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by Stockwatch Business Reporter

West Texas Intermediate crude for October delivery lost 25 cents to $46.90 on the New York Merc, while Brent for November lost 67 cents to $49.08 (all figures in this para U.S.). Western Canadian Select traded at a discount of $13.60 to WTI ($33.30), up from a discount of $13.65. Natural gas for October lost 0.8 cent to $2.652. The TSX energy index added 2.17 points to close at 174.33.

Citigroup made the latest contribution to takeover talk in the oil sands. Its new report singled out Suncor Energy Inc. (SU: $35.13) and Imperial Oil Ltd. (IMO: $42.59) as "the best positioned to act as consolidators," and named MEG Energy Corp. (MEG) and Canadian Oil Sands Ltd. (COS) as potential targets, citing the fact that the two smaller producers trade at 0.5 times and 0.8 times book value, respectively. MEG's stock rose 46 cents to $9.42 on 3.46 million shares. Canadian Oil Sands, however, had a subdued day, losing five cents to $6.79 on 4.26 million shares. Perhaps investors are just more optimistic about MEG. The company has had a miserable time lately, plunging below $10 from over $41 last summer, but a few weeks ago it made a firm commitment to cleaning up its balance sheet by hiring advisers to help it sell its 50-per-cent-owned Access pipeline. It did not say how much it hoped to receive in proceeds, but RBC analyst Mark Friesen recently estimated the value of the interest at $1.6-billion to $2.1-billion. Even a sale on the low end of that range would be enough to take care of MEG's $1.25-billion (U.S.) senior secured term loan due 2020, representing nearly one-third of its long-term debt. Of course, there is no estimate of when that might happen.

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