Murphy Oil Corporation 2012 Analyst Day

M U R P H Y O I L C O R P O R AT I O N

2012 Analyst Day

El Dorado, Arkansas

May 8, 2012

M U R P H Y O I L C O R P O R A T I O N

Agenda

Financial Overview Kevin Fitzgerald - Executive VP & CFO

Exploration & Production Roger Jenkins – Executive VP, Exploration & Production

Sam Algar – VP, Worldwide Exploration

Break

Downstream Tom McKinlay – Executive VP, Worldwide Downstream

Wrap Up


Financial Overview

Kevin Fitzgerald

Executive Vice President & CFO

May 8, 2012


Cautionary Note

Cautionary Note to U.S. Investors - The United States Security and

Exchange Commission permits oil and gas companies, in their

filings with the SEC, to disclose only proved and probable

reserves. We use certain terms in this presentation, such as

reserve estimates, that the SEC’s rules strictly prohibit us from

including in filings with the SEC.

This presentation contains forward-looking statements as defined

in the Private Securities Litigation Reform Act of 1995. These

statements, which express management’s current views

concerning future events or results, are subject to inherent risks

and uncertainties. Factors that could cause actual results to differ

materially from those expressed or implied in our forward-looking

statements include, but are not limited to, the volatility and level of

crude oil and natural gas prices, the level and success rate of our

exploration programs, our ability to maintain production rates and

replace reserves, political and regulatory instability, and

uncontrollable natural hazards. For further discussion of risk

factors, see Murphy’s 2011 Annual Report on Form 10-K on file with

the U.S. Securities and Exchange Commission. Murphy undertakes

no duty to publicly update or revise any forward-looking

statements.


First Quarter 2012

Net Income $ 290

Cash Flow 730

Capital Expenditures 740

Long-term Debt 250

Stockholders’ Equity 9,119

L/T Debt as % of Capital Employed 2.7%

($ Millions))

2


Financial Strength / Liquidity

Liquidity sources Cash flow

$3.4 billion in 2012 at $95.00 WTI and $3.00 Henry Hub

Assumes mid-year conversion of Milford Haven refinery to a terminal

Revolver

$1.5 billion committed facility maturing in June 2016

Long term bond market

Maintain investment grade rating (BBB, Baa3)

Preparing to access market - $500 million for 10 years

3


Historically Low Debt

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

0

500

1,000

1,500

2,000

2,500

1970 1975 1980 1985 1990 1995 2000 2005 2010

LTD Debt/Cap

LowPrices

$ MM Debt/Cap %

Ninian ContractDrilling

Kikeh WCSB

4


Financial Projections

2012 2013 2014 2015

Oil Price Assumption – WTI ($/bbl) 95.00 95.00 95.00 95.00

Brent Assumption ($/bbl) 110.00 105.00 100.00 95.00

Natural Gas Price Assumption – HH ($/mcf) 3.00 3.50 4.00 4.10

Oil and Gas Production – mboe/d 193 200 250 260

Cash Flow from Operations ($MM) 3,400 3,500 4,300 4,200

Capital Expenditures ($MM) 3,700 3,800 4,000 3,300

Free Cash Flow ($MM) (300) (300) 300 900

Total Long Term Debt ($MM) 950 1,450 1,350 750

5


CASH FLOW vs. CAPEX

E&P AND DOWNSTREAM

2,900

500

3,400 3,500

200

3,700

0

1,000

2,000

3,000

4,000

E&P 2012 DS 2012 Total 2012

Cash Flow CAPEX

$MM

6


Capital Expenditures

95%

5%

2012 CAPEX BY SEGMENT

E&P DS

E&P 3,500

Downstream 200

Total 3,700

$MM

7



Exploration & Production

11%

89%

2012 E&P CAPEX BY TYPE

Exploration Development

Exploration 400

Development 3,100

Total 3,500

$MM

Eagle Ford 985

Kikeh, Kakap, Siakap 800

Sarawak 515

Seal 215

Syncrude 165

Montney 140

Major Dev. Projects $MM

8




U.S.34%

Canada19%

Malaysia41%

Other6%

2012 E&P CAPEX BY REGION

Malaysia 1,450

U.S. 1,200

Canada 650

Other 200

Total 3,500

$MM

9



Downstream

15%

85%

2012 DS CAPEX BY TYPE

UK Refining & Retail US Marketing

Marketing (incl Ethanol)

170

UK Refining & Retail 30

Total 200

$MM

10


Conclusion

Operating groups continued goal to live within cash flow

Financial flexibility within Capex programs

Sufficient liquidity/access to markets to take advantage of multiple opportunities

11



Roger Jenkins

President

Sam Algar

Vice President - Worldwide Exploration

May 8, 2012

1


Since We Last Met

220% Reserve Replacement, Lower F&D, Higher R/P

Remained Oil Weighted: 73% - Production, 75% - Reserves

NA Onshore Oil - Exceeding Expectations

Sanctioned 6 Offshore Oil Projects - De-Risked Block H FLNG

Back to Normal Pace of Exploration

New Completions at Kikeh – Problem Resolved

Slowed NA Dry Gas – Shift Capital to Oil

Improved Rigor in Production Forecasting Process

2


Since We Last Met

193 200

250260

-

50

100

150

200

250

300

350

2012 2013 2014 2015

MB

OEP

D

Δ Recalibration

Last Year

3


Agenda

Upstream Strategy

North America Dry Gas

Ongoing Oil Projects

Oil Focused Exploration Program

Operations, Reserves, and Production

Conclusions

4


UPSTREAM

STRATEGY

5


Murphy Strategic Objectives

RESULT:

