MEG CEO dismisses takeover speculation after Q3 loss
The CEO of MEG Energy Corp. says it’s business as usual for the oil sands producer despite speculation it could be a takeover target in the wake of the $3.8-billion buyout of Husky Energy Inc. announced by Cenovus Energy Inc. on Sunday.
Derek Evans says the Calgary-based company doesn’t consider itself a “driver” in the consolidation business and is concentrating on continuing to operate its business as the largest remaining pure-play bitumen producer in the oilsands.
Analysts Dennis Fong of CIBC and Phil Skolnick of Eight Capital, however, said in separate reports they still consider MEG the most logical target if consolidation continues in the oilsands.
Skolnick points out, however, that there’s no pressure on MEG to do a deal because it is well supplied with cash and its earliest maturing long-term debt doesn’t come due until March 2024.
The company posted its third consecutive quarterly net loss of $9 million or three cents per share for the three months ended Sept. 30, compared with a $24 million profit a year earlier.
Revenue decreased to $533 million from $958 million in the third quarter of 2019 on lower prices and lower bitumen production as it completed a 75-day maintenance shutdown in August.
MEG’s revenue and net loss beat analyst expectations of a loss of 16 cents per share on $490 million of revenue, according to financial markets data firm Refinitiv.