Murphy Oil Announces Preliminary First Quarter 2011 Earnings and Drilling Results

Murphy Oil Corporation (NYSE: MUR) announced today that net income in
the first quarter of 2011 was $268.9 million ($1.38 per diluted share),
compared to net income of $148.9 million ($0.77 per diluted share) in
the first quarter of 2010.

The improved net income in 2011 compared to 2010 was due to a
combination of a higher average realized crude oil sales price, record
natural gas production volumes, improved U.S. refining margins and lower
losses for transactions denominated in foreign currencies. The 2011
quarterly results were unfavorably affected by lower crude oil sales
volumes, lower North  American natural gas sales prices and higher
exploration expenses.

Exploration and Production (E&P)

Income contribution from E&P operations was $260.4 million in the first
quarter of 2011 compared to $247.0 million in the same quarter of 2010.
A higher average realized sales price for crude oil was the primary
driver for the improvement in 2011. The current period also benefited
from record natural gas sales volumes. Unfavorable variances to the 2010
quarter included lower crude oil sales volumes, higher exploration
expenses and higher workover expenses at the Kikeh field, offshore
Sabah, Malaysia.

The Company′s worldwide crude oil, condensate and natural gas liquid
sales prices averaged $86.73 per barrel for the 2011 first quarter
compared to the 2010 first quarter average of $64.89 per barrel. Total
crude oil, condensate and gas liquids production of 113,313 barrels per
day in the first quarter of 2011 was below the 139,060 barrels per day
produced in the 2010 quarter. The decline in oil production in 2011 was
primarily attributable to lower gross volumes at the Kikeh field caused
by wells shut-in awaiting workovers. Additionally, oil production in the
Gulf of Mexico was lower in the 2011 quarter compared to 2010 due to the
delay in permitting by U.S. government regulators following the Macondo
incident in April 2010. Total sales volumes of  crude oil, condensate and
natural gas liquids averaged 112,804 barrels per day in the first
quarter 2011 compared to 145,783 barrels per day in the 2010 quarter.
North American natural gas sales prices averaged $4.35 per thousand
cubic feet (MCF) in the 2011 first quarter compared to $5.14 per MCF in
the same quarter of 2010. Natural gas produced at fields offshore
Sarawak Malaysia was sold at an average of $5.64 per MCF in the 2011
quarter, up from $4.58  per MCF in the 2010 first quarter. Natural gas
sales volume of 413 million cubic feet per day in the first three months
of 2011 was a quarterly record for the Company, up from the 343  million
cubic feet per day sold in the 2010 period. The increase in natural gas
sales volume was due to start-up of natural gas production at the Tupper
West area in Northeast British Columbia in February 2011, coupled with
higher gas production volumes in several areas, including the Tupper
Main area, offshore Malaysia blocks and the Mondo  NW field in the
Gulf  of Mexico.

Exploration expense in the 2011 period was $96.3 million compared to
$66.3 million in 2010. Dry hole expense was higher by $13.5 million in
the 2011 period as unsuccessful drilling costs offshore Suriname in the
current period exceeded the drilling expense offshore Sabah in the 2010
first quarter. The Aracari wildcat well offshore Suriname, drilled in
the first quarter 2011, was a dry hole. Geological and geophysical
expense was $5.0 million higher in 2011 compared to 2010 due to more
seismic acquisition costs in the just completed quarter in the
Mississippi  Canyon deepwater area in the Gulf of Mexico and the Eagle
Ford Shale area of South Texas. Undeveloped leasehold amortization
expense in 2011 was $8.6  million more than in 2010 primarily due to
amortizing our growing lease position in the Eagle  Ford Shale area, plus
amortization costs associated with the recently licensed Central Dohuk
lease in the Kurdistan region of Iraq.

Refining and Marketing (R&M)

Murphy′s R&M operations had income of $30.7 million in the 2011 first
quarter compared to a loss of $29.7 million in the 2010 quarter. In
2010, the Company announced its intention to sell the U.S. refining and
U.K. R&M assets in 2011. The sale activities continue to progress.

In the United States, income from R&M operations totaled $39.4  million
in 2011 compared to a loss of $14.7 million in 2010. U.S. manufacturing
operations reflected a profit of $28.7 million in the 2011 quarter, an
improvement of $52.3 million compared to the first quarter 2010 loss.
U.S. refining margins of $2.93 per barrel were much improved in the 2011
quarter compared to very weak margins during the 2010 quarter of
negative $4.23 per barrel. Additionally, throughput of crude oil and
other feedstocks in the 2011 quarter for U.S. refining operations was a
quarterly record of 169,217 barrels per day. A six-week shutdown of the
Meraux, Louisiana, refinery for a planned turnaround during the 2010
quarter significantly curtailed crude oil throughputs at U.S. refineries
during the prior year′s first quarter.

U.S. marketing operations generated a profit of $10.7 million in the
2011 quarter, an increase of $1.8  million compared to the same quarter
in 2010. Margins for U.S. retail marketing operations were slightly
improved in the 2011 quarter compared to a year earlier. These stronger
retail fuel margins, coupled with higher profits on merchandise sales,
more than offset lower U.S. motor fuel sales volumes through the
Company′s retail stations.

