Edgar Filing: MURPHY OIL CORP /DE

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement

[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12

MURPHY OIL CORPORATION
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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[_] Fee paid previously with preliminary materials.

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Notes:

Reg. (S) 240.14a-101.

SEC 1913 (3-99)

[LOGO OF MURPHY OIL CORP.]

NOTICE OF ANNUAL MEETING

To the Stockholders of
Murphy Oil Corporation:

The Annual Meeting of Stockholders of Murphy Oil Corporation will be held at
the South Arkansas Arts Center, 110 East 5th Street, El Dorado, Arkansas, on
Wednesday, May 9, 2001, at 10:00 a.m., Central Daylight Time, for the
following purposes:

1. To elect directors to serve for the ensuing year.

2. To vote upon a proposed amendment to the Company's Certificate of
Incorporation attached as Exhibit A to the accompanying Proxy Statement. If
adopted, this amendment will increase the number of authorized shares of
Common Stock from 80,000,000 to 200,000,000.

3. To approve or disapprove the action of the Board of Directors in
appointing KPMG LLP as the Company's independent auditors for 2001.

4. To transact such other business as may properly come before the meeting.

Only stockholders of record at the close of business on March 12, 2001, the
record date fixed by the Board of Directors of the Company, will be entitled
to notice of and to vote at the meeting or any adjournment thereof. A list of
all stockholders entitled to vote is on file at the offices of the Company,
200 Peach Street, El Dorado, Arkansas 71730.

You may vote your shares by signing and returning the enclosed proxy card or
by telephone or internet as explained on the card.

Walter K. Compton
Secretary

El Dorado, Arkansas
March 26, 2001

PROXY STATEMENT

March 26, 2001

SOLICITATION

The solicitation of the enclosed proxy is made on behalf of the Board of
Directors of Murphy Oil Corporation (the "Company") for use at the Annual
Meeting of Stockholders to be held on May 9, 2001. It is expected that this
Proxy Statement and related materials will first be mailed to stockholders on
or about March 26, 2001.

The complete mailing address of the Company's principal executive offices is
200 Peach Street, P.O. Box 7000, El Dorado, Arkansas 71731-7000.

VOTING PROCEDURES

The affirmative vote of a majority of the shares present in person or
represented by proxy at the meeting is required for approval of matters
presented at the meeting. Your proxy will be voted at the meeting, unless you
(i) revoke it at any time before the vote by filing a revocation with the
Secretary of the Company, (ii) duly execute a proxy card bearing a later date,
or (iii) appear at the meeting and vote in person. Proxies returned to the
Company, votes cast other than in person and written revocations will be
disqualified if received after commencement of the meeting. If you elect to
vote your proxy by telephone or internet as described in the
telephone/internet voting instructions on your proxy card, we will vote your
shares as you direct. Your telephone/internet vote authorizes the named
proxies to vote your shares in the same manner as if you had marked, signed
and returned your proxy card.

Votes cast by proxy or in person at the meeting will be counted by the
persons appointed by the Company to act as election inspectors for the
meeting. The election inspectors will treat shares represented by proxies that
reflect abstentions as shares that are present and entitled to vote for
purposes of determining the presence of a quorum and for purposes of
determining the outcome of any other business submitted at the meeting to the
stockholders for a vote. Abstentions, however, do not constitute a vote "for"
or "against" any matter and thus will be disregarded in the calculation of
"votes cast."

The election inspectors will treat shares referred to as "broker non-votes"
(i.e., shares held by brokers or nominees as to which instructions have not
been received from the beneficial owners or persons entitled to vote and that
the broker or nominee does not have discretionary power to vote on a
particular matter) as shares that are present and entitled to vote for
purposes of determining the presence of a quorum. However, for purposes of
determining the outcome of any matter as to which the broker has physically
indicated on the proxy that it does not have discretionary authority to vote,
those shares will be treated as not present and not entitled to vote with
respect to that matter (even though those shares are considered entitled to
vote for quorum purposes and may be entitled to vote on other matters).

Unless specification to the contrary is made, the shares represented by the
enclosed proxy will be voted FOR all the nominees for director; FOR the
proposed amendment to the Company's Certificate of Incorporation; and FOR
approval of the appointment of KPMG LLP as the Company's independent auditors.

VOTING SECURITIES

On March 12, 2001, the record date for the meeting, the Company had
outstanding 45,057,083 shares of Common Stock, all of one class and each share
having one vote in respect of all matters to be voted on at the meeting. This
amount does not include 3,718,084 shares of treasury stock. Information as to
Common Stock Ownership of certain beneficial owners and management is set
forth in the tables on page 5 ("Security Ownership of Certain Beneficial
Owners" and "Security Ownership of Management").

ELECTION OF DIRECTORS

The by-laws of the Company provide for eleven directors to be elected on May
9, 2001. The by-laws also provide that the directors elected at each Annual
Meeting of Stockholders shall serve until their successors are elected and
qualified.

To the extent authorized by the proxies, the shares represented by the
proxies will be voted in favor of the election as directors of the eleven
nominees whose names are set forth below. If for any reason any of these
nominees is not a candidate when the election occurs, the shares represented
by such proxies will be voted for the election of the other nominees named and
may be voted for any substituted nominees. However, management of the Company
does not expect this to occur. All of management's nominees, except for
William L. Rosoff and David J.H. Smith, were elected at the last Annual
Meeting of Stockholders. Mr. Rosoff and Dr. Smith were elected by the Board on
February 7, 2001. The names of the nominees, and certain information as to
them, are as follows:

Principal occupation or
employment (for more Other public
than the past five years Director company
Name and age unless otherwise stated) since directorships
------------ -------------------------- -------- --------------------

B.R.R. Butler*# Managing Director, 1991 KS Biomedix Holdings
London, England Retired, The British p.l.c.
Age: 71 Petroleum Company p.l.c. Guildford, England
George S. Dembroski+* Vice Chairman, Retired, 1995 Cameco, Inc.
Toronto, Ontario, RBC Dominion Securities Saskatoon,
Canada Limited; Vice Chairman, Saskatchewan,
Age: 66 RBC Dominion Securities Canada
Limited from June, 1981 Electrohome Ltd.
to January 31, 1998. Kitchener, Ontario,
Canada
Claiborne P. Deming(S) President and Chief 1993 None
El Dorado, Arkansas Executive Officer of the
Age: 46 Company.
H. Rodes Hart +* Chairman and Chief 1975 None
Nashville, Tennessee Executive Officer,
Age: 69 Franklin Industries Inc.,
engaged in the
manufacture of brick and
industrial minerals.
Robert A. Hermes*# Chairman of the Board, 1999 None
Houston, Texas Purvin & Gertz, Inc., an
Age: 61 international energy
consulting firm, since
January 1, 2000;
President, Purvin &
Gertz, Inc. from 1987 to
December 31, 1999.
Michael W. Murphy* President, Marmik Oil Com- 1977 Regions Financial
El Dorado, Arkansas pany, engaged in explora- Corp.
Age: 53 tion for and production Birmingham, Alabama
of oil and gas. Presi-
dent, Murphy Motor Co.,
engaged in automobile
dealerships.
R. Madison Murphy(S) Chairman of the Board of 1993 Deltic Timber
El Dorado, Arkansas the Company. Corporation
Age: 43 El Dorado, Arkansas
BancorpSouth
Tupelo, Mississippi
William C. Nolan, Partner, Nolan and 1977 None
Jr.(S)+* Alderson, Attorneys.
El Dorado, Arkansas
Age: 61
William L. Rosoff Senior Vice President and 2001 None
New York, New York General Counsel of Marsh
Age: 54 & McLennan Companies,
Inc. since October 10,
2000. Marsh & McLennan
through subsidiaries is a
provider of risk and
insurance services,
investment management
services and global
consulting services.
Partner with Davis, Polk
& Wardwell from 1985 to
1998 and again from
February, 2000 to
October, 2000. Senior
Vice President and
General Counsel of RJR
Nabisco, Inc. from 1998
to October, 1999.

