks and any derivatives obtained to manage a portion of such risks.

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.

For accounting purposes, the Company has not designated commodity and foreign currency derivative contracts as

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note K – Financial Instruments and Risk Management (Continued)

hedges, and therefore, it recognizes all gains and losses on these derivative contracts in its Consolidated Statements of Operations.

Commodity Price Risks

The Company has entered into crude oil swap 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 September 30, 2022, volumes per day associated with outstanding crude oil derivative contracts and the weighted average prices for these contracts are as follows:

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:

During the first quarter of 2023, the Company did no t have any outstanding crude oil derivative contracts.

During the first quarter of 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 was above the ceiling price or payments to the Company if the NYMEX average closing price was below the floor price.

Foreign Currency Exchange Risks

The Company is subject to foreign currency exchange risk associated with operations in countries outside the U.S.

The Company had no foreign currency exchange derivatives outstanding at September 30, 2022 and 2021.

At September 30, 2022 and December 31, 2021, the fair value of derivative instruments not designated as hedging instruments are presented in the following table.

(Thousands of dollars) Asset (Liability) Derivatives Fair Value

Type of Derivative Contract Balance Sheet Location September 30, 2022 December 31, 2021

Commodity swaps Accounts payable $ ( 84,933 ) ( 239,882 )

Commodity collars Accounts payable ( 20,954 ) ( 19,533 )

Commodity collars Accounts receivable — 4,280

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)

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

For the three-month and nine-month periods ended September 30, 2022 and 2021, the gains and losses recognized in the Consolidated Statements of Operations for derivative instruments not designated as hedging instruments are presented in the following table.

Gain (Loss) Gain (Loss)

(Thousands of dollars) Statement of Operations Location Three Months Ended September 30, Nine Months Ended September 30,

Type of Derivative

Contract 2022 2021 2022 2021

Commodity swaps Gain (Loss) on derivative instruments $ 50,089 ( 43,235 ) $ ( 152,822 ) ( 483,865 )

Commodity collars Gain (Loss) on derivative instruments 65,102 ( 15,929 ) ( 155,832 ) ( 15,929 )

The Company had no foreign currency exchange derivatives outstanding at March 31, 2023 and 2022.

For the three-month periods ended March 31, 2023 and 2022, the gains and losses recognized in the Consolidated Statements of Operations for derivative instruments not designated as hedging instruments are presented in the following table.

(Thousands of dollars) Statement of Operations Location Three Months Ended March 31,

Type of Derivative Contract 2023 2022

Commodity swaps Loss on derivative instruments $ – $ ( 156,359 )

Commodity collars Loss on derivative instruments – ( 164,418 )

Fair Values – Recurring

4 unchanged sentences

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

The carrying value of assets and liabilities recorded at fair value on a recurring basis at September 30, 2022 and December 31, 2021, are presented in the following table.

September 30, 2022 December 31, 2021

The carrying value of assets and liabilities recorded at fair value on a recurring basis at March 31, 2023 and December 31, 2022, are presented in the following table.

March 31, 2023 December 31, 2022

(Thousands of dollars) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

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

$ — — — — — 4,280 — 4,280

Commodity swaps $ — 84,933 — 84,933 — 239,882 — 239,882

Commodity collars — 20,954 — 20,954 — 19,533 — 19,533

Contingent consideration — — 212,860 212,860 — — 196,151 196,151

Nonqualified employee savings plan 15,069 – – 15,069 15,135 – – 15,135

$ 15,069 $ – $ – $ 15,069 $ 15,135 $ – $ – $ 15,135

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

The fair value of commodity (WTI crude oil) collars was determined using an option pricing model.

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

The contingent consideration, related to 2018 and 2019 U.S.

Gulf of Mexico acquisitions, is valued using a Monte Carlo simulation model.

For the nine months ended September 30, 2022 and 2021, the pre-tax income effect of changes in the fair value of the contingent consideration was an expense of $ 98.5 million and $ 105.1 million respectively and is recorded in Other operating (income) expense in the Consolidated Statements of Operations.

In the nine months ended September 30, 2022, the pre-tax income effect of changes in the fair value of the contingent consideration exclude cash payments of $ 81.7 million, which reduced the value of the contingent consideration liability.

Contingent consideration is payable annually in years 2022 to 2026.

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.

The fair value of this liability was based on quoted prices for these equity securities and mutual funds.

The pre-tax 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)

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

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.

