What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-02 compared with 2023-11-02 · 575 added, 250 removed, 480 unchanged (63% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

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

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

2024 December 31,

42 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(Thousands of dollars, except per share amounts) 2024 2023

3 unchanged sentences

Total revenue from sales to customers 794,848 839,968

Gain (loss) on derivative instruments – 115,191 – ( 308,654 )

Gain on sale of assets and other income 1,564 1,748

9 unchanged sentences

Accretion of asset retirement obligations 12,774 11,157

Other operating expense (benefit) 4,385 ( 27,129 ) 21,333 115,726

Other operating expense 7,266 11,988

Impairment of assets 34,528 –

Total costs and expenses 642,355 544,920

Operating income from continuing operations 154,057 296,796

Other income 8,811 18,301 1,044 21,114

Other income (loss) 11,551 ( 73 )

Interest expense, net ( 20,021 ) ( 28,855 )

3 unchanged sentences

Income from continuing operations 115,530 214,035

Loss from discontinued operations, net of income taxes ( 421 ) ( 422 ) ( 744 ) ( 1,916 )

(Loss) gain from discontinued operations, net of income taxes ( 872 ) 279

Net income including noncontrolling interest 114,658 214,314

1 unchanged sentence

NET INCOME ATTRIBUTABLE TO MURPHY $ 90,002 $ 191,644

INCOME PER COMMON SHARE – BASIC

INCOME (LOSS) PER COMMON SHARE – BASIC

Continuing operations $ 0.60 $ 1.23

13 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(Thousands of dollars) 2024 2023

1 unchanged sentence

Other comprehensive (loss) income, net of tax

Net gain (loss) from foreign currency translation ( 39,353 ) ( 102,266 ) ( 2,601 ) ( 135,791 )

Net (loss) gain from foreign currency translation

( 35,528 ) 3,669

Retirement and postretirement benefit plans 910 1,098

Other comprehensive (loss) income ( 34,618 ) 4,767

Comprehensive income (loss) including noncontrolling interest $ 239,647 $ 474,975 $ 584,720 $ 791,977

Comprehensive income including noncontrolling interest $ 80,040 $ 219,081

Comprehensive income attributable to noncontrolling interest 24,656 22,670

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO MURPHY $ 217,185 $ 429,327 $ 546,019 $ 639,532

COMPREHENSIVE INCOME ATTRIBUTABLE TO MURPHY $ 55,384 $ 196,411

See Notes to Consolidated Financial Statements, page 7 .

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

Three Months Ended

(Thousands of dollars) 2024 2023

2 unchanged sentences

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

Loss from discontinued operations 744 1,916

Depreciation, depletion and amortization 211,134 195,670

Impairment of assets 34,528 –

Unsuccessful exploration well costs and previously suspended exploration costs 32,437 851

Amortization of undeveloped leases 8,215 10,651

Accretion of asset retirement obligations 34,196 34,725

Deferred income tax expense 19,478 49,042

Accretion of asset retirement obligations 12,774 11,157

Long-term non-cash compensation 9,851 8,536

Amortization of undeveloped leases 2,793 2,653

Loss (income) from discontinued operations

Contingent consideration payment – ( 123,965 )

Mark to market loss on contingent consideration – 3,938

Mark to market gain on derivative instruments

– ( 138,707 )

Long-term non-cash compensation 42,502 57,612

Gain from sale of assets ( 12 ) ( 18,871 )

Net increase in noncash working capital ( 142,788 ) ( 59,874 )

Other operating activities, net ( 15,381 ) ( 7,110 )

Net increase in noncash working capital ( 24,353 ) ( 75,031 )

Net cash provided by continuing operations activities 398,791 279,776

1 unchanged sentence

Property additions and dry hole costs ( 249,085 ) ( 345,319 )

Acquisition of oil and natural gas properties ( 22,773 ) ( 125,602 )

Proceeds from sales of property, plant and equipment 102,913 ( 2,129 )

Net cash required by investing activities ( 249,085 ) ( 345,319 )

2 unchanged sentences

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

Retirement of debt ( 248,675 ) ( 446,032 )

Early redemption of debt cost – ( 5,419 )

Repurchase of common stock ( 50,000 ) –

Contingent consideration payment ( 60,243 ) ( 81,742 )

Cash dividends paid ( 45,773 ) ( 42,925 )

Distributions to noncontrolling interest ( 20,052 ) ( 145,273 )

Withholding tax on stock-based incentive awards ( 25,270 ) ( 14,217 )

Capital lease obligation payments ( 457 ) ( 475 )

Distributions to noncontrolling interest ( 23,001 ) ( 9,679 )

Finance lease obligation payments ( 164 ) ( 139 )

Contingent consideration payment – ( 47,678 )

Issue costs of debt facility – ( 17 )

Net cash required by financing activities ( 144,208 ) ( 114,655 )

Net cash required by discontinued operations

Effect of exchange rate changes on cash and cash equivalents 858 618

Net decrease in cash and cash equivalents ( 164,194 ) ( 55,186 )

Net increase (decrease) in cash and cash equivalents

6,356 ( 179,580 )

Cash and cash equivalents at beginning of period 317,074 491,963

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(Thousands of dollars except number of shares) 2024 2023

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

$ – $ – $ – $ –

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

Common Stock – par $ 1.00 , authorized 450,000,000 shares, issued 195,100,628 shares at March 31, 2024 and 195,100,628 shares at March 31, 2023

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

16 unchanged sentences

Balance at beginning of period ( 1,737,566 ) ( 1,614,717 )

Purchase of treasury shares ( 75,773 ) – ( 75,773 ) –

Repurchase of common stock ( 50,049 ) –

Awarded restricted stock, net of forfeitures 45,117 25,876

12 unchanged sentences

Note A – Basis of Presentation

The unaudited financial statements presented herein, in the opinion of Murphy’s management, include all accruals necessary to present fairly the Company’s financial position as at September 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 September 30, 2023 and 2022, in conformity with U.S generally accepted accounting principles (GAAP).

The unaudited financial statements presented herein, in the opinion of Murphy’s management, include all accruals necessary to present fairly the Company’s financial position as at March 31, 2024 and December 31, 2023, and the results of operations, statements of operations, cash flows and changes in stockholders’ equity for the interim periods ended March 31, 2024 and 2023, 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 2023 Form 10-K report, as certain notes and other pertinent information have been abbreviated or omitted in this report.

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

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

and LLOG Bluewater Holdings, L.L.C.

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

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

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

As of September 30, 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.

Financial results for the three-month period ended March 31, 2024 are not necessarily indicative of future results.

Note B – New Accounting Principles and Recent Accounting Pronouncements

Accounting Principles Adopted

Recent Accounting Pronouncements

None affecting the Company.

Recent Accounting Pronouncements

Income Tax Disclosures.

In December 2023 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09 Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The standard becomes effective for annual periods beginning after December 15, 2024.

The update requires financial statements to include consistent categories and greater disaggregation of information in the rate reconciliation, as well as income taxes paid disaggregated by jurisdiction.

Murphy is currently evaluating the impact of adopting this standard.

Reportable Segment Disclosures.

In November 2023 the FASB issued ASU 2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The standard becomes effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The standard requires additional disclosures about operating segments, including segment expense information provided to the chief operating decision maker, and extends certain disclosure requirements to interim periods.

The standard does not affect our determination of significant segments.

Murphy is currently evaluating the impact of adopting this standard.