David J. H. Smith Chief Executive Officer of 2001 None
Maidstone, Kent, Whatman plc, a life-
England sciences company, since
Age: 59 1996. Chief Technology
Officer of Whatman from
1994 to 1996.
Caroline G. Theus(S)*# President, Inglewood Land 1985 None
Alexandria, Louisiana and Development Company,
Age: 57 a farming and land
holding corporation.
President, Keller
Enterprises, LLC which
manages investments and
real estate holdings.

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(S)Executive Committee
+ Audit Committee
* Executive Compensation and Nominating Committee
# Public Policy and Environmental Committee

Claiborne P. Deming, Michael W. Murphy, R. Madison Murphy, William C. Nolan,
Jr. and Caroline G. Theus are all related by blood. Michael W. Murphy and R.
Madison Murphy are brothers. Claiborne P. Deming, William C. Nolan, Jr. and
Caroline G. Theus are first cousins of each other and of Michael W. Murphy and
R. Madison Murphy. These five directors, their spouses, and members of their
immediate families directly or indirectly own in the aggregate approximately
25% of the outstanding Common Stock of the Company and may be considered the
controlling persons of the Company. See also "Security Ownership of
Management" on page 5.

Committees

The standing committees of the Board of Directors are the Executive
Committee, the Audit Committee, the Executive Compensation and Nominating
Committee, and the Public Policy and Environmental Committee.

The Executive Committee is empowered to exercise certain functions of the
Board of Directors when the Board is not in session.

The Audit Committee's functions include an oversight role for the Company's
financial statements and review of the results and scope of the work of the
Company's independent auditors and the Company's internal Auditing Division.
This committee meets with representatives of the independent auditors and with
members of the internal Auditing Division for these purposes.

The Executive Compensation and Nominating Committee administers the
Company's 1992 Stock Incentive Plan and the annual incentive compensation plan
and reviews generally the compensation of all executive and key personnel of
the Company and subsidiaries. This committee specifically determines the
compensation of the Chairman of the Board, the President, and certain other
officers. Other duties and authority of the Executive Compensation and
Nominating Committee, as fixed by the Board of Directors, are as follows:

"The Executive Compensation and Nominating Committee shall have the power
to: propose and consider suggestions as to candidates for membership on the
Board; review and propose to the Board criteria for Board membership and
responsibilities; periodically recommend to the Board candidates for
vacancies on the Board due to resignations or retirements or due to such
standards for composition of Board membership as may from time to time
legally prevail; review and recommend to the Board such modifications to
the prevailing Board of Directors retirement policy as may be deemed
appropriate in light of contemporary standards; and propose to the Board on
or before the February meeting of each year a slate of directors for
submission to the stockholders at the annual meeting."

Stockholders desiring to recommend candidates for membership on the Board of
Directors for consideration by the Executive Compensation and Nominating
Committee should address their recommendations to: Executive Compensation and
Nominating Committee of the Board of Directors, c/o Secretary, Murphy Oil
Corporation, P.O. Box 7000, El Dorado, Arkansas 71731-7000.

The Public Policy and Environmental Committee provides review and oversight
of the Company's policies, programs and practices with regard to
environmental, health and safety compliance and in relation to public issues.

Meetings and Attendance

During 2000 there were six meetings of the Board of Directors, twelve
meetings of the Executive Committee, six meetings of the Audit Committee, two
meetings of the Executive Compensation and Nominating Committee, and two
meetings of the Public Policy and Environmental Committee. All nominees
attended a minimum of 75% of the total number of meetings of the Board of
Directors and committees on which they served.

Compensation of Directors

The Company has a standard arrangement for compensation of directors who are
not also employees of the Company. Under this arrangement, for fiscal year
2000, nonemployee directors were compensated at the rate of $30,000 per annum
plus $1,000 for each meeting attended of the Board, the Audit Committee, the
Executive Compensation and Nominating Committee, or the Public Policy and
Environmental Committee. The Chairman of the Board is paid the aforementioned
plus an additional $75,000 per annum. No compensation is paid for attendance
at meetings of the Executive Committee. The Company also reimburses directors
for travel, lodging and related expenses they incur in attending Board and
committee meetings.

The Company adopted a retirement plan for nonemployee directors (the
"Director Retirement Plan") effective May 1, 1994. The Director Retirement
Plan provides a retirement benefit to any nonemployee director with at least
five (5) years of service if retirement occurs at or after the age of 72, or
with at least ten (10) years of service if retirement occurs prior to the age
of 72. The Director Retirement Plan will pay an annual benefit equal to the
annual retainer in effect at the time of the director's retirement. Benefits
will be paid for a period equal to years of service. Payment of retirement
benefits will be in the form of quarterly payments which will commence on the
first day of the calendar quarter following the later of the director's
attainment of age 65 or actual retirement from the Board. If a director dies
prior to retirement from the Board, no benefits will be paid under this plan.
In the event a director dies after retirement from the Board, benefits will be
paid to the surviving spouse, but in no event will the total of such benefits
exceed ten (10) years. If there is no surviving spouse, no benefits will be
paid to any other party, beneficiary or estate.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

As of December 31, 2000, the following are known to the Company to be the
beneficial owners of more than five percent of the Company's Common Stock:

Amount and
nature of
beneficial
Name and address of beneficial owner ownership(/1/) Percentage
------------------------------------ --------------- ----------

BancorpSouth, Inc. ............................. 2,402,327(/2/) 5.3%
One Mississippi Plaza
Tupelo, MS 38804
Capital Research and
Management Company.............................. 6,048,600(/3/) 13.4%
333 South Hope Street
Los Angeles, CA 90071
Putnam Investments, LLC......................... 2,284,800(/4/) 5.1%
One Post Office Square
Boston, MA 02109

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(1) Includes Common Stock for which the indicated owner has sole or shared
voting or investment power and is based on each indicated owner's 13G
filing for the period ended December 31, 2000.
(2) Shares reported are held in various trust accounts of which a subsidiary
of the filing person is a trustee. Total includes 52,174 sole voting and
investment power shares and 2,350,153 shared voting and investment power
shares.
(3) An investment adviser registered under Section 203 of the Investment
Advisers Act of 1940. All shares are sole investment power shares.
(4) Joint filing by Putnam Investments, LLC on behalf of itself and Marsh &
McLennan Companies, Inc. (parent holding company); Putnam Investment
Management, LLC and The Putnam Advisory Company, LLC. All shares are
shared investment power shares; 116,200 shares are shared voting power
shares.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth information, as of March 6, 2001, concerning
the number of shares of Common Stock of the Company beneficially owned by all
directors and nominees, each of the Named Executives (as hereinafter defined),
and directors and executive officers as a group:

