All financial figures are in Canadian dollars ($ or C$) and all
references to barrels are per barrel of bitumen unless otherwise
noted. The Corporation's Non-GAAP and Other Financial Measures are
detailed in the Advisory section of this news release. They
include: cash operating netback, blend sales, bitumen realization,
transportation and storage expense net of transportation revenue,
operating expenses net of power revenue, non-energy operating
costs, energy operating costs, adjusted funds flow, free cash flow
and net debt.
CALGARY, AB, May 2, 2022 /CNW/ - MEG Energy Corp. (TSX: MEG)
("MEG" or the "Corporation") reported its first quarter 2022
operational and financial results.
"The first quarter was a record quarter for MEG from both an
operational and financial perspective" said Derek Evans, President and Chief Executive
Officer. "The team achieved record quarterly production, which
together with strong benchmark pricing and low differentials drove
record free cash flow in the quarter, setting us up to be able to
accelerate debt reduction and initiate share buybacks under our
normal course issuer bid in the second quarter of this year."
Highlights include:
- Record funds flow from operating activities and adjusted funds
flow of $587 million ($1.87 per share);
- Record bitumen production volumes of 101,128 barrels per day
(bbls/d);
- Operating expenses net of power revenue of $8.98 per barrel, including non‐energy operating
costs of $4.74 per barrel. Power
revenue offset energy operating costs by 38%, resulting in energy
operating costs net of power revenue of $4.24 per barrel;
- Total capital expenditures of $88
million primarily directed towards sustaining and
maintenance activities, resulting in record free cash flow of
$499 million;
- Completed or announced the repayment of US$396 million (approximately $499 million) of outstanding indebtedness in the
quarter;
- On March 7, 2022, MEG received
approval from the Toronto Stock Exchange ("TSX") for a normal
course issuer bid ("NCIB") which will allow MEG to buy back up to
10% of its public float, as defined by the TSX, over a one-year
period; and
- On March 16, 2022, MEG announced
the planned retirement of its Chief Financial Officer effective
September 1, 2022. MEG is conducting
an external search for its next Chief Financial Officer and will
provide an update upon successful completion of the search.
Blend Sales Pricing
MEG realized an average AWB blend sales price of US$83.55 per barrel during the first quarter of
2022 compared to US$65.42 per barrel
during the fourth quarter of 2021. The increase in average AWB
blend sales price quarter over quarter was primarily a result of
the average WTI price increasing by US$17.10 per barrel. MEG sold 58% of its sales
volumes at the U.S. Gulf Coast ("USGC") in the first quarter of
2022 compared to 48% during the fourth quarter of 2021.
The increase quarter over quarter is primarily the result of
apportionment on the Enbridge mainline being 10% in the first
quarter of 2022 compared to 21% in the fourth quarter of 2021.
Transportation and storage expense net of transportation revenue
averaged US$7.01 per barrel of AWB
blend sales in the first quarter of 2022 compared to US$6.33 per barrel of AWB blend sales in the
fourth quarter of 2021. The increase was primarily a result of more
barrels being sold in the USGC in the quarter compared to the
fourth quarter of 2021.
Operational Performance
Bitumen production averaged 101,128 bbls/d at a steam-oil ratio
("SOR") of 2.43 in the first quarter of 2022, compared to 100,698
bbls/d at a SOR of 2.42 in the fourth quarter of 2021. Increased
steam utilization and ongoing optimization and recompletion work
all contributed to strong field-wide production performance in the
first quarter of 2022 as well as the fourth quarter of 2021. Also
contributing to this strong performance was the Corporation's
commitment in the last half of 2021 to increase spending on
incremental well capital aimed at fully utilizing the 100,000
barrels per day processing capacity of the Christina Lake plant.
Non‐energy operating costs averaged $4.74 per barrel of bitumen sales in the first
quarter of 2022 compared to $4.56 per
barrel in the fourth quarter of 2021. Energy operating costs, net
of power revenue, averaged $4.24 per
barrel in the first quarter of 2022 compared to $3.64 per barrel in the fourth quarter of 2021.
This increase quarter over quarter resulted primarily from stronger
natural gas prices. Power revenue offset energy operating costs by
38% during the first quarter of 2022 compared to 41% in the fourth
quarter of 2021.
General & administrative expense ("G&A") was relatively
consistent quarter over quarter with $14
million, or $1.61 per barrel
of production, in the first quarter of 2022 compared to
$15 million, or $1.58 per barrel of production, in the fourth
quarter of 2021.
Funds Flow from Operating Activities, Adjusted Funds Flow and
Net Earnings (Loss)
The Corporation's cash operating netback averaged $70.21 per barrel in the first quarter of 2022
compared to $37.87 per barrel in the
fourth quarter of 2021. This increase in cash operating netback was
primarily driven by the increase in average bitumen realization due
to the higher WTI price in the first quarter of 2022. Cash
operating netback during the fourth quarter of 2021 was impacted by
realized commodity price risk management losses. The increased cash
operating netback was the main driver for the increase in both the
Corporation's funds flow from operating activities and adjusted
funds flow from $266 million in the
fourth quarter of 2021 to $587
million in the first quarter of 2022.
The Corporation recognized net earnings of $362 million in the first quarter of 2022
compared to $177 million in the
fourth quarter of 2021. This increase in net earnings was primarily
due to stronger global crude oil prices.
Capital Expenditures
Capital expenditures in the first quarter of 2022 totaled
$88 million compared to $106 million in the fourth quarter of 2021.
Capital invested in the quarter was primarily directed towards
sustaining and maintenance activities and included incremental
capital to allow the Corporation to fully utilize the Christina Lake central plant facility's oil
processing capacity of approximately 100,000 bbls/d, prior to any
impact from scheduled maintenance activity or outages.
Debt Repayment
On January 18, 2022, MEG completed
the redemption of US$225 million
(approximately $285 million) of MEG's
outstanding 6.50% senior secured second lien notes due January 2025 at a redemption price of 101.625%
plus accrued and unpaid interest to, but not including the
redemption date.
On March 3, 2022, the Corporation
issued a notice to redeem the remaining US$171 million (approximately $214 million) of MEG's outstanding 6.50% senior
secured second lien notes due January
2025 at a redemption price of 101.625%, plus accrued and
unpaid interest to, but not including the redemption date. The
redemption was completed on April 4,
2022. Inclusive of the redemption, MEG has now redeemed, in
full, the original US$750 million
aggregate principal amount of the senior secured second lien
notes.
Post this redemption, the Corporation will have repaid
approximately US$2 billion of
outstanding indebtedness since 2018 and remains committed to
continued debt reduction as a key component of its capital
allocation strategy in 2022.
Capital Allocation Strategy Update
On March 7, 2022, MEG received
approval from the TSX for a NCIB which will allow MEG to purchase
for cancellation, from time to time, as the Corporation considers
advisable, up to a maximum of 27,242,211 common shares of MEG. The
NCIB became effective March 10, 2022
and will terminate on March 9, 2023
or such earlier time as the NCIB is completed or terminated at the
option of MEG. MEG's net debt balance at the end of the first
quarter of 2022 was approximately US$1.72
billion. Once the Corporation's net debt balance reaches
US$1.7 billion MEG will allocate
approximately 25% of free cash flow generated to share buybacks
with the remaining free cash flow applied to ongoing debt reduction
until the Corporation's net debt balance reaches US$1.2 billion. In the current commodity price
environment MEG expects to reach its US$1.2
billion net debt target in the third quarter of 2022.
Once the US$1.2 billion net debt
target is reached the Corporation intends to increase the
percentage of free cash flow allocated to share buybacks to
approximately 50% with the remainder applied to further debt
reduction until the Corporation reaches its net debt floor of
US$600 million at which time 100% of
free cash flow will be returned to shareholders. At current
production levels, this net debt floor implies a net debt to EBITDA
multiple of approximately 1.0 times at a long-term US$50 per barrel WTI price. In the current
commodity price environment MEG expects to reach its net debt floor
in the second half of 2023.
