Murphy Oil Corporation Q2 2026 Earnings Call - Bubale Discovery Drives CapEx Hike to $1.55B as Eagle Ford Funds Growth

Fern, Conference Operator: Good morning. My name is Fern. I will be your conference operator today. All lines have been placed on mute to prevent any background noise. After the presentation, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I will now turn it over to Atif Riaz, Vice President of Investor Relations and Treasurer.

Atif Riaz, Vice President of Investor Relations and Treasurer, Murphy Oil Corporation: Thank you, Fern. Good morning, and welcome to our 2Q 2026 earnings conference call. Joining me today are Eric Hambly, President and CEO, Tom Mireles, Executive Vice President and CFO, and Chris Lorino, Senior Vice President of Operations. Yesterday after market close, we issued our 2Q earnings release, a slide presentation, and a stockholder update. These documents can be found on Murphy’s website. We will reference them today throughout our call. As a reminder, today’s call contains forward-looking statements as defined under U.S. securities laws. No assurances can be given that these events will occur or that the projections will be attained. A variety of factors exist that may cause actual results to differ. For further discussion of risk factors, please refer to our most recent annual report filed with the SEC.

Murphy takes no duty to publicly update or revise any forward-looking statements except as required by law. Throughout today’s call, production numbers, reserves, and financial amounts are adjusted to exclude non-controlling interest in the Gulf of Mexico. I will now turn the call over to Eric for opening remarks.

Eric Hambly, President and CEO, Murphy Oil Corporation: Thank you, Atif, and thanks to everyone for joining us. I released detailed earnings materials yesterday. I will keep my comments focused this morning. I want to spend most of my time on the key developments in the quarter, including what we learned through our exploration and appraisal program, how those learnings are shaping our capital allocation, and why we believe these investments strengthen Murphy’s long-term outlook. The most important development this quarter was the Bubale discovery in Côte d’Ivoire. Just as important as the result itself is the disciplined exploration process that led us here. We entered Côte d’Ivoire with a clear thesis and a 3-well exploration strategy, and although the first two wells were non-commercial, we have remained confident in Bubale’s prospectivity and continuing to execute the plan. That patience and technical conviction paid off as the well encountered oil in both the Turonian and Cenomanian reservoirs.

Now, we want to be very clear about where we are in the process. While Bubale has the potential to become a significant growth driver for Murphy, there is still important appraisal work ahead. The next step is to understand the scale, quality, continuity, and economics of the resource. That work is now underway with the Bubale West 1X, which we spud in July to begin appraisal of the Turonian reservoir. It is the first of up to five potential appraisal wells. I emphasize potential because this will be a staged data-driven process over the next 18 to 24 months, with each well determining the scope and direction of the remaining appraisal program. An 18 to 24-month appraisal program may sound lengthy, this is how we protect value.

In our business, value can be destroyed long before a development well is ever drilled by misunderstanding the resource, overbuilding the project, or committing capital too early. Appraisal helps us avoid those mistakes by giving us the technical confidence to right-size the development and make disciplined capital decisions. Hai Su Vang in Vietnam exemplifies the importance of that discipline. Hai Su Vang 4X was a dry hole, based on the new data, we have reduced our resource estimate. There is no sugarcoating it. This is not the outcome we were hoping for. However, the appraisal program gave us critical insights, allowing us to now calibrate the field development plan before we commit significant capital in the coming years. Following the Hai Su Vang resource estimate revision, I want to emphasize two important points.

First, even at the revised estimate, Hai Su Vang remains a material 200 to 300 million barrel oil equivalent opportunity, approximately two to three times the size of Lac Da Vang. Second, our Vietnam peak production outlook of 30,000 to 50,000 barrels of oil equivalent per day remains unchanged. We may come closer to the lower end based just on what we know today, the final outcome will depend on what additional tieback opportunities we identify as we move forward. The key takeaway is that we now have greater clarity around our opportunity set with many compelling projects competing for capital. That brings me to our revised capital program and how we’re thinking about investments going forward. We’re increasing the midpoint of our 2026 capital expenditure estimate from $1.25 billion to $1.55 billion. This is not about chasing activity or reacting to price.

It’s a deliberate decision to fund specific high-value opportunities now in front of us with almost all of the increase supporting Murphy’s organic growth. Roughly $190 million relates to Bubale, including $100 million of incremental spend on the discovery well and $90 million for the first appraisal well. Another $70 million is going into the Eagle Ford, which is expected to add approximately 5,000 to 6,000 barrels oil equivalent per day in 2027. I want to take a minute to talk about the Eagle Ford decision because it highlights the key role this asset plays in our portfolio. As our offshore opportunity set expands, we can fund part of that growth through near-term, high-return production and cash flow. Eagle Ford is one of our best assets to do that.

