MEG Energy Corp T.MEG

Alternate Symbol(s): MEGEF

Energy Oil & Gas E&P

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.

TSX:MEG - Post by User

MEG Energy Corp

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Comment by wallop13on Mar 26, 2016 11:23am

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Post# 24701865

RE:RE:RE:RE:RE:RE:RE:likelihood of a takeover of MEG

2015ideaman wrote:

wallop13 wrote:

shambano1 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.

good post...you say "very fair" offer, I agree.....but offer could be somewhat higher as well, given the 12 to 36 month oil price outlook...

cheers..from ideaman

To be honest, I think MEG is heading north of $20 in the next 24 months. I'm not one to complain about a buyout, but I'm more than happy to hold too. The nice thing about MEG is that they will just pick up where they left off, not so for the majority.

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