Murphy Oil Corporation

All lines have been placed on mute to prevent any background noise. After the presentation, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I will now turn it over to Artis Riaz. Vice President of Investor Relations and Treasurer.

Thank you, Fern. Good morning and welcome to our second quarter 2026 earnings conference call. Joining me today are Eric Hambly, President and CEO, Tom Mireles, Executive Vice President and CFO, and Chris Larino, Senior Vice President of Operations. Yesterday, after markets closed, we issued our second quarter earnings release, a slide presentation, and a stockholder update. These documents can be found on Murphy's website and we will reference them today throughout our call. As a reminder, today's call contains forward-looking statements as defined under U.S. securities laws. 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, please refer to our most recent annual report filed with the SEC. or if he takes no duty to publicly update or revise any forward-looking statements except as required by law. Throughout today's call, production numbers, reserves, and financial amounts are adjusted to exclude non-controlling interests in the Gulf of America. I will now turn the call over to Eric for opening remarks.

Thank you, Asif, and thanks to everyone for joining us. We released detailed earnings materials yesterday, so I will keep my comments focused this morning. I want to spend most of my time on the key developments in the quarter, including what we learned through our exploration and appraisal program, how those learnings are shaping our capital allocation, and why we believe these investments strengthen Murphy's long-term outlook. The most important development this quarter was the Buval discovery in Cote d'Ivoire. Just as important as the result itself is the disciplined exploration process that led us here. We entered Cote d'Ivoire with a clear thesis and a three-well exploration strategy. And although the first two wells were non-commercial, we remained confident in Bubal's prospectivity and continued to execute the plan. That patience and technical conviction paid off as the well encountered oil in both the Turonian and Cinnamanian reservoirs. Now, we want to be very clear about where we are in the process. While Bubal has the potential to become a significant growth driver for Murphy, There is still important appraisal work ahead. The next step is to understand the scale, quality, continuity, and economics of the resource. That work is now underway with the Gubal West 1X, which we spot in July, to begin appraisal of the Toronian Reservoir. It is the first of up to five potential appraisal wells. I emphasize potential because this will be a staged, data-driven process over the next 18 to 24 months. with each well determining the scope and direction of the remaining appraisal program. An 18 to 24-month appraisal program may sound lengthy, but this is how we protect value. In our business, value can be destroyed long before a development well is ever drilled. By misunderstanding the resource, overbuilding the project, or committing capital too early, appraisal helps us avoid those mistakes by giving us the technical confidence to right-size the development and make disciplined capital decisions. Hai Su Vong in Vietnam exemplifies the importance of that discipline. Hai Su Vong 4X was a dry hole, and based on the new data, we have reduced our resource estimate. There is no sugarcoating it. This is not the outcome we were hoping for. However, the appraisal program gave us critical insights, allowing us to now calibrate the field development plan before we commit significant capital in the coming years. Following the Hai Su Vong resource estimate revision, I want to emphasize two important points. Thank you for joining us. on what additional tieback opportunities we identify as we move forward. The key takeaway is that we now have greater clarity around our opportunity set with many compelling projects competing for capital. That brings me to our revised capital program and how we're thinking about investments going forward. We're increasing the midpoint of our 2026 capital expenditure estimate from $1.25 billion to $1.55 billion. This is not about chasing activity or reacting to price. is a deliberate decision to fund specific high-value opportunities now in front of us with almost all of the increase supporting Murphy's organic growth. Roughly $190 million relates to Bubal, including $100 million of incremental spend on the Discovery Well and $90 million for the first appraisal well. Another $70 million is going into the Eagleford, which is expected to add approximately 5,000 to 6,000 barrels of oil equivalent per day in 2027. Thank you for joining us. This is the strength of our multi-basin portfolio in action, not a change in capital discipline. Our ability to fund growth through our base business while maintaining financial strength was evident this quarter. We generated $110 million of free cash flow, returned $50 million to shareholders through the dividend, maintained leverage below one time, and ended it with approximately $2.5 billion of liquidity. Thank you for joining us. is now through drilling after reaching a total depth of 26,000 feet and remains on track to come online in the fourth quarter. Loftavong is also on schedule for first oil in the fourth quarter with the pipeline, top sides, and FSO milestones now complete. As we look ahead, years of capital discipline and technical rigor are beginning to translate into a portfolio with multiple exciting pathways to growth. This is the Murphy model in action. Identify the opportunity, This full cycle capability and track record across geographies, asset types, and development stages sets Murphy apart and positions us to convert the opportunity ahead into lasting shareholder value. With that, we are ready to take your questions.