MEG Energy Corp T.MEG

$5 a barrel? 8? What is a good amount to reconcile the diff

[drunk@noon]

between the avg WCS price and the amount recieved for barrel taking blending costs and other dfferentials into consideration for determing what they recieve for the heavy oil (bitemin) produced?

thanks in advance

[CashHungry]

You'll get buried in the weeds trying to answer that question.  For one, I am sure the differential will depend on the point of sale, Edmonton or the Gulf. For my analysis I focus on the netback and try to determine how hedges, WTI:AWB differentials, WTI, WTI price come into play.  I then consider production and capex on FCF.  Helping FCF next year will be presumably better

[CashHungry]

To answer your question another way... WTI:AWB spread will be a little larger than the WTI:WCS because AWB is a more sour blend.  I saw one report that the spread was about $2 at the gulf over a quarterly period. With regards to removing the dilutent and comparing the realized Bitumen price to WCS makes no sense since WCS also contains blended products which would be specific to each

[Eigen337]

This post has been removed in accordance with Community Policy

[CashHungry]

Great work.  Now that you have gone that far caculate the discount at the USGC as did for Edmonton then find the blended discount by weight of point of sale and then subtract the dilutent cost and you have the answer for the specific question that was asked.