The first issue in our two-part series on US independent oil and gas producers examined the opportunity set for these names in an environment where oil prices remain lower for longer, likely settling at a level that incentivizes rational development but not growth for growth’s sake. We also looked at some of the larger, diversified exploration and production companies.

This time, we shift our focus to the leading lights of the shale oil and gas revolution, the names that have captured investors’ capital and their imaginations. The best of these companies boast savvy management teams, high-quality resource bases, strong balance sheets and a number of levers they can pull to unlock value.

Over time, these names should be able to grow their production and win market share from higher-cost producers. Unfortunately, the best of the best still trade at elevated valuations that don’t reflect the challenges on the ground. Simply put, a good value is hard to find in the upstream space, if you focus on quality. Investors should maintain their discipline and patience.

During our February and March Live Chats, we fielded a number of questions about specific US exploration and production companies, including Continental Resources (NYSE: CLR), a top producer in North Dakota’s Bakken Shale and leading proponent of the emerging South-Central Oklahoma Oil Province (SCOOP).

Readers’ interest in Continental Resources didn’t come as a surprise; as one of the preeminent players in the Bakken Shale, the name features prominently in many energy-focused investment portfolios.

Outspoken CEO Harold Hamm also appears regularly on financial television to tout Continental Resources’ story, argue for repealing the US ban on crude-oil exports and share his bullish outlook for a snapback in energy prices.

However, questions about SandRidge Energy (NYSE: SD) and Magnum Hunter Resources Corp (NYSE: MHR)—marginal producers with high leverage and dubious business models that struggled even with oil at $100 per barrel—took us aback.

This shift in sentiment in part reflects value-seeking tourists looking for bargains in a late-stage bull market. After all, the Bloomberg North American Independent E&P Index gave up almost 50 percent of its value in the back half of 2014—fertile hunting grounds for non-specialists who remember the snapback that occurred after energy prices collapsed in late 2008 and early 2009.

We prefer to stand aside on most upstream names, as valuations look full, especially when you consider that crude-oil prices will remain lower for longer now that service costs have started to go down, drilling efficiency continues to improve and Saudi Arabia remains committed to building market share by ramping up exports.

Investors interested in wading into the upstream space should consider easing into their positions and focusing on names with strong balance sheets, low production costs, a history of solid execution and franchise assets that can deliver production growth in a challenging environment. Names that can expand their output and win market share should outperform, as cash-strapped peers or those with inferior assets struggle.

With oil prices expected to be lower for longer, better buying opportunities will emerge in the future.