After this segment, you
can see Jim's Lightning
Round picks
here...
JJC:
I intended to discuss what
some would call the
controversy... the debate
surrounding the political
push to end the moratorium
on offshore drilling in
this country... And, by
the way, if you check out
the story about this on
page A3 of the Wall Street
Journal, it's very clear
that this issue is a
political winner for John
McCain... While, sadly,
the front page of the New
York Times also told us
today that Obama is wetted
to our food for oil,
(ethanol supported
program)...
We didn't stop using oil
tankers just because of
that one incident with the
Exxon Valdez did we?...
But one offshore oil
spill, and we have spent
four decades not taking
advantage of our natural
resources of our nation...
which I believe are hugely
abundant off both coasts.
It's not a political show,
all right?... What this is
about is technology...
"new technology"... so,
guess what?... things have
changed... "new
technology" has changed.
The technology has now
been developed by the
United States of America
to make the debate moot.
We may not have the
technology for clean coal,
but we sure do have the
technology for clean
drilling, clean pumping,
and clean extraction...
And practically every
other country on earth,
that has oil offshore, is
using our technology,
except us... because, of
course, we're the most
elitist nation on earth.
We'll make the tech, but
we only want other
countries to get their
hands dirty drilling for
oil... and that's all they
get dirty... their
hands... not their lands.
Because the technology we
have invented is so
effective and so clean...
In fact, it's probably
cleaner to drill off our
coasts and pipe in oil
than it is to ship it in
by tanker. I'd place more
odds on another Valdez
(tanker spill disaster)
than on a reprise of the
Santa Barbara spill. What
happened then, frankly,
just couldn't happen
today.
This bill in 1969 that
shut down our offshore
drilling happened when
Union Oil Co. was taking
out a pipe from a well
that created a huge change
in pressure... one that
Union Oil didn't
compensate for by adding
what is known as
additional fluid, called
drilling mud, down the
well...
The pressure build-up on
the Union Oil well led to
a blowout that cracked the
sea floor, and spilled
about 3 million gallons of
crude. The people who
don't want us to drill are
worried - and, look, I
don't blame them - that
this will happen again...
but... the technology we
have now, which I know
because of the stock...
I'm not a technology guru
or an engineer. I just go
where the stocks are and
find out what they do...
The technology right now
is so much better at
controlling and managing
the pressure in an oil
well.
We have new technology
fluids and fluid handling
systems that I talk about
every night on this show.
They would have
compensated for the change
in pressure... They would
have prevented the blowout
from ever happening.
We have better pipe
sheathing. We have sub-sea
trees that regulate all
this... And now we have
not just 3-D, but
four-dimensional seismic
technology... again,
invented by us... that
will tell us how a well's
pressure will respond to
drilling... which lets
drillers determine the
optimal amount of extra
pressure they need to
provide with this mud...
meaning drilling fluid...
so we can drill safely...
cleanly...
Do you know we've even got
robots that construct and
maintain rigs. This is not
a dirty, dangerous
endeavor anymore. If it
was, don't you think you'd
hear about all the damage
being done by other
countries that are
drilling offshore using
our technology?... You'd
think... considering that
most other places are
going full bore... that
this would make the news,
but I haven't heard
anything about it...
I've got a place right on
the (New) Jersey Shore...
I want rigs, because I've
seen the technology... I
know it. We have the
technology... which is a
Six-Million-Dollar-Man
(70s TV show) reference...
And it looks like we have
the political will, given
how popular an issue
drilling offshore is
proving to be. We may not
have the right
politicians...
We could have as much as
18 billion barrels of oil,
and 76 trillion cubic feet
of gas offshore in areas
where drilling is not
allowed... that could make
companies a lot of
money... and put a lot of
people to work, and make
stockholders rich...
In fact, given our great
new drilling technology,
it could be much more than
that... That's what we
care about on this show...
it's making you money.
And, if we have the
technology, and it's
clean, let's make money
off of it. It's why, every
day this week, I'm going
to focus on the "new
technology" companies...
not the ones that make the
better video games that
kill more people... the
"new technology" that
makes clean offshore
exploring, drilling and
producing possible...
countries that are making
fortunes already,
everywhere else on the
globe, but would make even
more money, if we lifted
the moratorium on offshore
drilling.
By the week's end, you
will know there is no
controversy... just
Luddites trapped in 1969
time warps, versus those
who embrace and recognize
American know-how to drill
much cleaner than we ever
could before.