Note C – Revenue from Contracts with Customers

2 unchanged sentences

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

the United States (U.S.) and Canada.

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

1 unchanged sentence

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 (NCI) 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.

Revenue is generally recognized when oil and natural gas are transferred

The exception to this is the reporting of the noncontrolling interest (NCI) in MP Gulf of Mexico, LLC (MP GOM) as prescribed by GAAP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note C - Revenue from Contracts with Customers (Continued)

to the customer at the delivery point.

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

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

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

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

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

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

2 unchanged sentences

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

The Company’s revenues and other income for the three-month periods ended March 31, 2024 and 2023 were as follows.

Three Months Ended

September 30, Nine Months Ended

September 30,

(Thousands of dollars) 2024 2023

2 unchanged sentences

Onshore $ 142,543 $ 130,081

Offshore 568,721 597,242 1,549,872 1,675,389

480,439 500,310

Onshore 13,873 21,952

Offshore 54,775 16,130

3,442 4,867 7,086 18,503

Total crude oil and condensate revenue 691,532 672,117

2 unchanged sentences

Onshore 7,836 8,270

Offshore 10,908 16,079 37,078 48,151

10,374 14,629

Onshore 1,437 3,463

3 unchanged sentences

Onshore 4,276 5,450

Offshore 18,377 52,143 55,311 121,911

12,889 22,132

Onshore 66,259 70,170

2 unchanged sentences

Sales of purchased natural gas

United States

Offshore – – – 181

Onshore 245 43,737

1 unchanged sentence

Total revenue from sales to customers 794,848 839,968

Gain (loss) on derivative instruments – 115,191 – ( 308,654 )

Gain on sale of assets and other income 1,564 1,748

Total revenues and other income $ 796,412 $ 841,716

1 Includes revenue attributable to noncontrolling interest in MP GOM.

Contract Balances and Asset Recognition

As of September 30, 2023, and December 31, 2022, receivables from contracts with customers, net of royalties and associated payables, on the balance sheets, were $ 248.8 million and $ 201.1 million, respectively.

As of March 31, 2024, and December 31, 2023, receivables from contracts with customers, net of royalties and associated payables, on the balance sheet from continuing operations, were $ 215.2 million and $ 193.7 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 September 30, 2023.

Based on a forward-looking expected loss model

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note C - Revenue from Contracts with Customers (Continued)

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, 2024.

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

For the periods presented, the Company did not identify any costs incurred to obtain a contract with a customer that should be recognized as an asset.

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

Performance Obligations

6 unchanged sentences

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

As of September 30, 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 September 30, 2023

As of March 31, 2024, the Company had the following sales contracts in place which are expected to generate revenue from sales to customers for a period over 12 months starting at the inception of the contract:

Long-Term Contracts Outstanding at March 31, 2024

Location Commodity End Date Description Approximate Volumes

1 unchanged sentence

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

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

Canada Natural Gas Q4 2024 Contracts to sell natural gas at CAD fixed pricing 124 MMCFD

Canada Natural Gas Q4 2024 Contracts to sell natural gas at USD fixed pricing 25 MMCFD

Canada Natural Gas Q4 2024 Contracts to sell natural gas at CAD index pricing 28 MMCFD

Canada Natural Gas Q4 2025 Contracts to sell natural gas at USD index pricing 25 MMCFD

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

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

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

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

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

Canada Natural Gas Q4 2027 Contracts to sell natural gas at USD index prices 20 MMCFD

Canada NGL Q1 2024 Contracts to sell natural gas liquids at various CAD pricing As produced

Canada Natural Gas Q4 2027 Contracts to sell natural gas at USD index pricing 30 MMCFD

Canada Natural Gas Q4 2028 Contracts to sell natural gas at USD index pricing 10 MMCFD

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

2 unchanged sentences

Exploratory Wells

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 September 30, 2023, the Company had total capitalized exploratory well costs pending the determination of proved reserves of $ 185.5 million.

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

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

As of March 31, 2024, the Company had total capitalized drilling costs pending the determination of proved reserves of $ 34.2 million.

The following table reflects the net changes in capitalized exploratory well costs during the three-month periods ended March 31, 2024 and 2023.

(Thousands of dollars) 2024 2023

1 unchanged sentence

Additions pending the determination of proved reserves 11,538 24,685

Reclassifications to proved properties based on the

determination of proved reserves ( 1,065 ) –

Capitalized exploratory well costs charged to expense ( 26,471 ) –

Balance at September 30 $ 185,477 $ 181,461

Capital additions of $ 40.8 million in 2023 are primarily related to Oso #1 well (Atwater Valley 138) 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 fourth quarter of 2023.

Capitalized well costs charged to dry hole expense of $ 26.1 million for the nine months ended September 30, 2023 are related to Cholula-1EXP well in Mexico and Chinook #7 (Walker Ridge 425) exploration well in the Gulf of Mexico.

The preceding table excludes well costs of $ 81.7 million incurred and expensed directly to dry hole during the nine months ended September 30, 2023, related to the Chinook #7 (Walker Ridge 425) exploration well in the Gulf of Mexico.

Balance at March 31 $ 34,185 $ 196,545

Capitalized well costs charged to dry hole expense of $ 26.5 million for the three months ended March 31, 2024 was related to the Hoffe Park #1 (Mississippi Canyon 166) exploratory well in the Gulf of Mexico.

Capital additions include the Orange #1 (Mississippi Canyon 216) and Ocotillo #1 (Mississippi Canyon 40) exploratory wells in the Gulf of Mexico.

The preceding table excludes well costs of $ 5.9 million incurred and expensed directly to dry hole during the three months ended March 31, 2024, mainly related to the Oso #1 (Atwater Valley 138) 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.

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

September 30,

(Thousands of dollars) Amount No.

6 unchanged sentences

$ 34,185 7 6 $ 196,545 9 8

Of the $ 185.5 million of exploratory well costs capitalized more than one year at September 30, 2023, $ 112.8 million was in Vietnam, $ 65.3 million was in the U.S., $ 4.7 million was in Canada, and $ 2.7 million was in Brunei.

Of the $ 22.5 million of exploratory well costs capitalized more than one year at March 31, 2024, $ 15.1 million was in Vietnam, $ 4.7 million was in Canada, and $ 2.7 million was in Brunei.

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

There w ere no imp airments in the nine months ended September 30, 2023 or 2022.

On September 15, 2023, the Company completed the previously announced divestment of certain non-core operated Kaybob Duvernay assets and all of our non-operated Placid Montney assets, located in Alberta, Canada for net cash proceeds of C$ 139.0 million.

There w ere pre-tax impairments of $ 34.5 million i n the three months ended March 31, 2024 r elated to Calliope field in the Mississippi Canyon block in the Gulf of Mexico in which operational issues led to a reserve reduction.

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

On September 15, 2023, the Company completed the divestment of certain non-core operated Kaybob Duvernay assets and all of our non-operated Placid Montney assets, located in Alberta, Canada for net cash proceeds of C$ 139.0 million.

No gain or loss was recorded related to this transaction, and the effective date of the transaction was March 1, 2023.

1 unchanged sentence

Note E – Financing Arrangements and Debt

As of September 30, 2023, the Company had an $ 800 million revolving credit facility (RCF).

As of March 31, 2024, the Company had an $ 800 million revolving credit facility (RCF).

The RCF is a senior unsecured guaranteed facility which expires on November 17, 2027.

At September 30, 2023, the Company had no outstanding borrowings under the RCF and $ 4.1 million of outstanding letters of credit, which reduce the borrowing capacity of the RCF.

