HighPeak Power is an aggressive oil play that might repay

CNBC’s Jim Cramer on Tuesday stated that buyers bullish on oil ought to contemplate betting on HighPeak Energy.

“In case you imagine the worth of oil can keep elevated right here, probably as a result of the warfare in Ukraine will flip right into a drawn-out stalemate, then you definately’ll seemingly get extra upside out of an aggressive oil producer like HighPeak Power,” he stated.

The inventory is riskier than Devon Energy or Pioneer Natural Resources on account of its “large variable dividends, however in case you imagine in oil right here, that is the one for you,” he added.

One cause HighPeak inventory is engaging is that it is comparatively low cost in comparison with its rivals, in keeping with the “Mad Money” host. The corporate inventory rose 3.94% on Tuesday to $21.88.

Cramer, who last month encouraged investors to personal an oil inventory as Russia’s invasion of Ukraine drives costs up on the pump, stated that HighPeak’s manufacturing ramp-up separates it from rivals like Devon. CEO Rick Muncrief told Cramer last month that Devon won’t enhance oil manufacturing as costs topped $100 a barrel.

HighPeak stated in its 2021 fourth-quarter outcomes that it acquired its third drilling rig in October of final 12 months and a fourth rig in January of this 12 months, including that the corporate plans to function not less than 4 drilling rigs and two frac fleets on common this 12 months. 

“Most gamers on this business have been loath to drill or develop as a result of they’re pleased with the present establishment,” Cramer stated. “However when everyone else is being disciplined, an organization like HighPeak Power can get away” with boosting manufacturing with out affecting crude costs, he added.

“Maybe most necessary, they’re drilling actually aggressively on the proper time, and that point is now,” he stated.

Disclosure: Cramer’s Charitable Belief owns shares of Devon Power.

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