Murphy Oil Corporation (MUR): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear-eyed view of Murphy Oil Corporation (MUR) through the PESTLE lens, mapping the external forces that truly matter to its valuation and operational stability. Honestly, for an exploration and production (E&P) company like Murphy Oil, the near-term risks are heavily concentrated in the Political and Economic spheres, but the long-term game is defintely won or lost on Environmental and Technological execution. Right now, the company's $1.2 billion CapEx plan is caught between US regulatory shifts in the Gulf of Mexico and global economic demand that pegs Brent crude between $78 and $95 per barrel. We've mapped the six critical external forces-Political, Economic, Sociological, Technological, Legal, and Environmental-to give you a clear, actionable view, showing why near-term cash flow is at the mercy of permitting delays, but long-term value rests on hitting that 40% reduction in methane intensity.

Murphy Oil Corporation (MUR) - PESTLE Analysis: Political factors

The political landscape for Murphy Oil Corporation (MUR) in 2025 is defined by a shift toward energy dominance in the US, a major regulatory change in Canada, and a stable, encouraging environment in Vietnam. The key takeaway is that US political actions-specifically a pro-drilling stance and sanctions on Venezuela-are creating near-term operational opportunities and favorable heavy crude pricing, while the Canadian political environment has removed a direct consumer cost but may increase industrial regulatory risk.

US Department of Interior's stance on Gulf of Mexico (GOM) lease sales and permitting

The US Department of the Interior, through the Bureau of Ocean Energy Management (BOEM), has signaled a clear political shift toward accelerating offshore oil and gas activity in the Gulf of Mexico (GOM). This stance, driven by a policy goal of achieving 'energy dominance,' creates a favorable environment for Murphy Oil's deepwater strategy.

The company is a significant operator in the GOM, allocating approximately $410 million of its total 2025 capital expenditure (CAPEX) to the region for development drilling and field development projects. This commitment is supported by the political environment, which is pushing for more lease sales than the previous administration's scaled-back plan, which contained only three lease sales over five years. Murphy Oil was already successful in securing new acreage, having been awarded six deepwater blocks in Federal Lease Sale 261 in the first quarter of 2024.

Here's the quick math: Increased political emphasis on domestic production means the permitting process for Murphy Oil's GOM projects, like the new Mormont and Samurai wells, should face fewer bureaucratic hurdles and delays, providing more certainty for their full-year 2025 production guidance, which is expected to be in the range of 174.5 to 182.5 MBOEPD.

Canadian federal carbon tax policy impacting their Montney and Tupper gas assets

A significant political change in Canada directly impacts Murphy Oil's onshore natural gas operations in the Montney and Tupper fields. The new federal government, in March 2025, eliminated the consumer-facing federal carbon tax, known as the Fuel Charge, effective April 1, 2025.

While this move removes a direct cost pressure on the end-use of natural gas-the price of a cubic meter was set to increase to $95 per tonne of greenhouse gas emissions before the tax was scrapped-the industrial carbon pricing system remains. The Output-Based Pricing System (OBPS), which applies to large industrial emitters like Murphy Oil's processing facilities, is still in place. The political rhetoric suggests a potential tightening of the OBPS, meaning the direct cost relief from the consumer tax removal is offset by the continued regulatory risk and potential future cost increases on industrial emissions.

Murphy Oil's Tupper Montney operation produced an average of 387 million cubic feet per day (MMCFD) of natural gas in the fourth quarter of 2024, making it a major asset exposed to the industrial pricing scheme. The company's 2025 CAPEX plan includes drilling in the Tupper Montney region, which has approximately 1,000 future locations on 120,000 net acres. The political decision to maintain and potentially strengthen the OBPS means Murphy Oil must prioritize capital efficiency gains and emissions reduction technology to maintain its competitive position against other North American gas producers.

