Q2 2024 Murphy Oil Corp Earnings Call

August 8, 2024

Operator: I would now like to turn the conference over to Kelly Whitley, Vice President, Investor Relations and Communications. Please go ahead.

I would now like to turn the conference over to Kelly Whitley, Vice President Investor Relations and Communications. Please go ahead.

Kelly Whitley: Thank you, Operator, and good morning, everyone, and thank you for joining us on our second quarter earnings call today. Joining us is Roger Jenkins, Chief Executive Officer, along with Eric Hambly, President and Chief Operating Officer, and Tom Mireles, Executive Vice President and Chief Financial Officer. Please refer to the informational slides we have placed on the Investor Relations section of our website as you follow along with our webcast today. Throughout today's call, production numbers, reserves, and financial amounts are adjusted to exclude noncontrolling interest in the Gulf of Mexico.

Kelly Whitley: Thank you operator, and good morning, everyone and thank you for joining us on our second quarter earnings call today, joining us as Roger Jenkins, Chief Executive Officer, along with Eric Hambly, President and Chief operating officer until morale is executive Vice President and Chief Financial Officer.

Kelly Whitley: Please refer to the informational slides we have placed on the Investor Relations section of our website as you follow along with our webcast today. Throughout today's call, production numbers, reserves, and financial amounts are adjusted to exclude noncontrolling interest in the Gulf of Mexico. Slide two.

Speaker Change: Please refer to the informational slides, we have placed on the Investor Relations section of our website as you follow along with our webcast today throughout today's call production numbers reserves financial amounts are adjusted to exclude noncontrolling interest in the Gulf of Mexico.

Kelly Whitley: Please keep in mind that some of the comments made during this call will be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. As such, no assurances can be given that these events will occur or that projections will be attained. A variety of factors exist that may cause actual results to differ.

Slide two please keep in mind that some of the comments made during this call will be considered forward looking statements as defined in the private Securities Litigation Reform Act of 1995 as such no assurances can be given that these events will occur or that projections will be attained a variety of factors success that may cause.

Roger Jenkins: Actual results to differ for further discussion of risk factors see Murphy's 2023 annual report on Form 10-K on file with the SEC Murphy takes no duty to publicly update or revise any forward looking statements I will now turn the call over to Roger Jenkins, Roger Thank you Kelly and good morning, everyone.

Kelly Whitley: For further discussion of risk factors, see Murphy's 2023 Annual Report on Form 10-K, on file with the SEC. Murphy undertakes no duty to publicly update or revise any forward-looking statements. I will now turn the call over to Roger Jenkins. Roger? Thank you.

Roger Jenkins: Thank you, Kelly. Good morning, everyone, and thanks for listening to our call today on slide three. I'd like to reiterate our corporate priorities of deliver, execute, explore, and return. As we continue to progress our capital allocation framework in the second quarter, we repurchased $50 million of senior notes through open market repurchases. Murphy also remains fully committed to achieving our long-term debt goal of $1 billion.

Roger Jenkins: Thanks for listening to our call today on slide three I'd like to read reiterate our corporate priorities of Delever execute explore and return.

Speaker Change: As we continue to progress our capital allocation framework in the second quarter.

Roger Jenkins: We repurchased $50 million of senior notes to open market repurchases. Murphy also remains fully committed to achieving our long term debt goal of $1 billion. We produced 181000 barrels equivalent per day in the second quarter with 50% all volumes as we exceeded guidance onshore well delivering are off.

Roger Jenkins: We produced 181,000 barrels equivalent per day in the second quarter, with 50% oil volumes as we exceeded guidance onshore while delivering our offshore well program. We also advanced our Loc Vang field development project in Vietnam by awarding key facilities and pipeline contracts during the quarter. Also, during the second quarter, we drilled a discovery well at the non-operated Ocotillo Well in the Gulf of Mexico.

Roger Jenkins: Sure well programs, we also advanced our locked playing field development project in Vietnam by awarding key facilities and pipeline contracts during the quarter.

Also during the second quarter, we drilled a discovery well at the non operated OCA till it well in the Gulf of Mexico. We're very pleased that the results turned to Vietnam or preparing to spud. The first of two operated exploration wells in the third quarter.

Roger Jenkins: We are very pleased with the results, turned to Vietnam, and are preparing to spud the first of two operated exploration wells in the third quarter, and look into our fourth priority of return. Our share repurchase program continued in the second quarter with 56 million shares repurchased, plus an additional 44 million shares repurchased in the third quarter through August 7. Year-to-date, we've repurchased $150 million of our stock, 3.8 million shares at an average price of $39.70 per share.

Roger Jenkins: TURNed Vietnam are preparing to spud the first of two operated exploration wells in the third quarter. Murphy will now allocate a minimum of 50% of adjusted free cash flow to shareholders focused on buybacks. The remaining adjusted free cash flow will be allocated to our balance sheet as we remain committed to our long-term $1 billion long-term debt goal target.

Roger Jenkins: Looking to our fourth priority of return our share repurchase program continued in the second quarter with 56 million shares repurchased plus an additional 44 million.

Roger Jenkins: Shares repurchased in the third quarter through August seven year to date, we've repurchased $150 million of our stock or three 8 million shares at an average price of $39.70 per share as we remain focused on progressing our shareholder returns I'm excited to announce today that our board has approved a <unk>.

Roger Jenkins: As we remain focused on progressing our shareholder returns, I'm excited to announce today that our board has approved a revision to our capital allocation framework that allows us to move to Murphy 3.0 now with a current debt level of $1.3 billion. Moving to slide four.

Roger Jenkins: Asian to our capital allocation framework allows us to move to Murphy 3.0, now with the current debt level of one $3 billion.

Roger Jenkins: Moving to slide four.

Roger Jenkins: Murphy will now allocate a minimum of 50% of adjusted free cash flow to shareholders focused on buybacks. The remaining adjusted free cash flow will be allocated to our balance sheet as we remain committed to our long-term $1 billion long-term debt goal target. Our board has also elected to increase our share repurchase authorization by $500 million. As of August 7th, we have approximately $800 million remaining. I'd also like to highlight today that, most impressively, we have fortified our balance sheet significantly in the past few years.

Roger Jenkins: Murphy, we now allocate a minimum of 50% of adjusted free cash flow to shareholders focused on buybacks. The remaining adjusted free cash flow will be allocated to our balance sheet as we remain committed to our long term 1 billion dollar long term debt go target.

Roger Jenkins: Our board has also elected to increase our share repurchase authorization by $500 million as of August 7th we have approximately $800 million remaining.

Roger Jenkins: I'd also like to highlight today that most impressively, we have fortified our balance sheet significantly in the past few years since launching the capital allocation framework two years ago today, we've repurchased $300 million of shares and increased our dividend by 70%. When you look back further to year end 2020, we've utilized more than 2 billion.

Roger Jenkins: Since launching the capital allocation framework two years ago today, we've repurchased $300 million of shares and increased our dividend by 70%. When you look back further to year-end 2020, we've utilized more than $2 billion of adjusted free cash flow to repurchase shares and reduce debt by $1.75 billion, achieving nearly $90 in annual interest expense savings and giving us one of the top, if not the top, balance sheets in all of E&P

Roger Jenkins: Adjusted free cash flow to repurchase shares and reduce debt by 1.75 billion, achieving nearly $90 million in annual interest expense savings and giving us one of the top if not the top balance sheet and all of the M. P.

Roger Jenkins: On slide five, in the second quarter, Murphy produced an average of 181,000 barrels equivalent per day, with 91,000 barrels of oil. We again realized a slight premium to WTI with a realized price of more than $81 per barrel, while our realized NGL pricing was nearly $22 per barrel, and our nat gas was $1.45 per 1,000 cubic feet. Overall, we generated $746 million of revenue per quarter, excluding NCI. I'll now turn the call over to our CFO, Tom Morales, for an update on our financial results. Tom said,

Speaker Change: On slide five in the second quarter Murphy produced an average of 181000 barrels equivalent per day with 91000 barrels of oil, we again realized a slight premium to WT eye with a realized price of more than $81 per barrel, while our realized NGL pricing was nearly 22 per barrel.

Speaker Change: And our Nat gas was $1 45 per thousand cubic feet overall, we generated $746 million of revenue a quarter excluding NCI.

Speaker Change: Now I'll turn the call over to our CFO, Tom morale or.

Speaker Change: For an update on our financial results Tom.

Tom Mireles: Thank you, Roger, and good morning, everyone. Slide 6. Murphy reported $128 million of net income in the second quarter, or $0.83 per diluted share, and $124 million of adjusted net income, or $0.81 per diluted share. We generated $396 million of adjusted EBITDA in the quarter with $292 million of accrued CapEx, excluding non-controlling interest.

Tom Moreale: Thank you Roger and good morning, everyone.

Kelly Whitley: Slide six. Murphy reported $128 million of net income in the second quarter, or $0.83 per diluted share, and $124 million of adjusted net income, or $0.81 per diluted share. And we now have 150 million shares outstanding. Slide seven. Our 6th Annual Sustainability Report was released this week and includes disclosures regarding Murphy's ongoing environmental stewardship, strong governance oversight, and positive impacts on our people and communities. With that, I'll turn it over to Eric Hambly, our President and Chief Operating Officer, to discuss our operational updates. Good boy.

Speaker Change: Slide six.

Tom Moreale: Murphy reported $128 million of net income in the second quarter or <unk> 83 per diluted share and $124 million of adjusted net income or <unk> 81 cents per diluted share.

Speaker Change: We generated $396 million of adjusted EBITDA in the quarter with $292 million of accrued capex, excluding noncontrolling interest.

Tom Mireles: As Roger just mentioned, we have continued executing our capital allocation framework while supporting a strong dividend in a front-loaded CapEx plan. Since August 2022, when we first announced the framework, we have repurchased more than 7 million shares or 300 million shares of stock at an average price of $41.72 per share, and we now have 150 million shares outstanding. I look forward to seeing what we can accomplish with the enhanced shareholder framework returns as part of Murphy 3.0.

Speaker Change: As Roger just mentioned, we have continued executing our capital allocation framework, while supporting our strong dividend and a frontloaded Capex plan.

Roger Jenkins: Since August 2022, when we first announced the framework, we've repurchased more than 7 million shares for $300 million of stock at an average price of $41.72 per share.

Roger Jenkins: And we now have 150 million shares outstanding.

Speaker Change: I look forward to see what we will accomplish with the enhanced shareholder framework returns as part of Mercury three point out.

Tom Mireles: Slide seven. Murphy maintains strong liquidity with $1.1 billion available as of June 30th. During the second quarter, we repurchased a total of $50 million of long-term debt through open market transactions comprised of $26.5 million of our 2027 senior notes and $23.5 million of our 2028 senior notes. As of June 30th, we had $1.28 billion of long-term debt outstanding, with our next maturity over three years away in December 2027.

Roger Jenkins: Slide seven.

Roger Jenkins: Murphy maintain strong liquidity with $1 $1 billion available as of June 30th.

Roger Jenkins: During the second quarter, we repurchased a total of $50 million of long term debt through open market transactions comprised of $26 $5 million of our 2027 senior notes and $23 $5 million of our 2028 senior notes as of June 30, we had one point to $8 billion of long term debt outstanding.

Roger Jenkins: Our next maturity over three years away in December 2027.

Roger Jenkins: Slide eight.

Eric Hambly: Our sixth annual sustainability report was released this week and includes disclosures regarding Murphy's ongoing environmental stewardship, strong governance oversight, and positive impacts on our people and communities. We have been recognized for our efforts with awards from a variety of organizations, including being named as a Best Place for Working Parents by the Greater Houston Partnership for a third year in a row. Additionally, we were named one of America's most responsible companies in 2024 by Newsweek. With that, I'll turn it over to Eric Hambly, our President and Chief Operating Officer, to discuss our operational updates. Good morning.

Roger Jenkins: Our sixth annual sustainability report was released this week and included disclosures regarding Murphy's ongoing environmental stewardship strong governance oversight and positive impacts on our people and communities.

Roger Jenkins: We have been recognized for our efforts with awards from a variety of organizations, including being named as a best place for working parents by the greater Houston partnership for a third year in a row.

Roger Jenkins: Additionally, we were named one of America's most responsible companies by in 2024 by Newsweek.

Eric Hambly: With that I'll turn it over to Eric Hambly, our President and Chief operating officer to discuss our operational updates. Good boring slide 10, Murphy produced 28000 barrels of oil equivalent per day in the second quarter from the Eagle Ford shale with 86% liquids and due to stronger well performance, we exceeded guidance by 17 Han.

Eric Hambly: Good morning. Slide 10. Murphy produced 28,000 barrels of oil equivalent per day in the second quarter from the Eagleford Shale with 86% liquids, and due to stronger well performance, we exceeded guidance by 1,700 barrels of oil equivalent per day. We brought online 11 operated wells in Catarina and four gross non-operated wells in Tilden during the quarter. We're on track to bring on five operated and three gross non-operated wells in Tilden in the third quarter.

Roger Jenkins: <unk> barrels of oil equivalent per day.

Roger Jenkins: We brought online 11 operated wells in Catarina and for gross non operated wells until then during the quarter.

Speaker Change: We are on track to bring on five operated and three gross non operated wells until then in the third quarter. Our 2024 Catarina wells are showing great performance compared to Murphy's recent historical average and I'm also pleased at the results we have seen across our completions activities. This year are completed lateral foot per day.

Eric Hambly: Our 2024 Caterina wells are showing great performance compared to Murphy's recent historical average, and I'm also pleased at the results we have seen across our completions activities this year. Our completed lateral foot per day has increased by approximately 50 percent, while our completion costs per completed lateral foot are down nearly 40 percent. Additionally, we've reduced our drilling diesel cost by 10% after installing EcoCell on our Patterson UTI rig.

Roger Jenkins: Has increased by approximately 50%, while our completion cost per completed lateral foot is down nearly 40%.

Roger Jenkins: Additionally, we've reduced our drilling diesel costs by 10% after installing eco sell on our Patterson UTI rig slide 11, we produced an average of 400 million cubic feet per day in the second quarter in Tupper montney exceeding guidance by nearly 20 million cubic feet per day, primarily due to well performance as we are.

Eric Hambly: Slide 11. We produced an average of 400 million cubic feet of gas per day in the second quarter in Tupper-Montney, exceeding guidance by nearly 20 million cubic feet per day, primarily due to well performance, as we brought 13 wells online and completed our 2024 program. Also, during the quarter, we achieved a record high peak gross production rate of 496 million cubic feet per day, thereby reaching processing plant capacity in conjunction with the sanctioning of our Tupper Montani plant expansion in the fourth quarter of 2020. We continue seeing great well performance from our optimized completion design. In particular, our average IP30 rate in our Tupper main area has increased approximately 120 percent since 2019 and more than 200 percent since 2016.

Roger Jenkins: Brought online 13 wells and completed our 2024 program.

Roger Jenkins: Also during the quarter, we achieved a record high peak gross production rate of 496 million cubic feet per day, thereby reaching processing plant capacity in conjunction with the sanctioning of our Tupper Montney plant expansion in the fourth quarter of 2020, we continue seeing great well performance from our optimized completion design and.

Speaker Change: <unk>, our average IP 30 rate and our Tupper main area has increased approximately 120% since 2019 and more than 200%. Since 2016 overall five of our 2024 wells are among Murphy's top 20, Tupper Montney wells based on IP 30 rates.

Eric Hambly: Slide 12. In the second quarter, our K-Bob DuVernay asset produced 4,000 barrels of oil equivalent per day with 72% liquids, which was slightly above guidance. Murphy brought three operated wells online during the quarter, which completes our well delivery program for 2024. We're also seeing some of our highest rates in company history for K-Bob DuVernay, with an average peak rate of 1,900 barrels of oil per day. This ranks in the top tier among our peers when normalized per lateral length. Overall, recent well performance has mirrored our Catarina wells in the Eagleford Shale, and I look forward to seeing further results. Slide 13.

Eric Hambly: Overall, five of our 2024 wells are among Murphy's top 20 Tupper Monti wells based on IP30 ratings. Slide 12. In the second quarter, our K-Bob DuVernay asset produced 4,000 barrels of oil equivalent per day with 72% liquids, which was slightly above guidance. Murphy brought online three operated wells during the quarter, which completes our well delivery program for 2024. We're also seeing some of our highest rates in company history for K-Bob DuVernay, with an average peak rate of 1,900 barrels of oil per day. This ranks in the top tier among our peers when normalized per lateral length.

Speaker Change: Slide 12 in the second quarter, our K, Bob Duvernay asset produced 4000 barrels of oil equivalent per day, with 72% liquids, which was slightly above guidance Murphy brought online three operated wells during the quarter, which completes our well delivery program for 2024. We're also seeing some of our highest rates in company history for KBR.

