Josef SchachterCenturion Energy InternationalCUX.TOTOP PICKNov 22, 2005
For the last 6 months has been putting in new plumbing, so they haven't really been exploring. The new facilities are coming on now and they now have 4 rigs in the field working, so they will be starting to do more exploration. Also have a big well with Petro Canada (PCA-T) offshore Tunisia which will be very material.
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.