MEG Energy Corp T.MEG

Q3 Results

[newcoin]

Capital Allocation Strategy

The Corporation is executing its capital allocation strategy of applying free cash flow to ongoing debt reduction and share buybacks. The Corporation generated $1.3 billion of free cash flow in the first nine months of 2022. During that time, MEG repurchased approximately $1.1 billion of outstanding indebtedness and returned approximately $0.2 billion to shareholders through share buybacks. MEG remains committed to continued debt reduction as a key component of its capital allocation strategy.

The Corporation reached US$1.2 billion net debt as at September 30, 2022 and is increasing the percentage of free cash flow allocated to share buybacks to approximately 50% with the remainder applied to further debt reduction. Once the net debt floor of US$600 million is reached 100% of free cash flow will be returned to shareholders.

[HighOctane89]

The numbers look good on the quarter with production of 102,000 bpd and 66% of sales volume sold at the US gulf coast . Impressive FCF and that they hit their debt target over 6 weeks ago , that means MEG has and will operate the entire Q4 on a 50/50 split between buybacks and debt reduction . This quarter supports the takeover therory as buying MEG would be a simple bolt-on acquisition of 100,000

[Hightowntrader]

Nice to see you here HO.  I'm liking the news, but I keep wondering one thing... Why can't they release little tidbits of info to the public on a more regular basis, and stop making the public wait for quarterly news? If it's a strategy to buy back more shares cheaper, it is definately working for them... Otherwise I think they should have dropped the 50/50 FCF news 6 weeks ago

[HighOctane89]

I agree Httrader , this BOD doesn't talk any more than is required but they are producing results . The Canadian market seems totally unable to properly value this sector which I expect is due to a lack of expertise on O&G analysis combined with a misguided publicity and policy war on the industry . Biden is running out of SPR barrels , the US gov't has no clear direction , Russian

[HighOctane89]

I have been digging into these numbers a bit deeper and I see a similarity to the SU Q3 report , both companies have used "paper charges" to attenuate real earnings . In this political environment , its no surprise companies don't want to have to report records profits but when you get into the numbers , the quarter was impressive . MEG took a $98M "charge" for currency