Murphy Oil Q4 2025 Murphy Oil Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Murphy Oil Corp Earnings Call
Speaker #1: Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator.
Speaker #1: This call is being recorded on Thursday, January 29, 2026. We request that our callers limit their questions to one main question and one follow-up.
Speaker #1: I would now like to turn the conference over to Atif Riaz, Vice President, Investor Relations and Treasurer. Please go ahead.
Speaker #2: Thank you, Joelle. Good morning and welcome to our fourth quarter 2025 earnings conference call. Joining me today are Eric Hambly, President and CEO; Tom Mireles, Executive Vice President and CFO; and Chris Lorino, Senior Vice President, Operations.
Atif Riaz: Thank you, Joelle. Good morning and welcome to our Q4 2025 Earnings Conference Call. Joining me today are Eric Hambly, President and CEO; Tom Mireles, Executive Vice President and CFO; and Chris Lorino, Senior Vice President, Operations. Yesterday, after market close, we issued our Q4 earnings release, a slide presentation, and a stockholder update. These documents can be found on Murphy's website, and we will reference them today throughout our call. As a reminder, today's call contains forward-looking statements as defined under U.S. securities laws. No assurances can be given that these events will occur or that the projections will be attained. A variety of factors exist that may cause actual results to differ. For further discussion of risk factors, please refer to our most recent annual report filed with the SEC. Murphy takes no duty to publicly update or revise any forward-looking statements except as required by law.
Atif Riaz: Thank you, Joelle. Good morning and welcome to our Q4 2025 Earnings Conference Call. Joining me today are Eric Hambly, President and CEO; Tom Mireles, Executive Vice President and CFO; and Chris Lorino, Senior Vice President, Operations. Yesterday, after market close, we issued our Q4 earnings release, a slide presentation, and a stockholder update. These documents can be found on Murphy's website, and we will reference them today throughout our call. As a reminder, today's call contains forward-looking statements as defined under U.S. securities laws.
Speaker #2: Yesterday after market close, we issued our 4th Quarter earnings release, a slide presentation, and a stockholder update. These documents can be found on MURPHY's website, and we will reference them today throughout our call.
Speaker #2: As a reminder, today's call contains forward-looking statements as defined under U.S. Securities Laws. No assurances can be given that these events will occur, or that the A variety of factors exist that may projections will be attained.
No assurances can be given that these events will occur or that the projections will be attained. A variety of factors exist that may cause actual results to differ. For further discussion of risk factors, please refer to our most recent annual report filed with the SEC. Murphy takes no duty to publicly update or revise any forward-looking statements except as required by law. Throughout today's call, production numbers, reserves, and financial amounts are adjusted to exclude non-controlling interest in the Gulf of Mexico. I will now turn the call over to Eric for opening remarks.
Speaker #2: Cause actual results to differ. For further discussion of risk factors, please refer to our most recent annual report filed with the SEC. Murphy takes no duty to publicly update or revise any forward-looking statements except as required by law.
Speaker #2: Throughout today's call, production numbers, reserves, and exclude non-controlling interest in the Gulf financial amounts are adjusted to of America. I will now turn the call over to Eric for opening
Atif Riaz: Throughout today's call, production numbers, reserves, and financial amounts are adjusted to exclude non-controlling interest in the Gulf of Mexico. I will now turn the call over to Eric for opening remarks.
Speaker #2: remarks. Thank you,
Eric Hambly: Thank you, Atif, and thank you, everyone, for joining us. I trust you have reviewed my quarterly stockholder update released yesterday, which covers our Q4 results, highlights for 2025, and our detailed plans for 2026. This morning, I will begin by sharing some key insights about our performance and then focus primarily on the year ahead. Before we dive in, I want to thank our employees. Their hard work and commitment made last year's impressive exploration and operational successes possible. Looking back, 2025 was underpinned by strong execution across our assets despite a challenging commodity price environment. Our production, both for the Q4 and full year, exceeded guidance as we delivered some of the best-performing onshore wells in company history and maintained strong uptime at our key offshore facilities.
Eric Hambly: Thank you, Atif, and thank you, everyone, for joining us. I trust you have reviewed my quarterly stockholder update released yesterday, which covers our Q4 results, highlights for 2025, and our detailed plans for 2026. This morning, I will begin by sharing some key insights about our performance and then focus primarily on the year ahead. Before we dive in, I want to thank our employees. Their hard work and commitment made last year's impressive exploration and operational successes possible. Looking back, 2025 was underpinned by strong execution across our assets despite a challenging commodity price environment. Our production, both for the Q4 and full year, exceeded guidance as we delivered some of the best-performing onshore wells in company history and maintained strong uptime at our key offshore facilities.
Speaker #3: Atif, and thank you everyone for joining us. I trust you have reviewed my quarterly stockholder update released yesterday, which covers our Q4 results, highlights for 2025, and our detailed plans for 2026.
Speaker #3: This morning, I will begin by sharing some key insights about our performance and then focus primarily on the year ahead. Before we dive in, I want to thank our employees.
Speaker #3: Their hard work and commitment made last year's impressive exploration and operational successes possible. Looking back, 2025 was underpinned by strong execution across our assets despite a challenging commodity price environment.
Speaker #3: Our production, both for the fourth quarter and full year, exceeded guidance as we delivered some of the best-performing onshore wells in company history and maintained strong uptime at our key offshore facilities.
Speaker #3: We also managed costs closely, reducing lease operating expenses by 20% year over year and capital expenditures below guidance, partly due to realized efficiency gains in our Eagle for Shale program.
Eric Hambly: We also managed costs closely, reducing lease operating expenses by 20% year-over-year and capital expenditures below guidance, partly due to realized efficiency gains in our Eagle Ford Shale program. Exploration and appraisal results were certainly the highlights of 2025 as we advanced four exploration and appraisal wells across three continents in the Q4 alone. Knowing that many of you were keenly anticipating the results from these wells, we released updates as they became available. We reported a highly successful appraisal result at Hai Su Vang Golden Sea Lion field, oil discoveries at both of our exploration wells in the Gulf of Mexico, and unfortunately, a dry hole at Civette in Côte d'Ivoire. Although the results for Civette were disappointing, we remained optimistic about the next two prospects in the program, Caracal and Bubale, as all three wells were strategically chosen to target independent plays.
We also managed costs closely, reducing lease operating expenses by 20% year-over-year and capital expenditures below guidance, partly due to realized efficiency gains in our Eagle Ford Shale program. Exploration and appraisal results were certainly the highlights of 2025 as we advanced four exploration and appraisal wells across three continents in the Q4 alone. Knowing that many of you were keenly anticipating the results from these wells, we released updates as they became available. We reported a highly successful appraisal result at Hai Su Vang Golden Sea Lion field, oil discoveries at both of our exploration wells in the Gulf of Mexico, and unfortunately, a dry hole at Civette in Côte d'Ivoire.
Speaker #3: Exploration and appraisal results were certainly the highlights of 2025 as we advanced four exploration and appraisal wells across three continents in the 4th Quarter alone.
Speaker #3: Knowing that many of you were keenly anticipating the results from these wells, we released updates as they became available. We reported a highly successful appraisal result at Hai Su Vong, a Golden Sea Lion Field, oil discoveries at both of our exploration wells in the Gulf of America, and unfortunately, a dry hole at Savette in Côte d'Ivoire.
Although the results for Civette were disappointing, we remained optimistic about the next two prospects in the program, Caracal and Bubale, as all three wells were strategically chosen to target independent plays. In Vietnam, the Hai Su Vang Golden Sea Lion appraisal found 429ft of net oil pay without encountering the oil-water contact, indicating a resource that is significantly above our initial midpoint of 170 million barrels of oil equivalent. Although we're continuing the appraisal campaign with 2 additional wells, results to date suggest a significant new growth business for Murphy in Vietnam. To put that into context, our exploration results in Vietnam will help us build a business that by the early 2030s will surpass the scale of our current Eagle Ford Shale operations. This outcome exemplifies the long-term organic value creation capability that makes us unique.
Speaker #3: Although the results for Savette were disappointing, we remained optimistic about the next two prospects in the program: Caracal and Bubal. As all three wells were strategically chosen to target independent plays, in Vietnam, the Hai Su Vong, Golden Sea Lion appraisal found 429 feet of net oil pay without encountering the oil-water contact, indicating a resource that is significantly above our initial midpoint of 170 million barrels of oil equivalents.
Eric Hambly: In Vietnam, the Hai Su Vang Golden Sea Lion appraisal found 429ft of net oil pay without encountering the oil-water contact, indicating a resource that is significantly above our initial midpoint of 170 million barrels of oil equivalent. Although we're continuing the appraisal campaign with 2 additional wells, results to date suggest a significant new growth business for Murphy in Vietnam. To put that into context, our exploration results in Vietnam will help us build a business that by the early 2030s will surpass the scale of our current Eagle Ford Shale operations. This outcome exemplifies the long-term organic value creation capability that makes us unique. In 2026, we will strategically invest in development, exploration, and appraisal activities in the Gulf of Mexico, Vietnam, and Côte d'Ivoire that will grow our portfolio and enhance shareholder value in the mid to long term.
Speaker #3: Although we're continuing the appraisal campaign with two additional wells, results to date suggest a significant new growth business for MURPHY in Vietnam. To put that into context, our exploration results in Vietnam will help us build a business that, by the early 2030s, will surpass the scale of our current Eagle for Shale operations.
Speaker #3: This outcome exemplifies the long-term organic value creation capability that makes us unique. In 2026, we will strategically invest in development, exploration, and appraisal activities in the Gulf of America, Vietnam, and Côte d'Ivoire that will grow our portfolio and enhance shareholder value in the mid to long term.
In 2026, we will strategically invest in development, exploration, and appraisal activities in the Gulf of Mexico, Vietnam, and Côte d'Ivoire that will grow our portfolio and enhance shareholder value in the mid to long term. Let's be upfront: we do not expect 2026 to be without its challenges. We're all aware of the unpredictable market environment and softening commodity prices. However, at Murphy, we've spent the last few years positioning the company to withstand a downturn. So this year is about making intentional, strategic investments that set the groundwork for growth far beyond the next few quarters, something that differentiates us from our peers.
Speaker #3: Let's be upfront. We do not expect 2026 to be without its challenges. We're all aware of the unpredictable market environment and softening commodity prices.
Eric Hambly: Let's be upfront: we do not expect 2026 to be without its challenges. We're all aware of the unpredictable market environment and softening commodity prices. However, at Murphy, we've spent the last few years positioning the company to withstand a downturn. So this year is about making intentional, strategic investments that set the groundwork for growth far beyond the next few quarters, something that differentiates us from our peers. From an operational perspective, our 2026 net production will be lower at 171,000 barrels of oil equivalents per day versus last year's 182,000 barrels of oil equivalents per day. Most of that production decrease is Tupper Montney natural gas volumes driven in part by higher gas prices and therefore higher royalties, so the cash flow impact will be muted. It's noteworthy that we'll maintain our Eagle Ford Shale production flat with 25% less capital spend this year.
Speaker #3: However, at MURPHY, we've spent the last few years positioning the company to withstand a downturn. So this year is about making intentional, strategic investments that set the groundwork for growth far beyond the next few quarters.
Speaker #3: Something that differentiates us from our peers. From an operational perspective, our 2026 net production will be lower at 171,000 barrels of oil equivalent per day versus last year's 182,000 barrels of oil equivalent per day.
From an operational perspective, our 2026 net production will be lower at 171,000 barrels of oil equivalents per day versus last year's 182,000 barrels of oil equivalents per day. Most of that production decrease is Tupper Montney natural gas volumes driven in part by higher gas prices and therefore higher royalties, so the cash flow impact will be muted. It's noteworthy that we'll maintain our Eagle Ford Shale production flat with 25% less capital spend this year.
Speaker #3: Most of that production decrease is tougher motiny natural gas volumes driven in part by higher gas prices and therefore higher royalties, so the cash flow impact will be muted.
Speaker #3: It's noteworthy that we'll maintain our Eagle for Shale production flat with 25% less capital spend this year. Additionally, our lease operating expenses will stay in line with the 10 to $12 per barrel range that we have previously guided.
Eric Hambly: Additionally, our lease operating expenses will stay in line with the $10 to $12 per barrel range that we have previously guided. We continue our focused exploration and appraisal program in the first half of 2026 with two appraisal wells in Vietnam's Hai Su Vang Golden Sea Lion field and two exploration wells in Côte d'Ivoire. In addition, as I mentioned in my stockholder update, we have expanded our exploration portfolio with an entry into offshore Morocco and acquisition of seven new blocks in the Gulf of America. Bid results are pending for another seven blocks in the Gulf of America where we were the apparent high bidder in the December 2025 lease sale.
Additionally, our lease operating expenses will stay in line with the $10 to $12 per barrel range that we have previously guided. We continue our focused exploration and appraisal program in the first half of 2026 with two appraisal wells in Vietnam's Hai Su Vang Golden Sea Lion field and two exploration wells in Côte d'Ivoire. In addition, as I mentioned in my stockholder update, we have expanded our exploration portfolio with an entry into offshore Morocco and acquisition of seven new blocks in the Gulf of America. Bid results are pending for another seven blocks in the Gulf of America where we were the apparent high bidder in the December 2025 lease sale.
Speaker #3: We continue our focused exploration and appraisal program in the first half of 2026 with two appraisal wells in Vietnam's Hai Su Vong, Golden Sea Lion Field, and two exploration wells in Côte d'Ivoire.
Speaker #3: In addition, as I mentioned in my stockholder update, we have expanded our exploration portfolio with an entry into offshore Morocco and acquisition of seven new blocks in the Gulf of America.