GROWTH INVALUE & SCALE

Invest with

Discipline

Maintain Oil-Weighted

Resource Base

Conduct Impactful

Exploration

Reduce Expl & Dev Cycle Time

Rationalize & Strengthen

Portfolio

6


Building on a Strong Foundation

69%

11%

20%

2015 Production Mix

Oil

Oil Indexed Gas

Gas

58%16%

26%

2011 Production Mix

Oil

Oil Indexed Gas

Gas

9 Oil Projects In Execution Phase

Global Business

Production Growth Resumes

680 MMBOE Risked Exploration Portfolio

Flexible, Substantial NA Land Position

Brent Priced Advantage

7


Oil Weighted Long Range Plan

-

50

100

150

200

250

300

2012 2013 2014 2015

MB

OEP

D

193200

250260

Oil

NA Dry GasOil-Indexed SK Gas

73% Oil-Weighted

80% Oil-Weighted

8


Visible, Valuable Growth

-

50

100

150

200

250

300

2012 2013 2014 2015

Production - MBOEPD

20%

17%

37%

26%Ongoing Projects

New Projects

Exploration

Base

Capital 2012 – 2015

Oil &

Oil Indexed: 73% 77% 81% 80%

M’sia

US

Canada

More Wells, Less Volatility

90% Of Growth Is Oil

Sanctioned New Projects On Track

Consistent Explorationand New Venture Activity

9


NORTH AMERICA

DRY GAS – VALUE-DRIVEN

FLEXIBILITY

10


Montney – Quality Gas Resource

Facilities- On Time- On Budget

First Quartile Well Costs

Opex = $ 0.65/MCF

DD&A = $2.50/MCF

EUR = 4.0 BCF/ Well

Total Resource = 1,700 - 3,500 BCF

X AECO Price

T77

T78

T79

T76

T75

T74

T73

R19 R18 R17 R16 R15 R14 R13R20R21

0 6Miles

Tupper

Groundbirch

Alb

erta

Bri

tish

Co

lum

bia

Brassey

Murphy Acreage

– 156,000 Acres

Tupper West

Sundown

11


NA Dry Gas – Montney Flexibility

208 130 137 123

50 28 44

0

50

100

150

200

250

2012 2013 2014 2015

Montney Net Production - MMCFD

Minimum Flexibility Curtailment

14 8 8 8

7 6 15

0

5

10

15

20

25

2012 2013 2014 2015

Montney Wells To Be Drilled

Curtailing 30 MMCFD for Remainder of 2012

Drilling for Land Retention Only

Activity Driven by Price Signal

Further Slowdown Possible in Outer Years - Absent Price Support

12


ONGOING OIL PROJECTS

13


NORTH AMERICA ONSHORE

14


NA Onshore – Sustainable Growth

-

25

50

75

100

125

2012 2013 2014 2015

OngoingProjects

New Projects 6%

7%

74%

13%

Capital 2012 – 2015

Montney

US

Canada Other

Base

Exploration

Production – MBOEPD

48% 58 % 65% 67%Oil:

Proven Capability

A Business of Scale

$1.7 Billion Spend Per Year

Seal & Eagle Ford:

De-Risked, Long Life Assets

Reorganized Team Delivering Results

15


0 10 mi

NUECES

CATARINA

TILDEN

KARNES

N TILDEN

Eagle Ford – Premier Resource

Murphy Oil Well

Murphy Gas Well

Drilled

216,000 Net Acres 60 % Oil

61 Producing Wells

10 Drilling Rigs

13 Facilities

2 Dedicated Frac Crews

42 MMBOE Booked

Murphy Acreage

Oil

Oil Condensate

Gas

16


EFS: De-Risked by Industry

xx

800,000 BOEPDSource: Bentek, a Platts Company

17


EFS Production

2012 Guidance:

15,450 BOEPD

December Rate:

25,275 BOEPD0

1

2

3

4

5

6

7

8

9

10

11

12

Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12

Net

MB

OEP

D

81%

13%

6%

2012 Production Mix

Oil Associated Gas Dry Gas

0

10

20

30

40

50

2011 2012 2013 2014 2015

Net

MB

OEP

DYearly Average Production

18


Karnes – Continues to Exceed

Expectations

500

10

100

1000

0 3 6 9 12 15 18 21 24 27 30

Gro

ss B

OP

D

Months

Drees 1H JOG 1H Bellah 1H Schendel A 1H Schendel C 1 H Wilson 1H

Schendel B-1 JOG E-1 Cannon-1 CEF-1 Dove E-1 Dove W-1

New Type Curve

730 MBBL EUR

31 Wells Producing14,440 Net Acres

Current Guidance

500 MBBL EUR

180 Locations on 80 Acre Spacing

19


Tilden – Major Growth Area

69,500 Acres

100% W.I. Except 5,200 Acres at 50% W.I.

