Cenovus Energy ammends MEG Energy acquisition agreement

Cenovus Energy (CVE) has entered into a second amending agreement in respect of the arrangement agreement to acquire MEG Energy (MEGEF). Under the terms of the agreement, each MEG shareholder will now have the option to elect to receive, for each MEG common share, $30.00 in cash; or 1.255 Cenovus common shares,based on a maximum amount of $3.8B in cash and a maximum of 159.6 million Cenovus common shares. The pro-rated consideration represents a mix of 50% cash and 50% Cenovus common shares. On a fully pro-rated basis, the consideration per MEG common share represents approximately $15.00 in cash and 0.6275 of a Cenovus common share. The fully pro-rated consideration for MEG represents a value of approximately $30.00 per MEG share at Cenovus’s closing share price on October 24. In conjunction with the amended agreement, Strathcona Resources (STHRF) has entered into a voting support agreement with Cenovus under which Strathcona has agreed to vote its common shares of MEG in favour of the MEG transaction. The special meeting of MEG shareholders remains scheduled for October 30 and the deadline for submitting proxies remains October 29. Cenovus also announced the sale of certain assets to Strathcona for total proceeds of up to $150M, comprised of $75M cash paid on closing and up to $75M in contingent consideration dependent on future commodity prices. These include the Vawn thermal heavy oil asset in Saskatchewan and certain undeveloped lands in western Saskatchewan and Alberta. Production from the asset has averaged approximately 5,000 barrels per day to date in 2025. Closing of the asset sale transaction is expected in Q4.