EARNINGS / Murphy Oil Announces Fourth Quarter Earnings
TSE SYMBOL: MUR.U
NYSE SYMBOL: MUR
JANUARY 28, 1999
EL DORADO, ARKANSAS--Murphy Oil Corporation's President and Chief
Executive Officer, Claiborne P. Deming, announced today that
income before special items in the fourth quarter of 1998 totaled
$1 million, $.02 a share, compared to $31.7 million, $.71 a share,
a year ago. Including special items, the current quarter reflected
a loss of $61.1 million, $1.36 a share, compared to net income of
$31.9 million, $.71 a share, in the fourth quarter of 1997. The
after-tax special items in the current quarter included a
previously announced charge of $57.6 million attributable to
impairment of oil and gas properties, a $4.2 million charge for
write-down of inventories, a $4.2 million charge for cancellation
of a drilling rig contract, and benefits, primarily from asset
sales, of $3.9 million. For the full year 1998, income before
special items totaled $43.5 million, $.97 a share, compared to
$132.3 million, $2.94 a share, in 1997. After special items, the
results of operations for 1998 reflected a loss of $14.4 million,
$.32 a share, compared to net income of $132.4 million, $2.94 a
share, in 1997. Cash flow from operating activities, excluding
changes in noncash working capital items, totaled $325 million for
the year 1998, $7.23 a share, and $62.9 million for the current
quarter, $1.40 a share, compared to $474.2 million, $10.55 a
share, and $137.9 million, $3.07 a share, respectively, a year
ago.
In commenting on the results of the current quarter, Mr. Deming
said, "Continuing weak demand and surplus supplies during the
fourth quarter of 1998 exerted significant downward pressures on
prices and resulted in the write-down of the carrying value of
certain of the Company's oil and gas properties and downstream
inventories. Current industry conditions are also impacting
operating costs. This is particularly true for drilling rigs, and
in the current quarter the Company and its partners canceled the
contract for the drilling rig originally scheduled to drill the
development wells of the Terra Nova oil field, offshore Canada. We
believe a more efficient and modern rig can now be obtained and
expect to reduce our costs for the drilling program compared to
what they might otherwise have been. The project remains on
schedule to deliver first oil, within budget, before the end of
2000."
Mr. Deming added, "Excluding special items, the current quarter's
operating results included earnings from our worldwide downstream
operation of $4.3 million compared to $8.3 million a year ago.
Exploration and production operations reported a loss of $.7
million compared to earnings of $27.5 million in the fourth
quarter of 1997, with a 13 percent increase in crude oil
production more than offset by a decline in average worldwide
crude oil prices of over $5.60 a barrel. While operating results
for the full year 1998 were also affected by low crude oil sales
prices, crude oil production was up 3 percent and for the eighth
consecutive year we will see an increase in proved reserves."
Exploration and production operations in the U.S. earned $4.3
million in the fourth quarter of 1998, compared to $22.1 million a
year ago. Operations in Canada earned $.6 million in the current
quarter compared to $3.3 million in the fourth quarter of 1997,
and U.K. operations earned $2.2 million compared to $3 million.
Operations in Ecuador reported a loss of $.3 million in the fourth
quarter of 1998 compared to earnings of $4.5 million a year ago.
Other international operations reported a loss of $7.5 million
compared to a loss of $5.4 million a year earlier. The Company's
worldwide crude oil and condensate sales price averaged $9.92 a
barrel in the current quarter compared to $15.55 a barrel a year
ago, a decrease of 36 percent. Total crude oil and gas liquids
production averaged 66,953 barrels a day in the current quarter
compared to 59,347 in the fourth quarter of 1997. Production from
new fields being brought on stream in the U.K. and offshore Canada
were partially offset by a decline in Canadian heavy oil
production due to a selective shut-in of production in response to
a drop in heavy oil prices. Natural gas sales prices were also
under pressure in the U.S. and averaged $2.03 an MCF in the
current quarter compared to $3.15 a year ago, down 36 percent.
Natural gas sales prices averaged $1.69 an MCF in Canada, an
increase of 17 percent. Total natural gas sales averaged 231
million cubic feet a day compared to 270 million a year ago. Sales
of natural gas in the U.S. averaged 160 million cubic feet a day
compared to 210 million in the fourth quarter of 1997. Exploration
expenses totaled $16.1 million in the current quarter compared to
$23.3 million a year ago.
Refining, marketing and transportation operations in the U.S.
earned $.6 million in the fourth quarter of 1998 compared to $3.4
million a year ago. Operations in the U.K. earned $2.8 million in
the current quarter compared to $3.2 million in the fourth quarter
of 1997. Earnings from purchasing, transporting and reselling
crude oil in Canada were $.9 million in the current quarter
compared to $1.7 million a year ago. Refinery crude runs were
168,124 barrels a day compared to 167,425 in the fourth quarter of
1997. Refined product sales were 174,379 barrels a day compared to
169,941 a year ago.
Corporate functions reflected losses of $2.6 million in the
current quarter compared to $4.1 million in the fourth quarter of
1997.
Crude oil and gas liquids production for the full year 1998
averaged 59,128 barrels a day compared to 57,494 in 1997. Natural
gas sales averaged 231 million cubic feet a day compared to 269
million a year ago. Refinery crude runs were 165,580 barrels a day
compared to 161,560. Petroleum product sales were 174,152 barrels
a day compared to 163,430 in 1997.
The forward-looking statements reflected in this release are made
in reliance upon the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. No assurance can be
given that the results discussed herein will be attained, and
certain important factors that may cause actual results to differ
materially are contained in Murphy's January 15, 1997 Form 8-K on
file with the SEC.
/T/
MURPHY OIL CORPORATION
CONSOLIDATED FINANCIAL DATA SUMMARY
(1998 unaudited)
1998 1997
FOURTH QUARTER
Revenues $ 376,232,000 565,413,000
Net income (loss) (61,149,000) 31,909,000(B)
Net income (loss) per Common share
Basic (1.36)(A) .71(B)
Diluted (1.36)(A) .71(B)
Average shares outstanding
Basic 44,962,370 44,890,823
Diluted 44,962,370 44,948,930
YEAR
Revenues $1,698,847,000 2,137,767,000
Net income (loss) (14,394,000) 132,406,000
Net income (loss) per Common share
Basic (.32)(A) 2.95(B)
Diluted (.32)(A) 2.94(B)
Average shares outstanding
Basic 44,955,679 44,881,225
Diluted 44,955,679 44,960,907
(A) - The fourth quarter and year both include a gain on sale of
assets of $2,943,000 ($.06 a share), a charge for impairment
of long-lived assets of $57,573,000 ($1.28 a share), a charge
to write down the value of crude oil inventories to market
value of $4,227,000 ($.09 a share), and a charge related to
cancellation of a drilling rig contract of $4,248,000 ($.09 a
share). The fourth quarter and year include $976,000 ($.02 a
share) and $2,410,000 ($.05 a share), respectively, for
recovery pertaining to 1996 modifications of foreign crude oil
contracts. The year also includes income of $2,760,000 ($.06 a
share) from modification of a U.K. natural gas sales contract.
(B) - Includes a gain in the fourth quarter and year of
$11,487,000 ($.25 a share) from sale of a Canadian oil
property. The fourth quarter and year include charges of
$12,909,000 ($.29 a share) and $16,224,000 ($.36 a share),
respectively, for impairment of long-lived assets. The fourth
quarter and year also include a recovery pertaining to 1996
modifications of foreign crude oil contracts of $1,642,000
($.04 a share), and the year includes a gain of $3,163,000
($.07 a share) from refund of U.K. income taxes. |
