============================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File Number 1-8590
MURPHY OIL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 71-0361522
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
200 PEACH STREET
P. O. BOX 7000, EL DORADO, ARKANSAS 71731-7000
(Address of principal executive offices) (Zip Code)
(870) 862-6411
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
[X] Yes [ ] No
Number of shares of Common Stock, $1.00 par value, outstanding at March 31,
1997 was 44,875,968.
============================================================================
<PAGE>
PART I - FINANCIAL INFORMATION
Murphy Oil Corporation and Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Thousands of dollars)
<TABLE>
<CAPTION>
(unaudited)
March 31, December 31,
1997 1996
---------- ------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 81,364 109,707
Accounts receivable, less allowance for
doubtful accounts of $15,288 in 1997 and
$15,267 in 1996 236,020 319,661
Inventories
Crude oil and raw materials 50,613 42,811
Finished products 46,099 44,310
Materials and supplies 44,020 44,234
Prepaid expenses 27,406 29,820
Deferred income taxes 18,106 19,626
--------- ---------
Total current assets 503,628 610,169
Property, plant, and equipment, at cost less
accumulated depreciation, depletion, and
amortization of $2,587,050 in 1997 and
$2,573,606 in 1996 1,580,627 1,556,830
Deferred charges and other assets 73,726 76,787
--------- ---------
$ 2,157,981 2,243,786
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term obligations $ 13,635 13,635
Accounts payable and accrued liabilities 426,115 503,013
Income taxes 33,746 37,393
--------- ---------
Total current liabilities 473,496 554,041
Notes payable and capitalized lease obligations 20,870 20,871
Nonrecourse debt of a subsidiary 180,103 180,957
Deferred income taxes 132,834 127,319
Reserve for dismantlement costs 150,758 152,528
Reserve for major repairs 32,075 29,776
Deferred credits and other liabilities 136,707 150,816
Stockholders' equity
Capital stock
Cumulative Preferred Stock, par $100, authorized
400,000 shares, none issued - -
Common Stock, par $1.00, authorized 80,000,000
shares, issued 48,775,314 shares 48,775 48,775
Capital in excess of par value 509,058 509,008
Retained earnings 566,735 550,699
Currency translation adjustments 9,706 22,573
Unamortized restricted stock awards (1,213) (1,298)
Treasury stock, 3,899,346 shares of
Common Stock in 1997, 3,912,971 shares
in 1996, at cost (101,923) (102,279)
--------- ---------
Total stockholders' equity 1,031,138 1,027,478
--------- ---------
$ 2,157,981 2,243,786
========= =========
</TABLE>
See Notes to Consolidated Financial Statements, page 4.
The Exhibit Index is on page 11.
1
<PAGE>
Murphy Oil Corporation and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1997 1996*
------- -------
<S> <C> <C>
REVENUES
Sales $ 493,489 403,838
Other operating revenues 13,683 11,565
Interest, income from equity companies,
and other nonoperating revenues 1,144 1,539
------- -------
Total revenues 508,316 416,942
------- -------
COSTS AND EXPENSES
Crude oil, products, and related operating expenses 363,270 304,757
Exploration expenses, including undeveloped
lease amortization 28,550 11,671
Selling and general expenses 14,305 14,494
Depreciation, depletion, and amortization 48,725 47,551
Interest expense 2,914 3,185
Interest capitalized (2,896) (2,167)
------- -------
Total costs and expenses 454,868 379,491
------- -------
Income (loss) from continuing operations
before income taxes 53,448 37,451
Federal and state income taxes 10,971 8,687
Foreign income taxes 11,861 8,438
------- -------
Income from continuing operations 30,616 20,326
DISCONTINUED FARM, TIMBER, AND REAL ESTATE OPERATIONS
Income from discontinued operations - 3,688
------- -------
NET INCOME $ 30,616 24,014
======= =======
Average Common shares outstanding 44,963,493 44,881,811
Income per Common share
Continuing operations $ .68 .45
Discontinued operations - .09
------- -------
Net income $ .68 .54
======= =======
Cash dividends per Common share $ .325 .325
======= =======
*Restated for discontinued operations.
