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Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 387 added, 279 removed, 981 unchanged (40% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

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

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

2024 December 31,

42 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

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

3 unchanged sentences

Total revenue from sales to customers 753,169 953,766 2,349,024 2,606,584

(Loss) on derivative instruments ( 1,344 ) – ( 1,344 ) –

Gain on sale of assets and other income 6,506 5,879 9,834 9,365

9 unchanged sentences

Accretion of asset retirement obligations 13,241 11,675 39,068 34,196

Other operating (income) expense ( 2,219 ) 4,960 5,047 16,948

Other operating expense 5,450 4,385 10,497 21,333

Impairment of assets – – 34,528 –

2 unchanged sentences

Other income (loss)

Other income (loss) 26,245 ( 7,694 ) 37,796 ( 7,767 )

Other (loss) income ( 3,926 ) 8,811 33,870 1,044

Interest expense, net ( 21,258 ) ( 29,984 ) ( 62,265 ) ( 88,695 )

Total other income (loss) 5,259 ( 37,550 ) ( 3,211 ) ( 66,478 )

Total other loss ( 25,184 ) ( 21,173 ) ( 28,395 ) ( 87,651 )

Income from continuing operations before income taxes 153,842 356,336 489,010 751,531

3 unchanged sentences

Net income including noncontrolling interest 151,112 277,804 422,032 583,974

Net income (loss) attributable to noncontrolling interest 28,523 ( 6,431 ) 53,179 16,239

Net income attributable to noncontrolling interest 12,018 22,462 65,197 38,701

NET INCOME ATTRIBUTABLE TO MURPHY $ 139,094 $ 255,342 $ 356,835 $ 545,273

15 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Thousands of dollars) 2024 2023 2024 2023

Net income including noncontrolling interest $ 151,112 $ 277,804 $ 422,032 $ 583,974

Other comprehensive (loss) income, net of tax

Net (loss) gain from foreign currency translation

Other comprehensive income (loss), net of tax

Net gain (loss) from foreign currency translation

17,764 ( 39,353 ) ( 34,588 ) ( 2,601 )

Retirement and postretirement benefit plans 1,174 1,196 2,998 3,347

Other comprehensive (loss) income ( 15,910 ) 34,136 ( 50,528 ) 38,903

Other comprehensive income (loss)

18,938 ( 38,157 ) ( 31,590 ) 746

Comprehensive income including noncontrolling interest 170,050 239,647 390,442 584,720

4 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

(Thousands of dollars) 2024 2023

9 unchanged sentences

Amortization of undeveloped leases 7,707 8,215

Mark-to-market loss on derivative instruments

Loss from discontinued operations

7 unchanged sentences

Property additions and dry hole costs ( 733,289 ) ( 902,295 )

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

Proceeds from sales of property, plant and equipment – 102,913

Net cash required by investing activities ( 733,289 ) ( 822,155 )

12 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 778 ( 414 )

Net increase (decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

( 45,851 ) ( 164,194 )

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Thousands of dollars except number of shares) 2024 2023 2024 2023

Common Stock – par $ 1.00 , authorized 450,000,000 shares, issued 195,100,628 shares at June 30, 2024 and 195,100,628 shares at June 30, 2023

Common Stock – par $ 1.00 , authorized 450,000,000 shares, issued 195,100,628 shares at September 30, 2024 and 195,100,628 shares at September 30, 2023

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

11 unchanged sentences

Balance at beginning of period ( 571,645 ) ( 495,783 ) ( 521,117 ) ( 534,686 )

Foreign currency translation (loss) gain, net of income taxes ( 16,824 ) 33,083 ( 52,352 ) 36,752

Foreign currency translation gain (loss), net of income taxes 17,764 ( 39,353 ) ( 34,588 ) ( 2,601 )

Retirement and postretirement benefit plans, net of income taxes 1,174 1,196 2,998 3,347

17 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 June 30, 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 June 30, 2024 and 2023, in conformity with U.S.

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, 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 September 30, 2024 and 2023, in conformity with U.S.

generally accepted accounting principles (GAAP).

2 unchanged sentences

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 six-month periods ended June 30, 2024 are not necessarily indicative of future results.

Financial results for the three-month and nine-month periods ended September 30, 2024 are not necessarily indicative of future results.

Note B – New Accounting Principles and Recent Accounting Pronouncements

2 unchanged sentences

Recent Accounting Pronouncements

Expense Disaggregation Disclosures.

In November 2024 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The standard becomes effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

The standard requires specified information about certain costs and expenses presented on the face of the income statement to be further disaggregated in the notes to the financial statements.

In addition, the standard requires certain expense and cost information that is not separately disaggregated to be qualitatively described.

Murphy is currently evaluating the impact of adopting the standard.

Income Tax Disclosures .

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

In December 2023 the FASB issued ASU 2023-09 Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

6 unchanged sentences

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.

The standard requires additional disclosures about reporting 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 reportable segments.

Murphy will adopt Update 2023-07 in the period required, and we do not expect the adoption to have a material impact on our consolidated financial position, operating results and cash flows.

Note C – Revenue from Contracts with Customers

Nature of Goods and Services

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note C – Revenue from Contracts with Customers (Continued)

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

5 unchanged sentences

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)

- 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.

6 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 and six-month periods ended June 30, 2024 and 2023 were as follows.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note C - Revenue from Contracts with Customers (Continued)

The Company’s revenues and other income for the three-month and nine-month periods ended September 30, 2024 and 2023 were as follows.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Thousands of dollars) 2024 2023 2024 2023

32 unchanged sentences

Total revenue from sales to customers 753,169 953,766 2,349,024 2,606,584

(Loss) on derivative instruments ( 1,344 ) – ( 1,344 ) –

Gain on sale of assets and other income 6,506 5,879 9,834 9,365

2 unchanged sentences

Contract Balances and Asset Recognition

As of June 30, 2024, and December 31, 2023, receivables from contracts with customers, net of royalties and associated payables, on the balance sheet from continuing operations, were $ 233.2 million and $ 193.7 million, respectively.

As of September 30, 2024, and December 31, 2023, receivables from contracts with customers, net of royalties and associated payables, on the balance sheet from continuing operations, were $ 165.1 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

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 June 30, 2024.

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, 2024.

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

3 unchanged sentences

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

As a result of this assessment for the Company, each unit of measure of the specified commodity is considered to represent a distinct performance obligation that is satisfied at a point in time upon the transfer of control of the commodity.

As a result of this assessment for the Company,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note C – Revenue from Contracts with Customers (Continued)

each unit of measure of the specified commodity is considered to represent a distinct performance obligation that is satisfied at a point in time upon the transfer of control of the commodity.

For contracts with market or index-based pricing, which represent the majority of sales contracts, the Company has elected the allocation exception and allocates the variable consideration to each single performance obligation in the contract.

2 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 June 30, 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 June 30, 2024

As of September 30, 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 September 30, 2024

Location Commodity End Date Description Approximate Volumes

5 unchanged sentences

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

Canada Natural Gas Q4 2025 Contracts to sell natural gas at CAD fixed pricing 40 MMCFD

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

Canada Natural Gas Q4 2026 Contracts to sell natural gas at CAD fixed pricing 50 MMCFD

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

2 unchanged sentences

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note D – Property, Plant and Equipment

1 unchanged sentence

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 June 30, 2024, the Company had total capitalized drilling costs pending the determination of proved reserves of $ 43.0 million.

The following table reflects the net changes in capitalized exploratory well costs during the six-month periods ended June 30, 2024 and 2023.

As of September 30, 2024, the Company had total capitalized drilling costs pending the determination of proved reserves of $ 51.1 million.

The following table reflects the net changes in capitalized exploratory well costs during the nine-month periods ended September 30, 2024 and 2023.

