Murphy Oil (NYSE:MUR) has an extensive portfolio of exploration prospects in inventory and hopes to continue the company's historical success in converting these prospects into productive status.

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Exploration History
Murphy Oil has a successful track record in exploring new oil and gas properties and has reported nine discoveries over the last three years across its portfolio, yielding a 39% success rate. On a long-term basis, Woods Mackenzie, an oil and gas consulting firm, ranks Murphy Oil in the top quartile of energy companies from 2001 to 2010 on value creation per dollar invested in the exploration business.

SEE: Oil And Gas Industry Primer

Exploration Program
Murphy Oil hopes to drill as many as 30 exploration wells by the end of 2013, after drilling only a handful in 2011. This ramp up in exploration will occur across the globe, and includes prospects in the Gulf of Mexico, Africa, Malaysia, Iraq and Australia.

The company's strategy in exploration is to target crude oil prospects and natural gas that can be scaled up to be economic through liquefied natural gas (LNG) projects.

Murphy Oil has already drilled successful exploration wells in 2012, finding resources in Brunei and Malaysia.

In Malaysia, Murphy Oil reported two discoveries on Block H, a prolific oil and gas area that has total natural gas resources between 1.5 and 2 Tcf. Murphy Oil has been active for years in Malaysia and is a core area for the company. Murphy Oil reported revenues of $564 million from Malaysia in the first quarter of 2012, with $301 million spent during the quarter on exploration and development activities.

Talisman Energy (NYSE:TLM) is also involved in Malaysia and reported production of 35,700 barrels of oil equivalent per day (BOE/D) in 2011 from its properties there.

Royal Dutch Shell (OTCBB:RYDAF) found oil and gas in Malaysia at the Malikai oil field located in offshore Block G. The company is partnering with ConocoPhillips (NYSE:COP) on this field and expects production to start up at this field in 2014.

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Murphy Oil also found oil and gas resources on block CA-1, located offshore Brunei. The Julong East 1 was the company's first discovery in Brunei and Murphy Oil is looking to drill an appraisal well here in 2013. The company is also currently drilling the Jagus East well on block CA-1 and expects to have results in 2012.

Gulf of Mexico
Another major target for Murphy Oil is the Gulf of Mexico, where the company plans between two and four exploration wells in 2012 and 2013. The company is targeting various Miocene prospects, including Dalmatian South, which is very similar to their 2010 Dalmatian North discovery.

West Africa
Murphy Oil plans to drill between two and five wells in West Africa in 2012 and 2013, with a focus on offshore areas in Congo and Cameroon. The company is targeting various cretaceous carbonate formations in these areas.

The balance of Murphy Oil's exploration program for 2012 includes wells activity in Iraq (two to four wells), Indonesia (two wells) and Australia (one to three wells).

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The Bottom Line
After a slight pause in 2011, Murphy Oil is poised to aggressively ramp up its oil and gas exploration program in 2012 and 2013. The company hopes to harvest success here to help generate long-term production growth for the company later in the decade.

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