MURPHY OIL CORP - FORM 8-K - EX-99.1 - A NEWS RELEASE ANNOUNCING PRELIMINARY EARNINGS FOR THE FOURTH QUARTER

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8-K - FORM 8-K - MURPHY OIL CORP	d476203d8k.htm

Exhibit 99.1

MURPHY OIL ANNOUNCES PRELIMINARY QUARTERLY AND

ANNUAL FINANCIAL RESULTS

EL DORADO, Arkansas, January 30, 2013 – Murphy Oil Corporation (NYSE: MUR) announced today that its net income in the fourth quarter of 2012 was $158.7 million ($0.82 per diluted share) compared to a net loss of $113.9 million ($0.59 per diluted share) in the fourth quarter of 2011. Net income in the fourth quarter of 2012 was improved over the same 2011 quarter principally due to lower impairment expenses and income tax benefits associated with operating losses in two foreign countries in the current period. The just completed quarter included total impairment charges of $261.0 million ($239.6 million after taxes) associated with both oil production operations in Republic of the Congo and ethanol production operations in Hereford, Texas. The Congo impairment related primarily to unsuccessful drilling operations in the fourth quarter and the removal of proved oil reserves at year-end 2012 at the Azurite field. The field continues to produce while we evaluate future options. Operating results in the fourth quarter of the prior year included an impairment charge for Azurite of $368.6 million. The Hereford ethanol plant was deemed impaired at year-end 2012 due to an expectation of weak future ethanol crush spreads. Income tax benefits in the upstream business totaled $108.3 million associated with tax deductions for operating losses in Republic of the Congo and Suriname. The 2012 fourth quarter included a loss from discontinued operations of $3.7 million ($0.02 per diluted share), compared to income from discontinued operations of $4.0 million ($0.02 per diluted share) in the 2011 quarter. Income from continuing operations in the fourth quarter of 2012 was $162.4 million ($0.84 per diluted share), but was a loss of $117.9 million ($0.61 per diluted share) a year ago.

For the year of 2012, net income totaled $970.9 million ($4.99 per diluted share) compared to $872.7 million ($4.49 per diluted share) in 2011. Net income included income from discontinued operations of $6.8 million ($0.04 per diluted share) in 2012 and $143.2 million ($0.74 per diluted share) in 2011. Income from continuing operations for the years of 2012 and 2011 totaled $964.1 million ($4.95 per diluted share) and $729.5 million ($3.75 per diluted share), respectively.

Net Income


	Three Months Ended December 31,						Years Ended December 31,
	2012			2011			2012			2011
(Millions of Dollars)
Exploration and Production	$	145.0			(144.6	)		905.0			614.2
Refining and Marketing		38.5			61.0			157.6			190.3
Corporate		(21.1	)		(34.3	)		(98.5	)		(75.0	)


Income (loss) from continuing operations		162.4			(117.9	)		964.1			729.5
Income (loss) from discontinued operations		(3.7	)		4.0			6.8			143.2


Net income (loss)	$	158.7			(113.9	)		970.9			872.7


Income (loss) per Common share – Diluted:
Income (loss) from continuing operations	$	0.84			(0.61	)		4.95			3.75
Net income (loss)		0.82			(0.59	)		4.99			4.49

Fourth quarter 2012 vs. Fourth quarter 2011

Exploration and Production (E&P)

Income for the Company’s E&P continuing operations was $145.0 million in the fourth quarter of 2012 compared to a loss of $144.6 million in the same quarter of 2011. The improvement in earnings in the fourth quarter 2012 compared to the same period in 2011 was primarily attributable to a larger impairment charge in Republic of the Congo in 2011 and income tax benefits recognized in 2012 totaling $108.3 million associated with operating losses in Republic of the Congo and Suriname. The 2012 quarter also benefited from higher crude oil sales volumes and lower exploration expenses, but these were mostly offset by lower oil and natural gas sales prices and higher overall extraction and administrative expenses. The increase in extraction expenses in the current year was attributable to higher worldwide average crude oil production and higher depreciation unit rates in Malaysia associated with ongoing capital development activities.

E&P Metrics


	Three Mos. Ended December 31,				Years Ended December 31,
	2012		2011		2012		2011
Oil Production Volume – Bbls. per day		132,918		108,771		112,591		103,160
Natural Gas Sales Volume – MCF per day		473,487		487,991		490,124		457,365
Total BOE Production Volume – BOE per day		211,833		190,103		194,278		179,388

Average Realized Oil Sales Price – $ per Bbl.	$	92.82		96.67		95.58		94.18
Average Realized North American Natural Gas Sales Price – $ per MCF	$	3.34		3.67		2.65		4.08
Average Realized Sarawak Natural Gas Sales Price – $ per MCF	$	6.78		7.85		7.50		7.10

Exploration expenses totaled $137.2 million in the fourth quarter 2012, down from $185.6 million in the 2011 quarter. The decrease was primarily attributable to lower dry hole costs associated with unsuccessful exploratory drilling in the 2012 quarter in Canada and Brunei, partially offset by higher dry hole costs in the current quarter in Republic of the Congo. Additionally, the 2012 quarter had lower leasehold amortization expense in the Kurdistan region of Iraq compared to the prior year.