Sustainability
On April 7, 2022 the Canadian
federal government announced an investment tax credit for carbon
capture, utilization and storage projects for industries across
Canada. MEG believes this announcement is a positive step in
the Oilsands Pathways to Net Zero ("Pathways") Alliance's efforts
to work collaboratively with governments to help Canada achieve its climate goals and ensure
our country can be the world's preferred supplier of
responsibly-produced oil. The Pathways Alliance anticipates that
this tax credit, together with support from the Alberta government, will help advance the
Pathways Alliance unprecedented plan to achieve meaningful
emissions reductions by 2030 and ultimately the goal of net zero
emissions from oil sands operations by 2050.
Conference Call
A conference call will be held to review MEG's first quarter of
2022 operating and financial results at 6:30
a.m. Mountain Time (8:30 a.m. Eastern
Time) on Tuesday May 3, 2022.
To participate, please dial the North American toll-free number
1-888-390-0546, or the international call number
1-416-764-8688.
A recording of the call will be available by 12 noon Mountain Time (2 p.m.
Eastern Time) on the same day at
www.megenergy.com/investors/presentations-and-events.
Operational and Financial Highlights
|
2022
|
2021
|
2020
|
($millions, except
as indicated)
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Bitumen production -
bbls/d
|
101,128
|
100,698
|
91,506
|
91,803
|
90,842
|
91,030
|
71,516
|
75,687
|
|
|
|
|
|
|
|
|
|
Steam-oil
ratio
|
2.43
|
2.42
|
2.56
|
2.39
|
2.37
|
2.31
|
2.36
|
2.32
|
|
|
|
|
|
|
|
|
|
Bitumen sales -
bbls/d
|
100,186
|
98,894
|
92,251
|
89,980
|
87,298
|
95,731
|
67,569
|
70,397
|
|
|
|
|
|
|
|
|
|
Bitumen
realization(1) - $/bbl
|
97.28
|
71.06
|
64.91
|
60.09
|
52.34
|
38.64
|
39.68
|
10.18
|
|
|
|
|
|
|
|
|
|
Operating expenses net
of power revenue(1) - $/bbl
|
8.98
|
8.20
|
7.17
|
5.54
|
5.25
|
6.98
|
6.05
|
6.14
|
|
|
|
|
|
|
|
|
|
Non-energy operating
costs(2) - $/bbl
|
4.74
|
4.56
|
4.46
|
3.84
|
4.05
|
4.70
|
3.96
|
4.09
|
|
|
|
|
|
|
|
|
|
Cash operating
netback(1) - $/bbl
|
70.21
|
37.87
|
37.31
|
31.30
|
26.03
|
18.66
|
16.58
|
25.84
|
|
|
|
|
|
|
|
|
|
General &
administrative expense -
$/bbl of bitumen production
volumes
|
1.61
|
1.58
|
1.72
|
1.56
|
1.77
|
1.65
|
1.50
|
1.29
|
|
|
|
|
|
|
|
|
|
Funds flow from
operating activities
|
587
|
260
|
212
|
160
|
121
|
81
|
19
|
69
|
Adjusted funds
flow(3)
|
587
|
266
|
239
|
166
|
127
|
84
|
26
|
89
|
Per
share, diluted
|
1.87
|
0.85
|
0.77
|
0.53
|
0.41
|
0.27
|
0.09
|
0.29
|
|
|
|
|
|
|
|
|
|
Revenues
|
1,531
|
1,307
|
1,091
|
1,009
|
914
|
786
|
533
|
307
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
362
|
177
|
54
|
68
|
(17)
|
16
|
(9)
|
(80)
|
Per share,
diluted
|
1.15
|
0.57
|
0.17
|
0.22
|
(0.06)
|
0.05
|
(0.03)
|
(0.26)
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
88
|
106
|
84
|
71
|
70
|
40
|
35
|
20
|
|
|
|
|
|
|
|
|
|
Net debt(3)
- C$
|
2,150
|
2,401
|
2,559
|
2,661
|
2,798
|
2,798
|
2,981
|
2,976
|
Net debt(3)
- US$
|
1,722
|
1,897
|
2,007
|
2,145
|
2,226
|
2,194
|
2,237
|
2,186
|
(1)
Non-GAAP financial measure - please refer to the Advisory
section of this news release.
|
|
(2)
Supplementary financial measure - please refer to the Advisory
section of this news release.
|
(3)
Capital management measure - please refer to the Advisory
section of this news release.
|
ADVISORY
Basis of Presentation
MEG prepares its financial statements in accordance with
International Financial Reporting Standards ("IFRS") and presents
financial results in Canadian dollars ($ or C$), which is the
Corporation's functional currency.