Geopolitical stability in Southeast Asia, specifically Malaysia and Vietnam, where Murphy Oil has production sharing contracts

Murphy Oil's Southeast Asia operations present a mixed political picture, with Vietnam offering strong support and Malaysia requiring careful monitoring of its national oil company's policies.

• Vietnam: The political environment is highly favorable. In October 2025, Party General Secretary To Lam welcomed Murphy Oil's plan to expand investment in oil and gas exploration and production, affirming that energy cooperation is a key pillar of the US-Vietnam Comprehensive Strategic Partnership. This high-level political endorsement provides a strong shield for their projects, including the Lac Da Vang (Golden Camel) field development, which has an allocation of $90 million of 2025 CAPEX.
• Malaysia: Political risk is primarily tied to the policies of Petroliam Nasional Berhad (PETRONAS), the national oil company, which acts as the regulator and partner in Production Sharing Contracts (PSCs). Murphy Oil's operations, including the Kikeh field, are subject to the government's long-term fiscal stability and local content requirements. Any sudden shifts in PETRONAS's stance on PSC terms or tax rates, though not immediately apparent as a major threat in late 2025, could impact the profitability of their Malaysian assets.

The political stability in Vietnam, coupled with the clear path for their $115 million total CAPEX in the region, makes it a defintely lower-risk international asset for Murphy Oil in 2025.

US-Venezuela sanctions policy, which indirectly affects global heavy crude pricing and competition

The ongoing US sanctions policy against Venezuela's state-owned oil company, PDVSA, is a crucial political factor that indirectly benefits Murphy Oil's heavy crude production, particularly from the GOM.

Venezuela's heavy-sour crude, with an API gravity typically ranging from 8-16 degrees, has historically been a key feedstock for US Gulf Coast refineries. The tightening of US sanctions, including the replacement of Chevron's General License 41 with a wind-down order in early 2025, has disrupted this supply chain, leading to a tighter market and higher prices for alternative heavy crude grades.

This political action supports the price of Murphy Oil's heavy crude production in the GOM, which competes directly with alternative sources like Canadian Heavy Oil (Western Canadian Select) and Middle Eastern heavy grades. While Venezuela's exports showed resilience, reaching 1.09 million barrels per day in September 2025, the political risk of a 25 percent tariff on countries importing Venezuelan oil, threatened in April 2025, keeps the supply constrained and the price differential favorable for Murphy Oil. This dynamic helps maximize the return on Murphy Oil's oil production, which is expected to be 50 percent of its total 2025 production volume.

Murphy Oil Corporation (MUR) - PESTLE Analysis: Economic factors

Oil price volatility, with the 2025 Brent crude forecast range sitting between $78 and $95 per barrel.

You know that oil price volatility is the single greatest determinant of an exploration and production company's cash flow. For 2025, the market consensus from agencies like the EIA projects a Brent crude average around $74.31 per barrel, but the volatility range Murphy Oil Corporation must plan for is much wider-specifically, the $78 to $95 per barrel band you mentioned. This higher end is a real risk, driven by geopolitical flashpoints. For instance, a major supply disruption, such as a six-month cut to Iranian hydrocarbon exports, could temporarily push Brent prices toward $90 per barrel. That's a huge swing, so the company must be prepared for both the consensus reality and the high-end risk. The low-end risk is also real, with some forecasts seeing prices drop toward $58 per barrel by late 2025 as non-OPEC+ supply grows.

Capital Expenditure (CapEx) for 2025 projected at approximately $1.2 billion, heavily weighted toward deepwater GOM projects.

Murphy Oil Corporation is maintaining a disciplined capital program, with its 2025 accrued Capital Expenditure (CapEx) guidance set in the range of $1,135 million to $1,285 million. The midpoint of this range is approximately $1.21 billion, a significant investment that shows a clear strategic focus. The capital is heavily weighted toward offshore assets, specifically the deepwater Gulf of Mexico (GOM) projects, which are the company's core competency. The total offshore capital budget is $545 million, with $410 million specifically allocated to the Gulf of America for development drilling and field development projects. The rest is split between the Eagle Ford Shale and international projects like Vietnam and Côte d'Ivoire. This deepwater focus is a long-term bet on high-margin barrels, but it also ties a large portion of the budget to complex, long-cycle projects.

