MEG Energy Corp.

MEG Energy Corp.

January 27, 2017 09:23 ET

MEG Energy announces successful closing of previously announced comprehensive refinancing plan

CALGARY, ALBERTA--(Marketwired - Jan. 27, 2017) - MEG Energy Corp. ("MEG" or the "Company") (TSX:MEG) announced today that it has successfully closed its previously announced comprehensive refinancing plan, comprised of four financing transactions (the "Transactions"). The Transactions are expected to support a strengthened balance sheet, as well as increased production and reduced costs, through an expansion of the Company's growth program. The refinancing plan retains the covenant-lite flexibility of the Company's current debt structure.

All dollar figures are in $CDN unless otherwise noted.

The comprehensive refinancing plan is comprised of the following four transactions:

  • An extension of the maturity date on substantially all of the commitments under the Company's covenant-lite revolving credit facility to November 2021. The commitment amount of the five year facility is US$1.4 billion, it has no financial covenants and is not subject to any borrowing base redetermination;
  • MEG's US$1.2 billion term loan was successfully refinanced to extend its maturity from March 2020 to December 2023. The refinanced term loan will bear interest at an annual rate of LIBOR + 3.50% with a LIBOR floor of 1%. The term loan was issued at a price equal to 99.75% of its face value;
  • MEG's existing US$750 million of unsecured notes due March 2021 were successfully refinanced and extended with new 6.5% second lien secured notes, issued at par, due January 2025. The existing 2021 notes will be redeemed with the proceeds from the second lien notes on March 15, 2017; and
  • $518 million of equity was successfully raised in the form of subscription receipts (the "Subscription Receipts") on a bought deal basis from a syndicate of underwriters (the "Subscription Receipt Offering"). The escrow release conditions for the Subscription Receipt Offering have now been satisfied and Subscription Receipts will convert into common shares with no further action on the part of holders.

"We are pleased to have successfully closed all four transactions that formed our comprehensive refinancing plan, with essentially no change to the cash costs of the business. These transactions allow the Company to move forward with our growth strategy. We have a five-year window to grow the business through our highly economic capital program and the added flexibility to pursue additional deleveraging alternatives," said Bill McCaffrey, President and Chief Executive Officer. "We believe our covenant-lite revolving credit facility, which at closing remains undrawn, is also sufficient to meet our foreseeable liquidity needs."

About MEG Energy

MEG Energy Corp. is focused on sustainable in situ oil sands development and production in the southern Athabasca oil sands region of Alberta, Canada. MEG is actively developing enhanced oil recovery projects that utilize SAGD extraction methods. MEG's common shares are listed on the Toronto Stock Exchange under the symbol "MEG."


This press release is not an offer of securities for sale in the United States, and the securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering to be made in the United States will be made by means of a prospectus that may be obtained from MEG and will contain detailed information about MEG and management, as well as financial statements.

Forward-Looking Information

This press release may contain forward-looking information including but not limited to the expected results of the refinancing plan and the expected redemption of the Company's existing 2021 notes. Such forward-looking information is based on certain assumptions and analysis made by MEG in light of its experience and perception of current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. However, whether actual results, performance or achievements will conform to MEG's expectations and predictions is subject to market conditions and a number of known and unknown risks and uncertainties which could cause actual results to differ materially from MEG's expectations.

Although MEG believes that the assumptions used in such forward-looking information are reasonable, there can be no assurance that such assumptions will be correct. Accordingly, readers are cautioned that the actual results achieved may vary from the forward-looking information provided herein and that the variations may be material. Readers are also cautioned that the foregoing list of assumptions, risks and factors is not exhaustive. Other factors which could materially affect such forward-looking information are described in the risk factors detailed in the offering documentation prepared and delivered by MEG in connection with the Subscription Receipt Offering and in MEG's most recently filed Annual Information Form ("AIF"), along with MEG's other public disclosure documents. Copies of the AIF and MEG's other public disclosure documents are available through the SEDAR website which is available at

The forward-looking information included in this document is expressly qualified in its entirety by the foregoing cautionary statements. Unless otherwise stated, the forward-looking information included in this document is made as of the date of this document and MEG assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances, except as required by law.

Contact Information

  • Investors & Media
    John Rogers
    Vice President, Investor Relations and
    External Communications