What changed in this filing

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Item 1. Business

2024-02-23 compared with 2023-02-27 · 88 added, 182 removed, 187 unchanged (59% of the section changed)

Business - Continued

reserves extends beyond five years due to limited well slot availability, thus making it necessary to wait for depletion of other wells prior to initiating further development of these locations or behind-pipe completions with significant capital costs that categorize them as undeveloped.

Murphy Oil’s Reserves Processes and Policies

As per the SEC, proved oil and natural gas reserves are “those quantities of oil and natural gas which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward.” The SEC has defined reasonable certainty for proved reserves, as a “high degree of confidence that the quantities will be recovered.” Proved reserves estimates will generally be revised only as additional geologic or engineering data become available or as economic conditions change.

Moreover, estimates of proved reserves may be revised as a result of future operations, effects of regulation by governmental agencies or geopolitical or economic risks.

Therefore, the proved reserves included in this report are estimates only and should not be construed as being exact quantities, and if recovered, could be more or less than the estimated amounts.

Murphy has established both internal and external controls for estimating proved reserves that follow the guidelines set forth by the SEC for oil and natural gas reporting.

Certain qualified technical personnel of Murphy from the various exploration and production business units are responsible for the preparation of proved reserve estimates and these technical representatives provide the necessary information and maintain the data as well as the documentation for all properties.

Proved reserves are then consolidated and reported through the Corporate Reserves group.

Murphy’s General Manager Corporate Reserves (Reserves General Manager) leads the Corporate Reserves group that also includes Corporate reserve engineers and support staff, all of which are independent of the Company’s oil and natural gas operational management and technical personnel.

The Reserves General Manager joined Murphy in 2020 and has more than 31 years of industry experience.

He has a Bachelor of Science in Mechanical Engineering and is a also a licensed Professional Engineer in the State of Texas.

The Reserves General Manager reports to the Executive Vice President and Chief Financial Officer and makes annual presentations to the Board of Directors about the Company’s reserves.

The Reserves Manager and the Corporate reserve engineers review and discuss reserves estimates directly with the Company’s technical staff in order to make every effort to ensure compliance with the rules and regulations of the SEC.

The Reserves General Manager coordinates and oversees the third-party audits which are performed annually and under Company policy generally target coverage of at least one-third of the barrel oil-equivalent volume of the Company’s proved reserves.

The estimated proved reserves reported in this Form 10-K are prepared by Murphy’s employees.

Internal audits may also be performed by the Reserves General Manager and qualified engineering staff from areas of the Company other than the area being audited by third parties.

In 2022, 98.0% of the Proved reserves were audited by third-party auditors and they were found to be within the acceptable 10.0% tolerance by each of the third-party firms.

Murphy engaged both Ryder Scott Company, L.P.

and McDaniel & Associates Consultants Ltd.

to perform a reserves audit of 49.9% and 48.1% of the Company’s total proved reserves, respectively.

Each significant exploration and production business unit also maintains one or more Qualified Reserve Estimators (QRE) on staff.

The QRE is responsible for estimating and evaluating reserves and other reserves information for his or her assigned area.

The QRE may personally make the estimates and evaluations of reserves or may supervise and approve the estimation and evaluation thereof by others.

A QRE is professionally qualified to perform these reserves estimates as a result of having sufficient educational background, professional training and professional experience to enable him or her to exercise prudent professional judgment.

Larger business units of the Company also employ a Regional Reserves Coordinator (RRC) who supervises the local QREs.

The RRC is usually a senior QRE who has the primary responsibility for coordinating and submitting reserves information to senior management.

QRE qualification requires a minimum of five years of practical experience in petroleum engineering or petroleum production geology, with at least three years of such experience being in the estimation and evaluation of reserves, and either a bachelors or advanced degree in petroleum engineering, geology or other discipline of engineering or physical science from a college or university of recognized stature, or the equivalent thereof from an appropriate government authority or professional organization.

Murphy provides annual training to all Company reserves estimators to ensure SEC requirements associated with reserves estimation and Form 10-K reporting are fulfilled.

The training includes materials provided to each participant that outlines the latest

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guidance from the SEC as well as best practices for many engineering and geologic matters related to reserves estimation.

The Company’s QREs maintain files containing pertinent data regarding each significant reservoir.

Each file includes sufficient data to support the calculations or analogies used to develop the values.

Examples of data included in the file, as appropriate, include:

production histories;

pertinent drilling and workover histories;

bottom hole pressure data;

volumetric, material balance, analogy, or other pertinent reserve estimation data;

production performance curves;

narrative descriptions of the methods and logic used to determine reserves values;

maps and logs;

and a signed copy of the documentation stating that, in their opinion, the reserves have been calculated, reviewed, documented and reported in compliance with SEC regulations.

