Murphy Oil Exits Malaysia

Murphy Oil exits Malaysia.
   
Murphy Oil exits Malaysia with a $2.13 billion asset sale to Thailand’s PTTEP.
     
Murphy will use some proceeds in a $500 million share buyback, and in a $750 million debt reduction.  $750 million of the residual earnings are set aside for purchases and funding of both deep-water and onshore projects in the US.
     
Murphy also has operations in Canada, Brazil, Vietnam, Brunei, Australia, and Mexico.  It plans to focus on the Eagle Ford Shale and the Gulf of Mexico for near term discovery and production deals.
    
Roger Jenkins of Murphy Oil said: ‘After 20 years of successful operations in Malaysia, I am happy to announce this all-cash transaction benefiting our shareholders by fully monetizing our proved and probable reserves.  The tactical repositioning of Murphy allows us to simplify our business and focus on our core assets in the Western Hemisphere.  The transaction will give us greater financial flexibility and let us continue returning cash to our shareholders through share repurchases.
     
We would like to congratulate PTTEP on their purchase, and we will support them in a smooth business transition over the coming months.  I would like to thank our long-term partners in Malaysia, PETRONAS, PETRONAS Carigali, and Pertamina.  Most importantly, I would like to thank our committed Malaysian staff for their hard work and endless dedication to our company and we look forward to their successful transition to PTTEP. 
    
Our strategy of delivering moderate production growth over the next few years while generating free cash flow above our planned dividend levels continues when applying conservative oil prices, even following the risk-free monetization of our Malaysian assets.  We will continue with our plans of investing in our high margin, oil-weighted Western Hemisphere opportunities, especially the Eagle Ford Shale and the Gulf of Mexico while maintaining our focused low-cost exploration program.  
   
We expect to generate $1.2 billion of free cash flow at a flat $55 West Texas Intermediate price.’
   
Bank of America Merrill Lynch served as financial adviser to Murphy Oil.  Tudor, Pickering, Holt & Co. was the legal adviser.  
   
Jefferies Group was financial adviser to PTTEP. 
 

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