Percent of
Amount and outstanding
nature of (if greater
beneficial than one
Name ownership(/1/) percent)
---- --------------- ------------

Basil R. R. Butler.............. 2,000 --
George S. Dembroski............. -- --
Claiborne P. Deming............. 1,586,684(/2/)(/3/) 3.5
H. Rodes Hart................... 172,670 --
Robert A. Hermes................ 2,000 --
Michael W. Murphy............... 359,775(/4/) --
R. Madison Murphy............... 2,867,099(/4/) 6.4(/4/)
William C. Nolan, Jr............ 686,397 1.5
William L. Rosoff............... 1,000 --
David J. H. Smith............... 2,000 --
Caroline G. Theus............... 956,634 2.1
Herbert A. Fox, Jr. ............ 71,105(/2/)(/3/) --
Enoch L. Dawkins................ 68,115(/2/)(/3/) --
Steven A. Cosse................. 66,617(/2/)(/3/) --
Odie F. Vaughan................. 26,867(/2/)(/3/) --
Directors and executive officers
as a group..................... 6,931,530(/2/)(/3/)(/5/) 15.4(/5/)

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(1) Includes common stock held by directors and officers or by their spouses
and other household members for which the directors and officers have sole
or shared voting or investment power.

(2) Includes shares subject to options exercisable within sixty days in the
following amounts: Deming 141,280; Fox 45,000; Dawkins 52,500; Cosse
52,500; and Vaughan 10,750.
(3) Includes shares of Restricted Stock awarded in 1998 pursuant to the
Company's 1992 Stock Incentive Plan. Such shares are subject to vesting
requirements, but the recipient is entitled to vote such shares upon their
issuance.
(4) Includes shares for which voting and/or investment power is shared between
Michael W. Murphy and R. Madison Murphy.
(5) In computing the aggregate number of shares owned by directors and
officers as a group, the same shares have not been counted more than once.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Under the securities laws of the United States, the Company's directors and
its executive officers are required to report their ownership of the Company's
Common Stock and any changes in that ownership to the Securities and Exchange
Commission and the New York Stock Exchange. Specific due dates for these
reports have been established and the Company is required to report in this
proxy statement any failure to file by these dates. In 2000, all officers and
directors satisfied their filing requirements except one Form 4 was not filed
on a timely basis for Michael W. Murphy.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In 2000, the Company purchased crude oil from Munoco Company L.C. in the
amount of $152,087. Munoco Company L.C. is an associate of William C. Nolan,
Jr. Purchases from Munoco were made at market prices on terms no more
favorable than those offered to unaffiliated third party sellers.

During 2000, the Company retained the law firm of Davis Polk & Wardwell.
William L. Rosoff was a partner in the firm from February, 2000 to October,
2000. The firm will also be retained in 2001. Mr. Rosoff is currently Senior
Vice President and General Counsel of Marsh & McLennan Companies, Inc. (MMC).
MMC, as parent holding company, was included in the 13G filing of Putnam
Investments, LLC as detailed on page 5 under the heading "Security Ownership
of Certain Beneficial Owners."

EXECUTIVE COMPENSATION

The following table sets forth information with respect to the individual
who served as the Company's chief executive officer during 2000 and the four
other most highly compensated executive officers of the Company at the end of
2000 (collectively, the "Named Executives"):

Summary Compensation Table

Annual Long-Term
Compensation Compensation Awards
--------------- ---------------------
Restricted
stock Securities All other
Name and principal Salary Bonus awards underlying compensation
position Year ($)(1) ($)(2) ($)(3) options ($)(4)
------------------ ---- ------- ------- ---------- ---------- ------------

Claiborne P. Deming 2000 691,674 650,000 -- 30,000 58,265
President and Chief
Executive Officer 1999 600,000 351,000 -- 20,000 52,855
Murphy Oil Corporation 1998 591,668 -- 495,000 25,000 57,417
Herbert A. Fox, Jr. 2000 394,174 250,000 -- 20,000 32,052
Vice President 1999 330,000 150,000 -- -- 28,408
Murphy Oil Corporation 1998 315,006 50,000 247,500 15,000 30,292
Enoch L. Dawkins 2000 372,917 250,000 -- -- 30,991
President, Murphy
Exploration & 1999 341,669 175,000 -- 15,000 28,993
Production Company (a 31,581
100% subsidiary) 1998 325,002 -- 247,500 15,000
Steven A. Cosse 2000 312,917 200,000 -- 20,000 27,991
Senior Vice President
and General Counsel 1999 290,004 130,000 -- 15,000 26,404
Murphy Oil Corporation 1998 267,091 -- 247,500 15,000 27,104
Odie F. Vaughan 2000 217,500 75,000 -- -- 17,513
Treasurer 1999 210,000 60,000 -- -- 16,936
Murphy Oil Corporation 1998 201,670 -- 123,750 6,500 17,958

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(1) Includes amounts of cash compensation earned and received by executive
officers as well as amounts earned but deferred at the election of those
officers.
(2) Bonuses were awarded and paid after the end of the year in which they are
reported. Because these payments related to services rendered in the year
prior to payment, the Company reported bonuses as a component of
compensation expense in the prior year.
(3) Represents the closing stock price of unrestricted stock on date of grant
($49.50 on February 3, 1998) times the number of restricted shares
granted. Dividends are being paid on restricted stock at the same rate
paid to all shareholders. Awards are subject to performance based
conditions and are forfeited if grantee terminates for any reason other
than retirement, death or full disability. None of the restricted stock
awards vest in under five years from the date of grant. Based on the
results of specified financial objectives, all of the restricted stock
awards granted in 1994 were forfeited effective December 31, 1998 and,
effective December 31, 2000, fifty percent of eligible shares granted in
1996 were awarded and the remaining shares were forfeited. On December
31, 2000, Mr. Deming held a total of 10,000 nonvested restricted shares
having a then current value of $604,375; Messrs. Fox, Dawkins and Cosse
each held a total of 5,000 nonvested restricted shares having a then
current value of $302,188; and Mr. Vaughan held a total of 2,500
nonvested restricted shares having a then current value of $151,094.
(4) The total amounts shown in this column for 2000 consist of the following:
Mr. Deming: $22,674 -- Dividends on nonvested restricted stock; $34,583
-- Company contributions to defined contribution plan; and $1,008 --
Benefit attributable to Company-provided term life insurance policy.
Mr. Fox: $11,336 -- Dividends on nonvested restricted stock; $19,708 --
Company contributions to defined contribution plan; and $1,008 -- Benefit
attributable to Company-provided term life insurance policy.
Mr. Dawkins: $11,336 -- Dividends on nonvested restricted stock; $18,647
-- Company contributions to defined contribution plan; and $1,008 --
Benefit attributable to Company-provided term life insurance policy.
Mr. Cosse: $11,336 -- Dividends on nonvested restricted stock; $15,647 --
Company contributions to defined contribution plan; and $1,008 -- Benefit
attributable to Company-provided term life insurance policy.
Mr. Vaughan: $5,668 -- Dividends on nonvested restricted stock; $10,837
-- Company contributions to defined contribution plan; and $1,008 --
Benefit attributable to Company-provided term life insurance policy.