11 Wells Producing

2,650 BOPD & 380 MCFD

870 Locations @ 80-Acre Spacing

Drilling 81 Wells This Year

Current Guidance

380 MBO

M o n t h s

Gro

ss

BO

PD

EUR: 380 MBO & 343 MMCF

20


Reduced Choke Production

Rate Comparison of Average Well

0 10 mi

Murphy Oil Well

Drilled

FOCUS

AREA

0

100

200

300

400

500

600

Month 3 Avg Month 6 Avg Month 12 Avg

Gro

ss B

OEP

D

MUR Competition

Preserves Reservoir Energy

Reduces Formation Damage

Enhances Frac Flow Performance

Benchmarked 230 Wells

21


Continuous D&C Improvements

0

10

20

30

40

2011 2012

240

260

280

300

320

340

2011 2012

Current

D&C Costs

($MM)

Target D&C

Year End

($MM)

Target D&C

2013

($MM)

Karnes 8.3 7.9 7.1

Tilden 7.9 7.6 6.8

Catarina 7.2 6.9 6.2

32%

16%

Drilling Days

Frac Cost/Stage $M

2012: 20+ Additional Wells -No Budget Increase

Drilling Records Set in Each County

Fit for Purpose Rigs

22


EFS Innovations

Down Spacing Pilots in 2012 Karnes (Drilling Now)

Tilden (3rd Quarter)

Catarina (3rd Quarter)

Frac Optimization Ongoing: Hybrid vs. Slick Water

Short Slick Water

5-Cluster Slick Water

Additional Optimization Tests: Packers PlusTM

Zipper Fracs

Less

Water

23


CATARINA

NUECES

KARNES

Flint Hills

Crude Oil Pipeline

Crude Oil Trucks

Gas Pipeline

Refinery

Crude Oil Truck Station

Murphy Acreage

Energy Transfer Pipeline

April Net Back Prices

Oil $/Bbl Rich Gas $/McfKarnes 110.21 5.46Tilden 115.48 5.46Catarina 112.76 5.27

Harbor Island Barge Terminal

EFS Oil & Gas Marketing

ValeroTILDEN

0 10 mi

24


Eagle Ford Summary

-

10

20

30

40

50

2012 2013 2014 2015


81% 86% 86% 86%

Karnes

Other

Tilden

Catarina

Oil:

Low Cost Entry with Attractive Returns

EURs Increasing

D&C Costs Improving

Moving from 10 to 12 Rigs

Early Days for Technology

275 MMBOE Resource

Significant Downspacing Potential

25


CADOTTE NORTH

WESTEAST

SOUTH

SOUTH

HARMON

CLIFFDALE

CENTRAL

Murphy 100% Lands

Murphy 50% W.I. Lands

Canada Seal Lake

Polymer

Thermal

70 HZ Wells in 2012

Increased Operated

Production by 20% to 8,500

BOPD

Successful Polymer Pilot

Successful 16 Well Strat

Program

Cyclic Steam Pilot- Q4 2012

Vertical Steam Pilot – Q3

2013

Successful Strat Wells CSS Pilot

VSD Pilot

26


0

100

200

300

400

500

600

Oct

-10

No

v-1

0

Dec

-10

Jan

-11

Feb

-11

Mar

-11

Ap

r-1

1

May

-11

Jun

-11

Jul-

11

Au

g-1

1

Sep

-11

Oct

-11

No

v-1

1

Dec

-11

Jan

-12

Feb

-12

Mar

-12

Pilot Oil Production - BOPD

Start of PolymerInjection

Targeted range of response

Seal

Polymer Update

Well PadProducerInjector

Injection Started Oct

2010

Response July 2011

Incremental Production -

380 BOPD from 4 Wells

Commercial Polymer

Project

Phase 1: Q2 2012

Phase 2: Q4 2012

27


Seal Resources

YE11 Resource

EUR Range

Identified STOIIP

Type of Recovery

STOIIP 5,850 MMSTB

Primary

2,555

MMSTB

200-300

MMSTB

210

MMSTB

Polymer

500-700

MMSTB

45-75

MMSTB

45

MMSTB

Thermal

1,000-1300

MMSTB

190-370

MMSTB

110

MMSTB

Polymer / Thermal

TBD

1,295 – 1,795

MMSTB

Total

5,850

MMSTB

485-1195

MMSTB

365

MMSTB

50-450

MMSTB

Reserve Group Focus- Resource Increased by 105%

Current Proven Reserves: 20 MMBOE

Focus on Polymer and Thermal EOR

28


Seal- Long Term Oil Growth

-

2

4

6

8

10

12

14

16

18

20

2012 2013 2014 2015

MBOEPD

Thermal

Polymer

Primary Drilling

5+ Billion Barrels in Place

Reallocation of Dry Gas Capital

Working Plan to Accelerate Production

Major Resource Adds Ahead

29


Southern Alberta - New Play

150,000 Acres

Low Entry Costs

Current Focus Kanai -3 Forks

2012 Plan Lower Costs

Enhanced Fracs

Longer Laterals

Lower BanffFocus Wells

30


S. Alberta Kainai Reserve

KAINAI

0 6 mi

14-5

15-21

Murphy Exshaw Focus

Murphy Lands

Kainai 14-5Testing

Kainai 15-21350 BOPD IPCum Prod:

24,000 BBLs

Murphy Three Forks FocusLower Banff Fm

Upper Exshaw

Middle Exshaw

Lower Exshaw

Three Forks

Stettler Fm

Mis

siss

ipp

ian

De

von

ian Recent Focus

Original Focus

5m

GR

31


Southern Alberta - The Prize

Summary

Oil in the System

42 Degree API

Search Continues for Perfect Zone

Upside in Longer Laterals and Frac Design

Lower Banff Middle

Exshaw Lower Exshaw Upper Three Forks

BTM

The Prize – 130 MMBO Net

160 Acre Spacing

250 BOPD, 250 MBO per Well

22% ROR

Resource Could Double

32


Southern Alberta vs. Eagle Ford Wells

0

100

200

300

400

500

600

1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101 106 111 116

Gro

ss B

OP

D

Days

5 per. Mov. Avg. (Kainai ) 5 per. Mov. Avg. (Jambers #1H) 5 per. Mov. Avg. (Briggs #2H)Kainai 14-5 EFS CatarinaEFS Tilden

