Large resource base with good reservoir quality Visibility to long-term production growth Competitive steam-assisted gravity drainage full-cycle cost profile Weak cash flow generation during the initial phases of project development Reliance on external financing during the development's early stages Lower crude prices associated with low API gravity production The ratings on Calgary, Alta.-based MEG Energy Corp. reflect Standard&Poor's Ratings Services' assessment of the company's negative free cash flow generation, below-average profitability as the company proceeds with its Phase 2B expansion of its multiyear steam-assisted gravity drainage (SAGD) project development, and lower realized crude oil prices. In our opinion, MEG's large resource base and high recovery rates, good visibility to long-term production growth, and a competitive SAGD full-cycle cost