OPTION EXERCISES AND FISCAL YEAR-END VALUES

Shown below is information with respect to stock options exercised in fiscal
2000 and the fiscal year-end value of unexercised options for the Named
Executives:

Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values

Number of securities Value of unexercised in-
underlying unexercised the-money options at
Shares options at FY-end (#) FY-end ($)*
acquired on Value ------------------------- -------------------------
Name exercise (#) realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------

Claiborne P. Deming..... 3,258 $187,030 118,780 62,500 $1,355,110 $732,655
Herbert A. Fox, Jr...... 5,038 300,076 37,500 27,500 193,313 149,530
Enoch L. Dawkins........ -- -- 37,500 22,500 193,313 451,406
Steven A. Cosse......... 5,439 336,414 37,500 42,500 193,313 520,780
Odie F. Vaughan......... 4,075 263,220 7,500 3,250 -- 34,734

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* Represents market value of underlying securities at year-end less the
exercise price.

OPTION GRANTS

Shown below is further information on grants of stock options pursuant to
the 1992 Stock Incentive Plan during the fiscal year ended December 31, 2000
to the Named Executives:

Option Grants in Last Fiscal Year

Individual grants
---------------------------------------------------------------------------------------------
Number of % of total
securities options Exercise Grant
underlying granted to or base date
options employees price Expiration present
Name granted (#)(1)(2) in fiscal year ($/Sh) date value ($)(3)
---- ----------------- ----------------- -------- ---------- ------------

Claiborne P. Deming..... 30,000 7.58% $56.9688 02/01/10 $450,000
Herbert A. Fox, Jr. .... 20,000 5.05% 56.9688 02/01/10 300,000
Enoch L. Dawkins........ -- -- -- -- --
Steven A. Cosse......... 20,000 5.05% 56.9688 02/01/10 300,000
Odie F. Vaughan......... -- -- -- -- --

--------
(1) No stock appreciation rights were granted in 2000.
(2) Options granted in 2000 vest 50% at the end of two years and 100% at the
end of three years from the date of grant and are exercisable for a period
of 10 years from the date of grant.
(3) Values were based on the Black-Scholes option pricing model adapted for
use in valuing executive stock options. The actual value, if any, an
executive may realize will depend on the excess of the stock price over
the exercise price on the date the option is exercised. There is no
assurance that value realized by the executive will be at or near the
value estimated by the Black-Scholes model. The estimated values under
that model are based on arbitrary assumptions as to certain variables and
in 2000 included the following:

. Risk-free rate of return 6.76%
. Stock volatility 26.06%
. Dividend yield 2.91%
. Expected life of option 5 years

Based on the Black-Scholes option pricing model, using the above
assumptions, the options granted in 2000 have been valued at $15.00 per
share as of the grant date.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Executive Compensation and Nominating Committee of the
Board of Directors of the Company during 2000 were Messrs. Butler, Dembroski,
Hart, Hermes, M. W. Murphy and Nolan and Ms. Theus.

COMPENSATION COMMITTEE REPORT FOR 2000

The Executive Compensation and Nominating Committee (the "Committee") of the
Board of Directors of the Company, which is comprised entirely of independent
outside directors, has prepared this Compensation Committee Report which
describes the guiding principles followed by the Company in establishing its
pay practices and reviews compensation decisions which were made during 2000
affecting the Named Executives.

Executive Compensation Philosophy and Principles

The Company's executive compensation programs and plans are based on
principles designed to align the interests of executives with those of
stockholders and provide a direct link with the Company's values, objectives,
business strategy and financial results. The following general guidelines have
been adopted by the Committee and have been used as the basic architecture for
all executive compensation and benefit arrangements for the Company:

. All programs are directed toward attracting and retaining key executives
who are critical to the long-term success of the Company and each of its
business units and who exhibit a high degree of business responsibility,
personal integrity and professionalism.

. These programs are designed to reward executives for both the short-term
and long-term achievements of Company and business unit objectives that
lead to the enhancement of shareholder value.

. All pay and benefit programs are intended to be competitive within each
industry segment, with upside opportunity and downside risk linked to the
achievement of annual and long-term performance objectives which are
regularly reviewed and approved by the Committee.

At the present time, executive compensation programs consist of base salary,
an annual cash incentive plan and long-term incentives in the form of both
stock options and performance-based restricted stock. The executive benefits
that are offered are typical of those provided by others in the industry. Each
of these compensation arrangements is briefly reviewed in the following
sections.

Base Salary Practices

The Named Executives and other employees are compensated within established
salary range guidelines that are generally based on similar positions in
companies that are comparable to the Company in size, complexity, and industry
orientation. The actual base pay level for each officer is based on a
combination of experience, performance and other factors that are determined
to be important by the Committee. Each year, the Company participates in
salary surveys within each industry segment and from time to time uses the
services of outside consultants to further supplement its competitive
information. The petroleum industry survey in which the Company participates
contains over twenty-five corporations that the Committee believes are
representative of the Company's labor market for management talent. The survey
is conducted by a major compensation consulting firm. Many of the companies in
the survey group are included in the S&P Oil (Domestic Integrated) Index line
on the performance graph as shown on page 12. The Committee generally targets
the base salary of most officers to be at or near the median (50th percentile)
of the competitive market. The actual salaries and the amount of increases for
2000 for the Named Executives were near the median

levels of the salaries in the referenced survey. The base salary of most
officers is reviewed annually, with the amount of any increases reflecting
factors such as Company performance, general economic conditions, marketplace
compensation trends and individual performance. In determining base salary and
increase in salaries, the most important criteria in the Committee's analysis
are marketplace comparisons and individual performance. Overall corporate
performance, including the Company's improvement in earnings and total
shareholder return, were also considered by the Committee in making salary
adjustments in 2000.

Annual Incentive Compensation Program

The Company restructured its annual incentive compensation plan in 1996. The
plan concept follows many of the precepts of economic value added and measures
the Company's ability to earn a return on capital that exceeds the weighted
average cost of capital as well as the improvement in the Company's return on
capital. The specific performance measure used for the 2000 performance year
was developed based upon a projection of the Company's weighted average cost
of capital. All participants in the plan, including the Named Executives, were
measured on this corporate-wide measure of Company performance. In 2000, the
Company met its return on capital employed performance target and therefore
achieved its targeted payout. As a result, the Named Executives received
annual incentive awards for the 2000 plan year under the plan's formula.

Long-Term Incentive Compensation

Under the 1992 Stock Incentive Plan (the "1992 Plan") as approved by the
Company's stockholders, long-term incentives may be provided through stock
options, stock appreciation rights and performance-based restricted stock, all
designed to increase the stock ownership of management and link these key
individuals directly to stockholders. All long-term incentive awards granted
during 2000 were granted under the 1992 Plan. Where appropriate, the Committee
uses the Black-Scholes option valuation model to determine the expected value
of stock options. Under the 1992 Plan, the Committee may award up to one
percent of the total issued and outstanding shares as of December 31 of the
immediately preceding year for executive long-term incentives. The 1992 Plan
also has a carry forward feature which allows the Committee to use unawarded
shares from years that were below the threshold to grant awards in a
particular year that may exceed this utilization level. In 2000, the Company
made grants which were .88% of total Company shares outstanding.

