Athabasca Oil Corporation press release

MEG Announces Further Improvement to Cenovus Transaction

2025-10-27

TSX - Toronto Stock Exchange · Oil · Bitumen · Natural Gas · Natural Gas Liquids · Canada · M&A / Asset Transactions

Canada NewsWire

_Improved Transaction Consideration of $30.00per MEG Share

_ _Improved Transaction Consideration payable 50% in cash and 50% in highly liquid Cenovus Shares

_ _The MEG Board recommends MEG Shareholders vote FORthe Improved Cenovus Transaction

_ _The Meeting date remains unchanged and the Meeting will occur on Thursday, October 30, 2025at 9:00 a.m.(Calgary Time)

_ For questions or assistance with voting or making elections, contact Sodali & Co., 1.888.999.2785 or 1.289.695.3075 for banks, brokers, and callers outside North America, assistance@investor.sodali.com

All amounts in Canadian dollars unless specified.

CALGARY, AB, Oct. 27, 2025/CNW/ - MEG Energy Corp. (TSX: MEG) ("MEG" or the "Company") today announced that it has entered into a second amending agreement (the "Second Amending Agreement") with Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) ("Cenovus") to amend the arrangement agreement between MEG and Cenovus dated August 21, 2025(the "Arrangement Agreement") as amended on October 7, 2025("First Amending Agreement"). The Second Amending Agreement increases the consideration payable to holders ("MEG Shareholders") of common shares of MEG ("MEG Shares") to $30.00per MEG Share (the "Improved Transaction Consideration") based on Cenovus's closing share price on October 24, 2025.

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The Improved Transaction Consideration represents a 47% premium to MEG's unaffected 20-day volume-weighted share price as of May 15, 2025, the last trading day preceding the first public announcement by Strathcona Resources Ltd. ("Strathcona") that it intended to acquire MEG, and an increase of $0.43per MEG Share from the market value as of October 24, 2025, of the consideration (the "Prior Transaction Consideration") offered by Cenovus under the First Amending Agreement.

In addition, MEG understands that, concurrently with the execution of the Second Amending Agreement, Cenovus has entered into an agreement with Strathcona(the "SCR Support Agreement") pursuant to which Strathcona, holding 36.1 million MEG Shares representing 14.2% of the outstanding MEG Shares, has agreed to vote, subject to the terms of the SCR Support Agreement, all of such MEG Shares FOR the Improved Cenovus Transaction (as defined herein). With Strathcona'ssupport, MEG currently expects that approximately 79% of the MEG Shares represented by proxy or expected to be voted in person at the Meeting are FOR the approval of the Improved Cenovus Transaction.

MEG also understands that, concurrent with the entering into the SCR Support Agreement, Cenovus entered into an agreement with Strathconato sell certain assets, including the Vawnthermal heavy oil asset in Saskatchewanand certain undeveloped lands in western Saskatchewanand Alberta("Divested Assets"), for aggregate consideration of $150 million, comprised of $75 millioncash paid on closing and up to $75 millionin contingent consideration dependent on future commodity prices (the "Cenovus Divestment Transaction"). The Divested Assets subject to the Cenovus Divestment Transaction have existing production of approximately 5,000 barrels of oil equivalent per day based on average production to date in 2025. The SCR Support Agreement and the Cenovus Divestment Transaction were each an arm's length transaction negotiated directly between Cenovus and Strathconawithout the involvement of MEG, and MEG understands that neither the Divested Assets nor the consideration payable in connection with the sale therewith are considered to be material to Cenovus.

Under the revised transaction with Cenovus, pursuant to the terms of the Second Amending Agreement (the "Improved Cenovus Transaction"), each MEG Shareholder will have the option to elect to receive:

i. $30.00in cash per MEG Share ("Cash Consideration");

ii. 1.255 Cenovus common shares (each whole share, a "Cenovus Share") per MEG Share ("Share Consideration"); or

iii. a combination thereof,

in all cases, subject to rounding and proration based on maximum aggregate Cash Consideration of approximately $3.8 billionand maximum aggregate Share Consideration of approximately 159.6 million Cenovus Shares, as set out in the Arrangement Agreement, as amended by the First Amending Agreement and the Second Amending Agreement.

The value of the Improved Transaction Consideration represents a mix of 50% cash and 50% Cenovus Shares. On a fully prorated basis, consideration per MEG Share represents approximately $15.00in cash and 0.6275 of a Cenovus Share. The consideration to be received by MEG Shareholders values MEG at $30.00per MEG Share on a fully prorated basis based on Cenovus's closing share price on October 24, 2025, representing an enterprise value of approximately $8.6 billion, including assumed debt.

