Murphy Oil doubles quarterly income

Higher crude oil prices and gains at its U.S. fuel stations helped El Dorado-based Murphy Oil Corp. post third quarter net income of $406.1 million, more than double the $202.8 million in the same quarter of 2010.

Revenue during the quarter was $7.24 billion, up 39.2% compared to the $5.2 billion during the 2010 period.

The company also said foreign currency exchanges helped boost revenue and income during the quarter.

For the first nine months of the year, Murphy has posted $986.63 million in net income, well ahead of the $624.012 million in the 2010 period. Revenue during the first nine months of the year reached $20.928 billion, compared to the $14.605 billion in the 2010 period.

The improved commodity prices during the first nine months have helped Murphy capture a 58.1% increase in comparable net income with a 43.2% increase in comparable total revenue.

Murphy is making progress on its exit from the refinery business. Sale of the Superior, Wisc., refinery was complete on Oct. 1, and sale of the Meraux, La., refinery was complete Sept. 30. Murphy generated $16.9 million in after-tax income from the sale of the two refineries.

David Wood, president and CEO, provided insight into ongoing operations. Those included:
• Murphy recently completed the entry into the Baranan exploration license, at a 25% working interest, in the Kurdistan Region of Iraq. Drilling plans are moving forward with operations expected to commence in early 2012.

• After the first well in Brunei Block CA-2, which found hydrocarbons in noncommercial quantities, the company is drilling the second well in the block, and began drilling on the first CA-1 well. Murphy said the area has “many promising prospects left to drill across this acreage.”

• Murphy’s North American “resource acreage” will be further expanded in coming months with the addition of two rigs in the Eagle Ford Shale (south Texas) oil window.

• The work over program at Kikeh (Malaysia) is proving successful with production from the field exceeding the company’s anticipated volume in the third quarter.

• Murphy’s U.S. retail marketing business contributed another quarter of strong profits.

“Murphy’s partnership with Walmart to provide customers a deep discount gasoline offer continues through Christmas Eve and is being well received,” Wood noted.

Murphy shares (NYSE: MUR) closed Wednesday at $55.63, up $1.49. The earnings report was released after the markets closed. During the past 52 weeks the share price has ranged from a $78.16 high to a $40.41 low.