Speaker #3: another seven blocks in the Gulf Good results are pending for of America where we were the apparent high bidder in the December 2025 lease sale.
Speaker #3: With industries average reserve life at 12 years, and Tier 1 shale inventories declining, our proactive approach to securing new blocks in diverse basins reinforces our exploration pipeline demonstrates our unique ability to partner globally and provides optionality for sustained growth in the decades ahead.
Eric Hambly: With industry's average reserve life at 12 years and Tier 1 shale inventories declining, our proactive approach to securing new blocks in diverse basins reinforces our exploration pipeline, demonstrates our unique ability to partner globally, and provides optionality for sustained growth in the decades ahead. Through all this, our balance sheet remains solid with a low leverage ratio and over $2 billion in liquidity. Our eye is on the long game. However, we have the ability—we have the flexibility to adjust if necessary to protect our balance sheet. If we see an extended period of low commodity prices, we're ready to tighten the purse strings and pull back on capital spending.
With industry's average reserve life at 12 years and Tier 1 shale inventories declining, our proactive approach to securing new blocks in diverse basins reinforces our exploration pipeline, demonstrates our unique ability to partner globally, and provides optionality for sustained growth in the decades ahead. Through all this, our balance sheet remains solid with a low leverage ratio and over $2 billion in liquidity. Our eye is on the long game. However, we have the ability—we have the flexibility to adjust if necessary to protect our balance sheet. If we see an extended period of low commodity prices, we're ready to tighten the purse strings and pull back on capital spending.
Speaker #3: Through all this, our balance sheet remains solid, with a low leverage ratio and over $2 billion in liquidity, our eye is on the long game.
Speaker #3: we have the flexibility to However, we have the ability adjust if necessary to protect our balance sheet. If we see an extended period of low commodity prices, we're ready to tighten the purse strings and pull back on capital spending.
Speaker #3: To sum it up, following a successful 2025 marked by robust operational execution, ongoing financial discipline, and an outstanding 80% success rate in our exploration efforts, we view 2026 as a year to invest in future growth and long-term shareholder value.
Eric Hambly: To sum it up, following a successful 2025 marked by robust operational execution, ongoing financial discipline, and an outstanding 80% success rate in our exploration efforts, we view 2026 as a year to invest in future growth and long-term shareholder value. We're navigating uncertainty by investing with intention, sharpening our operations, and setting up MURPHY for sustainable organic growth. With that, we're now ready to take your questions.
To sum it up, following a successful 2025 marked by robust operational execution, ongoing financial discipline, and an outstanding 80% success rate in our exploration efforts, we view 2026 as a year to invest in future growth and long-term shareholder value. We're navigating uncertainty by investing with intention, sharpening our operations, and setting up MURPHY for sustainable organic growth. With that, we're now ready to take your questions.
Speaker #3: We're navigating uncertainty, by investing with intention, sharpening our operations, and setting up MURPHY for sustainable, organic growth. With that, we're now ready to take your
Speaker #3: questions. Thank you, ladies and gentlemen.
Operator: Thank you, ladies and gentlemen. We will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from Paul Cheng with Scotiabank. Your line is now open.
Operator: Thank you, ladies and gentlemen. We will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from Paul Cheng with Scotiabank. Your line is now open.
Speaker #1: We will now begin the question and answer session. Should you have a question, please press star, followed by the one on your touchstone phone.
Speaker #1: You will hear a prompt at your hand has been raised. Should you wish to decline from the polling process, please press star, followed by the two.
Speaker #1: If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from Paul Chang with Scotiabank. Your line is now open.
Speaker #2: Hey, guys. Good
Timothy Rezvan: Hey, guys. Good morning.
Paul Cheng: Hey, guys. Good morning.
Speaker #2: morning. Morning,
Philip Jungworth: Côte d'Ivoire.
Eric Hambly: Côte d'Ivoire.
Timothy Rezvan: Good morning. Just curious that on the Hai Su Vang 2X stem test, the 12,000 barrels per day, is it an equipment constraint or is it stroke or that this is the natural flow rate? And the second question is that if we're looking at your 2026 CapEx, you're saying that you are ready if the condition needed, you could adjust it. So what portion of your CapEx in 2026 is considered flexible? Thank you.
Paul Cheng: Good morning. Just curious that on the Hai Su Vang 2X stem test, the 12,000 barrels per day, is it an equipment constraint or is it stroke or that this is the natural flow rate? And the second question is that if we're looking at your 2026 CapEx, you're saying that you are ready if the condition needed, you could adjust it. So what portion of your CapEx in 2026 is considered flexible? Thank you.
Speaker #2: Good morning. Just Paul. curious that on the Hai Su Van 2X stem test, the 12,000 barrel per day, is it a equipment constraint or is choke or that this is the natural flow rate?
Speaker #2: And the second question is that if we're looking at your 2026 FX, you're saying that you are ready if the condition needed you could adjust it.
Speaker #2: So what portion of your CAPEX in 2026 is considered flexible? Thank
Speaker #2: you.
Speaker #3: Great
Eric Hambly: Great questions, Paul. Thanks for that. At our Hai Su Vang appraisal well, we encountered pay in two reservoirs. There's a shallow reservoir and a deeper reservoir that we're referring to lately as the primary reservoir, which is where we've been kind of guiding a range of resources. In our test program for the Hai Su Vang 2X well, we tested the primary reservoir in two intervals, so two different flow tests. The first flow test followed by a second flow test. Both of them had test rates around 6,000 barrels a day. They were not conducted together. They were conducted in sequence just because of just the mechanical nature of the well, the way we had to test it. We had to do two different tests. Collectively, they produced at 12,000 barrels a day.
Eric Hambly: Great questions, Paul. Thanks for that. At our Hai Su Vang appraisal well, we encountered pay in two reservoirs. There's a shallow reservoir and a deeper reservoir that we're referring to lately as the primary reservoir, which is where we've been kind of guiding a range of resources. In our test program for the Hai Su Vang 2X well, we tested the primary reservoir in two intervals, so two different flow tests. The first flow test followed by a second flow test. Both of them had test rates around 6,000 barrels a day. They were not conducted together. They were conducted in sequence just because of just the mechanical nature of the well, the way we had to test it. We had to do two different tests. Collectively, they produced at 12,000 barrels a day.
Speaker #3: questions, Paul. Thanks for that. At our Hai Su Vong appraisal well, we encountered pay in two reservoirs. There's a shallow reservoir and a deeper reservoir that we're referring to lately as the primary reservoir.
Speaker #3: Which is where we've been kind of guiding a range of resources. In our test program for the Hai Su Vong 2X well, we tested the primary reservoir in two intervals.
Speaker #3: So two different flow tests. The first flow test followed by a second flow test. Both of them had test rates around $6,000 barrels a day.
Speaker #3: They were not conducted together. They were conducted in sequence because just the mechanical nature of the well, the way we had to test it.
Speaker #3: We had to do two different tests. Collectively, they produced at $12,000 barrels a day. If we were to have a producing well that had the same sort of completion interval when we were producing the entire primary reservoir together, we expect that the well would flow about 12,000 barrels a day.
Eric Hambly: If we were to have a producing well that had the same sort of completion interval where we were producing the entire primary reservoir together, we expect that the well would flow about 12,000 barrels a day. That is not constrained by facilities. That's really what the reservoir was able to deliver. If you compare that, for example, to the test rate in our discovery well, which was a facility-constrained 10,000 barrels a day, at the time, we communicated that we expect that was facility-constrained, and we had kind of internally estimated it might have been able to produce up to 12,000 barrels a day. And so we were happy to confirm without facility constraint that we're getting that type of productivity out of these wells. I think for context, that's extremely high production rates for this basin.
If we were to have a producing well that had the same sort of completion interval where we were producing the entire primary reservoir together, we expect that the well would flow about 12,000 barrels a day. That is not constrained by facilities. That's really what the reservoir was able to deliver. If you compare that, for example, to the test rate in our discovery well, which was a facility-constrained 10,000 barrels a day, at the time, we communicated that we expect that was facility-constrained, and we had kind of internally estimated it might have been able to produce up to 12,000 barrels a day. And so we were happy to confirm without facility constraint that we're getting that type of productivity out of these wells. I think for context, that's extremely high production rates for this basin.
Speaker #3: That is not constrained by facilities. That's really what the reservoir was able to deliver. If you compare that, for example, to the test rate in our discovery well, which was a facility-constrained 10,000 barrel a day, at the time, we communicated that we expect that was facility-constrained.
Speaker #3: And we had kind of internally estimated it might have been able to produce up to 12,000 barrels a day. And so we were happy to confirm without facility-constrained that we're getting that type of productivity out of these wells.
Speaker #3: I think for context, that's extremely high production rates for this basin. A typical well in the Koolong in one of these reservoirs similar to what we have is historically probably been producing in about a 2,000 barrel a day range.
Eric Hambly: A typical well in the Cuu Long in one of these reservoirs, similar to what we have, is historically probably been producing in about a 2,000-barrel-a-day range. So we're seeing what we think is very good reservoir quality, high productivity from our tests so far. So a really compelling result there so far for us at the Hai Su Vang or Golden Sea Lion. Moving to your second question around CapEx, I would say admittedly for 2026, our capital is constrained mostly because we are choosing to constrain our flexibility around our CapEx for several reasons. We have investments that we're making that we believe make sense in nearly any oil price, and I'll kind of walk through those, and then I'll come back around to what is more flexible.
A typical well in the Cuu Long in one of these reservoirs, similar to what we have, is historically probably been producing in about a 2,000-barrel-a-day range. So we're seeing what we think is very good reservoir quality, high productivity from our tests so far. So a really compelling result there so far for us at the Hai Su Vang or Golden Sea Lion. Moving to your second question around CapEx, I would say admittedly for 2026, our capital is constrained mostly because we are choosing to constrain our flexibility around our CapEx for several reasons. We have investments that we're making that we believe make sense in nearly any oil price, and I'll kind of walk through those, and then I'll come back around to what is more flexible.
Speaker #3: So we're seeing what we think is very good reservoir quality, high productivity from our tests so far. So really compelling result there so far for us at the Hai Su Vong or Golden Sea Lion.
Speaker #3: Moving to your second question around CAPEX. I would say admittedly for 2026, our capital is constrained mostly because we are choosing to constrain our flexibility around our CAPEX.
Speaker #3: For several reasons. We have investments that we're making that we believe make sense in nearly any oil price. And I'll kind of walk through those.
Speaker #3: And then I'll come back around to what is more flexible. The things that we expect to do because we think they create significant shareholder value, this year and longer term, are locked along or golden camel development project.
Eric Hambly: The things that we expect to do because we think they create significant shareholder value this year and longer term are our Lac Da Vang or Golden Camel development project. We have first oil in Q4 this year. We're not going to stop investing in that. We're going to see that investment through and continue to bring that field online and ramp it up as we move through 2027. Our exploration program in Côte d'Ivoire, we have 2 remaining prospects to drill. They're very compelling, large resource with low well cost. Those are things we're going to do in nearly every oil price looking forward. The other significant investments we have to make are our appraisal program at Hai Su Vang, which we just talked about. 2 more appraisal wells planned this year. Those are things that we will do almost definitely.
The things that we expect to do because we think they create significant shareholder value this year and longer term are our Lac Da Vang or Golden Camel development project. We have first oil in Q4 this year. We're not going to stop investing in that. We're going to see that investment through and continue to bring that field online and ramp it up as we move through 2027. Our exploration program in Côte d'Ivoire, we have 2 remaining prospects to drill. They're very compelling, large resource with low well cost. Those are things we're going to do in nearly every oil price looking forward. The other significant investments we have to make are our appraisal program at Hai Su Vang, which we just talked about. 2 more appraisal wells planned this year. Those are things that we will do almost definitely.
Speaker #3: We have first oil in the fourth quarter this year. We're not going to stop investing in that. We're going to see that investment through and continue to bring that field online and ramp it up as we move through 2027.
Speaker #3: Our exploration program in coat of wall, we have two remaining prospects to drill. They're very compelling, large resource with low well cost. Those are things we're going to do in nearly every oil price looking forward.
Speaker #3: The other significant investments we have to make are our appraisal program at Hai Su Vong, which we just talked about. Two more appraisal wells planned this year.
Speaker #3: Those are things that we will do almost definitely. And the last is the Chinook development well that we've talked about in our materials and in my stockholder update.
Eric Hambly: The last is the Chinook development well that we've talked about in our materials and in my stockholder update. It is a significant investment, which will take quite a bit of rig time this year to bring online in the second half of the year with very robust economics with a high IROR and is expected to be a high rate well. So it'll have a significant impact in our second half of the year production rate and should help us exit the year with solid oil trajectory in our Gulf of Mexico business. Those are the things that I look at our program and I say, "What are we likely to do in almost every oil price scenario?" There are other parts of our business that we have flexibility around.
The last is the Chinook development well that we've talked about in our materials and in my stockholder update. It is a significant investment, which will take quite a bit of rig time this year to bring online in the second half of the year with very robust economics with a high IROR and is expected to be a high rate well. So it'll have a significant impact in our second half of the year production rate and should help us exit the year with solid oil trajectory in our Gulf of Mexico business. Those are the things that I look at our program and I say, "What are we likely to do in almost every oil price scenario?" There are other parts of our business that we have flexibility around.
Speaker #3: Is a significant investment, which will take quite a bit of rig time this year to bring online in the second half of the year.
Speaker #3: As very robust economics, we're a high owner and it's expected to be a high rate well. So it'll have a significant impact in our second half of the year production rate and should help us exit the year with solid oil trajectory in our Gulf of America business.
