Murphy Oil (NYSE:MUR) executives used the company’s fourth-quarter 2025 earnings call to highlight operational execution in a difficult commodity-price environment and to outline a 2026 plan centered on funding major offshore and international projects while maintaining financial flexibility. Management emphasized exploration and appraisal activity—particularly in Vietnam—as a key driver of longer-term growth, while acknowledging that near-term production is expected to decline year over year.
2025 performance: production above guidance and lower costs
President and CEO Eric Hambly said 2025 results were “underpinned by strong execution” across Murphy’s assets. He noted that fourth-quarter and full-year production exceeded guidance, supported by strong onshore well performance and high uptime at key offshore facilities. Hambly also pointed to cost control, saying lease operating expenses (LOE) declined 20% year over year and capital expenditures came in below guidance, partly due to efficiency gains in the Eagle Ford Shale program.
Exploration and appraisal: Vietnam upside, Gulf of America discoveries, Civette dry hole
Murphy discussed several exploration outcomes from 2025, including a “highly successful” appraisal at Hai Su Vang in Vietnam’s Golden Sea Lion field, oil discoveries at two exploration wells in the Gulf of America, and a dry hole at Civette in Côte d’Ivoire.
In Vietnam, Hambly said the Hai Su Vang Golden Sea Lion appraisal found 429 feet of net oil pay without encountering the oil-water contact, which he said indicates a resource “significantly above” the company’s initial midpoint estimate of 170 million barrels of oil equivalent. He added that Murphy is continuing the appraisal program with two additional wells and described the early results as potentially creating “a significant new growth business” for the company.
On the Civette well in Côte d’Ivoire, Hambly told analysts Murphy found oil pay in multiple reservoirs but not in quantities sufficient for a commercial discovery. He said work is ongoing to understand why volumes fell short, but emphasized that Civette does not change the company’s view of the remaining two prospects in the program, Caracal and Bubal, which he described as “independent” tests of different reservoirs and plays.
2026 outlook: lower production, flat Eagle Ford with less capital
Hambly said Murphy expects 2026 net production of 171,000 barrels of oil equivalent per day, down from 182,000 boe/d in 2025. He attributed most of the decrease to Tupper Montney natural gas volumes, driven partly by higher gas prices that increase royalties and reduce net volumes, while stating the cash-flow impact should be “muted.”
He also said Murphy plans to keep Eagle Ford production flat while spending 25% less capital there, and reiterated LOE guidance of $10 to $12 per barrel.
Murphy’s first-half 2026 exploration and appraisal program includes two appraisal wells at Hai Su Vang in Vietnam and two exploration wells in Côte d’Ivoire. Hambly also said the company expanded its exploration portfolio with an entry offshore Morocco and the acquisition of seven new blocks in the Gulf of America, with bid results pending for another seven Gulf of America blocks where Murphy was the apparent high bidder in a December 2025 lease sale.
Project updates: Hai Su Vang test rates, Chinook timing, and Vietnam development sequencing
On questions about Hai Su Vang well testing, management said the Hai Su Vang 2X appraisal encountered pay in two reservoirs and tested the primary reservoir in two separate intervals. Each test flowed around 6,000 barrels per day, and management said that together they indicate expected productivity of about 12,000 barrels per day if produced as a single completion interval. The company said the 12,000 barrels per day expectation is not facility-constrained and reflects reservoir deliverability; by comparison, the discovery well’s 10,000 barrels per day test rate had been facility-constrained. Hambly added that typical wells in the basin have historically produced around 2,000 barrels per day, making the Hai Su Vang results notable for the area.
Murphy said the remaining Hai Su Vang appraisal wells (3X and 4X) will assess both the shallow secondary reservoir and the deeper primary reservoir. Hambly said early indications suggest the shallow reservoir could support a commercial development, but the company is not yet providing a resource estimate until it better understands lateral extent.
