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Bond Market News
Murphy Oil Downgraded to BB by S&P
January 8, 2026
Murphy Oil was downgraded by S&P to BB from BB+ with a stable outlook, reflecting expectations that credit metrics will remain weak over the next two years amid sustained capital spending and limited financial flexibility. S&P expects funds from operations-to-debt to average 45-50%, below the threshold for the prior rating. S&P mentioned that it is driven by high capex requirements, minimal hedging and sensitivity to commodity prices. While Murphy’s offshore developments in the Gulf of Mexico and Vietnam are expected to lift production from late-2026 and support stronger cash flow in 2027, execution and cost risks remain elevated. Liquidity is viewed as adequate following the upsizing and extension of its revolving credit facility. However, S&P does not expect the company to reach its $1bn debt target or resume shareholder distributions beyond the base dividend in the near term.
Murphy Oil’s bonds were trading a tad weaker with its 6% 2032s at 99.3, yielding 6.1%.
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