Murphy Oil Corporation (MUR) Q3 2026 Earnings Call Transcript

Operator: Good morning. My name is Eric, and I will be your conference operator today. Welcome to Murphy Oil Corporation Third Quarter 2026 Earnings Call. All lines have been placed on mute to prevent any background noise. After the presentation, there will be a question-and-answer session. You would like to ask a question during this time, simply press *1 followed on your telephone keypad. If you would like to withdraw your question, press *1 again. Thank you. I will now turn the call over to Atif Riaz, vice President of Investor Relations and Treasurer.

Atif Riaz: Thank you, Eric. Good morning, welcome to our third quarter 2026 earnings conference call. Joining me today are Eric Hambly, President and CEO; Tom Mireles, Executive Vice President and CFO; and Christopher J. Lorino, Senior Vice President of operations. Yesterday, after the market closed, we issued our third 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. 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. Murphy takes on 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 noncontrolling interest in the Gulf of Mexico. I will now turn the call over to Eric for opening remarks.

Eric Hambly: Good morning, everyone, and thank you for joining us. When we spoke in August, I mentioned that years of technical work were starting to translate into multiple pathways for growth. This quarter, several of those opportunities materialized across our portfolio. Over the past 3 months, we advanced the appraisal program at Bubale, made a new discovery in Vietnam, delivered first oil at Lac Da Vang, brought Chinook 8 online, and beat the top end of our production guidance. Our letter and earnings release cover these results in detail, What I want to focus on this morning is how these results and the strategy behind them are creating lasting value for our shareholders. Starting in the Gulf of Mexico, we acquired the Pioneer FPSO in 2025 with opportunities like Chinook number 8 in mind. On September 22nd, Chinook 8 came online through the Pioneer facility, adding oil weighted production without the cost or lead time of new infrastructure. Because we own the FPSO, those incremental barrels now benefit from stronger economics and higher returns. 5 days after bringing Chinook 8 online in the Gulf, we achieved first oil at Lac Da Vang in Vietnam. This was our first operated development in the country, and, not that I was counting, we brought it online in 2 years 11 months, and 23 days from project sanction. Safely on time, and on budget. Beyond that strong project execution and initial start up, Lac Da Vang creates value for Murphy in multiple ways. First, it gives us local operating and development experience that we can build on as we grow our business in Vietnam. Second, it adds attractive oil barrels with some recent cargoes selling at a premium of >$10 per barrel to Dated Brent. As production ramps up, Lac des Vong's cash flow contribution becomes material. And third, Lac Da Vang establishes the infrastructure to support our broader hub and spoke strategy in the country. With a hub now in place, our lock the trunk north, White Camel North Discovery, and other nearby opportunities can benefit from a lower economic threshold and a more capital efficient path to production. Turning to Cote D'Ivoire. The Bubale West-1X well confirmed oil in the Turonian Reservoir down dip from the original discovery and also encountered hydrocarbons in the Dieger Albion Reservoir. We were encouraged by the Bubale exploration, appraisal, and analysis work completed so far. The information from the DuBall West-1X well give us even more confidence that the likely range of resources in the Turonian Reservoir supports an economic development of the Turonian and help narrow the range of uncertainty in the recoverable resources. I think it will help investors if I characterize the Toronian Reservoir at a high level based on the data we have from the 2 Bubale wells and our seismic dataset. The Turonian Reservoir is a generally east to west trending deepwater channel system, which is narrower at the discovery location and widens to the west and down dip for the west 1 x location. Pressure data from the wells indicate likely reservoir continuity between the 2 wells. Recall that the 2 wells are about 8 miles apart and the west 1 x well is about 1.1 thousand ft structurally down dip from the discovery well. The Turonian appears to be a high quality reservoir that contains high quality oil. The Turonian oil is 37° API, and the gas-oil ratio is around 1.5 thousand to 2,000 cubic feet per barrel. We collected a whole core at the discovery location and are analyzing the core now. Preliminary work indicates that the average reservoir permeability is in the hundreds of millidarcy range with some reservoir over a darcy. More work is necessary to determine the variability of reservoir quality throughout the field. The west 1 x well encountered oil bearing and water bearing Turonian reservoir sands. The water encountered in the West-1X well may represent a definitive Turonian wide oil water contact but we need to do more work to confirm that. The fluid PVT properties suggest that the reservoir does not have a gas cap. In addition, we previously disclosed, we also encountered high quality oil in the deeper Cenomanian and Albian reservoirs, which will need to be appraised. We clearly know much less about the Centomanian and Albian reservoirs at this point but here's how we are thinking about them. Cenomanian is the same type of channel system as the Turonian, and it widens up dip to the north and is narrower at the discovery location and down-dip to the south. The Albian extends up dip to the northeast and down dip to the southwest, from the west 1 x location. We believe the west 1 x well encountered an oilfield sand at the edge of the Albion channel system. We are currently working to incorporate all the Cenomanian and Albian well and seismic data to improve our understanding of the reservoir and help determine the optimal locations for future appraisal wells. I recognize that is a fair amount of technical detail, but many of you have asked for greater visibility into what we are seeing at Bubale. We want to be transparent about what we know today and what we are still working through. There is more work ahead. But each appraisal well gives us a clearer picture of what we have and helps guide where we go next. Our key achievements this quarter are not isolated events, and I am proud of what our teams delivered. We are simultaneously bringing offshore projects online on opposite sides of the world, exploring and appraising in shallow and deep water across multiple basins, and operating our producing assets above expectations. This breadth of execution reflects capabilities built over decades and those capabilities are creating significant value. At $80 Brent, Lac Da Vang and Chinook are expected to generate approximately $1 billion of combined free cash flow over the next 5 years. While the exploration and appraisal opportunities we advanced this quarter represent resource potential roughly twice the size of our current offshore reserves. The base business also continues to deliver. With Eagle Ford, Gulf of Mexico and Tupper Montney all contributing to production above the high end of guidance and $515 million of operating cash flow in the quarter. Our results this quarter add both cash flow today and a broader set of investment choices for the future. As those opportunities mature, we will remain selective prioritize the investments with the most compelling returns, sequence capital with discipline, and maintain an uncompromising commitment to financial strength With that, we are ready to take your questions.

