Murphy Oil (NYSE:MUR) is working on various crude oil plays in Canada and plans to use these areas to meet long term production goals established by the company.

Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

Production Goals
Murphy Oil held an analyst meeting and set a goal of boosting total company production to 260,000 barrels of oil equivalent (BOE) per day by 2015. Although most of the growth will come from the company's operations in the Eagle Ford Shale and Malaysia, Canada will also contribute to the growth over the next few years.

Seal Lake
One area that Murphy Oil is developing is the Seal Lake project in Western Canada, where the company has 180,000 net acres. Murphy Oil is currently producing 8,500 BOE here, and plans to drill 70 horizontal wells in 2012, as the first phase of a plan to increase production from Seal Lake to 18,000 BOE per day in 2015.

Seal Lake is a heavy oil project and Murphy Oil has moved past its primary development plan and is employing enhanced oil recovery (EOR) methods to stimulate production from wells. The company started a polymer injection project in 2010 and reported incremental well production of 380 barrels of oil per day from this method.

Murphy Oil plans to start two additional phases of development at Seal Lake employing polymer injection, and will begin steam injection in late 2012 and 2013.

SEE: Oil And Gas Industry Primer

Alberta Light Oil
Murphy Oil has also assembled a 150,000 net acre position in a light oil play in Alberta, where the company has tested various formations, including the Exshaw, Lower Banff and Three Forks.

On the Kainai Reserve, Murphy Oil recently drilled a well to the Three Forks play and reported initial production of 350 barrels of oil per day, with cumulative production of 24,000 barrels of oil to date.

Murphy Oil estimates that this new play may hold 130 million barrels of oil using 160 acre spacing, and believes that this is a low estimate could increase as the company becomes more proficient in the play.

SEE: What Determines Oil Prices?

Non-Operated Production
Murphy Oil has interests in two major offshore oil fields in Eastern Canada. The Hibernia Field is located off Newfoundland and started up production in 1997. Murphy Oil owns a 6.5% interest at Hibernia, which is operated by Exxon Mobil (NYSE:XOM). Other companies that have an interest at Hibernia include Chevron Corporation (NYSE:CVX), Suncor Energy (NYSE:SU) and Statoil (NYSE:STO).

Murphy also owns a 10.475% non-operated interest in the Terra Nova oil field, also located offshore Newfoundland. Terra Nova is operated by Suncor Energy and stated up production in 2002. Other operators that own an interest at Terra Nova include Exxon Mobil, Statoil, Chevron and Husky Energy (TSX:HSE.TO).

SEE: A Guide To Investing In Oil Markets

The Bottom Line
Most investors pay too much attention to Murphy Oil's U.S. and International assets, while ignoring the Canadian oil and gas portfolio. These properties will also contribute to the company's long-term production goals through 2015.

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. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
  2. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  3. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  4. Mutual Funds & ETFs

    ETF Analysis: iShares Core Growth Allocation

    Find out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
  5. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  6. Stock Analysis

    Should You Follow Millionaires into This Sector?

    Millionaire investors—and those who follow them—should take another look at the current economic situation before making any more investment decisions.
  7. Professionals

    What to do During a Market Correction

    The market has what? Here's what you should consider rather than panicking.
  8. Mutual Funds & ETFs

    ETF Analysis: Vanguard Mid-Cap Value

    Take an in-depth look at the Vanguard Mid-Cap Value ETF, one of the largest and most popular mid-cap funds in the U.S. equity space.
  9. Mutual Funds & ETFs

    ETF Analysis: Schwab US Broad Market

    Take an in-depth look at the Schwab U.S. Broad Market ETF, an incredibly low-cost fund based on a wide selection of the U.S. equity market.
  10. Professionals

    Tips for Helping Clients Though Market Corrections

    When the stock market sees a steep drop, clients are bound to get anxious. Here are some tips for talking them off the ledge.
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Hard-To-Sell Asset

    An asset that is extremely difficult to dispose of either due ...
  3. Sucker Yield

    When an investor has essentially risked all of his capital for ...
  4. Benchmark Crude Oil

    Benchmark crude oil is crude oil that serves as a pricing reference, ...
  5. PT (Perseroan Terbatas)

    An acronym for Perseroan Terbatas, which is Limited Liability ...
  6. Ltd. (Limited)

    An abbreviation of "limited," Ltd. is a suffix that ...
  1. 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 >>
  2. 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 >>
  3. 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 >>
  4. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  5. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>
  6. What happens to the shares of stock purchased in a tender offer?

    The shares of stock purchased in a tender offer become the property of the purchaser. From that point forward, the purchaser, ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!