Murphy Oil Found the Oil. It Won't Say How Much.

Bubale delivered three reservoirs, a rig tender and no resource number — the refusal is now the investment case

MUR · Earnings Call · 2026-11-05

A Serial That Deliberately Stalled

For a year, Murphy Oil's quarterly call has run as a serial: a discovery, then an appraisal well, then a bigger number. On Thursday the serial stopped on purpose. The Bubale West-1X well — drilled roughly eight miles from the discovery and about 1,100 feet structurally down dip — encountered oil-bearing and water-bearing sands in the Turonian and sampled oil in the deeper Albian. Pressure data point to continuity between the two penetrations. Core analysis suggests permeability “in the hundreds of millidarcy range with some reservoir over a darcy.” And then the punchline: no new resource estimate. “I think we have quite a bit of confidence that we have, derisked through our appraisal program a volume that clears an economic development threshold. But I am not really yet ready to describe a new range of resources” — Eric Hambly, President and CEO · 2026-11-05 That is an editorial choice, not an accident. The range of uncertainty has become the disclosure. What Eric Hambly did hand over was texture: an east-to-west trending deepwater channel system, a 37° API crude, a gas-oil ratio of 1,500–2,000 cubic feet per barrel, no gas cap implied by the fluid work. The Albian is apparently better rock than expected at that depth; the Cenomanian probably worse. The Turonian Reservoir is the one they are confident can carry a project. The contrast is with themselves, two quarters ago, when the same team sized a different asset without hesitation: “200 million to 300 million barrel field in shallow water will have very attractive economics” — Eric Hambly, President and CEO · 2026-08-06. A company willing to size one field and refuse to size another is not being coy — it is telling you which one it actually understands.

Do Not Multiply

I do not want anyone to start multiplying things by 3, 4, 5. Think we ought to just do the work, make an assessment, progress through the appraisal program, give a new range.
Eric Hambly, President and CEO · 2026-11-05

The work now has a price tag and a schedule. Screening puts the minimum threshold for a standalone development at roughly 150 million barrels — “our screening numbers suggest we need a 150 million barrels roughly. To make it work.” — Eric Hambly, President and CEO · 2026-11-05 Each appraisal well runs $80–100 million, up to $110 million with a full evaluation programme. Five or six candidate locations are on the table — up-dip Cenomanian, Albian on either side of West-1X, another Turonian test between the two wells or north of West-1X. The tender process is advanced and the programme should start in the second quarter of 2027, running 18–24 months, with first oil perhaps six years from discovery. Two quarters ago the posture was different. Hambly then told the room: “we could go as low as 0 appraisal wells in Bubale next year if we chose to” — Eric Hambly, President and CEO · 2026-08-06. Flexibility was the message. Today there is a rig to be tendered and a multi-year programme to fund. That is the real change this quarter, and no new range is needed to see it.

The Bill Comes With a New Format

Which is why capital guidance is changing shape. Instead of the familiar single number, Hambly plans to split it: “We are likely to give you a range that is reasonably tight for sort of our base business. And then indicate the range of Bubale appraisal spend” — Eric Hambly, President and CEO · 2026-11-05. For a company that has spent years anchoring investors to a $1.2–1.3 billion band, that is a notable admission that one appraisal well can swing the budget. The base business is doing its part. third-quarter revenue of $928 million, up 33% year-over-year and operating income of $355 million, up 285%. Capex is running ahead of the story: $335 million in the quarter, up 57%. The Eagle Ford is the visible lever — spend rising from roughly $300 million toward $500 million in 2027, with drill-complete cost per foot down 26% year-over-year and the lowest completion cost per foot in the asset's history, below both 2016 and 2021. Longer laterals plus per-pad tailoring did that. Funding options are openly on the table, and the CEO was unusually direct about the read-across from Devon's Eagle Ford sale process: “it could be a nice place of funding if we determine the best outcome for our shareholders” — Eric Hambly, President and CEO · 2026-11-05. Farm-down, temporary debt, or an onshore asset sale — all modelled, none chosen. The balance sheet can absorb it: effective net cash of -$1.1 billion. What the balance sheet is not currently absorbing is buybacks.

That is a great question, and it is something that I think about 12x a day, Joshua.
Eric Hambly, President and CEO · 2026-11-05

The rhetoric is vivid; the tape is not. share repurchases of $1 million in Q1 and zero last quarter, against $194 million in a single quarter of 2024. The stock at 13.5x trailing earnings, versus more than 50x a quarter earlier, is optically cheap. But cash is going into the ground first.

What Is Quietly Sinking

Beneath the Côte d'Ivoire noise, the Gulf Of America franchise has slipped from a headline theme to a maintenance item — one of the largest momentum decliners in this company's keyword set this quarter. The language has changed accordingly: hold Gulf production “relatively stable,” drill maybe one hub-scale prospect in 2027, absorb workover activity into the first quarter, and keep operating costs in the $10–12 per BOE band. Chinook 8 added about 9,000 barrels a day, but weather and workovers netted the offshore segment to roughly flat quarter-on-quarter. Vietnam is where the execution proof sits. First oil at Lac Da Vang came 2 years, 11 months and 23 days after sanction — on time and on budget — with cargoes clearing more than $10 a barrel over Dated Brent. Net output should exit 2027 at 7,000–12,000 barrels a day and peak at 10,000–15,000 in 2028–29. Lac Trang North will likely be a subsea tieback with no appraisal well at all; Hai Su Vang targets sanction in the fourth quarter of 2027. Mauritania's PSC was signed this week, with a well perhaps in 2029. The equity has already run its own experiment in uncertainty. Murphy shares are up 15.2% over ninety trading days, peaked at $44.34 on October 23, and have given back 18.1% since. Two wells, three reservoirs and a five-to-six well appraisal queue is a genuinely better position than a year ago. It is also, until a number lands, an unpriced one — and the January budget, with its new two-part range, is the next place that price gets tested.