</TABLE>
See Notes to Consolidated Financial Statements, page 4.
2
<PAGE>
Murphy Oil Corporation and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(Thousands of dollars)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1997 1996*
------- -------
<S> <C> <C>
OPERATING ACTIVITIES
Income from continuing operations $ 30,616 20,326
Adjustments to reconcile above income to net cash
provided by operating activities
Depreciation, depletion, and amortization 48,725 47,551
Provision for major repairs 5,610 6,398
Expenditures for major repairs and dismantlement costs (3,872) (2,340)
Exploratory expenditures charged against income 25,948 9,213
Amortization of undeveloped leases 2,602 2,458
Deferred and noncurrent income taxes 6,562 2,906
Pretax gains from disposition of assets (3,000) (36)
Other - net 357 703
------- -------
113,548 87,179
Net (increase) decrease in operating working capital
other than cash and cash equivalents (2,347) 38,577
Other adjustments related to continuing operations (9,261) 1,374
------- -------
Net cash provided by continuing operations 101,940 127,130
Net cash provided by discontinued operations - 1,514
------- -------
Net cash provided by operating activities 101,940 128,644
------- -------
INVESTING ACTIVITIES
Capital expenditures requiring cash (117,125) (88,529)
Proceeds from sale of property, plant, and equipment 4,361 828
Other continuing operations - net (181) 99
Investing activities of discontinued operations - (2,151)
------- -------
Net cash required by investing activities (112,945) (89,753)
------- -------
FINANCING ACTIVITIES
Decrease in notes payable and capitalized lease
obligations (1) (1)
Increase (decrease) in nonrecourse debt of a subsidiary (854) 4,433
Cash dividends paid (14,580) (14,570)
------- -------
Net cash required by financing activities (15,435) (10,138)
------- -------
Effect of exchange rate changes on cash and
cash equivalents (1,903) (177)
------- -------
Net increase (decrease) in cash and cash equivalents (28,343) 28,576
Decrease applicable to discontinued operations - 53
------- -------
Net increase (decrease) in cash and cash equivalents
of continuing operations (28,343) 28,629
Cash and cash equivalents of continuing operations at
January 1 109,707 60,853
------- -------
Cash and cash equivalents of continuing operations
at March 31 $ 81,364 89,482
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES
Cash income taxes paid, net of refunds $ 25,947 8,026
Interest paid, net of amounts capitalized (1,148) 511
*Restated for discontinued operations.
</TABLE>
See Notes to Consolidated Financial Statements, page 4.
3
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
These notes are an integral part of the financial statements of Murphy Oil
Corporation and Consolidated Subsidiaries (Murphy/the Company) on pages 1
through 3 of this report on Form 10-Q.
NOTE A - INTERIM FINANCIAL STATEMENTS
The consolidated financial statements of the Company presented herein have not
been audited by independent auditors, except for the Consolidated Balance
Sheet at December 31, 1996. In the opinion of the Company's management, the
unaudited financial statements presented herein include all adjustments
(consisting only of normal, recurring accruals) necessary to present fairly
the Company's financial position at March 31, 1997, and the results of
operations and cash flows for the three-month periods ended March 31, 1997 and
1996, in conformity with generally accepted accounting principles.
Financial statements and notes to consolidated financial statements included
in this report on Form 10-Q should be read in conjunction with the Company's
1996 Annual Report on Form 10-K, as certain notes and other pertinent
information have been abbreviated in or omitted from this report. Financial
results for the three months ended March 31, 1997 are not necessarily
indicative of future results.
NOTE B - DISCONTINUED OPERATIONS
On December 31, 1996, Murphy completed a tax-free spin-off to its stockholders
of all common stock of its wholly owned farm, timber, and real estate
subsidiary Deltic Farm & Timber Co., Inc. (reincorporated as "Deltic Timber
Corporation"). The spin-off resulted in a net charge of $172.6 million to
"Retained Earnings" in 1996. As a result of the transaction, activities of
the farm, timber, and real estate segment have been accounted for as
discontinued operations, with prior periods restated. Selected operating
results for these activities, presented as a net amount in the Consolidated
Statement of Income for the three months ended March 31, 1996 were as follows.
