RE:RE:RE:RE:RE:likelihood of a takeover of MEGshambano1 wrote: MEG might not have a decline rate but they do have maintenance capital requirements to keep everything running smoothly and not have down time, so maintenance capital should eb treated like drilling capex to keep production flat.
that said MEG's maintenace capital for 2016 is a low 150 million or around there which is very low compared to drilling and completeing shale wells to keep produciton from falling.
so MEG has low maintenance capital, low operating expenses but high debt service costs.
once they sell access they will ahve stronger balancve sheet but I'm not sur ethey can lower long term debt due to maturities but maybe they can, I'm not sure on their debt maturities and payment options.
I'm still hoping for a takeover of the whole company for 12 range, which will effectively give me a nie double, but it take 12-18 months, I'm not sure even the big guys want to get more into debt, but IMO selling gasoline stations and rasing cash will help with any takeovers for sure.
SU is also contemplating selling gasoline stations to raise cash and lower debt, so SU could still be a possible suitor for MEG.
but to me CVE and MEG should be integrated into one company to lower costs and increase produciton and better weather the lower for longer environment.
GLTA
If a buyer were to pay $12, the offer would be about 6 billion (including debt), plus 2 billion for the pipeline. That seems very fair when you consider the COS sale price. I'm not sure about CVE. Seems like they are more focused on developing internal assets, but I think it would be a great fit for them. Plus they have that 4 billion in the bank.