The shares need about $13 billion of 2027 EBITDA at six times to sit here. I model $12.5 billion on $80 oil and flat production, which is a $58 stock, a market-like return from $62.
Key points
- $13.1 billion of 2027 EBITDA is what a $61.65 stock requires at six times after $11.8 billion of principal debt, $4.2 billion of cash and $8.3 billion of preferred.
- $80 WTI is my 2027 case; EIA’s October outlook is $80, versus $86 realized in the third quarter and $96 in the second.
- $5.9 billion of 2027 capital and flat 1.43 million barrels a day of production is management’s own starting frame.
The call
The price is too optimistic for 2027 cash. At six times enterprise value, $61.65 needs $13.1 billion of EBITDA. That only holds if oil stays near second-quarter levels while midstream spreads stay wide.
I believe $80 oil and a $12.5 billion EBITDA year instead. Production stays flat, Gulf restoration is already in the third-quarter run-rate, and preferred dividends still take $680 million a year. Six times that cash is $58.
Free cash flow by quarter ($ billions)- Reported FCF
- My 2027E run rate
SEC company facts through Q2 2026; 2027E is my $80 oil case annualized as $1.05 a quarter
Valuation
| Item | Figure |
|---|
| 2027 oil (my case) | $80 a barrel WTI |
| 2027 production | 1.43 million boe a day, flat |
| 2027 EBITDA (mine) | $12.5 billion |
| EV / EBITDA | 6 times |
| Net claims (debt + preferred − cash) | $16.0 billion |
| 12-month target | $58 a share |
Six times is the mid-cycle multiple I use on FANG and DVN at similar oil. Asymmetry is small: $90 oil would land near $66; $70 oil near $42. That is a hold, not a sell.
How the 12-month target moves with 2027 WTI6 times EBITDA, principal debt $11.8B, cash $4.2B, preferred $8.3B, 1.013B shares
Risks
- Oil stays above $90 through 2027; the stock would clear $66 on the same multiple.
- Gulf pipeline constraint lasts into 2027 and cuts more than 20,000 boe a day.
- Preferred redemption cash build crowds out any buybacks until 2029.
What would change my mind
A 2027 capital frame below $5.5 billion with production still flat, or WTI forwards above $90 for 2027.