Athabasca Oil Corporation press release

Athabasca Oil Announces Agreement to be Acquired by Cenovus Energy

2026-10-05

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

$12.00 per share Purchase Price, represents a 14% premium to Athabasca’s 20-day volume-weighted average trading price

Transaction consideration mix of 35% Cenovus shares and 65% cash; Athabasca shareholders may elect to receive all cash, all Cenovus shares or any combination of the two, allowing them to tailor elections to their individual investment preferences, subject to pro-ration under the Arrangement

_$5.7 billion enterprise value with compelling metrics__1__of $127,000 per boe/d and 10.2x Debt Adjusted Funds Flow, recognizing the industry-leading value creation by Athabasca_

_25% premium to Athabasca’s Proved plus Probable After-Tax Net Asset Value__2__, accelerating value capture from future growth plans_

Participation in upside to an increased and accelerated development plan of Athabasca’s McMurray thermal and Duvernay assets with exposure to Cenovus’s diverse top-tier energy portfolio

Substantial synergies from close asset proximity and Cenovus’s leading in-situ expertise and scale in the McMurray fairway. Cenovus’s broader integrated platform and scale are better positioned to manage ongoing fiscal, regulatory and market-access risks

CALGARY, Alberta, Oct. 05, 2026 (GLOBE NEWSWIRE) -- Athabasca Oil Corporation (TSX: ATH) (“Athabasca” or the “Company”) is pleased to announce that it has entered into a definitive arrangement agreement (the “Agreement”) with Cenovus Energy Inc. (“Cenovus”), pursuant to which Cenovus will acquire all of the issued and outstanding common shares of Athabasca (the “Athabasca Shares”) for $12.00 per Athabasca Share (the “Purchase Price”) in a cash-and-share transaction (the “Transaction”). The Transaction implies an equity value for Athabasca of approximately $5.8 billion and is expected to close in December 2026.

“We are immensely proud of what the Athabasca team has built. Through disciplined operational execution, prudent capital allocation and an unwavering focus on per-share value creation, we have transformed Athabasca over the past decade into a financially strong company with a deep portfolio of high-quality assets and delivered exceptional returns for our shareholders,” said Rob Broen, President and Chief Executive Officer of Athabasca.

“This Transaction recognizes the value our team has created and allows Athabasca shareholders to realize substantial value today, with the opportunity to participate in future upside through Cenovus shares. Cenovus is the right long-term operator for these assets, with the scale, financial capacity, technical expertise and proven execution record to accelerate their development and realize their long-term potential. This outcome reflects the commitment and execution of our employees, and I want to thank every member of the Athabasca team for their contribution to our success.”

Strategic Rationale

Compelling Value and Transaction Metrics:The $12.00 per share consideration, represents a 14% premium to Athabasca’s 20-day volume-weighted average price using the 0.264 share exchange ratio (see Transaction Details). The Transaction implies compelling metrics1of $127,000 per boe/d and 10.2x Debt Adjusted Funds Flow based on Athabasca management’s forecasts. These metrics compare well with historical corporate energy transactions. Recognition of Exceptional Shareholder Value Creation: The Transaction recognizes the substantial value created by Athabasca, as demonstrated by total shareholder return exceeding 1,000% over the past five years. Flexible Consideration with Value Certainty and Continued Upside:The aggregate consideration mix of 65% cash and 35% equity provides Athabasca shareholders with near-term liquidity and value certainty, together with continued upside exposure to Cenovus’s broader portfolio of leading in-situ assets including Christina Lake, Foster Creek and Sunrise in the McMurray fairway. Athabasca shareholders have additional election flexibility to prioritize near-term value crystallization, continued participation in future value creation across Cenovus’s in-situ and integrated portfolio or a combination of both. Meaningful Premium to Athabasca’s After-Tax Net Asset Value:The Purchase Price represents a premium of 25% to Athabasca’s Proved plus Probable After-Tax Net Asset Value2. Athabasca shareholders will receive significant and immediate recognition of the value embedded in Athabasca’s standalone growth plans, including the Leismer expansion, Corner development and Duvernay Energy. Accelerated Development of Athabasca’s Deep Thermal Resource Portfolio: Athabasca’s extensive, long-life Thermal resource portfolio (1.2 billion barrels Proved plus Probable reserves and 1 billion barrels Best Estimate Contingent Resource) will benefit from increased and accelerated development under Cenovus’s ownership. Cenovus brings an investment-grade balance sheet, leading in-situ operating and development expertise, diversified market access and a proven track record of successfully executing and operating large-scale thermal oil projects. Specifically, Corner Phases 2 and 3 and further Leismer expansions are expected to be accelerated relative to the timelines contemplated in Athabasca’s standalone plan. Synergies: Consolidating Cenovus and Athabasca assets in the McMurray fairway is expected to generate significant operational and development synergies to enhance asset value. Cenovus’s leading in-situ expertise and scale position it to execute a broader growth strategy in which Athabasca shareholders can participate through their Cenovus shares. Its integrated platform and scale are better positioned to manage ongoing fiscal, regulatory and market-access risks. Duvernay Consolidation:Cenovus and Athabasca are currently equity partners in Duvernay Energy Corporation. The Transaction consolidates ownership of Duvernay Energy Corporation under Cenovus, simplifies development planning and complements Cenovus’s conventional business. Cenovus will be able to accelerate development, utilizing its strong balance sheet to drive growth and capture value in these top-tier assets.

