Fund Manager Says Shale Is Here to Stay, Buy EOG, Pioneer

U.S. shale production isn’t going away, but not all shale is created equal and that should guide investment decisions in the sector, according to one expert. Brian Kessens, a portfolio manager with Tortoise Capital, likes EOG Resources (EOG) as a shale play. ‘EOG has some of the better acreage in some of the best basins, particularly in the Eagle Ford, in the Permian, and in the Bakken,’ explained Kessens. ‘They have reduced their drilling activity this year to wait for some better prices. But they’ve got a fortress-like balance sheet. They haven’t had to issue equity like a lot of other E&P companies are doing to maintain their investment grade status.’ Kessens also applauded EOG’s management team, and said they are spending within their means. Additionally, Kessens recommends Pioneer Natural Resources (PXD), and likes the company’s acreage in the Permian basin. ‘They have issued equity. They have a strong balance sheet going throughout this year. They are also well hedged and are spending within cash flow.’