(Thousands of dollars) 2024 2023

1 unchanged sentence

Additions pending the determination of proved reserves 28,452 40,825

Reclassifications to proved properties based on the

determination of proved reserves – ( 1,065 )

Capitalized exploratory well costs charged to expense ( 26,471 ) ( 26,143 )

Balance at June 30 $ 43,038 $ 193,405

Capitalized well costs charged to dry hole expense of $ 26.5 million for the six months ended June 30, 2024 was related to the Hoffe Park #1 (Mississippi Canyon 166) exploratory well in the Gulf of Mexico.

Capital additions are mainly for Ocotillo #1 (Mississippi Canyon 40) exploratory well in the Gulf of Mexico.

The preceding table excludes well costs of $ 31.8 million and $ 70.3 million incurred and expensed directly to dry hole for the six months ended June 30, 2024 and 2023, respectively.

In 2024 the amount includes $ 25.5 million for the Orange #1 (Mississippi Canyon 216) exploration well in the Gulf of Mexico and in 2023 the amount includes $ 69.2 million related to the Chinook #7 exploration well in the Gulf of Mexico.

Balance at September 30 $ 51,099 $ 185,477

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note D – Property, Plant and Equipment (Continued)

Capital additions of $ 28.5 million are mainly for Ocotillo #1 (Mississippi Canyon 40) exploratory well in the Gulf of Mexico and Hai Su Vang #1 (Block 15/2-17) and Lac Da Hong #1 (Block 15-1/05) exploratory wells in Vietnam.

Capitalized well costs charged to dry hole expense of $ 26.5 million for the nine months ended September 30, 2024 were related to the Hoffe Park #1 (Mississippi Canyon 166) exploratory well in the Gulf of Mexico.

The preceding table excludes well costs of $ 43.0 million and $ 81.7 million incurred and expensed directly to dry hole for the nine months ended September 30, 2024 and 2023, respectively.

In 2024, these costs primarily include $ 25.8 million for the Orange #1 (Mississippi Canyon 216) and $ 11.8 million for the Sebastian #1 (Mississippi Canyon 387) exploration wells in the Gulf of Mexico.

In 2023, the amount primarily includes $ 80.3 million for the Chinook #7 (Walker Ridge 425) 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

$ 51,099 6 6 $ 185,477 6 5

Of the $ 22.5 million of exploratory well costs capitalized more than one year at June 30, 2024, $ 15.1 million was in Vietnam, $ 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 September 30, 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 were no impairments in the three months ended June 30, 2024.

There w ere pre-tax impairments of $ 34.5 million i n the six months ended June 30, 2024 r elated to Calliope field in Mississippi Canyon, in the Gulf of Mexico, where operational issues led to a reserve reduction.

There were no impairments in the three and six months en ded June 30, 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

There were no impairments in the three months ended September 30, 2024.

There were pre-tax impairments of $ 34.5 million in the nine months ended September 30, 2024 r elated to the Calliope field, in the Gulf of Mexico, where operational issues led to a reserve reduction.

There were no impairments in the three and nine months en ded September 30, 2023.

No gain or loss was recorded related to this transaction.

Note E – Financing Arrangements and Debt

As of June 30, 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 June 30, 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 June 30, 2024, the interest rate in effect on borrowings under the RCF would have been 7.69 %.

At June 30, 2024, the Company was in compliance with all covenants related to the RCF.

Revolving Credit Facility

As of September 30, 2024, the Company had an $ 800.0 million revolving credit facility (RCF).

The RCF is a senior unsecured guaranteed facility was set to expire on November 17, 2027.

At September 30, 2024, the Company had no outstanding borrowings under the RCF and $ 0.4 million of outstanding letters of credit, which reduce the borrowing capacity of the RCF.

At September 30, 2024, the interest rate in effect on borrowings under the RCF would have been 7.20 %.

At September 30, 2024, the Company was in compliance with all covenants related to the RCF.

Subsequent Event - Revolving Credit Facility

On October 7, 2024, the Company entered into a credit agreement governing a $ 1,200.0 million senior unsecured guaranteed revolving credit facility (New RCF) with a maturity date on October 7, 2029.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note E – Financing Arrangements and Debt (Continued)

RCF, which is effective October 2024, extends the borrowing term and increases the borrowing capacity of the previous RCF.

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

In addition, prior to the Investment Grade Ratings Date, the Company will be required to comply with a maximum consolidated leverage ratio of 3.25 x and a minimum consolidated interest coverage ratio of 2.50 x.

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

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

The “Alternate Base Rate” of interest is the highest of (a) the Wall Street Journal prime rate in effect on such day, (b) the New York Federal Reserve Bank (NYFRB) Rate in effect on such day plus ½ of 1% and (c) the Adjusted Term SOFR Rate for a one-month interest period as published two U.S.

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

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

Government Securities Business Day) plus 1 %.

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

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

The “Applicable Rate” of interest means, for any day, the applicable rate per annum based upon the ratings of Moody’s Investors Service, Inc.

and Standard and Poor’s Rating Services, respectively, as set forth in the grid included in the full text of the credit agreement governing the New RCF.

The Company has incurred $ 12.4 million in transaction costs and will record the amount to “Deferred charges and other assets” in the Consolidated Balance Sheets, which will be amortized to interest expense over the term of the New RCF.

Debt Extinguishment

In May 2024, the Company paid a total of $ 50.5 million to complete the open market repurchases of $ 26.5 million aggregate principal of its 5.875 % senior notes due 2027 (2027 Notes) and $ 23.5 million aggregate principal of its 6.375 % senior notes due 2028 (2028 Notes).

The cash costs of the debt extinguishment of $ 0.5 million is included in “Interest expense, net” on the Consolidated Statements of Operations for the six months ended June 30, 2024.

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

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

The cash costs of the debt extinguishment of $ 0.5 million is included in “Interest expense, net” on the Consolidated Statements of Operations for the nine months ended September 30, 2024.

In September 2023, the Company redeemed the remaining $ 248.7 million principal amount outstanding of its 5.750 % 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.

Debt Offering

On September 19, 2024, the Company announced the public offering (the Offering) of $ 600.0 million aggregate principal amount of 6.000 % senior notes due 2032.

This Offering was pursuant to the shelf registration statement on file with the U.S.

Securities and Exchange Commission (SEC) that permits the offer and sale of debt and/or equity securities.

Subsequent to quarter end, the shelf registration statement was renewed through October 15, 2027.

Subsequent Event - Debt Offering

On October 3, 2024, the Company closed the Offering of $ 600.0 million aggregate principal amount of new senior notes that bear interest at a rate of 6.000 % per annum and mature on October 1, 2032.

The Company has incurred transaction costs of $ 10.1 million on the issuance of these new notes.

The Company will pay interest semi-annually on April 1 and October 1 of each year, beginning April 1, 2025.

The proceeds of the $ 600.0 million notes will be used to fund the repurchase and repayment of debt.

To date, the Company has repurchased and canceled an aggregate $ 521.1 million of its notes, comprised of:

$ 258.8 million of the 2027 Notes, $ 200.2 million of the 2028 Notes and $ 62.1 million of the 7.050 % senior notes due 2029 (2029 Notes).

The total cost of the debt extinguishment was $ 18.2 million:

consisting of cash costs of $ 14.9 million and non-cash costs of $ 3.3 million.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note F – Other Financial Information

Additional disclosures regarding cash flow activities are provided below.

Six Months Ended

Nine Months Ended

September 30,

(Thousands of dollars) 2024 2023

2 unchanged sentences

(Increase) decrease in inventories 1,823 ( 6,609 )

Decrease in prepaid expenses 2,296 8,291

(Increase) decrease in prepaid expenses ( 8,131 ) ( 3,364 )

Increase (decrease) in accounts payable and accrued liabilities ¹ ( 43,231 ) ( 60,582 )

9 unchanged sentences

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note G – Asset Retirement Obligations

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

A reconciliation of the beginning and ending aggregate carrying amount of the ARO for the six-month periods ended June 30, 2024 and 2023 are shown in the following table.

(Thousands of dollars) June 30, 2024 June 30, 2023

A reconciliation of the beginning and ending aggregate carrying amount of the ARO for the nine-month periods ended September 30, 2024 and 2023 are shown in the following table.

