MEG Provides Additional Information Related to the Improved Cenovus Transaction

Executive Summary

• MEG Energy disclosed a Second Amending Agreement that raises the purchase price offered by Cenovus to C$30.00 per MEG share, an increase of C$0.50 per share.
• The amendment is tied to Strathcona Resources’ support agreement and a $150 million divestiture of assets from Cenovus, which advisors deem immaterial to the overall transaction.
• MEG’s board and special committee approved the amendment and confirmed that the transaction will be subject to a Minority Approval Vote under MI 61‑101, with Strathcona’s 36.1 million shares excluded from that vote.

Key Details

• Second Amending Agreement: Increases consideration payable to MEG shareholders to C$30.00 per share (based on Cenovus closing price on Oct 24, 2025).
• SCR Support Agreement: Strathcona holds 36.1 million MEG shares (14.2% of outstanding) and will vote all for the acquisition.
• Divestiture Agreement: Cenovus to sell Vawn thermal heavy‑oil asset + undeveloped lands to Strathcona for $150 M total – $75 M cash at closing, up to $75 M contingent on WCS price (> C$70/barrel).
• Asset Production: Divested assets produced ~5,000 boe/d in 2025; Cenovus produced ~832,000 boe/d Q3‑2025.
• Advisors’ Opinion: BMO Capital Markets and RBC Capital Markets concluded the divested assets are immaterial to Cenovus and will not materially affect MEG shareholders’ consideration.
• Board Approval: Special Committee recommended, and the MEG Board unanimously approved, the Second Amending Agreement.
• Minority Approval Vote: Transaction classified as a “business combination” for MI 61‑101; requires simple majority of non‑related‑party votes. Strathcona’s 36.1 M shares (and related parties) will be excluded from the vote count.
• Reserves of Divested Assets: Proven reserves of 25.2 MM barrels as of year‑end 2024. Contingent payment formula: $1 M per dollar per barrel WCS index exceeds C$70, payable quarterly over 14 quarters, max $75 M.
• Information Circular: Updated on Sep 12, 2025 and further amended by press releases on Oct 10, 27, 30 2025; available at MEG’s investor site.
• Financial & Legal Advisors: BMO Capital Markets (financial) & Burnet, Duckworth & Palmer LLP (legal) to MEG; RBC Capital Markets (financial) & Norton Rose Fulbright Canada LLP (legal) to Special Committee.

Notable Quotes

(No direct CEO/President quotes were provided in the release.)