In Standard&Poor's Ratings Services' opinion, the ratings on Calgary, Alta.-based MEG Energy Corp. reflect the company's lack of meaningful internal cash flow generation until Phase II of its Christina Lake project begins producing; execution risk of bringing its projects 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, in our view. MEG holds a 100% interest in more than 800 square miles of oil sands leases in the Athabasca region of northern Alberta. It is primarily engaged in an oil sands development at its 80-section Christina
