Oil and natural gas company Murphy Oil Corp. (MUR) said Wednesday after the markets closed that rose 8% from last year, helped by strong performance of its exploration and production operations.
First quarter income from the company's exploration and production increased 23.5% to $321.6 million from $260.4 million a year ago, helped by higher crude oil prices and lower exploration expenses. The latest quarter results were hurt by lower crude oil sales volumes and significantly lower North American natural gas prices.
Crude oil, condensate and gas liquids production for the quarter dropped to 107,490 barrels per day from 113,313 barrels per day a year ago.
The decline in oil production was due to lower volumes produced at the Kikeh field, offshore Sabah, Malaysia, the Azurite field, offshore Republic of the Congo, and at Syncrude in Western Canada, the company noted.
The average sales price for the company's crude oil, condensate and gas liquids rose to $97.78 per barrel in the first quarter from $86.73 per barrel in the same quarter last year.
Natural gas sales volumes averaged a record 525 million cubic feet per day in the first quarter, up from 413 million cubic feet per day in the year-ago quarter, due mainly to a full quarter of natural gas production at the Tupper West area in Northeast British Columbia. North American natural gas sales prices averaged $2.56 per thousand cubic feet in the the latest quarter, down sharply from $4.35 per MCF in the prior year quarter. Natural gas sold from fields offshore Sarawak, Malaysia averaged $7.80 per MCF in the 2012 quarter, up from $5.64 per MCF in the 2011 quarter.
David Wood, Murphy Oil's President and Chief Executive Officer, said, "The divergence in North American oil and natural gas prices during the first quarter was quite extreme. Although oil prices remain strong in the early days of the second quarter, natural gas prices in North America have further softened during the shoulder months in the spring."
The El Dorado, Arkansas-based company reported net income for the first quarter of $290.1 million or $1.49 per share, compared to $268.9 million or $1.38 per share for the year-ago quarter.
On average, 13 analysts polled by Thomson Reuters expected the company to earn $1.53 per share for the first quarter. Analysts' estimates typically exclude special items.
Revenue for the first quarter rose 11.5% to $6.99 billion from $6.27 billion in the same quarter last year. Two analysts had a consensus revenue estimate of $7.21 billion for the first quarter.
Looking forward, the company said it expects second quarter earnings to be in the range of $1.35 to $1.60 per sharer. Analysts currently expect the company to earn $1.55 per share for the second quarter.
The company also said it expects second quarter production to average 185,000 barrels of oil equivalent per day, but that it expects sales volumes of oil and natural gas for the quarter to average 184,000 barrels of oil equivalent per day.
Additionally, the company said it now targets a full year 2012 production rate of about 193,000 barrel equivalents per day, below its prior guidance of 200,000 barrel equivalents per day due to reduced dry gas volumes at the Tupper area, revised Syncrude performance, and workover delays at Kikeh. . Among others in the industry, Exxon Mobil Corp. (XOM), the world's largest publicly traded oil company, last week reported an 11% decline in first quarter profit, reflecting a drop in oil and natural gas production and sales volumes.
Also last week, Chevron Corp. (CVX) reported a 4% rise in first quarter profit, benefiting from higher crude oil prices that led to a modest growth in revenue. However, production dropped from last year owing partly to normal field declines.
Murphy Oil shares, which have traded in a range of $40.41 to $74.56 over the past year, closed Wednesday's regular trading session at $55.29, down 62 cents or 1.11%, but gained 2 cents in after hours trading.
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