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Canada’s MEG Energy to sell pipeline, storage assets for CAD 1.61 billion

Canadian oil sands producer MEG Energy as saying that it had agreed to sell some pipeline and storage assets in Alberta to Wolf Midstream Inc for CAD 1.61 billion to pay down debt and fund its flagship project in Athabasca. MEG said it would sell its 50 percent interest in the Access Pipeline for CAD 1.4 billion and its full interest in the 900,000-barrel Stonefell oil storage facility for CAD 210 million.

MEG said that it will get CAD 1.52 billion in cash when the deal closes, and a credit of CAD 90 million toward future expansions of the Access Pipeline.

The company said it plans to use the deal proceeds to repay about CAD 1.23 billion in senior secured term loans and the rest to fund the expansion of its Christina Lake project in Athabasca.

The bitumen miner also intends to raise its 2018 capital budget to $700 million from USD 510 million to fund the expansion.

BMO Capital Markets and Credit Suisse are MEG’s financial advisers, while Burnet, Duckworth and Palmer LLP and Latham & Watkins LLP gave legal advice.
Source : REUTERS
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