A stock option granted under the 1992 Plan gives the executive the right to
purchase a specified number of shares of the Company's Common Stock at an
option price equal to the market price on the date the option was granted.
Options, which may be either nonqualified stock options or incentive stock
options, vest 50% at the end of two years and 100% at the end of three years
from the date of grant and are exercisable for a period of 10 years from the
date of grant. The size of option grants awarded each year is based on
competitive practices in general industry using comparative data provided by a
major compensation consulting firm. The Company's stock option grants in 2000
were generally between the 25th and 50th percentile levels of general industry
practices. In addition, the Committee considers the total number of grants
each executive has been awarded in recent years in determining whether to
grant additional stock options or performance-based restricted stock.
Nonqualified stock options were granted in 2000 to certain Named Executives;
however, no stock appreciation rights were granted in 2000.

On a biennial basis, the Company may grant performance-based restricted
shares to key executives, including the Named Executives. These restricted
share grants are totally performance-based in that the restrictions will only
be lifted and the shares earned in the event that the Company meets or exceeds
its performance target. The performance target for restricted share grants is
the Company's total shareholder return as compared to a selected peer group of
integrated oil and gas companies over a stated performance period. During this
five year performance period executives are extended voting and dividend
rights on their restricted shares. No performance-based restricted shares were
granted in 2000 to the Named Executives.

In 1997, the stockholders of the Company approved an amendment to the 1992
Plan to limit the number of awards to any one individual and to specify the
performance criteria for performance-based restricted shares in compliance
with Section 162(m) of the Internal Revenue Code.

Discussion of 2000 Compensation for the President and Chief Executive Officer

Claiborne P. Deming served as President and Chief Executive Officer of the
Company for fiscal year 2000. During 2000, the Committee made the following
determinations regarding Mr. Deming's compensation:

Mr. Deming received a base salary adjustment during 2000. With this salary
adjustment, Mr. Deming's base salary approaches the median (50th percentile)
of the competitive market as reported to the Committee by a major consulting
firm.

As noted earlier, the Company restructured its annual incentive compensation
plan in 1996 to focus upon financial performance, as measured by return on
capital employed, which should lead to the enhancement of shareholder value.
As a participant in the plan, Mr. Deming earned an annual incentive award of
$650,000. The performance criteria of the plan was the Company's 2000 return
on capital employed. The incentive award in combination with the CEO's base
salary, takes the CEO's total annual cash compensation above the $1,000,000
Section 162(m) limit. Therefore a small portion of the annual incentive award
will not be tax deductible for the year 2000. The Committee feels the amount
in question is de minimis and not materially detrimental to the Company's
financial performance for the year.

In 2000, Mr. Deming received a grant of 30,000 nonqualified stock options at
an exercise price of $56.9688, which was the fair market value of the
Company's stock on the date of the grant. These options will vest 50% two
years from the date of grant and 100% three years from the date of grant. The
option grant was made in recognition of both Mr. Deming's performance and that
of the Company in 1999 and early 2000. Mr. Deming's grant was below the 25th
percentile of competitive practice based upon survey data provided by a major
compensation consulting firm. The compensation consulting firm assisted the
Committee in determining the size of the stock option grant to Mr. Deming and
all other Company executives.

The Executive Compensation and Nominating Committee members during 2000
were, and this Compensation Committee Report is submitted by, Messrs. Butler,
Dembroski, Hart, Hermes, M. W. Murphy, Nolan, and Ms. Theus.

SHAREHOLDER RETURN PERFORMANCE PRESENTATION

The following line graph presents a comparison of the cumulative five-year
shareholder returns (including the reinvestment of dividends) for the Company,
the Standard and Poor's 500 Stock Index (S&P 500 Index) and the S&P Oil
(Domestic Integrated) Index.

[MURPHY OIL CORPORATION]
Comparison of Five-Year Cumulative Shareholder Returns

[GRAPH]

-------------------------------------------------------------------------------

1995 1996 1997 1998 1999 2000
------------------------------------------------------------------

Murphy Oil Corporation $100 $138 $155 $122 $175 $189
S&P 500 Index 100 123 164 211 255 232
S&P Oil (Domestic Integrated) Index 100 125 150 122 148 174

-------------------------------------------------------------------------------
Data are provided by Bloomberg L.P.

RETIREMENT PLANS

The following table shows the estimated annual pension benefit payable, at
age 65, under Murphy Oil Corporation's Retirement Plan at December 31, 2000
for the compensation and length of service indicated. The amounts shown are
subject to reduction for social security benefits.

Pension Plan Table--Murphy Oil Corporation Plan

Years of Service
------------------------------------------------------------------------------
Remuneration(/1/) 15 20 25 30 35 40
----------------- -------- -------- -------- -------- -------- --------

$ 200,000 $ 48,000 $ 64,000 $ 80,000 $ 96,000 $112,000 $128,000
400,000 96,000 128,000 160,000(/2/) 192,000(/2/) 224,000(/2/) 256,000(/2/)
600,000 144,000(/2/) 192,000(/2/) 240,000(/2/) 288,000(/2/) 336,000(/2/) 384,000(/2/)
800,000 192,000(/2/) 256,000(/2/) 320,000(/2/) 384,000(/2/) 448,000(/2/) 512,000(/2/)
1,000,000 240,000(/2/) 320,000(/2/) 400,000(/2/) 480,000(/2/) 560,000(/2/) 640,000(/2/)
1,200,000 288,000(/2/) 384,000(/2/) 480,000(/2/) 576,000(/2/) 672,000(/2/) 768,000(/2/)
1,400,000 336,000(/2/) 448,000(/2/) 560,000(/2/) 672,000(/2/) 784,000(/2/) 896,000(/2/)
--------
(/1/)During 2000, the maximum compensation limit for qualified retirement
plans, as established by the Internal Revenue Service, was $170,000.
Remuneration is the highest consecutive three year average compensation
which includes the participant's salary and bonus.
(/2/)Exceeds presently allowable maximum legislative limits for annual pension
benefits under a defined benefit pension plan. In 2000, the maximum
benefit allowable was $135,000.

A portion of the benefits shown above would be paid under the Company's
Supplemental Benefit Plan to the extent such benefits exceed legislative
limitations.

The credited years of service for Messrs. Deming, Fox, Cosse and Vaughan are
twenty-two years, thirty-one years, twenty-one years and thirty-nine years,
respectively.

