(Adds details on re-exports, quote, updates share price)
By Nia Williams
Oct 29 (Reuters) - Canadian oil sands producer MEG Energy is considering applying for a license to re-export Canadian crude from the U.S. Gulf Coast, chief executive officer Bill McCaffrey said on Wednesday.
MEG has committed capacity of up to 100,000 barrels-per-day on Enbridge's new Flanagan South pipeline, which will link up with the Seaway pipeline to transport crude to the Gulf Coast.
From there it could be shipped by tanker to overseas markets. Re-exporting, which requires a license from the U.S. Department of Commerce, is an enticing prospect for oil sands producers in landlocked Alberta as it enables them access to higher international prices for their crude.
Enbridge Inc subsidiary Tidal Energy Marketing and Russian oil major Lukoil have both shipped cargos to Europe this year.
"We are certainly looking at this type of thing. If you take the Flanagan South and Seaway combination it lands us in Houston and obviously we can move crude out of this area," McCaffrey said on the company's third-quarter earnings call.
"We did evaluate that as one possible area to move crudes offshore. We have not applied at this stage but we are evaluating things."
The United States does not allow exports of its own oil, with few exceptions such as barrels going to Canada or re-exports of foreign oil from U.S. ports.
MEG reported weaker-than-expected quarterly operating profit and cash flow, partly due to lower bitumen sales volumes as a result of linefill on the Access pipeline, which carries diluted bitumen and diluent between MEG's Christina Lake oil sands project and the Edmonton trading hub.
MEG said its cash flow, a key indicator of its ability to fund new projects, rose to C$238.7 million, or C$1.06 per share, from C$144.5 million, or 64 Canadian cents per share, in the same year-ago quarter.
Consensus expectations had been for C$1.14 per share.
Operating profit, which excludes most one-time items, rose to C$87.5 million, or 39 Canadian cents, from C$56.2 million, or 25 Canadian cents. However, it lagged the average analyst estimate for the measure of 50 Canadian cents per share.
Production at Christina Lake continued to ramp up, more than doubling to 76,471 barrels of oil equivalent per day from 34,246 a year earlier.
MEG management said 2014 capital spending was likely to come in below the initial 2014 guidance range of C$1.6 billion to C$1.8 billion.
Despite the slight earnings miss, analysts said MEG's outlook was positive as Christina Lake continued to exceed production expectations.
"Operationally it was another strong quarter with higher-than-expected bitumen production, lower-than-expected operating costs and capital expenditures, which continue to track under budget," BMO Capital Markets analyst Randy Ollenberger said in a note to clients.
MEG shares were last up 85 cents on the Toronto Stock Exchange at C$29.00. (1 US dollar = 1.1158 Canadian dollar) (Additional reporting by Anannya Pramanick in Bangalore; Editing by Ted Kerr, Sriraj Kalluvila and Chris Reese)