Don't lose sight of oil amid buzz over natural gas

Two blockbuster energy deals reflect the foreign interest in our crude and our growing need for a bridge fuel to renewables.

By Jim Cramer Oct 17, 2011 10:31AM

the streetWe will all be buzzing, as we should be, about the huge Kinder Morgan (KMI) deal to buy El Paso (EP) and how it will make Kinder Morgan a colossus of a pipeline that will be able to move natural gas through much of the country.

 

It is a deal meant to ensure the Kinder entities dominate the transport of the fuel. Of the three entities -- Kinder Morgan, which owns and operates the pipelines; Kinder Morgan Energy Partners (KMP), the toll collector of the group; and Kinder Morgan Management (KMR), a limited partner of KMP  that controls its business -- I like KMP best because it is a master limited partnership that gives you a high 6.4% yield.

 

But save some mindshare for this huge Statoil (STO) deal for Brigham Exploration (BEXP). BEXP is a crucial Bakken player, after my favorite, Continental Resources (CLR), and then the not-as-well-executing Whiting Pete (WLR).

 

BEXP, which also owns some natural gas assets, is one of the major independents in the North Dakota formation that could be as big as, if not bigger, than Prudhoe Bay. And its light sweet crude can be used by a lot of the refineries that currently import oil from Nigeria and Venezuela.

 

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The gigantic Kinder deal is a sign that Rich Kinder recognizes that our country is going to need much more natural gas as a bridge fuel until we get to renewables, with natural gas replacing heating oil, coal and, ultimately, maybe even diesel.

 

And the BEXP deal is a reminder that foreigners want in here because of our crude oil findings, both in North Dakota and in the Eagle Ford Shale in South Texas. I continue to believe that CLR and EOG (EOG) are the two best plays, the latter having terrific Bakken assets as well as a huge amount of oil in Eagle Ford.

I would buy KMP on any weakness, and I would buy CLR and EOG only after they come down from the speculative high I expect to see at the opening.

 

At the time of publication, Cramer had no position in any of the securities mentioned.

 

jim cramer

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for his charitable trust.

6Comments
Oct 17, 2011 12:46PM
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2009 calls himself dr.unh and recommends unh at 61.....stock tanks and still hasn't recovered

2010 call nyx the stock of the year at 90...buys more at 60....stock tanks and sticks 20-30 range

2011 picks alcoa as the best stock in the dow 30 at 18...buys more at 12 ......now around 9-10

 

he makes numerous picks that tank but these are his BEST picks that i use to illustrate

that this gypsy is nothing but a con....short his best picks and make money

 

 

Oct 17, 2011 1:13PM
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why does this idiot babble about his suits and shirts? what does his clothing have to do with stocks? an insane egomaniac shyster at best
Oct 17, 2011 1:51PM
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Seriously Jimmy Boy, isn't what you do against the law????
Oct 17, 2011 1:40PM
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Jimmy Boy, thanks for the tip when you say oil I say GET OUT OF OIL NOW NOW NOW!!!!!!!!!!!!!
Oct 17, 2011 3:18PM
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when madoff is cramer's cellmate justice will have prevailed

ponzi scheme with pump and dump in the same cell

Oct 17, 2011 5:53PM
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  Not to defend his picks, but this has been one of the most screwed up markets I have seen in 40 years.  I have to wonder if speculators and hft are skewing the market away from fundamentals.
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