The US shale industry took a high-profile bashing this month from David Einhorn, the US hedge fund manager who gained notoriety by shorting Lehman Brothers a year before the bank collapsed in 2008. In a May 4 presentation, Einhorn claims that “frack addicts” are not only wasting money but destroying value by developing uneconomic US shale. Singling out Pioneer Natural Resources as the “Mother-Fracker”, Einhorn alleged that- under his own valuation metrics-shale players are burning through huge amounts of cash with few prospects of sustainable returns. So much so, Einhorn believes, that Pioneer is actually losing $12 for every boe of shale it develops.
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