$400M project to boost oilsands production

Oilsands producer MEG Energy Corp. says it will spend $400 million

CALGARY — Oilsands producer MEG Energy Corp. says it will spend $400 million over the next two years on a brownfield expansion plan to add 20,000 barrels per day of bitumen production from its northern Alberta works.

The Calgary-based company says it plans to drill new wells and implement production-enhancing technology on part of its steam-driven Christina Lake Project, boosting its overall output by about 25 per cent to 100,000 bpd in the first half of 2019.

MEG (TSX:MEG) says its spending this year will climb to $590 million, up from about $125 million in 2016, with about $320 million earmarked for the expansion project.

CEO Bill McCaffrey says the increased production, to be gradually brought on through 2018 and early 2019, is being made in the “context” of improving crude oil prices.

He says the spending increase is made possible by an extensive reorganization of MEG’s debt, also announced Wednesday, which will include raising $357 million by selling shares.

Cenovus Energy Inc. (TSX:CVE) and Canadian Natural Resources Ltd. (TSX:CNQ) have also announced oilsands expansions in the past two months, approving previously shelved projects that will add 50,000 bpd and 40,000 bpd, respectively.

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