Speaker Change: Duvernay with an average peak rate of 19 100 barrels of oil per day. This ranks in the top tier among our peers when normalized for lateral length. Overall recent well performance has mirrored our catarina wells in the Eagle Ford shale and I look forward to seeing further results slide 13.

Eric Hambly: Overall, recent well performance has mirrored our Catarina wells in the Eagleford Shale, and I look forward to seeing further results. Slide 13. Murphy produced an average 74,000 barrels of oil equivalent per day in the second quarter from the Gulf of Mexico with 82% oil volume. We progressed our Gulf of Mexico well program in the second quarter as we brought online the operated Calise No. 4 well and non-operated Lucius No. 11.

Speaker Change: Mercury produced an average 74000 barrels of oil equivalent per day in the second quarter from the Gulf of Mexico, with 82% oil volumes, we progressed, our Gulf of Mexico, well program in the second quarter as we brought online the operated caliche number four well and non operated Lucius number 11, we also drilled the operated more month number three well.

Eric Hambly: We also drilled the operated Mormont No. 3 well, which is on track to come online in the third quarter. In offshore Canada, we produced an average of 8,000 barrels of oil equivalent per day with 100% oil. Non-operated Terra Nova production was impacted by additional downtime during the quarter.

Speaker Change: Which is on track to come online in the third quarter and offshore Canada. We produced an average of 8000 barrels oil equivalent per day with 100% oil non operated Terra Nova production was impacted by additional downtime during the quarter.

Eric Hambly: Slide 14. I'm pleased that we are nearing completion of our 2024 workover and project program in the Gulf of Mexico as we advance operations in the second quarter. Early in the third quarter, we brought online the operated Niederdenmeyer No.

Speaker Change: Slide 14, I'm pleased that we are nearing completion of our 2024 Workover and project program in the Gulf of Mexico, as we advance operations in the second quarter early in the third quarter. We brought online the operated meter admire number one sidetrack well, while our operating partner completed the Kodiak number three well workover.

Eric Hambly: 1 sidetrack well, while our operating partner completed the Kodiak No. 3 well workover. The operation of Dalmatian No.

Eric Hambly: 2 The subsea safety valve repair is progressing, and we forecast it will come online later in the third quarter. Our workover expenses, which are included in our lease operating expenses, totaled $68 million for the second quarter, which included the cost of the Niedermeyer sidetrack well. We forecast $35 million of workover expenses for the third quarter of 2024. Slide 15. In Vietnam, we have been progressing our plans for our Loc De Vang field development project.

Roger Jenkins: The operated Dalmatian number two subsea safety valve repair is progressing and we forecast it will come online later in the third quarter.

Roger Jenkins: Our workover expenses, which are included in our lease operating expenses totaled $68 million for the second quarter, which included the cost of the niedermeyer sidetrack well.

Eric Hambly: We forecast $35 million of workover expenses for the third quarter of 2024. Also, during the quarter, we completed drilling the non-operated Orange No. 1 exploration well and encountered non-commercial hydrocarbons. Our operating partner plugged and abandoned the well.

Roger Jenkins: We forecast $35 million of Workover expenses for the third quarter of 2020 for slide.

Roger Jenkins: Slide 15 in Vietnam, we have been progressing our plans for our locked volume field development project in the second quarter, we awarded facilities and pipeline contracts and we expect to award the remaining major contracts by year end 2024, we look forward to begin drilling our development wells in 2025 and remain on schedule for achieving first oil.

Eric Hambly: In the second quarter, we awarded facilities and pipeline contracts, and we expect to award the remaining major contracts by the year-end 2024. We look forward to beginning drilling our development wells in 2025 and remaining on schedule for achieving first oil in late 2026. Slide 17.

Roger Jenkins: In late 2026.

Eric Hambly: We recently completed our Gulf of Mexico exploration program for the year, and I'm excited to announce a discovery at the non-operated Ocotillo No. 1 well, where our operating partner found approximately 100 feet of net pay across two zones. The partner group is currently evaluating results to determine the next steps, and we look forward to advancing this project. Also, during the quarter, we completed drilling the non-operated Orange No. 1 exploration well and encountered non-commercial hydrocarbons. Our operating partner plugged and abandoned the well.

Roger Jenkins: Slide 17, we recently completed our Gulf of Mexico exploration program for the year and I'm excited to announce a discovery at the non operated <unk> number one well where our operating partner found approximately 100 feet of net pay across two zones. The partner group is currently evaluating results to determine the next steps and we look forward to advancing this project.

Roger Jenkins: <unk>.

Roger Jenkins: Also during the quarter, we completed drilling the non operated Orange number one exploration well and encountered non commercial hydrocarbons are operating partner plug and abandon the well.

Eric Hambly: Slide 18. We're preparing to begin our Vietnam exploration program, and we plan to spud the Hai Su Vong exploration well in block 15 to 17, late in the third quarter. The rig will then move to drill the Lokta Hong exploration well in Block 15-105 in the fourth quarter. We forecast approximately $30 million in total net drilling costs for the wells and look forward to seeing the results of these wells as they provide the potential to create a more sizable business in Vietnam. Slide 9.

Roger Jenkins: Slide 18, we are preparing to begin our Vietnam exploration program and we plan to spud the <unk> exploration well in block 15 to 17 late in the third quarter.

Roger Jenkins: The rig will then move to drill the locked the Hong exploration well in block 15, 105 in the fourth quarter.

Roger Jenkins: We forecast approximately $30 million and total net drilling costs for the wells and look forward to seeing the results of these wells as they provide the potential to create a more sizable business in Vietnam slide.

Roger Jenkins: Slide 19, our seismic reprocessing work continues to progress for our acreage and code of what we anticipate receiving final data by year end 2024 from our current evaluation. We're pleased at the multiple opportunities available across the exploration types. In addition to recent nearby discoveries announced by other operators Murphy will can.

Eric Hambly: Our seismic reprocessing work continues to progress for our acreage in Cote d'Ivoire, and we anticipate receiving final data by year-end 2024. From our current evaluation, we are pleased at the multiple opportunities available across the exploration types, in addition to recent nearby discoveries announced by other operators. Murphy will continue its evaluation as additional data becomes available and will likely begin preparations for an exploration program in 2025 or 2026. At the undeveloped pond discovery, Murphy remains on track to submit a field development plan by year-end 2025. Slide 21.

Roger Jenkins: Our evaluation as additional data becomes available and will likely begin preparations for an exploration program in 2025 or 2026 at the undeveloped pond discovery Mercury remains on track to submit a field development plan by year end 2025.

Roger Jenkins: Slide 21 for.

Roger Jenkins: For the third quarter of 2024, we forecast total production of 181 12 to 189 12 thousand barrels of oil equivalent per day, with approximately 50 percent of oil volumes. This range assumes 3,900 barrels of oil equivalent per day of potential Gulf of Mexico storm downtime, as well as 2,900 barrels of oil equivalent per day of planned onshore downtime, and 2,600 barrels of oil equivalent per day of planned Gulf of Mexico downtime. Murphy forecast spending approximately $270 million of accrued CapEx in the third quarter.

Roger Jenkins: For the third quarter of 2024, we forecast total production of 181, and a half to 189 5000 barrels oil equivalent per day with approximately 50% oil volumes. This range assumes 3900 barrels of oil equivalent per day of potential Gulf of Mexico storm downtime as well as 2900 barrels of oil.

Roger Jenkins: Equivalent per day of planned onshore downtime and 'twenty 600 barrels oil equivalent per day of planned the Gulf of Mexico downtime.

Roger Jenkins: Murphy forecast spending approximately $270 million of accrued capex in the third quarter.

Roger Jenkins: For full year 2024, we are maintaining our production guidance of 180 to 188,000 barrels of oil equivalent per day with a 52 percent oil volume. Currently, we expect to be at the lower end of this range due to operational impacts in the Gulf of Mexico. In particular, the development plan for an operated well in the Samurai Field was altered to a single zone to maximize total field recovery. Additionally, extended operations at the planned Niedermeyer No.

Roger Jenkins: For full year 2024, we are maintaining our production guidance of 180 to 188000 barrels of oil equivalent per day with 52% oil volumes. Currently we expect to be at the lower end of this range due to operational impacts in the Gulf of Mexico in particular, the development plan for our operated well in the samurai field was altered.

Roger Jenkins: To a single zone to maximize total field recovery. Additionally, extended operations at the planned niedermeyer number one sidetrack well delay the rig from commencing the Dalmatian well workover.

Roger Jenkins: 1 sidetrack well delayed the rig from commencing the Dalmatian well work. We also maintain our accrued CapEx range of $920 million to $1.02 billion, excluding NCI. And with that, I will turn it back to Roger. Thank you, Eric.

Roger Jenkins: We also maintained our accrued capex range of $920 million to 1.02 billion excluding NCI.

Roger Jenkins: With that I will turn it back to Roger Thank you Eric.

Roger Jenkins: Thank you, Eric. Effective at year-end, our strategy remains unchanged, with the one exception that we'll now be executing Murphy 3.0 of our capital allocation framework and forecast reaching our $1 billion long-term debt goal in mid-25. Longer term, we plan to reinvest approximately 45% of our cash flows, enabling us to achieve average production of approximately 210 to 220,000 barrels of oil equivalent per day, with always more than 50% oil weighting. Murphy will continue to generate ample free cash flow to allocate toward further share returns and accretive investments, as well as supporting any exploration success.

Roger Jenkins: <unk> at year end, our strategy remains unchanged with the one exception will be now executing Murphy III porno of our capital allocation framework and forecast, reaching our $1 billion long term debt go in mid 'twenty five.

Speaker Change: Longer term, we plan to reinvest approximately 45% of our cash flows enabled us to achieve average production of approximately 210 to 220000 barrels equivalent per day with always more than 50% oil weighting.

Roger Jenkins: <unk> continues to generate ample free cash flow to allocate towards further share returns and accretive investments as well as supporting any exploration success. Additionally, as part of this plan we remain committed to achieving metrics that are consistent with an investment grade rating and we're pleased with the rating agency outlook improvements achieved this past spring.

Roger Jenkins: Additionally, as part of this plan, we remain committed to achieving metrics that are consistent with the investment rating, and we're pleased with the rating agency outlook improvements achieved this past spring. Turning to 23, as we close our call today.

Turning to 'twenty three as we close our call today, we had another good quarter, which set us up for an exciting second half of the year. Most importantly, murphy's accelerating shareholder returns by revising our capital allocation framework.

Operator: We had another good quarter, which sets us up for an exciting second half of the year. Most importantly, Murphy's accelerating shareholder returns by revising our capital allocation framework and maintaining our $1 billion long-term debt goal. In support of this, our board increased our share repurchase authorization, and we continue executing our plan and have been exceeding production guidance across all our onshore assets while advancing a solid Gulf of Mexico well program and workover project.

Roger Jenkins: And maintaining our $1 billion long term debt goal in support of this our board increased our share repurchase authorization. We'll continue executing our plan had been exceeding production guidance across all of our onshore assets, while advancing a solid Gulf of Mexico, well program and Workover projects.

Operator: In exploration, we expanded our Gulf of Mexico portfolio with a discovery and are preparing to launch an exciting Vietnam exploration program in the third quarter where we have a long-term development going as well. In closing, I'd like to thank our employees for their ongoing efforts to support Murphy's success. I look forward to what we will achieve as we close out the second half of 2024. With that, we'll turn it back over to our operator and look forward to your questions this morning.

Speaker Change: Exploration, we have expanded our Gulf of Mexico portfolio with a discovery and preparing the launch of an exciting Vietnam exploration program in the third quarter, where we have a long term development going as well.

Roger Jenkins: In closing like to thank our employees for their ongoing efforts to support Murphy success I look forward to what we will achieve as we close out the second half of 'twenty four.

Speaker Change: With that we'll turn it back over to our operator and look forward to your questions. This morning.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the 1 on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the 2. If you are using a speakerphone, please lift the headset before pressing any keys.

Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the one on your Touchtone phone, you'll hear a prompt that your hand has been raised should you wish to decline from the polling process. Please press the star followed by the two.

Speaker Change: We're using a speaker phone please lift the headset the floor pressing any cheese one moment. Please for your first question.

Operator: One moment, please, for your first question. Your first question comes from Neal Dignam, trusts and securities. Please go ahead.

Speaker Change: Your first question comes from Neil dig NIM trusts.

Speaker Change: Securities. Please go ahead.

Neal Dingmann: Morning, Roger. A nice quarter.

Speaker Change: Good morning, and nice quarter. My first question. Thanks for all your decision that.

Speaker Change: My question is around the decision to accelerate it was nice to see the decision to accelerate III pointed out plan was this driven more by the stock price or investor discussions or just wanted to decision behind us and then when.

Neal Dingmann: My first question is about your decision. My question is around the decision to accelerate. It was nice to see the decision to accelerate the 3.0 plan. Was this driven more by the current stock price or investor discussions, or just one of the decisions behind this? And then when you decide now behind the stepped-up potential shareholding return, and you always see a lot of creative potential acquisitions, is this just simply a return exercise? How do you decide?

Speaker Change: When you decide now behind the stepped up share of potential shareholder return.

Speaker Change: And you always see a lot of interest in atmos accretive potential acquisitions.

Speaker Change: Just simply returned exercise how do you decide between these two.

Roger Jenkins: Thank you so much, Neal. One thing about when our board meets: we have a lot of ownership on our board, probably second only to all of the MPs. That's a little bit of a different matter when we meet about returns. It would be my idea to do this.

Speaker Change: Thank you so much Neil one thing about when our board meets we have a lot of ownership on our board probably second of all of the E&P. So it's a little bit of a different matter. When we made about returns this is b.

Roger Jenkins: It wasn't from investor outreach. I believe our framework was successful. We just started benchmarking with Tom and his team.

Speaker Change: My idea to do this it wasn't from Investor outreach I believe our framework. We're successful we just started benchmarking with Tom and his team with a leading balance sheet. We have we also see a lot of openness to credit markets today.

Roger Jenkins: What a leading balance sheet we have. We also see a lot of openness to credit markets today. And you're the leading balance sheet. We have a bit of a price dislocation this year in our equity pricing. And we're still maintaining that $1 billion goal. And that hasn't been changed. It's just pushed out a couple of quarters, if you will, or three.

Speaker Change: And you are the leading balance sheet, you have a bit of a price dislocation this year in our equity pricing and we still maintaining that $1 billion goal.

Neal: That hasnt been change its just pushed out a couple of quarters, if you will or three and we decided to go ahead and move today and start allocate more returns and one thing very key Neal about this and I want I can't emphasize it enough from the original framework disclosure two years ago, probably within a day or two of now it says minimum.

Roger Jenkins: And we decided to go ahead and move today and start allocating more returns. And one thing very key, Neal, about this, and I can't emphasize it enough, from the original framework disclosure two years ago, probably within a day or two of now, it says a minimum of 50%. So we'll go over if we continue to see price dislocation. It's a minimum, and it's always been a minimum.

Speaker Change: A 50% so we will go over if we continue to see price dislocation, it's minimum and it's always been minimum minimum.

Zero for the Operator.

Kelly Whitley: I would now like to turn the conference over to Kelly Whitley, Vice President, Investor Relations and Communications. Please go ahead. Thank you, Operator, and good morning, everyone, and thank you for joining us on our second quarter earnings call today. Joining us is Roger Jenkins, Chief Executive Officer, along with Eric Hambly, President and Chief Operating Officer, and Tom Morales, Executive Vice President and Chief Financial Officer. Please refer to the informational slides we have placed on the Investor Relations section of our Web.

Speaker Change: As to your question on M&A that would be adjusted out of our Formula would pull back on the cash flow we have.

Roger Jenkins: As to your question on M&A, that would be adjusted out of our formula, and we'll pull back on the cash flow we have. And debt associated with that could be associated with that as well. And we continue to review M&A opportunities. We have a lot of competition in non-operated businesses in the Gulf of Mexico. We usually strive where you need to operate and improve or execute better, which is what we do. And M&A is still forefront. It hasn't been changed.

Speaker Change: And that of that could be associated with that as well and we continue to review M&A. We're excited about M&A opportunities of a lot of competition and non operated business in the Gulf of Mexico, We usually strive where you would need to operate and improve or execute better which is what we do and M&A still.

Kelly Whitley: As you follow along with our Webcast today, throughout today's call, production numbers, reserves, financial amounts are adjusted to exclude non-controlling interest in the Gulf of Mexico. Slide two, please keep in mind that some of the comments made during this call will be considered forward-looking statements as defined in the Private Security's Litigation Reform Act of 1995. As such, no assurances can be given that these events will occur or that projections will be attained. A variety of factors exist that may cause actual results to differ. For further discussion of risk factors, see Murphy's 2023 Annual Report on Form 10K on File with the SEC.

Speaker Change: Our front it hasnt been change we're still having the same discussions and meetings on that just felt like had a great balance sheet, a leading balance sheet through benchmarking of any type of metric and moved it forward and glad we did and excited about doing that the rest of the year.