_Footnote: Refer to the “Reader Advisory” section within this news release for additional information on Non‐GAAP Financial Measures. Notes: 1. Metrics based on enterprise value to Athabasca management’s 2026 exit production and Debt Adjusted Funds Flow forecast. 2026 strip commodity prices (Sept. 28): US$85 WTI, US$15.50 Western Canadian Select heavy differential, C$1.80 AECO, 0.72 C$/US$ FX. 2. Net Asset Value per Share calculated as McDaniel’s Proved plus Probable after-tax NPV10, as at December 31, 2025, adjusted for Net Cash as at June 30, 2026, and the Duvernay Energy minority interest divided by common shares._

Transaction Details

The Transaction will be completed by way of a plan of arrangement (the “Arrangement”) under the Business Corporations Act (Alberta) (the “ABCA”).

Under the terms of the Arrangement, Cenovus will acquire all of the issued and outstanding Athabasca Shares for cash and share consideration currently valued at $12.00 per Athabasca Share (the “Purchase Price”). Athabasca shareholders will have the option to elect to receive (i) $12.00 in cash for each Athabasca Share held; (ii) 0.264 of a Cenovus share for each Athabasca Share held; or (iii) such other proportion of cash and Cenovus shares as specified by the Athabasca shareholder. Shareholders who do not make a valid election will be deemed to have elected to receive default consideration of 100% cash for their Athabasca Shares.

All elections (including deemed elections) will be subject to pro-ration and cash and Cenovus share maximums. The aggregate cash consideration will not exceed 75% of the total consideration payable under the Arrangement, and the aggregate share consideration will not exceed 35% of the total consideration payable under the Arrangement. Accordingly, the aggregate total consideration will comprise between 65% and 75% cash and between 25% and 35% Cenovus shares, based on elections made and deemed to be made. Depending on a particular shareholder’s election or deemed election and pro-rationing, an Athabasca shareholder may ultimately receive entirely cash, entirely Cenovus shares or a combination of both.

The Transaction requires approval by Athabasca’s shareholders at a special meeting of Athabasca shareholders to be called to consider and vote on the Transaction (the “Athabasca Meeting”). The Athabasca Meeting is expected to be held in late November 2026, with the Transaction expected to close in December 2026. Details of the Transaction and the required shareholder vote will be included in a management information circular (“Circular”) that Athabasca expects to mail to Athabasca shareholders and file on SEDAR+ (http://www.sedarplus.com) in early November 2026. All Athabasca shareholders are urged to read the Circular once available as it will contain additional important information concerning the Transaction, including the deadline for making elections to receive cash and/or Cenovus shares.

Completion of the Transaction is subject to certain conditions set forth in the Agreement, including, without limitation, receipt of Athabasca shareholder approval, approval of the Court of King’s Bench of Alberta, applicable regulatory and stock exchange approvals, including under the _Competition Act_(Canada), and other customary closing conditions.

All of the directors and executive officers of Athabasca have entered into voting support agreements with Cenovus pursuant to which they have agreed, subject to the terms thereof, to vote their Athabasca Shares in favour of the resolutions approving the Transaction.