Operator: We will now begin the question and answer session. At this time, I would like to remind everyone in order to ask a question, please press star then the number 1 on your telephone keypad. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Arun Jayaram with JPMorgan. Your line is open. Please go ahead.

Arun Jayaram: Eric and team, good morning. Appreciate some of the key technical details around, Bubale. I was wondering if you could maybe help us think about the bigger picture here you mentioned that you believe that you have already reached a minimum threshold for development. I was wondering if you could maybe help us think about your big area extent, the size of the recoverable resource range and a little bit more on the next steps, in the appraisal program.

Eric Hambly: Arun, thanks for that. I know everyone is anxious for us to give a new resource range for Bubale. What I will tell you is from where I am sitting, we have 2 wells in the reservoir and still a fair bit of remaining uncertainty about the range of resources. Like you pointed out, I think we have quite a bit of confidence that we have, derisked through our appraisal program a volume that clears an economic development threshold. But I am not really yet ready to describe a new range of resources, for the Toronian and we have a lot of work to do before we are ready to talk about the other reservoirs. And so what I would expect is as we progress our appraisal program over the next 18 to 24 months, we will in a better position to give a new updated resource range. I just do not know it yet. there is still quite a bit of uncertainty that we have, obviously, from our release materials and my comments just now, we have learned quite a bit about the Turonian, but there is still quite a bit of uncertainty. How much of the Turonian system is filled in a lateral extent is still something that we have to think about. As we indicated, we do not expect that the reservoir above the discovery location in Turonian should contain anything other than oil, but we have 2 data points. We expect in these type of systems that we would have variability of reservoir thickness, quality, etcetera, and we need to know more before we pin down a resource range. I am I am excited that we believe that we are at the point where we have a project to develop here. But I do not have confidence in a new range yet. So we will be working on that. Obviously, we have not described that we have an active appraisal program coming up. There are quite a few remaining things to learn. I anticipate that we will, between now and probably the second quarter next year, we will kind of hone in on the most impactful and helpful wells to drill to reduce our remaining uncertainty in all the reservoirs. So the things that we are thinking about, we have about 5 to 6 locations that make sense today to learn more. And we are continuing to incorporate the data that we have recently collected from the wells We are relooking at our seismic dataset and incorporating the well data in the seismic dataset and doing additional work to decide where to put the well locations to continue to reduce uncertainty in the most capital efficient way. And so the kinds of wells we may drill in next year's program the things that make most sense would likely be an up dip Cenomanian that would be heading north Of The Discovery Location. In the Albian, we could move up dip or down dip in the Albian from the West-1X location. In the Turonian, there is still a potential to have a well, north or south of the West 1 X location, so testing lateral extent of the channel system. there is a possibility of a Turonian well between the 2, the discovery and the West 1 X location. there is still a possibility of a down dip Turonian well, although I think that is less likely now with the results of our West 1 X well. it is still possible it is something we would pursue if we conclude that we have not encountered a definitive Turonian wide oil water contact, we might be chasing oil downdip in some of the stacked Turonian channel sands. So there is still a lot of work to do with the team. I am really proud of. They are doing a great job of incorporating all the data. But we just are not yet ready to give a new resource range. And we are trying to. As you have heard from us this morning, we are trying to tell everybody what we know, what we do not know, and be pretty transparent about it. And, I know it is closely watched for the company. A really big deal for us. We are excited that this field as we learn more about it, is looking more and more. Giving us more and more confidence that we have a project here, because the project, here is significant for our shareholders as we exit this decade and head into the next decade, as we are likely looking to bring it online about 6 years from discovery to coming online first oil.