Worldwide production totaled 211,833 barrels of oil equivalent per day in the 2012 fourth quarter, an 11% increase from the 190,103 barrels of oil equivalent per day produced in the 2011 quarter. Crude oil, condensate and gas liquids production was 132,918 barrels per day in the 2012 quarter compared to 108,771 barrels per day in 2011. The oil production increase in the current year was primarily attributable to an ongoing development drilling program in the Eagle Ford Shale area of South Texas as well as purchase of additional working interests in the Thunder Hawk and Front Runner fields in the Gulf of Mexico during 2012. Natural gas sales volumes averaged 473 million cubic feet per day in quarter four 2012, down 3% from the 488 million cubic feet per day sold in the prior year’s quarter. The 2012 reduction was primarily attributable to lower gas volumes produced at the Tupper area in Western Canada due to a

planned shut-in of certain wells and virtually no development drilling in this area in the 2012 quarter because of continued weak North American natural gas sales prices. Natural gas production in 2012 in the U.S. was above 2011 levels primarily due to the development drilling program in the Eagle Ford Shale.

The average sales price for the Company’s crude oil, condensate and gas liquids was $92.82 per barrel for continuing operations in the 2012 fourth quarter, down from $96.67 per barrel in the 2011 quarter. Natural gas sales prices in North America averaged $3.34 per thousand cubic feet (MCF) in the 2012 quarter, down from $3.67 per MCF in the 2011 quarter. Natural gas sold from fields offshore Sarawak, Malaysia, averaged $6.78 per MCF in the 2012 quarter compared to $7.85 per MCF a year ago.

Refining and Marketing (R&M)

The Company’s refining and marketing business generated a quarterly profit from continuing operations of $38.5 million in the fourth quarter 2012 compared to a profit of $61.0 million in the same quarter a year earlier. U.S. R&M continuing operations generated earnings of $22.0 million in the fourth quarter of 2012 compared to earnings of $50.7 million in the 2011 quarter. The earnings reduction for this business in 2012 was principally the result of an impairment charge of $39.6 million after taxes to reduce the carrying value of the Hereford, Texas ethanol plant. The Company’s U.S. ethanol plants experienced weaker operating results in the 2012 quarter compared to the prior year due to depressed ethanol crush spreads. U.S. retail marketing operations reflected improved results as margins for this business averaged 14.1 cents per gallon in the 2012 quarter compared to 13.0 cents per gallon in the 2011 quarter. Retail operations also benefited from improved merchandise margins in the current quarter compared to a year ago. The U.K. R&M operations posted a net profit of $16.5 million in the 2012 quarter compared to a profit of $10.3 million in 2011, with the improved results based on better overall unit margins for this business.

Downstream Metrics


	Three Mos. Ended December 31				Years Ended December 31
	2012		2011		2012		2011
U.S. Retail Fuel Margins – Per gallon	$	0.141		0.130		0.129		0.156
U.S. Retail Merchandise sales per store month	$	154,730		157,425		156,429		158,144
U.K. Refinery Inputs – Bbls. per day		133,599		138,492		132,613		135,391
U.K. R&M Unit Margins – Per Bbl.	$	2.21		1.38		1.94		(0.67	)
Total Petroleum and Other Product Sales – Bbls. per day*		494,406		465,946		474,949		556,434

*	Includes 122,361 bbls. per day in the 2011 year related to discontinued operations.

Corporate

Corporate activities incurred after-tax costs of $21.1 million in the fourth quarter of 2012, well below the net costs of $34.3 million in the 2011 quarter. The 2012 cost reduction was primarily related to favorable effects from transactions denominated in foreign currencies. The 2012 quarter included an after-tax benefit of $3.5 million from foreign currencies, compared to an after-tax charge of $11.6 million in the 2011 quarter. The Company also had lower net interest expense in the 2012 quarter due to capitalizing a larger portion of its financing costs to oil development projects in the current period. Administrative expenses were higher in the 2012 quarter compared to a year earlier due to additional costs for professional services and employee compensation.

Discontinued Operations

The loss from discontinued operations was $3.7 million ($0.02 per diluted share) in the fourth quarter 2012, compared to income of $4.0 million ($0.02 per diluted share) in the 2011 fourth quarter. The 2012 quarterly results included income tax adjustments related to the Company’s former U.S. oil refineries which were sold in 2011, mostly offset by profits from U.K. oil and gas production operations. The quarterly profit a year ago was primarily attributable to results of the U.K. oil and gas production operations. The sale of these U.K. oil and gas assets is expected to be completed during the first quarter 2013.

