Murphy Oil Corporation

Good morning, ladies and gentlemen, and welcome to the Murphy Oil Corp fourth quarter 2021 earnings conference call. If at any time during this call you require assistance, please press star zero for the operator. I would now like to turn the conference over to Ms. Kelly Whitley, Vice President, Investor Relations and Communications. Please go ahead.

Good morning, everyone, and thank you for joining us on our fourth quarter earnings call today. Joining us is Roger Jenkins, President and Chief Executive Officer, along with David Looney, Executive Vice President and Chief Financial Officer, and Eric Hambly, Executive Vice President, Operations. 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 non-controlling interest in the Gulf of Mexico. Please keep in mind that some of the comments made during this call will be considered forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. As such, 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, see Murphy's 2020 Annual Report on Form 10-K on file with the SEC. Murphy takes no duty to publicly update or revise any forward-looking statements. With that, I will now turn the call over to Roger Jenkins.

Good morning, everyone. Thank you, Kelly. Turning to slide two, we'd like to continue to remind our investors of our story as Murphy continues to deliver a strong value proposition. Our ongoing execution of three producing areas proves we're a long-term sustainable company, and as discussed later, we had our best year ever on protecting our environments. Our competitive advantage of executing in offshore is illustrated by the outstanding progress in our Khaleesi Moormont Samurai fields and the Kings Key project. We have maintained strong cash flow due to capital discipline that covers our planned spending and debt reduction goal, as well as enhancing our support of shareholders through our multi-decade dividend, of which today we declared a 20% increase. Lastly, our meaningful level of board and management ownership highlights our personal interest in the company's long-term success. On slide three, we established a focused three-tiered strategy in early 21, and I'm very pleased at how the team and the company have remained in alignment with these priorities throughout the year. In the fourth quarter, we redeemed $150 million of our 2024 senior notes, which marked the achievement of our long-term debt reduction goal of $300 million in the second half of 2021. Overall, in 2021, we significantly delivered our company with 17% total debt reduction during the year, a great first step toward our larger goal of $1.4 billion reduction by the end of 2024 at what we are using as very conservative prices. It's important to note that without our strong execution across our company in 2021 and continued controllable cost focus, we would not have generated sufficient cash flow to achieve our delivering goal. Our focus in the fourth quarter is to maintain timing and schedule of Calise Mormont Samurai in the Gulf of Mexico, as well as transport the Kings Key floating production system to its final location in advance of receiving first oil in the second quarter of this year. Additionally, our operating partner transported the Terranova FPSO to Spain to begin dry dock work as part of its asset life extension project. The third priority in our strategy is exploration. Timing shift on sputting our non-operated cutthroat exploration well in Brazil in the fourth quarter into first quarter 22 due to COVID-19 delays in Brazil. However, we remain excited about the wells we prepare to spud with the rig on location. Also, during the fourth quarter of 21, Murphy participated in the Gulf of Mexico federal lease sale and was named a parent high bidder on three deepwater blocks. On slide four, Murphy made tremendous progress Progress this year as we advanced our 2021 priorities. We achieved the first step in our new levering plan by reducing debt $531 million, or 17%, in part through redemption of $300 million of 24 notes. We remain on track for reaching $1.4 billion debt by the end of 2021. 24, rather, I'm sorry. Our team continued reducing costs throughout the year with record low G&A of $122 million, a 13% decline from 2020, and LOE of $8.65 per barrel, which is 5% less than the prior year. Their strong execution efforts were further highlighted by maintaining schedule on our major operated Gulf of Mexico projects, as well as maintaining our asset base with 102% total reserve replacement. I'm also pleased at the success we had on sustainability efforts as we continue achieving excellent safety metrics while accomplishing significant environmental milestones of record low emissions intensity and zero algae piece builds in 21. Lastly, we continue to manage our exploration program in preparation for drilling key wells in 2022. In slide 5, on the fourth quarter, production, Murphy achieved guidance for the fourth quarter with production of 150,000 barrels equivalents per day, while capex of $140 million was $9 million below our guide. Liquids volumes were 6% for the quarter. Hydrolyzed prices enabled us to achieve nearly $700 million in revenue for the quarter. As to slide six, for all of 2021, we produced 158,000 barrels equivalent per day with 87,000 barrels of oil per day, which was a 6% above our original pre-hurricane guidance due to our outstanding agarford shale execution. Total capex for the year was $671 million compared to our $680 million midpoint. It's important to note that our CapEx guidance originally did not include the $20 million Lucius working interest acquisition that occurred in the first quarter. When we account for the non-budget of accretive A&D, we were still able to lower our spending for the year from the original guidance. Overall, we reported a $2.6 billion in revenue for the year due to improved commodity prices. Now I'm going to turn the call over to our CFO, David Looney, who gave a further financial update.