100% ownership of over 800 square miles of oil sands leases MEG is a world World-Scale Oil Steam assisted gravity drainage (SAGD) technology Resource 1.9 billion bbls of 2P and 3.7 billion bbls of contingent resources (best estimate)…
Estimated Oil Reserves The Canadian oil sands are concentrated in Alberta (bn bbls) The Canadian oil Overview sands represent 2nd largest recoverable oil resource in the world behind Saudi Arabia a large, stable, strategic and -170…
MEG utilizes SAGD, a form of in situ SAGD Process technology - 80% of Albertas oil sands are accessible with in situ production In situ provides: 1. Scalability 2. Low capital intensity 3. Low labor costs 4. Low levels of…
SAGD extraction methods have several key environmental advantages: Only 10-15% land surface usage One well pad can service an area the size of 96 NFL football fields and will recover approximately 9-12 MMbbls of bitumen 90% of the…
MEGs assets are in well-defined, proven SAGD producing areas Christina Lake Surmont Growth Properties Lease Holdings 51,200 acres Lease Holdings 20,480 acres Lease Holdings Evaluated 192,000 acres 2P Reserves 1,919 Contingent…
Mbbls/d Current Focus Future Development Phases Staged development plan 300 260 mitigates operating and 250 210 50 financing risks and allows MEG to 200 incorporate 50 technological improvements 150 25,000 bbls/d on-stream 50 35,000…
Christina Lake production exceeds nominal plant capacity of 25,000 bbls/d Production has ramped-up ahead of budget Scheduled Plant Turnaround 1-May-10 1-Aug-10 1-Nov-10 9
Christina Lake SOR averaged 2.3 in 4Q 2010 MEG has achieved lower than budgeted SORs to-date 1-May-10 1-Aug-10 1-Nov-10 10
Comparison of Production Ramp-up of Phase 2 with Other SAGD Projects(1)(2) Christina Lake Phase 2 production ramped-up to design rates in only 10 months Source: Public data from the ERCB as of January 2010 1. Projects include…
215-mile dual pipeline (50/50 JV with Devon Energy) Access pipeline Current capacity (net to MEG): 78,000 provides cost and bbls/d blended bitumen & 35,000 bbls/ revenue d condensate advantages - Incremental pumping stations unique to…
MEG has built cogeneration facilities to complement and enhance its economics Cogeneration flow diagram MEG employs cogeneration to Cogen benefits: generate SAGD electricity used in 1. Produces heat used for steam generation…
At 12/31/10, PV-10% of 2P reserves was 12.1 bn and PV-10% of contingent resources was 13.3 bn (best estimate) MEG has demonstrated a 2P Reserves Best Estimate Contingent Resources strong track record of reserve (mmbbls) (mmbbls) and…
Between Dec. 2006 and Dec. 2010, the PV-10% of MEGs 2P reserves increased by over 750% as a result of: GLJs Dec. 2010 -Core holes and seismic work performed at existing Christina Lake properties reserve report -Equity-financed…
GLJ Base Case MEGs resource December 2010 valuation Pro Forma Collateral Coverage: substantially Resource 7.8x exceeds the Reserve 3.2x 7.1x 7.1x amount of MEGs total pro forma leverage Existing cash and transaction proceeds add…
Netbacks per bbl Natural hedges ( per bbl) reduce 100 commodity price 86.22 81.91 (Avg. WTI Price) risk (long crude & (Avg. WTI Price) electricity; short 80 natural gas & diluent) 60 40 20 (1) Cash Operating Netback…
Total Capital Investment for 2011 900 MM Expand and further define resource base -Core hole drilling 80-90 MM Staged production growth -Christina Lake Phase 2B expansion 450 MM -Infrastructure: 200 MM Operation staff housing…
On March 18, 2011, MEG completed a two-part financing that included: Inaugual issuance of U.S.750 million in Senior Unsecured Notes due 2021(B3/BB) - Priced at par to yield 6.50% - Currently trading at 101.125 to yield 6.32%(1)…
Valuation Summary Pro Forma Capitalization (1) MEG ranks among ( in millions, except share prices and valuation metrics) ( in millions, unless otherwise noted) Pro Forma the top 30 TSX Market Statistics 12/31/10 Cash and Short-Term…
World-Scale Oil Resource Management Has Strong Initial a Proven Development Track Record Results Access Pipeline: Strong Financial Strategic & Economic Position Benefits 21
MEGs Christina Lake Project 22
Appendix 23
Indicative Summary Terms Issuer: MEG Energy Corp. Issue: Senior Unsecured Notes (Notes) Principal Amount: US750 million Ratings: B3 / BB Use of Proceeds: For general corporate purposes, including to pre-fund capital expenditures, and to…
Indicative Summary Terms Borrower: MEG Energy Corp. Description: US1,500 million Senior Secured Credit Facilities, consisting of: US500 million Multi-Currency Revolving Credit Facility due 2016 (Revolver) US1,000 Term Loan Facility due…
Adjusted EBITDA Reconciliation(1) 1. MEG calculates Adjusted EBITDA as net income before: (i) future income tax expense (recovery); (ii) change in fair value of other assets; (iii) loss on modification of long-term debt; (iv) risk…
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