Bill Harris, CFACenturion Energy InternationalCUX.TOBUYJan 03, 2006
There are so many things going on with this company. Spent a lot of money last year on high risk exploration and there is no way to put a pin in the value. You need to bring a gas/oil well on and have it run for six months before you can get an assessment of what the oil pool is. If things work out, 2006 should see $20.
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.