Murphy Oil Corp. fell the most in almost three years after rising exploration costs and abandoned fields led earnings to plummet and miss analysts’ estimates.
Murphy, based in El Dorado, Arkansas, dropped 6.9 percent to $62.13 at the close in New York. It earlier declined as much as 8.5 percent, the most intraday since September 2011.
Second-quarter net income slumped 68 percent from a year earlier, to $129.4 million, after the costs of drilling in Malaysia surged and two prospects in Southeast Asia were abandoned as dry holes, Murphy said yesterday after markets closed. Per-share profit excluding one-time items of 90 cents trailed the $1.21 average of 14 analysts’ estimates compiled by Bloomberg.
Oil-equivalent production of 210,191 barrels a day in the quarter fell 3 percent short of the company’s expectations, leading Murphy to say it will lower its 2014 production target.
The results “felt like a throw-back to earlier days, complete with dry holes, a production miss and a fiscal-year production guide-down,” Deutsche Bank analyst Ryan Todd said in a note to clients today.
Shares pared some of the losses after Murphy announced the sale of its Milford Haven refinery in Wales to The Klesch Group today.
Murphy Chief Executive Officer Roger Jenkins said in May that the company was in talks with potential buyers for the refinery, though a sale could take as long as one year. A spokesman for Murco, Murphy’s U.K. subsidiary, declined to comment on the sale price or other specifics.
Murphy will hold its second-quarter earnings call at 1 p.m. New York time.