What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-25 compared with 2025-02-27 · 52 added, 47 removed, 140 unchanged (41% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued

Murphy will seek to enter new commitments, exercise options to extend contracts and retender contracts for rigs and other industry services which could expose Murphy to the impact of higher costs.

Murphy continues to strive toward safely executing our work in an ever-increasingly efficient manner to mitigate possible inflationary pressures in our business.

Natural gas prices are also affected by supply and demand, which are often affected by the weather and by the fact that delivery of natural gas can be restricted to specific geographic areas.

Natural gas is also impacted by demand for lower carbon emissions.

commitments and therefore is partially protected from potential increases in the price of services.

However, from time to time, Murphy will seek to enter new commitments, exercise options to extend contracts and retender contracts for rigs and other industry services which could expose Murphy to the impact of higher costs.

Murphy continues to strive toward safely executing our work in an ever-increasingly efficient manner to mitigate potential inflationary pressures in its business.

Natural gas prices are also affected by supply and demand factors, which are often influenced by the weather and by the fact that delivery of natural gas can be restricted to specific geographic areas.

Natural gas prices can also be impacted by the demand for lower-carbon energy sources.

As a result of the overall volatility of oil and natural gas prices, it is not possible to predict the Company’s future cost of oil field goods and services.

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Estimated reserves are subject to future revision, certain of which could be substantial, based on the availability of additional information, including reservoir performance, new geological and geophysical data, additional drilling, technological advancements, price changes and other economic factors.

Reserves revisions inherently lead to adjustments of the Company’s depreciation rates and the timing of settlement of ARO liabilities.

Reserves revisions inherently lead to adjustments of the Company’s depreciation rates and the timing of settlement of asset retirement obligation (ARO) liabilities.

Downward reserves revisions can also lead to significant impairment expense.

The Company cannot predict the type of oil and natural gas reserves revisions that will be required in future periods.

The Company’s proved reserves of crude oil, natural gas and NGLs are presented on pages 106 to 115 of this Form 10-K report.

The Company’s proved reserves of oil and natural gas are presented on pages 111 to 120 of this Form 10-K report.

Murphy’s estimations for proved reserves were generated through the integration of available geoscience, engineering, and economic data (including hydrocarbon prices, operating costs, and development costs), and commercially available technologies, to establish “reasonable certainty” of economic producibility.

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Reliable geologic and engineering technology is a method or combination of methods that are field-tested and have been demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation.

This integrated approach increases the quality of and confidence in Murphy’s proved reserves estimates.

It was utilized in certain undrilled acreage at distances

This integrated approach increases the quality of

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued

greater than the directly offsetting development spacing areas, and in certain reservoirs developed with the application of improved recovery techniques.

and confidence in Murphy’s proved reserves estimates.

It was utilized in certain undrilled acreage at distances greater than the directly offsetting development spacing areas.

Murphy utilized a combination of 3D seismic interpretation, core analysis, wellbore log measurements, well test data, historic production and pressure data, and commercially available seismic processing and numerical reservoir simulation programs.

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See further discussion of proved reserves and changes in proved reserves during the three years ended December 31, 2025 beginning on pages 4 and 111 of this Form 10-K report.

Property, Plant and Equipment - impairment of long-lived assets – The Company continually monitors its long-lived assets recorded in “Property, plant and equipment” in the Consolidated Balance Sheet to ensure that they are fairly presented.

The Company must evaluate its property, plant and equipment for potential impairment when circumstances indicate that the carrying value of an asset may not be recoverable from undiscounted future net cash flows.

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Although the projected future costs are considered to be reasonable, at times, costs have been higher or lower than originally estimated.

In 2025, the Company recognized a pretax non-cash impairment charge of $115.0 million ($92.0 million excluding NCI) to reduce the carrying value at the Dalmatian field, in the Gulf of America, as certain projects in the field were less competitive for capital allocation.

In 2024, the Company recognized pretax non-cash impairment charges of $62.9 million to reduce the carrying values at select properties.

In the first quarter of 2024, the Company recognized $34.5 million related to the Calliope field, in the Gulf of America, and in the fourth quarter of 2024, the Company recognized $28.4 million related to the Nearly Headless Nick field, in the Gulf of America.

Both of the impairment charges were due to subsurface issues that led to reserve reductions.

There were no impairments recognized in 2023.

The Company recognized impairments of $34.5 million, related to the Calliope field, and $28.4 million, related to the Nearly Headless Nick field, both in the Gulf of America.

