Seeking Alpha

Pioneer Natural, EOG are Cramer's favorites for the Permian Basin boom

Aubrey McClendon would seem to be overpaying in his $2.5B purchase of 63K acres in the Permian Basin "unless he knows more than we do," Jim Cramer says while acknowledging that McClendon - a "genius" a buying energy-rich land - probably does.

Some companies have figured out the "code" to drilling in the Permian Basin, and McClendon is unlikely to have overpaid in the long run, Cramer says.

McClendon's American Energy Partners is not publicly traded, but investors can benefit from the Permian Basin boom by buying stocks such as Pioneer Natural Resources (PXD), EOG Resources (EOG) and Cimarex Energy (XEC), Cramer believes.

From other sites
Comments (3)
  • sophocles
    , contributor
    Comments (221) | Send Message
    Companies with the greatest leverage to the Permian Basin acres per $1 million of EV include Approach Resources, Clayton Williams Energy and Abraxas. Clayton Williams, Concho Resources, Cimarex Energy and Pioneer Natural Resources are most levered to the play based on acres per thousand shares.
    10 Jun 2014, 03:49 PM Reply Like
  • cfg3450
    , contributor
    Comments (87) | Send Message
    It pays to read the Comments. Thanks
    10 Jun 2014, 07:00 PM Reply Like
  • sophocles
    , contributor
    Comments (221) | Send Message
    Thanks cfg3450. CWEI has more acres per thousand shares in Permian and Eagle Ford. The CEO owns more than 50% shares, debt level is high but they are drilling good wells. There are only 12m shares and bid-ask spread is high. It has done well so far this year and over one year but it is still relatively unknown to pundits.
    11 Jun 2014, 08:35 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs