(Corrects nature of Warburg Pincus ownership in first paragraph.)
MEG Energy Corp. (MEG), the oil-sands developer whose largest shareholder is Warburg Pincus LLC, fell to its lowest intraday price as crude dropped and on Canada’s outlook for slower economic growth.
MEG, based in Calgary, declined 5.8 percent to C$27.05 at 12:16 p.m. in Toronto, after earlier falling to C$26.39, the lowest since its C$35 a share initial public offering in July 2010. Other Canadian oil stocks faced losses, including Baytex Energy Corp. (BTE), which fell 4.3 percent, Canadian Oil Sands Ltd. (COS), off 3.8 percent, and Penn West Petroleum Ltd. (PWT), 4.8 percent lower.
“There’s been a commodity selloff within the Canadian space on concerns about the global economy and growth out of key regions like China,” Chris Feltin, a Calgary-based analyst at Macquarie Group Ltd., said in a phone interview. Feltin cited today’s decline, of as much as 2.9 percent, in U.S. crude prices and lower demand for Canadian oil as U.S. refineries undergo seasonal maintenance.
MEG, which extracts a heavy crude called bitumen from the oil sands, declined more than others because of its higher debt relative to cash flow as the company increases production, Feltin said. Bank of Canada Governor Mark Carney trimmed his 2013 economic growth outlook for the nation today, citing lower business investment and government spending.
“Obviously, we’re part of a general wave right now; it’s a movement with the drop of the price of oil and that’s hitting the market,” Brad Bellows, a MEG spokesman, said in a phone interview.
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