Opening Segment 1 Title: 'Cramer's Game Plan   For Next Week' .  .  .  .  . Featured Stock(s): BP plc (BP) Permian Basin Royalty Trust (PBT) ConocoPhillips (COP) Williams Companies, Inc. (WMB) Compagnie Gnrale de Gophysique-Veritas (CGV) Oceaneering International, Inc. (OII) FMC Technologies, Inc. (FTI) Smith International Inc. (SII) See Opening Segment 2, below...

After this segment, you can see Jim's Lightning Round picks here...

        
JJC:    I'm just glad this down-3% week is over.  Yeah, we had to bring his head out.  Making a statement.  That's the last time you're going to hear bear, or see it.  Anyway, another crummy session behind us, what are you going to do?   We could dwell on it, we could put a lot of decos underneath...  That's the yellow thing underneath.  Or, I say we could focus on what's going to happen...  What's going to happen next, not what happened already...  That doesn't make you money.  Next week is a shortened week.  Thank heavens.  This market needs to catch its breath.  The declines have been brutal and swift and nightmareish, except for a handful of companies that provide energy worldwide. 

Which brings me to next weeks Game Plan...

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This coming Wednesday, at 10:30 a.m., a number will come out, a sainted number...  It's called the oil inventory number, and it will cause considerable angst and hoopla.  Hundreds of thousands of traders will be fixated on it and I frankly think it's absoulutely right to cover it with a full court press.  It will be full of sound and fury.  But it signifies nothing, because it makes you no money.  And we on Mad Money are not about to pay attention to something that makes us no money. In fact, this inventory number is what I call a contrary indicator, an indicator that you can't ignore because if you go against it, I think you'll get your best trade of the week.  And the Game Plan is all about trading, the only time during the week I reccommend them.

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Every week for the last year, we have seen this domestic inventory number come out, 10:30, and it usually comes out where it's supposed to be or where it's predicted by short term traders who try to gain the next dollar or two of crude prices every wednsday. Sometimes it's a little more than predicted, meaning that we have a little more oil in the US system than we did the week before. Sometimes it is a little less than predicted, and then the world goes insane at 10:31 after the number comes out. Take this week... The numbers were a little bit high and the price of oil immediately plunged, dropped $4. What happened was all the stocks we like here on Mad Money, including the series of clean coastal drilling stocks we featured this week just got pollaxed, spindled, mutilated anilated, pancaked... Or to use our favorite word here on Mad Money... They got pantsed. All, mind you, because of this plunge in the oil futures casued by a domestic, not a worldwide, not a Chinese - a domestic inventory number that was a little too high. So what happened the next day? Did we just dwell on that? Do you think it must have gone lower, right? Futures signify the inventory bill?... No. Crude rallied $6 bucks and went to an all time high. Now, what happened to that invenvtory that everyone thought was oh so important? Despite the abjectly horrible nature of the market yesterday, many of the oil stocks bucked the trend... Some rallied, most stayed even. How can this be? Doesn't the domestic inventory number control oil? No. Hardly... Think of it like this... Recall that I just said every week, every wednsday we get a report, and it's pretty much in line, plus or minus, and everybody goes nuts selling the oil and gas stocks if the inventories are high and buying them if the inventories are low. Yet, what has happened? What happened in the last year despite this up a little, down a little, up a little... What happened is that oil has doubled. So I don't think its direction, its pricing over this period had anything to do with any Wednsday's number, or any particular inventory number. So what do we do with this insight? I say we use it to our Cramerican advantage. If this number comes out next Wednsday and it shows a big inventory bulge... What are we going to do?... You think maybe, what we should do is panic, and sell with the maddening crowd?... No, no. We're going to utilize the information I just gave you, the contrary information and we're going to buy the oil stocks. We're going to go buy the ones we like and we're going to use the moronic hair trigger selling by everyone else who's uninformed to our advantage.

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For those of you who are looking for a relatively safe oil play with yield, how about you sit there and buy some BP plc (BP) with a near 5% yield. For those who want a humango-monsterous yield I think you should purchase Cramer-fave, Permian Basin Royalty Trust (PBT), a yield double BP. You want something a little game, then I'd say go with ConocoPhillips (COP), the most integrated, balanced refiner, with natural gas. If you agree with Cramer about this year being the year of nat gas, how about this one?

How about picking up some Williams Companies, Inc. (WMB), which had the misfortune to report yesterday. It reported one of the greatest upside surprises I have ever seen on a down-358 point day... giving you the good fortune to be able to buy it at prices much lower than it should be trading.

How about a coastal drilling play?... because you realize that the momentum is there... We featured a bunch of them... Compagnie Gnrale de Gophysique-Veritas (CGV), Oceaneering International, Inc. (OII), FMC Technologies, Inc. (FTI), Smith International Inc. (SII), and a player to be named later. That ladies and gentleman, is called, because I am such a TV guy, a tease.

Now here's the frustrating part of the gameplan...   The big caveat...

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Okay here's the big caveat.... The big cabiet that could make everything I've said irrelevant. If we do not get a build in inventories that causes the price of oil to plunge, along with everybody in the oil patch, then there is nothing to do at all.  Trade cancelled. We will simply have to wait for the following week to get another chance. The bat stays on our shoulder. I've got both bats out because I want you to remember next Wednesday. You don't get the inventory build, you keep the bat on your shoulder.

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The Bottom Line!:      Here's my recommended, truncated Game Plan for a truncated week. Wait for your oil pitch.  If it's grooved, if it hangs, if it's juicy and fat, swing for the fences.  If it's outside and can't be hit, just say, Happy Fourth of July, and move on.

