Intrinsic value of Murphy Oil - MUR

Previous Close

$31.89

  Intrinsic Value

$6.68

stock screener

  Rating & Target

str. sell

-79%

Previous close

$31.89

 
Intrinsic value

$6.68

 
Up/down potential

-79%

 
Rating

str. sell

We calculate the intrinsic value of MUR stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 5.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  21.60
  19.94
  18.45
  17.10
  15.89
  14.80
  13.82
  12.94
  12.15
  11.43
  10.79
  10.21
  9.69
  9.22
  8.80
  8.42
  8.08
  7.77
  7.49
  7.24
  7.02
  6.82
  6.63
  6.47
  6.32
  6.19
  6.07
  5.97
  5.87
  5.78
Revenue, $m
  2,706
  3,245
  3,844
  4,501
  5,217
  5,989
  6,817
  7,699
  8,634
  9,621
  10,658
  11,747
  12,885
  14,072
  15,310
  16,599
  17,940
  19,333
  20,782
  22,287
  23,851
  25,477
  27,167
  28,925
  30,755
  32,659
  34,642
  36,708
  38,863
  41,110
Variable operating expenses, $m
  3,315
  3,975
  4,709
  5,514
  6,390
  7,336
  8,350
  9,431
  10,576
  11,785
  13,057
  14,389
  15,784
  17,239
  18,755
  20,334
  21,976
  23,684
  25,458
  27,302
  29,218
  31,209
  33,280
  35,433
  37,674
  40,007
  42,436
  44,968
  47,607
  50,360
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  3,315
  3,975
  4,709
  5,514
  6,390
  7,336
  8,350
  9,431
  10,576
  11,785
  13,057
  14,389
  15,784
  17,239
  18,755
  20,334
  21,976
  23,684
  25,458
  27,302
  29,218
  31,209
  33,280
  35,433
  37,674
  40,007
  42,436
  44,968
  47,607
  50,360
Operating income, $m
  -609
  -730
  -865
  -1,013
  -1,174
  -1,347
  -1,534
  -1,732
  -1,943
  -2,165
  -2,398
  -2,643
  -2,899
  -3,166
  -3,445
  -3,735
  -4,036
  -4,350
  -4,676
  -5,015
  -5,367
  -5,732
  -6,113
  -6,508
  -6,920
  -7,348
  -7,794
  -8,259
  -8,744
  -9,250
EBITDA, $m
  560
  672
  796
  932
  1,080
  1,240
  1,412
  1,594
  1,788
  1,992
  2,207
  2,433
  2,668
  2,914
  3,171
  3,438
  3,715
  4,004
  4,304
  4,615
  4,939
  5,276
  5,626
  5,990
  6,369
  6,763
  7,174
  7,602
  8,048
  8,514
Interest expense (income), $m
  128
  181
  251
  329
  416
  512
  616
  729
  849
  978
  1,114
  1,258
  1,409
  1,567
  1,733
  1,906
  2,087
  2,274
  2,470
  2,673
  2,884
  3,103
  3,331
  3,567
  3,814
  4,070
  4,336
  4,614
  4,902
  5,203
  5,517
Earnings before tax, $m
  -790
  -981
  -1,194
  -1,429
  -1,686
  -1,964
  -2,263
  -2,582
  -2,920
  -3,279
  -3,656
  -4,052
  -4,467
  -4,900
  -5,351
  -5,821
  -6,311
  -6,820
  -7,349
  -7,898
  -8,469
  -9,063
  -9,680
  -10,322
  -10,990
  -11,684
  -12,408
  -13,162
  -13,948
  -14,767
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -790
  -981
  -1,194
  -1,429
  -1,686
  -1,964
  -2,263
  -2,582
  -2,920
  -3,279
  -3,656
  -4,052
  -4,467
  -4,900
  -5,351
  -5,821
  -6,311
  -6,820
  -7,349
  -7,898
  -8,469
  -9,063
  -9,680
  -10,322
  -10,990
  -11,684
  -12,408
  -13,162
  -13,948
  -14,767

