Increased Production and Higher Prices Nearly Triple Murphy Oil's Quarterly Income

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Researched by Industrial Info Resources (Sugar Land, Texas)--On October 29, Murphy Oil Corporation (NYSE:MUR) (El Dorado, Arkansas) announced third quarter 2008 earnings. Like other larger oil companies, Murphy's third-quarter profits rocketed up from last year. The company's third quarter net income nearly tripled to $584.4 million in 3Q08, compared to $199.5 million in 3Q07.

The company operates in two business segments: Exploration & Production and Refining & Marketing. The Refining & Marketing segment brought increased income of $85.8 million, compared with $73.2 million in 3Q07. The Exploration & Production segment showed a more than 350% increase, rising from $150.8 million in 2007 to $529.9 million this year. In a conference call regarding the earnings, Senior Vice President and Chief Financial Officer Kevin Fitzgerald commented on the increased profits. "Higher earnings for the 2008 quarter were primarily attributable to higher crude oil price realizations and higher oil sales volumes," he said. "Crude oil and gas liquids production for the current quarter was a little over 118,000 barrels per day, compared to approximately 88,000 barrels per day in the corresponding 2007 quarter."

The increased production occurred despite losses caused by Hurricanes Gustav and Ike. "The third quarter impact to production was approximately 6,000 barrel-equivalents a day," said Claiborne P. Deming, President and CEO. "The impact on the fourth quarter is estimated to be up to 7,000 barrel-equivalents a day, with all production on-stream by the end of the quarter."

In addition to an estimated $6 billion sour-crude conversion project that is currently in the planning stages at one of Murphy's refineries, Industrial Info is tracking $230 million of Murphy's projects. The company is in the process of completing the addition of a sulfur-recovery unit. The addition is scheduled to be complete by the end of the year with an additional reconfiguration project ending in early 2009.

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