Full Description

Murphy Oil Corporation (Murphy), incorporated in 1950, is a worldwide oil and gas exploration and production company, with refining and marketing operations in the United States and the United Kingdom. Its operations are classified into two business activities: Exploration and Production, and Refining and Marketing. Murphy’s exploration and production activities are subdivided into six geographic segments, including the United States, Canada, the United Kingdom, Malaysia, Ecuador and all other countries. Murphy’s refining and marketing activities are subdivided into geographic segments for North America and United Kingdom. In November 2008, the Company acquired a 70% interest and operatorship of a second Browse Basin exploration permit in Block WA-423-P.

Exploration and Production

The Company’s exploration and production business explores for and produces crude oil, natural gas and natural gas liquids worldwide. Its exploration and production management team in Houston, Texas directs the Company’s worldwide exploration and production activities. During 2008, Murphy’s principal exploration and production activities were conducted in the United States by wholly owned Murphy Exploration & Production Company-USA (Murphy Expro USA); in Ecuador, Malaysia and the Republic of Congo, Indonesia, Australia and Suriname by wholly owned Murphy Exploration & Production Company-International (Murphy Expro International) and its subsidiaries; in western Canada and offshore eastern Canada by wholly owned Murphy Oil Company Ltd. (MOCL) and its subsidiaries, and in the United Kingdom North Sea and the Atlantic Margin by wholly owned Murphy Petroleum Limited. Murphy’s crude oil and natural gas liquids production, during 2008, was in the United States, Canada, the United Kingdom, Malaysia and Ecuador, its natural gas was produced and sold in the United States, Canada and the United Kingdom. MOCL owns a 5% undivided interest in Syncrude Canada Ltd. in northern Alberta, a producer of synthetic crude oil.

Murphy’s worldwide crude oil, condensate and natural gas liquids production, during 2008, averaged 118,254 barrels per day. The Company’s worldwide sales volume of natural gas averaged 56 million cubic feet (MMCF) per day during 2008. Total worldwide production on a barrel of oil equivalent basis (six thousand cubic feet of natural gas equals one barrel of oil), during 2008, was 127,507 barrels per day. In the United States, Murphy has production of oil and/or natural gas from four fields operated by the Company and four main fields operated by others. Of the total producing fields as of December 31, 2008, six are in the deepwater Gulf of Mexico and two are onshore in Louisiana. The Company produced approximately 10,700 barrels of oil per day and 46 million cubic feet of natural gas per day in the United States during 2008. In Canada, the Company owns an interest in three non-operated, long-lived assets, the Hibernia and Terra Nova fields offshore Newfoundland and Syncrude Canada Ltd. in northern Alberta. In addition, the Company owns interests in one oil area and one natural gas area in the Western Canadian Sedimentary Basin (WCSB). Murphy has a 6.5% interest in Hibernia and a 12% interest in Terra Nova in the Jeanne d’Arc Basin, offshore Newfoundland. Total net production during 2008 was approximately 8,500 barrels of oil per day at Hibernia, while net production from Terra Nova was approximately 8,300 barrels of oil per day. Murphy produces oil and natural gas in the United Kingdom sector of the North Sea. In Malaysia, the Company has majority interests in seven separate production sharing contracts (PSCs). The Company serves as the operator of all these areas, which cover approximately 9.6 million acres.

In Ecuador, the Company owns a 20% working interest in Block 16, which is operated by Repsol-YPF under a participation contract that expires in January 2012. The Company’s net production was approximately 7,400 barrels of oil per day during 2008. The Company has interests in Production Sharing Agreements covering two offshore blocks in the Republic of Congo. These blocks are named Mer Profonde Sud (MPS) and Mer Profonde Nord (MPN). The Company’s interests cover approximately 1.33 million acres with water depths ranging from 490 to 6,900 feet.

Refining and Marketing

Murphy’s refining and marketing businesses are located in the United States and the United Kingdom, and primarily consist of operations that refine crude oil and other feedstocks into petroleum products, such as gasoline and distillates, buy and sell crude oil and refined products, and transport and market petroleum products. Murphy Oil USA, Inc. (MOUSA), a wholly owned subsidiary of Murphy, owns and operates two refineries in the United States. The larger of its United States refineries is at Meraux, Louisiana, on the Mississippi River approximately 10 miles southeast of New Orleans. The refinery is located on fee land. The Company’s refinery at Superior, Wisconsin is also located on fee land. Murco Petroleum Limited (Murco), a wholly owned United Kingdom subsidiary, owns 100% interest in a refinery at Milford Haven, Wales.

MOUSA markets refined products through a network of retail gasoline stations and branded and unbranded wholesale customers in a 24-state area of the southern and midwestern United States. Murphy’s retail stations are primarily located in the parking lots of Wal-Mart Supercenters in 21 states and use the brand name Murphy USA. The Company also markets gasoline and other products at stations under the Murphy Express brand. Murphy owns a 20% interest in a 120-mile refined products pipeline, with a capacity of 165,000 barrels per day, which transports products from the Meraux refinery to two common carrier pipelines serving the southeastern United States. The Company also owns a 3.2% interest in the Louisiana Offshore Oil Port LLC (LOOP), which provides deepwater unloading accommodations off the Louisiana coast for oil tankers and onshore facilities for storage of crude oil. As of December 31, 2008, Murphy owned approximately 1% of the crude oil refining capacity in the United States and 5.9% of the refining capacity in the United Kingdom.