As of March 31, 2023, there were no outstanding commodity (WTI crude oil) swaps and collars contracts subject to fair value measurement.

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.

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.

Under the terms of the transaction, in addition to the consideration paid, Murphy had an

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note K – Financial Instruments and Risk Management (Continued)

obligation to pay additional contingent consideration of up to $ 200 million in the event that certain revenue thresholds were 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.

The obligation period related to LLOG revenue-related contingent consideration ended in 2022, with final payments being made in the first half of 2023.

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 had an obligation to pay additional contingent consideration of up to $ 150 million if certain price and production thresholds were 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 of December 31, 2022, the $ 150 million obligation limit was achieved.

As at March 31, 2023 and 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 or reaching time limitations which ended in 2022.

As a result, the related liabilities as at March 31, 2023 and December 31, 2022, of $ 25.0 million and $ 192.7 million, respectively, were no longer subject to fair value measurement.

The liability remaining is included in “Other accrued liabilities” in the Consolidated Balance Sheets.

During the three months ended March 31, 2023, the Company paid a total of $ 171.7 million in contingent consideration payments, thereby reducing the liability balance.

In the Consolidated Statement of Cash Flows, $ 124.0 million is shown in operating activities and $ 47.7 million is shown in financing activities.

The remaining $ 25.0 million of contingent consideration liability at March 31, 2023, balance was paid in April 2023.

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

There were no offsetting positions recorded at September 30, 2022 and December 31, 2021.

Note M – Accumulated Other Comprehensive Loss

The components of Accumulated other comprehensive loss on the Consolidated Balance Sheets at December 31, 2021 and September 30, 2022 and the changes during the nine-month period ended September 30, 2022, are presented net of taxes in the following table.

There were no offsetting positions recorded at March 31, 2023 and December 31, 2022.

The following table presents the carrying amounts and estimated fair values of financial instruments held by the Company at March 31, 2023 and December 31, 2022.

The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties.

The table excludes cash and cash equivalents, trade accounts receivable, trade accounts payable and accrued expenses, all of which had fair values approximating carrying amounts.

The fair value of current and long-term debt was estimated based on rates offered to the Company at that time for debt of the same maturities.

The Company has off-balance sheet exposures relating to certain letters of credit.

The fair value of these, which represents fees associated with obtaining the instruments, was nominal.

March 31, December 31,

(Thousands of dollars) Carrying

Value Carrying

Financial assets (liabilities):

Current and long-term debt $ ( 1,823,676 ) ( 1,725,190 ) $ ( 1,823,139 ) ( 1,668,216 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note L – Accumulated Other Comprehensive Loss

The components of “Accumulated other comprehensive loss” on the Consolidated Balance Sheets at December 31, 2022 and March 31, 2023 and the changes during the three-month period ended March 31, 2023, are presented net of taxes in the following table.

(Thousands of dollars) Foreign

4 unchanged sentences

Components of other comprehensive income (loss):

Before reclassifications to income and retained earnings ( 135,791 ) — ( 135,791 )

Before reclassifications to income 3,669 – 3,669

Reclassifications to income ¹ – 1,098 1,098

Net other comprehensive income (loss) 3,669 1,098 4,767

Balance at September 30, 2022 $ ( 447,686 ) ( 206,142 ) ( 653,828 )

1 Reclassifications before taxes of $ 12,293 are included in the computation of net periodic benefit expense for the nine-month period ended September 30, 2022.

See Note H for additional information.

Related income taxes of $ 2,619 are included in Income tax expense (benefit) for the nine-month period ended September 30, 2022.

Note N – Environmental and Other Contingencies

Balance at March 31, 2023 $ ( 414,561 ) $ ( 115,358 ) $ ( 529,919 )

1 Reclassifications before taxes of $ 1,334 thousand are included in the computation of net periodic benefit expense for the three-month period ended March 31, 2023.

See Note G for additional information.

Related income taxes of $ 236 thousand are included in Income tax expense (benefit) for the three-month period ended March 31, 2023.

Note M – Environmental and Other Contingencies

The Company’s operations and earnings have been and may be affected by various forms of governmental action both in the United States and throughout the world.

9 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;

1 unchanged sentence

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, HEALTH AND SAFETY 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.

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 greenhouse gas emissions;

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

wildlife, habitat and water protection;

2 unchanged sentences

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 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 insured, subject the Company to substantial expense, including both the cost to comply with applicable laws and 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.