Speaker #3: Those are the things that I look at our program and I say, what are we likely to do in almost every oil price scenario?
Speaker #3: There are other parts of our business that we have flexibility around. We could choose to do a lot of different things with the last three to four months of our rig program in the Gulf of America.
Eric Hambly: We could choose to do a lot of different things with the last three to four months of our rig program in the Gulf of Mexico. In our Eagle Ford program, we have flexibility. In our onshore Canada, we have flexibility of what we might do. However, I will caveat that with a note that most of our onshore activity is very front half of the year weighted. So as we move through the year, the flexibility around 2026 onshore program starts to go away. So we might be able to flex down without significant onshore changes. We might be able to flex down our capital by 10% in 2026. If you think broader, you think go into 2027 and say, "We have very low oil price in 2027," which I don't think will be the case.
We could choose to do a lot of different things with the last three to four months of our rig program in the Gulf of Mexico. In our Eagle Ford program, we have flexibility. In our onshore Canada, we have flexibility of what we might do. However, I will caveat that with a note that most of our onshore activity is very front half of the year weighted. So as we move through the year, the flexibility around 2026 onshore program starts to go away. So we might be able to flex down without significant onshore changes. We might be able to flex down our capital by 10% in 2026. If you think broader, you think go into 2027 and say, "We have very low oil price in 2027," which I don't think will be the case.
Speaker #3: In our Eagleford program, we have flexibility in our onshore Canada. We have flexibility in what we might do. However, I will caveat that with a note that most of our onshore activity is very front half of the year weighted.
Speaker #3: So as we move through the year, the flexibility around 2026 onshore program starts to go away. So we might be able to flex down without significant onshore changes.
Speaker #3: We might be able to flex down our capital by 10% in '26. If you think broader, you think go into 2027 and say we have very low oil price in '27 and which I don't think will be the case.
Speaker #3: But if we did, those things that I said were almost definitely likely to do, will not repeat. And then we have a lot of flexibility in a significantly lower capital program if we chose to do so.
Eric Hambly: But if we did, those things that I said we're almost definitely likely to do will not repeat. And then we have a lot of flexibility in a significantly lower capital program if we chose to do so. And significantly lower is probably a 30%, 30, maybe 40% reduction than our annual capital program if we wanted to do that. And so I hope my comments kind of frame this year and then kind of the longer picture view of our flexibility around capital deployment.
But if we did, those things that I said we're almost definitely likely to do will not repeat. And then we have a lot of flexibility in a significantly lower capital program if we chose to do so. And significantly lower is probably a 30%, 30, maybe 40% reduction than our annual capital program if we wanted to do that. And so I hope my comments kind of frame this year and then kind of the longer picture view of our flexibility around capital deployment.
Speaker #3: And significantly lower is probably our 30%, 30, maybe 40% reduction than our annual capital program if we wanted to do that. And so I hope my comments kind of frame this year and then kind of the longer picture view of our flexibility around capital deployment.
Speaker #2: No, you're great. Thank
Philip Jungworth: No, you're great. Thank you.
Paul Cheng: No, you're great. Thank you.
Speaker #3: Thanks, Paul.
Eric Hambly: Thanks, Paul.
Eric Hambly: Thanks, Paul.
Operator: Your next question comes from Carlos Escalante with Wolfe Research. Your line is now open.
Operator: Your next question comes from Carlos Escalante with Wolfe Research. Your line is now open.
Speaker #1: from Carlos Escalante Your next question comes with WULF Research. Your line is now
Speaker #1: open. Hey, good morning, Eric Tom
Carlos Escalante: Hey, good morning, Eric Hambly, Chris. My first question would be around the drilling of Civette. So if I may, could you perhaps detail to us what the exact failure mechanism was and how do you think that impacts the probability of success at Caracal and Bubale? And the reason I asked is, you know, I acknowledge that the geology is completely distant from one another, just how you're targeting separate structural prospects. But you were testing a concept, and I think I'm quoting you from prior calls where you were testing something different that had been done since the dawn of Jubilee, the discovery of Jubilee. So wondering how your probability of geological success looks based on that, and if you're going to test anything different in terms of how you approach the targets and whatnot.
Carlos Escalante: Hey, good morning, Eric Hambly, Chris. My first question would be around the drilling of Civette. So if I may, could you perhaps detail to us what the exact failure mechanism was and how do you think that impacts the probability of success at Caracal and Bubale? And the reason I asked is, you know, I acknowledge that the geology is completely distant from one another, just how you're targeting separate structural prospects. But you were testing a concept, and I think I'm quoting you from prior calls where you were testing something different that had been done since the dawn of Jubilee, the discovery of Jubilee. So wondering how your probability of geological success looks based on that, and if you're going to test anything different in terms of how you approach the targets and whatnot.
Speaker #4: and Chris. My first question would be around the drilling of Savette. So if I make could you perhaps detail to us what the exact failure mechanism was and how do you think that impacts the probability of success at Caracal and Bubal?
Speaker #4: And the reason I ask this is I acknowledge that the geology is completely distant from one another, just how you're targeting. Separate structural prospects.
Speaker #4: But you were testing a concept and I think I'm quoting you from prior calls where you were testing something different that had been done since the dawn of Jubilee, the discovery of Jubilee.
Speaker #4: So wondering how your probability of geological success looks based on that. And if you're going to test anything different in terms of how you approach the targets and
Speaker #4: whatnot. That's a good question.
Eric Hambly: That's a good question. Thanks, Carlos. So at Civette, we were testing multiple objectives. Going to your last details of your question around the age of the reservoirs we're testing. The Civette, we were fortunate to be able to test multiple objectives, both younger and older than the kind of traditional play in the basin. We did find oil pay in multiple reservoirs, which is what we expected. We did not find oil in quantities to be commercial, which is, of course, disappointing. We will take what we learned from our evaluation program there and assess the future prospectivity on the block. I will say that the three prospects that we have planned for this year are all independent. Test different age reservoirs. They're fundamentally very different. They do not have any dependence between each other.
Eric Hambly: That's a good question. Thanks, Carlos. So at Civette, we were testing multiple objectives. Going to your last details of your question around the age of the reservoirs we're testing. The Civette, we were fortunate to be able to test multiple objectives, both younger and older than the kind of traditional play in the basin. We did find oil pay in multiple reservoirs, which is what we expected. We did not find oil in quantities to be commercial, which is, of course, disappointing. We will take what we learned from our evaluation program there and assess the future prospectivity on the block. I will say that the three prospects that we have planned for this year are all independent. Test different age reservoirs. They're fundamentally very different. They do not have any dependence between each other.
Speaker #3: Thanks, Carlos. So at Savette, we were testing multiple objectives. Going to your last details of your question around the age of the reservoirs, we're testing the Savette.
Speaker #3: We were fortunate to be able to test multiple objectives. Both younger and older than the kind of traditional play in the basin. We did find oil pay in multiple reservoirs, which is what we expected.
Speaker #3: We did not find oil in quantities to be commercial, which is of course disappointing. We will take what we learned from our evaluation program there and assess the future prospectivity on the block.
Speaker #3: I will say that the three prospects that we have planned for this year are all independent test different age reservoirs. They're fundamentally very different.
Speaker #3: They do not have any dependence between each other. So, what we learned about Savette is important for learning about the prospectivity that remains near Savette, but it doesn't have any implication to the Caracal and Bubal prospects.
Eric Hambly: So what we learn about Civette is important for learning about the prospectivity that remains near Civette, but it doesn't have any implication to the Caracal and Bubale prospects. So we remain just as excited about those prospects as we were before learning anything about Civette. Just a little more color. It's always disappointing to drill a dry hole. It is nice, however, that the model we put together about trying to understand the geology and what's happening held together and that we found sands and we found oil pay. Would have loved to have found enough oil pay to have a commercial discovery. We do have more work to do to understand why we didn't find the oil in quantities that we expected. And that's something that we'll work on as we incorporate all the data we've collected from the well.
So what we learn about Civette is important for learning about the prospectivity that remains near Civette, but it doesn't have any implication to the Caracal and Bubale prospects. So we remain just as excited about those prospects as we were before learning anything about Civette. Just a little more color. It's always disappointing to drill a dry hole. It is nice, however, that the model we put together about trying to understand the geology and what's happening held together and that we found sands and we found oil pay.
Speaker #3: So we remain just as excited about those prospects as we were before learning anything about Savette. Just a little more color: it's always disappointing to drill a dry hole.
Speaker #3: It is nice, however, that the model we put together about trying to understand the geology and what's happening held together and that we found sands and we found oil pay.
Would have loved to have found enough oil pay to have a commercial discovery. We do have more work to do to understand why we didn't find the oil in quantities that we expected. And that's something that we'll work on as we incorporate all the data we've collected from the well. It's just a little too early to be able to talk very clearly about it because the work is ongoing and I don't have an answer yet.
Speaker #3: Would have loved to have found enough oil pay to have a commercial discovery. We do have more work to do to understand why we didn't find the oil in quantities that we expected.
Speaker #3: And that's something that we'll work on as we incorporate all the data we've collected from the well. It's just a little too early to have that be able to talk very clearly about it because the work is ongoing and I don't have an answer
Eric Hambly: It's just a little too early to be able to talk very clearly about it because the work is ongoing and I don't have an answer yet.
Speaker #3: yet.
Speaker #4: Very clear and helpful. Thank you. And then on my follow-up, so alluding to your opening remarks about how big the Vietnam business could be and also I think even Roger would say that back in the day, you think this could be larger than the Eagle Ford as it stands today.
Carlos Escalante: Very clear and helpful. Thank you. And then on my follow-up, so alluding to your opening remarks about how big the Vietnam business could be, and also I think even Roger would say that back in the day, you think this could be larger than the Eagle Ford as it stands today. It's roughly more than 35, 40, perhaps KBOE per day oil weighted, obviously. But considering that you'll produce 15,000 or so net to you through LDV, you have a discovery in your hands four times as large with HSV, at least from our vantage point. Are you selling yourself short or am I missing something here?
Carlos Escalante: Very clear and helpful. Thank you. And then on my follow-up, so alluding to your opening remarks about how big the Vietnam business could be, and also I think even Roger would say that back in the day, you think this could be larger than the Eagle Ford as it stands today. It's roughly more than 35, 40, perhaps KBOE per day oil weighted, obviously. But considering that you'll produce 15,000 or so net to you through LDV, you have a discovery in your hands four times as large with HSV, at least from our vantage point. Are you selling yourself short or am I missing something here?
Speaker #4: It's roughly more than 35, 40, perhaps KBOE per day. Oil weighted obviously. But you're considering that you'll produce 15,000 or so net to you through LDV.
Speaker #4: You have a discovery in your hands four times as large with HSV. At least from our vantage point, wouldn't are you selling yourself short or am I missing something
Speaker #4: here? Well,
Eric Hambly: Well, I think the short answer is we're not attempting to, at this point with what we know, we're not attempting to be overly aggressive in what we think may happen from the field. We have more work to do to appraise it. We've communicated, before we drilled the well, a range of resources that was significant. And then lately, with appraisal results, we're saying we believe in the primary reservoir, we're probably closer to the high end of that initial range. We have two more appraisal wells to go, which are important to understand the field. And at the end of collecting data from those two appraisal wells, we think we're going to be in a position to give a much better range of a couple of resources from the primary reservoir, and secondary reservoir, the shallower one.
Eric Hambly: Well, I think the short answer is we're not attempting to, at this point with what we know, we're not attempting to be overly aggressive in what we think may happen from the field. We have more work to do to appraise it. We've communicated, before we drilled the well, a range of resources that was significant. And then lately, with appraisal results, we're saying we believe in the primary reservoir, we're probably closer to the high end of that initial range. We have two more appraisal wells to go, which are important to understand the field. And at the end of collecting data from those two appraisal wells, we think we're going to be in a position to give a much better range of a couple of resources from the primary reservoir, and secondary reservoir, the shallower one.
Speaker #3: I think the short answer is we're not attempting to, at this point with what we know, we're not attempting to be overly aggressive in what we think may happen from the field.
Speaker #3: We have more work to do to appraise it. We've communicated before we drilled the well, a range of resources that was significant. And then lately with appraisal results, we're saying we believe in the primary reservoir we're probably closer to the high end of that initial range.
Speaker #3: We have two more appraisal wells to go, which are important to understand the field. And at the end of collecting data from those two appraisal wells, we think we're going to be in a position to give a much better range of a couple of resources from the primary reservoir and secondary reservoir, the shallower one.
Speaker #3: And so I'm hesitant to continually provide updates to the resource range. I think what we've said is indicative of what we expect to find.
Eric Hambly: And so I'm hesitant to continually provide updates to the resource range. I think what we've said is indicative of what we expect to find. There's definitely upside, and that's why we're continuing to appraise. From a production rate perspective, there's a number of things happening. I believe because of a large resource that we expect in Hai Su Vang, that it'll take time to develop it. It won't have, for example, we don't anticipate that every development well in the Hai Su Vang or Golden Sea Lion development will be online on the first day. There'll probably be a sustained phase development campaign, and that may impact the peak rate.
And so I'm hesitant to continually provide updates to the resource range. I think what we've said is indicative of what we expect to find. There's definitely upside, and that's why we're continuing to appraise. From a production rate perspective, there's a number of things happening. I believe because of a large resource that we expect in Hai Su Vang, that it'll take time to develop it. It won't have, for example, we don't anticipate that every development well in the Hai Su Vang or Golden Sea Lion development will be online on the first day. There'll probably be a sustained phase development campaign, and that may impact the peak rate.
Speaker #3: There's definitely upside and that's why we're continuing to appraise. From a production rate perspective, there's a number of things happening. I believe because of a large resource that we expect in High Sioux Vong, that it'll take time to develop it.
