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Thread: MEG Energy

  1. #11
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    Might be buyout time...my guess as well. That's a HUGE jump considering where prices have been.

    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

  2. #12
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    MEG's chart is brutally bad. If you plot MEG vs XEG it steadily under-performs (for many years), and lately it has dramatically under-performed.

    Any large % increases lately are just part of the pattern you naturally see when a stock is making large % declines. It's volatile; it's going up and down like crazy.

    But mostly down. It's a horrible chart, guys.

  3. #13
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    See what I mean ... down over 17% today. Very volatile. Volatile means big moves up as well as down

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  5. #14
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    Haha, yep, extremely volatile..down 20.35% _today_ at the moment!

    MEG is very sensitive to changes in price of oil, and yes the swings definitely go both ways. I still think these guys will weather the current low oil price environment, but there's definitely a risk of a takeover at a low ball price.

  6. #15
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    I am wondering how these guys are going to survive?
    5B of debt, little cashflow when compared to debt. The SP keeps going lower and lower. I have not ever owned this stock and I am not really thinking about owning it at this time, but I am wondering what you all think of it?

  7. #16
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    ^ MEG made some big moves in January refinancing debt and issuing stock and after the changes they don't repay debt until 2023. They also started a hedging program. So I suppose I'm fairly comfortable with MEG's survival at this point.

    The $5 Billion of debt is obviously an issue. Also 2016 revenue of 1.9 Billion and net loss of 429 Million, not ideal but not a company in survival mode. If anything they are focused on low cost expansion...from their last quarterly report:
    “Over the next several years, we plan to grow our production to 210,000 bpd through the addition of more of these high return, short cycle 10,000 to 20,000 bpd brownfield projects,”

    MEG also has high quality assets like Christina Lake, and a very competitive Steam to Oil ratio of 2.3.

    Probably the safer alternative is to pick up someone like Cenovus (who might acquire MEG one day anyway!) But a Cenovus isn't going to see a 3 or 4x return like MEG potentially will. But then again if oil crashes Cenovus (unlike MEG) won't be taken over for pennies. Interesting times!

    Last edited by protomok; 2017-03-18 at 02:06 PM.

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