Welcome to the Murphy Oil Corporation fourth quarter 2009 earnings conference call. During today’s presentation all parties will be in a listen only mode. Following the presentation the conference will be opened for questions. (Operator Instructions) This conference is being recorded Thursday, May 7, 2009. I will now turn the call over to Dave Wood, please go ahead sir.

With me are Kevin Fitzgerald, Senior Vice President and Chief Financial Officer, John Eckart, Vice President and Controller, Mindy West, Vice President and Treasurer and Dory Stiles, Manager of Investor Relations.

Today’s call will follow our usual format, Kevin will begin by providing a review of first quarter 2009 results, David will then follow with an operational update after which questions will be taken. Please keep in mind that some of the comments made during this call will be considered forward-looking statements. As such, no assurances can be given that these events will occur or that the projections will be obtained. A variety of factors exist that may cause actual results to differ. Many of these have been identified in Murphy’s January 19, 1997 Form 8K filed with the SEC. I will now turn the call over to Kevin for his remarks.

Net income in the first quarter of ’09 was $171.1 million, or $0.89 per diluted share and this compares to net income in the first quarter of ’08 of $409 million or $2.14 per diluted share. The 2009 quarter included income from discontinued operations of almost $100 million or $0.52 per diluted share as we sold our operations in Ecuador recognizing and after tax gain of $104 million on the sale. The 2008 quarter included an almost $40 million gain or approximately $0.21 a share related to the sales of all of the Berkana Energy shares we had held in Canada. Compared to the 2008 first quarter the 2009 quarter was unfavorably impacted by significantly lower worldwide crude oil and North American natural gas sales prices. In the downstream part of the business earnings in the 2009 quarter were essentially flat with the prior year. Looking at income by segment, in the E&P segment in the first quarter of 2009 net income from continuing operations was $50.3 million and this compares to net income in the first quarter of ’08 from continuing ops of $427.2 million. Lower E&P earnings for 2009 were primarily attributable to the previously mentioned lower crude oil and natural gas sales prices down approximately 52% and 45% respectively. Higher exploration expenses in 2009 and the gain on the sales of Berkana Energy shares also contributed. Crude oil condensate and gas liquids production for the current quarter averaged approximately 139,300 barrels per day a quarterly record compared to approximately 113,300 barrels per day for the corresponding 2008 quarter. The increase was attributable to production in the Kikeh field in Malaysia partially offset by lower production in Canada and at the Schiehallion field in the UK. Natural gas volumes were 111 million cubic feet per day in the…

With a third of the year behind us the tone for the immediate term has changed little since our last call. Focus remains not so much on uncontrollable external factors but insuring we are positioned correctly to remain strategically advantaged. Overall, crude prices have improved since our last call while natural gas prices have fallen. With Murphy having a production mix heavily weighted towards crude we are better off as a result, albeit somewhat tempered by the fact that international crudes have lagged the rebounding US crudes in pricing recently. Meanwhile, the downward trending natural gas price while not advantageous for our Tupper startup program does play in to our hands as we continue to scout for opportunities to expand our North American natural gas presence on which I am bullish long term. Downstream margins at this point continue to be weighed down by the decreased worldwide consumer demand for finished products. Fundamentally in both upstream and downstream things could of course be better but certainly have been worse. I remain optimistic that the present environment will yield opportunities for us to add value to our business long term. I thought I’d take a few minutes updating you on our business units beginning with exploration and production. Operating results during the second quarter included an unsuccessful exploration well at Abalone Deep, our first prospect in the Browse Basin of Australia. The well did find gas pay as prognoses but not in quantities deemed commercial and was subsequently plugged and abandoned. Final costs exceed estimates due to cyclone evacuations during the course of drilling the well and the deepening for a secondary target. We will continue to evaluate the additional prospects on that block as well as prospects on our newly awarded Browse Basin Block WA-423-P. Elsewhere on the exploration front…

(Operator Instructions) Your first question comes from Erik Mielke – Bank of America Merrill Lynch. Erik Mielke – Bank of America Merrill Lynch: My first question relates to Malaysia where you have some old blocks, exploration blocks, Block L and Block M that you haven’t been able to drill for several years because of the border dispute between Malaysia and Brunei. There was reports in March that that dispute had been resolved and had moved to technical committee. Can you give us an update on where you are with that and what time line you see and what you expect to get out from that whole negotiation process.

