Murphy Oil Q2 2026 Earnings: Higher Prices Drive a Profit Rebound

Murphy Oil (NYSE: MUR) reported Q2 2026 revenue from production of $926.3 million, up about 36% from $683.1 million a year earlier, while diluted EPS increased to $1.59 from $0.16. Net income attributable to Murphy rose to $232.2 million from $22.3 million, with management citing stronger commodity prices and continued operational outperformance. Production of 168,995 BOEPD reached the upper end of guidance, while net cash provided by continuing operations increased to $655.9 million.

Core Earnings Results

Revenue growth combined with lower operating costs to produce a much larger increase in operating income. Lease operating expense declined by one-third to $143.7 million, helping total costs and expenses fall to $573.6 million from $603.4 million even as exploration expense increased.

The improvement also carried through to non-GAAP results. Adjusted net income from continuing operations attributable to Murphy reached $225.8 million, and adjusted diluted EPS rose to $1.55.

Adjusted EBITDA attributable to Murphy was $592.7 million, while adjusted EBITDAX was $632.0 million. Both are non-GAAP measures.

The consolidated GAAP statements include the 20% noncontrolling interest in MP Gulf of Mexico, including its share of revenue, expenses and cash flows. Net income and adjusted measures labeled “attributable to Murphy” exclude that noncontrolling interest, while operating highlights generally exclude it unless otherwise noted.

Business and Production Performance

Total production was approximately 169,000 BOEPD, including 85,265 barrels of oil per day. Management said production reached the upper end of quarterly guidance primarily because of continued strong well performance at Tupper Montney.

Onshore operations produced approximately 103,800 BOEPD and were 38% liquids. Offshore production excluding noncontrolling interest was approximately 65,000 BOEPD and was 88% liquids.

Murphy brought six Eagle Ford wells and four Kaybob Duvernay wells online during the quarter. An eight-well Tupper Montney pad, eight operated Eagle Ford wells and six non-operated Eagle Ford wells came online after quarter-end.

Offshore, Murphy completed drilling and began completion work at the Chinook #8 development well in the Gulf of America. The well is expected to start production in Q4 2026 at a gross initial rate of approximately 15 MBOEPD.

The Lac Da Vang project in Vietnam remains scheduled for first oil in Q4 2026 following pipeline installation, the launch of its floating storage and offloading vessel, and subsequent topside installation. In Côte d’Ivoire, the Bubale-1X discovery encountered 100 feet of net pay across two reservoirs, and Murphy subsequently began drilling the Bubale West-1X appraisal well.

Exploration results were not uniformly positive. The Hai Su Vang appraisal program concluded with the Hai Su Vang-4X well being expensed as a dry hole, although management described the broader opportunity as having moved from appraisal into development planning.

Profitability, Cash Flow and Balance Sheet

Net cash provided by continuing operations was $655.9 million, including a $67.5 million benefit from changes in non-cash working capital. Operating cash flow excluding working-capital adjustments was $588.4 million. After $476.0 million of capital expenditures, Murphy generated $110.0 million of non-GAAP free cash flow.

Cash and cash equivalents increased by $105.1 million during the quarter to $483.9 million. At June 30, Murphy reported approximately $2.48 billion of liquidity, consisting of an undrawn $2.00 billion senior unsecured credit facility and approximately $480 million of cash, including noncontrolling interest.

Total debt was $1.55 billion, consisting of long-term fixed-rate notes with a weighted average maturity of 8.7 years and a weighted average coupon of 6.3%. Murphy paid approximately $50 million in quarterly dividends but did not repurchase shares. It had $550 million remaining under its repurchase authorization.

2026 Guidance

Following the quarter, Murphy expanded its full-year capital program to advance appraisal and development opportunities. The midpoint increased by $300 million, from $1.25 billion to $1.55 billion, an increase of about 24%.

The company also expects Q3 production to exceed the Q2 level at the midpoint of its range. Exploration expense remains an important component of the outlook because Q3 guidance includes $100 million of assumed dry-hole expense.

The guidance excludes noncontrolling interest. Full-year exploration expense includes $80 million of dry-hole expense recorded in the first half and $100 million of assumed dry-hole expense for the second half.

Management’s View

President and CEO Eric M. Hambly emphasized the company’s expanding exploration and development options. Management views the Bubale discovery, Hai Su Vang development planning and the approaching start of Lac Da Vang production as separate paths for longer-term portfolio growth, with capital intended to be prioritized among the highest-value opportunities.

Recent Insider Transactions

The supplied insider data lists two direct stock sales by company officers in March 2026, with a combined disclosed value of approximately $1.90 million. These transactions are presented as reported and do not by themselves establish the insiders’ views on Murphy’s outlook.

Risks Investors Should Monitor

• Commodity-price sensitivity: Management identified stronger commodity prices as a major reason for the earnings increase. Lower realized prices could therefore pressure revenue, profit and operating cash flow.
• Higher capital requirements: The full-year capital-spending midpoint increased by $300 million. Heavier investment may reduce free cash flow if operating cash generation does not keep pace.
• Exploration volatility: Exploration expense rose to $39.3 million from $10.4 million, and the Hai Su Vang-4X well was expensed as a dry hole. Q3 guidance includes another $100 million of assumed dry-hole expense.
• Project execution and timing: Chinook #8 and Lac Da Vang are both expected to contribute in Q4 2026. Delays or weaker-than-planned performance could affect future production and the returns generated by the larger capital program.

Summary

Murphy Oil’s Q2 2026 results reflected higher commodity prices, lower lease operating expense and production at the upper end of guidance, producing substantial increases in earnings and operating cash flow. The next phase centers on converting that performance into future production through a larger capital program, with Lac Da Vang, Chinook #8 and the Bubale appraisal among the main operational milestones. Investors will need to balance those opportunities against higher spending and continued exploration risk.