MEG Energy (TSX: MEG) announced late Wednesday that it is lowering its 2022 average production guidance. The oil producer now looks at 92,000 – 95,000 bbls/d from the previously announced 94,000 – 97,000 bbls/d.
The company said that while the expected Christina Lake Phase 2B facility scheduled turnaround in May was completed on time and on budget, the facility experienced “an unplanned electrical event” following the turnaround. This caused a “slower than forecast production ramp-up during the month of June.”
While the facility has now been restored to full production, the slower June ramp-up impacted Q2 2022 average production. The company expects to exit the quarter with approximately 67,000 bbls/d.
This then led to the 2,000 bbls/d shaved off the 2022 average annual production guidance.
Alongside, the oil firm increased its guidances for non-energy operating costs (now $4.60 – $4.90 per bbl from $4.50 – $4.80 per bbl) and G&A expenses (now $1.75 – $1.90 per bbl from $1.70 – $1.85 per bbl).
In its Q1 2022 operating results, the company saw a record production of 101,128 bbls/d. Following a strong quarter, the firm saw BMO Capital Markets raise their 12-month price target for MEG from $22 to $25.
MEG last traded at $18.15 on the TSX.
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