Reserves calculations are completed by technical personnel with the support of the QREs and appropriately reviewed by RRCs, the Corporate reserves engineers and the Reserves General Manager.

Summaries are reviewed and approved with the heads of the Company’s exploration and production business units and other senior management on an annual basis.

The Company’s Controller’s department is responsible for preparing and filing reserves schedules within the Form 10-K report.

To ensure accuracy and security of reported reserves, the proved reserves estimates are coordinated in industry-standard software with access controls for approved users.

In addition, Murphy complies with internal controls concerning the various business processes related to reserves.

More information regarding Murphy’s estimated quantities of proved reserves of crude oil, natural gas liquids and natural gas for the last three years are presented by geographic area on pages 112 through 119 of this Form 10-K report.

Murphy currently has no oil and natural gas reserves from non-traditional sources.

Murphy has not filed and is not required to file any estimates of its total proved oil or natural gas reserves on a recurring basis with any federal or foreign governmental regulatory authority or agency other than the SEC.

Annually, Murphy reports gross reserves of properties operated in the United States to the U.S.

Department of Energy;

such reserves are derived from the same data from which estimated proved reserves of such properties are determined.

Crude oil, condensate and natural gas liquids production and sales, and natural gas sales by geographic area with weighted average sales prices for each of the three years ended December 31, 2022 are shown on pages 41 through 43 of this Form 10-K report.

Production expenses for the last three years in U.S.

dollars per equivalent barrel are discussed beginning on page 38 of this Form 10-K report.

Supplemental disclosures relating to oil and natural gas producing activities are reported on pages 110 through 125 of this Form 10-K report.

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Acreage and Well Count

At December 31, 2022, Murphy held leases, concessions, contracts or permits on developed and undeveloped acreage as shown by geographic area in the following table.

Gross acres are those in which all or part of the working interest is owned by Murphy.

Net acres are the portions of the gross acres attributable to Murphy’s interest.

Developed Undeveloped Total

Area (Thousands of acres )

Gross Net Gross Net Gross Net

United States Onshore 109 96 24 23 133 119

Gulf of Mexico 60 27 560 271 620 298

Total United States 169 123 584 294 753 417

Canada Onshore 152 116 279 195 431 311

Offshore 101 11 28 1 129 12

Total Canada 253 127 307 196 560 323

Mexico — — 636 254 636 254

Brazil — — 2,453 1,110 2,453 1,110

Australia — — 482 241 482 241

Brunei 2 — 1,446 116 1,448 116

Vietnam — — 7,324 4,571 7,324 4,571

Spain — — 8 1 8 1

Totals 424 250 13,240 6,783 13,664 7,033

Certain acreage held by the Company will expire in the next three years.

Scheduled expirations in 2023 include 241 thousand net acres in Australia, 116 thousand net acres in Brunei, 75 thousand net acres in Brazil, 34 thousand net acres in onshore Canada,16 thousand net acres in the Gulf of Mexico, 5 thousand net acres in Mexico and 1 thousand net acres in Spain.

Acreage currently scheduled to expire in 2024 include 4.5 million net acres in Vietnam, 47 thousand net acres in the Gulf of Mexico and 17 thousand net acres in onshore Canada.

Scheduled expirations in 2025 include 249 thousand net acres in Mexico, 37 thousand net acres in Brazil, 7 thousand net acres in the Gulf of Mexico and 5 thousand net acres in onshore Canada.

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As used in the three tables that follow, “gross” wells are the total wells in which all or part of the working interest is owned by Murphy, and “net” wells are the total of the Company’s fractional working interests in gross wells expressed as the equivalent number of wholly-owned wells.

An “exploratory” well is drilled to find and produce crude oil or natural gas in an unproved area and includes delineation wells which target a new reservoir in a field known to be productive or to extend a known reservoir beyond the proved area.

A “development” well is drilled within the proved area of an oil or natural gas reservoir that is known to be productive.

The following table shows the number of oil and natural gas wells producing or capable of producing at December 31, 2022.

Oil Wells Natural Gas Wells

Gross Net Gross Net

United States Onshore 1,139 917 30 4

Gulf of Mexico 77 34 13 6

Total United States 1,216 951 43 10

Canada Onshore 18 13 400 338

Offshore 47 5 — —

Total Canada 65 18 400 338

Totals 1,281 969 443 348

Murphy’s net wells drilled and completed in the last three years are shown in the following table.

