(Reuters) - MEG Energy Corp MEG.TO reported a bigger-than-expected quarterly profit on Tuesday, as the Canadian oil sands producer benefited from a surge in production and higher prices.
Production of low-grade bitumen crude jumped 36.4% to 97,288 barrels per day (bpd) in the second quarter, while realized price for bitumen rose 31.5% to average C$62.23 per barrel.
That helped revenue surge 54.1% to C$1.06 billion ($806.1 million), beating analysts’ estimates of C$854.8 million.
MEG, whose key operations are in the Athabasca oil sands region in Alberta, said year-ago production was hit by a large-scale turnaround activity.
The Calgary-based company maintained its plans to spend C$200 million in 2019 and confirmed that the discretionary budget of C$75 million will not be sanctioned due to Alberta’s output curtailments and as the company prioritizes paying down debt.
The previous government of Alberta, Canada’s major oil-producing province, imposed output curtailments in January in a rare step to drain a glut of oil in storage and lift prices.
MEG said its net loss narrowed to C$64 million ($48.7 million), or 21 Canadian cents per share, in the three months ended June 30, from C$179 million, or 61 Canadian cents per share, a year earlier.
On an adjusted basis, it earned 57 Canadian cents per share, topping estimates of 19 Canadian cents per share, according to IBES data from Refinitiv.
Reporting by Shanti S Nair in Bengaluru; Editing by Bernard Orr
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