(Thousands of dollars) September 30, 2024 September 30, 2023

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

12 unchanged sentences

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note H – Employee and Retiree Benefit Plans

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note H – Employee and Retiree Benefit Plans (Continued)

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

7 unchanged sentences

the life insurance benefits are noncontributory.

The table that follows provides the components of net periodic benefit expense for the three-month and six-month periods ended June 30, 2024 and 2023.

Three Months Ended June 30,

The table that follows provides the components of net periodic benefit expense for the three-month and nine-month periods ended September 30, 2024 and 2023.

Three Months Ended September 30,

Pension Benefits Other Postretirement Benefits

7 unchanged sentences

Total net periodic benefit expense $ 4,734 $ 4,576 $ ( 28 ) $ 106

Six Months Ended June 30,

Nine Months Ended September 30,

Pension Benefits Other Postretirement Benefits

7 unchanged sentences

Total net periodic benefit expense $ 14,202 $ 13,732 $ ( 84 ) $ 304

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 six-month period ended June 30, 2024, the Company made contributions of $ 18.9 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 (loss) income” in the Consolidated Statements of Operations.

During the nine-month period ended September 30, 2024, the Company made contributions of $ 31.3 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 $ 9.9 million.

11 unchanged sentences

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.

During the six months ended June 30, 2024, the Committee granted the following awards from the 2020 Long-Term Plan:

During the nine months ended September 30, 2024, the Committee granted the following awards from the 2020 Long-Term Plan:

Type of Award Number of Awards Granted Grant Date Grant Date

16 unchanged sentences

460 April 1, 2024 $ 45.98 Average Stock Price

Time-based RSUs (Stock-Settled) 2

22,990 August 19, 2024 $ 37.78 Average Stock Price

1 Performance-based RSUs are tied to the achievement of Total Shareholder Return (TSR) and Return on Average Capital Employed (ROACE) performance goals and are scheduled to vest three years from the date of grant if performance conditions are met.

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.

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

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

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

During the six months ended June 30, 2024, the Committee granted the following awards to Non-Employee Directors under the 2021 NED Plan:

During the nine months ended September 30, 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

5 unchanged sentences

1,364 June 28, 2024 $ 41.24 Closing Stock Price

Time-Based RSUs 2

1,668 September 30, 2024 $ 33.74 Closing Stock Price

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

4 unchanged sentences

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 June 30, 2024 there were no outstanding stock options or SARs remaining.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note I – Incentive Plans (Continued)

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

As of September 30, 2024 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:

Six Months Ended

Nine Months Ended

September 30,

(Thousands of dollars) 2024 2023

4 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 six-month periods ended June 30, 2024 and 2023.

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, 2024 and 2023.

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Weighted-average shares) 2024 2023 2024 2023

4 unchanged sentences

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 six-month periods ended June 30, 2024 and 2023, the Company’s effective income tax rates were as follows:

Three months ended June 30, 17.2 % 27.4 %

Six months ended June 30, 18.7 % 22.4 %

The effective tax rate for the three-month period ended June 30, 2024, 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 a Canada tax credit received.

These impacts are partially offset by the effects of income generated in foreign tax jurisdictions, certain of which have income tax rates higher than the U.S.

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

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

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

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

state tax expense;

stock-based compensation;

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

The effective tax rate for the six-month period ended June 30, 2024 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 a Canada tax credit received.

These impacts were 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.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note K – Income Taxes (Continued)

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

For the three-month and nine-month periods ended September 30, 2024 and 2023, the Company’s effective income tax rates were as follows:

Three months ended September 30, 1.4 % 21.9 %

Nine months ended September 30, 13.3 % 22.2 %

The effective tax rate for the three-month period ended September 30, 2024 was below the U.S.

statutory tax rate of 21% primarily due to an income tax deduction for prior years’ Australia exploration spend which resulted in an income tax benefit of $ 33.7 million.

The effective tax rate for the nine-month period ended September 30, 2024 was below the U.S.

statutory tax rate of 21% primarily due to an income tax deduction for prior years’ Australia exploration spend and no tax applied to the pre-tax income of the noncontrolling interest in MP GOM.

The effective tax rates for the three-month period and nine-month period ended September 30, 2023 were above the U.S.

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

1 unchanged sentence

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.

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.

1 unchanged sentence

These audits often take years to complete and settle.

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.

Although the Company believes that recorded liabilities for unsettled issues

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note K – Income Taxes (Continued)

are adequate, additional gains or losses could occur in future years from resolution of outstanding unsettled matters.

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

As of June 30, 2024, the earliest years remaining open for audit and/or settlement in our major taxing jurisdictions are as follows:

As of September 30, 2024, the earliest years remaining open for audit and/or settlement in our major taxing jurisdictions are as follows:

Canada – 2016;

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

Commodity Price Risks

During the second 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 June 30, 2024 and 2023.

The Company had no foreign currency exchange derivatives outstanding at September 30, 2024 and 2023.

Commodity Price Risks

During the third quarter of 2024, the Company entered into natural gas swap contracts that will be effective in 2025.

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

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

At September 30, 2024, volumes per day associated with outstanding natural gas derivative contracts and the weighted average prices for these contracts are as follows:

NYMEX HENRY HUB swap contracts:

Volumes (MMCF/d):

Price per MCF:

At September 30, 2024 and December 31, 2023, the fair value of derivative instruments not designated as hedging instruments are presented in the following table:

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

Type of Derivative Contract Balance Sheet Location September 30, 2024 December 31, 2023

Commodity swaps Accounts payable $ ( 1,344 ) $ –

For the three-month and nine-month periods ended September 30, 2024 and 2023, 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:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note L – Financial Instruments and Risk Management (Continued)

Gain (Loss) Gain (Loss)

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

Type of Derivative Contract Statement of Operations Location 2024 2023 2024 2023

Commodity swaps (Loss) on derivative instruments $ ( 1,344 ) $ – $ ( 1,344 ) $ –

Fair Values – Recurring

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

The fair value measurements for these assets and liabilities at June 30, 2024 and December 31, 2023, are shown in the following table.

June 30, 2024 December 31, 2023

The fair value measurements for these assets and liabilities at September 30, 2024 and December 31, 2023, are shown in the following table:

September 30, 2024 December 31, 2023

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

Commodity swaps $ – $ 1,344 $ – $ 1,344 $ – $ – $ – $ –

Nonqualified employee savings plan 19,225 – – 19,225 17,785 – – 17,785

$ 19,225 $ 1,344 $ – $ 20,569 $ 17,785 $ – $ – $ 17,785

The fair value of commodity (Henry Hub natural gas) swaps was based on active market quotes for Henry Hub (HH) natural gas.

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

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

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

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

The income effect of changes in the fair value of the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note L – Financial Instruments and Risk Management (Continued)

nonqualified employee savings plan is recorded in “Selling and general expenses” in the Consolidated Statements of Operations.

As of June 30, 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.

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.

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

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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 six months ended June 30, 2023, the Company paid a total of $ 199.8 million in contingent consideration payments.

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

In the Consolidated Statements of Cash Flows, $ 139.6 million is shown in “Operating Activities” and $ 60.2 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 June 30, 2024 and December 31, 2023.

The following table presents the carrying amounts and estimated fair values of financial instruments held by the Company at June 30, 2024 and December 31, 2023.

There were no offsetting positions recorded at September 30, 2024 and December 31, 2023.

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

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The fair value of these, which represents fees associated with obtaining the instruments, were minimal.

June 30, December 31,

September 30, December 31,

(Thousands of dollars) Carrying

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Current and long-term debt

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

$ 1,280,072 $ 1,288,682 $ 1,329,075 $ 1,265,185

Note M – Accumulated Other Comprehensive Loss

The components of “Accumulated other comprehensive loss” on the Consolidated Balance Sheets at December 31, 2023 and June 30, 2024 and the changes during the six-month period ended June 30, 2024 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 September 30, 2024 and the changes during the nine-month period ended September 30, 2024 are presented net of taxes in the following table.