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JJC:    Every day this week I've been making the case that Congress should lift the moritorium, the moritorium of offshore drilling, because I believe all the reasons against it become moot years and years ago because of American technology. I don't know if any of the environmentalists in Congress have even listened my crusade to persuade... But I hope you've been listening to all the companies I've been giving you this week, because, boy, with oil up at $141 bucks, these are the stocks, these allows us to drill more cleanly, to explore more cleanly and produce oil offshore... Because whether we get the chance to drill offshore in this country or not, these stocks are great investments. I've been trying to illustrate all the changes in the offshore drilling business that have taken place since that one horrible oil spill off of Santa Barbara in 1969, which shut down all coastal drilling in this country... And I've been trying to use the stocks, great stocks to drive the point home. I think that people who are against drilling have not done their homework. We've talked about CGV, about Oceaneering, OII, FMC, FTI and Smith International, SII... And these are good to go at these prices.

Tonight I've got one last cleaner drilling technology drilling for you. It's offshore support vehicles, osv's, offshore support vehicles are the life blood of offshore drilling, because rigs are not self-supporting... They need supplies, men, ships, to haul away cuttings. Cuttings are something the environmentalists are very worried about... That's the waste created by drilling. They need assistance with construction, and OSV's provide all these services and more. For example, the osv's are what enable a rig to stay in the right position during extreme weather, so the rig doesn't float away, which would jepordize the drilling operation and maybe leave the rig to crash into other infrastructure, causing a spill. Bobby Gindall, the governer of Louisiana, was just on TV, talking about chemical, something about a chemical castration bill he just signed into law... No doubt to be used against short-selling speculators... But he also mentioned that during Katrina and Rita, Lousiana did not have any serious problems with their offshore operations. I'm sure part of that has to be due to the fact that the OSV's held the rigs in place, for the most part... And OSV's are now being fitted with more high tech futures than ever to let them do an even better job. As more rigs move even further offshore to get where the deep oil is, they've become even more isolated, and OSV's have been getting larger to supply rigs with more fluids and remove more waste... Again, to be able to drill more cleanly. They've been fitted with more multi-purpose technology to fill more roles... For example, they have firefighting equipment, so they can support sub-sea instillations... And those remote operated vehicles that Oceaneering makes, remember those robots we talked about... OSV's now help with repairing rigs and wells, inspecting them, and also take part in pollution and spill prevention. How's that for cleaner drilling? Once again, every other country on Earth is using our technology except for us to drill off their coasts. The company that owns offshore vehicles... Alright, here we go...

My pick is Hornbeck Offshore Services Inc. (HOS)... Easy to remember, HOS!... They have the second largest fleet of OSV's in the Gulf of Mexico. It's also the youngest fleet, meaning it's more advanced and commands higher rates... 35 new generation OSV's, in addition to 10 conventional ones. Now, HOS doesn't, doesn't that remind you of Horatio Hornblower?... Or, do you guys prefer Patrick O'Brien's books, or, perhaps, ultimately, it's Bonanza derived symbol. Dan Blocker was a great man, and I don't think there is a shrine or monument to him. It was just business... Okay, anyways. What rememerences of things pass Hornbeck and Stills?... I'm sure it's benefitting from a shortage of OSV's right now. Currently there are 762 OSV's on order... 168 offshore rigs on order, rememeber that TransOcean, RIG, whoa. Now, historically, there has been a 6:1 ratio between OSV's and rigs, so we're short 226 OSV's right now... And at the same time, almost 60% of the existing 3,897 OSV's were built before 1985. Did we ever spend no money on oil? We spent no money on oil infrastructure for 25 years here because no one could make any money. Those old ones will probably be scrapped in the not-too-distant future, replaced by newer, more advanced OSV's, like the kind HOS has. The shortage will mean they will get better rates for their OSV's until 2010, at the earliest. HOS is growing from 45 to 65 ships by 2010 to help meet the extra demand, and all 20 ships will be new generation ones that are larger and have the dynamic positioning technology that helps keep them in place better than older generations of OSV's... And once again, really cuts down, if not eliminates, part of the spilling we were so worried about in '69...

Now, if Congress does decide to permit coastal drilling, HOS will be a gigantic beneficiary, as it's fleet mainly serves deep water operations in Gulf of Mexico... But HOS has plenty of other opportunities... They sent two of their newest OSV's to Brazil for ong term contracts... Remember, Petrabra, PBR, they are just doing so well... And they have a lot of de-commissioning work left in the Gulf, where there are around 400 wells and 90 destroyed platforms that have to be decommissioned. I'm pretty sure the government's going to get more aggressive about getting this work done. The company has a tugboat and barge business... It could sell it... It could sell it, it could sell it for maybe $345-465 million. For its entire fleet of 17 tugs and 20 ocean tank barges. Hornbeck, HOS, could then use the proceeds, which is more than a fourth of the company's market cap, to buy more OSV's... And, I think that would lead to some good old-fashioned multiple expansion... Because the stock is only selling at 11.2 times earnings... How these oil and oil related stocks have these low mulitples, lower than any industrials, lower than Coke and Pepsi, makes no sense to me. The stock is only a couple points off its 52-week high, though. Small company, only 20 million shares traded... All rules apply. Buy in small amounts. Use limit orders, that means no market orders. Above all else, wait for the stock to pull back before you pull the trigger. The only thing that is happening with HOS is that I am talking about it. If the stock spikes and the Wall Street Journal will never acknowledge that it's me, I mean, excuse me, the Wall Street Journal... But, that's okay, you know why?... Because this is the business I've chosen.

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