Here's the quick math on the offshore commitment:

Inflationary pressures on deepwater drilling and completion services, pushing up project costs by an estimated 10-15% year-over-year.

Inflation is defintely a headwind, but the pressure on deepwater costs is easing from the double-digit growth seen in previous years. While the market risk for a 10-15% cost surge remains a high-end scenario, industry analysts project a more moderate increase for 2025. Total drilling and completion (D&C) costs for the broader offshore sector are expected to increase by a modest 2-3% year-over-year, with deepwater rig rates specifically rising only 1-4%. This slowdown is due to cooling in the floater market and better capital discipline. Still, the marine installation market is an outlier, with costs expected to rise by 12% as demand strains capacity. Murphy Oil Corporation must use its strategic relationships with key suppliers to lock in day rates and service costs now, mitigating the risk of that high-end 10-15% spike.

Global economic growth impacting demand; a slowdown in China or Europe directly hits the price deck.

The global economic outlook for 2025 is a major drag on the demand side of the oil equation. The International Energy Agency (IEA) has cut its world GDP growth outlook for 2025 to around 2.8%, a below-trend pace that directly impacts consumption. A slowdown in major economies is a direct hit to the price deck because they are the largest consumers. China, which drove 50% of world oil demand growth between 2000 and 2023, is seeing its demand growth slow sharply due to a downturn in the property sector and the rapid adoption of electric vehicles. Meanwhile, oil consumption in the European Union (EU) is already down 7.0% below 2019 levels. This means the market is relying almost entirely on growth from other emerging and developing economies, which is a fragile foundation.

Hedging strategy effectiveness against commodity price swings to secure cash flow.

Murphy Oil Corporation's hedging strategy is crucial for securing cash flow and protecting the returns on its large CapEx program. The company uses derivative commodity instruments, primarily swaps and fixed price forward sales, to manage commodity price volatility. This strategy provides a floor for a portion of its production, making its cash flow more predictable and helping to underpin its capital spending. They are particularly active in natural gas hedging, which is a smart move given the price swings in that market.

• Secures Q3 2025 natural gas production (60 MMCFD) at an average price of $3.65 per MCF.
• Locks in Q4 2025 natural gas production (60 MMCFD) at an average price of $3.74 per MCF.
• Uses fixed price forward sales contracts in Canada to mitigate AECO price volatility.

This hedging gives the company a clear line of sight on a portion of its revenue, which is vital when the market is forecasting Brent crude could swing by over $30 per barrel in a single year. The next step is for the Risk Management team to review the 2026 hedge book and increase the oil hedge ratio to at least 40% of forecasted production by year-end, protecting the investment in the new deepwater wells coming online.

Murphy Oil Corporation (MUR) - PESTLE Analysis: Social factors

Increasing investor and public pressure for Environmental, Social, and Governance (ESG) performance metrics.

You are defintely seeing a shift in how investors and the public view oil and gas companies; it's no longer just about barrels and dollars, but about Environmental, Social, and Governance (ESG) performance. For Murphy Oil Corporation, this translates into tangible pressure for transparent reporting.

The company is actively responding, as evidenced by its 2025 Sustainability Report. They had over 400+ face-to-face interactions with investors, which shows the sheer volume of ESG-related scrutiny. To be fair, this is a necessary cost of capital in the modern market, but it's still a huge time commitment.

Critically, Murphy Oil has integrated sustainability metrics into its annual incentive plan, which is a clear action that aligns executive compensation with ESG goals. This includes metrics like methane intensity and water recycling ratio. They've also secured third-party assurance of their Greenhouse Gas (GHG) Scope 1 and 2 data for five consecutive years, which builds credibility in a skeptical environment. That kind of external verification is a non-negotiable for institutional investors.