The Second Amending Agreement will be filed today, October 27, 2025, on MEG's SEDAR+ profile at www.sedarplus.ca.

The MEG Board Unanimously Recommends MEG Shareholders Vote FORthe Improved Cenovus Transaction

The Board of Directors of MEG (the "MEG Board"), informed in part by the recommendation of a special committee of independent directors (the "Special Committee") and after considering advice from its external financial and legal advisors, unanimously determined that the Improved Cenovus Transaction is in the best interests of MEG, and approved the Second Amending Agreement and the transactions contemplated thereby. The MEG Board recommends MEG Shareholders vote FORthe Improved Cenovus Transaction at the Meeting.

The Improved Cenovus Transaction is subject to a number of conditions, including: (i) approval by at least 66⅔% of the MEG Shareholders represented in person or by proxy at the Meeting and the Minority Approval Vote (as defined below); (ii) approval of the Court of King's Bench of Alberta; and (iii) other customary closing conditions. The Competition Act Approval and the HSR Approval (each as defined in the Arrangement Agreement), were obtained on September 25, 2025and September 16, 2025, respectively, and remain in effect for the Improved Cenovus Transaction.

Minority Approval Vote

Although the Arrangement is not subject to the requirements of Multilateral Instrument 61-101 - _Protection of Minority Security Holders in Special Transactions_("MI 61-101"), the MEG Board, in approving the Second Amending Agreement, has as a matter of fairness determined that the Arrangement should be considered a "business combination" for purposes of MI 61-101 and thereby subject to a Minority Approval Vote (as defined below) in addition to the approval of the Arrangement by at least 66⅔% of the MEG Shareholders represented in person or by proxy at the Meeting.

MI 61-101 requires that, in addition to any other required security holder approval, a business combination must be subject to "minority approval" (as defined in MI 61-101), which is a simple majority of the votes cast thereon by MEG Shareholders present in person or represented by proxy at the Meeting, after excluding the votes cast by those persons whose votes are required to be excluded in accordance with MI 61-101 (the "Minority Approval Vote"). Pursuant to MI 61-101, MEG Shares held by a Shareholder who is a "related party" may in certain circumstances be excluded from voting in the Minority Approval Vote. Strathcona is a "related party" of MEG pursuant to MI 61-101 by virtue of its ownership of greater than 10% of the issued and outstanding MEG Shares. As a result, the MEG Shares held, directly or indirectly by Strathcona, and its respective related parties or joint actors, will be excluded for the purpose of tabulating the Minority Approval Vote.

As of the date hereof, to the knowledge of MEG, Strathconaand its related parties or joint actors beneficially own or exercise control or direction over, directly or indirectly, an aggregate of 36,100,000 MEG Shares, representing in the aggregate approximately 14.2% of the outstanding MEG Shares.

Based on the foregoing, MEG currently expects that approximately 75% of the MEG Shares represented by proxy or expected to be voted in person at the Meeting are FOR the approval of the Improved Cenovus Transaction when excluding the MEG Shares controlled by Strathconafor the purposes of the Minority Approval Vote.

Vote FORthe Improved Cenovus Transaction Today – Wednesday, October 29, 2025Proxy Deadline Approaching

The special meeting of MEG Shareholders (the "Meeting") is scheduled for Thursday, October 30, 2025at 9:00 a.m.(Calgary Time) and will take place at Brookfield Place, 225 – 6th Avenue S.W., Suite 1400, Calgary, Albertaor through a live audio webcast accessible at https://meetings.lumiconnect.com/400-560-917-636. The password for the live audio webcast of the Meeting is "meg2025", case-sensitive.

The MEG Board urges you to deposit your proxy form or voting instruction form and vote FORthe Improved Cenovus Transaction ahead of the proxy deadline of Wednesday, October 29, 2025 at 9:00 a.m.(Calgary Time)(the "Proxy Deadline").

No further action is required of MEG Shareholders who have already voted their MEG SharesFORthe previously announced Cenovus transaction.

MEG Shareholders who have not already voted are recommended to vote their MEG SharesFORthe Improved Cenovus Transaction promptly, and in any case, prior to the Proxy Deadline, using the instructions provided in their proxy form or voting instruction form.