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 greenhouse gas emissions (including methane emissions).

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 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note M– Environmental and Other Contingencies (Continued)

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,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)

Note N– Environmental and Other Contingencies (Contd.)

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.

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.

20 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.

Note O – Business Segments

Note N – Business Segments

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

1 unchanged sentence

Corporate, including interest income, other gains and losses (including foreign exchange gains/losses and realized and unrealized gains/losses on commodity price derivatives), interest expense and unallocated overhead, is shown in the table to reconcile the business segments to consolidated totals.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)

Total Assets at September 30, 2022 Three Months Ended September 30, 2022 Three Months Ended September 30, 2021

(Millions of dollars) External

Revenues Income

(Loss) External

Revenues Income

Exploration and production ¹

United States $ 6,901.0 973.8 481.5 565.2 168.1

Canada 2,076.0 209.6 41.4 124.6 73.9

Other 237.4 4.8 ( 5.8 ) — ( 5.2 )

Total exploration and production 9,214.4 1,188.2 517.1 689.8 236.8

Corporate 1,014.0 115.2 57.4 ( 59.1 ) ( 98.8 )

Continuing operations 10,228.4 1,303.4 574.5 630.7 138.0

Discontinued operations, net of tax 0.8 — ( 0.4 ) — ( 0.7 )

Total $ 10,229.2 1,303.4 574.1 630.7 137.3

Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021

The Company has accounted for its former United Kingdom (U.K.) and U.S.

refining and marketing operations as discontinued operations for all periods presented.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note N - Business Segments (Continued)

Total Assets at March 31, 2023 Three Months Ended March 31, 2023 Three Months Ended March 31, 2022

(Millions of dollars) External

11 unchanged sentences

Total $ 10,188.5 $ 841.7 $ 214.3 $ 553.0 $ ( 65.5 )

1 Additional details about results of oil and natural gas operations are presented in the tables on page 25 and 26.

1 Additional details about results of oil and natural gas operations are presented in the table on page 22 .

MANAGEMENT’S DISCUSSION AND ANALYSIS

In the third quarter of 2022, crude oil and natural gas benchmark prices increased compared to the same period of 2021.

Prices were higher in the third quarter of 2022 as compared to the same period in 2021, principally due to demand recovery from COVID-19 and geopolitical uncertainty and market disruption following the Russian invasion of Ukraine.

Prices were lower in the third quarter 2022 as compared to the second quarter of 2022 primarily due to increased supply related to the Strategic Petroleum Reserve oil release in the third quarter, ongoing concerns related to possible economic slowdown and lower demand from China.

Similar to the overall inflation in the wider economy, the oil and gas industry, and hence the Company, is observing higher costs for goods and services used in exploration and production operations.

In the first quarter of 2023, crude oil and natural gas benchmark prices decreased compared to the same period of 2022.

Prices were lower in the first quarter of 2023 as compared to the same period in 2022 principally due to concerns on the economy and potential recession, as well as short-term downward demand pressure related to global refinery outages resulting from maintenance activities in the first quarter of 2023.

Similar to the overall inflation in the wider economy, the oil and natural gas industry, and hence the Company, is observing higher costs for goods and services used in exploration and production operations.

Murphy continues to manage input costs through its dedicated procurement department focused on managing supply chain and other costs.

For the three months ended September 30, 2022, West Texas Intermediate (WTI) crude oil prices averaged approximately $91.55 per barrel (compared to $108.41 in the second quarter of 2022 and $70.56 in the third quarter of 2021).

The average price for WTI in September of 2022 was approximately $83.80 per barrel, reflecting a 17% increase from September of 2021 and a 27% reduction from the average price from June of 2022.

The average price in October 2022 was $87.03 per barrel.

As of close on November 1, 2022, the NYMEX WTI forward curve prices for the remainder of 2022 and 2023 were $88.37 and $81.53 per barrel, respectively.

For the three months ended September 30, 2022, the Company produced 196 thousand barrels of oil equivalent per day (including noncontrolling interest) from continuing operations and invested $296.1 million in capital expenditures (on a value of work done basis), which included $79.1 million in acquisition capital, primarily for an additional working interests in the GOM Lucius field.

The Company reported net income from continuing operations of $574.5 million for the three months ended September 30, 2022;

this amount includes income attributable to noncontrolling interest of $45.6 million and after-tax gains on unrealized mark to market revaluations on commodity price swap and collar positions and contingent consideration of $188.8 million and $24.8 million, respectively.

