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How to Play the Shale According to Jim Cramer



July 19, 2011 – Comments (0) | RELATED TICKERS: CHK , EOG , PES

There is always an added confidence when Jim Cramer agrees with your picks or the stocks you have chosen to invest in. Cramer recently announced his favorite stock choices for playing the shale boom. Interested in shale plays? Michelle Fox has put together the list of Cramer’s picks.


" First, he thinks Chesapeake Energy [CHK  32.85    -0.11  (-0.33%)   ] could be a big winner.

“Just like Petrohawk, Chesapeake trades at a huge discount to its net asset value because of worries about liquidity and overspending,” he said.

The “Mad Money” host thinks Chesapeake could go to $60 based on the Petrohawk premium. That’s 86 percent higher than where the stock is right now.

And what about companies that look like Petrohawk? Cramer said EOG Resources[EOG  101.53    0.34  (+0.34%)   ] and Pioneer Drilling [PDC  15.60    -0.17  (-1.08%)   ] both have a ton of exposure to the Eagle Ford and Permian Basin.


EOG is the biggest producer in the Eagle Ford, with 520,000 net acres and they’re the top producer in the Bakken shale. Based on the Petrohawk price, Cramer thinks EOG could hit $160 a share.

Pioneer could be worth as much as $174 based on the deal, Cramer said, although he isn’t necessarily saying it will have that kind of rally."


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