Murphy Oil Price Target Cut to $35, Flags Softer 2026 Production Outlook
BMO Capital cut Murphy Oil’s price target to $35 from $37 and kept a Market Perform rating, citing a softer 2026 production outlook due to Montney royalties pressure. Murphy’s Q4 output topped guidance, LOE declined about 20%, and capex remained under guidance, underpinning robust free-cash-flow breakeven and low leverage.
1. BMO Cuts Price Target
On February 3 BMO Capital lowered its Murphy Oil price target to $35 from $37 and maintained a Market Perform rating, citing a softer production outlook in 2026 driven by higher Montney royalties and subdued output in the Gulf of America.
2. Q4 Results and Cost Metrics
Murphy Oil’s Q4 production exceeded guidance, driven by high-performing onshore wells and stable offshore uptime, while lease operating expenses declined roughly 20% year over year and capital spending remained below guidance, enhancing free-cash-flow breakeven and sustaining low leverage.
3. Exploration Highlights
The appraisal well at Hai Su Vang intersected 429 feet of net oil pay with no oil-water contact, suggesting resource potential above the initial midpoint of 170 million barrels of oil equivalent, while exploration wells in the Gulf of America found oil and the Civette well offshore Côte d’Ivoire came up dry.