MEG Energy $750 million credit facility to launch Wednesday

By Sara Rosenberg

New York, Feb. 27 - MEG Energy Corp. is scheduled to hold a bank meeting on Wednesday to launch its proposed $750 million credit facility (BB), according to market sources.

Lehman and Credit Suisse are the lead banks on the deal, with Lehman the left lead.

The facility consists of a $50 million three-year revolver with a 50 basis point undrawn fee, a $350 million funded seven-year term loan B and a $350 million two-year delayed-draw, with seven-year final maturity, term loan B, sources said.

Talk is that the revolver, the funded term loan B and the delayed-draw term loan B will all be launched with opening price talk of Libor plus 225 bps.

Proceeds will be used to develop a SAGD (Steam Assisted Gravity Drainage) project. SAGD involves drilling pairs of horizontal wells. The upper wells are the steam injection wells and the lower wells are equipped as the bitumen production wells. Steam is continuously injected through the upper well bores to create steam chambers, which heat the formation. The heated bitumen, under the influence of gravity, then drains to the lower horizontal wells and is produced to the surface.

MEG Energy is an oil and gas company involved in oil sands development in northeast Alberta, Canada.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.