Speaker #3: It won't have, for example—we don't anticipate that every development well in the High Sioux Vong or Golden Sea Line development will be online on the first day.
Speaker #3: There’ll probably be a sustained phase development campaign, and that may impact the peak rate. I feel like, from what we know now, to say that our Lock to Vong Golden Camel, plus our High Sioux Vong Golden Sea Line fields collectively, should produce in a 30,000 to 50,000 net BOE per day range in the early 2030s is a pretty good number.
Eric Hambly: I feel like from what we know now to say that our Lac Da Vang, Golden Camel, plus our Hai Su Vang, Golden Sea Lion fields collectively should produce in a 30,000 to 50,000 net BOE per day range in the early 2030s is a pretty good number. And if we know more or we think that number could move higher at the end of our appraisal campaign, we'll certainly talk about that in upcoming investor presentations and earnings calls. Right now, I feel like it's a pretty good assessment of what to expect. I'll just note that we're 40% working interest in both blocks. So the ability for it to go dramatically higher is limited unless we have a very, very heavy upfront, lots of wells producing on day one program, which I think is not the thing to do to create maximum shareholder value.
I feel like from what we know now to say that our Lac Da Vang, Golden Camel, plus our Hai Su Vang, Golden Sea Lion fields collectively should produce in a 30,000 to 50,000 net BOE per day range in the early 2030s is a pretty good number. And if we know more or we think that number could move higher at the end of our appraisal campaign, we'll certainly talk about that in upcoming investor presentations and earnings calls.
Speaker #3: And if we know more or we think that number could move higher, at the end of our appraisal campaign, we'll certainly talk about that in upcoming investor presentations and earnings calls.
Right now, I feel like it's a pretty good assessment of what to expect. I'll just note that we're 40% working interest in both blocks. So the ability for it to go dramatically higher is limited unless we have a very, very heavy upfront, lots of wells producing on day one program, which I think is not the thing to do to create maximum shareholder value.
Speaker #3: Right now, I feel like it's a pretty good assessment of what to expect. I'll just note that we're 40% working interest in both blocks.
Speaker #3: So the ability for it to go dramatically higher is limited unless we have a very heavy upfront, lots of wells producing on day one program, which I think is not the thing to do to create maximum shareholder
Speaker #3: value. Very
Carlos Escalante: Very helpful, Eric. Thank you.
Carlos Escalante: Very helpful, Eric. Thank you.
Speaker #4: helpful, Eric. Thank
Speaker #4: you. Your next
Operator: Your next question comes from Neil Mehta with Goldman Sachs. Your line is now open.
Operator: Your next question comes from Neil Mehta with Goldman Sachs. Your line is now open.
Speaker #1: question comes from Neil Mehta with SACS. Your line is now
Speaker #1: open. Yeah, thanks so
Neil Mehta: Yeah, thanks so much, Eric. Appreciate the perspective. And I think just to unpack the oil volume point a little bit more, it did come in softer than I think expected, but I think a lot of that's just timing, as you said, in the back half of the year, we should get that ramp. So I know it's too early to talk about 2027 for oil, but can you help us think about that exit? And as people kind of try to square the 2027 number, any advice you can provide would be super.
Neil Mehta: Yeah, thanks so much, Eric. Appreciate the perspective. And I think just to unpack the oil volume point a little bit more, it did come in softer than I think expected, but I think a lot of that's just timing, as you said, in the back half of the year, we should get that ramp. So I know it's too early to talk about 2027 for oil, but can you help us think about that exit? And as people kind of try to square the 2027 number, any advice you can provide would be super.
Speaker #5: much, Eric. Appreciate the perspective. And I think just to unpack the oil volume point a little bit more, it did come in softer than I think expected, but I think a lot of that's just timing, as you said, in the back half of the year.
Speaker #5: We should get that ramp. So it's too early to talk about 27 for oil, but can you help us think about that exit and as people kind of get try to square the 27 number?
Speaker #5: Any advice you can provide would be
Speaker #5: super. Yeah, great question,
Eric Hambly: Yeah, great question, Neil. Just around the oil profile for the year, I think you've characterized it correctly. Our offshore business in 2026 annual average will be a little bit lower than it was in 2025. There's a number of, I guess, moving parts there. One, in 2025, we had no weather downtime. We have a provision in our 2026 for 1,500 barrels a day, roughly, of weather downtime. I would love to have no repeat of weather downtime. So if that happens, we basically have flat oil year over year, which would be nice. This year, we actually have a little more planned downtime at primarily our non-operated facilities, which impacts us a little bit. And then we have a compelling investment at Chinook, which just takes a while to bring online. And so the timing of wells, it kind of explains the other difference.
Eric Hambly: Yeah, great question, Neil. Just around the oil profile for the year, I think you've characterized it correctly. Our offshore business in 2026 annual average will be a little bit lower than it was in 2025. There's a number of, I guess, moving parts there. One, in 2025, we had no weather downtime. We have a provision in our 2026 for 1,500 barrels a day, roughly, of weather downtime. I would love to have no repeat of weather downtime.
Speaker #3: Neil, just around the oil profile for the year—I think you've characterized it correctly. Our offshore business in 2026 annual average will be a little bit lower than it was in 2025.
Speaker #3: There's a number of, I guess, moving parts there. One, in 2025, we had no weather downtime. We have a provision in our 2026 for one and a half thousand barrels a day, roughly, of weather downtime.
Speaker #3: I would love to have no repeat of weather downtime. So if that happens, we basically have flat oil year over year. Which would be nice.
So if that happens, we basically have flat oil year over year, which would be nice. This year, we actually have a little more planned downtime at primarily our non-operated facilities, which impacts us a little bit. And then we have a compelling investment at Chinook, which just takes a while to bring online. And so the timing of wells, it kind of explains the other difference.
Speaker #3: This year, we actually have a little more planned downtime, primarily at our non-operated facilities, which impacts us a little bit. And then we have a compelling investment at Chinook, which just takes a while to bring online.
Speaker #3: And so the timing of wells, it kind of explains the other difference. Having said that, I think because the Chinook well is expected to be high rate, and expected to come online in the second half of the year, we ought to see from our offshore business a pretty decent exit rate.
Eric Hambly: Having said that, I think because the Chinook well is expected to be high rate and expected to come online in the second half of the year, we ought to see from our offshore business a pretty decent exit rate. And then as we continue to layer on expected activity at the end of the year, heading into 2027, from our offshore business and ramp up our Vietnam development, Lac Da Vang, we should start to see some modest growth in our production profile and particularly our oily profile there. I've been hesitant, as you know, to give very specific numbers. I think you could think of our kind of midterm ramp in production to be low single digit feels good. Depending on what we choose to do and when we do it, you may see some years where that growth is very low, single digit, 1%.
Having said that, I think because the Chinook well is expected to be high rate and expected to come online in the second half of the year, we ought to see from our offshore business a pretty decent exit rate. And then as we continue to layer on expected activity at the end of the year, heading into 2027, from our offshore business and ramp up our Vietnam development, Lac Da Vang, we should start to see some modest growth in our production profile and particularly our oily profile there.
Speaker #3: And then as we continue to layer on expected activity, at the end of the year, heading into 2027, from our offshore business and ramp up our Vietnam development lock to Vong, we should start to see some modest growth in our production profile and particularly our oily profile there.
I've been hesitant, as you know, to give very specific numbers. I think you could think of our kind of midterm ramp in production to be low single digit feels good. Depending on what we choose to do and when we do it, you may see some years where that growth is very low, single digit, 1%. You may see that it's 5%. It can get a little lumpy. But I think if you think about what we're doing with our assets, we're investing in the projects to have stability to modest growth. You layer on top of that our growing Vietnam business.
Speaker #3: I've been hesitant, as you know, to give very specific numbers I think you could think of our kind of midterm ramp in production to be low single-digit feels good.
Speaker #3: Depending on what we choose to do and when we do it, you may see some years where that growth is very low, single-digit, 1%.
Eric Hambly: You may see that it's 5%. It can get a little lumpy. But I think if you think about what we're doing with our assets, we're investing in the projects to have stability to modest growth. You layer on top of that our growing Vietnam business. When you look a little farther out, you see more material growth with that organically created Vietnam business coming. And so as you point out, it's a little early to talk about 2027, but in the context of what we're doing with our assets, it's fair to see similar or slightly higher production, and especially oily production with growth in the Gulf and our Vietnam oily business growing.
Speaker #3: 5%. It can get a little lumpy and but You may see that it's I think if you think about what we're doing with our assets, we're investing in the projects to have stability, to modest growth.
Speaker #3: You layer on top of that our growing Vietnam business. When you look a little farther out, you see more material growth with that organically created Vietnam business coming.
When you look a little farther out, you see more material growth with that organically created Vietnam business coming. And so as you point out, it's a little early to talk about 2027, but in the context of what we're doing with our assets, it's fair to see similar or slightly higher production, and especially oily production with growth in the Gulf and our Vietnam oily business growing.
Speaker #3: And so, as you point out, it's a little early to talk about 2027, but in the context of what we're doing with our assets, it's fair to see similar or slightly higher production, and especially oily production, with growth in the Gulf and our Vietnam oily business.
Speaker #3: growing. Eric, that would
Neil Mehta: Eric, that would be similar production to the full year guide or to the exit rate startup?
Neil Mehta: Eric, that would be similar production to the full year guide or to the exit rate startup?
Speaker #5: be similar production to the full year guide or to the exit rate? I'm
Speaker #5: sorry. Got
Speaker #3: I would say to
Eric Hambly: I would say to the full year guide.
Eric Hambly: I would say to the full year guide.
Speaker #3: the full year guide.
Neil Mehta: Got it. And then just on Chinook, can you just talk about de-risking it? It sounds like it'll come on later this year. What are the gaining items there and confidence interval around that production?
Neil Mehta: Got it. And then just on Chinook, can you just talk about de-risking it? It sounds like it'll come on later this year. What are the gaining items there and confidence interval around that production?
Speaker #5: it. And then just on Chinook, can you just talk about de-risking it? It sounds like it'll come on later this year. What are the gaining items there?
Speaker #5: And confidence interval around that production?
Speaker #3: Sure. The Chinook 8 development well is targeting a reservoir that is currently developed and producing, but is effectively an underdeveloped reservoir. So, the well will be near a well that used to produce in the field at a rate similar to what we've quoted—about 15,000 barrels per day gross.
Eric Hambly: Sure. The Chinook 8 development well is targeting a reservoir that is currently developed and producing, but is effectively an underdeveloped reservoir. So the well will be near a well that used to produce in the field at a rate similar to what we've quoted of about 15,000 barrels per day gross. So we expect that there is very limited uncertainty in terms of the subsurface. In terms of production rate, you always have a little bit of uncertainty around just exactly how much pay thickness you find and how good the completion is. So from an execution perspective, the main issue is around timing of delivery. It's a deep well. It's going to take a little while to drill and complete. So production outcome for the year, the uncertainty is primarily driven by timing.
Eric Hambly: Sure. The Chinook 8 development well is targeting a reservoir that is currently developed and producing, but is effectively an underdeveloped reservoir. So the well will be near a well that used to produce in the field at a rate similar to what we've quoted of about 15,000 barrels per day gross. So we expect that there is very limited uncertainty in terms of the subsurface. In terms of production rate, you always have a little bit of uncertainty around just exactly how much pay thickness you find and how good the completion is.
Speaker #3: So we expect that there is very limited uncertainty in terms of the subsurface. In terms of production, right, you always have a little bit of uncertainty around just exactly how much pay thickness you find and how good the completion is.
So from an execution perspective, the main issue is around timing of delivery. It's a deep well. It's going to take a little while to drill and complete. So production outcome for the year, the uncertainty is primarily driven by timing. We always have, on a new well, a new deep water well, a ±25% type of rate you could see on the initial production rate. I feel good about this one because it's basically replacing a well that had already produced in the field. So I would characterize it as relatively low uncertainty and nearly zero risk.
Speaker #3: So from an execution perspective, the main issue is around timing of delivery. It's a deep well. It's going to take a little while to drill and complete.
Speaker #3: So production outcome for the year the uncertainty is primarily driven by timing. We always have on a new well. A new deep water well, you probably have a plus or minus 25% type of rate you could see on the initial production rate.
Eric Hambly: We always have, on a new well, a new deep water well, a ±25% type of rate you could see on the initial production rate. I feel good about this one because it's basically replacing a well that had already produced in the field. So I would characterize it as relatively low uncertainty and nearly zero risk.
Speaker #3: I feel good about this one because it's basically replacing a well that had already produced in the field. So I would characterize it as relatively low uncertainty and nearly zero risk.
Speaker #5: Yeah, very clear. Thank you, sir.
Neil Mehta: Yeah. Very clear. Thank you, sir.
Neil Mehta: Yeah. Very clear. Thank you, sir.
Speaker #1: Your next question comes from Charles Mead with Johnson Rice Company. Your line is now open.
Operator: Your next question comes from Charles Mead with Johnson Rice & Company. Your line is now open.
Operator: Your next question comes from Charles Mead with Johnson Rice & Company. Your line is now open.
Speaker #6: Good morning, Eric, to you and the rest of the MURPHY team. I wanted to ask
Charles Meade: Good morning, Eric, to you and the rest of the Murphy team.
Charles Meade: Good morning, Eric, to you and the rest of the Murphy team.
Speaker #4: Good morning, Charles.
Carlos Escalante: Morning, Charles.
Eric Hambly: Morning, Charles.
