At $80 oil the shares need only $12 billion of 2027 EBITDA to sit here. I model $13.5 billion on 530,000 barrels a day, which at 5.5 times is $233.
Key points
- $12 billion of 2027 EBITDA at 5.5 times is what a $192 stock with $12 billion net debt requires.
- 530,000 barrels a day of oil at $80, plus gas and NGLs, supports about $13.5 billion of EBITDA on a $4.1 billion capital budget.
- $1.10 quarterly base dividend plus buybacks from ~$7.5 billion of free cash leave room to cut shares and debt.
The call
The price requires about $12 billion of 2027 EBITDA at a 5.5 times Permian multiple. That is a cautious oil year: roughly $75 to $80 WTI after basis, with gas still discounted at Waha. Q3 unhedged oil already printed $87.30 a barrel.
I believe volumes stay near 1.03 million barrels of oil equivalent a day and cash costs stay near $11.50 a barrel. That mix at $80 oil produces $13.5 billion of EBITDA. Five and a half times that, after $10 billion of net debt and 276 million shares, is $233.
Revenue and my 2027 EBITDA ($ billions)GAAP revenue from SEC XBRL; 2026E–2027E and EBITDA are mine. As of Oct 9, 2026.
Valuation
| Item | Figure |
|---|
| 2027 oil | 530,000 bbl/d at $80 |
| 2027 EBITDA (mine) | $13.5 billion |
| EV / EBITDA | 5.5 times |
| Forward net debt | $10 billion |
| Shares | 276 million |
| 12-month target | $233 |
Five and a half times is a mid-cycle Permian multiple, not a peak. If oil holds $85, EBITDA is nearer $14.5 billion and the same multiple is about $255. If WTI averages $70, the target falls toward $190. The skew is to the upside while inventories stay tight.
Risks
- WTI falling through $70 for two quarters would cut EBITDA below $11 billion.
- Casing and service inflation above 5% would absorb the efficiency that funds growth inside a $4 billion budget.
- Waha gas staying negative into 2027 would erase $1 billion of the gas-plus-NGL line.
What would change my mind
A 2027 capital budget above $4.5 billion with oil guidance below 520,000 barrels a day, or a trailing-twelve-month WTI average under $70.