(Thousands of dollars) Foreign

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Net other comprehensive income (loss) ( 34,588 ) 2,998 ( 31,590 )

Balance at June 30, 2024 $ ( 433,984 ) $ ( 137,661 ) $ ( 571,645 )

1 Reclassifications before taxes of $ 2.5 million are included in the computation of net periodic benefit expense for the six-month period ended June 30, 2024.

Balance at September 30, 2024 $ ( 416,220 ) $ ( 136,487 ) $ ( 552,707 )

1 Reclassifications before taxes of $ 4.0 million are included in the computation of net periodic benefit expense for the nine-month period ended September 30, 2024.

See Note H for additional information.

Related income taxes of $ 0.7 million are included in "Income tax expense” on the Consolidated Statements of Operations for the six-month period ended June 30, 2024.

Related income taxes of $ 1.0 million are included in "Income tax expense” on the Consolidated Statements of Operations for the nine-month period ended September 30, 2024.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note N – Environmental and Other Contingencies

22 unchanged sentences

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note N – Environmental and Other Contingencies (Continued)

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.

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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, federal methane regulations are 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.

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.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note N – Environmental and Other Contingencies (Continued)

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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note O – Common Stock Issued and Outstanding

Activity in the number of shares of common stock issued and outstanding for the six-month periods ended June 30, 2024 and 2023 is shown below.

Activity in the number of shares of common stock issued and outstanding for the nine-month periods ended September 30, 2024 and 2023 is shown below.

( Number of shares outstanding )

June 30, 2024 June 30, 2023

September 30, 2024 September 30, 2023

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

Stock options exercised 1

Restricted stock awards 1

4 unchanged sentences

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.

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 of an additional $ 300 million, bringing the total amount allowed to be repurchased under the program to $ 600 million.

The Company’s Board of Directors has authorized a share repurchase program whereby the Company can repurchase up to $ 1,100.0 million of the Company’s common stock.

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 six months ended June 30, 2024, the Company repurchased 2.6 million shares of its common stock under the share repurchase program for $ 105.8 million ($ 106.5 million including excise taxes and fees).

As of June 30, 2024, the Company had $ 344 million of its common stock remaining available to repurchase under the program.

On August 7, 2024, the Company’s Board of Directors authorized an increase to the share repurchase program of an additional $ 500 million, bringing the total amount allowed to be repurchased under the program to $ 1.1 billion.

Subsequent to the second quarter of 2024, the Company repurchased 1,142,867 shares of its common stock in open-market transactions for $ 44.1 million, excluding taxes and fees.

As of August 7, 2024 the Company had $ 800 million of its common stock remaining available to repurchase under the program.

During the nine months ended September 30, 2024, the Company repurchased 8.0 million shares of its common stock under the share repurchase program for $ 300.0 million ($ 302.7 million including excise taxes and fees).

As of September 30, 2024, the Company had $ 650.1 million of its common stock remaining available to repurchase under the program.

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 and August 8, 2024.

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

Total Assets at June 30, 2024 Three Months Ended June 30, 2024 Three Months Ended June 30, 2023

Total Assets at September 30, 2024 Three Months Ended September 30, 2024 Three Months Ended September 30, 2023

(Millions of dollars) External

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Total $ 9,716.4 $ 758.3 $ 151.1 $ 959.6 $ 277.8

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

(Millions of dollars) External

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Purchase options also exist for certain leases.

During the second quarter of 2024, the Company exercised an option to extend and expand an operating lease pertaining to a drill ship used in our offshore business.

During the second quarter of 2024, the Company exercised an option to extend an operating lease pertaining to a drill ship used in our offshore business.

This resulted in an increase of $ 254.1 million (discounted) to our right-of-use assets and operating lease liabilities at June 30, 2024.

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Lease Term and Discount Rate

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Weighted average remaining lease term:

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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 June 30, 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.

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 September 30, 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.

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In Canada, we produce from the onshore fields Tupper Montney and Kaybob Duvernay, 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 second quarter of 2024 were as follows:

• Produced 187,847 barrels of oil equivalent per day (including NCI) during the quarter

• Drilled a discovery at the non-operated Ocotillo #1 exploration well in Mississippi Canyon 40 in the Gulf of Mexico

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

• Produced 191,273 barrels of oil equivalent per day (including NCI)

• Maintained quarterly dividend of $0.30 per share or $1.20 per share annualized

• Advanced the capital allocation framework 1 :

• Repurchased $194.1 million ($196.2 million including excise taxes and fees) of common stock, or 5,374,191 shares, at an average price of $36.12 per share

◦ Completed the open market repurchase of approximately $50.0 million of long-term debt notes

1 Details of the capital allocation framework can be found as part of the Company’s Form 8-K filed on August 4, 2022 and August 8, 2024.

Subsequent to the second quarter of 2024:

• On August 7, 2024 the Company’s Board of Directors authorized an increase to the share repurchase program of an additional $500 million, bringing the total amount allowed to be repurchased under the program to $1.1 billion

• As of August 7, 2024 the Company repurchased $44.1 million ($44.6 million including excise taxes and fees) of common stock, or 1,142,867 shares, and had $800 million of its common stock available to repurchase under the program

Murphy Oil Corporation’s net income from continuing operations, including noncontrolling interest, for the three months ended June 30, 2024, was $156.9 million, an increase of $64.4 million compared to the same period in 2023.

Higher net income from continuing operations was largely driven by lower exploration costs ($73.1 million), higher other income ($33.9 million) and lower interest expense on long-term debt ($8.9 million), partially offset by higher lease operating costs ($65.3 million).

The decrease in exploration costs were driven primarily by lower dry hole costs related to the Orange #1 (Mississippi Canyon 216) exploration well that encountered non-commercial hydrocarbons in the second quarter of 2024.

In the second quarter of 2023, exploration costs included dry hole costs relating to the Chinook #7 (Walker Ridge 425) exploration well in the Gulf of Mexico, and previously suspended exploration costs for the Cholula-1EXP well in Mexico.

Higher other income related to foreign exchange gains and interest income on several outstanding joint interest receivables and lower interest expense on long-term debt related to debt repayments since the prior period.

These were partially offset by increased workover costs in the Gulf of Mexico.

Subsequent to the third quarter of 2024:

• Issued $600.0 million of 6.000% senior notes due 2032, and used proceeds to tender an aggregate $521.1 million of senior notes due 2027, 2028 and 2029

• Entered into new five-year, $1.2 billion senior unsecured credit facility, representing a 50 percent increase from previous facility size

Murphy Oil Corporation’s net income from continuing operations, including noncontrolling interest, for the three months ended September 30, 2024, was $151.7 million, a decrease of $126.5 million compared to the same period in 2023.

Lower net income from continuing operations was driven primarily by lower revenues from production ($192.7 million), higher lease operating expenses ($29.5 million), and lower other income ($12.7 million), and was partially offset by lower income tax expense ($76.0 million), lower transportation, gathering and processing expenses ($14.1 million), and lower depreciation, depreciation, depletion and amortization expenses ($13.9 million).

Lower revenues were primarily driven by lower oil production in the U.S., combined with lower oil prices.

Higher lease operating expenses relate primarily to workover projects in the Gulf of Mexico.

Lower other income represents unrealized foreign exchange losses.

Lower income tax expense in the current period is driven primarily by lower operating income, in addition to an income tax deduction for prior years’ Australia exploration spend.

Lower transportation, gathering and processing expenses and lower depreciation, depletion and amortization expenses were both driven by lower production in the U.S.

For the three months ended September 30, 2024 total hydrocarbon production was 191,273 barrels of oil equivalent per day, a decrease of 8% compared to the third quarter of 2023.

The decrease was principally due to lower production in the U.S., primarily in the Gulf of Mexico, due to workover activities and downtime, and in the Eagle Ford Shale, due primarily to the timing of new wells.

Decreases in the U.S.

were offset by increases in Canada at both Terra Nova, which restarted production in late 2023.

