Murphy Oil Corporation ( MUR - Analyst Report ) sold $500 million of 4.0% notes maturing on June 1, 2022. The notes were offered at $99.786 (per $100.00 principal).

Murphy Oil intends to utilize the proceeds to repay outstanding due under its existing credit facilities and for other general corporate purposes. The company borrowed from its credit facilities to repay the 10-year $350 million bond which matured on May 1, 2012.

Murphy Oil’s long-term debts as of March 31, 2012, of $249.6 million were flat with the year-end 2011 level. The debt-to-equity ratio at the end of the first quarter 2012 was 6.2%. The issue of new debts will drive the debt-to-equity ratio higher to 7.6%.

Interest expenses in the first quarter 2012 were $11.73 million, increasing marginally from $11.71 million reported at the end of the first quarter 2011. Murphy’s interest burden will increase with the issue of this new series with interest being paid bi-annually in June and December.

Murphy Oil continues to have a strong financial position. Cash generated from operations during the first quarter of 2012 was $991 million versus $474.9 million in the year-ago period. Cash and cash equivalents as of March 31, 2012, were $936. 7 million, which we believe will enable the company to meet the increased interest burden.

During the first quarter earnings call, Murphy Oil announced that it expects its sales volume in the second quarter to be 184,000 barrels of oil equivalent per day. The earnings per share guidance is in the band of $1.35 to $1.60.The Zacks Consensus Estimate for second-quarter 2012 is currently at the mid point of the range, at $1.44 per share.

Murphy retains a short-term Zacks #3 Rank which translates into a Hold rating. Its competitor Marathon Oil Corporation ( MRO - Analyst Report ) also holds a short-term Zacks #3 Rank.

Based in El Dorado, Arkansas, Murphy Oil Corporation engages in the exploration, production, refining and marketing of oil and gas in the U.S. and the U.K.