Good afternoon, ladies and gentlemen, and welcome to the Murphy Oil Corporation Third Quarter 2012 Earnings Conference Call. Today's call is being recorded. I would now like to turn the conference over to Mr. Steven Cosse, President and Chief Executive Officer. Please go ahead.

Good afternoon, everyone, and thanks for joining us on our call today. With me are Roger Jenkins, our Executive Vice President and Chief Operating officer; Kevin Fitzgerald, our Executive VP and Chief Financial Officer; John Eckart, our Senior VP and Controller; Mindy West, our Vice President and Treasurer; Barry Jeffery, Director of Investor Relations; and Tammy Taylor, Assistant Manager of Investor Relations. Barry you've got the customary cautionary statement?

Thanks, Steve. And welcome, everyone. Today's call will follow our usual format. Kevin will begin by providing a review of third quarter 2012 results. Steve and Roger 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 defined in the Private Securities Litigation Reform Act of 1995. As such, no assurances can be given that these events will occur or that the projections will be attained. A variety of factors exist that may cause actual results to differ. For further discussion of risk factors, see Murphy's 2011 annual report on Form 10-K filed with the SEC. Murphy takes no duty to publicly update or revise any forward-looking statements. I'll now turn the call over to Kevin.

Thanks, Barry. Our net income for the third quarter of 2012 was $226.7 million or $1.16 per diluted share. This compares to net income in the third quarter of last year of $406.1 million or $2.09 per diluted share. For the 9 months period of 2012, we had net income of $812.2 million or $4.17 per diluted share compared to net income for the first 9 months of 2011 of $986.6 million, $5.07 per diluted share. During the third quarter of this year, Murphy's board agreed to sell our U.K. upstream operations and as you know our U.S. refining operations were sold near the end of the third quarter of 2011. Accordingly, all of these have been reported as discontinued operations in the respective periods. Excluding these results, income from continuing operations totaled $228.9 million or $1.17 per diluted share in the third quarter of 2012 compared to $347.3 million or $1.79 per diluted share in the third quarter of last year. For the 9 months period ending September 30, income from continuing operations totaled $801.7 million or $4.12 per diluted share in 2012 and $847.4 million or $4.36 per diluted share for 2011. Looking at net income from continuing operations by segment. In the E&P segment, net income from continuing ops in the third quarter of 2012 was $221.1 million compared to net income in the third quarter of 2011 of $273.4 million. The lower earnings for 2012 quarter were primarily due to lower North American natural gas prices, higher DD&A expenses and lower income tax benefits, partially offset by the effects of higher crude oil sales volumes. Crude oil and liquids prices averaged $96.09 a barrel in third quarter of 2012 versus $95.95 last year. North American natural gas prices averaged $2.61 per MCF this year compared to…

Thanks, Kevin. WTI averaged $92.20 in the third quarter. Dated Brent, which as you know is the marker for the majority of our crude oil production continue to outpace WTI averaging $109.60 for the quarter with the spread recently going beyond $20 a barrel. Crude price has fallen off a bit recently on economic concerns, but they still remain within our budgeted levels for 2012. Our natural gas prices in North America showed some improvement with Henry Hub averaging $2.89 in the third quarter and more recently rising into the $3.50-plus range due to a warm summer and strong demand for power generation with some impact of switching from coal to natural gas. U.S. retail margins were challenged in a rising wholesale market during much of the third quarter. We have recently shown significant improvement. We did see strong refining margins at Milford Haven, which was a contributing factor to overall downstreaming results. As you know, we recently announced our decision to proceed with the spinoff of the U.S. Downstream business subject to confirmation of its tax-free status and other regulatory approvals. We expect the spin process will be concluded in 2013 and a new company would include all of retail, U.S. retail outlets, currently 1,154 stations, 2 ethanol plants and 7 product distribution terminals. The U.K. Downstream business will remain with Murphy Oil Corp. until the sales process for those assets is complete. Roger Jenkins is going to give us now an update on the E&P business.