Year 2012 vs. Year 2011

Exploration and Production (E&P)

The Company’s E&P continuing operations earned $905.0 million for the full year 2012 compared to $614.2 million in 2011. The improvement in 2012 earnings versus 2011 was primarily attributable to higher oil production and lower impairment and exploration expenses in 2012, plus income tax benefits recognized in the current year related to U.S. tax deductions for losses incurred in Republic of the Congo and Suriname. The current year also benefited from marginally higher average crude oil sales prices. The 2011 period included a $13.1 million after-tax gain on sale of gas storage assets in Spain. Unfavorable effects in 2012 included lower North American natural gas sales prices and higher extraction expenses, with the latter caused by increased production levels and higher overall per-unit depreciation rates.

Total exploration expense was $380.9 million in 2012, down from $489.4 million in 2011. Exploration costs were lower in the current year due to more drilling success in 2012, plus lower geophysical expense in the Gulf of Mexico, Malaysia, Brunei and the Kurdistan region of Iraq.

Total worldwide production in 2012 was 194,278 barrels of oil equivalent per day, an 8% increase from 179,388 barrel equivalents produced in 2011. Total crude oil, condensate and gas liquids production averaged 112,591 barrels per day in 2012, an increase of 9% compared to the 2011 level of 103,160 barrels per day. The increase in the current year was mostly attributable to higher production in the Eagle Ford Shale area of South Texas and at the Kikeh field, offshore Sabah, Malaysia. Natural gas sales volumes increased from 457 million cubic feet per day in 2011 to 490 million cubic feet per day in 2012. The 7% increase in gas volumes in the current year was primarily attributable to higher production in the Tupper area and the Eagle Ford Shale.

Natural gas volumes would have increased more in 2012 but for the fact that the Company voluntarily shut-in certain wells and significantly reduced development drilling in Western Canada due to depressed North American natural gas sales prices.

The average sales price for crude oil and other liquids for continuing operations was $95.58 per barrel in 2012 compared to $94.18 per barrel in 2011. North American natural gas was sold at an average price of $2.65 per MCF in 2012, significantly below the 2011 average of $4.08 per MCF. However, natural gas volumes produced offshore Sarawak were sold for $7.50 per MCF in 2012, up from $7.10 per MCF in the prior year.

Refining and Marketing (R&M)

The Company’s refining and marketing continuing operations generated a profit of $157.6 million in the year of 2012 compared to a profit of $190.3 million in 2011. U.S. R&M profits from continuing operations were $105.4 million in 2012 compared to $223.6 million in 2011. Operating results in 2012 for the U.S. R&M business were lower than 2011 due to weaker retail marketing margins and significantly lower margins for ethanol production operations. Per gallon margins for U.S. retail operations averaged 12.9 cents in 2012 compared to 15.6 cents in 2011. Ethanol production operating results were adversely affected by both weaker crush spreads and a $39.6 million after-tax asset impairment charge related to the Hereford, Texas plant. The U.K. R&M business produced a net profit of $52.2 million in 2012 compared to a net loss of $33.3 million in 2011. The improvement in U.K. operating results was attributable to more than a $2.60 per barrel increase in unit margins in the current year.

Corporate

Corporate after-tax costs were $98.5 million in the year of 2012 compared to costs of $75.0 million in 2011. The significant unfavorable variance in 2012 compared to the prior year was mostly associated with foreign currency effects. Although after-tax effects from

transactions denominated in foreign currencies were minimal in 2012, the prior year benefited from an after-tax gain of $20.7 million. The 2012 period also had higher administrative costs compared to 2011, primarily associated with more employee compensation and professional service expenses in the later period. However, net interest expense was lower in 2012 than 2011 essentially due to higher levels of interest capitalized to oil development projects in the current year.

Discontinued Operations

Income from discontinued operations was $6.8 million in 2012 compared to $143.2 million in 2011. The 2011 results primarily related to income for two U.S. refineries sold in late 2011, including $113.1 million of operating profits and an $18.7 million net gain on disposal. Income from discontinued operations in both years included operating profits for U.K. offshore oil and gas assets that are expected to be sold in the first quarter 2013.

Steven A. Cossé, President and Chief Executive Officer, commented, “The just completed 2012 was an important year for our Company. Murphy’s Board decided to separate our U.S. downstream subsidiary into an independent public company; the completion of this process is expected during 2013. The U.S. retail business executed a new contract with Walmart, which will provide growth opportunities for this company for the next several years. In the oil and gas business, once again our reserves replacement significantly exceeded our oil and gas production volumes. We continued growth in our Eagle Ford Shale operation, where total production averaged 15,000 net barrels of oil equivalent per day for 2012, with expected 2013 annual production increasing to 30,000 net barrel equivalents per day. We added acreage and working interests in Canada and the Gulf of Mexico, while finalizing sale agreements for our oil and gas properties in the U.K. that are expected to close in the first quarter of this year. We also paid a $2.50 per share special dividend and commenced a stock buyback program near year-end.

