CALGARY — Shares in oilsands producer MEG Energy Corp. rose by as much as 3.9 per cent Friday after it announced lower capital spending and a continued focus on debt retirement in 2020.
Analysts applauded the Calgary-based company's plan to spend $250 million next year — about $20 million less than some expected — with production that is still forecast to meet expectations at between 94,000 and 97,000 barrels of bitumen per day.
MEG says about $210 million of the budget is considered sustaining and maintenance capital.
It plans to spend $20 million to complete a processing facility expansion to provide more steam generation, water handling and oil treating capacity at its northeastern Alberta works which use steam to produce bitumen from wells.
The remaining $20 million is mainly for needed field infrastructure and regulatory and corporate capital costs.
MEG says after reducing its debt by $500 million this year, it will continue to allocate all excess free cash flow to further reductions. Net debt is expected to fall to just under $3 billion by the end of 2019.
MEG shares rose as high as $5.85, up 22 cents, on the Toronto Stock Exchange. A year ago, they were trading at $8.55.
This report by The Canadian Press was first published on Nov. 22, 2019.
Companies in this story: (TSX:MEG)