I don’t regard them as old blocks, I think they’re current blocks in our inventory. What has been said in the press is that there has been a resolution between the two countries, I think that has been reported several times and in several different ways. We’re hopeful that that will resolve to a point where we can get back to work. I don’t have a time line for that. We like the acreage, we’ve clearly been a very active explorer offshore [Sabah] and are looking forward to getting back to work. Erik Mielke – Bank of America Merrill Lynch: But nothing specific in terms of time line, whether this is a 2009 event or more 2011, 2012?

I don’t have a time line better than what I said Erik. Erik Mielke – Bank of America Merrill Lynch: Staying with the region, you mentioned that you are about to spud a well in Malaysia. Can you give us a bit more detail on what you are targeting and potential timing on announcement?

Yes, the well is called [Seacap] North. Back in 2004 we drilled a well, this is outboard of Kikeh so it’s in the southern part of the old Block K and we found some oil but we didn’t find as much pay as Kikeh. We have targeted an up dip fault component to that feature with this well that we’re going to drill and it offsets on the same structural trend a discovery that was announced not too long ago by the parties in the adjoining block. So, we’re going to spud that well here within the next couple of weeks or so and it’s about a 30 day well so that’s the time line.

Your next question comes from Mark Gilman – The Benchmark Company. Mark Gilman – The Benchmark Company: On the Eagle Ford transaction, what did the acreage cost you?

You know Mark, we’re still actively leasing so I hate to hamper our guys’ effort there. We’re targeting really focus area on two counties although we’ve got acreage in other places La Salle and McMullen and we’ve been doing it for a while here but I’m a little loath to say what the acreage costs are because it’s still active work. Mark Gilman – The Benchmark Company: When do you plan to drill?

We have a location set now but I doubt that we’ll start drilling before the fourth quarter. I’d like to drill multiple wells so we can get a sense of the acreage. As you know most of those types of plays have variability to them and so we see what other people are doing, they are near where we are or we’re near where they are but we’re going to have to drill our own acreage. So, we’re going to put together our own appraisal program including coring, etc. and kick that off in the fourth quarter. Mark Gilman – The Benchmark Company: With respect to one of the prior questions, you didn’t say whether you dispute whether there has been a resolution on Blocks L and M, do you?

It’s been in the press and both leaders of both countries have said quite unequivocally that they have reached a resolution. I would not dare to go against leaders of two countries. Mark Gilman – The Benchmark Company: But David, it’s been in the press umpteen times over the past there years and has amounted to very little.

I stand by what’s been said publically, I think it’s the right story. Mark Gilman – The Benchmark Company: Just one other one for me, the two prospects on the MPS block on the Congo. Can you discuss in general terms what the differences are either in process or type of prospect versus the wells that have been drilled on the block previously?

Mark, that’s a good question, we drilled a discovery with the first well and followed it up with functionally four dry holes, I think one of them was purely dry and the other ones had small amounts of hydrocarbon. When you do that you always have to question what your assessment was which we did. We came back in and shot some [CSM] data to help be independent from what our previous analysis had been and it showed up anomalies calibrated to the discovery in the dry holes of course that were positive on some of these other prospects. The prospects that we’ve got short changed here to drill have those types of anomalies. In addition to that, we took a real close look at some of the fault movement timing because we think that’s one of the critical issues and we think we have a much better sense of the risk associated with drilling prospects. Now, going back to our original though process after making the Azurite discovery, we thought that the number one thing that we would have to derisk was volume. That was why we stayed around Azurite. These prospects were recognized before and were high graded before but were not chosen to drill because they were further away from Azurite. This go around I think the number one prospect to drill is called WW, it will get a name different than that but it looks very akin to Azurite. It’s off to the North and has a lot of the same timing attributes and it has one of the [CSM] anomalies on it so we’re anxious to test that. That’s the whole thought process. Mark Gilman – The Benchmark Company: Prospect size, at all?

