High-Return, Short-Cycle Growth

The Impact of Technology on MEG’s Business Model

MEG Energy has transformed the way business can be done in the oil sands by utilizing our proven, proprietary eMSAGP technology to increase production while decreasing our costs and steam-oil ratio. Through the application of eMSAGP on our Phase 2B assets, we expect to increase production by 25% to 100,000 bpd by early 2019 while continuing to drive our steam oil ratio down and reducing our non-energy operating costs per barrel.

MEG is also advancing our Phase 2B brownfield expansion, which includes the addition of incremental steam capacity at the Phase 2B facility and two well pads. Production is anticipated to begin ramping up in the second half of 2019 to bring MEG’s production to 113,000 bpd in early 2020 while further reducing the company’s cash costs. As MEG continues to grow, we expect to reduce cash costs by an additional $1 per barrel with every 10,000 bpd of new production coming on stream.

 

eMVAPEX

MEG’s proprietary eMVAPEX process is a continuation of eMSAGP that involves the injection of a condensable gas to maintain reservoir pressure, which reduces steam injection to near-zero. To date, MEG has implemented eMVAPEX on three well pairs and their associated infill wells with encouraging results. In 2018, the company plans to convert up to seven additional well pairs and associated infills to eMVAPEX and construct a solvent recycling facility to test the commerciality and scalability of the technology.

eMVAPEX has the potential to dramatically decrease MEG's steam-oil ratio, reduce future capital costs by lessening the requirement for steam and water handling capacity at the central plant facility, and further decrease operating costs and greenhouse gas emission intensities. Initial test results for the technology have been very encouraging and MEG hopes to update markets on our plans for eMVAPEX by early 2019.