Seeking Higher Prices
In the "Executive Decision" segment, Cramer once again talked with Harold Hamm, chairman and CEO of Continental Resources (CLR), a stock that's fallen seven points since Cramer visited the company in North Dakota last month. Shares of Continental trade just three points off their 52-week low, at 14.6 times earnings.
Hamm explained that the disconnect in pricing between Brent crude prices and West Texas prices is due to a lack of pipeline capacity in Texas that's hampering supply. That's why Continental sends 75% of its oil to places other than Texas, where it can take advantage of higher prices. Hamm said since places like the Bakken shale ship most of its oil via rail, it's easy to plan ahead and send the oil to where the best prices will be.
Hamm also said that Continental shares are a bargain at current levels, which is why the company recently purchased 100,000 of its own shares and is look to do so again soon. He said that Continental was able to hedge a lot of its oil at very good prices, so fears that falling oil prices will hurt the company are unfounded.When asked about oil prices overall, Hamm said he's not seeing demand fall off, as many have called from in China and other emerging markets. He said prices are likely to moderate some, with Brent prices falling and West Texas prices rising, but overall, Hamm said the markets are still having trouble meeting global demand. Cramer reiterated his buy recommendation for Continental Resources, saying that the stock still remains far too cheap given its market opportunities.