It is flexible, well-weighted, and capable of efficiently translating capital into production. Going forward, we expect the Eagle Ford to become an increasingly important source of cash flow and financial flexibility across the business. This is the strength of our multi-basin portfolio in action, not a change in capital discipline. Our ability to fund growth through our base business while maintaining financial strength was evident this quarter. We generated $110 million of free cash flow, returned $50 million to shareholders through the dividend, maintained leverage below 1x, and ended the quarter with approximately $2.5 billion of liquidity. Even with the revised capital program, at current commodity prices, we expect to generate positive free cash flow for the full year. Operationally, second quarter production averaged 169,000 barrels of oil equivalent per day above the midpoint of our guidance, led by stronger performance at Tupper Montney and continued outperformance in the Eagle Ford.

In the Gulf of Mexico, Chinook number 8 is now through drilling after reaching a total depth of 26,000 feet and remains on track to come online in the fourth quarter. Lac Da Vang is also on schedule for first oil in the fourth quarter, with the pipeline, topsides, and FSO milestones now complete. We look ahead, years of capital discipline and technical rigor are beginning to translate into a portfolio with multiple exciting pathways to growth. This is the Murphy model in action: identify the opportunity, test it with discipline, develop it safely and efficiently, and fund it through resilient cash flow and financial strength. This full-cycle capability and track record across geographies, asset types, and development stages sets Murphy apart and positions us to convert the opportunity ahead into lasting shareholder value. With that, we are ready to take your questions.

Fern, Conference Operator: We will now begin the question and answer session. At this time, I would like to remind everyone, in order to ask a question, press star, then the number 1 on your telephone keypad. Please stand by while we compile the Q&A roster. The first question is from the line of Arun Jayaram with J.P. Morgan Securities. Your line is open. Please go ahead.

Arun Jayaram, Analyst, J.P. Morgan Securities: Eric, good morning. Appreciate the comments in the shareholder letter. Exploration, as is investing, can be humbling, did want to maybe get your thoughts on next steps at HSV. What needs to happen in terms of kind of moving to that FID decision in 2027? Can you give us a little bit of an update on how you are thinking about kind of the development options for HSV?

Eric Hambly, President and CEO, Murphy Oil Corporation: Arun, thanks for that. Great question. Obviously, we’re disappointed that the 4X well was a dry hole, but I will say that we’re still very excited about what is a very significant development for us. 200 million-300 million barrel field in shallow water will have very attractive economics. I would have loved for it to be larger. We now have a lot of confidence in the size of the resource and gaining increasing knowledge about how we’re going to develop the field in terms of the well count, well spacing, and the type of facility concept is something we’ll be evolving over the coming year or so. We’re looking at a number of options for the development. One option would be an FPSO. The other option would be a processing platform with a series of wellhead platforms tied to an FSO, similar to our Lac Da Vang project.

Those are things that we will assess as we plan a development of the field over the coming 12 months or so. We are going to work closely with our partners on a series of approvals required to achieve an approved field development in Vietnam. After we do that, we will take the project to our board for a final investment decision. As we highlighted in our letter, we’re targeting that in the fourth quarter of 2027, and I think we’re well on track to do that. Really happy with this significant discovery that’ll help us build a really material business in Vietnam, and I think we’re going to create a lot of value for our shareholders.

I don’t think we’re getting a lot of recognition of that value creation today, and we’re happy to demonstrate our ability to continue to execute, developing projects 40% faster than the industry.

Arun Jayaram, Analyst, J.P. Morgan Securities: Great. Maybe my follow-up, you’ve spud now Bubale West in July. Looks like you’ll be appraising the Turonian. Maybe just give us a sense of what your concept is for this appraisal well, and what will be the governor of the appraisal program, which could include up to five wells.

Eric Hambly, President and CEO, Murphy Oil Corporation: Yeah, thanks for that. As we featured before, we drilled the discovery well in a position where the Turonian and the Cenomanian cross. There was one location where we could test both reservoirs. We were fortunate to be able to find oil in both Turonian and Cenomanian, and that leaves us with a need to understand the lateral extent of the field, the variability in reservoir quality and thickness across two different reservoir intervals, and also, importantly, learn how much of those structures are oil-filled. The next well that we’re moved to, Bubale West 1X, is moving down dip in the Turonian. The main objective of the well is to test for continuity and variability of reservoir sands and also hopefully determine to prove a deeper oil level than is proven at the base of the Bubale 1X well.

