The important decision to spinoff its downstream operations was magnified in Murphy Oil's (MUR -0.88%) third quarter earnings release. While missing analyst estimates by $0.03 is negligible, the growing issues for Murphy Oil are expanding its resources base, and establishing viable oil reserves for the long term. Oil and NGL production increased 10% from the same quarter in 2011, but with only one-third of all proven resources still to be developed, the company needs to acquire more potential drilling locations.

By spinning off its downstream operations, Murphy Oil will shed its thin-margined refining and marketing arm, and focus its capital on the highly-profitable oil exploration and development. Both independent operations will be allowed to focus on their respective strategic priorities, making both segments more valuable over the long term.