Good afternoon, everyone. First off, on exploration. In Malaysia, we drilled the Block H of Bemban well and made another nice gas discovery, our sixth in a row in this play and counting 262 feet of pay. Bemban has a resource level of 100 BCF and we continue to work with our partner Petronas toward a 2013 sanction of a floating LNG project for Block H Malaysia. In our shallow water Sarawak gas filled go lot, we successfully delineated a deep objective. This successful well would allow us to add 60 to 100 BCF of resource to this long-term asset. We drilled our final commitment well in Block P offshore Sabah, Malaysia. The well did find oil and gas but the volumes were not commercial. In the Gulf of Mexico, we have an oil discovery on a DC 134 Dalmatian South well and counted 50 feet of oil pay in the original hole and 86 feet of oil pay in the planned side track. We're currently performing studies as to the proper development options for Dalmatian South. The Miocene oil amplitude play is a focus area for Murphy in the Gulf with high returns. Over to Congo, we're currently drilling the Opale Marine #1 well in the MPN Block offshore the Republic of Congo. The well should finish in December with the total projected cost of $65 million. The target zone is the Sendji carbonate which, is a pre-drill estimate of 260 million barrels. In Iraq. We have completed drilling and testing and we're now the #1 exploration well in our Central Dohuk Block in the Kurdistan region. While the log show numerous pay-in rules, we failed to produce hydrocarbon in the testing program and plugged and abandoned the well. We did encounter evidence of heavy oil that had very…

The U.S. downstream business is operating well in a tough market of rising wholesale gasoline prices. Overall, in U.S. Downstream third quarter net income was $17.3 million. We added 12 new stations to U.S. retail chain in the quarter. And today, our total station count is 1,154. We plan to end the year at 1,165. And we'll have 10 stations as sort of flop over into 2013. The U.K. Downstream business provided a positive contribution for the quarter and for the first 9 months and in an environment of strong refining margins, and the U.K. retail business continuing its steady performance. Now looking to 2013, while we're still in the middle of our budgeting process, our budget gets approved in the December board meeting. I see us maintaining our production target for 2013 of 200,000 BOEs per day, but we'll have more details on that at the fourth quarter call in January. In summary, we drilled 2 successful wells, 1 in Block H Malaysia and the Dalmatian South well in the Gulf of Mexico. Our exploration program continues in the fourth quarter with the well offshore Congo and one offshore Australia. Development work is moving forward on our offshore Malaysian projects, and the Eagle Ford Shale continues to show predictable production increases. We added acreage positions in 2 exploration focus areas, Australia and Vietnam. And as part of the continued review of our portfolio, we decided to sell our U.K. upstream assets. We'll continue the sales process for our U.K. Downstream business and lastly, we're continuing to execute on our plan to spin off our U.S. downstream business. And with that, we'll open up to questions.

[Operator Instructions] Our first question will come from Blake Fernandez with Howard Weil.

Question for you on the U.K. retail -- the sale, I'm sorry, the upstream sale. Obviously, this wasn't part of the conversation when you recently came out suggesting you were hiring bankers to evaluate Syncrude and Montney. Should we take from this maybe an increased appetite to maybe move ahead with some upstream sales?

I don't think so, Blake. The sale of the U.K. has been underway for a long time, we just weren't able to disclose it until now.

Okay. On the buyback front, I know we have a $1 billion authorization. Can you say whether that program has begun yet?

Well, obviously work on it has begun, but we're constrained from executing stock purchases in the blackout period on up to earnings announcements, so we haven't completely done anything yet.

Right. Okay, that's true. The last one I have for you is on the retail. Steve, I know in the past you were evaluating some of the performance. It seems like you were addressing that. I'm just curious, this quarter's performance obviously we had weaker benchmarks across the board, but I'm just curious, is there any underlying improvement that you've seen whether it be market share gain or anything like that?

