Murphy Oil Corporation Announces Offering of $600 Million of Senior Notes Due 2032

Rhea-AI Summary

Murphy Oil (NYSE: MUR) has announced its intention to offer $600 million of Senior Notes due 2032, subject to market conditions. The company plans to use the net proceeds, along with cash on hand, to fund cash tender offers for up to $600 million aggregate principal amount of its outstanding 5.875% Senior Notes due 2027, 6.375% Senior Notes due 2028, and 7.050% Senior Notes due 2029. The offering is being made under an automatic shelf registration statement on Form S-3, with J.P. Morgan Securities , BofA Securities, Inc., and MUFG Securities Americas Inc. acting as physical joint book-running managers.

Positive

• Potential refinancing of existing debt with new Senior Notes
• Possible reduction of interest expenses through tender offers for higher-interest notes
• Utilization of effective shelf registration statement for efficient offering process

Negative

• Increase in total debt by $600 million
• Potential impact on company's leverage and financial flexibility
• Market conditions may affect the success of the offering

Insights

Financial Analyst

Murphy Oil's $600 million Senior Notes offering is a strategic move to refinance existing debt. This debt restructuring could potentially lower interest expenses and extend maturity dates, improving the company's financial flexibility. The tender offers for existing notes with higher interest rates (5.875% to 7.050%) suggest a cost-saving initiative. However, investors should note that while this may optimize the debt structure, it doesn't necessarily reduce the overall debt load. The market's reaction will depend on the new notes' interest rate and how it compares to the existing debt being retired. This move indicates management's proactive approach to capital structure management, which could be viewed positively by the market if executed effectively.

Oil Industry Expert

Murphy Oil's debt refinancing comes at a important time for the oil industry. With oil prices relatively stable, companies are focusing on financial optimization to weather potential market volatility. This move could strengthen Murphy's balance sheet, potentially allowing for more flexibility in capital expenditures or shareholder returns. The energy sector is transitioning and companies with stronger financial positions are better equipped to navigate changes or invest in new opportunities. However, investors should monitor how Murphy allocates any potential savings - whether towards exploration and production activities, debt reduction, or shareholder returns. This refinancing doesn't directly impact production or reserves, but it could influence Murphy's ability to pursue growth strategies in a competitive market landscape.

HOUSTON--(BUSINESS WIRE)-- Murphy Oil Corporation (the “Company”) (NYSE: MUR) announced today that, subject to market conditions, it intends to offer $600 million of Senior Notes due 2032 pursuant to an effective shelf registration statement previously filed with the Securities and Exchange Commission (“SEC”).

The Company expects to use the net proceeds from the offering, together with cash on hand, to (i) fund the cash tender offers (the “Tender Offers”) announced today to purchase up to $600 million aggregate principal amount of its outstanding 5.875% Senior Notes due 2027, 6.375% Senior Notes due 2028 and 7.050% Senior Notes due 2029 (together, the “Tender Notes”) pursuant to the terms and conditions set forth in the Offer to Purchase for the Tender Offers and (ii) pay any related premiums, fees and expenses.

J.P. Morgan Securities LLC, BofA Securities, Inc. and MUFG Securities Americas Inc. are acting as physical joint book-running managers for the offering. The offering is being made under an automatic shelf registration statement on Form S-3 (Registration No. 333-260287) filed by the Company with the SEC and only by means of a prospectus supplement and accompanying prospectus. An investor may obtain free copies of the prospectus supplement and accompanying prospectus related to the offering by visiting EDGAR on the SEC website, www.sec.gov, or by contacting:

J.P. Morgan Securities LLC
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, New York 11717
Telephone: 1-866-803-9204

This news release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In addition, this news release does not constitute an offer to purchase or the solicitation of an offer to sell the Tender Notes.

