XML 28 R14.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Property, Plant and Equipment | 12 Months Ended
--- | ---
Dec. 31, 2017
Property, Plant And Equipment [Abstract] |
Property, Plant and Equipment | Note E – Property, Plant and Equipment ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |
﻿ |  | December 31, 2017 |  |  | December 31, 2016 |
﻿(Thousands of dollars) |  | Cost |  | Net |  |  | Cost |  | Net |
﻿Exploration and production 1 |  | $ | 20,329,930 |  | 8,120,293 | 2 |  | 20,767,772 |  | 8,214,740 | 2
﻿Corporate and other |  |  | 170,842 |  | 99,738 |  |  | 156,231 |  | 101,448 |
﻿ |  | $ | 20,500,772 |  | 8,220,031 |  |  | 20,924,003 |  | 8,316,188 |
﻿1 Includes unproved mineral rights as follows: |  | $ | 600,423 |  | 198,349 |  |  | 595,138 |  | 188,689 |
2. Includes $38,670 in 2017 and $48,053 in 2016 related to administrative assets and support equipment. ﻿ 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 t he transaction was $48.8 million. Additionally, the buyer assumed the asset retirement obligation of approximately $85.9 million. A $129.0 million pretax gain was reported in 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 $19.6 million. There were no gains or losses recorded related to the non-core Eagle Ford Shale sales. ﻿ In 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 associated with the Syncrude divestiture. ﻿ In 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. Total cash consideration received upon closing was $414.1 million. A gain on sale of approximately $187.0 million was ﻿ deferred and is being recognized over approximately the next 18 years in the Canadian operating segment. The Company amortized approximately $7.1 million and $5.1 million of the deferred gain during 2017 and 2016, respectively. The remaining deferred gain of $181.7 million was included as a component of D eferred credits and other liabilities in the Company’s Consolidated Balance Sheet as of December 31, 2017. ﻿ Acquisition ﻿ In 2016, a Canadian subsidiary of Murphy Oil acquired a 70% operated working interest (WI) of Athabasca Oil Corporation’s (Athabasca) production, acreage, infrastructure and facilities in the Kaybob Duvernay lands, and a 30% 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 December 31, 2017, $44.8 million of the carried interest had been paid. The carry is to be paid over a period of up to five years from 2016. ﻿ Impairments ﻿ During 2016 and 2015, declines in future oil and gas prices led to impairments in certain of the Company’s producing properties. During 2016, the Company recorded pretax noncash 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. In 2015, the Company recognized pretax noncash impairment charges of $2.49 billion to reduce the carrying value of certain offshore producing and non-producing properties in the Gulf of Mexico, producing offshore properties in Malaysia and for Western Canada onshore heavy oil producing properties. 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. The following table reflects the recognized impairments for the three years ended December 31, 2017. ﻿ ﻿ ﻿
﻿ |  |  |  |  |  |  |  |
﻿ |  | December 31, |
﻿(Thousands of dollars) |  |  | 2017 | 2016 |  | 2015
﻿Gulf of Mexico |  | $ | – |  | – |  | 328,982 |
﻿Canada |  |  | – |  | 95,088 |  | 683,574 |
﻿Malaysia |  |  | – |  | – |  | 1,480,600 |
﻿ |  | $ | – |  | 95,088 |  | 2,493,156 |
﻿ Other ﻿ In 2006, the Kakap field in Block K was unitized with the Gumusut field in an adjacent block under a Unitization and Unit Operating Agreement (UUOA) between the owners. The Gumusut-Kakap Unit is operated by another company. In the fourth quarter 2016, the owners completed the first redetermination process for a revision to the blocks’ tract participation interest, and the operator of the unitized field sought the approval of Petronas to effect the change in 2017. In 2016, the Company recorded an estimated redetermination expense of $39.1 million ($24.1 million after taxes) related to an expected revision in the Company’s working interest covering the period from inception through year-end 2016 at Kakap. In February 2017, the Company received Petronas official approval to the redetermination change that reduced the Company’s working interest in oil operations to 6.67% effective at April 1, 2017. Working interest redeterminations are required at different points within the life of the unitized field. ﻿ Following a further Unitization Framework Agreement (UFA) between the governments of Brunei and Malaysia, the Company now has a 6.35% interest in the Kakap field in Block K Malaysia as of December 31, 2017. The UFA unitized the Gumusut/Kakap (GK) and Geronggong/Jagus East fields effective November 23, 2017. In the fourth quarter 2017, the Company recorded an estimated redetermination expense of $15.0 million ($9.3 million after tax) related to Company’s revised working interest. ﻿ Exploratory Wells ﻿ Under 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 December 31, 2017, 2016 and 2015, the Company had total capitalized drilling costs pending the determination of proved reserves of $175.6 million, $148.5 million and $130.5 million, respectively. The following table reflects the net changes in capitalized exploratory well costs during the three-year period ended December 31, 2017. ﻿ ﻿
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿(Thousands of dollars) | 2017 |  | 2016 |  | 2015
﻿Beginning balance at January 1 | $ | 148,500 |  | 130,514 |  | 120,455
﻿Additions pending the determination of proved reserves |  | 51,488 |  | 17,986 |  | 64,578
﻿Reclassifications to proved properties based on the determination of proved reserves |  | (15,988) |  | – |  | –
﻿Capitalized exploratory well costs charged to expense |  | (8,360) |  | – |  | (54,519)
﻿ Ending balance at December 31 | $ | 175,640 |  | 148,500 |  | 130,514
﻿ The capitalized well costs charged to expense in 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. The capitalized well costs charged to expense in 2015 included one well in the Gulf of Mexico in which development of the well also could not be justified due to noncommercial hydrocarbon quantities found in the sidetrack and one project in the Gulf of Mexico deemed unlikely to be developed due to low commodity prices. ﻿ 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 has been capitalized. The projects are aged based on the last well drilled in the project. ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ | 2017 |  | 2016 |  | 2015
﻿(Thousands of dollars) | Amount |  | No. of Wells |  | No. of Projects |  | Amount |  | No. of Wells |  | No. of Projects |  | Amount |  | No. of Wells |  | No. of Projects
﻿Aging of capitalized well costs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ Zero to one year | $ | 41,480 |  | 3 |  | 2 |  | $ | 20,481 |  | 1 |  | 1 |  | $ | 66,032 |  | 7 |  | 6
﻿ One to two years |  | 5,812 |  | 1 |  | 1 |  |  | 63,527 |  | 5 |  | 5 |  |  | – |  | – |  | –
﻿ Two to three years |  | 43,200 |  | 2 |  | 2 |  |  | – |  | – |  | – |  |  | 57,876 |  | 3 |  | –
﻿ Three years or more |  | 85,148 |  | 7 |  | 1 |  |  | 64,492 |  | 6 |  | – |  |  | 6,606 |  | 3 |  | –
﻿ | $ | 175,640 |  | 13 |  | 6 |  | $ | 148,500 |  | 12 |  | 6 |  | $ | 130,514 |  | 13 |  | 6
﻿ Of the $134.1 million of exploratory well costs capitalized more than one year at December 31, 2017, $70.4 million is in Brunei, $43.2 million is in Vietnam and $20.5 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.

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