Is the recent tumult in the energy sector a sign that investors should flee energy stocks? The quick answer is no. The turmoil does, however, give investors an opportunity to ditch some of the weaker and more poorly positioned players—mainly companies whose operations are concentrated in North America—and switch into the much stronger international entities.

In most cases this means shifting from producers to service companies and in particular getting out of companies in the business of domestic nonconventional oil production, aka the frackers. Even more critical to avoid are smaller plays: most of the small nonconventional producers are unlikely to survive at all.

Nor would it shock us to see some of the larger nonconventional producers go out of business as well, especially ones with a heavy emphasis on oil. These companies are relying on a business model that evokes the mindset of bankers, who tend to think these days that all the money they have on hand is testament to their exceptional business acumen rather than reflecting a desperate Fed—i.e., it’s no business model at all. The frackers have long relied on the happy if woefully misguided notion that it’s no problem to need ever more drilling activity—or more precisely, ever rising amounts of drilling inputs such as sand and water—to keep production rising. It’s all hunky dory, as long as the banks are willing to keep the money flowing, which they will do as long as production and earnings keep growing. (Psychologists might call this behavior mass denial; economists might ask, “What else would the banks do with the money.”)

These company chiefs happily pound their chests about the growing productivity of their wells. But they fail to note that the increase in productivity pales beside the increased volumes of sand and water each well requires. In other words, the increased productivity comes far more from the increase in materials used than from any technological improvements. Indeed percentage increases in the cost of materials in general have been far greater than percentage increases in well production.

Also true, the increased amounts of sand and water invariably require a greater use of energy to transport and apply those materials. Per unit of production, the wells are becoming more energy-intensive, with ever more energy needed to obtain the additional units of production. In other words, the energy payback from fracking is very small and shrinking.

With the lower oil prices, major declines in revenues and profits from existing wells are very likely. The only way to keep the party going would be through massive capital expenditures to sharply increase drilling. But this raises two related problems. First, if oil prices stay put, only a small handful of any new wells drilled would have any chance to become profitable. Second—and this is the killer—these companies will be hard pressed to find any money to finance future drilling.

We do not predict the demise of all the major frackers. We do believe, however, that the days of unlimited capital flow to these companies are gone. Also gone, or soon to be gone, are the best drilling spots in the fields. This means that if, as we expect, oil goes back up to even $120 or $130, it wouldn’t equate to oil at $100 or higher in today’s environment. Given the recent oil shock, no sane lender would contemplate handing out unlimited sums to these companies unless positive free cash flow is readily in view. And there is nothing to suggest this will be the case.

Perhaps at long last renewables will assume a more prominent spot in America’s energy calculus, but don’t bet on it. So while we urge you to forget the frackers, we also urge you to snap up major franchises that have enduring stakes in oil services.