MEG unveils 2020 capital investment plan
MEG Energy Corp. today announced its 2020 capital investment plan and operational guidance, with an eye to continuing debt reduction.
- A capital budget of $250 million, to be fully funded with a portion of expected 2020 adjusted funds flow;
- 2020 production guidance of 94,000 to 97,000 bpd, which takes into account a planned major turnaround with an anticipated 2,500 bpd impact on production for the year;
- Non-energy operating cost and G&A cost guidance of $4.50 to $4.90 per barrel and $1.75 to $1.85 per barrel, respectively; and
- Year-to-date debt repayment of approximately $500 million. Management remains committed to applying all free cash flow above its 2020 capital investment plan to further debt reduction.
MEG 2020 production guidance is based on MEG entering and exiting the year with productive capacity of approximately 96,000 and 100,000 bpd respectively, and includes the impact of a major 25-day turnaround planned for September 2020, which is expected to impact annual production levels by approximately 2,500 bpd.
The January 2020 productive capacity level of 96,000 bpd, which is approximately 3,500 bpd over MEG’s current curtailment limit, reflects management’s decision in the second quarter of 2019 to moderate the corporation’s productive capacity in response to the uncertainty at that time as to how long government mandated production curtailment, which came into effect January 1, 2019, would stay in effect.
After the Alberta Government’s Special Production Allowance program was announced on October 31 for curtailed producers, MEG began ramping back up its productive capacity and expects to reach full 100,000 bpd capacity post plant turnaround.