Good day and welcome to the Murphy Oil Corporation second quarter 2016 earnings conference call. Today's conference is being recorded. I would now like to turn the call over to Ms. Kelly Whitley, Vice President of Investor Relations and Communications. Please go ahead. Kelly L. Whitley - Vice President-Investor Relations & Communications: Good afternoon, Jake. Good afternoon, everyone. Thank you for joining us on our call today. With me are Roger Jenkins, President and Chief Executive Officer, and John Eckart, Executive Vice President and Chief Financial Officer. Please refer to the information we have placed on slides in the Investor Relations section of our website as you follow along with our webcast today. John will begin by providing a review of the second quarter financial results, highlighting our balance sheet and strong liquidity position, followed by Roger with an operational update and outlook, 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 discussions of risk factors, see Murphy's 2015 Annual Report on the form 10-K on file with the SEC. Murphy takes no duty to publicly update or revise any forward-looking statements. I will now turn the call over to John for his comments. John W. Eckart - Chief Financial Officer & Executive Vice President: Thank you, Kelly, and good afternoon, everyone. Murphy's consolidated results in the second quarter of 2016 were a profit of $2.9 million, $0.02 per diluted share. The comparative result from the second quarter of 2015 was…

Thank you. And we'll hear first from Paul Cheng with Barclays.

Hey, good morning. Good afternoon. Roger W. Jenkins - President & Chief Executive Officer: Good morning, Paul.

Several quick questions. I think from time to time people looking at your dividend and I think last time you was mentioning that you guys will revisit it in August. Any kind of conclusion that the you have come? Roger W. Jenkins - President & Chief Executive Officer: Thanks, Paul. Our dividend's been historically a long part of our commitment to long-term shareholders here at Murphy. Our dividends are viewed by the board each quarter as common practice. It's always been our practice also to review our annual dividend policy at our August board meeting which is scheduled for next week. We'll review our current financial outlook under various price levels and different options of capital allocation and we're going to present this to the board and discuss it with them next week and announce it at that time.

Do you at this point, at the management standpoint, do you believe that it look like that your partnership situation is quite robust at this point, or much improved. So the need for any dividend cut in theory is not as urgent as what it was six months ago. Don't know whether you agree on that comment. Roger W. Jenkins - President & Chief Executive Officer: That would be getting ahead of the board, Paul, not when you're in a chair like this you stay in this chair by not getting ahead of your board.

Okay, that's fair. On the Duvernay asset, can you give us some comparison on that asset that so far you learned, comparing to Eagle Ford? Roger W. Jenkins - President & Chief Executive Officer: Really pleased with it. It's been a big transition. We have to take over the operations of the asset that currently has production. We're in a phase of doing that plan to do so here very quickly. We're completing the four wells and are discussing and being able to influence the completion of our partner. These are wells drilled prior, probably at only 4000 feet type laterals and we want get this lateral length up and get the sand up like we've been seeing recently in Eagle Ford and also see success at higher sand pumping with our friends at Encana and others in that play. And that we want to hit the ground

Everyone we're still experiencing a temporary interruption in today's call. Please remain online will be resuming momentarily (24:54-29:41) Ms. Whitley, please go ahead. Roger W. Jenkins - President & Chief Executive Officer: It's Roger, everyone, sorry about that. We have severe weather here in El Dorado today and it went to total blackout here. So I'll go back to answering Paul's question if everyone's back on the line. Paul, Duvernay, very pleased about that, moving into longer laterals, taking over operatorship, more sand, volume similar to Encana that are performing well in the play. And we're looking forward to operating this asset. Like we say, we're drilling off our first pad in the play in just short order and are completing four previously drilled wells today with our partner, working together and moving forward as operator and also pleased with our Placid Montney. I mean Placid Montney area as well.