Arun Jayaram: Great. Thanks for that, that, that color. My follow-up is in Vietnam. You are approaching, an FID decision in about 12 months from now at Hai Su Vang, Golden Sea Lion. Could you give us a little bit of an update on just general thoughts around how that project, is developing.

Eric Hambly: Yeah. that is a really great question. What I am really happy to tell you is that we are advancing our assessment and working with our partners and government at a faster pace than we have seen other companies be able to accomplish in the past in Vietnam where we have indicated that Vietnam is very supportive of our work there, and they are wanting to push to move things faster, and we are seeing that happen. There are several steps in the process of going from discovery to an approved development and then executing it. The steps that we are executing there, we are moving through very rapidly. So I think we are on track for a project sanction at the end of, let's say, the fourth quarter of 2027. it is moving along very well with partners in government and no reason to have anything but happiness about how it is progressing. Alright. Great. Thanks, Eric. Thanks, Arun.

Operator: Your next question comes from the line of Doug Leggate with Wolfe Research. Your line is open. Please go ahead.

Analyst: Thank you. Good morning, everyone. Eric, a lot of geometry in your description this morning.

Eric Hambly: I wonder if I could ask you to go a little deeper, pardon the pun, on the Albion feature. You have not really talked anything about the extent of how that compares to the shallower test that you have already done. So can you offer any color? You say that it is sounds like you are seeing it is an oil filled sand, so it sounds like no oil water contact in the Albion. What does that feature look like in terms of the scale? The aerial extent of the Albian and the Cenomanian assuming that they are filled and are current seismic interpretation is correct, which is a big leap from where we are today. Are similar in extent to the Turonian. We think the Turonian is potentially longer and narrower, and they all be in. Could be shorter and wider. The. We did we did sample oil in the Albian Like we indicated, we think it is on the edge of a channel system. We confirmed it There will be sampled oil. it is a nice looking oil with a low GOR. Or moderate GOR. I hate to press on this a wee bit, but you did give some you gave some permeability data on a tyranin, but you did not mention anything about the sound quality and the deeper sections. You offer anything there? And I wonder-- what is behind my question really is as we think about this moving towards a commercial development. 1 of the big challenges that area has had in the past was the number of wells required to develop. I am trying to just thinking in terms of what you know, what the capital intensity would be to bring something like this to market. So color you can offer there would be great. Thank you. Yeah. Doug, so we are thinking about the same thing that are on your mind, and that is why we are, you know, collect. We are working through all the data. I am not yet ready to share the data on the deeper horizons because we have not yet done the work. So we have collected core will analyze it. it is it is being analyzed. We have not yet done that work. I think it is normal to expect in many cases that you would have lower reservoir quality the deeper you go. I think we have some indication that the Cenomanian while not comprehensively yet assessed, centimannian may be lower permeability than the tauronian. The limited data we have from the Albian, very limited data we have from the Albion, suggest that we have we have found what maybe surprised us as even better reservoir quality than we would anticipate at this depth. So still a lot to learn, not yet ready. I am very encouraged by the reservoir quality we have encountered in the Turonian. With respect to, you know, how to efficiently and economically develop the field. We have more work to do before we have that same confidence in the other 2 reservoirs. Eric, would you mind if I just tag on a quick follow-up your original range, was there. Was the Albion included in your original resource range? So the range that we provided. The only range we provided so far was our predrill range for the Cenomanian. And we have said so far is we are not I do not wanna reference that range anymore. That was an ex. Before you had any data, drilled here, we said the Cenomanian might have a certain range of mean to upside volumes, not the range, the full range. And, that was for 1 reservoir, Like I said earlier, I. We do not yet know what a new range is. We contemplated 1 reservoir that was significant in its potential extent. And we encountered that reservoir, which is still significant in its potential extent, along with the Turonian and the Albian that are that are significant in their extent. So we have a lot of work to do What I would hesitate to say or have anyone think is gave you a range for 1 that was a mean to upside, and now we have 3 reservoirs, and it is gonna be 3 times that big. I do not expect that to be the case. I think we are we are honing in on a commercial scale development with a very large range of uncertainty of how large this resource is, and I would. I do not want anyone to start multiplying things by 3, 4, 5. Think we ought to just do the work, make an assessment, progress through the appraisal program, give a new range. Again, I am excited that I believe we have a commercial development at Turonian. More resource to be honed, to be fine-tuned in the other reservoirs, kind of what we know now. And we will tell people more when we know more. Thanks so much, guys. Appreciate it.