Roger Jenkins: We're still having the same discussions and meetings on that. Just felt like we had a great balance sheet, a leading balance sheet through benchmarking of any type of metric, and we moved it forward. And I'm glad we did and excited about doing that the rest of the year. Also, I think with M&A and those possibilities, people will say, well, you may not ever reach a billion. You may do this, you may do that, but now we have closed that off and moved it.

Murphy takes no duty to publicly update or revise any forward-looking statements.

Speaker Change: Also I think with M&A in those possibilities people will say well.

Speaker Change: You May now never reach a billion you may do this you may do that but now we close that off and moved it.

Eric Hambly: Now, well said. And then just a second question on the oil guide for the remainder of the year. Was the change just due to, I guess, the Gulf? Or maybe can you just talk about just oil production for Maynard here, how that's impacted both offshore and onshore. Thank you.

Speaker Change: No well said and then just second question on <unk>.

Eric Hambly: On the guide oil guide for remainder of the year.

Speaker Change: The change just due to I guess.

Speaker Change: Activity in the Gulf or maybe can you just talk about just oil production for remainder of the year.

Roger Jenkins: I will now turn the call over to Roger Jenkins, Roger. Thank you, Kelly. Good morning, everyone, and thanks for listening to our call today on slide three. I'd like to reiterate our corporate priorities of the lever, execute, explore, and return. As we continue to progress our capital allocation framework in the second quarter, we repurchase $50 million of senior notes, the open market repurchases. Murphy also remains fully committed to achieving our long-term debt goal of $1 billion.

Speaker Change: That's impacted both offshore and onshore thank you.

Eric Hambly: Well, Eric's going to handle the offshore and onshore questions today. Go ahead, Eric. Okay, thanks very much.

Eric Hambly: Eric is going to handle the offshore and onshore questions. Today go ahead, Eric Okay. Thanks very much.

Eric Hambly: Neal, the impacts that we highlighted earlier in our call are driving us to be toward the lower end of our original annual production guidance range. The main issues there are a well in Samurai Field had been producing from two zones, and we elected to produce them one at a time going forward. We did that based on what we learned from the well as we produced it and in order to maximize ultimate recovery.

Eric Hambly: Neil the impacts that we highlighted earlier on our call are driving us to be toward the lower end of our original annual production guidance range.

Speaker Change: Main issues there are a well in samurai field had been producing from two zones and we elected to produce them. One at a time going forward. We did that based on what we learned from the wells, we produce it and in order to maximize the ultimate recovery. It does have a negative instantaneous oil rate for us.

Roger Jenkins: We produced 181,000 barrels equivalent per day in the second quarter with 50% oil volumes. As we exceeded guidance onshore while delivering our offshore well program. We also advanced our Lock Van Field Development Project in Vietnam by awarding key facilities and pipeline contracts during the quarter. Also during the second quarter, we drilled a discovery well at the non-operated Ocatillo well in the Gulf of Mexico, and we are very pleased at the results.

Eric Hambly: It does have a negative instantaneous oil rate for us in the Samurai Field of about 4,000 barrels equivalent per day, which is driving a significant change in the last half of the year production rate. The other impact was that the Niedermeyer No. 1 well that we did a sidetrack on took a little bit longer to complete that operation, so it came online slightly later than our earlier guidance. And because the rig that was on that well was moved to the Dalmatian DC-4 No.

Speaker Change: US and our samurai field of about 4000 barrels equivalent per day, which is driving.

Speaker Change: Significant change in the last half of the year type of production rates. The other impact was that the niedermeyer number one well that we did a sidetrack on took a little bit longer to complete that operation. So it came online slightly later than our earlier guidance and because of the rig that was on that well.

Roger Jenkins: Turn to Vietnam are preparing to split the first of two operated exploration wells in the third quarter. Look into our fourth priority of return. Our share repurchase program continued in the second quarter with 56 million shares repurchased plus an additional 44 million shares repurchased in the third quarter through August seven. Year to date, we've repurchased to $150 million of our stock or 3.8 million shares at an average price of $39.70 per share.

Eric Hambly: 2 subsea safety valve repair job delayed the online timing of that well. So, it does affect us a little bit. If you give me a minute here, I'll kind of explain what will happen as we head toward later in the year.

Speaker Change: Move to the Dalmatian DC for number two subsea safety valve repair job it delayed the online timing of that well.

Speaker Change: So that it does affect us a little bit.

Speaker Change: You give me a minute here I'll kind of explain what will happen as we head towards later in the year. So in our offshore business will see production growth in the fourth quarter versus the third quarter due to a number of factors.

Eric Hambly: So, in our offshore business, we'll see production growth in the fourth quarter versus the third quarter due to a number of factors. That total increase is probably in the range of 8,000 to 9,000 barrels a day. It's driven by the DC-4 number one being online, coming online; it's currently offline. And the Kodiak well being online for a full quarter instead of most of a quarter. The Mormont-3 well will come online, and then in the fourth quarter, we'll have a little bit less storm downtime.

As we remain focused on progressing our shareholder returns, I'm excited to announce today that our board has approved the revision to our capital allocation framework that allows us to move to Murphy 3.0 now with a current debt level of $1.3 billion. Moving to slide four, Murphy will now allocate a minimum of 50% of adjusted free cash flow to shareholders focused on buybacks. The remaining adjusted free cash flow will be allocated to our balance sheet as a remain committed to our long-term $1 billion long-term debt gold target.

Eric Hambly: That total increase is probably in the range of 8,000 to 9,000 barrels a day. It's driven by the DC Ford No. 1 being online, coming online. It's currently offline. The Kodiak well being online for a full quarter instead of most of a quarter. The Mormont III well will come online, and then in the fourth quarter, we'll have a little bit less storm downtime. So we'll see some nice growth in our offshore business, about 8,000 to 9,000 barrels a day in the fourth quarter. That'll be partially offset by a decline in our onshore business, which is typical since we have a very limited number of wells to come online the rest of the year on our onshore business.

Speaker Change: Total increases probably in the range of eight to 9000 barrels a day and it's driven by the DC for number one being online.

Eric Hambly: Online, it's currently offline the Kodiak, well being online for a full quarter instead of most of the quarter.

Eric Hambly: The more month, three well will come online and then in the fourth quarter will have a little bit less storm downtime. So we'll see some nice growth in our offshore business.

Eric Hambly: So we'll see some nice growth in our offshore business, about 8,000 to 9,000 barrels a day in the fourth quarter. And that'll be partially offset by a decline in our onshore business, which is typical since we have a very limited number of wells to come online the rest of the year in our onshore business.

Eric Hambly: It's 9000 barrels a day in the fourth quarter and that'll be offset by partially offset by decline in our onshore business, which is typical since we have very limited number of wells to come online the rest of the year and our onshore business.

Our board is also elected to increase our share repurchase authorization by $500 million as of August 7th, we have approximately $800 million remaining. I'd also like to highlight today that most impressively, we have fortified our balance sheet significantly in the past few years since launching the capital allocation framework two years ago today, we've repurchased $300 million of shares and increased our dividend by 70%. When you look back further, the year in 2020, we've utilized more than $2 billion of adjusted free cash flow to repurchase shares and reduce debt by $1.75 billion, achieving nearly $90 million in annual interest expense savings and giving us one of the top, if not the top balance sheet in all of the MP.

Roger Jenkins: Perfect, thank you all. Also, Neal, keep in mind, right there in the guidance, we have hurricane season, we're an offshore operator, and that's a big number for the third quarter, and we have to make sure we account for that as well, and if there are no hurricanes, it'll be way higher. That's right.

Speaker Change: Perfect. Thank you all.

Eric Hambly: Also <unk> got keep in mind right. There in the guidance, we have hurricane season, we're in offshore operator, and that's a big number for the third quarter end.

Eric Hambly: We have to make sure we account for that as well and then there's no hurricanes it would be way higher that's right.

Roger Jenkins: You're a great point. Thank you, Roger. Thank you, Neal. Take care.

Speaker Change: Great. Thank you Roger.

Speaker Change: Thank you Neil take care.

Operator: Your next question comes from Arun Jayaram from J.P. Morgan. Please go ahead.

Speaker Change: Your next question comes from my Rune <unk> from J P. Morgan. Please go ahead.

Arun Jayaram: Good morning, gentlemen. Good morning, Roger.

Arun Jayaram: Yes, good morning morning good.

Arun Jayaram: Good morning, Roger I was wondering if you could just give us an update on the exploration program in Vietnam. It sounds like youll be spud the first well.

On slide five, in the second quarter, we're producing average of 181,000 barrels of equivalent per day with 91,000 barrels of oil. We again, realized a slight premium to WTI with our realized price of more than $81 for barrel, while our realized NGL pricing was nearly 22 per barrel and our net gas was a $1.45 for 1,000 cubic feet. Overall, we generated $746 million a revenue quarter, excluding NCI.

Roger Jenkins: I was wondering if you could just give us an update on the exploration program in Vietnam. It sounds like you'll be putting the first well before the end of the third quarter, but maybe you could just give us an update on that program. I'll, at a high level, like Eric, dig in a bit to the details. So we have a big project going there, a 100 million barrel field that we're developing. We've been in Vietnam for a while now.

Speaker Change: By the end of the before the end of the third quarter, but maybe just give an update on.

Speaker Change: On that program.

Speaker Change: At a high level of Eric digging a bit too detail. So we have a big project gone there 100 million barrel a field that we're developing we've been in Vietnam for a while.

Roger Jenkins: We were brought to Vietnam by their government because we were very successful in a shallow water business in Malaysia, which both Eric and Tom ran at parts of their careers. I was more of a deep water guy in the old days.

Speaker Change: Out to Vietnam by their government, because we were very successful in a shallow water business in Malaysia, which both Eric and Tom ran parts of their career.

Eric Hambly: And so we have that going for us, and we have lots of prospects in Vietnam. Many who chose to drill a couple of big ones in a row here that are very exciting in a lower risk basin to help build up possibly a big business for us in Vietnam. And that's kind of a high-level view of the wells we're about to go into. Thanks, Roger.

Tom Morales: I'll now turn the call over to our CFO, Tom Morales, for an update on our financial results. Tom? Thank you, Roger.

Speaker Change: Or was it more of a deepwater guy in the old days and so we have that going for us and we have lots of prospects in Vietnam, Many who chose to drill a couple of big ones.

Good morning, everyone. Slide six. Murphy reported $128 million of net income in the second quarter, or 83 cents per deluded share, and $124 million of adjusted net income, or 81 cents per deluded share. We generated $396 million of adjusted EBIDA in the quarter, with $292 million of accrued capex, excluding non-controlling interest. As Roger just mentioned, we have continued executing our capital allocation framework, while supporting a strong dividend in a front-loaded capex plan.

Eric Hambly: In a row here that are very exciting and a lower risk base and to help build up possibly a big business for us in Vietnam, and that's kind of the high level picture and Eric will walk you through the couple of wells are about to go here. Thanks, Roger I just wanted to highlight that we're very excited about our exploration wells in Vietnam. The rig that we're going to use to drill those.

Eric Hambly: I just wanted to highlight that we're very excited about our exploration wells in Vietnam. The rig that we're going to use to drill those is currently working with another operator in Vietnam. And when they're done, the rig will come to us. We expect to sputter our well late in the third quarter.

Speaker Change: <unk> is currently working with another operator in Vietnam, and when they're done the rig will come to US we expect to spud our well late in the third quarter. The first well that we will start drilling will be on block 15 to 17, the HIFU long prospect where were targeting a mean to upward volume of 170 to 430 million barrels.

Eric Hambly: The first well that we'll start drilling will be on Block 15217, the Hai Su Vong prospect, where we're targeting a mean to upward volume of 170 to 430 million barrels. It's a very nice looking prospect, a sizable prospect, that'll test the same type of geology as our Loc De Vang development project. So I'm looking forward to that. After we complete that exploration well, we'll move to Block 15105, where we'll drill the Loc De Vang prospect. And that's targeting a 65 to 135 million barrel stratigraphic play.

Since August 2022, when we first announced the framework, we have repurchased more than 7 million shares, or 300 million of stock at an average price of $41.72 per share, and we now have 150 million shares outstanding. I look forward to see what we will accomplish with the enhanced shareholder framework returns as part of Murphy 3.0.

Speaker Change: It's a very nice looking prospect sizable prospect that will test the same type of geology as our <unk> development project. So looking forward to that after we complete that exploration well, we will move to the block 15, 105, where we'll drill the lock the Hong prospect.

Slide seven. Murphy maintains strong liquidity with $1.1 billion available as of June 30. During the second quarter, we repurchased a total of $50 million of long-term debt through open-market transactions comprised of $26.5 million of our 2027 senior notes, and $23.5 million of our 2028 senior notes. As of June 30, we had $1.28 billion of long-term debt outstanding, with our next maturity over three years away in December 2027.

Speaker Change: And Thats targeting a 65 to 135 million barrel.

Speaker Change: Graphic play another very exciting well for US overall these wells in Vietnam have the potential to really prove up a really material sizable exciting business for us in Vietnam with some success. So looking forward to them as you know.

Eric Hambly: Another very exciting well for us. Overall, these wells in Vietnam have the potential to really prove up a really material, sizable, exciting business for us in Vietnam with some success. So, we are looking forward to them. As you know, our exploration is a core tenant of our focus area, and these are looking to be great prospects for us.

Operator: Our exploration as a core tenant of our focus area and these are looking to be great prospects for us to drill.

Slide eight.

Our sixth annual sustainability report was released this week and included disclosures regarding Murphy's ongoing environmental stewardship, strong governance oversight, and positive impacts on our people and communities.

Arun Jayaram: As my follow-up is just on slide 22, you highlight the three-year program which will deliver, you know, 5% growth CAGR to $195 and BOE per day at 95,000 barrels of offshore. Can you help us think about some of the growth drivers, Roger, in 2025? You know, obviously, 2026 you'll start getting some volumes in Vietnam, but just help us think about some of the growth drivers next year. Well, we're putting on a lot of nice wells at both our

Arun Jayaram: Great. As my follow-up is just on slide 22, you highlight the three-year period.

Arun Jayaram: Greg as my follow up is just on slide 2022, Slide 22 pardon me.

Arun Jayaram: You highlight the three year.

Arun Jayaram: The program, which will deliver.

We have been recognized for our efforts with awards from a variety of organizations, including being named as a best place for working parents by the Greater Houston Partnership for a third year in a row. Additionally, we were named one of America's most responsible companies in 2024 by Newsweek.

Arun Jayaram: The 5% growth CAGR to 195 BOE per day at 95000 barrels BOE offshore can you help us think about some of the growth drivers Roger.

Arun Jayaram: In 2025.

Speaker Change: Obviously 2026, you'll start getting some some volumes in Vietnam, but just help us think about some of the growth drivers for next year.

Eric Hambly: With that, I'll turn it over to Eric Hambly, our President and Chief Operating Officer to discuss our operational updates. Good morning, slide 10. Murphy produced 28,000 barrels of oil equivalent per day in the second quarter from the EGO for Chail with 86% liquids, and due to stronger well performance, we exceeded guidance by 1,700 barrels of oil equivalent per day. We brought online 11 Operated Wells in Catalina and four gross non-operated wells in Tilden during the quarter.

Roger Jenkins: Well, we're putting on a lot of nice wells at both our Samurai Field, which has been a very successful field with millions of barrels of reserves still there today, over 60 million barrels remaining in Samurai today. We're drilling a nice well at the Cleesey-Mormont Field. We put one on. We have two more to go.

Arun Jayaram: What we're putting on a lot of nice wells at both our samurai field, which has been a very successful field with millions of barrels of reserves still there today over 60 million barrels remaining in samurai today.

Speaker Change: Drilling a nice well, let the <unk> see more month feel we put one of them. We have two more to go to have a full year of those rates. These are very high rate wells.

Roger Jenkins: They'll have a full year of those rates, so these are very high-rate wells. Eric just ran through a litany of workover things that we've had this year that will be flowing for the full year. We're hopeful that Terranova can improve their operations a bit and get back to a nice level, which they have achieved several times. And that's the gist of what we're trying to do there, but this is a three-year average deal, not necessarily worth $25.

Speaker Change: Eric just ran through a litany of Workover things that we've had this year that would be flowing for the full year.

Eric Hambly: We were on track to bring on five Operated and three gross non-operated wells in Tilden in the third quarter. Our 2024 Catalina Wells are showing great performance compared to Murphy's recent historical average, and I'm also pleased at the results we have seen across our completions activities this year. Our completed lateral foot per day has increased by approximately 50% while our completion costs per completed lateral foot is down nearly 40%. Additionally, we've reduced our drilling diesel cost by 10% after installing ECO cell on our Patterson UTI rig.

