MEG Energy Corp T.MEG

my old post but applies more today

[shambano1]

this will be a very important release for MEG and it will move the SP one way or the other you can count on that.

why?

well I'm just guessing here but the market is looking for stability and longevity and survivability, 3 things that MEG has to prove they have.

1-stability  This means oil prices will be fairly stable and not crash and burn as they did last year and the year before.  With oil prices in the 45-50 range MEG can easily hold on  and possibly even improve operations by lowering costs and increasing netbacks.  

2-longevity - well we already know that MEG has long life assets both producing and undeveloped.  and we know they are very good assets with low operating costs compared to most other sagd operators.  but we also know that MEG will not use remaining cash or debt or even new equity to raise money for Brownfield expansions, well not until oil gets back to 60 plus. 

so is MEG currently looking for JV partners to help increase production through Brownfield expansions and if so will they find willing partners who will pay a reasonable price for this future production?

3-survivability  - well this means that most issues can be resolved before any serious debt maturities occur the first of which will start in 2020, 3.5 years away??  The assets will survive there is no doubt because they are great assets and the debt will get paid back one way or another.  This is where the risk lies.  Can MEG restore their balance sheet before their debt matures or can be refinanced???

the Q2 report might help answer some of these quesitons but be prepared for volatility especially if oil prices move one way or the other.