MEG Energy Corp. is snapping up millions of its own shares, the latest Canadian energy company to undertake shareholder-friendly moves as oil prices hold at multi-year highs.

The company said Tuesday it purchased 3.4 million shares out of a block trade of 15 million shares that changed hands at $21.85 per share. It was not immediately known who sold the 15 million shares.

Eric Nuttall, a partner and senior portfolio manager at Ninepoint Partners, told BNN Bloomberg he’s “99.9 per cent sure” the seller is Chinese energy giant CNOOC Ltd., as the company was the only shareholder with the scale to offload such a stake.

"It's CNOOC for sure," he said. 

CNOOC did not immediately respond to BNN Bloomberg’s request for comment.

A MEG Energy spokesperson said the company was in no position to comment on the share sale.

“Thanks for your inquiry. I’m not in a position to comment on this matter,” the spokesperson said. 

According to public disclosures, CNOOC holds a 12.39 per cent stake in MEG. The only other shareholder with 15 million shares to sell – equivalent to about 4.9 per cent of the public float in MEG – is FMR LLC, which holds shares of MEG in dozens of funds under the Fidelity Investments banner.

A spokesperson for Fidelity told BNN the firm does not comment on changes in its individual holdings due to compliance rules. 

The share repurchase is part of plans MEG announced in March to repurchase about 27 million shares, or roughly 10 per cent of its total shares outstanding.

The share buyback comes on the heels of MEG posting record adjusted funds flow in its fiscal first quarter, boosted by strength in energy prices as demand rebounds and the Russian invasion of Ukraine prompts supply-side concerns.

MEG also announced plans to allocate 25 per cent of its free cash flow to share buybacks once net debt reaches US$1.7 billion – just a hair lower than the US$1.72 billion of net debt on its books at the end of the first quarter.

The remainder of that free cash flow is being put to work further reducing the company’s debt, which it expects to fall to US$1.2 billion by the end of the third quarter. Once that target is achieved, MEG plans to dedicate 50 per cent of free cash on hand to share buybacks.

- With a file from BNN Bloomberg Western Bureau Chief Tara Weber