John StephensonCenturion Energy InternationalCUX.TOCOMMENTNov 07, 2005
A premium is being paid for North American producers rather than International producers because of geopolitical risks. Nothing fundamentally wrong with this company. Seem to be expanding their production base which will ultimately get recognized, but it's an out of favour area right now.
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.