In the third quarter of 2022, the Company reduced debt by $247.6 million aggregate principal amount of its 6.875%, 5.750%, 6.375%, 6.125% senior notes due 2024, 2025, 2028, 2042 for the principal amount plus cash costs of $2.0 million.

In 2021, the Company executed a series of financial transactions which redeemed the remaining notes due 2022 and partially redeemed the 2024 Notes.

In August 2022, the Company acquired an additional 3.37% working interest (there is no noncontrolling interest) in the Lucius field in the Gulf of Mexico for a purchase price of $77.1 million.

For the nine months ended September 30, 2022, the Company produced 173 thousand barrels of oil equivalent per day (including noncontrolling interest) from continuing operations and invested $918.0 million in capital expenditures (on a value of work done basis), which included $125.6 million related to acquisition capital and $25.3 million related to the Cutthroat exploration well in Brazil deferred from 2021.

The Company reported net income from continuing operations of $920.0 million for the nine months ended September 30, 2022.

This amount includes income attributable to noncontrolling interest of $152.4 million, after-tax gains on unrealized mark to market revaluations on commodity price swap and collar positions of $109.5 million and after-tax losses on contingent consideration of $77.5 million.

In the second quarter of 2022, the Company achieved first production from the at the Khaleesi, Mormont, Samurai field development project in the Gulf of Mexico;

with production flowing through the Murphy-operated King’s Quay floating production facility.

In addition, the Company acquired an additional 11.0% working interest (with no noncontrolling interest) in the Kodiak field in the Gulf of Mexico for a purchase price of $48.5 million.

In the second quarter of 2022, the Company redeemed $200.0 million aggregate principal amount of its 6.875% 2024 Notes for the principal amount plus cash costs of $3.4 million.

For the three months ended September 30, 2021, the Company produced 163 thousand barrels of oil equivalent per day (including noncontrolling interest) from continuing operations;

this includes the impact of Hurricane Ida on U.S.

Gulf of Mexico production of 14.5 thousand barrels of oil equivalent per day (including NCI).

The Company invested $110.5 million in capital expenditures (on a value of work done basis), in the three months ended September 31, 2021.

The Company reported net income from continuing operations of $138.0 million for the third quarter of 2021.

This amount included income attributable to noncontrolling interest of $28.9 million, after-tax gains on unrealized mark to market revaluations on commodity price swap and collar positions of $44.1 million, an after-tax non-cash credit of $53.6 million related to the deferral of asset retirement obligations and after-tax losses on contingent consideration of $22.4 million.

MANAGEMENT’S DISCUSSION AND ANALYSIS (Contd.)

Summary (contd.)

For the nine months ended September 30, 2021, the Company produced 170 thousand barrels of oil equivalent per day (including noncontrolling interest) from continuing operations;

this includes the impact of Hurricane Ida on U.S.

Gulf of Mexico production of 4.9 thousand barrels of oil equivalent per day (including NCI).

The Company invested $568.7 million in capital expenditures (on a value of work done basis) in the nine months ended September 30, 2021, which included $18.0 million to fund the development of the King’s Quay floating production system (which was subsequently reimbursed by Arclight).

The Company reported net loss from continuing operations of $156.0 million for the nine months ended September 30, 2021.

This amount included income attributable to noncontrolling interest of $85.5 million, after-tax impairment charges of $128.0 million, an after-tax non-cash credit of $53.6 million related to the deferral of asset retirement obligations and after-tax losses on unrealized mark to market revaluations on commodity price derivative positions and contingent consideration of $180.5 million and $83.0 million, respectively.

In the first quarter of 2021, the Company’s subsidiary, Murphy Exploration & Production Company - USA, closed a transaction with ArcLight Capital Partners, LLC (ArcLight) for the sale of Murphy’s entire 50% interest in the King’s Quay FPS and associated export lateral pipelines.

The transaction reimbursed Murphy for its share of project costs from inception to closing with proceeds of $267.7 million.

For the three months ended March 31, 2023, West Texas Intermediate (WTI) crude oil prices averaged approximately $76.13 per barrel (compared to $94.29 in the first quarter of 2022 and $82.65 in the fourth quarter of 2022).

The average price for WTI in March of 2023 was approximately $73.37 per barrel, reflecting a 32% reduction from March of 2022 and a 4% reduction from the average price from December of 2022.

The average price in April 2023 was $79.44 per barrel.