Analyst: Thanks, Timothy.

Operator: Your next question comes from the line of Christopher Baker with Evercore ISI. Your line is open. Please go ahead.

Christopher Baker: Hey. Good morning, guys. Eric, appreciate all the detail. You know, I guess, maybe just a different angle on the same topic that is been asked. You know, as you think about sort of a minimum resource you would need for the standalone development given the encouraging signs that you have seen to date, what would that look like? And I guess in terms of the timeline, when would it make the most sense to potentially bring on a partner given you are 85-90% working interest there?

Eric Hambly: Christopher, great questions. Obviously, the, as we learn more about the Turonian, it will influence our exact assessment of the resource we need to be commercial. You know? The better the quality, the more continuous, etcetera. The less wells are required for the development to recover the same volume. So there is certainly work to be done to fine tune Our screening numbers suggest we need a 150 million barrels roughly. To make it work. And that is just developing stand alone a typical deep water field with an FPSO and a number of wells. So that is a fairly low bar, but it is actually a pretty significant amount of volume. that is kind of where we are where we are sitting in terms of, early screening number of what we need to clear a commercial threshold. that is great.

Christopher Baker: And I also wanted to touch base on the Eagle Ford. I know, just curious how you are thinking about that within what seems like an opportunity rich 2027 outlook here. In terms of a step up in capital and the timing, anything you can share there in terms of you know, what the growth profile could look like and what CapEx cadence could end up being.

Eric Hambly: Yeah. So we indicated a couple months ago that we were intending to ramp up our Eagle Ford. So we added capital this year to resume drilling, which will allow us accelerate bringing online wells earlier next year than our original plan for the year. that is the beginning of what I anticipate will be a multiyear ramp up to some new plateau rate for the Eagle Ford. So we will not bring online this year more wells in the Eagle Ford than our original plan, but we will have wells ready to be completed late this year, heading into early next year, which will increase our annual average production rate next year materially. And we are planning next year to run a steady program which would have a ramp through the year with a peak production in the fourth quarter, which is different than what we have done really for the last 5 years where we practically done with our program by the third quarter. So that will lead to more capital deployment to Eagle Ford. Obviously, we have not yet formulated our budget. We are gonna work on that between now and the end of the year, and we will present that in our fourth quarter earnings call in late January. But I think directionally, we are looking at Eagle Ford Capital, increasing from, you know, sort of the plus or minus $300 million mark in the last 1 to 2 years To around $500 million, somewhere in that ballpark, in 2027. Again, more fine tuning to be done, that is kind of how we are thinking about it. Thank you.

Operator: Your next question comes from the line of Leo Mariani with ROTH Capital Partners. Your line is open. Please go ahead.

Leo Mariani: Hi, I just wanted to follow-up on some of the comments that you made around Cote D'Ivoire. If I kind of heard you right, it sounds like still a lot of analysis to go, but perhaps you guys do not get to kind of the next appraisal well, maybe till sometime in the second half of 2027. Is that reasonable? It sounded like you guys would really take your time and be thoughtful about where that next well goes.

Eric Hambly: Leo, we are actively working to conduct that appraisal program. We are in an advanced stage on our tender process. We have uncertainty about when specifically it arrives. I expect now that we would start that program sometime in the second quarter of next year. But I will know a lot more when we actually tender the rig.

Leo Mariani: Okay. Thanks. And I just wanted to follow-up on Lac Trang North. Have you guys been able to do some more work on that discovery? Obviously, it is a good sized discovery. Do you have a sense of whether or not you guys need to drill an appraisal well? Or do you think at this point, it is just going to progress towards a subsea tieback to it? Any more color would be great.

Eric Hambly: The way we are thinking about it now is it is likely to be progressed as a subsea tieback without an appraisal well. We are likely to drill some exploration wells north of Lac Trang, in the future, let's say, in 2027 or 2028, that are in the Lac Duong complex, that is Orange Camel. And depending on how those wells come in, it either we would either develop Lac Trang, Lac Trang North, Lac Duong as a new hub, or more likely, would be tied back to the Lac Da Vang infrastructure. And we will know more about that as we continue to progress our evaluation We are happy with our Lac Trang, Lac Trang North. Discoveries. I think that they are nice tieback scale will be developed very capital efficiently, and likely will not have an appraisal well on Lac Trang North.

