We are revising our outlook on MEG Energy Corp. to negative from stable. We are affirming our ratings, including our 'BB' long-term corporate credit rating, on the company. Although we believe MEG's industry leading operating efficiency and cash operating cost profile (excluding diluent costs) will likely remain among the best in the oil sands sector, its strong cost profile will not insulate it against the market pricing pressures. As a result, we believe there is some risk that the company will not be able to generate sufficient incremental cash flow to offset the deteriorating effects on its cash flow protection metrics its increasing debt will cause. On Feb. 22, 2013, Standard&Poor's Rating Services revised the outlook on Calgary,
