INVESTOR
PRESENTATION
January2016
Disclaimer
This presenta1on is not, and under no circumstances is to be construed to be a prospectus, offering memorandum, adver1sement or public offering of any
securi1esofMEGEnergyCorp.(“MEG”).NeithertheUnitedStatesSecuri1esandExchangeCommission(the“SEC”)noranyotherstatesecuri1esregulatornorany
securi1es regulatory authority in Canada or elsewhere has assessed the merits of MEG’s securi1es or has reviewed or made any determina1on as to the
truthfulnessorcompletenessofthedisclosureinthisdocument.Anyrepresenta1ontothecontraryisanoffence.
Recipientsofthispresenta1onarenottoconstruethecontentsofthispresenta1onaslegal,taxorinvestmentadviceandrecipientsshouldconsulttheirown
advisorsinthisregard.
MEGhasnotregistered(andhasnocurrentinten1ontoregister)itssecuri1esundertheUnitedStatesSecuri1esActof1933,asamended(the“U.S.Securi1es
Act”),oranystatesecuri1esor“bluesky”lawsandMEGisnotregisteredundertheUnitedStatesInvestmentActof1940,asamended.Thesecuri1esofMEGmay
notbeofferedorsoldintheUnitedStatesortoU.S.personsunlessregisteredundertheU.S.Securi1esActandapplicablestatesecuri1eslawsoranexemp1on
from such registra1on is available. Without limi1ng the foregoing, please be advised that certain financial informa1on rela1ng to MEG contained in this
presenta1onwaspreparedinaccordancewithIFRSasissuedbytheInterna1onalAccoun1ngStandardsBoard,whichdiffersfromgenerallyacceptedaccoun1ng
principles in the United States and elsewhere. Accordingly, financial informa1on included in this document may not be comparable to financial informa1on of
UnitedStatesissuers.
The informa1on concerning petroleum reserves and resources appearing in this document was derived from a report of GLJ Petroleum Consultants Ltd. dated
effec1ve as of December 31, 2014, which has been prepared in accordance with the Canadian Securi1es Administrators Na1onal Instrument 51-101 en1tled
StandardsofDisclosureforOilandGasAc1vi1es(“NI51-101”)atthat1me.SuchreporthasnotbeenrevisedtoreflectamendmentsmadetoNI51-101effec1ve
July1,2015.ThestandardsofNI51-101differfromthestandardsoftheSEC.TheSECgenerallypermitsU.S.repor1ngoilandgascompaniesintheirfilingswiththe
SEC,todiscloseonlyproved,probableandpossiblereserves,netofroyal1esandinterestsofothers. NI51-101,meanwhile,permitsdisclosureofes1matesof
con1ngentresourcesandreservesonagrossbasis. Asaconsequence,informa1onincludedinthispresenta1onconcerningourreservesandresourcesmaynot
becomparabletoinforma1onmadebypublicissuerssubjecttotherepor1nganddisclosurerequirementsoftheSEC.
There are significant differences in the criteria associated with the classifica1on of reserves and con1ngent resources. Con1ngent resource es1mates involve
addi1onalrisk,specificallytheriskofnotachievingcommerciality,notapplicabletoreserveses1mates.Thereisnocertaintythatitwillbecommerciallyviableto
produceanypor1onoftheresources.Thees1matesofreserves,resourcesandfuturenetrevenuefromindividualproper1esmaynotreflectthesameconfidence
levelases1matesofreserves,resourcesandfuturenetrevenueforallproper1es,duetotheeffectsofaggrega1on.Furtherinforma1onregardingthees1mates
andclassifica1onofMEG’sreservesandresourcesiscontainedwithintheCorpora1on’spublicdisclosuredocumentsonfilewithCanadianSecuri1es
regulatory authori1es, and in par1cular, within MEG’s most recentlyfiled annual informa1on form (the “AIF”). MEG’s public disclosure documents,
including the AIF, may be accessed through the SEDAR website (www.sedar.com), at MEG’s website (www.megenergy.com), or by contac1ng MEG’s investor
rela1onsdepartment.
An1cipated netbacks are calculated by adding an1cipated revenues and other income and subtrac1ng an1cipated royal1es, opera1ng costs and transporta1on
costsfromsuchamount.
