Murphy Oil Corporation

views updated May 23 2018

Murphy Oil Corporation

200 Peach Street
Post Office Box 7000
E1 Dorado, Arizona 71731–7000
U.S.A.
Telephone: (870) 862-6411
Fax: (870) 864-6373
Web site: http://www.murphyoilcorp.com

Public Company
Incorporated: 1950 as Murphy Corporation
Employees: 1,566
Sales: $1.69 billion (1998)
Stock Exchanges: New York Toronto
Ticker Symbol: MUR
NAIC: 211111 Crude Petroleum and Natural Gas Extraction; 324110 Petroleum Refineries; 422710 Petroleum Bulk Stations and Terminals; 447110 Other Gasoline Stations; 486110 Pipeline Transportation of Crude Oil; 486910 Pipeline Transportation of Refined Petroleum Products

Murphy Oil Corporation is one of the smallest of the U.S.-based integrated oil companies. Murphy conducts onshore and offshore exploration activities mainly in the United States (particularly the Gulf of Mexico), western Canada, the United Kingdom’s North Sea, and Ecuador. The company owns two U.S. oil refineries located in Meraux, Louisiana, and Superior, Wisconsin, and holds a 30 percent stake in a U.K. refinery in Milford Haven, Wales. On the marketing side, Murphy sells refined products through more than 560 SPUR and Murphy USA gasoline stations in 17 states in the Southeast and Upper Midwest of the United States and in the Thunder Bay area of Ontario, Canada. About 45 of the stations are located in the parking lots of discount retail giant Wal-Mart Stores, Inc. In the United Kingdom, Murphy sells refined products via nearly 400 MURCO and EP gasoline stations. The company also holds stakes in four crude oil pipelines in western Canada, and in several crude oil and refined petroleum product pipelines in the United States.

Early Years: From Timber to Oil Exploration

The Murphy story began in the early 1900s in El Dorado, Arkansas, where Charles H. Murphy, Sr., started a lumber company with thousands of acres of timberland along the Arkansas-Louisiana border. Although he drilled his first oil well in the Caddo Pool of northern Louisiana in 1907, his primary efforts in oil exploration did not actually commence until 1936–37, when he and his associates discovered two large oil fields in southern Texas and Arkansas. At this time Murphy realized his land holdings were worth more for oil than for timber.

Murphy’s business interest gradually expanded into a loose collection of partnerships, corporations, and individual holdings. In 1944, after he and his associates discovered their largest deposit near Delhi, Louisiana, they brought their diverse entities together as C.H. Murphy & Company.

Charles H. Murphy suffered a stroke late in the decade, and his son, 21-year-old Charles H. Murphy, Jr., was put in charge during his subsequent illness. With his new role in the company the younger Murphy was not able to attend college but eventually educated himself by reading the classics and learning foreign languages, and his ambitions grew with the goals of the company. He saw that corporate status would be necessary to achieve company objectives, so, in 1950, he reincorporated C.H. Murphy & Company as Murphy Corporation, the direct predecessor of Murphy Oil Corporation.

During the early 1950s, Murphy continued to explore for oil on the more than 100,000 acres of company-owned land, which also contained timber and farming operations. In 1956, two years after Charles H. Murphy, Sr., died, his son brought the company public, offering shares on the New York Stock Exchange.

Late 1950s Through Early 1970s: Creating an Integrated Oil Company

Toward the end of the decade Murphy began an expansion program that eventually led to the company’s status as an integrated oil company. He helped found the 51 percent owned Ocean Drilling and Exploration Company (ODECO), an outfit one reviewer called “one of the true pioneers and innovators in the off-shore drilling industry.” In 1958 he exchanged 71,958 shares for Murphy’s first refinery: Lake Superior Refining Company’s Superior, Wisconsin, installation.

In 1960, Murphy continued to grow, acquiring Amurex Oil Co., River States Oil Co., and National Petroleum Corp. Most importantly, that year a merger took place with Spur Oil Co., an outfit whose extensive service station network would become Murphy’s own.

After acquiring a second refinery in 1961—Ingram Oil and Refining Company’s Meraux, Louisiana, installation—Murphy began expanding the company’s drilling network. In 1962 he obtained the Western Natural Gas Company’s Venezuelan properties and production. In the following years the company would begin exploring the Persian Gulf, Libya, the North Sea, the Louisiana shore, and other lands in the continental United States. It would also take large land positions in British Columbia, off the shore of Nova Scotia, in New Zealand’s Tasman Sea, and off the coast of New South Wales in Australia.

