TEXT-S&P rates Murphy Oil Corp notes 'BBB'

Tue Nov 27, 2012 10:31am EST

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Nov 27 - Standard & Poor's Ratings Services today assigned its 'BBB' issue
rating to Murphy Oil Corp.'s announced senior unsecured note offering. 

The offering will consist of three maturities of five-, 10-, and 30-years; 
however, the amounts allocated to each maturity have not been determined at 
this time. Murphy Oil's subsidiaries do not guarantee the notes and they will 
be structurally subordinated to all existing and future debts and other 
liabilities of those subsidiaries. We expect the company to use net proceeds 
to fund the previously announced special dividend of $2.50 per share of common 
stock ($500 million total) and $1.0 billion share repurchase program.

The ratings on El Dorado, Ark.-based Murphy Oil Corp. reflect our assessment 
of its "satisfactory" business risk, "modest" financial risk, and "strong" 
liquidity position. The rating also considers the limited scale of the 
company's exploration and production (E&P) operations relative to similarly 
rated peers, which is somewhat buffered by consistently strong financial 
performance and favorable outlook for crude oil prices. 

Pro forma for the special dividend and share repurchases we expect credit 
measures to remain adequate for the current ratings. In particular, funds from 
operations (FFO) to debt should remain above 50% through 2013. In addition, 
the potential sale of the U.K. downstream assets and spin-off of Murphy Oil 
USA are already included in our rating analysis. 

We would re-evaluate the ratings if Murphy pursued further shareholder 
initiatives. Given its limited scale of operations relative to 
investment-grade peers, the sale of either the Montney or Syncrude assets, 
without offsetting growth from other assets such as the Eagle Ford Shale, 
would cause us to reassess our ratings. 


RELATED RESEARCH AND CRITERIA
     -- Methodology: Business Risk/Financial Risk Matrix Expanded, Sept. 18, 
2012 
     -- Methodology And Assumptions: Liquidity Descriptors For Global 
Corporate Issuers, Sept. 28, 2011.
     -- Corporate Ratings Criteria 2008, published April 15, 2008. 

RATINGS LIST
Murphy Oil Corp.
 Corporate credit rating         BBB/Stable/--

New Ratings
Senior Unsecured Notes
 Five-year                       BBB
 10-year                         BBB
 30-year                         BBB


Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.
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