Higher Bitumen Sales Help MEG Energy Post Operating Profit

Canadian oil sands producer MEG Energy Corp reported a fourth-quarter operating profit, compared with a loss a year earlier, helped by an increase in bitumen sales and lower costs.

MEG's results were also helped by a 32 percent rise in average bitumen realization to C$50.48 ($40.30) per barrel.Canadian crude prices have benefited due to increased crude-by-rail and capacity of pipelines, which have helped stop a glut of crude building up in Alberta.

In December, Enbridge Inc opened its 600,000 barrel-per-day Flanagan South pipeline, which links up with the Seaway Twin pipeline in Cushing, Oklahoma, to provide a direct route to the world's largest refining complex on the U.S. Gulf Coast.

Cash operating netback, the net revenue received by MEG after adjusting for operating and transportation costs, rose to C$35.56 per barrel from C$23.78 per barrel.

The company, which has committed capacity of up to 100,000 barrels-per-day on Enbridge's new Flanagan South pipeline, said bitumen sales almost doubled to 35, 990 barrels of oil equivalent per day (boepd), compared with 70,116 boepd.

(downstreamtoday.com Edited by Topco)