Last week, crude oil prices reached $100 per barrel. As fears of an energy crisis generated by the Russia-Ukraine conflict sent prices shooting up, experts speculated as to just how high they could go. Oil stocks began rising in accordance, sending several small cap companies to new heights. One name that has emerged as a winner of the new oil boom is Indonesia Energy Corp. (NYSEAMERICAN:INDO). INDO stock wasn’t considered a player among oil plays, but its recent gains should have it on every investor’s radar.
What’s Happening With INDO Stock
This week has seen oil prices rise even higher, hitting $113 per barrel. Oil stocks are only continuing to ride this wave, and for some penny stocks, it has been an excellent one.
As its name suggests, Indonesia Energy Corp. is an oil and gas producer primarily based in Indonesia. INDO stock began rising last week and has spiked by more than 130% during the past five days. This growth has pushed it into the green by almost 500%.
Today, it shows no signs of slowing down. As of this writing, it is up 60% for the day and, despite some early turbulence, seems to be on an upward trajectory.
Why It Matters
Less than one month ago, INDO was trading at penny-stock levels at less than $4 per share. The new oil boom has pushed it to a new high of $21. When such a small cap company rises by such an impressive extent, it always worth a closer look.
None of INDO’s peers have come close to matching these gains. Imperial Petroleum (NASDAQ:IMPP) has risen more than 60% for the week and 200% for the month but remains a penny stock at $2.39 per share. Camber Energy (NYSEAMERICAN:CEI) also rose last week but has been falling since and is currently down more than 16%.
All this raises the question of what has propelled INDO stock to these impressive heights. InvestorPlace contributor Chris MacDonald looked into the company earlier this month when the stock first caught fire. While he noted that INDO could see a short-squeeze play like that of the 2021 meme-stock rally, he also found several other elements to draw investors in.
At his time of writing, commodity prices were already surging, thereby creating the type of boon that a company with Indonesia’s speculative energy assets needed to grow. “Drilling operations suggested early success, leading some investors to take the view that this is a potentially undervalued stock relative to its forward-looking prospects,” he noted.
These assets include 1.05 million land acres, located primarily on the islands of Sumatra and Java. For an energy company concerned with exploration and development, this type of setting could lead to plenty of success.
What It Means
All this creates a picture of an undervalued oil company operating in an off-the-grid location. For investors seeking a speculative play for the growing oil boom, INDO stock looked perfect, particularly because it was trading at $3.87 when the boom first began.
Now that Wall Street is paying attention to this former penny stock, there’s no telling how far it will go. It may not be a penny anymore, but it still trades at fairly low levels considering its potential for growth. This is a name that investors should be watching closely as oil prices continue to rise.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.