11:08 AM EST, 11/26/2024 (MT Newswires) -- (Adds analyst comment and updates shares.)

MEG Energy ( MEGEF ) late on Monday unveiled its 2025 capital investment plan and operational guidance for its northern Alberta oil-sands operations and said plans to boost output through a Christina Lake facility expansion project.

Capital expenditures are forecast at $635 million in 2025, including $70 million for a maintenance turnaround and $130 million for the facility expansion project. The company expects annual production of 95,000 to 105,000 barrels per day (b/d), reflecting a scheduled second-quarter 2025 turnaround that will affect annual output by up to 8,000 b/d.

In addition, 100% of free cash flow will be distributed to shareholders in 2025 through a sustainable dividend and share buybacks.

MEG's board of directors made a final investment decision to proceed with a multi-year facility expansion project to add 25,000 b/d of new production capacity to the company's Christina Lake thermal oil-sands operations, with an estimated cost of $440 million over the next three years.

National Bank of Canada maintained its sector-perform rating and $31.00 price target following MEG's release.

"Overall, the business update is directionally consistent with our current production forecast; however, we would note that our sustaining capital and efficiencies are higher than the company expects over the longer range plan," National Bank said.

MEG shares were last seen down $0.92 to $25.10 on the Toronto Stock Exchange.

Price: 25.06, Change: -0.96, Percent Change: -3.69