Murphy Oil, Southwestern Energy shore up executive suites with recent CFO hires

by Wesley Brown ([email protected]) 306 views 

Murphy Oil Corp. and Southwestern Energy Co., two of the state’s longest and largest employers in the oil and gas sector, have both announced key changes in their executive suites with the hiring of new chief financial officers in the past week.

On Tuesday, Southwestern’s board of directors announced that Julian Bott was elected executive vice president and CFO of the Houston-based company, effective March 5. Bott, age 55, formerly served from August 2015 to February as CFO of SandRidge Energy Inc., an Oklahoma City-based oil and gas company that emerged from a $4.4 billion bankruptcy in 2016.

Bott has also previously served in other executive positions at top oil and gas companies in the U.S. He will replace former company CFO Craig Owen, who resigned in June 2017. Jennifer Stewart, who has served as CFO on an interim basis, will now become senior vice president of government and regulatory affairs.

In addition to Bott’s hiring, Southwestern also announced that Paige Penchas has joined the company as vice president of investor relations, replacing Michael Hancock who assumed another role as vice president of financial planning and analysis.

“We welcome Julian and Paige to Southwestern Energy. We are fortunate to have the addition of their collective expertise as we reposition the Company to accelerate value from our highest return assets, strengthen our balance sheet and enhance our financial performance,” Southwestern President and CEO Bill Way said in a statement.

According to Southwestern officials, Bott will initially have a base salary of $530,000 and a target bonus of 100% of base salary, prorated in 2018 for the period of his employment. For 2018, he will receive long-term incentives of $2.5 million and participate in the company’s change-in-control severance package with benefits on par with other senior executives.

With the hiring of Bott and Penchas, Way has replaced most of the executives that served under the company’s former and longtime president and CEO, Steve Mueller. In early December, Way tabbed former El Paso Energy executive and oil and gas industry veteran Clayton Carrell to take over the company’s chief operating officer, assuming responsibility of the company’s operational and technical activities.

Way joined Southwestern in 2011 and later replaced Mueller in early 2017, where he immediately announced plans to cut 600 jobs and shut down drilling operations in the Fayetteville Shale. Way announced last month that Southwestern planned to put its Fayetteville Shale natural gas asset on the auction block to focus on the company’s growth oil and gas liquids shale play on the East Coast.

Company officials say there are only now an estimated 500 Southwestern employees in Arkansas supporting the state’s aging natural gas shale play, which analysts say could receive bids as high as $2 billion from top bidders.

Separately, El Dorado-based Murphy Oil announced last week that David Looney has been elected by the company’s board of directors to serve as executive vice president and CFO, effective March 1. Looney will succeed John Eckart who previously announced his intent to retire from the company later this year. Eckart will relinquish CFO title to Looney next week but continue in active service for “a period of time” to assist in the transition, company officials said.

“We are pleased to welcome David to the Murphy Oil leadership team and look forward to leveraging his deep experience and wealth of knowledge to guide the financial strategy of our company. David is an experienced chief financial officer who is well-known in the energy markets and we now look to him to continue our ongoing commitment to financial discipline,” Murphy Oil President and CEO David Jenkins said in a statement.

According to a Feb. 23 federal 8K filing with the Securities and Exchange Commission, Looney’s compensation will include a base salary of $650,000 reviewed annually, and be allowed to participate in Murphy’s annual incentive plan where he could receive 85% of his base salary.

In addition, the company’s top financial officer will receive an initial equity long-term incentive on his hire date with a grant date value equal to $2,925,000, with 25% of the total value granted as time-based restricted stock units vesting on March 1, 2021. Another 75% of the total value of the incentive will be granted as performance-based restricted stock units, vested on Feb. 6, 2021, if key performance criteria are met.

The oil and gas industry veteran will also receive a one-time cash payment of $150,000 to cover Mr. Looney’s relocation expenses and any lost compensation from his prior employer, payable within 45 days of his March 1 hire date.

Looney joins Murphy Oil as the independent Arkansas oil and gas company looks to return to profitability after a string of quarterly losses that have led to a change in strategic direction that includes jobs cuts, overseas assets sales and a leaner operation that is focusing on the company’s upstream oil and gas developments in Southeast Asia, Canada and the Gulf of Mexico, along with onshore shale plays in south Texas and Canada.

In the fourth quarter, the El Dorado oil company reported a fourth quarter loss of $287 million, including a one-time $274 million adjustment related to recently enacted federal Tax Cuts and Jobs Act. For 2018, Murphy Oil is planning a capital budget of $1.05 billion, which is 18% above the company’s 2017 capital expenditures of $890 million.

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