Murphy Oil Corporation (MUR) Earnings & Analysis

Latest quarter

Murphy Oil reported Q3 FY2026 revenue of $855.0 million, above the consensus estimate of $766.7 million. Adjusted earnings of $1.08 per share also exceeded the consensus of $0.91 per share.

Revenue rose from $733.0 million a year earlier. In its filing, Murphy attributed the increase in production revenue primarily to higher realized oil prices in the U.S. and Canada. Higher volumes at Canada’s Terra Nova and Kaybob fields also helped, while lower Eagle Ford and Gulf of America volumes partly offset those gains.

The filing said lease operating expenses fell by $35.2 million from a year earlier, primarily because of lower Gulf workover costs, including the effect of insurance reimbursements. Murphy reported an operating margin of 30.0%, compared with 0.79% a year earlier, and diluted earnings per share of $1.17, compared with −$0.02.

Murphy’s filing showed non-GAAP free cash flow of $48.2 million, down from $218.8 million a year earlier. The company reported quarterly production of 186,495 barrels of oil equivalent per day, above its guided range.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Eric Hambly focused on new production and exploration progress. He said Chinook 8 came online through the company-owned Pioneer facility in September without the cost or lead time of new infrastructure. Days later, Murphy achieved first oil at Lac Da Vang, its first operated development in Vietnam, which he said came online on time and on budget.

Hambly said Lac Da Vang gives Murphy local operating experience and infrastructure that can support nearby opportunities. He also said recent cargoes had sold at a premium of >$10 per barrel to Dated Brent. At $80 Brent, he expects Lac Da Vang and Chinook to generate approximately $1 billion of combined free cash flow over the next 5 years.

At Bubale in Côte d’Ivoire, Hambly said the West-1X well confirmed oil in the Turonian reservoir and gave Murphy more confidence that it could support an economic development. He cautioned that water found in the well might represent an oil-water contact across the Turonian, but further work was needed to confirm it. He also said deeper reservoirs require appraisal.

Analysts pressed Hambly on the size of the discovery and the quality of the deeper reservoirs. He said appraisal had reduced uncertainty around a volume sufficient for development, but that he was “not really yet ready to describe a new range of resources” for the Turonian. Over the next 18 to 24 months, he expects appraisal to put Murphy in a better position to update that range.

Hambly expects the Bubale appraisal program to start sometime in the second quarter of next year, subject to rig availability. He estimated appraisal wells at $80-100 million per location without an extensive evaluation program, and said that spending would drive much of the uncertainty around the next capital budget. Separately, he indicated Eagle Ford capital spending could rise to around $500 million in 2027.

Guidance

Murphy raised its full-year 2026 production outlook, excluding noncontrolling interest, to 176.0 to 178.0 thousand barrels of oil equivalent per day from 167.0 to 175.0 thousand. The company attributed the increase primarily to accelerated Eagle Ford activity, new well outperformance and lower royalties at Tupper Montney.