“We anticipate total worldwide production volumes of 200,000 barrels of oil equivalent per day in the first quarter of 2013. Sales volumes of oil and natural gas are projected to average 202,000 barrels of oil equivalent per day during the quarter. At the present time, we expect income from continuing operations in the first quarter to range between $0.55 and $0.90 per diluted share. The first quarter estimate includes projected exploration expense of between $70 million and $140 million, and a loss from our downstream businesses of approximately $10 million. Results could vary based on the risk factors described below.”

The public is invited to access the Company’s conference call to discuss fourth quarter 2012 results on Thursday, January 31 at 12:00 p.m. CST either via the Internet through the Investor Relations section of Murphy Oil’s Web site at http://www.murphyoilcorp.com/ir or via the telephone by dialing 1-888-503-8172. The telephone reservation number for the call is 6962469. Replays of the call will be available through the same address on Murphy Oil’s Web site, and a recording of the call will be available through February 4 by calling 1-888-203-1112 and referencing reservation number 6962469. Audio downloads will also be available on the Murphy Web site through March 1 and via Thomson StreetEvents for their service subscribers.

Summary financial data and operating statistics for the fourth quarter and year of 2012 with comparisons to 2011 are contained in the attached tables.

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management’s current views concerning future events or results, including Murphy’s plans to separate its U.S. downstream business and to divest its U.K. downstream and U.K. upstream operations, are subject to inherent risks and uncertainties. Factors that could cause one or more of these forecasted events not to occur include, but are not limited to, a failure to obtain necessary regulatory approvals, a failure to obtain assurances of anticipated tax treatment, a deterioration in the business or prospects of Murphy or its U.S. downstream business, adverse developments in Murphy or its U.S. downstream operation’s markets, adverse developments in the U.S. or global capital markets, credit markets or economies generally or a failure to execute a sale of the U.K. downstream or U.K. upstream operations on acceptable terms or in the timeframe contemplated. Factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements include, but are not limited to, the volatility and level of crude oil and natural gas prices, the level and success rate of our exploration programs, our ability to maintain production rates and replace reserves, customer demand for our products, adverse foreign exchange movements, political and regulatory instability, and uncontrollable natural hazards. For further discussion of risk factors, see Murphy’s 2011 Annual Report on Form 10-K and the September 30, 2012 Quarterly Report on Form 10-Q on file with the U.S. Securities and Exchange Commission. Murphy undertakes no duty to publicly update or revise any forward-looking statements.

#####

MURPHY OIL CORPORATION

FUNCTIONAL RESULTS OF OPERATIONS (Unaudited)

(Millions of dollars)


	Three Months Ended December 31, 2012					Three Months Ended December 31, 2011*
	Revenues		Income			Revenues			Income
Exploration and production
United States	$	366.4		84.9			198.0			45.9
Canada		279.6		61.8			323.5			43.5
Malaysia		650.6		231.3			603.5			253.2
Republic of the Congo		—		(232.7	)		37.4			(384.9	)
Other		—		(.3	)		0.2			(102.3	)

		1,296.6		145.0			1,162.6			(144.6	)

Refining and marketing
United States		4,471.6		22.0			4,115.8			50.7
United Kingdom		1,614.9		16.5			1,531.3			10.3

		6,086.5		38.5			5,647.1			61.0

		7,383.1		183.5			6,809.7			(83.6	)
Intersegment transfers elimination		—		—			(5.4	)		—

		7,383.1		183.5			6,804.3			(83.6	)
Corporate		6.1		(21.1	)		(10.3	)		(34.3	)

Revenue/income from continuing operations		7,389.2		162.4			6,794.0			(117.9	)
Discontinued operations, net of tax		—		(3.7	)		—			4.0

Total revenues/net income (loss)	$	7,389.2		158.7			6,794.0			(113.9	)


	Twelve Months Ended December 31, 2012					Twelve Months Ended December 31, 2011*
	Revenues		Income			Revenues			Income
Exploration and production
United States	$	1,038.0		168.0			737.7			152.7
Canada		1,084.3		208.1			1,288.6			328.0
Malaysia		2,428.1		894.2			2,045.6			812.7
Republic of the Congo		57.6		(241.1	)		148.8			(385.3	)
Other		.1		(124.2	)		24.6			(293.9	)

		4,608.1		905.0			4,245.3			614.2

Refining and marketing
United States		17,723.4		105.4			17,471.9			223.6
United Kingdom		6,283.0		52.2			6,030.3			(33.3	)

		24,006.4		157.6			23,502.2			190.3

		28,614.5		1,062.6			27,747.5			804.5
Intersegment transfers elimination		—		—			(142.8	)		—

		28,614.5		1,062.6			27,604.7			804.5
Corporate		11.5		(98.5	)		33.4			(75.0	)

Revenue/income from continuing operations		28,626.0		964.1			27,638.1			729.5
Discontinued operations, net of tax		—		6.8			—			143.2

Total revenues/net income	$	28,626.0		970.9			27,638.1			872.7

*	Reclassified to conform to current presentation.