United States Canada Other Totals

Productive Dry Productive Dry Productive Dry Productive Dry

Exploration — — — — — 0.6 — 0.6

Development 29.1 — 22.1 — — — 51.2 —

Exploration — 0.1 — — — — — 0.1

Development 27.9 — 14.6 — — — 42.5 —

Exploration — 0.4 0.7 — — — 0.7 0.4

Development 21.5 — 8.9 — — — 30.4 —

Murphy’s drilling wells in progress at December 31, 2022 are shown in the following table.

The year-end well count includes wells awaiting various completion operations.

Exploration Development Total

Gross Net Gross Net Gross Net

United States Onshore — — 15.0 7.0 15.0 7.0

Gulf of Mexico 1.0 0.3 4.0 1.6 5.0 1.9

Canada Onshore — — 5.0 5.0 5.0 5.0

Offshore — — — — — —

Totals 1.0 0.3 24.0 13.6 25.0 13.9

Business - Continued

Sustainability

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At the same time, access to affordable, reliable energy is essential to improving the world’s quality of life and the functioning of the global economy.

We believe that as the energy economy transitions, oil and natural gas will continue to play a vital role in the long-term energy mix.

We believe that as the energy economy transitions, oil and gas will continue to play a vital role in the long-term energy mix.

We are committed to reducing our GHG emissions and are focused on understanding and mitigating our climate change risks.

To guide our climate change strategy, Murphy has adopted a climate change position, and we are setting meaningful emissions reduction goals.

In 2021, we endorsed the goal of eliminating routine flaring by 2030, under the current World Bank definition of routine flaring.

This adds to the Company’s previously established GHG emissions intensity reduction target of 15% to 20% by 2030 from our 2019 level, excluding our discontinued and divested Malaysia operations.

The Company has established a GHG emissions intensity reduction target of 15% to 20% by 2030 from our 2019 level, excluding our discontinued and divested Malaysia operations.

In addition, we have endorsed the goal of eliminating routine flaring by 2030, under the current World Bank definition of routine flaring.

Murphy recognizes that emissions are only one element of our total environmental footprint.

Protecting natural resources is also an important factor in our overall sustainability efforts.

See our discussion of Climate Change and Emissions on page 48.

See our 2023 Sustainability Report, located on the Company’s website, for details.

Further, we are subject to various international, foreign, national, state, provincial and local environmental, health and safety laws and regulations, including related to the generation, storage, handling, use, disposal and remediation of petroleum products, wastewater and hazardous materials;

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

Under applicable requirements, BOEM evaluates the financial strength and reliability of lessees and operators active on the Outer Continental Shelf, including the Gulf of Mexico.

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

Outer Continental Shelf, including the Gulf of Mexico.

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

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Since 2009, the U.S.

Environmental Protection Agency (EPA) has been monitoring and regulating GHG emissions, including carbon dioxide and methane, from certain sources in the oil and gas sector due to their association

Environmental Protection Agency (EPA) has been monitoring and regulating GHG emissions, including carbon dioxide and methane, from certain sources in the oil and gas sector due to their association with climate change.

In addition, international climate efforts, including the 2015 “Paris Agreement” and the

Business - Continued

with climate change.

In addition, international climate efforts, including the 2015 “Paris Agreement” and the 2021 and 2022 Conferences of the Parties of the UN Framework Convention on Climate Change (COP26 and COP27, respectively), have resulted in commitments from many countries to reduce GHG emissions and have called for parties to eliminate certain fossil fuel subsidies and pursue further action on non-carbon dioxide GHGs.

recent Conferences of the Parties of the UN Framework Convention on Climate Change (COP26, COP27, and COP28, respectively), have resulted in commitments from many countries to reduce GHG emissions and have called for parties to eliminate certain fossil fuel subsidies and pursue further action on non-carbon dioxide GHGs.

Murphy is currently required to report GHG emissions from its U.S.

operations in the Gulf of Mexico and onshore in south Texas and in its Canadian onshore business in British Columbia and Alberta.

In British Columbia and Alberta, Murphy is subject to a carbon tax on the purchase or use of many carbon-based fuels.

Additionally, starting in 2017, a carbon tax began to be applied to certain operations in Alberta.

In Canada, Murphy is subject to GHG regulations and resultant carbon pricing programs specific to the jurisdiction of operation.

Any limitations or further regulation of GHG, such as a cap and trade system, technology mandate, emissions tax, or expanded reporting requirements, could cause the Company to restrict operations, curtail demand for hydrocarbons generally, and/or cause costs to increase.

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Our employees are our most valuable asset.

Murphy strives to achieve incident-free operations through continuous improvement processes managed by the Company’s Health, Safety, Environment (HSE) Management System (HSE-MS), which engages all personnel, contractors and partners associated with Murphy operations and facilities, and provides a consistent method for integrating HSE concepts into our procedures and programs.