Charles Meade: I wanted to ask on the royalty mechanism up in the Tupper Montney. Can you give us a sense of what the year-over-year delta in your NRI is? And also remind us how exactly that works, whether the 2026 rate is based on the realized or an index price in 2025 and how often it resets. Just fill out the picture there.
Charles Meade: I wanted to ask on the royalty mechanism up in the Tupper Montney. Can you give us a sense of what the year-over-year delta in your NRI is? And also remind us how exactly that works, whether the 2026 rate is based on the realized or an index price in 2025 and how often it resets. Just fill out the picture there.
Speaker #6: on the royalty mechanism up in the Tuppermont. Can you give us a sense of the what the year-over-year delta in your NRI is and also remind us how exactly that works, whether it's whether the 2026 rate is based on the realized or an index price in '25 and how often it resets just fill out the picture there?
Speaker #3: Sure. The royalty that we pay in our Tuppermont asset is a sliding scale driven by the commodity price that we realize. And it moves fairly quickly as gas prices move up.
Eric Hambly: Sure. The royalty that we pay in our Tupper Montney asset is a sliding scale driven by the commodity price that we realize. And it moves fairly quickly as gas prices move up. So our royalty rate that we paid in 2025 annual for the year was 4.6%. And we're projecting with expected prices in 2026 an 8.4% rate. 8.6, one of those numbers, 8.4, I think. So it's roughly doubling the royalty rate. Having said that, it is still lower than 25% that everyone pays in the United States. So it does create a little bit of noise in our net gas volumes with prices moving around, but it is still quite low. There is one caveat to all of that is that new wells that come online have a fixed royalty at 5% for a period of time. I think it's a couple of years.
Eric Hambly: Sure. The royalty that we pay in our Tupper Montney asset is a sliding scale driven by the commodity price that we realize. And it moves fairly quickly as gas prices move up. So our royalty rate that we paid in 2025 annual for the year was 4.6%. And we're projecting with expected prices in 2026 an 8.4% rate. 8.6, one of those numbers, 8.4, I think. So it's roughly doubling the royalty rate. Having said that, it is still lower than 25% that everyone pays in the United States. So it does create a little bit of noise in our net gas volumes with prices moving around, but it is still quite low. There is one caveat to all of that is that new wells that come online have a fixed royalty at 5% for a period of time. I think it's a couple of years.
Speaker #3: So our royalty rate that we paid in 2025 annual for the year was 4.6%. And we're projecting with expected prices in 2026 an 8.4% rate, 8.6, one of those numbers, 8.4, I think.
Speaker #3: So it's roughly doubling the royalty rate. Having said that, it is still lower than the 25% that everyone pays in the United States. So it does create a little bit of noise in our net gas volumes with prices moving around, but it is still quite low.
Speaker #3: There is one caveat to all of that is that is new wells that come online have a fixed royalty at 5% for a period of time.
Speaker #3: I think it's a couple of
Speaker #3: years. Got it.
Charles Meade: Got it. Got it. In all things being equal, you'd be happy to pay at a higher royalty rate with the better prices. I want to ask a question about the Hai Su Vang in Vietnam. And I know with good reason you've really been focused on the primary reservoir so far, but with the next two appraisal wells, is there an element of those appraisal wells that's designed to assess that shallower secondary reservoir in addition to the deeper primary? And I guess the real aim of that is what's the path or what's the chances that that secondary shallower reservoir will be considered real resource and can add to the overall resource in place and perhaps even the production rates down the line?
Charles Meade: Got it. Got it. In all things being equal, you'd be happy to pay at a higher royalty rate with the better prices. I want to ask a question about the Hai Su Vang in Vietnam. And I know with good reason you've really been focused on the primary reservoir so far, but with the next two appraisal wells, is there an element of those appraisal wells that's designed to assess that shallower secondary reservoir in addition to the deeper primary? And I guess the real aim of that is what's the path or what's the chances that that secondary shallower reservoir will be considered real resource and can add to the overall resource in place and perhaps even the production rates down the line?
Speaker #6: Got it. And all things being equal, you'd be happy to pay it at a higher royalty rate, with the better prices. I want to ask a question about your about the heist of Vong in Vietnam.
Speaker #6: And I know with good reason you've really been focused on the primary reservoir so far, but with these with the next two appraisal wells, is there an element of those appraisal wells that's designed to assess that shallower secondary reservoir in addition to the deeper primary?
Speaker #6: And I guess the real aim of that is what are the what's the path or what's the chances that that secondary shallower reservoir will be considered real resource and can add to the overall resource in place and perhaps even the production rates down
Speaker #6: The line? Yeah, that's a great
Eric Hambly: Yeah, that's a great question. The Hai Su Vang 3X and 4X wells will both test that shallower reservoir. And that's one of the reasons why I'm hesitant to give a resource number just yet on it. We have two well penetrations in it where we've found nice-looking pay, and we need to assess the areal extent of that reservoir, and it'll really help us come up with a resource range from that. I would say that what we believe we've found so far or the range of what we may have found so far in that shallower reservoir represents a commercial development. We're just hesitant to give a number on the resource range just yet because we have quite a bit of work to do. But both the two remaining appraisal wells will assess that.
Eric Hambly: Yeah, that's a great question. The Hai Su Vang 3X and 4X wells will both test that shallower reservoir. And that's one of the reasons why I'm hesitant to give a resource number just yet on it. We have two well penetrations in it where we've found nice-looking pay, and we need to assess the areal extent of that reservoir, and it'll really help us come up with a resource range from that. I would say that what we believe we've found so far or the range of what we may have found so far in that shallower reservoir represents a commercial development.
Speaker #3: The heist of Vong 3X and 4X wells will both test that shallower reservoir. And that's one of the reasons why I'm hesitant to give a resource number just yet on it.
Speaker #3: We have two well penetrations in it where we found nice-looking pay and we need to assess the aerial extent of that reservoir and it'll really help us come up with a resource range from that.
Speaker #3: I would say that what we believe we found so far, or the range of what we may have found so far in that shallower reservoir, represents a commercial development.
Speaker #3: We're just hesitant to give a number on the resource range just yet because we have quite a bit of work to do. But both the two remaining appraisal wells will assess that and at the end of the program, as I mentioned earlier, I think we'll be in a position to give resource ranges on both the primary and secondary
We're just hesitant to give a number on the resource range just yet because we have quite a bit of work to do. But both the two remaining appraisal wells will assess that. At the end of the program, as I mentioned earlier, I think we'll be in a position to give resource ranges on both the primary and secondary reservoir.
Eric Hambly: At the end of the program, as I mentioned earlier, I think we'll be in a position to give resource ranges on both the primary and secondary reservoir.
Speaker #3: reservoir. Eric, just a quick clarification.
Charles Meade: Eric, just a quick clarification. Those two appraisal wells, they're going to assess both the shallower and the deeper?
Charles Meade: Eric, just a quick clarification. Those two appraisal wells, they're going to assess both the shallower and the deeper?
Speaker #6: Those two appraisal wells, they're going to assess both the shallower and the deeper?
Eric Hambly: Yes, that's correct.
Eric Hambly: Yes, that's correct.
Speaker #6: Got it. Okay. Yes, that's correct. Thank you.
Charles Meade: Got it. Okay. Thank you.
Charles Meade: Got it. Okay. Thank you.
Speaker #6: you. Your next question comes
Operator: Your next question comes from Chris Baker with Evercore. Your line is now open.
Operator: Your next question comes from Chris Baker with Evercore. Your line is now open.
Speaker #1: from Chris Taker with Evercore, your line is now open.
Speaker #1: From Chris Taker with Evercore, your line is now open. Hey,
Chris Baker: Hey, guys. Thanks for the time. Just wanted to go back to that comment about 2027. I know it's still really early, but Eric, I think you were saying low single-digit oil growth despite obviously ramping volumes in Vietnam. Just want to make sure I heard that correctly, and what that kind of implies in terms of the Gulf maybe coming off a little further in 2027.
Chris Baker: Hey, guys. Thanks for the time. Just wanted to go back to that comment about 2027. I know it's still really early, but Eric, I think you were saying low single-digit oil growth despite obviously ramping volumes in Vietnam. Just want to make sure I heard that correctly, and what that kind of implies in terms of the Gulf maybe coming off a little further in 2027.
Speaker #7: guys. Thanks for the time. I just want to go back to that comment about 2027. I know it's still really early, but Eric, I think you were saying low single-digit oil growth despite obviously ramping volumes in Vietnam.
Speaker #7: Just want to make sure I heard that correctly and what that kind of implies in terms of the Gulf maybe coming off a little further in '27.
Speaker #3: Yeah. I hate to get overly focused on exact numbers for 2027 because we haven't put together a budget for 2027. But I think if you look back at when we developed long-range plans for our business, what we've communicated about what we can do with those assets over a midterm is to have low single-digit growth.
Eric Hambly: Yeah. I hate to get overly focused on exact numbers for 2027 because we haven't put together a budget for 2027. But I think if you look back at when we developed long-range plans for our business, what we've communicated about what we can do with those assets over a midterm is to have low single-digit growth. The comment I tried to make earlier around Chinook was that it is a high-rate well that comes on in the second half of 2026 and will produce all of 2027. And then we have a growing Vietnam business. And so I'm hesitant to give you an exact production growth number from 2026 to 2027, first of all, because we haven't built a budget for that yet.
Eric Hambly: Yeah. I hate to get overly focused on exact numbers for 2027 because we haven't put together a budget for 2027. But I think if you look back at when we developed long-range plans for our business, what we've communicated about what we can do with those assets over a midterm is to have low single-digit growth. The comment I tried to make earlier around Chinook was that it is a high-rate well that comes on in the second half of 2026 and will produce all of 2027. And then we have a growing Vietnam business.
Speaker #3: The comment I tried to make earlier around Chinook was that it is a high-rate well that comes on in the second half of '26 and will produce all of 2027.
Speaker #3: And then we have a growing Vietnam business. And so I'm hesitant to give you an exact production growth number from 2026 to '27. First of all, because we haven't built a budget for that yet.
And so I'm hesitant to give you an exact production growth number from 2026 to 2027, first of all, because we haven't built a budget for that yet. But when we do build long-range plans and we kind of model how we develop our different investment options across our portfolio, I expect that we'll have modest oil growth from 2026 to 2027.
Speaker #3: But when we do build long-range plans and we kind of model how we develop our different investment options across our portfolio, I expect that we'll have modest oil growth from '26 to
Eric Hambly: But when we do build long-range plans and we kind of model how we develop our different investment options across our portfolio, I expect that we'll have modest oil growth from 2026 to 2027.
Speaker #3: '27. Okay,
Chris Baker: Okay. Great. Thank you.
Chris Baker: Okay. Great. Thank you.
Speaker #7: great. Thank you.
Speaker #1: Your next question comes from Leo Morani with Roth. Your line is now
Operator: Your next question comes from Leo Mariani with Roth. Your line is now open.
Operator: Your next question comes from Leo Mariani with Roth. Your line is now open.
Speaker #1: open. Hi, I was
Leo Mariani: Hi. I was hoping to dive into Vietnam a little bit more here, but could you talk about kind of the ramp-up period for Lac Da Vang? You guys have talked about 10,000 to 15,000 barrels at a peak. Roughly when do you think that peak will occur? And is this kind of a bit of a linear ramp-up over a handful of years? Just could you give us a little bit more color on what that looks like?
Leo Mariani: Hi. I was hoping to dive into Vietnam a little bit more here, but could you talk about kind of the ramp-up period for Lac Da Vang? You guys have talked about 10,000 to 15,000 barrels at a peak. Roughly when do you think that peak will occur? And is this kind of a bit of a linear ramp-up over a handful of years? Just could you give us a little bit more color on what that looks like?
Speaker #7: Hoping to dive into Vietnam a little bit more here, but could you talk about kind of the ramp-up period for Loch Dubong? You guys have talked about 10,000 to 15,000 barrels at peak.
Speaker #7: Roughly when do you think that peak will occur? And is this kind of a bit of a linear ramp-up over a handful of years?
Speaker #7: Just could you give us a little bit more color on what that looks
Speaker #7: like? Yeah, sure.
Eric Hambly: Yeah, sure. Great question. So just a reminder, our Lac Da Vang, our Golden Camel development, is a two-phase development. The initial production will come from the Lac Da Vang A platform. We will drill half of the development wells from that platform. And in 2028, we'll install a new substructure, a new jacket, Lac Da Vang B platform, and begin drilling wells in 2028. Then the topsides for that second platform will be installed in 2029 per our current plan. And so the full development will take place over the current period and end in 2029. I expect that we'll have a production ramp at Lac Da Vang that moves up significantly from 2026 to 2027 and a peak likely in the later part of 2027 or early part of 2028 when we bring online a lot of wells.
Eric Hambly: Yeah, sure. Great question. So just a reminder, our Lac Da Vang, our Golden Camel development, is a two-phase development. The initial production will come from the Lac Da Vang A platform. We will drill half of the development wells from that platform. And in 2028, we'll install a new substructure, a new jacket, Lac Da Vang B platform, and begin drilling wells in 2028. Then the topsides for that second platform will be installed in 2029 per our current plan. And so the full development will take place over the current period and end in 2029. I expect that we'll have a production ramp at Lac Da Vang that moves up significantly from 2026 to 2027 and a peak likely in the later part of 2027 or early part of 2028 when we bring online a lot of wells.
Speaker #3: Great question. So just a reminder, our Loch Dubong, our golden camel development, is a two-phase development. The initial production will come from the Loch Dubong A platform.
Speaker #3: We will drill half of the development wells from that platform. And in 2028, we'll install a new substructure, a new jacket on the Loch Dubong B platform, and begin drilling wells in 2028.