As a result of this overwhelming concentration on fossil fuels, Murphy reorganized the company as Murphy Oil Corporation on January 1, 1964, placing the company’s farm and timber interests—which now included 200,000 owned acres and 100,000 acres managed for others—into a wholly owned subsidiary, Deltic Farm & Timber Co., Inc.

In the mid-1960s, the company scored large successes in Iran’s Sassan Field and in Libya. Between 1964 and 1969 the company’s production of crude oil and liquids increased from 16,000 barrels per day to 37,000 barrels per day, while refinery intake rose from 43,000 barrels per day to 90,000 barrels per day. Much of the gasoline refined by the company went to owned or independently operated gas stations using the SPUR name. By 1969 there were 942 leased and owned SPUR stations and 1,332 SPUR stations operated by others. Of these, 548 were in the United Kingdom, 315 in eastern Canada, and 127 in Sweden.

ODECO also grew during the late 1960s. Between 1964 and 1969, its revenues more than doubled from $12.4 million to $28.5 million. Of all drilling contractors ODECO was in a unique position to help its corporate parent. The company contracted work for itself in addition to farming some jobs out, and therefore received portions of successful leases on their proceeds, adding to Murphy’s total reserves. By 1968 ODECO was operating 12 drilling barges and according to the Wall Street Transcript was considered “one of the best growth stocks in the oil industry.”

About the only Murphy product which did not grow during the 1960s was natural gas production, which fell from a record 65.6 million cubic feet per day in 1962 to 60.3 cubic feet per day in 1969. However, rising production did not always translate into rising profits. Steep transportation costs, high exploration costs, weak refined products prices, and losses in Europe led to declining profits from 1967 through 1969, when net income fell from $8.2 million to $6.2 million.

Despite these losses, Murphy—who still controlled 51 percent of the stock—continued to expand the company. In 1969, he created Murphy Eastern Oil Company in London, to monitor diversified overseas operations. The same year he signed off on ODECO’s formation of Sub Sea International, Inc. to operate various undersea systems such as diving bells and underwater welding chambers.

In 1970, a year in which profits rose to $9.3 million, reflecting higher prices and lower ocean freight costs, Murphy Oil began drilling in the British North Sea through an eight percent participation with Burmah Oil and Williams Bros. To finance this project as well as drilling barges for ODECO and additional acreage in the Gulf of Mexico, the company sold $34 million in convertible debentures in 1969 and 800,000 shares of common stock in June 1971.

By 1971, the company as a whole was reporting revenues of $300 million. While two-thirds of its crude reserves were in Iran, Libya, and Venezuela, it had also created Murphy Oil Company, Ltd., which oversaw exploration, production, and marketing operations in Canada and was headquartered in Calgary, Alberta.

The 1970s–80s: Profiting from High Oil Prices

The OPEC oil embargo of 1973 was a boon for Murphy Oil. Sales shot up from $377.6 million in 1972 to $499 million and $862 million in 1973 and 1974, respectively. At the same time profits ballooned from $14.3 million to $48.5 million and $60.9 million. In 1977 the company surpassed $1 billion in sales for the first time, selling $1.11 billion worth of fossil fuel products and services.

Prices remained high at the end of the decade. In 1979, after North Sea drilling paid off in the huge Ninian Field (the United Kingdom’s third largest), the company racked up three consecutive years of record sales and income. Revenues surpassed $2 billion for the first time in 1980 while in 1981 profits reached $163 million despite a total $119 million increase in American, Canadian, and British crude oil excise taxes.

Key Dates:

1944:: Charles H. Murphy, Sr., and associates form C.H. Murphy & Company.
1950:: Incorporation of the company as Murphy Corporation.
1956:: Company is taken public on the New York Stock Exchange.
1958:: First refinery, located in Superior, Wisconsin, is purchased.
1960:: First service stations are acquired through acquisition of Spur Oil Co.
1964:: Company is reorganized as Murphy Oil Corporation; farm and timber interests are placed into a wholly owned subsidiary, Deltic Farm & Timber Co., Inc.
1973:: OPEC oil embargo leads to increased revenues and profits for the company.
1980:: Revenues surpass $2 billion for the first time.
1983:: Murphy Oil is reorganized as a holding company; Murphy Oil USA, Inc. is created to oversee domestic oil interests and Canadian marketing division is sold.
1986:: Low crude prices lead to the layoff of 30 percent of the Murphy workforce and an annual loss of $194.7 million.
1996:: Company launches alliance with Wal-Mart Stores, Inc., under which Murphy gas stations are added to the retailer’s store properties; Deltic Farm & Timber is spun off to company shareholders.