Murphy strives to achieve incident-free operations through continuous improvement processes managed by the Company’s Health, Safety, Environment (HSE) Management System, which engages all personnel, contractors and partners associated with Murphy operations and facilities, and provides a consistent method for integrating HSE concepts into our procedures and programs.

We work hard to build a culture of safety across our organization, with regular training, exercise drills and key targeted safety initiatives.

Response to COVID-19 .

During the COVID-19 pandemic, a proactive approach was taken by Murphy and we adopted strict protocols to protect our employees and their families, contractors and the communities in which we work from the virus.

Our response program was led by our Incident Management Team (IMT), under the guidance of our Crisis Management Team (CMT), leveraging the advice and recommendations of infectious disease experts and establishing safety protocols for all workers.

The Company is subject to the requirements of the U.S.

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In addition, the OSHA hazard communication standard requires that certain information regarding hazardous materials used or produced in Murphy’s operations be maintained and provided to employees, state and local government authorities and citizens.

In Canada, the Company is subject to Federal Occupational Health and Safety (OH&S) Legislation, the provincially-administered Occupational Health and Safety Act (Alberta), the Workers Compensation Act (British Columbia) and the Workplace Hazardous Materials Information System (WHMIS).

In Canada, the Company is subject to Federal Occupational Health and Safety Legislation, the provincially-administered Occupational Health and Safety Act (Alberta), the Workers Compensation Act (British Columbia) and the Workplace Hazardous Materials Information System.

Environmental, Social and Governance (ESG) Disclosure

We publish an annual sustainability report according to internationally recognized ESG reporting frameworks and standards, including Sustainability Accounting Standards Board, Task Force on Climate-related Financial Disclosures (TCFD), Global Reporting Initiative, Ipieca and American Petroleum Institute.

As this is an area of continual improvement across our industry, we strive to update our disclosures in line with operating developments and with emerging best practice ESG reporting standards.

In 2023, we published our fifth annual sustainability report, located on the Company’s website.

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As of December 31, 2023, we had 438 office-based employees and 287 field employees, all of whom are guided by our mission, vision, values and behaviors.

Together with the Executive Leadership Team, the Vice President of Human Resources and Administration, who reports directly to our President and Chief Executive Officer, is responsible for developing and executing our human capital management strategy.

Together with the Executive Leadership Team, the Vice President, Human Resources and Administration, who reports directly to our Chief Executive Officer, is responsible for developing and executing our human capital management strategy.

This includes the attraction, recruitment, development and engagement of talent to deliver on our strategy, the design of employee compensation, health and welfare benefits, and talent programs.

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• Health and Welfare Benefits

The Board of Directors receives related updates from management on a regular basis including the review of compensation, benefits, succession and talent development and diversity, equity and inclusion.

The Board receives related updates from the Vice President, Human Resources and Administration on a regular basis including the review of compensation, benefits, succession and talent development, along with diversity, equity and inclusion.

Employee Compensation Programs

Our purpose, to empower people, includes tying a portion of our employees’ pay to performance in a variety of ways, including incentive compensation and performance-based bonus programs, while maintaining the best interest of stockholders.

We benchmark for market practices, and regularly review our compensation against the market to ensure it remains competitive to attract and retain the best talent.

We benchmark for market practices, and regularly review our compensation and hiring acceptance rates against the market to ensure competitiveness to attract and retain the best talent.

We believe our current practices align our employees’ compensation with the interests of our stockholders, and support our focus on cash flow generation, capital return and environmental stewardship.

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• Develop employee capabilities through effective feedback and coaching

• Maintain a process that is consistent throughout the organization to measure employee performance and is tied to Company and stockholder interests

• Maintain a process that is consistent throughout the organization to measure employee performance that is tied to Company and stockholder interests

All employees’ performance is evaluated at least annually through self-assessments that are reviewed in discussions with supervisors.

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Talent Development and Training

Employees are able to participate in continuous training and development, with the goal of equipping them for success and providing increased opportunities for growth at Murphy.

Through our digital platform, My Murphy Learning, employees can access self-directed courses, external articles and videos that cover topics such as business, technology and productivity.

Employees are able to participate in continuous training and development, with the goal of equipping them for success and providing increased opportunities for growth.

Through our digital platform, My Murphy Learning, employees now have access to LinkedIn Learning with more than 15,000 courses, Continuing Education Unit (CEU) credit and certification opportunities, and access to expert instructors.

We also administer mandatory compliance training for our employees through My Murphy Learning with a 100% utilization.

Further, we strive to empower our leadership, so we sponsor several programs to address career advancement for emerging leaders.

Plus, we provide a tuition reimbursement program for those who choose to acquire additional knowledge to increase their effectiveness in their present position or to prepare for career advancement.

