Murphy Oil Announces Preliminary Quarterly Earnings

November 4, 2009

EL DORADO, Arkansas, November 4, 2009 – Murphy Oil Corporation (NYSE: MUR) announced today that net income in the third quarter of 2009 was $188.9 million, $0.98 per diluted share, compared to net income of $584.4 million, $3.04 per diluted share, in the third quarter of 2008. The Company’s income decreased in 2009 compared to 2008 due to significantly lower sales prices for oil and natural gas produced in the exploration and production operations and lower earnings from the refining and marketing operations.
For the first nine months of 2009, net income totaled $518.8 million, $2.70 per diluted share, compared to $1.61 billion, $8.39 per diluted share, for the same period in 2008. The first nine months of 2009 included income from discontinued operations of $97.8 million, $0.51 per diluted share, which arose primarily from a gain on sale of the Company’s operations in Ecuador in March 2009. The 2008 period included after-tax gains on sale of Canadian assets totaling $108.3 million, $0.57 per diluted share, which is included in continuing operations.

Third Quarter 2009 vs. Third Quarter 2008
Exploration and Production (E&P)
Reviewing quarterly results by type of business, the Company’s income contribution from E&P continuing operations was $184.1 million in the third quarter of 2009 compared to $530.5 million in the same quarter of 2008. The reduced earnings in 2009 compared to 2008 were primarily based on lower oil and natural gas sales prices and higher expenses for production operations and depreciation. Total crude oil and gas liquids production from continuing operations was 131,637 barrels per day in the third quarter 2009 compared to 111,751 barrels per day in the 2008 quarter, with the 18% increase primarily attributable to a combination of higher production at the Kikeh field, offshore Sabah, Malaysia, and new production at two fields that started up during the third quarter 2009 – the Thunder Hawk field in the Gulf of Mexico and the Azurite field offshore the Republic of the Congo. In the 2008 quarter, U.S. crude oil and natural gas production was adversely affected for fields shut-in by hurricanes Gustav and Ike. Lower 2009 oil production offshore Eastern Canada was attributable to normal decline and a higher royalty rate at the Hibernia field and downtime for scheduled maintenance at the Terra Nova field. Crude oil sales volumes from continuing operations averaged 128,187 barrels per day in the third quarter of 2009 compared to 111,338 barrels per day in the 2008 period. The Company’s worldwide crude oil, condensate and natural gas liquids sales prices from continuing operations averaged $61.13 per barrel for the 2009 third quarter compared to $112.55 per barrel in the same quarter of 2008. Natural gas sales volumes were 182 million cubic feet per day in the third quarter 2009 compared to 46 million cubic feet per day in the third quarter of 2008, with the nearly 300% increase primarily due to higher production at the Tupper area in Western Canada and at the Kikeh field, offshore Sabah Malaysia. North American natural gas volumes were sold at an average of $3.01 per thousand cubic feet (MCF) during the 2009 third quarter compared to $11.51 per MCF during the 2008 quarter. Exploration expenses were $37.9 million in the 2009 quarter compared to $83.4 million in the same period of 2008, with the decrease primarily attributable to lower dry hole costs, mostly in the Gulf of Mexico and offshore Malaysia, and lower undeveloped lease amortization expense for the Tupper properties.

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