Yes. Yes, we have. Let me say, we've had, I think, I mentioned in the last call, that we had teamed up with a leading consulting firm to help us understand some of the underperformance issues. And when we got their recommendation, started implementing them in August. But as I noted earlier, it's pretty tough wholesale gasoline market. We started seeing the results though with some of the steps we took towards the end of September and I have to say now looking at it currently, we're showing real significant increases, but we're pretty buoyed, pretty happy about it.

We'll take our next question from Leo Mariani with RBC.

Just a question on Seal. Just looking at the numbers. It looks like the production's kind of been down like for 3 quarters in a row there. I mean, has there been any kind of maintenance there or anything? And when will we expect to see some growth. I know you guys are kind of running through rigs out there?

Yes, we've got real behind, Leo, this is Roger, we got real behind on our rigs due to our extended breakup period there and really hit our stride. We've increased production just this month about 600 barrels a day net just in the month of October. There was a shut-in of a Fenwest facility, a gas handling facility that drove us into a shutdown back to upstream to us. So that's way we didn't have an increase this quarter with some planned shut in there. But we see a pretty good build this quarter there of probably 1,000 barrels a day and like I said well on our way through this month of having that.

Okay. And where do you think Seal can sort of go to as we get into 2013?

Well we see next -- Barry, do you have the numbers for Seal, next year? I would say in the mid-7,500 at this time. We have a lot of these projects going on with the vertical steam drives and cyclic steam that could really help increase production down the line. We see a long-term business there hopefully in 20,000 range are going to stay with it, way out in the long-range plan. But I would say next year, just some noble small gain there as we build up these new pilot areas. But over long haul, this is a focus area for us for sure, Leo.

Got you. Okay. Question here with retail. Obviously, margin down pretty significantly here in the third quarter. I'm trying to get a sense of where those margins have sort of gone here in October.

They have widened, they really have. Let me just leave it at that.

Okay, widened as in have improved considerably for you guys?

Yes.

Okay. Got you. And can you just give more color around Vietnam? Talk about how you thought it was underexploited area kind of like when you got into Malaysia, can you give us any details on sort of size of potential targets out there you identified, targets you might drill? And when would we expect to see a well possibly gets spud out there, is there a seismic? Just any kind of more color you have around your recent Vietnam deal will be helpful.

Sure, Leo. One clarification. Seal for next year, we have probably in the 8,000 range. I misspoke at 7. Of course, Vietnam, very under-explored area, very large acreage position. If you look back to Malaysia, we went into that area with a shallow water and deepwater focus, meaning we would have the lower risk shallow water blocks accompanied by the deepwater riskier blocks. In the deepwater there, we see a lot of 2D seismic and very large structures, very large stratigraphic trap features, but a long way to go to get to 3D-ready status, but very, very large blocks probably same acreage we had in Malaysia. We, of course, want to have other awards there. We find that going a little bit slow and getting to final PSC signature there, quite frankly. But continuing to progress both at shallow water and a deepwater focus. In the shallow water blocks, there is previous discoveries that are there, similar to what was in Malaysia before where you can delineate off of those and add in smaller oil accumulations in cluster environment. So all in all, we see it to be a mirror image of that, but greatly under-explored now with a big upside as to 3D and to structures down the road. I would say probably late '14, '15 sort of drilling time there.

Got you. Okay. Just jumping over to Congo I guess it's an area where you haven't sold any oil for the past couple of quarters. When would we expect that to start to get back up and moving?

We do not have a low level of production there. Of course, that's been a very troubled asset for us. We're making about 4,000 net barrels a day with a bigger ship and we won't have a sale there till early '13, because we have other parties, there partners and government who take their share along the way of a pretty poor performing asset.

Got you. Okay, and you also discussed a bolt-on acquisition that you are working on here. You're done by the end of the year. Is that like a U.S. asset? Could you give us just the city, color on sort of approximate where that might be?

It's North America. We're always constantly looking at our North American positions there. Not a gas one but in oil, and I'm just not at liberty to talk about it today.

And we'll hear next question from Evan Calio with Morgan Stanley.

My first question is on Kikeh. I know you gave the number of wells that you plan to bring online in 4Q, yet are there any wells still to be brought online in 2013. And can you give just a year-end exit rate?

We don't really go into exit rate. Our December rate there is -- our gross number would be a little in the mid, I believe it's the mid-70s right now, and we're ahead of that today. As far as wells this quarter, we have 4 already flowing with what I mentioned of the 5. And next year, we'll have an ongoing program there on our platform rig, but our floating rig is -- will be off at sea cap north, another project we have nearby, so we're probably over next year. What we have at Kikeh is an ongoing business there of replacing wells that have its older completion, which we have very few of those left. So we have wells where we're accelerating, where reservoirs have flown long -- have flowed longer than they originally planned. And finishing up our original field development plan work. So among workovers, recompletions, sidetracks and wells keep the Kikeh platform rig going, I don't have it off the top of my head, but I would imagine about 5 to 6 wells next year. That will sort of keep the decline at bay hopefully in that project.

Maybe you could help me with the PSCs. I know that you've increased capital spending related to recompletions. At current oil prices, when would you expect any material production impact post cost recovery within those PSCs? I guess I was looking at it 207,000 in the fourth quarter with I guess a 200,000 barrel a day. Would you tentatively talk about guidance wise to understand where the drop-off is in the portfolio other than asset sales, obviously?

Okay. Lots of things there, Evan. As to the changes in production from the end of the year to next year, we've got to keep in mind that in the third quarter alone, we had 300 shut-in days of turnaround on 6 facilities. And 2 shut-in periods at Kikeh. Next year, we'll have turnarounds and shut-ins again. This typically not very often happening in the winter. So we will cross into that. That's where you get from the 207,000 to the 200,000. To your question on Kikeh, I'm sorry? I don't recall?

Yes, just I mean you increased capital spending related to recompletion, so what I'm trying to understand...

I'm sorry. We're under -- of course we are cost current there, we're recovering our costs through our PSC. We don't see a significant change in entitlement in the Block K area till probably 2018.

Okay, that's good enough. Well, one other, just a question on taxes if I could. I know there was a big -- can you tell us the bigger driver in the increase in deferred taxes in the quarter? And then secondly, in 2013 following disposition of U.S. retail and U.K. refining, would you expect to avail more preferential tax expensing of IDRs as not being an integrated company? I leave you with that.

Evan, this is Kevin. Deferred taxes in the third quarter related to the timing of drilling and the spend in Eagle Ford and in the Gulf of Mexico, so it's all U.S. driven. Nothing unusual, that's just the timing. As far as next year, once we become 100% pure E&P company, we'll be entitled to 100% of IDC instead of 70%.

We'll hear the next question from Pavel Molchanov with Raymond James. Pavel Molchanov - Raymond James & Associates, Inc., Research Division: A couple of exploration program. As you think about it on a year-to-date basis, what is your success rate specifically in exploration?

Hang on one second. On this year, we have -- this year we have been successful at DC 134 in Gulf of Mexico. We have a dry hole in Kurdistan. We've been successful at 3 wells in Block H Malaysia and we had a dry hole at Block P in Malaysia and 2 successful wells at small working interest offshore in Brunei. I don't know that percent, but pretty high. Pavel Molchanov - Raymond James & Associates, Inc., Research Division: So 5 out of 7 or something like that. And I mean, so it's obviously higher relative to 2011, would you agree?

Yes, correct, much high. Pavel Molchanov - Raymond James & Associates, Inc., Research Division: As we look at exploration expense, which is down about 30% from a year ago, how much of that relates to lower interest in the exploration wells and how much of that is a function of higher success rates if you arrive at...