<TABLE>
<CAPTION>
--------------------------------------------------------
(Millions of dollars, except per share amount)
--------------------------------------------------------
<S> <C>
Revenues. . . . . . . . . . . . . . . . . . . . . $20.3
Income tax provisions . . . . . . . . . . . . . . 2.4
Income from discontinued operations . . . . . . . 3.7
Income from discontinued operations per share . . .09
</TABLE>
NOTE C - ENVIRONMENTAL CONTINGENCIES
The Company's worldwide operations are subject to numerous laws and
regulations intended to protect the environment and/or impose remedial
obligations. In addition, the Company is involved in personal injury and
property damage claims, allegedly caused by exposure to or by the release or
disposal of materials manufactured or used in the Company's operations. The
Company operates or has previously operated certain sites or facilities,
including refineries, oil and gas fields, service stations, and terminals, for
which known or potential obligations for environmental remediation exist.
Under the Company's accounting policies, liabilities for environmental
obligations are recorded when such obligations are probable and the cost can
be reasonably estimated. If there is a range of reasonably estimated costs,
the most likely amount will be recorded, or if no amount is most likely, the
minimum of the range. Recorded liabilities are reviewed quarterly and
adjusted as needed. Actual cash expenditures often occur a number of years
following recognition of the liabilities.
The Company's reserve for remedial obligations, which is included in "Deferred
Credits and Other Liabilities" in the Consolidated Balance Sheets, contains
certain amounts that are based on anticipated regulatory approval for proposed
remediation of former refinery waste sites. If regulatory authorities
require more costly alternatives than the proposed processes, future
expenditures could exceed the amount reserved by up to an estimated $3
million.
4
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)
NOTE C - ENVIRONMENTAL CONTINGENCIES (Contd.)
The Company is currently identified by the U.S. Environmental Protection
Agency as a Potentially Responsible Party (PRP) at four Superfund sites and
has been assigned responsibility by defendants at another Superfund site. The
potential total cost to all parties to perform necessary remedial work at
these sites is substantial; however, current information indicates that the
Company is a "de minimus" party, with assigned or potentially assigned
responsibility of less than two percent at all but one of the sites. At that
site, the Company has not determined either its potentially assigned
responsibility percentage or its potential total remedial cost. The Company
has recorded a reserve of $.1 million for Superfund sites, and due to
currently available information on one site and the minor percentages
involved on the other sites, the Company does not expect that its related
remedial costs will be material to its financial condition or its results of
operations. Additional information may become known in the future that would
alter this assessment, including any requirement to bear a pro rata share of
costs attributable to nonparticipating PRP's or indications of additional
responsibility by the Company.
Although the Company is not aware of any environmental matters that might have
a material effect on its financial condition, there is the possibility that
expenditures could be required at currently unidentified sites, and new or
revised regulatory requirements could necessitate additional expenditures at
known sites. Such expenditures could materially affect the results of
operations in a future period.
The Company believes that certain environmentally related liabilities and
prior environmental expenditures are either covered by insurance or will be
recovered from other sources. The outcome of potential insurance recoveries
is the subject of ongoing litigation, including the appeal of a judgment
awarded the Company in 1995. Since no assurance can be given that the
judgment will be upheld upon appeal or that recoveries from other sources will
occur, the Company has not recognized a benefit for these potential recoveries
at March 31, 1997.
NOTE D - OTHER CONTINGENCIES
The Company's operations and earnings have been and may be affected by various
other forms of governmental action both in the U.S. and throughout the world.
Examples of such governmental action include, but are by no means limited to:
tax increases and retroactive tax claims; restrictions on production; import
and export controls; price controls; currency controls; allocation of supplies
of crude oil and petroleum products and other goods; expropriation of
property; restrictions and preferences affecting issuance of oil and gas or
mineral leases; laws and regulations intended for the promotion of
safety; and laws and regulations affecting the Company's relationships with
employees, suppliers, customers, stockholders, and others. Because
governmental actions are often motivated by political considerations, may be
taken without full consideration of their consequences, and may be taken in
response to actions of other governments, it is not practical to attempt to
predict the likelihood of such actions, the form the actions may take, or the
effect such actions may have on the Company.