We’re very intentionally targeting the well to give us high confidence that we have a resource in the Turonian that is in line with or in excess of the volume we need to have a commercial development. As we sit today, we think what we’ve found is commercial, but we don’t have high confidence because we have one penetration and two reservoirs, very large reservoirs to test, very large lateral extent. We’re hoping this well gives us high confidence that we’ll be able to then move forward with the development as quickly as possible while we continue to assess and appraise the full size and value of the field.

Arun Jayaram, Analyst, J.P. Morgan Securities: Great. Thanks, Eric.

Eric Hambly, President and CEO, Murphy Oil Corporation: Thank you.

Fern, Conference Operator: Your next question is from the line of Neil Mehta with Goldman Sachs. Your line is now open. Please go ahead.

Neil Mehta, Analyst, Goldman Sachs: Yeah. Eric, I wanted you to unpack a little bit of the decision to pull forward activity in the Eagle Ford. You alluded to it a little bit in your comments, but maybe you talk about why you thought this was the right environment and what kind of incremental returns you’re going to get on the incremental CapEx associated with the $70 million acceleration.

Eric Hambly, President and CEO, Murphy Oil Corporation: Yeah, thanks for that. Before I get just into the Eagle Ford, I want to back up a bit and talk about how we’ve been thinking about our overall company business. What we’ve said over the last few years is we thought we could develop our base business, continue to develop that, also our emerging and growing Vietnam business with a capital program that’s sort of in a $1.2 billion to $1.3 billion range. That any additional spending to develop something like Bubale would likely be additive or largely additive. I would say where we sit today, that is still true. As we look forward and think we want to maintain our Canadian onshore business effectively flat, maintain the scale of our Gulf of Mexico business relatively flat through the rest of this decade.

We look at an additional need for CapEx for appraising and developing Bubale, the place that we’ve found was most optimal to help provide part of that is through accelerating our Eagle Ford. If you look at our Eagle Ford business, we’ve had increasingly strong well performance over the last few years, generating strong free cash flows, even in periods of fairly low oil price in the past couple of years. The reliability of it and the flexibility of it, we look at it and say, "This is a great place to invest a little bit more that’ll generate more free cash flow next year and likely through the end of the decade that’ll help us fund the appraisal of Bubale.

As we move into additional volume growth out of Vietnam, we’ll have even stronger cash flows. It’s the best place to find oily production, and we can do it scalably. We’ve had very strong returns and increasing well performance from Eagle Ford, so it’s kind of the go-to place to do it. I think you’ll see us, as we highlighted in our materials, increase spending this year, which leads to increased free cash flow next year. While we haven’t formulated a plan that we’ve released for 2028 through 2029 to 2030, I think you’ll see us increasingly lean into that if it allows us to continue to generate more free cash flow. We’re really about creating shareholder value.

I think it’s nice to be able to generate incremental oily production growth in the short run, but the primary reason is it’s free cash flow generative and can help us fund what we think is an exciting opportunity in Côte d’Ivoire.

Neil Mehta, Analyst, Goldman Sachs: Eric, that’s the follow-up. The new CapEx plan is $1.516 billion in accrued CapEx for this year. Any advice on what we should put in as a placeholder for 2027? I know there’s a lot of moving pieces, any thoughts on the market there so we can calibrate accordingly?

Eric Hambly, President and CEO, Murphy Oil Corporation: That’s a fair question. We don’t have a number to give you for next year’s CapEx, I’ll talk just about how I think about it. I think that you should expect us to increase slightly more in the Eagle Ford than in the past. With that alone, without any change to investing in Côte d’Ivoire, that would likely put our typical capital program toward the high end of our kind of previous $1.2 billion-$1.3 billion range, maybe slightly above. That’s still something we’re going to work on. Spending on Bubale is likely additive to that. We’ll probably see a higher CapEx in 2027 than you’ve seen from us recently. I don’t know the number. Importantly, I want to go back to the comment we made about the appraisal program. We’re drilling a well at Bubale West 1X now.

Depending on what we find, we may have no appraisal program or a limited appraisal program. We’re going to learn from every well, next year’s capital spending will be materially driven by what we continue to find. If we keep finding more oil at Bubale, we’ll likely keep spending. If we have less wells required to define the size, scope, and quality of Bubale, then we’ll spend less. There’s a pretty big range around that. We’re going to still work on that. The results from the Bubale West 1X well will probably materially shape our view of likely spending and spending ranges for 2027. I think I don’t want to try to make you feel like we’re likely to come in below $1.25 billion next year. It’s going to be higher.

