UPDATE 1-MEG Energy oper profit plunges on weak prices

Thu Jul 26, 2012 6:53am EDT

July 26 (Reuters) - MEG Energy Corp, a Canadian oil sands company, reported a 70 percent fall in quarterly operating profit on lower bitumen prices.

The realized price for each barrel of bitumen fell 27 percent to C$45.59 in the second quarter, MEG Energy said. The average U.S. benchmark crude price dipped 9 percent in the quarter compared to a year earlier.

Second-quarter operating earnings fell to C$11.1 million, or 6 Canadian cents per share, from C$36.5 million, or 18 Canadian cents per share, a year earlier.

Including a foreign exchange charge of C$34.9 million on the translation of its U.S. dollar denominated debt, net loss was C$29.5 million ($28.94 million), or 15 Canadian cents per share.

Production at the company, whose key operations are in the southern Athabasca oil sands region of Alberta, rose 9 percent to an average of 30,429 barrels of bitumen per day.

Cash flow from operations, a key indicator of its ability to pay for new projects, fell 32 percent to C$60 million.

Shares of MEG, which has a market value of $7.45 billion, closed at C$38.91 on Wednesday on the Toronto Stock Exchange.