EFS Tilden

Kainai 14-5

EFS Catarina

33


0 6Miles

Muskwa - New Area

Targeting the Muskwa

Shale

Equivalent to Duvernay Fm

Total Acres to Date:

168,000

Low Entry Cost

Murphy 4-1-109 Well

IP = 150 BOPD

Put Well on Pump

Evaluating

Murphy Well

Murphy Lands

Competitor Well

IP 200 BOPD

Cum Prod 30.2

MBBL

4 - 1 - 109 Well

34


INTERNATIONAL & OFFSHORE

35


International/Offshore – Pillar for Growth

$1.7 Billion Spend Per Year

Malaysia – Attractive for Continued Investment

Back to Work in GOM

Malaysia FLNG –Significant New Project

-

25

50

75

100

125

150

175

2012 2013 2014 2015


33%

27%

40%

New

Projects

Exploration

Base

Capital 2012 – 2015

Sabah

Other

GoM

Srwk

89% 90 % 92% 90%

Oil &Oil Indexed:

36


Kikeh

World Class Deepwater Field

140 MM BBLs Recovered To Date

The Kikeh Issue - Sand/Fines Migration Upon Planned Water Production Resolved With Gravel Pack (GP)

Completions

8 New Gravel Packed Wells

3 of 8 Produce Water as Planned - No Sand / Fines

Field Producing with Forecasted Water Cuts

40%

60%

Yearly Production

Deeper Reservoirs Shallow Reservoirs

8

8

4

2

Well Types

No Sand Control New GP Wells

Old Screen Completions Shut In

(9 wells) (11 wells)

37


Kikeh: Robust, Will Continue to Deliver

State-of-the-Art Reservoir Monitoring Continuously Updated Simulation

(1.7 mil cells, 593 layers)

90+ Well Penetrations Tie Model to Reality

Waterflood is Working

Partner - NOC Technical Collaboration

Highly Experienced Team

452mSand

Shale

Wells452m

38


Kikeh Field Performance

Sand/Fines Control Process 100% Success

Key Issues Rig Schedule

Execution

GP Refinement

Total Field Recovery Maintained

0

10

20

30

40

50

60

70

80

90

100

Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12

Gravel Pack Completions

Gro

ss M

BO

PD

39


Sarawak Oil Projects

Moving Forward

Sanctioned Oil Projects Resource Levels Net MMBOE

First Oil Status

Serendah & Patricia 25 Q2 2013 Construction and Drilling

South Acis 23 Q3 2013 Construction

Permas & Endau 12 Q4 2013 FEED Work

Utilizes Existing Infrastructure

Progressing on Schedule

0

5

10

15

20

25

30

2003 2006 2009 2012 2015 2018 2021 2024 2027

Net

MB

OP

D

Future Fields

Existing

40


Dalmatian Development

3 Well Subsea Development to Petronius

55 MMBOE Recoverable Resource

40% Oil Mix

Robust Economics

Path Forward DOCD Approval June 2012

Project Sanction June 2012

Completions Mid 2013

First Oil Q1 2015

0

5

10

15

20

2015 2017 2019 2021 2023 2025 2027 2029

Dalmatian Gross, MBOEPD

41


Murphy 60% W.I.

Existing Completions Exceeding Expectations

3 Well Subsea Development 16-27 MMBOE

Recoverable

Spud 1st Well Q2 2013

1st Oil Q2 2015

Medusa Subsea Development

0

5

10

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Net MBOEPD

42


SK Gas – Major Oil Indexed Project

Consistent Steady Production

Facility Upgrade 2012 Working to Increase Rate

$7.00+/MCF Gas

PP

P

P

P

P

PPP

P

PP

PPP

PPP

- Phase 1 Successful Delineation



0

50

100

150

200

250

300

2009 2011 2013 2015 2017 2019 2021 2023 2025

Gro

ss M

MC

FD

0

50

100

150

200

250

300

Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12

Gro

ss M

MC

FD

Phase 1 Phase 2 Phase 3

43


Long Term Oil Indexed Growth

Malaysia FLNG Block H

De-Risked by Recent Exploration Success

Award FEED Q3 2012

Sanction 2013

First Gas Planned 2016/17

0

50

100

150

200

250

300

2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

MM

CFD

Murphy Net Entitlement = ~1,150 BCF

Gross Risked Resources: ~2,200 BCF

Discovered

910 BCF

Drill Ready Prospects

635 BCF

Discovered

425 BCF

Leads

260 BCF

44


EXPLORATION

45


Exploration Value Creation

Proven Track Record in Value Creation Through Exploration

Last 3 Years: 9 Discoveries (39% Success) 13 Successful Delineation Wells in Malaysia (81% Success)

Sanctioned 4 Projects with 88 MM Net BOE

0

1

2

3

4

5

6

7

8

9

10

Woodmac, 2012

MU

RP

HY

Exploration Efficiency - Value Creation per Dollar Invested

2001 - 2010

PEER GROUPAPC, APA, BG, BHP, BP, CVX, COP, ENI, XOM, HES, Maersk, MRO, NXY, NBL, OXY, OGX, OMV, Petrobras, PETRONAS,

Repsol YPF, RWE Dea, STO, RDS, Statoil, TLM, Total, TLW, Wintershall, WPL

46


Exploration Drilling – More Coming

Limited Recent Exploration Drilling

Ramping Back-Up in 2012-13

First 3 Wells of 2012 Discoveries

0

5

10

15

20

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Exp

lora

tio

n W

ells

Year

Wells Yet to be Drilled

Wildcat Dry Holes

Wildcat Discoveries

Key Discoveries

47


2012-13 Exploration Program

Technically Grounded, Value Driven

Up to 30 Wells; Oil / LNG-Scale Gas Focus

Leveraging Operational Expertise – Partner of Choice

Balance - Frontier & Lower Risk Proven Plays

5 Billion BOE Gross; 500 Million BOE Risked Net 2012-2013 Portfolio

GOM2-4 Wells

Iraq2-4 Wells

Brunei2-5 Wells

Australia1-3 Wells

Malaysia5-7 Wells

Cameroon1-2 Wells

Indonesia2 Wells

Congo1-3 Wells

48


Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

MALAYSIA Block H/P

BRUNEI CA-1

CA-2

IRAQC. Dohuk &

Baranan

CAMEROON Ntem

CONGO MPN/MPS

AUSTRALIAWA-423-P

ACP/36

INDONESIA Semai II

GOM Multiple

Discovery

Exploration Program

Eupheme-1

Rig ContractedExact Timing

TBD

Block H

Gali

MPS

MPN

NTP/80

Block H

Wells Shown by Spud Date

Jagus

East-1

Julong

East-1

Dalmatian

South

Linnava-1

Bassett Deep

Buluh-1

Bunga Lili-1

MPN

Block P

Semai II

Baranan-1

2012 2013

49


MALAYSIA - Block H

2 Discoveries for 2012 Buluh-1 Bunga Lili-1

4 Discoveries/4 Wells

Results Matched Pre-drill Predictions

Multiple Low Risk Lookalike Prospects Remain

Total Resource ~1.5 - 2 TCF

Gas Field

Low Risk Prospects

Higher Risk Leads

Block H

Hanks

Bemban

ROTAN

DOLFIN

Bates

Saraca

Tembusu N& S

Bunga Lili North

Bunga Lili South

BUNGA LILI

BULUH

Rotan W

0 5 km

50


CA-1 Julong East-1 Discovery

2013 Appraisal

Jagus East 2012 Exploration

Additional Prospects

CA-2 Re-processing Seismic to

Locate Sand

3 Lower Risk Prospects Identified Late 2012 / 2013 Drilling

BLOCK

K

Prospects

0 20 km

KIKEH

BLOCK CA-1

(5% W.I.)

BLOCK CA-2

(30% W.I.)

BRUNEI

First Discovery Made

KAKAP -

GUMUSUT

Saga

Jati Semerak

Julong

East-1

Jagus

East

Oil Discovery

51


IRAQ

Drilling Next to Giants

Surrounded by Giant Oil Discoveries in Same Plays

First Well, Linnava-1, Drilling

WI 50%

Resource Range 100-600-1500 MMBBL

0 25kmOil

Discovery

TawkePeshkabir-1 Ber Bahr

Shaikan

Sheik Adi

Swara Tika

Atrush

Jebel Simrit

Linnava-1

52


CONGO – Extending Proven Plays

Cretaceous Carbonate Oil Fields Nearby

Play Unexplored in Deep Water New Seismic Defines Multiple Prospects 100-350 MMBO Each

Pre-Salt Structures Underlie Carbonates

Q3 2012 Well Firm

W Africa Rig Firm Q3 2013+

Oil Discovery - MMBO

Pre-Salt Prospect

Cretaceous Prospect

Tertiary Prospect

Kilometers

0 10 20 30 40 50

Zatchi226

Likouala127

N’Kossa358/2 TCF

Kitina91

Sendji263

Yanga164

Yombo110

Loango305

Moho100

MohoNord

Tchendo62

MPN

Murphy - 85%

MPS

Murphy - 50%

W South Prospect

W. SouthProspect

0 50 km

Pre-Salt Structure

Cretaceous 4-Way Closure

53


Equatorial

Guinea

Ca

me

ro

on

Gas Condensate

Oil

Prospects/Leads

0 40 km

CAMEROON– Ghana Play Extension

Extending Play from Ghana to Cameroon

Ntem - 50% WI & Operatorship 3D Seismic Shot In-House

Multiple 100+ MMBO Prospects

First Wells 2012 / 13

Room to Grow in Play

Ntem

Aseng Complex

143 MMBO

Okume Complex

320 MMBO

Cretaceous Source Rock

Seal Rock

54


Focus on Proven Plays Miocene Amplitudes

Norphlet

Sub-Salt Structures

Securing Long Term Rig Contract

Multiple Prospects 2 - 4 Wells in 2012 - 13; First in July

GoM – Back to Action

Mid - Lwr. Miocene Subsalt Play

EGOM Play Area

Murphy HBP

Murphy Leases

Murphy Facilities

LEGEND

Oil Prospect

DalmatianSouth Hornet

PhotoFinish

Skyhawk

Samurai

Mustang

DeepBlue

Trifecta

Titanium

55


Gulf of Mexico Prospects

Skyhawk

Photo Finish

Samurai

Photo FinishGunflint

SkyhawkVito

Samurai-1

Subsalt 4-way 50 - 100 MMBO

3-way Against Salt 90 - 350 MMBO

3-way Against Salt 65 - 200 MMBO

56


AUSTRALIA

Testing the Largest Undrilled Structures

Browse Basin ACP/36 Bassett Deep Jurassic Plover Reservoir Tilted Fault Block Trap Multi TCF Drill 2012/13

Bonaparte Basin NTP/80 Fulmar Permian Reservoirs Anticlinal Trap 1.5 to 4 TCF Drill 2013

