RE:meg futureslots of good discussion even if just opinions which we all have and are all based on our current positions.
Personally I did sell a few yeaterday but I continue to hold a core position.
why ?
well the discussion around debt is that MEG will never be able to repay it. Maybe that is true with oil at 44-50 range but they don't need to repay all the debt either. Their assets are worth upward of 6-8 billion or more and I haven't reallty researched that value enough and of course it depends on the value of booked reserves as well and future prices for oil, but asset values are almost 2 times their debt at this time.
so in reality they need to pay down at most 2 - 2.5 billion to strengthen their balance sheet if oil prices don't go higher than 50. if oil prices recover to 55-65 range then cashflow will go up significantly and debt payments can be made from cashflow as well as from asset sales, and all is gopod.
on the cost side and brownfield expansions, MEG has done an excellent job of lowering operating costs and capex for maintenance and in 2016 they have 30 million left over from 2016 capex for maintenance capital.
now they can use this 30 million for brownfield and expand produciton to 90 million barrels by year-end or keep it for capex in 2017 and they will need around another 100 -120 million for 2017 capex. thsi can come rorm increased cashflow if oil prices are in the 50-60 range and cash on hand which was 100 plus million as of june 30.
so for me debt is a concern but manageable if oil prices are rising, and oil prices are stuck in the 40-50 range for 2017 then MEG will need to sell access to provide them cash to manage their business.
If oil prices crash back under 40, then MEG will need to sell access and sell assets be it JV or outright sale of the company.
I also beleiove that an offer for the whole company is on the table but management and the boarrd thinks it too low and maybe the big MEG shareholders also think it';s too low.
I think the offer is in the 8-10 range but for now MEG and big shareholders would like to see where oil prices go in 2017 before jumping ship.
just my 2 cents, bullish and bearish scenarios