Roger, if I could, two final question. One, I think in the past that you are talking about total production run rate for Eagle Ford. And since then that you have raised the total EUR for the area significantly. And now we also have heard that some number falling around talking about operate the gross 100% production, say 20,000 barrels a day by 2020, 2021. So just want to see whether you can confirm are those still the good number or whether those have changed? And last question is that under what criteria or that what is the criteria you will look at before you reconsider raising your CapEx? Roger W. Jenkins - President & Chief Executive Officer: First, on production, Paul, we have of some of the new wells – we've got four of the eight wells we just brought on completed with these new techniques. They're doing very well and our guidance for the quarter would have that in it and I would say we'd be a little light on our fourth quarter guidance as to more of those wells coming on. We have a big third quarter of well adds in the Eagle Ford Shale. So hold back on increasing the fourth quarter at this time due to staying one quarter at a time. I'm not sure about your question about the 20,000 barrels over certain period of time. Murphy is quite confident that when oil recovers into a near $60 level, that we can achieve single digit production growth in our company and be free cash flow. We're very confident in that because of three unconventionals we have and our very strong offshore base that we have. And I'm not sure if that calculates into the number that you have but that's how...

The 20,000 barrels per day is talking about the Duvernay asset. Roger W. Jenkins - President & Chief Executive Officer: Yes. Oh yes, that is still confirmed and I think that we're building a ground-floor field development plan from grassroots up there, Paul, with the lateral length, sand, all the – we're about to review that and move forward with that. And as I look at probably some additional capital there for 2017 than we originally planned and I believe we'd be well on to that number that you mentioned. Yes. But that's Duvernay only specific. We want to replace the Syncrude production with the Duvernay as fast as we can, living inside cash flow CapEx parity, Paul.

All right. Thank you. Roger W. Jenkins - President & Chief Executive Officer: Thank you.

And now we'll move to a question from Ryan Todd with Deutsche Bank Roger W. Jenkins - President & Chief Executive Officer: Good afternoon, Ryan. How're you doing?

Good, thanks. How are you? Roger W. Jenkins - President & Chief Executive Officer: All right.

So maybe if I could start with a little bit of a – if we start with maintenance CapEx. I think, Roger, in the past you thought – any maybe as a follow-up to the last question. You just talked about your ability to hold production flat to 2016's exit into 2017, potentially around $800 million, $900 million a year of spend. Is that correct? Given your ability to do more with less this year, is that still the right number or has that number come down? Roger W. Jenkins - President & Chief Executive Officer: I think it'll be on the lower end of what you just said, Ryan.

Okay. And then I guess as we think about cash allocation, I mean I think there's been some concern that despite a relatively intriguing Duvernay asset, you may be limited in your ability to allocate material CapEx in that direction in the near-term. I guess, can you talk about priorities for capital allocation into 2017 and where the Duvernay fits in the pecking order there? Roger W. Jenkins - President & Chief Executive Officer: We really have a lot of things to choose from in our onshore. If you look at individual well economics today, our top two places would be our Catarina and Karnes area, probably over 40% with current May 25 strip prices. For Duvernay light oil in the mid-30%s there. And our Placid Montney also in the low 30%s. We're going to be probably moving – we are just reviewing our capital for next year, but it's going to be significant capital in there to build this production base, as I just answered the question for Paul. And we're in the middle of doing our 2017 plans, but our unconventional is going to be a lot of our CapEx there, Ryan, as you anticipate. And very pleased with the places I have to allocate capital. I wanted to have more competition for capital allocation. I'm going to do so, and we're going to be getting this CapEx up in Duvernay Shale to see what we have there pretty quick.

Okay. Thanks. I will leave it there. Roger W. Jenkins - President & Chief Executive Officer: Okay, thank you. Appreciate it.

And next we will hear from Ben Wyatt with Stephens. Roger W. Jenkins - President & Chief Executive Officer: Good morning, Ben. How're you doing?

Hey. Good afternoon. If I can have a follow-up here to the Duvernay question that was asked, as you guys get after it here in the back half, just trying to get a sense of maybe the pace of progress or the pace of change in how you guys complete wells. I believe I saw on the slide deck where you're going to start out at 2,000 pounds a lateral foot. I think people have gotten as high as about 3,500 pounds per lateral foot. Just curious how you guys are thinking about that for the back half of 2016. Do you just kind to stay at a pretty standard completion technique? Roger W. Jenkins - President & Chief Executive Officer: We're going 2,000 on our operated area and working with our partner on their operated area. First step is to get the longer laterals and do that. It's my view, Ben, from the information I have that 1,000 pounds per foot is quite common there now. There's been very few people stepping to the 2,000. I have not personally heard of a 3,500-pound-per-foot lateral. But it's like all things, we're taking over the operatorship, hiring those personnel into our company, get our practices in the field, drilling our first pad starting in October, November. Then we have to work on how long it takes to tie in wells and go through the field development plan of near infrastructure versus leased timing versus the best wells in the G&G and the best for capital allocation. We're in the middle of doing all that right now. I'm very pleased with this ground-floor buildup result, be reviewing that in more detail quickly. So, I think that we're going to start at the 2,000 pound per foot and go from there. And then I think there will be a lot of information from that and the flow-back techniques and various other things that are critical to plays. But our experience of hundreds of wells in the Montney and the Eagle Ford and all types of experimentation around slick water and sand volumes will bode us well to move in here and really get off the learning curve very quickly, run by one single leader in all of our onshore business.

Got it. Very good. Appreciate that. One more here. Maybe jumping over to the Eagle Ford, you guys have done a great job of lowering cost. Even this year, you guys have put downward pressure on cost and, I believe, just going around and drilling single, one-off wells. Is there more room there on the cost side of things, especially as you guys get back to pad development, or have you kind of squeezed all you can out of that? Roger W. Jenkins - President & Chief Executive Officer: Well, I keep thinking that it's flattened on the drilling side, but we continue to improve. And you are right, we have had a lease maintenance CapEx here, and that leads to some of these timing issues on capital in the second quarter, and that's why that capital is phased in that way. And that's what the outcome is. But we just drilled a record well last week. We drilled a well in Catarina over 12,000 feet in four days. I can tell you that's incredible performance. So we haven't even gotten into full back-pad drilling mode again and I just see big upside. There's discussions about service costs and large service players and that going up, et cetera, over time. But in the old operation days, it's a day's business. You have to be on wells less days no matter the cost, and really doing well there right now.

Very good. Well, Roger, I appreciate it. Thanks for letting me ask a couple. Roger W. Jenkins - President & Chief Executive Officer: No problem, Ben. Thank you.

And now we'll take our next question. That will come from Ed Westlake with Credit Suisse. Edward George Westlake - Credit Suisse Securities (USA) LLC (Broker): Good afternoon, Roger. Roger W. Jenkins - President & Chief Executive Officer: Afternoon to you, Ed. Edward George Westlake - Credit Suisse Securities (USA) LLC (Broker): I just wanted to get into a little bit of the well costs and EURs. in some of the new areas. Obviously, the Canadian dollar has come down as well, industry is doing better. So maybe just on the Tupper Montney, just any updates on well costs and well performance in terms of EUR there. Roger W. Jenkins - President & Chief Executive Officer: The Tupper Montney that we have, we're looking at costs below C$5 million right now total. And EURs there, we've said previously that we want to get to 10 BCF to 12 BCF wells there. We just did our first big high pumping of sand well, and we're pleased with the results there and think we're going to get there. Edward George Westlake - Credit Suisse Securities (USA) LLC (Broker): Right, and then in the Duvernay, I mean these 2,000 pound-plus longer laterals in Canadian. Where do you reckon those are going to come in? Roger W. Jenkins - President & Chief Executive Officer: The current wells that we're doing, we inherited the wells from our partner. They are completing them. And they are currently using a – got to keep in mind we just started working there over the last month. So they're using a C$9.5 million, which is $7.2 million kind of a charge there. And we know that these fracs went very well and are under the current completion cost of C$5 million, which adds up to that number. And we're…

Now moving to our next question, Roger Read with Wells Fargo. Roger W. Jenkins - President & Chief Executive Officer: Afternoon, Roger. How're you doing?