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (Unaudited)

THREE MONTHS ENDED DECEMBER 31, 2012 AND 2011


			Canada							Republic
(Millions of dollars)	United States		Conventional		Synthetic		Malaysia			of the Congo			Other			Total
Three Months Ended December 31, 2012
Oil and gas sales and other revenues	$	366.4		151.1		128.5		650.6			—			—			1,296.6
Production expenses		74.7		38.6		57.0		116.0			24.3			—			310.6
Depreciation, depletion and amortization		119.4		70.6		14.9		163.4			.1			.6			369.0
Accretion of asset retirement obligations		2.8		1.2		2.2		3.6			.3			—			10.1
Impairment of properties		—		—		—		—			200.0			—			200.0
Exploration expenses
Dry holes		.1		7.2		—		(.1	)		76.2			8.9			92.3
Geological and geophysical		6.5		.1		—		.5			—			7.1			14.2
Other		1.5		.5		—		—			—			6.1			8.1

		8.1		7.8		—		.4			76.2			22.1			114.6
Undeveloped lease amortization		11.3		7.5		—		—			—			3.8			22.6

Total exploration expenses		19.4		15.3		—		.4			76.2			25.9			137.2

Selling and general expenses (credits)		15.6		6.5		.2		(1.7	)		.1			13.9			34.6

Results of operations before taxes		134.5		18.9		54.2		368.9			(301.0	)		(40.4	)		235.1
Income tax provisions (benefits)		49.6		1.9		9.4		137.6			(68.3	)		(40.1	)		90.1

Results of operations (excluding corporate overhead and interest)	$	84.9		17.0		44.8		231.3			(232.7	)		(.3	)		145.0


Three Months Ended December 31, 2011*
Oil and gas sales and other revenues	$	198.0		207.2		116.3		603.5			37.4			.2			1,162.6
Production expenses		45.9		39.2		60.1		116.3			9.4			—			270.9
Depreciation, depletion and amortization		50.9		74.6		12.0		102.6			23.3			.6			264.0
Accretion of asset retirement obligations		2.5		1.2		1.9		2.6			.1			—			8.3
Impairment of properties		—		—		—		—			368.6			—			368.6
Exploration expenses
Dry holes		—		50.6		—		.1			15.2			66.5			132.4
Geological and geophysical		2.7		2.5		—		1.5			.2			5.6			12.5
Other		.7		3.4		—		—			.1			8.9			13.1

		3.4		56.5		—		1.6			15.5			81.0			158.0
Undeveloped lease amortization		9.9		7.4		—		—			—			10.3			27.6

Total exploration expenses		13.3		63.9		—		1.6			15.5			91.3			185.6

Selling and general expenses (credits)		11.3		3.7		.2		(.5	)		1.4			11.8			27.9

Results of operations before taxes		74.1		24.6		42.1		380.9			(380.9	)		(103.5	)		37.3
Income tax provisions (benefits)		28.2		11.1		12.1		127.7			4.0			(1.2	)		181.9

Results of operations (excluding corporate overhead and interest)	$	45.9		13.5		30.0		253.2			(384.9	)		(102.3	)		(144.6	)

*	Reclassified to conform to current presentation.

MURPHY OIL CORPORATION

OIL AND GAS OPERATING RESULTS (Unaudited)

TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011


			Canada								Republic
(Millions of dollars)	United States		Conventional			Synthetic		Malaysia			of the Congo			Other			Total
Twelve Months Ended December 31, 2012
Oil and gas sales and other revenues	$	1,038.0		620.6			463.7		2,428.1			57.6			.1			4,608.1
Production expenses		252.4		167.2			224.1		422.7			48.4			—			1,114.8
Depreciation, depletion and amortization		330.2		290.5			55.3		532.1			33.9			2.4			1,244.4
Accretion of asset retirement obligations		11.4		5.1			8.5		12.5			.9			—			38.4
Impairment of properties		—		—			—		—			200.0			—			200.0
Exploration expenses
Dry holes		32.3		8.0			—		26.1			76.2			39.3			181.9
Geological and geophysical		11.4		1.3			—		1.1			.4			18.0			32.2
Other		8.2		1.2			—		—			.2			27.4			37.0

		51.9		10.5			—		27.2			76.8			84.7			251.1
Undeveloped lease amortization		71.6		29.3			—		—			—			28.9			129.8

Total exploration expenses		123.5		39.8			—		27.2			76.8			113.6			380.9

Selling and general expenses (credits)		52.7		19.7			.9		(5.3	)		3.2			48.4			119.6

Results of operations before taxes		267.8		98.3			174.9		1,438.9			(305.6	)		(164.3	)		1,510.0
Income tax provisions (benefits)		99.8		25.1			40.0		544.7			(64.5	)		(40.1	)		605.0

Results of operations (excluding corporate overhead and interest)	$	168.0		73.2			134.9		894.2			(241.1	)		(124.2	)		905.0


