With a ‘buy’ recommendation and a 21.4p price target, VSA Capital sees the potential for the share price to soar more than 500% from the current price of 3.72p.
VSA’s view is bolstered by Columbus Energy’s recent acquisition of Steeldrum, a fellow Trinidad-based oil firm.
“The acquisition brings immediate production along with upside potential from low cost optimisation as well as new drilling,” VSA analyst Oliver O’Donnell said in a note.
“The shares have been range bound recently, however, we believe that CERP now has a stronger platform for achieving its combined organic and acquisitive growth strategy which will deliver the expected rerating, in our view.”
“Completion of the Steeldrum acquisition diversifies CERP’s production base with immediate additional production of 200-250bopd with near term upside potential, including new production from the Snowcap well in the Cory Moruga field during Q4 2018.”
O’Donnell added: “Our earnings estimates are updated to reflect the acquisition … and we remain convinced of the considerable upside potential in the shares with production growth and drilling upcoming in the next period.”