Petrel

Frigate

Tern

0 50 km

Brecknock5.3 TCF

Icthys~13 TCF

Torosa11.5 TCF

Poseidon/Kronos ~7 TCF

Calliance4TCF

ACP/36Prospect

Bonaparte FLNG

1.5 TCF

0 50 km

Prelude~2.5 TCF

NTP/80Fulmar Prospect

57


Murphy Global Exploration

Ramping Up Exploration Drilling in 2012-13 Up to 30 Wells by End 2013

5 Billion BOE Gross, 500 MMBOE Net Risked

Oil or Oil Indexed Gas Focus

Multiple Impactful Prospects Iraq, Congo, Cameroon, Australia

Balanced With Smaller, Lower Risk Prospects Malaysia, GoM

Continuing to Grow Acreage in Focused Areas

58


OPERATIONS, RESERVES

& PRODUCTION

59


Murphy – A Proven Operator

HSE

First Ever - Flow Capture Permit

No Lost Time Accidents 3 Years in Congo

TRIR in Malaysia 0.22 YTD

Industry Leading Uptime

GOM

Canada Gas Plants

Kikeh FPSO - No 1 in the World

Cycle Time

Iraq Drilling

SK Oil Projects - On Time

60


Production Volatility To Improve

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Kik

eh

SK G

as

Go

M

Wes

t P

at

EFS

Mo

ntn

ey

Seal

Gro

ss M

BO

EPD

2012 Average Production By Well

Onshor

e

Offshor

e

0

25

50

75

100

125

150

175

2011 2012

Kikeh FPSO M'sia LNG Methanol Plant

Montney Other Facilities

Facilities

Op

era

ted

Ne

t

Pro

du

cti

on

MB

OE

PD

Doubled Well Count in Two Years

Operate 82% of Wells

Resource Plays – Step Change

0

250

500

750

2 Years Ago 1 Year Ago Today End 2012

NAOnshore

Operated Well Count

Offshore

61


2012 Worldwide Production

100,000

125,000

150,000

175,000

200,000

225,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Actual Forecast

BO

EP

D

Guidance = 193,000 BOEPD

Syncrude - TARMedusa - PL Shut-InTerra Nova - Offline

Kikeh - SS WellsEFS - WellsTerra Nova - ReturnSeal - Wells

62


Reserves – Continue to Grow & Replace

YE 2009 YE 2010 YE 2011

Contingent (Unconventional)

Contingent (Conventional)

Possible

Probable

Proved Reserves

3.4 BBOE

Deepwater

27%

Conventional

17%Syncrude

24%

Resource Play

28%

Heavy Oil

4%

Total Proved – 534 MMBOE

65% Oil

65% North America

67% Developed

220% Replacement

3.3 BBOE

2.8 BBOE

63


Low Risk Non-Proved Resource

YE 2009 YE 2010 YE 2011

Contingent (Unconventional)

Contingent (Conventional)

Possible

Probable

Proved Reserves

3.4 BBOE

Msia Oil11%

Msia Gas10%

North AmericaDry Gas

25%

EFS Oil& Assoc Gas

15%

Total Non-Proved – 2.9 BBOE

75% Oil Weighted

54% Low Risk – Existing Development Areas

38% NA Onshore Oil

3.3 BBOE

2.8 BBOE

Seal12%

Syncrude11%

Other Oil Projects

16%

64


193 200

250 260

0

50

100

150

200

250

300

350

2012 2013 2014 2015

Guidance

Capacity Forecast

Upside Potential

MB

OEP

D

65


Value Proposition – NAV

0 5 10 15 20 25 30 35

Malaysia

Canada

USA

Exploration

Based on 2P/2C Resource Incremental Resource Upside

of 80%

Based on Long-term $95/Bbl Brent, $4.25/MMBTU HH

Discounted at 10% After-Tax

$/Share

Malaysia Oil MalaysiaGas

SyncrudeEast

CoastOn-

Shore

GOMEagleFord EF

SU

psi

de

Risked 2012 - 2015

Portfolio

66


Conclusions

Strong Oil Weighted Production Growth Ahead

NA Gas Growth on Hold

New Production Forecasting Process in Place – Consistency to Improve

NA Onshore Oil – Source of Near-term Growth with Upside

Exploration – Back to Normal Activity Levels

Kikeh – New Completion Success; Long Term Project

Value Ahead in Malaysia Oil-Indexed Gas

Oil Weighted, De-Risked Resource Base

67


Downstream Business

Tom McKinlay

Executive VP, World Wide Downstream

May 8, 2012

1


Agenda

Refining

Renewable Energy

UK Marketing

US Marketing

2


Refining

3


Milford Haven Refinery Highlights

0.00

0.40

0.80

1.20

1.60Milford Haven 12 Month Rolling Incident Rates

TRIR LTIRIndustry

TRIR Avg

Industry

LTIR Avg

Continued Focus on Safety and Operational Excellence Zero Incident Rate for Last 12 Month Period

Consistently High Crude Rates - Demonstrated 135,000+ Bbl/D

Improved Operating Margin Capture ~$1.00/Bbl vs Q1 2011 EBITDA: 2011 - $(15.16) MM; 2012 YTD - $20.44 MM

