MEG Energy posts larger-than-expected loss despite bitumen price increase

0 1


A powerful rebound in western Canadian oil markets helped ship the best realized bitumen costs in 4 years for oilsands producer MEG Vitality Corp. within the first quarter, it stated Tuesday.

Income rose to $919 million, up 27 per cent from $721 million within the year-earlier quarter, beating analyst expectations of $651 million as reported by Thomson Reuters Eikon.

The low cost paid for Western Canadian Choose bitumen mix crude in contrast with U.S. benchmark West Texas Intermediate fell after the Alberta authorities imposed manufacturing quotas in January to liberate pipeline area.

“It goes with out saying one of the vital important impacts on our robust Q1 outcomes was the dramatic narrowing of the WCS differential from US$39 to US$12 a barrel from This fall 2018 to Q1 2019,” stated MEG CEO Derek Evans on a convention name.

He stated decrease prices for the sunshine petroleum used to dilute the bitumen for transportation additionally helped enhance returns, as realized costs for MEG’s blended bitumen rose 56 per cent versus the fourth quarter of 2018.

The corporate set a $200-million 2019 funds in January after rival Husky Vitality Inc. dropped a hostile takeover bid as a result of it didn’t win the wanted two-thirds assist from MEG shareholders.


READ MORE:
Oilsands producer MEG Vitality posts $199M loss, vows to ship extra oil by rail

Watch beneath: Some latest movies from World Information’ protection of the oil business in Canada.

MEG stated Tuesday it lower an unspecified variety of workers in February to align with decrease ranges of capital spending and to optimize effectivity.

In an electronic mail, vice-president Tara McCool wouldn’t say what number of workers had been let go however stated total numbers at MEG are down 52 per cent since 2014. Company data present MEG had about 700 workers on the finish of that 12 months.

A $75-million undertaking to develop MEG’s Christina Lake undertaking capability to 113,000 barrels per day from 100,000 bpd stays on maintain till there’s readability on curtailments and oil export choices, stated Evans on the decision.

MEG bitumen manufacturing was 87,100 bpd within the first quarter, down from 93,200 bpd a 12 months earlier, because of the Alberta curtailments.

Nevertheless, it stated gross sales averaged 89,800 bpd because it shipped saved barrels to make the most of increased costs, a transfer analysts stated helped MEG beat their expectations for money movement within the quarter.

MEG intends to ramp up its crude-by-rail shipments to 30,000 bpd by the third quarter regardless of posting excessive supply prices of US$23 per barrel for the 18,650 bpd it moved within the first quarter, Evans stated.

Rail prices from Edmonton to the U.S. Gulf Coast are anticipated to ease to between US$17 and $19 later this 12 months, he stated, including bitumen is successful “premium” pricing there due to falling heavy oil imports from Venezuela and Mexico.

MEG reported 31 per cent of its oil was bought within the Gulf Coast within the first quarter, the place it realized a US$three premium to barrels bought within the Edmonton market, internet of rail and pipeline transportation prices.

MEG reported a internet lack of $48 million or 16 cents per share within the three months ended March 31, in contrast with a revenue of $141 million or 47 cents in the identical interval a 12 months in the past.


READ MORE:
Husky Vitality walks away from its hostile takeover bid for MEG Vitality

The loss included a internet overseas alternate acquire of $78 million and a loss on hedging contracts of $230 million.

Its internet earnings within the first quarter of 2018 included a $318-million acquire on the sale of its half curiosity within the Entry Pipeline in northern Alberta, a internet overseas alternate lack of $108 million, and a loss on hedging of $76 million.

 

window.fbAsyncInit = function() {
var currentCommentID = 0;
FB.Event.subscribe(‘comment.create’, function(response) );
};

(function(d, s, id)
var js, fjs = d.getElementsByTagName(s)[0];
if (d.getElementById(id)) return;
js = d.createElement(s); js.id = id;
js.src = “http://connect.facebook.net/en_US/sdk.js#xfbml=1&appId=318812448281278&version=v2.9”;
js.async = true;
fjs.parentNode.insertBefore(js, fjs);
(document, ‘script’, ‘facebook-jssdk’));



Supply hyperlink – https://globalnews.ca/information/5250122/meg-energy-posts-loss-bitumen-increase/

You might also like