As of close on May 1, 2023, the NYMEX WTI forward curve prices for the remainder of 2023 and 2024 were $74.52 and $70.76 per barrel, respectively.

For the three months ended March 31, 2023, the Company produced 179.7 thousand barrels of oil equivalent per day (including noncontrolling interest) from continuing operations and invested $336.0 million in capital expenditures (on a value of work done basis).

The Company reported net income from continuing operations of $214.0 million for the three months ended March 31, 2023;

this amount includes income attributable to noncontrolling interest of $22.7 million and after-tax losses for the contingent consideration adjustments of $3.1 million.

For the three months ended March 31, 2022, the Company produced 149.9 thousand barrels of oil equivalent per day (including noncontrolling interest) from continuing operations.

The Company invested $304.7 million in capital expenditures (on a value of work done basis) in the three months ended March 31, 2022.

The Company reported a net loss from continuing operations of $64.9 million for the three months ended March 31, 2022.

This amount included income attributable to noncontrolling interest of $47.9 million and after-tax losses on unrealized mark to market revaluations on commodity price derivative positions and contingent consideration adjustments of $148.9 million and $77.2 million, respectively.

MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)

Results of Operations (Continued)

Results of Operations

1 unchanged sentence

Income (Loss)

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Millions of dollars) 2023 2022

5 unchanged sentences

1 The Company has presented its former U.K.

refining and marketing and Malaysian exploration and production operations as discontinued operations in its consolidated financial statements.

refining and marketing operations as discontinued operations in its consolidated financial statements.

Exploration and Production

1 unchanged sentence

Income (Loss)

Three Months Ended

September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Millions of dollars) 2023 2022

4 unchanged sentences

Total $ 242.7 $ 231.4

MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)

Results of Operations (Continued)

Other key performance metrics

2 unchanged sentences

Management uses EBITDA and Adjusted EBITDA internally to evaluate the Company’s operational performance and trends between periods and relative to its industry competitors.

EBITDA and adjusted EBITDA are non-GAAP financial measures and should not be considered a substitute for Net income (loss) or Cash provided by operating activities as determined in accordance with

MANAGEMENT’S DISCUSSION AND ANALYSIS (Contd.)

Results of Operations (contd.)

accounting principles generally accepted in the United States of America.

Also presented below is adjusted EBITDA per barrel of oil equivalent sold, a non-GAAP financial metric.

Management uses EBITDA per barrel of oil equivalent sold to evaluate the Company’s profitability of one barrel of oil equivalent sold in the period.

EBITDA and Adjusted EBITDA are non-GAAP financial measures and should not be considered a substitute for Net income (loss) or Cash provided by operating activities as determined in accordance with GAAP.

Also presented below is Adjusted EBITDA per barrel of oil equivalent sold.

Management uses Adjusted EBITDA per barrel of oil equivalent sold to evaluate the Company’s profitability of one barrel of oil equivalent sold in the period.

Adjusted EBITDA per barrel of oil equivalent sold is a non-GAAP financial metric.

Three Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars, except per barrel of oil equivalents sold)

2022 2021 2022 2021

Net income (loss) attributable to Murphy (GAAP) $ 191.6 $ (113.3)

3 unchanged sentences

EBITDA attributable to Murphy (Non-GAAP) 463.6 63.6

Mark-to-market (gain) loss on derivative instruments (239.1) (55.9) (138.7) 228.5

Mark-to-market (gain) loss on contingent consideration (31.4) 28.4 98.5 105.1

Foreign exchange gain (20.7) (2.8) (28.7) (1.5)

Gain on sale of assets ¹ (15.2) — (15.2) —

Accretion of asset retirement obligations ¹ 9.9 10.5

Discontinued operations loss 0.4 0.7 1.9 0.6

Impairment of assets — — — 171.3

Unutilized rig charges — 3.2 — 8.5

Asset retirement obligation gains — (71.8) — (71.8)

Mark-to-market loss on contingent consideration 3.9 98.1

Foreign exchange loss 0.4 –

Discontinued operations (income) loss (0.3) 0.6

Mark-to-market loss on derivative instruments – 188.5

Adjusted EBITDA attributable to Murphy (Non-GAAP) $ 477.5 $ 361.3

Total barrels of oil equivalents sold from continuing operations attributable to Murphy (thousands of barrels) 15,541 12,565

Adjusted EBITDA per barrel of oil equivalents sold $ 36.35 20.23 $ 36.25 21.45

1 Depreciation, depletion, and amortization expense, gain on sale of assets and accretion of asset retirement obligations used in the computation of Adjusted EBITDA exclude the portion attributable to the non-controlling interest (NCI).

