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MEG Energy Corp T.MEG

Alternate Symbol(s):  MEGEF

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

Post by retiredcfon Nov 12, 2024 7:58am
223 Views
Post# 36307861

Ink Research

Ink Research

Morning Report: Buybacks do the heavy lifting at heavy oil producer MEG Energy

November 12, 2024

With almost $75 million in share buybacks in October, heavy oil producer MEG Energy (MEG) was eighth on our

preliminary October Top 100 Issuers with Buybacks list, published on Monday. When MEG announced Q3 results on November 5th, it reported debt of approximately $646 million as of September 30th which met its debt reduction target. Given the achievement, MEG expects to apply all of its free cash flow to expanded buybacks and its newly inaugurated base quarterly dividend of $0.10 per share. According to our September Top 100 Issuers with Buybacks list, MEG spent almost $53 million buying back shares that month.

MEG generated Q3 funds flow from operating activities of $362 million, down from $492 million in Q3 2023 as bitumen prices fell. Free cash flow fell to $221 million from $409 million in Q3 2023. Q3 production averaged 103,298 bbls/d, off slightly from 103,726 bbls/d in the comparable period. Production was up from the 2022 average production of about 95,000 bbls/d which we referenced the last time we featured MEG on January 23, 2023. At the time, insiders were buying as short sellers bet against the stock. Since the report, insiders have come out on top with MEG advancing 26.9%, outpacing the S&P/TSX Capped Energy Index, up 10.0%. Although shorts are still betting against the stock with just over 4.2 million shares shorted as of October 31st, that is down from almost 8.2 million shares shorted as of mid-January 2023. Nevertheless, the position is big enough to generate an INK potential short-squeeze setup signal. Meanwhile, insiders have been buying again. Generally, we would view insider buying, issuer buybacks, and a meaningful short interest position as a bullish combination.


 



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