INVESTORPRESENTATION2016
2
DisclosureAdvisories
Forward-LookingStatements
This document may contain forward-looking informa1on including but not limited to: expecta1ons of future produc1on, revenues, expenses, cash flow, opera1ng costs, steam-oil
ra1os,pricingdifferen1als,reliability,profitabilityandcapitalinvestments;es1matesofreservesandresources;thean1cipatedreduc1onsinopera1ngcostsasaresultofop1miza1on
and scalability of certain opera1ons; and the an1cipated sources of funding for opera1ons and capital investments. Such forward-looking informa1on is based on management's
expecta1onsandassump1onsregardingfuturegrowth,resultsofopera1ons,produc1on,futurecapitalandotherexpenditures,plansforandresultsofdrillingac1vity,environmental
mafers,businessprospectsandopportuni1es.
By its nature, such forward-looking informa1on involves significant known and unknown risks and uncertain1es, which could cause actual results to differ materially from those
an1cipated. These risks include, but are not limited to: risks associated with the oil and gas industry, for example, the securing of adequate supplies and access to markets and
transporta1on infrastructure; the availability of capacity on the electricity transmission grid; the uncertainty of reserve and resource es1mates; the uncertainty of es1mates and
projec1onsrela1ngtoproduc1on,costsandrevenues;health,safetyandenvironmentalrisks;risksoflegisla1veandregulatorychangesto,amongstotherthings,tax,landuse,royalty
andenvironmentallaws;assump1onsregardingandthevola1lityofcommoditypricesandforeignexchangerates;risksanduncertain1esassociatedwithsecuringandmaintainingthe
necessaryregulatoryapprovalsandfinancingtoproceedwithMEG’sfuturephasesandtheexpansionand/oropera1onofMEG’sprojects;risksanduncertain1esrelatedtothe1ming
ofcomple1on,commissioning,andstart-up,ofMEG’sfuturephases,expansionsandprojects;andtheopera1onalrisksanddelaysinthedevelopment,explora1on,produc1on,and
thecapaci1esandperformanceassociatedwithMEG'sprojects;anduncertain1esarisinginconnec1onwithanyfuturedisposi1onofassets.
AlthoughMEGbelievesthattheassump1onsusedinsuchforward-lookinginforma1onarereasonable,therecanbenoassurancethatsuchassump1onswillbecorrect.Accordingly,
readers are cau1oned that the actual results achieved may vary from the forward-looking informa1on provided herein and that the varia1ons may be material. Readers are also
cau1onedthattheforegoinglistofassump1ons,risksandfactorsisnotexhaus1ve.
Furtherinforma1onregardingtheassump1onsandrisksinherentinthemakingofforward-lookingstatementscanbefoundinMEG’smostrecentlyfiledannualinforma1onform
(“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
availableatwww.sedar.com.
Theforward-lookinginforma1onincludedinthisdocumentisexpresslyqualifiedinitsen1retybytheforegoingcau1onarystatements.Unlessotherwisestated,theforward-looking
informa1onincludedinthisdocumentismadeasofthedateofthisdocumentandtheCorpora1onassumesnoobliga1ontoupdateorreviseanyforward-lookinginforma1onto
reflectneweventsorcircumstances,exceptasrequiredbylaw.