Both impairment charges were due to subsurface issues that led to reserve reductions.

See also Note D for further discussion of impairment charges.

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net operating losses, liabilities for dismantlement, retirement benefit plan obligations and net deferred tax liabilities relating to tax and accounting basis differences for property, plant and equipment.

The Company routinely evaluates all deferred tax assets to determine the likelihood of their realization and reduces such assets to the expected realizable amount by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

In assessing the need for valuation allowances,

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued

we consider all available positive and negative evidence.

In assessing the need for valuation allowances, we consider all available positive and negative evidence.

Positive evidence includes projected future taxable income and assessment of future business assumptions, a history of utilizing tax assets before expiration, significant proven and probable reserves and reversals of taxable temporary differences.

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In reviewing the likelihood of realizing this asset, the Company considered the reversal of taxable temporary differences, carryforward periods and future taxable income estimates based on projected financial information which, based on currently available evidence, we believe to be reasonably likely to occur.

Certain estimates and assumptions are used in the estimation of future taxable income, including (but not limited to) (a) future commodity prices for crude oil, natural gas and NGLs, (b) estimated reserves for crude oil, natural gas and NGLs, (c) expected timing of production, (d) estimated lease operating costs and (e) future capital requirements.

Certain estimates and assumptions are used in the estimation of future taxable income, including (but not limited to) (a) future commodity prices for oil and natural gas, (b) estimated reserves for oil and natural gas, (c) expected timing of production, (d) estimated lease operating costs and (e) future capital requirements.

In the future, the underlying actual assumptions utilized in estimating future taxable income could be different and result in different conclusions about the likelihood of the future utilization of our net operating loss carryforwards.

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Based on bond yields as of December 31, 2025, the Company has used a weighted average discount rate of 5.40% at year end 2025 for the primary U.S.

This weighted average discount rate is 0.5% higher than prior year, which decreased the Company’s recorded liabilities for retirement plans compared to a year ago.

This weighted average discount rate is 0.2% lower than prior year, which increased the Company’s recorded liabilities for retirement plans compared to a year ago.

The Company assumed a return on plan assets of 7.70% for the primary U.S.

plan and periodically reconsiders the appropriateness of this and other key assumptions.

The Company’s retirement and postretirement plan (health care and life insurance benefit plans) expenses in 2025 are expected to be $5.3 million lower than in 2024 primarily due to the decrease in the benefit obligations at December 31, 2024 compared to the prior year, which decreases the interest cost recognized in net periodic benefit costs.

The Company’s retirement and postretirement plan (health care and life insurance benefit plans) expenses in 2026 are expected to be $0.4 million lower than in 2025 primarily due to higher actual return on plan assets, partially offset by an increase in the benefit obligations at December 31, 2025 compared to the prior year.

In 2025, the Company paid $25.1 million into various retirement plans and $12.9 million into postretirement plans.

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Total 2026 2027 - 2028 2029 - 2030 After 2030

Debt, excluding interest $ 1,284.8 $ — $ 78.9 $ 266.2 $ 939.7

Debt, excluding finance leases and interest $ 1,384.8 $ — $ 227.5 $ 217.5 $ 939.8

Operating and finance leases 1,024.8 318.9 215.8 123.0 367.1

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Total $ 6,402.2 $ 1,209.6 $ 925.9 $ 950.9 $ 3,315.8

1 Capital expenditures, drilling rigs and other includes $25.3 million, $13.7 million, $7.3 million and $1.1 million, in 2025 for approved capital projects in non-operated interests in the Gulf of America, U.S.

Onshore, Canada Offshore and Other Offshore, respectively.

Capital expenditures, drilling rigs and other includes $4.7 million in 2026 for approved capital projects in non-operated interests in the Gulf of America.

1 Capital expenditures, drilling rigs and other includes $28.1 million, $25.4 million, $7.7 million, $1.0 million and $0.6 million in 2026 for approved capital projects in non-operated interests in the Gulf of America, the Eagle Ford Shale, Canada Offshore, Brunei, and Canada Onshore, respectively.

Also includes $72.2 million (2026), $141.1 million (2027 - 2028), $81.0 million (2029 - 2030) and $235.9 million (After 2030) for pipeline transportation commitments in Canada.

Also includes $3.7 million (2026), $7.5 million (2027 - 2028), $7.4 million (2029 - 2030) and $14.3 million (After 2030) for long-term take-or-pay commitments relating to natural gas processing in Canada.