Murphy holds internal technical ideas forums each year designed to share best practice and technical advances across the Company, including safety and environmental topics.

Finally, we provide a tuition reimbursement program for those who choose to acquire additional knowledge to increase their effectiveness in their present position or to prepare for career advancement.

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We encourage employee engagement and solicit feedback through internal surveys and our employee driven Ambassador program to gain insights into workplace experiences.

To enhance employees’ commitment to the Company’s Scorecard and understanding of annual incentive plans, three training courses were introduced covering the following topics:

(1) Free Cash Flow and return metrics;

(2) Lease Operating Expenses (LOE) and General and Administrative;

and (3) Total Recordable Incident Rate, Spill Rate and Emissions.

These training opportunities, in particular, enhanced the business acumen of our employee base, as well as brought renewed focus to how we measure success.

We strive to empower our leadership with programs that offer career advancement for experienced and emerging leaders.

Over eighty managers participated in leadership programs, from a top rated business school, addressing focus areas such as strategic agility, enterprise thinking, building high-performing teams and enhancing trust.

We encourage employee engagement and solicit feedback through internal surveys and our employee-led Ambassador program to gain insights into workplace experiences.

Employees are provided opportunities to raise suggestions and collaborate with leadership to improve programs and increase their alignment with Murphy’s mission, vision, values and behaviors.

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Health and Welfare Benefits

We believe that doing our part to aid in maintaining the health and welfare of our employees is a critical element in Murphy achieving success.

We believe that doing our part to aid in maintaining the health and welfare of our employees is a critical element in Murphy’s achieving success.

As such, we provide our employees and their families with a comprehensive set of subsidized benefits that are competitive and aligned to Murphy’s mission, vision, values and behaviors.

We also believe that the well-being of our employees is enhanced when they can give back to their local communities or charities either through the Company “Impact – Murphy Makes a Difference” program or on their own and receive a Company match for donations.

In addition, we offer an Employee Assistance Program (EAP) that provides confidential assistance to employees and their immediate family members for mental and physical well-being, as well as legal and financial issues.

We also believe that the well-being of our employees is enhanced when they can give back to their local communities or charities either through the Company Matching Gift Program, “Impact – Murphy Makes a Difference” Program or on their own and receive a Company match for donations.

Finally, we offer an Employee Assistance Program that provides confidential assistance to employees and their immediate family members for mental and physical well-being, as well as legal and financial issues.

We also maintain an Ethics Hotline that is available to all our employees to report, anonymously if desired, any matter of concern.

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We welcome our employees’ differences, experiences and beliefs and we are investing in a more productive, engaged, diverse and inclusive workforce.

The Board of Directors receives DE&I updates on Demographic Data, Strategic Partnerships, Recruiting Strategies and Programs from management on a regular cadence.

We seek input and program recommendations from our DE&I Committee with the support of the Executive Leadership team and through the sponsorship of our Vice President, Human Resources and Administration.

The Board receives DE&I updates on demographic data, strategic partnerships, recruiting strategies and programs from the Vice President, Human Resources and Administration on a regular cadence.

We seek input and program recommendations from our DE&I Committee and through the sponsorship of our Vice President, Human Resources and Administration.

Our DE&I Committee consists of diverse employees at various levels from across the organization that share a passion for DE&I.

Our Board currently includes three women directors with at least one female director on each committee.

Our Board currently includes three directors who are women, with at least one woman on each committee.

Our Nominating and Governance Committee is actively focused on DE&I issues as part of its overall mandate.

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Other (Administrative Support and Field) 7 %

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Minority 1 Representation (U.S.-Based Only)

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1 As defined by the U.S.

Equal Employment Opportunity Commission (EEOC).

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Equal Employment Opportunity Commission.

We believe that it is important we attract employees with diverse backgrounds where we operate and are focusing on attracting and retaining women and minorities in our workforce ensuring a vibrant talent pipeline.

Environmental, Social and Governance (ESG) Disclosure

We publish an annual sustainability report according to internationally recognized ESG reporting frameworks and standards, including Sustainability Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosures (TCFD), Global Reporting Initiative (GRI):

Core option, Ipieca and American Petroleum Institute (API).

As this is an area of continual improvement across our industry, we strive to update our disclosures in line with operating developments and with emerging best practice ESG reporting standards.

In 2022, we published our fourth annual sustainability report, located on the Company’s website.

Website Access to SEC Reports

Murphy Oil’s internet Website address is http://www.murphyoilcorp.com.

Murphy Oil’s internet address is http://www.murphyoilcorp.com.

The information contained on the Company’s Website is not part of, or incorporated into, this report on Form 10-K.

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The Company faces risks in the normal course of business and through global, regional and local events that could have an adverse impact on its reputation, operations, and financial performance.

