El Dorado-based Murphy Oil Corp. reported net income of $45.5 million, or 26 cents a share, for the second quarter of 2018, the company said Wednesday.
Net income was up in comparison to a $17.5 million loss, or 10 cents a share, reported for the same period in 2017.
The company reported a $168.2 million, or 96 cents per share, profit for the first quarter of 2018.
Murphy Oil generated adjusted income of $63 million, or 36 cents per share. Analysts with Zacks Equity Research expected the company to report earnings of 35 cents per share after the stock market closed Wednesday.
The company reported revenue of $618 million for the second quarter of 2018, up from $508 million in 2017.
Roger W. Jenkins, Murphy Oil president and chief executive officer, cited oil production exceeding the high end of guidance reports as a contributing factor to second quarter results.
The company produced 171,000 barrels of oil equivalent per day, including record Kaybob Duvernay production in Canada. During the quarter, Murphy Oil achieved record production averaging over 7,300 barrels of oil equivalent per day in the Kaybob play with 63 percent liquids.
Late in the second quarter, the company brought a four-well pad online in the Kaybob West development area, with an initial average rate of nearly 800 barrels of oil equivalent and 80 percent liquids.
"Since taking over operatorship of this asset two years ago, our Kaybob Duvernay team has done an outstanding job reducing costs while steadily increasing production," Jenkins said in statements attached to Murphy's earnings report.
He added that in the past 24 months, production has grown "almost six-fold to over 7,300" barrels of oil equivalent per day.
"We are well on our way to a fourth quarter exit rate that exceeds 11,000 barrels of oil equivalent per day. Simultaneously, our drilling and completion costs in the Kaybob Duvernay have been reduced by 30 percent to a second quarter average of $6.5 million per well. This includes a Murphy pacesetter well of $5.9 million, which is industry-leading for the play," Jenkins said.
Murphy Oil said production exceeded the high end of guidance because of performance at Front Runner, Clipper, Thunder Hawk and Kodiak Fields in the Gulf of Mexico -- and the new wells in the Kaybob Duvernay, onshore Canada.
"We continue to implement our 2018 plan, with annual production guidance being increased for the second consecutive quarter, Jenkins said. "Our high-margin offshore fields continue to lead the way in production performance. By successfully executing our operating and financial goals, we are able to deliver cash to our shareholders through our competitive dividend yield and generate significant cash returns on our invested capital."
Looking ahead this year, the company said it plans to allocate an additional $50 million in the Kaybob Duvernay to drill, complete additional wells, and build infrastructure. The increase in capital will reduce the remaining drilling carry, which is expected to be completed by year end 2019.
A Murphy Oil spokesperson did not immediately return phone messages left Wednesday.
Murphy Oil shares fell 87 cents, or 2.6 percent, to close Wednesday at $32.51 before the earnings report was released.
Murphy Oil will hold a conference call at 10 a.m. today to discuss its quarterly earnings. The call will be available online in the investor relations section of its website at http://www.murphyoilcorp.com/.
Business on 08/09/2018
Print Headline: Murphy Oil's net income tops $45M in 2nd quarter