Also includes approximately $7.2 million (2025), $25.5 million (2026 - 2027), $25.3 million (2028 - 2029) and $120.0 million (After 2029) for Other Offshore for the purpose of supporting future development activities in Vietnam.

2 Other long-term liabilities, including debt interest, includes future cash outflows for ARO liabilities.

Also includes $23.6 million (2026), $47.1 million (2027 - 2028), $48.1 million (2029 - 2030) and $176.8 million (After 2030) for the purpose of supporting future production activities in Vietnam.

2 Other long-term liabilities includes debt interest and future cash outflows for ARO liabilities.

The Company has entered into agreements to lease production facilities for various producing oil fields as well as other arrangements that require future payments as described in the following section.

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Total outstanding letters of credit were $211.8 million as of December 31, 2025.

Subsequent to the balance sheet date, the Company completed a series of transactions regarding its long-term debt arrangements and RCF.

In January 2026, the Company closed a public offering of $500.0 million aggregate principal amount of its 6.500% senior notes due 2034 (2034 Notes), used the proceeds to redeem an aggregate $227.5 million of its outstanding 2027 Notes and 2028 Notes, repaid $100.0 million that was outstanding on the previous RCF, as of December 31, 2025, and expects to use the remaining proceeds to cover transaction-related fees and expenses and for general corporate purposes.

See Note F for additional information.

Material off-balance sheet arrangements – Certain U.S.

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As of close on February 23, 2026, forward price curves for existing forward contracts for the remainder of 2026 and 2027 are shown in the table below.

NYMEX ($/MMBTU)

NYMEX WTI ($/BBL)

$ 64.90 $ 62.02

NYMEX Henry Hub ($/MMBTU)

AECO (US$ Equivalent/MCF)

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If significant price declines occur, the Company will review the option of production curtailments to avoid incurring losses on certain produced barrels.

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

The oil and natural gas industry and the Company continue to observe higher costs for goods and services used in E&P operations.

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

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

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

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

The Company’s capital expenditure spend for 2025 is expected to be between $1,135 million and $1,285 million, excluding noncontrolling interest.

The Company’s capital expenditure spend for 2026 is expected to be between $1,200 million and $1,300 million, excluding NCI.

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

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

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

Details of the framework can be found in the “Capital Allocation Framework” section of the Company’s Form 8-K filed on August 4, 2022 and F orm 8-K filed on August 8, 2024.

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

Details of the plan can be found in the “Capital Allocation Framework” section of the Company’s Form 8-K filed on August 4, 2022 and Form 8-K filed on August 8, 2024.

The Board has authorized a share repurchase program whereby the Company can repurchase up to $1,100 million of the Company’s common stock.

As of December 31, 2025, the Company had $550.1 million of its common stock remaining available to repurchase under the program.

Subsequent to year end, as of February 25, 2025, the Company repurchased 3.4 million shares of its common stock in open-market transactions for $95.1 million, excluding taxes and fees.

As of this date, the Company had $555.0 million of its common stock remaining available to repurchase under the program.

In addition, subsequent to the balance sheet date, on January 30, 2025, the Board of Directors declared a quarterly cash dividend on the Common Stock of Murphy Oil Corporation of $0.325 per share, or $1.30 per

Subsequent to the balance sheet date, the Company completed a series of transactions regarding its long-term debt arrangements and RCF.

In January 2026, the Company closed a public offering of $500.0 million aggregate principal amount of its 2034 Notes, used the proceeds to redeem an aggregate $227.5 million of its outstanding 2027 Notes and 2028 Notes, repaid $100.0 million that was outstanding on the previous RCF, as of December 31, 2025, and expects to use the remaining proceeds to cover transaction-related fees and expenses and for general corporate purposes.

In addition, the Company entered into an amendment to its credit agreement which increased its RCF capacity from $1.35 billion to $2.0 billion and extended the term of the agreement to 2031.

See Note F for additional information on these transactions.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued

share on an annualized basis.

On January 28, 2026, the Board of Directors declared a quarterly cash dividend on the Common Stock of Murphy Oil Corporation of $0.35 per share, which on an annualized basis would be $1.40 per share .

The dividend is payable on March 2, 2026, to stockholders of record as of February 17, 2026.

