Liam Denning, Columnist

A Bucket Of Water For Hot Shale

In this sector, as in tech, the lack of growth will be punished harshly.

August 2, 2017 at 5:35 PM UTC

Liam Denning is a Bloomberg Opinion columnist covering energy. A former banker, he edited the Wall Street Journal’s Heard on the Street column and wrote the Financial Times’s Lex column.

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It was a big day for the shale patch on Wednesday. And by big, I mean dreadful:

Pioneer Natural Resources Co. and EOG Resources Inc., two bellwethers of the bellwether Permian shale basin, reported results on Tuesday evening. Pioneer beat earnings estimates handsomely, while EOG lagged them by 33 percent, according to data compiled by Bloomberg. One look at the chart above, along with the fact that both companies trade on 2017 earnings multiples of more than 100 times, tells you all you need to know about how much investors in this sector tend to focus on earnings.