Speaker #3: Then the topsides for that second platform will be installed in 2029 per our current plan. And so the full development will take place over the current period and end in 2029.
Speaker #3: I expect that we'll have a production ramp at Loch Dubong that moves up significantly from '26 to '27, and a peak likely in the later part of '27 or early part of '28 when we bring online a lot of wells.
Speaker #3: When we finish the development in '29, we'll start to see production decline. After no more wells are online, at the end of 2029. So exact timing will be a little bit dependent on well performance.
Eric Hambly: When we finish the development in 2029, we'll start to see production decline after no more wells are online at the end of 2029. So exact timing will a little bit depend on well performance and how things go around the execution of how fast we drill the wells and bring them online. But I think you could see kind of a late 2027, maybe early 2028 peak rate there.
When we finish the development in 2029, we'll start to see production decline after no more wells are online at the end of 2029. So exact timing will a little bit depend on well performance and how things go around the execution of how fast we drill the wells and bring them online. But I think you could see kind of a late 2027, maybe early 2028 peak rate there.
Speaker #3: And how things go around the execution of how fast we drill the wells and bring them online. But I think you could see kind of a late '27, maybe early '28 peak rate there.
Speaker #3: And how things go around the execution of how fast we drill the wells and bring them online. But I think you could see kind of a late '27, maybe early '28 peak rate there.
Speaker #7: Okay, so maybe just to clarify, that would be that 10,000 to 15,000 net peak rate, and it sounds like the second platform is more just going to hold production maybe flat for a period of time before you start to go into decline.
Leo Mariani: Okay. So maybe just to clarify, so that would be that 10,000 to 15,000 net peak rate. And it sounds like the second platform is more just going to hold production maybe flat for a period of time before you start to go and decline. And maybe that provides a shallower decline with the second platform. Just want to make sure I understand that.
Leo Mariani: Okay. So maybe just to clarify, so that would be that 10,000 to 15,000 net peak rate. And it sounds like the second platform is more just going to hold production maybe flat for a period of time before you start to go and decline. And maybe that provides a shallower decline with the second platform. Just want to make sure I understand that.
Speaker #7: And maybe that provides a shallower decline when the second platform. Just want to make sure I understand
Speaker #7: That's right. Yes, you're understanding it correctly.
Eric Hambly: Yes, you're understanding it correctly, Leo.
Eric Hambly: Yes, you're understanding it correctly, Leo.
Speaker #7: Okay. Leo. Thanks. And then just I also want on Vietnam, you kind of talked about the goal. Obviously, over time, bringing on Hai Su Bang of 30 to 50,000 barrels a day.
Leo Mariani: Okay. Thanks. And then just also on Vietnam, you kind of talked about the goal, obviously, over time, bringing on Hai Su Vang of 30,000 to 50,000 barrels a day. When would you roughly expect Hai Su Vang to start contributing? Is this kind of like 2031, roughly, to where you start to see that material jump up in sort of Vietnam? And I would imagine in a similar fashion, it may take a couple of years also to kind of hit that peak rate. Can you just provide a little bit more kind of color on the high-level thinking there?
Leo Mariani: Okay. Thanks. And then just also on Vietnam, you kind of talked about the goal, obviously, over time, bringing on Hai Su Vang of 30,000 to 50,000 barrels a day. When would you roughly expect Hai Su Vang to start contributing? Is this kind of like 2031, roughly, to where you start to see that material jump up in sort of Vietnam? And I would imagine in a similar fashion, it may take a couple of years also to kind of hit that peak rate. Can you just provide a little bit more kind of color on the high-level thinking there?
Speaker #7: Are you not when would you roughly expect Hai Su Bang to start contributing? Is this kind of like 2031, roughly, to where you start to see that material jump up and sort of Vietnam?
Speaker #7: And I would imagine in a similar fashion may take a couple of years also to kind of hit that peak rate. Can you just provide a little bit more kind of color on the high-level
Speaker #7: thinking there? Sure.
Eric Hambly: Sure. It's a great question, actually. I'll give a little more context around how to think about the timing and the key milestones to realize production from Hai Su Vang. So we're appraising now. We expect to complete our appraisal program at Hai Su Vang in the middle of this year by the end of Q2. Then we'll move into a field development plan process where we'll assess the field and come up with an optimal development. We'll work with our partners on that and get government approval for a field development plan. That will take some time. I would imagine it's about a year-long process. So we're looking at targeting a project sanction or an FID likely in 2027 or by the end of 2027.
Eric Hambly: Sure. It's a great question, actually. I'll give a little more context around how to think about the timing and the key milestones to realize production from Hai Su Vang. So we're appraising now. We expect to complete our appraisal program at Hai Su Vang in the middle of this year by the end of Q2. Then we'll move into a field development plan process where we'll assess the field and come up with an optimal development. We'll work with our partners on that and get government approval for a field development plan. That will take some time. I would imagine it's about a year-long process. So we're looking at targeting a project sanction or an FID likely in 2027 or by the end of 2027.
Speaker #3: It's a great question, actually. And I'll give a leave in a little more context around how to think about the timing and the key milestones to realize production from Hai Su Bang.
Speaker #3: So, we're appraising now. We expect to complete our appraisal program at Hai Su Bang in the middle of this year, by the end of the second quarter.
Speaker #3: And then we'll move into a field development plan process, where we'll assess the field and come up with an optimal development. We'll work with our partners on that and get government approval for our field development plan.
Speaker #3: That will take some time. I would imagine it's about a year-long process. And so we're looking at a targeting a project sanction or an FID likely in 2027 or by the end of 2027.
Speaker #3: And then what we've demonstrated with our development, our similar developments in the past, is sort of a three to four-year execution timeline. And so what I think is reasonable is first oil in 2031, if things go faster it's possible to catch maybe the second half of 2030.
Eric Hambly: And then what we've demonstrated with our development or similar developments in the past is sort of a 3- to 4-year execution timeline. And so what I think is reasonable is first oil in 2031. If things go faster, it's possible to catch maybe the second half of 2030. So somewhere in the early 2030s feels like it's reasonable from what we know now about the Hai Su Vang development. I think if I was just guessing, I would say 2031, but I'll be pressing my team to make it happen even faster. 2030 would be nice. And when we know more about the field, we'll definitely tell you what we think the timeline is.
And then what we've demonstrated with our development or similar developments in the past is sort of a 3- to 4-year execution timeline. And so what I think is reasonable is first oil in 2031. If things go faster, it's possible to catch maybe the second half of 2030. So somewhere in the early 2030s feels like it's reasonable from what we know now about the Hai Su Vang development. I think if I was just guessing, I would say 2031, but I'll be pressing my team to make it happen even faster. 2030 would be nice. And when we know more about the field, we'll definitely tell you what we think the timeline is.
Speaker #3: So, somewhere in the early 2030s feels like it's reasonable from what we know now about the Hai Su Bang development. I think if I was just guessing, I would say 2031.
Speaker #3: But I'll be pressing my team to make it happen even faster. 2030 would be nice. And when we know more about the field, we'll definitely tell you what we think the timeline is.
Speaker #7: Okay. That's super helpful, Eric. And just lastly on Morocco, obviously, you guys introduced it. I know there's no obligation wells over the next handful of years, but can you maybe just outline kind of what your plans are over the next handful of years and how close do you think you are to being sort of drill ready?
Leo Mariani: Okay. That's super helpful, Eric. And just lastly on Morocco, obviously, you guys introduced it. I know there's no obligation wells over the next handful of years, but can you maybe just outline kind of what your plans are over the next handful of years and how close do you think you are to being sort of drill-ready? Is there seismic? Are you still analyzing things? Just any high-level color around that.
Leo Mariani: Okay. That's super helpful, Eric. And just lastly on Morocco, obviously, you guys introduced it. I know there's no obligation wells over the next handful of years, but can you maybe just outline kind of what your plans are over the next handful of years and how close do you think you are to being sort of drill-ready? Is there seismic? Are you still analyzing things? Just any high-level color around that.
Speaker #7: Is there seismic? Are you still analyzing things? Just any high-level color on
Speaker #7: that? Sure.
Eric Hambly: Sure. Great question. We're pretty excited about this Morocco entry. It is providing an opportunity to test a very large untested four-way structure. The fiscal regime in Morocco is extremely good, primarily because there's hardly any oil production in Morocco. So the terms are really good in places where there's no oil. But we really are excited about the play here, very large four-way structure, and the cost to enter is extremely low. And the cost to figure out whether or not we want to go drill a well is also low. There is existing seismic data that we will reprocess and assess the prospectivity after reprocessing seismic over the next few years. Our expenditure there is going to be quite low, probably on the order of $5 million maximum over the next three years.
Eric Hambly: Sure. Great question. We're pretty excited about this Morocco entry. It is providing an opportunity to test a very large untested four-way structure. The fiscal regime in Morocco is extremely good, primarily because there's hardly any oil production in Morocco. So the terms are really good in places where there's no oil. But we really are excited about the play here, very large four-way structure, and the cost to enter is extremely low. And the cost to figure out whether or not we want to go drill a well is also low. There is existing seismic data that we will reprocess and assess the prospectivity after reprocessing seismic over the next few years. Our expenditure there is going to be quite low, probably on the order of $5 million maximum over the next three years.
Speaker #3: Great question. We're pretty excited about this Morocco entry. It is providing an opportunity to test a very large untested four-way structure. The fiscal regime in Morocco is extremely good, primarily because there's hardly any oil production in Morocco.
Speaker #3: So, the terms are really good in places where there's no oil, but we really are excited about the play here. Very large four-way structure.
Speaker #3: And the cost to enter is extremely low. And the cost to figure out whether or not we want to go drill a well is also low.
Speaker #3: There is existing seismic data that we will reprocess. And assess the prospectivity after reprocessing seismic over the next few years. Our expenditure there is going to be quite low.
Speaker #3: Probably in the order on the order of $5 million or maximum over the next three years.
Speaker #7: Thank you. Very helpful.
Leo Mariani: Thank you. Very helpful.
Leo Mariani: Thank you. Very helpful.
Speaker #1: Your next question comes from Tim Rezvan with Key Bank. Your line is now
Operator: Your next question comes from Tim Rezvan with KeyBank. Your line is now open.
Operator: Your next question comes from Tim Rezvan with KeyBank. Your line is now open.
Speaker #1: open. Okay.
Timothy Rezvan: Okay. Good morning, folks. Thank you for taking our questions. I wanted to ask about slide 13 in your deck. You call out a number of prospects across the Cuu Long Basin on that page, both inside and outside of Hai Su Vang. Your 2026 plan calls for the two HSV appraisals as well as a well at Lac Da Trang. Can you kind of talk maybe more about the medium-term appraisal plan and how we should think about the prospects you call out here? Thanks.
Tim Rezvan: Okay. Good morning, folks. Thank you for taking our questions. I wanted to ask about slide 13 in your deck. You call out a number of prospects across the Cuu Long Basin on that page, both inside and outside of Hai Su Vang. Your 2026 plan calls for the two HSV appraisals as well as a well at Lac Da Trang. Can you kind of talk maybe more about the medium-term appraisal plan and how we should think about the prospects you call out here? Thanks.
Speaker #8: Good morning, folks. Thank you for taking our questions. I wanted to ask about slide 13 in your deck. You call out a number of prospects across the Koolong Basin.
Speaker #8: On that page, both inside and outside of Hai Su Bang, your 2026 plan calls for the two HSV appraisals as well as a well at Lac de Trang.
Speaker #8: Can you kind of talk maybe more about the medium-term appraisal plan and how we should think about the prospects you call out here? Thanks.
Speaker #3: Yeah. Great question. So we have a characterized what we know about our business so far in Vietnam is that we have kind of two hubs that are emerging.
Eric Hambly: Yeah. Great question. So the way I would characterize what we know about our business so far in Vietnam is that we have kind of two hubs that are emerging. The Lac Da Vang or Golden Camel development that comes online later this year should be kind of a northern hub. And our Hai Su Vang or Golden Sea Lion will likely function as a southern hub. We have other discoveries, which you note on the slide: Lac Da Trang, Lac Da Nau, and Lac Da Hong. So that's white, brown, and pink camel for those who are tracking camel colors. Those will likely be tied into those other facilities in the future. And then we have other prospects to drill.
Eric Hambly: Yeah. Great question. So the way I would characterize what we know about our business so far in Vietnam is that we have kind of two hubs that are emerging. The Lac Da Vang or Golden Camel development that comes online later this year should be kind of a northern hub. And our Hai Su Vang or Golden Sea Lion will likely function as a southern hub. We have other discoveries, which you note on the slide: Lac Da Trang, Lac Da Nau, and Lac Da Hong. So that's white, brown, and pink camel for those who are tracking camel colors. Those will likely be tied into those other facilities in the future. And then we have other prospects to drill.
Speaker #3: The Lac de Vang or Golden Camel development that comes online later this year should be a kind of a northern hub. And our Hai Su Bang or Golden Sea Lion will likely function as a southern hub.
Speaker #3: We have other discoveries, which you note on the slide, Lac de Trang, Lac de Nao, and Lac de Hong. So that's white, brown, and pink camel.
Speaker #3: For those who are tracking camel colors, those will likely be tied into those other facilities in the future. And then we have other prospects to drill.
Speaker #3: We're going to drill Lac de Trang North Well, which we'll test kind of the northern extension just to the north of Lac de Vang.
Eric Hambly: We're going to drill a Lac Da Trang north well, which will test kind of the northern extension just to the north of Lac Da Vang with an exploration well this year. And then the remaining prospectivity, we're currently thinking about when do we test it and kind of sequencing that. And we have plenty of time to do it. We do not yet have a plan in place that's firm around when we'll test them, although I think that it's reasonable to expect that between 2028 and 2029, that we'll likely test a significant part of the remaining prospectivity on those blocks.
