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Non-Core Canadian Assets of Murphy Oil Successfully Divested for $104M
10/13/2023
Houston-based Murphy Oil Corp. has successfully concluded the divestiture of its non-core operated assets located across its Western Canadian terrain, including the assets in the Kaybob Duvernay region and the complete non-operated Placid Montney position through a subsidiary.
The divestiture was initially made public in August and was concluded. The transaction yielded cash proceeds of around US$104 million (CA$141 million), slightly lower than the originally anticipated US$112 million.
Assets Included
The divested assets encompass the Saxon and Simonette areas of Kaybob Duvernay, wherein Murphy maintains a 70% working interest as the operator.
Murphy's 30% working interest in the Placid Montney assets, operated by Athabasca Oil Corp., was also included, along with accompanying pipelines, batteries, and associated processing and marketing contracts.
In total, the transaction enveloped 138 net drilling locations across 42,000 net acres in Kaybob Duvernay and 26,000 net acres in Placid Montney.
Current Production and Reserves
The amalgamated assets are yielding approximately 1,700 barrels of oil equivalent per day (boe/d) net, with oil constituting 39% of the production. The net proved reserves were recorded at 5.3 million barrels of oil equivalent (MMboe) as of December 31, 2022.
Allocation of Proceeds
A segment of the proceeds is earmarked for investments in West Africa and Asia, aligning with Murphy’s strategic capital allocation framework. The focus will be on new business ventures in Côte d'Ivoire and developmental projects in Vietnam.
Murphy President and CEO, Roger W. Jenkins expressed satisfaction in actualizing the value from the non-core portion of their assets and emphasized the company’s anticipation in channeling the proceeds towards evolving ventures.
In related developments, Murphy has also unveiled plans to redeem its outstanding 5.750% senior notes due in 2025. The payment of the redemption price, including the accrued and unpaid interest, is slated to be executed on October 16, following the redemption date on October 15, as stated in a regulatory filing.
About Murphy Oil
Murphy Oil Corp. operates as a holding entity, focusing on the discovery and extraction of oil and natural gas. It conducts its business through two main segments: Exploration and Production, and Corporate and Other. The Exploration and Production segment has operations in the United States, Canada, and various other international regions.
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Murphy Oil Plans to Sell Less Essential Canadian Assets for $112 Million
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Murphy Oil has entered into a purchase and sale agreement to sell a section of its Kaybob Duvernay assets and entire Placid Montney assets. A subsidiary of Murphy Oil Corp. has entered into an agreement to sell a "non-core segment" of its operated Kaybob Duvernay assets and its entire non-operated Placid Montney assets to a private company, as stated in the company's earnings report released on August 3rd. The transaction is set to take effect from March 1, 2023, and the closing is expected to be finalized in the third quarter of the same year.
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