As of January 1, 1992, employees of Murphy Exploration & Production Company,
formerly named Ocean Drilling & Exploration Company (ODECO), began
participating in the Company's plans. Prior to that time such employees
participated in similar plans of ODECO. Employees of the Company or one of its
100% owned subsidiaries who were previously included in the ODECO Retirement
Plan may receive a benefit upon retirement which is based on a combination of
the Company and ODECO plans. The following table indicates the estimated
annual benefit computed on a straight life annuity basis payable, at age 65,
under the ODECO plan for the salary and length of service indicated:

Pension Plan Table--ODECO Plan

$200,000 $ 59,352 $ 79,082 $ 98,812 $118,542 $138,272(/2/) 158,002(/2/)
300,000 89,352 119,082 148,812(/2/) 178,542(/2/) 208,272(/2/) 238,002(/2/)
400,000 119,352 159,082(/2/) 198,812(/2/) 238,542(/2/) 278,272(/2/) 318,002(/2/)
500,000 149,352(/2/) 199,082(/2/) 248,812(/2/) 298,542(/2/) 348,272(/2/) 398,002(/2/)
600,000 179,352(/2/) 239,082(/2/) 298,812(/2/) 358,542(/2/) 418,272(/2/) 478,002(/2/)

--------
(/1/)During 2000, the maximum compensation limit for qualified retirement
plans, as established by the Internal Revenue Service, was $170,000.
Remuneration is the highest consecutive three year average compensation
which includes the participant's salary and bonus.
(/2/)Exceeds presently allowable maximum legislative limits for annual pension
benefits under a defined benefit pension plan. In 2000, the maximum
benefit allowable was $135,000.

The above tables do not reflect any reductions in retirement benefits that
would result from the selection of one of either plan's various available
survivorship options nor the actuarial reductions required by the plans for
retirement earlier than age 62.

The credited years of service for Mr. Dawkins are thirty-five years.

It is not feasible to calculate the specific amount attributable to the
plans in respect to each employee. The Company had no required contributions
to the retirement plans in 2000 and therefore no contributions were made.

AMENDMENT TO CERTIFICATE OF INCORPORATION TO AUTHORIZE ADDITIONAL SHARES OF
COMMON STOCK

At a meeting held on February 7, 2001, the Board of Directors of the Company
adopted a resolution proposing an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of Common Stock from
80,000,000 to 200,000,000. The full text of the proposed amendment is attached
hereto as Exhibit A.

The Board of Directors recommends this increase in the number of authorized
Common shares to the stockholders so that the additional shares would be
readily available if an opportunity should present itself for the Company to
acquire assets by exchanging Common shares, or so that capital might be
increased, if appropriate, by the issuance and sale of additional Common
shares, or if the Board of Directors should in the future determine it to be
advisable to distribute additional Common shares to the stockholders by way of
stock dividends. The Board of Directors does not at this time contemplate any
transaction in which additional Common shares would be exchanged, sold or
issued but believes it would be in the best interests of the stockholders for
the Board of Directors to have the discretion to issue additional shares if an
opportunity requiring the issuance of such shares should arise.

The Common stockholders will not, under Delaware law and the Company's
Articles of Incorporation, have any preemptive rights to subscribe for
additional shares of Common stock. Additional shares could be issued without
any further authorization by Common stockholders and the Board of Directors
does not now contemplate that any further authorization from stockholders will
be solicited, with respect to the issuance of the shares which would be
authorized by the proposed amendment.

The Board of Directors recommends a vote FOR the proposed amendment.

AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors of the Company has been
established to implement and to support the Board's oversight function with
respect to the Company's financial reporting, accounting policies, internal
controls and independent outside auditors. The Audit Committee Charter,
adopted by the Board on May 10, 2000, is included as Exhibit B to this Proxy
Statement. The Audit Committee met six times in 2000. All of the members of
the Audit Committee are independent under the rules of the New York Stock
Exchange.

In connection with the December 31, 2000 financial statements, the Audit
Committee reviewed and discussed the audited financial statements with
management; discussed with the auditors the matters required by Statement on
Auditing Standards No. 61; and received and discussed with the auditors the
matters required by Independence Standards Board Statement No. 1 and
considered the compatibility of non-audit services with the auditor's
independence. Fees for services provided by the Company's principal
accountant, KPMG, for the fiscal year ended December 31, 2000 were as follows:

Financial Information Systems Design
Audit Fees And Implementation Fees All Other Fees
---------- ------------------------------------ --------------

$525,000 $-0- $532,000

Based on these reviews and discussions, the Audit Committee recommended to
the Board that the Company's audited financial statements be included in its
Annual Report on Form 10-K for the year ended December 31, 2000.

The Audit Committee members during 2000 were Messrs. Dembroski (Chairman),
Hart and Nolan.

APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS

The Board of Directors desires that the stockholders indicate their approval
or disapproval of the Board's action in appointing KPMG LLP, Certified Public
Accountants, as independent auditors of the Company for the year 2001. KPMG
LLP has been serving the Company and its subsidiaries as independent auditors
for many years. The firm has advised the Company that its members have no
direct or indirect financial interest in the Company or any of its
subsidiaries. Members of the firm are expected to be present at the Annual
Meeting for the purpose of responding to inquiries by stockholders, and such
representatives will have an opportunity to make a statement if they desire to
do so.

In the event a majority of the stockholders voting should indicate
disapproval of the appointment of KPMG LLP, the adverse vote will be
considered as a directive to the Board of Directors to select other auditors
for the following year. Because of the difficulty and expense of making any
substitution of auditors during a year, it is contemplated that the
appointment for 2001 will be permitted to stand unless the Board finds other
good reason for making a change.

The Board of Directors recommends that shareholders vote FOR approval of the
appointment of KPMG LLP as independent auditors for the year 2001. Proxies
solicited on behalf of the Board will be voted FOR this proposal.

STOCKHOLDER PROPOSALS

Stockholder proposals for the Annual Meeting of Stockholders in the year
2002 must be received by the Company at its executive offices on or before
December 3, 2001 in order to be considered for inclusion in the proxy
materials.

OTHER INFORMATION

The management of the Company knows of no business other than that described
above that will be presented for consideration at the meeting. If any other
business properly comes before the meeting, it is the intention of the persons
named in the proxies to vote such proxies thereon in accordance with their
judgment.

The expense of this solicitation, including cost of preparing and mailing
this Proxy Statement, will be paid by the Company. Such expenses may also
include the charges and expenses of banks, brokerage houses and other
custodians, nominees or fiduciaries for forwarding proxies and proxy material
to beneficial owners of shares.

The above Notice and Proxy Statement are sent by order of the Board of
Directors.

Walter K. Compton
Secretary

El Dorado, Arkansas
March 26, 2001

PLEASE COMPLETE AND RETURN YOUR PROXY PROMPTLY
IN THE ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED IF IT IS MAILED IN THE UNITED STATES
OF AMERICA. ALTERNATIVELY, YOU MAY VOTE BY
TELEPHONE OR INTERNET AS DESCRIBED ON THE PROXY
CARD.

EXHIBIT A

PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION

The Certificate of Incorporation of the Company is hereby amended by
deleting the first paragraph of Article FOURTH and substituting therefor the
following:

"The total number of shares of stock of all classes which the Company
shall have authority to issue is 200,400,000, of which 400,000 shall be of
the par value of $100 each, designated as "Cumulative Preferred Stock', and
200,000,000 shall be of the par value of $1.00 each, designated as "Common
Stock'."

EXHIBIT B

MURPHY OIL CORPORATION

AUDIT COMMITTEE CHARTER

----------------

ADOPTED BY THE BOARD OF DIRECTORS
ON MAY 10, 2000

PURPOSES AND RESPONSIBILITIES

The Audit Committee of the Board of Directors (the "Board") of Murphy Oil
Corporation (the "Company") has been established to implement and to support
the Board's oversight function of the Company's financial reporting,
accounting policies, internal controls and independent and objective outside
auditors.