MANAGEMENT’S DISCUSSION AND ANALYSIS (Contd.)

Results of Operations (contd.)

OIL AND GAS OPERATING RESULTS – THREE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

Net income (loss) attributable to Murphy per barrel of oil equivalents sold $ 12.33 $ (9.02)

Adjusted EBITDA per barrel of oil equivalents sold (Non-GAAP) $ 30.72 $ 28.75

1 Depreciation, depletion, and amortization expense and accretion of asset retirement obligations used in the computation of Adjusted EBITDA exclude the portion attributable to the non-controlling interest (NCI).

MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)

Results of Operations (Continued)

OIL AND GAS OPERATING RESULTS – THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(Millions of dollars) United

Canada Other Total

Three Months Ended September 30, 2022

Three Months Ended March 31, 2023

Oil and gas sales and other operating revenues $ 682.3 $ 112.1 $ 3.6 $ 798.0

18 unchanged sentences

Results of operations (excluding Corporate segment) $ 226.0 $ 21.9 $ (5.2) $ 242.7

Three Months Ended September 30, 2021

Oil and gas sales and other operating revenues $ 565.2 124.6 — 689.8

Lease operating expenses 96.7 33.4 0.1 130.2

Severance and ad valorem taxes 10.8 0.8 — 11.6

Transportation, gathering and processing 28.4 16.2 — 44.6

Depreciation, depletion and amortization 147.0 39.7 0.1 186.8

Accretion of asset retirement obligations 9.3 2.9 — 12.2

Exploration expenses

Dry holes and previously suspended exploration costs 17.3 — — 17.3

Geological and geophysical — — 0.3 0.3

Other exploration 1.3 0.1 0.5 1.9

18.6 0.1 0.8 19.5

Undeveloped lease amortization 3.1 0.1 1.8 5.0

Total exploration expenses 21.7 0.2 2.6 24.5

Selling and general expenses 4.2 4.0 1.2 9.4

Other 39.1 (71.7) 2.0 (30.6)

Results of operations before taxes 208.0 99.1 (6.0) 301.1

Income tax provisions 39.9 25.2 (0.8) 64.3

Results of operations (excluding Corporate segment) $ 168.1 73.9 (5.2) 236.8

1 Includes results attributable to a noncontrolling interest in MP GOM.

MANAGEMENT’S DISCUSSION AND ANALYSIS (Contd.)

Results of Operations (contd.)

OIL AND GAS OPERATING RESULTS – NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(Millions of dollars) United

Canada Other Total

Nine Months Ended September 30, 2022

Three months ended March 31, 2022

Oil and gas sales and other operating revenues $ 707.4 $ 129.3 – $ 836.7

18 unchanged sentences

Results of operations (excluding Corporate segment) $ 252.9 $ 22.7 $ (44.2) $ 231.4

Nine months ended September 30, 2021

Oil and gas sales and other operating revenues $ 1,704.4 349.2 — 2,053.6

Lease operating expenses 303.3 100.0 0.4 403.7

Severance and ad valorem taxes 30.6 1.6 — 32.2

Transportation, gathering and processing 90.5 46.7 — 137.2

Depreciation, depletion and amortization 476.6 128.0 1.1 605.7

Accretion of asset retirement obligations 27.5 7.4 — 34.9

Impairment of assets — 171.3 — 171.3

Exploration expenses

Dry holes and previously suspended exploration costs 17.9 — — 17.9

Geological and geophysical 2.7 — 1.3 4.0

Other exploration 4.2 0.2 9.6 14.0

24.8 0.2 10.9 35.9

Undeveloped lease amortization 7.9 0.2 5.8 13.9

Total exploration expenses 32.7 0.4 16.7 49.8

Selling and general expenses 15.0 12.0 4.7 31.7

Other 133.5 (67.7) (1.2) 64.6

Results of operations before taxes 594.7 (50.5) (21.7) 522.5

Income tax provisions (benefits) 112.9 (12.8) 0.8 100.9

Results of operations (excluding Corporate segment) $ 481.8 (37.7) (22.5) 421.6

1 Includes results attributable to a noncontrolling interest in MP GOM.

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-Q

Item 1. Financial Statements