Speaker Change: We're hopeful of turnover can improve their operations a bit and get back to a nice level, which they have achieved it several times and that's that's the gist of what we're trying to do there, but this is a three year average deal not necessarily 25.

Roger Jenkins: But we have many opportunities to be on and many opportunities that will flow for the whole year as you put these wells in, and they come in with pretty high rates. So that's how that's going to march upward on that.

Speaker Change: But that's we have many opportunities or beyond and many opportunities that will flow for the whole year as you put on these wells.

Arun Jayaram: And they come in with pretty Hot right. So that's how that's going to March upward on that Arun.

Speaker Change: Thank you Sir.

Speaker Change: Thank you.

Arun Jayaram: Okay.

Slide 11. We produced an average of 400 million cubic feet per day in the second quarter in Tupper Montany, exceeding guidance by nearly 20 million cubic feet per day, primarily due to well performance. As we brought online 13 wells and completed our 2024 program. Also during the quarter, we achieved a record high peak gross production rate of 496 million cubic feet per day, thereby reaching processing plant capacity and conjunction with ascensioning of our Tupper Montany plant expansion in the fourth quarter of 2020.

Operator: Your next question comes from Neal Mehta from Goldman Sachs. Please go ahead.

Speaker Change: Your next question comes from Neil Mehta from Goldman Goldman Sachs. Please go ahead.

Neal Mehta: Good morning, sir. Thanks for taking the time. I had a couple of Canada questions for you, if you'd like. I guess the first is that we're in a challenging environment for 8th Oil. I think there's an interesting multi-year outlook for Western Canadian gas prices from where we are here, but just your perspective on the way some of the U.S. gas producers are holding back molecules until we get into a better environment. Does it make sense to change the cadence of your production profile to monetize at a better price?

Neal Mehta: Good morning.

Neal Mehta: Morning, Sarah Thanks for taking the time add a couple of Canada questions for you. If you will that I guess the first is we're in a challenging environment for eight though I think there's an interesting multi year outlook.

Speaker Change: For Western Canadian gas prices from where we are here, but just your perspective on.

Speaker Change: The way some of the U S gas producers are holding back molecules until we get into a better environment does it make sense to change the cadence of your production profile to monetize.

We continue seeing great well performance from our optimized completion design. In particular, our average IP 30 rate in our Tupper main area has increased approximately 120% since 2019, and more than 200% since 2016. Overall, five of our 2024 wells are among Murphy's top 20 Tupper Montany wells based on IP 30 rates.

Speaker Change: It's a better better price environment.

Roger Jenkins: Thank you for that question. It's a great question.

Speaker Change: Thank you Matt No question Great question.

Speaker Change: No different than the big gas only players in the U S. We're making we have a plant and infrastructure can only handle 500 million a day. So it's not an enormous multi bcf business we have benchmarked.

Roger Jenkins: We're a little different than the big gas-only players in the US. We have a plant and an infrastructure that can only handle $500 million a day, so it's not an enormous multi-BCF business. We have, as benchmarked by your competitors and many other times in the industry, the lowest break-even in North America, adjusted for ACO and for a C-dollar type of exchange. So, we have very, extremely low break-even prices. We have hellacious wells.

Eric Hambly: Slide 12. In the second quarter, our K-Bub Dubernae asset produced 4,000 barrels of oil equivalent per day with 72% liquids, which was slightly above guidance. Murphy brought online three operating wells during the quarter, which completes our well delivery program for 2024. We're also seeing some of our highest rates in company history for K-Bub Dubernae with an average peak rate of 1900 barrels of oil per day. This ranks in the top tier among our peers when normalized for lateral length. Overall, recent well performance has mirrored our K-Bub Dubernae wells in the eager for sale, and I look forward to seeing further results.

Speaker Change: Benchmarked by your competitors and many other times in the industry the lowest breakeven in North America adjusted for <unk> and for Oxy dollar type of exchange, so a very extremely low breakeven.

Speaker Change: Breakeven prices with Hellacious wells, we have commitments to our pipelines into this plant and so far economically it's shown us to want to do that and we see a future there with LNG, Canada over a long haul we have relationships that are key to us and differentiating to our peers both air.

Roger Jenkins: We have commitments to our pipelines and to this plant, and so far, economically, it's shown us that we want to do that. And we see a future there with LNG Canada over the long haul. We have relationships that are key to us and differentiate us from our peers. Both Eric, Tom, and I all lived in KL.

Roger Jenkins: We're very well-known in Asia, very well-known for delivering gas into LNG systems. We're a little different animal there. There are multiple LNG outlets being built in Western Canada, but right now, it's better for us with the commitments we have at our plant and pipelines to continue on with our low break-even and continue to make free cash flow there with the assets that we have. But I understand that question, and that's how we're going at this time.

Speaker Change: Tom and I all lived in KL.

Speaker Change: Well known in Asia, we're well known to deliver gas into LNG systems, we are a little different animal there there're multiple LNG outlets being built in western Canada, but right now it's better for us with the commitments we have at our plant in pipes to continue on with our low breakeven and continue to make free cash flow.

Slide 13. Murphy produced an average 74,000 barrels of oil equivalent per day in the second quarter from the Gulf of Mexico with 82% oil volumes. We progressed our Gulf of Mexico well program in the second quarter, as we brought online, the operated Calisi number four well, and the non-operated Lucius number 11. We also drilled the operated Marmont number three well, which is on track to come online in the third quarter. In Oxford, Canada, we produced an average of 8,000 barrels of oil equivalent per day with 100% oil. Non-operated Terra Nova production was impacted by additional downtime during the quarter.

Operator: There.

Speaker Change: With the assets that we have but I understand that question and that's our.

Speaker Change: How would go on at this time on Neal.

Roger Jenkins: So also, Neal, one more thing, pretty good hedging situations. If you look at our netbacks, while I would imagine your coverage list, you probably have some of the highest net guess netbacks there is because we have forward sales in Canada. We're actually forward selling and looking into the business for 25 today as well. So that's at times been a little below, but we're winning with the hedging today. It's not really hedging; it's forward sales of molecules.

Speaker Change: So also near one more thing.

Speaker Change: Pretty good hedging situations, if you look at our net backs well.

Speaker Change: I would imagine of your coverage list you probably have some of the highest Matt yes net backs there is.

Eric Hambly: Slyte 14. I'm pleased that we are nearing completion of our 2024 workover and project program in the Gulf of Mexico as we advance operations in the second quarter. Early in the third quarter, we brought online the Operated Needle and Meyer number one sidetrack well while our operating partner completed the Kodiak number three well workover. The Operated Dalmatian number two subsidy safety valve repair is progressing and we forecast it will come online later in the third quarter.

Speaker Change: Because we have forward sales in Canada were actually forward selling and looking into the business for 25 today.

Speaker Change: Well so that's at Thompson, a little below but we are winning with the hedging today, it's not really hedging its forward sales of molecules that are not adjusted for market.

Roger Jenkins: They're not adjusted for market. So you have to look in the back of the filing here today to see that. And that puts us in a, we don't get the 50 cent ACO too much. We have differentiation and forward sales, and we're at a different level. I think, based on U.S. fear, we're probably pretty good shape on gas, actually.

Speaker Change: So you have to look in the back of the filing here today to see that and it puts us in a.

Speaker Change: We don't get the 50 cent ACO too much we have differentiation in forward sales and we're at a different level I think based on U S figure is probably a pretty good shape on gas action.

Eric Hambly: Our workover expenses, which are included in our lease operating expenses total $68 million for the second quarter, which included the cost of the near Meyer sidetrack well. We forecast $35 million of workover expenses for the third quarter of 2024.

Neal Mehta: Thank you, sir. And then the follow-up is just, you alluded to Terranova. I recognize it's smaller in the context of your portfolio, and then you're not the ultimate operator here, but just your perspective on, as an owner, you know, how far are we away from getting that to optimal operations?

Speaker Change: Okay. Thank you Sara and then the follow up is just you.

Speaker Change: You alluded to Terra Nova and recognize a small panther.

Speaker Change: Context, your portfolio and then youre not talks of the operator here, but just your perspective on.

Slyte 15. In Vietnam, we have been progressing our plans for our Lock the Vong Field Development Project. In the second quarter, we awarded facilities and pipeline contracts. And we expect to award the remaining major contracts by the year end 2024. We look forward to begin drilling our development wells in 2025 and remain on schedule for achieving first oil in late 2026.

Eric Hambly: Slyte 17.

Speaker Change: And as an owner.

Speaker Change: How far are we away from getting that optimal operations.

Eric Hambly: I'll let Eric opine on that. I'm too emotional about it, Neal. Thanks, Roger.

Roger Jenkins: I'll let Eric opine on that. I'm too emotional about it, Neal. Thanks, Roger. We're a bit frustrated.

Speaker Change: I'll, let Eric upon on that too emotional about it Neil.

Eric Hambly: Roger, we're a bit frustrated with the operator's performance in the second quarter. You can see it had a fairly significant impact on us in underperforming second quarter oil at Terranova. We are an 18% working interest owner in that, with Suncor and Synovus, obviously having a large ownership. We work with the operator and offer assistance and guidance to the extent we can as a non-operated partner. I feel that they have continued to make improvement, and we're expecting that, ultimately, they will get through their larger than expected downtime issues and have steady operations. And later this year, we ought to see a 6,000 barrels a day net to us type production rate. So I'm confident they'll get there, just a little slower than we'd like.

Neal: Thanks Roger.

Speaker Change: We're a bit frustrated with the operators performance in the second quarter, you can see it had a fairly significant impact to us in.

We recently completed our Gulf of Mexico Exploration program for the year and I'm excited to announce a discovery at the non-operated Ocatillo number one well where our operating partner found approximately 100 feet of net pay across two zones. The partner group is currently evaluating results to determine the next steps and we look forward to advancing this project.

Speaker Change: And underperforming second quarter oil at Terra Nova.

Speaker Change: We are in 18% working interest owner in that with Sanofi with Suncor and Synovus, obviously, having large ownership, we work with the operator and offer assistance and guidance and the extent, we can as a non operated partner.

Eric Hambly: Also during the quarter, we completed drilling the non-operated orange number one exploration well and encountered non-commercial hydrocarbons. Our operating partner plugged and abandoned the well. Slyte 18.

Speaker Change: I feel that they have continued to make improvement and we're expecting that ultimately they will get through their larger than expected downtime issues and.

We're preparing to begin our Vietnam Exploration program and we plan to spread the high Siu Vong Exploration well in Block 15 to 17 late in the third quarter. The rig will then move to drill the Lock the Hong Exploration well in Block 15 105 in the fourth quarter. We forecast approximately $30 million in total net drilling costs for the wells and look forward to seeing the results of these wells as they provide the potential to create a more sizable business in Vietnam.

Speaker Change: They have steady operations and later this year, we ought to see a 6000 barrel a day net to us type production rate.

Eric Hambly: So I'm confident they'll get there just a little slower than we'd like.

Neal Mehta: Thanks, Eric Thanks, Roger.

Eric Hambly: Thank you, Neal. Good talking to you. Take care.

Roger Jenkins: Thank you, Neal. Good talking to you. Take care.

Speaker Change: Thank you Neil good talking to you take care.

Operator: Your next question comes from Carlos Escalante from Wolf Research. Please go ahead.

Eric Hambly: Your next question comes from Carlos Escalante from Wolfe Research. Please go ahead.

Carlos Escalante: Morning, Carlos. Good morning, Roger and team. How are you guys doing? Doing great.

Carlos: Good morning Carlos.

Eric Hambly: Slyte 19. Our seismic reprocessing work continues to progress for our acreage encode of WAF. We anticipate receiving final data by year and 2024. From our current evaluation, we are pleased at the multiple opportunities available across the exploration types in addition to recent nearby discoveries announced by other operators.

Neal: Good morning, Roger and team are you guys doing.

Eric Hambly: Doing great.

Carlos Escalante: I guess I'd like to start out my question with the shift in your MER 3.0 framework into the current quarter. You cite that 50% of adjusted free cash was allocated to share buybacks and potential dividend increases. And I wonder and am curious about how you think about specifically the latter part of that, of the framework? What's your dividend growth policy now that you've entered MER 3.0 earlier, and does one work at the expense of the other, and I guess just generally, how do you manage in between buybacks and dividend growth at this point in time? Thank you.

Neal Mehta: I'd like to start up my question with the the shift on your Mercury Paulino framework into the current quarter.

Speaker Change: You cite the.

Roger Jenkins: 50% of adjusted free cash was allocated to share buybacks and potential dividend increases. And I wonder and am curious about how you think about specifically the latter part of that or the framework.

Speaker Change: 50% of adjusted free cash flow allocated to share buybacks and potential dividend increase at <unk>.

Murphy will continue our evaluation as additional data becomes available and will likely begin preparations for an exploration program in 2025 or 2026. At the undeveloped pond discovery, Murphy remains on track to submit a field development plan by year in 2025.

Eric Hambly: And I Wonder and curious about how do you think about it.

Eric Hambly: The latter part of that of that.

Eric Hambly: For the framework.

Speaker Change: Whats your dividend growth policy now that you've entered mercury pointed out earlier.

Eric Hambly: Slyte 21. For the third quarter of 2024, we forecast total production of 181.5 to 189.5 thousand barrels oil equivalent per day with approximately 50 percent oil volumes. This range assumes 3,900 barrels of oil equivalent per day of potential Gulf of Mexico storm downtime as well as 2,900 barrels of oil equivalent per day of planned on short downtime and 2,600 barrels of oil equivalent per day of planned Gulf of Mexico downtime. Murphy forecast spending approximately 270 million dollars of accrued capex in the third quarter.

Speaker Change: Does one work at the expense of the other and I guess.

Speaker Change: And just generally how do you manage in between buybacks and dividend growth at this point of where you are.

Roger Jenkins: Thank you for that question. It is a very good question.

Speaker Change: Thank you for that question very good question.

Roger Jenkins: If you really want me, what I see in this is when you build these frameworks. You know, we said primarily buybacks and dividend increases. That would be a one-off dividend or a change in dividend policy. I can tell you today that the focus of this Murphy 3.0 is buybacks.

Eric Hambly: If you really want me.

Eric Hambly: What I see and this is when you build these frameworks.

Eric Hambly: I would say primarily buyback and dividend increases that would be a one.

Eric Hambly: One off dividend or change in dividend policy.

Eric Hambly: I can tell you today that the focus of this Murphy tucano as buybacks.

Eric Hambly: For full year 2024, we are maintaining our production guidance of 180 to 188,000 barrels of oil equipment per day with 52 percent oil volumes. Currently, we expect to be at the lower end of this range due to operational impacts in the Gulf of Mexico. In particular, the development plan for an operated well in the samurai field was altered to a single zone to maximize total field recovery. Additionally, extended operations at the plan need reminder number one side track well, delayed the rig from commencing the Dalmatian well workover. We also maintain our approved CAPX range of 920 million to 1.02 billion dollars excluding NCI.

Roger Jenkins: We have been a long-term dividend player my entire life; since 1961, we've been paying a dividend, returning billions of dollars to shareholders through dividends. So if you look at our framework, which I'm sure you're familiar with, you back out dividends underneath to get to the formula for our adjusted free cash flow that's shared on this slide and in numerous slides and publications. So we see that as a difference.

Speaker Change: We have been a long term dividend player in my entire life. Since 1961, we've been paying a dividend return billions of dollars to shareholders through dividend. So.

Eric Hambly: If you look at our framework on which I'm sure you're familiar you back out dividends underneath to get to the formulae for our adjusted free cash flow is it shared in this slide and then numerous sites and publications. So we see that as a different we have a typical dividend we're trying to increase our dividend every year and that we see that the minimum.

Roger Jenkins: So we see that as a difference. We have a typical dividend. We're trying to increase our dividend every year. And we see the minimum of 50% of adjusted free cash flow to really be focused on buybacks at this time and not about changing our dividend policy.

Roger Jenkins: We have a typical dividend; we try to increase our dividend every year, and we see the minimum of 50% of adjusted free cash flow to really be focused on buybacks at this time and not about changing our dividend policy. So every year, at the beginning of the year, we will be increasing our dividend, hopefully, in this type of price regime or this type of business regime that we're in. We want to be a dividend increaser, and then we'll be using buybacks, and we want to be a company that's always increasing its dividend per share and cash flow per share, and when we do that, we'll be a successful company.

Roger Jenkins: Minimum of 50% of adjusted free cash flow to really be focused on buybacks at this time and not about changing our dividend policy. So every year at the beginning of the year, we will be increasing our dividend hopefully in this type of price regime. This type of business regime that we're in we want to be a dividend increase or and then we'll be using buybacks in.

