Mark Jackson, CFA
Centurion Energy International
CUX-T
BUY
Sep 12, 2005
You have to cognizant of the fact that because they are operating in Egypt, they don't get world price for natural gas. They are building L & G facilities on the coast which will allow them to get a world price. Sees some upside in their production level.
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.
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.