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Dicker: Where's the Next Anadarko?

NEW YORK (TheStreet) -- I was talking with Jim Cramer today about oil stocks, and particularly the nice call I had on Anadarko Petroleum (APC). Naturally, Jim wanted to know what I was looking at now that could repeat that kind of performance.

Anadarko represented a very special case where a legal liability question was overhanging the stock for months. There is nothing else quite on that plane right now in the energy sphere, but that doesn't mean there aren't other values that will require some patience to be unleashed.

One of these stocks is Devon Energy (DVN), a very long-term recommendation of mine. The underlying value in Devon continues to be contained in their slow turnaround from a predominantly natural gas company to a crude oil and liquids production company, a plan they have been executing for the last two years. While Devon shares were mostly flat in 2013 while other energy exploration and production companies soared, this year Devon shares are starting to show some life as their turnaround becomes more complete.

Another case of unlocked value I mentioned to Jim is SandRidge Energy (SD). While the results from SandRidge's Mississippi Lime assets continue to be only so-so, it does have a different ace in the hole.

Following the lead of several other energy companies (including Devon), SandRidge is looking to spin off midstream assets into a Master Limited Partnership. Investors tend to pay almost twice the multiple for MLPs as they do for energy assets, thus immediately unleashing value into the share price.

CEO James Bennett has said he is looking to spin off SandRidge's frack-water disposal assets, a move that will still need Internal Revenue Service approval, which is pending. But other oil companies have included such assets in their MLPs in the past so I don't see much reason for the IRS not to approve this plan.

I talk more about some longer-term oil plays with Jim in the video above.

At the time of publication the author had positions in APC and DVN. Jim Cramer's charitable trust, Action Alerts PLUS, had a position in APC.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Dan Dicker has been a floor trader at the New York Mercantile Exchange with more than 25 years of oil trading experience. He is a licensed commodities trade adviser.

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