Murphy Oil Navigates Price Volatility, Bets Big on Vietnam and Offshore Growth in 2026

HOUSTON – Murphy Oil Corporation (NYSE: MUR) struck a cautiously optimistic tone during its fourth-quarter 2025 earnings call, framing the past year as one of disciplined execution and setting the stage for a 2026 strategy that prioritizes long-term international growth over short-term volume gains. Facing persistent commodity price headwinds, the independent explorer emphasized financial flexibility while committing capital to what it deems high-value offshore and international ventures.

President and CEO Eric Hambly pointed to cost control and outperformance at key assets as the foundation of 2025 results. "Our teams delivered production above guidance, driven by robust onshore well results and exceptional uptime offshore," Hambly stated. He noted a 20% year-over-year reduction in lease operating expenses and capital expenditures that came in below forecast, crediting efficiency gains in the Eagle Ford Shale.

The undisputed star of the year, however, was the company's exploration program. Hambly reported an "outstanding" 80% exploration success rate, with activity spanning three continents. The most promising results came from the Hai Su Vang appraisal well in Vietnam's Golden Sea Lion field. The well encountered 429 feet of net oil pay without reaching an oil-water contact, suggesting resources "significantly above" the initial midpoint estimate of 170 million barrels of oil equivalent. Flow tests indicated a potential productivity of around 12,000 barrels per day per well, far exceeding the basin's historical average of 2,000 barrels. "This has the potential to create a significant new growth business for Murphy," Hambly remarked.

This bullish outlook on Vietnam is balanced against a planned overall production decrease for 2026. The company forecasts net production of 171,000 barrels of oil equivalent per day (boe/d), down from 182,000 boe/d in 2025. Management attributed the decline primarily to higher royalties impacting Tupper Montney natural gas volumes in Canada, while assuring that the cash-flow impact would be "muted."

Murphy's 2026 blueprint is deliberately front-loaded with what executives call "value-accretive" commitments. The first half will see continued appraisal in Vietnam and exploration drilling in Côte d'Ivoire. The company also expanded its footprint with new entries offshore Morocco and in the Gulf of America. Hambly emphasized that core projects like the Lac Da Vang development in Vietnam and the Chinook well in the Gulf of America are likely to proceed in "almost every oil price scenario," though the company retains the flexibility to trim overall capital spending by roughly 10% if needed.

The long-term picture hinges on replenishing the portfolio. Hambly acknowledged that without new investment, the company's deepwater Gulf of America volumes would face an ~18% annual decline rate. He projected that most identified major Gulf projects would be developed by the end of the decade, potentially allowing Murphy to maintain scale before a "significant decline post-2029." The exploration pipeline, including the Vietnam discovery and newly acquired blocks, is intended to extend that runway.

Murphy concludes 2025 with a strong balance sheet, low leverage, and over $2 billion in liquidity, positioning it to navigate uncertainty while funding its most promising bets.

Market Voices: Analyst & Investor Reactions

David Chen, Energy Portfolio Manager at Horizon Capital: "Murphy is executing a classic 'quality over quantity' pivot. The Vietnam discovery is a genuine company-maker if the resource size holds up. Their discipline in maintaining a fortress balance sheet gives them optionality that many peers lack in this environment."

Sarah Fitzpatrick, Senior Analyst at ClearView Energy Partners: "The near-term production decline is a concern, but it's a calculated trade-off. The capital being diverted to Vietnam and offshore has a much higher potential return on investment. The key will be execution on those long-dated projects without cost overruns."

Michael "Rig" Rourke, Veteran Oil & Gas Geologist and Independent Blogger: "An 80% success rate? Let's see them replicate that outside of one hot spot. They're touting a 2031 first oil target in Vietnam like it's around the corner. That's six years of political, regulatory, and execution risk. Investors are supposed to hold their breath while production declines today? This feels like a story to distract from the near-term metrics."

Anya Desai, ESG-Focused Investment Strategist: "The report is light on any substantive energy transition discussion. While the operational efficiency gains are commendable, the long-term strategy seems entirely anchored in extending the fossil fuel lifecycle. The market's valuation of pure-play E&Ps is increasingly factoring in this kind of stranded asset risk."