Talent retention challenges for highly specialized deepwater engineers and geoscientists.

The deepwater sector is a specialized world, and Murphy Oil's multi-basin portfolio, which includes complex Gulf of Mexico and Vietnam operations, demands a very specific, highly experienced talent pool. This is a significant social risk because the talent pipeline is thinning across the industry.

The company is consistently seeking Staff Geoscientists for deepwater roles, requiring a minimum of 12 years' experience in oil and gas, with at least 5 years in the Deepwater Gulf of Mexico. The high barrier to entry for these roles means competition for top talent is fierce, and retention is expensive.

The challenge isn't just hiring; it's keeping the expertise in-house and transferring that knowledge. The job descriptions themselves emphasize mentoring junior members, which is a tacit admission of the looming 'Great Crew Change' risk. If onboarding takes 14+ days for a new engineer, project schedules start to slip. This is a generational problem that requires a long-term, structural fix, not just higher salaries.

Local community relations in operating areas, particularly regarding offshore infrastructure and onshore support facilities.

Maintaining a social license to operate (SLO) is crucial, especially in international and offshore areas where operations are highly visible. Murphy Oil's strategy focuses on minimizing negative impacts and constructive engagement before any new operation.

In 2025, the company's commitment is tangible in its key development areas. For instance, the Lac Da Vang field development project in Vietnam, which had a 2025 capital budget of $110 million, achieved a major social milestone: 1 million work hours with zero Lost Time Injuries on the platform construction. This safety record is a powerful indicator of operational excellence and commitment to worker well-being, which resonates strongly with local communities and regulators.

In the US and Canada, the company maintains a formal grievance process through its Land Department, assigning a surface landman to address landowner concerns directly. They also invest in community development:

• Receive United Way's Community Honor Roll recognition for over 10 years.
• Partner with the Houston Food Bank, earning the United States President's Volunteer Service Award.
• Offer the El Dorado Promise scholarship, which has benefited over 4,500+ students since 2007.

Shifting public sentiment toward energy transition, influencing long-term capital access and cost.

Public sentiment is a double-edged sword right now. While the long-term trend is toward energy transition, the near-term reality in late 2025 is a pivot back to core business for many major oil companies, with some of the initial fervor for pure-play ESG investing waning. This shift has, ironically, made oil and gas companies more attractive to value investors, driving down valuations to compelling levels.

For Murphy Oil, the shift means their access to capital remains strong, especially given their financial discipline. They achieved their lowest net debt in over a decade at approximately $850 million in late 2024, with a long-term goal of ~$1.0 billion. Plus, their commitment to returning capital is clear: a minimum of 50% of adjusted Free Cash Flow is allocated to share buybacks and potential dividend increases. They have paid a dividend for 55 consecutive years, which speaks volumes to their financial stability and ability to generate cash, regardless of the broader energy transition narrative.

The key risk here is that public perception still influences long-term debt costs and access to certain 'green' financing pools. But still, the Q2 2025 results, with production hitting 190,000 barrels of oil equivalents per day, show strong operational execution that keeps the company a viable investment, even with a consensus analyst price target of $28.50 (as of November 2025) and a mixed immediate stock reaction.

Murphy Oil Corporation (MUR) - PESTLE Analysis: Technological factors

Advancements in deepwater seismic imaging and subsurface modeling to reduce drilling risk and cost.

You need to see technology as a risk-mitigation tool, not just a cost center. Murphy Oil Corporation's deepwater exploration success is directly tied to its use of advanced seismic imaging and subsurface modeling, especially in high-potential areas like the Gulf of Mexico, Vietnam, and Côte d'Ivoire. Their 2025 exploration program is budgeted at approximately $145 million, a significant spend that relies on this technology to de-risk prospects before drilling.

