June 7, 2019 / 12:51 PM / 4 months ago

BUZZ-MEG Energy: TPH cuts to 'hold', cites pipeline bottlenecks in Canada

** Tudor Pickering Holt & Co downgrades Canadian oil producer MEG Energy to “hold” from “buy”

** While there is significant asset value in business, it is unlikely to be appreciated in near-term given continued challenges in Canadian energy space that limits investor interests -brokerage

** Delay in Enbridge Inc’s Line 3 pipeline replacement project presents uncertainty for MEG to utilize fully the incremental Flanagan South pipeline volumes in 2020

** Cos in Alberta are in need for new export pipelines to help alleviate congestion and increase access to higher-priced markets

** “We continue to view the company as a unique animal in the Canadian space with an estimated FCF to equity yield of 24% on avg. 2019-2022...” -TPH

** 10 of 17 brokerages rate the stock “buy” or higher, 6 “hold” and 1 “sell”; their median PT is C$8

** Upto Thursday’s close stock down ~46% YTD (Reporting By Arundhati Sarkar in Bengaluru)

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