MEG Energy Reports Record Q3 Production

MEG Energy (TSX:MEG) has released its third quarter 2018 operating and financial results. During the quarter the energy company reported record production rates as well as a low per barrel operating cost.

In the announcement MEG also confirmed that the board has unanimously rejected the takeover offer from Husky Energy (TSX:HSE).

As quoted from the press release:

Highlights include:

• Record quarterly bitumen production volumes of 98,751 barrels per day (bpd) and low steam-oil-ratio (SOR) of 2.2. Annual production is well on-track to achieve 2018 guidance of 87,000 to 90,000 bpd;
• Record low per barrel net operating costs of C$4.34, including low non-energy operating costs of C$4.38 per barrel;
• Strong adjusted funds flow from operations of C$116 million or C$0.39 per share, including C$88 million of realized net hedging losses. Adjusted funds flow from operations excluding realized net hedging losses totalled C$0.68 per share;
• Total cash capital investment of C$145 million in the quarter, primarily directed to advance the Phase 2B Brownfield expansion and eMVAPEX pilot;
• Cash and cash equivalents of C$373 million; MEG’s covenant-lite US$1.4 billion facility remains undrawn;
• Subsequent to the quarter, MEG executed a binding agreement to access 30,000 bpd of unit train rail loading capacity at the Bruderheim terminal, operated by Cenovus. The term of this agreement is for three years, with a one-year extension at MEG’s option; and
• On October 17, 2018, MEG announced that its Board of Directors unanimously rejected Husky Energy’s unsolicited bid to acquire the company and recommended MEG shareholders NOT tender their shares.

“The MEG of today is more robust on every measure. We are entering an exciting period of greater financial strength and flexibility, as the Company reaches a critical inflection point transforming from a net consumer of cash to a generator of significant cash flow, well in excess of future capital investment requirements. Through our world-class asset base and industry-leading technology, the Board and Management remain committed to maximizing value for our shareholders,” says Derek Evans, president and CEO.

Click here to read the full announcement