Commercial Momentum – Key Themes From 2Q Results

Research evidence excerpt

Commercial Momentum – Key Themes From 2Q Results

Idea

August 4, 2026 04:30 AM GMT

Morgan Stanley & Co. LLCMNatural Gas E&Ps | North America Devin McDermott

Equity Analyst and Commodities Strategist

Commercial Momentum – Key Devin.McDermott@morganstanley.comJoe Laetsch, CFA +1 212 761-1125

Equity Analyst

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

Themes From 2Q Results Helen Lin

Research Associate

Helen.Lin@morganstanley.com +1 212 761-0766

Gas E&Ps posted 2Q production 1% above cons, cash flow +2%, Jacqueline M Kenny

and capex 1% below. Companies largely maintained guidance, ResearchJacqueline.Kenny@morganstanley.comAssociate +1 212 761-2253

with EQT and AR raising production outlooks. Commercial deals Svetlana Do

and efficiency gains were key themes. On gas macro, Permian ResearchSvetlana.DO@morganstanley.comAssociate +1 212 761-2409

pipeline additions keep us cautious into 2027. Justin W Latran, CFA

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

Key Takeaways

Exploration & Production

Gas E&Ps delivered solid 2Q results, with +1% production beat and lighter spend North America

Industry View In-Line

on average, while cash flow was +2% above.

Most held '26 guides. Changes include: EQT raised production and cut capex, AR's

small acquisition lifted 2H26/2027 volumes, while CRK raised spending by ~3%.

Strategic & commercial updates centered on EQT’s LNG, Propane, and Power

deals, EXE’s Twin Eagle acquisition, and TOU’s new LPG export agreement.

Gas E&Ps reflect an avg. of ~$3.60 Henry Hub, above the 12-month strip. EXE, AR

& EQT offer the highest FCF yields within our gas coverage.

Gas macro remains soft into 2027 as strong supply, softer LNG demand outweigh

stronger Power & Industrial demand. The 2028+ outlook remains attractive.