The ratings on Calgary, Alta.-based MEG Energy Corp. reflects the company's lack of material internal cash flow generation, as it is in the process of bringing its Christina Lake oil sands project to production; the risk of cost increases on construction of its project and execution risk in bringing it online; and its exposure to heavy oil differentials once production begins. The above-average reserve life index (RLI) of MEG's oil sands leases, and the expected stable production profile with negligible finding costs associated with oil sands extraction somewhat mitigate these constraints. MEG holds a 100% interest in more than 750 sections of oil sands leases in the Athabasca region of northern Alberta. It is primarily engaged in an oil sands