In the normal course of its business activities, the Company is required under
certain contracts with various governmental authorities and others to provide
letters of credit that may be drawn upon if the Company fails to perform under
those contracts. At March 31, 1997, the Company had contingent liabilities of
$18.8 million on outstanding letters of credit and $17.2 million under certain
financial guarantees.
NOTE E - NEW ACCOUNTING STANDARD
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings per Share," in February 1997.
SFAS No. 128 is effective for periods ending after December 15, 1997. After
the effective date, any prior period earnings per share (EPS) data in
subsequent reports must be restated to conform to the new standard.
The Company has not yet determined the effect that the provisions of SFAS No.
128 will have on EPS as reported herein for the three-month periods ended
March 31, 1997 and 1996, but believes the effect will be insignificant.
5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contd.)
NOTE F - BUSINESS SEGMENTS (unaudited)
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1997 March 31, 1996*
- -----------------------------------------------------------------------------
(Millions of dollars) Revenues Income Revenues Income
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Exploration and production**
United States ....................... $ 68.3 12.1 63.7 13.8
Canada .............................. 44.5 7.2 35.4 4.3
United Kingdom ...................... 34.0 6.1 33.1 6.0
Ecuador ............................. 9.0 2.6 6.5 1.7
Other international ................. .3 (3.0) 3.2 (1.4)
- -----------------------------------------------------------------------------
156.1 25.0 141.9 24.4
- -----------------------------------------------------------------------------
Refining, marketing, and transportation
United States ....................... 318.3 5.7 247.0 (2.7)
United Kingdom ...................... 57.2 .4 71.0 (.2)
Canada .............................. 6.7 1.7 5.2 1.0
- -----------------------------------------------------------------------------
382.2 7.8 323.2 (1.9)
- -----------------------------------------------------------------------------
538.3 32.8 465.1 22.5
Intrasegment transfers elimination .... (31.1) - (49.7) -
- -----------------------------------------------------------------------------
507.2 32.8 415.4 22.5
Corporate ............................. 1.1 (2.2) 1.5 (2.2)
- -----------------------------------------------------------------------------
Revenues/income from continuing
operations ........................... 508.3 30.6 416.9 20.3
Income from discontinued operations ... - - - 3.7
- -----------------------------------------------------------------------------
$ 508.3 30.6 416.9 24.0
=============================================================================
*Restated for discontinued operations.
**Additional details are presented in the tables on page 9.
</TABLE>
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
RESULTS OF OPERATIONS
Net income for the first quarter of 1997 was $30.6 million, $.68 a share, and
was up 51 percent compared to income from continuing operations of $20.3
million, $.45 a share, in the 1996 quarter. Net income in the first quarter a
year ago, including income from discontinued operations relating to the now
independent Deltic Timber Corporation, totaled $24 million, $.54 a share. Net
cash from operating activities excluding changes in noncash working capital
items totaled $104.3 million in the first quarter of 1997, up 18 percent from
a year ago.
The increase in earnings from continuing operations was primarily caused by an
improvement in worldwide downstream operations, which earned $7.8 million in
the current quarter compared to a loss of $1.9 million a year ago. The 1997
quarter also reflected a continuation of the strong performance of Murphy's
exploration and production operations, which earned $25 million in the current
quarter compared to $24.4 million a year ago. An eight-percent increase in
U.S. natural gas sales and higher crude oil sales prices worldwide more than
offset higher exploration expenses.
