Murphy oil slashes 2016 budget to less than $1 billion

Murphy Oil Corp. is expected to cut its budget for 2016 by more than half to below $1 billion, according to a Raymond James & Associates Inc. energy update on Dec. 9.

“At yesterday’s analyst dinner, Murphy guided—to our knowledge, for the first time—to less than $1 billion of capital spending in 2016,” RJA reported. “This compares to $2.3 billion in 2015, so a nearly 60% cut. This is one of the steepest 2016 spending cuts we’ve seen across oil and gas producers.”

The financial services firm says, as a result, Murphy anticipates a 7% drop in its production guidance when comparing its 2016 average from the fourth-quarter 2015 run-rate.

“A better comp is [fourth-quarter 2016] vs. [fourth-quarter 2015], which management didn’t spell out, but assuming a linear trajectory, there would be a 12-15% decline by yearend 2016,” RJA said.

The company’s Eagle Ford production “will take the brunt,” RJA said, with plans to average 1.75 rigs, down from 3 in the fourth quarter. Murphy’s oil and natural gas production from the play in 2014 was 51,300 b/d and 33 MMcfd, respectively.

Murphy operates four fields in the Eagle Ford: Karnes with 62% interest, Tilden 94%, Catarina 100%, and Nueces 86%.

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Making DDoS Mitigation Part of Your Incident Response Plan: Critical Steps and Best Practices

Like a new virulent strain of flu, the impact of a distributed denial of service (DDoS) attack is...

The Multi-Tax Challenge of Managing Excise Tax and Sales Tax

To be able to accurately calculate multiple tax types, companies must be prepared to continually ...

Operational Analytics in the Power Industry

Cloud computing, smart grids, and other technologies are changing transmission and distribution. ...

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...