Murphy Oil adds $300 million to 2026 capex plans

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Murphy Oil adds $300 million to 2026 capex plans

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Murphy Oil Corp., Houston, is supersizing its 2026 capital spending budget as its leaders look to build on a Côte d’Ivoire oil discovery in June and aim to have Eagle Ford production fund more offshore growth.

Three months ago, president and chief executive officer Eric Hambly and his team said they expected Murphy to spend $1.2-1.3 billion on development, exploration, and appraisal projects this year. While reporting second-quarter results Aug. 5, they said that range now stands at $1.5-1.6 billion.

Here’s how the $300 million jump breaks down:

About $190 million will go to the company’s Bubale play offshore Côte d’Ivoire, where teams discovered oil in June. Of that $190 million, $100 million will go toward incremental spending on the discovery well while $90 million will help fund a first appraisal well.
$70 million is being pumped into Murphy’s Eagle Ford operations, which will produce about 40,000 boe/d this quarter. The added investment should add 5,000-6,000 boe/d next year and generate cash to help fund investments elsewhere.
$40 million is being earmarked for Chinook #8, a development well in the US Gulf of Mexico that’s expected to come online in the fourth quarter.

Murphy teams in June discovered oil in the Bubale-1X block offshore Côte d'Ivoire. — Murphy teams in June discovered oil in the Bubale-1X block offshore Côte d’Ivoire.

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“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,” Hambly said on a conference call with analysts and investors.

Hambly added that the Eagle Ford is Murphy’s best asset when it comes to funding the company’s longer-term offshore opportunities, which also include Vietnam and Morocco.

“It is flexible, oil-weighted and capable of efficiently translating capital into production,” he said. “This is the strength of our multi-basin portfolio in action, not a change in capital discipline.”

Investors weren’t really buying that take on Aug. 6, when shares of Murphy (Ticker: MUR) fell sharply after the earnings release and conference call. In early-afternoon trading, they were down about 9% to $32.76. The drop wiped out nearly all of the stock’s gains from the past 6 months and trimmed Murphy’s market capitalization to about $4.7 billion.

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