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Revenue from Contracts with Customers
 12 Months Ended
Dec. 31, 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 is 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 U.S. GAAP.
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 is 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.
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 years ended December 31, 2022, 2021 and 2020 the Company recognized $4,220.1 million, $2,801.2 million and $1,751.7 million, respectively, from contracts with customers for the sales of oil, natural gas liquids and natural gas.
Years Ended December 31,
(Thousands of dollars)202220212020
Net crude oil and condensate revenue
United StatesOnshore$856,219 $626,136 $353,311 
                     
Offshore1
2,229,658 1,478,993 940,265 
Canada    Onshore131,400 119,799 93,591 
Offshore117,747 92,741 71,495 
Other22,824 4,924 1,806 
Total crude oil and condensate revenue3,357,848 2,322,593 1,460,468 
Net natural gas liquids revenue
United States Onshore64,015 50,189 22,504 
 
Offshore1
60,424 44,411 19,749 
Canada Onshore18,338 16,375 8,921 
Total natural gas liquids revenue142,777 110,975 51,174 
Net natural gas revenue
United States Onshore64,037 39,803 20,132 
Offshore1
161,160 81,944 49,300 
Canada   Onshore312,629 245,900 170,635 
Total natural gas revenue537,826 367,647 240,067 
Revenue from production4,038,451 2,801,215 1,751,709 
Sales of purchased natural gas
United States Offshore204 — — 
Canada Onshore181,485 — — 
Total sales of purchased natural gas181,689 — — 
Total revenue from sales to customers 4,220,140 2,801,215 1,751,709 
(Loss) gain on crude contracts(320,410)(525,850)202,661 
Gain on sale of assets and other income
32,932 23,916 12,971 
Total revenue and other income$3,932,662 $2,299,281 $1,967,341 
1 Includes revenue attributable to noncontrolling interest in MP GOM.
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. Purchases of natural gas are reported on a gross basis when Murphy takes control of the product and has risks and rewards of ownership. Sales of natural gas are reported when the contractual performance obligations are satisfied. This occurs at the time the product is delivered to a third party purchaser at the contractually determinable price.
Contract Balances and Asset Recognition
As of December 31, 2022 and 2021, receivables from contracts with customers, net of royalties and associated payables, on the balance sheet from continuing operations, were $201.1 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 December 31, 2022, 2021 or 2020.
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 December 31, 2022, the Company had the following sales contracts in place which are expected to generate revenue from sales to customers for a period of 12 months or more starting at the inception of the contract:
Current Long-Term Contracts Outstanding at December 31, 2022
LocationCommodityEnd DateDescriptionApproximate Volumes
U.S.Natural Gas and NGLQ1 2023Deliveries from dedicated acreage in Eagle FordAs produced
U.S.Natural Gas and NGLQ2 2023Deliveries from dedicated acreage in Eagle FordAs produced
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 BOEPD
Fixed price contracts are accounted for as normal sales and purchases for accounting purposes.