Moody's lowers Murphy Oil view to stable

Moody's Investors Service said it affirmed Murphy Oil Corp.'s Ba2 corporate family rating, Ba2-PD probability of default rating and Ba2 rating of its senior unsecured notes rating.

The company's speculative grade liquidity rating was affirmed at SGL-1.

The outlook was changed to stable from positive.

The outlook revision follows news that Murphy reached an agreement to sell its operations in Malaysia for $2.2 billion in cash to PTT Exploration & Production PCL, Moody's said.

The proceeds will be used to fund $500 million share repurchases and reduce debt by $750 million, as well as to fund future growth.

The divestment of the large maturing asset brings forward substantial cash proceeds that Murphy requires to fund the development of its assets in North America, previously funded through reinvestment of free cash flow generated in Malaysia, the agency said.

The Ba2 rating assumes that Murphy will use half of the proceeds to invest in growth, both organically and through acquisitions, Moody's said, and will increase its scale over the next several years while keeping solid leverage profile.

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