Roger Jenkins: So every year at the beginning of the year, we will be increasing our dividend, hopefully, in this type of price regime or this type of business regime that we're in. We want to be a dividend increaser. And then we'll be using buybacks, and we want to be a company that's always increasing its dividend per share and cash flow per share. And when we do that, we'll be a successful company. And so we're going to use the buyback of stock to increase our EPS, our cash flow per share, and then increase our dividend per share. But it is stated in that framework of dividend increases, but make no mistake, this is a buyback focus for our management team right now and will be for a while.

And with that, I will turn it back to Roger. Thank you, Eric. The fact of it year in our strategy remains unchanged.

Roger Jenkins: With the one exception, we'll be now executing Murphy 3.0 of our CAPX allocation framework and forecast reaching our 1 billion dollar long term debt goal in mid 25. Long return, we plan to reinvest approximately 45 percent of our cash flows, enabling us to achieve average production of approximately 210 to 220,000 barrels equivalent per day with always more than 50 percent oil weighting. Murphy will continue to generate ample free cash flow to allocate toward further share returns and a creative investments as well supporting any exploration success. Additionally, as part of this plan remain committed to achieving metrics that are consistent with investment rating and we're pleased since the rating agency outlook improvements achieve this past spring.

Roger Jenkins: We want to be a company that's ever increasing dividend per share cash flow per share and when we do that will be a successful company and that's what we're going to use to buy back stock to ever increase our our EPS or cash flow per share and an increasing our dividend per share but.

Roger Jenkins: And so we're going to use the buyback of stock to ever-increase our EPS, our cash flow per share, and then increase our dividend per share. But it is stated in that framework of dividend increases, but make no mistake, this is a buyback focus for our management team right now and will be for a while.

Roger Jenkins: It is said stated in that framework dividend increases, but make no mistake. This is a buyback focus for our management team right now and will be for a while.

Carlos Escalante: And then on my second question, I'd like to ask you and then perhaps Eric, what your sustaining capital is once you hit 2027, 2028, where you have a clear line of sight on your projects, and once you reach that 200,000 barrels of oil equivalent per day threshold, what do you see as your sustaining capital going forward at that point? Thank you.

Eric Hambly: It was awesome. Thank you for that answer, And then on my second question, I'd like to ask you and then perhaps Eric, what your sustaining capital is once you hit 2027, 2028, where you have a clear line of sight on your projects, and once you reach that 200,000 barrels of oil equivalent per day threshold, what do you see as your sustaining capital going forward at that point? Eric Hambly, Timothy Rezvan, Kelly Whitley, Roger Jenkins, Eric Hambly, Leo Mariani, Thomas Mireles, Arun Jayaram, Carlos Escalante, Murphy Oil Corp

Speaker Change: Awesome. Thank you for that answer and then I think I didn't question.

Eric Hambly: To ask you and perhaps Eric on.

Operator: Thank you; I appreciate the call.

Speaker Change: What do you see as your sustaining capital being once you you hit 2027, and 2028, where you have clear line of sight.

Turn to 23 as we close our call today, we had another good quarter which set us up for an exciting second half of the year. Most importantly, Murphy's accelerating show of returns by revising our CAPL allocation framework and maintaining our 1 billion dollar long term debt goal. The support of this our board increased our share repurchase authorization. We'll continue executing our plan and have been exceeding production, got it across all our own share assets, all advancing our solid Gulf Mexico well program and work over projects. In exploration, we expanded our Gulf Mexico portfolio with a discovery and preparing to launch an exciting Vietnam exploration program in the third quarter where we have a long-term development going as well.

Operator: <unk>.

Operator: And once you reach that 200000 barrels of oil equivalent per day threshold, what do you see as your sustaining capital going forward at that point.

Eric Hambly: Go ahead, Eric. Sure. The way we think about our sort of longer-term view when we get to that $210,000, $220,000 barrel a day range in 2027, is that we anticipate reinvesting about 45% of our operating cash flow, and that may move around from year to year. If you have a $75 per barrel world, we anticipate that that would be something around a billion dollars a year of cap equity.

Speaker Change: Go ahead Eric.

Operator: Sure.

Speaker Change: The way, we think about our sort of longer term view when we get to that $2 10 to 2000 8000 barrel a day range.

Speaker Change: <unk> 27 on as we anticipate reinvesting about 45% of our operating cash flow and that may move around from year to year if.

Speaker Change: If you have a $75 per barrel world, we anticipate that that would be something around $1 billion a year of capex.

And close like to thank our employees for their ongoing efforts to support Murphy's success, look forward to what we will achieve as we close out the second half of 24.

Eric Hambly: Thank you. Thank you, Eric. Thank you, Roger.

Speaker Change: Okay. Thank you. Thank you. Thank you one thing I might just add to that is when we built our long range plans, we never assume that we have successful exploration. So if we do have material exploration success, we would likely see an increase in capital to fund that <unk>.

Carlos Escalante: One thing I might just add to that is when we build our long-range plans, we never assume that we have successful exploration. So if we do have material exploration success, we would likely see an increase in capital to fund that development. That's one of the reasons why, within our capital allocation framework, we're using the part of our adjusted free cash flow that doesn't go to share buyback to build cash on the balance sheet so that, in the future, we can use that cash to fund successful exploration.

With that, we'll turn it back over to our operator and look forward to your questions this morning. Thank you.

Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch tone phone. You will hear a prompt that your hand has been raised.

Speaker Change: <unk> is one of the reasons why within our capital allocation framework, we are using the part of our adjusted free cash flow that doesn't go to share buyback to build cash on the balance sheet. So in the future. We can use that cash to fund successful exploration. So if you think about our current business with zero exploration success, what I said earlier applies.

Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speaker phone, please lift the headset before pressing any keys. One moment please for your first question.

Carlos Escalante: So if you think about our current business with zero exploration success, what I said earlier applies. If we make a massive discovery somewhere, then we'd probably increase our capital to fund that. But these kinds of things take a little bit of time. Thanks for the clarification, guys. Have a good one.

Neil Dignam: Your first question comes from Neil Dignam Trust Securities. Please go ahead. Morning, Roger, a nice quarter. My first question is on your decision that my question is around the decision to accelerate. It was nice to see the decision to accelerate the 3.0 plan. Was this driven more by the turn stock price or investor discussions, or I'm just wondering the decision behind this. And then when you decide now behind the step up, share a potential shareholder return and you know you always see a lot of interesting act was, you know, create a potential acquisition. You know, this just simply a return exercise, between these two.

Speaker Change: We make a massive discovery somewhere then we'd probably increase our capital to fund that but these kind of things take a little bit of time.

Operator: <unk>.

Speaker Change: Thanks for the clarification guys have a good one.

Roger Jenkins: Thank you; I appreciate the call.

Operator: Thank you I appreciate the call.

Operator: Your next question comes from Paul Cheng from Scotiabank. Please go ahead.

Speaker Change: Your next question comes from Paul Cheng from Scotia Bank. Please go ahead.

Paul Cheng: Good morning, Paul. How are you doing? Hey, good morning. Two questions, please.

Paul Cheng: Good morning, Paul. How are you doing? Hey, good morning.

Paul Cheng: Hi, Good morning, Paul how are you doing good morning.

Speaker Change: Two question May I.

Paul Cheng: First I think just for Eric.

Eric Hambly: First, I think it's for Eric. Eric, can you tell us what happened to the work over and about the delay? And because I thought the expense would be essentially done by the second quarter. And initially, I think you are targeting 68. And now you say actual spending was 65. But then the third quarter. Another 35, so the end result is going to be much higher than we initially thought. Can you tell us what happened there? And also that, can you talk about, you're still targeting by 2027, 210 to 220,000 bill per annum. If we look at the risk factor, where you see the biggest risk in terms of achieving that.

Paul Cheng: Two questions, please. The first, I think, is for Eric. Eric, can you tell us what happened to the work over with the delay? Because I thought the expense would be essentially done by the second quarter, and initially, I think you were targeting 68 and now you say actual spending was 65, but then the third quarter... another 35. So the end result is going to be much higher than we initially thought.

Speaker Change: Eric can you tell us that what happened to the <unk>.

Eric Hambly: And that with the delay and because I thought.

Speaker Change: Expense will be.

Speaker Change: <unk> already done by.

Thank you so much, Neil. One thing about our board meets, we have a lot of ownership on our board, probably second of all of the MPs. It's a little bit of a different matter when we meet about returns. This has been my idea to do this. It wasn't from investor outreach. I believe our framework worked successfully. We just started benchmarking with Tom and his team what a leading balance sheet we have.

Speaker Change: Second quarter and initially I think you had talked about 68 and now you say actual spending was 65, but then the third quarter, yes, and another 35.

Eric Hambly: And it's going to be much higher than we initially thought can you tell us what happened there.

Paul Cheng: Can you tell us what happened there? And also, can you talk about, you're still targeting by 2027, 210 to 220,000 billion. If we look at the risk factor, where you see the biggest risk in terms of achieving that.

Eric Hambly: And also can you talk about.

Speaker Change: Are you still targeting by 2027 to 110 to 220000 Boe per day.

We also see a lot of openness to credit markets today. You're the leading balance sheet. You have a bit of a price dislocation this year and our equity pricing. We still maintaining that $1 billion goal. That hasn't been changed. It's just pushed out a couple of quarters, if you will, or three. We decided to go ahead and move today and start allocating more returns. One thing, very key, Neil, about this. I want to, I can't emphasize it enough.

Speaker Change: Look at the risk factor.

Speaker Change: <unk> is the biggest risk in terms of achieving that.

Eric Hambly: And the second question, I think, is for Tom. It appears that there's some one-off benefit to your U.S. operation because I see a credit balance. You're showing a credit in both G and A and other expenses. Can you tell us what those are?

Speaker Change: And second question I think is for Tom.

Speaker Change: It appears that that's some one off benefit in your U S operation.

Speaker Change: Because I see a quite the fundings youre showing a question in both G&A and other expense can you tell us what that does thank you.

From the original framework disclosure two years ago, probably within a day or two of now, it says minimum of 50%. We'll go over if we continue to see price dislocation. It's minimum and it's always been minimum. As to your question on M&A, it would be adjusted to have our formula. We would pull back on the cash flow we have and debt of that could be associated with that as well. We continue to review M&A.

Paul Cheng: Thank you. That's three questions, Paul, but we'll answer them all. OK, well, I'll get started talking about the Niedermeyer well. Just go back and have some context.

Eric Hambly: Yes, three questions fall, but we will we will.

Eric Hambly: Answer mall, Okay, well I'll get started they were talking about talking about the niedermeyer well.

Eric Hambly: Just go back and have some context, we originally plan that is a fairly simple upper completion, workover and it escalated into a sidetrack.

Eric Hambly: We originally planned that as a fairly simple upper completion workover, and it escalated into a sidetrack. And the sidetrack operation just took a little bit longer at the completion stage than we anticipated. This is a very high-rate well, so missing out on 20 days or so of production from a high-rate well impacts the production rate average for the quarter. It wasn't anything particularly alarming or concerning. It's just the operations took longer than our estimate, and um...

Eric Hambly: And the sidetrack operation just took a little bit longer in the completion stage than we anticipated.

Eric Hambly: This is a very high rate well, so missing out on 20 days or so of production from our high rate well impacts the production rate average for the quarter.

We're non-operated business in the Gulf of Mexico. We usually strive where you need to operate and improve or execute better, which is what we do. M&A is still forefront. It hasn't been changed. We still have the same discussions and meetings on that just felt like had a great balance sheet, a leading balance sheet through benchmarking of any type of metric and moved it forward and glad we did and excited about doing that the rest of the year. Also, I think with M&A and its possibilities, people will say, well, you may not ever reach a billion. You may do this, you may do that, but now we close that off and move it.

Eric Hambly: It wasn't anything, particularly alarming or concerning is just the operations took longer than our estimate.

Eric Hambly: And.

Eric Hambly: In fact, if you look at our second quarter workover expense, it was very close to our guide. So we do see a little bit of the workover drifting into the third quarter. We anticipated that Niedermeyer well being done, effectively spending money in the second quarter, and it drifted into the third quarter a little bit, which impacts the workover expense and the production. And then that impacts the following activity as well, the timing of the TC4 well. I think I addressed that first part of your question. Sure.

Speaker Change: In fact, if you look at our second quarter Workover expense. It was very close to our guide. So we do see a little bit of the workover drifting into the third quarter, we anticipated that niedermeyer wellbeing done effectively spending money in the second quarter. It had drifted into the third quarter, a little bit which impacts a little bit the workover expense and production.

Roger Jenkins: Now, what I said, and then just second question on the guide for the remainder of the year was the change just due to activity in the Gulf, or maybe if you just talk about just oil production for a major year, how that's impacted both offshore and onshore. Thank you. Well, Eric's going to handle the offshore and onshore questions today. Go ahead, Eric. Okay. Thanks very much. Neil, the impacts that we highlighted earlier in our call are driving us to be toward the lower end of our original annual production guidance range.

Eric Hambly: And then that impacts the following activity as well as the timing of the <unk> four well.

Eric Hambly: I think I addressed that first part of your question.

Eric Hambly: Sure, because I thought, is it always in the original plan that third quarter you have work over expenses? Because maybe I got it wrong. I thought third quarter you're not supposed to have work over expenses before.

Eric Hambly: Sure because I thought.

Speaker Change: Is it always.

Speaker Change: The original plan that third quarter <unk> expense, because maybe I thought you've wrong I thought the quarter youre not supposed to add work over expense before.

Eric Hambly: Yeah, we believe we expect a third-quarter workover expense. The timing may have moved just slightly with some costs drifting into the second quarter, but we can take a look at that. One thing I might do just to reiterate, if you look at our overall business, in the second quarter, our LOE per BOE was $15.09. If you exclude workovers, we were $10.77.

Eric Hambly: Yes, we believe we expect the third quarter Workover expenses. The timing may have moved just slightly with some costs drifting into the second quarter, but we can take a look at that one thing I might do just to reiterate if you look at our overall business in the second quarter are low.

Roger Jenkins: Main issues there are a well in Samurai field had been producing from two zones and we elected to produce them one at a time going forward. We did that based on what we learned from the wells we produced it and in order to maximize the ultimate recovery. It does have a negative instantaneous oil rate for us in a Samurai field of about 4,000 barrels equivalent per day, which is driving a significant change in the last half of the year type of production rate.

Speaker Change: Per BOE was $15 nine says if you exclude workovers, we were $10 77.

Eric Hambly: In the second half of this year, we expect our operating expenses to drift down into the 11 to $13 per BOE range with production volumes higher from our onshore business for the rest of the year and also the Gulf of Mexico work over program wrapping up.

Eric Hambly: In the second half of this year, we expect our operating expenses to drift down into the $11 to $13 per BOE range, with production volumes higher from our onshore business for the rest of the year and also the Gulf of Mexico workover program wrapping up. If you give me a second here, I'll talk a little bit about your question around the long-term production rate. The things in our business that cause us to have variability in a range are primarily non-operated activities in our offshore business and exactly predicting correctly the rates of new wells to come online.

Speaker Change: Okay. Thank you.

Speaker Change: If you could give me a second here I will talk a little bit about your question around the long term production rate.

Roger Jenkins: The other impact was that the need or my or number one well that we did a sidetrack on took a little bit longer to complete that operation. So it came online slightly later than our earlier guidance. And because the rig that was on that well is moved to the Dalmatian EC4 number two sub C safety valve repair job it delayed the online timing of that well. So that it does affect us a little bit.

Eric Hambly: The things in our business that caused us to have variability of our range are primarily non operated activity in our offshore business.

Eric Hambly: Exactly predicting correctly the rates of new wells to come online those are the main drivers for our production range. The other thing that has become a little bit challenging to predict and we've tried to do the best we can is our montney volumes are pretty large and the effect of royalty variation.

Eric Hambly: Those are the main drivers for our production range. The other thing that has become a little bit challenging to predict, and we've tried to do the best we can, is our Montaney volumes are pretty large, and the effect of royalty variation driven by gas prices can swing the VOEs quite a bit. I do want to point out that the overall royalty in the Montaney is very, very low. So they do move around on us a little bit, and that affects our range. It's one of the reasons we communicated our production range.

Eric Hambly: If you give me a minute here I'll kind of explain what will happen as we head toward later in the year. So in our offshore business we'll see production growth in the fourth quarter versus the third quarter due to a number of factors. That total increase is probably in the range of eight to 9,000 barrels a day. It's driven by the EC4 number one being online coming online it's currently offline. The more month three well will come online and then in the fourth quarter we'll have a little bit less storm downtime.

Speaker Change: Driven by gas prices can swing the boe's quite a bit.

Eric Hambly: I do want to point out that the overall royalty in and the money is very very low so they do move around on us a little bit and that affects our range is one of the reasons, we communicated production range.

Paul Cheng: Okay, perfect. Thank you.

Speaker Change: Okay perfect. Thank you.

Eric Hambly: Okay, and Paul, I just wanted to make sure I understood your question. Was that in reference to other income?

Speaker Change: Okay, and Paul just wanted to make sure I understood. Your question was that in reference to the other income.