I don’t know how much higher, we’re going to be disciplined, focused on creating shareholder value, and investing in things that are going to be very valuable for our company and our shareholders.

Neil Mehta, Analyst, Goldman Sachs: Yes, sir. Thank you, Eric.

Fern, Conference Operator: Your next question is from the line of Carlos Escalante with Wolfe Research. Your line is now open. Please go ahead.

Carlos Escalante, Analyst, Wolfe Research: Hey, good morning, Eric and team. Thank you for the update today. I want to go back to HSV-4X very quickly to clarify a few things, then move on from there. It looks like HSV-4X was a dry hole, which in my view, it implies that you didn’t find an oil water contact that presumably more of this. Just wondering what’s stopping you from testing an additional well where you can find that threshold, and what gives you the confidence that you don’t need to? Perhaps you can speak more broadly about what you found in HSV-3X in terms of a discovery, pay or any kind of really property around the well and the discovery.

Eric Hambly, President and CEO, Murphy Oil Corporation: Yeah. Thanks, Carlos. I’m happy to provide more context there. Let me go back to where we were at the end of the 2X well. We drilled 1X, 2X. We had extremely encouraging results, strong DSTs. We had a view at the time that the field was likely toward the high end of our previously guided, which was a pre-drill range of resource. We told everyone that because we wanted to inform and keep everyone appraised of how we were thinking about it. We said at the time we thought it was possible that the resource could be even larger. Importantly, we had drilled a fairly central area of the field, and we needed to test the northeast and southwest extensions of the field, which was what the purpose of the 3X and 4X wells was.

With the 3X, we were testing for lateral extension to the northeast. How continuous are the sands? Are they the same quality? We weren’t really chasing a deeper oil water contact there. We were just chasing for continuity. With the 4X well, we were testing what we thought would be an expanded reservoir section with potentially a deeper oil water contact. What we found from the program from the 3X and the 4X, was that the reservoir thickness was not as extensive as we expected over the entire structure, which tightened up the resource estimate. With the 4X, we found the interval we were looking for, the reservoir quality was low, we didn’t have any net pay. The story for 4X was not really about oil water contact. It was really about the extent of productive reservoir being limited.

Now that we have bounded the reservoir with these four wells, we have high confidence in a developable resource that we’re going to move forward with a field development plan.

Carlos Escalante, Analyst, Wolfe Research: Thank you. I appreciate that. Yeah, presumably a four-way closure, so you don’t need to test the other bounds. My follow-up, and maybe a follow-up to Neil’s question. For next year, again, very difficult for you to talk about, 2027 where we are today, but can you at least frame for us how you’re thinking on what is senior to what in terms of the levers you can pull if you needed to have a more lean program, if you will, in 2027? Obviously, it sounds like you’re going to prioritize the appraisal at Bubale if you find any kind of success, but wondering what it means for the broader onshore portfolio and maybe the Gulf of Mexico if you need to, again, be leaner on your 2027 program.

Eric Hambly, President and CEO, Murphy Oil Corporation: Yeah. I think what you’ll see from us is investing in our Gulf of Mexico business to try to maintain production relatively stable there. In our Eagle Ford, likely incrementally more spending than historical. In Canada onshore, stable investment, stable production. Vietnam, obviously, we’re working through additional development drilling in our Lac Da Vang project. We won’t have likely additional drilling in Hai Su Vang next year, we’ll be moving to engineering studies, which is not a lot of spending. In Côte d’Ivoire, what we spend will be driven by what we keep finding, as I mentioned before with Neil. That’s really driving a significant uncertainty in our spending. As I said, we’re going to learn from every appraisal well, and we’ll decide what does that mean about the next well. There’s a probably broad uncertainty.

If we needed to pull back spending for some reason, if oil prices went to be extremely low, we could change our plan for practically any part of our business. We are fortunate in Vietnam and in Côte d’Ivoire that we operate, we can control the pace of any spending. We believe it is valuable for shareholders to quickly appraise Bubale, determine if we have a commercial project definitively, and determine the extent of it so we can move on for field development planning. If we needed to, we could slow the pace of appraisal. We could go as low as zero appraisal wells in Bubale next year if we chose to. We have a lot of flexibility. We’re going to continue to spend money where we think it’s value creating for shareholders and maintain flexibility to spend less if it’s necessary.

Carlos Escalante, Analyst, Wolfe Research: Thank you, Eric. Appreciate it as always.

