Good afternoon, ladies and gentlemen, and welcome to the Murphy Oil Corporation First Quarter 2015 Earnings Call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Barry Jeffery, Vice President, Investor Relations. Please go ahead, sir.

Thank you, Operator. Good afternoon, everyone, and thank you for joining us on our call today. With me are John Eckart, Executive Vice President and Chief Financial Officer; Gene Coleman, Executive Vice President of Global Offshore; and Mike McFadyen, Executive Vice President, North American Onshore. Please refer to the informational slides we have placed on the Investor Relations section of our website as you follow along with our webcast today. On today's call, John will provide a review of first quarter 2015 financial results and then follow up with an operational update, 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 discussion of risk factors, see Murphy's 2014 annual report on Form 10-K on file with the SEC. Murphy takes no duty to publicly update or revise any forward-looking statements. I'll now turn the call over to John.

Thank you, Barry. Good afternoon. As previously announced, our Chief Executive Officer, Roger Jenkins, could not be with us today due to a medical procedure performed on Tuesday. We wish Roger a continued quick recovery and look forward to having him return next week. Murphy's consolidated results in the first quarter of 2015 were a loss of $14.4 million, $0.08 per diluted share, compared to a profit of $155.3 million or $0.85 per share a year ago. Excluding discontinued operations in the U.K. our income from continuing operations amounted to $3.5 million in the first quarter of 2015, $0.02 per diluted share, again compared to the first quarter of 2014 of $169.3 million profit or $0.93 per diluted share. The first quarter results from continuing operations for 2015 included a gain of $199.5 million on the sale of an additional interest in our Malaysian business. It also included a $32.5 million of estimated after-tax cost to remediate a condensate pipeline leak or leaks in Alberta, Canada. These and other items affecting comparability of earnings between periods are listed in the schedule of adjusted earnings included as part of our earnings release. All of these figures in this schedule are on an after-tax basis. Earnings in the 2015 first quarter were negatively impacted by significantly lower realized sales prices for crude oil, natural gas liquids and North American natural gas, the effects of which were partially offset by higher production and sales levels. The company's average realized crude oil sales price fell more than $49 per barrel, which equates to 51% reduction, while U.S. natural gas liquid prices were almost $22 per barrel lower, which was 63% reduction. Natural gas prices also softened in the first quarter of '15 compared to the prior year's quarter. It dropped by $1.69 per Mcf…

[Operator Instructions] We'll go first to Leo Mariani from RBC.

Want to talk a little bit about Malaysia. I know you guys are kind of continuing some development work there. It certainly looks like your volumes are down a little bit in the second quarter versus first quarter. I realize part of that is due to the sale. Just trying to get a sense of kind of second half of 2015. Should we expect Malaysia oil volumes to start growing again versus your second quarter '15 Malaysian oil guidance?

Okay, Leo, this is Barry talking here. So let's just talk through sort of from first quarter moving into our second quarter as a starting point. You're right, we have had the sell-down in Malaysia, so that's going to impact us by 3,500 barrels a day just starting there. And of course with our turnarounds scheduled here and shut-in plans, we've got about 3 a day in our shallow water area and about 2 a day in our deepwater area that impacts us here going into the second quarter. Some of this turnaround work still continues on into the third quarter. We've got some deepwater shut-in activity at Kikeh going into the third quarter as well. So it's going to be impacting here through the summer season. Maintenance work is common for us through this middle part of the year. And so you'll see Malaysia probably not getting back to, I would say, more regular rates until probably into the fourth quarter.

Okay. That's helpful. I guess you guys kind of referred to some business development opportunities on the conference call. Could you guys elaborate a little bit more on sort of what you guys are thinking at this point?

Leo, this is John Eckart. And obviously, first, we believe that Murphy has the ability to execute projects in different areas, both offshore and North American onshore. And our business development group and our planning group are busy looking at evaluating several areas. At this time, it's early days with that. We are not -- we also say, though, that we're not going to do any deal just to do a deal. I mean, what we are interested in is opportunities that advance our position in various ways. So in North American onshore, our most likely interest would be in some bolt-on opportunity around the Eagle Ford or, of course, good acreage in nearby areas such as the Permian would also be attractive. We're seeing, Leo, a lot of ground floor opportunities available in the offshore business as well. Capital constraints among industry members are causing, though, many people to look for partners where they can't fully fund their operations. And we believe we're kind of a sought-after company to -- which means opportunities come up because of our balance sheet and our execution ability, which we believe is proven. So really I can't comment on too many specifics, but the takeaway is that we are looking at numerous places and we believe we are well-positioned to take advantage of opportunities that arise in either offshore globally or onshore in North America.

