MEG Vitality meets mortgage goal regardless of huge worth low cost on its oil

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Regardless of challenges of broad discounting of oil costs

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Derek Evans, chief govt of MEG Vitality Corp., mentioned a consortium of oil firms proposing to construct a $16.5 billion carbon seize and storage community in northern Alberta is transferring ahead “as shortly as potential” on the megaproject.

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Throughout a convention name with traders on Thursday, Evans pointed to bulletins made by Ottawa within the fall financial replace and federal efforts to advance inexperienced expertise incentives geared toward leveling the taking part in area with jurisdictions just like the US. Praised the federal government – particularly by a proposed Canada Development Fund that Evans mentioned might present traders with higher certainty in main carbon-capture initiatives.

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“Now we have a objective of 2030 to get this pipeline up and working,” Evans mentioned. “I’ll let you know, it is a very difficult timeline with out the regulatory certainty or the monetary stimulus certainty that we have to make (the ultimate funding resolution).”

Evans famous that some bumps had been to be anticipated alongside the way in which, noting that the undertaking is the primary of its dimension in Canada, if not the world.

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“We’re breaking new floor with each the federal and provincial authorities as we attempt to determine the way it all works,” he mentioned.

The feedback come as MEG Vitality promised to spice up share buybacks after the OilSands main met its debt goal in 1 / 4 that noticed revenue soar 189 % over the earlier yr.

MEG’s $156 million revenue within the third quarter, nevertheless, was down from the earlier quarter as oil costs slipped from their highs and the value hole widened between Canadian crude blends and US benchmark West Texas Intermediate.

The Calgary-based firm ramped up manufacturing to a report and elevated gross sales of bitumen, however the common promoting worth for its Entry Western Mix fell to US$76.55 per barrel through the third quarter, from US$100.42 per barrel within the second. was.

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“Clearly, we’re not very pleased with the latest (worth) enhance, however we imagine that is actually only a momentary shift within the world supply-demand stability for closely sourced crude,” Evans mentioned. Reforms, expanded sanctions on Russia, deliberate OPEC manufacturing cuts and easing of COVID restrictions in China are anticipated to coincide with the tip of the discharge from the US Strategic Petroleum Reserve (SPR).

“We count on[the gaps]to be narrowing as we transfer ahead into subsequent yr, and they’re going to tighten consistent with diminished provide and rising demand,” Evans mentioned.

The oil producer used the free money movement generated within the quarter to pay down debt and repurchase $350 million in excellent senior unsecured notes. The corporate additionally repurchased 5.6 million frequent shares in MEG Vitality value $92 million.
MEG’s CEO additionally used the third quarter convention name with traders to replace shareholders on progress being made on the sector’s local weather ambitions.

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The Pathway Alliance partnership – which incorporates MEG, in addition to Canadian Pure Assets Ltd, Cenovus Vitality Inc., Suncor Vitality Corp, Imperial Oil Ltd and ConocoPhillips Canada – has set a objective of decreasing the sector’s absolute emissions by 22 million tonnes. attain net-zero by 2030 and by 2050.

The group’s proposed carbon seize pipeline and storage hub was chosen final month as one among 19 carbon seize proposals that can obtain additional analysis by the Authorities of Alberta – one for the undertaking being awarded to Pore House within the Chilly Lake area. vital situation.

“There is not any lack of will, there isn’t any lack of want to verify it occurs,” Evans mentioned. “However we notice that is the primary time this has occurred and we’re creating guidelines and laws for future initiatives that can comply with.”

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