Cenovus announces amended agreement with increased price to acquire MEG Energy and provides update on third-quarter operating results

Executive Summary

• Cenovus Energy entered into an amended arrangement agreement to acquire MEG Energy, offering each MEG share either $29.50 cash or 1.240 Cenovus shares (max $3.8 bn cash and 157.7 m Cenovus shares), a 50/50 cash‑share mix on a fully pro‑rated basis.
• The amended consideration values MEG at approximately $29.80 per share, about $1.32 higher than the original terms, and represents Cenovus’s final offer.
• Concurrently, Cenovus reported record Q3 2025 production, closed the sale of its 50% stake in WRB Refining for ~$1.8 bn, and accelerated share repurchases ($900 m total in Q3).

Key Details

• Amended Consideration:
• Cash option: $29.50 per MEG common share (max $3.8 bn).
• Share option: 1.240 Cenovus common shares per MEG share (max 157.7 m shares).
• Fully pro‑rated mix: ~50% cash, 50% Cenovus shares → approx. $14.75 cash + 0.620 Cenovus share per MEG share.
• Valuation: Approx. $29.80 per MEG share at Cenovus closing price on Oct 7 2025 (≈$1.32 premium to original terms).
• Standstill Amendment: Allows Cenovus to purchase up to 9.9% of MEG’s outstanding common shares and vote any acquired shares in favour of the transaction.
• Shareholder Meeting: Special meeting postponed from Oct 9 2025 to Oct 22 2025 (9 a.m. MT / 11 a.m. ET).
• Regulatory Approvals: Received clearance from Canadian Competition Bureau and U.S. FTC.
• Q3 2025 Production Highlights:
• Upstream production: ~832,000 BOE/d (record), with Oil Sands at ~640,000 bbl/d.
• Downstream crude throughput: ~712,000 bbl/d; U.S. refining ~606,000 bbl/d; utilization 98.8%.
• Project Updates: Narrows Lake ramp‑up on schedule; first oil from Foster Creek Optimization expected early 2026; first oil from West White Rose expected Q2 2026.
• Divestiture: Closed sale of 50% interest in WRB Refining LP to Phillips 66, cash proceeds ≈$1.8 bn received Oct 1 2025.
• Net Debt: ~US$5.3 bn before WRB proceeds; ~US$3.5 bn after receipt of proceeds.
• Share Repurchases (Q3 2025):
• September: 21.5 m shares for $512 m ($23.81 avg price).
• Total Q3: 40.4 m shares for $900 m ($22.31 avg price).
• Intent to accelerate repurchases in coming months, supported by net‑debt below long‑term target of US$4 bn.

Notable Quotes

• “We listened to these comments and have changed the consideration under our offer to a maximum of 50% cash and 50% Cenovus shares… we believe this Amended Agreement delivers compelling and superior value to MEG shareholders.” – Jon McKenzie, President & CEO, Cenovus Energy.