Cramer Likes Oilsands Quest (BQI) as a Speculative Play

June 23, 2008 10:08 AM EDT

On Friday's Mad Money, Jim Cramer highlighted a stock he called a speculative way to play oil prices: Oilsands Quest (AMEX: BQI).

Cramer believes Oilsands is a "real estate play on the ever-increasing quest for more oil." With over 500,000 acres of land in Canada, Cramer mentioned that Oilsands could be sitting on top of up to 10 billion barrels of bitumen. Although bitumen, which is often considered "dirty oil", is much harder to refine than light sweet crude, Cramer points out that oil prices are so high that refiners will use whatever they can to produce oil.

Recently, Ivanhoe Energy (Nasdaq: IVAN) bought land leases in Canada valued at $2.8 million per square acre. Cramer uses this amount to estimate that Oilsands 1,200 square miles of land could be priced at $3.4 billion, about 3 times as much as Oilsands current market cap of about $1.4 billion.

While Cramer said he would be a buyer of Oilsands, he cautioned viewers that Oilsands is a speculative play and to "not pay up for the shares". With shares up about 6% from Friday's close, trading most recently at $6.59, I bet Cramer would suggest waiting for a pullback before pulling the trigger on shares of Oilsands.

Oilsands Quest, Inc., an exploration stage company, together with its subsidiaries, engages in the exploration and development of oil sands deposits in the provinces of Saskatchewan and Alberta.

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