What changed in this filing

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Item 1. Financial Statements

2023-08-03 compared with 2023-05-03 · 215 added, 245 removed, 481 unchanged (49% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

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

(Thousands of dollars, except share amounts) June 30,

2023 December 31,

42 unchanged sentences

Three Months Ended

June 30, Six Months Ended

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

17 unchanged sentences

Total costs and expenses 649,711 549,449 1,194,631 1,144,534

Operating income (loss) from continuing operations 296,796 ( 42,124 )

Operating income from continuing operations 164,877 551,608 461,673 509,484

Other income (loss)

Other expenses ( 73 ) ( 2,495 )

Other (expenses) income ( 7,694 ) 5,308 ( 7,767 ) 2,813

Interest expense, net ( 29,856 ) ( 41,385 ) ( 58,711 ) ( 78,662 )

Total other loss ( 37,550 ) ( 36,077 ) ( 66,478 ) ( 75,849 )

Income (loss) from continuing operations before income taxes 267,868 ( 81,896 )

Income tax expense (benefit) 53,833 ( 16,961 )

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

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

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

Net income attributable to noncontrolling interest 22,670 47,850

NET INCOME (LOSS) ATTRIBUTABLE TO MURPHY $ 191,644 $ ( 113,336 )

INCOME (LOSS) PER COMMON SHARE – BASIC

Income from continuing operations before income taxes 127,327 515,531 395,195 433,635

Income tax expense 34,870 105,084 88,703 88,123

Income from continuing operations 92,457 410,447 306,492 345,512

Loss from discontinued operations, net of income taxes ( 602 ) ( 943 ) ( 323 ) ( 1,494 )

Net income including noncontrolling interest 91,855 409,504 306,169 344,018

Net (loss) income attributable to noncontrolling interest ( 6,431 ) 58,947 16,239 106,797

NET INCOME ATTRIBUTABLE TO MURPHY $ 98,286 $ 350,557 $ 289,930 $ 237,221

INCOME PER COMMON SHARE – BASIC

Continuing operations $ 0.63 2.27 $ 1.86 $ 1.54

Discontinued operations – ( 0.01 ) – ( 0.01 )

Net income (loss) $ 1.23 $ ( 0.73 )

Net income $ 0.63 2.26 $ 1.86 $ 1.53

INCOME (LOSS) PER COMMON SHARE – DILUTED

1 unchanged sentence

Discontinued operations – ( 0.01 ) – ( 0.01 )

Net income (loss) $ 1.22 $ ( 0.73 )

Net income $ 0.62 $ 2.23 $ 1.84 $ 1.50

Cash dividends per common share $ 0.275 $ 0.175 $ 0.550 $ 0.325

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(Thousands of dollars) 2023 2022 2023 2022

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

Other comprehensive income, net of tax

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

Net income including noncontrolling interest $ 91,855 $ 409,504 $ 306,169 $ 344,018

Other comprehensive (loss) income, net of tax

Net gain (loss) from foreign currency translation 33,083 ( 51,545 ) 36,752 ( 33,525 )

Retirement and postretirement benefit plans 1,053 3,173 2,151 6,509

Other comprehensive income 4,767 21,356

Other comprehensive (loss) income 34,136 ( 48,372 ) 38,903 ( 27,016 )

Comprehensive income (loss) including noncontrolling interest $ 125,991 $ 361,132 $ 345,072 $ 317,002

4 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

( UNAUDITED )

Three Months Ended

Six Months Ended

(Thousands of dollars) 2023 2022

Operating Activities

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

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

(Income) loss from discontinued operations ( 279 ) 551

Net income including noncontrolling interest $ 306,169 $ 344,018

Adjustments to reconcile net income to net cash provided by continuing operations activities

Loss from discontinued operations 323 1,494

Depreciation, depletion and amortization 411,337 359,980

2 unchanged sentences

Accretion of asset retirement obligations 22,521 23,439

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

Deferred income tax expense 92,557 66,691

Contingent consideration payment ( 139,574 ) –

2 unchanged sentences

Long-term non-cash compensation 22,076 40,467

Gain from sale of assets – ( 35 )

