Cenovus Energy Inc. (TSX:CVE) entered into an arrangement agreement to acquire MEG Energy Corp. (TSX:MEG) from Strathcona Resources Ltd. (TSX:SCR) and others for CAD 7.7 billion on August 21, 2025. A cash consideration will be paid by Cenovus Energy Inc. Under the terms of the Transaction, each holder of MEG Shares (a ?MEG Shareholder?) will have the option to elect to receive for each MEG Share (i) CAD 27.25 in cash; or (ii) 1.325 Cenovus common shares (each whole share, a ?Cenovus Share?), subject to pro-ration based on a maximum amount of cash and Cenovus Shares set out in the Arrangement Agreement. On a fully pro-rated basis, consideration per MEG Share represents approximately CAD 20.44 in cash and 0.33125 of a Cenovus Share. As on September 8, 2025, Cenovus will acquire all issued and outstanding MEG shares, that values MEG at CAD 27.76 per share or CAD 8 billion, inclusive of assumption of MEG's debt. The value of consideration payable under the Arrangement Agreement represents a mix of 75% cash and 25% Cenovus Shares. The transaction will be financed through term loan of CAD 2.7 billion and bridge facility of CAD 2.5 billion. As of October 08, 2025, Cenovus Energy amended the agreement, under the terms of the Amended Agreement, each MEG shareholder will have the option to elect to receive, for each MEG common share, (i) CAD 29.50 in cash; or (ii) 1.240 Cenovus common shares, subject to rounding and pro-ration based on a maximum amount of CAD 3.8 billion in cash and a maximum of 157.7 million Cenovus common shares increasing the Aggregate Consideration to CAD 7.6 billion. The pro-rated consideration represents a mix of 50% cash and 50% Cenovus common shares. As of October 26, 2025, MEG Energy Corp. entered into a second amending agreement (the "Second Amending Agreement") with Cenovus Energy Inc. The Second Amending Agreement increases the consideration payable to holders ("MEG Shareholders") of common shares of MEG ("MEG Shares") to CAD 30.00 per MEG Share (the "Improved Transaction Consideration") based on Cenovus's closing share price on October 24, 2025. 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 CAD 0.43 per 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. 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: CAD 30.00 in cash per MEG Share ("Cash Consideration"); 1.255 Cenovus common shares (each whole share, a "Cenovus Share") per MEG Share ("Share Consideration"); or a combination thereof, in all cases, subject to rounding and proration based on maximum aggregate Cash Consideration of approximately CAD 3.8 billion and 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 CAD 15.00 in cash and 0.6275 of a Cenovus Share. The consideration to be received by MEG Shareholders values MEG at CAD 30.00 per MEG Share on a fully prorated basis based on Cenovus's closing share price on October 24, 2025, representing an enterprise value of approximately CAD 8.6 billion, including assumed debt.

The Special Committee, with the support of its financial and legal advisors, conducted a comprehensive review of all available alternatives to maximize value. Holders of Cenovus Shares and MEG Shareholders are expected to own approximately 95.5% and 4.5% of Cenovus, respectively, following the completion of the Arrangement. In case of termination CAD 242 million is payable by MEG Energy to Cenovus Energy and Cenovus Energy to MEG Energy.

The MEG Board, informed in part by the recommendation of the Special Committee, and after considering advice from its external financial and legal advisors, has unanimously: (i) determined that the Arrangement is in the best interests of MEG; (ii) determined that the Arrangement is fair to the MEG Shareholders; (iii) approved the Arrangement Agreement and the transactions contemplated thereby; and (iv) resolved to recommend that the MEG Shareholders vote in favour of the Transaction at the Meeting. The Transaction requires approval by at least 662/3% of the votes cast at the Meeting by MEG Shareholders represented in person or by proxy. The Transaction is subject to a number of other conditions including certain required regulatory and government approvals, Anti trust approval, approval of the Court of King's Bench of Alberta, listing approval and Closing of the Arrangement is expected to occur early in the fourth quarter of 2025. As per the filing announced on September 19, 2025, the transaction is expected to close on November 13, 2025. MEG Energy Corp.?s board turned down Strathcona Resources Ltd.?s sweetened offer to buy the oil sands producer, recommending that shareholders stick with a rival proposal from Cenovus Energy Inc. As on October 21, 2025, Cenovus?s proposed acquisition of MEG has been postponed from October 22, 2025, to October 30, 2025. 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 of October 27, 2025, The MEG board unanimously recommends MEG shareholders vote FOR the improved Cenovus transaction. As of November 6, 2025, MEG Energy Corp. shareholders approved the transaction.

BMO Nesbitt Burns Inc, Grant Zawalsky and Bronwyn Inkster of Burnet, Duckworth & Palmer LLP are acting as financial advisor and Fairness Opinion and legal counsel, respectively, to the MEG Energy. RBC Dominion Securities Inc and Evelyn Li, Dion J. Legge, Katherine Prusinkiewicz and Justin E. Ferrara of Norton Rose Fulbright Canada LLP are acting as financial advisor, Fairness Opinion and legal counsel, respectively, to the Special Committee. Yuni Yan Sobel, Stephen C. Centa, Christopher J.Cummings and Adam M. Givertz of Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to Cenovus Energy Inc. (TSX:CVE). John Piasta of McCarthy Tétrault LLP acted as legal advisor to Cenovus Energy. Morrow Sodali (Canada) Ltd acted as proxy solicitor to MEG Energy and will receive a fee of CAD 0.25 million. Computershare Trust Company of Canada acted as transfer agent to MEG Energy. David Miller, John Greer, Bryant Lee, Krisa Benskin, Jason Cruise, Peter Todaro, Matthew Piehl and Joseph Bargnesi of Latham & Watkins LLP acted as legal advisor to MEG Energy. Goldman Sachs Canada Inc. and CIBC Capital Markets are acting as financial advisors to Cenovus. Computershare Investor Services Inc. acted as depository for MEG in the transaction.

Cenovus Energy Inc. (TSX:CVE) completed the acquisition of MEG Energy Corp. (TSX:MEG) from Strathcona Resources Ltd. (TSX:SCR) and others on November 13, 2025. The MEG common shares are expected to be delisted by the Toronto Stock Exchange at the close of market on November 14, 2025.