At September 30, 2023, the interest rate in effect on borrowings under the RCF would have been 7.92 %.

At September 30, 2023, the Company was in compliance with all covenants related to the RCF.

In September 2023, the Company redeemed the remaining $ 248.7 million principal amount outstanding of its 5.75 % senior notes due 2025 (2025 Notes).

The non-cash costs of the debt extinguishment of $ 0.9 million is included in “Interest expense, net” on the Consolidated Statements of Operations for the nine months ended September 30, 2023.

The Company irrevocably deposited the repayment amount with a trustee in September 2023.

With this deposit, as per the terms of the 2025 Notes indenture, all covenants and conditions were complied with to satisfy and discharge the full indebtedness of the 2025 Notes.

The Trustee has been irrevocably instructed to repay all sums outstanding and payable on the Redemption Date in accordance with the Indenture.

At March 31, 2024, the Company had no outstanding borrowings under the RCF and $ 3.7 million of outstanding letters of credit, which reduce the borrowing capacity of the RCF.

At March 31, 2024, the interest rate in effect on borrowings under the RCF would have been 7.68 %.

At March 31, 2024, 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.

2 unchanged sentences

Additional disclosures regarding cash flow activities are provided below.

Nine Months Ended

September 30,

Three Months Ended

(Thousands of dollars) 2024 2023

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

(Increase) in accounts receivable $ ( 69,689 ) $ ( 130,792 )

(Increase) decrease in accounts receivable $ ( 13,174 ) $ ( 3,976 )

(Increase) decrease in inventories 4,860 ( 9,296 )

(Increase) in prepaid expenses ( 3,364 ) ( 8,561 )

Decrease in prepaid expenses 5,110 3,813

Increase (decrease) in accounts payable and accrued liabilities ¹ ( 24,852 ) ( 63,800 )

7 unchanged sentences

Asset retirement costs capitalized $ 10,955 $ 2,396

Decrease in capital expenditure accrual 75,760 34,853

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

(Increase) decrease in capital expenditure accrual ( 12,948 ) 15,973

1 Excludes payable balances relating to contingent consideration for prior acquisitions.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1 unchanged sentence

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 nine-month periods ended September 30, 2023 and 2022 is shown in the following table.

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

A reconciliation of the beginning and ending aggregate carrying amount of the ARO for the three-month periods ended March 31, 2024 and 2023 is shown in the following table.

(Thousands of dollars) March 31, 2024 March 31, 2023

Balance at beginning of year $ 914,763 $ 911,653

23 unchanged sentences

the life insurance benefits are noncontributory.

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

Three Months Ended September 30,

Pension Benefits Other Postretirement Benefits

(Thousands of dollars) 2023 2022 2023 2022

Service cost $ 1,650 $ 2,129 $ 132 $ 292

Interest cost 8,534 5,163 874 574

Expected return on plan assets ( 8,223 ) ( 7,999 ) – –

Estimated defined contribution provision 53 – – –

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

Recognized actuarial loss (gain) 2,407 3,822 ( 767 ) ( 77 )

Total net periodic benefit expense $ 4,576 $ 3,697 $ 106 $ 656

Nine Months Ended September 30,

The table that follows provides the components of net periodic benefit expense for the three-month periods ended March 31, 2024 and 2023.

Three Months Ended March 31,

Pension Benefits Other Postretirement Benefits

7 unchanged sentences

Total net periodic benefit expense $ 4,734 $ 4,519 $ ( 28 ) $ 92

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

During the nine-month period ended September 30, 2023, the Company made contributions of $ 31.5 million to its defined benefit pension and postretirement benefit plans.

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

During the three-month period ended March 31, 2024, the Company made contributions of $ 9.5 million to its defined benefit pension and postretirement benefit plans.

Remaining funding in 2024 for the Company’s defined benefit pension and postretirement plans is anticipated to be $ 31.7 million.

3 unchanged sentences

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note I - Incentive Plans (Continued)

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

1 unchanged sentence

The 2020 Long-Term Plan expires in 2030.

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

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 nine months ended September 30, 2023, the Committee granted the following awards from the 2020 Long-Term Plan:

Type of Award Number of Awards Granted Grant Date Grant Date Fair Value Valuation Methodology

Performance Based RSUs 1

409,160 January 31, 2023 $ 60.46 Monte Carlo

Time Based RSUs 2

499,220 January 31, 2023 43.27 Average Stock Price

Cash Settled RSUs 3

123,230 January 31, 2023 43.27 Average Stock Price

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

2 Time based RSUs are generally scheduled to vest over three years from the date of grant.

3 Cash settled RSUs are generally scheduled to vest over three years from the date of grant.

A total of five million shares are issuable during the term of the 2020 Long-Term Plan.

Shares issued pursuant to awards granted under the 2020 Long-Term Plan may be shares that are authorized and unissued or shares that were reacquired by the Company, including shares purchased in the open market.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note I - Incentive Plans (Continued)

During the three months ended March 31, 2024, the Committee granted the following awards from the 2020 Long-Term Plan:

Type of Award Number of Awards Granted Grant Date Grant Date

Fair Value Valuation Methodology

Performance-based RSUs (TSR) 1

423,640 February 6, 2024 $ 41.95 Monte Carlo

Performance-based RSUs (ROACE) 1

105,980 February 6, 2024 $ 38.08 Average Stock Price

Time-based RSUs (Stock-Settled) 2

658,420 February 6, 2024 $ 38.08 Average Stock Price

Time-based RSUs (Cash-Settled) 2

102,900 February 6, 2024 $ 38.08 Average Stock Price

1 Performance-based RSUs are tied to the achievement of TSR and ROACE performance goals and scheduled to vest over a three-year performance period.

2 Time-based RSUs generally vest on the third anniversary of the date of grant.

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

1 unchanged sentence

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

During the nine months ended September 30, 2023, the Committee granted the following awards to Non-Employee Directors:

During the three months ended March 31, 2024, the Committee granted the following awards to Non-Employee Directors under the 2021 NED Plan:

Type of Award Number of Awards Granted Grant Date Grant Date Fair Value Valuation Methodology

1 unchanged sentence

47,412 February 07, 2024 $ 37.97 Closing Stock Price

1 Non-employee directors time-based RSUs are scheduled to vest in February 2024.

All stock option exercises are non-cash transactions for the Company.

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

The actual income tax benefit realized from the tax deductions related to stock option exercises of the share-based payment arrangements were immaterial for the nine-month period ended September 30, 2023.

Time-Based RSUs 2

1,230 March 28, 2024 $ 45.70 Closing Stock Price

1 Non-employee directors time-based RSUs are scheduled to vest on the first anniversary of the date of grant.

Non-employee directors may elect to defer settlement of their vested time-based RSUs until (1) termination of service from the Board or (2) a future date selected by the director at the time of their deferral election.

These unvested time-based RSUs are included in the table above, will vest in one year and become deferred RSUs.

2 Effective January 1, 2024, non-employee directors can elect to receive their annual cash retainers in the form of deferred RSUs.

Director fees which are deferred into RSUs are calculated and expensed each quarter by taking fees earned in respect of the applicable quarter and dividing by the closing price of our common stock on the last trading day of the quarter.

Each deferred RSU represents the right to receive one share of common stock following (1) termination of service from the Board or (2) a future date selected by the director at the time of their deferral election.

In 2017, the Company ceased granting stock options and SARs as a part of the Company’s long-term incentive compensation program.