We're going to drill a Lac Da Trang north well, which will test kind of the northern extension just to the north of Lac Da Vang with an exploration well this year. And then the remaining prospectivity, we're currently thinking about when do we test it and kind of sequencing that. And we have plenty of time to do it. We do not yet have a plan in place that's firm around when we'll test them, although I think that it's reasonable to expect that between 2028 and 2029, that we'll likely test a significant part of the remaining prospectivity on those blocks.
Speaker #3: With an exploration well this year. And then the remaining prospectivity we're currently thinking about when do we test it and kind of sequencing that.
Speaker #3: And we have plenty of time to do it. We do not yet have a plan in place that's firm around when we'll test them.
Speaker #3: Although I think that it's reasonable to expect that, between 2028 and 2029, we'll likely test a significant part of the remaining prospectivity on those blocks.
Speaker #8: Okay. That's helpful context. Appreciate it. And then my follow-up, in the release last night, you gave preliminary year-end 2025 reserves. We were a little bit surprised to see the decline; it was about 7% proof developed reserves.
Timothy Rezvan: Okay. That's helpful context. Appreciate it. Then my follow-up, in the release last night, you gave preliminary year-end 2025 reserves. We were a little bit surprised to see the decline. It was about 7% proved developed reserves. Oil, almost 13% year-over-year decline. Can you give some context on that change? Was that all price-related, or was there something else driving those numbers? Thank you.
Tim Rezvan: Okay. That's helpful context. Appreciate it. Then my follow-up, in the release last night, you gave preliminary year-end 2025 reserves. We were a little bit surprised to see the decline. It was about 7% proved developed reserves. Oil, almost 13% year-over-year decline. Can you give some context on that change? Was that all price-related, or was there something else driving those numbers? Thank you.
Speaker #8: Oil almost 13% year-over-year decline. Can you give some context on that change? Was that all price-related or was there something else driving those numbers?
Speaker #8: Thank you.
Speaker #3: Yeah. Just give you my thoughts around the reserve situation as a whole. We had 103% overall reserve replacement on proof, which is pretty strong.
Eric Hambly: Yeah. Just give you my thoughts around the reserve situation as a whole. We had 103% overall reserve replacement on proved, which is pretty strong. We've maintained our reserves in similar level for over a decade, around 700 million barrels. So we had pretty solid reserve replacement, which I'm pretty pleased with. Over the last few years, we have proved developed reserves that have kind of moved somewhere in the 50% to 57% of total proved. And so I'm happy with what we've done there. I think we have a pretty solid outcome. We do have in our offshore business, sometimes we have a little bit of lumpiness in things that are in proved undeveloped moving to proved developed. So for example, the Chinook 8 well is booked as proved undeveloped. It'll move to proved developed this year. It'll represent a significant move.
Eric Hambly: Yeah. Just give you my thoughts around the reserve situation as a whole. We had 103% overall reserve replacement on proved, which is pretty strong. We've maintained our reserves in similar level for over a decade, around 700 million barrels. So we had pretty solid reserve replacement, which I'm pretty pleased with. Over the last few years, we have proved developed reserves that have kind of moved somewhere in the 50% to 57% of total proved. And so I'm happy with what we've done there. I think we have a pretty solid outcome.
Speaker #3: We've maintained our reserves in similar level for over a decade, around 700 million barrels. So we had pretty solid reserve replacement, which I'm pretty pleased with.
Speaker #3: Over the last few years, we have proof-developed reserves that have kind of moved somewhere in the 50% to 57% of total proof. And so I'm happy with what we've done there.
Speaker #3: I think we have pretty solid outcome. We do have in our offshore business, sometimes we have a little bit of lumpiness in things that are in proof undeveloped moving to proof developed.
We do have in our offshore business, sometimes we have a little bit of lumpiness in things that are in proved undeveloped moving to proved developed. So for example, the Chinook 8 well is booked as proved undeveloped. It'll move to proved developed this year. It'll represent a significant move.We did move proved developed significant adds in prior years for the sanction of Lac Da Vang. We added significant reserves when we acquired the FPSO, which supports Cascade and Chinook fields. So there's a little bit of lumpiness sometimes in our offshore business. What's in proved total versus proved developed? I wouldn't characterize any of that as abnormal for us. I think we're in a very good spot. And moving our total company from around 50% proved developed up to 57% proved developed is a very positive thing.
Speaker #3: example, the Chinook 8 So for well is booked as proof undeveloped. It'll move to proof developed this year. It'll represent a significant move. We did move proof developed significant adds in prior years for the sanction of Lac de Vang.
Eric Hambly: We did move proved developed significant adds in prior years for the sanction of Lac Da Vang. We added significant reserves when we acquired the FPSO, which supports Cascade and Chinook fields. So there's a little bit of lumpiness sometimes in our offshore business. What's in proved total versus proved developed? I wouldn't characterize any of that as abnormal for us. I think we're in a very good spot. And moving our total company from around 50% proved developed up to 57% proved developed is a very positive thing.
Speaker #3: We added significant reserves when we acquired the Cascade FPSO, which supports the Cascade and Chinook fields. So there's a little bit of lumpiness sometimes in our offshore business.
Speaker #3: What's in proof total versus proof developed? I wouldn't characterize any of that as abnormal for us. I think we're in very good spot. And moving our total company from around 50% proof developed up to 57% proof developed is a very positive
Speaker #3: thing. Okay.
Timothy Rezvan: Okay. Appreciate the context. Thank you.
Tim Rezvan: Okay. Appreciate the context. Thank you.
Speaker #8: Appreciate the context. Thank you.
Speaker #3: Thanks.
Eric Hambly: Thanks.
Eric Hambly: Thanks.
Speaker #1: Your next question comes from Philip Jungmors with BIEMO. Your line is now open.
Operator: Your next question comes from Philip Jungworth with BMO. Your line is now open.
Operator: Your next question comes from Philip Jungworth with BMO. Your line is now open.
Speaker #1: open. Thanks.
Philip Jungworth: Thanks. Good morning. I guess building on the proved reserves question, in the offshore resource disclosure part of the deck, you did shift more projects to the sub-$40 break-even category than you had previously. We often see this with shale, but I was just wondering if you could talk about the drivers of the improvement in the offshore inventory. Then separately, just how you see the 7 new blocks in the Gulf of Mexico adding to this, whether it's more focused on tie-back potential to existing infrastructure or a bit more exploration.
Philip Jungwirth: Thanks. Good morning. I guess building on the proved reserves question, in the offshore resource disclosure part of the deck, you did shift more projects to the sub-$40 break-even category than you had previously. We often see this with shale, but I was just wondering if you could talk about the drivers of the improvement in the offshore inventory. Then separately, just how you see the 7 new blocks in the Gulf of Mexico adding to this, whether it's more focused on tie-back potential to existing infrastructure or a bit more exploration.
Speaker #3: Good morning. I guess building on the proof reserve question, in the offshore resource disclosure part of the deck, you did shift more projects to the sub-$40 break-even category than you had previously.
Speaker #3: And we often see this with shale, but I was just wondering if you could talk about the drivers of the improvement in the offshore inventory and then separately just how you see the seven new blocks in the Gulf of America adding to this, whether it's more focused on Tyvac potential to existing infrastructure, or a bit more exploration.
Speaker #3: Sure. I'll start with your last part there. The blocks that we picked up in the lease sale are exploration, oriented. They're all oriented around exploration.
Timothy Rezvan: Sure. I'll start with your last part there. The blocks that we picked up in the lease sale are exploration-oriented. They're all oriented around exploration. One of the blocks is in the Ocotillo field where we have already made a discovery. It kind of represents a northern extension of Ocotillo. And so that's something that we're going to be working on trying to monetize with our partners. The overall update on project economics for our offshore business, there may be a little bit of movement. We update this once a year. So we update our costs and our resource estimates for all of our projects. I wouldn't characterize any of it as moving significantly. There might be minor changes. I wouldn't say that we've kind of wholesale reassessed our portfolio, that there's a dramatically different cost structure or resource.
Tim Rezvan: Sure. I'll start with your last part there. The blocks that we picked up in the lease sale are exploration-oriented. They're all oriented around exploration. One of the blocks is in the Ocotillo field where we have already made a discovery. It kind of represents a northern extension of Ocotillo. And so that's something that we're going to be working on trying to monetize with our partners. The overall update on project economics for our offshore business, there may be a little bit of movement.
Speaker #3: One of the blocks is in the Ocotillo field, where we have already made a discovery. It kind of represents a northern extension of Ocotillo.
Speaker #3: And so that's something that we're going to be working on, trying to monetize with our partners. The overall update on project economics for our offshore business—there may be a little bit of movement.
We update this once a year. So we update our costs and our resource estimates for all of our projects. I wouldn't characterize any of it as moving significantly. There might be minor changes. I wouldn't say that we've kind of wholesale reassessed our portfolio, that there's a dramatically different cost structure or resource. I think there may be just slight movement around kind of fine-tuning what we expect of the projects and the timing of the projects.
Speaker #3: We update this once a year. So we update our costs and our resource estimates for all of our projects. I wouldn't characterize any of it as moving significantly.
Speaker #3: There might be minor changes. I wouldn't say that we've kind of wholesale reassessed our portfolio that there's a dramatically different cost structure or resource.
Speaker #3: I think that maybe just slight movement around kind of fine-tuning what we expect of the projects and the timing of the projects.
Timothy Rezvan: I think there may be just slight movement around kind of fine-tuning what we expect of the projects and the timing of the projects.
Speaker #1: Okay, great. And then the market’s seen a pretty significant re-rate of Montney valuations over the past six months. Wondering how core you view the onshore position in Canada—whether it could make sense to take advantage of a strong A&D market, recycle capital into high-return areas, or maybe some kind of drilling partnership carry is also possible just given the deep inventory and improving egress we’re seeing.
Philip Jungworth: Okay. Great. And then the market's seen a pretty significant re-rate of Montney valuations over the past six months. Wondering how core you view the onshore position in Canada, whether it could make sense to take advantage of a strong A&D market, recycle capital at high return areas, or maybe some kind of drilling partnership carry is also possible just given the deep inventory and improving egress we're seeing.
Philip Jungwirth: Okay. Great. And then the market's seen a pretty significant re-rate of Montney valuations over the past six months. Wondering how core you view the onshore position in Canada, whether it could make sense to take advantage of a strong A&D market, recycle capital at high return areas, or maybe some kind of drilling partnership carry is also possible just given the deep inventory and improving egress we're seeing.
Speaker #3: That's a great question. To provide even bigger context, I think I would say we're very internally active at assessing what our assets do in our portfolio and how they may be viewed by the market. I meet once a week with a business development team and my executive leadership team, and we walk through opportunities for M&A. That includes buying things at an asset or company level and selling things at an asset level.
Eric Hambly: That's a great question. To provide even bigger context, I think I would say we're very internally active at assessing what our assets do in our portfolio and how they may be viewed by the market. I meet once a week with a business development team and my executive leadership team, and we walk through opportunities for M&A. That includes buying things at an asset or company level and selling things at an asset level. So we constantly are thinking about, does it make sense for us to have this asset? What does the asset do in our portfolio? Is it better that someone else has that asset and we do different things with the capital we might raise from selling it? We're very actively looking at it. We're very aware of what we think our assets are worth to other people in the market.
Eric Hambly: That's a great question. To provide even bigger context, I think I would say we're very internally active at assessing what our assets do in our portfolio and how they may be viewed by the market. I meet once a week with a business development team and my executive leadership team, and we walk through opportunities for M&A. That includes buying things at an asset or company level and selling things at an asset level. So we constantly are thinking about, does it make sense for us to have this asset? What does the asset do in our portfolio? Is it better that someone else has that asset and we do different things with the capital we might raise from selling it? We're very actively looking at it.
Speaker #3: And so we constantly are thinking about, does it make sense for us to have this asset? What does the asset do in our portfolio?
Speaker #3: Is it better that someone else has that asset and we do different things with the capital we might raise from selling it? So we're very actively looking at it.
Speaker #3: We're very aware of what we think our assets are worth to other people in the market. Right now, I don't look at an asset and say, "We think we could transact where we would sell that and have an ability to deploy it to something that we think is even better." The tougher Montney is somewhat unique in that the resource is tremendous.
We're very aware of what we think our assets are worth to other people in the market. Right now, I don't look at an asset and say, "We think we could transact where we would sell that and have an ability to deploy it to something that we think is even better." The Tupper Montney is somewhat unique in that the resource is tremendous. If you value the Tupper Montney business, our Tupper Montney business on discounted cash flow type of metric or any other assessment of the NAV, it's unique in that the number you calculate now is basically the same number you get a decade from now because the resource length is so long that it effectively doesn't change in value, which is an interesting thing and a nice thing to have.
Eric Hambly: Right now, I don't look at an asset and say, "We think we could transact where we would sell that and have an ability to deploy it to something that we think is even better." The Tupper Montney is somewhat unique in that the resource is tremendous. If you value the Tupper Montney business, our Tupper Montney business on discounted cash flow type of metric or any other assessment of the NAV, it's unique in that the number you calculate now is basically the same number you get a decade from now because the resource length is so long that it effectively doesn't change in value, which is an interesting thing and a nice thing to have. We like it because in periods of high gas price, it can generate nice cash flows. In periods of low gas price, we break even or do a little better.
Speaker #3: If you value the tougher Montney business—our tougher Montney business—on a discounted cash flow type of metric or any other assessment of the NAV, it's unique in that the number you calculate now is basically the same number you get a decade from now, because the resource length is so long that it effectively doesn't change in value, which is an interesting thing and a nice thing to have.