MarketData
This presenta1on contains sta1s1cal data, market research and industry forecasts that were obtained from government or other industry publica1ons and reports or based on
es1matesderivedfromsuchpublica1onsandreportsandmanagement’sknowledgeof,andexperiencein,themarketsinwhichMEGoperates.Governmentandindustrypublica1ons
and reports generally indicate that they have obtained their informa1on from sources believed to be reliable, but do not guarantee the accuracy and completeness of their
informa1on.Ohen,suchinforma1onisprovidedsubjecttospecifictermsandcondi1onslimi1ngtheliabilityoftheprovider,disclaiminganyresponsibilityforsuchinforma1on,and/or
limi1ngathirdparty’sabilitytorelyonsuchinforma1on.Noneoftheauthorsofsuchpublica1onsandreportshasprovidedanyformofconsulta1on,adviceorcounselregarding
anyaspectof,orisinanywaywhatsoeverassociatedwith,MEG.Further,certainoftheseorganiza1onsareadvisorstopar1cipantsintheoilsandsindustry,andtheymay
present informa1on in a manner that is more favourable to that industry than would be presented by an independent source. Actual outcomes may vary materially from those
forecastinsuchreportsorpublica1ons,andtheprospectformaterialvaria1oncanbeexpectedtoincreaseasthelengthoftheforecastperiodincreases.Whilemanagementbelieves
thisdatatobereliable,marketandindustrydataissubjecttovaria1onsandcannotbeverifiedduetolimitsontheavailabilityandreliabilityofdatainputs,thevoluntary
natureofthedatagatheringprocessandotherlimita1onsanduncertain1esinherentinanymarketorothersurvey.Accordingly,theaccuracy,currencyandcompletenessofthis
informa1oncannotbeguaranteed.NoneofMEG,itsaffiliatesortheunderwritershasindependentlyverifiedanyofthedatafromthirdpartysourcesreferredtointhispresenta1on
orascertainedtheunderlyingassump1onsrelieduponbysuchsources.
INVESTORPRESENTATION2016
3
StayingtheCourse
LowoperaJngandsustainingandmaintenancecostssupportMEG
throughalowoilpriceenvironment
•
Targeted2016produc1onvolumesof80,000–83,000bpd
•
2016capitalinvestmentplanof$328million,~70%ofwhichisdirectedtowardssustaining
2015produc1onlevelsand20%towardscapturingproduc1vitygainsassociatedwith
eMSAGPandposi1oningMEGforfuturegrowththroughbrownfieldexpansions
•
Financialresourcesavailabletofundthe2016capitalbudgetincludeinternallygenerated
cashflow,proceedsof$110millionfromthesaleofanon-coreassetin4Q15andcashon
hand
•
CommifedvolumesonFlanaganSouth/Seawaypipelinegrowto50,000bpdinearly2016,
improvingaccesstoworldpricedmarketswhilereducingvola1lityofMEG’srealizedpricing
•
Developthemajorityoftheremaining210,000bpdpermifedcapacityatChris1naLakevia
aseriesofbrownfieldexpansions,tobefundedprimarilyfrominternallygeneratedcash
flowasoilpricesimprove
•
Strengthenthebalancesheetthroughorganicgrowthandpursueop1onsforthe
accelera1onofdeleveragingthroughthemone1za1onofMEG’sinterestintheAccess
Pipeline
INVESTORPRESENTATION2016
4
ChrisJnaLakePerformance
RecentplanttesJngconfirmscombinedoiltreaJngcapacity
inPhases1/2/2Bexceeds110,000bpd,80%overiniJaldesign
*Plannedplantmaintenanceturnarounds
INVESTORPRESENTATION2016
5
BrownfieldGrowththroughRISER
1
Proprietaryreservoirtechnology
(eMSAGP)reducessteam-oilra1o
Lowerenergycost,lowerGHGemissions
intensity,increasedrecoveryrates
2
Redeployfreed-upsteamtonewSAGD
wellstofurtherincreaseproduc1on
3
Debofleneckandincrementally
expandexis1ngcentralfacili1es
tohandleincreasedthroughput
