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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2004

OR

For the transition period from              to             

Commission file number 1-8590

MURPHY OIL CORPORATION

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (870) 862-6411

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).    Yes  x     No  ¨.

Aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on average price at June 30, 2004, as quoted by the New York Stock Exchange, was approximately $6,725,984,000.

Number of shares of Common Stock, $1.00 Par Value, outstanding at January 31, 2005 was 92,034,083.

Documents incorporated by reference:

Portions of the Registrant’s definitive Proxy Statement relating to the Annual Meeting of Stockholders on May 11, 2005 have been incorporated by reference in Part III herein.

Table of Contents

MURPHY OIL CORPORATION

TABLE OF CONTENTS – 2004 FORM 10-K

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PART I

Items 1. and 2. BUSINESS AND PROPERTIES

Summary

Murphy Oil Corporation is a worldwide oil and gas exploration and production company with refining and marketing operations in North America and the United Kingdom. As used in this report, the terms Murphy, Murphy Oil, we, our, its and Company may refer to Murphy Oil Corporation or any one or more of its consolidated subsidiaries.

The Company was originally incorporated in Louisiana in 1950 as Murphy Corporation. It was reincorporated in Delaware in 1964, at which time it adopted the name Murphy Oil Corporation, and was reorganized in 1983 to operate primarily as a holding company of its various businesses. Its operations are classified into two business activities: (1) “Exploration and Production” and (2) “Refining and Marketing.” For reporting purposes, Murphy’s exploration and production activities are subdivided into six geographic segments, including the United States, Canada, the United Kingdom, Ecuador, Malaysia and all other countries. Murphy’s refining and marketing activities are subdivided into geographic segments for North America and United Kingdom. Additionally, “Corporate and Other Activities” include interest income, interest expense, foreign exchange effects and overhead not allocated to the segments.

The information appearing in the 2004 Annual Report to Security Holders (2004 Annual Report) is incorporated in this Form 10-K report as Exhibit 13 and is deemed to be filed as part of this Form 10-K report as indicated under Items 1, 2 and 7. A narrative of the graphic and image information that appears in the paper format version of Exhibit 13 is included in the electronic Form 10-K document as an appendix to Exhibit 13.

In addition to the following information about each business activity, data about Murphy’s operations, properties and business segments, including revenues by class of products and financial information by geographic area, are provided on pages 9 through 18, F-12, F-27 through F-29, F-34 through F-36, and F-38 of this Form 10-K report and on pages 6 through 14 of the 2004 Annual Report.

Interested parties may access the Company’s public disclosures filed with the Securities and Exchange Commission, including Form 10-K, Form 10-Q, Form 8-K and other documents, by accessing the Investor Relations section of Murphy Oil Corporation’s website at www.murphyoilcorp.com.

Exploration and Production

The Company’s exploration and production business explores for and produces crude oil, natural gas and natural gas liquids worldwide.

During 2004, Murphy’s principal exploration and production activities were conducted in the United States by wholly owned Murphy Exploration & Production Company-USA (Murphy Expro USA), in Ecuador, Malaysia and the Republic of the Congo by wholly owned Murphy Exploration & Production Company-International (Murphy Expro International) and its subsidiaries, in western Canada and offshore eastern Canada by wholly owned Murphy Oil Company Ltd. (MOCL) and its subsidiaries, and in the U.K. North Sea and the Atlantic Margin by wholly owned Murphy Petroleum Limited. Murphy’s crude oil and natural gas liquids production in 2004 was in the United States, Canada, the United Kingdom, Malaysia and Ecuador; its natural gas was produced and sold in the United States, Canada and the United Kingdom. MOCL owns a 5% undivided interest in Syncrude Canada Ltd. in Northern Alberta, the world’s largest producer of synthetic crude oil.

Murphy’s worldwide crude oil, condensate and natural gas liquids production from continuing operations in 2004 averaged 93,634 barrels per day, an increase of 22% compared to 2003. The increase was primarily due to a full year of production in 2004 at the Medusa and Habanero deepwater fields in the Gulf of Mexico and the West Patricia field offshore Sarawak, Malaysia. The Company’s worldwide sales volume of natural gas from continuing operations averaged 109 million cubic feet (MMCF) per day in 2004, down 2% from 2003 levels. The lower natural gas sales were due to production declines in mature producing areas that more than offset higher production from the Medusa and Habanero fields in the deepwater Gulf of Mexico.

