By HotStockRockets | Saturday 18 April 2020
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Columbus Energy Resources (CERP) has updated on its measures with it “actively working to make itself resilient during the current downturn” and “optimistic that it will emerge well placed for the future”…
It notes “cash balance of US$2.56m, including US$780,000 in restricted cash (as at 31 March 2020)”. That compares to $3.1 million including US$0.62 million in restricted cash we noted when updating in February. It now though also emphasises staffing and capex cost savings and some share issuance to conserve cash amidst the downturn in the oil markets and the global markets.
They clearly create a difficult backdrop – and the shares are currently at 1.125p, to capitalise the company at just over £10 million. That is at least a bit of a recovery from a sub 1p share price hit last month, but still well down from the approaching 2.5p of our previous update.
We noted then the Saffron well in the South West Peninsula of Trinidad significant – noting potential unlocking of a NPV10 of circa $88 million. There is clear risk – with currently testing “ongoing” and, of course, the macro backdrop will impact any future returns but there has been some stabilisation since lows last month and there looks set to be an, albeit perhaps gradual, increase in demand.
The company states it “look forward to providing a comprehensive update on the Saffron well on 27 April” and, ahead of that, it is, at these levels, worth averaging down on. Buy.
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