FIRST ENERGY: TOP PICK 16 $ Target
Some interesting info from First Energy. The interesting part is that it was released in NOVEMBER 2011....yes NOVEMBER 2011 when CZE was at 8-8,5 C$ with a 44,000 $/bopd valuation and it had lower production than the current one of almost 12,000 bopd.
You can contact First Energy to confirm it.
CZE trade for 26,000 $/bopd (!!!) currently and just 2x its funds from operations annualized although it has higher production than late 2011.
So FIRST ENERGY noted back in NOVEMBER 2011 with a price target of 16 C$:
Reasons to Buy C&C
1. The Zopilote discovery on the Cravoviejo Block
(100% WI) is potentially significantly bigger than
originally anticipated. The discovery can be
monetized and any associated cash flow could potentially
fund the Company’s entire 2012e capital
expenditure program.
2. The Cachicamo Block (100% WI) has seven to nine
undrilled prospects, versus previous disclosure
that only indicated four undrilled prospects. Resources
at the Cachicamo Block are potentially materially
larger, which should reflect positively on
the Company’s longer-term production forecast.
3. A significant exploration program will soon
commence on the Company’s exploration blocks,
including up to two wells at Llanos 19 (100% WI)
starting in Q4 2011e, two wells at Andaquies (54%
WI post farm-out) starting in Q4 2011e, and one
well at Coati (60% WI post farm-out) in Q1 2012e.
The exploration drilling campaign remains on
schedule.
4. C&C has consistently been able to produce and
sell more than 10,000 bbl/d of oil for the past few
weeks. This is positive news and speaks to the
productive capabilities of the Company’s wells.
Our Q4 2011e and 2012e production forecast is
conservative.
5. The Company continues to trade well below core
NAV of $11.08 per share, and trades at an inexpensive
2012e DACF multiple of 2.8x and enterprise
value of approximately US$44,500 per flowing
bbl/d. Given that our production forecast is
conservative, our valuation metrics should also be
considered conservative.