Net increase in noncash working capital ( 15,340 ) ( 121,598 )

3 unchanged sentences

Property additions and dry hole costs ( 694,753 ) ( 552,825 )

Acquisition of oil and natural gas properties – ( 46,491 )

Proceeds from sales of property, plant and equipment – 47

Net cash required by investing activities ( 694,753 ) ( 599,269 )

2 unchanged sentences

Repayment of revolving credit facility ( 200,000 ) ( 100,000 )

Retirement of debt – ( 200,000 )

Early redemption of debt cost – ( 3,438 )

Distributions to noncontrolling interest ( 15,983 ) ( 94,854 )

13 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(Thousands of dollars except number of shares) 2023 2022 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 March 31, 2023 and 195,100,628 shares at March 31, 2022

Balance at beginning of period 195,101 195,101

Exercise of stock options – –

Balance at end of period 195,101 195,101

$ – $ – $ – $ –

Common Stock – par $ 1.00 , authorized 450,000,000 shares, issued 195,100,628 shares at June 30, 2023 and 195,100,628 shares at June 30, 2022

Balance at beginning and end of period 195,101 195,101 195,101 195,101

Capital in Excess of Par Value

Balance at beginning of period 857,000 880,537 893,578 926,698

Exercise of stock options, including income tax benefits ( 184 ) ( 7,220 )

Restricted stock transactions and other ( 2,321 ) ( 3,415 ) ( 42,415 ) ( 55,804 )

3 unchanged sentences

Balance at beginning of period 6,204,217 5,082,034 6,055,498 5,218,670

Net income (loss) attributable to Murphy 191,644 ( 113,336 )

Net income attributable to Murphy 98,286 350,557 289,930 237,221

Cash dividends paid ( 42,942 ) ( 27,191 ) ( 85,867 ) ( 50,491 )

8 unchanged sentences

Awarded restricted stock, net of forfeitures 2,319 2,138 28,195 39,107

Exercise of stock options 25,876 4,672

Balance at end of period – 38,945,622 shares of Common Stock in 2023 and 39,677,584 shares of Common Stock in 2022, at cost

18 unchanged sentences

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

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.

As of June 30, 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 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).

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 June 30, 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 June 30, 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.

1 unchanged sentence

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 period ended March 31, 2023 are not necessarily indicative of future results.

Financial results for the three-month and six-month periods ended June 30, 2023 are not necessarily indicative of future results.

Note B – New Accounting Principles and Recent Accounting Pronouncements

9 unchanged sentences

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 Gulf of Mexico, LLC (MP GOM) as prescribed by ASC 810-10-45.

The exception to

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note C – Revenue from Contracts with Customers (Continued)

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 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.

2 unchanged sentences

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

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.

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

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.

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 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.

For the three-month periods ended June 30, 2023, and 2022, the Company recognized $ 812.9 million and $ 1,196.2 million, respectively, from total revenue from sales to customers, from sales of oil, natural gas liquids and natural gas.

For the six-month periods ended June 30, 2023, and 2022, the Company recognized $ 1,652.8 million and $ 2,067.6 million, respectively, from total revenue from sales to customers, from sales of oil, natural gas liquids and natural gas.

Three Months Ended

June 30, Six Months Ended

(Thousands of dollars) 2023 2022 2023 2022

5 unchanged sentences

Offshore 24,871 38,354 41,001 67,186

– 13,636 3,644 13,636

Total crude oil and condensate revenue 702,103 969,774 1,374,220 1,672,620

13 unchanged sentences

Sales of purchased natural gas

United States

Offshore – 181 – 181

Onshore 13,014 49,758 56,751 86,604

5 unchanged sentences

Contract Balances and Asset Recognition

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 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.

As of June 30, 2023, and December 31, 2022, receivables from contracts with customers, net of royalties and associated payables, on the balance sheets from continuing operations, were $ 197.4 million and $ 201.1 million,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note C – Revenue from Contracts with Customers (Continued)

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.

The Company has not entered into any revenue contracts that have financing components as of June 30, 2023.

