Q2 2019 Earnings Call
Good morning, ladies and gentlemen, and welcome to the Murphy Oil Corporation second quarter 2018.
Conference call and webcast.
At this time all lines are in listen only mode.
Following the presentation, we will conduct a question answer session.
But any time during this call you require assistance. Please press star zero for the operator.
This call is being recorded on Thursday August eight 2018.
And I would now like turn the conference over to tell you about me.
Vice President Investor Relations and Communications. Please go ahead.
[noise] good morning, everyone and thank you for joining us on our second quarter earnings call. Today with me are Roger Jenkins, President and Chief Executive Officer, David Delaney Executive Vice President and Chief Financial Officer, Mike Mcfadyen, Executive Vice President offshore and Eric Chamblee Executive Vice President onshore [noise]. Please refer to the informational slides we have placed on the Investor Relations section of our website as you follow along with our webcast today throughout today's call production numbers reserves and financial amounts are adjusted to exclude the non controlling interest in the Gulf of Mexico since divesting our Malaysia portfolio. Please note. These assets are characterized as discontinued operations.
Slide one. Additionally, please keep in mind that some of the comments made during this call will be considered forward looking statements as defined in the private Securities Litigation Reform Act of 1995 as such no assurances can be given that these events will acquire 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 see Murphy's 2018 annual report on Form 10-K on file with SEC Murphy takes no duty to publicly update or revise any forward looking statements I will now turn the call over to Roger Jenkins Roger.
Thank you Kelly good morning, everyone. Thank you for listening to our call today first time for the year was extremely busy at Murphy as we continue to simplify and transform our company. Following the close of the L. log in Malaysia transactions, our second quarter results clearly illustrate our commitment to be an old way the company with production from our U.S. onshore North American offshore assets generating robust realized prices leading to continued free cash flow production from continuing operations averaged 159000 equivalents per day in the second quarter, 67% liquids and more importantly, 61% all are more than 94000 barrels of oil per day with only one month of the Kellogg assets contributing to our business.
We also exceeded our production guidance by 5500 barrels oil equivalent per day.
[noise] or U.S. onshore production was 44000 equivalents per day with 74%. All this represents more than a 23% increase in production over the first quarter as we as our well execution is on track and North American offshore production averaged 65000 equivalents per day with 87%. All this includes 8800 barrels of oil equivalent per day from our newly acquired Gulf of Mexico assets above our guidance of 7600 barrels equivalent per day is there a new Gulf of Mexico asset base continues to perform.
We returned 342 million to shareholders in the second quarter, including 300 million share repurchase subsequent to quarter end, we received over 2 million in proceeds for the Malaysia sale and use the funds to repay 1.9 billion of debt incurred from our two Gulf of Mexico acquisitions, along with further increasing cash on our balance sheet.
Over the past several months have been made tremendous strides in transforming our company was quickly move to sanction new projects within our expanding Gulf of Mexico portfolio as well as drilling a successful development well at Dalmatian that we expect to bring online in the fourth quarter.
I will now turn the call over to our Chief Financial Officer, Mr., David Loney to give a financial update.
Thank you Roger and good morning, everyone.
Starting with slide three.
For the second quarter Murphy generated net income of $92.3 million or 54 cents per diluted share with adjusted income of $35.7 million or 21 cents per diluted share. These results exclude the non controlling interests are and see I related to our MP gom business and reflect our Malaysia business as discontinued operations. Similarly, all of the balance sheet accounts related to the Malaysian business rolled up into one of two accounts either assets or liabilities held for sale.
Lastly, lastly, the cash flow statement excludes the Malaysian operations until you get to the very bottom of the statement. We're all such cash flows are covered in the section titled cash flows from discontinued operations.
In addition to the M.C.I. and discontinued operations treatment, we had several one off items in the quarter totaling over $57 million pretax.
These included $15 million in noncash mark to market adjustments of our potential contingent payment liabilities $8 million and transaction costs related to our recent acquisitions and divestitures.
A 51 million dollar noncash mark to market gain on crude oil derivative contracts at a $13 million credit associated with tax reform in the province of Alberta.
