EL DORADO, Arkansas, May 6, 2009 – Murphy Oil Corporation (NYSE: MUR) announced today that net income in the first quarter of 2009 was $171.1 million ($0.89 per diluted share), compared to net income of $409.0 million ($2.14 per diluted share) in the first quarter of 2008. The 2009 net income includes income from discontinued operations of $99.9 million ($0.52 per diluted share) associated with Ecuador operations that were sold in March at an after-tax gain of $104.0 million. In the 2008 quarter, income from discontinued operations was $0.8 million, $0.01 per diluted share. The smaller profit from continuing operations in 2009 compared to 2008 was primarily due to significantly lower worldwide crude oil and North American natural gas sales prices, which led to much lower earnings in the Company’s exploration and production business. The first quarter 2008 also included a $39.9 million after-tax gain on sale of Berkana Energy in Canada. Earnings in the Company’s refining and marketing business in the 2009 first quarter were about even with the prior year as improved U.S. refining margins were mostly offset by much tighter U.S. retail marketing margins and lower margins for operations in the U.K.
Exploration and Production Murphy’s income contribution from continuing exploration and production operations was $50.3 million in the first quarter of 2009 compared to $427.2 million in the same quarter of 2008. Lower realized sales prices for crude oil and natural gas and higher exploration expenses were the primary reasons for weaker earnings in the 2009 period. In addition, the 2008 first quarter included the aforementioned gain on sale of Berkana Energy. The Company’s worldwide crude oil, condensate and natural gas liquid sales prices averaged $43.15 per barrel for the 2009 first quarter compared to $89.51 per barrel in the 2008 first quarter. Total crude oil, condensate and gas liquids production of 139,318 barrels per day in the first quarter of 2009 was a quarterly record, 23% higher than the 113,339 barrels per day produced in the 2008 quarter. The increase in crude oil production volumes in 2009 was mostly attributable to ramp-up at the Kikeh field in Block K Malaysia. Oil volumes improved at Kikeh as additional production wells were drilled and put on stream during 2008. Despite higher Kikeh oil production in 2009, oil production volumes declined at several other areas. Heavy oil production in Western Canada declined primarily due to the sale of the Lloydminster field in the second quarter of 2008. Production volumes were also lower at Terra Nova offshore Eastern Canada where field decline continued coupled with a higher royalty rate, and at Schiehallion offshore the United Kingdom where more downtime for equipment repairs occurred in the 2009 quarter. North American natural gas sales prices averaged $4.66 per thousand cubic feet (MCF) in the 2009 first quarter compared to $8.40 per MCF in the same quarter of 2008. Natural gas sales volumes were 111 million cubic feet per day in the first quarter of 2009 compared to 69 million cubic feet per day in the 2008 period, with the increase primarily due to the December 2008 start-up of the Tupper field in British Columbia and ramp-up of natural gas production at the Kikeh field that also started up in December 2008. Exploration expense in the 2009 period was $111.1 million compared to $66.5 million in 2008. Dry hole expense was higher by $67.3 million in the