08:27 AM EDT, 10/01/2024 (MT Newswires) -- MEG Energy ( MEGEF ) said on Tuesday that it will begin returning 100% of its free cash flow to shareholders after it completed a deleveraging program that cut net debt to US$600 million.
The oil-sands producer said it repurchased the last of US$1.2 billion of its 2027 7.125% senior unsecured notes last week and will now return all unallocated cash for to shareholders through dividends and share buybacks, up from its current 50% payout level.
"This achievement marks a significant milestone in our multi-year capital allocation strategy, positioning us to substantially increase returns to our shareholders," Chief Executive Darlene Gates said in a release.
The company will make its first-ever dividend payment to shareholders, declared in July, this month, paying out $0.10 per share on Oct. 15 to shareholders of record on Sept. 17.
Free cash flow is the excess cash generated by the company that is not needed to support its operations. MEG in July said its free cash over the first two quarters of the year totaled $448 million after funding $235 million of capital expenditures.
MEG shares closed up $0.50 to $25.41 Monday on the Toronto Stock Exchange.