I'm good. Same to you, Roger. Roger W. Jenkins - President & Chief Executive Officer: Thanks.

Hopefully, you can stay dry there in El Dorado. Roger W. Jenkins - President & Chief Executive Officer: Yeah. We're dry. We just lost our power for a while. We're back.

All right. I think most of it's been hit. But I guess maybe one thing to explore here. You've done the asset sales. Originally we thought maybe a little more aggressive on the asset side in the lower 48. Recognize valuations may have gotten away a little bit there. But is there anything else that looks particularly interesting at this point other than the obvious if somewhere in Texas that you might want to grab? Roger W. Jenkins - President & Chief Executive Officer: Probably not out of there. We do have very active business development team at Murphy involved in always repositioning. I don't believe we are in the mode of doing a lot of shrinking right now. We want to keep what we have, but we're not against selling and buying and things of that nature. We have a very active team that looks both at all of the plays in and around where we're working, and we're seeing some more data rooms and different choices there. And we look at them and study them but we have a pretty high threshold to have strip price return at Murphy here, and we're real proud of our entry costs that we have in our three plays that we have.

Thanks for that. And then thinking about the offshore, I know you don't want to do a whole lot of exploration right now. But we've seen a number of companies sell offshore or attempt to sell offshore and, in some cases, walk away from what were at one time called discoveries. So was wondering, are you seeing any value? Or is it just far too early in the process or oil prices need to be higher to make something happen in the offshore if you decided to go that direction? Roger W. Jenkins - President & Chief Executive Officer: No, we're very excited about these opportunities. We do have a very strong execution team in the offshore to operate any kind of facility or drill any kind of wells anywhere in the world at any time. And we look at these opportunities. I believe that with the deepwater rigs and the mergers of things like Technip and FMC, and you see Cameron and Schlumberger, et cetera, will lead to opportunity for lower costs there and a new starting point of a development, if you will. And we are poised to look at that where some others who may not have that ability or have no team or ability to look in deepwater kind of leave that behind. So, many of those, and we would be looking at those on occasion. But we're pretty selective on it.

Okay. Thank you. Roger W. Jenkins - President & Chief Executive Officer: Thank you.

And now we'll move to question from Paul Sankey with Wolfe Research. Roger W. Jenkins - President & Chief Executive Officer: Paul. How're you doing?

Fine. Thanks. Most of the cash flows in Q2 were really low. Is there a particular – were there any kind of one-off issues with that? I guess what I'm thinking is that if we're in Q3 with a lower price, I mean is there reason to think that cash flows would be stronger? Roger W. Jenkins - President & Chief Executive Officer: I'll let John answer that. But we have just a real payment of our accounts payable during the quarter, Paul. We don't – we feel confident in our total yearly projection. I'll let John speak to that. John W. Eckart - Chief Financial Officer & Executive Vice President: Yeah. We did have some items, Paul, that hit in the second quarter that were accrued in prior periods, and that includes a significant amount of interest costs. Some of our restructuring costs were paid even though they were accrued for last quarter. So there's a number of things that lag, if you will. Some of the cost reductions on our LOE are now – in fact, we're seeing continue going down over time. But we've still paid for some of those in second quarter. So it's a timing matter as to when these bills catch up with the payments. So I don't see anything in particular worrisome with it, and it should balance itself out over time.

Understood. Could you give us a sense for the scale of that? Or are you pointing us towards the full year – is there guidance for cash flow for the full year? Roger W. Jenkins - President & Chief Executive Officer: Well, I mentioned earlier, Paul, that we – on a pro forma basis, the $750 million, when you annualize the six months, doesn't seem crazy. In fact, we might be a little north. We'd be a little north of that on our internal projections. Again, subject to whatever prices do to us, and maybe they won't hold up very well. But we'll see. But interest...