Throughout the industry, high prices made higher cost and higher risk exploration activities economically viable. Murphy invested heavily in prospects in Alaska and off the coast of Spain, and although he balanced these more risky plays with leases near established properties in the Gulf of Mexico, the company’s activities reflected those of an industry that was taking more chances and using more drilling rigs. This was good news at ODECO, where executives ordered several new platforms to satisfy demand.

On February 15, 1982, the company experienced a tragedy inherent in the ocean drilling business. During a severe storm off the coast of Newfoundland, ODECO’s semisubmersible Ocean Ranger sank. Eighty-four people were on board and all were lost.

Although margins, particularly for refined products narrowed in the early 1980s, Murphy remained highly profitable. In 1983, the company began pumping oil from the Gaviota field off the north coast of Spain. The same year, it reorganized as a holding company, creating Murphy Oil USA, Inc. to oversee domestic oil interests and selling its Canadian marketing division, consisting of 100 owned or leased SPUR stations, a dealer network, and three product terminals.

Ups and Downs Through Early 1990s

In 1984 Charles H. Murphy, Jr., while retaining his role as the company’s chairperson, turned the positions of CEO and president over to Robert J. Sweeney, an engineering physicist with a long career at Murphy. Sweeney faced an industry in which overcapacity and conservation had begun to pressure crude prices, and, consequently, refining and drilling margins. For example, as crude prices fell from $34 a barrel to $27 a barrel, there were periods in which the cost of products refined at company facilities were $2 higher than the same products on the spot cargo market.

In the fourth quarter of 1985, crude prices fell into the $15 to $20 range. Given reasonable returns for much of the year, Sweeney was able to salvage profits of $79.7 million, but in 1986 continued low prices forced him to take drastic economic measures. He slashed exploration budgets, terminated scientist positions, reduced support personnel by 15 percent, and let hundreds go at ODECO. Overall, he laid off over 1,600 employees—almost 30 percent of the company’s total. Despite these efforts, the company lost $194.7 million, in what Sweeney in his annual report called “a terrible year.”

Prices began to rise again in 1987, and all of the company’s sectors rebounded except for ODECO, which suffered in a generally poor drilling climate. Since ODECO’s capital costs were very high, underutilization of rigs meant heavy losses. In 1987 ODECO lost $61 million and at one point during the year was using only 29 percent of capacity. Excluding ODECO’s figures, Murphy made $18 million that year; taking ODECO’s losses into account, the company lost $44 million.

During these low years, management retained its credibility with stockholders by maintaining a $1 per share dividend. Moreover, Sweeney did make some moves toward growth. He used company land holdings to enter the real estate business in Little Rock, Arkansas, where the company was building homes and a PGA quality golf course. In 1986, he bought ten drilling rigs, reasoning that a shakeup was underway and that ODECO might profit from being one of the few surviving firms. In 1987, hebought out the 23 percent minority interest in Murphy Oil Company Ltd., Murphy’s London-based subsidiary. That year the company also replaced its oil and gas reserves on an energy equivalent basis.

In 1988, Jack W. McNutt succeeded Sweeney as CEO. Like Sweeney, McNutt presided over a basically profitable company whose drilling subsidiary was what the Arkansas Gazette called the “monkey” on its back. ODECO was one of the nation’s top three drilling companies, but like the industry as a whole, it had overbuilt and was carrying too many underutilized rigs.

During his first year, McNutt tried to gain more leverage in ODECO by buying out its minority owners. Though unsuccessful in this endeavor, Murphy reported a net income of $39 million in 1988—the first profit in three years. By 1990 the company had made a major rebound. Because of higher prices induced by Iraq’s invasion of Kuwait, sale of the Sub Sea International (ODECO’s diving segment), and divestment of a share of its interest in Ninian Field, Murphy reported net income of $114 million, the best overall result since 1983.

