Increased production, improved prices and strong exports to the United States turned Canadian oilsands specialist Meg Energy Corp. profitable in the first half of 2021, reversing deep losses inflicted a year ago by the Covid-19 pandemic.

Christina lake

The Calgary firm’s bitumen production in northeastern Alberta grew to a first-half 2021 average of 91,326 b/d from 83,622 b/d in the same period of 2020.

Meg bitumen fetched an average of C$56.30/bbl ($45.04/bbl) from January through June this year, more than triple the company’s realized price of C$15.56 ($12.45) in the slump brought on by the pandemic in the first half of 2020.

The firm credited the gain partly to selling 38-45% of its oilsands output to refineries on the Gulf Coast. The long-distance marketing effort, using the Seaway and Flanagan South pipelines, raises delivery costs but reaps premium prices over Canadian exports to the U.S. Midwest.

Meg increased its forecast for full-year 2021 average production to 91,000-93,000 b/d from its previous prediction of 88,000-90,000 b/d. The firm’s 2021 capital budget has been increased to C$335 million ($268 million) from an initial estimate of C$260 million.

Meg reported work has begun on restoring production capacity at its Christina Lake thermal oilsands extraction complex to its full potential for 100,000 b/d. The firm also announced a C$100 million debt repayment.

The company reported first-half 2021 earnings of C$51 million ($40.8 million) or C17 cents/share (14 cents/share) versus year-ago losses of C$364 million ($291.2 million) or C$1.21 (minus 97 cents).