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.
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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 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.

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

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