UPDATE 2-MEG Energy reports bigger-than-expected loss as crude slumps

Thu Jul 28, 2016 6:47am EDT
 
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* Q2 operating loss C$0.43 vs. est. loss C$0.27

* Net operating costs fall to C$7.43/barrel from C$9.43

* Bitumen production rises 16.5 pct to 83,127 bpd (Compares results with estimates, adds details, background)

July 28 (Reuters) - MEG Energy Corp, a major player in the Canadian oil sands, reported a bigger-than-expected quarterly loss on Thursday as a rise in production and record low operating costs failed to make up for a slump in crude prices.

MEG, whose main operations are in the Athabasca region of Alberta, said its cash flow from operations fell by about 93 percent to C$7 million ($5.3 million) in the second quarter as bitumen prices fell along with U.S. benchmark crude prices.

U.S. crude prices averaged about 21 percent lower in the quarter compared with a year earlier.

MEG said its realized bitumen prices fell to C$30.93 per barrel in the quarter from C$44.54 in the same period of 2015.

However, the company's net operating costs fell to a record low of C$7.43 per barrel from C$9.43, while bitumen production rose 16.5 percent to 83,127 barrels per day (bpd).

"Our second-quarter production levels have been close to record highs and we are currently seeing net operating costs of under C$7.50 to produce a barrel of oil," Chief Executive Bill McCaffrey said in a statement.   Continued...