REAL-TIME GLOBAL RESEARCH
2Q Preview: E&Ps, Majors & Canada
Research evidence excerpt
2Q Preview: E&Ps, Majors & Canada
Idea
July 15, 2026 06:41 AM GMT
Morgan Stanley & Co. LLCMEnergy | North America Devin McDermott
Equity Analyst and Commodities Strategist
2Q Preview: E&Ps, Majors & Devin.McDermott@morganstanley.comJoe Laetsch, CFA +1 212 761-1125
Equity Analyst
Joe.Laetsch@morganstanley.com +1 212 761-8804
Canada Helen Lin
Research Associate
Helen.Lin@morganstanley.com +1 212 761-0766
Oil producers are set to report the strongest quarterly earnings Svetlana Do
since 2022, reflecting elevated oil prices and, for Integrateds, ResearchSvetlana.DO@morganstanley.comAssociate +1 212 761-2409
strong downstream margins. As the Middle East situation Justin W Latran, CFA
remains fluid, we continue to recommend using large pullbacks ResearchJustin.Latran@morganstanley.comAssociate +1 212 761-2869
to add exposure to high-quality names in the sector. Jacqueline M Kenny
Jacqueline.Kenny@morganstanley.com +1 212 761-2253
Key Takeaways
Exploration & Production
We expect generally clean operational updates from US producers, with most North America
Industry View In-Line
reiterating activity plans outlined alongside 1Q earnings.
Integrated Energy
With industry-wide activity adds still muted, most indicated no cost or North America
Industry View Attractive
inflationary pressure relative to guidance, with optimism on further efficiency
gains.
Into 2Q earnings, our forecasts skew constructive for DVN, OXY, EQT, CVX, &
CNQ, and more cautious for MUR, NOG, TOU, & SU.
At $70, our oil coverage offers median '27 FCF yield of 9% (10% US E&Ps, 8%
Majors, 9% Canada). Valuations reflect ~$66 WTI. '27 FCF yields of 11% for gas.
Beyond the quarter, we retain our preference for Majors and E&Ps with positive
rate of change.
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