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  11,816
  14,172
  16,786
  19,656
  22,780
  26,152
  29,766
  33,618
  37,701
  42,011
  46,543
  51,295
  56,264
  61,452
  66,858
  72,486
  78,340
  84,426
  90,751
  97,323
  104,153
  111,253
  118,634
  126,311
  134,299
  142,615
  151,275
  160,299
  169,707
  179,519
Adjusted assets (=assets-cash), $m
  11,816
  14,172
  16,786
  19,656
  22,780
  26,152
  29,766
  33,618
  37,701
  42,011
  46,543
  51,295
  56,264
  61,452
  66,858
  72,486
  78,340
  84,426
  90,751
  97,323
  104,153
  111,253
  118,634
  126,311
  134,299
  142,615
  151,275
  160,299
  169,707
  179,519
Revenue / Adjusted assets
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
Average production assets, $m
  10,055
  12,059
  14,284
  16,727
  19,385
  22,254
  25,330
  28,608
  32,082
  35,750
  39,607
  43,650
  47,879
  52,293
  56,894
  61,683
  66,664
  71,843
  77,225
  82,818
  88,631
  94,672
  100,953
  107,486
  114,284
  121,360
  128,730
  136,409
  144,414
  152,764
Working capital, $m
  -509
  -610
  -723
  -846
  -981
  -1,126
  -1,282
  -1,447
  -1,623
  -1,809
  -2,004
  -2,208
  -2,422
  -2,646
  -2,878
  -3,121
  -3,373
  -3,635
  -3,907
  -4,190
  -4,484
  -4,790
  -5,107
  -5,438
  -5,782
  -6,140
  -6,513
  -6,901
  -7,306
  -7,729
Total debt, $m
  4,042
  5,310
  6,716
  8,261
  9,941
  11,755
  13,700
  15,772
  17,969
  20,287
  22,726
  25,282
  27,956
  30,747
  33,655
  36,683
  39,832
  43,107
  46,509
  50,045
  53,720
  57,540
  61,511
  65,641
  69,939
  74,412
  79,072
  83,926
  88,988
  94,267
Total liabilities, $m
  6,357
  7,624
  9,031
  10,575
  12,256
  14,070
  16,014
  18,087
  20,283
  22,602
  25,040
  27,597
  30,270
  33,061
  35,970
  38,997
  42,147
  45,421
  48,824
  52,360
  56,035
  59,854
  63,825
  67,955
  72,253
  76,727
  81,386
  86,241
  91,302
  96,581
Total equity, $m
  5,459
  6,547
  7,755
  9,081
  10,524
  12,082
  13,752
  15,532
  17,418
  19,409
  21,503
  23,698
  25,994
  28,391
  30,888
  33,489
  36,193
  39,005
  41,927
  44,963
  48,119
  51,399
  54,809
  58,356
  62,046
  65,888
  69,889
  74,058
  78,404
  82,938
Total liabilities and equity, $m
  11,816
  14,171
  16,786
  19,656
  22,780
  26,152
  29,766
  33,619
  37,701
  42,011
  46,543
  51,295
  56,264
  61,452
  66,858
  72,486
  78,340
  84,426
  90,751
  97,323
  104,154
  111,253
  118,634
  126,311
  134,299
  142,615
  151,275
  160,299
  169,706
  179,519
Debt-to-equity ratio
  0.740
  0.810
  0.870
  0.910
  0.940
  0.970
  1.000
