Athabasca Oil Corporation press release

Athabasca Files Management Information Circular for Arrangement with Cenovus

2026-11-02

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

CALGARY, Alberta, Nov. 02, 2026 (GLOBE NEWSWIRE) -- Athabasca Oil Corporation (TSX: ATH) (“Athabasca” or the “Corporation”) announced today that it has filed its management information circular (the “Information Circular”) and related materials for the upcoming special meeting (the “Meeting”) of holders (the “Athabasca Shareholders”) of its common shares (the “Athabasca Shares”). At the Meeting, Athabasca Shareholders will consider the previously announced acquisition of all outstanding Athabasca Shares by Cenovus Energy Inc. (“Cenovus”) pursuant to a plan of arrangement (the “Arrangement” or the “Transaction”). The Information Circular and related Meeting materials can be found on Athabasca’s SEDAR+ profile at www.sedarplus.ca and on its website at www.atha.com/2026-special-meeting.

The Board of Directors of Athabasca (the “Athabasca Board”) unanimously recommends that shareholders vote FOR the Transaction Vote today. The proxy voting deadline is November 25, 2026 at 10:00 a.m. (Calgary time) _Questions or Require Voting Assistance? Contact Athabasca’s proxy solicitation agent, Laurel Hill Advisory Group by telephone at 1__‑877__‑452__‑7184 (toll-free in North America), 1-416-304-0211 (outside North America), by texting __“INFO__” to either number, or by email to assistance@laurelhill.com. Also visit www.atha.com/2026-special-meeting for more information_

Consideration under the Arrangement

Under the terms of the Arrangement, Cenovus will acquire all of the issued and outstanding Athabasca Shares for cash and share consideration 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.

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 as at October 2, 2026. 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 exceptionally 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. 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 immediate recognition of the value embedded in Athabasca’s standalone growth plans, including the Leismer expansion, Corner development and Duvernay Energy. 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. Athabasca shareholders have election flexibility to prioritize near-term value crystallization, continued participation in future value creation across Cenovus’s portfolio or a combination of both. Accelerated Development of Athabasca’s Deep Thermal Resource Portfolio: Athabasca’s long-life Thermal resource will benefit from increased and accelerated development utilizing Cenovus’s fiscal capacity. 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 synergies and allow execution of a broader growth strategy. Cenovus’s integrated platform and scale are better positioned to manage ongoing fiscal, regulatory and market-access risks. Duvernay Consolidation: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 Measure (e.g. Debt Adjusted Funds Flow) and production disclosures.

Notes: 1. Metrics based on $5.7 billion 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. After-Tax Net Asset Value per Share calculated as at December 31, 2025 as evaluated by Athabasca's independent reserves evaluator McDaniel as Proved plus Probable after-tax NPV10, adjusted for Net Cash as at June 30, 2026, and the Duvernay Energy minority interest divided by common shares.

The Meeting

The Meeting is being held to vote on a special resolution to approve the previously announced Arrangement which provides for the acquisition of all of the outstanding Athabasca Shares by Cenovus.

The Meeting will be held in a hybrid format on November 27, 2026 at 10:00 a.m. (Calgary time), where Athabasca Shareholders can participate in person at Lumi Experience Studio, Suite 1410, 225 6 Ave SW, Calgary, Alberta, Canada, T2P 3S9, or through a live audio webcast accessible online at https://meetings.lumiconnect.com/400-819-831-662(case-sensitive). The password for the live audio webcast is "athabasca2026" (case-sensitive).

Athabasca Board Recommendation

The Athabasca Board unanimously recommends that Athabasca Shareholders vote FOR the Transaction Resolution.In making their recommendations, the Athabasca Board and a special committee of independent directors of the Corporation considered and relied on a number of factors, including the strategic rationale and anticipated benefits to Athabasca Shareholders outlined above and described in greater detail in the Information Circular.

Vote Your Shares Today – Voting is Important and Easy

The deadline for shareholders to return their completed proxies or voting instruction forms is Wednesday, November 25, 2026 at 10:00 a.m. (Calgary time).