Non-GAAP and Other Financial Measures
Certain financial measures in this news release are non-GAAP
financial measures or ratios, supplementary financial measures and
capital management measures. These measures are not defined by IFRS
and, therefore, may not be comparable to similar measures provided
by other companies. These non-GAAP and other financial measures
should not be considered in isolation or as an alternative for
measures of performance prepared in accordance with IFRS.
Adjusted Funds Flow and Free Cash Flow
Adjusted funds flow and free cash flow are capital management
measures and are defined in the Corporation's annual financial
statements. Adjusted funds flow and free cash flow are presented to
assist management and investors in analyzing operating
performance and cash flow generating ability. Funds flow from
operating activities is an IFRS measure in the Corporation's
consolidated statement of cash flow. Adjusted funds flow is
calculated as funds flow from operating activities excluding items
not considered part of ordinary continuing operating results. By
excluding changes in non-recurring adjustments from cash flows, the
adjusted funds flow measure provides a meaningful metric for
management and investors by establishing a clear link between the
Corporation's cash flows and the cash operating netback. Free cash
flow is presented to assist management and investors in analyzing
performance by the Corporation as a measure of financial liquidity
and the capacity of the business to repay debt and return capital
to shareholders. Free cash flow is calculated as adjusted funds
flow less capital expenditures.
The following table reconciles funds flow from operating
activities to adjusted funds flow to free cash flow:
|
Three months ended
March 31
|
($millions)
|
2022
|
2021
|
Funds flow from
operating activities
|
$
587
|
$
121
|
Adjustments:
|
|
|
Payments
on onerous contract
|
—
|
6
|
Adjusted funds
flow
|
587
|
127
|
Capital
expenditures
|
(88)
|
(70)
|
Free cash
flow
|
$
499
|
$
57
|
Net Debt
Net debt is a capital management measure and is defined in the
Corporation's annual financial statements. Net debt is an important
measure used by management to analyze leverage and liquidity. Net
debt is calculated as long-term debt plus current portion of
long-term debt less cash and cash equivalents.
The following table reconciles the Corporation's current and
long-term debt to net debt:
As at
|
March 31,
2022
|
December 31,
2021
|
Long-term
debt
|
$
2,226
|
$
2,477
|
Current portion of
long-term debt
|
214
|
285
|
Cash and cash
equivalents
|
(290)
|
(361)
|
Net debt -
C$
|
$
2,150
|
$
2,401
|
Net debt -
US$
|
$
1,722
|
$
1,897
|
Cash Operating Netback
Cash operating netback is a non-GAAP financial measure, or ratio
when expressed on a per barrel basis. Its terms are not defined by
IFRS and, therefore, may not be comparable to similar measures
provided by other companies. This non-GAAP financial measure should
not be considered in isolation or as an alternative for measures of
performance prepared in accordance with IFRS.
Cash operating netback is a financial measure widely used in the
oil and gas industry as a supplemental measure of a company's
efficiency and its ability to generate cash flow for debt
repayment, capital expenditures, or other uses. The per barrel
calculation of cash operating netback is based on bitumen sales
volume.
Revenues, is an IFRS measure in the Corporation's consolidated
statement of earnings (loss) and comprehensive income (loss), which
is the most directly comparable primary financial statement measure
to cash operating netback. A reconciliation from revenues to cash
operating netback has been provided below:
|
Three months ended
March 31
|
($millions)
|
2022
|
2021
|
Revenues
|
$
1,531
|
$
914
|
Diluent
expense
|
(517)
|
(296)
|
Transportation and
storage expense
|
(118)
|
(93)
|
Purchased
product
|
(160)
|
(185)
|
Operating
expenses
|
(104)
|
(66)
|
Cash operating netback
before realized commodity risk management
|
632
|
274
|
Realized gain (loss) on
commodity risk management
|
1
|
(69)
|
Cash operating
netback
|
$
633
|
$
205
|
Blend Sales and Bitumen Realization
Blend sales and bitumen realization are non-GAAP financial
measures, or ratios when expressed on a per barrel basis, and are
used as a measure of the Corporation's marketing strategy by
isolating petroleum revenue and costs associated with its produced
and purchased products and excludes royalties. Their terms are not
defined by IFRS and, therefore, may not be comparable to similar
measures provided by other companies. These non-GAAP financial
measures should not be considered in isolation or as an alternative
for measures of performance prepared in accordance with IFRS. Blend
sales per barrel are based on blend sales volumes and bitumen
realization per barrel is based on bitumen sales volumes.
