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What to Expect from Murphy Oil (MUR) in Q3 Earnings?

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Murphy Oil Corporation (MUR - Free Report) is scheduled to report third-quarter 2017 results after the market closes on Nov 1. Last quarter, the company reported a positive earnings surprise of 26.67%.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Murphy Oil’s total net production for the third quarter was expected to be in the range of 156-158 thousand barrels of oil equivalent per day (MBOE/d). However, this guidance was set at a lower level than the second-quarter actual figures due to pre-planned downtime work at Sarawak oil and gas fields and Terra Nova field in Eastern Canada. It also takes into consideration the loss due to a non-operated Kodiak well in the Gulf of Mexico.

The Zacks Consensus Estimate for net crude oil & condensate produced for the current quarter is pegged at 85 MBOE/d, indicating a 4.5% drop sequentially. However, the Zacks Consensus Estimate for net natural gas liquids produced for the quarter is pegged at 11.24 million cubic feet of gas per day (mmcf/d) reflecting 20% increase. The Zacks Consensus Estimate for current quarter total revenues is currently pegged at $473 million, reflecting a 4.4% drop in revenue from the prior quarter.

The new wells, which came online in the second half of 2017, are expected to boost total production from Eagle Ford Shale to 50 MBOE/d up from 46 MBOE/d at the end of second quarter. Proper cost management and improving production from this region is going to boost performance of the company.

Thanks to the ongoing development in Murphy Oil’s North American onshore assets, productions from these assets are expected to improve 15% year over year by the end of 2017.

Murphy Oil Corporation Price, Consensus and EPS Surprise

Earnings Whispers

Our proven model does not conclusively show that Murphy Oil is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates and Murphy’s has the right mix.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: Earnings ESP for Murphy Oil is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 14 cents.

Zacks Rank: Murphy Oil is a Zacks Rank #3, increasing the possibility of a beat, but the 0.00% ESP makes it unlikely that this will see fruition this season.

Conversely, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few players in the same industry that have the right combination of elements to post an earnings beat this quarter.

Northern Oil and Gas, Inc. (NOG - Free Report) is expected to report third-quarter earnings 2017 on Nov 14. It has an Earnings ESP of +11.1% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bill Barrett Corp. has an Earnings ESP of +6.7% and a Zacks Rank #2. It is slated to report third-quarter 2017 earnings on Oct 31.

Denbury Resources Inc. has an Earnings ESP of +11.1% and a Zacks Rank #2. It is scheduled to report third-quarter 2017 earnings on Nov 7.

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