Murphy Oil 2Q Profit Up 14% on Higher Oil Prices, Margins

(Dow Jones Newswires), July 28, 2011

Murphy Oil's second-quarter earnings increased 14% as higher crude oil prices boosted the exploration and production operations, while the company also reported stronger U.S. refining and retail marketing margins.

While revenue growth in the latest quarter was better than expected, the oil-and-gas explorer issued a weak outlook for the current quarter. That sent shares down 4.4%, to $64 in after-hours trading.

Murphy forecast third-quarter earnings of $1.05 to $1.15 a share. Analysts surveyed by Thomson Reuters expected $1.71.

The company has benefited from climbing crude-oil prices that have boosted overall revenue while natural gas prices have remained stagnant as increased production from shale adds to already abundant inventories.

Murphy reported earnings of $311.6 million, or $1.60 a share, up from $272.3 million, or $1.41 a share, a year earlier. In May, the company forecast earnings of $1.50 a share to $1.80.

Revenue climbed 56%, to $8.72 billion, easily topping the $8.1 billion forecast by analysts.

Profit from exploration and production operations grew 11% as average selling prices for oil jumped 54%. The refining and marketing segment's profit grew 9.4%.

Earlier this week, Murphy agreed to sell a Wisconsin refinery to Calumet Specialty Product Partners LP (CLMT) for $214 million, plus the value of hydrocarbon inventory, which at the end of the first half was $260 million. Murphy last year said it would sell all three refineries it owns, although the company is finding it difficult to unload the assets as more oil companies place their refineries on the block.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Brent Crude Oil : $51.46/BBL 4.63%
Light Crude Oil : $48.9/BBL 4.78%
Natural Gas : $3.18/MMBtu 0.90%
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