Petroleum revenue, net of royalties, is an IFRS measure in the
Corporation's consolidated statement of earnings (loss) and
comprehensive income (loss), which is the most directly comparable
primary financial statement measure to blend sales and bitumen
realization. A reconciliation from petroleum revenue, net of
royalties to blend sales and bitumen realization has been provided
below:
|
Three months ended
March 31
|
|
2022
|
2021
|
($millions, except
as indicated)
|
|
$/bbl
|
|
$/bbl
|
Petroleum revenue, net
of royalties
|
$
1,507
|
|
$
886
|
|
Royalties
|
47
|
|
7
|
|
Petroleum
revenue
|
1,554
|
|
893
|
|
Purchased
product
|
(160)
|
|
(185)
|
|
Blend sales
|
1,394
|
$
105.79
|
708
|
$
61.28
|
Diluent
expense
|
(517)
|
(8.51)
|
(296)
|
(8.94)
|
Bitumen
realization
|
$
877
|
$
97.28
|
$
412
|
$
52.34
|
Transportation and Storage Expense net of Transportation
Revenue
Transportation and storage expense net of transportation revenue
is a non-GAAP financial measure, or ratio when expressed on a per
barrel basis. Its terms are not defined by IFRS and, therefore, may
not be comparable to similar measures provided by other companies.
This non-GAAP financial measure should not be considered in
isolation or as an alternative for measures of performance prepared
in accordance with IFRS. Per barrel amounts are based on bitumen
sales volumes.
It is used as a measure of the Corporation's marketing strategy
by focusing on maximizing the realized AWB sales price after
transportation and storage expense by utilizing its network of
pipeline and storage facilities to optimize market access. Per
barrel amounts are based on bitumen sales volumes.
Transportation and storage expense, is an IFRS measure in the
Corporation's consolidated statement of earnings (loss) and
comprehensive income (loss).
Other revenue, is an IFRS measure in the Corporation's
consolidated statement of earnings (loss) and comprehensive income
(loss), which is the most directly comparable primary financial
statement measure to transportation revenue. A reconciliation from
other revenue to transportation revenue has been provided
below.
|
Three months ended
March 31
|
|
2022
|
2021
|
($millions, except
as indicated)
|
|
$/bbl
|
|
$/bbl
|
|
|
|
|
|
Transportation and
storage expense
|
$
(118)
|
$
(13.12)
|
$
(93)
|
$
(11.83)
|
|
|
|
|
|
Other
revenue
|
$
24
|
|
$
28
|
|
Less power
revenue
|
(23)
|
|
(25)
|
|
Transportation
revenue
|
$
1
|
$
0.15
|
$
3
|
$
0.42
|
|
|
|
|
|
Transportation and
storage expense net of transportation revenue
|
$
(117)
|
$
(12.97)
|
$
(90)
|
$
(11.41)
|
Operating Expenses net of Power Revenue
Operating expenses net of power revenue is a non-GAAP financial
measure, or ratio when expressed on a per barrel basis. Its terms
are not defined by IFRS and, therefore, may not be comparable to
similar measures provided by other companies. This non-GAAP
financial measure should not be considered in isolation or as an
alternative for measures of performance prepared in accordance with
IFRS. Per barrel amounts are based on bitumen sales volumes.
It is used as a measure of the Corporation's cost to operate its
facilities at the Christina Lake
project after factoring in the benefits from selling excess power
to offset energy costs.
Non-energy operating costs and energy operating costs are
supplementary financial measures as they represent portions of
operating expenses. Non-energy operating costs relate to
production-related operating activities and energy operating costs
reflect the cost of natural gas used as fuel to generate steam and
power. Per barrel amounts are based on bitumen sales volumes.