Paul Cheng: You know, when I'm looking at your press release, when you break down the result in the E&P by U.S. and Canada, and then when I'm looking at the U.S. expense line item, your G&A is a small credit, like $3 million in self-expenses and income. And then the other expense is a $25 million credit. So it seems very unusual, wondering whether that is one of the things we need

Speaker Change: And when I'm looking at your past with knees.

Eric Hambly: So we'll see some nice growth in our offshore business about eight to 9,000 barrels a day in the fourth quarter and that'll be offset by partially offset by decline in our onshore business which is typical since we have very limited number of wells to come online the rest of the year onshore, for Business. Also Neil got keeping mine right there in the guidance. We have Hurricane season, we're an offshore operator, and that's a big number for the third quarter, and we have to make sure we account for that as well, and there's no hurricanes, it'll be way higher. That's right. Great point. Thank you, Roger. Thank you, Neil.

Eric Hambly: Great.

Eric Hambly: We saw.

Eric Hambly: The E&P by U S Canada.

Speaker Change: And then when I look at the U S expense line item.

Eric Hambly: G&A, yes, a small credit E Friedman.

Take care.

Eric Hambly: So if expenses that income.

Eric Hambly: And then they're out there.

Eric Hambly: <unk> is a 25 million.

Speaker Change: So it seems unusual.

Speaker Change: Wondering that just that one off what we need to dose.

Tom Mireles: We can't find what you're talking about, Paul, at this time. It might be something we can... Our GNA is industry leading, pretty much, very low.

Speaker Change: We can't find what you are talking about Paul at this time.

Speaker Change: It might be something we can our G&A is industry, leading pretty much very low.

Arun Jayaram: Your next question comes from Arun Jayaram from J.P. Morgan. Please go ahead. Good morning, Morgan. Good morning, Roger. I was wondering if you could just give us an update on the exploration program in Vietnam. It sounds like you'll be spiting the first well, but before the end of the third quarter, but maybe just give an update on that program. I'll have high level of Eric digging a bit to the details. We have a big project going there, a hundred million barrel of field that we're developing.

Eric Hambly: Sure.

Tom Mireles: I'm not sure, Paul. We'll have to... Let's dig into that. Let's dig into that and get with Kelly and call you back.

Eric Hambly: I'm not sure Paul will have to.

Speaker Change: Let's dig into that let's dig into that and get with Kelly and call you back okay.

Eric Hambly: Let's dig into that. Let's dig into that and get with Kelly and call you back.

Paul Cheng: Okay, we'll do it. Thanks. OK, thanks, Paul.

Roger Jenkins: Okay. Thanks, Paul. I appreciate it.

Speaker Change: Okay. Thanks, Paul appreciate it.

Operator: Your next question comes from Leo Mariani from Roth. Please go ahead.

Speaker Change: Your next question comes from Leo Mariani from Roth. Please go ahead.

Speaker Change: Hey, Leo good morning.

Leo Mariani: Hey, good morning. I wanted to touch base on the Eagle Ford a little bit here. Kind of looking at your guide for the year, it looks like maybe some of the Eagle Ford wells slipped into the fourth quarter here from prior quarters. Just wanted to get a sense of what was happening there. It sounds like it might be some maintenance-related issues. And then, you know, as a result, when do we expect Eagle Ford production to peak for the year? Is that going to be in 3Q or 4Q, as you all...

Leo Mariani: Hey, good morning, I wanted to touch base on the Eagle Ford a little bit here kind of looking at your guide.

Speaker Change: Guide for the year it looks like maybe that.

Arun Jayaram: We've been in Vietnam for a while, and we were brought to Vietnam by their government because we were very successful in a shallow water business in Malaysia, in which both Eric and Tom ran at parts of their career. I was more of a deep water guy in the old days.

Leo Mariani: Some of the Eagle Ford Wells slipped into the fourth quarter here from from prior quarters, just wanted to get a sense of what was happening there it sounds like it might be some maintenance related issues and then as a result, when do we expect Eagle Ford production to peak for the year is that going to be in <unk> or <unk>.

Roger Jenkins: We have that going for us, and we have lots of prospects in Vietnam, many who chose to drill a couple of big ones in a row here that are very exciting and a lower risk basin to help build up possibly a big business for us in Vietnam, and that's kind of the high level pitcher and Eric will walk you through the couple of wells about to go here. Thanks, Roger. It's one of the highlights that we're very excited about are exploration wells in Vietnam.

Speaker Change: You'll see it here.

Leo Mariani: Okay, thanks very much, Leo.

Eric Hambly: Okay, thanks very much, Leo. Our operated well program, the Eagleford, has actually been delivering a little bit earlier than normal. We have had a little bit of a minor change in our non-operated program, so the cadence overall of net wells may have just very slightly altered. I wouldn't characterize the overall impact as negative at all. In fact, I think we're, on average, delivering slightly ahead of schedule. So that combined with the well performance exceeding expectations across most of our wells and a little bit earlier timing, we've seen slightly higher rates earlier than expected. Peak production for Eagleford, based on the timing of our well delivery, will be in the third quarter and will see a bit of a decline heading into the fourth quarter.

Leo Mariani: Okay. Thanks very much.

Leo Mariani: Okay. That's helpful.

Leo Mariani: Our operated well program in the Eagle Ford has actually been delivering a little bit earlier than normal we have had a little bit of minor change in our non operated program. So the cadence over all of net wells may have.

Speaker Change: Very slightly altered.

Roger Jenkins: The rig that we're going to use to drill those is currently working with another operator in Vietnam, and when they're done, the rig will come to us. We expect to spot our well late in the third quarter. The first well that we'll start drilling will be on block 15 to 17, the Haiseu Vong prospect, where we're targeting a mean to upward volume of 170 to 430 million barrels. It's a very nice looking prospect, sizable prospect, that'll test the same type of geology as our Loctobong development project, so looking forward to that.

Speaker Change: I wouldn't characterize the overall impact as negative at all in fact, I think were on average delivering slightly ahead of schedule. So that combined with the well performance exceeding expectations across most of our wells.

Leo Mariani: And a little bit earlier timing, we've seen a little bit higher rates earlier than expected.

Leo Mariani: Peak production for Eagle Ford based on the timing of our well delivery will be in the third quarter.

Leo Mariani: And see a bit of decline heading into the fourth quarter.

Leo Mariani: Okay. That's helpful.

Leo Mariani: And then just with respect to LOE, you talked about LOE coming down in the second half of the year, which is nice to see. But if I just take a step back and look at your overall LOE, it's up quite a bit this year in 24 versus where you came in last year, and it sounds like workovers are driving the majority of this at the end of the day. I just wanted to kind of get a sense, you know, as you look out over the next couple years. Do you think that workover activity on some of these gulf wells can be similar in the next few years, or do you think this year was maybe more of a one-off with some heavier activity, and that should come down in the next couple years, and perhaps your overall LOE will be dropping?

Roger Jenkins: After we complete that exploration well, we'll move to the block 15 105, where we'll drill the Loctobong prospect, and that's targeting a 65 to 135 million barrel stratigraphic play. Another very exciting well for us. Overall, these well-in-Vietnam have the potential to really prove up a really materiable, sizable, exciting business for us in Vietnam with some success. Looking forward to them. As you know, our exploration is a core tenant of our focus area, and these are looking to be great prospects for us to drill.

Speaker Change: And then just with respect to LOE, you talked about LOE coming down on the <unk>.

Speaker Change: Half of the year, which is nice to see.

Speaker Change: Just take a step back and look at your overall LOE.

Speaker Change: It's up quite a bit this year and <unk> 24 versus where you came in last year and it sounds like Workovers is driving the majority of this at the end of the day I just wanted to kind of get a sense as you look out over the next couple of years I mean, do you think that workover activity on some of these Gulf wells.

Speaker Change: Can be similar in the next few years or do you think this year was any more of a one off with some heavier activity and that should come down in the next couple of years and perhaps your overall LOE will be dropping.

Roger Jenkins: Great. My follow-up is just on slide 2022, or slide 22, pardon me. You highlight the three-year program, which will deliver in a 5 percent growth cager to 195 MBOE per day at 95,000 barrels of offshore. Can you help us think about some of the growth drivers, Roger, in 2025? Obviously, 2026, you'll start getting some volumes in Vietnam, but just help us think about some of the growth drivers next year. We're putting on a lot of nice wells at both our samurai field.

Eric Hambly: Yeah, definitely, our workover activity this year is an outlier, quite a significant outlier, and I expect to have very limited workover activity in our offshore business going forward. If you look at our second quarter of this year, our LOE excluding workovers was $10.77. That compares to the prior year, second quarter, of $10.32. And most of that difference, which is pretty minor, is driven by Terra Nova restarting. Terra Nova has a bit higher operating expense than our other fields, our other Gulf of Mexico fields. So it does drive a little bit of the variance, but again, we're talking about $0.30 or so.

Leo Mariani: Yeah definitely our Workover activity. This year is an outlier quite a significant outlier and I expect to have very limited work over activity in our offshore business going forward. If you look at our second quarter of 24, our LOE, excluding workovers was $10 77.

Leo Mariani: That compares to prior year second quarter of $10 32.

Speaker Change: And most of that difference, which is pretty minor is driven by Terra Nova restarting Terra Nova has a bit higher operating expense than our other fields. Our other operated Gulf of Mexico fields. So it does drive a little bit of the variance, but again, we're talking about 30 or so.

Roger Jenkins: It's been a very successful field with millions of barrels of reserve still there today. Over 60 million barrels remaining in samurai today. We're doing a nice well at the Cleasty Moremont field. We've put one on. We have two more to go. We have a full year of those erraties, our very high-rate wells. Eric just ran through a litany of work over things that we've had this year that'll be flowing for the full year.

Leo Mariani: Okay, now that's helpful. And then just in the Gulf, I know that you folks are still looking to, you know, do more work on Ocotillo, and it's a non-opera well, but it seems like this would be a subsea tieback, just given the size. Is there infrastructure nearby that you guys could tie that back to?

Leo Mariani: Okay. That's helpful and then just in the Gulf.

Speaker Change: I know you folks are still looking to.

Speaker Change: If you do more work on <unk>.

Speaker Change: The non op well, but it seems like this would be a subsea tieback just given the size.

Speaker Change: Is there infrastructure nearby that you guys could tie that back to you.

Roger Jenkins: We're hopeful that Terinova can improve their operations a bit and get back to a nice level, which they have achieved at several times. That's the gist of what we're trying to do there. This is a three-year average deal, not necessarily 25. We have many opportunities to be on and many opportunities that will flow for the whole year as you put on these wells. They come in with pretty high rates. That's how that's going to march upward on that run. Thank you, sir.

Eric Hambly: That's correct. We don't operate the well. Occidental operates the well, and we are working with the partner group there for a plan for the development of the field, and I anticipate that it will be tied back to a nearby facility operated by Occidental. Okay, thank you.

Speaker Change: That's correct.

Speaker Change: We don't operate the well Occidental operates the world.

Eric Hambly: Oh, thank you.

Leo Mariani: And we are working with the partner group there for a plan of development of the field and I anticipate that there'll be tied back to.

Speaker Change: Nearby facility operated by Oxy.

Leo Mariani: Okay. Thank you.

Operator: Please press star followed by the one should you have a question. Our next question comes from Charles Meade from Johnson Rice. Please go ahead.

Speaker Change: Please press star followed by the one should you have a question. Our next question comes from Charles Meade from Johnson Rice. Please go ahead.

Your next question comes from Neil Mateth from Goldman Sachs. Please go ahead. Good morning, sir. Thanks for taking the time. I met a couple of candidates questions for you, if you will. I guess the first is we're in a challenging environment for April. I think there's an interesting multi-year outlook for Western Canadian gas prices from where we are here. Just your perspective on the way some of the U.S, gas producers are holding back molecules to again to a better environment.

Leo Mariani: Good morning Charles.

Charles Meade: Good morning, Roger, to you and your whole team there. Roger, I want to go back to your comment earlier in the Q&A, when you said you have hellacious wells in Canada, and I'm wondering if you could give maybe a little more detail. It looks like you've had some great results in both the K-bob and the topper, and I'm wondering if that is just a happy coincidence, or is there some, you know, over, over?

Speaker Change: Good morning, Roger to you and your whole Youll whole team Theyre up I'm not sure I wanted to go back to Europe.

Speaker Change: Your comment earlier in the Q&A you I think when you you said you have a malicious wells.

Speaker Change: In Canada, and I'm wondering if you could.

Speaker Change: Could give maybe a little more detail it looks like you've had some great results in both the.

Leo Mariani: Both the K-bob and the and the topper, and I'm wondering if that just a happy coincidence? Or is there some, you know, overarching kind of unifying theme there?

Speaker Change: Both the K, Bob and the and the Tupper and I'm wondering is that just a.

Does it make sense to change the cadence of your production profile to monetize into a better price environment? Thank you, Neil. Great question. We'll meet in an infrastructure that can only handle 500 million a day. It's not an enormous multi-BCF business. We have, as Benchmarked by your competitors and many other times in the industry, the lowest breakeven in North America adjusted for ACO and for a $C type of exchange. We have very extremely low breakeven prices.

Speaker Change: A happy coincidence or is there some.

Speaker Change: The overarching kind of unifying theme there.

Roger Jenkins: No, we've just been doing so well. If you go back to Eric's commentary in the script, which was, you know, an hour ago, I guess we have some of the top wells we've ever had. We continue to improve our fracking and our execution based on our four or five-year-old reorganization of one operating team in Houston and lessons learned between Eagleford and there, and we've just really been delivering some record wells.

Leo Mariani: No we've been it's been doing so well if you go back to Eric's commentary in the script, which is an hour ago I guess.

Speaker Change: We have some of the top wells, we've ever had we continued to improve our fracking and our execution based on our four five year now reorganization of one operating team in Houston and lessons learned between the Eagle Ford in there and just really been delivering some record wells.

Speaker Change: <unk> main is an older part of tougher that we got.

Roger Jenkins: Tupper, Maine is an older part of Tupper that we got, oh, I might have got that 17 years ago, and we went in there and did some old fracking and development there, came back with some incredible wells there, industry-leading wells there. If you benchmark Murphy against all North American gas, the lowest break-even price there is, adjusted back to ACO, etc.

Speaker Change: The amount of got that 17 years ago, and we went in there and did some old fracking in development. There came back with a new some incredible wells, they're industry, leading wells there if you benchmark Murphy against all North American gas.

We have hellacious wells. We have commitments to our pipelines into this plant. And so far economically, it's shown us to want to do that. And we see a future there with LNG Canada over a long haul. We have relationships that are key to us and differentiating to our peers. Both Eric Tom and I all lived in KL with very well known in Asia, very well known to deliver gas into LNG systems.

Speaker Change: <unk> breakeven price there is adjusted back to <unk> et cetera, just a good run of great wells in the Montney and K, Bob to the place where we've been dormant we wanted to go and drill some wells and take our new ideas and take our new fracking to Duvernay shale and prove up we have another cat arena.

Roger Jenkins: Just a good run of great wells in the Montaney, and K-Bob, too, is a place where we've been dormant. We wanted to go and drill some wells and take our new ideas and take our new fracking to the DuVernay Shale and prove that we have another Catarina. It's exactly like the Catarina, which is a major Eagleford area that's drilled by many peers, many public peers, sought-after acreage in the Eagleford. So, we have another Eagleford business in DuVernay that just makes $5 a barrel less of oil and much higher NGL.

We're a little different animal there. They're multiple LNG outlets being built in Western Canada. But right now, it's better for us with the commitments we have at our plant and pipes to continue all with our low breakeven and continue to make free cash flow there with the assets that we have. But I understand that question and that's how we're going at this time on you. So also, Neil, one more thing, a pretty good hedging situation.

Speaker Change: Exactly like to get kind of arena, which is a major eagle Ford <unk> drove by many peers many public peers salt after acreage in the Eagle Ford. So we have another Eagle Ford business and Duvernay that just makes $5 a barrel less are all in much higher NGL.

Roger Jenkins: So, these wells are very economical, and it just proves our long-term giant onshore business. We're not a company that runs out of locations or opportunities to go along with all the opportunities we have in the ocean, a big Vietnam future with exploration, a big project there. So just wanted to highlight that, Dan, on slide 12, it shows that we're the second-best operator in Kaibab, and we haven't put wells in the ground there in three or four years, and we're one of the top operators on a productivity basis in the Montany. So that's what I was getting at there, Charles.

Speaker Change: So these wells are very economic niches proves up our long term.

Speaker Change: Onshore business, we're not a company run out locations or opportunities to go along with all the opportunities we have in the ocean and our big Vietnam future with exploration a big project. There. So just wanted to highlight that as Dan on Slide 12 shows that were the second best operator, and K, Bob when we haven't put wells on the ground there in three or four years.