Twelve Months Ended December 31, 2011*
Oil and gas sales and other revenues	$	737.7		782.0			506.6		2,045.6			148.8			24.6			4,245.3
Production expenses		164.8		151.2			236.1		420.6			37.6			—			1,010.3
Depreciation, depletion and amortization		183.0		273.9			52.1		357.3			87.8			1.9			956.0
Accretion of asset retirement obligations		9.9		4.9			7.6		10.6			.5			.3			33.8
Impairment of properties		—		—			—		—			368.6			—			368.6
Exploration expenses
Dry holes		.6		50.6			—		.1			18.1			181.6			251.0
Geological and geophysical		27.1		5.9			—		11.0			2.7			32.6			79.3
Other		8.8		4.3			—		—			.2			27.6			40.9

		36.5		60.8			—		11.1			21.0			241.8			371.2
Undeveloped lease amortization		62.2		28.8			—		—			—			27.2			118.2

Total exploration expenses		98.7		89.6			—		11.1			21.0			269.0			489.4

Terra Nova working interest redetermination		—		(5.4	)		—		—			—			—			(5.4	)
Selling and general expenses (credits)		42.1		14.2			.9		(1.6	)		2.2			39.8			97.6

Results of operations before taxes		239.2		253.6			209.9		1,247.6			(368.9	)		(286.4	)		1,295.0
Income tax provisions		86.5		79.7			55.8		434.9			16.4			7.5			680.8

Results of operations (excluding corporate overhead and interest)	$	152.7		173.9			154.1		812.7			(385.3	)		(293.9	)		614.2

*	Reclassified to conform to current presentation.

MURPHY OIL CORPORATION

SUMMARIZED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, except twelve months in 2011)

(Thousands of dollars, except per share amounts)


	Three Months Ended December 31,						Twelve Months Ended December 31,
	2012			2011¹			2012			2011¹

Revenues	$	7,389,228			6,794,033			28,626,046			27,638,121


Costs and expenses
Crude oil and product purchases		5,636,262			5,242,076			22,449,306			21,875,297
Operating expenses		579,675			516,828			2,127,503			1,964,891
Exploration expenses		137,210			185,519			380,924			489,346
Selling and general expenses		93,206			79,183			354,493			297,520
Depreciation, depletion and amortization		402,914			296,219			1,375,577			1,079,750
Accretion of asset retirement obligations		10,289			8,562			39,341			34,724
Impairment of properties		260,988			368,600			260,988			368,600
Redetermination of Terra Nova working interest		—			—			—			(5,351	)
Interest expense		17,827			14,183			54,105			55,831
Interest capitalized		(11,813	)		(3,584	)		(39,173	)		(15,131	)

		7,126,558			6,707,586			27,003,064			26,145,477


Income from continuing operations before income taxes		262,670			86,447			1,622,982			1,492,644
Income tax expense		100,279			204,400			658,936			763,173

Income (loss) from continuing operations		162,391			(117,953	)		964,046			729,471
Income (loss) from discontinued operations, net of income taxes		(3,704	)		4,025			6,830			143,231


Net income (loss)	$	158,687			(113,928	)		970,876			872,702


Income (loss) per Common share – Basic
Continuing operations	$	0.84			(0.61	)		4.97			3.77
Discontinued operations		(0.02	)		0.02			0.04			0.74

Net income (loss)	$	0.82			(0.59	)		5.01			4.51


Income (loss) per Common share – Diluted
Continuing operations	$	0.84			(0.61	)		4.95			3.75
Discontinued operations		(0.02	)		0.02			0.04			0.74

Net income (loss)	$	0.82			(0.59	)		4.99			4.49


Cash dividends per Common share²	$	2.8125			0.275			3.675			1.10

Average Common shares outstanding (thousands)
Basic		193,452			193,605			193,902			193,410
Diluted		194,403			194,486			194,669			194,512

¹	Reclassified to conform to current presentation.

²	Current year amounts include special dividend of $2.50 per share.

SUMMARIZED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, except twelve months in 2011)

(Thousands of dollars)


	Three Months Ended December 31,						Twelve Months Ended December 31,
	2012			2011¹			2012			2011¹
Operating Activities
Net income (loss)	$	158,687			(113,928	)		970,876			872,702
Adjustments to reconcile net income to net cash provided by operating activities
(Income) loss from discontinued operations		3,704			(4,025	)		(6,830	)		(143,231	)
Depreciation, depletion and amortization		402,914			296,219			1,375,577			1,079,750
Amortization of deferred major repair costs		5,942			5,719			22,818			23,076
Impairment of properties		260,988			368,600			260,988			368,600
Expenditures for asset retirements		(17,485	)		(6,319	)		(40,434	)		(21,490	)
Dry hole costs		92,279			132,369			181,924			250,954
Amortization of undeveloped leases		22,599			27,588			129,750			118,211
Accretion of asset retirement obligations		10,289			8,562			39,341			34,724
Deferred and noncurrent income tax charges		160,971			46,313			316,587			156,983
Pretax (gains) losses from dispositions of assets		1,352			513			1,258			(22,679	)
Net increase in operating working capital other than cash and cash equivalents		(196,723	)		(520,484	)		(413,963	)		(825,705	)
Other – net		30,364			31,834			151,226			67,955