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

Overview (Continued)

For the three months ended June 30, 2024 total hydrocarbon production was 187,847 barrels of oil equivalent per day, a decrease of 1% compared to the second quarter of 2023.

The decrease was principally due to lower production in the U.S., primarily at the Eagle Ford Shale due to a lower number of new wells on production, and in the Gulf of Mexico due to downtime and timing of new wells .

Decreases in the U.S.

were offset by increases in Canada at both Tupper Montney, due to new wells online, and Terra Nova, which restarted production in late 2023.

Murphy Oil Corporation’s net income from continuing operations, including noncontrolling interest, for the six months ended June 30, 2024 was $272.4 million, a decrease of $34.1 million compared to the same period of 2023.

Lower net income from continuing operations was largely driven by higher lease operating expenses ($99.6 million), higher impairment of assets ($34.5 million), and higher DD&A expense ($15.3 million).

Decreases were partially offset by higher other income ($45.6 million), lower exploration expenses ($38.9 million), lower income tax expense ($26.0 million), and lower interest expense on long-term debt ($17.7 million).

Higher lease operating expenses related to workover costs at Neidermeyer and were partially offset by lower production handling costs at the King’s Quay floating production facility in the Gulf of Mexico.

Impairment costs related to the Calliope field were recorded in the first quarter of 2024.

Higher other income related to foreign exchange gains and interest income on outstanding joint interest receivables.

Exploration expense in the current period was primarily due to dry hole expenses recorded for the Orange #1 (Mississippi Canyon 216) non-operated exploratory well in the Gulf of Mexico, the previously suspended exploration 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 Orange #1 (Mississippi Canyon 216) exploratory well encountered non-commercial hydrocarbons and was classified to dry hole expense in the second quarter of 2024.

The Hoffe Park #1 (Mississippi Canyon 166) lease expired 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 driven by lower net income.

Lower interest expense is driven by overall lower debt levels.

For the six months ended June 30, 2024 total hydrocarbon production was 182,259 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 U.S., primarily in the Gulf of Mexico due to downtime for workovers and timing of new wells, and in the Eagle Ford Shale due to a lower number of new wells on production in the current period.

Murphy Oil Corporation’s net income from continuing operations, including noncontrolling interest, for the nine months ended September 30, 2024 was $424.1 million, a decrease of $160.6 million compared to the same period of 2023.

Lower net income from continuing operations was largely driven by lower revenues from production ($196.7 million), higher lease operating expenses ($129.2 million), and higher impairment of assets ($34.5 million).

These were partially offset by lower income tax expense ($102.0 million), lower exploration expenses ($34.1 million), higher other income ($32.8 million), lower interest expense on long-term debt ($26.4 million), and lower transportation, gathering and processing expenses ($17.8 million).

Lower revenues from production were primarily driven by downtime in the Gulf of Mexico and Eagle Ford Shale and lower natural gas prices, partially offset by higher year-to-date oil prices, higher production in Canada due to the restart of production at Terra Nova in late 2023, and well performance, combined with lower royalty rates at Tupper Montney.

Higher lease operating expenses were primarily due to workovers in the Gulf of Mexico and higher production activity in Canada at Terra Nova, partially offset by lower production handling (PHA) fees in the Gulf of Mexico.

Impairment charges related to the Calliope field were recorded in the first quarter of 2024.

The decrease in income tax expense primarily relates to lower income tax expenses driven by lower overall income, in addition to an income tax deduction for prior years’ Australia exploration spend.

Exploration expense in the current period was primarily due to dry hole expense recorded for multiple wells in the Gulf of Mexico, including Sebastian #1 (Mississippi Canyon 387) and Orange #1 (Mississippi Canyon 216), additional costs related to the Oso #1 (Atwater Valley 138) well, and for previously suspended exploration costs related to an expired lease at Hoffe Park #1 (Mississippi Canyon 166).

Higher other income related to unrealized foreign exchange gains and interest income on several outstanding joint interest receivables.

Lower interest expense was due to lower debt levels and lower transportation, gathering and processing expenses related to lower production in the U.S.

For the nine months ended September 30, 2024 total hydrocarbon production was 185,286 barrels of oil equivalent per day, a decrease of 4% compared to the same period in 2023.

The decrease was principally due to lower production in the U.S., primarily in the Gulf of Mexico due to downtime for workovers, and in the Eagle Ford Shale, due to timing of new wells.

Decreases in the U.S.

were substantially offset by increases in Canada at both Tupper Montney due to new wells online, and Terra Nova, which restarted production in late 2023.

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

were partially offset by increases in Canada at both Tupper Montney, due to new wells online, and Terra Nova, which restarted production in late 2023.

Results of Operations

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars) 2024 2023 2024 2023

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Net income including noncontrolling interest 151.1 277.8 422.0 584.0

Net income (loss) attributable to noncontrolling interest

Net income attributable to noncontrolling interest

12.0 22.5 65.2 38.7

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars) 2024 2023 2024 2023

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Results of Operations (Continued)

The following table contains the weighted average sales prices for the three-month and six-month periods ended June 30, 2024 and 2023.

The following table contains the weighted average sales prices for the three-month and nine-month periods ended September 30, 2024 and 2023.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Weighted average sales prices) 2024 2023 2024 2023

23 unchanged sentences

dollar equivalent.

The following table contains benchmark prices relevant to the Company for the three-month and six-month periods ended June 30, 2024 and 2023.

The following table contains benchmark prices relevant to the Company for the three-month and nine-month periods ended September 30, 2024 and 2023.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Average price for the period) 2024 2023 2024 2023

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Production Volumes

The following table contains hydrocarbons produced during the three-month and six-month periods ended June 30, 2024 and 2023.

The following table contains hydrocarbons produced during the three-month and nine-month periods ended September 30, 2024 and 2023.

For further discussion on volumes, please see “Revenues from Production” section on page 29 .

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Barrels per day unless otherwise noted) 2024 2023 2024 2023

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Results of Operations (Continued)

The following discussion of E&P continuing operations includes amounts attributable to a noncontrolling interest in MP GOM and excludes the Corporate segment unless otherwise noted.

Revenues from Production

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars) 2024 2023 2024 2023

14 unchanged sentences

$ 753.2 $ 945.9 $ 2,345.3 $ 2,542.0

Revenues from production for the three months ended June 30, 2024 decreased $2.3 million compared to the same period in 2023.

Lower revenue was driven by increased workovers, downtime and timing of wells in the Gulf of Mexico, fewer wells brought online in the Eagle Ford Shale and lower realized natural gas prices in Tupper Montney.

These effects were partially offset by increased production due to prior period downtime and improved well performance in the Gulf of Mexico, the Terra Nova field restarting production in the fourth quarter of 2023, new wells online at Tupper Montney, and higher oil prices.

Revenues from production for the six months ended June 30, 2024 decreased $4.0 million compared to the same period in 2023.

Lower revenues were primarily related to workovers and downtime in the Gulf of Mexico, fewer new wells brought online in the Eagle Ford Shale, and lower realized natural gas prices in Tupper Montney.

These effects were partially offset by new wells online at Tupper Montney, restarting production at Terra Nova in late 2023, and higher oil prices.

Revenues from production for the three months ended September 30, 2024 decreased $192.7 million compared to the same period in 2023.

Revenue was lower in the Gulf of Mexico, mostly driven by downtime at the Samurai field, as well as hurricane related downtime.

Additionally, Eagle Ford Shale revenues decreased due to the natural decline of wells and fewer wells brought online.

These decreases were partially offset by new production at Terra Nova in Canada, which restarted production in late 2023.

Lower pricing across all products also contributed to the decrease during the period.

Revenues from production for the nine months ended September 30, 2024 decreased $196.7 million compared to the same period in 2023.

Lower revenue was driven primarily by workover activities, downtime and timing of new wells in the Gulf of Mexico, fewer new wells brought online in the Eagle Ford Shale, and lower realized natural gas prices in Tupper Montney.

These effects were partially offset by production restarting at Terra Nova in late 2023, and higher oil prices.

