MEG Energy Corp T.MEG

Post Royalty Payout

[Helloworld]

Can anyone explain how far away they are and what affect it would have on their FCF once they are beyond?

[cashtango00]

MEG should hit royalty payout sometime in Q4 '22 at which point the costs go up.  The payout is based on pricing, but a good estimate would be a move from 2-3% of revenue to 8-9%.  That's a big jump, but it's well worked into the market. I still don't completely buy the " extreme tightness" of the market thesis.  WTI/WCS looks sloshy and the forward curve

[Eigen337]

This post has been removed in accordance with Community Policy

[jack4567]

Granted, short-term WTS/WCS demand looks sloshy, and it may be nonsense to say that recessions don't drop oil demand.  On the other hand, some recessions do not drop oil demand much, as discussed here:  https://seekingalpha.com/article/4521645-recession-wont-push-oil-below-100-at-least-not-for-long

[Moemoney42]

Agreed, this "recession" is an odd one with lots of jobs available and a shortage of workers to fill them.. this tells me demand destruction shouldn't be a concern of this recession to any large degree..??