Leo Mariani: Okay. that is helpful. And then on the Eagle Ford, you obviously mentioned that you are going to spend more money next year. I think that is been very well socialized by you folks for continuous program and makes sense. And just how about any of the other kind of moving pieces? Do you see kind of the exploration and appraisal budget up a decent amount year over year as well in 2027? It sounds like you are geared for more activity. It sounds like at least a couple wells in Cote D'Ivoire, maybe 2 or 3 there. And several more wells in Vietnam. Just kind of any high level color you can provide on kind of activity set and some of the bigger offshore stuff next year versus this year.

Eric Hambly: Sure. As we are thinking about our program next year, I expect our exploration program, which includes all of our seismic, our seismic acquisition reprocessing data all that kind of. And drilling wells will be in the 10-15% of our total capital program. But our appraisal program at Bubale will be significant investment The wells that we will drill appraising Bubale, are likely in the, $80-100 million range per location. And that is assuming that we do not conduct an extensive evaluation program. If we conduct an extensive evaluation program, that could easily get to be a $110 million-type range per location. So depending on the number of wells and how we progress them, you know, there is significant uncertainty about our appraisal spend at Bubale. That will drive the bulk of our range of uncertainty in our capital program next year. What I can tell you as I am thinking about setting our budget for the year, communicating it in January, likely to give capital guidance next year differently than we have historically. We are likely to give you a range that is reasonably tight for sort of our base business. And then indicate the range of Bubale appraisal spend again, because it is material, and every well we drill will then inform whether we wanna drill more and how much they will be. And just that range of uncertainty is today significant. Will likely continue to be significant. As we head into the early part of next year, and we will try to communicate that, a bit differently. Okay. Appreciate it. Thank you.

Analyst: Thanks, Leo.

Operator: Your next question comes from the line of Noah Hungness with Wells Fargo. Your line is open. Please go ahead.

Analyst: Morning. For my first question here, I did wanna touch on kind of the central funding requirements. for a Cote d'Ivoire development and just you are thinking about that and in the event of a potential farm down or asset sale, if you were to if you were to explore those options, could you maybe talk about the decision tree between those? And if a farm down would be a farm down of the Cote d'Ivoire asset or a farm down of some of your currently producing assets.

Eric Hambly: I would tell you that where we are sitting today, we do not have an answer of what is best for our shareholders, but that is how we will be thinking about it. As we learn more about what we found in Cote D'Ivoire, we will form a view of do we want to keep all of the ownership we currently have in Bubale, and the associated potential of other discoveries on the blocks? Or do we want to do something else with our assets? We are coming into this with a great balance sheet, a lot of liquidity and a really good financial position to figure out what we have and decide the best outcome for shareholders. We are aware that we have assets that other people would like, so asset monetizations are something that we will think about. We are not yet in a position where we need to make those choices. We are conducting an appraisal program over the next 18 to 24 months. And at the end of that program, we will probably have a better view for funding needs size of the opportunity, size of the capital program, and then determine does it make most sense to farm down what we found in Cote D'Ivoire, or does it make sense to take on temporarily a bit of debt or does it make sense to, sell potentially assets, in our onshore business? Potentially a combination of all those things. We are looking at that. We are modeling that. We do not have an answer to what we. The problem is yet, but we are aware that we have quite a few options to do it, and we are really excited to have all those options. And then for my second question, I was wondering if you could talk about some of the exploration projects in the Gulf of Mexico. Would these be greenfield exploration developments, brownfield expansions? Just some of your earliest thoughts on that asset. So Great question. So the way we think about our opportunity set in The Gulf, we have a handful of hub scale prospects and quite a few tieback scale opportunities that are near our existing infrastructure, mostly that we operate. And so you will see us over the next, you know, 3, 4 years in The Gulf conduct a program that occasionally tests a hub-scale opportunity, exploration well, and more often does tieback scale things near our existing infrastructure. As we are thinking about our program next year, we have choices to make. I anticipate next year's program in The Gulf Of America will feature a hub scale test, but we have not formalized that yet. When we announce our budget in January, we will let you know what our program is, but I think we are likely to test 1 hub-scale prospect in The Gulf. And in Vietnam, some tieback scale opportunities in our Lac Da Vang, the block that contains Lac Da Vang, 105. Great.

Analyst: Thanks. Thank you.

Operator: Your next question comes from the line of Joshua Silverstein with UBS. Your line is open. Please go ahead.

Joshua Silverstein: Yes. Good morning, guys. Wanted to touch on the cost structure. LOE was very low this quarter. And you reduced, the full-year, excuse me, guidance to the bottom end of that $10 to $12 per BOE range. Can you just talk about how this is trending into next year? I do not know if there were any 1-off items in there, clearly, a good result this quarter.