As of December 31, 2023 there were no outstanding stock options or SARs remaining.

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

Nine Months Ended

September 30,

Three Months Ended

(Thousands of dollars) 2024 2023

5 unchanged sentences

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 nine-month periods ended September 30, 2023 and 2022.

Net income 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, 2024 and 2023.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

(Weighted-average shares) 2024 2023

2 unchanged sentences

Diluted method 153,816,626 157,388,566

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.

Three Months Ended September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Antidilutive stock options excluded from diluted shares – 1,316,222 – 163,800

Weighted average price of these options $ – $ 34.42 $ – $ 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 and nine-month periods ended September 30, 2023 and 2022, the Company’s effective income tax rates were as follows:

Three months ended September 30, 21.9 % 21.7 %

Nine months ended September 30, 22.2 % 21.2 %

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

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

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

Federal rate;

state tax expense;

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

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

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

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

For the three-month periods ended March 31, 2024 and 2023, the Company’s effective income tax rates were as follows:

Three months ended March 31, 20.6 % 20.1 %

The effective tax rate for the three-month periods ended March 31, 2024 and 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, and partially offset by several factors, including:

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

2 unchanged sentences

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 nine-month period ended September 30, 2022, was above the U.S.

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

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

Federal rate;

state tax expense;

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note K – Income Taxes (Continued)

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

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

The 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 September 30, 2023, the earliest years remaining open for audit and/or settlement in our major taxing jurisdictions are as follows:

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

As of March 31, 2024, the earliest years remaining open for audit and/or settlement in our major taxing jurisdictions are as follows:

Canada – 2016;

and Malaysia – 2017.

Following the sale in 2019, the Company has retained certain possible liabilities and rights to income tax receivables relating to the divested Malaysia business for the years prior to 2019.

The Company believes current recorded liabilities are adequate.

The Company has retained certain possible liabilities and rights to income tax receivables relating to Malaysia for the years prior to 2019.

Note L – Financial Instruments and Risk Management

5 unchanged sentences

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note L – Financial Instruments and Risk Management (Continued)

Commodity Price Risks

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

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

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

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

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

During the first quarter of 2024 and 2023, the Company did no t have any crude oil derivative contracts.

Foreign Currency Exchange Risks

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

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

For the three-month and nine-month periods ended September 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

September 30, Nine Months Ended

September 30,

Type of Derivative Contract 2023 2022 2023 2022

Commodity swaps Gain (loss) on derivative instruments $ – $ 50,089 $ – $ ( 152,822 )

Commodity collars Gain (loss) on derivative instruments – 65,102 – ( 155,832 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note L – Financial Instruments and Risk Management (Continued)

The Company had no foreign currency exchange derivatives outstanding at March 31, 2024 and 2023.

Fair Values – Recurring

4 unchanged sentences

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

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

September 30, 2023 December 31, 2022

The fair value measurements for these assets and liabilities at March 31, 2024 and December 31, 2023, are shown in the following table.

March 31, 2024 December 31, 2023

(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 September 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 Sheets.

As of March 31, 2024 and December 31, 2023, there were no outstanding commodity WTI crude oil swaps and collars contracts subject to fair value measurement, no r were there any commodity swaps and collars liabilities.

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

4 unchanged sentences

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 made in the first half of 2023.

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

2 unchanged sentences

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

Malo Field if certain enhanced oil recovery projects are undertaken.

Malo Field if certain enhanced oil recovery projects were undertaken.

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

1 unchanged sentence

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

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

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.

As of the end of the second quarter of 2023, the Company had no remaining liabilities relating to prior acquisitions from PAI and LLOG.

During the nine months ended September 30, 2023, the Company paid a total of $ 199.8 million in contingent consideration payments.

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

In the Consolidated Statements of Cash Flows, $ 124.0 million is shown in “Operating Activities” and $ 47.7 million is shown in “Financing Activities”.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note L – Financial Instruments and Risk Management (Continued)

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

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

The following table presents the carrying amounts and estimated fair values of financial instruments held by the Company at September 30, 2023 and December 31, 2022.

There were no offsetting positions recorded at March 31, 2024 and December 31, 2023.

The following table presents the carrying amounts and estimated fair values of financial instruments held by the Company at March 31, 2024 and December 31, 2023.

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

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

The table excludes

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note L – Financial Instruments and Risk Management (Continued)

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

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

2 unchanged sentences

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

September 30, December 31,

March 31, December 31,

(Thousands of dollars) Carrying

3 unchanged sentences

Note M – Accumulated Other Comprehensive Loss

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

The components of “Accumulated other comprehensive loss” on the Consolidated Balance Sheets at December 31, 2023 and March 31, 2024 and the changes during the three-month period ended March 31, 2024 are presented net of taxes in the following table.

(Thousands of dollars) Foreign

7 unchanged sentences

Net other comprehensive income (loss) ( 35,528 ) 910 ( 34,618 )

Balance at September 30, 2023 $ ( 420,831 ) $ ( 113,109 ) $ ( 533,940 )

1 Reclassifications before taxes of $ 4,146 thousand are included in the computation of net periodic benefit expense for the nine-month period ended September 30, 2023.

Balance at March 31, 2024 $ ( 417,160 ) $ ( 138,575 ) $ ( 555,735 )

1 Reclassifications before taxes of $ 1.2 million are included in the computation of net periodic benefit expense for the three-month period ended March 31, 2024.

See Note H for additional information.

Related income taxes of $ 799 thousand are included in "Income tax expense” on the Consolidated Statements of Operations for the nine-month period ended September 30, 2023.

Related income taxes of $ 0.3 million are included in "Income tax expense” on the Consolidated Statements of Operations for the three-month period ended March 31, 2024.

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.

The Company’s operations and earnings have been and may be affected by various forms of governmental action both in the U.S.

and throughout the world.

Examples of such governmental action include, but are by no means limited to:

6 unchanged sentences

expropriation of property;

restrictions and preferences affecting the issuance of oil and natural gas or mineral leases;

restrictions and preferences affecting the issuance of oil and gas or mineral leases;

restrictions on drilling and/or production;

3 unchanged sentences

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

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

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

The principal environmental, health and safety laws and regulations to which Murphy is subject address such matters as the generation, storage, handling, use, disposal and remediation of petroleum products, wastewater and hazardous materials;

3 unchanged sentences

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

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

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

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

1 unchanged sentence

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

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

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 environmental legal proceedings likely to exceed this $ 1.0 million threshold.

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

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

For example, federal methane regulations currently pending or enacted that would, among other things, require increased leak detection monitoring and repairs, stringent restrictions on venting and flaring, a new third-party monitoring program, and new fees on methane emissions from petroleum and natural gas facilities.

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

10 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note N – Environmental and Other Contingencies (Continued)

prevent future contamination.

contaminated property (including contaminated groundwater) or to perform remedial plugging operations to 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.

11 unchanged sentences

Note O – Common Stock Issued and Outstanding

Activity in the number of shares of the Company’s Common Stock issued and outstanding for the nine-month periods ended September 30, 2023 and 2022 is shown below.

Activity in the number of shares of common stock issued and outstanding for the three-month periods ended March 31, 2024 and 2023 is shown below.

( Number of shares outstanding )

September 30, 2023 September 30, 2022

March 31, 2024 March 31, 2023

Beginning of period 152,748,642 155,467,319

Stock options exercised 1

Restricted stock awards 1

1 unchanged sentence

Treasury shares purchased

( 1,273,245 ) –

End of period 152,576,156 156,098,075

1 Shares issued upon exercise of stock options and award of restricted stock are less withholding for statutory income taxes owed upon issuance of shares.

