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Murphy Oil posts 4Q profit, reverses year-ago loss

EL DORADO, Ark. (AP) -- Murphy Oil Corp. on Wednesday posted a fourth-quarter profit, reversing a year-ago loss, as it recorded fewer charges related to foreign operations and a weakened ethanol market.

For the final quarter of 2012, the oil and gas producer reported net income of $158.7 million, or 82 cents per share. That compared with a net loss of $113.9 million, or 59 cents per share, in the 2011 fourth quarter.

Revenue rose 9 percent to $7.39 billion.

Analysts, on average, expected profit of $1.35 per share, on revenue of $6.77 billion, according to FactSet.

In extended trading Murphy Oil shares rose 39 cents to $63.23. The stock closed the regular session at $62.84, up about 5.5 percent since the start of the year.

Murphy recorded total impairment charges of $261 million related to oil production operations in the Republic of the Congo and ethanol production operations in Texas.

The Congo impairment related primarily to unsuccessful drilling operations in the fourth quarter and removal of proved oil reserves at year-end at a field in the African nation. Murphy said the field continues to produce and it is evaluating future operations there.

The company's ethanol plant in Hereford, Texas, was deemed impaired at the end of the year due to expectations of a sharp decline in the spread between the price of ethanol and corn, a result of severe drought in the U.S.

Oil production during the quarter rose 22 percent, while the average price per barrel dropped to $92.82 from $96.67. The production increase came mainly from drilling in South Texas and the purchase of new fields in the Gulf of Mexico.

Natural gas sales volume slipped nearly 3 percent, while the average price dropped to $3.34 per thousand cubic feet from $3.67. Production declined mainly due to planned lower volume in Western Canada, where some wells were shut down. Murphy said it had virtually no development drilling in the area because of continued weak natural gas sales prices in North America.

Murphy earned $38.5 million in its refining and marketing operations, down from $61 million in the 2011 quarter. The drop reflected the $39.6 million charge at the Texas ethanol plant.

For the full year, Murphy posted net income of $970.9 million, or $4.99 per share, up from $872.7 million, or $4.49 per share, for all of 2011. Revenue rose 4 percent to $28.63 billion.