​MEG reports $48 million loss despite 56% bitumen price increase

MEG Energy's Christina Lake project. Image: MEG

MEG Energy Corp. is reporting a larger-than-expected first-quarter net loss despite a rise in revenue as its average price for blended bitumen rose by 56 per cent compared with the fourth quarter of 2018.

The company says it lost $48 million or 16 cents per share in the three months ended March 31, compared with a profit of $141 million or 47 cents in the same period a year ago.

Analysts had expected a loss of 13 cents per share, according to Thomson Reuters Eikon.

Revenue came in at $919 million, compared with $721 million in the year-earlier quarter, beating analyst expectations of $651 million.

MEG’s loss included a net foreign exchange gain of $78 million and a loss on hedging contracts of $230 million.

Its net earnings in the first quarter of 2018 included a $318-million gain on the sale of its half interest in the Access Pipeline, a net foreign exchange loss of $108 million, and a loss on hedging of $76 million.

MEG bitumen production was 87,100 bbls/d in the first quarter, down from 93,200 bbls/d a year earlier (and its capacity of 100,000 bbls/d) due to the Alberta government's production curtailment program that began Jan. 1, the company said.

However, it said sales averaged 89,800 bbls/d as it shipped stored bbls to take advantage of higher prices.

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