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Energy Summary for Nov. 22, 2019

2019-11-22 20:21 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for January delivery lost 81 cents to $57.77 on the New York Merc, while Brent for January lost 58 cents to $63.39 (all figures in this para U.S.). Western Canadian Select traded at a discount of $19.15 to WTI, unchanged. Natural gas for December added 10 cents to $2.67. The TSX energy index lost a fraction to close at 132.84.

Oil sands producer MEG Energy Corp. (MEG) got as high as $5.85 in intraday trading before reversing course and closing at $5.60, down three cents, on 2.9 million shares. It released its 2020 guidance yesterday evening. Its planned budget is $250-million, nearly 10-per-cent lower than analysts were forecasting. Production guidance of 94,000 to 97,000 barrels a day is fairly close to analysts' forecasts of a firm 97,000 barrels a day, and represents a roughly 3-per-cent increase over this year's expected production of about 92,500 barrels a day (a target that was hiked last month from about 91,000 barrels a day). The trim budget partly reflects years of cost-cutting efforts. For example, non-energy operating costs (which exclude gas consumption) are forecast at about $4.70 per barrel next year, down from over $8 per barrel in 2014. MEG is optimistic that it will bring in more than enough cash flow to cover its budget, and will use the extra cash flow to keep paying down its debt. It patted itself on the back for having already reduced its debt by about $500-million so far this year.

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