Operating expenses is an IFRS measure in the Corporation's
consolidated statement of earnings (loss) and comprehensive income
(loss). Other revenue, is an IFRS measure in the Corporation's
consolidated statement of earnings (loss) and comprehensive income
(loss), which is the most directly comparable primary financial
statement measure to power revenue. A reconciliation from other
revenue to power revenue has been provided below.
|
Three months ended
March 31
|
|
2022
|
2021
|
($millions, except
as indicated)
|
|
$/bbl
|
|
$/bbl
|
Non-energy operating
costs
|
$
(43)
|
$
(4.74)
|
$
(34)
|
$
(4.05)
|
Energy operating
costs
|
(61)
|
(6.80)
|
(32)
|
(4.34)
|
Operating
expenses
|
$
(104)
|
$
(11.54)
|
$
(66)
|
$
(8.39)
|
|
|
|
|
|
Other
revenue
|
$
24
|
|
$
28
|
|
Less transportation
revenue
|
(1)
|
|
(3)
|
|
Power
revenue
|
$
23
|
$
2.56
|
$
25
|
$
3.14
|
|
|
|
|
|
Operating expenses net
of power revenue
|
$
(81)
|
$
(8.98)
|
$
(41)
|
$
(5.25)
|
Forward-Looking Information
Certain statements contained in this news release may constitute
forward-looking statements within the meaning of applicable
Canadian securities laws. These statements relate to future events
or MEG's future performance. All statements other than statements
of historical fact may be forward-looking statements. The use of
any of the words "anticipate", "continue", "estimate", "expect",
"may", "will", "project", "should", "believe", "plan", "intend",
"target", "potential" and similar expressions are intended to
identify forward-looking statements.
Forward-looking statements are often, but not always, identified
by such words. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements. In particular, and without limiting the
foregoing, this press release contains forward looking statements
with respect to: the Corporation's expectation of accelerating debt
reduction and initiating its share buyback program in the second
quarter of 2022; the Corporation's continued focus on debt
reduction as a key component of its capital allocation strategy in
2022; statements regarding incremental well capital required to
allow the Corporation to fully utilize the Christina Lake central plant facility's oil
processing capacity of approximately 100,000 bbls/d; the
Corporation's expectation of reaching its near-term net debt target
of US$1.7 billion in the second
quarter of 2022 and thereafter allocating 25% of free cash flow to
share buybacks with the remaining cash flow applied to ongoing debt
reduction; the Corporation's expectation of reaching its
debt-target of US$1.2 billion in the
third quarter of 2022 and thereafter allocating 50% of free cash
flow to share buybacks with the remainder applied to further debt
reduction until the Corporation reaches its net debt floor of
US$600 million at which time 100% of
free cash flow will be returned to shareholders; the Corporation's
expectation that net debt of US$600
million implies a net debt to EBITDA multiple of 1.0 times
at a long-term US$50 per barrel WTI
price; the Corporation's expectation that it will reach its net
debt floor of US$600 in the second
half of 2023 and the Corporation's expectation that the announced
federal investment tax credit, together with support from the
Alberta government, will help
advance the Oilsands Pathways to Net Zero Alliance's plan to
achieve meaningful emissions reductions by 2023 and net zero
emissions from oil sands operations by 2050.
Forward-looking information contained in this press release is
based on management's expectations and assumptions regarding, among
other things: future crude oil, bitumen blend, natural gas,
electricity, condensate and other diluent prices, differentials,
the level of apportionment on the Enbridge mainline system, foreign
exchange rates and interest rates; the recoverability of MEG's
reserves and contingent resources; MEG's ability to produce and
market production of bitumen blend successfully to customers;
future growth, results of operations and production levels; future
capital and other expenditures; revenues, expenses and cash flow;
operating costs; reliability; continued liquidity and runway to
sustain operations through a prolonged market downturn; MEG's
ability to reduce or increase production to desired levels,
including without negative impacts to its assets; anticipated
reductions in operating costs as a result of optimization and
scalability of certain operations; anticipated sources of funding
for operations and capital investments; plans for and results of
drilling activity; the regulatory framework governing royalties,
land use, taxes and environmental matters, including the timing and
level of government production curtailment and federal and
provincial climate change policies, in which MEG conducts and will
conduct its business; the availability of government support to
industry to assist in the achievement of net zero GHG emissions by
2050; the impact of MEG's response to the COVID-19 global pandemic;
and business prospects and opportunities. By its nature, such
forward-looking information involves significant known and unknown
risks and uncertainties, which could cause actual results to differ
materially from those anticipated.
