LITTLE ROCK — Murphy Oil Corp. lost $113.9 million, or 59 cents a share, in the quarter that ended Dec. 31, down from a profit of $174.1 million, or 90 cents a share, in the same quarter a year ago.
The loss was attributed to a $370 million assetimpairment charge for its West African subsidiary because of lower-than-expected production there. It said it would take the noncash charge to its earnings.
Murphy said in a news release Monday that its impairment charge is due to dry holes drilled in the Azurite field, offshore of the Republic of Congo.
The shares closed Wednesday at $60.65 on the New York Stock Exchange, up 93 cents, or 1.56 percent, then fell 4.4 percent to $58 in light after-hours trading. The report was released after daily trading.
On Monday, shares closed at $60.70, up 34 cents from its Friday close, but by Tuesday it opened 76 cents lower at $59.94. It closed on Tuesday at $59.72.
The stock has fallen 15 percent in the 12 months ending Wednesday, Dow Jones reported.
“Murphy is a relatively risky oil and gas stock because of its exploration footprint ” Pavel Molchanov an analyst with Raymond James and Associates in Houston said Wednesday. “Searching for oil and gas in places that the company doesn’t have existing reserves or production” can lead to dry holes.
For the year, El Doradobased Murphy said Wednesday, it had earned income of $872.7 million, up 9 percent from 2010, when its earnings were $798.1 million.
Analysts polled by Thomson Reuters estimated the company to report earnings of $1.40 per share for the quarter. Analysts’ estimates typically exclude special items like the asset impairment.
Molchanov said he expected the net loss. Adjusted for the asset impairment, he expected earnings of $1.44 a share.
Murphy has drilling operations in the south Texas Eagle Ford Shale oil field, which Molchanov said is low-risk. He said Murphy is “ramping up” drilling there. But he said Murphy has run into problems drilling offshore of Malaysia, as well as offshore of the Republic of Congo.
The release from Murphy said it has also seen a delay in permitting in the Gulf of Mexico after the 2010 BP oil spill, adversely affecting Murphy’s production.
Still, Murphy’s revenue climbed nearly 23 percent in the fourth quarter to $6.82 billion, compared with $5.56 billion in the fourth quarter of 2010.
It attributed much of the climb to higher crude oil prices in 2011. In 2010, a barrel of crude sold by Murphy averaged $73.60, whereas in 2011 it sold a barrel of crude at an average of $96.90.
Worldwide, Murphy produced 190,103 barrels of oil a day in the fourth quarter, up from 177,917 barrels of oil a day a year before. This quarter, it expects production to increase to 195,000 barrels of oil a day, and be 200,000 for the year.
The company’s refining and marketing segment saw a fourth-quarter profit of $61 million, up 208 percent from the fourth quarter of 2010. However, in 2010 Murphy included two refineries it has since sold. The company presents the financial results of these assets as discontinued operations.
Murphy sold a refinery in Superior, Wis., for $214 million and another in Meraux, La., for $325 million, and reported an after-tax net gain of $16.9 million.
David M. Wood, president of chief executive officer of Murphy said in the release that Murphy would likely sell its refinery in Wales sometime in 2012.
He said 2011 was an important year and the company would “build upon the improvements seen in 2011.”
“Two thousand and 11 was an important year,” Wood said in the release. “The sale of our two U.S. refineries was a key step in our strategy.”
Business, Pages 25 on 01/26/2012