The Calgary-based company is now aiming at $305 million of capital spending next year, down from the previous estimate of $1.2 billion. The previous 2015 budget included about $600 million for mid-term growth initiatives at the Christina Lake oilsands project.
MEG didn't disclose on Wednesday where the spending reductions will be made but said it's responding to a decline in oil prices, which have fallen to five-year lows.
It said that staff levels "will remain consistent with current levels to maintain operations and to execute future growth."
Its previous guidance for 2015, issued Dec. 4, said the company would direct $965 million of its 2015 capital budget towards growth projects and $235 million for sustaining and maintaining its assets.
The company said previously that it had determined the Phase 2B plant at its Christina Lake oilsands operation was capable of processing more than 55,000 barrels per day of bitumen — well above the initial design of 35,000 barrels per day.
It said in the Dec. 4 guidance that $355 million would be allocated to a series of "brownfield" expansions at Christina Phase 2B to increase steam generation and water treatment capacity and a further $160 million for drilling plus and $85 million for early engineering for followup expansions.
"The revision of our 2015 capital investment plan is in response to the continuing deterioration of global crude oil markets," Bill McCaffrey, MEG's president and chief executive officer, said Wednesday.
"While our projects remain economic at current strip pricing, we believe it is prudent to reduce capital spending until we see a sustained improvement in commodity prices. Our brownfield opportunities also provide us with the flexibility to increase spending at a measured pace under the right market conditions."
MEG's previous guidance estimated 2014 capital spending would be $1.2 billion, down from the previous estimate of $1.8 billion.