We have really big spend coming up at this time. We have a big well going on in MPN. We'll drill an additional well at Block H in Malaysia and we have some other international wells. We have a good bit of dry hole in this quarter, so I think we'll get our spending up in the 200-plus range that we normally have. You will see that as the year folds out at our next call. Pavel Molchanov - Raymond James & Associates, Inc., Research Division: Okay. And for next year, would you expect to maintain the current pace of exploration drilling or would you try to curtail that?

We're going to try to maintain it and keep the 10 well program and anticipate the spending would be similar.

We'll take our next question from Guy Baber with Simmons & Company. Guy A. Baber - Simmons & Company International, Research Division: In light of your plans to strategically review your Syncrude and Montney assets, just had a conceptual question here around your targeted reserve life for your portfolio, but currently proven reserve life is a little over 8 years and a potential divestment of Syncrude and Montney would obviously be diluted to that. So can you just talk a little bit more about internal reserve life targets and the roadmap you see over the next couple of years for reserve growth above production and potential adds with some of your major areas?

Thank you, Guy, this is Roger. We, as you say is nearing 8, of course sales are dropping the 5 7 range, if you did both of them it'd be quite significant. We, outside of that, want to target ourselves being up in the 8 to 10 range. And then our long-range plan, without those significant sales, we would see that taking place. Place like Eagle Ford Shale with well over 300 million barrels net to us and only 45 million booked. We continue to book at Kikeh every year. We have a very strong position of booking at SK Gas. And so we rode up here with some of the highest production levels in the industry, so it's pulled us back a bit on our RFP, but over our long-range plan, unless we were to do a divesture in Canada with major assets, we see ourselves at the 8-plus range over the planned period. And I consider a decent shape with the level of production we have. Guy A. Baber - Simmons & Company International, Research Division: Okay, great. And then I have a follow up on the Eagle Ford, but I think you mentioned the 30,000 barrels a day target or expectation for 2013, and that looks stronger than the previous guidance, I think we have which was around 25,000. So do we have those numbers correct, first? And then if so, can you talk a little bit more about the upgrade to production there, what the primary improvements revolve around? And then also could you maybe just conceptually talk around potential upside to some of your long-term Eagle Ford projections you gave at the May Analyst Day early this year, or maybe what's changed since then?

If you go back to that number it's probably lower, that's just the basis of going through your bids and having another year of business there. We continue to do very well in the drilling, like most operators there a 20% increase. We were able to drill the wells. We're an all pad drilling now. We're putting more wells online per quarter. If you look at our quarterly information it's -- continue to do well. I think it's just a matter of getting into the detail of drilling improving, pad drilling improving, EUR improving and just the real solid. While we have 10 rigs now, if you look back at the exact detail, we had some rigs -- some new rigs we got late. And we ended up really this year with only an average of 8, so it's a matter of better drilling, better EUR and more completions per quarter and just really into the detail after having a real good quarter of a big build behind us is the reason. For us, the long term there, of course, pure soft shale, we're in the middle of that area where other operators are ahead of us a bit because we continue to protect the acreage that we have, of course. And we look for that to be growth. And of course, you see Buddha shale and other Wilcox and other formations across the Eagle Ford down the road. And also I would assume that further downspacing, we have delved often to 80 acres everywhere but, of course, other operators are talking 40, and that would mean additional upside. We probably won't show all that to our annual meeting in May, but you have a lot of detail about the other additional things to happen to that long-term profile. But obviously Eagle Ford's a place we're very happy with, very consistent, predictable growth. It's a place that allows us to add more wells and help with production guidance. And it's doing very well and we're very happy with it.

We'll take our question next question from Kashif Malik with Crédit Suisse.

Can you give us an update on your recent conversations with Moody's? And just broadly thinking how do you view your investment grade ratings? And also, if you've had any conversations with Fitch over the last couple of weeks?

