Is Titan Energy the next Maverick Drilling and Exploration?

Maverick Drilling and Exploration (ASX: MAD) have been on a hot streak, putting it mildly. The shares have soared over…

Maverick Drilling and Exploration (ASX: MAD) have been on a hot streak, putting it mildly. The shares have soared over 500 per cent in 2012 alone, making them the very best performer on the whole ASX.

Motley Fool readers will know we first recommended the shares back in August 2011, saying they still looked attractive in January this year, before all the excitement saw Maverick shares take off into the stratosphere.

Source: Google Finance

It’s natural for investors to look for “the next Maverick”.

Some have suggested Titan Energy (ASX: TTE) might be one such stock, saying apparently this penny stock has won a contract to drill an area for oil. The reason people might be excited is that they won the deal over Maverick Drilling and it is in their area.

Unfortunately for the ‘get rich quick’ brigade, investing is never that easy.

We haven’t looked at Titan Energy in detail, but at first blush to appears they are trying to ride on Maverick’s coat-tails, which is never a great strategy.

Before investing in Titan, you should consider:

  • Whether they have the deep local experience and drilling expertise that Maverick does.
  • Where it is going to get funds for its drilling program.
  • Was it sensible to be the highest bidder? Maverick is more likely to know the field and what it is worth. Maverick also has a very low cost drilling ability, so will Titan be able to profit based on the deal they struck.

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