The Board of Directors exercises oversight of the Company’s enterprise risk management program, which includes strategic, operational and financial matters, as well as compliance and legal risks.

The Board of Directors receives updates annually on the risk management processes.

The Board exercises oversight of the Company’s enterprise risk management program, which includes strategic, operational and financial matters, as well as compliance and legal risks.

The Board receives updates annually on the risk management processes.

The following are some important factors that could cause the Company’s actual results to differ materially from those projected in any forward-looking statements.

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These factors include:

• the occurrence or threat of epidemics or pandemics, such as the outbreak of coronavirus disease 2019 (COVID-19), or any government response to such occurrence or threat which may lower the demand for hydrocarbon fuels;

• worldwide and domestic supplies of, and demand for, crude oil, natural gas liquids and natural gas;

• the ability of the members of OPEC and certain non-OPEC members, for example, Russia, to agree to maintain or adjust production levels;

• the ability of the members of the Organization of the Petroleum Exporting Countries (OPEC) and certain non-OPEC members, for example, Russia, to agree to maintain or adjust production levels;

• the production levels of non-OPEC countries, including, amongst others, production levels in the shale plays in the United States;

• political instability or armed conflict in oil and natural gas producing regions, such as the Russia-Ukraine conflict;

• political instability or armed conflict in oil and gas producing regions, such as the Russia-Ukraine conflict and Israeli-Palestinian conflict;

• the level of drilling, completion and production activities by other exploration and production companies, and variability therein, in response to market conditions;

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• increased activism against, or change in public sentiment for, oil and gas exploration, development, and production activities and considerations including climate change and the transition to a lower carbon economy;

• the occurrence or threat of epidemics or pandemics, such as the outbreak of COVID-19, or any government response to such occurrence or threat which may lower the demand for hydrocarbon fuels;

• domestic and foreign governmental regulations and taxes, including further legislation requiring, subsidizing or providing tax benefits for the use or generation of alternative energy sources and fuels;

• general economic conditions worldwide, including inflationary conditions and related governmental policies and interventions.

West Texas Intermediate (WTI) crude oil prices averaged $94 per barrel in 2022, compared to $68 in 2021, $39 in 2020 and $57 in 2019.

West Texas Intermediate (WTI) crude oil prices averaged $77.62 per barrel in 2023, compared to $94.23 in 2022 and $67.91 in 2021.

and Canadian crude oils are priced from oil indices other than WTI, and these indices are influenced by different supply and demand forces than those that affect WTI prices.

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The average New York Mercantile Exchange (NYMEX) natural gas sales price was $2.53 per million British Thermal Units (MMBTU) in 2023, compared to $6.38 in 2022 and $3.84 in 2021.

The Company also has exposure to the Canadian benchmark natural gas price, AECO, which averaged US$4.09 per MMBTU in 2022, compared to US$2.89 in 2021 and US$1.66 in 2020.

The Company has entered into certain forward fixed price contracts as detailed in the Outlook section on page 54 a nd spot contracts providing exposure to other market prices at specific sales points such as Malin (Oregon, U.S.) and Dawn (Ontario, Canada).

The Company also has exposure to the Canadian benchmark natural gas price, Alberta Energy Company (AECO), which averaged C$2.64 per MCF in 2023, compared to C$5.31 in 2022 and C$3.63 in 2021.

The Company has entered into certain forward fixed price contracts as detailed in the Outlook section beginning on page 51 and spot contracts providing exposure to other market prices at specific sales points such as Malin (Oregon, U.S.) and Dawn (Ontario, Canada).

Lower prices, should they occur, will materially and adversely affect our results of operations, cash flows and financial condition.

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The Company cannot predict how changes in the sales prices of oil and natural gas will affect the results of operations in future periods.

The Company may hedge a portion of its exposure to the effects of changing prices of crude oil and natural gas by selling forwards, swaps and other forms of derivative contracts.

Lower oil and natural gas prices adversely affect the Company in several ways:

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These reserve reductions could be significant.

• In order to manage the potential volatility of cash flows and credit requirements, we maintain appropriate bank credit facilities.

Inability, as a result of low oil and natural gas prices, to access, renew or replace such credit facilities or access other sources of funding as they mature would negatively impact our liquidity.

• Lower oil and natural gas prices could lead to an inability to access, renew, or replace credit facilities, and could also impair access to other sources of funding as these mature, potentially negatively impacting our liquidity.

• Lower prices for oil and natural gas could cause the Company to lower its dividend because of lower cash flows.

See Note L for additional information on the derivative instruments used to manage certain risks related to commodity prices.

See Note K for additional information on the derivative instruments used to manage certain risks related to commodity prices.