(46:25) John W. Eckart - Chief Financial Officer & Executive Vice President: ...for example, interest in the second quarter was $40 million that we paid on our notes. So that comes in in a lumpy fashion because we pay it semiannually instead of monthly or quarterly. So the things of that nature. $10 million – $9-plus million worth of restructuring cost and things of that nature that were paid this quarter.

Understood. That's helpful. Thank you. What was the price assumption, you used the strip for the $750 million? John W. Eckart - Chief Financial Officer & Executive Vice President: Yes.

$50 or around $50. John W. Eckart - Chief Financial Officer & Executive Vice President: Yeah. That's right. That's correct.

Understood. So it was definitely a one-off kind of thing this quarter. I get it. Roger, a second follow-up question would just be on the Duvernay, if you haven't – if you feel you could add some more. You're talking about low 30%s, I think, breakeven. Is that correct? Could you talk about what sort of parameters you are using there to get to those numbers in terms of all the usual stuff that we need to get there? If you're prepared to reveal those, that would be great. Thank you, and I'll leave it there. Roger W. Jenkins - President & Chief Executive Officer: We have a pretty cautious EUR here. We think this is going to improve over time. But in certain portions of our light area, we're probably close to 700 equivalent type EURs at around 80% liquids. In other parts of the more eastern area of light oil, approaching 500,000 equivalents, with around 80% liquids there. In the condensate, approaching 800 equivalents at 55% liquids. And then down in the Placid Montney, like 750 with 31% liquids, but we actually see around 42% at this time. So if you take those EURs and get into our ultimate cost of wanting to drill the wells for 6.50 to 6 USD (48:16) I think you will lead to some pretty high rate of returns here. And we also have the infrastructure in place. We have adequate infrastructure built to handle a couple years of growth here. And like I said earlier in the call, building our ground-floor field development plan, we're going to review it in September. And we liked it when we bought it and we love it when we own it now.

Got it. What pricing diffs do you get given the infrastructure positions? Roger W. Jenkins - President & Chief Executive Officer: We're using just current strips in there. That would be probably a little more conservative to current strip when we make that assessment.

Understood, but there's not a need to discount that against the fact that... Roger W. Jenkins - President & Chief Executive Officer: No, we're going to build our facilities in a way to uniquely pull out the NGL and the condensate and the light oil, and we actually get a premium to WTI here. In the first quarter it was a little bit below the premium due to the shut-in of the – all of the mining which you are very familiar with. But this is a nice situation to WTI. It's definitely not a discount.

Understood. Thanks, Roger. Have a good afternoon. Roger W. Jenkins - President & Chief Executive Officer: Paul, thank you.

We will now hear from Guy Baber with Simmons. Roger W. Jenkins - President & Chief Executive Officer: Hi, Guy. How're you doing? Guy A. Baber IV - Simmons & Company: I'm good Roger, how are you? Roger W. Jenkins - President & Chief Executive Officer: All right. Guy A. Baber IV - Simmons & Company: Thank you, guys, for taking the question. I just wanted to make sure I understand some of the earlier comments, so just a follow-up here. But is the general framework we should be thinking about is that you can grow in the single-digit percentage rate off your 2016 exit production base, which would be in the mid-160,000 barrel a day range assuming oil is near $60 a barrel? Is that the point at which you would consider growing? Do I have that correct? Roger W. Jenkins - President & Chief Executive Officer: I would say that – I'm not sure if oil will be in the $60s in 2017 right now. So if it's in the $50s, it would be more stabilizing in next year, and that's our goal and then look to grow, let's say, a year from now when oil, we hope, approaches $60 again. It's all about cash flow and the CapEx and the oil price, Guy, as you know. But we have modeled a $60 flat price forever in our business that shows post a year from now, we can start having 4% to 5% production growth with these type prices, and we believe in it confidently. Guy A. Baber IV - Simmons & Company: And is the framework – or is your primary objective still to spend within your cash flow and dividend? So, not outspending? Roger W. Jenkins - President & Chief Executive Officer: Yes. Guy A. Baber IV - Simmons & Company: Okay. Thank you. Appreciate it. Roger W. Jenkins - President & Chief Executive Officer: Thank you.

