Central Petroleum posted its 4Q20 result, with cash receipts and production costs in-line with Morgans forecasts, while General & Administrative and finance costs were below its forecasts.
Operating cash flow of $4m impressed the broker.
Work on the Range coal seam gas project remains suspended and follow up drilling of the Dukas prospect has been scheduled for 1H22.
Morgans sees attractive upside in Central Petroleum. However, the company is being weighed down by excessive debt. The analyst would revisit the investment thesis if the debt is refinanced, Range is progressed and a farm-in partner secured for its extensive Amadeus acreage package.
The Hold rating is maintained. The target price is increased to $0.089 from $0.072.
Target price is $0.09.Current Price is $0.09. Difference: ($0.00) – (brackets indicate current price is over target). If CTP meets the Morgans target it will return approximately -1% (excluding dividends, fees and charges – negative figures indicate an expected loss).