Murphy Oil Corp. (MUR) decided to exit Malaysia by selling its assets to PTT Exploration and Production (OTCPK:PEXNY) for $2.13B, which represents a full monetization of its 2P (Proved and Probable) reserves. Although the deal is positive because it materializes the firm’s geographic strategy to focus on US opportunities, we believe the true impact of the transaction in the long term will be determined by the way management will reinvest the money.
At stake are $750M, which MUR determined to be destined to fund potential acquisitions and fund both deep-water projects (probably Gulf of Mexico) and U.S. onshore opportunities (Eagle Ford).
At the moment, Norwegian Equinor (EQNR) and Pioneer Natural Resources (PXD) are marketing their respective acreage in the Eagle Ford, which could spark MUR’s interest considering the company’s plans on increasing activity at Karnes, Tilden, and Catarina.
Dateline 2019-03-21, Reuters:
Murphy Oil Corp is exiting Malaysia with a $2.13 billion sale of its oil and gas assets there to Thailand’s PTTEP and said it will use the proceeds to pay down debt, buy back shares and fund potential deals in the United States.
Besides the enterprise value of the sale, PTT Exploration and Production Public Co Ltd (PTTEP), a unit of state-owned PTT PCL, will also pay Murphy Oil up to $100 million as a bonus if certain exploration projects show results before October 2020, the companies said on Thursday.
The deal between Murphy and PTTEP comes as M&A activity is heating up in Malaysia’s oil and gas sector, where global companies pursuing expansion plans are spotting opportunities.
Dateline 2018-12-10, Seeking Alpha:
Murphy Oil Corporation (NYSE:MUR) has reportedly received a bid from an unknown third-party that is seeking to buy its Malaysian oil & gas assets for US$2 billion-US$3 billion. The division is a material cash flow generator to Murphy Oil Corporation as the upstream player pumped 46,700 BOE/d net out of Malaysia during the third quarter of this year (61% liquids cut). Murphy Oil Corporation also has several very promising growth prospects in the region, including an ongoing floating liquefied natural gas development in Block H. The firm would need to receive a generous offer to part with those opportunities. Let’s dig in.
Dateline 2018-11-28, Reuters:
Murphy Oil Corporation is in talks to sell its Malaysian oil and gas assets after an unsolicited bid that could fetch between $2 billion to $3 billion, people familiar with the matter said, in the latest energy M&A deal in the Southeast Asian nation.
The independent U.S. oil and gas exploration and production company has tapped banks for the potential sale of its majority interests in eight separate offshore production sharing contracts in Malaysia, said the people, who declined to be identified because the matter is confidential.
Dateline 2018-01-14, Hadeplatform (not to be confused with Hades Platform, you ‘The Good Place’ fans):
Malaysia E&P operations reported earnings of $67.7 million for the third quarter of 2017, compared to earnings of $65.0 million a year earlier. Favorable to Malaysia was higher average oil and natural gas prices.
However this was mostly offset by lower natural gas volume sold, higher lease operating expense, higher depreciation expense and higher income tax expense. Crude oil and natural gas sales volumes in Malaysia were lower in the 2017 quarter versus 2016, primarily due to a maintenance shutdown in Sarawak in 2017.
I don’t know whether they mean Malaysia opns, or worldwide opns.
Dateline 2016-01-27, Asia Oil & Gas:
Sarawak gas project operator, US-based Murphy Oil Corp., reported net loss of US$2.27 billion for 2015, plus cuts budget by more than half.
The company plans to reduce capital expenditure this year to $825.0 million, approximately 62% lower than the $2.19 billion spent in 2015.
About 45% will be allocated towards offshore spending, 41% towards Eagle Ford Shale and 14% for onshore work in Canada.
Production for Q1 2016 is estimated in the range of 190,000-194,000 boe/d with full year production to be between 180,000-185,000 boe/d.
“We remain focused on driving down operating and G&A costs across all segments of our business,” said Roger W. Jenkins, president and CEO of Murphy. “The cost reductions better positions the company to weather the anticipated ‘lower for longer’ commodity price environment.”
Dateline 2015-07-30, Rigzone:
Murphy Oil Corp. completed a five-well drilling campaign at the Belum gas field in shallow water offshore Sarawak, east Malaysia in the second quarter of 2015, the company said in its quarterly results Wednesday.
The U.S. independent oil company indicated that the “Belum field has lower nitrogen content that will blend into our current gas production fields and allow us to de-risk our 250 million cubic feet per day (MMcf/d) contractual volume on demand.”
Murphy, currently drilling oil wells at the Permas shallow water development, added that Sarawak gas production for the second quarter was 111 MMcf/d and liquids production was around 14,700 barrels of oil per day (bopd.) Meantime, the firm successfully finalized the planned outage in early second quarter at its Sarawak facilities to complete regulator-required inspections and major maintenance.