VSA has a ‘buy’ recommendation with a 25p price target, compared to the current price of 4.44p.
“The shares have outperformed peers since management took over although we believe that the recent pullback provides an attractive buying opportunity,” VSA analyst Oliver O'Donnell said in a note.
O'Donnell added: “With the operational turnaround at Goudron well underway, management’s efforts have also been focused on unlocking the value in the South West Peninsula where an estimated 1.3BBoe are in place.”
“The announcements in relation to BOLT, and now Icacos, pave the way for exploration drilling in 2019, which will enable the value realised by CERP shareholders to be maximised, in our view.”
The analyst added: “Following the publication of full year financial results we have updated our estimates.
“The stronger recent performance of WTI oil prices has modestly benefited our near term estimates although this has been offset by a slightly slower ramp up and we expect an average of 675bopd through FY 2018 with over 800bopd by year end.
“We have also rolled over the model to reflect a return to profitability for forward earnings. Our Goudron value is adjusted to 17.5p/sh.”
“The benefits of the recent transaction are harder to quantify definitively, however, we believe that operational control will enable CERP to more rapidly advance development than with a partner to whom the development is considered non-core.”