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Canada Natural Gas Fixed price forward sales 78 C$2.94 4/1/2026 6/30/2026

(MMCF/d) Price/MCF Remaining Period

Area Commodity Type Start Date End Date

United States Natural Gas Fixed price derivative swap 40 US$3.58 2/1/2025 6/30/2025

United States Natural Gas Fixed price derivative swap 60 US$3.65 7/1/2025 9/30/2025

United States Natural Gas Fixed price derivative swap 60 US$3.74 10/1/2025 12/31/2025

Canada Natural Gas Fixed price forward sales 78 C$2.94 7/1/2026 9/30/2026

Canada Natural Gas Fixed price forward sales 59 C$3.00 10/1/2026 12/31/2026

Canada Natural Gas Fixed price forward sales 9.5 C$3.14 1/1/2027 12/31/2027

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued

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This Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are generally identified through the inclusion of words such as “aim”, “anticipate”, “believe”, “drive”, “estimate”, “expect”, “expressed confidence”, “forecast”, “future”, “goal”, “guidance”, “intend”, “may”, “objective”, “outlook”, “plan”, “position”, “potential”, “project”, “seek”, “should”, “strategy”, “target”, “will” or variations of such words and other similar expressions.

Forward-looking statements are generally identified through the inclusion of words such as “aim”, “anticipate”, “believe”, “drive”, “estimate”, “expect”, “forecast”, “future”, “goal”, “guidance”, “intend”, “may”, “objective”, “outlook”, “plan”, “position”, “potential”, “project”, “seek”, “should”, “strategy”, “target”, “will” or variations of such words and other similar expressions.

These statements, which express management’s current views concerning future events, results and plans, are subject to inherent risks, uncertainties and assumptions (many of which are beyond our control) and are not guarantees of performance.

In particular, statements, express or implied, concerning the Company’s future operating results or activities and returns or the Company's ability and decisions to replace or increase reserves, increase production, generate returns and rates of return, replace or increase drilling locations, reduce or otherwise control operating costs and expenditures, generate cash flows, pay down or refinance indebtedness, achieve, reach or otherwise meet initiatives, plans, goals, ambitions or targets with respect to emissions, safety matters or other ESG (environmental/social/governance) matters, make capital expenditures or pay and/or increase dividends or make share repurchases and other capital allocation decisions are forward-looking statements.

In particular, statements, express or implied, concerning the Company’s future operating results or activities and returns or the Company's ability and intent to replace or increase reserves, increase production, generate returns and rates of return, replace or increase drilling locations, reduce or otherwise control operating costs and expenditures, generate cash flows, pay down or refinance indebtedness, achieve, reach or otherwise meet initiatives, plans, goals, ambitions or targets with respect to emissions, safety matters or other environmental, social and governance matters, make capital expenditures, pay and/or increase dividends or make share repurchases and other capital allocation decisions are forward-looking statements.

Factors that could cause one or more of these future events, results or plans not to occur as implied by any forward-looking statement, which consequently could cause actual results or activities to differ materially from the expectations expressed or implied by such forward-looking statements, include, but are not limited to:

macro conditions in the oil and natural gas industry, including supply/demand levels, actions taken by major oil exporters and the resulting impacts on commodity prices;

macro conditions in the oil and natural gas industry, including supply and demand levels, actions taken by major oil exporters and the resulting impacts on commodity prices;

geopolitical concerns;

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political and regulatory instability in the markets where we do business;

the impact on our operations or market of health pandemics such as COVID-19 and related government responses;

other natural hazards impacting our operations or markets;

the impact on our operations or markets of health pandemics and related government responses;

natural hazards impacting our operations or markets;

any other deterioration in our business, markets or prospects;

cyber attacks and other cybersecurity risks;

any failure to obtain necessary regulatory approvals;

the impact of current and future laws, rulings and governmental regulations;

any inability to service or refinance our outstanding debt or to access debt markets at acceptable prices;

or adverse developments in the U.S.

or global capital markets, credit markets, banking system or economies in general, including inflation and trade policies.

or global capital markets, credit markets, banking system or economies in general, including inflation, trade policies, tariffs and other trade restrictions.

For further discussion of factors that could cause one or more of these future events or results not to occur as implied by any forward-looking statement, see “ Item 1A.

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The information on our website is not part of, and is not incorporated into, this report.

Murphy Oil Corporation undertakes no duty to publicly update or revise any forward-looking statements.

Each forward-looking statement contained in this report speaks only as of the date of this report.

Except as required by applicable law, Murphy Oil Corporation undertakes no duty to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis