US shale oil: can a leaner industry ever lure back investors?

US shale oil: can a leaner industry ever lure back investors?

Smaller, slower and more profitable. These are the watchwords for Chesapeake Energy as it emerges from bankruptcy. Free of the colossal liabilities that sank it as the pandemic slashed global energy demand last year, the company has also abandoned the growth-at-all-costs strategy that made it a pioneer of the shale revolution “” and poster child of the sector's debt-fuelled excess.

Chesapeake's market value will be a fraction of the $35bn it boasted more than a decade ago, back when its controversial founder, the late Aubrey McClendon, was America's best-paid chief executive and his company poured money into everything from Oklahoma real estate to an NBA arena. The new Chesapeake pledges to spend less than it brings in and return the excess to shareholders.

Outside the US oil and gas industry, this wouldn't sound radical. Within the business, it is a departure. The only feature that matched shale's disruptive rise in the past 15 years “” more than doubling US oil and gas production and sharply reducing dependence on foreign oil supplies “” was the industry's unmatched knack for destroying investors' money, as hundreds of billions of dollars were spent with little return. Wall Street reacted by dumping its stocks, making the sector