Leveraged Oil Producers Face Lower Valuations

Energy services and midstream operators should watch how producer debt levels shape the financing and contract terms they receive.

Updated on Oct. 31, 2026 in Oil and Gas

Isometric editorial illustration of two unlabeled steel storage tanks of unequal height on flat ground, joined by a single pipeline, in muted oxblood, teal, and mustard. — Leveraged oil producer Chord Energy, rated at 2.8 times EV/EBITDA, is planning to sell its Marcellus position to reduce debt and focus on core assets. AI Illustration. Upload story photo >

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Analysts Long Player, Dhierin Bechai and Daniel Jones discussed oil-stock picks on October 31, naming ExxonMobil, Chevron, Enterprise Products Partners and Western Midstream as core holdings and presenting Chord Energy as a higher-risk, lower-valuation option for U.S. energy investors.

Why it matters

The picks reflect how investors are weighing large integrated producers against smaller, more leveraged independents, a distinction that shapes capital costs and financing options across the U.S. oil and gas sector. Chord's planned sale of its Marcellus position is intended to reduce leverage and focus the company on core assets.

Chord Energy trades at an EV/EBITDA multiple of 2.8 times, below the four-to-six-times industry range that analysts used as a benchmark. ExxonMobil management projects $25 billion in earnings growth and $35 billion in cash flow growth between 2024 and 2030, while Chord's projected free cash flow runs $1.13 billion to $1.39 billion.

The players

ExxonMobil

A large integrated oil and gas producer with upstream, refining and chemicals operations, whose management has set out earnings and cash flow growth targets through 2030.

Chevron

A major integrated oil company with global upstream production and downstream refining, named among the oil-stock picks discussed by analysts.

Enterprise Products Partners

A large U.S. midstream operator that moves and processes natural gas liquids and crude oil through pipelines and storage, named among the oil-stock picks discussed by analysts.

Western Midstream

A midstream company that gathers, processes and transports oil, natural gas and water for upstream producers, named among the oil-stock picks discussed by analysts.

Chord Energy

An independent U.S. oil and gas producer presented as a higher-risk option with a lower valuation, which plans to sell its Marcellus position to reduce leverage.

The details

Enterprise value to EBITDA, or EV/EBITDA, compares a company's total value including debt against its operating earnings, so a lower multiple typically signals that investors price the business cheaply relative to its cash generation or see greater risk. Chord's 2.8 times figure falls well under the four-to-six-times industry range, which analysts treated as the reason to present it as a higher-risk option. Chord's planned sale of its Marcellus position is intended to reduce leverage and concentrate capital on core assets, a move that can lower debt-service costs for a producer whose cash flow depends on commodity prices.

October 31: Analysts Long Player, Dhierin Bechai and Daniel Jones discuss oil-stock picks.
2024-2030: ExxonMobil management expects earnings and cash flow growth over this window.
2040: ExxonMobil expects its low-carbon businesses to generate $13 billion in earnings.

Market Landscape

The valuation gap between integrated majors and leveraged independent producers has become a central way analysts separate energy stocks by risk. Chord's 2.8 times EV/EBITDA multiple sits below the four-to-six-times range that frames how the sector is priced, which is why its debt reduction plan carries weight in the comparison.

Operators in energy services and midstream logistics should note that investor attention is tilting toward companies with lower leverage and clearer cash-flow paths, which can influence the financing terms their customers and partners receive. Teams tracking supplier credit should watch whether producers with high debt follow Chord's path of asset sales to reduce leverage.

The takeaway

Valuation multiples and leverage now distinguish oil and gas companies more sharply than headline production figures, so operators should track EV/EBITDA trends alongside commodity prices. Review your own debt obligations against commodity-price scenarios with a qualified accountant before making financing decisions.