Exploration and production operations in the U.S. earned $12.1 million
compared to $13.8 million in the first quarter of 1996. Operations in Canada
earned $7.2 million, up from $4.3 million a year ago, and U.K. operations
earned $6.1 million in the current quarter compared to $6 million. Operations
in Ecuador earned $2.6 million in the first quarter of 1997 compared to $1.7
million a year ago. Other international operations reported a loss of $3
million compared to a $1.4 million loss a year earlier. The Company's crude
oil and condensate sales prices averaged $21.81 a barrel in the U.S. and
$20.49 in the U.K., increases of 20 percent and four percent, respectively.
In Canada, sales prices averaged $19.98 a barrel for light oil, up 14 percent,
and $13.17 for heavy oil, an increase of 17 percent. The average sales price
for synthetic oil in Canada was $22.02 a barrel, up 19 percent from a year
ago. In Ecuador, sales prices averaged $13.61 a barrel, down five percent.
Total crude oil and gas liquids production averaged 55,078 barrels a day
compared to 54,909 in the first quarter of 1996. U.S. production declined 23
percent, with the reduction due to the sale of onshore producing properties in
the third quarter of 1996. In Canada, heavy oil production increased 22
percent, while light oil production was down 16 percent. The Company's net
interest in production of synthetic oil in Canada was essentially unchanged,
as was production in the U.K. Production in Ecuador increased 45 percent.
Murphy's average natural gas sales price in the U.S. was $2.76 a thousand
cubic feet (MCF) in the current quarter compared to $2.84 a year ago. The
average natural gas sales price in Canada increased from $1.07 an MCF to
$1.77. Sales prices averaged $2.68 an MCF in the U.K. compared to $2.59 a
year ago. Total natural gas sales averaged 246 million cubic feet a day
compared to 248 million a year ago. Although sales of natural gas in the U.S.
averaged 180 million cubic feet a day, up from 167 million in the first
quarter of 1996, this increase was nearly offset in Spain, where production
ceased at the end of 1996. Exploration expenses totaled $28.6 million in the
current quarter compared to $11.7 million a year ago. The tables on page 9
provide additional details of the results of exploration and production
operations for the first quarter of each year.
Refining, marketing, and transportation operations in the U.S. earned $5.7
million compared to a loss of $2.7 million a year ago. Margins in U.S.
downstream operations rebounded sharply in the final two months of the quarter
and continued to be strong early in the second quarter. In addition, the
current quarter included a $4.1 million after-tax benefit related to crude oil
swap agreements. Operations in the U.K. earned $.4 million in the current
quarter compared to a $.2 million loss in the first quarter of 1996. Earnings
from purchasing, transporting, and reselling crude oil in Canada were $1.7
million in the current quarter compared to $1 million in the first quarter of
1996. Refinery crude runs were 151,610 barrels a day compared to 139,716 in
the first quarter of 1996. Refined product sales were 159,667 barrels a day,
up from 148,335 a year ago.
Corporate functions reflected a loss of $2.2 million in the current quarter,
unchanged from the first quarter of 1996. In addition, the 1996 quarter
included income of $3.7 million, $.09 a share, from the discontinued farm,
timber, and real estate segment; as previously announced, the common stock of
Deltic Timber Corporation was distributed to Murphy's shareholders on December
31, 1996.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (Contd.)
FINANCIAL CONDITION
Cash provided by operating activities was $101.9 million for the first three
months of 1997 compared to $128.6 million for the same period in 1996. The
1996 amount included a benefit of $1.5 million from discontinued operations.
Changes in operating working capital other than cash and cash equivalents
required cash of $2.4 million in the first quarter of 1997, while such changes
provided cash of $38.5 million in the 1996 period. Cash provided by operating
activities was reduced by expenditures for refinery turnarounds and
abandonment of oil and gas properties totaling $3.9 million in the current
quarter compared to $2.3 million a year ago. Predominant uses of cash in both
years were for capital expenditures (which, including amounts expensed, are
summarized in the following table) and payment of dividends.