Lowcostproduc:ongains,lowersustainingcapital
Improvedcapitalefficiency,loweropcostsperbarrel
INVESTORPRESENTATION2016
6
Phase1eMSAGPPerformance
SteaminjecJonreduced
by70%;resource
recoveryanJcipated
toreach70%
INVESTORPRESENTATION2016
ChrisJnaLakePadA
A3
Infillwells
Phase1
A2
SAGDwells
NCG/steam
A1
co-injec1on
A3N
*
A2N
Infill
A1N wells
A3N
A7N
*A2N
*
7
NetGHGIntensityPerformance
eMSAGPandcogeneraJonhaveenabledMEGtolowerits
GHGIntensity21%belowinsituindustryaverage
*PhaseStart-UpHighersteamrequirementswithlowini:alproduc:on**TheNetGHGIntensityincludestheassociatedbenefitsofcogenera:on
Source:Third-partyassuredMEGGHGdata,EnvironmentCanadaNa:onalInventoryReport,CAPP
ResponsibleCanadianEnergy2013ProgressReportSummary,industryaveragees:mate
INVESTORPRESENTATION2016
8
MarkeJngStrategy
MEG’sHub&Spokestrategyfocusesondiversifyingmarket
accesstogettoworld-pricedmarkets
Pipe
HUB
•  U.S.Midwestaccessibleviaexistingpipelines
•  AccessPipeline
50%-owned:dual
dilbit/condensate
pipeline
•  U.S.GulfCoastaccessviaFlanaganSouth/
Seawaypipeline–MEGhascontractedini1al
capacityof25,000bpd,rampingupto50,000bpd
inearly2016and100,000bpdby2020
•  StonefellTerminal
100%-owned
Rail
•  Directpipe-to-railconnec1onfromStonefell
to3rdpartyrail-loadingterminal
•  BroadaccesstoNorthAmericanmarkets
Barge
•  Pipe-to-bargeaccesstoU.S.GulfCoast
andLouisiana
INVESTORPRESENTATION2016
9
WorldPricingforAlbertaHeavyOil MEGandtheindustryhaveimprovedrealizedbitumenpricesby
gainingaccesstoworldheavyoilpricingintheGulfCoast
Dec2013
July2015
Sept2015
Jan2014
Sept/Oct2014
MEGshippingby
railfrompipeline
connected
Canexusterminal
Marketlink
(XLSouth)startup
(700,000bpd)
Flanagan-Seaway
nomina1ons/linefill
(550,000bpd)
ImpactofJune
Albertawildfires
Impactofplanned
andunplanned
refineryoutages
inPADDII
Source:Bloomberg,Shorecan,NetEnergy
INVESTORPRESENTATION2016
10
CashOperaJngNetbacks
StrongoperaJngperformanceandlowcoststructureenable
MEGtonavigatethroughalowandvolaJlepriceenvironment
BusinessEnvironment 1H153Q15
WTIUS$/bbl
53.29
46.43
AECOC$/mcf
2.69
2.89
FXC/US$
1.24
1.31
Differential–WTI/WCS%
25%
29%
46.86
41.09
(12.47)
(10.06)
Bitumenrealiza1on
34.39
31.03
Transporta1on
(4.64)
(4.64)
Royalties
(0.85)
(0.88)
Opera1ngcosts–non-energy
(7.31)
(5.98)
Opera1ngcosts–energy
(3.91)
(3.97)
Powersales
1.21
0.85
Netbacks
Blendsales
Costofdiluent
CashOperatingNetback 18.89 16.41
C$perbarrelunlessspecified
INVESTORPRESENTATION2016
11
SustainingCapital
LowdeclineratesandlowsustainingcapitalenablesMEGtomaintain
andgrowproducJoninalowoilpriceenvironment
Sources:BMOCapitalMarketses:matesof2016sustainingcapital,MEG’sownes:mate
INVESTORPRESENTATION2016
12
CorporateBreakeven
PosiJonedtomaintainlowcostproducJonatUS$42-45WTI
3Q15actualresultsinC$unlessspecified
*AssumesAWBblenddiscountat32%ofbreakevenWTI,priceofdiluentat109%ofbreakevenWTI,
C/USFX$1.31,sustainingcapexof$7.50/bblatmid-pointofguidance
INVESTORPRESENTATION2016
13
2016CapitalBudgetandOperaJonalGuidance
CapitalInvestmentSummary
$millions
Sustainingandmaintenance
225
Produc1vityenhancementandgrowthcapital
65
Marke1ng,corporateandother
38
328
Other
~10%
10%
Growthcapital
20%
Sustainingand
maintenance
~70%
70%
Subjecttorounding
OperaJonalGuidance
Produc1on
Non-energyopera1ngcosts
INVESTORPRESENTATION2016
80,000to83,000bpd
Sustainingandmaintenancecapital
maintains2015’slevelofproduc1onand
includesmaintenanceofthePhase2
processingfacili1esplannedfor2Q16.