Total crude oil, condensate and natural gas liquids production is expected to increase in 2005 because of a full year of production at the Front Runner field in the deepwater Gulf of Mexico and the Seal area in western Canada. Front Runner came on stream in December 2004. Natural gas sales volumes are expected to increase in 2005 compared to 2004 due to the higher production from the three deepwater Gulf of Mexico fields mentioned above.

In the United States, Murphy has production of oil and/or natural gas from 13 fields operated by the Company and 15 fields operated by others. Of the total producing fields at December 31, 2004, four are in the deepwater Gulf of Mexico, 20 are in more shallow waters on the Gulf of Mexico continental shelf, three are onshore in Louisiana and one is the Northstar field in Alaska. The Company’s primary focus in the U.S. is in the deepwater Gulf of Mexico, which is generally defined as water depths of 1,000 feet or more. The Company operates and owns a 60% interest in the Medusa field, in Mississippi Canyon Blocks 538/582. Medusa produced about 12,000 barrels of oil per day and 12 MMCF of gas

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per day net to the Company in 2004. Peak net production from Medusa is expected to be 25,000 barrels of oil equivalent per day. The Company owns a 33.75% interest in the Habanero field in Garden Banks Block 341. Habanero, which is operated by Shell, produced about 4,000 barrels of oil per day and 10 MMCF of gas per day net to the Company in 2004. The Front Runner field in Green Canyon Blocks 338/339 came on stream in December 2004 and will have additional wells completed and hooked up throughout 2005. Murphy owns 37.5% and operates the Front Runner field, which is expected to have peak net production of 20,000 barrels of oil equivalent per day in 2006. Hurricane Ivan caused temporary shut in of wells and damaged certain facilities which ultimately reduced the Company’s annualized production in the U.S. during 2004 by about 4,000 barrels of oil equivalent per day. The other deepwater producing field is at Tahoe in Viosca Knoll Block 783 (30%). Tahoe is operated by Shell and in 2004 produced about 13 MMCF of natural gas per day and 300 barrels of oil per day net to the Company. In 2004, Murphy announced a discovery at the Thunderhawk wildcat well in Mississippi Canyon Block 734 and in early 2005 announced a discovery at South Dachshund in Lloyd Ridge Blocks 1 and 2. Murphy holds an interest in 183 blocks in the deepwater Gulf of Mexico, and expects to drill about four deepwater prospects per year over the next several years. The Company’s largest producing field on the continental shelf of the Gulf of Mexico is at South Timbalier Blocks 63/86 (100%/96%). Murphy operates South Timbalier Blocks 63/86 with a combined net production of about 400 barrels of oil per day and 10 MMCF per day in 2004. Onshore production, which is mostly natural gas, is primarily located on several leases in Vermilion Parish, Louisiana. Murphy’s net production in 2004 from onshore fields was 26 MMCF per day. The Company owns approximately a 1.4% working interest in the Northstar field operated by BP in Alaska. Total net oil production for this field was approximately 800 barrels per day in 2004.

