What Are Analysts Saying about Murphy Oil’s 1Q16 Earnings?
Murphy Oil’s production guidance
For 1Q16, Murphy Oil (MUR) expects total production in a range of 190–194 MBoepd (thousand barrels of oil equivalent per day). The midpoint of the 1Q16 production guidance is 192 MBoepd, which is ~13% lower when compared with Murphy Oil’s production volumes in 1Q15. Sequentially, Murphy Oil’s production guidance is lower by ~4% when compared with 4Q15.
Respectively, upstream companies Devon Energy (DVN) and Diamondback Energy (FANG) have reported ~2% and ~46% year-over-year increases in their 4Q15 total production. Energen Corporation (EGN) reported an ~11% year-over-year decrease in its 4Q15 total production.
The SPDR S&P Oil and Gas Exploration & Production ETF (XOP) generally invests at least 80% of its total assets in oil and gas exploration companies. The Direxion Daily S&P Oil & Gas Exploration & Production Bear 3x Shares ETF (DRIP) is a leveraged inverse ETF that invests in oil and gas exploration and production companies.
For 2016, MUR expects total production volume in a range of 180–185 MBoepd, a midpoint decrease of ~12% from its 2015 production of ~208 MBoepd. Other upstream companies such as Energen Corporation (EGN), Southwestern Energy (SWN), Chesapeake Energy (CHK), and Devon Energy (DVN) are also expecting lower production volumes for 2016.
Murphy Oil’s capital expenditure
Murphy Oil (MUR) expects a 2016 capital expenditure of $825 million, which is ~62% lower than the ~$2.2 billion spent in 2015. MUR plans to allocate ~45% to offshore, 41% to Eagle Ford Shale, and 14% to Canada onshore. Murphy Oil plans to keep the capital program flexible and intends to make downward revisions if lower commodity prices persist.
Continue to the next part for a rundown of the recent reaction from Wall Street.
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