Murphy Oil posts $73.8 million quarterly loss, to cut 7% of workforce

Arkansas oil giant Murphy Oil Corp., now a pure play oil and gas explorer, saw its second quarter earnings fall deeper into the well as benchmark international crude prices on Tuesday fell to their lowest since the beginning of the year.

Murphy Oil CEO and President Roger Jenkins responded by saying the El Dorado-based oil and gas company has reduced its payroll by cutting over 100 positions from its global workforce of more than 1,500 employees – a nearly 7% reduction.

“We remain focused on organizational efficiency, capital allocation and reducing operating expenses. We addressed general and administrative costs by reducing our workforce by 7%,” Jenkins said the El Dorado oil company, which has a global workforce of more than 1,500 workers. “Murphy remains well-positioned financially to carry out our plans and evaluate opportunities to improve our business going forward.”

For the period ended June 30, El Dorado-based Murphy Oil reported a net loss of $73.8 million, or 42 cents per share, compared with net income of $129.4 million, 72 cents a share, a year ago.

Net losses from continuing operations were $59 million, or 51 cents per share, compared to a profit of $142.7 million, or 79 cents per share, in the second quarter a year ago.

Revenues fell dramatically to $738 million, down 35% from $1.35 billion a year ago. Wall Street expected the Arkansas oil company to report second quarter profits of 55 cents per share on revenue of $698 million, according to Thomson Reuters.

Jenkins primarily attributed the earnings slide on a 44% decline in both Brent and West Texas Intermediate benchmark crude prices.

In trading Wednesday, Brent crude futures settled down 17 cents, or 0.3%, at $53.30 a barrel on ICE Futures Europe, the lowest settlement since Jan. 30. On the New York Mercantile Exchange, West Texas Intermediate closed up 59 cents, or 1.2%, to $47.98 a barrel, ending a four-day decline.

In its Eagle Ford Shale operations, which was comprised of 90% liquids, Murphy averaged near 60,800 barrels of oil equivalent per day (boepd) net.

“As planned, we continue to operate four drilling rigs and two completion spreads and we expect to stay near this level of activity for the rest of the year,” the company said. “We brought 36 new wells on line in the second quarter and have brought 58% of our total estimated wells for the year online in the first half.”

Company officials said production in the third quarter of 2015 is estimated to average over 59,000 boepd with the 2015 full year outlook now expected to average near 59,000 boepd, slightly ahead of annual production for 2014.

Overall, Murphy’s second quarter production averaged 201,000 boepd, beating its earlier guidance of 197,000 boepd as new well performance in the Eagle Ford Shale was better than expected.

Jenkins said the Murphy has increased its full year production guidance to a range of 200,000 to 208,000 boepd. Capital spending was unchanged at $2.3 billion for fiscal 2015.

In other developments, Murphy Oil on Monday named Kelly Whitley as its new vice president of investor relations and communications, replacing Barry Jeffery who has taken a new role as vice president of insurance, security and risk.

At Wednesday’s closing bell, Murphy’s shares were up 11 cents at $34.13. Murphy’s shares have fallen off 32% for the first six months of the fiscal year, while trading between $32.50 and $68.15 over the past 52 weeks.