Murphy Oil Cuts Budget by 73% in 2016

Murphy Oil Cuts Budget by 73% in 2016

Murphy Oil Corporation (NYSE: MUR) has cut 2016 capex once again down 30% from the initial budget of $825 million, a decrease of ~73% below 2015 spending. MUR is forecasting an increase in production from 111 MBoepd in 2015 to 180 to 185 MBoepd in 2016.

90% of Remaining Eagle Ford Locations Break-Even Below $40.50 per Bbl

  • Spending in the Eagle Ford has decreased by 75% from 2015 to $203 million
  • 55% of 2015 onshore production came from the Eagle Ford
  • 20 wells planned for 2016
  • 34 wells still left uncompleted
  • Aiming for D&C costs of just over $4 million per well in 2016

MUR-breakeven-by-play

Longer Laterals and Higher Proppant Doesn’t Mean Better Wells

  • Murphy is using FTSI for 82% of their frac jobs in the basin since the start of 2015
  • Laterals of 8,000 feet and longer have not seen increased well performance
  • Karnes and Mc Mullen counties have seen the best IP rates

Below is a chart showing the relationship between proppant amount (y-axis), lateral length (x-axis), IP Boe rates (radius) and county (color) by well for completed wells since April of 2015.

energent-MUR-Well-Cohort

 

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