MURPHY CUTS 60%
Murphy Oil Corp. is expected to cut its budget for 2016 by more than half to below $1 billion, according to a Raymond James & Associates Inc. energy update on Dec. 9.
"At yesterday's analyst dinner, Murphy guided—to our knowledge, for the first time—to less than $1 billion of capital spending in 2016," RJA reported. "This compares to $2.3 billion in 2015, so a nearly 60% cut. This is one of the steepest 2016 spending cuts we've seen across oil and gas producers."
The financial services firm says, as a result, Murphy anticipates a 7% drop in its production guidance when comparing its 2016 average from the fourth-quarter 2015 run-rate.
"A better comp is [fourth-quarter 2016] vs. [fourth-quarter 2015], which management didn't spell out, but assuming a linear trajectory, there would be a 12-15% decline by yearend 2016," RJA said.
The company's Eagle Ford production "will take the brunt," RJA said, with plans to average 1.75 rigs, down from 3 in the fourth quarter. Murphy's oil and natural gas production from the play in 2014 was 51,300 b/d and 33 MMcfd, respectively.
Murphy operates four fields in the Eagle Ford: Karnes with 62% interest, Tilden 94%, Catarina 100%, and Nueces 86%.
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U.S. Rig Count is up 330 rigs from last year's count of 593, with oil rigs up 273, gas rigs up 58, and miscellaneous rigs down 1 to 0. Canada Rig Count is up 41 rigs from last year's count of 174, with oil rigs up 13, gas rigs up 30, and miscellaneous rigs down 2 to 2.