Cenovus Energy (CVE) investor relations material

Deal rationale and strategic fit

• Acquisition consolidates adjacent, highly complementary SAGD oil sands assets, creating a leading producer with a strengthened portfolio of long-life, low-cost production and the lowest steam-to-oil ratio in the region.

• Combines two efficient SAGD producers, unlocking and accelerating access to previously stranded resources and enabling integrated development.

• Combined production will exceed 720,000 bbls/d, with plans to grow to over 850,000 bbls/d by 2028.

• Brings together the industry's most efficient projects, consolidating the Christina Lake region for integrated development.

• Sets new benchmarks for heavy oil development and enhances asset quality.

Financial terms and conditions

• Transaction valued at $7.9 billion, or $27.25 per MEG share, paid 75% in cash and 25% in shares, including assumed debt and lease liabilities.

• Cash component funded by a $2.7 billion term loan and $2.5 billion bridge facility; strong liquidity maintained.

• Pro forma net debt expected to be $10.8 billion, less than 1x adjusted funds flow, maintaining investment-grade credit ratings and over $8 billion in liquidity.

• MEG shareholders to receive pro-rated cash and shares based on $5.2 billion cash cap and 84.3 million share cap.

• No financing contingency for the transaction.

Synergies and expected cost savings

• Over $400 million in annual run-rate synergies expected by 2028, with $150 million achievable in 2026–2027.

• Synergies include $280 million in operating and development, $80 million in G&A, $30 million in commercial, and $10 million in financing fees.

• $120 million in corporate and commercial synergies achievable by 2026, including G&A, IT, procurement, and financing savings.

• Additional $200 million near-term one-time benefit net of integration and transaction costs.

• Synergies leverage combined technical expertise and operational optimization.