Yes, they’re in the 150 kind of million barrel recoverable sort of range. It all depends on how much column you put in those prospects Mark as to how much pay you get in but that’s kind of our working number. Mark Gilman – The Benchmark Company: David, is it a channel sand type prospect?

Yes, they’re all channels, you can see the channels very, very clearly on the 3D which is very good quality and so reservoir isn’t an issue. The issue is charge and charge retention so that’s what we’ve really been focused on. But, these channels you can map very, very well. Mark Gilman – The Benchmark Company: Just one final one on it, I’m told that [CSM], channel sand environments tend to have a bit of spotty reliability?

You know, we could probably take the rest of the call and kind of talk about that but functionally it’s to do with if you shot a [CSM] line across the width of a channel you might not see it as well because it just doesn’t not have that big of a propagation land. If you shot it down the length of the channel where you have a much longer propagation land, the anomalies in our experiments tend to show much, much better. So, that orientation helps you a lot.

Your next question comes from Paul Cheng – Barclays Capital. Paul Cheng – Barclays Capital: David, I know that you don’t want to comment too much about Malaysia but I just wanted to ask it in another way, have you guys been contacted by the Malaysian government to confirm that they have a resolution with Brunei or that your comment or sense is based on what you read from the newspaper and the other magazines?

You know Paul, you are absolutely right I’m loathed to drawn on this issue because it is not resolved. But, I will say that we are actively engaged with Petronas with who we have a PSC. Paul Cheng – Barclays Capital: I guess my question is have you been told by someone official from either the Malaysia government or Petronas that yes, the border dispute has been resolved or no one has actually officially contacted you? I guess that’s my question.

I’d go back to my comment, we’re actively working with Petronas on this issue. Paul Cheng – Barclays Capital: An easier subject, on Kikeh, have you guys already fully recovered the capital cost or that still has some to go yet? If you do have some to go home much money left on there?

Paul, we’re very close and it’s really tied to oil price. We should be fully cost recovered here in the second quarter. If we could predict oil prices we’d have a much better idea but it’s going to be in the second quarter. Paul Cheng – Barclays Capital: So that means in the third quarter, no later than the third quarter we will start moving in to the 50/50 split, right?

The way it works is when we reach payout there is we go from about 70% net entitlement to about 60% net entitlement. I say about because it’s tied to oil prices, etc. So, when I said earlier that we were getting about 74,000 barrels a day net of current levels, that will go down to just over 60,000 barrels a day net. Paul Cheng – Barclays Capital: And you expect that sometime in the second quarter or the third quarter to happen?

The second quarter I think. Paul Cheng – Barclays Capital: With that in mind Dave, I know that you have the Thunder Hawk in the Congo is coming on stream. Your previous production target I think at one point was 180 for 2009 and [inaudible] so that will be about 175, first half it will be somewhere in the 150 based on your second quarter guidance. That would suggest that to meet that you need about 200 in the second half so will we actually be able to get there or does it become somewhat vulnerable here?

Paul, you’re wonderful at doing that math and you’re exactly right. We should exit the year north of 200, 210 type number, a little bit better than that. Paul Cheng – Barclays Capital: So you actually still think that is doable?

Yes. Paul Cheng – Barclays Capital: I can see in Congo and Thunder Hawk those two, Thunder Hawk you probably have about 15, in Congo you probably have about 20, 25 so that gives you about in the 40s. In the first quarter you are about 160 so I assume that your Kikeh is going to be down maybe 10 due to the [inaudible] so is that remaining difference is your sensory that Malaysian gas will be kicking in?

I think the average for the last quarter for Malaysian gas about 180 million a day number and so yes, it ramps up pretty quick and its going to get up there. Paul Cheng – Barclays Capital: I know that you guys have been from time-to-time to look at the M&A opportunity and the credit market I think right now you’re sort of open but don’t know whether you’ll discontinue. So, from a strategic standpoint Dave does it make sense even though you don’t need the money today for you to go out and maybe raise $200 or $300 million of debt put it in to your balance sheet even though you have to pay interest upfront but just in case something comes up then you don’t have to worry about whether the credit market is opened or not?

