MURPHY OIL CORPMUR
MURPHY OIL CORP Leases Disclosure
Note T – Leases
Nature of Leases
The Company has entered into various operating and financial leases such as a natural gas processing plant, floating production storage and off-take vessels, buildings, marine vessels, vehicles, drilling rigs, pipelines and other oil and natural gas field equipment.
Remaining lease terms range from 1 year to 15 years, some of which may include options to extend leases for multi-year periods and others which include options to terminate the leases within 1 month.
Options to extend lease terms are at the Company’s discretion. Early lease terminations are a combination of Company discretion and mutual agreement between the Company and the lessor. Purchase options also exist for certain leases.
Related Expenses
Expenses related to finance and operating leases (both short-term and long-term) included in the Consolidated Financial Statements are as follows.
| Year Ended December 31, | ||||||||||||||||||||
| (Thousands of dollars) | Financial Statements Category | 2025 | 2024 | |||||||||||||||||
Operating lease 1, 2 | Lease operating expenses | $ | 342,520 | $ | 411,303 | |||||||||||||||
Operating lease 2 | Transportation, gathering and processing | 8,308 | 16,117 | |||||||||||||||||
Operating lease 2 | Selling and general expenses | 10,405 | 10,990 | |||||||||||||||||
Operating lease 2 | Other operating expense | 467 | 6,622 | |||||||||||||||||
Operating lease 2 | Exploration expenses | 14,335 | 38,974 | |||||||||||||||||
Operating lease 2 | Property, plant and equipment | 175,400 | 277,170 | |||||||||||||||||
Operating lease 2 | Asset retirement obligations | 85,690 | 10 | |||||||||||||||||
| Finance lease | ||||||||||||||||||||
| Amortization of asset | Depreciation, depletion and amortization | 1,026 | 855 | |||||||||||||||||
| Interest on lease liabilities | Interest expense, net | 229 | 193 | |||||||||||||||||
| Sublease income | Other income | (240) | (1,143) | |||||||||||||||||
| Net lease expense | $ | 638,140 | $ | 761,091 | ||||||||||||||||
1 Variable lease expenses. For the years ended December 31, 2025 and 2024, included variable lease expenses of $34.6 million and $42.3 million, respectively, primarily related to operating costs at a natural gas processing plant in our Canada Onshore business.
2 Short-term leases due within 12 months. The table below shows amounts included in the Consolidated Financial Statements related to short-term leases due within 12 months. These expenses primarily related to drilling rigs and other oil and natural gas field equipment.
| (Thousands of dollars) | Year Ended December 31, | |||||||||||||
Financial Statements Category | 2025 | 2024 | ||||||||||||
Lease operating expenses | $ | 159,746 | $ | 236,402 | ||||||||||
| Transportation, gathering and processing | 8,308 | 12,993 | ||||||||||||
| Selling and general expenses | 1,918 | 772 | ||||||||||||
| Other operating expense | 16 | 6,230 | ||||||||||||
| Exploration expenses | 13,211 | 38,500 | ||||||||||||
| Property, plant and equipment | 96,909 | 97,104 | ||||||||||||
| Asset retirement obligations | 65,418 | 10 | ||||||||||||
Total short-term lease expense | $ | 345,526 | $ | 392,011 | ||||||||||
Maturity of Lease Liabilities
| (Thousands of dollars) | Operating Leases | Finance Leases | Total | ||||||||||||||
| 2026 | $ | 315,609 | $ | 3,302 | $ | 318,911 | |||||||||||
| 2027 | 146,130 | 3,302 | 149,432 | ||||||||||||||
| 2028 | 63,009 | 3,302 | 66,311 | ||||||||||||||
| 2029 | 60,214 | 2,491 | 62,705 | ||||||||||||||
| 2030 | 58,445 | 1,885 | 60,330 | ||||||||||||||
| Remaining | 366,321 | 774 | 367,095 | ||||||||||||||
| Total future minimum lease payments | 1,009,728 | 15,056 | 1,024,784 | ||||||||||||||
| Less imputed interest | (193,121) | (2,402) | (195,523) | ||||||||||||||
Present value of lease liabilities 1 | $ | 816,607 | $ | 12,654 | $ | 829,261 | |||||||||||
1 Includes both the current and long-term portion of the lease liabilities.
Lease Term and Discount Rate
| December 31, 2025 | December 31, 2024 | ||||||||||
| Weighted average remaining lease term: | |||||||||||
| Operating leases | 7 years | 8 years | |||||||||
| Finance leases | 5 years | 6 years | |||||||||
| Weighted average discount rate: | |||||||||||
| Operating leases | 5.5 | % | 5.7 | % | |||||||
| Finance leases | 5.4 | % | 4.9 | % | |||||||
Other Information
| Year Ended December 31, | |||||||||||
| (Thousands of dollars) | 2025 | 2024 | |||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows from operating leases | $ | 258,564 | $ | 328,847 | |||||||
| Operating cash flows from finance leases | 339 | 311 | |||||||||
| Financing cash flows from finance leases | 1,238 | 665 | |||||||||
| Right-of-use assets obtained in exchange for lease liabilities: | |||||||||||
| Operating leases ¹ | $ | 247,566 | $ | 349,312 | |||||||
Finance leases 2 | 8,845 | 1,749 | |||||||||
1 For the year ended December 31, 2025, right-of-use assets, obtained in exchange for operating lease liabilities, primarily included $153.7 million for a drill ship operating lease extension used in our U.S. Offshore business and $72.2 million for a drilling rig and two support vessels in our Vietnam business. December 31, 2024 included $254.1 million for a drill ship operating lease extension in our U.S. Offshore business and $52.7 million related to two drilling rigs and several natural gas compressors in our U.S. Onshore business.
2 For the year ended December 31, 2025, right-of-use assets obtained in exchange for finance lease liabilities primarily included $8.8 million related to computing equipment in the U.S.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 27, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.