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Revenue from Contracts with Customers
 12 Months Ended
Dec. 31, 2024
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 NGLs (collectively referred to as oil and natural gas) in select basins around the world. 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, natural gas and NGLs.
For operated oil and natural gas production where a 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 GAAP.
U.S. - In the U.S., the Company primarily produces oil and natural gas from fields in the Eagle Ford Shale area of South Texas and in the Gulf of America. 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. 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.
The Company’s revenues and other income for each of the three years presented were as follows.
Years Ended December 31,
(Thousands of dollars)202420232022
Net crude oil and condensate revenue
United States - Onshore
$586,584 $676,139 $856,219 
United States - Offshore 1
1,777,723 2,072,353 2,229,658 
Canada - Onshore70,855 78,088 131,400 
Canada - Offshore193,961 78,650 117,747 
Other6,537 11,022 22,824 
Total crude oil and condensate revenue2,635,660 2,916,252 3,357,848 
Net natural gas liquids revenue
United States - Onshore32,853 33,178 64,015 
United States - Offshore 1
38,858 47,434 60,424 
Canada - Onshore7,454 8,914 18,338 
Total natural gas liquids revenue79,165 89,526 142,777 
Net natural gas revenue
United States - Onshore17,443 21,346 64,037 
United States - Offshore 1
50,329 71,332 161,160 
Canada - Onshore232,259 278,183 312,629 
Total natural gas revenue300,031 370,861 537,826 
Revenue from production3,014,856 3,376,639 4,038,451 
Sales of purchased natural gas 2
United States - Offshore
— — 204 
Canada - Onshore
3,742 72,215 181,485 
Total sales of purchased natural gas3,742 72,215 181,689 
Total revenue from sales to customers 3,018,598 3,448,854 4,220,140 
(Loss) on derivative instruments(1,707)— (320,410)
Gain on sale of assets and other operating income11,583 11,293 32,932 
Total revenues and other income
$3,028,474 $3,460,147 $3,932,662 
1 Includes revenue attributable to noncontrolling interest in MP GOM.
2 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, 2024 and 2023, receivables from contracts with customers, net of royalties and associated payables, on the balance sheet from continuing operations, were $178.3 million and $193.7 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, 2024, 2023 or 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 December 31, 2024, the Company had the following sales contracts in place which are expected to generate revenue from sales to customers for a period over 12 months starting at the inception of the contract:
Long-Term Contracts Outstanding at December 31, 2024
LocationCommodityEnd DateDescriptionApproximate Volumes
U.S.Natural Gas and NGLsQ2 2030Deliveries from dedicated acreage in Eagle FordAs produced
CanadaNatural GasQ4 2025Contracts to sell natural gas at USD index pricing25 MMCFD
CanadaNatural GasQ4 2026Contracts to sell natural gas at USD index pricing49 MMCFD
CanadaNatural GasQ4 2027Contracts to sell natural gas at USD index pricing30 MMCFD
CanadaNatural GasQ4 2028Contracts to sell natural gas at USD index pricing10 MMCFD
CanadaNatural GasQ4 2025Contracts to sell natural gas at CAD fixed pricing40 MMCFD
CanadaNatural GasQ4 2026Contracts to sell natural gas at CAD fixed pricing50 MMCFD
CanadaNGLsQ2 2025Contracts to sell NGLs at CAD index pricingAs produced
The fixed price contracts above are accounted for as normal sales and purchases for accounting purposes.