Property, Plant and Equipment

3 Months Ended

Mar. 31, 2025

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Note D – Property, Plant and Equipment

Exploratory Wells

Under FASB guidance, exploratory well costs should continue to be capitalized when the well has found a sufficient quantity of reserves to justify its completion as a producing well and the Company is making sufficient progress assessing the reserves and the economic and operating viability of the project.

As of March 31, 2025, the Company had total capitalized drilling costs pending the determination of proved reserves of $96.8 million. The following table reflects the net changes in capitalized exploratory well costs during the three-month periods ended March 31, 2025 and 2024.

(Thousands of dollars)	2025		2024
Beginning balance at January 1	$	72,055	$	49,118
Additions pending the determination of proved reserves	24,790		11,538
Capitalized exploratory well costs charged to expense	—		(26,471)
Balance at March 31	$	96,845	$	34,185

Capital additions of $24.8 million, for the quarter ended March 31, 2025, are mainly for the Hai Su Vang-1X (Golden Sea Lion), Block 15/2-17 and Lac Da Hong-1X (Pink Camel), Block 15-1/05 exploration wells in Vietnam and long-lead equipment for the Cello #1 and Banjo #1 exploration wells (Mississippi Canyon 385) in the Gulf of America. The Lac Da Hong-1X (Pink Camel) exploration well in Vietnam encountered 106 feet of net oil pay from one reservoir. There were no capitalized well costs charged to dry hole expense for the three months ended

March 31, 2025. Capitalized well costs charged to dry hole expense of $26.5 million for the three months ended March 31, 2024 were related to the Hoffe Park #1 (Mississippi Canyon 166) exploration well in the Gulf of America. The preceding table excludes well costs of $0.2 million and $5.9 million incurred and expensed directly to dry hole for the three months ended March 31, 2025 and 2024, respectively. In 2025, the amount primarily relates to the finalization of previous dry hole wells, and in 2024, the amount primarily relates to the non-operated Oso #1 (Atwater Valley 138) exploration well in the Gulf of America.

The following table provides an aging of capitalized exploration well costs based on the date the drilling was completed for each individual well.

	March 31,
	2025			2024
(Thousands of dollars)	Amount		No. of Wells	Amount		No. of Wells
Aging of capitalized well costs:
Zero to one year	$	9,421	2	$	11,641	4
One to two years	65,160		3	—		—
Two to three years	—		—	—		—
Three years or more	22,264		3	22,544		3
	$	96,845	8	$	34,185	7

Of the $87.4 million of exploration well costs capitalized more than one year at March 31, 2025, $59.0 million was in Vietnam, $21.2 million was in the Gulf of America, $4.4 million was in Canada, and $2.7 million was in Brunei. In all geographical areas, either further appraisal or development drilling is planned and/or development studies/plans are in various stages of completion.

Property Additions

During the first quarter of 2025, Murphy purchased a floating production storage and offloading vessel (FPSO) from BW Offshore (UK) Limited for a gross purchase price of $125.0 million, subject to customary closing adjustments. This acquisition includes an initial $100.0 million payment in the first quarter of 2025. The remaining balance will be due when certain contractual obligations are met, which is expected by the end of the second quarter of 2025. The FPSO will remain at its current location, supporting operations at the Cascade field (Walker Ridge 206 and 250) and Chinook field (Walker Ridge 469 and 425) in the Gulf of America. BW Offshore (UK) Limited will continue to provide operations and maintenance services under a new five-year contract.

Impairments

There were no impairments in the three months ended March 31, 2025. There were pretax impairments of $34.5 million in the three months ended March 31, 2024 related to the Calliope field in Mississippi Canyon in the Gulf of America, in which operational issues led to a reserve reduction.