  1.020
  1.030
  1.050
  1.060
  1.070
  1.080
  1.080
  1.090
  1.100
  1.100
  1.110
  1.110
  1.110
  1.120
  1.120
  1.120
  1.120
  1.130
  1.130
  1.130
  1.130
  1.130
  1.140
Adjusted equity ratio
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -790
  -981
  -1,194
  -1,429
  -1,686
  -1,964
  -2,263
  -2,582
  -2,920
  -3,279
  -3,656
  -4,052
  -4,467
  -4,900
  -5,351
  -5,821
  -6,311
  -6,820
  -7,349
  -7,898
  -8,469
  -9,063
  -9,680
  -10,322
  -10,990
  -11,684
  -12,408
  -13,162
  -13,948
  -14,767
Depreciation, amort., depletion, $m
  1,169
  1,402
  1,661
  1,945
  2,254
  2,588
  2,945
  3,326
  3,731
  4,157
  4,605
  5,076
  5,567
  6,081
  6,616
  7,172
  7,752
  8,354
  8,980
  9,630
  10,306
  11,008
  11,739
  12,498
  13,289
  14,112
  14,969
  15,861
  16,792
  17,763
Funds from operations, $m
  380
  421
  467
  516
  568
  624
  683
  745
  810
  878
  949
  1,024
  1,101
  1,181
  1,264
  1,351
  1,441
  1,534
  1,631
  1,732
  1,837
  1,945
  2,059
  2,177
  2,299
  2,427
  2,561
  2,700
  2,845
  2,996
Change in working capital, $m
  -90
  -101
  -113
  -124
  -134
  -145
  -156
  -166
  -176
  -186
  -195
  -205
  -214
  -223
  -233
  -242
  -252
  -262
  -272
  -283
  -294
  -306
  -318
  -331
  -344
  -358
  -373
  -389
  -405
  -422
Cash from operations, $m
  470
  523
  579
  639
  703
  769
  838
  911
  986
  1,064
  1,145
  1,228
  1,315
  1,404
  1,497
  1,593
  1,693
  1,796
  1,903
  2,015
  2,131
  2,251
  2,376
  2,507
  2,643
  2,785
  2,933
  3,088
  3,250
  3,419
Maintenance CAPEX, $m
  -961
  -1,169
  -1,402
  -1,661
  -1,945
  -2,254
  -2,588
  -2,945
  -3,326
  -3,731
  -4,157
  -4,605
  -5,076
  -5,567
  -6,081
  -6,616
  -7,172
  -7,752
  -8,354
  -8,980
  -9,630
  -10,306
  -11,008
  -11,739
  -12,498
  -13,289
  -14,112
  -14,969
  -15,861
  -16,792
New CAPEX, $m
  -1,786
  -2,005
  -2,224
  -2,443
  -2,658
  -2,869
  -3,076
  -3,278
  -3,475
  -3,667
  -3,857
  -4,044
  -4,229
  -4,414
  -4,601
  -4,789
  -4,982
  -5,179
  -5,382
  -5,593
  -5,812
  -6,041
  -6,281
  -6,533
  -6,798
  -7,076
  -7,370
  -7,679
  -8,005
  -8,350
Cash from investing activities, $m
  -2,747
  -3,174
  -3,626
  -4,104
  -4,603
  -5,123
  -5,664
  -6,223
  -6,801
  -7,398
  -8,014
  -8,649
  -9,305
  -9,981
  -10,682
  -11,405
  -12,154
  -12,931
  -13,736
  -14,573
  -15,442
  -16,347
  -17,289
  -18,272
  -19,296
  -20,365
  -21,482
  -22,648
  -23,866
  -25,142
Free cash flow, $m
  -2,278
  -2,651
  -3,047
  -3,464
  -3,900
  -4,354
  -4,825
  -5,312
  -5,815
