We expect independent oil & gas exploration & production company Murphy Oil Corporation MUR to beat expectations when it reports first-quarter 2016 results on May 4, after the market closes. Last quarter, the company had reported a positive earnings surprise of 33.91%. Why a Likely Positive Surprise? Our proven model shows that Murphy Oil is likely to beat earnings because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to be able to beat estimates and Murphy Oil has the right mix. Zacks ESP: The Earnings ESP which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +24.14%. This is a meaningful and leading indicator of a likely positive earnings surprise. Zacks #3 Rank: Murphy Oil currently carries a Zacks Rank #3 (Hold). The combination of Murphy Oil’s Zacks Rank #3 and +24.14% ESP makes us confident of an earnings beat this season. Conversely, we caution against Sell-rated stocks (#4 and #5) going into the earnings announcement, especially when the company is seeing negative estimate revisions. Surprise History The above chart indicates that Murphy Oil was able to generate positive earnings surprises in three out of the last four quarters. The average positive surprise was 10.04%. What's Driving Better-than-Expected Earnings? Murphy Oil is focused on its exploration and development plans. Proceeds from its strategic divestments continue to help the company carry out its exploration & production (E&P) and development activities. Moreover, Murphy Oil has undertaken cost-saving initiatives which should continue to benefit the company in 2016. The company also aims to reduce its total exploration expense to $22 million in the first quarter of 2016, significantly lower than the prior-year level. These actions are expected to boost its performance in the to-be reported quarter. On the flip side, due to the ongoing slump in commodity prices, Murphy Oil has decided to go slow on its capital projects. In this regard, it will invest $825 million in 2016, down 62% from 2015. This move should aid the company in increasing its financial flexibility. Other Stocks to Consider Murphy Oil is not the only company looking up this earnings season. We see a likely earnings beats coming from these companies as well: Linn Energy, LLC LINE has an Earnings ESP of +600.00% and a Zacks Rank #3. Bill Barrett Corp. BBG has an Earnings ESP of +9.09% and a Zacks Rank #2. Chesapeake Energy Corp. CHK has an Earnings ESP of +9.09% and a Zacks Rank #3. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CHESAPEAKE ENGY (CHK): Free Stock Analysis Report BILL BARRETT CP (BBG): Free Stock Analysis Report LINN ENERGY LLC (LINE): Free Stock Analysis Report MURPHY OIL (MUR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research