Murphy reports 4th-quarter gain

Tax benefits, fewer writedowns key to $159 million profit

— Murphy Oil Corp. turned a fourth-quarter profit of $158.7 million, reversing a $113.9 million loss a year ago, the El Dorado-based company reported Wednesday.

Murphy attributed the improvement to lower impairment expenses and income tax benefits associated withoperating losses in two countries.

Along with it’s quarterly profit, the company reported an 8.8 percent increase in revenue. For the quarter that ended Dec. 31, Murphy reported revenue of $7.4 billion, compared with $6.8 billion for the corresponding period in 2011.

For the year, the company reported a net income of $970.9 million, compared with $872.7 million in 2011. Total revenue in 2012 increased by about 3.6 percent to $28.6 billion.

Murphy took two writedowns totaling $261 million during its fourth quarter. The charges involved oil production operations in the Republic of the Congo andethanol production in Hereford, Texas.

The Congo charge is related to unsuccessful drilling during the quarter and the removal of oil reserves in its Azurite field.

Murphy took a $368.6 million write-down on the same field in the same quarter a year ago.

The smaller write-down in the Congo and income tax benefits of $108.3 million, which are associated with operating losses in the Congo and Suriname, helped improve Murphy’s net income for the quarter.

The company said the ethanol plant in Hereford was “deemed impaired at yearend 2012” because of concerns about ethanol prices.

The two impairment charges lowered Murphy’s earnings per share, said Pavel Molchanov, an analyst with Raymond James and Associates.

The company reported 82cents per share for the quarter, compared with the loss of 59 cents per share in thesame quarter a year ago.

Excluding the writedowns, Murphy’s adjusted earnings per share was $2.07, which would have beat Raymond James’ prediction of $1.25 per share, Molchanov said.

Murphy shares fell 97 cents, or 1.52 percent, on the New York Stock Exchange on Wednesday to close at $62.84. Shares of the company ranged from $62.71 to $64.10 throughout the day. Murphy released it’s earnings report after the market closed.

Murphy did not provide any details in its release of the company’s decision to spin off it’s retail and marketing business from it’s exploration and productionoperations. The company announced the decision in October.

“The just completed 2012 was an important year for our company,” said Steven Cosse, president and chief executive officer of Murphy. “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 public can listen to Murphy’s conference call at noon today by going to the investor relations section of the company’s website at murphyoilcorp.com/ir.

It can also be accessed by calling (888) 503-8172. The telephone reservation number for the call is 6962469.

Business, Pages 27 on 01/31/2013

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