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OGFJ_IPAA_CNBC_Mad Money

Tue, 7 Dec 2010|

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Transcript

Trainers in this country stock traders futures traders have completely given up one natural gas. And even though you know that we need and mad money are believers in the long term potential -- guest Nacchio as a bridge too. That's the foreign companies like Matsui took -- now -- well it's from it. Making investments in the unconventional North American -- -- list -- that we talk about all the time. Well we're -- we got except the fact that we haven't seen any embraced by the federal government of this cleaner more abundant fossil fuel. That could make us energy independent -- but you know what. For those of you can't take the pain of owning a pure natural -- -- hey hop on a hybrid play instead. One it still has exposure to the kind of shale acreage the foreigners can't get enough off. What is more -- leaving dancing as they say in the research -- have to worry so much about the price the commodity natural gas getting out. How about Swift Energy assets why. A Louisiana and Texas based producer with a 113 million barrels of oil equivalent reserves that are 58 and well. Swift just reported an amazing quarter was terrific last Tuesday cash flow per share coming at two dollars and ten cents. The Wall Street was expecting dollar it's no -- this is the one that went to 52 cut to we caught. And then had a very positive analyst meeting on Thursday I urge you to go and look at the presentation I loved it. The company -- legacy place in Louisiana and Texas. Like the lake Washington field thirty million barrels of oil equivalent reserves -- -- the fund its production growth and that growth is for real. It's working in the -- -- drilled two wells which should be done soon. As expected drove thirteen more I think that's just the beginning eagle Ford shale is we don't even better economics -- -- -- Marcellus Shale and happily. Because of -- more oil heavy and according to a great know from Wells Fargo some good research in this company Swiss evil -- at its alone are worth about fifty. Fifteen dollars a share it's only 34 dollar stock up 200 -- 2% this over the last year we -- just discovered. It's barely less -- a point off its 52 we -- But I still think the stock has room to run even -- the break up values rumored to be only forty I think that's too well how much -- are we talking about. Let's hear from Swift Energy energy's president -- Benson who also so we'll get a little Mac Pro here is the chairman of the independent petroleum association of America. He's in town this week to attend the oil and gas investments post. Mr. baseball from the mad money thanks Jim got -- right here panacea. Is what I do love stocks is there's excitement and there's nothing not nothing only -- some excitement. You've been around for years -- company. Well respected you've got this area south Texas a kind of -- -- What happens -- American people what happens. Well you know it's a good example of a legacy assets you know we for years called -- at every -- field in south Texas -- rocket Gibraltar -- rock solid foundation. Expected to -- for many many years well passed -- time in the business but technology. Comes along and unlocks the ability to extract -- gas out of other Iran's that are deeper the eagle for -- is an example that. You know shale gas and America is discovery of an American treasure throughout the country were -- and out that we can extract oil and natural gas from the shales. And -- resource -- that American's domestic that we can create jobs with. In south Texas we have the eagle for though -- is may be one of the nationals in North America does not just gas but it has little in common -- rich and that I I. It's the one who thinks there's -- people that they've beaten New York Times which -- -- particularly on table why I think to the industry that it's it at that natural gas extraction dirty business it is spoils the -- it makes it so that. Odd that may -- -- -- threat treasury -- are reservoirs are going. Are are going to be to -- by this. But why don't get that publicity not the idea that -- this is a cleaner fuel then Cole what I don't wanna going to -- -- can -- people. Well that's a great question because just -- people face of and so doesn't mean it. People do attacked the development -- natural gas because of what's called hydraulic fracturing -- a completion method. In sixty years of utilizing this technology there's not a known example where hydraulic fracture stimulation actually contaminated fresh water resolution. People continue to continue to say that's gonna have -- isn't really great things about south Texas and why it has such a low cost is that you've got the infrastructure down there are no one's down they're trying to say you know you can't do it. We arrived in south Texas is a lot of private plans -- -- is not public a lot of large ranch lands a lot of these areas have been developed for years so they have infrastructure in place road. Pipelines processing plants -- he can also get to market fairly quickly. Now one of things I think that you can probably be better than anyone because of your industry role. Is that this is a -- it's cheaper and cleaner than other alternatives 50% of our utilities our whole they including some or plants forty years old. Could put us at the back end of what -- Copenhagen -- what ever whenever greenhouse here. God it did as a mission you want to talk about. What is the road block here. What is the -- walk in Washington -- to Washington just going to be overrun by the fundamentals. Well I think you're a couple of -- books America's natural gas clearly -- the fuel of the future I mean it's clean it's under carbon fuel. But we now have well over hundred plus years of supply natural -- American ought to be a big part of both a clean energy. Agenda but also a big part of America's energy future and I think the -- wants -- policy side. We've got to -- policy makers if that's true and I think for American progress from the consulate crazy policies that that advocates the use natural gas. But we also have the end users we got to convince union leaders -- we have this long term supply and reliable predictable so silly sort of help Burres who previously -- -- -- yes absolutely there. They're been burned mainly by price volatility -- -- -- -- convinced that the prices within some man. And we're not gonna have these big double -- we just had one of the course winners in history and there was no abandoned all we're lucky for box doesn't -- mean anything to these people it should it should and and that's one of the things we need to keep working on helping the and you understand the reliability. And predictable -- that's the big difference in the market right today. -- -- one I think that I'm concerned about and I know that maybe not for -- for because of your low cost there. But -- -- the report out -- plots today talking about North American -- -- -- put defies break even economics there's so much natural gas being found. And not enough to us store space -- end user demand yet fit maybe this industry is gonna be on economical. But wouldn't that also threaten. -- -- -- Well no actually -- -- all but it won't become an economic what will happen is people move capital away from a lot of your in a little more capital invested in drilling shale -- today right because people are trying to early -- But what happens when the price comes down investment moves away you're seeing a lot of companies and investment conference we've been at -- -- -- -- -- it. It's right everyone I know I did -- a -- -- a good story huge huge stock went up fourteen straight points when they went so called liquid. But you're protecting yourself aren't you and I don't want to lead people -- you've had some very hedges are yes and our company has has been had a significant liquid content for a long time we've always believed in balance -- and vacation. Well mr. Vincent this is -- -- Swift Energy present secretary you've done a marvelous job for shareholders thank you so much coming on the stuff.

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