Oppenheimer analyst Fadel Gheit downgraded Murphy Oil Corporation MUR 0.5% on Thursday from Outperform to Perform following the company’s Q2 earnings report this week. Gheit believes that Murphy will continue its deficit spending “into 2017 and beyond.”

The Numbers

Murphy reported Q2 earnings per share this week of -$0.48, slightly beating consensus expectations of -$0.54. Oppenheimer is now projecting 2016 EPS of -$2.64.

In terms of production, Murphy averaged 202 mboed in Q2, and the company issued guidance of 200 mboed for Q3 and 200-208 mboed for the full year.

Murphy reported $331 million in operating cash flow and $610 million in capex, $62 million in dividends and $250 million in share buybacks.

Tough Environment

With the price of oil projected to remain well below $80 per barrel over the next several years, Gheit finds…

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