Operations Supporting the Sales Process

Aided by the Dedication and Goodwill of our Team

Industry Average Source: OSHA 4


Renewable Energy

5


Ethanol Plants

HANKINSON, ND

Running at 120+ mmgpy Rates Best-in-Class Production

Increasing to 135+ mmgpy

Co-product Development

Advantaged by Corn Supply

HEREFORD, TX

Running at 104+ mmgpy Rates 115+ mmgpy Target in

2013

Full 12 Months Operations

Advantaged by Local Demand

6


UK Marketing

7


Today Murco

Operates 457 Stations in the UK 233 Company, 224 Branded

Sells ~185 mmgpy

Has 2.0% of UK Market Share

Sells ~$145 Million of Merchandise Each Year

16%

14%

10%

5%

% of Total Stations

Supermarkets

BP

Shell

Esso

Texaco

Total

Murco

Jet

GB Oils

Other

41%

15%12%

2%

% of Total Fuel Sold

UK Marketing

Source: Energy Institute, DECC, Forecourt Trader (06/2011) 8


£0

£5

£10

£15

£20

£25

2006 2007 2008 2009 2010 2011

£ M

illio

ns

Retail Company Stations Retail Dealer Stations

UK Marketing

Retail EBITDA

9


US Marketing

10


Gasoline Demand Trends

200

210

220

230

240

250

260

8000

8200

8400

8600

8800

9000

9200

9400

Ve

hic

le M

iles

Trav

ele

d (

Bill

ion

s)

Gas

olin

e D

em

and

(M

B/D

)

Gasoline Demand (MB/D) Vehicle Miles Traveled Billions

Source: PIRA, (VMT Peak 1/2007, Base 12/2011)

Consumers are Driving 49 Billion Fewer Miles per Year from Peak in 2007

Automobile Efficiencies Impacting Demand

11


US Retail

12


Murphy USA Overview

Opened First Retail Store in 1996

Operate 1,137 sites in 23 states 1,007 Murphy USAs on Walmart Lots

130 Murphy Express Stores

Provide 3% of Total US Retail Gasoline (5% in Mkt Area)

We serve ~1.6 Million Customers Every Day

Historically Strong Growth Model 91% Fee-owned Real Estate

100% Company Operated

1,175*

0

200

400

600

800

1,000

1,200

1,400

Operating Sites

*By End 2012

13


US Retail Safety

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

Murphy USA 12 Month Rolling Incident Rates

TRIR LTIR

Industry Leading Performance

Received National Liberty Mutual Award for OSHA Recordable Rate Significantly Lower Than National Average

Industry

TRIR Avg

Industry

LTIR Avg

Industry Average Source: OSHA 14


OKTN

0% - 2%

3% - 6%

7% - 14%

US Market Share ~3%(5% Mkt Area)

2011 Gasoline Market Share

Source: EIA, Internal Calculations 15


Murphy USA’s Model

Oil FieldsRefineries/ Commodity

MarketsCustomer

Wholesale

Marketing Terminal

Product Supply & Primary

Distribution

Crude Pipeline/

Vessel

Secondary Distribution/ Trucking

16Booz & Company March 2011


Murphy USA

Low Price, High Volume Fuel Seller

Low Cost Fuel Supplier

Low Cost Operator

Low Price Niche Merchandising

Relationship with #1 Retailer Walmart

Attractive Business

17

M U R P H Y O I L C O R P O R A T I O N Source: Company Reports

$ Billion

High Revenue Business

2011

0

2

4

6

8

10

12

14

16

18

Barnes & Noble Nordstrom Starbucks Murphy USA Southwest

18


Fuel Volume vs. Publicly-Traded Peers

Source: Company Reports

0

50

100

150

200

250

300

Murphy USA

Casey's Delek Couche Tard

Pantry Susser Sunoco Valero Tesoro Marathon

2011 Fuel Sales/Store/Month (000 Gallons)

19


Midstream Supports Low Cost Model

Integrated Midstream Scale and Assets Reduce Unit Costs

Pipeline History and Terminal Position Creates Supply Advantage

Product Supply Ensures Lowest Cost of Product and Security of Supply

Maximizes Geographic Arbitrage Opportunities

Best Buy Distribution System Tactical Direction and Contract Management Creates Optimal

Supply Logistics

20


Murphy Terminals

Third-Party Terminals

Pipelines

▬ Colonial

▬ Plantation

▬ Explorer

▬ TEPPCO

▬ Magellan

Product Distribution System

21


Low Operating Expenses

Source: NACs and Internal Data

$12.6$8.6

$2.0 $1.0 $1.0$4.8

$30.2

$26.7

$8.5

$3.7 $3.6$1.8

$7.5

$51.8

$0

$10

$20

$30

$40

$50

$60

Wages Credit Card

Maintenance Utilities Supplies Other Total

2011 Murphy USA vs. NACS Top Quartile Operating Expenses Per Store Month ($000)

Murphy USA NACs

22


US Retail Merchandise Contribution

Merchandise SalesBillion Per Year

$0.9

$1.2

$1.3

$1.8

$2.0

$2.2

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

$1.8

$2.0

$2.2

2006 2007 2008 2009 2010 2011

Merchandise MarginMillion Per Year

*2011 included nonrecurring adjustment of $(8.4)MM

$120

$152

$178

$214

$259$270

$0

$50

$100

$150

$200

$250

$300

2006 2007 2008 2009 2010 2011*

23


Segment Performance

Source: Altria MSAi, ACN and Coke / Pepsi National Account Reporting

2011 % Volume Change vs. Previous Year

5%

16%

22%

-4%

4% 0.3%

-5%

0%

5%

10%

15%

20%

25%

30%

Cigarettes Beverage Beer

Murphy IndustryConvenience Store Industry

24


Merchandise Sales Comps

Source: Company Reports

0

5

10

15

20

25

30

35

40

45

Tesoro Delek Casey's Couche Tard

Pantry Sunoco Valero - US Susser Murphy USA

Marathon

Merchandise Sales/ Store/ Week ($000)