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 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

As of June 30, 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 June 30, 2023

Location Commodity End Date Description Approximate Volumes

14 unchanged sentences

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)

As of June 30, 2023, the Company had total capitalized exploratory well costs for continuing operations pending the determination of proved reserves of $ 193.4 million.

The following table reflects the net changes in capitalized exploratory well costs during the six-month periods ended June 30, 2023 and 2022.

(Thousands of dollars) 2023 2022

2 unchanged sentences

Capitalized exploratory well costs charged to expense ( 26,188 ) ( 10,472 )

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.

Balance at June 30 $ 193,405 $ 178,421

Capital additions of $ 47.7 million in 2023 are primarily related to Oso #1 well (Atwater Valley 138) and Longclaw GC 433 #1 in the Gulf of Mexico and LDV-4X in Vietnam.

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.

Capitalized well costs charged to dry hole expense of $ 26.2 million for the six months ended June 30, 2023 are related to Cholula -1 EXP well in Mexico and Chinook #7 exploration well in the Gulf of Mexico.

The preceding table excludes well costs of $ 70.3 million incurred and expensed directly to dry hole during the six months ended June 30, 2023, related to the Chinook #7 exploration well 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 have been capitalized.

8 unchanged sentences

$ 193,405 7 6 $ 178,421 15 8

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.

Of the $ 184.9 million of exploratory well costs capitalized more than one year at June 30, 2023, $ 112.4 million was in Vietnam, $ 65.0 million was in the U.S., $ 4.8 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 three months ended March 31, 2023 or 2022.

There were no impairments in the six months ended June 30, 2023 or 2022.

On July 31, 2023 the Company entered into a purchase and sale agreement to sell a portion of our operated non-core Kaybob Duvernay assets and all of our non-operated Placid Montney assets, located in Alberta, Canada for net cash consideration of C$ 150 million.

The transaction is anticipated to close in the third quarter of 2023, subject to closing conditions and adjustments.

No gain or loss is anticipated in relation to this transaction.

These assets did not meet the accounting criteria to be disclosed as held for sale as of June 30, 2023 and continue to be classified as “Property, plant and equipment” on the Company’s Consolidated Balance Sheets.

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.

As of June 30, 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note E – Financing Arrangements and Debt (Continued)

which case, the RCF will expire on that date.

As of June 30, 2023, the Company had $ 248.7 million outstanding on the 2025 Notes.

At June 30, 2023, the Company had no outstanding borrowings under the RCF and $ 30.4 million of outstanding letters of credit, which reduce the borrowing capacity of the RCF.

At June 30, 2023, the interest rate in effect on borrowings under the RCF would have been 7.74 %.

At June 30, 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note F – Other Financial Information

Additional disclosures regarding cash flow activities are provided below.

Three Months Ended

Six Months Ended

(Thousands of dollars) 2023 2022

3 unchanged sentences

(Increase) decrease in prepaid expenses 8,291 ( 1,693 )

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

Increase in accounts payable and accrued liabilities ¹ 6,642 147,790

Increase (decrease) in income taxes payable ( 3,005 ) 5,501

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

Net increase in noncash working capital $ ( 15,340 ) $ ( 121,598 )

Supplementary disclosures:

6 unchanged sentences

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

Note G – Asset Retirement Obligations

The asset retirement obligations liabilities (ARO) recognized by the Company 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 ARO for the six-month periods ended June 30, 2023 and 2022 is shown in the following table.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note G – Asset Retirement Obligations (Continued)

(Thousands of dollars) June 30, 2023 June 30, 2022

Balance at beginning of year $ 911,653 971,893

Accretion 22,521 23,439

Liabilities incurred 4,805 9,007

Revisions of previous estimates ( 822 ) —

Liabilities settled ( 64,978 ) ( 26,144 )

Changes due to translation of foreign currencies 2,920 ( 3,650 )

Balance at end of year 876,099 974,545

Current portion of liability at June 30 ¹ ( 32,771 ) ( 110,653 )

Noncurrent portion of liability at June 30 $ 843,328 863,892

1 Included in “Other accrued liabilities” on the Consolidated Balance Sheets.

The estimation of future ARO is based on a number of assumptions requiring professional judgment.

