Three Energy Stocks Worth Watching After the Ceasefire

SLB — formerly Schlumberger — is the world's largest oilfield services company. Unlike E&P companies, SLB doesn't take commodity price risk directly. It sells the technology, equipment, and services that oil producers need regardless of whether oil is at $60 or $90.

The company generated $36.4 billion in revenue in 2025 with a 14.5% operating margin and $4.6 billion in free cash flow. The stock trades at 14x forward earnings — cheap for a company growing revenue at 8-10% annually with a global monopoly in deepwater drilling technology.

What makes SLB particularly interesting post-ceasefire is the Suriname deepwater collaboration announced recently. SLB is expanding its subsea production systems partnership in one of the most promising new offshore basins. The market treated the ceasefire as negative for SLB, but reduced geopolitical risk actually accelerates international deepwater investment — the exact segment where SLB dominates.

After tracking the oilfield services cycle through multiple oil price environments, we've observed that SLB's revenue is less correlated with spot oil prices than the market assumes. International E&P spending commitments are multi-year, and the current capex cycle has 3-4 years of runway remaining.

The 62% rally over the past year has been earned, not speculative. At 14x forward earnings with a $45 target price (8% upside), SLB is reasonably valued with further upside if international activity continues expanding.

ConocoPhillips is the largest US independent E&P company, producing approximately 1.8 million barrels of oil equivalent per day. Revenue reached $57.5 billion in 2025 with $16.5 billion in net income.

COP's investment case rests on capital discipline. Management has committed to returning 40%+ of operating cash flow to shareholders through dividends and buybacks, while keeping reinvestment rates at 40-50% of cash flow. This discipline — maintaining production growth of 3-5% annually while returning the majority of cash — separates COP from the boom-bust E&P companies that destroy capital in every upcycle.

The Marathon Oil acquisition, completed in 2024, added Permian Basin acreage and Eagle Ford assets that are now fully integrated. Synergies of $500 million annually have been realised ahead of schedule.

At 13x forward earnings and a 3.1% dividend yield (including the variable component), COP offers the best risk-reward in large-cap E&P. The balance sheet is conservative — $7.1 billion in net debt at 0.5x EBITDA — providing cushion for any oil price weakness.

Even if Brent falls to $65, COP remains free cash flow positive and dividend-covered. At $75 Brent (our base case), FCF exceeds $12 billion, supporting continued buybacks and dividend growth. Our fair value is $130-140, implying 15-25% upside.

EOG Resources is the premium US shale producer — the company that consistently delivers the lowest finding and development costs in the Permian, Eagle Ford, and Uinta basins. Revenue of $23.7 billion in 2025 generated $7.8 billion in net income at a 33% profit margin.

What sets EOG apart is operational efficiency. The company's well-level returns exceed 100% at $60 WTI — meaning every dollar invested in drilling is returned within 12 months. No other large-cap E&P can match this consistently.

EOG's capital allocation is shareholder-friendly but less aggressive than COP's. The regular dividend yields 2.8%, supplemented by special dividends that have averaged $3-4 per share annually. The balance sheet is virtually debt-free — $1.2 billion in net debt at 0.1x EBITDA.

At 11x forward earnings, EOG is the cheapest of the three names. The discount reflects the market's concern that shale inventory is depleting — a valid long-term concern but one that's 5-7 years from being material for EOG's acreage quality. In the meantime, the company generates $9+ billion in annual FCF with nowhere for it to go except back to shareholders.

Our fair value is $145-155, representing 15-20% upside. EOG is the purest way to own US shale efficiency at a cyclically attractive price.