There is an adage in the oil business: "The best place to find oil is an oilfield." So, if a company has already discovered a commercial oil well, chances are there could be more oil nearby.
IC TIP:
Buy
at
206p
Tip style
Speculative
Risk rating
High
Timescale
Long Term
Bull points
- Drilling 27 wells in 2013
- Huge exploration upside
- Cash flow from production
- Fully funded
Bear points
- Some upside already priced in
- Shares have been range-bound
Mid-cap explorer-producer Salamander Energy (SMDR) has proved that its acreage in the Gulf of Thailand and Indonesia contains large oil and gasfields. Now, it's trying to discover oil and gas in surrounding prospects.