The payoff is clear: advanced seismic reprocessing, like the work completed for Côte d'Ivoire, allows the company to test a mean unrisked resource potential ranging from 500 million to over 1 billion barrels across their key exploration areas. This precision in imaging complex salt structures and deep reservoirs is what turns a high-risk exploration well into a calculated capital allocation decision.

Use of subsea tie-back technology to connect new fields like Khaleesi/Shelby/Samurai to existing infrastructure, lowering development costs.

The smartest capital is the capital you don't have to spend. Murphy Oil Corporation's strategy in the Gulf of Mexico (GOM) heavily relies on subsea tie-back technology, which connects new discoveries to existing floating production systems (FPSs) rather than building new, expensive platforms. The Khaleesi/Shelby/Samurai complex is a prime example of this hub-and-spoke model, with the Samurai well workover completed in early second quarter 2025 and the Khaleesi #2 workover completed and returned to production early in the third quarter 2025.

This approach became even more capital-efficient with the strategic acquisition of the BW Pioneer Floating Production Storage and Offloading vessel (FPSO) in the GOM. The net purchase price was $104 million, but the financial benefit is immediate and substantial. Honestly, that's a great deal.

• FPSO Acquisition Cost: $104 million (net purchase price, Q1 2025).
• Projected Annual Operating Cost Reduction: Nearly $60 million annually.
• Payback Period: Approximately two years.

Digital twin technology and remote monitoring for GOM platforms to optimize production and minimize downtime.

Digital twin technology (a virtual replica of a physical asset) and remote monitoring are becoming mandatory for deepwater operations, especially as Murphy Oil Corporation focuses on operational efficiency to manage its GOM assets. While the company does not publish a specific 2025 production uplift figure for its own digital twin program, the industry standard for this technology suggests a potential for a 30% efficiency increase in areas like maintenance and document approval times.

This technology is defintely critical for Murphy Oil Corporation's deepwater execution ability, which management calls a competitive advantage. Here's the quick math: managing complex workovers, like the one on Samurai #3 or the repairs on Mormont #2 in 2024, cost approximately $30 million in the fourth quarter of 2024 alone. Using a digital twin to predict failures and streamline maintenance is the only way to minimize that kind of unplanned downtime and expense.

Early-stage investment in Carbon Capture, Utilization, and Storage (CCUS) readiness for future compliance in North America.

The regulatory environment in North America, particularly the US Gulf Coast, is pushing all operators toward Carbon Capture, Utilization, and Storage (CCUS) readiness. While Murphy Oil Corporation has not announced a specific, dedicated 2025 CCUS project or capital expenditure, their forward-looking statements consistently highlight the need to manage Environmental, Social, and Governance (ESG) matters and emissions.

The company's strategic focus on the Eagle Ford Shale in Texas and its deepwater GOM assets places it in two key regions where CCUS infrastructure is rapidly developing, especially with Texas securing Class VI well primacy, which accelerates CO₂ injection well permitting. The technology readiness is a strategic imperative, even if the capital allocation is currently embedded within general asset integrity and exploration planning, rather than a separate line item. What this estimate hides is the potential future CAPEX required once federal incentives solidify and a clear CCUS pathway is chosen.

The table below summarizes the key 2025 technological enablers and their direct financial or operational impact:

Your next step is to evaluate how these technological efficiencies translate into a sustained competitive advantage against peers who are facing similar deepwater complexity.

Murphy Oil Corporation (MUR) - PESTLE Analysis: Legal factors

Bureau of Ocean Energy Management (BOEM) and Bureau of Safety and Environmental Enforcement (BSEE) permitting timelines in the GOM, which can delay key projects.

The regulatory environment in the U.S. Gulf of Mexico (GOM) is a constant operational risk, mostly due to the permitting processes managed by the Bureau of Ocean Energy Management (BOEM) for leases and the Bureau of Safety and Environmental Enforcement (BSEE) for operations.

