Mizuho's Top Oil & Gas Picks
Mizuho has identified three preferred names in the oil and gas sector: Devon Energy, Permian Resources and EQT Corp.
Devon Energy (NYSE:DVN)
Mizuho places Devon Energy at the top as it continues post‑merger integration with CrownRock. Management has launched a full portfolio review against strategic and financial criteria to allocate capital across the combined asset base. The company added approximately 400 premium Delaware Basin locations in the recent federal lease sale at an effective cost of about $4 million per location. Over 350 synergy initiatives are underway, with the gross opportunity already exceeding the $1 billion target. Early surfactant testing shows 90 % of initial wells delivering material uplift and production more than 15 % higher after 180 days. Devon plans to issue an initial 2027 outlook in November while completing its portfolio review. It has met its 2026 debt‑reduction target and considers the current share price attractive for its $8 billion share‑repurchase programme. In Q2 2026 the company reported adjusted earnings of $1.57 per share on revenue of $7.42 billion, beating expectations, and raised its quarterly dividend by 33 % to $0.32 per share.
Permian Resources (NYSE:PR)
Permian Resources ranks second after it raised its 2026 oil‑production guidance by roughly 3 % to about 199,000 barrels per day. Capital expenditures were increased to approximately $1.95 billion, driven by higher working‑interest costs, expanded work‑over activity and the Ward County bolt‑on acquisition. Drilling and completion well‑costs have fallen to about $685 per foot, a decline of roughly 6 % since Q4 2025, with a target of $675 per foot for 2026. The company has completed more than $1 billion of acquisitions year‑to‑date across roughly 190 transactions. It converted to a traditional C‑Corp with a single share class, eliminating all remaining private‑equity sponsor ownership, and secured natural‑gas marketing agreements to reduce Waha‑price exposure from 2026 onward. Permian reported Q2 2026 adjusted earnings of $0.69 per share on revenue of $1.86 billion and generated a record $751 million of free cash flow while raising its full‑year 2026 oil‑production guidance.
EQT Corp (NYSE:EQT)
EQT Corp is listed third. The company signed a five‑year LNG offtake agreement for 0.5 million tonnes per annum starting in 2028, expected to add roughly $45 million of free cash flow at current strip pricing. It also entered a new 325 million‑cubic‑feet‑per‑day CPV Shay agreement linked to PJM power prices. EQT accelerated construction of the MVP Southgate project, pulling $85 million of capital forward into 2026 after receiving key regulatory approvals. The firm acquired Blackline for about $77 million, anticipating a roughly 20 % free‑cash‑flow yield under its base case, and is tracking approximately 20 billion cubic feet per day of potential Appalachian demand and takeaway projects. S&P Global Ratings upgraded EQT’s outlook to positive from stable, citing significant debt reduction. In Q2 2026 EQT posted revenue of $1.81 billion, slightly above forecasts, and raised its production guidance.
The article was generated with AI assistance and reviewed by an editor.