Maintain operations and to execute future growth
"The revision of our 2015 capital investment plan is in response to the continuing deterioration of global crude oil markets," says Bill McCaffrey, President and Chief Executive Officer. "While our projects remain economic at current strip pricing, we believe it is prudent to reduce capital spending until we see a sustained improvement in commodity prices. Our brownfield opportunities also provide us with the flexibility to increase spending at a measured pace under the right market conditions."
MEG expects that staff levels will remain consistent with current levels to maintain operations and to execute future growth.
Financial Update
MEG's December 31, 2014 cash position is forecast to be $650 million.
The company's revised capital investment plan for 2015 is $305 million.
In November 2014, MEG extended and increased its five-year committed revolving credit facility from US$2.0 billion to US$2.5 billion with its 12 bank syndicate. The revolver matures in November 2019 and is "covenant lite" in structure, meaning it is free of any financial maintenance covenants and is not dependent on, nor calculated from, MEG's crude oil reserves. The revolver remains undrawn.
Similar to MEG's revolving credit facility, all of the company's long-term debt is "covenant lite" in structure. The first maturity of any of MEG's long term-debt obligations is March 31, 2020.
On December 15, 2014, MEG closed on a five-year US$500 million guaranteed letter of credit facility with Export Development Canada. Letters of credit issued under this facility will not consume revolver capacity, thereby increasing MEG's liquidity. All of MEG's existing letters of credit under its revolver are being transferred to this facility.