Recommendation of the Athabasca Board of Directors

The board of directors of Athabasca (the “Athabasca Board”), based in part upon the unanimous recommendation of the Special Committee of the Athabasca Board formed to consider the Transaction (the “Special Committee”) and after seeking and carefully considering advice from its financial and legal advisors, has unanimously determined that the Transaction is in the best interests of Athabasca and is fair to Athabasca shareholders. The Athabasca Board has determined to unanimously recommend that Athabasca shareholders vote in favour of the resolutions approving the Transaction and related matters at the Athabasca Meeting.

Advisors and Fairness Opinions

Peters & Co. Limited (“Peters & Co.”) is acting as exclusive financial advisor to the Company and the Athabasca Board. Peters & Co. has provided a verbal opinion to the effect that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Athabasca shareholders pursuant to the Transaction is fair, from a financial point of view, to Athabasca shareholders.

National Bank of Canada Capital Markets is acting as financial advisor to the Special Committee and has provided a verbal opinion to the Special Committee that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Athabasca shareholders pursuant to the Transaction is fair, from a financial point of view, to Athabasca shareholders.

Norton Rose Fulbright Canada LLP is acting as legal counsel to the Company. Bennett Jones LLP is acting as independent legal counsel to the Special Committee.

About Athabasca Oil Corporation

Athabasca Oil Corporation is a Canadian energy company with a focused strategy on the development of thermal and light oil assets. Situated in Alberta’s Western Canadian Sedimentary Basin, the Company has amassed a significant land base of extensive, high-quality resources. Athabasca’s light oil assets are held in a private subsidiary (Duvernay Energy Corporation) in which Athabasca owns a 70% equity interest. Athabasca’s common shares trade on the TSX under the symbol “ATH”. For more information, visit www.atha.com.

| For more information, please contact: | | | Matthew Taylor | Robert Broen | | Chief Financial Officer | President and CEO | | 1-403-817-9104 | 1-403-817-9190 | | mtaylor@atha.com | rbroen@atha.com | | | |

Reader Advisory:

This News Release contains forward-looking information that involves various risks, uncertainties and other factors. All information other than statements of historical fact is forward-looking information. The use of any of the words “anticipate”, “plan”, “project”, “continue”, “maintain”, “may”, “estimate”, “expect”, “will”, “target”, “forecast”, “could”, “intend”, “potential”, “guidance”, “outlook” and similar expressions suggesting future outcome are intended to identify forward-looking information. The forward-looking information is not historical fact, but rather is based on the Company’s current plans, objectives, goals, strategies, estimates, assumptions and projections about the Company’s industry, business and future operating and financial results. This 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 information. 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. This information speaks only as of the date of this News Release. In particular, this News Release contains forward-looking information pertaining to, but not limited to, the following: the Purchase Price per Athabasca share to be received pursuant to the Transaction; the anticipated benefits of the Transaction to Athabasca shareholders, including but not limited to near-term liquidity and value certainty and participation in future upside of Cenovus; the anticipated timing for closing of the Transaction; the expectation that the Transaction reduces Athabasca shareholders’ exposure to future volatility associated with commodity prices, regulatory and fiscal policy, and the execution of Athabasca’s standalone growth plans; the expectations that the Transaction will bring forward substantial value from Athabasca’s standalone growth plans including the Leismer expansion, Corner development and Duvernay Energy; the anticipated accelerated development of Athabasca’s assets under Cenovus’s ownership, including the advancement of Corner Phases 2 and 3 and further Leismer expansions beyond the timelines contemplated in Athabasca’s standalone plans; the expectations that consolidating Cenovus and Athabasca assets in the McMurray fairway will generate significant operational and development synergies to enhance asset value; the expectations that the consolidated ownership of Duvernay Energy under Cenovus as a result of the Transaction will simplify development planning, accelerate development, drive growth, capture value and complement Cenovus’s conventional business; the anticipated timing for holding of the Athabasca Meeting; the expected timing of the mailing and contents of the Circular; and other similar statements.