Okay. That's helpful. And I guess with respect to Eagle Ford, you guys said that you're definitely not planning on bringing back activity here in 2015 to raise the rig count. Obviously, oil prices have been recovering for the past, I guess, 1.5 months or so here. Trying to get a sense if there is an oil price environment that we could get to where you guys would say, all right, it makes sense to start adding rigs again in the Eagle Ford. Can you comment on that?

Okay, Leo. This is John again. And so we don't have any magic number or price that we're looking at. Obviously, the better the price, the more it gives you an itch to do something. But right now, we are wanting to see where prices go in the long term. We're going to look -- our budget process is a couple of months away for 2016. We're obviously going to study it very closely at that point in time. I think, unless prices really shot up significantly, we would probably just wait and evaluate what to do in the Eagle Ford with the number of rigs and the count there toward as we move into the budget season for '16. I think we probably would look at a price that got into the 60s as just helping us for 2015 without really making any future commitments at this point until we get through that budget process for '16. And so the good news is we can go back and get rigs quickly. They're out there to get. We are not in any particular hurry at this point in time based on where prices are to make a call on it. We're going to sit back and wait.

Okay. That's helpful. I guess with respect to your Gulf of Mexico volumes, you guys mentioned some maintenance that kind of hurt first quarter volumes a little bit. Looking at your second quarter guidance in the Gulf, it's just kind of flattish with the first quarter. Are you guys also seeing, I guess, some maintenance in the second quarter, and when that clears up should your volumes go up later on this year in the Gulf?

Leo, it's Barry again. So second quarter, you're right, we do have some shut-in planned maintenance in the second quarter as well. We've also got a flow line that we're working to unplug, and that's hindered us a little bit here. Going into the rest of the year, we're going to see production starting to ramp back up. The biggest impact there is going to be starting up our new expansion project at Medusa. So we'll have some new volumes coming on and that sort of tempers some of the downtime. One other thing that we'll have happening is we're forecasting our Mondo gas field to go offline this year permanently. It's been one that we've been predicting to go off for some time, and it looks like it's coming there.

All right. What would you guys add from Medusa roughly in terms of those new wells?

Well, I mean, peak production on our share is going to be in the neighborhood of 5 a day.

We'll move on. Brian Singer from Goldman Sachs.

You highlighted your commitment to exploration as a core focus of the company. Beyond the personnel shifts and the lower risk preference, what has changed in the process by which you're selecting your exploration wells? And perhaps you can use some of Sea Eagle on some of your second half wells as examples.

Brian, I'm going to pass to Gene Coleman, our EVP of Global Offshore, to address your question.

Exploration remains a key commitment -- component of our strategy, as you mentioned. And we have to start delivering results, and we understand that. As you mentioned, we have made significant changes to the organization, the staff, the leadership. And really, there's 3 key areas and it's broken out into people, processes and portfolio. People, it's almost a complete changeout of the exploration team, with over 1/2 of our technical geoscientists, which is in the number greater than 50, with the company less than 2 years. So we've made -- it's not just the people. It's certain skill sets that these -- the technical staff that we brought on board have, some specific basin modelers. We've got regional stratigraphers. A lot of key gaps that we filled with the technical staff. But moving on to your question of the processes, it's the technical rigor and risking process that we're using. And it's a global process, where we're using the same yardstick across the entire globe of all the prospects. We also have a separate technical assurance section within our exploration group now that looks critically at risking. And as I mentioned, we have the additional technical staff. On the portfolio, as you saw on the slides and in John's comments, we've tightened our focus significantly. So we're -- we have more people with the technical expertise looking at a smaller number of basins. So we are providing better scrutiny over a smaller area. And we think those 3 things really tighten that up. On Sea Eagle, mentioning technology, there's a lot of new technology. In fact, it's first of a kind to check the risking of our Seal, which is the highest risk on this Miocene amplitude. We have a group in our KL office that has worked globally on our new block, it's Sarawak SK 2C, where we think we've de-risked this. And we're pretty excited about both of those prospects, which are kind of needle-moving size. The other part of our strategy is moving to some lower risk opportunities beyond those 2 wells in the Gulf of Mexico. That includes Thunderbird, where we're sidetracking existing discovery up-dip, a low-risk prospect which can deliver production in 2016. And we also have the Dalmatian area, which are low-risk Upper Miocene amplitudes. So while we're doing those, and those are drill and complete operations, gives us time to further work our portfolio, further high-grade and make decisions on where we go forward there. Hopefully, that helps.