Slide four.
We once again generated free cash flow of approximately $63 million more than our capex in the quarter, which benefited from a $93 million or working capital benefit. This working capital shift essentially represented the unwinding of working capital drain we experienced in the first quarter immediately after taking over the M.P. calm operations. It is worth noting that for the six months year to date, our cash flow from operations after adjusting for working capital changes exceeded capex by $15 million.
Given the size of the two transactions, we recently closed and the ultimate classification of all of our Malaysian cash generation as discontinued operations. The fact that we were able to once again generate positive free cash flow. During this period is a strong testament to the fact that Murphy takes free cash flow generation very seriously.
Other cash flow adjustments for the quarter included approximately $22 million of noncash long term compensation as well as an additional cash inflow of approximately $20 million in cash proceeds for the sale of non core Midland basin acreage in Dawson County.
Most importantly, subsequent to quarter end, we repaid $1.9 billion of debt on the balance sheet, bringing our credit facility borrowings to zero combined with our cash this results in available liquidity of more than $2 billion.
Lastly in order to partially protect our increasing exposure to oil prices, resulting from our greatly expanded Gulf of Mexico portfolio. Subsequent to quarter end, we entered into a series of pages at the W. T I level for the remainder of 2019 in all of 2020.
In total we now have hedged to be as swaps 23000 barrels per day for August Onest to December 30, Onest of this year and 24000 barrels per day for calendar 2020 at prices exceeding $63 for the rest of this year and approaching $60 for 2020.
On slide five this is how we would like investors to think about our new assets and the high margins, they're able to generate.
Murphy is really a premium to W.T.I. company now with the majority of our operations in the Eagle Ford Shale and Gulf of Mexico near Gulf Coast markets with existing infrastructure.
This slide illustrates the second quarter oil sales, 5% and what types of markets. They are selling into such as Mars, Brent and new Magellan East Houston or any age that is largely replaced LLS and many contracts.
All have premium differentials over WT.
And while there might be some softening over the next few quarters, we still expect each of these barrels to trade at a premium to WT Act.
Especially when you take our newest offshore assets, which are very valuable from an ATP oil quality perspective, we expect to once again realized premium prices going forward.
On a combined basis, our portfolio of oil assets realized over $63 per barrel post all transportation adjustments as compared to W.T.I. at almost $60.
At an asset level, our Eagle Ford shale is able to generate an EBITDA per Boe, we over $35 and our north American offshore assets generate an impressive $38 EBITDA per Boe.
With that I'll turn it back over to Roger.
Thank you David as previously stated we produced 159000 equivalents in the quarter exceeded guidance for 4% all our operated assets continue to perform very well as we experience lower downtime and offshore assets, especially in our recently purchased fields and better online execution across our onshore assets on slide seven Murphy has a long history of supporting shareholders will continue to do so over the past 10 years. We've returned over 3.8 billion to shareholders and have not issued equity and the second quarter, we repurchased 300 million or roughly 7% of our outstanding shares, which equates to purchasing our proven barrels for only non dollars and 75 cents per Boe.
We still have 200 million remaining under our board authorization, which expires at year end 2020, we will continue to be opportunistic when we purchase shares going forward.
With the recent success in free cash flow generation returns to shareholders since the price collapse of late 15, we're one of only six peers, who actually have free cash flow yield and a history of not overspending.
Our cash flows during this time, we're the leading company in the peer group when dividends and buybacks or added together net of issuances of which we have none are considered.
Move forward now to slide nine.
And the second quarter, we brought on 35 operated wells 23 of which are in Karnes 12, and Tilden as completion efficiencies led to advancing our 2019 drilling program. The Tilden wells, which were scheduled to come online in the third quarter actually brought online in the second quarter.
Overall, we expect to bring 91 wells on line for the year and relatively equal division between Karnes Tilden and Catarina.
[noise] Oh production in the Eagle Ford shale increased by 28% over quarter one.
Which is we feel is an outstanding benchmark for us and our as and as we anticipate a near 7000 barrel equivalent of production increase for quarter three over quarter, one over quarter, two rather and this asset.
