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MEG is in negotiations to sell its 50 per cent share of the Access Pipeline it shares with Devon. The line is used to bring diluted oilsands bitumen from their facilities south of Fort McMurray in northern Alberta to the Edmonton area.

The cuts at MEG and Devon follow announcements of at least 1,340 job cuts this year at Cenovus Energy Inc., Canada’s largest thermal in situ oilsands producer.

In a recent report on oilsands, Calgary investment bank Peters & Co. said more layoffs can be expected if benchmark oil prices remain at or below US $50 per barrel, as that is a level where most oilsands producers will see minimal if any positive cash flow.

“The staff reductions that have been undertaken are a real cost saving that we believe has started to show through in the financial results,” it said, “and we believe that further headcount reductions will need to be undertaken — particularly if growth projects continue to be deferred.”

A Herald reader whose spouse was laid off by Devon said Calgary staff were told in e-mails sent out Wednesday at 7 a.m. to be in their offices with the doors closed by 8 a.m.

“Each employee either got a visit from a third party HR firm to handle the termination or from their manager if they were being retained,” the spouse said in an e-mail, speaking on condition of anonymity.

“Terminated employees were given until noon to pack their offices.”

In its second-quarter report, Oklahoma City-based Devon Energy Corp. said it produced an average of 98,000 barrels per day of heavy oil through its subsidiary in Canada, up 27 per cent year-over-year thanks to an additional 23,000 bpd from its Jackfish 3 oilsands project expansion. Excluding the impact of a turnaround at Jackfish, field operating costs declined 30 per cent year‐over‐year to US $15.64 per barrel, it stated.