Brian Singer with Goldman Sachs, please go ahead. Brian Singer - Goldman Sachs & Co.: Thank you, good afternoon. Roger W. Jenkins - President & Chief Executive Officer: Hey, Brian. Brian Singer - Goldman Sachs & Co.: I wanted to see how you're thinking about the Block H expansion. As costs have come down globally, does that impact how you think about timing and incremental capital? Can you just give us an update there and if that is above and beyond your growth and free cash flow metrics that you just laid out? Roger W. Jenkins - President & Chief Executive Officer: That is not going to be a very large CapEx for us. I do not have that off the top of my head, as it has been moved out. Our partner, Petronas, is building a floating LNG ship in Korea. Due to capital cutbacks early in the year across all industry, across every NOC, they have delayed that ship. It's partially built today. It sits in Korea. And it will be coming to us around 2020 to 2021, I believe is the latest. And we have to drill four or five wells there and do the tieback of pipelines. Naturally, if deepwater costs persist at this level, it will be much lower than we originally envisioned. This is a game, Brian. It's a $50 Brent game to give you the type of gas price to have nice returns here. This would be in our long range plan program but would be out in – and we have agreed with them to delay it, and it's in our assessment. And it's a long way to 2020 from now in my life. So that's the game plan there. And it would count in the numbers I was just talking about…

And now we're hear from Pavel Molchanov with Raymond James. Luana Siegfried - Raymond James & Associates, Inc.: Hi. This is Luana Siegfried in for Pavel. Thank you for taking the question. It's a very quick one for me. I know it can be a little bit too early. But if you could share your expectations for the production ramp-up in Kaybob and Montney and also any ballpark figure for the incremental CapEx going forward, that would be great. Thank you. Roger W. Jenkins - President & Chief Executive Officer: Our Duvernay is going to go to around $50 million for the rest of the year and a big growth in CapEx there, around $40 million this coming quarter. And it's a little bit too early to get into our 2017. But if we're able to get our capital in a near $200 million range, we can get that to 14,000 barrels next year. Luana Siegfried - Raymond James & Associates, Inc.: Perfect. Thank you so much. Roger W. Jenkins - President & Chief Executive Officer: Thank you.

And we'll hear from Sean Sneeden with Oppenheimer. Sean M. Sneeden - Oppenheimer & Co., Inc. (Broker): Hi, guys. Thank you for fitting me in here. Roger W. Jenkins - President & Chief Executive Officer: Having a little trouble hearing you there, Sean. Sean M. Sneeden - Oppenheimer & Co., Inc. (Broker): Okay. Is this any better? Roger W. Jenkins - President & Chief Executive Officer: Yep, little bit. Sean M. Sneeden - Oppenheimer & Co., Inc. (Broker): Okay. John, maybe for you, could you talk about the credit facility refinancing process at this point? I guess, with nothing drawn on the facility, how are you guys kind of thinking that's impacting the negotiations? I guess, specifically, are you guys thinking that you might be able to keep that facility unsecured or can you give us any guidance on how to think about that? John W. Eckart - Chief Financial Officer & Executive Vice President: Well, Sean, we are working it. We are very close to having it completed. It's going well. I think we're pleased with where we're at. And I think we will announce that here in the next couple of weeks, I think, or so if it continues to go the way we're working it. So I think we're in good shape on it. And I think, other than that, I'd probably just need to not say much else. Sean M. Sneeden - Oppenheimer & Co., Inc. (Broker): Okay. John W. Eckart - Chief Financial Officer & Executive Vice President: We're really happy with the progress, thus far, with it. Sean M. Sneeden - Oppenheimer & Co., Inc. (Broker): Would it be fair to characterize it as not really adding any additional complexity to your capital structure as it stands here today? John W. Eckart - Chief…

And with that ladies and gentlemen, this does concludes today's call. We thank you for your participation. You may now disconnect.