Slide 10.
In further detail, our second quarter Eagle Ford Shale wells performance have been strong in both current and Tilden with recent Tilden wells are the best we've ever drilled in this area. This quarter, we drilled all three zones Austin chalk the upper lower Eagle Ford shale with average results exceeding type curves importantly, we achieved average IP 30 rates across all three zones and corns are approximately 1200 equivalents per day was 90% liquids content.
The Tilden wells are important because weve applied our latest completion techniques for the first time in this area.
Central Tilden assets, specifically aligned with the robust performance of our Karnes wells and have achieved significant IP 30 rates, averaging 13, 70 barrels equivalent per day with 92% liquids content.
We're encouraged by recent well results and excited for the future development of this acreage.
Slide 11.
And the Kaybob duvernay or asset continued to perform well as we brought online six wells for the quarter across or K, Bob North into creeks acreage. The initial volumes of proven strong with facility constrained IP 30 rates more than 1000 barrel equivalents per day, and Kaybob, North and 750 barrels equivalent per day into creeks.
We've also closed a cashless acreage swap in Kaybob east, thereby gaining approximately 20000 contiguous gross acres in exchange for only 5800 noncore acres in another area.
Following quarter end the three wells in the Seminary resumed production after third party midstream spec constraint prevented them from flowing to sales in the first half the year.
Going forward, our focus for the remainder of the year is on acreage retention was drilling 13 wells are scheduled to come online in 2020.
Slide 12.
Our Tupper Montney wells continue to deliver steady performance added five wells in the quarter and highlight the new volumes trend in line with our 18 Bcf per well type curves.
Our price mitigation strategy continues to be successful as we realize second quarter pricing of $1.82 per Mcf Canadian excluding transportation compared to an echo price of a dollar and three cents Mcf Canadian.
This is attributed to our excellent marketing team, which remains focused on diversifying our price exposure through hedges and all FICO sales.
Slide 14, we're pleased with our expanded Gulf Mexico portfolio and after completing two major transaction Murphy is now the fifth largest producer in the region.
We successfully drilled development wells at Dalmatian that we plan to bring online in the fourth quarter was the growth rate of more than 6000 equivalents per day.
Well, it's very robust returns as with any nearby infrastructure tie back and the Gulf of Mexico.
We drilled successful well at half Port number two we counted oil and three zones. The well is just completed logging and evaluation results are ongoing we discovered resources. It can easily be produced nearby Murphy operated Delta House facility. We unfortunately found volumes below.
Our main projection for the well.
Slide 15.
In the Gulf of Mexico have a long runway of higher rate of return projects that will provide production and cash flow for several years to come onboard sanction three of these key projects in June one of the projects is a kings key floating production system, which will host the production from two recently purchased fields and the log transaction as well as our recently sanctioned samurai development teams key is being constructed in Korea with first still first steel cut last month.
Well, 50% working interest in the production system and we're currently analyzing our options to sell down a portion of this facility as it is it is highly sought after in the midstream asset market.
The facility will be designed to capture third party volumes as well for additional cash flow and tariffs.
We expect to flow samurai development and at least two more might feel so the facility with first all anticipated in the first half of 2022.
Slide 16, our board sanctioned to developments at CA leasing momentum in samurai's, well, which was successfully drilled by samurai, which has successfully drilled by Murphy in 2018, we see more month or two adjacent fields that we acquired from L. log policing more mine is a seven well development project of which four of the wells previously drilled and cased. The total six wellbore per train penetrations previously drilled.
We invested approximately 200 million over four years with first oil in the first time for 2022. The grocery source is 165 million barrels equivalent with 90% liquids and we expect it will produce for the next.
20 years generating a full cycle rate of return of more than 30%. The reserves have been confirmed by two third party audit firms.
The third project will start in the second half of 19 is a multi well development XM right, which further benefits from our Gulf of Mexico acquisition by achieving synergy being located less than 10 miles from the policing more modeling can kings key facility.
The proximity to now Murphy owned and operated facility not only enhances economics increases the recoverable resources net to Murphy, we expect several decades of production this development as well and a project full cycle rate of return of over 35%.
We're providing a 10 years of disclosure for all three projects to clearly illustrate the timing of spend and the long runway of production and cash flow cash flows following the initial investments.
Slide 17, we've laid out our upcoming short cycle capital projects through 2021 on the Gulf of Mexico, along their spending requirements and associated production gains to highlight the returns of our new asset base.
Overall, we generate nearly 12000 barrels equivalent per day, and this work and additional volumes by 2021 upon completion of the six projects, which include single wells and Workovers and generate an average IR are of more than 80%.
The further illustrates the significant runway of long term growth provided by the Gulf of Mexico business with excellent returns.
Slide 19.
As a review of production, we need to keep in mind that these volumes are from continuing operations net to Murphy unless otherwise noted.
As we look to the third quarter, we expect production to be 190 to 296000.
Equivalents per day of which approximately 118000 barrels will be oil. This is a real engine behind our new cash flow generating ability.
Our full year production is forecasted to range between 174 to 178000 barrels equivalent per day. This implies fourth quarter production will be more than 200000 equivalents per day at a level, we have not seen since 2015.
This is our new baseline going forward as we've adjusted our asset base, the past few years, and particularly enhancing the Gulf of Mexico and Eagle Ford shale.
Or 2019, Capex guidance of 1.35 to 1.45 billion remains within the range, we guided at the beginning of the year prior to any of the transactions that we've conducted this tightened range includes a reduction of 106 million from Malaysia, and an increase of 140 million allocated toward the newly acquired Gulf of Mexico assets.
Approximately 20% of the new ALOG capital is allocated.
Towards short cycle tie backs that are expected to have first all within 18 months, 20% toward long term tieback projects and the remainder allocated to the kings key Fps.
Slide 20 in closing Weve, clearly position Murphy for long term value creation, we transform the company with no equity or debt issuances, and while buying stock and created a new company with more oil weighting and premium pricing Eagle Ford shales, performing with production continuing to ramp up.
We're executing short cycle high rate of return projects in the Gulf as well as Eagle Ford and from this we will generate significant levels of cash flow.
As always we continue to focus on our shareholder friendly activities executing on our share repurchase program and paying our long standing dividend, while maintaining cash flow parity with that I'd like turn the call over to our operator I'd be glad to take your questions. This morning.
Thank you.
Ladies and gentlemen, we will now begin the question and answer session.
I have a question. Please press the star followed by the one on your Touchtone phone.
Well here are three Tom pop acknowledging request.
You are using a speaker phone please lift the handset before pressing any keith.
And your first question is from Brian singer from Goldman Sachs. Brian . Please go ahead.
Hi, good morning, Ron.
Roger you provided some helpful project detail on the Gulf of Mexico short and medium term impact from short to medium term project spending and production. When you put these together with your legacy base can you talk about what Gulf of Mexico, total spending and production looks like in 2020 and 2021.
We are still you know that really gets us back into another way of really asking Brian 2020, Capex and let me.
Frame and start off with that.
We of course have these projects that we sanctioned that there will be additional capex that we have we have a rig program at front runner. We have some non operated wells to do next year.
We have not went beyond that work at this time.
And I appreciate the call and focused on this 2020 matter and I know that people are very interested in this before we get started on that I'd just like to start over in frame, where Murphy is on this and we again when we look at data fruit for 15 to now we are one of the few companies that have even free cash flow at all so we're not a an overspend or all while being a big dividend and shareholder support to do buybacks. So our goal is to be a free cash flow providing company says other projects.
We will need to fit into what we do when we decide our free cash flow Capex parity as we go into 2020.
And 2021, which have triggers that they can change as well as the projects. We disclose here if we need to so so we are not disclosing all those other project Capex now we just went with the new projects. We felt it was important to illustrate to investors and analysts that we have purchased some really good assets and walk to work is and then went out with many years of disclosure trying to illustrate the value of the new assets as well as the ones. We just sanctioned.
Okay. Thanks.
Maybe switching to especially to the Eagleford you highlight the big ramp up in production. That's happening there can you speak to once you get to that 57000 BOE a day type rate that you expect to approach in the fourth quarter, what would be needed to hold production flat from a rig count and capital perspective, and then maybe another way around a 2020 question is what your strategy is for incremental growth and free cash flow at the Eagleford. Once you once you get to that to get to that right.
I have Eric answer that for you Brian .
Thanks for the question so it looks quite a bit what our maintenance capital is to maintain production at a similar rate for our average for this year that looks to be somewhere in the $425 million to $450 million.
To maintain at 57000 Boe per day, or something like that would be a little bit more than that we haven't really work that exact number but I think you can do some math to figure approximately what that looks like.
Great and the strategy in 2020 beyond the 57 continue with a further further rig adds there are price dependent and free cash flow dependent.
Well that Brian gets into our 2020 Capex. So let me just stop and take care of what we have prepared to say on the 2020 capex today.
As I said earlier, we're not a habitual overspend or not by a long shot not by our long history.
When you look at 2020 Capex.
We really have not worked on this yet we know the new projects that we just sanctioned with our board and partners.
We're just starting to work on it next week.
This usually begins after August board meeting and conference call.
If you ask us for a range of what's going to happen it would be a low teens to be below 10 to below 15% an increase in both production and capex for our company. The Capex that we've disclosed this year.
But like any view of those things with free cash flow parity in play we will continue to work that as we get into our budgeting process and as I. Just mentioned, we entered into a very nice floating production system arrangement with ALOG, which we wanted to.
Take over that Operatorship of that facility executed and the history in ability that we bring to the table and we have a.
Big ability to sell that project down.
So our capital as put here today has an ability to sell down the Fps, which is greatly being looked at by many midstream companies.
We wanted to take control of the schedule and how to facilities being built before we took that on so a lot of moving parts with six months before we disclose it.
The capex here.
Brian This morning.
Does that help you with what you need there. So we the eagle from Capex will probably be flat to slightly higher.
For sure.
And.
But we want to maintain capital in both they are in Gulf of Mexico, because that's the key parts of our company they were making enormous cash flow and have great operations running there.
Appreciate the color. Thank you.
Thank you.
Your next question comes from Ivan.
Jay I ran from JP Morgan. Please go ahead.
Good morning.
Hi, good morning, Sir.
I wanted to ask you about your comments in the press release about achieving free cash flow growth over the long term you're clearly.
In a bit of an investing cycle on the Gulf of Mexico. I was wondering if you could maybe give us a bridge too.
Those free cash flow.
Comments that you made in the press release.
Well, we have disclosed a plan thats over a billion dollars of free cash flow over longer period involving an average capital spend in our Gulf of Mexico business over that period, and we stand behind that today until we rework that plan over the next few months, but have no reason to see a significant change in that plan today.
Thats been previously disclosed and I were just reiterating.
The prior disclosure of our plans of which we will be.
Increasing production at a moderate pace not an incredible growth trajectory a lot of increase in there is oil which is a good thing and we stand behind the significant free cash flow that we've disclosed throughout the years throughout this year in conferences et cetera, as we really look at our plan starting next week.
Okay and is there a point in time that you can point to where and when the inflection comes inflection of lightweight.
In terms of the free cash flow inflection.
It's we've disclosed that over and over that long period of time and.
And we're just staying with what we have and I do not see that changing over that period.
And the inflection point is.
We're not talking about that rework it again, starting next week.
Fair enough. Thanks, Thanks for that Roger just just a follow up I was wondering if you could elaborate on your comments on the floating production system that you made some commentary that this could be something that's intriguing from a midstream monetization.
Perspective, so just wanted to get a little bit more insights on that.
It's quite common in the Gulf of Mexico today to have facilities.
Handled by third party. There are several of these facilities. We also have a long history of dealing with leased facilities in Malaysia and another facility in the Gulf of Mexico. The repricing had ownership of so this is nothing new at the project was going forward in very early stages. When we made the asset purchase we have a lot of execution ability in our company and we're not happy with the terms of that the way that was headed took over the operatorship of it and sanctioned it has very nice very nice returns without oil price risk of course, and we took over that and arranged a tariff system to flow into by other parties in one of our other partners became a partner with us in the facility and the facility continues to be sought after by midstream companies in which we would remove this capex and air into a leasing arrangement with that party is probably as primarily a take over the project with the really nice rate of return.
