MEG Energy Announces Preliminary 2019 Fourth Quarter and Full-Year Financial and Operating Data

All financial figures are in Canadian dollars ($ or C$) and all references to barrels are per barrel of bitumen sales unless otherwise noted

CALGARY, Jan. 16, 2020 /CNW/ - MEG Energy Corp. ("MEG" or the "Company") (TSX: MEG) announced today its preliminary estimates of expected ranges of certain financial and operating data for the three months and year ended December 31, 2019.

The table below presents management's preliminary estimates, based on the information and data currently available, of expected ranges of certain financial and operating data for the three months and year ended December 31, 2019. The line items in the table for the three months ended December 31, 2019 are estimates and are subject to finalization. Based on estimated results for the fourth quarter of 2019, MEG anticipates achieving results in line with its previously disclosed 2019 guidance.





Range of Expected Estimates

Actual Results


Year ended

Three months ended

Three months ended


 

Dec 31, 2019

 

Dec 31, 2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019


Low

High

Low

High




Production (bbls/d)

92,750

93,250

94,000

95,000

93,278

97,288

87,133

Non-Energy Operating Cost (C$/bbl)

$4.61

$4.65

$4.43

$4.61

$4.22

$4.53

$5.22

General and Administrative Expenses1 (C$/bbl)

$1.98

$2.00

$2.20

$2.25

$1.66

$1.81

$2.27

Capital Expenditures (C$mm)

$195

$200

$70

$75

$40

$32

$53

Cash and Cash Equivalents (C$mm)

$203

$209

$203

$209

$154

$399

$154


1.  $ per barrel based on production.

 

Update to MEG 2020 Commodity Price Risk Management Positions

In the fourth quarter of 2019 and the first few days of 2020, MEG entered into additional derivative financial contracts to manage commodity price risk. MEG's current commodity price risk management contracts, including those entered into in the fourth quarter of 2019 and the first few days of 2020, are summarized below:




Forecast Period


Q1 2020

Q2 2020

Q3 2020

Q4 2020

2020

WTI Hedges






WTI Fixed Price Hedges






Volume (bbls/d)

72,899

62,395

19,043

16,887

42,806

Weighted average fixed WTI price (US$/bbl)

$58.67

$59.68

$59.38

$59.36

$59.19

Enhanced WTI Fixed Price Hedges with Sold Put Options






Volume (bbls/d)

-

-

16,870

24,500

10,342

Weighted average fixed WTI price (US$/bbl) /
Put option strike price1 (US$/bbl)

-

-

$59.38 /
$52.00

$59.11 /

$52.00

$59.22 /
$52.00

Total WTI hedge volume (bbls/d)

72,889

62,395

35,913

41,387

53,148







WTI:WCS Differential Hedges






Volume2 (bbls/d)

30,150

30,150

30,150

32,150

30,650

Weighted average fixed WTI:WCS differential at
Edmonton (US$/bbl)

($20.14)

($20.14)

($20.14)

($20.01)

($20.10)







Condensate Hedges






Volume3 (bbls/d)

19,149

23,298

23,208

23,208

22,216

Average % of WTI landed in Edmonton (%)

102%

101%

100%

100%

101%


1. Includes fixed price swap and sold put option.

2. 2020 includes approximately 13,200 bbls/d of physical forward rail blend sales at a fixed WTI:AWB differential.

3. Q4 2019 and 2020 include approximately 13,300 bbls/d and 7,200 bbls/d (annual average) of physical forward condensate purchases, respectively. Where applicable, the average % of WTI landed in Edmonton includes estimated net transportation costs.

 

About MEG

MEG is an oil company focused on sustainable in situ thermal oil development and production in the southern Athabasca region of Alberta, Canada. MEG is actively developing enhanced oil recovery projects that utilize steam-assisted gravity drainage extraction methods to improve the economic recovery of oil as well as lower carbon emissions. MEG transports and sells Access Western Blend to refiners throughout North America and internationally. MEG's common shares are listed on the Toronto Stock Exchange under the symbol "MEG".

Forward-Looking Information

Certain statements contained in this news release may constitute forward-looking statements within the meaning of applicable Canadian securities laws. These statements relate to future events or MEG's future performance. All statements other than statements of historical fact may be forward-looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", "dependent", "ability" "plan", "intend", "target", "potential" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are often, but not always, identified by such words. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. In particular, and without limiting the foregoing, this news release contains forward-looking statements with respect to the expected ranges of certain financial and operating data for the three months and year ended December 31, 2019, including anticipated results that are in line with previously disclosed guidance for 2019. Such forward-looking information is based on certain assumptions and analysis made by MEG in light of its experience and perception of current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. However, whether actual results, performance or achievements will conform to MEG's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from MEG's expectations. Other factors which could materially affect such forward-looking information are described in the risk factors detailed in the offering documentation prepared and delivered by MEG in connection with the offering.

For further information, please contact:

Investor Relations
T 403.767.6206
E  invest@megenergy.com

Media Relations
T 403.767.1485
E media@megenergy.com

SOURCE MEG Energy Corp.