John StephensonCenturion Energy InternationalCUX.TOBUYJun 21, 2005
Might be a reasonable entry point. A gas play. Has 6.3 million net undeveloped acres in Egypt. If they can develop some of this, they could potentially see a quadrupling in its productive capacity from about 11000/12000 BOE's a day to over 50,000. Very undervalued if you believe it can come forward with its potential.
The company has had execution problems. If they can overcome these problems there will be an upside. At $7.00 it is a buy and he recommends buying it. Target price is $15.00.
Has dropped because of 3 dry and abandoned wells. Going to try and get bigger, stronger casings that can handle the pressures. Going to restart in Q1. With their 32,000 BOE's a day should do about $1.35 annualized cash flow. Under $6, it is very cheap. Buy in Q4 of 06.
Chart is pretty ugly on this name. 3 of their Algerian wells will need specialised equipment that won't arrive until September. Avoid it until you have a better feeling of the direction where things are going.