25


2011 Walmart Promotion

26


Walmart’s Partner of Choice

StateMurphy

USA Walmart %

AR 52 68 76%

TX 210 308 68%

LA 54 80 68%

MS 37 60 62%

TN 65 107 61%

AL 56 92 61%

OK 44 76 58%

GA 65 134 49%

FL 84 178 47%

MO 44 101 44%

SC 32 72 44%

IA 21 49 43%

KY 32 76 42%

IN 32 87 37%

NC 43 125 34%

OH 40 127 31%

MI 23 79 29%

IL 25 107 23%

MN 7 48 15%

VA 3 84 4%

Walmart Supercenters with Murphy USAs

27


“We Are Murphy USA”

US National Managers MeetingOrlando, FL 2012

We Employ More Than 7,000 People

28


Store ManagerTurnover

A Committed Team

Circle of Stars Program

Effective On-line Recruitment Process

Daily Electronic Store Communications

Exceptional Team

*Projected Annual

29%23%

0%

20%

40%

60%

2007 2008 2009 2010 2011 2012*

29


Connecting with our Customers

Murphy USA Mobile App

Re-launched in March – Expecting 250,000+

Downloads This Year

Provides Real-time Pricing and Location

Information for Murphy USA & Competitors

Innovative GPS Technology to Match to In-

station Merchandise & Fuel Discounts

30


The Way Forward

31


US Retail Financial Performance

2006-2011 Key Financial Indicators ($Millions)

2006 2007 2008 2009 2010 2011

Total Margin 454 511 812 535 707 849

Operating Expense 270 306 339 340 384 404

Admin and G&A 27 30 54 61 66 76

Total Operating Cost 297 336 393 401 450 480

Operating Income (Loss) 157 175 419 134 257 369

EBITDA 156 164 408 130 255 363

EBITDA per Site 0.17 0.17 0.41 0.13 0.24 0.33

After-tax Cash Flow 124 128 278 111 186 273

32


$(6)

$7 $8

$(2)

$9

$14

$24

$6

$14

$33

$4

0

1

2

3

4

5

6

7

8

9

10

$(10)

$(5)

$-

$5

$10

$15

$20

$25

$30

$35

Q1 2002

Q1 2003

Q1 2004

Q1 2005

Q1 2006

Q1 2007

Q1 2008

Q1 2009

Q1 2010

Q1 2011

Q1 2012

CP

G

EBTI

DA

(M

illio

ns)

Actual EBITDA Actual CPG Fuel Margin

US Retail First Quarter Comparison

$ 0.60 $ 0.95 $ 1.04 $ 1.32 $ 1.70 $ 1.63 $ 2.43 $ 1.21 $ 2.05 $ 2.60 $ 2.98 Avg. GC

Spot Price

Source: GC Spot Price: EIA 33


-8%-6%-4%-2%0%2%4%6%8%

-

2

4

6

8

10

12

14

Valero (a) MUSA Marathon Delek

YoY 1Q12 Volume % Increase / (Decrease) 1Q12 Fuel Gross Margin (CPG)

Source: Publicly available information, as of 5/3/12.(a) U.S. operations only. Note: Valero Gross Margin CPG understated relative to peer group due to credit card fees included in COGS.

1Q Performance vs. Peers

-5%-4%-3%-2%-1%0%1%2%3%4%5%6%

Pantry Valero (a) Marathon MUSA Susser

-

2

4

6

8

10

12

14

MUSA Marathon Pantry Valero (a) Susser

1Q09 Fuel Gross Margin (CPG)YoY 1Q09 Volume % Increase / (Decrease)

34


Operating statistics (LTM)

# of Retail Locations 1,128 5,715 1,677 1,649 541

Fuel Volumes (MM Gallons) 3,715 3,672 1,416 1,889 768

Retail Fuel Volume/Store (000 Gallons)

3,333 894 858 1,157 1,430

Average Fuel Margin (¢/Gallon) 15.6¢ 15.9¢ 15.9¢ 17.5¢ 16.5¢

Merchandise Sales ($MM) $2,115 $6,343 $1,779 $1,779 $863

Merchandise Sales/Store/Week ($000) $36 $21 $20 $21 $31

EBITDA per Store ($000) $326 $131 $164 $133 $263

Total EBITDA $363 $747 $275 $275 $142

EBITDA Multiple (TEV/EBITDA) ?? 10.8x 8.9x 5.4x 5.5x

Real Estate % Ownership 91% 30% 99% 26% 45%

ROIC 13% 17% 10% 1% 6%

Fuel

Merchandise

2011 Competitor Comps

26%74%

24%

76%

30%70%

62%

38%68%

32%

Source: Company Reports, Capital IQ 35


Growth Avenues

Walmart Cross Promotion & New Site Growth

Opportunities with Third Parties

Growth Outside the Walmart Pad

36


In Summary

Low Cost Model

From the Refinery Gate Direct to the Customer

Exceptionally Efficient Operation

High Volume Business

Strong Relationship with Walmart

Established Fuel Discount Program

Strong Cross-promotional History

Advantaged and Growing High-Traffic Locations

Platform for Growth Refinery Divestment Opens New Markets

Good Returns in Both Rural and Urban Environments

Actively Evaluating Parallel Growth Strategies

37

M U R P H Y O I L C O R P O R AT I O N

2012 Analyst Day

El Dorado, Arkansas

May 8, 2012

Murphy Oil Corporation 2012 Analyst Day

Business

Transcript of Murphy Oil Corporation 2012 Analyst Day