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 Energy majors from BP <BP.L> to Shell <RDSa.L> have faced pressure
from shareholders to control spending and return spare cash amid
concerns over the impact of rising costs and the returns available
if oil prices drop.
Murphy's planned sale comes after Newfield Exploration Co <NFX.N>
and Hess Corp <HES.N> sold their Southeast Asia operations, partly
to address share price underperformance. The move has been prompted
in part by the strong demand generated for the Newfield and Hess
auctions last year, the sources, who had knowledge of the plan,
said.
The advent of "fracking" shale formations is leading to a boom in
U.S. crude production which is expected to approach historic highs
by the turn of the decade to levels that would have been unforeseen
just a few years ago.
"There is a possibility that these smaller producers are looking at
their U.S. home market and see good prospects with the development
we are seeing of tight oil," said Victor Shum, vice-president of
energy consultancy IHS Energy Insight, referring to the shale boom.
"That could be one factor driving them out of the Asian market, back
to their home market. We are not seeing that as a trend as yet, but
this could be the beginning as companies always evaluate their
business options and portfolios," Shum added.
EARLY STAGES
Murphy's potential sale process, however, was still in the early
stages and it could, in the end, decide not to sell, the sources
said.
The Arkansas-based company has interests in oil and gas fields in
Malaysia, Vietnam, Indonesia, Brunei and Australia. Malaysia is the
biggest of Murphy's Asian portfolios, and accounted for more than 45
percent of its total 2012 net production, according to the company's
website (www.murphyoilcorp.com).
As on December 31, 2012, the company had majority interests in six
separate production contracts in Malaysia, covering approximately
2.79 million gross acres, and held interests in four exploration
licenses in Indonesia over a total of 3.381 million gross acres,
according to the website.
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The planned sale is driven less by share price underperformance and
more by the desire to monetize part of the business at the valuation
secured by Newfield, the sources said.
In October, Newfield sold its Malaysian assets for $898 million,
which translates into $59.87/barrell for 15 million barrels of
proved reserves.
One of the deal structures being discussed was to sell just 30
percent of the Malaysian operations, one of the sources said.
A Murphy spokesman did not immediately reply to an email and return
a call to his office seeking comment. The sources declined to be
identified as the company's plans are confidential.
ASIAN INTEREST
Murphy, which has a $10.7 billion market value, is working with a
U.S.-based consultant who has informally reached out to potential
buyers, including some sovereign wealth funds in the Middle East and
Asian energy companies, which are relishing the opportunity to
expand in their region.
Brightoil Petroleum Holdings Ltd <0933.HK> is one such company that
has been keen to buy upstream assets for years.
The Hong Kong-listed oil trader and shipping firm has held talks
with U.S. oil companies Anadarko Petroleum Corp <APC.N> and Newfield
to buy their China operations, sources said.
Trading in Brightoil's shares has been suspended since February 11
pending an announcement of a "very substantial acquisition".
(Additional reporting by Charlie Zhu in
Hong Kong and Jane Xie and Manash Goswami Singapore; editing by
Michael Flaherty, Miral Fahmy and Muralikumar Anantharaman)
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