Murphy Oil Corp. is set to relocate to Houston due to the ‘unprecedented’ oil market crash, shuttering its legacy headquarters office in El Dorado, Ark., where the company was formed by its namesake in 1944.
The E&P company also plans to close its longstanding office in Calgary, Alberta, home to approximately 110 employees. Both offices are set to close by early third quarter, impacting nearly 200 employees.
“The El Dorado office closure is particularly painful and difficult, because the company was founded here by C. H. Murphy Jr. and has been an integral and important part of the community for many years,” Claiborne P. Deming, chairman of the Murphy Oil board, said in a statement on May 6.
In the release, Murphy Oil said it intends to continue funding the El Dorado Promise. Founded in 2007, the program pays the college tuition, up to the highest amount charged by an Arkansas public university, of every college-bound graduate of the El Dorado Public School District.
Murphy Oil has already taken several actions over the past several months to reduce costs, including a 50% cut to its capex, slashing the company dividend in half and payouts to executive officers’ salaries.
“We realize, reluctantly, that we need to consolidate our offices to capture additional cost savings to remain competitive in this unprecedented industry environment,” Deming added in his statement. “We simply do not have a choice and came to this decision only after exhausting all other cost-saving measures.”
Murphy CEO Roger W. Jenkins noted that the office closures will not impact the company’s field operations in the U.S. and Canada.
On May 6, Murphy Oil reported a net loss of $416 million, or $2.71 per diluted share, for the first quarter. The results were roughly in line with expectations, according to Brian T. Velie, energy equity analyst with Capital One Securities Inc.
In a May 7 research note, Velie also noted that the company finished the quarter with $1.8 billion of liquidity comprised of $408 million of cash and $1.4 billion of capacity remaining on its senior unsecured credit facility.
Murphy Oil is an independent E&P company with global operations. About 74% of its oil volumes in the first quarter came from its Eagle Ford Shale operations where the company brought online 10 Catarina wells and four Karnes wells with an average drilling and completion cost of $4.8 million per well.
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