Murphy’s commodity price risk management may limit the Company’s ability to fully benefit from potential future price increases for oil and natural gas.

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To the extent that the Company enters into these contracts and in the event that prices for oil and natural gas increase in future periods, the Company will not fully benefit from the price improvement on all production.

See Note L for additional information on the derivative instruments used to manage certain risks related to commodity prices.

See Note K for additional information on the derivative instruments used to manage certain risks related to commodity prices.

Risk Factors - Continued

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Murphy operates in highly competitive environments which could adversely affect it in many ways, including its profitability, cash flows and its ability to grow.

Murphy operates in the oil and natural gas industry and experiences competition from other oil and natural gas companies, which include major integrated oil companies, independent producers of oil and natural gas, and state-owned foreign oil companies.

Murphy operates in the oil and gas industry and experiences competition from other oil and gas companies, which include major integrated oil companies, independent producers of oil and gas, and state-owned foreign oil companies.

Many of the major integrated and state-owned oil companies and some of the independent producers that compete with the Company have substantially greater resources than Murphy.

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The Company drills exploratory wells which subjects its exploration and production operating results to exposure to dry hole expense, which has in the past, and may in the future, adversely affect our results of operations.

The Company’s strategy is to participate in three to five exploration wells per year.

In 2022, the Company participated in two exploration wells, the Cutthroat well located in Brazil and the Tulum-1EXP well located in Mexico, that failed to encounter commercial hydrocarbons.

In addition, in December of 2022, the Company commenced drilling of the Oso-1 well in the Gulf of Mexico, with drilling to continue through the first quarter of 2023.

The Company has budgeted $100 million for its 2023 exploration program, which includes finishing the Oso-1 well and drilling two additional Gulf of Mexico operated exploration wells.

The Company plans to continue assessing exploration activities as part of its overall strategy.

In 2023, the Company participated in three exploration wells.

The Longclaw #1 well (Green Canyon 433), located in the Gulf of Mexico, resulted in a commercial discovery while the Oso #1 (Atwater Valley 138) and Chinook #7 (Walker Ridge 425) wells, located in the Gulf of Mexico, failed to encounter commercial hydrocarbons.

Additionally, the Company expensed previously suspended costs associated with the 2019 Cholula-1EXP well which was determined to be non-commercial.

The Company has budgeted $120 million for its 2024 exploration program, which includes drilling two operated wells in Vietnam and two non-operated wells in the Gulf of Mexico.

If Murphy cannot replace its oil and natural gas reserves, it may not be able to sustain or grow its business.

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Murphy’s proved reserves are based on the professional judgment of its engineers and may be subject to revision.

Proved reserves of crude oil, natural gas liquids (NGL) and natural gas included in this report on pages 110 through 119 have been prepared according to the SEC guidelines by qualified Company personnel or qualified independent engineers based on an unweighted average of crude oil, NGL and natural gas prices in effect at the beginning of each month of the respective year as well as other conditions and information available at the time the estimates were prepared.

Proved reserves of crude oil, natural gas liquids, and natural gas included in this report on pages 103 through 112 have been prepared according to the SEC guidelines by qualified company personnel or qualified independent engineers based on an unweighted average of crude oil, NGL and natural gas prices in effect at the beginning of each month of the respective year as well as other conditions and information available at the time the estimates were prepared.

Estimation of reserves is a subjective process that involves professional judgment by engineers about volumes to be recovered in future periods from underground oil and natural gas reservoirs.

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• Operating and/or capital costs which are materially different from those assumed to compute proved reserves;

Risk Factors - Continued

• Future reservoir performance which is materially different from models used to compute proved reserves;

• Governmental regulations or actions which materially impact operations of a field.

Risk Factors - Continued

The Company’s proved undeveloped reserves represent significant portions of total proved reserves.

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The discounted future net revenues from our proved reserves as reported on pages 116 and 117 should not be considered as the market value of the reserves attributable to our properties.

As required by generally accepted accounting principles (GAAP), the estimated discounted future net revenues from our proved reserves are based on an unweighted average of the oil and natural gas prices in effect at the beginning of each month during the year.

As required by U.S.

generally accepted accounting principles (GAAP), the estimated discounted future net revenues from our proved reserves are based on an unweighted average of the oil and natural gas prices in effect at the beginning of each month during the year.

Actual future prices and costs may be materially higher or lower than those used in the reserves computations.

In addition, the 10% discount factor that is required to be used to calculate discounted future net revenues for reporting purposes under GAAP is not necessarily the most appropriate discount factor based on our cost of capital, the risks associated with our business and the risk associated with the industry in general.

Murphy is reliant on certain third party infrastructure to develop projects and operations.

