Murphy Oil (NYSE:MUR) expects to increase oil and gas production to 260,000 barrels of oil equivalent (BOE) per day by 2015, as the company moves to exploit its drilling inventory in North America and Malaysia.
Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

Production Growth
Murphy Oil reported that its production growth will be nonlinear due to the timing of its investments and the difficulty in bringing production on in some areas. The company estimates that production in 2012 will average 193,000 BOE per day and move slightly higher in 2013 to 200,000 BOE per day.

It expects production to jump up sharply over the next two years, reaching 250,000 BOE per day in 2014 and 260,000 BOE per day in 2015. This growth will be led by the development of the Eagle Ford Shale in Texas and by properties in Malaysia.

SEE: Oil And Gas Industry Primer

Eagle Ford Shale
Murphy Oil has 216,000 net acres prospective for the Eagle Ford Shale, with 60% of the acreage in the oil window. The company estimates that its production will reach approximately 47,000 BOE per day from here by 2015.

Many in the industry have heralded the Eagle Ford Shale as one of the greatest finds in the history of oil and gas exploration in North America, with development here helping to support a sluggish economy in Texas.

A recent study conducted by the Center for Community and Business Research at The University of Texas at San Antonio found that activity contributed $25 billion in total economic output and supported the creation of 47,000 local jobs in 2011. Local governments also received $257 million in revenue related to the development of the Eagle Ford Shale.

Other Operators
Marathon Oil (NYSE:MRO) is another operator that's active in the Eagle Ford Shale in Texas. The company just added to its acreage through the purchase of Paloma Partners II, a private oil and gas company. Marathon paid $750 million for 17,000 net acres and 7,000 BOE per day of production.

Chesapeake Energy (NYSE:CHK) is also involved here and has 475,000 net acres under lease. The company reported production of 23,000 BOE per day from the Eagle Ford Shale in the first quarter of 2012, up 35% sequentially.

SEE: What Determines Oil Prices?

Lower Costs
The exploration and production industry is also seeing relief from the high cost of developing wells in the Eagle Ford Shale, as the industry shifts development out of natural gas plays. Halliburton (NYSE:HAL) reported during its first quarter of 2012 conference call that pricing for hydraulic fracturing services has started to decline as contracts rollover.

Malaysia
Malaysia will also generate production growth for the company through 2015, with several oil projects at the Sarawak field coming on line during 2013. The company expects full year production from these projects and others in Malaysia to add 30,000 BOE per day of production in 2014.

SEE: A Guide To Investing In Oil Markets

The Bottom Line
Murphy Oil has assembled an excellent inventory of oil and gas assets in the United States and in Malaysia and plans to aggressively develop these and other assets through 2015 to achieve the company's production goals.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Chart Advisor

    Watch This ETF For Signs Of A Reversal (BCX)

    Trying to determine if the commodity markets are ready for a bounce? Take a look at the analysis of this ETF to find out if now is the time to buy.
  2. Investing News

    What You Can Learn from Carl Icahn's Mistakes

    Carl Icahn has been a stellar performer in the investment world for decades, but following his lead these days could be dangerous.
  3. Investing Basics

    The Importance of Commodity Pricing in Understanding Inflation

    Commodity prices are believed to be a leading indicator of inflation, but does it always hold?
  4. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  5. Fundamental Analysis

    4 Predictions for Oil in 2016

    Learn four predictions for oil markets in 2016 including where prices are heading and the key fundamental factors driving the market.
  6. Fundamental Analysis

    Performance Review: Commodities in 2015

    Learn how commodities took a big hit in 2015 with a huge variance in performances. Discover how the major commodities performed over the year.
  7. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  8. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
  9. Investing News

    Is Buffett's Bet on Oil Right for You? (XOM, PSX)

    Oil stocks are getting trounced, but Warren Buffett still likes one of them. Should you follow the leader?
  10. Stock Analysis

    The Biggest Risks of Investing in SandRidge Stock

    Learn about the significant risks of investing in SandRidge. Read how the company may not be able to service its substantial debt load.
RELATED FAQS
  1. Which mutual funds made money in 2008?

    Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
  2. Do hedge funds invest in commodities?

    There are several hedge funds that invest in commodities. Many hedge funds have broad macroeconomic strategies and invest ... Read Full Answer >>
  3. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  4. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  5. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  6. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center