MEG Shareholders who previously voted their MEG SharesAGAINSTthe previously announced Cenovus transaction are recommended to cast a new vote FORthe Improved Cenovus Transaction promptly, and in any case, prior to the Proxy Deadline. The later-dated proxy form or voting instruction form will revoke any previous vote made by such MEG Shareholders.

Due to time sensitivity and the Canada Post strike, MEG Shareholders are strongly encouraged to only vote online or by telephone using the instructions below:

| | Registered MEG Shareholders

| Beneficial MEG Shareholders

| | Who? | _If your MEG Shares are held in your name and represented by a physical certificate or direct registration system advice ("DRS Advice")_ | _If your MEG Shares are held with a broker, bank or other intermediary_ | | Telephone | Call 1.866.732.VOTE (8683) (toll-free in North America) or 1.312.588.4290 (outside North America) using the 15-digit control number found in your proxy.

If you have not received your 15-digit control number, please contact 1-800-564-6253 (toll-free in North America) or +1-514-982-7555 (outside North America). | Call the toll-free number on your voting instruction form (VIF) and vote using the 16-digit control number provided therein. | | Online | www.investorvote.com(requires your 15-digit control number from your broker) | www.proxyvote.com(requires your 16-digit control number from your broker) |

Questions and Assistance with Voting

If you are a beneficial MEG Shareholder and have not yet received your voting materials, please contact your broker or investment advisor to obtain your 16-digit control number and vote immediately at www.proxyvote.com. Your 16-digit control number will not change with the Improved Cenovus Transaction. Alternatively, contact Sodali & Co. at 1-888-999-2785 or assistance@investor.sodali.comfor help casting your vote.

Reminder to Submit Your Election for Your Preferred Consideration

MEG also reminds MEG Shareholders to submit their elections in respect of the consideration to be received pursuant to the Improved Cenovus Transaction. To be valid, MEG Shareholders must submit their elections to Computershare Investor Services Inc. (the "Depositary"), who is acting as depositary in connection with the Improved Cenovus Transaction, by the revised election deadline ofWednesday,October 29, 2025 at 4:30 p.m.(Calgary Time)(the "Revised Election Deadline").

The Improved Cenovus Transaction provides MEG Shareholders with a choice to elect their preferred form of consideration and each MEG Shareholder will be entitled to elect to receive the Cash Consideration, the Share Consideration, or a combination thereof, in all cases, subject to rounding and proration as described above.

MEG Shareholders who do not submit their election ahead of the Revised Election Deadline will be deemed to have elected to receive Cash Consideration with respect to 50% of their MEG Shares and Share Consideration with respect to 50% of their MEG Shares.

No further action is required of MEG Shareholders who previously submitted an election and who do not wish to change such election, including the mix of Cash Consideration and Share Consideration elected.

MEG Shareholders who previously submitted an election and who wish to change such election, including the mix of Cash Consideration and Share Consideration elected, must re-submit their election using the instructions below prior to the Revised Election Deadline.

MEG Shareholders who have not submitted an election are encouraged to submit their election in respect of the Improved Cenovus Transaction using the instructions below prior to the Revised Election Deadline.

Notwithstanding the election or deemed election of a MEG Shareholder for Cash Consideration or Share Consideration, such MEG Shareholder may receive a combination of Cash Consideration and Share Consideration (or a different combination than what was elected by such MEG Shareholder), depending on the elections (including deemed elections) made by all other MEG Shareholders.

A MEG Shareholder will not actually receive any consideration until the Improved Cenovus Transaction is completed and all required documents are submitted to the Depositary, including a Letter of Transmittal and Election Form and any certificate(s) or DRS Advice(s) representing their MEG Shares.

Due to the time sensitivity and the Canada Post strike, MEG recommends that all MEG Shareholders make their elections and courier or hand deliver the required documentation as soon as possibleand in advance of the Revised Election Deadline to permit delivery to the Depositary at or prior to the Revised Election Deadline in accordance with the below instructions.

Please courier or hand deliver the required documentation to Computershare Investor Services Inc. at any of the following addresses:

Toronto: 320 Bay Street, 14th Floor, Toronto, ON, M5H 4A6, Canada, 1.416.263.2900

Montreal: 650 de Maisonneuve Blvd. West, 7th floor, Montreal, QC, H3A 3T2, Canada, 1.514.982.7888

Vancouver: 510 Burrard St, 3rd Floor, Vancouver, BC, V6C 3B9, Canada, 1.604.661.9400

