CALGARY, ALBERTA–(Marketwired – Dec. 17, 2014) –
All dollar amounts in $Cdn unless otherwise noted.
MEG Energy (TSX:MEG) today announced a reduction to its 2015 capital program to $305 million from the original $1.2 billion budget. Previously released 2015 guidance remains unchanged, targeting a production increase of approximately 19% to 78,000 to 82,000 barrels per day at non-energy operating costs of $8 to $10 per barrel.
“The revision of our 2015 capital investment plan is in response to the continuing deterioration of global crude oil markets,” says Bill McCaffrey, President and Chief Executive Officer. “While our projects remain economic at current strip pricing, we believe it is prudent to reduce capital spending until we see a sustained improvement in commodity prices. Our brownfield opportunities also provide us with the flexibility to increase spending at a measured pace under the right market conditions.”
MEG expects that staff levels will remain consistent with current levels to maintain operations and to execute future growth.
- MEG’s December 31, 2014 cash position is forecast to be $650 million.
- The company’s revised capital investment plan for 2015 is $305 million.
- In November 2014, MEG extended and increased its five-year committed revolving credit facility from US$2.0 billion to US$2.5 billion with its 12 bank syndicate. The revolver matures in November 2019 and is “covenant lite” in structure, meaning it is free of any financial maintenance covenants and is not dependent on, nor calculated from, MEG’s crude oil reserves. The revolver remains undrawn.
- Similar to MEG’s revolving credit facility, all of the company’s long-term debt is “covenant lite” in structure. The first maturity of any of MEG’s long term-debt obligations is March 31, 2020.
- On December 15, 2014, MEG closed on a five-year US$500 million guaranteed letter of credit facility with Export Development Canada. Letters of credit issued under this facility will not consume revolver capacity, thereby increasing MEG’s liquidity. All of MEG’s existing letters of credit under its revolver are being transferred to this facility.
This document may contain forward-looking information including but not limited to: expectations of future production, revenues, expenses, cash flow, operating costs, steam-oil ratios, pricing differentials, reliability, profitability and capital investments; estimates of reserves and resources; the anticipated reductions in operating costs as a result of optimization and scalability of certain operations; and the anticipated sources of funding for operations and capital investments. Such forward-looking information is based on management’s expectations and assumptions regarding future growth, results of operations, production, future capital and other expenditures, plans for and results of drilling activity, environmental matters, business prospects and opportunities.
By its nature, such forward-looking information involves significant known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to: risks associated with the oil and gas industry, for example, the securing of adequate supplies and access to markets and transportation infrastructure; the availability of capacity on the electrical transmission grid; the uncertainty of reserve and resource estimates; the uncertainty of estimates and projections relating to production, costs and revenues; health, safety and environmental risks; risks of legislative and regulatory changes to, amongst other things, tax, land use, royalty and environmental laws; assumptions regarding and the volatility of commodity prices and foreign exchange rates; risks and uncertainties associated with securing and maintaining the necessary regulatory approvals and financing to proceed with MEG’s future phases and the expansion and/or operation of MEG’s projects; risks and uncertainties related to the timing of completion, commissioning, and start-up, of MEG’s future phases, expansions and projects; and the operational risks and delays in the development, exploration, production, and capacities and performance associated with MEG’s projects.
Although MEG believes that the assumptions used in such forward-looking information are reasonable, there can be no assurance that such assumptions will be correct. Accordingly, readers are cautioned that the actual results achieved may vary from the forward-looking information provided herein and that the variations may be material. Readers are also cautioned that the foregoing list of assumptions, risks and factors is not exhaustive.
Further information regarding the assumptions and risks inherent in the making of forward-looking statements can be found in MEG’s annual information form (“AIF”) dated March 5, 2014, along with MEG’s other public disclosure documents. Copies of the AIF and MEG’s other public disclosure documents are available through the SEDAR website which is available at www.sedar.com.
The forward-looking information included in this document is expressly qualified in its entirety by the foregoing cautionary statements. Unless otherwise stated, the forward-looking information included in this document is made as of the date of this document and the Corporation assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances, except as required by law.
MEG Energy Corp. is focused on sustainable in situ oil sands development and production in the southern Athabasca oil sands region of Alberta, Canada. MEG is actively developing enhanced oil recovery projects that utilize SAGD extraction methods. MEG’s common shares are listed on the Toronto Stock Exchange under the symbol “MEG”.
Investors: MEG Energy Corp.
John Rogers, Vice President,
Investor Relations and External Communications
Media: MEG Energy Corp.
Director, External Communications