ABOUT MURPHY OIL CORPORATION

As an independent oil and natural gas exploration and production company, Murphy Oil Corporation believes in providing energy that empowers people by doing right always, staying with it and thinking beyond possible. Murphy challenges the norm, taps into its strong legacy and uses its foresight and financial discipline to deliver inspired energy solutions. Murphy sees a future where it is an industry leader who is positively impacting lives for the next 100 years and beyond.

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified through the inclusion of words such as “aim”, “anticipate”, “believe”, “drive”, “estimate”, “expect”, “expressed confidence”, “forecast”, “future”, “goal”, “guidance”, “intend”, “may”, “objective”, “outlook”, “plan”, “position”, “potential”, “project”, “seek”, “should”, “strategy”, “target”, “will” or variations of such words and other similar expressions. These statements, which express management’s current views concerning future events, results and plans, are subject to inherent risks, uncertainties and assumptions (many of which are beyond our control) and are not guarantees of performance. In particular, statements, express or implied, concerning the Company’s future operating results or activities and returns or the Company's ability and decisions to replace or increase reserves, increase production, generate returns and rates of return, replace or increase drilling locations, reduce or otherwise control operating costs and expenditures, generate cash flows, pay down or refinance indebtedness, achieve, reach or otherwise meet initiatives, plans, goals, ambitions or targets with respect to emissions, safety matters or other ESG (environmental/social/governance) matters, make capital expenditures or pay and/or increase dividends or make share repurchases and other capital allocation decisions are forward-looking statements. Factors that could cause one or more of these future events, results or plans not to occur as implied by any forward-looking statement, which consequently could cause actual results or activities to differ materially from the expectations expressed or implied by such forward-looking statements, include, but are not limited to: macro conditions in the oil and gas industry, including supply/demand levels, actions taken by major oil exporters and the resulting impacts on commodity prices; geopolitical concerns; increased volatility or deterioration in the success rate of our exploration programs or in our ability to maintain production rates and replace reserves; reduced customer demand for our products due to environmental, regulatory, technological or other reasons; adverse foreign exchange movements; political and regulatory instability in the markets where we do business; the impact on our operations or market of health pandemics such as COVID-19 and related government responses; other natural hazards impacting our operations or markets; any other deterioration in our business, markets or prospects; any failure to obtain necessary regulatory approvals; any inability to service or refinance our outstanding debt or to access debt markets at acceptable prices; or adverse developments in the U.S. or global capital markets, credit markets, banking system or economies in general, including inflation. For further discussion of factors that could cause one or more of these future events or results not to occur as implied by any forward-looking statement, see “Risk Factors” in our most recent Annual Report on Form 10-K filed with the SEC and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K that we file, available from the SEC’s website. Murphy Oil Corporation undertakes no duty to publicly update or revise any forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240918616443/en/

Investor Contacts:

InvestorRelations@murphyoilcorp.com

Kelly Whitley, 281-675-9107

Megan Larson, 281-675-9470

Beth Heller, 832-506-6831

Source: Murphy Oil Corporation

FAQ

What is the purpose of Murphy Oil's $600 million Senior Notes offering?

Murphy Oil (MUR) intends to use the proceeds from the $600 million Senior Notes offering, along with cash on hand, to fund cash tender offers for up to $600 million of its outstanding notes due in 2027, 2028, and 2029.

When are Murphy Oil's (MUR) new Senior Notes due?

The new Senior Notes that Murphy Oil (MUR) is offering are due in 2032.

Who are the joint book-running managers for Murphy Oil's (MUR) Senior Notes offering?

J.P. Morgan Securities , BofA Securities, Inc., and MUFG Securities Americas Inc. are acting as physical joint book-running managers for Murphy Oil's (MUR) Senior Notes offering.

What is the registration status of Murphy Oil's (MUR) Senior Notes offering?

Murphy Oil's (MUR) Senior Notes offering is being made under an automatic shelf registration statement on Form S-3 (Registration No. 333-260287) filed with the SEC.