Calgary: 800 – 324 8 Avenue SW Calgary, AB, T2P 2Z2, Canada, 1.403.267.6800

Registered MEG Shareholders:No further action is required of registered MEG Shareholders who have already submitted an election and who do not wish to change such election, including the mix of Cash Consideration and Share Consideration elected. In connection with the First Amending Agreement, MEG made available a Letter of Transmittal and Election Form to each registered MEG Shareholder which outlined the necessary documentation and information required to make an election with respect to the transaction consideration. Registered MEG Shareholders who have not yet made an election in respect of the consideration they wish to receive under the Cenovus transaction, or who wish to change their election, should use this Letter of Transmittal and Election Form to make their election in respect of the Improved Cenovus Transaction. The Letter of Transmittal and Election Form is for use by registered MEG Shareholders only and can be found at: https://www.megenergy.com/investors/shareholder-information/special-meeting-of-meg-shareholders/and on MEG's SEDAR+ issuer profile at www.sedarplus.ca. Registered MEG Shareholders can refer to the instructions contained in the Letter of Transmittal and Election Form and should ensure they provide the required documentation and information to the Depositary ahead of the Revised Election Deadline.

Beneficial MEG Shareholders: No further action is required of beneficial MEG Shareholders who have already submitted an election and who do not wish to change such election, including the mix of Cash Consideration and Share Consideration elected. Beneficial MEG Shareholders (MEG Shareholders whose MEG Shares are not registered in their name but are held by an intermediary or broker) who have not yet made an election or who wish to change their election may provide instructions to their broker or other nominee to make or change the election on such beneficial MEG Shareholder's behalf. Intermediaries and brokers may establish earlier deadlines to make an election, and MEG urges such beneficial MEG Shareholders to contact their intermediary or broker for specific instructions.

Registered MEG Shareholders have the right to dissent with respect to the Improved Cenovus Transaction and to be paid by MEG the fair value of their MEG Shares in accordance with the provisions of Section 191 of the _Business Corporations Act_(Alberta), as modified by the interim order of the Court granted September 9, 2025(the "Interim Order") and the plan of arrangement, as appended to the Second Amending Agreement. Any dissent notices must be received by MEG, c/o Burnet, Duckworth & Palmer LLP, attention: Paul Chiswell, email: pchiswell@bdplaw.comby 5:00 p.m.(Calgary Time) on Wednesday, October 29, 2025. MEG Shareholders should review the Circular (as defined herein) for additional information with respect to their rights of dissent and how to exercise such dissent rights.

As a result of the First Amending Agreement and the Second Amending Agreement, MEG's application (the "Final Order Application") to the Court of King's Bench of Alberta(the "Court") for a final order in respect of the Improved Cenovus Transaction will be rescheduled to a later date. MEG Shareholders and any other interested parties that wish to attend the Final Order Application must file with the Court and serve upon MEG, c/o Burnet, Duckworth & Palmer LLP, attention: Paul Chiswell, email: pchiswell@bdplaw.com, a notice of intention to appear on or before 5:00 p.m.(Calgary Time) on Wednesday October 29, 2025, which notice must comply with the instructions set out in the Circular.

Information Circular

MEG filed an information circular ("Circular") on September 12, 2025, providing further details on the previously announced Cenovus transaction, election process and the upcoming Meeting. MEG Shareholders are encouraged to review the Circular. In accordance with the Interim Order, certain information provided in the Circular was revised in MEG's press release dated October 10, 2025to reflect recent updates, and has now been further revised in this press release, to reflect additional updates. Copies of the Circular, the Letter of Transmittal and Election Form, the First Amending Agreement, the Second Amending Agreement and additional information on the Meeting can be found at: https://www.megenergy.com/investors/shareholder-information/special-meeting-of-meg-shareholders/.

Advisors

BMO Capital Markets and Burnet, Duckworth & Palmer LLP are acting as financial advisor and legal counsel, respectively, to the Company. RBC Capital Markets and Norton Rose Fulbright Canada LLP are acting as financial advisor and legal counsel, respectively, to the Special Committee.

Forward-Looking Information

Certain statements contained in this news release may contain forward-looking statements and forward-looking information (collectively, "forward-looking information") within the meaning of applicable Canadian securities laws. All statements other than statements of historical fact may be forward-looking statements. Forward-looking information is frequently characterized by words such as "estimate", "will", "would", "believe", "plan", "expected", "potential", and other similar words or statements that certain events or conditions "likely", "may", "should", "would", "might" or "could" occur. Forward-looking information is often, but not always, identified by such words. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements, many of which are beyond MEG's control. MEG believes the expectations reflected in the forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking information included in this news release should not be unduly relied upon.