The Audit Committee shall have responsibility to:

. oversee the integrity of the audit process, financial reporting and
internal accounting controls of the Company;

. oversee the work of the Company's financial management ("Management"),
internal auditors (the "Internal Auditors") and independent auditors (the
"Outside Auditors") in these areas;

. oversee Management's proper development of, and adherence to, a sound
system of internal accounting and financial controls; and

. provide an open avenue of communication among the Board and the Outside
Auditors and the Internal Auditors;

The Audit Committee may adopt policies and procedures and use discretionary
and appropriate means to discharge its responsibilities in these areas.

COMMITTEE MEMBERSHIP

1. The Audit Committee will consist of three or more directors as determined
annually by the Board and appointed in accordance with the Company's bylaws.

2. Each member of the Audit Committee must:

. not have a relationship with the Company that would interfere with the
exercise of his or her independence from Management and the Company;

. be financially literate, as that qualification is interpreted by the Board
in its business judgment from time to time, or must become financially
literate within a reasonable period of time after his or her appointment to
the Audit Committee;

. not be or have been during the three years preceding his or her appointment
to the Audit Committee an employee or non-employee executive officer of the
Company or any of its Affiliates (as defined in the paragraph 303.02 of the
New York Stock Exchange, Inc.'s NYSE Listed Company Manual (the "NYSE
Definitions"));

. not be or have been during the three years preceding his or her appointment
to the Audit Committee a partner, controlling shareholder or executive
officer of an organization that has a business relationship with the
Company unless the Board determines in its business judgment that the
business relationship does not interfere with the Director's exercise of
independent judgment;

. not have or have had within the three years preceding his or her election
to the Audit Committee a direct business relationship with the Company
unless the Board determines in its business judgment that the relationship
does not interfere with the Director's exercise of independent judgment;

B-1

. not be employed as an executive of another corporation for which any of the
Company's executive officers serve as a member of the other corporation's
compensation committee; and

. not be an Immediate Family member (as defined in the NYSE Definitions) of
an individual who is or had been during the three years preceding his or
her appointment to the Audit Committee an executive officer of the Company
or its Affiliates.

At least one member of the Audit Committee must have accounting or related
financial management expertise, as the Board interprets such qualification in
its business judgment from time to time.

3. The Board will exercise its business judgment to determine a director's
eligibility to serve on the Audit Committee.

MEETINGS OF THE AUDIT COMMITTEE

4. The Audit Committee will meet as often as it deems appropriate to discharge
its responsibilities; provided that the Audit Committee shall meet at least
two times each year. The Audit Committee may ask members of Management, the
Outside Auditors, the Internal Auditors or others to attend any of its
meetings and to provide the Audit Committee with any information it may deem
appropriate.

SPECIFIC RESPONSIBILITIES

Selection and Oversight of the Outside Auditors.

5. The Outside Auditors are ultimately accountable to the Board and the Audit
Committee. The Board and Audit Committee shall select and, where appropriate,
replace the Outside Auditors or nominate an independent accounting firm to be
proposed in the Company's proxy statement for shareholder approval as the
Outside Auditors.

6. The Audit Committee will approve the terms of the engagement and
compensation of the Outside Auditors, including compensation for management
advisory or other services provided to the Company by the Outside Auditors or
an affiliate of the Outside Auditors.

7. The Audit Committee will, as it deems necessary in its business judgment,
evaluate the Outside Auditors and their impact on the accounting practices,
internal controls and financial reporting of the Company.

8. The Audit Committee shall be responsible for ensuring that the Outside
Auditors submit to it on a periodic basis a formal written statement
delineating all relationships between the Outside Auditors and the Company.
That statement shall include the disclosures regarding the Outside Auditors'
independence required by the Independence Board Standard No. 1, as in effect
from time to time.

9. The Audit Committee shall be responsible for actively engaging in a
dialogue with the Outside Auditors with respect to any disclosed relationships
or services between the Outside Auditors and the Company that may impact the
objectivity and independence of the Outside Auditors. The Audit Committee
shall also be responsible for recommending that the Board take appropriate
action in response to the Outside Auditors' report to satisfy itself of the
Outside Auditors' independence.

Appointment and Oversight of Internal Auditors.

10. The Audit Committee will review and concur in the appointment,
replacement, reassignment or dismissal of the Company's senior internal audit
executive, if any. Where appropriate in its business judgment, the Audit
Committee will evaluate and recommend the dismissal and replacement of that
senior internal audit executive.

B-2

11. The Audit Committee will, as it deems necessary in its business judgment,
evaluate the Internal Auditors and their impact on the accounting practices,
internal controls and financial reporting of the Company.

Oversight and Review of Accounting Principles and Practices and Internal
Controls.

12. The Audit Committee will, as it deems necessary in its business judgment,
exercise oversight of, and review and discuss with Management, the Outside
Auditors and the Internal Auditors:

a. the quality, appropriateness and acceptability of the Company's accounting
principles used in its financial reporting, the clarity of the financial
disclosures made, changes in the Company's accounting principles or
practices, the application of particular accounting principles and
disclosure practices by Management to new transactions or events;

b. potential major changes in generally accepted accounting principles and the
effect of those changes on the Company's financial statements;

c. changes in accounting principles, financial reporting policies and internal
controls proposed to be implemented by the Company;

d. significant litigation, contingencies and claims against the Company and
material accounting issues that require disclosure in the Company's
financial statements;

e. information regarding any "second" opinions sought by management from an
independent auditor with respect to the accounting treatment of a
particular event or transaction;

f. Management's compliance with the Company's processes, procedures and
internal controls;

g. the adequacy and effectiveness of the Company's internal accounting and
financial controls and the recommendations of Management, the Outside
Auditors and Internal Auditors for the improvement of accounting practices
and internal controls; and

h. disagreements between Management and the Outside Auditors or the Internal
Auditors regarding the application of any accounting principles or any
other matter.

Oversight and Monitoring of the Company's Financial Statements and Audits.

13. The Audit Committee will, as it deems necessary in its business judgment:

a. review with the Outside Auditors, the Internal Auditors and Management the
audit function generally, the scope of proposed audits of the Company's
financial statements and the audit procedures to be used in those audits;

b. review the audit efforts with the Outside Auditors, the Internal Auditors
and Management to ensure effective use of audit resources;

c. review information regarding internal audits;

d. review with the Outside Auditors and Management each set of audited
financial statements and the notes to those financial statements and, with
respect to the Company's audited financial statements for the preceding
fiscal year, to recommend whether those audited financial statements should
be included in the Company's Annual Report on Form 10-K relating to that
fiscal year; and

e. discuss with the Outside Auditors any serious difficulties or disputes with
Management encountered during the course of any audit.

Communications with the Outside Auditors.

14. The Audit Committee will, as it deems necessary in its business judgment,
communicate with the Outside Auditors to:

B-3

a. obtain information concerning accounting principles adopted by the Company,
internal controls of the Company, Management, the Company's financial,
accounting and internal auditing personnel and the impact of each on the
quality and reliability of the Company's financial reporting;

b. obtain the information required to be disclosed to the Company by generally
accepted auditing standards in connection with the conduct of an audit,
including topics covered by SAS 54, 60, 61 and 82; and

c. require the Outside Auditors to review the financial information included
in the Company's Quarterly Reports on Form 10-Q in accordance with Rule 10-
01(d) of Regulation S-X of the Securities and Exchange Commission (the
"Commission") prior to the Company filing such reports with the Commission
and to provide to the Company for inclusion in the Company's Quarterly
Reports on Form 10-Q any reports of the Outside Auditors required by Rule
10-01(d).