  -6,334
  -6,869
  -7,421
  -7,990
  -8,577
  -9,184
  -9,811
  -10,461
  -11,134
  -11,833
  -12,558
  -13,312
  -14,096
  -14,913
  -15,765
  -16,653
  -17,580
  -18,548
  -19,560
  -20,617
  -21,723
Issuance/(repayment) of debt, $m
  1,126
  1,268
  1,406
  1,544
  1,681
  1,814
  1,945
  2,072
  2,197
  2,319
  2,438
  2,556
  2,674
  2,791
  2,909
  3,028
  3,149
  3,274
  3,403
  3,536
  3,675
  3,820
  3,971
  4,130
  4,298
  4,474
  4,659
  4,855
  5,061
  5,279
Issuance/(repurchase) of shares, $m
  1,759
  2,069
  2,402
  2,755
  3,129
  3,522
  3,933
  4,361
  4,807
  5,270
  5,750
  6,247
  6,762
  7,296
  7,849
  8,422
  9,015
  9,631
  10,271
  10,935
  11,625
  12,343
  13,090
  13,869
  14,680
  15,526
  16,409
  17,331
  18,294
  19,300
Cash from financing (excl. dividends), $m  
  2,885
  3,337
  3,808
  4,299
  4,810
  5,336
  5,878
  6,433
  7,004
  7,589
  8,188
  8,803
  9,436
  10,087
  10,758
  11,450
  12,164
  12,905
  13,674
  14,471
  15,300
  16,163
  17,061
  17,999
  18,978
  20,000
  21,068
  22,186
  23,355
  24,579
Total cash flow (excl. dividends), $m
  607
  686
  761
  835
  909
  981
  1,052
  1,121
  1,188
  1,254
  1,319
  1,383
  1,446
  1,510
  1,573
  1,638
  1,704
  1,771
  1,841
  1,913
  1,988
  2,066
  2,148
  2,234
  2,325
  2,420
  2,520
  2,626
  2,738
  2,856
Retained Cash Flow (-), $m
  -1,759
  -2,069
  -2,402
  -2,755
  -3,129
  -3,522
  -3,933
  -4,361
  -4,807
  -5,270
  -5,750
  -6,247
  -6,762
  -7,296
  -7,849
  -8,422
  -9,015
  -9,631
  -10,271
  -10,935
  -11,625
  -12,343
  -13,090
  -13,869
  -14,680
  -15,526
  -16,409
  -17,331
  -18,294
  -19,300
Prev. year cash balance distribution, $m
  131
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -1,021
  -1,384
  -1,641
  -1,920
  -2,220
  -2,540
  -2,881
  -3,240
  -3,618
  -4,015
  -4,431
  -4,864
  -5,316
  -5,786
  -6,275
  -6,784
  -7,312
  -7,860
  -8,430
  -9,022
  -9,637
  -10,277
  -10,942
  -11,634
  -12,355
  -13,106
  -13,889
  -14,705
  -15,556
  -16,444
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -979
  -1,267
  -1,428
  -1,581
  -1,721
  -1,844
  -1,946
  -2,025
  -2,079
  -2,105
  -2,104
  -2,076
  -2,021
  -1,943
  -1,842
  -1,724
  -1,591
  -1,448
  -1,298
  -1,146
  -997
  -853
  -717
  -593
  -481
  -382
  -298
  -228
  -170
  -124
Current shareholders' claim on cash, %
  75.3
  57.2
  43.7
  33.7
  26.2
  20.4
  16.1
  12.7
  10.1
  8.0
  6.4
  5.2
  4.2
  3.4
  2.8
  2.2
  1.8
  1.5
  1.2
  1.0
  0.8
  0.7
  0.6
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1