The bottom line... again,
not political... trying to
make us money...
. . . .
.
The Bottom Line!:
One oil spill that
happened in 1969 should
not stop us from taking
advantage of our national
natural resources wealth
that everyone else is...
which is why these stocks
keep hitting a 52-week
high... And I want you to
stick with Cramer, if you
want to know the companies
that make clean drilling
possible. They're all on
the 52-week high list, and
they are not done... and
we're going to get their
names after the break.
. . . .
.
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JJC:
We're talking about clean
drilling... about the so-called
controversy about offshore
drilling... And, most importantly,
the stocks of the companies that,
with their technology, render this
debate moot... because there's no
tradeoff between drilling offshore
and protecting marine life
anymore.
We can do both...
Our technology is so good that, if
you went to one of these rigs, the
water would be so clean, you'd
want to start diving off... and
start swimming...
It doesn't seem like Congress is
going to end the moratorium on
offshore drilling anytime soon.
But, if by some chance, these guys
in Washington get a clue, or even
watch Mad Money, I want to tell
you about the companies that will
be the first to benefit...
They're already benefitting from
increased exploration everywhere
but the United States. They're
just not getting any love at
home...
. . . .
.
Who are they?... Who's the first
to win?... They're the
four-dimensional seismic mapping
companies. That's right... four
dimensions. They take 3-D studies
and apply them over time... over
time intervals... so that you can
see what's happening in an oil
field over time, rather than just
get a static image.
This technology... and, by the
way, if this isn't "new tech"
nothing is... increases safety,
and helps maximize production, and
virtually rules out the 1960s oil
spills that we saw...
These seismic companies get hired
by the exploration and production
companies... to send out their
boats, and create a detailed and
illuminated image of a deep
sub-sea area... getting better
views of the geology... something
that's especially useful around
Florida... where lifting the
moratorium would open up a lot of
drilling, because there are a lot
of areas in the Gulf where the
ocean floor is covered by layers
of salt, making it harder for oil
and gas deposits to be seen with
traditional imaging methods.
Now, when my old partner, Larry
Kudlow, had the CEO of
Diamond Offshore Drilling
Inc. (DO)...
Larry Dickerson... he's good... on
his show, he said that, if
Congress green lit this today, the
first thing that would happen is
the oil companies would do a bunch
of seismic studies... the
wildcatters would do the seismic
studies...
. . . .
.
So, who do we like for this?...
Now this is a little
complicated... There are five
major offshore seismic
companies...
One trades only in Norway. Another
trades only in The Netherlands. A
third is a privately-held Chinese
company... Chinese communist
company...
So now we've got a field of two...
Now I think actually one of the
best - if not the best - is
Western Geophysical. This is a
subsidiary of oil service giant,
Schlumberger (SLB)...
but it's a relatively small part
of the company... just 11% of
revenues on profits... And, while
we have been huge fans of SLB on
this show, we're looking for a
pure play on seismic imaging and,
unfortunately, they ain't it...
although, if Congress decides to
lift the moratorium, the numbers
for SLB would have to go up huge,
as the analysts aren't factoring
in this potential business into
their estimates at all.
. . . .
.
So that leaves one play...
We're going to go all over the
globe for answers, even though
it's American technology, for the
most part... The play here is
Compagnie Gnrale de
Gophysique-Veritas (CGV)...
also known by everybody as CGV...
You see, it's French, but it
trades here actively. I don't
usually mention ADRs (i.e.,
American Depositary Receipts), but
this one really trades a lot
here...
This is the one we want...
CGV is a pure play on seismic
imaging. It also makes the
equipment needed for doing seismic
studies. The company is about
two-thirds seismic services...
onshore... offshore... and
one-third making the equipment for
both markets.
This is it man. CGV is great...
because, whatever the seismic
company, they have to come to CGV
for the technology. CGV controls
60% of the market for seismic
equipment. Consider them the arms
dealers to the seismic
companies...
. . . .
.
The Bottom Line!:
For safe, clean
offshore exploration,
the first ingredient
is seismic mapping.
Seismic mapping is
Compagnie Gnrale de
Gophysique-Veritas (CGV).
I think it's great
right now but, if
Congress does the
right thing, I am
telling you... this
one's going to play
catch-up to every
single driller out
there.
. . . .
.
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