Big Natural Gas Finds
In an exclusive "Executive Decision" segment, Cramer spoke with David Demshur, chairman, president and CEO of Core Labs (CLB), an oil service company that's up 72% since Cramer first recommended the company in February, 2010.
Demshur said that Core Labs is focused on international crude development. He said with the price of Brent crude still sky high, many projects are getting green-lighted. He said the company is excited about huge natural gas finds off the east coast of Africa and about new oil discoveries off the west coast of Africa as well. In the U.S., the Bakken and Utica shale fields also hold huge potential, he said.
New technologies is also helping the bottom line at Core Labs, as Demshur noted that his company is helping drillers drill longer horizontal wells which are delivering more oil initially and more oil for longer periods of time.When asked about the company's surprising return on capital, Demshur said the company aims for every project to return 30% on its invested capital, but last quarter it was able to deliver a 39% return. Helping the company's margins is the price of specialty steel, which is on the decline since overall steel demand has fallen. Finally, when asked about Core Labs curious pattern of its stock price falling after positive earnings releases, Demshur said that the trend supplies investors with opportunities to buy the stock at a great price. He said that Core Labs itself uses pullbacks and weakness in its shares to buy back stock.