Sure. This is Kevin. We're in discussions with all the rating agencies. As we mentioned the initiatives that we have they'll be funded primarily with some additional debts, and so we are currently in negotiations -- I said negotiations is the wrong word, discussions with the rating agencies. And I don't want to get ahead of that. We're meeting with some of them next week. As far as the investment-grade ratings, we would certainly like to keep the investment-grade ratings. It certainly helps with raising the money. It certainly at the times when you have, like in 2008, when we had the credit crisis it just makes your access a lot better, so we certainly like to keep the investment-grade ratings. We went into these initiatives, we knew it would be kind of pushing the envelope relative to debt to total cap relative to some of our peers, but we certainly didn't think it was going to be an issue.

Okay. And Kevin, can you just give us some color in terms of recent conversations you've had, what more you have to do to keep the investment-grade ratings as far as the rating agencies are concerned?

I guess you'd have to ask the rating agencies. As far as we're concerned, we're doing what we have to do to keep the investment-grade ratings.

We'll hear next from Arjun Murti with Goldman Sachs.

I just wanted to follow up, I think it might've been Roger's comments regarding some of the completion issue the Kikeh bin behind you. If we look at the longer-term outlook, I think before you had these issues, we would have thought Kikeh would have been entering its kind of longer-term decline after several years of plateau. But you've now had a couple of years of lower production. Just wondering if that bodes better for the volumes here the next couple of years, or if maybe you just have an updated outlook for Kikeh growth your net production over the next 2 or 3 years would be great.

For the ability of the field we said to be similar and we'll probably -- I want to get through this buildup in December and get into our January budget and talk about the timing we have of Siakap coming on in Block K in general. But I do see a pretty good situation there through '13 and '14 and moving in their origin. I do not see a big worry about the field in anyway and it's been performing probably a little better than we thought of late. I just feel real comfortable about where we are. If you want to talk about wells at risk and all completions of an 80,000 gross number, 62,000 from new completions today. So we hardly have any production at risk anymore, and sand production issues are well in check compared to a few months ago. And just in pretty good shape at Kikeh long term and we will get back on a plateau drop in the outer years as you would anticipate. Those fields flowed for 5 years on August 17. So all in all, I don't see a big worry with Kikeh, would prefer to get into the '13, '14 production when we talk about our budget further in January.

No, I appreciate that. It does sound like though that at least you should be able to maintain this production for longer than you might otherwise would have given that it wasn't producing that where...

Oh, yes. If you go back to '11, I mean, we had some really difficult issues with these completions. And it's been flat now for almost 3 quarters in a row. So we're doing pretty well there.

And is the 80 where it's going to be or is there still more stuff to come on, and you kind of end up higher than the 80?

When you get to 80, you're constantly having -- you have decline in the field that's old. I don't see us getting above 80 for long periods of time. And then we have -- we still have wells that come offline and wells that are planned to come offline as we replace them with timing. So in general it's going to be hard to hold the 80s, but I would say when the facilities not have tie in with other facility or something going on to it, it has an ability to be a 70 player next year for a lot of the months.

That's great. And if I'm repeating an earlier question, I apologize, but do you have total company production thoughts for 2013 at this point?

Yes, we maintain our 200,000 that we've said in May. And our current draft to the budget is holding up with all of what we have going on with buying and selling, et cetera.

We'll hear next from John Herrlin with Societe Generale.

Just a quick one for me. You said you want to maintain your exploration exposure on kind of a dollar basis in terms of wells drilled. What about your risk profile? Are you going to stay high risk because you are losing free cash from some of the other business issues spitting out?

What I see is a -- what we're trying to get at every year is a 10-well consistent program. It's primarily offshore driven in 4 areas: The Gulf of Mexico, Atlantic margins, Southeast Asia, Australia. We want to get to a point to have a bigger portfolio, which we will and do see in '14 and '15 and get that mixture into some lower risk opportunity such as the Block H gas, we have been very successful. Shallow water Malaysia, we have been very successful. Gulf of Mexico amplitude oil plays where we've been very successful. So we're going to blend that in a mixture of your big 300-million barrel swings along with the smaller and it's my goal to have a profile across that paradigm. And not be all of the big swings and have the high risk. On occasion with rigs and things lined up and like this, those things lined up and have some dry hole risk more quarters than others. But our goal is try to have a total yearly program of some lower risk blended in with the high risk.

