MEG Announces Further Improvement to Cenovus Transaction

Executive Summary

• MEG Energy Corp. entered into a Second Amending Agreement with Cenovus Energy, raising the transaction consideration to $30.00 per MEG share (50% cash, 50% Cenovus shares).
• The improved consideration represents a 47 % premium to the pre‑announcement price and adds $0.43 per share versus the prior offer.
• Shareholders are urged to vote FOR the transaction at the special meeting on Oct 30, 2025, with an expected ~79 % support (≈75 % after minority‑approval adjustments).

Key Details

• Improved Transaction Consideration: $30.00 per MEG share
• Cash component: $15.00 per share (max aggregate cash ≈ $3.8 bn)
• Share component: 0.6275 Cenovus shares per MEG share (max aggregate ≈ 159.6 m Cenovus shares)

• Payment Mix: 50% cash, 50% Cenovus common shares.

• Second Amending Agreement filed on Oct 27, 2025 to SEDAR+.

• Shareholder Voting:

• Special meeting: Thu Oct 30, 2025 at 9:00 a.m. (Calgary time).
• Proxy deadline: Wed Oct 29, 2025 9:00 a.m. (Calgary time).

• Revised election deadline for consideration choice: Wed Oct 29, 2025 4:30 p.m. (Calgary time).

• Support from Strathcona Resources Ltd.:

• Holds 36.1 m MEG shares (≈14.2 % of outstanding) and has agreed to vote FOR the improved transaction under a separate SCR Support Agreement.

• Cenovus Divestment Transaction (related but arm’s‑length):

• Sale of Vawn thermal heavy oil asset & undeveloped lands for $150 m ($75 m cash + up to $75 m contingent consideration).

• Assets produce ~5,000 boe/d; not material to Cenovus.

• Approval Conditions:

• ≥66⅔ % shareholder approval (including Minority Approval Vote).
• Court of King's Bench of Alberta approval and customary closing conditions.

• Competition Act and HSR approvals already obtained (Sept 2025).

• Minority Approval Vote:

• Required under MI 61‑101; Strathcona’s shares excluded from this count.

• Expected ≈75 % support after exclusion.

• Enterprise Value Post‑Transaction: Approx. $8.6 bn (including assumed debt).

• Advisors:

• MEG – BMO Capital Markets (financial), Burnet, Duckworth & Palmer LLP (legal).
• Special Committee – RBC Capital Markets (financial), Norton Rose Fulbright Canada LLP (legal).

Notable Quotes

“The Board unanimously recommends shareholders vote FOR the Improved Cenovus Transaction, which provides a significant premium and balanced cash‑share consideration for our investors.” – MEG Board of Directors

Materiality Assessment: Material – Positive (substantive amendment to a major business combination that materially enhances shareholder value).