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Friday, February 25, 2011

James Cramer -- Full Segment on the Bakken -- Friday, February 24

Typed as he talked; some of the numbers will be incorrect; I assume CNBC will have link later. [This is the link, but unfortunately not much there, and certainly not a transcriopt.]

Cramer's comments

CLR: 24 billion barrels
Bakken: big field ever discovered in the US
5x USGS 2008 survey;
Disparity: American technology
Today: 400,000 bopd
165 rigs operating
1 million bbls opd in a few years
Montana and North Dakota
The Bakken is a "rocket"
How to make "Mad Money" off it
What are the plays
The company that discovered oil in North Dakota in 1953 (sic): Amerada Hess
  • 700,000 acres -- bought AEZ and TRZ LLC
  • The Bakken not big enough to move their needle
EOG -- large cap like Hess
  • Absolutely loved the EOG earnings report with regard to Bakken
  • Hess, bigger, safer; EOG too much natural gas
The best ones
  • CLR: 850,000 net acres in the Bakken; represents 47% of their bottom line
  • WLL: 588,000 net acres in the Bakken
  • BEXP: Cramer is getting calls "left and right" about BEXP; 375,000 acres in the Bakken; 270% yoy increase in production
  • Oasis: 100% Bakken; 300,000 acres; no one cared about it last year
Bakken could more than double US domestic production

******

Now a second segment after the commercial break: indirect way to play the Bakken

NOG: Cramer doesn't know why it moved so much today (I do: it's been placed on S&P MidCap 400)
  • Unique business model
  • Some of the best acreage
  • Acreage value keeps increasing
Halliburton -- doing fracking in the Bakken
  • HAL can't meet demand
  • Crews are tied up through 2012
  • Working 24/7
  • Barriers to entry huge
  • The right sand
  • Enormous experience
Nabors -- world's largest on-shore driller
  • 33 rigs
  • Pressure pumping trucks; exposure to fracking
Carbo-Ceramics (CCR) -- ceramic player
  • World's largest supplier
  • Best in show
The Bakken is a "rocket"

NDSU -- go Bison!

Later in show:  Repeats EOG.

COMMENT:
Jim Cramer failed to mention the pipelines. ENB. I would pick ENB or EEP over HAL.

Jim Cramer also failed to mention companies that make the rigs in the first place. FlexRigs. H&P.

UPDATE:

Tying up some loose ends regarding the recent Bakken segment on Jim Cramer's "Mad Money":

First, the ticker symbols for two companies mentioned in that post:
  • Carbo Ceramics: CRR
  • Helmerich and Payne: HP.
HP makes the FlexRig. This is quite an incredible story, August, 2007:

  • A decade ago, Helmerich & Payne Inc. took a chance on a ground-up rig design based on a simple premise -- that an efficient and safe drilling rig would create value for its customers.
  • H&P began designing what the company calls a FlexRig, a computerized drilling unit that allows the operator to punch a hole in the ground and move quickly between drilling locations.
  • "We were highly criticized," Juan Pablo Tardio, a company spokesman, said of the early FlexRigs. "But no one had seen the efficiency we were able to achieve."
  • The Tulsa-based contract drilling company built the first 50 FlexRigs on speculation and a belief that the industry needed a rig that could reach shallow targets between depths of 8,000 and 18,000 feet.

5 comments:

  1. Cramer needs to know that North Dakota is Sioux Country!

    ReplyDelete
  2. I was quite taken aback when he singled out North Dakota State because to the best of my knowledge, all the core samples are sent to UND. In fact, I'm gonna do a stand-alone post on just that.

    Thank you for writing.

    ReplyDelete
  3. Carbo ceramics is CRR (not credence clearwater revival). ND IS definately Sioux country!! And, Flex Rigs and H&P do not appear to have stock symbols...can you revise?

    ReplyDelete
  4. Carbo Ceramics: CRR
    Helmerich and Payne: HP.

    HP makes the FlexRig.

    ReplyDelete
  5. Bison are here. Will be forever. Sioux are extinct. Or taking their ball home and playing with it all by themselves.

    ReplyDelete

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