Net cash provided by continuing operations		935,881			272,961			2,989,118			1,959,850
Net cash provided (required) by discontinued operations		4,723			(4,323	)		52,713			185,535

Net cash provided by operating activities		940,604			268,638			3,041,831			2,145,385


Investing Activities
Property additions and dry holes		(1,428,104	)		(758,158	)		(3,660,171	)		(2,603,158	)
Proceeds from sale of assets		181			147			569			27,776
Purchases of investment securities²		(258,562	)		(455,766	)		(1,619,308	)		(1,689,087	)
Proceeds from maturity of investment securities²		634,563			417,377			2,035,798			1,773,552
Expenditures for major repairs		(1,423	)		(2,583	)		(12,790	)		(5,409	)
Investing activities of discontinued operations, including proceeds in 2011 from sale of U.S. refineries and associated inventories		(21,632	)		528,659			(58,156	)		873,958
Other – net		2,188			864			11,086			8,014

Net cash required by investing activities		(1,072,789	)		(269,460	)		(3,302,972	)		(1,614,354	)


Financing Activities
Increase (decrease) in notes payable		1,060,568			(725,011	)		1,645,467			(340,041	)
Purchase of treasury stock		(250,000	)		—			(250,000	)		—
Proceeds from exercise of stock options and employee stock purchase plans		1,186			7,306			12,324			15,551
Excess tax benefits related to exercise of stock options		690			719			2,647			4,838
Withholding tax on stock-based incentive awards		181			—			(3,341	)		(8,014	)
Issue cost of long-term debt		(2,674	)		714			(6,959	)		(7,905	)
Cash dividends paid		(546,909	)		(53,223	)		(714,429	)		(212,752	)

Net cash provided (required) by financing activities		263,042			(769,495	)		685,709			(548,323	)


Effect of exchange rate changes on cash and cash equivalents		(235	)		5,209			8,875			(4,660	)


Net increase (decrease) in cash and cash equivalents		130,622			(765,108	)		433,443			(21,952	)
Cash and cash equivalents at beginning of period		816,694			1,278,981			513,873			535,825


Cash and cash equivalents at end of period	$	947,316			513,873			947,316			513,873

¹	Reclassified to conform to current presentation.

²	Represents cash invested in Canadian government securities with maturities greater than 90 days at the date of acquisition.

MURPHY OIL CORPORATION

OTHER FINANCIAL DATA

(Unaudited, except for December 31, 2011)

(Millions of dollars)


					Dec. 31, 2012		Dec. 31, 2011
Total current assets					$	4,100.1		3,447.7
Total current liabilities						3,352.9		2,824.9
Total assets						17,501.9		14,138.1
Long-term debt						2,245.2		249.6
Stockholders' equity						8,966.9		8,778.4

	Three Months Ended December 31,				Twelve Months Ended December 31,
	2012		2011		2012		2011
Capital expenditures—continuing operations
Exploration and production
United States	$	521.0		216.6		1,653.4		733.1
Canada		417.8		288.5		897.7		946.1
Malaysia		411.5		286.8		1,453.9		705.9
Other		69.3		70.6		165.6		362.9

		1,419.6		862.5		4,170.6		2,748.0

Refining and marketing
United States		36.1		29.6		111.5		100.1
United Kingdom		6.8		8.7		22.2		22.2

		42.9		38.3		133.7		122.3


Corporate		2.6		0.8		8.0		5.2

Total capital expenditures—continuing operations		1,465.1		901.6		4,312.3		2,875.5

Charged to exploration expenses*
United States		8.1		3.4		51.9		36.5
Canada		7.8		56.5		10.5		60.8
Malaysia		0.4		1.6		27.2		11.1
Other		98.3		96.5		161.5		262.8

Total charged to exploration expenses		114.6		158.0		251.1		371.2


Total capitalized—continuing operations	$	1,350.5		743.6		4,061.2		2,504.3


*Excludes amortization of undeveloped leases of	$	22.6		27.6		129.8		118.2

MURPHY OIL CORPORATION

STATISTICAL SUMMARY


	Three Months Ended December 31,				Twelve Months Ended December 31,
	2012		2011		2012		2011
Net crude oil, condensate and gas liquids produced – barrels per day		132,918		108,771		112,591		103,160
Continuing operations		129,323		106,022		109,133		100,737
United States		38,009		18,329		26,090		17,148
Canada – light		227		110		245		83
– heavy		7,518		8,418		7,241		7,264
– offshore		6,632		8,967		6,986		9,204
– synthetic		15,417		12,370		13,830		13,498
Malaysia		60,073		54,091		52,663		48,551
Republic of the Congo		1,447		3,737		2,078		4,989
Discontinued operations – United Kingdom		3,595		2,749		3,458		2,423

