Australia Upstream Energy: June 2026 Quarterlies Preview

Research evidence excerpt

Australia Upstream Energy: June 2026 Quarterlies Preview

Idea

July 5, 2026 06:43 PM GMT

Morgan Stanley Australia Limited+MAustralia Upstream Energy | Asia Pacific Rob Koh

Equity Analyst

June 2026 Quarterlies Preview Rob.Koh@morganstanley.comSamantha R Edie +61 3 9256-8932

Samantha.Edie@morganstanley.com +61 2 9770-1671

We think the sharp reversion in oil and stock prices provides Maya Blackman

more attractive entry points within our Australia E&P coverage. ResearchMaya.Blackman@morganstanley.comAssociate +61 2 9775-2213

The proposed 2027 Domestic Gas Reservation policy adds

uncertainty at the margin.

Key Takeaways

We upgrade STO (EW→OW), WDS (UW→EW), and BPT (UW→EW) in this Australia Energy

grouping on valuation, FCF yields, and execution risk skew. Asia Pacific

Industry View In-Line

ORG remains our less preferred exposure, as we fear lower East Coast domestic What’s Changed

gas prices may pressure electricity prices. Woodside Energy Group Ltd

(WDS.AX) From To

Our commodity price mark-to-market sees 2026 EPS downgrades of ~1-28% vs. Rating Underweight Equal-weight

the ASX200 Energy index down 15% over the last 2 months.

Santos (STO.AX) From To

Quarterlies: BPT (22 Jul), STO (23 Jul), KAR (23 Jul), WDS (29 Jul), ORG (31 Jul). Rating Equal-weight Overweight

Price Target A$7.50 A$7.67

Catalysts: Neon concept select (Q3), WDS Scarborough 1st LNG (Q4), STO Papua

Karoon Energy Ltd (KAR.AX) From To

LNG FID (2H26).

Price Target A$1.91 A$1.58

Exhibit 1: Australia Exploration & Production FCF yield sensitivity to Brent oil Origin Energy Ltd. (ORG.AX) From To

Price Target A$11.00 A$10.35

prices

Beach Energy Ltd (BPT.AX) From To

40%

Rating Underweight Equal-weight

35% Price Target A$1.20 A$0.88

30%

25%

Australia Energy Research

20%