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Business Segments
 12 Months Ended
Dec. 31, 2018
Business Segments [Abstract]  
Business Segments



Note U – Business Segments



Murphy’s reportable segments are organized into geographic areas of operations.  The Company’s exploration and production activity is subdivided into segments for the United States, Canada, Malaysia and all other countries.  Each of these segments derives revenues primarily from the sale of crude oil, condensate, natural gas liquids and/or natural gas.  The Company’s management evaluates segment performance based on income (loss) from operations, excluding interest income and interest expense. 



The Company has several customers that purchase a significant portion of its oil and natural gas production.  During 2018, 2017, and 2016, sales to Phillips 66 and affiliated companies represented approximately 12%, 14% and 17%,  respectively, of the Company’s total sales revenue.  Due to the quantity of active oil and natural gas purchasers in the markets where it produces hydrocarbons, the Company does not foresee any difficulty with selling its hydrocarbon production at fair market prices.



The Company completed the sale of its U.K. downstream assets during 2015.  For all years presented, assets and liabilities associated with U.K. refining and marketing operations were reported as held for sale in the Consolidated Balance Sheets.  These operations have been reported as Discontinued operations for all periods presented in these consolidated financial statements.



Information about business segments and geographic operations is reported in the following tables.  For geographic purposes, revenues are attributed to the country in which the sale occurs.  Corporate and other activities, including interest income, other gains and losses (including foreign exchange gains/losses, and realized/unrealized gains/losses on crude oil contracts), interest expense and unallocated overhead, are shown in the tables to reconcile the business segments to consolidated totals.  As used in the table on the following page, certain long-lived assets at December 31 exclude investments, noncurrent receivables, deferred tax assets, and other intangible assets.





 

 

 

 

 

 

 

 

 

 

 

Segment Information

Exploration and Production

 

(Millions of dollars)

United
States

 

Canada1

 

Malaysia

 

Other

 

Total
E&P

 

Year ended December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

Segment income (loss)

$

 242.9 

 

 51.1 

 

 269.5 

 

 (16.6)

 

 546.9 

 

Revenues from external customers

 

 1,289.6 

 

 438.6 

 

 854.2 

 

 22.2 

 

 2,604.6  2 

Interest income

 

– 

 

– 

 

– 

 

– 

 

– 

 

Interest expense, net of capitalization

 

– 

 

– 

 

– 

 

 0.2 

 

 0.2 

 

Income tax expense (benefit)

 

 68.1 

 

 14.5 

 

 143.3 

 

 (25.3)

 

 200.6 

 

Significant noncash charges (credits)

 

 

 

 

 

 

 

 

 

 

 

       Depreciation, depletion and amortization

 

 519.5 

 

 232.4 

 

 198.6 

 

 3.5 

 

 954.0 

 

       Accretion of asset retirement obligations

 

 19.5 

 

 7.7 

 

 17.4 

 

– 

 

 44.6 

 

       Amortization of undeveloped leases

 

 36.8 

 

 0.8 

 

– 

 

 2.5 

 

 40.1 

 

       Impairment of assets

 

 20.0 

 

– 

 

– 

 

– 

 

 20.0 

 

       Deferred and noncurrent income taxes

 

 68.1 

 

 16.5 

 

 (0.5)

 

 (25.7)

 

 58.4 

 

Additions to property, plant, equipment

 

 1,343.5 

 

 373.8 

 

 138.6 

 

 15.9 

 

 1,871.8 

 

Total assets at year-end

 

 6,342.9 

 

 1,711.9 

 

 1,670.2 

 

 188.1 

 

 9,913.1 

 

Year ended December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

Segment income (loss)

$

 (8.9)

 

 112.5 

 

 224.2 

 

 (37.5)

 

 290.3 

 

Revenues from external customers

 

 944.3 

 

 485.5 

 

 781.1 

 

– 

 

 2,210.9 

 

Interest income

 

– 

 

– 

 

– 

 

– 

 

– 

 

Interest expense, net of capitalization

 

– 

 

– 

 

– 

 

– 

 

– 

 

Income tax expense (benefit)

 

 (0.8)

 

 44.4 

 

 126.4 

 

 (36.2)

 

 133.8 

 

Significant noncash charges (credits)

 

 

 

 

 

 

 

 

 

 

 

       Depreciation, depletion and amortization

 

 546.1 

 

 185.4 

 

 204.6 

 

 3.8 

 

 939.9 

 

       Accretion of asset retirement obligations

 

 17.4 

 

 7.9 

 

 17.3 

 

– 

 

 42.6 

 

       Amortization of undeveloped leases

 

 60.2 

 

 1.6 

 

– 

 

– 

 

 61.8 

 

       Deferred and noncurrent income taxes

 

 2.5 

 

 55.3 

 

 (3.7)

 

 (36.2)

 

 17.9 

 

Additions to property, plant, equipment

 

 534.8 

 

 267.6 

 

 16.0 

 

 37.6 

 

 856.0 

 

Total assets at year-end

 

 5,186.2 

 

 1,725.8 

 

 1,670.1 

 

 154.2 

 

 8,736.3 

 

Year ended December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

Segment loss

$

 (164.2)

 

 (35.9)

 

 171.1 

 

 (54.7)

 

 (83.7)

 

Revenues from external customers

 

 749.1 

 

 365.3 

 

 753.4 

 

 0.2 

 

 1,868.0 

 

Interest income

 

– 

 

– 

 

– 

 

– 

 

– 

 

Interest expense, net of capitalization

 

– 

 

– 

 

– 

 

– 

 

– 

 

Income tax expense (benefit)

 

 (65.7)

 

 (134.3)

 

 85.9 

 

 (18.8)

 

 (132.9)

 

Significant noncash charges (credits)

 

 

 

