What's next for US energy firms

New York

WITH nearly a quarter of US energy shares' value wiped out by oil's six-month slide, investors are wondering if the sector has taken enough punishment and whether it is time to pile back in ahead of earnings reports later this month.

The broad energy S&P 1500 index gained more than 4 per cent over the past month, suggesting that many believe markets have already factored in the pain caused by oil prices tumbling by more than half since June below US$50 a barrel.

Yet since the start of this year, most energy stocks have given up some of those gains, revealing anxiety that some nasty surprises might still be lurking somewhere and that last month's bounce may not last.

A closer look at valuations and interviews with a dozen of smaller firms ahead of fourth quarter results from their bigger, listed rivals, shows there are re…