In addition, information and statements in this News Release relating to “Reserves” and “Resources” are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated, and that the reserves and resources described can be profitably produced in the future. With respect to forward-looking information contained in this News Release, assumptions have been made regarding, among other things: the timely completion of the Transaction and the satisfaction of the conditions to which the Transaction is subject to; the approval of the Transaction at the Athabasca Meeting; Athabasca’s standalone plan; regulatory and government approvals for the Transaction, including approval of the Court of King’s Bench of Alberta and receipt of applicable regulatory and stock exchange approvals, in each case on the anticipated timelines; the realization of anticipated benefits of the Transaction including significant operational and development synergies; commodity prices; the regulatory framework governing royalties, taxes and environmental matters in the jurisdictions in which the Company conducts and will conduct business and the effects that such regulatory framework will have on the Company, including on the Company’s financial condition and results of operations; the Company’s financial and operational flexibility; the Company’s financial sustainability; Athabasca's cash flow break-even commodity prices; the Company’s ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the applicability of technologies for the recovery and production of the Company’s reserves and resources; future capital expenditures to be made by the Company; future sources of funding for the Company’s capital programs; the Company’s future debt levels; future production levels; the Company’s ability to obtain financing and/or enter into joint venture arrangements, on acceptable terms as permitted under the Agreement; operating costs; compliance of counterparties with the terms of contractual arrangements; impact of increasing competition globally; collection risk of outstanding accounts receivable from third parties; geological and engineering estimates in respect of the Company’s reserves and resources; recoverability of reserves and resources; the geography of the areas in which the Company is conducting exploration and development activities and the quality of its assets. Certain other assumptions related to the Company’s Reserves and Resources are contained in the report of McDaniel & Associates Consultants Ltd. (“McDaniel”) evaluating Athabasca’s Proved Reserves, Probable Reserves and Contingent Resources as at December 31, 2025 (which is referred to herein as the “McDaniel Report”).

Actual results could differ materially from those anticipated in this forward-looking information as a result of significant known and unknown risks and uncertainties. Factors that could cause actual results to vary from forward-looking information or may affect the operations, performance, development and results of Athabasca’s businesses include: the risk that the Transaction may be varied, accelerated or terminated in certain circumstances; risks relating to the outcome of the Transaction, including the risks associated with approval at the Athabasca Meeting; the risk that the conditions to the Transaction may not be satisfied, or to the extent permitted, waived, including the risk that required regulatory approvals may not be received in a timely manner or at all; fluctuations in the market price of Cenovus shares and the resulting value of the share consideration; the risk that the anticipated benefits of the Transaction may not be realized in the manner or on the timelines anticipated or at all; weakness in the oil and gas industry; exploration, development and production risks; prices, markets and marketing; market conditions; trade relations and tariffs; climate change and carbon pricing risk; statutes and regulations regarding the environment; regulatory environment and changes in applicable law; gathering and processing facilities, pipeline systems and rail; reputation and public perception of the oil and gas sector; environment, social and governance goals; political uncertainty; state of capital markets; ability to finance capital requirements; access to capital and insurance; abandonment and reclamation costs; changing demand for oil and natural gas products; anticipated benefits of acquisitions and dispositions; royalty regimes; foreign exchange rates and interest rates; reserves; hedging; operational dependence; operating costs; project risks; supply chain disruption; financial assurances; diluent supply; third party credit risk; Indigenous claims; reliance on key personnel and operators; income tax; cybersecurity; advanced technologies; hydraulic fracturing; liability management; seasonality and weather conditions; unexpected events; internal controls; evolving corporate governance, sustainability and reporting framework; limitations of insurance; litigation; natural gas overlying bitumen resources; competition; chain of title and expiration of licenses and leases; breaches of confidentiality; new industry related activities or new geographical areas; water use restrictions and/or limited access to water; relationship with Duvernay Energy Corporation; management estimates and assumptions; third-party claims; conflicts of interest; inflation and cost management; credit ratings; growth management; impact of pandemics; ability of investors resident in the United States to enforce civil remedies in Canada; and risks related to Athabasca’s debt and securities. All subsequent forward-looking information, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Further information regarding the assumptions and risks inherent in the making of forward-looking statements and in respect of the Transaction will be found in the Circular, along with Athabasca’s other public disclosure documents, including the Company’s Annual Information Form dated March 4, 2026, which are available on SEDAR+ at www.sedarplus.ca.