MEG Energy Corp T.MEG

Alternate Symbol(s): MEGEF

Energy Oil & Gas Refining & Marketing

MEG Energy Corp. is a Canada-based energy company focused on in-situ thermal oil production in the southern Athabasca oil region of Alberta, Canada. The Company is engaged in the development of enhanced oil recovery projects that utilize steam-assisted gravity drainage extraction methods to improve the economic recovery of oil. It transports and sells thermal oil (AWB) to customers throughout North America and internationally. The Company owns a 100% interest in over 410 square miles of mineral leases in the southern Athabasca oil region of Alberta, Canada and is primarily engaged in sustainable in situ thermal oil production at its Christina Lake Project. Christina Lake Project is a multi-phased project, located 150 kilometers south of Fort McMurray in northeast Alberta. It comprised of approximately 200 square kilometers of leases.

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MEG Energy Corp

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Comment by guyf1963on Feb 10, 2016 8:52pm

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Post# 24545989

RE:This can't help

canviking wrote: Why MEG’s Access Pipeline sale might not provide high returns

Category: News - Articles Published: 2016-Feb-09
Author: JWN staff

MEG Energy and Devon Canada are both looking to shed their 50 percent interests in the Access Pipeline. But is the sale of this asset going to help or hurt? Analysts with FirstEnergy Capital say they “do not see a reasonable scenario whereby MEG’s cash flow is not negatively impacted by the sale.” “Certainly MEG is a motivated seller. However the strategic value of its 50% interest in this pipeline, which has excess capacity in a region that also has excess pipeline capacity, is questionable for many of the likely interested parties,” FirstEnergy said in a research note released this week. “History has taught us to be a bit skeptical when management teams speak with a sense of eagerness and excitement regarding planned asset sales.” Access connects MEG’s Christina Lake Devon’s Jackfish SAGD projects in the south Athabasca oilsands region to transportation hubs near Edmonton. FirstEnergy says that since there is little need currently for more pipeline capacity in the area, it is reasonable to assume that the proceeds MEG may receive from the sale of the pipeline would not price in much upside for the future. “MEG’s investment to date in the Access Pipeline has been $1.1 billion-$1.2 billion. The proceeds MEG may receive for the pipeline will largely be driven by the terms that MEG agrees to pay in fixed commitments going forward. Assuming the price is in the range of $1.4 billion-$1.6 billion, we estimate this would result in ~$130 million-$165 million in annual fixed commitments from MEG (assuming a 25-year flat payment term at an 8-9% rate of return),” FirstEnergy said. “Effectively, this transaction would be a sale leaseback, exchanging an increase in short term liquidity for longer term off balance sheet liability.” - See more at:

https://www.oilweek.com/index.php/757-why-meg-s-access-pipeline-sale-might-not-provide-high-returns#sthash.KhGYW1za.dpuf