American investment firms are assuming a “wait and see” position on the development of stock of Murphy Oil, the partner of Staatsolie Oil Company that announced recently that a second well off Suriname’s coast has come up dry. Murphy Oil’s striking out in its Suriname exploration efforts has dampened the company’s hopes for frontier South America play.

But financial analysts remain neutral. “Murphy oil is presently working to expand its operations globally. The company is continuing with its North American oil and natural gas development work in Tupper West and Eagle Ford Shale. Meanwhile the company continues to drill in Wildcat, Indonesia and has plans to start drilling offshore Brunei in the latter half of the year. We appreciate Murphy’s initiatives to downsize its downstream operations in the U.S. and U.K. with a view to re-focus on its upstream business. The shares of Murphy retain a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock,” Zacks Equity Research wrote.

Investment banking and securities firm Goldman Sachs also announced a Neutral rating following Murphy’s earnings report. In a note to investors, Goldman writes, “While we think Murphy shares offer investors meaningful absolute share price upside in the context of our bullish crude oil view, we remain Neutral-rated relative …,” Goldman Sachs announced.

Strong 1^st quarter earnings by Murphy Oil have been were overshadowed by disappointing exploration results and a reduced production. On Wednesday, the company said it earned US$ 269 million in the first quarter, up from US$ 149 million a year ago. Second-quarter net income was expected at US$ 1.50 to US$ 1.80 per share, well shy of Wall Street expectations of US$ 1.86 per share.

El Dorado, Arkansas-based Murphy Oil Corporation’s subsidiary, Murphy Suriname Oil Company Ltd., in 2007 signed a production sharing contract with state oil company Staatsolie Maatshappij Suriname N.V., for Block 37 offshore, which covers an area of approximately 2.1 million acres and lies in water depths of 160 to 1,000 feet. Murphy is Operator and has an 80% working interest in Block 37. Staatsolie holds the remaining 20% interest. The contract covers an initial six-year exploration phase and includes commitments to drill two wells and acquire 3D seismic. Drilling commenced in 2008.

It is not clear what affects the disappointing earnings will have on further explorations.