Net crude oil, condensate and gas liquids sold – barrels per day		135,371		109,609		113,624		101,422
Continuing operations		131,070		107,524		110,252		99,123
United States		38,009		18,329		26,090		17,148
Canada – light		227		110		245		83
– heavy		7,518		8,418		7,241		7,264
– offshore		6,124		8,183		7,092		9,079
– synthetic		15,417		12,370		13,830		13,498
Malaysia		63,775		56,158		54,286		48,092
Republic of the Congo		—		3,956		1,468		3,959
Discontinued operations – United Kingdom		4,301		2,085		3,372		2,299

Net natural gas sold – thousands of cubic feet per day		473,487		487,991		490,124		457,365
Continuing operations		469,516		485,489		486,753		453,439
United States		59,964		45,500		52,962		47,212
Canada		186,972		230,781		217,046		188,787
Malaysia – Sarawak		170,921		179,542		174,283		176,943
– Kikeh		51,659		29,666		42,462		40,497
Discontinued operations – United Kingdom		3,971		2,502		3,371		3,926

Total net hydrocarbons produced – equivalent barrels per day¹		211,833		190,103		194,278		179,388
Total net hydrocarbons sold – equivalent barrels per day¹		214,286		190,941		195,311		177,650

Weighted average sales prices
Crude oil, condensate and natural gas liquids – dollars per barrel²
United States	$	100.63		108.23		102.60		103.92
Canada³– light		78.50		95.10		81.22		94.28
– heavy		42.93		61.60		46.45		57.00
– offshore		110.37		109.80		112.08		110.02
– synthetic		91.10		102.50		91.85		102.94
Malaysia⁴		92.83		94.51		97.29		90.14
Republic of the Congo⁴		—		102.93		107.26		103.02
Discontinued operations – United Kingdom		110.86		108.86		111.21		110.13

Natural gas – dollars per thousand cubic feet
United States²	$	3.50		3.51		2.76		4.13
Canada³		3.29		3.70		2.62		4.07
Malaysia – Sarawak⁴		6.78		7.85		7.50		7.10
– Kikeh		0.24		0.24		0.24		0.24

Discontinued operations – United Kingdom³		11.60		9.93		10.30		9.99

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

²	Includes intracompany transfers at market prices.

³	U.S. dollar equivalent.

⁴	Prices are net of payments under the terms of the respective production sharing contracts.

MURPHY OIL CORPORATION

STATISTICAL SUMMARY (Continued)


	Three Months Ended December 31,						Twelve Months Ended December 31,
	2012			2011			2012			2011
Refining and Marketing
United States retail marketing:
Fuel margin per gallon¹	$	0.141		$	0.130		$	0.129		$	0.156
Gallons sold per store month		297,465			275,549			277,001			277,715
Merchandise sales revenue per store month	$	154,730		$	157,425		$	156,429		$	158,144
Merchandise margin as a percentage of merchandise sales		13.0	%		11.5	%		13.5	%		12.8	%
Store count at end of period		1,165			1,128			1,165			1,128

United Kingdom refining and marketing – unit margins per barrel	$	2.21			1.38			1.94			(0.67	)

Petroleum products sold – barrels per day		494,406			465,946			474,949			556,434
United States		353,154			329,024			337,900			420,737	²
Gasoline		302,465			280,699			289,650			312,945
Kerosine		348			2,769			146			11,864
Diesel and home heating oils		50,341			45,556			48,104			74,410
Residuals		—			—			—			12,618
Asphalt, LPG and other		—			—			—			8,900
United Kingdom		141,252			136,922			137,049			135,697
Gasoline		55,608			39,609			47,087			35,757
Kerosine		18,286			14,331			17,273			16,298
Diesel and home heating oils		51,561			53,296			48,595			48,893
Residuals		11,621			14,133			13,744			14,427
LPG and other		4,176			15,553			10,350			20,322

U.K. refinery inputs – barrels per day		133,599			138,492			132,613			135,391
Milford Haven, Wales – crude oil		130,311			134,846			129,334			131,959
– other feedstocks		3,288			3,646			3,279			3,432

U.K. refinery yields – barrels per day		133,599			138,492			132,613			135,391
Gasoline		56,181			38,625			46,100			34,171
Kerosine		17,447			16,608			16,941			17,038
Diesel and home heating oils		47,827			50,557			46,004			47,418
Residuals		13,195			15,143			13,922			14,185
LPG and other		(4,668	)		14,300			5,976			19,448
Fuel and loss		3,617			3,259			3,670			3,131

¹	Represents net sales prices for fuel less purchased cost of fuel.

Includes 122,361 bbls. per day in the twelve-month period in 2011 related to discontinued operations in the United States. Subsequent to the sale of the U.S. refineries in late 2011, a portion of the reduction in refined products produced and sold by these discontinued operations were offset by higher finished products purchased and sold by the Company’s ongoing marketing operations.

MURPHY OIL CORP - FORM 8-K - EX-99.1 - A NEWS RELEASE ANNOUNCING PRELIMINARY EARNINGS FOR THE FOURTH QUARTER - January 30, 2013

Attached files

MURPHY OIL CORP Reports