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.

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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.

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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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