2 Details of the capital allocation framework can be found as part of the Company’s Form 8-K filed on August 4, 2022.

On August 4, 2022, the Company’s Board of Directors authorized a share repurchase program of up to $ 300 million of the Company’s common stock.

On October 30, 2023, the Company authorized an increase to the share repurchase program by an additional $ 300 million, bringing the total amount allowed to be repurchased under the program to $ 600 million.

This repurchase program has no time limit and may be suspended or discontinued completely at any time without prior notice as determined by the Company at its discretion and dependent upon a variety of factors.

During the three and nine months ended September 30, 2023, the Company repurchased 1,684,522 shares of its Common Stock under the share repurchase program for $ 75.8 million, including excise taxes, commissions and fees.

Subsequent to the third quarter of 2023, the Company’s Board of Directors authorized an increase to the share repurchase program by an additional $ 300 million, bringing the total amount allowed to be repurchased under the program to $ 600 million, and has $ 525 million remaining available to repurchase.

The share repurchase program is a component of the Company’s capital allocation framework, the details of which can be found as part of the Company’s Form 8-K filed on August 4, 2022.

During the three months ended March 31, 2024, the Company repurchased 1.3 million shares of its common stock under the share repurchase program for $ 50.0 million, including excise taxes, commissions and fees.

As of March 31, 2024, the Company has $ 400 million of its common stock remaining available to repurchase under the program.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2 unchanged sentences

For geographic purposes, revenues are attributed to the country in which the sale occurs.

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

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

Corporate, including interest income, other gains and losses, interest expense and unallocated overhead, is shown in the table to reconcile the business segments to consolidated totals.

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

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

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

Total Assets at March 31, 2024 Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

(Millions of dollars) External

11 unchanged sentences

Total $ 9,668.7 $ 796.4 $ 114.7 $ 841.7 $ 214.3

Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

(Millions of dollars) External

Revenues Income

(Loss) External

Revenues Income

1 Additional detail about the results of oil and natural gas operations is presented in the Exploration and Production Continuing Operations table on page 23 .

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read together with the unaudited consolidated financial statements and accompanying notes for the quarter ended March 31, 2024 included under Item 1 Financial Statements of this Form 10-Q and the audited consolidated financial statements and related notes and MD&A included in Item 8 and 7, respectively, of our Annual Report on Form 10-K for the year ended December 31, 2023.

This MD&A includes forward-looking statements that involve certain risks and uncertainties.

See Forward-Looking Statements at the end of this section.

Murphy Oil Corporation is a global oil and gas exploration and production company, with both onshore and offshore operations and properties.

The Company produces crude oil, natural gas and natural gas liquids primarily in the U.S.

and Canada and explores for crude oil, natural gas and natural gas liquids in targeted areas worldwide.

Our production in the U.S.

is primarily from fields in the Gulf of Mexico and in the Eagle Ford Shale area of South Texas.

In Canada, we produce from the Tupper Montney and Kaybob Duvernay fields in British Columbia and Alberta, and we produce from the Hibernia and Terra Nova fields, located offshore Newfoundland in the Jeanne d’Arc Basin.

Significant Company financial and operational highlights during the first quarter of 2024 were as follows:

• Production during the quarter was 176,671 barrels of oil equivalent per day (including NCI).

• Exploration areas expanded with the award of six deepwater blocks from Gulf of Mexico Federal Lease Sale 261

• Repurchased shares of our common stock under the share repurchase program for $50.0 million, including excise taxes, commissions and fees.

Murphy Oil Corporation’s net income from continuing operations, including noncontrolling interest, for the three months ended March 31, 2024 was $115.6 million, a decrease of $98.5 million compared to the same period of 2023.

Lower net income from continuing operations was largely driven by higher lease operating expenses ($34.3 million), higher exploration expenses ($34.2 million), and higher impairment of assets ($34.5 million), partially offset by lower income tax expense ($23.8 million).

Higher lease operating expenses related to workovers in the Gulf of Mexico and ramp up of production from the Terra Nova field in Canada Offshore following the completion of the asset life extension project in the fourth quarter of 2023.

Higher exploration costs were the result of dry hole expense for the previously suspended exploration costs for Hoffe Park #1 (Mississippi Canyon166) and additional costs related to Oso #1 (Atwater Valley 138) exploration well in the Gulf of Mexico.

The Mississippi Canyon Block 166 lease will expire in 2024 and there are no plans for additional exploration activities.

The Oso #1 (Atwater Valley 138) exploration well encountered non-commercial hydrocarbons in the fourth quarter of 2023 and operations finished in the first quarter of 2024.

Lower income tax expense was the result of lower pre-tax income.

For the three months ended March 31, 2024, total hydrocarbon production was 176,671 barrels of oil equivalent per day, a decrease of 2% compared to the same period in 2023.

The decrease was principally due to lower production in the Gulf of Mexico due to increased downtime for workovers, which was substantially offset by an increase in volumes at Tupper Montney from new well production and lower royalty rates and an increase in production from the Terra Nova field in Canada Offshore due to the restart of production.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Results of Operations

Murphy’s Net income (loss) by type of business and geographic segment is presented below.

Income (Loss)

Three Months Ended

(Millions of dollars) 2024 2023

Exploration and production

3 unchanged sentences

Total exploration and production

Corporate and other (27.5) (28.7)

Income from continuing operations 115.6 214.0

Discontinued operations ¹ (0.9) 0.3

Net income including noncontrolling interest 114.7 214.3

Net income attributable to noncontrolling interest

Net income attributable to Murphy $ 90.0 $ 191.6

1 The Company has presented its former U.K.

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

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Results of Operations (Continued)

Exploration and Production Continuing Operations

The following section of Exploration and Production (E&P) continuing operations excludes the Corporate segment, unless otherwise noted.

The following are summarized income statements for E&P continuing operations:

Three Months Ended

(Millions of dollars) 2024 2023

Revenues and other income

Revenue from production

$ 794.6 $ 796.2

Sales of purchased natural gas

Total revenues and other income

Cost and Expenses

Lease operating expenses 234.3 200.0

Severance and ad valorem taxes 10.1 11.4

Transportation, gathering and processing 56.5 53.9

Costs of purchased natural gas 0.2 32.3

Depreciation, depletion and amortization 208.3 192.8

Impairments of assets 34.5 –

Accretion of asset retirement obligations 12.7 11.1

Total exploration expenses 44.4 10.3

Selling and general expenses 6.1 8.9

Other 8.8 13.6

Results of operations before taxes 180.5 307.4

Income tax provisions

Results of operations (excluding Corporate segment) 1

$ 143.1 $ 242.7

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

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Results of Operations (Continued)

The following table contains the weighted average sales prices for the three-month periods ended March 31, 2024 and 2023.

Three Months Ended

(Weighted average sales prices) 2024 2023

Crude oil and condensate – dollars per barrel

United States - Onshore

$ 76.85 $ 74.98

United States - Offshore 1

Canada - Onshore 2

Canada - Offshore 2

Natural gas liquids – dollars per barrel

United States - Onshore 20.67 22.11

United States - Offshore 1

Canada - Onshore 2

Natural gas – dollars per thousand cubic feet

United States - Onshore 1.94 2.51

United States - Offshore 1

Canada - Onshore 2

1 Prices include the effect of noncontrolling interest in MP GOM.

dollar equivalent.

