XTEX dividend paid 0.26c, and up 6% in 3 weeks

Both my current oil and gas plays are doing well. Crosstex Energy (XTEX) paid 26c dividend which gives it around 6.4% yeild at the current price. It's also up 6% from when I bought 3 weeks ago. I wrote on 1/26 when I bought this stock that I was worried about my entry point not being optimal, as it was above the upper bollinger band. The stretching of the bollinger band did pull the price back down for a day, but then the trend just continued like nothing had happened.

It's quite possible there might be another pullback tomorrow after todays sprint. Interestingly, the payout of the dividend didn't slow the stock down, as is sometimes visible with these types of limited partnerships.

This is a long term hold for dividend income and capital gain with a price target of $30 within 12 months, as there is an long term plateau within the $30 - $40 range. There is no reason why it shouldn't get there, as gas extracted from all the Texas fraccing oil plays comes on stream and these reservers are increasingly understood to be a critical part of US energy security given insatiable Chinese demand for gas reserves globally.

Re-entered the my Texas Oil and Gas play AREX today as it looks like it has finished it's bench and will continue it's long term rally.

AREX Long at $25 - Trade the trend

The 4 month trend says it all. Notwithstanding the trend, when we pay $3 at the pump, it's time to buy gas and oil stocks. I'm looking at XTEX as well for my income portfolio as they pay a $0.26 dividend in Feb to shareholders on record 1/31.

Unique Oil Stocks That Should Rise Hundreds of Percent

By Matt Badiali, editor, S&A Resource Report Friday, December 3, 2010

"Let me get this straight. You paid $200 per acre for the land… and then sold it for $10,000 per acre?" I was sitting in a deep leather chair in the best hotel in Zurich, Switzerland, speaking to my friend Cactus. Cactus is a "wildcatter" – an independent oil explorer. His group had just closed a land deal worth more than $1.3 billion – land that is located in the most exciting new oil district in America. I wanted details… That's why, when Cactus started talking about this oil district at my publisher's recent conference in Zurich, I was all ears. The presentation concerned the Eagle Ford shale, the largest new oil discovery since Prudhoe Bay, Alaska. If Cactus is right, investors in the right stocks will make many times their money from this find. And he provided several easy ways to take a position. The Eagle Ford shale is an "unconventional" oil field. Thin layers of rock trap the oil and gas. Successful wells drill down to the depth of the shale, then turn horizontally for up to a mile. The drillers use high-pressure fluid to crack the rock layers around the well (a technique called fraccing), giving them access to the oil and gas inside. The process is nothing like conventional drilling… where you basically stick a straw in the ground and oil gushes out of it. The Eagle Ford boom means companies that specialize in drilling unconventional fields are enjoying amazing demand right now. One oil company in the Eagle Ford has already identified 22,000 well locations. And it's going to need drilling services for those wells. Every company needs at least a hundred wells drilled… Cactus recommended two drilling companies that are getting a huge piece of the Eagle Ford drilling business. First is Patterson-UTI Energy (PTEN), a $3.2 billion drilling company with 44 rigs operating in the Eagle Ford. Companies are locking these rigs down with contracts up to two years. When I visited the region this summer, one of these rigs nearly ran me off a dirt county road. It was a huge rig, rolling by on a series of tractor-trailers. Cactus also mentioned Nabors Industries (NBR), a $6.6 billion drilling company with 55 rigs operating in the Eagle Ford. Both Patterson and Nabors will enjoy a big tailwind of demand from the Eagle Ford over the coming years. And to provide you with a bigger picture of the drilling situation, I put together this table of the public companies responsible for over 60% of the drilling in the Eagle Ford. Driller Symbol Rigs Active % of Drilling % of Fleet Nabors Industries NBR 55 16% 10% Helmerich & Payne HP 50 15% 25% Patterson UTI Energy PTEN 44 13% 13% Precision Drilling PDS 28 8% 8% Pioneer Drilling PDC 15 4% 21% Unit Corp UNT 8 2% 7% Key Energy Service KEG 3 1% 7% The "rigs active" column is the number of drill rigs operating in the Eagle Ford right now. The next column ("% of drilling") is the volume of Eagle Ford drilling the company controls. The final column shows the percent of the company's fleet committed to the Eagle Ford. While Nabors has the most rigs in the play, it's interesting to note that Helmerich & Payne has a quarter of its fleet in the Eagle Ford. It's clear the company is betting big on this field. As many DailyWealth readers know, I'm a big fan of the "picks and shovels" approach to investing in big commodity trends (make sure to read this essay for how it has produced huge gains for us this year). By owning some of the drilling companies I've mentioned here, you can take this approach to the most exciting American oil field of this generation. Good investing, Matt Badiali