Energy: Refreshing the Price Deck

Research evidence excerpt

Energy: Refreshing the Price Deck

Idea

June 26, 2026 12:20 PM GMT

Morgan Stanley & Co. LLCMEnergy | North America Devin McDermott

Equity Analyst and Commodities Strategist

Refreshing the Price Deck Devin.McDermott@morganstanley.comJoe Laetsch, CFA +1 212 761-1125

Equity Analyst

Joe.Laetsch@morganstanley.com +1 212 761-8804

WTI has fallen to ~$72, oil E&Ps back at pre-conflict levels, and Helen Lin

Majors -9% below it. We refresh our estimates for the latest ResearchHelen.Lin@morganstanley.comAssociate +1 212 761-0766

prices. FCF yields are still strong, with '27 median of 12% for oil Svetlana Do

Research Associate

E&Ps, while intrinsic valuations only reflect ~$64 WTI. Risk- Svetlana.DO@morganstanley.com +1 212 761-2409

rewards screen better post the pullback. Justin W Latran, CFA

Justin.Latran@morganstanley.com +1 212 761-2869

Key Takeaways Jacqueline M Kenny

WTI oil has fallen another ~15% since the MoU, now back to ~$72/bbl. Alongside Jacqueline.Kenny@morganstanley.com +1 212 761-2253

Zackary C Warden softer crude, energy stocks have also moved lower

We update our price deck to 6/19 strip, WTI assumption falls 12% in '26 while '27 Zackary.Warden@morganstanley.com +1 212 761-4164

stays at $70. Our EBITDA ests are -7% vs consensus for FY26 and -6% for '27 Exploration & Production

North America

For 2Q, our EBITDA ests are in-line with consensus for oil producers and 8% Industry View In-Line

below for gas. We also forecast above consensus 2Q EPS for XOM Integrated Oil

At $70, our oil coverage offers median '27 FCF yield of 10% (12% US E&Ps, 9% Industry View Attractive

Majors, 10% Canada). Valuations reflect ~$64 WTI. '27 FCF yields of 9% for gas

See our price target changes in Exhibit 13.

We retain our preference for Majors and E&Ps with positive rate of change (DVN,