The following table contains benchmark prices relevant to the Company for the three-month periods ended March 31, 2024 and 2023.

Three Months Ended

(Average price for the period) 2024 2023

WTI ($/BBL) $ 76.96 $ 76.13

NYMEX ($/MMBTU) 2.42 2.67

AECO (C$/MCF)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Results of Operations (Continued)

Production Volumes

The following table contains hydrocarbons produced during the three-month periods ended March 31, 2024 and 2023.

For further discussion on volumes, please see Revenues from Production section on page 26 .

Three Months Ended

(Barrels per day unless otherwise noted) 2024 2023

Net crude oil and condensate

United States - Onshore

20,382 19,277

United States - Offshore 1

66,078 75,699

Canada - Onshore

Canada - Offshore

Other 245 269

Total net crude oil and condensate

95,224 100,987

Net natural gas liquids

United States - Onshore

United States - Offshore 1

Canada - Onshore

Total net natural gas liquids

Net natural gas – thousands of cubic feet per day

United States - Onshore

24,231 24,160

United States - Offshore 1

53,161 75,203

Canada - Onshore

355,455 305,232

Total net natural gas

432,847 404,595

Total net hydrocarbons - including NCI 2,3

176,671 179,745

Noncontrolling interest

Net crude oil and condensate – barrels per day (6,499) (6,613)

Net natural gas liquids – barrels per day (211) (232)

Net natural gas – thousands of cubic feet per day (2,074) (2,354)

Total noncontrolling interest 2,3

(7,056) (7,237)

Total net hydrocarbons - excluding NCI 2,3

169,615 172,508

1 Includes net volumes attributable to a noncontrolling interest in MP GOM.

2 Natural gas converted on an energy equivalent basis of 6:1.

3 NCI – noncontrolling interest in MP GOM.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Results of Operations (Continued)

Revenues from Production

The Company’s production revenues by country and product were as follows:

Three Months Ended

(Millions of dollars) 2024 2023

Revenues from production

United States - Oil

$ 623.0 $ 630.4

United States - Natural gas liquids

United States - Natural gas

Canada - Natural gas liquids

Canada - Natural gas

Total revenue from production

$ 794.6 $ 796.2

Revenue from production for the three months ended March 31, 2024 decreased by $1.6 million compared to the same period in 2023.

Lower revenue from U.S.

E&P was primarily attributable to lower sales volumes from the Gulf of Mexico due to increased downtime for workovers, partially offset by higher sales volumes at Eagle Ford Shale assets from new well production and higher realized prices at both Eagle Ford Shale assets and the Gulf of Mexico.

Higher revenue from Canadian E&P was primarily attributable to higher sales volumes from Terra Nova and Tupper Montney fields, partially offset by lower pricing at Tupper Montney and lower sales volumes from Kaybob Duvernay fields.

Tupper Montney had an increase in volumes as a result of new well production and lower royalty rates, while lower volumes at Kaybob Duvernay resulted from the divestiture of certain non-core operated assets and all of our non-operated Placid Montney assets during the second half of 2023.

The Terra Nova field in Canada Offshore restarted production during the fourth quarter of 2023 after completion of the asset life extension project.

Natural gas is purchased and subsequently sold to third parties in order to provide operational flexibility and cost mitigation for transportation commitments.

Sales of purchase natural gas is included in “Total revenues and other income” and cost to purchase natural gas is included in “Costs and Expenses” in the summarized income statements for E&P continuing operations on page 23 .

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Results of Operations (Continued)

Lease Operating and Transportation, Gathering and Processing Expenses

The Company’s total lease operating expenses and transportation, gathering and processing (TGP) expenses by geographic area were as follows:

Three Months Ended

(Millions of dollars)

(Dollars per equivalent barrel)

2024 2023 2024 2023

Lease operating expenses

United States - Onshore

$ 35.6 $ 37.3 $ 13.68 $ 15.08

United States - Offshore

151.0 125.3 20.34 14.69

Canada - Onshore

31.0 33.7 5.49 6.81

Canada - Offshore

16.5 3.1 25.91 15.06

Other 0.2 0.6 – 15.05

Total lease operating expenses

$ 234.3 $ 200.0 $ 14.37 $ 12.35

United States - Onshore

2.7 4.1 1.04 1.70

United States - Offshore

33.9 33.3 4.57 3.90

Canada - Onshore

18.0 15.3 3.19 3.10

Canada - Offshore

1.9 1.2 3.03 5.57

Total TGP expenses

$ 56.5 $ 53.9 $ 3.47 $ 3.33

Lease operating expenses and TGP expenses for the three months ended March 31, 2024 increased by $34.3 million and $2.6 million, respectively, compared to the same period in 2023.

Higher lease operating expenses from US E&P was due to workovers in the Gulf of Mexico.

Higher lease operating expenses and TGP from Canada E&P resulted from ramp up of production at the Terra Nova field since the completion of the asset life extension project in the fourth quarter of 2023.

Depreciation, Depletion and Amortization Expense

The Company’s depreciation, depletion and amortization (DD&A) expense by geographic area were as follows:

Three Months Ended

(Millions of dollars)

(Dollars per equivalent barrel)

(Millions of dollars) 2024 2023 2024 2023

United States - Onshore

$ 74.1 $ 64.6 $ 28.52 $ 26.18

United States - Offshore

99.9 95.7 13.46 11.22

Canada - Onshore

28.1 29.7 4.99 6.01

Canada - Offshore

6.2 1.9 9.68 9.29

Other – 0.9 20.38 21.62

Total DD&A expense

$ 208.3 $ 192.8 $ 12.77 $ 11.90

DD&A expense for the three months ended March 31, 2024 increased by $15.5 million, compared to the same period in 2023.

Higher DD&A expense from U.S.

E&P resulted from higher sales volumes from the Eagle Ford Shale assets and an overall increase in rates.

Higher DD&A expense from Canada E&P was primarily the result of higher sales volumes from Tupper Montney and Terra Nova fields, partially offset by overall lower rates due to fewer sales volumes from Kaybob Duvernay and Placid Montney assets following the sale of a portion of non-core assets in the fourth quarter of 2023.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Results of Operations (Continued)

Impairment of Assets

Impairment of assets for the three months ended March 31, 2024 was $34.5 million and related to Calliope field in Mississippi Canyon in the Gulf of Mexico, as a result of operational issues that led to a reserve reduction.

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

Exploration Expenses

The Company’s exploration expenses were as follows:

Three Months Ended

(Millions of dollars) 2024 2023

Exploration expenses

Dry holes and previously suspended exploration costs $ 32.4 $ 0.9

Geological and geophysical 1.4 0.8

Other exploration 7.8 5.9

Undeveloped lease amortization 2.8 2.7

Total exploration expenses

$ 44.4 $ 10.3

Exploration expenses for the three months ended March 31, 2024 increased by $34.1 million compared to the same period in 2023.

Higher dry holes and previously suspended exploration costs primarily relate to the previously suspended costs for Hoffe Park #1 (Mississippi Canyon 166) and additional costs related to the Oso #1 (Atwater Valley 138) exploration well in the Gulf of Mexico.

The Mississippi Canyon Block 166 lease will expire in 2024 and there are no plans for additional exploration activities.

The Oso #1 (Atwater Valley 138) exploration well encountered non-commercial hydrocarbons in the fourth quarter of 2023 and finished operations in the first quarter of 2024.

