Page 1

PRESS RELEASE MEG Energy announces strong first quarter operational and financial performance All financial figures are in Canadian dollars ( $ or C $ ) and all references to barrels are per barrel of bitumen unless otherwise noted - CALGARY , ALBERTA ( May 3 , 2021 ) – MEG Energy Corp. ( TSX : MEG , " MEG " or the " Corporation " ) reported its first quarter of 2021 operational and financial results . MEG continues to proactively respond to the safety challenges associated with the COVID - 19 pandemic and remains committed to ensuring the health and safety of all of its personnel and the safe and reliable operation of the Christina Lake facility . " MEG's first quarter was strong from both a financial and operational perspective " said Derek Evans , President and Chief Executive Officer . " We continue to benefit from both the strength in global oil market dynamics as well as the structural improvement in heavy oil differentials . Operationally , better than expected Christina Lake reservoir performance post the 75 - day turnaround in 2020 has given us the confidence to tighten our production guidance and sets us up well for the balance of 2021. " First quarter financial and operating highlights include : • • • Adjusted funds flow of $ 127 million ( $ 0.41 per share ) , impacted by a realized commodity price risk management loss in the quarter of $ 69 million ( $ 0.22 per share ) ; Quarterly production volumes of 90,842 barrels per day ( bbls / d ) at a steam - oil ratio ( SOR ) of 2.37 . Annual average production guidance has been revised to 88,000 - 90,000 bbls / d as production has continued to outpace expectations post the major turnaround in 2020 ; Net operating costs of $ 5.25 per barrel , including non - energy operating costs of $ 4.05 per barrel . Power revenue offset energy operating costs by 72 % , resulting in a net impact of $ 1.20 per barrel ; Successfully refinanced in the quarter US $ 600 million of existing indebtedness at a coupon of 5.875 % due February 2029 , which pushed out the earliest outstanding long term debt maturity to 2025 ; and Total capital investment of $ 70 million in the quarter was directed to sustaining and maintenance capital , resulting in $ 57 million of free cash flow in the quarter . Blend Sales Pricing and North American Market Access MEG realized an average AWB blend sales price of US $ 48.39 per barrel during the first quarter of 2021 compared to US $ 35.11 per barrel in the fourth quarter of 2020. The increase in average AWB blend sales price quarter over quarter was primarily a result of the average WTI price increasing by US $ 15.18 per barrel , partially offset by the average WTI : AWB differential at Edmonton widening by US $ 3.66 per barrel . MEG sold 38 % of its sales volumes to the U.S. Gulf Coast ( " USGC " ) in the first quarter of 2021 compared to 48 % in the fourth quarter of 2020. The decrease in sales volume to the USGC in the first quarter of 2021 is a result of the Enbridge mainline apportionment increasing from 22 % in the fourth quarter of 2020 to 48 % in the first quarter of 2021 . MEG ENERGY 21st Floor , 600 - 3rd Avenue S.W. , Calgary , AB T2P OG5 T 403.770.0446 F 403.264.1711 megenergy.com