Wilf GobertCenturion Energy InternationalCUX.TOHOLDNov 07, 2005
The one reason it has not performed that well this year is that it is almost 100% natural gas which is sold at a relatively fixed price. Hasn't had any participatiuon in the runup of oil prices. You buy this one for exploration sucess in the future. Fairly valued at this price.
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.