Energy Majors and E&Ps: North America: Exploring 2027 Plans: Growth, Costs, & Efficiencies

Efficiency gains support modest guidance raises. Following results from gas producers and Integrateds earlier during reported season, our oil E&P coverage wrapped up 3Q results over the past week. On average, oil E&Ps reported production 2% above consensus (+1% for oil only), with capex 2% below and cash flow 4% ahead. Efficiency gains, including some pockets of well outperformance, and base production optimization supported several slight increases to 2026 volume outlooks (+0.2% for oil and ~1.5% for total production, on average), while efficiency-driven activity acceleration and higher infrastructure spending prompted some companies to raise budgets, but only modestly (+2.6% on average, for those that made changes). Commentary pointed to higher consumables costs, though efficiencies have largely offset these pressures year to date. With lingering upside & downside risks for crude, we would continue to use periods of further oil strength to rotate more defensively across the sector. 2