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Revenue from Contracts with Customers
 6 Months Ended
Jun. 30, 2022
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers Note C – Revenue from Contracts with Customers
Nature of Goods and Services
The Company explores for and produces crude oil, natural gas and natural gas liquids (collectively oil and natural gas) in select basins around the globe. The Company’s revenue from sales of oil and natural gas production activities are primarily subdivided into two key geographic segments: the U.S. and Canada.  Additionally, revenue from sales to customers is generated from three primary revenue streams: crude oil and condensate, natural gas liquids, and natural gas.
For operated oil and natural gas production where the non-operated working interest owner does not take-in-kind its proportionate interest in the produced commodity, the Company acts as an agent for the working interest owner and recognizes revenue only for its own share of the commingled production. The exception to this is the reporting of the noncontrolling interest in MP GOM as prescribed by ASC 810-10-45.
U.S. - In the United States, the Company primarily produces oil and natural gas from fields in the Eagle Ford Shale area of South Texas and in the Gulf of Mexico.  Revenue is generally recognized when oil and natural gas are transferred to the customer at the delivery point. Revenue recognized is largely index based with price adjustments for floating market differentials.
Canada - In Canada, contracts include long-term floating commodity index priced and natural gas physical forward sales fixed-price contracts. For the offshore business in Canada, contracts are based on index prices and revenue is recognized at the time of vessel load based on the volumes on the bill of lading and point of custody transfer. The Company also purchases natural gas in Canada to meet certain sales commitments.
Disaggregation of Revenue
The Company reviews performance based on two key geographical segments and between onshore and offshore sources of revenue within these geographies.
For the three-month period ended June 30, 2022, and 2021, the Company recognized $1,196 million and $758.8 million, respectively, from total revenue from sales to customers, from sales of oil, natural gas liquids and natural gas.
For the six-month period ended June 30, 2022, and 2021, the Company recognized $2,067.6 million and $1,351.4 million, respectively, from total revenue from sales to customers, from sales of oil, natural gas liquids and natural gas.
Three Months Ended
June 30,		Six Months Ended
June 30,
(Thousands of dollars)2022202120222021
Net crude oil and condensate revenue
United States
Onshore$264,841 183,267 $436,537 297,757 
                     Offshore612,526 411,076 1,078,147 739,417 
Canada    
Onshore40,417 30,695 77,114 60,598 
Offshore38,354 31,772 67,186 49,834 
Other
13,636 — 13,636 — 
Total crude oil and condensate revenue969,774 656,810 1,672,620 1,147,606 
Net natural gas liquids revenue
United States
Onshore18,062 9,596 34,747 17,124 
 
Offshore18,093 10,766 32,072 20,820 
Canada
Onshore5,001 3,240 9,868 7,227 
Total natural gas liquids revenue41,156 23,602 76,687 45,171 
Net natural gas revenue
United States
Onshore19,034 6,872 30,403 13,315 
Offshore43,567 17,273 69,768 39,411 
Canada
Onshore72,768 54,272 131,349 105,853 
Total natural gas revenue135,369 78,417 231,520 158,579 
Revenue from production1,146,299 758,829 1,980,827 1,351,356 
Sales of purchased natural gas
United States
Offshore181 — 181 — 
Canada
Onshore49,758 — 86,604 — 
Total sales of purchased natural gas49,939 — 86,785 — 
Total revenue from sales to customers1,196,238 758,829 2,067,612 1,351,356 
Loss on crude contracts(103,068)(226,245)(423,845)(440,630)
Gain on sale of assets and other income7,887 17,059 10,251 18,902 
Total revenues and other income$1,101,057 549,643 $1,654,018 929,628 

In 2022, the Company included additional line items on the face of the Consolidated Statements of Operations to report Sales of purchased natural gas and Costs of purchased natural gas. Sales and purchases of natural gas are reported on a gross basis when Murphy takes control of the products and has risks and rewards of ownership.
Contract Balances and Asset Recognition
As of June 30, 2022, and December 31, 2021, receivables from contracts with customers, net of royalties and associated payables, on the balance sheet from continuing operations, were $292.4 million and $169.8 million, respectively. Payment terms for the Company’s sales vary across contracts and geographical regions, with the majority of the cash receipts required within 30 days of billing. Based on a forward-looking expected loss model in accordance with ASU 2016-13, the Company did
not recognize any impairment losses on receivables or contract assets arising from customer contracts during the reporting periods.
The Company has not entered into any revenue contracts that have financing components as of June 30, 2022.
The Company does not employ sales incentive strategies such as commissions or bonuses for obtaining sales contracts. For the periods presented, the Company did not identify any assets to be recognized associated with the costs to obtain a contract with a customer.
Performance Obligations
The Company recognizes oil and natural gas revenue when it satisfies a performance obligation by transferring control over a commodity to a customer.  Judgment is required to determine whether some customers simultaneously receive and consume the benefit of commodities. As a result of this assessment for the Company, each unit of measure of the specified commodity is considered to represent a distinct performance obligation that is satisfied at a point in time upon the transfer of control of the commodity.
For contracts with market or index-based pricing, which represent the majority of sales contracts, the Company has elected the allocation exception and allocates the variable consideration to each single performance obligation in the contract. As a result, there is no price allocation to unsatisfied remaining performance obligations for delivery of commodity product in subsequent periods.
The Company has entered into several long-term, fixed-price contracts in Canada. The underlying reason for entering a fixed price contract is generally unrelated to anticipated future prices or other observable data and serves a particular purpose in the Company’s long-term strategy.
As of June 30, 2022, the Company had the following sales contracts in place which are expected to generate revenue from sales to customers for a period of more than 12 months starting at the inception of the contract:
Current Long-Term Contracts Outstanding at June 30, 2022
LocationCommodityEnd DateDescriptionApproximate Volumes
U.S.Natural Gas and NGLQ2 2023Deliveries from dedicated acreage in Eagle FordAs produced
CanadaNatural GasQ4 2022Contracts to sell natural gas at USD index pricing8 MMCFD
CanadaNatural GasQ4 2022Contracts to sell natural gas at CAD fixed prices5 MMCFD
CanadaNatural GasQ4 2022Contracts to sell natural gas at USD fixed pricing20 MMCFD
CanadaNatural GasQ4 2023Contracts to sell natural gas at USD index pricing25 MMCFD
CanadaNatural GasQ4 2023Contracts to sell natural gas at CAD fixed prices38 MMCFD
CanadaNatural GasQ4 2024Contracts to sell natural gas at USD index pricing31 MMCFD
CanadaNatural GasQ4 2024Contracts to sell natural gas at CAD fixed prices100 MMCFD
CanadaNatural GasQ4 2024Contracts to sell natural gas at CAD fixed prices34 MMCFD
CanadaNatural GasQ4 2024Contracts to sell natural gas at USD fixed pricing15 MMCFD
CanadaNatural GasQ4 2026Contracts to sell natural gas at USD index pricing49 MMCFD
CanadaNGLQ3 2023Contracts to sell natural gas liquids at CAD pricing952 BOED
Fixed price contracts are accounted for as normal sales and purchases for accounting purposes.