Shareholders are encouraged to vote well in advance of the Meeting to ensure votes are received in a timely manner. Further voting instructions can be found at www.atha.com/2026-special-meetingor by calling Laurel Hill at the contact below.

Shareholder Questions and Voting Assistance

If you have questions, including the procedures for voting, please contact Athabasca’s proxy solicitation agent:

Laurel Hill Advisory Group

Toll-free calls in North America at 1-877-452-7184 (1-416-304-0211 outside North America)

Text message by texting "INFO" to 416-304-0211 or 1-877-452-7184

Email at assistance@laurelhill.com

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 form of consideration and elections under the Transaction; the implied value of the Transaction and Athabasca management’s 2026 exit production and Debt Adjusted Funds Flow forecast; the anticipated timing for closing of the Transaction; the expectation that Cenovus is better positioned to manage ongoing fiscal, regulatory and market-access risk; the expectation that the Transaction provides significant and immediate recognition of the value embedded in Athabasca's standalone growth plans; 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 relative to the timelines contemplated in Athabasca’s standalone plans; the anticipated ramp-up of production at Leismer, including the timing of steaming of well pairs, the winter drilling program and the expectation that the Leismer expansion will remain on budget and on schedule; the development of the Corner Phase 1 project; Duvernay Energy's development plans, including the timing of production from new well pads and the construction of regional infrastructure; 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 shareholder meeting; the expected timing of the mailing of the management information circular; and other similar statements.

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 shareholder 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 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 the risk factors set forth in the Company’s Annual Information Form (“AIF”) dated March 4, 2026 available on SEDAR at www.sedarplus.ca, including, but not limited to: 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. 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 management information circular, along with Athabasca’s other public disclosure documents, including the Company’s AIF dated March 4, 2026, which are available on SEDAR+ at www.sedarplus.ca.

Also included in this News Release are estimates of Athabasca's 2026 exit production and Debt Adjusted Fund Flow, which are based on the various assumptions as to production levels, commodity prices, currency exchange rates and other assumptions disclosed in this News Release. To the extent any such estimate constitutes a financial outlook, it was approved by management and the Board of Directors of Athabasca and is included to provide readers with an understanding of the Company’s outlook. Management does not have firm commitments for all of the costs, expenditures, prices or other financial assumptions used to prepare the financial outlook or assurance that such operating results will be achieved and, accordingly, the complete financial effects of all of those costs, expenditures, prices and operating results are not objectively determinable. The actual results of operations of the Company and the resulting financial results may vary from the amounts set forth herein, and such variations may be material. The outlook and forward-looking information contained in this News Release was made as of the date of this News Release and the Company disclaims any intention or obligations to update or revise such outlook and/or forward-looking information, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law.

Oil and Gas Information

“BOEs" may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 Mcf: 1 bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Reserves Information

The McDaniel Report was prepared using the assumptions and methodology guidelines outlined in the COGE Handbook and in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities, effective December 31, 2025. There are numerous uncertainties inherent in estimating quantities of bitumen, light crude oil and medium crude oil, tight oil, conventional natural gas, shale gas and natural gas liquids reserves and the future cash flows attributed to such reserves. The reserve and associated cash flow information set forth above are estimates only. In general, estimates of economically recoverable reserves and the future net cash flows therefrom are based upon a number of variable factors and assumptions, such as historical production from the properties, production rates, ultimate reserve recovery, timing and amount of capital expenditures, marketability of oil and natural gas, royalty rates, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary materially. For those reasons, estimates of the economically recoverable reserves attributable to any particular group of properties, classification of such reserves based on risk of recovery and estimates of future net revenues associated with reserves prepared by different engineers, or by the same engineers at different times, may vary. The Company's actual production, revenues, taxes and development and operating expenditures with respect to its reserves will vary from estimates thereof and such variations could be material. Reserves figures described herein have been rounded to the nearest MMbbl or MMboe. For additional information regarding the consolidated reserves and information concerning the resources of the Company as evaluated by McDaniel in the McDaniel Report, please refer to the Company’s AIF that is available on SEDAR+ at www.sedarplus.ca.