Murphy Oil Expands Operations with $125M Vessel Purchase: Details

On Wednesday, Murphy Oil Corporation MUR disclosed that its subsidiary had signed a Purchase and Sale deal to acquire floating production storage and offloading vessel (FPSO) from BW Offshore for gross purchase price of $125 million.

The purchase includes an initial $100 million payment upon delivery by first quarter of 2025, with the remaining balance upon meeting contractual obligations (expected by second-quarter of 2025).

The FPSO will stay at its current site, supporting operations at the Cascade and Chinook fields in the Gulf of America.

BW Offshore will continue providing operations and maintenance under a new five-year reimbursable contract.

Notably, the BW Pioneer, the first FPSO approved for Gulf of America operations, features a storage capacity of 600,000 barrels and can process up to 80,000 barrels of oil per day.

Outlook: Murphy reaffirmed its 2025 capital expenditure guidance of $1.135 billion–$1.285 billion and for the first quarter at $425 million.

Eric M. Hambly, President and Chief Executive Officer, said, ”By acquiring the FPSO and restructuring our contract, we will achieve a material reduction in operating costs of nearly $60 million annually with a payback of about two years independent of oil price, while enhancing returns for future infield development and exploration and increasing net proved developed reserves by approximately 8 million barrels of oil equivalent.”

In January 2025, the company reported fourth-quarter revenue of $670.96 million, missing analysts’ estimate of $741.18 million, and adjusted earnings per share of 35 cents, missing analysts’ estimate of 57 cents.

As of the end of the year, the company had net debt of about $850 million, the lowest in over a decade.

Investors can gain exposure to the stock via ALPS/CoreCommodity Natural Resources ETF CCNR and Harbor ETF Trust Harbor AlphaEdge Small Cap Earners ETF EBIT.

Price Action: MUR stock closed lower by 0.48% at $25.13 on Wednesday.

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