<TABLE>
<CAPTION>
-------------------------------------------------------------
Three Months Ended March 31,
-------------------------------------------------------------
(Millions of dollars) 1997 1996
-------------------------------------------------------------
<S> <C> <C>
Exploration and production . . . . . . . . $110.3 81.6
Refining, marketing, and transportation . . 6.6 6.7
Corporate . . . . . . . . . . . . . . . . . .2 .2
-------------------------------------------------------------
$117.1 88.5
=============================================================
</TABLE>
Working capital at March 31, 1997 was $30.1 million, down $26 million from
December 31, 1996. This level of working capital does not fully reflect the
Company's liquidity position, because the lower historical costs assigned to
inventories under LIFO accounting were $89.9 million below current costs
at March 31, 1997.
At March 31, 1997, nonrecourse debt of a subsidiary was $180.1 million, down
slightly from December 31, 1996 due to changes in foreign currency exchange
rates. Notes payable and capitalized lease obligations of $20.9 million
remained unchanged. A summary of capital employed at March 31, 1997 and
December 31, 1996 follows.
<TABLE>
<CAPTION>
------------------------------------------------------------------
March 31, 1997 Dec. 31, 1996
------------------------------------------------------------------
(Millions of dollars) Amount % Amount %
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Notes payable and capitalized
lease obligations . . . . . . . . $ 20.9 2 20.9 2
Nonrecourse debt of a subsidiary. . 180.1 14 180.9 15
Stockholders' equity. . . . . . . . 1,031.1 84 1,027.5 83
------------------------------------------------------------------
$1,232.1 100 1,229.3 100
==================================================================
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
OIL AND GAS OPERATING RESULTS (unaudited)
- ------------------------------------------------------------------------------
United Synthetic
United King- Ecua- Oil -
(Millions of dollars) States Canada dom dor Other Canada Total
- ------------------------------------------------------------------------------
THREE MONTHS ENDED
MARCH 31, 1997
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Oil and gas sales and
operating revenues $68.3 27.5 34.0 9.0 .3 17.0 156.1
Production costs 10.3 8.6 8.7 3.5 - 9.8 40.9
Depreciation, depletion,
and amortization 17.0 7.3 11.2 2.7 - 1.6 39.8
Exploration expenses
Dry hole costs 14.8 2.2 - - - - 17.0
Geological and geophysical
costs 2.6 2.1 .1 - 1.9 - 6.7
Other costs .5 .2 .6 - 1.0 - 2.3
- ------------------------------------------------------------------------------
17.9 4.5 .7 - 2.9 - 26.0
Undeveloped lease
amortization 1.8 .8 - - - - 2.6
- ------------------------------------------------------------------------------
Total exploration
expenses 19.7 5.3 .7 - 2.9 - 28.6
- ------------------------------------------------------------------------------
Selling and general expenses 3.1 1.3 .8 .1 .4 - 5.7
Income tax provisions 6.1 1.2 6.5 .1 - 2.2 16.1
- ------------------------------------------------------------------------------
Results of operations
(excluding corporate
overhead and interest) $12.1 3.8 6.1 2.6 (3.0) 3.4 25.0
==============================================================================
THREE MONTHS ENDED
MARCH 31, 1996
- ------------------------------------------------------------------------------
Oil and gas sales and
operating revenues $63.7 20.9 33.1 6.5 3.2 14.5 141.9
Production costs 13.4 7.1 8.7 2.7 .2 10.0 42.1
Depreciation, depletion,
and amortization 16.8 6.0 11.2 1.9 1.9 1.4 39.2
Exploration expenses
Dry hole costs 2.0 .6 - - - - 2.6
Geological and geophysical
costs 2.5 1.0 .2 - .8 - 4.5
Other costs .7 .1 .3 - 1.0 - 2.1
- ------------------------------------------------------------------------------
5.2 1.7 .5 - 1.8 - 9.2
Undeveloped lease
amortization 1.8 .7 - - - - 2.5
- ------------------------------------------------------------------------------
Total exploration
expenses 7.0 2.4 .5 - 1.8 - 11.7
- ------------------------------------------------------------------------------
Selling and general expenses 3.2 1.3 .8 - .3 - 5.6
Income tax provisions 9.5 1.7 5.9 .2 .4 1.2 18.9
- ------------------------------------------------------------------------------
Results of operations
(excluding corporate
overhead and interest) $13.8 2.4 6.0 1.7 (1.4) 1.9 24.4
==============================================================================
</TABLE>
9
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company and its subsidiaries are engaged in a number of legal
proceedings, all of which the Company considers routine and incidental to
its business and none of which is material as defined by the rules and
regulations of the U.S. Securities and Exchange Commission.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The Exhibit Index on page 11 of this Form 10-Q report lists the
exhibits that are hereby filed or incorporated by reference.