If you look at our netbacks, well, I would imagine of your coverage list, we probably have some of the highest net guess netbacks there is because we have forward sales in Canada and we're actually forward selling and looking into the business for 25 today as well. So that's at Tom's been a little below, but we're winning with hedging today. It's not really hedging its forward sales of molecules. They're not adjusted for market.

Leo Mariani: And we're one of the top operators on a productivity basis in the Montney. So that's what I was getting at there Charles Thank.

Charles Meade: Thank you. Thanks for that, Roger.

Leo Mariani: Thank you Charlotte Raleigh, Charles just to just to add briefly.

So you have to look in the back of the following here the day to see that and that puts us in a we don't get the 50 cent acre too much we have differentiation and forward sales and we're a different level I think based on US fear is probably pretty good shape on gas actually.

Speaker Change: We took our learnings from our Eagle Ford completions in 2023 had a fundamentally different completion style in our Montney and we saw tremendous results and we use that information and when we went in to do the K Bob completions. This year, we've made some adjustments for localizing it for K, Bob but at the same type of benefits we saw in tougher we apply.

Eric Hambly: Just to add briefly, we took our learnings from our Eagleford completions and, in 2023, had a fundamentally different completion style in Montany, and we saw tremendous results. And we used that information, and when we went in to do the KBOB completions this year, we made some adjustments for localizing it for KBOB, but the same type of benefits we saw in Tupper, we applied in KBOB. So, really, a completely optimized completion design there, and we're able to execute it even more efficiently on timing and cost and get exceptional well results, and I expect to see those going forward to potentially have minor improvements as well.

Neil Mateth: Thank you sir and then the follow up is just you alluded to Terinova and recognize a smaller context report folio and then you're not supposed to operate her here, but you just your perspective on. And as an owner, you know, how far are we away from getting that to adopt them all operations. I'll let Eric opon on that I'm too emotional about it Neil. Thanks Roger. We're a bit frustrated with the operators performance in the second quarter you can see how to fairly significant impact to us in under performing second quarter oil and Terinova.

K Bob: K Bob.

Speaker Change: Really completely optimized completion design, there and we're able to execute it even more efficiently on timing and cost.

Speaker Change: And get exceptional well results and I expect to see those going forward to potentially have minor improvements as well.

Roger Jenkins: Hey, Charles, one more thing. I got the word from your founder, Mr. Johnson, this morning. Sorry about that. Thinking about you guys today. He was a legend, a big guy in New Orleans.

Charles: Hey, Charles one more thing I got the word of your founder Mr. Johnson. This morning, sorry about that.

Speaker Change: Thinking about you guys today, he's a legend legend Guy in New Orleans.

Charles Meade: Roger, that is appreciated by me and by the whole firm. I feel comfortable saying that. Thank you. The follow-up, Roger, you referenced your opportunities in the ocean. I know this is kind of peering a little bit further ahead, but a question about the Cote d'Ivoire, and uh... i know that you guys are going to have to have a uh... replacement of field development planning in twenty five But it's also that you expect to get your new seismic back later this year, and I'm curious if you could maybe offer any insight into what sort of decisions that new seismic will inform, and if maybe they have to bear on some of the reasons that that pay-on wasn't initially developed, maybe about whether it's questions about reservoir connectivity or compartmentalization that you expect to resolve, or just maybe you can paint the bigger picture for us there with respect to the seismic.

Speaker Change: Roger that.

Leo Mariani: It is appreciated by me and by the whole firm.

Neil Mateth: We are an 18% working interest owner and that with son with son core and son of us obviously having large ownership. We work with the operator and offer assistance and guidance and extent we can as an on operated partner. I feel that they have continued to make improvement and we're expecting that ultimately they will get through their larger than expected downtime issues and have steady operations and later this year we ought to see a 6000 barrel day net to us production rate. So I'm confident they'll get there just a little slower than we'd like. Thanks Eric. Thanks Roger. Thank you Neil. Good talking to you. Take care.

Speaker Change: I feel comfortable saying that.

Roger Jenkins: Thanks, Charles. A really good question.

Leo Mariani: Thank you.

Speaker Change: The the <unk>.

Speaker Change: A follow up.

Roger Jenkins: Roger you referenced your opportunities of the Ocean I noticed kind of period, a little bit further ahead, but.

Leo Mariani: A question about the Cote d'ivoire.

Speaker Change: And I know that you guys are going to have to have a we're planning to submit a field development planning in 'twenty five.

Eric Hambly: But it's also that you expect to get your new seismic back later this year, and I'm curious if you could maybe offer any insight into what sort of decisions that new seismic will inform, and if maybe they have to bear on some of the reasons that that pay-on wasn't initially developed, maybe about whether it's questions about reservoir connectivity or compartmentalization that you expect to resolve, or just maybe you can paint the bigger picture for us there with respect to the seismic.

Speaker Change: But it's also that you expect to get your your new size of the new seismic back later this year and I'm curious if you could maybe offer any insight into into what sort of decisions that new seismic will inform and it may be.

Eric Hambly: Maybe they have to bear on some of the reasons that the pay on wasn't initially developed maybe about whether it's questions about reservoir connectivity.

Eric Hambly: Compartmentalize nation that you expect to resolve or just maybe you can paint.

Your next question comes from Carlos Escalante from Wolf Research. Please go ahead. Morning Carlos. Good morning Roger and team. How are you guys doing? I'm doing great. I get that like to start out my question with the shift on your murder 3.0 frameworks into the current quarter. You cite the 50% of adjusted free cash while located to share buybacks and potential dividend increases. And I wonder and curious about how do you think about specifically that the latter part of that for the frameworks.

Eric Hambly: Paint the bigger picture for us there with respect to the the seismic.

Roger Jenkins: I think the big 3D seismic is going to connect us from the shore to ultra-deep water. We're also bookended by two big discoveries by ENI on both the east and west of us in this description here. We have a prospect very near the moraine, a big stoat announcement by ENI, which is a different type of situation because we're right there with another prospect in the same situation. As to Pond, Pond is a good discovery. Pond has a great amount of data.

Speaker Change: Thanks, Charles really good question I think the big <unk> to connect us from the shore to ultra deep water, but also bookended by two big discoveries by Eni on both.

Speaker Change: East and west of Us and this description here.

Speaker Change: We have a prospect very near that Maureen Big Stope announcement by Eni, which is a different type situations right there with another prospect.

Speaker Change: Same situation.

Speaker Change: S. Upon palms is a good discovery upon its great amount of data almost properly delineated by the prior owners what's changed there as the gas market. What's changed there is cote d'ivoire wanted to be in electric supplier to their neighbors whats changed there rolling blackouts in Cote d'ivoire, we hear possibly and they want to have.

Carlos Escalante: What's your dividend growth policy? Now that you entered murky 0.0 earlier and does one work at the expense of the other? And I guess just generally how do you manage in between buyback and dividend growth at this point of where you are? Thank you that question very good question. If you really want many what I see in this is when you build these frameworks. You know we're primarily buyback and dividend increases that would be a one off dividend or change in dividend policy.

Roger Jenkins: The Pond was properly delineated by the prior owners. What's changed there is the gas market. What's changed there is Cote d'Ivoire wanted to be an electric supplier to their neighbors. What's changed there are rolling blackouts in Cote d'Ivoire, we hear, possibly, and they want to have gas and probably didn't want the gas then. It's a gas field, rich gas with an oil

Speaker Change: Gas and probably didn't want the gas then it's a gas field rich gas with an old Ram.

Roger Jenkins: We're working with them, and they want this done. They requested that we, Murphy, which operates big things offshore from scratch, be our calling card. That was their request. The gas market's changed. There's not a compartmentalization or subsurface concern with Pond at all.

Murphy: We're working with them and they want this done they requested that we Murphy, which operate.

Speaker Change: Big things offshore from scratch is our calling card and that was their request to the gas markets change there is not a <unk> of subsurface concern with <expletive> at all is the change in market and we bring to bear our low cost fast development ability that the reason, we got the box and that's why we're in.

Carlos Escalante: I can tell you today that the focus of this murky 3.0 is buybacks. We have been a long term dividend player my entire life since 1961 we've been paying a dividend return billions of dollars to shareholders through dividend. So if you look at our framework in which I'm sure you're familiar. You back out dividends underneath to get to the formula for our adjusted free cash flow that's shared in this slide and numerous slides and publications.

Roger Jenkins: It's just a change in market, and we bring to bear our low-cost, fast development ability. That's the reason we got the block. And that's why we're an alternative to super majors in that type of exploration around the world. And that's why we've been very successful internationally. And because things are important to us and are not as important to a supermajor because they have many, many options. Let's go over at a high level what's going on there, Charles.

Eric Hambly: And that's why we're an alternative to super majors in that type of exploration around the world. And that's why we've been very successful internationally. And because things are important to us.

Speaker Change: Alternative to Super majors and that type of exploration around the world.

Eric Hambly: It's how we've been very successful internationally.

Eric Hambly: Because things are important to us and are not as important to a super major because they have many many opportunities that's kind of a high level of what's going on there Charles.

Carlos Escalante: So we see that as a difference. We have a typical dividend we're trying to increase our dividend every year. And that we see the minimum minimum of 50% of adjusted free cash flow to really be focused on buyback to this time and not about changing our dividend policy. So every year at the beginning of the year we will be increasing our dividend hopefully in this type of price regime of this type of business regime that we're in.

Charles Meade: That's good detail. Thank you, Roger. Thank you. Take care.

Eric Hambly: Good detail. Thank you Roger.

Eric Hambly: Oh, thank you. Take care.

Speaker Change: Thank you take care.

Operator: Our final question comes from Josh Silverstein from UBS. Please go ahead.

Eric Hambly: Our final question comes from Josh Silverstein from UBS. Please go ahead.

Joshua Silverstein: Good morning, guys. I just wanted to follow up on some of the questions raised this morning on the Montaney. You guys have a deep resource space. You mentioned you're kind of up against plant capacity there. What does the next phase for that asset look like? Do you build some additional capacity up there just to bring forward some of the inventory that you have? Or is this kind of just flat at this capacity level for the foreseeable future? Thanks. Okay.

Speaker Change: Thanks, Good morning, guys.

Speaker Change: Just to follow up on some of the question good morning.

Speaker Change: On the Montney you guys have a deep resource base, you mentioned, you're kind of up against the plant capacity. There. What is the next phase for that asset look like do you build some additional capacity there.

Carlos Escalante: We want to be a dividend increase and then we'll be using buybacks and we want to be a company that's ever increasing dividend per share cash flow per share. And when we do that will be a successful company. And so we're going to use the buyback of stock to ever increase our EPS or cash flow per share and then increasing our dividend per share. But it is said stated in that framework dividend increases with make no mistake. This is a buyback focus for our management team right now will be for a while. Thank you for that answer.

Speaker Change: To bring forward some of the inventory that you have or is this kind of just.

Eric Hambly: Flat.

Speaker Change: This capacity level for the foreseeable future.

Eric Hambly: Okay, yeah, thanks, Josh. We're really pleased with the performance we've had here in the Monty and able to execute on our multi-year plan of building production while generating free cash flow in that asset. We are up against plant capacity, and we anticipate in the coming years having to allocate capital to effectively keep that plant full or just under full. And for the near term, that's what we expect to do. However, if we were to consider a significant growth in production there, we would need to commit to an expansion of the plant and also additional pipeline capacity.

Josh: Okay, Yeah. Thanks, Josh.

Eric Hambly: We're really pleased with the performance we've had here in the Montney and able to execute on our multiyear plan.

Eric Hambly: Building production, while generating free cash flow in that asset.

And then on my question to ask you and perhaps Eric, what do you see as your sustaining capital being once you hit 2027 and 2028, where you have clear line of side on your projects, and once you reach that 200,000 barrels of oil equivalent per day threshold, what do you see as you're sustaining capital going forward that point? Go ahead, Eric, that's sure. So what we think about our sort of longer-term view, we'll be get to that 210, 220,000 barrels a day range, 2027 on, is we anticipate reinvesting about 45% of our operating cash flow, and that may move around from year to year.

Eric Hambly: We are up against the capacity we anticipate over.

Eric Hambly: In the coming years to allocate capital to effectively keep that plant full or just under four and.

Eric Hambly: For the near term, that's what we expect to do.

Eric Hambly: If we were to consider a significant growth in production there we would need to commit to an expansion of the plant.

Eric Hambly: And also additional pipeline capacity and from a decision to do that to being online is approximately a three year process from a permitting engineering construction commissioning type of cycle and so it's not easy flip a switch and suddenly have a lot more.

Eric Hambly: And from a decision to do that to being online is approximately a three-year process through the permitting, engineering, construction, and commissioning type of cycle. And so it's not an easy flip of a switch and suddenly have a lot more. We do evaluate the potential of expanding the plants and increasing the rate there. Since we recognize that we have such a large resource with so many decades of remaining gas, bringing that value forward is something that we consider, we model, and we evaluate. If we decide to do it, it'll be pretty well signaled since there's a three-year timeline on it.

If you have a 75 dollar barrel world, we anticipate that that would be something around a billion dollars in your cap ex. Thank you, thank you. One thing I might just add to that is when we build our long-range plans, we never assume that we have successful exploration. So if we do have material exploration success, we would likely see an increase in capital to fund that development. That's one of the reasons why within our capital allocation framework, we're using the part of our just a free cash flow that doesn't go to share buyback to build cash on the balance sheet, so that in the future, we can use that cash to fund successful exploration.

Eric Hambly: We do evaluate the potential of expanding the plants and increasing the rate there. Since we recognize that we have such a large resource with so many decades of remaining gas, bringing that value forward is something that we consider, we model, and we evaluate. If we decide to do it, it'll be pretty well signaled since there's a three-year timeline on it. We are also very conscious of the fact that we're producing half a BCF in a 17 BCF market.

Eric Hambly: We do evaluate the potential of expanding the plants and increasing the rate there since we recognize that we have such a large resource with so many decades of remaining gas bringing that value forward is something that we consider we model we evaluate.

Eric Hambly: If we decided to do it it will be pretty well signaled since theres, a three year timeline on it.

Eric Hambly: We are also very conscious of the fact that we're producing half of Bcf in the 17 Bcf market. So if we added half a bcf it would be a significant increase to what is happening in the ACO market and we're sort of going to watch a little bit on the sidelines of what happens with LNG capacity and as that grows.

Eric Hambly: So if we added half a BCF, it would be a significant increase to what is happening in the AECO market. And we're sort of going to watch a little bit on the sidelines of what happens with LNG capacity. And as that grows with takeaway, that's been different than what we've seen in the past to a totally different market, that perhaps AECO strengthens, and an additional half a BCF of volumes would be supported by reasonable AECO prices.

Speaker Change: With takeaway that's been different than what we've seen in the past to a totally different market that perhaps echo strengthens an additional half a bcf of volumes would be supported by reasonable eco prices. So.

So if you think about our current business with zero exploration success, what I said earlier applies, if we make a massive discovery somewhere, then we probably increase our capital to fund that. But these kind of things take a little bit of time, obviously.

Eric Hambly: So we're sort of carefully watching and evaluating that, and it's something we could do. We also may have a possibility in the future of participating in the LNG opportunity through selling our gas to some potential partners that are involved in phase two of LNG Canada, if that's something that is of interest to them.

Speaker Change: It was sort of carefully watching and.

Eric Hambly: Evaluating that and it's something we can do.

Eric Hambly: We also may have a possibility in the future of participating in LNG opportunity through selling our gas to some potential partners that are involved in the phase two of LNG, Canada. If that's something that is of interest to them.

Eric Hambly: Thanks for the clarification, guys. Have a good one.

Thank you.

Paul Chang: Appreciate call. Your next question comes from Paul Chang from Scotia Bank. Please go ahead. Hi. Morning, Paul. How are you doing? Hey, good morning.

Joshua Silverstein: Got it. That's helpful. And then maybe just on the balance sheet, return to capital framework, I'm curious what you think the kind of base level of cash is that you want to hold. I mean, even if you're still at that 50% of free cash flow level goes to buybacks. You can run scenarios in which you get to basically a zero net debt position in 2026. Do you want to continue to build that cash relative to the $300 million, $400 million that you guys had beforehand? Or is that kind of a comfort level for you guys around here?

Speaker Change: Got it that's helpful.

Too question, May I?

Speaker Change: And then maybe just on the balance sheet and return of capital framework.

Paul Chang: First, I think it's for Eric. Eric, can you tell us that what happened to the work over in that with the delay? And because I thought the expense will be essentially done by the second quarter. And initially, I think you are targeting 68. And now you see actual spending on 65, but then the third quarter is another 35. So the end up is going to be much higher than when you initially thought.

Speaker Change: What you think the kind of base level of cash is the one holds I mean, even if you are still at that 50% of free cash flow level goes to the buybacks.