Eric Hambly, President and CEO, Murphy Oil Corporation: Thanks, Carlos.

Fern, Conference Operator: Your next question is from the line of Phillip Jungwirth with BMO. Your line is now open. Please go ahead.

Phillip Jungwirth, Analyst, BMO: Yeah, thanks. Good morning.

Eric Hambly, President and CEO, Murphy Oil Corporation: Morning.

Phillip Jungwirth, Analyst, BMO: Coming back to the Eagle Ford, which will be a larger part of the program. I know you’ve always had Austin Chalk in the location count, but it has gotten more attention laid across both the east and west portions of the play. Was just hoping you could talk about how large a contributor the Chalk is to your program, go forward program, or is it largely, lower Eagle Ford focus and still and just how you see the opportunity set here overall?

Eric Hambly, President and CEO, Murphy Oil Corporation: Sure. Our Eagle Ford inventory has a fairly limited amount of Austin Chalk. Our development programs in Karnes, over part of our Karnes position, will include an occasional one or two Austin Chalk wells in a 10 to 12-well pad that is mostly lower and upper Eagle Ford locations. We have been developing them. They’re limited to part of our Karnes position in terms of what we’re investing in near-term, they’re not a huge feature for us. We like them where the reservoir quality is good, so we co-develop them where it makes sense. I don’t think it’s a big driver for our program. It’s not something that is really worth calling out or highlighting as unique. It’s fairly limited. Where we do have them in part of our Karnes position, we really like them.

Phillip Jungwirth, Analyst, BMO: Okay, great. On the Bubale West appraisal well, was hoping you could kind of just speak to the confidence in the $90 million well cost, or maybe just break down the incremental costs from the first well, why you think these won’t repeat, just to have confidence as the play moves forward and the overall well cost and ultimate F&D.

Eric Hambly, President and CEO, Murphy Oil Corporation: Sure. Before we drilled the Bubale 1X well, we estimated that a dry hole cost for the well was $65 million. When we drilled the well, we encountered a section in the shallow Turonian above the discovered Turonian interval that was slow to drill. We had a fairly slow rate of penetration as we drilled it. It’s slower than we had anticipated, we’ve incorporated that learning into our dry hole cost estimate for the Bubale West 1X well. Instead of assuming it’s $65 million, we’re moving it to $90 million. If we encounter hydrocarbons in the West 1X well, we’re likely to spend additional funds with formation evaluation, logging core, fluid samples, et cetera. That might push the well cost above $90 million, which is normal how we conduct our business.

Phillip Jungwirth, Analyst, BMO: Thank you.

Eric Hambly, President and CEO, Murphy Oil Corporation: Thank you.

Fern, Conference Operator: Your next question is from the line of Tim Rezvan with KeyBanc. Your line is now open. Please go ahead.

Tim Rezvan, Analyst, KeyBanc: Okay, thank you. Good morning. Appreciate you taking our questions. I want to ask on Vietnam more broadly. You’ve now wrapped the HSV appraisal program. You’ve talked about drilling LDT. I believe it’s a 40 to 80 million barrel resource potential area. Given the large size of your position across several blocks, can you talk about longer-term exploration aspirations in Vietnam, maybe 2027 and beyond? Do you ultimately see this asset sort of self-funding future exploration once you get LDV online?

Eric Hambly, President and CEO, Murphy Oil Corporation: Yeah, that’s a really good question. We are drilling the Lac Da Trang North 1X well now. As you mentioned, it has a pre-drill mean to upward resource range of 40 to 80 million barrels, which is a nice prospect to drill. With success, it likely sets up a development as a tieback of Lac Da Trang North and Lac Da Trang to the infrastructure at Lot 1 Dang. As Lot 1 Dang comes online in the fourth quarter, we’ll generate revenue. Over the course of a few years, we’ll recover the costs of our historical investment in the block. That’d be all of our exploration costs in Block 15-1/05 and also our development costs of Lot 1 Dang.

We’ll be able to use the revenue from Lac Da Vang to recover costs from the exploration that we’re doing going forward, what we’re doing now and in future years. We have significant remaining prospectivity on both Block 15-1/05 and Block 15-2/17, and we’ll test those likely between now and the end of this decade and stage in a development with standalone developments where the resource size is large enough to be necessary or tiebacks to existing infrastructure in what are likely to be two key hubs, a Lac Da Vang and a Hai Su Vang hub in kind of a north and south position. We’re really excited about the potential there. We have a pretty strong record of having successful exploration here. We keep finding oil, and we need to find about 8 million-10 million barrels for an economic tieback.

