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


All financial figures are in Canadian dollars ($ or C$) and all references to barrels are per barrel of bitumen sales unless otherwise noted

CALGARY – 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.

About MEG

MEG is an oil company focused on sustainable in situ thermal oil development and production in the southern Athabasca region of Alberta, Canada. MEG is actively developing enhanced oil recovery projects that utilize steam-assisted gravity drainage extraction methods to improve the economic recovery of oil as well as lower carbon emissions. MEG transports and sells Access Western Blend to refiners throughout North America and internationally. MEG’s common shares are listed on the Toronto Stock Exchange under the symbol “MEG”.



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