In Canada, the Company owns an interest in three legacy assets, the Hibernia and Terra Nova fields offshore Newfoundland and Syncrude Canada Ltd. In addition, the Company owned interests in two heavy oil areas and one natural gas area in the Western Canada Sedimentary Basin (WCSB) at the end of 2004. In the second quarter 2004, the Company completed the sale of most of its WCSB assets, while retaining a limited number of heavy oil and natural gas fields which are strategic to the Company. Assets sold produced about 20,000 barrels of oil equivalent per day in 2003 and had total proved reserves of approximately 43 million barrels of oil equivalent at the time of sale. In late 2004, Murphy acquired additional acreage in the Seal heavy oil area at a cost of $121 million. Murphy holds a 6.5% interest in Hibernia and a 12% interest in Terra Nova, with these being the first two fields on production in the Jeanne d’Arc Basin, offshore Newfoundland. Total net production in 2004 was 12,700 barrels of oil per day from Hibernia, which is operated by Hibernia Management and Development Company, while net production from Terra Nova, which is operated by PetroCanada, was also 12,700 barrels of oil per day. Murphy owns a 5% undivided interest in Syncrude Canada Ltd., a joint venture located about 25 miles north of Fort McMurray, Alberta. Syncrude utilizes its assets to extract bitumen from oil sand deposits and to upgrade this bitumen into a high-value synthetic crude oil. Syncrude is currently expanding its facilities and is adding a third coker that will allow for increased production beginning in 2006. Total net production in 2004 was 11,800 barrels of crude oil per day, but with the expansion net production is expected to exceed 15,000 barrels per day in 2006. Although Syncrude produces a very high quality synthetic crude oil from bitumen, the U.S. Securities and Exchange Commission (SEC) does not allow the Company to include Syncrude’s reserves in its proved oil reserves, which are reported on page F-32. The SEC considers Syncrude to be a mining operation, and not a conventional oil operation.

Murphy produces oil and natural gas in the United Kingdom sector of the North Sea. The Company’s primary oil production in the U.K. is now derived from two areas, Schiehallion and Mungo/Monan. Murphy owns 5.88% of the Schiehallion field operated by BP. This field is located in an area known as the Atlantic Margin and lies west of the Shetland Islands. Schiehallion produces oil into a Floating Production Storage and Offloading vessel (FPSO). The oil is transported via dedicated tanker to Sullom Voe terminal, where the oil is sold to third parties. Schiehallion produced approximately 5,300 net barrels of oil per day in 2004. Schiehallion development will continue with further infield drilling planned in 2005 onwards. Murphy owns a 4.843% interest in the FPSO, which also handles production from a nearby field owned by others. Mungo/Monan is also operated by BP and is 12.65% owned by Murphy. The Mungo field produces through an unmanned platform, while Monan is produced through subsea facilities. Both the platform and subsea facilities are tied to a central processing facility that is linked to the Forties pipeline system. In 2004, the Mungo and Monan fields produced approximately 4,500 barrels of oil per day, net to Murphy’s interest. In 2004, the Company sold its interest in the “T” Block field. Production from this field averaged about 1,600 net barrels per day in 2004 prior to the sale.

In Ecuador, Murphy owns a 20% working interest in Block 16, which is operated by Repsol YPF under a participation contract. The Company’s net production was about 7,700 barrels of oil per day in 2004. Between June and December 2004, Murphy did not receive its equity share of oil sales from Block 16 due to a dispute with the operator involving the Company’s new transportation and marketing arrangements. Murphy is owed more than 1.5 million barrels from other Block 16 working interest owners as of December 31, 2004. Murphy expects to make up this shortfall owed by the other owners in 2005 by either a cash settlement or an allocation of additional 2005 production barrels to the Company.

The Company has majority interests in eight separate production sharing contracts (PSCs) in Malaysia. The Company serves as the operator of all these areas, which cover approximately 14.4 million acres in total. Murphy has an 85% interest in two shallow water blocks, known as SK 309 and SK 311. The West Patricia field in Block SK 309, discovered in 2002, came on stream in May 2003. The Company’s net share of production averaged about 11,900 barrels of oil per day in 2004. The Company made a major discovery at the Kikeh field in deepwater Block K in 2002 and added a discovery at Kikeh Kecil in 2003 and discoveries at Kakap, Senangin and Kikeh deep formation in 2004. Further exploration and appraisal drilling will occur in the 80% owned Block K in 2005. In 2004, our Board of Directors and Malaysian authorities sanctioned the Kikeh field development plan, and in early 2005 engineering and construction contracts for major equipment were awarded. The Company added proved oil reserves of 40.5 million barrels related to the Kikeh field in Block K Malaysia at year-end 2004. These proved reserves did not include any volumes attributable to pressure maintenance programs that the Company intends to utilize to produce the Kikeh field when

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production begins, which is currently projected to be in the second half of 2007. Murphy also owns 75% interests in Blocks PM 311 and PM 312, located offshore peninsular Malaysia. Murphy announced discoveries at Kenarong and Pertang in PM 311 in 2004. The Company has a number of exploration prospects in Block H (80%) in deepwater. The Company was awarded interests in PSCs covering deepwater Blocks L (60%) and M (70%) in early 2003. The Sultanate of Brunei also claims this acreage. Murphy drilled a wildcat well in Block L in mid-2003. Well results have been kept confidential and well costs of $12 million are held in suspension pending the resolution of the ownership issue. The Company is unable to predict when the ownership issue will be resolved or the outcome of such a resolution. A total of 2.9 million gross acres associated with Blocks L and M have been included in the acreage table below.