These risks and uncertainties include, but are not limited to,
risks and uncertainties related to: the oil and gas industry, for
example, the securing of adequate access to markets and
transportation infrastructure (including pipelines and rail) and
the commitments therein; the availability of capacity on the
electricity transmission grid; the uncertainty of reserve and
resource estimates; the uncertainty of estimates and projections
relating to production, costs and revenues; health, safety and
environmental risks, including public health crises, such as the
COVID-19 pandemic, and any related actions taken by governments and
businesses; legislative and regulatory changes to, amongst other
things, tax, land use, royalty and environmental laws and
production curtailment; the cost of compliance with current and
future environmental laws, including climate change laws; risks
relating to increased activism and public opposition to fossil
fuels and oil sands; the inability to access government support to
industry to assist in the achievement of net zero GHG emissions by
2050; assumptions regarding and the volatility of commodity prices,
interest rates and foreign exchange rates; commodity price,
interest rate and foreign exchange rate swap contracts and/or
derivative financial instruments that MEG may enter into from time
to time to manage its risk related to such prices and rates; timing
of completion, commissioning, and start-up, of MEG's turnarounds;
the operational risks and delays in the development, exploration,
production, and the capacities and performance associated with
MEG's projects; MEG's ability to reduce or increase production to
desired levels, including without negative impacts to its assets;
MEG's ability to finance sustaining capital expenditures; MEG's
ability to maintain sufficient liquidity to sustain operations
through a prolonged market downturn; changes in credit ratings
applicable to MEG or any of its securities; MEG's response to the
COVID-19 global pandemic; the severity and duration of the COVID-19
pandemic; the potential for a temporary suspension of operations
impacted by an outbreak of COVID-19; actions taken by OPEC+ in
relation to supply management; the impact of the Russian invasion
of Ukraine and associated
sanctions on commodity prices; the availability and cost of labour
and goods and services required in the Corporation's operations,
including inflationary pressures; supply chain issues including
transportation delays; the cost and availability of equipment
necessary to our operations; and changes in general economic,
market and business conditions.
Although MEG believes that the assumptions used in such
forward-looking information are reasonable, there can be no
assurance that such assumptions will be correct. Accordingly,
readers are cautioned that the actual results achieved may vary
from the forward-looking information provided herein and that the
variations may be material. Readers are also cautioned that the
foregoing list of assumptions, risks and factors is not
exhaustive.
Further information regarding the assumptions and risks inherent
in the making of forward-looking statements can be found in MEG's
most recently filed Annual Information Form ("AIF"), along with
MEG's other public disclosure documents. Copies of the AIF and
MEG's other public disclosure documents are available through the
Company's website at www.megenergy.com/investors and through the
SEDAR website at www.sedar.com.
The forward-looking information included in this news release is
expressly qualified in its entirety by the foregoing cautionary
statements. Unless otherwise stated, the forward-looking
information included in this news release is made as of the date of
this news release and MEG assumes no obligation to update or revise
any forward-looking information to reflect new events or
circumstances, except as required by law.
About MEG
MEG is an energy company focused on sustainable in situ
thermal oil production in the southern Athabasca oil region of Alberta, Canada. MEG is actively developing
innovative enhanced oil recovery projects that utilize
steam-assisted gravity drainage extraction methods to improve the
responsible economic recovery of oil as well as lower carbon
emissions. MEG transports and sells thermal oil (AWB) to customers
throughout North America and
internationally. MEG's common shares are listed on the Toronto
Stock Exchange under the symbol "MEG" (TSX: MEG).
Learn more at: www.megenergy.com
Investor Relations
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Media Relations
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SOURCE MEG Energy Corp.