MEG Energy records bigger Q2 loss on lower oil prices, reduced bitumen output
Oilsands producer MEG Energy Corp. is reporting a higher second-quarter net loss on voluntarily curtailed bitumen production and lower oil prices.
The Calgary-based company says it had a net loss of $ 80 million or 26 cents per share in the three months ended June 30 on revenue of $ 307 million, versus a net loss of $ 64 million or 21 cents per share on revenue of $ 1.06 billion in the second quarter of 2019.
Analysts had expected a loss of $ 34 million or nine cents per share, according to financial markets data firm Refinitiv.
MEG, which produces bitumen from steam-activated wells in northeastern Alberta, reported production of 75,700 barrels per day, down from 91,560 in the first quarter and 97,300 bpd in the second quarter of 2019.
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Its realized price per barrel was C$ 10.18, down from C$ 19.45 in the first quarter and C$ 62.23 in the year-earlier period.
In response to low oil prices in the second quarter, MEG cut its 2020 capital budget to $ 150 million from the original guidance of $ 250 million and rolled back salaries and benefits across the company.
“The second quarter was characterized by extreme negative movements in commodity prices coupled with unprecedented uncertainty regarding near-term crude oil supply and demand balances due to COVID-19,” said CEO Derek Evans in a statement.
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