We have a lot of capacity under our revolver. Our revolver is about at $2 billion facility that we still have a couple of years on and we only have about $300 to $350 million borrowed under it at this point so we have for any smaller amounts we have full use under that revolver so we really don’t need to go out in to the market and do that. Even though, we do watch it and we look at it and we contemplate what we have coming forward, but we haven’t seen a reason to do that just yet. Paul Cheng – Barclays Capital: Just one final question, in your earnings guidance for second quarter you’re talking about $0.40 to $0.60 per share. I think built in there is an [inaudible] earning about $30 or $35 million. In the first quarter you earned about $11 million and based on what Dave you have described the market condition in the second quarter it does not seem that you are very optimistic margin will improve a lot from the first quarter or at least so far. So, I think I’m a little bit at a loss that why the earnings then will be much higher in the second quarter for the [R&M] than the first quarter?

Paul, I think a lot of it is based on the US retail in that the first quarter is historically low and we’ve always seen improvement in the second quarter as you get in to the driving season and all. Now, the economy is different now so that will have to wait to be seen but a lot of that is driven by expected improvement US retail. Paul Cheng – Barclays Capital: Kevin, have you seen that improvement already or is this assuming the remaining two months are going to see a substantial improvement?

We’ve seen a little bit. But, it’s bouncing around.

Your next question comes from Paul Sankey – Deutsche Bank Securities. Paul Sankey – Deutsche Bank Securities: You said a little less about costs than some of your other reporting company competition had with this quarterly results so I wondered if you could just make any observations that you have about how those may have benefitted you over this quarter and how they may benefit you going forward?

The costs we’ve seen kind of in the last nine months have come down in the order of anywhere, depending on what you’re talking about from zero if you’ve got things still under long term contract to anything between 15% and 35% on service costs. In some cases it depends on the geography. Where there are a lot of choices people are being a lot more aggressive to keep business and where there’s a lot less choice there’s obviously less. But, I would say for new types of business that we’re looking to do the Eagle Ford being one, if I look at rig prices today for that play versus what it was nine months ago they’re 40% plus down. So, I think the industry is moving that way and I think costs are going to help us, they’re going to help everybody and I still think there’s a little way to go.

Your next question comes from Gene Gillespie – Gillespie Consulting Group. Gene Gillespie – Gillespie Consulting Group: This is for Mindy I guess, everything else that I had has been answered but, now with a payout at Kikeh or cost recovery at Kikeh, supplemental taxes is going to become a little bit more of an issue and I was wondering if you could provide the current base price for the calculation?

You’re talking about Gene for whenever we move to cost recovery, is that correct? Gene Gillespie – Gillespie Consulting Group: Yes, there’s a base price in the mid 30s or whatever and it escalates at I believe 4% a year.

I just wanted to make sure I was clear on what you were asking. It’s $37 in that neighborhood for 2009.

Your next question comes from Mark Caruso – Millennium Partners. Mark Caruso – Millennium Partners: I just had two quick questions, one was circling back on your comments about still interested in expanding North American natural gas and I was curious if you could sort of expand on that more given the prices we’re seeing, are there more opportunities in the Montney or are you seeing more opportunities here in the lower 48 that are intriguing and then I have a follow up?

I think long term and this is a long term business that goes through many cycles. Right now I’m very happy to be 80% oil in terms of production and 20% gas. But, I think there are opportunities to get in to high quality gas on shore the US and we did that up in British Columbia in our Tupper properties which are for the Montney plays. For me high quality plays are ones where you have really no surface issues to speak of that don’t impact what you do and that you can bring gas to the market at $4 or less all in. Because, I think longer term gas prices are likely to move up and down and it’s just a margin game. If you can get your base as low as possible you’re going to be able to have advantage going forward. But, it’s a very long term game. I said before what I would like to have is basically three Tupper positions. We have one, I think we have the potential for one here in South Texas with the Eagle Ford play and I’d like another. If I can get positioned that way I think this company, our company would be in great shape to take advantage for natural gas going forward. There has been a lot said about dependence on foreign oil as though that’s a bad thing but in terms of gas the North American gas supply is wonderful and it has the ability to grow and satisfy incremental energy demands. I just want us to be positioned in that game. Mark Caruso – Millennium Partners: Do you see that the bid/ask is narrowing now or given where we are with the commodity prices or is there a little bit more life as borrowing bases have been redetermined here recently?