Refining and marketing operations in the United  Kingdom incurred a loss
of $8.7 million in the first quarter 2011 compared to a loss of $15.0
million in the same quarter of 2010. The lower loss for U.K. R&M
operations in 2011 was primarily due to a better refining margin in the
most recent quarter. Additionally, crude oil throughput volume at the
Milford Haven, Wales, refinery was a quarterly record in the 2011
period. The prior-year′s quarter included lower than normal crude oil
throughput volumes associated with the early stages of a plant-wide
turnaround at Milford Haven that began in March 2010.

Corporate

Corporate functions had net costs of $22.2 million in the 2011 first
quarter compared to net costs of $68.4 million in the 2010 first
quarter. The variance in 2011 was significantly favorable to 2010
primarily due to after-tax losses of $1.1 million in the current quarter
on transactions denominated in foreign currencies compared to after-tax
losses of $41.3 million in the 2010 quarter. The foreign currency
charges in 2010 were generated due to a combination of a strengthening
of the U.S. dollar against the British pound and a weakening of the U.S.
dollar against the Malaysian ringgit. The stronger U.S. dollar led to
foreign currency losses on dollar based liabilities in the sterling
functional U.K. downstream operations, and the stronger Malaysian
ringgit led to foreign currency losses on ringgit based income tax
liabilities in the dollar functional Malaysian oil and gas operations.
The Company also had lower net interest expense in 2011 than in 2010 due
to a combination of lower average borrowings and more interest
capitalized to oil and natural gas development projects in 2011.

David Wood, Murphy′s President and Chief Executive Officer, commented,
'We began 2011 with a good financial performance mostly attributable to
a combination of strong oil prices and better than expected refining
margins during the winter season. Once again our financial results have
benefited from being heavily weighted with oil production. The higher
oil prices did have a dampening effect, however, on our retail gasoline
margins, which coupled with the normal weak gasoline demand during the
winter, led to thin profits in this U.S. business.

'We continue our oil and natural gas development work in several areas,
including our primary North American resource plays at Tupper West and
Eagle Ford Shale. Our enhanced oil recovery project at Seal Lake
continues, and early evaluation drilling in Southern Alberta is ongoing.
Additionally, oil development projects progress offshore Sarawak, with
anticipated start-up of sanctioned fields at Patricia and Serendah in
2012 and 2013, respectively. Wildcat drilling in Indonesia is ongoing
and drilling offshore Brunei begins in the third quarter this year. In
our downstream business, we continue with the process for selling our
U.S. refining and U.K. downstream. This work is on target for disposal
of these assets in 2011. Construction at our ethanol plant in Hereford,
Texas, was completed in the first quarter and start-up and commissioning
of the plant commenced at the end of the March. Our U.S. retail gasoline
station portfolio expanded further in 2011 with the addition of eleven
new stations during the first quarter.

'We anticipate total worldwide production volumes of about 187,000
barrels of oil equivalent per day in the second quarter of 2011. Sales
volumes of oil and natural gas are projected to average 180,000 barrels
of oil equivalent per day in the second quarter 2011. We anticipate full
year 2011 production volumes of 200,000 barrels of oil equivalent per
day. At the current time, we expect net income in the second quarter to
range between $1.50 and $1.80 per diluted share. Exploration expense
should total between $75  million and $125 million during the quarter.
The second quarter estimate includes projected earnings from our
downstream businesses of approximately $55 million. Results could vary
based on commodity prices, drilling results, timing of crude oil and
natural gas sales, refining and marketing margins, and foreign exchange
movements.?

The public is invited to access the Company′s conference call to discuss
first quarter 2011 results on Thursday, May 5, at 12:00 p.m. CDT either
via the Internet through the Investor  Relations section of Murphy′s Web
site at http://www.murphyoilcorp.com/ir
or via the telephone by dialing 1-866-564-7444. The telephone
reservation number for the call is 8880163. Replays of the call
will be available through the same address on the Murphy Web site, and a
recording of the call will be available through May 9 by dialing 1-888-203-1112
and referencing reservation number 8880163. Audio downloads will
be available on the Murphy Web site through June 1 and via Thomson
StreetEvents for their service subscribers.

Summary financial data and operating statistics for the first quarter
2011 with comparisons to 2010 are contained in the attached tables.

This press release contains forward-looking statements as defined in
the Private Securities Litigation Reform Act of 1995.These
statements, which express management′s current views concerning future
events or results, are subject to inherent risks and uncertainties.Factors
that could cause actual results to differ materially from those
expressed or implied in our forward-looking statements include, but are
not limited to, the volatility and level of crude oil and natural gas
prices, the level and success rate of our exploration programs, our
ability to maintain production rates and replace reserves, customer
demand for our products, political and regulatory instability, and
uncontrollable natural hazards.For further discussion of risk
factors, see Murphy′s 2010 Annual Report on Form 10-K on file with the
U.S. Securities and Exchange Commission.Murphy undertakes no
duty to publicly update or revise any forward-looking statements.

Investor/Media Contact:

Murphy Oil Corporation

Barry Jeffery,
870-864-6501