UPDATE 1-MEG Energy back in profit, raises production forecast

Wed Jul 30, 2014 7:18am EDT
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July 30 (Reuters) - MEG Energy Corp, a fast-growing player in Canada's oil sands, reported a second-quarter profit, compared with a year-earlier loss, and raised its annual production forecast.

MEG, whose main operations are in the southern Athabasca oil sands region of Alberta, raised its 2014 bitumen production forecast to 65,000-70,000 barrels per day from 60,000-65,000.

Production in the quarter ended June 30 more than doubled from a year earlier to 68,984 bpd.

MEG, in which China National Offshore Oil Corp holds a minority stake, said average realized bitumen prices rose about 35 percent in the quarter compared with the same quarter of 2013.

MEG reported a net profit of C$248.95 million ($229.13 million), or C$1.11 per share, for the three months ended June 30, compared with a net loss of C$62.31 million, or 28 Canadian cents per share, a year earlier.

It was MEG's first profit since the third quarter of 2013. The company incurred huge currency losses in the two preceding quarters as a weak Canadian dollar pushed up the cost of servicing its U.S. dollar-denominated debt.

MEG had total long-term debt of C$4.15 billion at the end of March, compared with C$2.81 billion a year earlier, according to Thomson Reuters data.

The company's cash flow, a key indicator of its ability to fund new projects, rose 70 percent to C$261.71 million in the latest quarter.

MEG's shares, which closed at C$37.72 on the Toronto Stock Exchange on Tuesday, have risen about 23 percent this year, outperforming the Toronto Stock Exchange 300 Composite Index , which has risen 13.4 percent. ($1 = 1.0865 Canadian dollars) (Reporting by Sneha Banerjee; Editing by Ted Kerr)