Murphy Oil (MUR) to Gain From Acquisitions & Investments

Murphy Oil MUR is well poised to benefit from acquisitions, divestitures and oil-weighted discoveries.  Low-cost assets and a multi-basin portfolio will drive its performance.

MUR – which currently has a Zacks Rank #3 (Hold) – operates in a highly competitive environment and is vulnerable to rising interest rates and changes in federal or state laws.


Murphy Oil possesses one of the best upstream portfolios among the domestic oil and natural gas integrated companies and independent E&P groups. It includes onshore and offshore assets for additional risk reduction flexibility amid fluctuating prices. The company entered into hedges and fixed-price forward sales contracts through 2024 to counter the fluctuation in commodity prices and protect free cash flow.

In the past several months, MUR has been trying to transform through acquisitions, divestitures and oil-weighted discoveries. It has acquired working interest in two high-returns, non-operated Gulf of Mexico fields, which are expected to provide a considerable upside to production. Murphy Oil now expects to invest in the range of $875-$1,025 million in 2023 to strengthen operations further. With proper cost management initiatives of the company, total costs and expenses are likely to decline.

Focus on developing high-margin liquid assets is evident from the production mix. In second-quarter 2023, the company plans to bring 17 operated wells online in the Eagle Ford Shale and further boost the region’s production. Courtesy of the existing multi-basin assets, the company expects its 2023 production in the band of 175.5-183.5 MBOEPD, comprising 55% oil.


Murphy Oil’s business operates in a highly competitive environment. It is subject to volatile global commodity prices, political turmoil, rising interest rates, stringent government regulations and unfavorable foreign currency conversion rates.

Stocks to Consider

Some better-ranked stocks in the same sector are Weatherford International WFRD, Archrock AROC and DrilQuip DRQ. Weatherford International sports a Zacks Rank #1 (Strong Buy), while Archrock and DrilQuip carry Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Weatherford International, Archrock and DrilQuip’s 2023 earnings per share indicates a year-over-year increase of 466.3%, 110.7% and 82.1%, respectively.

Weatherford International, Archrock and DrilQuip delivered an average earnings surprise of 0.5%, 8.3%, and 119.8%, respectively, in the last four quarters.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Dril-Quip, Inc. (DRQ) : Free Stock Analysis Report

Murphy Oil Corporation (MUR) : Free Stock Analysis Report

Archrock, Inc. (AROC) : Free Stock Analysis Report

Weatherford International PLC (WFRD) : Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research