The table below presents management’s preliminary estimates, based on the information and data currently available to management, of expected ranges of certain financial and operating data for the three months and year ended December 31, 2020. The line items in the table for the three months ended December 31, 2020 and year ended December 31, 2020 are estimates and are subject to finalization. Based on estimated results for the fourth quarter of 2020, MEG anticipates achieving results largely in line with its previously disclosed 2020 guidance.
Range of Expected Estimates |
Actual Results |
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Year ended |
Three months ended |
Three months ended |
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Dec 31, |
Dec 31, |
Sep 30, |
Jun 30, |
Mar 31, |
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2020 |
2020 |
2020 |
2020 |
2020 |
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Low |
High |
Low |
High |
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Production (bbls/d) |
82,250 |
82,500 |
90,500 |
91,750 |
71,516 |
75,687 |
91,557 |
Non-Energy Operating Costs (C$/bbl) |
$4.36 |
$4.41 |
$4.60 |
$4.80 |
$3.96 |
$4.09 |
$4.57 |
General and Administrative Expenses(1) (C$/bbl) |
$1.59 |
$1.66 |
$1.55 |
$1.75 |
$1.50 |
$1.29 |
$1.96 |
Capital Expenditures (C$mm) |
$147 |
$152 |
$37 |
$42 |
$36 |
$20 |
$54 |
Cash and Cash Equivalents (C$mm) |
$110 |
$116 |
$110 |
$116 |
$49 |
$120 |
$62 |
(1) |
$ per barrel based on production volumes |
Update to MEG 2021 Commodity Price Risk Management Positions
During the fourth quarter of 2020 and the first few days of 2021, MEG entered into additional financial derivatives and physical delivery contracts to manage commodity price risk. MEG’s current commodity price risk management contracts, including those entered into in the fourth quarter of 2020 and the first few days of 2021, are summarized below:
Forecast Period |
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Q1 2021 |
Q2 2021 |
Q3 2021 |
Q4 2021 |
2021 |
||||
WTI Hedges |
||||||||
WTI Fixed Price Hedges |
||||||||
Volume (bbls/d) |
37,361 |
13,000 |
– |
– |
12,590 |
|||
Weighted average fixed WTI price (US$/bbl) |
$48.28 |
$46.31 |
– |
– |
$47.77 |
|||
Enhanced WTI Fixed Price Hedges with Sold Put Options(1) |
||||||||
Volume (bbls/d) |
29,000 |
29,000 |
29,000 |
29,000 |
29,000 |
|||
Weighted average fixed WTI price (US$/bbl) / |
$46.18 / |
$46.18 / |
$46.18 / |
$46.18 / |
$46.18 / |
|||
Put option strike price (US$/bbl) |
$38.79 |
$38.79 |
$38.79 |
$38.79 |
$38.79 |
|||
WTI:WCS Differential Hedges |
||||||||
Volume(2) (bbls/d) |
10,667 |
20,000 |
– |
– |
7,667 |
|||
Weighted average fixed WTI:WCS differential (US$/bbl) |
($14.73) |
($14.47) |
– |
– |
$14.56 |
|||
Condensate Hedges |
||||||||
Volume(3) (bbls/d) |
15,495 |
18,211 |
14,028 |
14,028 |
15,440 |
|||
Weighted average % of WTI landed in Edmonton (%)(4) |
96% |
96% |
96% |
95% |
96% |
|||
Natural Gas Hedges |
||||||||
Volume(5) (GJ/d) |
57,700 |
42,500 |
42,500 |
42,500 |
46,250 |
|||
Weighted average fixed AECO price (C$/GJ) |
$2.64 |
$2.61 |
$2.61 |
$2.61 |
$2.62 |
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Power Hedges |
||||||||
Quantity(6) (MW) |
10 |
15 |
15 |
15 |
14 |
|||
Weighted average fixed price (C$/MW-h) |
$63.83 |
$63.83 |
$63.83 |
$63.83 |
$63.83 |
(1) |
If in any month of 2021 the month average WTI settlement price is US$38.79 per barrel (the sold put option) or higher, MEG will receive US$46.18 per barrel (the fixed price swap) on hedged 2021 production in that month. If in any month of 2021 the month average WTI settlement price is less than US$38.79 per barrel, MEG will receive the month average WTI settlement price in that month plus US$7.39 per barrel (the swap spread) on each barrel hedged in that month. |
(2) |
Includes 10,000 bbls/d (Q1) and 15,000 bbls/d (Q2) of physical forward blend sales at fixed WTI:AWB differentials. |
(3) |
Includes approximately 4,500 bbls/d of physical forward condensate purchases for the full year 2021 (annual average). |
(4) |
The average % of WTI landed in Edmonton includes estimated net transportation costs to Edmonton. |
(5) |
Includes 7,500 GJ/d of physical forward natural gas purchases for full year 2021 (annual average) at a fixed AECO price. |
(6) |
Represents physical forward power sales at a fixed power price. |
About MEG
MEG is an energy company focused on sustainable in situ thermal oil production in the southern Athabasca region of Alberta, Canada. MEG is actively developing innovative enhanced oil recovery projects that utilize steam-assisted gravity drainage (“SAGD”) extraction methods to improve the responsible economic recovery of oil as well as lower carbon emissions. MEG transports and sells its thermal oil production to refiners throughout North America and internationally. MEG’s common shares are listed on the Toronto Stock Exchange under the symbol “MEG.”