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How Murphy Oil’s Free Cash Flow Is Trending

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Murphy Oil’s normalized free cash flow in 2017

As we have seen in part one of this series, Murphy Oil (MUR) has normalized FCF (free cash flow) of ~14%, which is the third highest among the upstream producers in the US. In this part, we’ll study MUR’s free cash flow and normalized free cash flow trends.

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Murphy Oil’s free cash flow trend

In 3Q17, Murphy Oil (MUR) reported FCF (free cash flow) of -$47 million, which is lower when compared with MUR’s FCF of -$10 million in 3Q16. In the last four quarters, Murphy Oil’s (MUR) FCF showed an inverted U-shaped trend.

Murphy Oil’s normalized free cash flow trend

In the last one year, Murphy Oil’s (MUR) normalized FCF (free cash flow) decreased from -6% in 3Q16 to -21% in 3Q17. The decrease in MUR’s normalized FCF in the last four quarters can be attributed to the higher rise of ~55% in its capital expenditures compared to the 36% increase in cash from operations in the last four quarters.

Murphy Oil’s stock performance in 2017

Year-to-date in 2017, MUR’s stock is down ~0.8%. In comparison, the Energy Select Sector SPDR Fund (XLE), which represents an index of stocks across the energy sector, fell ~3.5%, and the SPDR S&P 500 ETF (SPY) rose ~21.8%.

Next, we will take a look at Devon Energy’s (DVN) free cash flow trends.

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