That sounds good. What about a capital split, would that be even as well or more skewed to Asia?

I'm sorry, the question again please, sir?

What about the capital split, will it be kind of geographically distributed if you will or...

I haven't thought about it in that way, but I would say it's fairly evenly split. Next year maybe a little more Gulf of Mexico than in the past.

We'll hear next from Paul Cheng with Barclays.

. A number of questions. Can you remind me on the PSC term for Kikeh? I believe the initial profit split is 80-20 and then you will move to 50-50 when you recover 300 million barrels. So how many barrels have you already recovered at this point? Well, first of all, if my understanding is correct?

Yes, you're exactly correct. And there's a 300 million-barrel threshold in Block K for the whole block. And today we've recovered around 100 million barrels, I believe. And the field's probably recovered 150. So no, the field's recovered 150. We net 100 so the total...

So the 300 million is for the total for you.

We see that hitting in for the block, Paul, in 2018 that's what you're getting that.

When Kakap come on stream because Kakap is actually at least partly how that is going to be count?

How's that going to be, I'm sorry?

How that is going to be count?

There will be a -- it's a Block K development. It's totally -- all the wells are in Block K. All the partners are in Block K. It's flowing into our facility starting hopefully this month. And all that production will come in split through the partners and go through the total PSC for the Block K. So each partner will have its own Block K spending profile. We have ours, the other partners have theirs. We'll net the barrels and go through the calculation that way.

But that will be counted in the 300 million barrel also, is it?

That's correct. All of the Block K production counts, Siakap North, Kikeh and the Kakap.

And on if I'm looking at your exploration program over the last 10 years, do you have maybe a number you can share if we exclude Kikeh because that will, I mean, Kikeh by itself will pay for over the last 10 years of the exploration expense. And if you exclude what are the internal way of return for the remaining of your program has been, any kind of rough idea?

I don't know. I don't have that number, Paul. I look at many things all the time, but I don't have that. But if you look at a 10-year period by a very comprehensive Wood Mac study, you would find that Murphy, over the long haul, is on the top quartile, probably second place of all the explorers, which means it is the power of one and if we started excluding Kikeh, that's really unfair. It's one of the big winners that we have and that's why we're out exploring to have that one other hit. And I believe we will do that. So over the -- but I do know for the Gulf of Mexico, for example, I did calculate it there, we have a full cost, all-in rate of return of 13% across all of our Gulf business, so it should be an example of big exploration and discoveries over...

So in Gulf of Mexico is about 13%?

Yes. So I haven't calculated it globally, but overall, if you look at the Wood Mac Study, we would be a top quartile over the long haul. And over the short period of 5 years, we, being even as poor as we've been, are still in the middle of the pack. So I feel good about the benchmarking, while I may not be happy with the result of late, it's a long-term program of consistent drilling of low and high-risk opportunity. If we stay with it, we will be successful.

On the U.K. sales for the $300 million for Schiehallion you said just for Schiehallion only, or including everything else?

No. That will be all the fields combined and we're unable to say the split out, Paul.

And is that going to result in any cash tax payment.

Kevin?

No, no, will not.

So with that, you are going to receive $300 million in cash and net to your after-tax?

Subject to some post-closing adjustments, yes.

Okay. All right. I know that you guys probably were coming up with a new CapEx number for next year. Any kind of rough estimate, is that going to be pretty similar to what you put out in your May Analyst Meeting for 2013?

Well, I think it's fair to say that the number will be somewhat similar to what you're seeing in 2012 .

In 2012, so $4.4 billion?

If you look overall, that's considering for a full year downstream and you won't get that when we conclude the spend, right. I don't know many months you have, but it'll probably be a little bit less than that. But it's in that ballpark.

And Kevin, I just want to make sure that when you say 2012, you're not talking about the original budget, but you're talking about your revised budget 2012, which is $4.4 billion so you're saying that next year...

