MEG Energy

MEG Energy Corp.

Company type	Public
Traded as	TSX: MEG
Industry	Oil and gas industry
Founded	1999 by William J McCaffery as McCaffery Energy Group Inc
Headquarters	Calgary, Alberta, Canada
Key people	Derek W. Evans chair, pres, ceo Dale Hohm cfo
Products	Petroleum Electricity
Production output	93.082 thousand barrels of oil equivalent (569,460 GJ) per day(2019)
Revenue	$3,931 million (2019)
Net income	C($72) million (201943%
Total assets	C$7,866 million (2019)6%
Total equity	$3,853 million (2019).85%
Number of employees	485 (June 2013)
Website	www.megenergy.com

MEG Energy is a pure play Canadian oil sands producer engaged in exploration in Northern Alberta. All of its oil reserves are more than 1,000 feet (300 m) below the surface, so they depend on steam-assisted gravity drainage and associated technology to produce (heavy bitumen must first be brought to the surface). The company's main thermal project is Christina Lake. 85-megawatt cogeneration plants are used to produce the steam used in SAGD which is required to bring bitumen to the surface. The excess heat and electricity produced at its plants is then sold to Alberta's power grid. Its proven reserves have been independently pegged at 1.7 billion barrels (270×10^⁶ m³) and probable reserves (also called recoverable resource) 3.7 billion barrels (590×10^⁶ m³) (by engineering firm GLJ Petroleum Consultants Ltd [1]); That's significant considering only 300 billion barrels (48×10^⁹ m³) of the 1.6 trillion barrels (250×10^⁹ m³) of bitumen in Alberta is considered recoverable under current technology. The value of those reserves is over $19.8 billion. CNOOC has a minority 16.69% interest in MEG Energy.

Within nine months of going public it reached large cap company status after a small cap ipo. As recently as 2007 it was a junior oil company.

History

MEG Energy was founded in 1999 as McCaffrey Energy Group Inc by CEO and President Bill McCaffrey, Director and Corporate Secretary David Wizinsky and former Director Steve Turner. It went public with an IPO of $660 million in August 2010. At the time it was considered a $9.7 billion equity cap company. The Christina Lake project first received approval from the government in 2008, it was one of six oil megaprojects in Canada that year.

April 14, 2005 - CNOOC Ltd, China's 3rd biggest oil and natural gas company purchased a 16.69% interest in MEG Energy for $C150 million (13.6 million common shares).

Production

In 2012 bitumen production averaged 28,773 bpd, +2,168 bpd versus the previous year. By the second quarter of 2013 average production had reached 32,144 bpd, +1,715 bdp. Also up is the realized oil price per barrel: $53.98 vs $45.59.

Christina Lake

MEG's interest in Christina Lake includes 80 blocks/sections. It is a three phase project that was operating at 12.4% (26,000 bbls/d) of total expected production capacity at the end of 2010. Since 2009 the first two phases were producing, albeit at a low level because construction of phase 2B (design capacity 40% larger than phase 1 and 2A combined) didn't begin until 2011. When combined with phase three, total production will exceed 200,000 barrels per day (32,000 m³/d) with 2020 production estimated at 260,000 bbls/d. The pipeline system used to carry bitumen out and diluent in is the 343-kilometre (213 mi) Access Pipeline which MEG co owns with Devon ARL Corp.

Phase 3 - the most important part of the project is currently awaiting regulatory approval (May 2011). Estimated production is 150,000 barrels per day (24,000 m³/d).

The company operates the Christina Lake Aerodrome.

Cenovus Energy also produces at Christina Lake.

Surmont

The company's leases cover over 20,000 acres (8,100 ha) of land. The leases give MEG access to over 650 million barrels (103×10^⁶ m³) of contingent resources. Production isn't expected to begin until 2018.

Takeover Bid

In October 2018, Husky Energy put it in a hostile takeover bid to acquire MEG Energy Corp.

Initial production process

Initially two horizontally parallel wells are created. Oil is directed to the lowest well after injecting steam into the one above it in order to heat the area so that the liquid in the area flows downwards (allows for the separation of oil from sand). The steam used comes from MEG's cogeneration plants.