Athabasca Oil Corporation press release

MEG Announces Improved Cenovus Transaction: Higher Offer, Increased Equity Participation, and Special Meeting Postponement

2025-10-08

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

Canada NewsWire

_Improved Transaction Consideration of $29.80 per MEG Share represents an increase of $2.35 per MEG Share from the announced value of the Initial Transaction Consideration

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

_ _Increased equity component provides MEG Shareholders with additional upside participation in Cenovus, an industry-leading producer with significant scale, growth, and synergy potential at Christina Lake

_ _The MEG Board recommends MEG Shareholders vote FOR the Improved Cenovus Transaction

_ _The Meeting has been postponed to Wednesday, October 22, 2025 at 9:00 a.m. (Calgary Time) to allow MEG Shareholders additional time to deposit proxies and vote FOR the Improved Cenovus Transaction

_ _Deadline for MEG Shareholders to deposit their proxies in order to vote on the Improved Cenovus Transaction revised to Monday, October 20, 2025 at 9:00 a.m. (Calgary Time)

_ _Deadline for MEG Shareholders to make an election with respect to their preferred form of consideration to be received under the Improved Cenovus Transaction revised to Monday, October 20, 2025 at 4:30 p.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. 8, 2025 /CNW/ - MEG Energy Corp. (TSX: MEG) ("MEG", or the "Company") today announced that it has entered into an amending agreement (the "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 Amending Agreement increases the consideration payable to holders ("MEG Shareholders") of common shares of MEG ("MEG Shares") to $29.80 per MEG Share (the "Improved Transaction Consideration") based on Cenovus's closing share price on October 7, 2025 , representing a 46% 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.

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The Improved Transaction Consideration represents an increase of $2.35 per MEG Share from the market value of the consideration (the "Initial Transaction Consideration") offered under the initial transaction with Cenovus, as announced on August 22, 2025 (the "Initial Cenovus Transaction"), and an increase of $1.32 per MEG Share from the market value of the Initial Transaction Consideration as of October 7, 2025 .

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

i. $29.50 in cash per MEG Share ("Cash Consideration"); or

ii. 1.240 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 billion and maximum aggregate Share Consideration of approximately 157.7 million Cenovus Shares, as set out in the 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 $14.75 in cash and 0.620 of a Cenovus Share. The consideration to be received by MEG Shareholders values MEG at $29.80 per MEG Share on a fully prorated basis at Cenovus's closing share price on October 7, 2025 , representing an enterprise value of approximately $8.6 billion , including assumed debt.

In consideration of Cenovus amending and increasing the consideration for MEG, MEG and Cenovus have also amended the terms of the existing standstill agreement between the parties to allow Cenovus to complete purchases of up to 9.9% of the MEG Shares.

The Amending Agreement will be filed on MEG's SEDAR+ profile at www.sedarplus.ca .

"We are pleased to announce the Amending Agreement with Cenovus, which provides improved transaction economics and greater opportunity for MEG Shareholders to participate in substantial synergies through a higher equity component," said James McFarland , Chairman of MEG's board of directors (the "MEG Board"). "This marks the third enhancement to the terms originally put forward by Cenovus, delivering a significant increase to an already attractive transaction. The Improved Cenovus Transaction is the value maximizing strategic alternative for MEG Shareholders."

"Since the Initial Cenovus Transaction was announced, there has been strong recognition of the industrial logic and the synergy potential between MEG and Cenovus," said Darlene Gates , President and CEO of MEG. "The Amending Agreement enables MEG Shareholders to benefit from greater upside through a significant increase to the proportion of share consideration, while also raising the Initial Transaction Consideration. The Improved Transaction Consideration implies a flowing-barrel metric of $79,500 per bpd, the highest value ever paid for a pure-play oil sands asset."

MEG Meeting Postponed to Wednesday October 22, 2025

The special meeting of MEG Shareholders (the "Meeting"), previously scheduled for Thursday, October 9, 2025 at 9:00 a.m. (Calgary Time), has been postponed to Wednesday, October 22, 2025 at 9:00 a.m. (Calgary Time), to allow MEG Shareholders additional time to deposit proxies and vote FOR the Improved Cenovus Transaction.

The Meeting will take place at Brookfield Place, 225 – 6th Avenue S.W., Suite 1400, Calgary, Alberta or 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.

Deadline to Deposit Proxies Revised to Monday, October 20, 2025

The MEG Board urges you to deposit your proxy form or voting instruction form and vote FOR the Improved Cenovus Transaction ahead of the revised proxy deadline of Monday October 20, 2025 at 9:00 a.m. (Calgary Time) (the "Revised Proxy Deadline").

No further action is required of MEG Shareholders who have already voted their MEG Shares FOR the Initial Cenovus Transaction

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

MEG Shareholders who previously voted their MEG Shares AGAINST the Initial Cenovus Transaction are encouraged to cast a new vote FOR the Improved Cenovus Transaction promptly, and in any case, prior to the Revised Proxy Deadline. The later-dated proxy or voting instructions will supersede any previous submission.

In accordance with the terms of the Interim Order, the record date for the postponed Meeting remains September 8, 2025 .

Due to the time sensitivity and the Canada Post strike, MEG Shareholders are strongly encouraged to only vote online or by telephone prior to the Revised Proxy Deadline 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 . Alternatively, contact Sodali & Co. at 1-888-999-2785 or _assistance@investor.sodali.com _for help casting your vote.

Deadline to Submit Consideration Election Revised to Monday, October 20, 2025

MEG Shareholders are entitled 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 Monday, October 20, 2025 at 4:30 p.m. (Calgary Time) (the "Revised Election Deadline").