Eric Hambly: Joshua, thanks for that. Obviously, we have not set our program for next year definitively. This quarter, we are choosing to have a pretty active workover program in The Gulf. We identified a number of wells that were either, had a potential to produce at higher rates or in the case of 1 well, not producing That we are able to go in, do some workover activity, and add volumes as we either exit this year or head into next year. I think we will see some of that activity continue into the first quarter of next year. But then the rest of the year is likely not to have significant workover activity. Again, we still have not set our budget for next year, but I expect that the. Some of the work we are doing in this quarter will carry into the first quarter of next year. And, again, we. We have been communicating probably for a few years now that we anticipate operating expenses to be in the $10 to $12 per barrel range. I would expect that a reasonable number for 2027 as well. So, yep, that is kind of where we are. Got it. Okay.

Joshua Silverstein: And then just curious about the shareholder return thoughts as well. Obviously, there is a bit of uncertainty to what the CapEx budget looks like for next year. And what the long term, you know, budget may be around, you know, potential development there. Are the buybacks on hold for now as you just kind of look to keep the balance sheet in good shape for potential bigger CapEx opportunities for you guys? I know you had, you know, previously done that, but you want to make sure the dividend's paid keep the balance sheet in good shape. So just curious on that front Yeah.

Eric Hambly: that is a great question, and it is something that I think about 12x a day. Joshua. The way I think about it is that we believe that our shares do not reflect the value of some of our expansion opportunities that we see in front of us. for Hai Su Vang, does not reflect any value for Cote D'Ivoire. Partly do not reflect value for Cote D'Ivoire because we have not been able to tell you how big it is, so how would anyone value it? I understand that. As we learn more, we will probably conclude that, we anticipate a period of time between learning about the field and trying to communicate the potential value of it that our share price may not move to reflect that because of discounting, risking, etcetera. It probably will encourage us to buy our shares because they would be cheap relative to what we think intrinsic value will be we see periods in the next year or so that our share price pulls back significantly lower than even a fair view of intrinsic value, we are likely to buy back stock. I would like to reward our long holding shareholders by concentrating the value of the company in fewer shareholders that are long holders, and buying back stock is a nice way of doing that. Having said that, we will protect the balance sheet. We will be careful about debt level. that is very important for us. So we have a bit of tension in the system between funding the, appraisal program and understanding what we have, buying back stock, Those are in tension, and we will be thinking about that And we will be monitoring oil price because our share price moves a lot with oil price. And be thinking about how do we win for our shareholders.

Operator: Your next question comes from the line of Phillip Jungwirth with BMO. Your line is open. Please go ahead.

Phillip Jungwirth: Yeah. Thanks. Thanks. Morning, all. Good morning. You made some really good progress on Eagle Ford well cost this quarter and was just hoping you could hit on the drivers there. And then as you look to run a larger and, I assume, more level loaded program next year, do you think there could be incremental efficiencies that come out of it as a result And then just what are you seeing on the cost side inflation at the moment?

Eric Hambly: Thanks, Phillip. Let me give you kind of high level view, and I will ask Christopher J. Lorino to provide maybe a little bit of additional color. This year's program, we are really excited about our well cost coming down materially. We reduced our cost per foot to drill and our cost per foot to complete. The drilling work was about 5 different things the team really focused on. Completions are getting very efficient in how we are pumping these frac jobs, and we are also tailoring every stage of the frac job to be the most capital efficient possible. Operationally efficient, and a 26% reduction year over year in well cost drill completes. Pretty impressive. As I was prepping for our call, this morning, I noted that our completion cost per foot realized in 2026 is the lowest completion cost per foot we have seen in our Eagle Ford business to date. lower than 2016 when service costs were very low, lower than 2021 when service costs were low. We really nailed it out of the park. Part of that is long laterals. it is not just long laterals. it is also operational efficiencies. Christopher, I do not know if you have any color to add to that.

Christopher J. Lorino: Yeah. You hit on it. The combination from the longer laterals and the completions efficiency We keep continuing to be creative on how we get our cost per foot down and really tailoring each pad to the best outcome and the best plan to get that get the BOEs out. So we continue to see that improve, and you think it would flatline, start to flatline, but we are continuing to see improvement there by tailoring each 1. And it is a combination of the longer laterals with our completions efficiency.

Phillip Jungwirth: that is great. And then a bit more frontier than Cote d'Ivoire, but was hoping You Could Talk About The entrance into Mauritania and what drew you to this area, next steps after signing the PSC and just confirm is the objective here oil just because the country does have a large LNG project also.

