Under FASB guidance, exploratory well costs should continue to be capitalized when the well has found a sufficient quantity of reserves to justify its completion as a producing well and the Company is making sufficient progress assessing the reserves and the economic and operating viability of the project.

As of June 30, 2025, the Company had total capitalized drilling costs pending the determination of proved reserves of $110.5 million. The following table reflects the net changes in capitalized exploratory well costs during the six-month periods ended June 30, 2025 and 2024.


(Thousands of dollars)	2025		2024
Beginning balance at January 1	$	72,055	$	49,118
Additions pending the determination of proved reserves	38,469		20,391

Capitalized exploratory well costs charged to expense	—		(26,471)
Balance at June 30	$	110,524	$	43,038

Capital additions of $38.5 million, for the six months ended June 30, 2025, were mainly for the Hai Su Vang-1X (Golden Sea Lion), Block 15/2-17 and Lac Da Hong-1X (Pink Camel), Block 15-1/05 exploration wells in Vietnam and long-lead equipment for the Cello #1 (Mississippi Canyon 385) and Banjo #1 (Mississippi Canyon 385) exploration wells in the Gulf of America. The Lac Da Hong-1X (Pink Camel) exploration well in Vietnam encountered 106 feet of net oil pay from one reservoir and continues to progress post-drill evaluations. Capital

additions of $20.4 million, for the six months ended June 30, 2024, were mainly for the non-operated Ocotillo #1 (Mississippi Canyon 40) exploration well in the Gulf of America.

There were no capitalized well costs charged to dry hole expense for the six months ended June 30, 2025. Capitalized well costs charged to dry hole expense of $26.5 million for the six months ended June 30, 2024 were related to the Hoffe Park #1 (Mississippi Canyon 166) exploration well in the Gulf of America.

The preceding table excludes well costs of $31.8 million incurred and expensed directly to dry hole for the six months ended June 30, 2024. This amount primarily related to the non-operated Orange #1 (Mississippi Canyon 216) exploration well in the Gulf of America.

The following table provides an aging of capitalized exploration well costs based on the date the drilling was completed for each individual well.


	June 30,
	2025			2024

(Thousands of dollars)	Amount		No. of Wells		Amount		No. of Wells
Aging of capitalized well costs:
Zero to one year	$	16,002	5		$	20,545	3
One to two years	72,004		3		—		—
Two to three years	—		—		—		—
Three years or more	22,518		3		22,493		3
	$	110,524	11		$	43,038	6

Of the $94.5 million of exploration well costs capitalized and classified as more than one year at June 30, 2025, $65.0 million was in Vietnam, $22.1 million was in the Gulf of America, $4.7 million was in Canada, and $2.7 million was in Brunei. In all geographical areas, either further appraisal or development drilling is planned and/or development studies/plans are in various stages of completion.

During the first quarter of 2025, Murphy purchased a floating production storage and offloading vessel (FPSO) from BW Offshore (UK) Limited for a gross purchase price of $125.0 million, subject to customary closing adjustments. An initial payment of $100.0 million was made in the first quarter of 2025, with the remaining balance paid during the second quarter of 2025, after certain contractual obligations were met. The FPSO will remain at its current location, supporting operations at the Cascade field (Walker Ridge 206 and 250) and Chinook field (Walker Ridge 469 and 425) in the Gulf of America. BW Offshore (UK) Limited will continue to provide operations and maintenance services under a new five-year contract.

There were no impairments in the three and six months ended June 30, 2025, as well as no impairments in the three months ended June 30, 2024. There were pretax impairments of $34.5 million in the six months ended June 30, 2024 related to the Calliope field in Mississippi Canyon in the Gulf of America, in which operational issues led to a reserve reduction.