If we can find 40 million-80 million, we’ll be very happy. It’ll be very value-creating for us and allow us to maintain a long production plateau of our overall Vietnam business. We’re creating a lot of value here with our shareholders, spending very little money to do it.

Tim Rezvan, Analyst, KeyBanc: Okay. That’s good context. Thank you. As my follow-up, I just wanted to go back to the Eagle Ford. You’re spending $70 million. Can you just talk, is this like a spot rig that’s going to come and drill a couple pads over six months? As we think about that, should we be thinking over the medium term that maybe you’re going to run this at a 40,000-45,000 barrel a day level? Just trying to kind of contextualize the ramp you’re anticipating. Thank you.

Eric Hambly, President and CEO, Murphy Oil Corporation: Yeah. Where we sit today, we do not have a rig actively drilling at Eagle Ford. We completed our drilling program that we had originally contemplated and are working through the last of our completions and well onlines. What we’ve decided to do is resume drilling. Instead of resuming drilling in January, to pull that forward to begin in October. We’ll drill a pad in Karnes and a pad in Catarina this year. We’ll probably begin completing the Catarina pad at the end of the year, and we’ll bring those new wells online early in 2027. I think what you’ll see is that’s just the beginning of an active program next year. I think your range of rates for Eagle Ford next year is reasonable.

I would assume we’re a little toward the higher end of what you said than the lower end, but we still have to formulate exactly what our 2027 program is.

Tim Rezvan, Analyst, KeyBanc: Okay. Thanks, Eric.

Eric Hambly, President and CEO, Murphy Oil Corporation: Thank you.

Fern, Conference Operator: Your next question is from the line of Josh Silverstein with UBS. Your line is now open. Please go ahead.

Josh Silverstein, Analyst, UBS: Thanks. Good morning, guys. I wanted to see how we should be thinking about using the balance sheet and the shareholder return profile in this period of higher spending. Are you willing to use the balance sheet to support all these projects, getting incremental capital? As far as the shareholder return profile, is this really just limited to the base dividend going forward as you examine everything here? Thanks.

Eric Hambly, President and CEO, Murphy Oil Corporation: That’s a great question, Josh. The way I would frame it is we have not changed our capital allocation plan or framework at all. We still have the exact same priorities. We plan to prioritize investing in our assets to maintain or grow the scale, pay dividend, focus on the balance sheet, and occasionally share buybacks when it makes sense. We really have no change in that. Our plan, as we’ve been very clear about, is based on adjusted free cash flow, which is after our dividend and a few other things, including M&A. We will likely, going forward, have modest free cash flow. There may be periods between now and first oil at HSV or potentially, if we’re so fortunate at the fall, that we have periods of time of negative free cash flow for the whole company.

We’re going to be measured in our pace, and we’re going to be very conscious of protecting our balance sheet. We’re not afraid of using our liquidity and our balance sheet as necessary, but we’re going to keep ourselves in a strong balance sheet position at all times. That’s a priority for us. We will definitely be maintaining our dividend. That’s core to us. We’ve paid a dividend since 1961. We’re going to continue to pay a dividend, I would imagine, going forward for the entire tenure of me being here. If we encounter situations where we think our share price is significantly out of whack with intrinsic value, then we’ll be active in share buyback. I think that’s the same story you’ve heard from us in the past. We’re fortunate to have even more organic growth opportunities than we had a few years ago.

It provides us more challenges in terms of how we choose to allocate capital, but we’re in control of the pace as operator everywhere, and we’re going to do what we think is best for shareholder value going forward. Again, not being afraid to use our balance sheet, but always with an eye toward protecting a strong balance sheet at all times.

Josh Silverstein, Analyst, UBS: Got it. Then, just wanted to see what’s potentially on the exploration horizon next year since you’ve added some new exploration opportunities across West and North Africa, and how you would classify them relative to what you’ve done in Vietnam and Côte d’Ivoire.

Eric Hambly, President and CEO, Murphy Oil Corporation: Yeah, thanks for that. I think you’ll see next year that we’ll invest in the Gulf of Mexico in exploring in one or two wells. You’ll likely see us invest in Vietnam in our Cuu Long blocks, most likely in 15-1/05. The inventory that we were just talking about a few minutes ago. I don’t expect other than appraisal drilling in West Africa, we’ll have more West Africa drilling activity. We’re intentionally phasing in opportunities in West Africa that are at different parts of our prospect maturation timeframe. We signed a block in Morocco recently. We’re going to reprocess seismic there. That’s very little spending.