Eric Hambly: Yeah. Great questions. Mauritania is to us what we have been communicating our portfolio needs, which is low cost entry into material opportunities that we can assess relatively cheaply and test relatively cheaply. And we are really happy with our entry here into Mauritania. We are exploring for oil. We do recognize there are gas discoveries in the area. We are looking for oil in the deepwater in Mauritania, and we think it checks the box of those things. Low cost of entry, low cost to assess. Relatively low cost to test, good financial, good fiscal regime, etcetera. After we signed up-- after signing the PSC, which we have just done this week, we will move forward to do some seismic reprocessing and studies work and we will decide at some point if our thoughts around our prospectivity are confirmed by reprocessed seismic and more assessment, and we will make a decision about a potential well in the future I would guess at this point, that a well being drilled, an exploration well, is probably not something we do until perhaps 2029 or that kind of time frame. So very limited spend, mostly around seismic reprocessing and assessment work here over the next, 2 years or so. that is great. Thanks.

Analyst: Thank you.

Operator: Your next question comes from the line of Charles Meade with Johnson Rice. Your line is open. Please go ahead.

Charles Meade: Yes. Good morning, Eric, to you and the rest of the Murphy team there. I would like to go back to the question around the Cote D'Ivoire appraisal. You got really interesting challenge here in front of you, and probably no 1 path that is going to please everybody or satisfy all the kind of competing you know, the competing priorities. But I wonder if you could talk about you know, the. Your philosophy for the appraisal maybe the relative priority of establishing, you know, a minimum threshold in the Toronian versus, you know, sizing an eventual development And I am really, you know, wondering how that plays into the you know, your current thinking about the. Perhaps the sequencing of the appraisal wells. Like, if you are more interested in clearing that minimum threshold, upfront or rather that is, you are more interested in size seeing it perhaps with a, you know, a Cenomanian or Albian. Test before then.

Eric Hambly: Yeah. that is a really good question. And it gives us a chance to talk about how we think about our development strategy here as it relates to appraisal. What we have done with most of our developments over the last 2 decades at Murphy is appraise enough to get to a point where we have confidence that we are not materially over or undersizing the development. To efficiently develop the resource. But also not appraise to the point where we have no remaining uncertainty. What are you. What I would expect us to do here is to learn enough that we can build we can design an FPSO that is not significantly too large or too small. It addresses a reasonable range of outcomes both in total resource size and productivity, the wells. And when move forward with development, while we continue to learn more about the full potential of all the reservoirs in the field. We are gonna need to get to a point where we are not committing large capital that is, misdesigned for the resource that we have and the rates we can produce it. And if you think about that, we are spending significant money appraising. You know? Let's just say we will spend another $3.4 billion ball. that is an estimate. I do not know if we will do that. But if we keep finding oil, we will keep doing that. that is is a lot of money, but it is not of the same magnitude as a 10 to $20 per barrel capital development of a Montreal resource. So it is important to us to get the to get right the large capital investment by learning enough that we do not make a mistake to be significantly too big or too small. But we are not gonna we are not gonna praise and reduce all uncertainty and then commit to a development. We are going to, at some point, decide we have enough that we can be flexible and we can move forward, and we will learn as we develop the field.

Charles Meade: Got it. That is that. that is helpful for the generality. I am going to try to drill in maybe 1 step further. Does that. Is your next appraisal well going to be that, that Turonian that, you know, in between the Discovery and the 1 x, which would you know, you mentioned in your prepared comments, you think you are in pressure communication, but I imagine that a test there would. You know, could confirm that. Possibly, which really, you know, raises the low end of the bar and perhaps, also, there is a there is some potential for appraisal in the Cenomanian and Albion if you if you choose that in between location. Is that next?

Eric Hambly: So as I mentioned earlier, we do not yet know the sequence of wells that or which exact locations. We are doing that work now. By the time we start our appraisal program in the second quarter, have an order that we will know and we will act on. I cannot yet tell you what the next 1 will be. Because we are doing the work. I think again, restating, centimetium updip Albian updip or down dip, a Turonian well between a Turonian well north of the west 1 x. Those are all likely places where we would drill the first well. Your assessment of the ability to learn more about the Turonian by putting a well in between is valid and we were thinking about it the same way. I do not yet know if that is the next well. it is a well that we are considering doing We are gonna do more work to figure out the optimal thing to advance the project in the most capital efficient way. And I do not have an answer yet. Unfortunately. That. No. that is great color, Eric. it is gonna be really, interesting to watch this unfold. Thank you for the, commentary.

Analyst: Thanks so much.

Operator: Your next question comes from the line of Jack Kavanaugh with Goldman Sachs. Your line is open. Please go ahead.

Jack: Good morning, team. I wanted to start on Lac Da Vang. You know, it is a great milestone to bring that on in 3Q. I was wondering if you could speak to the shape of what that ramp looks like to peak production in 2029 or 2020, as well as the timing on when you could develop any 1 of these tieback opportunities in the area?