It does, great. And then shifting onshore, you highlighted both the operating and the capital costs deflation in the Eagle Ford Shale, 20% and 15%, with the expectation that could be more. When it's time for you and others to bring activity or some level of activity back again, and I know it's hard to say on your end when that would be, do you see those costs going back to where they've come from? And if not, how far down do you think would represent more secular type deflation from an F&D cost perspective?

Brian, it's Barry again here. I'm going to let Mike McFadyen, who looks after the onshore business, step in.

Good afternoon. We see additional opportunity to, I guess, to start out to reduce the capital costs further on the drilling and completion side with nearing 25% towards the end of the year and doing that through both working on the service and material side and re-tendering those services along with continued improvement in efficiencies, operational efficiencies in the field. So we continue to improve, reducing the days required to drill the wells. We're down now to our pacesetter wells in, for example, the Catarina area are 7 days. So those savings are going to continue on in the future. And we expect through technology to continue to drive costs down through efficiency. For the service and material side, that's a hard question to answer. Depends on what level of activity returns. We are renegotiating contracts on our rigs and our frac services for extended periods of time. So taking the savings now and adding additional time to our contracts. And for some of our units, we're going to wait until the contracts expire and then renegotiate. So we expect the costs will not approach what they did in the previous development stages of the Eagle Ford unless we see oil go back to 100 plus dollars.

And we'll take Pavel Molchanov with Raymond James. Pavel Molchanov - Raymond James & Associates, Inc., Research Division: After 3 straight dry holes in the Perth Basin, are you kind of giving up on that play? Or do you still see some opportunity to maybe come back to it?

Those 3 wells, which were clearly disappointing, fulfill our commitment for drilling on that block. We took 3 tests at a potential needle moving with the size of the acreage position there. We saw a lot of running room and it was potentially impactful. The results of these 3 wells clearly increase our risk, and we're going to take some time to look at any remaining potential. But I would say the upside there has been greatly reduced by the results of these 3 wells. Our focus now on Australia is really on the Sub Vulcan Basin where we just picked up a new block in Northern Australia as well as the Ceduna Basin down to the south of Australia, which we see as frontier with a tremendous potential. Pavel Molchanov - Raymond James & Associates, Inc., Research Division: Okay. And then kind of switching gears, what's your current stance on share buyback in the current landscape?

Okay. As you know, the board authorized a $500 million stock buyback in October and it runs for one year. Of course, we were -- as you also know, we were in a different price environment at that time. And so the board has been looking at this and so far to date has determined it's better to concentrate on a proper capital allocation and protect our cash position and debt standing rather than buy back shares. The view is that the price decline could lead to opportunities in the acquisition market and we want to be ready. We want to have ourself in shape to do that, which we think we have with our balance sheet. So to date, the board has chosen not to pull the trigger on a buyback, but the board will continue to evaluate this process as we move forward, and again, depending on what prices do, could impact the decision. But the board will take that up and discusses that from time to time, and it will be their call. But thus far, within this buyback program under this pricing environment, hasn't seemed like the appropriate thing to do.

[Operator Instructions] We'll take Edward Westlake from Crédit Suisse. Zachary Deschaine - Crédit Suisse AG, Research Division: This is Zach Deschaine for Ed. There's been a lot of noise in the cash flow statement so far from what we've seen kind of across E&Ps this quarter. You guys have flagged a $200 million decrease in working capital and Other. Can you walk us through kind of how much is working capital, how much is Other and then how we should think about those components going forward through the year?

Well, our working capital reduction is primarily in our accounts receivable because we -- the prices are down and the timing of our sales liftings and such in different locations impacts that. So the working capital is really related to our timing of our accounts receivable and the price that we get for our oil. So it's -- I don't see it having any -- at these price environments, it's probably fairly similar to what it's going to be going forward. Zachary Deschaine - Crédit Suisse AG, Research Division: Okay. So the $200 million is mainly working capital? There's no substantial kind of Other floating around in there to flag?

No, no. Correct. Zachary Deschaine - Crédit Suisse AG, Research Division: Okay. Just a real quick one on deferred taxes posting a loss. It's sort of funny. And again, this is across the sector. Is there anything out there in particular to be aware of over the course of the year in terms of timing of tax payments?

Well, in the U.S. our tax benefits that we recorded are deferred tax benefits and so that would continue to be expected if the losses continue in the U.S. And of course with prices improving, it should be somewhat better. But we don't have the ability to carry back U.S. losses into prior years and recover cash at this point. So the benefits that we are booking on a tax basis are deferred and carry forward. We expect that to continue for the time being at this price environment.

