Cramer recommended his final pick for Wildcatter Week on Friday – Ram Energy.
He’d already put the spotlight on Rex Energy , Petrohawk Energy, BPZ Energy and Range Resources. These wildcatters are the oil and gas drillers that look for much-needed new reserves in the hardest-to-reach places. It’s a cost-prohibitive business, and one that only makes sense right now, with oil at $135 a barrel.
Here’s the deal on Ram : It’s an incredibly small independent driller operating in Texas, Louisiana, Oklahoma and West Virginia. About two-thirds of the company’s production and reserves are in oil, leaving enough exposure for Ram to benefit from what Cramer’s called the year of natural gas.
Ram is ramping up production in two different shales, and Cramer is expecting the company to raise its production guidance in the next month or so. The stock should move as a result, especially now that the 18.8 million warrants at a $5 strike price that were holding RAME back have recently expired.
Only four small firms cover this stock, so Cramer’s coverage alone could move the $5 name to $8, he said. But be sure to take it slow with RAME. It’s a small-cap pick that should only be bought in increments and only when there’s a good entry point.
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