Mizuho’s Top Oil & Gas Picks
Mizuho has released its preferred list of oil and gas equities, naming Devon Energy (NYSE:DVN) as its top pick, followed by Permian Resources (NYSE:PR) and EQT Corp (NYSE:EQT).
Devon Energy
Devon Energy leads the ranking as it continues post‑merger integration with Coterra Energy. Management has begun a full portfolio review against strategic and financial criteria to allocate capital across the combined asset base. The company added roughly 400 premium Delaware Basin locations in the recent federal lease sale at an effective cost of about $4 million per location. More than 350 synergy initiatives are underway, with the gross opportunity already exceeding the $1 billion target. Early surfactant testing showed 90 % of initial wells delivering material uplift, with production running over 15 % higher after 180 days. Devon plans to issue an initial 2027 outlook in November while completing its portfolio review. The firm has already met its 2026 debt‑reduction target and considers the current share price attractive for its $8 billion share‑repurchase programme. In its second‑quarter 2026 results, Devon reported adjusted earnings of $1.57 per share on revenue of $7.42 billion, beating analyst expectations, and increased its quarterly dividend by 33 % to $0.32 per share.
Permian Resources
Permian Resources is ranked second after it raised its 2026 oil‑production volume guidance by approximately 3 % to roughly 199,000 barrels per day. Capital expenditures were lifted to about $1.95 billion, driven by higher working‑interest costs, increased work‑over activity, and the Ward County bolt‑on acquisition. The company achieved drilling and completion well‑cost reductions to roughly $685 per foot, a decline of about 6 % since Q4 2025, and targets $675 per foot in 2026. To date, Permian has completed over $1 billion of acquisitions across roughly 190 transactions. It recently 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 pricing exposure for 2026 and beyond. In Q2 2026, Permian posted adjusted earnings of $0.69 per share on revenue of $1.86 billion, generated a record $751 million of free cash flow, and raised its full‑year 2026 oil‑production guidance.
EQT Corp
EQT Corp ranks third, highlighted by a new five‑year LNG offtake agreement for 0.5 million tonnes per annum starting in 2028, which is expected to add roughly $45 million of free cash flow at current strip pricing. The company also signed a 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. It acquired Blackline for approximately $77 million, anticipating a roughly 20 % free‑cash‑flow yield under its base case. EQT is tracking about 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 its Q2 2026 results, EQT reported revenue of $1.81 billion, slightly above forecasts, and raised its production guidance.