Eric Hambly: At Lac Da Vang, we anticipate adding a second well this year. We will continue to deliver more wells through 2028, and 2029. Next year, production rate is probably, net to us, probably 3 thousand to 5 thousand barrels a day. Exit rate is probably in the 7 thousand-12 thousand-barrel-a-day range. So I am sorry. exit of 2027 to be clear. And we anticipate peak production of 10 thousand to 15 thousand barrels a day net to us probably in 2028 or 2029.

Jack: Got it. Appreciate that. And maybe, you know, reflecting on the Devon Eagle Ford sale process, Just curious what that told you about the market value of your asset. And if that changes any of the way you view kind of the optionality of holding that asset within your longer term vision for the portfolio.

Eric Hambly: Think what we learned from Devon's process was that the Eagle Ford is attractive to even more potential buyers than we might have previously thought. And confirms that we have an asset that other people value We like our asset. We are happy that we have an ability to use the Eagle Ford to ramp it up, to generate more free cash flow, to help fund our appraisal program and other priorities for our company. We are very aware that it is valuable, and we are happy to have the flexibility that if in the future we chose to sell our Eagle Ford or part of our Eagle Ford, it could be a nice place of funding if we determine the best outcome for our shareholders. And the most value creating. And so, yeah, I think it is an interesting, to see asset of that scale have so much attention from so many players. And, reconfirms that we have a great asset here.

Jack: Appreciate it. Thanks.

Operator: Your next question comes from the line of Betty Jiang with Barclays. Your line is open. Please go ahead.

Wei Jiang: Good morning. Thank you for taking my question. I want to ask about GOM. You guys delivered a pretty strong quarter. In 3Q. And but I think 4Q guide is not-- there are some changes in the Q4 guide. So can you just maybe speak to the quarter on quarter variations, how much of the Chinook startup you are baking in, and how should we be thinking about the GOM production trajectory into next year?

Christopher J. Lorino: Yeah. Thanks, Betty. I will let Christopher address that. Yeah. So just looking at our offshore only, we do. You know, obviously, we are very excited about the Chinook 8 well being online, and it is gonna provide about 9 thousand bopd for the quarter. So really strong well. And excited about that. But that was as far as quarter on quarter, that was offset a little bit by the weather and the hurricane that happened, in the beginning of the quarter, which was around 3.7 thousand boe. And then in addition to that, Eric mentioned some of the workovers that are happening. Some of them are getting do have production. So while we work on those wells, they will be shut in as well. So that includes a nonoperated, workover at Kodiak as well. So that kind of offsets the impact. The big impact from the Chinook 8 well, which kind of gives you a flattish or up about 1.2 thousand boe/d quarter on quarter for offshore. In addition to that, we also have some planned maintenance at Delta House that also kind of offsets that.

Wei Jiang: So then, I will assume the first half of next year will start seeing the volumes go back to a higher level after the work? Will Yeah.

Christopher J. Lorino: So we will be done we will done. We will be done, but I will 1 of the workovers, 1 will go into first quarter. And so we will be done with them, and that will be early first quarter is what it looks like. So we will have all that behind us very early in the year, and then we will ramp back up for our golf production.

Wei Jiang: Great. Thank you. And then my follow-up on LOE, I think the production cost management has been coming consistently lower. Maybe just speak to what is driving that lower LOE cost and how you think about the LOE cost range. Going forward, especially with now Eagle Ford expected to ramp into next year?

Eric Hambly: Thanks, Betty. Our operating expenses offshore excluding workover activity, tend to be very steady. Our onshore teams have been very focused, particularly our Eagle Ford team, on continuing to lower operating expenses to be more competitive. I am proud of the work they have done. They have addressed that across multiple categories. They focus on labor costs, We optimize our labor costs, all the time. They are focused on equipment rental water disposal, chemicals, We have a remote operation center that we deployed in 2017 and we continue to enhance its capability every year. They are focused on minimizing downtime by maximizing the best wells coming online when we do have upsets. And all of that is contributing to Eagle Ford operating costs improving materially. Within the Eagle Ford from quarter, we have variability in the dollar per barrel OpEx, mostly driven by variability in our production profile, with a very, very nice effort from our team to lower total dollar operating expenses there. that is really the story.

Wei Jiang: Great. Thanks. Thanks for the color.

Analyst: Thanks, Betty.

Operator: Again, if you would like to ask a question, press star then the number 1 on your telephone keypad. There are no further questions at this time. Mister Hambly, I turn the call back over to you.

Eric Hambly: Thank you, operator. As we close today, I just want to thank our employees for their hard work and dedication. We have done a great job. We had excellent execution throughout the quarter. Across our entire organization, and I am really proud of what we delivered. As always, to our shareholders, we appreciate your continued trust and support, and that concludes our call for today. Thanks so much.

Operator: This concludes today's call. You may now disconnect.