(b) A current report on Form 8-K dated January 3, 1997 was filed
regarding:
(1) The allocation of tax basis resulting from the tax-free spin-off
of Deltic Timber Corporation.
(2) Cautionary statement for purposes of the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MURPHY OIL CORPORATION
(Registrant)
By /s/ Ronald W. Herman
---------------------
Ronald W. Herman, Controller
(Chief Accounting Officer and Duly
Authorized Officer)
May 9, 1997
(Date)
10
<PAGE>
EXHIBIT INDEX
Exhibit Page Number or
No. Incorporation by Reference to
- ------- -----------------------------
3.1 Certificate of Incorporation of Exhibit 3.1, Page Ex. 3.1-1,
Murphy Oil Corporation as of of Murphy's Annual Report on
September 25, 1986 Form 10-K for the year ended
December 31, 1996
3.2 Bylaws of Murphy Oil Corporation Exhibit 3.3, Page Ex. 3.3-1,
at October 4, 1995 of Murphy's Annual Report on
Form 10-K for the year ended
December 31, 1995
4 Instruments Defining the Rights of
Security Holders. Murphy is party to
several long-term debt instruments,
none of which authorizes securities
that exceed 10 percent of the total
assets of Murphy and its subsidiaries
on a consolidated basis. Pursuant to
Regulation S-K, item 601(b), paragraph
4(iii)(A), Murphy agrees to furnish
a copy of each such instrument to the
Securities and Exchange Commission upon
request.
4.1 Rights Agreement dated as of December Exhibit 4.1, Page Ex. 4.1-0,
6, 1989 between Murphy Oil Corporation of Murphy's Annual Report on
and Harris Trust Company of New York, Form 10-K for the year ended
as Rights Agent December 31, 1994
10.1 1987 Management Incentive Plan (adopted Exhibit 10.2, Page Ex. 10.2-0,
May 13, 1987, amended February 7, 1990 of Murphy's Annual Report on
retroactive to February 3, 1988) Form 10-K for the year ended
December 31, 1994
10.2 1992 Stock Incentive Plan Exhibit 10.3, Page Ex. 10.3-0,
of Murphy's Annual Report on
Form 10-K for the year ended
December 31, 1992
27 Financial Data Schedule for the Included only in electronic
three months ended March 31, 1997 filing
Exhibits other than those listed above have been omitted since they either are
not required or are not applicable.
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS FINANCIAL DATA SCHEDULE CONTAINS SUMMARY UNAUDITED FINANCIAL INFORMATION
EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AT MARCH 31, 1997, AND THE
CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS THEN ENDED OF MURPHY OIL
CORPORATION AND CONSOLIDATED SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 81,364
<SECURITIES> 0
<RECEIVABLES> 251,308
<ALLOWANCES> 15,288
<INVENTORY> 140,732
<CURRENT-ASSETS> 503,628
<PP&E> 4,167,677
<DEPRECIATION> 2,587,050
<TOTAL-ASSETS> 2,157,981
<CURRENT-LIABILITIES> 473,496
<BONDS> 200,973
<COMMON> 48,775
0
0
<OTHER-SE> 982,363
<TOTAL-LIABILITY-AND-EQUITY> 2,157,981
<SALES> 493,489
<TOTAL-REVENUES> 508,316
<CGS> 411,995
<TOTAL-COSTS> 411,995
<OTHER-EXPENSES> 28,550
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18
<INCOME-PRETAX> 53,448
<INCOME-TAX> 22,832
<INCOME-CONTINUING> 30,616
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 30,616
<EPS-PRIMARY> .68
<EPS-DILUTED> .68
</TABLE>