While Murphy Oil Corporation has successfully advanced major GOM projects in 2025, timing remains a challenge. For example, in the first quarter of 2025, the new Mormont #4 well (Green Canyon 478) and the Samurai #3 well workover (Green Canyon 432) were delayed, which contributed to a total production impact of 1.3 thousand barrels of oil equivalent per day (MBOEPD) in Q1 2025. This was partly due to winter storm activity, but the underlying regulatory complexity means any weather or technical issue can quickly turn into a costly delay if a BSEE permit extension is required. Murphy Oil Corporation has allocated approximately $410 million of its 2025 Capital Expenditure (CAPEX) to the Gulf of Mexico for development drilling and field development projects, so permitting speed directly impacts capital efficiency.

You have to be defintely on top of the paperwork to keep these big offshore projects moving.

Compliance with the US Inflation Reduction Act (IRA) provisions related to methane emissions and royalty rates on federal lands and waters.

The US Inflation Reduction Act (IRA) introduced two significant legal changes for federal operations, though one has been neutralized in 2025. The IRA's Waste Emissions Charge (WEC), a fee on excessive methane emissions, was a major potential cost, set to be $1,200 per metric ton for 2025 emissions.

However, the IRA's methane fee was repealed by Congress in February 2025, effectively eliminating this new operating cost for Murphy Oil Corporation's GOM and onshore federal assets. This is a clear, positive risk mitigation event for the company's near-term financial outlook. The other key IRA provision, the increase in federal royalty rates, remains in effect.

• The onshore royalty rate on new leases increased from 12.5% to 16.67%.
• The offshore royalty rate on new leases increased from 18.75% to 18.75% (this rate was already in place for offshore).

This royalty hike raises the cost of new federal leases in the Eagle Ford Shale and GOM, impacting the economics of future drilling programs.

International contract renegotiations and host government fiscal terms in Malaysia and Vietnam.

Murphy Oil Corporation's exposure to fiscal term renegotiation risk in Malaysia is zero, as the company divested its entire Malaysian business in 2019 for $2.127 billion. This strategic move simplified their international legal footprint to focus on other core areas like Vietnam and Côte d'Ivoire.

In Vietnam, the legal and political environment remains highly favorable for Murphy Oil Corporation's operations. The company is advancing the Lac Da Vang (Golden Camel) field development, which is on schedule for first oil in the second half of 2026. This stability was reinforced in October 2025 when the CEO met with the Vietnamese Party General Secretary, who affirmed the country's commitment to creating favorable conditions for foreign energy investors.

The company's 2025 CAPEX allocation reflects this commitment:

Decommissioning liabilities for mature GOM assets, requiring significant financial provisioning.

The GOM is a mature basin, and the legal requirement to decommission (remove) platforms and plug wells at the end of their useful life represents a substantial, non-discretionary financial liability. The Bureau of Ocean Energy Management (BOEM) requires companies to provide financial assurance to cover these costs, which can include posting surety bonds or other security.

Murphy Oil Corporation actively manages this liability through financial provisioning, which is the accounting term for setting aside funds or recognizing the future cost. For the three months ended March 31, 2025, the company recorded an Accretion of asset retirement obligations (ARO) of $14.045 million. This quarterly charge reflects the time value of money on the estimated future decommissioning costs, showing the steady, legal obligation that must be factored into the balance sheet and cash flow forecasts.

This is a cost you can't defer; you have to provision for it every quarter.

Murphy Oil Corporation (MUR) - PESTLE Analysis: Environmental factors

You need to understand that environmental factors for an offshore-heavy operator like Murphy Oil Corporation (MUR) are less about abstract risk and more about immediate capital expenditure (CapEx) and operational costs. The core story here is that the company is outperforming its peers on key intensity metrics, but the regulatory and physical risks in the Gulf of Mexico (GOM) are still driving up compliance and maintenance spending, which impacts your 2025 free cash flow (FCF) projections.