Growthcapitalincludesnewwells
thatwillcapitalizeonfreed-upsteam
fromfurtherop1miza1onofeMSAGP.
Includescapitalforcri1calpathand
seasonalitemsrelatedtofuture
brownfieldprojects,allowingMEG
flexibilitytorespondtoimproving
marketcondi1ons.
MarkeJng,corporateandother
primarilyincludesprojectswhichare
focusedonenhancingthevaluethe
companyreceivesforitsfuturebarrels.
$6.75to$7.75perbarrel
14
FinancialPosiJon
SignificantliquidityoffersflexibilitythroughvariousmarketcondiJons
•
Cashbalanceof$351millionatSeptember30th,2015andaddi1onal
proceedsof$110millionfromthesaleofanon-coreassetin4Q15
•
Rela1velylow-levelofsustainingandmaintenancecapital
•
US$2.5billionundrawnrevolvingcreditfacilitywithnoborrowingbase
•
Noneartermmaturi1es–firstdebtmaturityin2020
•
Alldebtiscovenant-lite–freeofanyfinancialmaintenancecovenants
andnotdependentonnorcalculatedfromcrudeoilreserves
•
Organicgrowthandpoten1almone1za1onofassetstofurther
strengthenthebalancesheet
INVESTORPRESENTATION2016
15
LiquidityandDebt
InC$billions,assumeUS$1=C$1.3394
Subjecttorounding
Liquidity
AsofSeptember30,2015
Cashandcashequivalents
0.35
Undrawnrevolvingcreditfacility
3.35
3.70
OutstandingDebt
Seniorsecuredtermloandue2020
1.68
6.5%Seniorunsecurednotesdue2021
1.00
6.375%Seniorunsecurednotesdue2023
1.07
7.0%Seniorunsecurednotesdue2024
1.34
5.09
Averagepre-taxeffecJvecostofdebt=5.8%*
*Definedastheweightedaverageinterestrateoftheseniorsecuredtermloanandsenior
unsecurednotesoutstanding,includingtheimpactofinterestrateswaps
S&Pra1ngsonMEG’soutstandingdebtareBB+andBB-fortheseniorsecuredtermloan
andourthreeseniorunsecurednotesrespec1vely,asofOctober31,2015.
Moody’sra1ngsonMEG’soutstandingdebtareBa2andB2fortheseniorsecuredtermloan
andourthreeseniorunsecurednotesrespec1vely,asofOctober31,2015.
INVESTORPRESENTATION2016
16
DebtMaturity
NodebtmaturityunJl2020
INVESTORPRESENTATION2016
17
APPENDICES
EnhanceModifiedSteam&GasPush
AcombinaJonofproventechnologiestoreduceSOR
•  Non-condensablegas(NCG)andinfillwellsareproventechnologies,typically
carriedoutasawind-downprocessafter6-8yearsofSAGDopera1ons
•  EarlyapplicationofeMSAGPhasthepotentialtosignificantlyreduceSORs
whileaccelera1ngbitumenproduc1onandincreasingul1materecoveries
*SteamandGasPush(SAGP)wasinventedbythelateDr.RogerButler,whoalsoinventedtheSAGDprocess.
INVESTORPRESENTATION2016
19
ChrisJnaLakeeMSAGPPadLayout
INVESTORPRESENTATION2016
20
HighQualityReservoirs
CoreholedrillingidenJfiessimilarcharacterisJcs
atChrisJnaLakeandSurmont
Porosity
AveragePay
Bitumen
Permeability
Thickness
SaturaJon
(%)
ChrisJnaLake
Phase1
26
72
34
3,000-7,000
ChrisJnaLake
Phase2
25
80
34
3,000-7,000
ChrisJnaLake
Phase2B
28
75
33
3,000-7,000
Surmont
26
76
34
3,000-7,000
(metres)
INVESTORPRESENTATION2016
(millidarcies)
(%)
21
Notes:
INVESTORPRESENTATION2016
22
InvestorRelationsContacts
HelenKelly
Director,InvestorRelations
403.767.6206
helen.kelly@megenergy.com
JohnRogers
VP,InvestorRelationsandExternalCommunications
403.770.5335
john.rogers@megenergy.com
www.megenergy.com/investors