No further action is required of MEG Shareholders who have previously submitted an election under the Initial Cenovus Transaction and who do not wish to change such election, including the mix of cash and share consideration elected.

MEG Shareholders who have previously submitted an election under the Initial Cenovus Transaction and who wish to change such election, including the mix of cash 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.

Under the terms of the Amending Agreement, 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.

MEG Shareholders who have already made an election, whether for all Cash Consideration, Share Consideration, or a combination thereof, are encouraged to consider their election in light of the Improved Cenovus Transaction. If a MEG Shareholder desires to change a prior election, such MEG Shareholder should re-submit their election 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 the 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 required documentation as soon as possible and 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 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 MEG Shareholders who have already submitted an election under the Initial Cenovus Transaction and who do not wish to change such election. For the benefit of those who have not yet made an election or who wish to change their election, MEG shall deliver a Letter of Transmittal and Election Form to each registered MEG Shareholder which will outline the necessary documentation and information required to make an election in respect of the consideration such MEG Shareholder wishes to receive under the Improved Cenovus Transaction. Registered MEG Shareholders can refer to the instructions contained in the Letter of Transmittal and Election Form and 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 MEG Shareholders who have already submitted an election under the Initial Cenovus Transaction and who do not wish to change such election. MEG Shareholders who have not yet made an election or who wish to change their election, and whose MEG Shares are not registered in their name but are held by an intermediary or broker may provide instructions to their broker or other nominee to make or change the election on such MEG Shareholder's behalf. Intermediaries and brokers may establish earlier deadlines to make an election, and the MEG Board urges such beneficial MEG Shareholders to contact their intermediary or broker for specific instructions.

MEG Board Unanimously Recommends MEG Shareholders Vote FOR the Improved Cenovus Transaction

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 Amending Agreement and the transactions contemplated thereby. The MEG Board recommends MEG Shareholders vote FOR the 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; (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 Amending Agreement), were obtained on September 25, 2025 and September 16, 2025 , respectively, and remain in effect for the Improved Cenovus Transaction.

The MEG Board recommends that MEG Shareholders vote FOR the Improved Cenovus Transaction for the following reasons:

Enhanced Premium. The $29.80 Improved Transaction Consideration represents a 46% premium to MEG's unaffected 20-day volume-weighted average share price on May 15, 2025 , the last trading day before Strathcona's initial public announcement that it intended to acquire MEG, and a $2.35 and $1.32 increase per MEG Share, respectively, to the Initial Transaction Consideration at the time of announcement on August 22, 2025 and based on the current market value of the Initial Transaction Consideration as at October 7, 2025 . The Improved Cenovus Transaction values MEG at approximately $8.6 billion (including assumed debt), or $79,500 per bpd, the highest value ever paid for a pure-play oil sands asset.

Preferred Strategic Alternative After Comprehensive Review of All Alternatives. MEG's comprehensive review process involved outreach to over 15 parties and the publicly-announced process gave other parties the opportunity to express interest. MEG received three non-binding proposals, including one from Cenovus, and through rigorous negotiations, MEG secured an increase in the Cenovus offer from $25.00 to $27.25 per MEG Share (at announcement) and increased the equity component from 20% to 25%. The Amending Agreement includes Improved Transaction Consideration of $29.80 per MEG Share with an increase in the equity component from 25% to 50%, representing the third enhancement from the terms originally put forward by Cenovus.

Participation in Realization of Significant Synergies. The Improved Cenovus Transaction provides MEG Shareholders the ability to participate in future upside through ownership in Cenovus, an industry-leading producer with significant scale and growth potential. The combined company will benefit from greater efficiencies and significant synergies, and Cenovus expects to realize approximately $150 million in near-term annual synergies, increasing to over $400 million per year in 2028 and beyond. Increased equity consideration under the Amending Agreement further enhances participation by MEG Shareholders in the synergies expected from the Improved Cenovus Transaction.

Upside Potential in Cenovus Shares. 100% of equity research analysts covering Cenovus rate Cenovus Shares with a "buy" recommendation. The Improved Cenovus Transaction offers MEG Shareholders an option to choose their preferred form of consideration in the form of the Cash Consideration, the Share Consideration or a combination thereof. Increased equity consideration under the Amending Agreement further enhances upside participation for MEG Shareholders.

Accelerates MEG's Standalone Value. Cenovus plans to spend an incremental ~$400 million of capital between 2026-2028 to accelerate value and deliver production capacity of 150,000 bpd at Christina Lake by 2028, 15,000 bpd above what is expected of MEG's standalone business plan.

Certainty of Value and Robust Liquidity. The Improved Cenovus Transaction offers a high degree of value certainty, with 50% of the value of total consideration in highly liquid Cenovus Shares and 50% in cash. The Cenovus Shares will be freely tradeable immediately upon closing.

Recommended by Both Independent Proxy Advisory Firms. On September 26, 2025 and September 30, 2025 Institutional Shareholder Services and Glass, Lewis & Co., respectively, each announced that they recommend MEG Shareholders vote FOR the Initial Cenovus Transaction.

For additional detail, please refer to MEG's investor presentation dated October 8, 2025 , which is available at www.megenergy.com/offer-update

MEG's management information circular in respect of the Initial Cenovus Transaction dated September 9, 2025 (the "Circular") is available at www.megenergy.com/offer-update and on SEDAR+ at www.sedarplus.ca . MEG does not intend to prepare or deliver a revised management information circular in respect of the Improved Cenovus Transaction.

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 "will", "expect", "intend", "plan", "potential", "growth", "opportunity", "future" 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.