The company's focus on deepwater assets means environmental compliance is a defintely a high-cost, high-stakes game. Their $1,135 million to $1,285 million accrued CapEx guidance for 2025 reflects this reality, with approximately $410 million allocated to the Gulf of Mexico alone for development and exploration.

Methane emissions reduction targets

Murphy Oil Corporation is already significantly ahead of many industry methane reduction targets, translating a long-term commitment into near-term performance. By the end of 2024, the company had achieved a 56% reduction in methane intensity compared to its 2019 baseline, according to its 2025 Sustainability Report Highlights.

This performance is well beyond the typical 40% reduction targets set by some industry peers for 2030, which positions Murphy Oil Corporation favorably against environmental, social, and governance (ESG) screens. The company's strategy focuses heavily on its onshore assets, where 70% of its 2023 methane emissions originated, primarily from pneumatic equipment.

Here's the quick math on their recent performance:

What this estimate hides is the CapEx needed to sustain this performance, like replacing natural gas pneumatics with instrument air in the Eagle Ford Shale.

Increased scrutiny on oil spill prevention and response capabilities for deepwater operations

The operational environment for Murphy Oil Corporation's deepwater assets in the Gulf of Mexico and Offshore Canada mandates a high-cost, high-readiness posture for spill prevention and response. The Deepwater Horizon incident remains the industry standard for regulatory and public scrutiny, and any minor incident is immediately amplified.

The company maintains a comprehensive Health, Safety, Environment, and Corporate Responsibility (HSE&CR) Management System that guides its spill management, asset integrity, and internal annual targets.

Key investments and operational realities in 2025 include:

• Acquisition of the BW Pioneer Floating Production Storage and Offloading (FPSO) vessel for a net purchase price of $104 million, enhancing deepwater infrastructure control but also increasing operational liability.
• The U.S. National Oceanic and Atmospheric Administration (NOAA) responded to 71 incidents in the first four months of 2025 (January to April), demonstrating the high frequency of spill-related events and the constant regulatory presence in the GOM.
• Murphy Oil Corporation's deepwater execution ability is a competitive advantage, but it comes with the inherent risk of an expensive, complex response to any deepwater event, which can quickly wipe out a quarter's earnings.

Compliance with stricter flaring regulations in the GOM and Canada, pushing for gas capture solutions

Stricter flaring regulations, particularly the push for zero routine flaring by 2030 endorsed by the Texas Methane & Flaring Coalition and the World Bank, are forcing CapEx decisions now. Murphy Oil Corporation is ahead of the curve, having reduced flaring intensity by 65% from 2019 to 2024.

The company is actively investing in gas capture solutions, which include building redundant pipelines to minimize flaring caused by third-party downstream constraints. This is a critical investment to ensure production uptime and avoid regulatory fines. In Offshore Canada, Murphy Oil Corporation has allocated approximately $20 million of its 2025 CapEx, mostly for non-operated Hibernia development drilling, where strict Canadian regulations apply.

Managing the physical risks of climate change, such as increased hurricane frequency and intensity in the Gulf of Mexico

Physical climate risks are not theoretical for Murphy Oil Corporation; they are a direct driver of production downtime and capital spending. The Gulf of Mexico is a high-exposure area for tropical storms and hurricanes.

Concrete impacts from weather events in the near-term include:

• Q4 2024 Production Impact: Unplanned downtime due to offshore weather impacts accounted for 2.4 thousand barrels of oil equivalent per day (MBOEPD) of lost production.
• Q1 2025 Production Impact: Winter storm activity delayed first production at the new Mormont #4 well and the Samurai #3 workover.
• Risk Mitigation: The company must continually spend to harden infrastructure and manage insurance costs, which are rising due to increased storm frequency.

The company's 2025 forward-looking statements explicitly list 'other natural hazards impacting our operations' as a factor that could cause actual results to differ materially from expectations.

Next step: Finance needs to model the sensitivity of 2025 free cash flow to a 15% CapEx increase and a $10/barrel oil price drop by the end of the month.