The Company relies on the availability and capacity of infrastructure, such as transportation and processing facilities, and equipment that are often owned and operated by others.

These third-party systems, facilities, and equipment may not always be available to the Company and, if available, may not be available at a price that is acceptable to the Company.

The unavailability or high cost of such equipment or infrastructure could adversely affect our ability to establish and execute exploration and development plans within budget and on a timely basis, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our inability to access appropriate equipment and infrastructure in a timely manner and on acceptable terms may hinder our access to oil and natural gas markets or delay our oil and natural gas production.

Murphy is sometimes reliant on joint venture partners for operating assets, and/or funding development projects and operations.

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During 2023, approximately 18% of the Company’s total production was at fields operated by others, while at December 31, 2023, approximately 13% of the Company’s total proved reserves were at fields operated by others.

Additionally, the Company relies on the availability of transportation and processing facilities that are often owned and operated by others.

These third-party systems and facilities may not always be available to the Company and, if available, may not be available at a price that is acceptable to the Company.

Some of Murphy’s development projects entail significant capital expenditures and have long development cycle times.

As a result, the Company’s partners must be able to fund their share of investment costs through the development cycle, through cash flow from operations, external credit facilities, or other sources, including financing arrangements.

Murphy’s partners are also susceptible to certain of the risk factors noted herein, including, but not limited to, commodity price, fiscal regime changes, government project approval delays, regulatory changes, credit downgrades and regional conflict.

If one or more of these factors negatively impacts a project partners’ cash flows or ability to obtain adequate financing, it could result in a delay or cancellation of a project, resulting in a reduction of the Company’s reserves and production, which negatively impacts the timing and receipt of planned cash flows and expected profitability.

Murphy’s partners are also susceptible to certain of the risk factors noted herein, including, but not limited to, commodity prices, fiscal regime changes, government project approval delays, regulatory changes, credit downgrades and regional conflict.

If one or more of these factors negatively impacts a project operator’s or partners’ cash flows or ability to obtain adequate financing, or if an operator of our projects fails to adequately perform operations or fulfill its obligations under the applicable agreements, it could result in a delay or cancellation of a project, resulting in a reduction of the Company’s reserves and production, which negatively impacts the timing and receipt of planned cash flows and expected profitability.

Risk Factors - Continued

Murphy’s business is subject to operational hazards, severe weather events, physical security risks and risks normally associated with the exploration and production of oil and natural gas, which could become more significant as a result of climate change.

The Company operates in urban and remote, and sometimes inhospitable, areas around the world.

The Company operates in a variety of locales, including urban, remote, and sometimes inhospitable, areas around the world.

The occurrence of an event, including but not limited to acts of nature such as hurricanes, floods, earthquakes (and other forms of severe weather), mechanical equipment failures, industrial accidents, fires, explosions, acts of war, civil unrest, piracy and acts of terrorism could result in the loss of hydrocarbons and associated revenues, environmental pollution or contamination, personal injury, (including death), and property damages for which the Company could be deemed to be liable and which could subject the Company to substantial fines and/or claims for punitive damages.

This risk extends to actions and operational hazards of other operators in the industry, which may also impact the Company.

The location of many of Murphy’s key assets causes the Company to be vulnerable to severe weather, including hurricanes and tropical storms.

The location of many of Murphy’s key assets causes the Company to be vulnerable to severe weather, including hurricanes, tropical storms and extreme temperatures.

Many of the Company’s offshore fields are in the U.S.

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hurricane season runs from June through November.

Moreover, it should be noted that scientists have predicted that increasing concentrations of GHG in the earth’s atmosphere may produce climate changes that increase significant weather events, such as

Moreover, scientists have predicted that increasing concentrations of GHG in the earth’s atmosphere may produce climate changes that increase significant weather events, such as increased frequency and severity of storms, droughts, and floods and other climatic events.

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

Although the Company maintains insurance for such risks, due to policy deductibles and possible coverage limits, weather-related risks to our operations are not fully insured.

For additional details on insurance, see Risk Factors, “General Risk Factors – Murphy’s insurance may not be adequate to offset costs associated with certain events, and there can be no assurance that insurance coverage will continue to be available in the future on terms that justify its purchase.”

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

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

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

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

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

The risks associated with hydraulic fracturing operations include, but are not limited to, underground migration or surface spillage due to releases of oil, natural gas, formation water or well fluids, as well as any related surface or groundwater contamination, including from petroleum constituents or hydraulic fracturing chemical additives.

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

In addition, hydraulic fracturing requires significant quantities of water;

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

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

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

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

The Company’s operations are subject to various international, foreign, national, state, provincial and local environmental, health and safety laws, regulations, governmental actions and permit requirements, including

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

What changed 10-K

Item 1. Business