RE:MEG uncertainty - real of imaginedVery informative post,
Like you said, oil sand operations face many headwinds market access, transportation etc. thus takeover is not likely given the current price environment.
In terms of oil, I don't believe shale players will come back with vengence at $50 oil, and I think non-OPEC production will continue to fall at this price level. Slight tick up in rig count numbers, which we may see in weeks to come will not be enough to stop the production fall. However, going towards $60 oil, not only productions will slowly recover, the demand could also respond as the stockpiling by India and China may slow down.
Modeling based on $60 oil, MEG will be cash flow positive, but grwoth is out of question given the already leveraged balance sheet. Unless the sale of access pipeline closes, which I suspect will be in a month or two. MEG will continue to be range bound around 6ish depending on oil price given the limited options and growth potential it has.
Disclosure: I have a small long position in MEG and shorting puts.