Speaker #3: We like it because in high periods of high gas price, it can generate nice cash flows. In periods of low gas price, we break even or do a little better.
We like it because in periods of high gas price, it can generate nice cash flows. In periods of low gas price, we break even or do a little better. It's very capital efficient, and it's a giant resource that provides long-term optionality where we think that the world will need more and more natural gas going forward. So we like it, but we are also aware, other people like it, and we consider opportunities for the assets all the time as we do with all of our assets. I hope that gave you more context. Maybe I can clarify if you have a follow-on.
Speaker #3: It's very capital efficient. And it's a giant resource. That provides long-term optionality where we think that the world will need more and more natural gas going forward.
Eric Hambly: It's very capital efficient, and it's a giant resource that provides long-term optionality where we think that the world will need more and more natural gas going forward. So we like it, but we are also aware, other people like it, and we consider opportunities for the assets all the time as we do with all of our assets. I hope that gave you more context. Maybe I can clarify if you have a follow-on.
Speaker #3: So we like it, but we are also aware other people like it. And we consider opportunities for the assets all the time. As we do with all of our assets.
Speaker #3: I hope that gave you more context. Maybe I can clarify if you have a follow-on.
Speaker #1: No, that's great. Really helpful. Appreciate it, guys. Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Betty Jang with Barclays.
Philip Jungworth: No, that's great. Really helpful. Appreciate it, guys.
Philip Jungwirth: No, that's great. Really helpful. Appreciate it, guys.
Operator: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Betty Jiang with Barclays. Your line is now open.
Operator: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Betty Jiang with Barclays. Your line is now open.
Speaker #1: Your line is now open.
Speaker #9: Good morning. Eric, thank you for taking my question. I have my question on one legacy asset and one on Vietnam. On legacy, we go I'm not going to ask about 2027, but I was wondering how to think about the base decline rate for GOA assets with the offshore resource pie you disclose in the deck.
Atif Riaz: Good morning, Eric. Thank you for taking my question. My question on one on legacy asset and one on Vietnam. On legacy on GOM, I'm not going to ask about 2027, but I was wondering how to think about the base decline rate for GOM assets with the offshore resource pie you disclosed in the deck. GOM is also a smaller percentage of that offshore resources than a year ago. Just wondering with Vietnam growing, what is GOM doing longer term in that single-digit oil growth number?
Betty Jiang: Good morning, Eric. Thank you for taking my question. My question on one on legacy asset and one on Vietnam. On legacy on GOM, I'm not going to ask about 2027, but I was wondering how to think about the base decline rate for GOM assets with the offshore resource pie you disclosed in the deck. GOM is also a smaller percentage of that offshore resources than a year ago. Just wondering with Vietnam growing, what is GOM doing longer term in that single-digit oil growth number?
Speaker #9: GOA is also a smaller percentage of that offshore resource than a year ago. Just wondering, with Vietnam growing, what is GOA doing longer term in that single-digit oil growth number?
Speaker #3: Yeah, great question. So, to the first question around decline rate, it's difficult to give you an exact number. When we've looked at this before, and kind of in aggregate, if you invest nothing in the deepwater Gulf of America, you should expect about an 18% annual decline rate.
Philip Jungworth: Yeah. Great question. So the first question around decline rate, it's difficult to give you an exact number. When we've looked at this before and kind of in aggregate, if you invest nothing in the Deepwater Gulf of America, you should expect about 18% annual decline rate. That's kind of what we've seen. Some fields have shallower decline, like say MALO. Other fields are slightly steeper. On balance, if I was guessing and I was putting it in my model, I would put an 18% decline rate. The projects that we've identified in our development set that we put in our appendix of our slide deck on slide 37, the Gulf of America projects, most of them of significant scale get developed by the end of this decade.
Eric Hambly: Yeah. Great question. So the first question around decline rate, it's difficult to give you an exact number. When we've looked at this before and kind of in aggregate, if you invest nothing in the Deepwater Gulf of America, you should expect about 18% annual decline rate. That's kind of what we've seen. Some fields have shallower decline, like say MALO. Other fields are slightly steeper. On balance, if I was guessing and I was putting it in my model, I would put an 18% decline rate. The projects that we've identified in our development set that we put in our appendix of our slide deck on slide 37, the Gulf of America projects, most of them of significant scale get developed by the end of this decade.
Speaker #3: That's kind of what we've seen. Some fields have shallower decline, like St. Malo; other fields are slightly steeper. On balance, if I was guessing, and I was putting it in my model, I would put an 18% decline rate.
Speaker #3: The projects that we've identified in our development set that we put in our appendix of our slide deck on slide 37, the Gulf of America projects, most of them of significant scale get developed by the end of this decade.
Speaker #3: So what I expect is our ability to maintain scale to have potentially slight growth in our GOA volumes through the end of the decade and then have significant decline post-2029 with basically running out of things to do in our existing portfolio of discovered fields and developed fields.
Philip Jungworth: So what I expect is our ability to maintain scale, to have potentially slight growth in our GOA volumes through the end of the decade, and then have significant decline post-2029 with basically running out of things to do in our existing portfolio of discovered fields and developed fields. Those things are new wells or workovers, various opportunities in existing fields. Our pipeline of exploration activity is designed to help extend that runway. So things like we just discovered, like Cello Banjo won't be in there yet. Ocotillo, I don't believe is in there. So there are things that we've just discovered that will make their way into that over time, and they're not there yet. So I expect those will help us push out that plateau a little bit farther for the overall Gulf business. There's work to be done, obviously.
So what I expect is our ability to maintain scale, to have potentially slight growth in our GOA volumes through the end of the decade, and then have significant decline post-2029 with basically running out of things to do in our existing portfolio of discovered fields and developed fields. Those things are new wells or workovers, various opportunities in existing fields. Our pipeline of exploration activity is designed to help extend that runway. So things like we just discovered, like Cello Banjo won't be in there yet. Ocotillo, I don't believe is in there. So there are things that we've just discovered that will make their way into that over time, and they're not there yet.
Speaker #3: Those things are new wells or workovers, various opportunities in existing fields. Our pipeline of exploration activity is designed to help extend that runway. So things like we just discovered, like Cello Banjo won't be in there yet.
Speaker #3: Ocotillo, I don't believe is in there. So there are things that we've just discovered that will make their way into that over time, and they're not there yet.
So I expect those will help us push out that plateau a little bit farther for the overall Gulf business. There's work to be done, obviously. And then we maintain a fairly robust portfolio of exploration opportunities in the Gulf. That's a balance between near-infrastructure opportunities that are higher chance of success, likely smaller volume, and larger opportunities that we'll probably test in the 2027, 2028 timeframe that could help extend the runway here. And so I think that helps characterize what to expect kind of our core already identified business and then what may happen with our drill bit through exploration.
Speaker #3: So I expect those will help us push out that plateau a little bit farther for the overall Gulf business. There's work to be done, obviously, and then we maintain a fairly robust portfolio of exploration opportunities in the Gulf that's a balance between near-infrastructure opportunities that are higher chance of success, likely smaller volume, and larger opportunities that will probably test in the 27, 28 timeframe that could help extend the runway here.
Philip Jungworth: And then we maintain a fairly robust portfolio of exploration opportunities in the Gulf. That's a balance between near-infrastructure opportunities that are higher chance of success, likely smaller volume, and larger opportunities that we'll probably test in the 2027, 2028 timeframe that could help extend the runway here. And so I think that helps characterize what to expect kind of our core already identified business and then what may happen with our drill bit through exploration.
Speaker #3: And so I think that helps characterize what to expect, kind of our core already identified business, and then what may happen with our drill bit through exploration.
Speaker #9: No, that's very helpful, Color. Thank you. Follow-up on the Vietnam number: so, you mentioned earlier that you expect first oil maybe in 2030 to 2031 for HSV.
Atif Riaz: No, that's very helpful color. Thank you. Follow-up on the Vietnam number. So you mentioned earlier that you expect first oil maybe in 2030 to 2031 for HSV. Is it fair to say that you get to that 30,000 to 50,000 barrels per day number a few years into that, like by mid-2030s, since it's a phased approach? And then with the two appraisal wells that you are drilling, what would you characterize as the most meaningful drivers of upside that you're looking for that could result in increases to either the resource or the production number?
Betty Jiang: No, that's very helpful color. Thank you. Follow-up on the Vietnam number. So you mentioned earlier that you expect first oil maybe in 2030 to 2031 for HSV. Is it fair to say that you get to that 30,000 to 50,000 barrels per day number a few years into that, like by mid-2030s, since it's a phased approach? And then with the two appraisal wells that you are drilling, what would you characterize as the most meaningful drivers of upside that you're looking for that could result in increases to either the resource or the production number?
Speaker #9: Is it fair to say that you get to that 30,000 to 50,000 barrels per day number a few years into that? By mid-2030s, since it's a phased approach.
Speaker #9: And then, with the two appraisal wells that you're drilling, what would you characterize as the most meaningful drivers of upside that you're looking for, that could result in increases to either the resource or the production number?
Speaker #3: Sure. I would say if we achieved high SUBONG first production in 2031, obviously, we don't yet have an exact plan of how we develop the field, but going on what kind of historically makes sense, I would expect that we would see peak production there by 2033.
Philip Jungworth: Sure. I would say if we achieved Hai Su Vang first production in 2031, obviously we don't yet have an exact plan of how we develop the field, but going on what kind of historically makes sense, I would expect that we would see peak production there by 2033. That's a guess. It'll probably be fine-tuned. By the time we have this call a year from now, we probably know a lot more we know there, but it's reasonable to expect from first oil 2031 and production peak 2033. That's a guess. It's a reasonable guess. I think if I were you and trying to model it, that's probably what I would do.
Eric Hambly: Sure. I would say if we achieved Hai Su Vang first production in 2031, obviously we don't yet have an exact plan of how we develop the field, but going on what kind of historically makes sense, I would expect that we would see peak production there by 2033. That's a guess. It'll probably be fine-tuned. By the time we have this call a year from now, we probably know a lot more we know there, but it's reasonable to expect from first oil 2031 and production peak 2033. That's a guess. It's a reasonable guess. I think if I were you and trying to model it, that's probably what I would do.
Speaker #3: That's a guess. It'll probably be fine-tuned. By the time we have this call a year from now, we probably know what we a lot more we know there, but it's a reasonable to expect from first oil 2031 and production peak 2033.
Speaker #3: That's a guess. It's a reasonable guess. I think if I were you and trying to model it, that's probably what I would do. The appraisal wells at the high SUBONG 3X and 4X are designed to test the shallow and the primary reservoir and to prove the lateral extent and also potentially deepen the known oil-water level in the field.
Philip Jungworth: The appraisal wells at the Hai Su Vang 3X and 4X are designed to test the shallow and the primary reservoir and to prove the lateral extent and also potentially deepen the known oil-water level in the field. As we pointed out, we did not encounter oil-water contact in our Hai Su Vang 2X appraisal well. We deepened the known oil-water level. There's still potential room on the structure to have more oil below the level we identified in the 2X, and we're definitely chasing that with the 3X and 4X wells. They'll also help us with the shallower reservoir, understand lateral extent, resource range.
The appraisal wells at the Hai Su Vang 3X and 4X are designed to test the shallow and the primary reservoir and to prove the lateral extent and also potentially deepen the known oil-water level in the field. As we pointed out, we did not encounter oil-water contact in our Hai Su Vang 2X appraisal well. We deepened the known oil-water level. There's still potential room on the structure to have more oil below the level we identified in the 2X, and we're definitely chasing that with the 3X and 4X wells. They'll also help us with the shallower reservoir, understand lateral extent, resource range.
Speaker #3: As we pointed out, we did not encounter oil-water contact in our high SUBONG 2X appraisal well. We deepened the known oil-water level. There's still potential room on the structure to have more oil below the level we identified in the 2X, and we're definitely chasing that with the 3X and 4X wells.
Speaker #3: They'll also help us with the shallower reservoir. Understand lateral extent, resource range, and again, I think by the time we get through our appraisal program and do a little updated modeling work later this year, we'll have a really good feel for what the range of resources for the field is and how we want to optimally develop it.
Philip Jungworth: And again, I think by the time we get through our appraisal program and do a little updated modeling work later this year, we'll have a really good feel for what the range of resources for the field is and how we want to optimally develop it.
Philip Jungwirth: And again, I think by the time we get through our appraisal program and do a little updated modeling work later this year, we'll have a really good feel for what the range of resources for the field is and how we want to optimally develop it.
Speaker #9: That's great. Thank you for that, Color.
Operator: That's great. Thank you for that color. There are no further questions at this time. I will now turn the call over to Eric Hambly for closing remarks.
Betty Jiang: That's great. Thank you for that color.
Operator: There are no further questions at this time. I will now turn the call over to Eric Hambly for closing remarks.
Speaker #1: There are no further questions at this time. I will now turn the call over to Eric Hambly for closing remarks.
Speaker #3: Thank you, Operator. I'd like to close by thanking our employees for their tremendous dedication and hard work, and our shareholders for their ongoing trust.
Timothy Rezvan: Thank you, Operator. I'd like to close by thanking our employees for the tremendous dedication and hard work, and our shareholders for their ongoing trust. Thank you, and this concludes our call.
Eric Hambly: Thank you, Operator. I'd like to close by thanking our employees for the tremendous dedication and hard work, and our shareholders for their ongoing trust. Thank you, and this concludes our call.
Speaker #3: Thank you, and this concludes our call.
Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating in FAE. Please disconnect your lines.
Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating in FAE. Please disconnect your lines.