The year 1990 was also marked by an industrywide trend toward increased production of natural gas, a fuel whose environmental benefits many believed would prove valuable to utility and automotive companies in the future. At Murphy this trend was evidenced by record production and by the fact that for the first time natural gas production exceeded liquid hydrocarbon production on an energy equivalent basis.

In 1991, McNutt finally disposed of Murphy’s ODECO problem. After several unsuccessful attempts, he acquired the minority interest in ODECO through a tax free exchange of shares and then sold ODECO for $372 million to Diamond M Corp., a contract drilling subsidiary of Loews Corp. Though the deal was not actually consummated until January 30, 1992, it was reported in 1991 as an $83.9 million charge against earnings and resulted in a loss for the year of $11.2 million. The company gained a much stronger balance sheet as a result, however. Part of the proceeds were used to pay debt down to just $24 million by the end of 1992, leaving it in a cash-rich position, with a little more than $300 million on hand.

Mid-1990s and Beyond

In the mid-1990s Murphy Oil chose to invest this money in its exploration and production operations (the upstream side of the oil industry) rather than in refining and marketing (the downstream side). The company’s upstream strategy was to purchase interests—largely nonoperated—in high-risk, high-potential, very large global exploration ventures, balancing this with investment in lower risk prospects in the Gulf of Mexico and western Canada. In 1993, then, Murphy expanded its interests in North Sea production operations through the purchase of an 11.3 percent stake in the “T-Block”—a venture between Italy’s AGIN, the field’s operator, British Gas PLC, PetroFina S.A. of Belgium, and others—for about $145 million. Murphy also bought a 6.5 percent stake in the Hibernia field, which was located off Newfoundland and was a potential 615 million barrel find. Also in 1993, the company purchased from the province of Alberta a five percent interest—equivalent to 100 million barrels—in Syncrude, an oil shale project in the northern reaches of the province. Moreover, in late 1994 it acquired a 10.7 percent stake in the Terra Nova field, which had the potential of producing 400 million barrels and was located 20 miles southeast of Hibernia. Murphy Oil was also targeting several other areas for exploration, including fields in Peru, Ecuador, and China. By the end of 1994 the company had increased its proven reserves to 327.6 million barrels, a significant jump from the year-end 1992 figure of 187 million barrels.

Other key developments in 1994 involved the company’s management. In October of that year, R. Madison Murphy, who had been serving as CFO, was named to the largely ceremonial post of chairman, replacing his father. That same month, Mc-Nutt was replaced as president and CEO by Claiborne P. Dem-ing, a cousin of Madison who had been chief operating officer. Almost immediately, Murphy Oil became more visible to the press and the investment community, reflecting the influence of Deming; under Charles Murphy, Jr.’s leadership, the company had kept a very low profile for a public company.

Deming proceeded with several major restructuring moves. In 1995 the company reported a net loss of $118.6 million that was entirely attributed to writedowns of previously overvalued assets. In August 1996 Deming sold 48 U.S. onshore oil and gas fields to a group of institutional investors for more than $47 million. At year-end 1996, in a move aimed at refocusing the company on its core petroleum operations, Murphy Oil spun off to its shareholders Deltic Farm & Timber, its farm, timber, and real estate subsidiary, which was reincorporated as Deltic Timber Corporation.

Deming also attempted to revive the company’s long struggling downstream activities. In November 1996 Murphy Oil entered into an agreement to merge its U.K. refining and marketing interests with those of Chevron Corporation and France’s Elf Aquitaine S.A. However, it withdrew from the merger in early 1997, choosing to go it alone in the difficult U.K. retailing environment. Murphy subsequently entered into an alliance with U.K. convenience chain Costcutter, whereby Costcutter stores were added to existing Murphy gas stations. The ensuing increase in volume helped turn the U.K. downstream operations from loss-making to profitable. Murphy Oil followed a similar strategy in the United States, where it joined with Wal-Mart Stores, Inc. to test the addition of gasoline stations to the retail giant’s stores. The test proved so successful that Murphy had 145 stations operating on Wal-Mart parking lots by the end of 1999, with plans laid to more than double the amount by the end of 2000. The Wal-Mart program began in the Southeast, using gasoline from Murphy’s Meraux, Louisiana, refinery, then expanded to the Upper Midwest, where the stations were serviced from the refinery in Superior, Wisconsin. Murphy Oil’s commitment to its partnership with Wal-Mart was underscored by the announcement in August 1999 of the sale of 60 company-owned SPUR gas stations.