Hambly also provided additional timing context for Vietnam developments. For Lac Da Vang (Golden Camel), he described a two-phase development with initial production expected in the fourth quarter of 2026 from the Lac Da Vang A platform. A second platform (Lac Da Vang B) is planned with a substructure installation in 2028 and topsides installation in 2029. He said Lac Da Vang is expected to ramp significantly from 2026 to 2027, with peak production likely in late 2027 or early 2028, and that production would begin declining after development concludes in 2029.
For Hai Su Vang, Hambly said Murphy expects to complete the appraisal program by the end of the second quarter of 2026, followed by a field development plan process that could take about a year. He said a final investment decision is targeted in 2027 or by the end of 2027, with a 3- to 4-year execution timeline thereafter. Based on that framework, he called first oil in 2031 “reasonable,” with the possibility of late 2030 if execution moves faster. In a separate exchange, he suggested peak production could occur around 2033, while emphasizing these timelines are preliminary until development planning is complete.
In the Gulf of America, Hambly said the Chinook 8 development well is expected online in the second half of 2026 and is targeting an already producing but “underdeveloped” reservoir. He described subsurface risk as limited and said uncertainty for 2026 production is primarily related to timing because it is a deep well requiring significant drilling and completion time. He added that initial rate uncertainty on a new deepwater well could be around plus or minus 25%, but characterized Chinook as “relatively low uncertainty and nearly zero risk” because it is effectively replacing a prior producer in the field.
Capital flexibility, royalties, and longer-term Gulf decline dynamics
Murphy reiterated that it is prepared to adjust spending if commodity prices remain weak, but Hambly said much of the 2026 capital program is intentionally “constrained” by commitments the company views as value-accretive across a wide range of oil prices. He cited continued investment in the Lac Da Vang development, the remaining Côte d’Ivoire exploration prospects, the Hai Su Vang appraisal program, and the Chinook development well as items Murphy is likely to pursue in “almost every oil price scenario.”
He said Murphy has flexibility in areas such as the later months of its Gulf of America rig program, the Eagle Ford program, and onshore Canada, though he noted onshore activity is weighted toward the first half of the year, reducing flexibility as 2026 progresses. Hambly estimated Murphy could potentially reduce 2026 capital spending by about 10% if needed, and said a larger reduction of roughly 30% to 40% could be possible in a lower-price environment in 2027 because certain major spending items would not repeat.
On Canada, Murphy explained that Tupper Montney royalties are on a sliding scale tied to realized commodity prices. Management said the royalty rate paid in 2025 averaged 4.6% and is projected at about 8.4% in 2026, reflecting higher expected prices. The company added that new wells receive a fixed 5% royalty for a period of time.
Responding to longer-term Gulf of America questions, Hambly said that without investment, Murphy would expect an approximate 18% annual decline rate in deepwater Gulf volumes, though he said declines vary by field. He also said Murphy expects most identified Gulf projects of significant scale to be developed by the end of the decade, potentially allowing the company to maintain scale or see slight growth through the end of the decade, followed by “significant decline post-2029” as the company exhausts opportunities in its currently discovered and developed portfolio. Hambly said Murphy’s exploration pipeline—including recent discoveries and newly acquired blocks—aims to extend that runway.
Murphy ended the call by reiterating that it is entering 2026 with a “solid” balance sheet, a low leverage ratio, and more than $2 billion of liquidity, positioning the company to invest in future growth while retaining the ability to pull back spending if the commodity environment weakens.
About Murphy Oil (NYSE:MUR)
Murphy Oil Corporation is an independent upstream oil and gas company engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids. The company’s operations encompass conventional onshore and offshore reservoirs, with an emphasis on liquids-rich properties and deepwater assets. Through a combination of proprietary technologies and strategic joint ventures, Murphy Oil seeks to optimize recovery rates and manage its portfolio to balance long-term resource development with operational flexibility.
Murphy Oil’s exploration and production activities are geographically diversified.
Featured Articles
- Five stocks we like better than Murphy Oil
- Do not delete, read immediately
- NEW LAW: Congress Approves Setup For Digital Dollar?
- “Fed Proof” Your Bank Account with THESE 4 Simple Steps
- A U.S. “birthright” claim worth trillions – activated quietly
- The Crash Has Already Started (Most Just Don’t See It Yet)
