MEGEF - MEG Energy: The Potential For An Attractive Long-Term Investment
MEG Energy (MEGEF) reported messy Q1 results. Management highlighted the free cash flow of C$98 million. Yet, net debt increased and cash flow was negative. And, due to the production curtailment in Alberta, the capital program was lower than the long-term sustaining capital. Also, the ramp-up of the marketing diversification out of Canada impacted both realized prices and transportation costs.
These results are short-term distractions, though. The free cash flow potential at WTI prices above US$50/bbl is important, but the company will be facing a debt wall in 2023.
Before evaluating the investment