The Company finalized the award of Production Sharing Agreements (PSAs) covering two offshore blocks in the Republic of the Congo in 2004. The Company has an 85% interest in each PSA. These blocks are named Mer Profonde Sud and Mer Profonde Nord, and together, these blocks cover approximately 1.8 million acres with water depths ranging from 490 to 6,900 feet. Murphy drilled its first exploration well in late 2004 and in early 2005 announced a significant oil discovery at Azurite Marine #1 in Mer Profonde Sud.

Murphy’s estimated net quantities of proved oil and gas reserves and proved developed oil and gas reserves at December 31, 2001, 2002, 2003 and 2004 by geographic area are reported on pages F-31 and F-32 of this Form 10-K report. Murphy has not filed and is not required to file any estimates of its total net proved oil or gas reserves on a recurring basis with any federal or foreign governmental regulatory authority or agency other than the U.S. Securities and Exchange Commission. Annually, Murphy reports gross reserves of properties operated in the United States to the U.S. Department of Energy; such reserves are derived from the same data from which estimated net proved reserves of such properties are determined.

Net crude oil, condensate, and gas liquids production and sales, and net natural gas sales by geographic area with weighted average sales prices for each of the five years ended December 31, 2004 are shown on page 8 of the 2004 Annual Report.

Production expenses for the last three years in U.S. dollars per equivalent barrel are discussed on page 14 of this Form 10-K report. For purposes of these computations, natural gas sales volumes are converted to equivalent barrels of crude oil using a ratio of six thousand cubic feet (MCF) of natural gas to one barrel of crude oil.

Supplemental disclosures relating to oil and gas producing activities are reported on pages F-30 through F-38 of this Form 10-K report.

At December 31, 2004, Murphy held leases, concessions, contracts or permits on developed and undeveloped acreage as shown by geographic area in the following table. Gross acres are those in which all or part of the working interest is owned by Murphy. Net acres are the portions of the gross acres attributable to Murphy’s working interest.

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The only significant undeveloped acreage that expires in the next three years is approximately 9.5 million net acres in Malaysia and .9 million acres offshore the East Coast of Canada. The Company is currently negotiating to extend the exploration rights for the Malaysian acreage.

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

The following table shows the number of oil and gas wells producing or capable of producing at December 31, 2004.

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

The increase in the number of development dry hole wells in Canada in 2004 was caused by 23 nonproducing stratigraphic wells drilled in the Seal area for the purpose of placement of horizontal development wells for the field.

Murphy’s drilling wells in progress at December 31, 2004 are shown below.

Additional information about current exploration and production activities is reported on pages 5 through 10 of the 2004 Annual Report.

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Refining and Marketing

The Company’s refining and marketing businesses are located in North America and the United Kingdom, and primarily consist of operations that refine crude oil and other feedstocks into petroleum products such as gasoline and distillates, buy and sell crude oil and refined products, and transport and market petroleum products.

Murphy Oil USA, Inc. (MOUSA), a wholly owned subsidiary of Murphy Oil Corporation, owns and operates two refineries in the United States. The Meraux, Louisiana refinery is located on fee land and on two leases that expire in 2010 and 2021, at which times the Company has options to purchase the leased acreage at fixed prices. The refinery at Superior, Wisconsin is located on fee land. Murco Petroleum Limited (Murco), a wholly owned U.K. subsidiary serviced by Murphy Eastern Oil Company, has an effective 30% interest in a refinery at Milford Haven, Wales that can process 108,000 barrels of crude oil per day. Refinery capacities at December 31, 2004 are shown in the following table.