XML 21 R11.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Property, Plant and Equipment | 9 Months Ended
--- | ---
Sep. 30, 2017
Property, Plant And Equipment [Abstract] |
Property, Plant and Equipment | Note B – Property, Plant and Equipment ﻿ ﻿ Exploratory Wells ﻿ Under Financial Accounting Standards Board (FASB) guidance exploratory well costs should continue to be capitalized when the well has found a sufficient quantity of reserves to justify its completion as a producing well and the Company is making sufficient progress assessing the reserves and the economic and operating viability of the project. ﻿ At September 30, 2017, the Company had total capitalized exploratory well costs pending the determination of proved reserves of $178.4 million. The following table reflects the net changes in capitalized exploratory well costs during the nine-month periods ended September 30, 2017 and 2016. ﻿ ﻿
﻿ |  |  |  |  |
﻿ |  |  |  |  |
﻿(Thousands of dollars) | 2017 |  |  | 2016
﻿Beginning balance at January 1 | $ | 148,500 |  |  | 130,514
﻿Additions pending the determination of proved reserves |  | 51,614 |  |  | 847
﻿Reclassifications to proved properties based on the determination of proved reserves |  | (13,370) |  |  | –
﻿Capitalized exploratory well costs charged to expense |  | (8,360) |  |  | –
﻿Other adjustments |  | – |  |  | (3,205)
﻿Balance at September 30 | $ | 178,384 |  |  | 128,156
﻿ ﻿ The capitalized well costs charged to expense during the first nine months of 2017 included the Marakas-01 well in Block SK314A, offshore Malaysia in which development of the well could not be justified due to noncommercial hydrocarbon quantities found and cha nge in development plan due to commodity prices. Note B – Property, Plant and Equipment (Contd.) ﻿ The following table provides an aging of capitalized exploratory well costs based on the date the drilling was completed for each individual well and the number of projects for which exploratory well costs have been capitalized. The projects are aged based on the last well drilled in the project. ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  | September 30,
﻿ | 2017 |  | 2016
﻿(Thousands of dollars) | Amount |  | No. of Wells |  | No. of Projects |  | Amount |  | No. of Wells |  | No. of Projects
﻿Aging of capitalized well costs: |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Zero to one year | $ | 41,609 |  | 3 |  | 2 |  | $ | 10,563 |  | 2 |  | 2
﻿One to two years |  | 8,430 |  | 2 |  | 2 |  |  | 53,101 |  | 3 |  | 3
﻿Two to three years |  | 43,197 |  | 1 |  | 1 |  |  | 31,627 |  | 2 |  | –
﻿Three years or more |  | 85,148 |  | 7 |  | 1 |  |  | 32,865 |  | 4 |  | –
﻿ | $ | 178,384 |  | 13 |  | 6 |  | $ | 128,156 |  | 11 |  | 5
﻿ Of the $136.8 million of exploratory well costs capitalized more than one year at September 30, 2017, $70.4 million is in Brunei, $43.2 million is in Vietnam and $23.2 million is in Malaysia. In all geographical areas, either further appraisal or development drilling is planned and/or development studies/plans are in various stages of completion. ﻿ Divestments ﻿ In January 2017, a Canadian subsidiary of the Company completed its disposition of the Seal field in Western Canada. Total cash consideration to Murphy upon closing of the transaction was approximately $49.0 million. Additionally, the buyer assumed the asset retirement obligation of approximately $85.9 million. A $132.4 million pretax gain was reported in the first quarter of 2017 related to the sale. Also, in 2017, a U.S. subsidiary of the Company completed its disposition of certain non-core properties in the Eagle Ford Shale area. Total cash consideration to Murphy upon closing of the transaction was approximately $19.4 million. There were no gain s or loss es recorded related to these sale s. ﻿ During the second quarter 2016, a Canadian subsidiary of the Company completed the sale of its five percent, non-operated working interest in Syncrude Canada Ltd. (“Syncrude”) asset to Suncor Energy Inc. (“Suncor”). The Company received net cash proceeds of $739.1 million and recorded an after-tax gain of $71.7 million in the nine-month period ended September 30, 2016 associated with the Syncrude divestiture. ﻿ During the second quarter 2016, a Canadian subsidiary of the Company completed a divestiture of natural gas processing and sales pipeline assets that support Murphy’s Montney natural gas fields in the Tupper area of northeastern British Columbia. A gain on sale of approximately $187.0 million was deferred and is being recognized over the next 19 years in the Canadian operating segment. The Company amortized approximately $5.3 million and $3.4 million of the deferred gain during the nine-month period s ended September 30, 2017 and 2016, respectively. The remaining deferred gain of $185.0 million was included as a component of deferred credits and other liabilities in the Compa ny’s Consolidated Balance Sheet as of September 30, 2017. ﻿ Acquisitions ﻿ During the second quarter 2016, a Canadian subsidiary acquired a 70 percent operated working interest (WI) of Athabasca Oil Corporation’s (Athabasca) production, acreage, infrastructure and facilities in the Kaybob Duvernay lands, and a 30 percent non-operated WI of Athabasca’s production, acreage, infrastructure and facilities in the liquids rich Placid Montney lands in Alberta, the majority of which was unproved. Under the terms of the joint venture, the total consideration amounts to approximately $375.0 million of which Murphy paid $206.7 million in cash at closing, subject to normal closing adjustments, and an additional $168.0 million in the form of a carried interest on the Kaybob Duvernay property. As of September 30, 2017, $32.0 million of the carried interest had been paid. The carry is to be paid over a period of up to five years from 2016. Note B – Property, Plant and Equipment (Contd.) ﻿ Impairments ﻿ D eclines in future oil and gas prices in early 2016 led to impairments in certain of the Company’s producing properties and the nine-month period in 2016 included pretax non-cash impairment charges of $95.1 million to reduce the carrying values to their estimated fair values for the Terra Nova field offshore Canada and the Western Canada onshore heavy oil producing properties at Seal. The fair values were determined by internal discounted cash flow models using estimates of future production, prices from futures exchanges, costs, and a discount rate believed to be consistent with those used by principal market participants in the applicable region. See also Note J. ﻿ Other ﻿ The Company has an interest in the Kakap field in Block K Malaysia. The Kakap field is operated by another company and was jointly developed with the Gumusut field owned by others. As required by the agreements governing the field, a redetermination (unitization) review was required in 2016. In the fourth quarter 2016, the Company recorded $39.1 million in redetermination expense related to an expected reduction in the Company’s working interest covering the period from inception through year-end 2016 at Kakap. In February 2017, PETRONAS officially approved the redetermination that reduce d the Company’s working interest from 8.6% to approximately 6.7% effective April 1, 2017. The Company partially settled $21.8 million of the redetermination expense in cash in the second quarter of 2017. The Company currently expects to settle the remainder of the redetermination costs in future periods. It is possible that the final adjustment amount could be different than the current estimate. D ue to the change in working interest, the future payments under a capital lease of a floating, production and storage facility in the Kakap field are lower and the Company reduced the total debt recorded on the Consolidated Balance Sheet in the second quarter 2017 by approximately $56.7 million, with a similar reduction to Property, plant and equipment.

X
- References No definition available. + Details
Name: | us-gaap_PropertyPlantAndEquipmentAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 + Details
Name: | us-gaap_PropertyPlantAndEquipmentDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration