Liam Denning, Columnist

Drilling Some Discipline Into the Shale Frackers

Investors are judging U.S. E&P firms by different metrics these days, and they favor cash preservation.

October 24, 2018 at 4:15 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.

A Permian fracking site.
Photographer: Spencer Platt/Getty Images North America

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In business, one company’s discipline is another’s pain. Oilfield services stocks have been struggling since summer. Schlumberger Ltd., the biggest, is at its lowest level in more than eight years; below even where it got to in the panic of early 2016, when oil dipped below $30 a barrel.

Bottlenecks in the Permian basin have taken some of the heat out of America’s No. 1 oil prospect. But logistics aren’t the only potential headwind here. And the earnings season just getting underway for exploration and production companies — the contractors’ clients — will show just how strong it is.