Josef SchachterCenturion Energy InternationalCUX.TOBUYOct 07, 2005
They are involved with hooking up 2 major facilities, so management has been focusing on the plumbing side of the business. Starting September, they have 4 rigs focused on exploration. The company gets $2.65 US a well in Egypt for their gas. The real upside is the liquids and the oil that they are finding in addition to their gas.
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.