Meanwhile, an oil glut forced down the price of a barrel of crude by late 1998 to about $11, the cheapest price in history with inflation factored in; just one year earlier, the price had been about $23. The oil glut was caused by a number of factors, principally the Asian economic crisis and the sharp decline in oil consumption engendered by it, and the virtual collapse of OPEC which was unable to curb production by its own members. The low prices were the principal factor in a 20 percent decline in revenues for Murphy Oil in 1998, from the $2.13 billion figure of 1997 to $1.69 billion. The company also took a $57.6 million after-tax charge to write down the value of some of its properties, leading to a net loss for the year of $14.4 million. With oil prices bouncing back up in 1999, this appeared to be only a temporary setback. In late 1999 the company announced capital expenditures totaling $457 million for 2000, an 18 percent increase over 1999, with the bulk of the funds going toward exploration in the Gulf of Mexico, development of the Terra Nova field, which was expected to start production in early 2001, and expansion of the Wal-Mart retailing program.

Principal Subsidiaries

Murphy Eastern Oil Company (U.K.); Murphy Exploration & Production Company; Murphy Oil Company, Ltd. (Canada); Murphy Oil USA, Inc.

Principal Competitors

Alberta Energy Company Ltd.; Apache Corporation; BP Amoco pic; Canadian Occidental Petroleum Ltd.; Chevron Corporation; The Coastal Corporation; Enterprise Oil pic; Exxon Mobil Corporation; Kerr-McGee Corporation; Marathon Ashland Petroleum LLC; Noble Affiliates, Inc.; Petro-Canada; RaceTrac Petroleum, Inc.; Ranger Oil Limited; Royal Dutch/Shell Group; 7-Eleven, Inc.; Southern Mineral Corporation; Suncor Energy Inc.; Texaco Inc.; Texoil, Inc.; Union Pacific Resources Group Inc.; Unocal Corporation.

Murphy Oil Corporation

views updated May 17 2018

Murphy Oil Corporation

200 Peach St.
El Dorado, Arizona 71730-5836
U.S.A.
(501) 862-6411
Fax: (501) 862-9057

Public Company
Incorporated: 1950 as Murphy Corporation
Employees: 3,991
Sales: $1.69 billion
Stock Exchanges: New York Philadelphia Pacific Boston Chicago
SICs: 1311 Crude Petroleum & Natural Gas; 0762 Farm Management Services; 0851 Forestry Services; 6719 Holding Companies Nec

Murphy Oil Corporation is the corporate parent of a consolidated group of enterprises that conducts onshore and offshore exploration activities in 11 countries and produces oil and natural gas liquids in the United States, Canada, Spain, Gabon, and the North Sea. Murphy owns two U.S. oil refineries and shares ownership in a U.K. refinery. Along with wholesale and retail sales in the United States, Western Europe, and Canada, Murphy is engaged in farming, timber and land management, and lumber manufacturing operations, primarily in Arkansas and Louisiana, and in real estate development in Little Rock, Arkansas.

The Murphy story began in the early 1900s in El Dorado, Arkansas, where Charles H. Murphy, Sr., started a lumber company with thousands of acres of timberland along the Arkansas-Louisiana border. Although he drilled his first oil well in the Caddo Pool of northern Louisiana in 1907, his primary efforts in oil exploration did not actually commence until 1936-37, when he and his associates discovered two large oil fields in southern Texas and Arkansas. At this time Murphy realized his land holdings were worth more for oil than for timber.

Charles H. Murphy suffered a stroke late in the decade, and his son, 21-year-old son Charles H. Murphy, Jr., was put in charge during his subsequent illness. With his new role in the company the younger Murphy wasn’t able to attend college but eventually educated himself by reading the classics and learning foreign languages, and his ambitions grew with the goals of the company. He saw that corporate status would be necessary to achieve company objectives, so, in 1950, he reincorporated C. H. Murphy & Company as Murphy Corporation, the predecessor of the current corporation.

Toward the end of the decade Murphy began the expansion program that would ultimately lead to the Murphy Oil of today. He helped found the 51 percent owned Ocean Drilling and Exploration Company (ODECO), an outfit one reviewer called “one of the true pioneers and innovators in the off-shore drilling industry.” In 1958 he exchanged 71,958 shares for Murphy’s first refinery—Lake Superior Refining Company’s Superior, Wisconsin, installation.

