Rig hands thread together drilling pipe at a hydraulic fracturing site owned by EQT Corp. located atop the Marcellus shale rock formation in Washington Township, Pennsylvania. Ty Wright | Bloomberg | Getty Images

In recent months U.S. shale drillers have answered investors' calls to tighten their belts, showing they are finally willing to do what's necessary to return cash to shareholders. In return, investors sold off their stocks. The latest episode in the American shale revolution shows that shale drillers — and their stock prices — are entering a transition period. Drillers are exercising the financial discipline that could generate a return on investment, but shareholders are now seeing the production growth that first attracted them to the stocks fade.

Today our dilemma is that as a sector, we have destroyed a lot of trust in the investment community over the last decade. Lee Tillman Marathon Oil chairman and CEO

That trend came to a head over the last month, when many drillers cut spending and lowered production guidance for 2019. The title of a recent research note by Simmons Energy summed up the the response: "No Good Deed Unpunished." Simmons analysts called the reaction from investors "nothing short of punishing." Though it's rallying this week, the SPDR S&P Oil & Gas Exploration and Production exchange-traded fund tumbled 8 percent between the start of the drillers' earnings season in February and the end of last week. During the same time, the rose 1.4 percent. But it's not as simple as saying investors sold the stocks because production growth forecasts fell, said Osmar Abib, chairman of global energy at Credit Suisse. The space is also on shaky ground because investors aren't yet sure drillers will hold the line on spending. "I would say it's a bit of a 'show me' situation, and so one quarter isn't long enough," he told CNBC on the sidelines of the CERAWeek by IHS Markit energy conference in Houston. "I think investors need to see a little bit more time, a little bit more evidence, and I think there's still concern that if oil prices go back up, that some of this discipline might erode to a certain degree."

Investors have good reason to be wary. Throughout much of the last decade, shale drillers borrowed heavily to underwrite spectacular production growth. But few companies have proven they can reliably generate free cash flow or meaningful returns for investors. "Today our dilemma is that as a sector, we have destroyed a lot of trust in the investment community over the last decade," Lee Tillman, chairman and CEO of Marathon Oil, said during a panel on shale drilling at CERAWeek on Tuesday. Exercising fiscal discipline means throttling back spending, which translates into lower production growth. That lower growth in turn makes stock price valuations look less attractive. "I'd say there's a recalibration of stock prices going on with the shale drillers," Hess CEO John Hess told CNBC at CERAWeek. Hess is one of the companies that produces oil in North Dakota's Bakken shale fields, where drillers use advanced methods like hydraulic fracturing to free fossil fuels from rock formations. These "frackers" have to constantly reinvest because shale wells produce a burst of oil at first, but then output declines sharply.