And we'll take our next question from Guy Baber with Simmons. Guy Allen Baber - Simmons & Company International, Research Division: I Wanted to discuss the financial framework a bit, especially in the context of pursuing an acquisition that could be meaningful. Obviously, the balance sheet is very strong right now and you guys have a nice cash position. Was just hoping you could talk a little bit about perhaps your targeted leverage framework, how comfortable or how high you might be willing to take that level or leverage levels if you did find an attractive acquisition target. And perhaps also how willing you may or may not be to use equity, if necessary, to fund an acquisition that you found was really attractive and additive in the right ways.

Okay. I'll try to address that as best I can. We have a history -- within our history, we've been up in the 40s on a debt-to-cap ratio before. And so the board is not absolutely uncomfortable, or the company is not absolutely uncomfortable with that kind of position. But it depends on each individual situation. We -- potentially there are opportunities out there in the marketplace, as previously mentioned. Some of those opportunities could very well favor equity type currency instead of cash. And so we have had discussions about that. And best I would say and all I could say right now is that we would not be dead set against an equity, using equity for such an acquisition, but it would be evaluated in each individual situation. And so you have to manage both the debt and equity side to be -- have an appropriate relationship, and so that's part of all the consideration in each review and opportunity that comes up. Guy Allen Baber - Simmons & Company International, Research Division: And then one more from me. I'm just curious as to what the timeline looks like with respect to when you guys might be comfortable with releasing or talking about 2016 production and 2016 capital spending. Is that something where you just have to get more confidence in the commodity price framework? Or is there anything additional that you're looking to see before you do that?

I think it's depending on what price it would be, of course. But I think I have previously mentioned and I think I'd say again, is that really, when it's -- when we do our budget process for 2016 that decisions will have to be made about what we will do with capital spend, how much debt we'd be comfortable with having. And we would evaluate that probably most thoroughly at that time and likely not say a lot about it before late third-quarter, early fourth quarter or such a time as that. Our board typically doesn't deal with the budget until quite late in the year. So we never ever want to get out ahead of those guys, those folks.

And our next question comes from Evan Calio with Morgan Stanley.

Maybe a follow-up on the new ventures comments. How do you compare the capital allocation between onshore and offshore developments when reviewing opportunities? Is it return threshold? Is there any premium that you're putting for the onshore given the capital flexibility and strategic balancing of your portfolio? How do you kind of compare and contrast those 2 opportunity sets?

Well, that's a difficult question to answer only from the standpoint of every opportunity we look at is different. And so the opportunities are evaluated based on each individual situation. And so I don't know that I can really answer the question other than to say that it's all considered and we look at our opportunities and weigh each one typically fairly consistently, depending on what it adds to the mix and what it adds to the portfolio. And we have certain criteria we look at and look for in an acquisition type environment. And same thing with what kinds of returns we're looking for from the assets that we already have in our portfolio. So it's just an individual review.

Yes, I know it's a tough question, I just didn't know if there was maybe a strategic preference for the objective.

Evan, this is Barry here. And just to follow up a little more, too, is that when you've got a balanced offshore and onshore business, some of the projects that are ongoing in the offshore, you're just not going to stop them. And so you've got to finish those up. And the ones we're doing today, like a Medusa subsea expansion or a Kodiak or things like that in the Gulf of Mexico are very robust. We've got like 10% return in the $30 range. So even -- obviously with prices higher than that, those are robust and moving forward with the infrastructure. Similarly in the offshore shallow water of Sarawak and things like that. So you're not going to stop an offshore product. And so then it comes down to balancing cash flow and CapEx for the year and you trim exploration where you can, you trim onshore rigs to balance out where you want to be on a cash flow basis as well. So it's value-based and it's also situational-based.

Great. I was thinking on the acquisition side. My second question, in exploration, and I appreciate the revamp of that business and you can kind of hear the frustration from the results, but I mean is there a timeline that you need to see results before you reallocate more capital away from that segment?

I think, as I mentioned before, the kind of shifting to some lower risk, almost appraisal-type opportunities gives us a little pause to restock in high-grade remaining portfolio. This new team that we have in place, the reality of it is, most of the wells, recent wells that we've drilled are not their wells, not as a result of the processes that we put in place. But we are starting to see them, and Sea Eagle is one of those. So I think we've got to give this some time. It's not something you fix overnight. And I think clearly going into 2016 we've got a lot of prospects and what we're trying to do is drill the best of a bigger portfolio, and that's what we're in the process of building. So clearly, we have a rig schedule that has some good opportunities through 2016. But as you mentioned, it's something that we continually have to be -- evaluate and look at. But clearly through 2016 we think we have a good program.

We have no further questions in the queue. At this time, I'll turn it back to you for any closing remarks.

Okay. Well, thank you, Operator, and thank you all for your attention today. And we'll speak to you again 3 months from now. Thank you. Have a good day.