We’re hoping to finalize agreements for Cameroon and Mauritania by the end of this year and next year, spend small money with studies, maybe the beginnings of seismic reprocessing, small dollar spending, drilling in Cameroon, Mauritania, or Morocco is probably a 2028, 2029, 2030 thing, depending on what we find. We’re going to follow our recipe of very detailed regional study leading to detailed prospect maturation and drill or not drill based on the merits of the prospects. That takes some time, as you saw, it led to some success here for us in Côte d’Ivoire. We think we’re setting up for a repeatable business model of exploring in emerging on frontier basins and doing it with low entry costs, relatively low well cost, targeting large resource, and that’s very value creating if we can continue to have some success.

Josh Silverstein, Analyst, UBS: Got it. Thanks, Eric.

Eric Hambly, President and CEO, Murphy Oil Corporation: Thank you.

Fern, Conference Operator: Your next question is from the line of Leo Mariani with Roth. Your line is now open. Please go ahead.

Leo Mariani, Analyst, Roth: Yeah, hi. Clearly you’re making a decision to put more capital into Eagle Ford to ramp it. Presumably that is probably more of a higher oil price type of decision. I would venture a guess that if oil is lower for whatever reason, then perhaps that asset does not see a real increase in free cash flow from putting more capital into it, which obviously will generate more production. Can you just provide any kind of thoughts around that? It just seems like obviously now with higher oil prices, that investment will generate incremental free cash flow in the next couple of years, but perhaps there’s some kind of breakeven where that starts to go away if oil is low enough.

Eric Hambly, President and CEO, Murphy Oil Corporation: Yeah, Leo, our decision to invest more in Eagle Ford is not driven by near term higher oil price. It’s driven by ability to generate strong free cash flows with a significant range of oil prices. If we saw oil price below $50 for a year, we would probably pare back our investment in a lot of places, including Eagle Ford. With even a significant range of oil prices in line with what we’ve seen over the last three years, we feel that Eagle Ford investment makes sense. We’ve generated strong free cash flow over the last few years doing it. We’ve increasingly strong well performance, and at even the modest oil prices, we’ll be investing in it to generate strong free cash flows. We’re not reacting to oil price.

We’re saying we now have a strong portfolio of organic growth to invest in. Part of the way we can fund that is by generating more free cash flow from Eagle Ford by investing more in Eagle Ford.

Leo Mariani, Analyst, Roth: Okay. Appreciate that. Just on Vietnam, obviously, you guys are going to have first oil here, in the fourth quarter. Looking at your guidance, you kind of expect a relatively small amount, but presumably, that’s going to ramp nicely in 2027. Can you just provide maybe a little color around kind of thoughts on that potential ramp on Vietnam oil next year?

Eric Hambly, President and CEO, Murphy Oil Corporation: Sure. As you mentioned, we’ll have fairly limited contribution to production this year because of a fourth-quarter online first oil for Lac Da Vang. We will continue to drill development wells through this year and into next year. If you look out toward the end of 2027, Lac Da Vang net production is probably in the 5,000-9,000 barrel a day range. As we continue to drill the remaining development wells in our phase development program through 2028 and 2029, we’ll ultimately ramp up to 10,000-15,000 barrels a day.

Leo Mariani, Analyst, Roth: Okay. Just to be clear, is that five to nine kind of like a 2027 exit rate, and then obviously it continues to ramp in 2028, 2029?

Eric Hambly, President and CEO, Murphy Oil Corporation: That’s exactly right.

Leo Mariani, Analyst, Roth: Just last one for me, Eric. You talked about this a little bit, but you guys have really gotten into a number of new exploration plays recently, a lot of which are in Africa, and you kind of rattled off sort of the plans, which seem a little bit limited in terms of capital in the near term, but presumably, those plays could require more capital as you get into 2028, 2029. I imagine there might be a shot clock on some of those to get some wells drilled eventually if you think prospects are maturing in the right way. Does this set up for just a lot higher capital later this decade in kind of the success case? Just if that’s right, just thoughts on how you would kind of handle that, fund that.

Eric Hambly, President and CEO, Murphy Oil Corporation: The way I would characterize that, Leo, is if we are conducting our typical sort of assessed opportunities and drill an exploration well occasionally, then that would not materially push our capital higher. Obviously, Bubale is likely to push our capital higher with success. Exploring and drilling an occasional well is something that fits into our overall exploration program, kind of in line with what we’ve been spending. If we are fortunate to have a discovery in Morocco, Cameroon, Mauritania, then that would lead to additional appraisal drilling and then development drilling, which would be great. That’s obviously a long way away, and as you know, exploration wells tend to be dry holes. I’m not too worried about it yet.