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

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars) (Dollars per equivalent barrel) (Millions of dollars)

23 unchanged sentences

$ 47.5 $ 61.5 $ 2.68 $ 3.22 $ 157.5 $ 175.3 $ 3.09 $ 3.33

For the three months ended June 30, 2024 lease operating expenses increased by $65.3 million and TGP expenses decreased by $6.5 million, compared to the same period in 2023.

Higher lease operating expenses were due to workover activity at the Neidermeyer field in the Gulf of Mexico, higher production at Terra nova, and were partially offset by lower production handling fees in the Gulf of Mexico.

For the three months ended September 30, 2024 lease operating expenses increased by $29.5 million and TGP expenses decreased by $14.0 million compared to the same period in 2023.

Higher lease operating expenses were due to workover activity in the Gulf of Mexico and higher production at Terra Nova and were partially offset by lower PHA fees in the Gulf of Mexico.

Lower TGP expenses during the quarter were a result of lower production volumes in the Gulf of Mexico.

For the six months ended June 30, 2024, lease operating expenses increased by $99.7 million and TGP expenses decreased by $3.8 million, compared to the same period in 2023.

Higher lease operating expenses were primarily due to workovers in the Gulf of Mexico and higher production at Terra Nova.

For the nine months ended September 30, 2024, lease operating expenses increased by $129.2 million and TGP expenses decreased by $17.8 million compared to the same period in 2023.

Higher lease operating expenses were primarily due to workovers in the Gulf of Mexico, primarily at the Neidermeyer field, and higher production at Terra Nova, and were partially offset by lower PHA fees in the Gulf of Mexico.

Lower TGP expenses resulted primarily from lower production volumes in the Gulf of Mexico.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars) (Dollars per equivalent barrel) (Millions of dollars)

14 unchanged sentences

Results of Operations (Continued)

DD&A expense for the three months ended June 30, 2024 decreased by $0.1 million, compared to the same period in 2023.

The decrease is primarily due to lower production volumes in U.S.

Offshore and Onshore, offset by increased rates in the Gulf of Mexico, and higher production volumes in Canada Offshore and Onshore.

DD&A expense for the six months ended June 30, 2024 increased by $15.4 million, compared to the same period in 2023.

Higher DD&A expense from U.S.

E&P resulted from higher rates in the Gulf of Mexico, partially offset by lower production.

Higher DD&A expense for Canada Offshore and Onshore was primarily the result of increased production volumes.

DD&A expense for the three months ended September 30, 2024 decreased by $12.6 million compared to the same period in 2023.

The decrease is primarily due to lower volumes in the Gulf of Mexico and at Eagle Ford Shale, partially offset by higher volumes in Canada Offshore and Onshore and higher rates in the U.S.

due to development drilling.

DD&A expense for the nine months ended September 30, 2024 increased by $2.9 million compared to the same period in 2023.

Higher DD&A expense from Canada E&P primarily related to increased volumes at Terra Nova, partially offset by lower volumes in the U.S.

and higher rates in the U.S., primarily due to development drilling at various offshore platforms.

Impairment of Assets

For the three months ended June 30, 2024, there were no impairments.

For the six months ended June 30, 2024, the Company impaired assets for $34.5 million 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 and six months ended June 30, 2023.

For the three months ended September 30, 2024, there were no impairments.

For the nine months ended September 30, 2024, the Company impaired assets for $34.5 million, related to the Calliope field in the Gulf of Mexico, as a result of operational issues that led to a reserve reduction.

There were no impairments in the three and nine months ended September 30, 2023.

Exploration Expenses

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars) 2024 2023 2024 2023

6 unchanged sentences

$ 31.2 $ 26.4 $ 118.4 $ 152.5

Exploration expenses for the three months ended June 30, 2024 decreased by $73.0 million compared to the prior year, primarily the result of lower dry hole costs in the current period.

Dry hole costs in the current period represented costs associated with the Orange #1 (Mississippi Canyon 216) non-operated exploration well in the U.S.

Gulf of Mexico, that encountered non-commercial hydrocarbons in the second quarter of 2024.

In the second quarter of 2023, we recorded expenses related to previously suspended exploration costs at the Cholula-1EXP well in Mexico, as well as dry hole costs related to Chinook #7 (Walker Ridge 425) exploration well in U.S.

Exploration expenses for the three months ended September 30, 2024 increased by $4.8 million compared to the prior year, primarily as a result of higher geological and geophysical costs in the Gulf of Mexico in the current period.

Dry hole costs in the current period represented costs associated with the Sebastian #1 (Mississippi Canyon 387) operated exploration well in the U.S.

Gulf of Mexico that encountered non-commercial hydrocarbons in the third quarter of 2024.

In the third quarter of 2023, we recorded dry hole costs related to the Chinook #7 (Walker Ridge 425) exploration well in the U.S.

Gulf of Mexico.

Exploration expenses for the six months ended June 30, 2024 decreased by $38.8 million compared to the same period in 2023.

In the current period, dry hole costs were recorded for the Orange #1 (Mississippi Canyon 216) non-operated exploration well, and for the previously suspended exploration well at Hoffe Park #1 (Mississippi Canyon 166) in the U.S.

Exploration expenses for the nine months ended September 30, 2024 decreased by $34.1 million compared to the same period in 2023.

In the current period, dry hole costs were recorded for the Sebastian #1 (Mississippi Canyon 387) operated exploration well, the Orange #1 (Mississippi Canyon 216) non-operated exploration well, and for the previously suspended exploration well at Hoffe Park #1 (Mississippi Canyon 166) in the U.S.

Gulf of Mexico.

1 unchanged sentence

Gulf of Mexico.

Other expenses for the three and six months ended June 30, 2024 decreased by $27.5 million and $32.4 million, respectively, compared to the same periods in 2023.

This decrease was due to a combination of interest income received, and a favorable tax settlement related to U.S.

Other expenses for the three and nine months ended September 30, 2024 decreased by $1.1 million and $33.7 million, respectively, compared to the same periods in 2023.

For the three months ended September 30, 2024 the decrease is primarily due to the absence of other operating expenses in Canada related to the Terra Nova life extension project.

For the nine months ended September 30, 2024 the decrease was due to a combination of interest income received and a favorable state tax settlement related to U.S.

Onshore activities.

1 unchanged sentence

Results of Operations (Continued)

Income taxes for the three and six months ended June 30, 2024 decreased by $5.6 million and $32.8 million, respectively, compared to the same periods in 2023.

Lower income taxes for each period, respectively, were primarily the result of Canada tax credits received in the current quarter, and lower year-to-date pre-tax income.

Income taxes for the three and nine months ended September 30, 2024 decreased by $75.9 million and $108.7 million, respectively, compared to the same periods in 2023.

Lower income taxes for each period, respectively, were primarily the result of lower year-to-date pre-tax income, and an income tax deduction for prior years’ Australia exploration spend.

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

Corporate activities reported a loss of $27.7 million for the three months ended June 30, 2024, a favorable variance of $18.9 million compared to the same period of 2023.

The favorable variance was primarily due to foreign exchange gains ($13.2 million) and decreased interest expense ($8.8 million), partially offset by lower income tax benefits ($3.5 million).

Corporate activities reported a loss of $33.7 million for the three months ended September 30, 2024, an unfavorable variance of $3.6 million compared to the same period of 2023.

The unfavorable variance was primarily due to unrealized foreign exchange losses ($14.0 million), partially offset by decreased interest expense ($8.8 million).

Lower interest expense for the current period was primarily due to lower overall debt levels.

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

Corporate activities reported a loss of $55.2 million for the six months ended June 30, 2024, a favorable variance of $20.0 million compared to the same period of 2023.

The favorable variance was primarily due to foreign exchange gains ($24.1 million) and lower interest expense ($17.8 million), partially offset by increased selling and general expense ($15.7 million) and lower income tax benefits ($6.9 million).

Corporate activities reported a loss of $88.9 million for the nine months ended September 30, 2024, a favorable variance of $16.5 million compared to the same period of 2023.

