Large resource base with good reservoir quality Visibility to long-term production growth Competitive steam-assisted gravity drainage (SAGD) full-cycle cost profile Persistent negative free cash flow generation during our ratings forecast period Continued reliance on external financing to fund development projects Exposure to volatile heavy oil price differentials The ratings on Calgary, Alta.-based MEG Energy Corp. reflect Standard&Poor's Ratings Services' assessment of the company's weak-but-improving cash flow generation, below-average profitability (measured by its return on capital employed - ROCE) as the company proceeds with its multi-stage steam-assisted gravity drainage (SAGD) project development, and the company's exposure to discounted crude oil prices. In our opinion, MEG's large resource base and high recovery rates, good visibility to long-term production growth, and
