As the new President and CEO of MEG Energy, I am writing to you today to share my enthusiasm for your company, and where senior management and I, along with the Board, will be focusing our efforts going forward to create shareholder value.
It was obvious to me, long before I joined the company, that MEG possessed a world-class resource base that was being developed with leading technology backed by strong technical expertise. Based on my observations from the inside, I can confirm the company’s strengths live up to its external reputation. Over the last few weeks, I have had the opportunity to meet our staff at Christina Lake and in Calgary. I have been most impressed by the innovative culture that has led to MEG’s technological breakthroughs and continue to extend the value of our assets in place.
We are at the threshold of significant transformation for the company. Much has been done by the Board and management team over the last few years to bring MEG to this inflection point: debt maturities have been extended, non-strategic assets have been, or are in the process of being sold, and the balance sheet has been substantially de-levered.
MEG has a thoughtful plan for value creation and a clear path to free cash flow, in my view. Supported by proven, industry-leading technology, Vision 20/20 is a low-risk, high-return plan that should further reduce our highly competitive overall cost structure, generate substantial free cash flow and significantly increase the value of the company. With the company’s history of operational excellence, I am confident we are on pace to hit our planned 113,000 bpd by 2020.
To support this vision, our job is to ensure we continue to expand our access to markets while appropriately mitigating commodity price fluctuations and differentials. Going forward, with significant free cash flow anticipated in coming years, we will work to further refine our strategy, optimize our capital allocation, and strengthen the balance sheet. I am committed to you as a shareholder that I will be laser-focused on capital efficiency and reinvesting into the business at a measured, prudent pace that is supported by a stronger balance sheet. To this end, we believe there remains a considerable amount of low-cost brownfield growth opportunities at Christina Lake well beyond 113,000 bpd, and will provide more definition on these plans as we drive forward. We will continue to explore all avenues for enhanced value creation.
I am excited to be leading MEG at this pivotal juncture. Bringing a fresh approach and working closely with the management team and the Board, I am confident we will build MEG into the best-in-class oil sands producer it has proven to be, realizing its full potential value for our shareholders.
I look forward to connecting and meeting with you in the near future. You have my commitment to open, honest and frequent communication from my office. Please feel free to reach out to myself or our Investor Relations team with any questions.
President and CEO
About MEG Energy Corp.
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”.