One of the best performers on the ASX in the last month has been the Santos Ltd (ASX: STO) share price.
Since this time last month the oil and gas producer's shares have climbed an impressive 16%.
Why have its shares gone gangbusters?
As well as gaining a boost from a rise in oil prices, Santos surprised the market last month when it announced its free cash flow breakeven forecast for FY 2017.
At the start of 2016 Santos was free cash flow breakeven at US$47 per barrel, whereas this has now been reduced to a lowly US$33 per barrel.
So with Brent crude oil at US$52 per barrel and WTI at US$48 per barrel, Santos' operations are highly profitable.
Management's hard work at transforming the company into a low-cost, reliable, and high performance business has clearly been a success.
Is it too late to buy shares?
According to one leading broker it isn't. A research note out of Credit Suisse last month revealed that its analysts have an outperform rating and $3.60 price target on the oil and gas producer's shares.
With its shares changing hands at $3.39, this price target implies potential upside of 6.2% excluding dividends even after its strong rally over the last month.
But ultimately whether or not its shares reach this level or climb even higher will depend on oil prices.
If oil prices do remain at these levels for the foreseeable future then I think Santos could prove to be a great option for investors looking for exposure to the resources sector.
But if OPEC fails to reduce the oil supply gut, then prices could fall back considerably.
Ultimately, if you are confident on oil prices I would suggest you consider an investment in Santos today ahead of its peers Woodside Petroleum Limited (ASX: WPL) and Oil Search Limited (ASX: OSH).
