Another Little Snippet3-point checklist for investing in oil stocks. By The Motley Fool Dec 13, 2016. Dec 13th 2016 07:15 AM. Full article on MF site/AOL Production versus exploration As the mining sector has started to recover over the last year, we've seen companies rewarded for focusing on cost-cutting and production. Most companies have made heavy cuts to planned spending on new projects and exploration. I believe we'll see similar patterns in the oil sector. The market will reward companies that are able to generate strong profit growth, backed by genuine free cash flow. At this point in the cycle, I think it makes sense to focus on companies with rising production, low operating costs and limited spending commitments. In my view, such companies should be lower risk investments and offer more reliable returns. One possible example is Ithaca Energy. This North Sea firm has already reduced net debt from nearly $800m to $590m, and should have significant new production coming on-stream over the next year.