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Jim Cramer: Focus on Shales

Stocks in this article: EOGNBLLINEJNJEMRBACMS

Editor's note (Part 7 of 7): The following is text from Jim Cramer's keynote speech at The Deal Economy Event on Dec. 5 at the New York Stock Exchange, New York City. To watch video replays of the event, click here. To read more content from Jim Cramer on Real Money,  click here.

NEW YORK ( TheStreet) -- Final theme? Oil and gas. We hear a lot about this revolution in our country and there are multiple ways to play it. I think we have to focus on the success of four shales, the Bakken in North Dakota, The Eagle Ford and Permian in Texas and the Niobrara in Colorado. These are the most oil-rich plays, with both the Eagle Ford and the old Permian being the biggest beneficiaries of the new form of horizontal drilling that's allowing us to find much more oil than we ever thought still existed in this country.

The Eagle Ford and the Permian can best be played with EOG (EOG)

If he's right, and we will know in 2014 if he is or not, you could see the stock advance 30-40% after a couple of excellent quarters where guidance is raised and production increased dramatically.

But my favorite, the independent that might be the next major, is Noble  (NBL), which dominates the Niobrara and also has the biggest natural gas field perhaps in the world adjacent to Israel. This field, the Leviathan, is incredibly important because it is able to break the stranglehold that a newly-threatening Russia currently has on the natural gas market in Europe. I think it's a double.

More aggressive types might want to buy Linn Energy (LINE) ahead of its closing of the Berry Petroleum deal next month. That company with its almost 10% yield, should be able to travel from $30-36 in a short period of time once that deal's finished. EOG and Pioneer are natural takeover targets, particularly the former now that the man who built it, Mark Papa, is stepping down this year. It's up 50% on a takeout at a minimum.

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