The Company cannot predict the type of revisions to these assumptions that may be required in future periods due to the availability of additional information such as:

prices for oil field services, technological changes, governmental requirements and other factors.

Note H – Employee and Retiree Benefit Plans

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

7 unchanged sentences

the life insurance benefits are noncontributory.

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,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The table that follows provides the components of net periodic benefit expense for the three-month and six-month periods ended June 30, 2023 and 2022.

Three Months Ended June 30,

Pension Benefits Other Postretirement Benefits

3 unchanged sentences

Expected return on plan assets ( 8,254 ) ( 7,954 ) – –

Estimated defined contribution provision 54 – – –

Amortization of prior service cost (credit) 155 579 ( 133 ) ( 133 )

Recognized actuarial loss (gain) 2,414 3,822 ( 767 ) ( 78 )

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 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.

Total net periodic benefit expense $ 4,583 3,715 106 655

Six Months Ended June 30,

Pension Benefits Other Postretirement Benefits

(Thousands of dollars) 2023 2022 2023 2022

Service cost $ 3,300 $ 4,258 $ 264 $ 584

Interest cost 17,071 10,382 1,748 1,148

Expected return on plan assets ( 16,448 ) ( 16,092 ) – –

Estimated defined contribution provision 108 — – –

Amortization of prior service cost (credit) 310 1,179 ( 266 ) ( 266 )

Recognized actuarial loss (gain) 4,815 7,644 ( 1,548 ) ( 155 )

Total net periodic benefit expense $ 9,156 $ 7,371 $ 198 $ 1,311

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

During the six-month period ended June 30, 2023, the Company made contributions of $ 18.9 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 $ 18.2 million.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note H – Incentive Plans

Note I – 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.

6 unchanged sentences

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

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

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

Share awards that have been

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note I – Incentive Plans (Continued)

canceled, expired, forfeited or otherwise not issued under an award shall not count as shares issued under the Plan.

During the six months ended June 30, 2023, the Committee granted the following awards from the 2020 Long-Term Plan:

2020 Long-Term Incentive Plan

12 unchanged sentences

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

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

During the six months ended June 30, 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 three-month period ended March 31, 2023.

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 six-month period ended June 30, 2023.

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

Three Months Ended

Six Months Ended

(Thousands of dollars) 2023 2022

1 unchanged sentence

Related income tax benefit recognized in income 3,444 5,822

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).

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note J – Earnings Per Share

Net income attributable to Murphy was used as the numerator in computing both basic and diluted income per Common share for the three-month and six-month periods ended June 30, 2023 and 2022.

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

Three Months Ended

June 30, Six Months Ended

(Weighted-average shares) 2023 2022 2023 2022

2 unchanged sentences

Diluted method 157,298,962 157,455,130 157,308,022 157,851,722

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

1 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.

Six Months Ended

Antidilutive stock options excluded from diluted shares $ – $ 234,000

Weighted average price of these options $ – $ 49.65

Note K – 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 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.

For the three-month and six-month periods ended June 30, 2023 and 2022, the Company’s effective income tax rates were as follows:

Three months ended June 30, 27.4 % 20.4 %

Six months ended June 30, 22.4 % 20.3 %

The effective tax rate for the three-month period ended June 30, 2023, was above the U.S.

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

no tax benefit applied to the pre-tax loss of the noncontrolling interest in MP GOM;

state tax expense;

stock-based compensation;

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 June 30, 2022, was below the statutory tax rate of 21% primarily due to no tax applied to the pre-tax income of the noncontrolling interest in MP GOM.

The effective tax rate for the six-month period ended June 30, 2023 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 six-month period ended June 30, 2022 was below the 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 exploration expenses in certain foreign jurisdictions in which no income tax benefit is currently available.

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

1 unchanged sentence

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:

Additionally, the Company has paid amounts into escrow, and may from time to time pay more amounts

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note K – Income Taxes (Continued)

into escrow, in order to continue tax disputes with the relevant taxing authorities.

As of June 30, 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 K – Financial Instruments and Risk Management

Note L – 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.

3 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

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.

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.

Commodity Price Risks

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.

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

During the second 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.

3 unchanged sentences

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 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,

The Company had no foreign currency exchange derivatives outstanding at June 30, 2023 and 2022.

For the three-month and six-month periods ended June 30, 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.

Gain (Loss) Gain (Loss)

(Thousands of dollars) Statements of Operations Location Three Months Ended

June 30, Six Months Ended

Type of Derivative Contract 2023 2022 2023 2022

7 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 March 31, 2023 and December 31, 2022, are presented in the following table.

March 31, 2023 December 31, 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note L – Financial Instruments and Risk Management (Continued)

The carrying value of assets and liabilities recorded at fair value on a recurring basis at June 30, 2023 and December 31, 2022, are presented in the following table.

June 30, 2023 December 31, 2022

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

4 unchanged sentences

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 June 30, 2023, there were no outstanding commodity West Texas Intermediate (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.

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 Sheets.

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;

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

1 unchanged sentence

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.

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

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

6 unchanged sentences

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.

As of December 31, 2022, the $ 150 million obligation limit was achieved and paid in the first half of 2023.

As at June 30, 2023, the Company had no remaining liabilities relating to prior acquisitions from PAI and LLOG.

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 reaching contractual thresholds or time limitations that ended in 2022.

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

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

During the six months ended June 30, 2023, the Company paid a total of $ 199.8 million in contingent consideration payments, thereby reducing the liability balance to nil as at June 30, 2023.

In the Consolidated Statement of Cash Flows, $ 139.6 million is shown in “Operating Activities” and $ 60.2 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 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.

There were no offsetting positions recorded at June 30, 2023 and December 31, 2022.

The following table presents the carrying amounts and estimated fair values of financial instruments held by the Company at June 30, 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.

1 unchanged sentence

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 Company has

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note L – Financial Instruments and Risk Management (Continued)

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,

June 30, December 31,

(Thousands of dollars) Carrying

Value Carrying

Financial assets (liabilities):

Financial liabilities:

Current and long-term debt $ 1,824,226 $ 1,728,376 $ 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.

Note M – Accumulated Other Comprehensive Loss

The components of “Accumulated other comprehensive loss” on the Consolidated Balance Sheets at December 31, 2022 and June 30, 2023 and the changes during the six-month period ended June 30, 2023 are presented net of taxes in the following table.

(Thousands of dollars) Foreign

7 unchanged sentences

Net other comprehensive income (loss) 36,752 2,151 38,903

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

Balance at June 30, 2023 $ ( 381,478 ) $ ( 114,305 ) $ ( 495,783 )

1 Reclassifications before taxes of $ 2,669 thousand are included in the computation of net periodic benefit expense for the six-month period ended June 30, 2023.

See Note H for additional information.

Related income taxes of $ 518 thousand are included in “Income tax expense (benefit)” on the Consolidated Statements of Operations for the six-month period ended June 30, 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note N – 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.

15 unchanged sentences

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;

the emission and discharge of such materials to the environment, including Greenhouse Gas (GHG) emissions;

wildlife, habitat and water protection;

6 unchanged sentences

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).

12 unchanged sentences

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.

Under existing laws, the Company could be required to investigate, remove or remediate previously disposed wastes (including wastes disposed of or released by prior owners or operators), to investigate and clean up contaminated property (including contaminated groundwater) or to perform remedial plugging operations to prevent future contamination.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note N – Environmental and Other Contingencies (Continued)

prevent future contamination.

Certain of these historical properties are in various stages of negotiation, investigation, and/or cleanup, and the Company is investigating the extent of any such liability and the availability of applicable defenses.

10 unchanged sentences

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 N – Business Segments

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note O – Business Segments

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

3 unchanged sentences

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

Total Assets at June 30, 2023 Three Months Ended June 30, 2023 Three Months Ended June 30, 2022

(Millions of dollars) External

11 unchanged sentences

Total $ 10,249.5 $ 814.6 91.9 $ 1,101.1 409.5

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 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 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

Murphy’s income (loss) by type of business is presented below.

