Revising Ests & TPs Post 1Q26 Earnings; Producers Stay the Course, Maximize FCF

Research evidence excerpt

Revising Ests & TPs Post 1Q26 Earnings; Producers Stay the Course, Maximize FCF

May 13, 2026 | 05:00 ET~

US Energy

Revising Ests & TPs Post 1Q26 Earnings; Producers US Energy

Stay the Course, Maximize FCF Phillip Jungwirth, CFA Analyst

phillip.jungwirth@bmo.com (303) 436-1127

Jack Kindregan, CFA VP AssociateBottom Line:

Jack.Kindregan@bmo.com (303) 436-1115

We update estimates following two weeks of E&P earnings, which also includes a mark-

Ajay Bakshani, CFA Senior Associateto-market for refining margins, NGLs, differentials, among other changes. We also revise

ajay.bakshani@bmo.com (332) 268-6994

target prices across our broader coverage. Earnings brought minor positive revisions

Legal Entity: BMO Capital Markets Corp.

for 2026-27 (ex. commodity price), although the outlook is strong with the 2027 strip

rolling-up. Company strategies were largely maintained, with producers in wait-and-see

Oil & Gas Exploration & Production

mode given oil price volatility. FCF is largely being deployed towards net debt reduction 850

and buybacks. We see the most earnings upside for refiners, while risk-reward and 800 750

valuation favors oily E&Ps. 700

650 200

Key Points 600 150

550 100

500 50

We viewed most E&P updates as positive with operational performance above 450 0

expectations, while costs / capex were held in check. Capital discipline was maintained LHS: Price / RHS:NovVolume (k) May Nov Source: FactSetMay

with minimal activity additions outside of DUCs. We expect some capex-creep through

the year if oil prices remain elevated. That said, we see only modest revisions such as

high-end of budgets or +5% and more level loaded programs. The back-end of the curve

has rolled up, with 2027 WTI now $76Bbl, versus $62Bbl at end of February. We think