Other Expenses

Other expenses for the three months ended March 31, 2024 decreased by $4.8 million compared to the same period in 2023.

Other expenses were lower primarily due to an unfavorable contingent consideration adjustment of $3.9 million recorded in 2023 related to prior Gulf of Mexico acquisitions (see Note L) .

Income taxes for the three months ended March 31, 2024 decreased by $27.3 million, compared to the same period in 2023.

Lower income taxes were primarily the result of lower pre-tax income.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Results of Operations (Continued)

Corporate activities include interest expense and income, foreign exchange effects and corporate overhead not allocated to E&P.

Corporate activities reported a loss of $27.5 million for the three months ended March 31, 2024, a favorable variance of $1.2 million compared to the same period of 2023.

The favorable variance was primarily due to foreign exchange gains ($10.9 million) and lower interest expense ($9.0 million), partially offset by increased selling and general expense ($15.7 million) and lower income tax benefits ($3.4 million) .

Interest charges are lower for the three months ended March 31, 2024, primarily due to lower overall debt levels.

Higher selling and general expenses were a result of the timing of corporate donations and an increase in provisions for incentive awards.

Lower income tax benefit was a result of lower pre-tax losses.

Financial Condition

The Company’s primary sources of liquidity are cash on hand, net cash provided by continuing operations activities and available borrowing capacity under its senior unsecured RCF.

The Company’s liquidity requirements consist primarily of capital expenditures, debt maturity, retirement and interest payments, working capital requirements, dividend payments, and, as applicable, share repurchases.

The following table presents the Company’s cash flows for the periods presented:

Three Months Ended

(Thousands of dollars) 2024 2023

Net cash provided by (required by):

Net cash provided by continuing operations activities $ 398.8 $ 279.8

Net cash required by investing activities

(249.1) (345.3)

Net cash required by financing activities

(144.2) (114.7)

Effect of exchange rate changes on cash and cash equivalents 0.9 0.6

Net increase (decrease) in cash and cash equivalents

$ 6.4 $ (179.6)

Cash Provided by Continuing Operations Activities

Net cash provided by continuing operations activities for the three months ended March 31, 2024 was $119.0 million higher compared to the same period in 2023.

The increase was primarily attributable to no contingent consideration payments related to prior Gulf of Mexico acquisitions in 2024 (2023:

$124.0 million) and the timing of working capital settlements ($50.7 million), partially offset by higher lease operating expenses ($34.3 million) primarily related to workovers in the Gulf of Mexico.

Payments of contingent consideration are shown both in “Operating Activities” and “Financing Activities” in the Company’s Consolidated Statements of Cash Flows;

amounts considered as financing activities are those amounts paid up to the original estimated contingent consideration liability included in the purchase price allocation, at the time of acquisition.

Any contingent consideration paid above the original estimated liability, included in the purchase price, are considered operating activities.

During the three months ended March 31, 2023, the Company paid a total of $171.7 million in contingent consideration, of which $124.0 million is shown in “Operating Activities” and $47.7 million is shown in “Financing Activities” in the Company’s Consolidated Statements of Cash Flows.

As of the end of the second quarter of 2023, the Company had no further obligation payable for contingent consideration relating to prior Gulf of Mexico acquisitions.

Cash Required by Investing Activities

Net cash required by investing activities for the three months ended March 31, 2024 was $96.2 million lower compared to the same period in 2023.

The decrease was due to lower property additions and dry hole costs ($96.2 million).

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Financial Condition (Continued)

A reconciliation of “Property additions and dry hole costs” in the Consolidated Statements of Cash Flows to total capital expenditures for continuing operations follows.

Three Months Ended

(Millions of dollars) 2024 2023

Property additions and dry hole costs per cash flow statements $ 249.1 $ 345.3

Geophysical and other exploration expenses 7.2 4.9

Capital expenditure accrual changes and other 15.0 (14.2)

Total capital expenditures $ 271.3 $ 336.0

Total accrual basis capital expenditures are shown below.

Three Months Ended

(Millions of dollars) 2024 2023

Capital Expenditures

Exploration and production $ 267.1 $ 329.7

Corporate 4.2 6.3

Continuing operations 2,615.9 584.7 2,957.4 920.0

Discontinued operations, net of tax – ( 0.7 ) – ( 1.9 )

Total $ 2,615.9 $ 584.0 $ 2,957.4 $ 918.1

1 Additional detail about the results of oil and natural gas operations is presented in the Exploration and Production Continuing Operations table on page 24 .

Total capital expenditures $ 271.3 $ 336.0

Lower capital expenditures in the three months ended March 31, 2024 compared to the same period of 2023 was primarily attributable to lower development expenditures at Eagle Ford Shale assets, partially offset by higher development expenditures at various Gulf of Mexico fields.

Capital expenditures in 2024 primarily relate to development drilling and field development activities at Eagle Ford Shale assets ($53.4 million), development drilling and field development activities at Tupper Montney field ($47.8 million), development activities in the Gulf of Mexico, primarily related to Khaleesi, Mormont, Lucius and St.

Malo fields ($106.4 million) and total exploration costs of $35.8 million.

Total exploration costs in 2024 were in the Gulf of Mexico for the Orange #1 (Mississippi Canyon 216) and Ocotillo #1 (Mississippi Canyon 40) exploration wells and additional costs related to Oso #1 (Atwater Valley 138) exploration well which encountered non-commercial hydrocarbons in the fourth quarter of 2023 and finished operations in the first quarter of 2024.

Cash Required by Financing Activities

Net cash required by financing activities for the three months ended March 31, 2024 increased by $29.5 million compared to the same period in 2023.

In 2024, the cash used in financing activities was principally for the repurchase of common shares ($50.0 million, excluding accrued excise tax), cash dividends to shareholders of $0.30 per share ($45.8 million), withholding tax on stock-based incentive awards ($25.3 million) and distributions to the noncontrolling interest in the Gulf of Mexico ($23.0 million).

In 2023, there were payments of contingent consideration related to prior Gulf of Mexico acquisitions ($47.7 million) as discussed in the “Cash Provided by Operating Activities” section.

At March 31, 2024, the Company had approximately $1.1 billion of liquidity consisting of $323.4 million in cash and cash equivalents and $796.3 million available on its committed senior unsecured RCF with a major banking consortium.

The Company’s $800 million senior unsecured RCF expires in November 2027 and as of March 31, 2024, the Company had no outstanding borrowings under the RCF and $3.7 million of outstanding letters of credit, which reduce the borrowing capacity of the senior unsecured RCF.

At March 31, 2024, the interest rate in effect on borrowings under the facility would have been 7.68%.

At March 31, 2024, the Company was in compliance with all covenants related to the RCF.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Financial Condition (Continued)

Cash and invested cash are maintained in several operating locations outside the U.S.

As of March 31, 2024, cash and cash equivalents held outside the U.S.

included U.S.

dollar equivalents of approximately $98.1 million, the majority of which was held in Canada ($60.0 million), Mexico ($15.0 million) and the U.K.

($9.1 million).

In certain cases, the Company could incur cash taxes or other costs should these cash balances be repatriated to the U.S.

in future periods.

Canada currently collects a 5% withholding tax on any earnings repatriated to the U.S.

Working Capital

(Millions of dollars) March 31, 2024 December 31, 2023

Working capital

Total current assets $ 760.9 $ 752.2

Total current liabilities 818.2 846.5

Net working capital liability

$ (57.3) $ (94.3)

As of March 31, 2024, net working capital had a favorable increase of $37.0 million compared to December 31, 2023.