Communications with the Internal Auditors.

15. The Audit Committee will, as it deems necessary in its business judgment,
communicate with the Internal Auditors to obtain information concerning
accounting principles adopted by the Company, internal controls of the
Company, Management, the Company's financial and accounting personnel and the
impact of each on the quality and reliability of the Company's financial
statements.

Communications with Management.

16. The Audit Committee will, as it deems necessary in its business judgment,
communicate with Management to obtain information concerning accounting
principles adopted by the Company, internal controls of the Company, the
Outside Auditors, the Company's financial, accounting and internal auditing
personnel and the impact of each on the quality and reliability of the
Company's financial statements.

Audit Committee Reports.

17. The Audit Committee will prepare annually a report for inclusion in the
Company's proxy statement relating to its annual shareholders meeting. In that
report, the Audit Committee will state whether it has: (i) reviewed and
discussed the audited financial statements with Management; (ii) discussed
with the Outside Auditors the matters required to be discussed by Statement on
Auditing Standards No. 61, as that statement may be modified or supplemented
from time to time; (iii) received from the Outside Auditors the written
disclosures and the letter required by Independence Standard Board Standard
No. 1, as that standard may be modified or supplemented from time to time, and
has discussed with the Outside Auditors, the Outside Auditors' independence;
and (iv) based on the review and discussions referred to in clauses (i), (ii)
and (iii) above, recommended to the Board that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the
last fiscal year for filing with the Commission.

18. To the extent such information is not included in the annual report of the
Audit Committee to be included in the Company's proxy statement relating to
its annual shareholders meeting, the Audit Committee will also report at least
annually to the Board on significant results of its activities and compliance
with this Charter.

Additional Responsibilities.

19. The Audit Committee will as it deems necessary in its business judgment,
conduct or authorize investigations into any matters within the Audit
Committee's scope of responsibilities. The Audit Committee shall be empowered
to retain independent counsel and other professionals to assist in the conduct
of any investigation.

The Charter.

20. The Board shall review and update this Charter annually and otherwise as
circumstances dictate.

B-4

[LOGO OF MURPHY OIL CORPORATION]

PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING, MAY 9, 2001

The stockholder(s) whose name(s) appears on the reverse side hereby appoints
R. Madison Murphy and Claiborne P. Deming, or each of them, as the stockholder's
proxy or proxies, with full power of substitution, to vote all shares of Common
Stock of Murphy Oil Corporation which the stockholder is entitled to vote at the
Annual Meeting of Stockholders to be held at the South Arkansas Arts Center, 110
East 5th Street, El Dorado, Arkansas, on May 9, 2001, at 10:00 a.m., Central
Daylight Time, and any adjournments thereof, as fully as the stockholder could
if personally present.

IMPORTANT -- This Proxy, if mailed, must be signed and dated on the reverse
side.

THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE
REVERSE SIDE, BUT IF NONE ARE INDICATED, THIS PROXY WILL BE VOTED FOR ALL
---
NOMINEES LISTED ON THE REVERSE SIDE, AND FOR PROPOSALS 2 and 3.
---

(continued on reverse side)

MURPHY OIL CORPORATION
PLEASE MARK VOTE IN OVAL USING DARK INK ONLY.

The Board of Directors Recommends a Vote "FOR" Each of the Listed Proposals.

1. Election of Directors-- For Withhold For (Except Nominees(s)
All All All written below)
01 - B.R.R. Butler [_] [_] [_]
02 - G.S. Dembroski ---------------------------
03 - C.P. Deming
04 - H.R. Hart
05 - R.A. Hermes
06 - M.W. Murphy
07 - R.M. Murphy
08 - W.C. Nolan, Jr.
09 - W.L. Rosoff
10 - D.J.H. Smith
11 - C.G. Theus

2. Adoption of Amendment to For Against Abstain
Company's Certificate of [_] [_] [_]
Incorporation to increase
the number of authorized
Common shares from
80,000,000 to 200,000,000.

3. Approve the appointment For Against Abstain
of KPMG LLP as [_] [_] [_]
independent auditors.

Dated: , 2001
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Please sign exactly as your
name or names appear hereon.
For joint accounts, each owner
should sign. When signing as
executor, administrator,
attorney, trustee or guardian,
etc., please give your full
title. Please return promptly.

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CONTROL NUMBER /\FOLD AND DETACH HERE/\

INSTRUCTIONS FOR VOTING BY TELEPHONE, INTERNET OR MAIL
-----------------------------------------------------
Murphy Oil Corporation encourages you to take advantage of new and convenient
ways to vote your shares for proposals to be covered at the Annual Meeting of
Stockholders. Please take this opportunity to use one of the three voting
methods detailed below to vote your shares. This year, voting has been made
easier than ever.

VOTE BY PHONE. Call toll-free at 1-877-482-6137 using a touch-tone
telephone to vote 24 hours a day, 7 days a week. Have your proxy card
(above) and social security number in hand when you call. Please enter the
6-digit control number which is located to the left and above, just below
your proxy card.

Option 1 To vote as the Board of Directors recommends on ALL proposals,
press 1. Your vote will be confirmed and cast as directed and
the call will end. If you wish to vote on each proposal
separately, press 0.
Option 2 If you selected 0 to vote on each proposal separately, you
will hear these instructions:
Proposal 1 (Election of Directors) - To vote FOR all nominees,
press 1; to WITHHOLD for all nominees, press 9; to WITHHOLD
for AN INDIVIDUAL nominee, press 0 and enter the two digit
number that appears on the proxy card (above) next to the name
of the nominee you DO NOT wish to vote for. Once you have
completed voting for Directors, press 0.
The Board of Directors recommends a vote FOR Proposal 1.
Proposal 2 (Proposed amendment to the Certificate
of Incorporation) - To vote FOR, press 1; to vote AGAINST,
press 9; to ABSTAIN, press 0. Your vote selection will be
repeated and you will have an opportunity to confirm it.
The Board of Directors recommends a vote FOR Proposal 2.
Proposal 3 (Approve the appointment of KPMG LLP as independent
auditors) - To vote FOR, press 1; to vote AGAINST, press 9; to
ABSTAIN, press 0. Your vote selection will be repeated and you
will have an opportunity to confirm it.
The Board of Directors recommends a vote FOR Proposal 3.

VOTE BY INTERNET. It's fast, convenient, and your vote is immediately confirmed
and posted.

Just follow these 4 easy steps:
1. Read the accompanying Proxy Statement.
2. Go to the following website:
www.computershare.com/us/proxy
------------------------------
3. Enter the information requested on your computer screen, including your
6-digit Control Number located above left on these instructions.
4. Follow the simple instructions on the Screen.

VOTE BY MAIL. Please vote, sign, date and return your proxy card (above)
using the enclosed postage-paid envelope.

If you vote by telephone or internet please do not mail your proxy card.
THANK YOU FOR VOTING