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Arkansas Co.'s Oil Well Failure Clouds 2023 Outlook
Research Report

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Murphy Oil Corp.'s Oso well was found to be "noncommercial," however, it may still be a Buy, noted as Roth MKM report.

Murphy Oil Corp. (MUR:NYSE) announced its Oso exploration well in the Gulf of Mexico was non-commercial, leading to an around US$30 million increase in 4Q 2023 exploration expense guidance, reported Roth MKM analyst Leo Mariani in a January 3 research note.

The increase will be from US$53 million to US$83 million. 

Still, Mariani maintained a Buy rating on Murphy Oil with a US$53 price target based on a 3.1x multiple of 2024 discounted after-capital free cash flow.

This target implies an over 20% upside from the current US$43 share price.

"We rate Murphy Oil a Buy on its very high free cash flow yield, growing production in 2024, flattish y/y CapEx in 2024, and increasing returns of capital to shareholders over time," wrote Mariani. However, they expect a "slight negative reaction vs. peers" to the Oso disappointment.

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Important Disclosures:

  1. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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Disclosures for Roth MKM, Murphy Oil Corp., January 3, 2024

Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Disclosures: The price target and rating history for Murphy Oil Corp. prior to February 1, 2023 reflect MKM’s published opinion prior to the acquisition of MKM Partners, LLC by Roth Capital Partners, LLC.

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate.

This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2024. Member: FINRA/SIPC.

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