It’s a picture that has many moving parts and a lot of the people that are playing it have hedges in which allow them some flexibility that’s independent of where prices are currently. So, I still thing that the bid/ask spread is wide. What we’ve been doing in the Eagle Ford is actually going and buying the leases. So, that’s a different approach, we’ve not been buying companies to get the acreage position. So, I’m very happy with the entry costs, I’m very happy with the quality of the play below ground and I’m comfortable that above ground that I don’t think we’ll see any untoward issues. Buying things is fine, I have no issue. Our business development group is very good at drumming up opportunities but as I said earlier in my comments, I think you’ve got to have things that work at $4 or less or you’re just going to be disadvantaged. So, I’m open to any mechanism that lets us get to that point. Mark Caruso – Millennium Partners: One follow up Eagle Ford question, I know you’re hesitant to give too much info and it sounds like the drilling program is more backend loaded but can you give us a sense of where you are in relation to some of your peers who have already announced their acreage positions?

We’re right in the heart of the plays is the way I’d look at it and I’d qualify that by saying that we haven’t drilled any wells yet but other people have and so we’re in that game. So, we’re in McMullen and La Salle counties primarily and we’ve got some acreage spread across there, we’ve got over 100,000 acres net and we’re growing. So, I think we’re in the play.

Your next question comes from Mark Gilman – The Benchmark Company. Mark Gilman – The Benchmark Company: David, you mentioned in the release that you’ll be drilling an eastern Gulf prospect later on in the year. Could you provide a little color?

Yes, what we’ll probably do is drill one around Dalmatian which is a discovery we made relatively recently. It’s a block of acreage we have, it contains several blocks, I think seven that are continuous and we see similar types of prospects on that acreage. While we’re in discussions amongst ourselves and with our partners to decide how to develop it, the thought is to drill at least one of those incremental prospects, help prove up side, therefore deliverability, etc. That’s likely where it’s going to be. Mark Gilman – The Benchmark Company: Just if I could, the release mentions non-commercial wells in Block P and in the US in the first quarter. Can you be specific as to what they were?

[Rempar] was the well that was in Malaysia Mark. The second well was the on shore South Louisiana well.

The [Rempar] prospect they found 100 bcf plus with a little bit of oil so it’s not something that’s stand alone and so that was the reason we wrote that off. In South Louisiana we were looking to offset a field that’s currently producing for us basically in an untested area and that just didn’t work. So, those were the two wells.

Your next question comes from Gene Gillespie – Gillespie Consulting Group. Gene Gillespie – Gillespie Consulting Group: In the dry hole expense I believe there’s a $35 million for Samurai, is that correct?

Yes, that’s correct. Gene Gillespie – Gillespie Consulting Group: So you’re pushing some of that total cost in to the third quarter?

That $35 million just reflects the second quarter piece Gene if that well were to be unsuccessful. Gene Gillespie – Gillespie Consulting Group: Can you tell me how much you’re pushing in to the third quarter?

I don’t have that off hand Gene but I can get that for you.

Gene the dry hole cost on that was about $140 million. Gene Gillespie – Gillespie Consulting Group: Gross?

Yes. But, I have to say the drilling operation is going very well. We’re very pleased with our operators.

I’m showing no further questions at this time. I’ll turn it back to management for any closing remarks.

I really appreciate everybody calling in and I look forward to talking to you for our next call.

Ladies and gentlemen this concludes the Murphy Oil Corporation first quarter 2009 earnings release conference call. If you’d like to listen to a replay of today’s conference please dial 1-800-405-2236 with access code 11130213. ACT would like to thank you for your participation. You may now disconnect.