In the mid-1960s, the company scored large successes in Iran’s Sassan Field and in Libya. Between 1964 and 1969 the company’s production of crude oil and liquids increased from 16 thousand barrels per day to 37 thousand barrels per day, while refinery intake rose from 43 thousand barrels per day to 90 thousand barrels per day. Much of the gasoline refined by the company went to owned or independently operated gas stations using the SPUR name. By 1969 there were 942 leased and owned SPUR stations and 1,332 SPUR stations operated by others. Of these, 548 were in the United Kingdom, 315 in Eastern Canada, and 127 in Sweden.

About the only Murphy product which did not grow during the 1960s was natural gas production, which fell from a record 65.6 million cubic feet per day in 1962 to 60.3 cubic feet per day in 1969. However, rising production did not always translate into rising profits. Steep transportation costs, high exploration costs, weak refined products prices, and losses in Europe led to declining profits for 1967 through 1969 when net income fell from $8.2 million to $6.2 million.

The OPEC oil embargo of 1973 was a boon for Murphy Oil. Sales shot up from $377.6 million in 1972 to $499 million and $862 million in 1973 and 1974, respectively. At the same time profits ballooned from $14.3 million to $48.5 million and $60.9 million. And in 1977 the company surpassed $1 billion in sales for the first time, selling $1.11 billion worth of fossil fuel products and services.

Throughout the industry, high prices made higher cost and higher risk exploration activities economically viable. Murphy invested heavily in prospects in Alaska and off the coast of Spain, and although he balanced these more risky plays with leases near established properties in the Gulf of Mexico, the company’s activities reflected those of an industry that was taking more chances and using more drilling rigs. This was good news at ODECO where executives ordered several new platforms to satisfy demand.

Although margins, particularly for refined products narrowed in the early 1980s, Murphy remained highly profitable. In 1983, the company began pumping oil from the Gaviota field off the north coast of Spain. The same year, it reorganized as a holding company creating Murphy Oil USA, Inc. to oversee U.S. domestic oil interests and selling its Canadian marketing division, consisting of 100 owned or leased SPUR stations, a dealer network, and three product terminals.

In 1984, Charles H. Murphy, Jr., while retaining his role as the company’s chairperson, turned the positions of CEO and president over to Robert J. Sweeney, an engineering physicist with a long career at Murphy. Sweeney faced an industry in which overcapacity and conservation had begun to pressure crude prices, and, consequently, refining and drilling margins. For example, as crude prices fell from $34 a barrel to $27 a barrel, there were periods in which the cost of products refined at company facilities were $2 higher than the same products on the spot cargo market.

During these low years, management retained its credibility with stockholders by maintaining a $l-per-share dividend. Moreover, Sweeney did make some moves toward growth. He used company land holdings to enter the real estate business in Little Rock, Arkansas, where the company was building homes and a PGA quality golf course. In 1986, he bought ten drilling rigs, reasoning that a shakeup was underway and that ODECO might profit from being one of the few surviving firms. In 1987, he bought out the 23 percent minority interest in Murphy Oil Company Ltd., Murphy’s London based subsidiary. That year the company also replaced its oil and gas reserves on an energy equivalent basis.

During his first year, McNutt tried to gain more leverage in ODECO by buying out its minority owners. Though unsuccessful in this endeavor, Murphy reported a net income of $39 million in 1988—the first profit in three years. Murphy’s outlook continued to improve in 1989, and the company made a major rebound in 1990 when because of higher prices induced by Iraq’s invasion of Kuwait, sale of the Sub Sea International (ODECO’s diving segment), and divestment of a share of its interest in Ninian Field, Murphy reported 1990 net income of $114 million, the best overall result since 1983.

1990 was also marked by an industry-wide trend toward increased production of natural gas, a fuel whose environmental benefits many believed would prove valuable to utility and automotive companies in the future. At Murphy this trend was evidenced by record production and by the fact that for the first time natural gas production exceeded liquid hydrocarbon production on an energy equivalent basis.

In 1991, McNutt finally disposed of Murphy’s ODECO problem. After several unsuccessful attempts, he acquired the minority interest in ODECO through a tax free exchange of shares and then sold ODECO for $372 million. Though the deal was not actually consummated until January 30, 1992, it was reported in 1991 as an $83.9 million charge against earnings and resulted in a loss for the year of $11 million.