By Ernest Scheyder
Investors in shale have seen thin returns despite boomingproduction, as shale firms have used profits to invest inraising output more rather than returning cash to shareholders.
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"Investors are using a large megaphone as they talk to theindustry about returns, and it's on the minds of a lot of CEOs,"Travis Stice, chief executive of shale producer DiamondbackEnergy Inc, said in an interview.
Diamondback last month announced a
"You're going to see more shale producers focus ondividends," said Leigh Goehring of G&R Associates, a
Since January, 11 shale producers have disclosed plans tospend
Oil producers this week will meet investors at an industryconference in
Calls are likely for more companies to begin offeringpayouts through dividends or share repurchases. The outlook forcontinued production gains and the impact of rising servicecosts also will be on investors' agenda.
"There does seem to be increasing evidence of financialprudence in the industry," said Andy McConn of oil consultancyWood Mackenzie.
Twelve of the 25 largest shale firms do not have quarterlypayouts, choosing instead to reinvest cash in drilling and otherprojects. Parsley Energy Inc and Continental ResourcesInc are among the largest of that group, focusing ondriving growth in the largest- and second-largest
That may change as more of their peers focus on payouts.
"Investors are looking for improving results, better returnsand operational performance," said Maynard Holt, chief executiveof energy investment bank Tudor, Pickering, Holt & Co.(Reporting by Ernest Scheyder; Editing by Gary McWilliams,Simon Webb and Sandra Maler)