Murphy Oil Corporation (Murphy) is an oil and gas exploration and production company. The Company's exploration and production business explores for and produces crude oil, natural gas and natural gas liquids across the world. Its exploration and production activities are subdivided into four geographic segments: the United States, Canada, Malaysia and all other countries. It explores for and produces crude oil, natural gas and natural gas liquids around the world. This business maintains upstream operating offices in several locations around the world, including Houston, Texas, Calgary, Alberta, and Kuala Lumpur, Malaysia. As of December 31, 2016, Murphy's principal exploration and production activities were conducted in the United States by Murphy Exploration & Production Company-USA (Murphy Expro USA), in Malaysia, Australia, Brunei, and Vietnam by Murphy Exploration & Production Company-International (Murphy Expro International) and its subsidiaries, and in Western Canada.

FINANCIAL RATIOS  of  Murphy Oil (MUR)

Valuation Ratios
P/E Ratio -19.9
Price to Sales 2.9
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 9.1
Price to Free Cash Flow -16.8
Growth Rates
Sales Growth Rate -30.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -63.6%
Cap. Spend. - 3 Yr. Gr. Rate -23.7%
Financial Strength
Quick Ratio 2
Current Ratio 0.1
LT Debt to Equity 49.3%
Total Debt to Equity 60.9%
Interest Coverage -3
Management Effectiveness
Return On Assets -1.9%
Ret/ On Assets - 3 Yr. Avg. -3.9%
Return On Total Capital -3.4%
Ret/ On T. Cap. - 3 Yr. Avg. -6.1%
Return On Equity -5.4%
Return On Equity - 3 Yr. Avg. -9.2%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 70.7%
Gross Margin - 3 Yr. Avg. 73.3%
EBITDA Margin 36.1%
EBITDA Margin - 3 Yr. Avg. 13.7%
Operating Margin -16.2%
Oper. Margin - 3 Yr. Avg. -39.6%
Pre-Tax Margin -25.8%
Pre-Tax Margin - 3 Yr. Avg. -40.5%
Net Profit Margin -14.5%
Net Profit Margin - 3 Yr. Avg. -26.7%
Effective Tax Rate 44.4%
Eff/ Tax Rate - 3 Yr. Avg. 31.3%
Payout Ratio -75%

MUR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MUR stock intrinsic value calculation we used $2225.129 million for the last fiscal year's total revenue generated by Murphy Oil. The default revenue input number comes from 0001 income statement of Murphy Oil. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our MUR stock valuation model: a) initial revenue growth rate of 21.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for MUR is calculated based on our internal credit rating of Murphy Oil, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Murphy Oil.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of MUR stock the variable cost ratio is equal to 122.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for MUR stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6.2% for Murphy Oil.

Corporate tax rate of 27% is the nominal tax rate for Murphy Oil. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the MUR stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for MUR are equal to 371.6%.

Life of production assets of 8.6 years is the average useful life of capital assets used in Murphy Oil operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for MUR is equal to -18.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4620.191 million for Murphy Oil - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 173.047 million for Murphy Oil is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Murphy Oil at the current share price and the inputted number of shares is $5.5 billion.

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COMPANY NEWS

▶ Is Murphy Oil Corporation (NYSE:MUR) A Good Dividend Stock?   [Nov-14-18 02:33PM  Simply Wall St.]
▶ Murphy Oil (MUR) Q3 Earnings Lag Estimates   [Nov-07-18 06:50PM  Zacks]
▶ Murphy Oil: 3Q Earnings Snapshot   [05:44PM  Associated Press]
▶ Why Murphy Oil Stock Is Skyrocketing Today   [Oct-11-18 03:22PM  InvestorPlace]
▶ Murphy Oil and Petrobras to Form Gulf of Mexico JV   [Oct-10-18 08:00PM  Rigzone.com]
▶ Murphy Oil Corporation Announces Dividend   [Oct-03-18 09:45AM  Business Wire]
▶ Steven Cohen Dives Deeper Into Extraction Oil & Gas   [Sep-05-18 01:54PM  GuruFocus.com]
▶ Murphy Oil: 2Q Earnings Snapshot   [05:48PM  Associated Press]
▶ Murphy Oil Corporation Announces Dividend   [Aug-01-18 09:16AM  Business Wire]
▶ Drilling Permit Roundup: Murphy Oil lays out Eagle Ford plans   [10:26AM  American City Business Journals]

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