Wish we could just focus on the returns here.
State of the capital Capex every single quarter and year. However, we take over this projects a very nice project then we have the ability to swing our capital as we look at oil prices and free cash flow analysis as we look at our Eagle Ford in our other golf business.
We felt we needed to disclose that our board sanctioned and we have operatorship and 50% owner of it today.
Great. Thanks, a lot Roger.
Thank you.
Thank you. Your next question is from Roger read from Wells Fargo. Please go ahead.
Good morning.
Good morning, Roger.
I guess, what most people are trying to get out here on the Capex front just to be to the same horse here is understanding maybe what your flexibility would be and 2020 across a range of oil prices.
If you think about Gulf of Mexico on a little longer lead times, you commit to something it's tough to change versus we look at the Eagleford or Canada, some maybe without giving us a number can you give us some idea of what your flexibility would be within the Gulf of Mexico next year in terms of pushing things back or not versus.
What would I think we would consider a fairly normal abilities to move things around in the Eagle Ford and Canada.
I appreciate that Roger and thanks as I continue to try to explain were working on our plan now and have already a big swing and just to sell down of this floating production system.
So.
Naturally when you look at capital allocation you have a ranking we haven't.
Very large dividend payment and we're going to make it. So that's first thing.
We know we want to work in the Gulf and we want to work in the Eagle Ford because we have the best prices and the oil field Murphy. So why would we not invest there and you get further away from there we have things like exploration.
We have things like Canada onshore and we have international development, such as Vietnam. So have a lot of flexibility on those top matters. We've also gone to 600 million Capex in 2016 and never issued equity like almost every other company as well. So we've stopped offshore projects before we start one of the biggest projects around the world at block H floating LNG. One time, so we have the flexibility to start stop and do what we needed as we respond to oil prices and our allocation of capital across us. Thanks.
So naturally want to have the Eagle Ford and the golf the primary benefactors of our Capex along with our continued shareholder support.
That's been a long history for US also with a strong liquidity.
A lot of money in the bank no nothing drawn on the revolver and a long history of not overspending here.
So I think we appreciate that it's just I mean thats what the market is concerned is across the board you're getting the same treatment everyone else's.
As a secondary question from an operating standpoint, obviously, a lot of moving parts here in the second quarter or get a little more clarity as things roll into the third give us an idea between the joint venture with Petrobras and then the ALOG acquisition here as you think about cash opex in the Gulf of Mexico, how that is progressing and whether you've been able to pull out all the savings and kind of integration expectations there.
The assets are very similar to what we do the facilities are very similar.
All of that is really has been very seamlessly transition very well our team in Houston. These are a lot of deals that weve done had to execute on the accounting side, the oil sales marketing and operations.
Well.
$10 to $13 kind of Opex in golf and the total golf, we have a workover in the third and fourth quarter of very highly.
Incredibly high rate of return Workover to repair safety valve on as well that we purchased in the Petrobras acquisition that will take place in the third quarter without that we'd be a solid eight or $9 Opex company. So really good shape on the price we received for the barrels and operating expense and their assets are very similar to ours and rolled in at a very similar opex starts.
Great. Thank you.
Thank you.
Okay.
Thank you. Your next question is from Mohammed <unk> from Raymond James. Please go ahead.
Thanks for taking the questions guys. A couple of months ago, you mentioned a that there were plans for additional exploration on block five in Mexico in 2020.
Are there any further details you can provide now that were in the second half 2019.
We're doing our work to drill two wells there and the difference between one two or three wells would be determined when we go through our budget process, but we're eager to drill there we have.
Oil that was found their amplitude is oil we have nearby amplitude we can drill and we have other prospects when drill more excited about going down there when we get through our capital allocation process.
Okay, and kind of another area of exploration any updates on Australia or are there any plans, we should be aware of over the next year or two.
We have turned over operatorship of about one portion of our blocks to Eni there will be closing that office and moving back to Houston, a very limited one or two man team to look after that.
The big so doing a basin of course remains a working interest to large working interest you have there in a very large block.
Ecuador is supposed to drill a well there over the next couple of years the outcome of that well could be important to us, but we would need to wait on that execution, hence, we've close that office and retreated back to Houston.
With a very limited team as part of our global exploration team that we were focused in the western hemisphere and that's the update there.
Okay understood. That's all for me thanks.
Thank you.
Thank you, ladies and gentlemen, as a reminder, should you have any questions. Please press star one.
Your next question is from Paul Cheng from Scotia. Please go ahead Paul.
Hey, guys. Good morning, Paul Paul I haven't heard from you in a long time.
Yeah I have been in a while that has been on got a nave.
Quick question Oh, yes.
Hope <unk> with all the imaging agent sessions Murphy have become a lot of American on showing all sole operator is that how we should look at the company going forward.
Oh, Yeah, just 100% IDTI should look at it.
HM Okay and that I think very very powerful company that we have with high oil rates, increasing over eight incredible cash flow top pricing.
<unk> and I think what you had previously said you talk at Eagle Ford to be about 90000 barrels a day by 2021, yes, that's still with the talking.
No.
I'm not sure where that target comes from.
That wouldn't be the the target it would probably be a name.
Going forward be 60, 70, Eightys as we look to 21 to 23 kind of a number Paul.
So 60 to 70.
Okay, and Eightys into 2023 that would match with the previously disclosed guidance, we have on cash flow generation and all of our price decks and we've been using all year.
Theres no change in that.
Okay that probably my mistake, then a full month they'll probably just remind me what your working interest in.
Some of my mum on and Tracey.
We are 50, 50, and samurai and were 34% increase in more money and 50% in the floating production system facility.
Okay.
And.
It looks like based on what you disclosed on the Gulf of Mexico projects. You. It appears that to suggest you we'd be able to hold the Gulf of Mexico production, which is roughly about 100000 barrel per day include they know a joint venture to be at least for the next 10, but yes, yes, that's correct.
Now the integration.
Our plans that we have disclosed in which we stand behind going into our Capex review next week, because it's a focus area is true is to maintain Gulf of Mexico near 85000, with an average capital span of 325 per year over a five year period, leading to significant cash flow from that five year period.
Oh, we stand behind that and we have these assets here are illustrating number one they were put there to illustrate the returns of the asset and incredible rate of return and disclosure of that long profiles cash flow also clearly see more mine has been reserved reviewed by two third party firms. So the point of the slides are to illustrate the returns and the long cash flow and Capex that we have we have natural decline in our fields and these and other more projects we have inside the capital. We previously disclosed maintains at.
Flat strong cash flow, providing production base or Eagle Ford is our growing oil production base.
Well go to it when you're talking about 85 years that net off your minority interest only include.
Everything I say is everything assays net to Murphy, Paul Okay. So that when I when I was talking about hundreds including that might yeah. That's that's of course correct.
But as we say in the call. It's written all over the place. Its it is confusing I understand that but we always report when it comes out of my lips as Matt.
Not to somebody so whatever is the number that you're talking about years net loss to minority interest correct, Yes, Sir 85 Murphy.
And that.
If I looking at that do you think maybe that use probably not ready to talk about yet if I look at your criminals and mix as the company as a whole you if I want to maintain to that production level in the oil and gas mix. What is that that capex number I think people need that before this concession you saw was talking about in the $800 million also so what's that number may look like today.
The major maintenance Capex number Paul.
Yep to maintain your production mix and your current production level.
Yeah, we feel that's a 850 to 900 million.
Okay very good thank you.
Good good talking with you again appreciate it.
Thank you there are no further questions from my phone lines I would now like to turn the call back over to Roger Jenkins for any closing remarks.
Thanks, everyone for calling in today, we look forward to continue to update you on our continued oil production growth.
In our North American assets, which are outstanding. Thank you and see you soon.
Ladies and gentlemen, this concludes the conference call for today, we thank you for participating and we ask that you. Please disconnect your lines.
Yeah.