The favorable variance was primarily due to lower interest expense ($26.6 million) and unrealized foreign exchange gains ($10.1 million) and was partially offset by increased selling and general expense ($15.6 million) and lower income tax benefits ($6.7 million).

Lower interest expense for the current period was primarily due to lower overall debt levels.

Higher selling and general expenses for the six months ended June 30, 2024 were primarily the result of the timing of corporate donations.

Higher selling and general expenses for the nine months ended September 30, 2024 were primarily attributable to timing of corporate donations.

Lower income tax benefit was the 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 primary sources of liquidity are cash on hand, net cash provided by continuing operations activities and available borrowing capacity under the New 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 Company may, from time to time, redeem, repurchase or otherwise acquire its outstanding notes through open market purchases, tender offers or pursuant to the terms of such securities.

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

Six Months Ended

Nine Months Ended

September 30,

(Thousands of dollars) 2024 2023

6 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 0.8 (0.4)

Net increase (decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

$ (45.9) $ (164.2)

Cash Provided by Continuing Operations Activities

Net cash provided by continuing operations activities for the six months ended June 30, 2024 was $116.7 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:

$139.6 million), lower spend on abandonments in 2024 ($62.0 million), and higher other income ($19.3 million).These increases were partially offset by increased lease operating expenses ($99.6 million).

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

Net cash provided by continuing operations activities for the nine months ended September 30, 2024 was $89.7 million higher compared to the same period in 2023.

The increase in cash flows from operations activities was primarily attributable to a decrease in non-cash working capital in the current period, compared to an increase in the prior period ($174.6 million), no contingent consideration payments related to prior Gulf of

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

Financial Condition (Continued)

amounts paid up to the original estimated contingent consideration liability included in the purchase price allocation, at the time of acquisition.

Mexico acquisitions in 2024 (2023:

$139.6 million), changes in other operating activities, net ($59.1 million), an increase in other income ($32.8 million), and a decrease in interest expense ($26.4 million).

These were partially offset by lower revenue from production ($196.7 million), and an increase in lease operating expenses ($129.2 million).

The increase due to changes in non-cash working capital is primarily due to lower accounts receivable, partially offset by lower accounts payable.

The decreases in accounts receivable and accounts payable are primarily due to lower overall production volumes and gas prices, other receivable settlements, and exploration activities in the Gulf of Mexico.

The increase due to changes in other operating activities is primarily due to spend on asset retirement obligations in the prior period.

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 six months ended June 30, 2023, the Company paid a total of $199.8 million in contingent consideration, of which $139.6 million is shown in “Operating Activities” and $60.2 million is shown in “Financing Activities” in the Company’s Consolidated Statements of Cash Flows.

During the nine months ended September 30, 2023, the Company paid a total of $199.8 million in contingent consideration, of which $139.6 million is shown in “Operating Activities” and $60.2 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 six months ended June 30, 2024 was $177.9 million lower compared to the same period in 2023.

The decrease was due to lower property additions and dry hole costs.

Net cash required by investing activities for the nine months ended September 30, 2024 was $88.9 million lower compared to the same period in 2023.

The decrease was due to lower property additions and dry hole costs ($169.0 million), partially offset by cash inflows from the sale of certain non-core operated Kaybob Duvernay assets and all of our non-operated Placid Montney assets Kaybob properties ($102.9 million) in 2023.

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

Six Months Ended

Nine Months Ended

September 30,

(Millions of dollars) 2024 2023

Property additions and dry hole costs per cash flow statements $ 733.3 $ 902.3

Acquisition of oil properties per the cash flow statements

Geophysical and other exploration expenses 35.5 30.1

2 unchanged sentences

Total accrual basis capital expenditures are shown below.

Six Months Ended

Nine Months Ended

September 30,

(Millions of dollars) 2024 2023

3 unchanged sentences

Total capital expenditures $ 776.6 $ 885.7

Lower capital expenditures in the six months ended June 30, 2024 compared to the same period of 2023 was primarily attributable to lower exploration expenditures in the Gulf of Mexico, and lower development expenditures at Eagle Ford Shale, 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 ($164.7 million), at Tupper Montney ($71.2 million) and Kaybob Duvernay ($24.1 million) in Canada, and at the Khaleesi, Mormont, Samurai, Lucius and St.

Malo fields in the Gulf of Mexico ($182.9 million).

Other international field development activities were ($15.5 million), and total exploration costs were $84.1 million.

Total exploration costs in 2024 were in the Gulf of Mexico for the Orange #1 (Mississippi Canyon 216) exploration well, that encountered non-commercial hydrocarbons, the Ocotillo #1 (Mississippi Canyon 40) exploration well, 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.

Lower capital expenditures in the nine months ended September 30, 2024 compared to the same period of 2023 was primarily attributable to lower exploration expenditures in the Gulf of Mexico, lower field development costs due to the Terra Nova asset life extension project ending in 2023, and lower development drilling costs at Eagle Ford Shale and Tupper Montney, 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 ($246.8 million), at the Khaleesi, Mormont and Samurai fields, and the non-operated St.

Malo and Lucius fields in the Gulf of Mexico ($235.7 million), and at Tupper Montney ($75.4 million), Kaybob Duvernay

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

Financial Condition (Continued)

($26.3 million), and the non-operated Hibernia field ($15.2 million) in Canada.

Other international field development activities were ($30.6 million), and total exploration costs were $123.4 million.

Exploration costs in 2024 were primarily comprised of activities in the Gulf of Mexico related to the Sebastian #1 (Mississippi Canyon 387), Orange #1 (Mississippi Canyon 216), and Oso #1 (Atwater Valley 138) exploration wells.

Sebastian #1 and Orange #1 encountered non-commercial hydrocarbons during 2024.

Oso #1 encountered non-commercial hydrocarbons in 2023, and operations completed in 2024.

Additional exploratory costs relate to the Ocotillo #1 (Mississippi Canyon 40) exploration well.

Cash Required by Financing Activities

Net cash required by financing activities for the six months ended June 30, 2024 increased by $157.7 million compared to the same period in 2023.

In 2024, the cash used in financing activities was principally for the repurchase of common shares ($105.9 million), excluding accrued excise tax), cash dividends to shareholders of $0.60 per share ($91.5 million), withholding tax on stock-based incentive awards ($25.3 million), distributions to the noncontrolling interest in the Gulf of Mexico ($61.2 million), and debt repurchases of $50.0 million.

In 2023, there were cash dividends to shareholders $85.9 million, withholding tax on stock-based incentive awards ($14.2 million), distributions to the noncontrolling interest in the Gulf of Mexico ($16.0 million), and contingent consideration related to prior Gulf of Mexico acquisitions ($60.2 million) as discussed in the “Cash Provided by Operating Activities” section.

At June 30, 2024 the Company had approximately $1.1 billion of liquidity consisting of $333.6 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 June 30, 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 facility.

At June 30, 2024 the interest rate in effect on borrowings under the facility would have been 7.69%.

At June 30, 2024 the Company was in compliance with all covenants related to the RCF.

Net cash required by financing activities for the nine months ended September 30, 2024 increased by $61.4 million compared to the same period in 2023.

In 2024, the cash used in financing activities was principally for the repurchase of common shares ($300.1 million), cash dividends to shareholders of $0.90 per share ($136.2 million), withholding tax on stock-based incentive awards ($25.3 million), distributions to the noncontrolling interest in the Gulf of Mexico ($96.6 million), and debt repurchases of $50.0 million.

In 2023, there were debt repurchases ($248.7 million), cash dividends to shareholders ($128.7 million), the repurchase of common shares ($75.0 million), withholding tax on stock-based incentive awards ($14.2 million), distributions to the noncontrolling interest in the Gulf of Mexico ($20.1 million), and contingent consideration related to prior Gulf of Mexico acquisitions ($60.2 million) as discussed in the “Cash Provided by Continuing Operations Activities” section.