Yes. In that ballpark.

In that ballpark but that -- okay I just want to make sure. That is about, I think, is that $600 million higher than your Analyst Meeting back in May? I think it's about...

I have to go pull the slide to see.

Paul, well so far sounds familiar, yes.

And is there any particular area that the increase is going to be?

I don't want to go there until we get the budget approved.

Okay that's fair. Roger, can you give us some data about the Eagle Ford operation? Can you show with us what is the unit cash operating cost in the third quarter? And if the well cost you're still talking about in the $7 million to $8 million a piece?

We're going to dig out the cost for you. Let me just walk you through this a little bit, Paul. We're in several areas in Eagle Ford. We're about 8.3 million in Carns all in, 7.7 in Tilden area and 6.5 over in the Catarina, which is shallower. That should be our drilling and completion costs. And what's the number you asked for earlier, I'm sorry?

The cash operating cost?

Third quarter OpEx was 25 81.

And do you expect that, that is going to trend lower as you ramp up your production over the next several quarter or that is actually it may not -- it will take you a couple of years?

I'm looking at it now and what we have in our long-range plan today is in '13 to be $16, for 2014 to be $13 and kind of leveling off in the $12 range. And that's been little longer than we had hoped to get to that number because of rental equipment and drilling so many wells and the building of all our facilities. But like I say, we do see that number coming down. And in '13 and '14 is a big focus area for us.

A final one in the Eagle Ford. Roger, what is the CapEx do you expect to spend in this year and next year?

Well, you always give us the same questions, Paul, hats off to you. I think this year, we spent $1.3 billion. And when you run 10 rigs in those facilities, we'll probably spend pretty close to that again.

We'll hear our next question from Jason Gilbert with Goldman Sachs.

The company has historically run with very low leverage and you're clearly going to lever up here a bit as the result of the transactions previously announced. Do you guys have a target leverage level for the company over time?

This is Kevin. I would say in the 30% range. Once it gets beyond that, we really start looking at it. I'd like to have -- I'd like to be able to point to things that are going to be paying that down because like I said, we do like to keep it conservative. We like to keep dry powder around for opportunities. So it'd be in that range.

And that 30% debt to cap?

Yes. Yes. And part of that you can't -- in our situation, it's hard to go by the exact number. You almost have to look at net debt because typically I tend to have some cash overseas that I could bring back, I could bring back that debt number lower but I choose not to, voluntarily in a lot of cases, because it's just tax inefficient. And so it's probably more fair to look at it from a net debt position.

And then just sort of a related question, I'm just trying to figure out how much we should view the share repurchase and special dividend as a one-time event or just a real change in the financial policies since you haven't done this before. Is this the kind of thing we could expect to see again in the future?

I think for now, I would characterize this as a one-time event. I wouldn't want to foreclose it entirely for the future because who knows what's in the future. But for now it's a one-time event.

And we'll hear our next question from Blake Fernandez with Howard Weil.

Just 2 points of clarification. Roger, you mentioned the reallocation of cost from Block P over to K. Is it fair to assume that there will be no ongoing spending in P?

That's fair. We have the lease would be expiring in early 2013, Blake.

Okay, great. And then, Steve, I was just curious. Can you give us some kind of feel for how we're going to get communication on the asset divestiture evaluation process. In other words, is there a time frame that we should think to hear something from you guys as to whether you're actually going to market these assets or not? And basically I mean, let's just say you were to decide to pursue the sale, should we think we're just going to get a press release one day where you've sold it, or we're going to hear beforehand your decision?

Let me say that work is just underway. And I don't want to prejudice it by putting it on a time table. And as to a sale or no sale, how we disclose that, let's leave that to the future and how this work unfolds.

And gentlemen, it appears we have no further questions at this time.

Well, thank you very much, everyone. And thank you, moderator. Thanks very much.

Again this does conclude today's conference. We thank you, all, for your participation.