I think we’ll continue to expose ourselves to opportunities that are at various stages, and I’m not concerned about a strong draw for capital between now and the end of this decade at any of those new entries, but excited for the potential that they may help us continue to have opportunities to develop and grow as we exit the 2030s and head into the 2040s.

Leo Mariani, Analyst, Roth: Okay. Thank you.

Fern, Conference Operator: As a reminder, if you would like to ask a question, press star one on your telephone keypad. Your next question is from the line of Charles Meade with Johnson Rice. Your line is now open. Please go ahead.

Charles Meade, Analyst, Johnson Rice: Yes. Good morning, Eric, to you and your whole team there. I’d like to go back to the, excuse me, the appraisal effort at Bubale, and I apologize if I missed some of the earlier detail, but I think what I heard you say is that the Bubale West is a down-dip Turonian appraisal. I guess I want to ask two things. When, I guess, the design of the appraisal well, and then the plans for the Sinnemahian. For the design of the appraisal well, there’s a lot of competing, I guess, priorities or competing ways that you design appraisal well. For eight miles out, is the dominant thing to test the extent of the structure, or are you perhaps instead looking for more reservoir development and more pay thickness? How would you answer that same sort of question for the eventual Sinnemahian appraisal test?

Eric Hambly, President and CEO, Murphy Oil Corporation: Okay. Thanks, Charles. The West 1X well is designed to test Turonian down-dip. It is testing for variability of reservoir, so that’d be reservoir thickness, reservoir quality. We’re hoping to get confidence that where we drill it, the Turonian at that location is connected to the Bubale-1X location, and also hoping to demonstrate an oil water or an oil level deeper than the oil down to in the Bubale-1 well. It’s doing multiple things, and we think that location is important because with significant oil presence in that well, in the Bubale West 1X well, to be clear, that we’ll have high confidence that we have a commercial development, but still significant uncertainty about the range of resource.

The location of the 1X well was drilled in a position where there was significant up-dip reservoir in the Cenomanian and the Turonian, and potentially significant down dip potential in both. The reservoir in the Turonian and the reservoir in the Cenomanian, they cross. If you were looking at them from above, they cross like an X. We drilled the 1X well right where they cross. Like I said, potential up dip and down dip from that in both reservoirs. Ultimately, if we have success, we’ll continue to identify and drill appraisal wells that will, over time, reduce uncertainty and give us high confidence in what we need to develop, how we need to develop it. This next well is really key for us to having high confidence in a commercial discovery.

Charles Meade, Analyst, Johnson Rice: Got it. It gets you with confidence over the low end, but with the upper end maybe still more unbounded.

Eric Hambly, President and CEO, Murphy Oil Corporation: Correct.

Charles Meade, Analyst, Johnson Rice: Going to Vietnam, I appreciate your comments earlier about the basis that, if I understood right, that within the 4X, HSV-4X, you basically just didn’t find reservoir quality rock. I’m curious, does that affect the prospectivity for some of these other blobs you have on your map in Block 15-2/17? I think they’re labeled like Bo Zam and Hai Su Vang. Does this diminish your appetite to drill those somewhere down the line?

Eric Hambly, President and CEO, Murphy Oil Corporation: Those other prospects, we obviously will have learned a little bit from drilling Hai Su Vang through various reservoirs, and we will incorporate that into our understanding of those. I would say because of the diversity of different play types there and different reservoirs that those prospects are targeting, that we probably still have quite a bit of confidence that they make sense. Again, there’s a little more work to do to plan an exploration program there. In Block 15-1/05, we have, I would say, very well characterized, and the learnings from HSV don’t significantly impact our prospectivity there. You’ll see us focus on exploring in Block 15-1/05 in the next couple of years, with probably activity in Block 15-2/17, maybe in 2028, 2029, not in 2027.

Charles Meade, Analyst, Johnson Rice: Got it. Thank you for that added detail.

Eric Hambly, President and CEO, Murphy Oil Corporation: Thank you.

Fern, Conference Operator: There are no further questions at this time. I’ll turn the call over to Mr. Hamley for closing remarks.

Eric Hambly, President and CEO, Murphy Oil Corporation: Thank you. I’ll close by thanking our employees for their commitment and execution. To our shareholders, we appreciate your continued trust and support. This concludes our call.

Fern, Conference Operator: This concludes today’s call. Thank you for attending. You may now disconnect.