MEG Energy Announces Preliminary 2019 Fourth Quarter and Full-Year Financial and Operating Data

Source Press Release
Company MEG Energy Corp. 
Tags Hedging, Capital Spending, Financial & Operating Data, Strategy - Corporate
Date January 16, 2020

MEG Energy Corp. ("MEG" or the "Company") (TSX: MEG) announced today its preliminary estimates of expected ranges of certain financial and operating data for the three months and year ended December 31, 2019.

The table below presents management's preliminary estimates, based on the information and data currently available, of expected ranges of certain financial and operating data for the three months and year ended December 31, 2019. The line items in the table for the three months ended December 31, 2019 are estimates and are subject to finalization. Based on estimated results for the fourth quarter of 2019, MEG anticipates achieving results in line with its previously disclosed 2019 guidance.

     
  Range of Expected Estimates  Actual Results 
  Year ended  Three months ended  Three months ended 
  Dec 31, 2019  Dec 31, 2019  Sep 30,
2019 
Jun 30,
2019 
Mar 31,
2019 
  Low  High  Low  High       
Production (bbls/d)  92,750  93,250  94,000  95,000  93,278  97,288  87,133 
Non-Energy Operating Cost (C$/bbl)  $4.61  $4.65  $4.43  $4.61  $4.22  $4.53  $5.22 
General and Administrative Expenses1 (C$/bbl)  $1.98  $2.00  $2.20  $2.25  $1.66  $1.81  $2.27 
Capital Expenditures (C$mm)  $195  $200  $70  $75  $40  $32  $53 
Cash and Cash Equivalents (C$mm)  $203  $209  $203  $209  $154  $399  $154 
 
1.  $ per barrel based on production. 

Update to MEG 2020 Commodity Price Risk Management Positions

In the fourth quarter of 2019 and the first few days of 2020, MEG entered into additional derivative financial contracts to manage commodity price risk. MEG's current commodity price risk management contracts, including those entered into in the fourth quarter of 2019 and the first few days of 2020, are summarized below:

   
  Forecast Period 
  Q1 2020  Q2 2020  Q3 2020  Q4 2020  2020 
WTI Hedges           
WTI Fixed Price Hedges           
Volume (bbls/d)  72,899  62,395  19,043  16,887  42,806 
Weighted average fixed WTI price (US$/bbl)  $58.67  $59.68  $59.38  $59.36  $59.19 
Enhanced WTI Fixed Price Hedges with Sold Put Options           
Volume (bbls/d)  16,870  24,500  10,342 
Weighted average fixed WTI price (US$/bbl) /
Put option strike price1 (US$/bbl) 
$59.38 /
$52.00 
$59.11 / $52.00  $59.22 /
$52.00 
Total WTI hedge volume (bbls/d)  72,889  62,395  35,913  41,387  53,148 
           
WTI:WCS Differential Hedges           
Volume2 (bbls/d)  30,150  30,150  30,150  32,150  30,650 
Weighted average fixed WTI:WCS differential at
Edmonton (US$/bbl) 
($20.14)  ($20.14)  ($20.14)  ($20.01)  ($20.10) 
           
Condensate Hedges           
Volume3 (bbls/d)  19,149  23,298  23,208  23,208  22,216 
Average % of WTI landed in Edmonton (%)  102%  101%  100%  100%  101% 
 
1. Includes fixed price swap and sold put option. 
2. 2020 includes approximately 13,200 bbls/d of physical forward rail blend sales at a fixed WTI:AWB differential. 
3. Q4 2019 and 2020 include approximately 13,300 bbls/d and 7,200 bbls/d (annual average) of physical forward condensate purchases, respectively. Where applicable, the average % of WTI landed in Edmonton includes estimated net transportation costs. 
Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd