Murphy Oil Adds 2.6 Million Acres Offshore Cameroon, Its Third New Country in Nine Days

Murphy Oil Corporation signed four production sharing contracts for blocks offshore Cameroon covering about 2.6 million acres, the Houston company said in a release dated Nov. 11 and filed with the U.S. Securities and Exchange Commission the following day. It was the third country Murphy entered in nine days.

The contracts cover the Elombo, Etinde Exploration, Ntem and Tilapia blocks. A Murphy subsidiary starts with a 100 percent working interest and operatorship, and Societe Nationale des Hydrocarbures, Cameroon's state hydrocarbons company, may take up to a 20 percent working interest in any future development. Oil and Gas Journal reported the signing the same day.

Murphy disclosed no financial terms, work commitments or drilling schedule for the Cameroon blocks, and none for the other two entries either. That leaves shareholders with a wider exploration map and no new number attached to it until the company sets its next capital budget. Its 2026 exploration expense guidance stands at US$195 million, of which US$90 million is dry hole expense.

The run began on Nov. 4, when Murphy executed two production sharing contracts for the C-10 and Tiof blocks offshore Mauritania, about 3.1 million acres. Murphy subsidiaries hold 90 percent and operatorship there, with Societe Mauritanienne des Hydrocarbures carried on the remaining 10 percent.

Five days later the Government of Israel awarded Murphy six exploration licenses in Zone G, a block of about 1,700 square kilometres sitting roughly 25 kilometres southwest of the Leviathan gas field. Murphy operates that acreage with 50 percent and Ratio Energies LP holds the rest. Oil and Gas Journal reported that Israel's Energy Ministry made the award.

Converted to the same unit, Zone G adds about 420,000 acres by Oil Authority's calculation, which brings the nine day haul to roughly 6.1 million acres across three coastlines. Murphy already lists exploration in the Gulf of America, Vietnam, Cote d'Ivoire and two Brazilian basins, so the additions widen a portfolio that was already spread thin across continents.

Canadian barrels fund the frontier hunt at Murphy Oil

The money behind the new acreage comes substantially from Canada. Murphy produced 186,495 barrels of oil equivalent per day in the third quarter, excluding noncontrolling interest, above its guidance range of 171,000 to 179,000. Tupper Montney in northeast British Columbia supplied 76,000 boe/d of that, Kaybob Duvernay in Alberta added 5,800 boe/d and offshore Canada contributed 7,000 barrels a day of oil.

Those three areas together make up 48 percent of group output by Oil Authority's calculation, which puts a Canadian gas asset at the centre of a company now drawing exploration maps in West Africa and the Eastern Mediterranean. Murphy's offshore Canada position consists of non-operated stakes in the Jeanne d'Arc Basin off Newfoundland, 6.5 percent of Hibernia and 18 percent of Terra Nova.

"The results we delivered this quarter reflect our ability to create value at every stage of the asset life cycle," said Eric M. Hambly, president and chief executive officer, in the company's third quarter release on Nov. 4. Murphy reported net income of US$171.1 million attributable to the company for the quarter, or US$1.17 per diluted share.

Spending pace leaves little room for a fast move on 6 million new acres

Capital spending attributable to Murphy reached US$422.2 million in the third quarter and US$1.36 billion over nine months, against full year guidance of US$1.5 billion to US$1.6 billion. Three frontier entries do not fit inside that envelope at any pace that matters, which is why seismic work and evaluation, rather than wells, is what the company has committed to in all three countries.

Commodity prices give the Canadian end of the business a steady footing while the exploration work proceeds. Henry Hub gas was US$3.00 per million British thermal units on Nov. 11, the most recent day in the U.S. Energy Information Administration daily series, and Europe Brent spot was US$92.14 a barrel the same day.

Cameroon is already offering more. Societe Nationale des Hydrocarbures published a call for interest on six further free blocks on Oct. 22, which gives Murphy a route to extend the position it has just taken. Its own next disclosure of any size is the fourth quarter report, when the 2027 capital budget will show how much of the spending moves toward the new acreage.