Oil slick

Fort SmithOutside The Wire

by The City Wire staff ([email protected]) May 6, 2010 6:57 am 62 views 

Murphy Oil Corp. ‘s earnings fell well below  expectations as higher crude oil prices were unable to offset the Arkansas oil giant’s weak refining margins, higher corporate costs and foreign currency losses.

For the period ended March 31, the El Dorado-based oil and gas producer and refiner posted first quarter net income of $148.9 million, or 77 cents per share, down 13% from net income of $171 million in the 2009 period.

Murphy’s revenue revenues for the quarter were $5.18 billion, up 50% from $3.4 billion in the same period of 2009. Excluding after-tax losses of $41.3 million, or 21 cents per share, on transactions denominated in foreign currencies, Murphy earnings were 98 cents per share. Wall Street analysts, on average, expected Murphy to report earnings of $1 per share on sales of $2.8 billion, according to Thomson Reuters.

Despite the lower earnings, Murphy’s exploration business pulled in profits of $247 million in the first quarter, compared to $50.3 million in the same quarter of 2009. Higher realized sales prices for crude oil were the primary driver for the improvement, but the current period also benefited from higher natural gas sales volumes and lower exploration expenses, the company said.

Murphy’s worldwide crude oil, condensate and natural gas liquid sales prices averaged $64.89 per barrel for the 2010 first quarter, well above last year’s $43.15 per barrel. However, Murphy’s refining and marketing operations had a loss of $29.7 million in the first quarter as refining margins were cut by higher prices for crude oil feedstocks and shutdown of the Meraux, La., refinery for a planned turnaround of nearly six weeks.

Murphy President and CEO David Wood said he anticipates an active exploration year for the oil and gas producer “with bigger targets ahead.”

“We anticipate full year 2010 production volumes of 200,000 barrels of oil equivalent per day.” Wood said. “At the current time, we expect consolidated earnings in the second quarter to range between $1.15 and $1.25 per diluted share.”