 

 

 

 

 

 

 

 

       Depreciation, depletion and amortization

 

 600.5 

 

 203.2 

 

 227.7 

 

 5.9 

 

 1,037.3 

 

       Accretion of asset retirement obligations

 

 17.1 

 

 13.3 

 

 16.3 

 

– 

 

 46.7 

 

       Amortization of undeveloped leases

 

 38.4 

 

 4.5 

 

– 

 

 0.5 

 

 43.4 

 

       Impairment of assets

 

– 

 

 95.1 

 

– 

 

– 

 

 95.1 

 

       Deferred and noncurrent income taxes

 

 (108.4)

 

 (175.8)

 

 (8.5)

 

 (18.3)

 

 (311.0)

 

Additions to property, plant, equipment

 

 269.8 

 

 361.3 

 

 101.4 

 

 (1.3)

 

 731.2 

 

Total assets at year-end

 

 5,419.0 

 

 1,559.5 

 

 2,024.7 

 

 115.7 

 

 9,118.9 

 



 1 Includes Synthetic crude operations in 2016.  This business was sold in June 2016.

 2 Includes a pretax gain of $129.0 million on sale of Seal area heavy oil field sold in January 2017.



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Geographic Information

Certain Long-Lived Assets at December 31

(Millions of dollars)

United
States

 

Canada

 

Malaysia

 

United
Kingdom

 

Other

 

Total

2018

$

 6,634.3 

 

 1,644.6 

 

 1,325.4 

 

– 

 

 153.3 

 

 9,757.6 

2017

 

 5,050.5 

 

 1,635.9 

 

 1,392.3 

 

– 

 

 141.3 

 

 8,220.0 

2016

 

 5,121.6 

 

 1,451.4 

 

 1,637.0 

 

– 

 

 106.2 

 

 8,316.2 







 

 

 

 

 

 



 

 

 

 

 

 

Segment Information — Continued

 

(Millions of dollars)

Corporate
and
Other

 

Discontinued
Operations

 

Consolidated
Total

Year ended December 31, 2018

 

 

 

 

 

 

Segment income (loss)

$

 (123.9)

 

 (3.5)

 

 419.5 

Revenues from external customers

 

 (34.0)

 

– 

 

 2,570.6 

Interest income

 

 8.0 

 

– 

 

 8.0 

Interest expense, net of capitalization

 

 181.4 

 

– 

 

 181.6 

Income tax expense (benefit)

 

 (191.3)

 

– 

 

 9.3 

Significant noncash charges (credits)

 

 

 

 

 

 

       Depreciation, depletion and amortization

 

 17.9 

 

– 

 

 971.9 

       Accretion of asset retirement obligations

 

– 

 

– 

 

 44.6 

       Amortization of undeveloped leases

 

– 

 

– 

 

 40.1 

       Deferred and noncurrent income taxes

 

 (242.1)

 

– 

 

 (183.7)

Additions to property, plant, equipment

 

 22.7 

 

– 

 

 1,894.5 

Total assets at year-end

 

 1,118.5 

 

 20.9 

 

 11,052.5 

Year ended December 31, 2017

 

 

 

 

 

 

Segment income (loss)

$

 (607.5)

 

 (0.9)

 

 (311.8)

Revenues from external customers

 

 4.6 

 

– 

 

 2,225.1 

Interest income

 

 7.4 

 

– 

 

 7.4 

Interest expense, net of capitalization

 

 181.8 

 

– 

 

 181.8 

Income tax expense (benefit)

 

 245.6 

 

– 

 

 382.7 

Significant noncash charges (credits)

 

 

 

 

 

 

       Depreciation, depletion and amortization

 

 17.8 

 

– 

 

 957.7 

       Accretion of asset retirement obligations

 

– 

 

– 

 

 42.6 

       Amortization of undeveloped leases

 

– 

 

– 

 

 61.8 

       Deferred and noncurrent income taxes

 

 242.5 

 

– 

 

 260.4 

Additions to property, plant, equipment

 

 14.8 

 

– 

 

 870.8 

Total assets at year-end

 

 1,101.7 

 

 22.9 

 

 9,860.9 



 

 

 

 

 

 

Year ended December 31, 2016

 

 

 

 

 

 

Segment loss

$

 (149.1)

 

 (2.0)

 

 (276.0)

Revenues from external customers

 

 6.6 

 

– 

 

 1,811.2 

Interest income

 

 2.9 

 

– 

 

 2.9 

Interest expense, net of capitalization

 

 148.2 

 

– 

 

 148.2 

Income tax expense (benefit)

 

 (64.1)

 

– 

 

 (219.2)

Significant noncash charges (credits)

 

 

 

 

 

 

       Depreciation, depletion and amortization

 

 16.8 

 

– 

 

 1,054.1 

       Accretion of asset retirement obligations

 

– 

 

– 

 

 46.7 

       Amortization of undeveloped leases

 

– 

 

– 

 

 43.4 

       Impairment of assets

 

– 

 

– 

 

 95.1 

       Deferred and noncurrent income taxes

 

 (76.8)

 

– 

 

 (387.8)

Additions to property, plant, equipment

 

 21.9 

 

– 

 

 753.1 

Total assets at year-end

 

 1,149.9 

 

 27.1 

 

 10,295.9 













 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

Geographic Information

Revenues from External Customers for the Year

(Millions of dollars)

United
States

 

Canada

 

Malaysia

 

Other

 

Total

2018

$

 1,297.5 

 

 438.5 

 

 854.3 

 

 (19.7)

 

 2,570.6 

2017

 

 958.3 

 

 485.7 

 

 781.1 

 

– 

 

 2,225.1 

2016

 

 692.3 

 

 365.3 

 

 753.4 

 

 0.2 

 

 1,811.2