Paul Chang: Can you tell us that what happened there? And also that can you talk about you still targeting by 2027 and 210 to 220,000. If we look at the risk factor, where you see is the biggest risk in terms of achieving that.

Speaker Change: You can run scenarios in which you get to basically zero net debt position in 2026.

Speaker Change: Do you want to continue to build that cash relative to the 300 or 400 million that you guys have had beforehand or is that.

Speaker Change: Kind of a comfort level for you guys around there. Thanks.

Tom Mireles: Thanks. All right, thanks. Thanks, Josh. I'll give you a little color on that.

Tom Mireles: Alright, thanks. Thanks, Josh.

Speaker Change: Alright, thanks, Thanks, Josh.

Eric Hambly: Give me a little color on that.

Tom Mireles: I'll give you a little color on that with our base level cash. To run our business, we do try to maintain roughly $325-$350 million, just for the needs that we have around the corporation. As we move past our debt target, once we get to a billion and we start putting more cash on the balance sheet, that'll give us more flexibility, and we'll have to see where we are a few years down the road.

Eric Hambly: Our base level of cash.

Speaker Change: In our business, we do try to maintain roughly.

Eric Hambly: 325 $350 million.

Speaker Change: Just for the needs that we have around the corporation as we move past our debt target and once we get to $1 billion.

Tom Mireles: Does it lead us to more debt reduction? Do we have exploration success that we can fund or additional buybacks? Those are the types of options we'd be looking at at that time. We look forward to getting to that point. We think we're just a few quarters away from pushing to the right into 2025 on our debt target. But at that point, when we start accumulating more cash, then we'll make those decisions then.

And second question, I think, is for Tom. It appears that there's someone off benefit in your US operation, because I see a credit bondage, you're showing a credit in both G and A and the other expense. Can you tell us that what are those?

Eric Hambly: And we do start putting more cash on the balance sheet that'll give us more flexibility and we will have to see where we are a few years down. The road is it does it lead us to more debt reduction we have exploration success that we can that we can fund.

Speaker Change: So thats or additional buybacks. So those are the types of options would be looking at that time, we look forward to getting to that point.

Tom Morales: Thank you. That's three questions, Paul, but we'll answer them all. Okay, we'll get started. We're talking about talking about the the Neater Marwell. Just go back and have some context. We originally planned that as a fairly simple upper completion workover and it escalated into a side track. And the side track operation just took a little bit longer in the completion stage than we anticipated. This is a very high rate well. So missing out on 20 days or so of production from a high rate well impacts the production rate average for the quarter.

Speaker Change: We think we are just a few quarters away from our <unk>.

Speaker Change: Pushing to the right into 2025 on our debt target.

Speaker Change: But at that point, when we start accumulating more cash than we will.

Eric Hambly: We will make those decisions then.

Speaker Change: Got it.

Eric Hambly: Yes.

Operator: There are no further questions from our phone lines. I would now like to turn the call back over to Roger Jenkins for any closing remarks. Thanks, everyone, for calling.

Eric Hambly: There are no further questions from our phone lines I would now like to turn the call back over to Roger Jenkins for any closing remarks.

Roger Jenkins: Thanks everyone for calling in today. We had a good call, had a lot of good questions. We appreciate those. Kelly and Megan, their team, are standing by to help our investors with further clarifications, and, as usual, our management team stands by to respond to investors and our analysts. So take care, have a great day, and see you in another quarter.

Operator: Thanks, everyone, for calling.

Tom Morales: It wasn't anything, you know, particularly alarming or concerning that just the operations took longer than our estimate, and in fact, if you look at our second quarter workover expense, it was very close to our guide. So we do see a little bit of the workover drifting into the third quarter. We anticipated that Mitter Mar well being done effectively spending money in the second quarter and it drifted into the third quarter a little bit, which impacts a little bit the workover expense and the production.

Speaker Change: Thanks, everyone for calling in today had a good call. It a lot of good questions. We appreciate those Kelly and Meg and their team standing by to help our investors with further clarification Zane as usual our management team stand by that.

Speaker Change: Respond to investors and our analysts so take care and have great day and see in another quarter.

Operator: <unk>.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you disconnect your lines.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask

Speaker Change: Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and we ask that you disconnect your lines.

Tom Morales: And then that impacts the following activity as well, the timing of the TC4 well. I think I addressed that first part of your question. Sure, because I thought, is it always in the original plan that third quarter you have workover expense because maybe I thought you wrong, I thought third quarter you're not supposed to have workover expense before. Yeah, I believe we expected third quarter workover expense. The timing may have moved just slightly with some cost drifting into the second quarter, but we can take a look at that.

Operator: Yeah.

Tom Morales: One thing I might do just to reiterate, if you look at our overall business in the second quarter, our L.O.E, per V.O.E, was $15.9. If you exclude workovers, we were $10.77. In the second half of this year, we expect our operating expenses to drift down into the 11 to $13 B.O.E, range with production volumes higher from our entrepreneur business for the second quarter.

Thank you. If you give me a second here, I'll talk a little bit about your question around the long-term production rate. The things in our business that caused us to have variability of a range are primarily non-operated activity in our offshore business and exactly predicting correctly the rates of new wealth to come online. Those are the main drivers for our production range. The other thing that has become a little bit challenging to predict, and we've tried to do the best we can, is our Monteney volumes are pretty large, and the effect of royalty variation driven by gas prices can swing the V.O.E, quite a bit.

I do want to point out that the overall royalty in the Monteney is very, very low, so they do move around on us a little bit, and that affects our range, it's one of the reasons we communicated production range.

Tom Morales: Okay, perfect. Thank you. Okay. Paul, just wanted to make sure I understood your question, was that in reference to the other income? No, when I look at it in your press with these, when you break down the result in the ENP by US, Canada, and then when I look at the US, it expands my item. Your GNA is a small credit, like three minutes, in self-expansions at income, and then the other expands is a 25-minute credit, so it seems like unusual, wondering that is that one of what related those?

Tom Morales: We can't find what you're talking about, Paul, at this time. There might be something we can... Our GNA is industry-leading pretty much, very low, and I'm not sure, Paul will have to... Let's dig into that. Let's dig into that and get with Kelly and call you back.

Okay, thank you. Okay, thanks Paul. Appreciate it.

Leo Mariani: Your next question comes from Leo Mariani from Ross. Please go ahead. Hey Leo, good morning. Hey, good morning. I wanted to touch base on the Eagle Ford a little bit here. Kind of looking at your guide for the year. It looks like maybe that somebody could put the Eagle Ford well flipped into fourth quarter here, you know, from prior quarters. Just wanted to get a sense of what was happening there. It sounds like it might be some maintenance related issues.

Leo Mariani: And then, you know, as a result, when do we expect Eagle Ford production to peak for the year? Is that going to be in 3K or 4K as you all see it here? Okay, thanks very much Leo.

Our operated well program, the Eagle Ferd has actually been delivering a little bit earlier. The normal we have had a little bit of minor change in our nonoperative program. So the cadence overall of net wells may have just very slightly altered. I wouldn't characterize the overall impact as negative at all. In fact, I think we're on average delivering slightly ahead of schedule. So that combined with the well performance exceeding expectations across most of our wells. And a little bit earlier timing.

Eric Hambly: We've seen a little bit higher rates earlier than expected peak production for Eagle Ferd based on the timing of our well delivery will be in the third quarter and see a bit of decline heading into the fourth quarter. Okay, that's helpful. And then there's for the respect to L.O.E, you talked about L.O.E, coming down in the second half of the year, which is nice to see. You know, if I just take a step back and look at your overall L.O.E, it's up part of it this year and 24 versus where you came in last year.

Eric Hambly: And it sounds like workovers is driving the majority of this at the end of the day. I just wanted to kind of get a sense, you know, as you look out over the next couple of years. I mean, you think that workover activity on some of these golf wells can be similar in the next few years. Or do you think this year was maybe more than one off with some heavier activity and that should come down in the next couple of years. And perhaps your overall L.O.E, will be dropping.

Yeah, definitely our workover activity this year is an outlier, quite a significant outlier. And I expect to have very limited workover activity in our offshore business going forward. If you look at our second quarter of 24, our L.O.E, excluding workovers was $10.77. That compares to prior year, second quarter of $10.32. And most of that difference, which is pretty minor, is driven by Terra Nova restarting. Terra Nova has a bit higher operating expense than our other field or other operating Gulf Mexico fields.

So it does drive a little bit of the variance. But again, we're talking about 30 cents or so. Okay, now that's helpful. And then just in the golf, I know that you folks are still looking to do more work on Ocatillo and it's a not-op well. But it seems like this would be a subsea tieback just given the size. Is there infrastructure nearby that you guys could tie that back to? That's correct. We don't operate the well.

Eric Hambly: Oxdental operates the well, and we are working with the partner group there for a plan of development of the field, and I anticipate that it'll be tied back to a nearby facility operated by oxy. Okay, thank you.

Please press star followed by the one should you have a question.

Charles Meade: Our next question comes from Charles Meade from Johnson Rice, please go ahead. Good morning, Charles. Good morning, Roger, to you and your whole team there up, Roger, I want to go back to your comment earlier in the Q&A, or I think when you said you have halacious wells in Canada, and I wonder if you could give me a little more detail. It looks like you've had some great results in both the K-bob and the topper.

Charles Meade: And I wonder is that just a happy coincidence, or is there some over our gene kind of unifying theme there? No, we've been doing so well. If you go back to Eric's commentarianist grip, which is an outward guy I guess, we have some of the top wells we've ever had, we intend to improve our fracking and our execution based on our four or five year now reorganization of one operating team in Houston and lessons learned between Eagleford and there, and just really been delivering some record wells.

Charles Meade: Tupper main is an older part of Tupper that we got, oh, I might have got that 17 years ago, and we went in there and did some old fracking and development there, came back with the new incredible wells there, industry leading wells there, if you benchmark Murphy against all North American gas, lowest break even price there is, adjusted back to ACO, et cetera. It's just a good run of great wells in the Montany and K-bob 2 is a place where we've been dormant.

Charles Meade: We wanted to go and drill some wells and take our new ideas and take our new fracking to Duvernet Shale and prove that we have another Catarina. It's exactly like the Catarina, which is a major Eagleford area that's drilled by many piers, many public piers, sold after acreage in the Eagleford. So we have another Eagleford business in Duvernet that just makes $5 a barrel less of oil and much higher NGL. So these wells are very economic and it just proves up our long term giants, onshore business for, we're not a company run out of locations or opportunities to go along with all the opportunities we have in the ocean and our big Vietnam future with exploration and a big project there.

Charles Meade: So just wanted to highlight that day and on slide 12 shows that we're the second best operator in K-bob and we haven't put wells on the ground there in three or four years and we're going to top operators on a productivity basis in the Montany. So that's what I was getting at there, Charles. Thank you, thanks for that, Roger. Just to add briefly, we took our learnings from our Eagleford completions and in 2023, had a fundamentally different completion style in our Montany and we saw tremendous results and we used that information and when we went in to do the K-bob completions this year, we made some adjustments for localizing it for K-bob but the same type of benefits we saw in Tupper, we applied in K-bob, so really a completely optimized completion design there and we were able to execute it even more efficiently on timing and cost and get exceptional well results and I expect to see those going forward to potentially have minor improvements as well.

Charles Meade: Hey, Charles, one more thing. I got the word of your founder, Mr. Johnson, this morning. Sorry about that. Thinking about you guys today, he was a legend, legend guy in New Orleans. Roger, that is appreciated by me and by the whole firm. I feel comfortable saying that. Thank you. The follow up, Roger, you referenced your opportunities in the ocean. I know this is kind of peering a little bit further ahead, but a question about the Coat of Law, and I know that you guys are going to have to have a plan to submit a field development plan in 25.

Charles Meade: But it's also that you expect to get your new seismic back later this year. And I'm curious if you could maybe offer any insight into into what sort of decisions that new seismic will inform. And if maybe, maybe they have to bear on some of the reasons that that pay on wasn't going to initially developed, you know, maybe about, you know, whether it's questions about reservoir connectivity or carp compartmentalization that you expect to resolve, or just maybe you can take the bigger picture for us there with with respect to the seismic.

Charles Meade: Thanks, Charles, really good question. I think the big 3D seismic connect us from the shore to ultra deep water, also book ended by two big discoveries by E and I on both the east and west of us in this description here. We have a prospect very near the Maureen big stoic announcement by E and I, which is a different type situation goes right there with another prospect in same situation. As to pond, palm is a good discovery, pond is a great amount of data, palm is properly delineated by the prior owners.

Charles Meade: What's changed there is the gas market. What's changed there is Cote DeVar want to be an electric supplier to their neighbors. What's changed there rolling blackouts and Cote DeVar we hear possibly. And they want to have gas and probably didn't want the gas then. It's a gas field rich gas with an old rim. And we're working with them and they want this done. They requested that we Murphy which operate, you know, big things offshore from scratch is our calling card.

Charles Meade: And that was their request. So the gas market's changed. There's not a compartmentalization of subsurface concern with pond at all. It's just a change in market and we bring to bear our low cost fast development ability that day. So reason we got the box. And that's why we're an alternative to super majors in that type of exploration around the world. And that's how we've been very successful internationally. And because things are important to us and are not as important to super major because they have many, many opportunities. That's called a high level what's going on there Charles. That's good detail. Thank you Roger. Oh, thank you.

Take care.

Josh Silverstein: Our final question comes from Josh Silverstein from UBS. Please go ahead. Yeah, thanks. Good morning guys. Just wanted to follow up on some of the questions morning on the mountain. You guys have a deep resource space. You mentioned you're kind of up against the the plank capacity there. What is the next phase for that as it look like? Do you build some additional capacity if they're just to bring forward some of the inventory that you have or is this kind of just.

Josh Silverstein: This capacity level for the foreseeable future. Thanks. Okay, yeah, thanks, Josh. We're really pleased with the performance we've had here in the Monney and able to execute on our multi-year plan of building production while generating free cash flow in that asset. We are up against capacity. We anticipate over the coming years to allocate capital to effectively keep that plan full or just under full. And for the near term, that's what we expect to do.

Josh Silverstein: If we were to consider a significant growth in production there, we would need to commit to an expansion of the plant and also additional pipeline capacity. And from a decision to do that to being online is approximately a three-year process from a permitting, engineering, construction, commissioning type of cycle. And so it's not an easy flip of switch and suddenly have a lot more. We do evaluate the potential of expanding the plants and increasing the rate there, since we recognize that we have such a large resource with so many decades of remaining gas, bringing that value forward is something that we consider, we model, we evaluate.

Josh Silverstein: If we decide to do it, it'll be pretty well signaled since there's a three-year timeline on it. We are also very conscious of the fact that we're producing half of BCF in a 17 BCF market. So if we added half of BCF, it would be a significant increase to what is happening in the ACO market. And we're sort of going to watch a little bit on the sidelines of what happens with LNG capacity.

Josh Silverstein: And as that grows with takeaway that's been different than what we've seen in the past to a totally different market that perhaps ACO strengthens and additional half of BCF of volumes would be supported by reasonable ACO prices. So we're sort of carefully watching and evaluating that, and it's something we could do. We also may have a possibility in the future of participating in LNG opportunity through selling our gas to some potential partners that are involved in the phase two of LNG Canada, if that's something that is of interest to them.

Josh Silverstein: Got it, that's helpful. And then maybe something on the balance sheet, or trying to calculate the framework, I'm curious what you think the kind of base level of cash is that you want to hold, I mean, even if you're still at that 50% of free cash level, it goes to the buybacks. You can run scenarios on which you get to a basically zero net debt position in 2026. Do you want to continue to build that cash relative to the 300 400 knowing that you guys have beforehand, or is that kind of a comfort level for you guys around there?

Josh Silverstein: Thanks. All right, thanks. Thanks, Josh. I'll give you a little color on that. Our base level cash, you know, to run our business, we do try to maintain roughly $325 to $350 million, just for the needs that we have around the corporation. As we move past our debt target, you know, once we get to a billion, and we do start putting more cash on the balance sheet, that will give us more flexibility, you know, and we'll have to see where we are a few years down the road as it lead us to more debt reduction.

Josh Silverstein: Do we have exploration success that we can, that we can fund, you know, so that's, or additional buybacks. So those are the types of options we'd be looking at at that time. We look forward to getting to that point. You know, we think we're just a few quarters away from our, you know, pushing to the right into 2025 on our debt target. But at that point, when we start accumulating more cash, then we'll, we'll, we'll, we'll make those decisions, FIS.

There are no further questions from our phone lines.

I would now like to turn the call back over to Roger Jenkins for any closing remarks. Thanks everyone for calling in today. You had a good call. I had a lot of good questions. We appreciate those, Kelly, and Megan, their team standing by to help our investors with further clarifications and as usual our management team stands by to respond to investors and our analysts. Take care and have a great day and see you in another quarter. Thanks.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and we ask that you disconnect your lines. Music

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