At September 30, 2024 the Company had approximately $1.1 billion of liquidity consisting of $271.2 million in cash and cash equivalents and $799.6 million available on its committed senior unsecured RCF with a major banking consortium.

The Company’s $800.0 million senior unsecured RCF was set to expire in November 2027 and as of September 30, 2024 the Company had no outstanding borrowings under the RCF and $0.4 million of outstanding letters of credit, which reduce the borrowing capacity of the facility.

At September 30, 2024 the interest rate in effect on borrowings under the facility would have been 7.20%.

At September 30, 2024 the Company was in compliance with all covenants related to the RCF.

Subsequent to quarter end, on October 7, 2024, the Company entered into a New RCF, a credit agreement governing a $1,200.0 million senior unsecured revolving credit facility with a maturity date in October 2029, which replaced the prior RCF.

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

As of June 30, 2024 cash and cash equivalents held outside the U.S.

As of September 30, 2024 cash and cash equivalents held outside the U.S.

included U.S.

4 unchanged sentences

Working Capital

(Millions of dollars) June 30, 2024 December 31, 2023

(Millions of dollars) September 30, 2024 December 31, 2023

Working capital

3 unchanged sentences

$ (255.2) $ (94.3)

As of June 30, 2024 net working capital decreased by $75.9 million compared to December 31, 2023.

The decrease was primarily attributable to higher accounts payable ($60.9 million) and higher operating lease liabilities ($46.9 million).

The decrease was partially offset by lower other accrued liabilities ($26.1 million) and a higher cash balance ($16.5 million).

Higher operating lease liabilities are primarily attributable to the current portion of lease extensions recorded during the period related to a drill ship in the U.S.

Gulf of Mexico (See Note Q for additional detail).

Higher accounts payable were primarily due to workover activity in the U.S.

Gulf of Mexico, and other timing of cash payments.

As of September 30, 2024 net working capital decreased by $160.9 million compared to December 31, 2023.

The decrease was primarily attributable to lower accounts receivable ($80.9 million), lower cash balance ($45.9 million), and higher operating lease liabilities ($45.5 million), and was partially offset by lower accounts payable ($17.1 million).

Lower accounts receivable was primarily due to lower revenues.

Higher operating lease liabilities were primarily attributable to the current portion of lease extensions recorded during the period related to a drill ship in the

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

Financial Condition (Continued)

Gulf of Mexico (See Note Q for additional detail).

Lower accounts payable were primarily due to lower revenue related payables and other timing of cash payments.

Capital Employed

A summary of capital employed at June 30, 2024 and December 31, 2023 follows.

June 30, 2024 December 31, 2023

A summary of capital employed at September 30, 2024 and December 31, 2023 follows.

September 30, 2024 December 31, 2023

(Millions of dollars) Amount % Amount %

3 unchanged sentences

Total capital employed $ 6,529.0 100.0 % $ 6,691.2 100.0 %

At June 30, 2024 long-term debt of $1,279.3 million decreased by $49.0 million compared to December 31, 2023, primarily as a result of the open market repurchase of $50.0 million.

At September 30, 2024 long-term debt of $1,279.3 million decreased by $49.1 million compared to December 31, 2023, primarily as a result of the open market repurchase of $50.0 million.

The total of the fixed-rate notes had a weighted average maturity of 7.5 years and a weighted average coupon of 6.2%.

2 unchanged sentences

Critical Accounting Estimates

As of June 30, 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.

As of September 30, 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

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars, except per share amounts)

7 unchanged sentences

Write-off of previously suspended exploration well – – 26.1 17.1

Foreign exchange (gain) loss (5.5) 7.9 (16.0) 8.3

Foreign exchange loss (gain) 5.4 (8.6) (10.6) (0.3)

Mark-to-market loss on derivative instruments 1.3 – 1.3 –

Mark-to-market loss on contingent consideration – – – 7.1

Total adjustments, before taxes 6.7 (8.6) 51.3 23.9

(5.5) 28.2 44.6 32.5

Income tax benefit related to adjustments

Income tax (benefit) expense related to adjustments

(1.7) 2.2 (10.5) (1.4)

Tax benefits on investments in foreign areas (34.0) – (34.0) –

Total adjustments after taxes (29.0) (6.4) 6.8 22.5

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Millions of dollars) 2024 2023 2024 2023

10 unchanged sentences

11.7 10.4 34.9 30.4

Foreign exchange (gain) loss (5.4) 7.9 (15.9) 8.3

Foreign exchange loss (gain) 5.4 (8.6) (10.6) (0.3)

Mark-to-market loss on derivative instruments 1.3 – 1.3 –

Mark-to-market loss on contingent consideration – – – 7.1

4 unchanged sentences

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 29 , higher average crude oil price during the second quarter of 2024, and lower average natural gas pricing compared to same period in 2023 directly impacted the Company’s product sales revenue.

As of close on August 6, 2024, forward price curves for existing forward contracts for the remainder of 2024 and 2025 are shown in the table below:

As discussed in the “Results of Operations” section discussing revenues, on page 29 , lower average crude oil and natural gas pricing during the third quarter of 2024 compared to same period in 2023 directly impacted the Company’s product sales revenue.

As of close on November 5, 2024, forward price curves for existing forward contracts for the remainder of 2024 and 2025 are shown in the table below:

WTI ($/BBL) 71.99 69.92

1 unchanged sentence

AECO (US$ Equivalent/MCF) 1.31 1.45

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

Similar to the overall inflation in the wider economy, the oil and gas industry and the Company are 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.

1 unchanged sentence

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

For the third quarter of 2024, production is expected to average between 181.5 and 189.5 thousand barrels of oil equivalents per day (MBOEPD), excluding noncontrolling interest.

For the fourth quarter of 2024, production is expected to average between 181.5 and 189.5 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.

5 unchanged sentences

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 and August 8, 2024.

In October 2023 and August 2024, the Company’s Board of Directors authorized an aggregate of $800 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 $1.1 billion.

On August 7, 2024 the Company’s Board of Directors approved a revision to the Capital Allocation Framework to enable the Company to move to the next phase (“Murphy 3.0”).

Beginning in the third quarter of 2024, Murphy will allocate a minimum of 50 percent of adjusted free cash flow to shareholder returns, primarily through share buybacks.

The remainder of adjusted free cash flow will be allocated to the balance sheet.

Murphy continues to be committed to maintaining a $1.0 billion total long-term debt goal.

Subsequent to the second quarter of 2024, the Company repurchased 1,142,867 shares of its common stock in open-market transactions for $44.1 million, excluding taxes and fees.

As of August 7, 2024, the Company had $800 million of its common stock remaining available to repurchase under the program.

The Company’s Board of Directors has authorized a share repurchase program whereby the Company can repurchase up to $1,100.0 million of the Company’s common stock.

Subsequent to quarter end, on October 3, 2024, the Company closed the Offering of $600.0 million aggregate principal amount of new senior notes that bear interest at a rate of 6.000% per annum and mature on October 1, 2032, the proceeds of which will be used for the repayment of debt.

To date, the Company has repurchased and canceled $258.8 million of the 2027 Notes, $200.2 million of the 2028 Notes and $62.1 million of the 2029 Notes.

In addition, on October 7, 2024, the Company entered into a credit agreement governing a $1,200.0 million New RCF with a maturity date on October 7, 2029.

Further details of these transactions can be found in the Company’s Form 8-K filed on October 3, 2024 and October 7, 2024, respectively.

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 ).

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

Outlook (Continued)

As of November 5, 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:

Price/MCF Remaining Period

Area Commodity Type Start Date End Date

Canada Natural Gas Fixed price forward sales 162 C$2.39 10/1/2024 12/31/2024

Canada Natural Gas Fixed price forward sales 40 C$2.75 1/1/2025 12/31/2025

Canada Natural Gas Fixed price forward sales 50 C$3.03 1/1/2026 12/31/2026

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

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

Price/MCF Remaining Period

Area Commodity Type Start Date End Date

United States Natural Gas Fixed price derivative swap 20 US$3.20 1/1/2025 12/31/2025

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