MEG to double down on crude-by-rail shipments
Oil sands producer MEG Energy says it has doubled its crude-by-rail shipments and will double them again to maximize prices in view of insufficient pipeline export capacity from Western Canada.
The Calgary-based company told Canadian Press that steep discounts for the bitumen it produces at its northern Alberta steam-driven project resulted in a net loss of $199 million or 67 cents per share in the fourth quarter of 2018.
That compares with a net loss of $24 million or eight cents per share in the year-earlier period.
MEG says it had an operating loss of $118 million compared with an operating profit of $44 million as its average realized price fell to $13.90 per barrel in the fourth quarter from $48.30 in the same period of 2017.
The company says its rail volumes doubled to 14,700 barrels per day in the last three months of 2018 from the previous quarter.
It says it expects crude by rail to average 20,000 bpd in the current quarter and increase to 30,000 bpd by next fall.
“Since January, in conjunction with the provincially mandated (production) curtailments for the industry and the increase in overall crude-by-rail exports, commodity prices have improved significantly, and our barrels have returned to profitability,” said CEO Derek Evans in a news release.