Josef SchachterCenturion Energy InternationalCUX.TOTOP PICKJan 11, 2006
The last six months, the company has been focusing on bringing on production. They finished last year with 38,000 BOE's a day, versus 21,150 at the end of '04. Now they are focusing on drilling again with 3 rigs working. Think they will do $1.34 in cash flow and $1.60 by the end of the year. The stock is cheap.
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.