Income (Loss)

Three Months Ended March 31,

(Millions of dollars) 2023 2022

Exploration and production $ 242.7 $ 231.4

Corporate and other (28.7) (296.3)

Income (loss) from continuing operations $ 214.0 (64.9)

Discontinued operations ¹ 0.3 (0.6)

Net income (loss) including noncontrolling interest $ 214.3 $ (65.5)

1 The Company has presented its former U.K.

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

Exploration and Production

Results of E&P continuing operations are presented by geographic segment below.

Income (Loss)

Three Months Ended March 31,

(Millions of dollars) 2023 2022

Six Months Ended June 30, 2023 Six Months Ended June 30, 2022

(Millions of dollars) External

Revenues Income

(Loss) External

Revenues Income

Exploration and production ¹

2 unchanged sentences

Other 3.6 ( 37.6 ) 13.7 ( 47.7 )

Total exploration and production 1,656.2 381.7 2,071.8 766.6

Corporate 0.1 ( 75.2 ) ( 417.8 ) ( 421.1 )

Continuing operations 1,656.3 306.5 1,654.0 345.5

Discontinued operations, net of tax – ( 0.3 ) – ( 1.5 )

Total $ 1,656.3 306.2 $ 1,654.0 344.0

MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)

Results of Operations (Continued)

Other key performance metrics

The Company uses other operational performance and income metrics to review operational performance.

The table below presents Earnings before interest, taxes, depreciation and amortization (EBITDA) and Adjusted EBITDA.

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 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

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

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

Income tax expense (benefit) 53.8 (17.0)

Interest expense, net 28.9 37.3

Depreciation, depletion and amortization expense ¹ 189.3 156.6

EBITDA attributable to Murphy (Non-GAAP) 463.6 63.6

Accretion of asset retirement obligations ¹ 9.9 10.5

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

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 March 31, 2023

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

Sales of purchased natural gas – 43.7 – 43.7

Lease operating expenses 162.6 36.8 0.6 200.0

Severance and ad valorem taxes 11.1 0.3 – 11.4

Transportation, gathering and processing 37.4 16.5 – 53.9

Costs of purchased natural gas – 32.3 – 32.3

Depreciation, depletion and amortization 160.3 31.6 0.9 192.8

Accretion of asset retirement obligations 9.1 1.9 0.1 11.1

Exploration expenses

Dry holes and previously suspended exploration costs (0.2) – 1.1 0.9

Geological and geophysical 0.3 – 0.5 0.8

Other exploration 1.6 0.1 4.2 5.9

1.7 0.1 5.8 7.6

Undeveloped lease amortization 2.0 0.1 0.6 2.7

Total exploration expenses 3.7 0.2 6.4 10.3

Selling and general expenses 6.4 2.3 0.2 8.9

Other 9.4 4.4 (0.2) 13.6

Results of operations before taxes 282.3 29.5 (4.4) 307.4

Income tax provisions 56.3 7.6 0.8 64.7

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

Three months ended March 31, 2022

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

Sales of purchased natural gas – 36.8 – 36.8

Lease operating expenses 99.9 36.9 – 136.8

Severance and ad valorem taxes 14.2 0.4 – 14.6

Transportation, gathering and processing 29.2 17.7 – 46.9

Costs of purchased natural gas – 33.7 – 33.7

Depreciation, depletion and amortization 126.5 34.2 0.1 160.8

Accretion of asset retirement obligations 9.4 2.5 – 11.9

Exploration expenses

Dry holes and previously suspended exploration costs – – 32.8 32.8

Geological and geophysical 2.6 – 0.2 2.8

Other exploration 1.5 0.1 6.1 7.7

4.1 0.1 39.1 43.3

Undeveloped lease amortization 2.4 0.1 1.8 4.3

Total exploration expenses 6.5 0.2 40.9 47.6

Selling and general expenses 8.3 5.1 2.4 15.8

Other 102.8 5.1 0.4 108.3

Results of operations before taxes 310.6 30.3 (43.8) 297.1

Income tax provisions (benefits) 57.7 7.6 0.4 65.7

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

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

1 Additional details about results of oil and natural gas operations are presented in the table on pages 27 and 28 .

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