The favorable increase was primarily attributable to lower other accrued liabilities ($39.5 million), lower operating lease liabilities ($28.4 million), higher accounts receivable ($12.9 million), and a higher cash balance ($6.4 million), partially offset by higher accounts payable ($39.0 million).

Lower accrued liabilities were primarily due to incentive payments and lower operating lease liabilities were primarily due to 2024 payments reducing drilling rig and vessel lease liabilities.

Higher accounts receivable and higher accounts payable were primarily due to the timing of cash receipts and cash payments, respectively.

Capital Employed

A summary of capital employed at March 31, 2024 and December 31, 2023 follows.

March 31, 2024 December 31, 2023

(Millions of dollars) Amount % Amount %

Capital employed

Long-term debt $ 1,328.7 20.0 % $ 1,328.3 19.9 %

Murphy shareholders' equity 5,304.0 80.0 % 5,362.8 80.1 %

Total capital employed $ 6,632.7 100.0 % $ 6,691.1 100.0 %

At March 31, 2024, long-term debt of $1,328.7 million had increased by $0.4 million compared to December 31, 2023, primarily as a result of normal debt issuance cost amortization.

The total of the fixed-rate notes had a weighted average maturity of 7.9 years and a weighted average coupon of 6.2%.

Murphy shareholders’ equity decreased by $58.8 million in 2024 primarily due to shares repurchased ($50.0 million, including excise tax), cash dividends paid ($45.8 million) and unrealized foreign currency translation losses ($35.5 million), partially offset by net income earned ($90.0 million).

A summary of transactions in stockholders’ equity accounts is presented in the Consolidated Statements of Stockholders’ Equity on page 6 of this Form 10-Q report.

Critical Accounting Estimates

As of March 31, 2024, there have been no significant changes to our critical accounting estimates since our Annual Report on Form 10-K for the year ended December 31, 2023.

Accounting Changes and Recent Accounting Pronouncements

See Note B to the Consolidated Financial Statements regarding the impact or potential impact of recent accounting pronouncements upon our financial position and results of operations.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Other Key Performance Metrics

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

Management uses adjusted net income, earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA internally to evaluate the Company’s operational performance and trends between periods and relative to its industry competitors.

Adjusted net income also excludes certain items that management believes affect the comparability of results between periods.

Management believes this information may be useful to investors and analysts to gain a better understanding of the Company’s financial results.

Adjusted net income, 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.

The following table reconciles reported net income attributable to Murphy to adjusted net income from continuing operations attributable to Murphy.

Three Months Ended

(Millions of dollars)

Net income attributable to Murphy (GAAP) 1

$ 90.0 $ 191.6

Discontinued operations loss (income) 0.9 (0.3)

Net income from continuing operations attributable to Murphy

Impairment of assets 34.5 –

Write-off of previously suspended exploration well 26.1 –

Foreign exchange (gain) loss (10.5) 0.4

Mark-to-market loss on contingent consideration — 3.9

Total adjustments, before taxes

Income tax benefit related to adjustments

Total adjustments after taxes 39.9 3.4

Adjusted net income from continuing operations attributable to Murphy

$ 130.8 $ 194.7

Net income from continuing operations per average diluted share (GAAP)

Adjusted net income from continuing operations per average diluted share

1 Excludes amounts attributable to a noncontrolling interest in MP GOM.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Other Key Performance Metrics (Continued)

The following table reconciles reported net income attributable to Murphy to EBITDA attributable to Murphy and adjusted EBITDA attributable to Murphy.

Three Months Ended

(Millions of dollars) 2024 2023

Net income attributable to Murphy (GAAP) 1

$ 90.0 $ 191.6

Income tax expense 30.1 53.8

Interest expense, net 20.0 28.9

Depreciation, depletion and amortization expense 1

EBITDA attributable to Murphy (Non-GAAP) 342.8 463.6

Impairment of asset 34.5 –

Write-off of previously suspended exploration well 26.1 –

Accretion of asset retirement obligations 1

Foreign exchange (gain) loss (10.5) 0.4

Mark-to-market loss on contingent consideration – 3.9

Discontinued operations loss (income) 0.9 (0.3)

Adjusted EBITDA attributable to Murphy (Non-GAAP) $ 405.2 $ 477.5

1 Excludes amounts attributable to a noncontrolling interest in MP GOM.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

The oil and gas industry is impacted by global commodity pricing and as a result the prices for the Company’s primary products are often volatile and are affected by the levels of supply and demand for energy.

As discussed in the Results of Operations section discussing revenues, on page 26 , higher average crude oil price during the first quarter of 2024 compared to same period in 2023, directly impacted the Company’s product sales revenue.

As of close on April 30, 2024, forward price curves for existing forward contracts for the remainder of 2024 and 2025 are shown in the table below:

NYMEX ($/MMBTU)

AECO (US$ Equivalent/MCF)

Similar to the overall inflation and higher interest rates in the wider economy, the oil and gas industry and the Company is observing higher costs for goods and services used in E&P operations.

Murphy continues to manage input costs through its dedicated procurement department focused on managing supply chain and other costs to deliver cash flow from operations.

We cannot predict what impact economic factors (including, but not limited to, inflation, global conflicts and possible economic recession) may have on future commodity pricing.

Lower prices, should they occur, will result in lower profits and operating cash flows.

For the second quarter of 2024, production is expected to average between 176 and 184 thousand barrels of oil equivalents per day (MBOEPD), excluding noncontrolling interest.

The Company’s capital expenditure spend for 2024 is expected to be between $920 million and $1,020 million, excluding noncontrolling interest.

Capital and other expenditures are routinely reviewed and planned capital expenditures may be adjusted to reflect differences between budgeted and forecast cash flow during the year.

Capital expenditures may also be affected by asset purchases or sales, which often are not anticipated at the time a budget is prepared.

The Company will primarily fund its capital program in 2024 using operating cash flow and available cash.

If oil and/or natural gas prices weaken, actual cash flow generated from operations could be reduced such that capital spending reductions are required and/or borrowings under available credit facilities might be required during the year to maintain funding of the Company’s ongoing development projects.

The Company plans to utilize surplus cash (not planned to be used by operations, investing activities, dividends or payment to noncontrolling interests), in accordance with the Company’s capital allocation framework designed to allow for additional shareholder returns and debt reduction.

Details of the framework can be found in the “Capital Allocation Framework” section of the Company’s Form 8-K filed on August 4, 2022.

In 2023, the Company’s Board of Directors authorized a $300 million increase to the original share repurchase program announced in the Capital Allocation Framework, bringing the total amount allowed to be repurchased under the program to $600 million.

As of March 31, 2024, the Company has $400 million remaining available to repurchase.

The Company continues to monitor the impact of commodity prices on its financial position and is currently in compliance with the covenants related to the RCF (see Note E ).

As of April 30, 2024, the Company has entered into forward fixed-price delivery contracts to manage risk associated with certain future oil and natural gas sales prices as follows:

(MMcf/d) Price/MCF Remaining Period

Area Commodity Type Start Date End Date

Canada Natural Gas Fixed price forward sales 162 C$2.39 4/1/2024 12/31/2024

Canada Natural Gas Fixed price forward sales 25 US$1.98 4/1/2024 10/31/2024

Canada Natural Gas Fixed price forward sales 15 US$1.98 11/1/2024 12/31/2024

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