Evans said that Magnum will use the $401 million in proceeds from the sale to pay down debt and take questions about the company's liquidity off the table once and for all. He said that Magnum will still be producing 20,000 barrels of oil a day, even without the Eagle Ford, and the company will make a 60% to 70% return on their remaining assets.
Evans explained the economics in both the Utica and Marcellus will be better for Magnum, especially given that natural gas prices have risen from $2 to $4. He said his company is hedged for 2013, but remains open for 2014 and 2015 given that gas and oil prices continue to creep ever higher.
Cramer admitted that he was clearly wrong to recommend Magnum Hunter a year ago, but with the changes the company's made and its outlook greatly improved, he said that now is the time for investors to average down.
Game-Changing Gene Therapies
Continuing with his focus on smaller, speculative biotech opportunities, Cramer looked at Isis Pharmaceuticals (ISIS), Alnylam Pharmaceuticals (ALNY) and Sangamo BioSciences (SGMO), three companies hoping to change the game when it comes to gene therapies.Cramer said shares of Isis are already up 78% since he recommended it in October, but this orphan drug maker still holds a lot of promise. He said the company has over 20 drugs in development including treatments for breast and prostate cancers. He said investors should use any weakness in the stock to buy more. Then there's Alnylam, a company working on similar gene therapies. It currently has five drugs under development. Cramer said Alnylam only has a $1.3 billion market cap, which means any Food and Drug Administration approvals would "move the needle" significantly for the company. Alnylam also has a suite of large biotech partners helping it along, which makes success all the more likely. Finally, there's Sangamo, a company with a $500 million market cap and a stock that's "highly, highly speculative," said Cramer. Sangamo is a high-risk, high-reward stock, he said, but the company's HIV treatment, currently in Phase II testing, could offer the first functional cure for the disease.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV