Veren (VRN) M&A Announcement summary

Deal rationale and strategic fit

• Strategic combination creates a leading Canadian light oil and condensate producer with 370,000 BOE/day production and 1.5 million acres in Montney and Duvernay, enhancing scale, operational efficiency, and asset overlap in key unconventional and conventional plays.

• Combined entity becomes the largest producer in Alberta Montney and Kaybob Duvernay, complemented by high netback, low decline conventional assets.

• Enhanced diversification across product mixes and geographies supports strategic capital allocation and growth.

• Decades of profitable and sustainable growth expected from a premium inventory of over 11,700 drilling locations.

• The merger is expected to unlock significant value, increase resilience, and provide a differentiated competitive advantage through increased free funds flow and a stronger balance sheet.

Financial terms and conditions

• All-share transaction valued at approximately CAD 15 billion, with Veren shareholders receiving 1.05 Whitecap shares per Veren share and pro forma ownership of 48% Whitecap, 52% Veren.

• Combined company forecasted to produce 370,000 BOE/day (63% liquids) with annualized funds flow of $3.8 billion and free funds flow of $1.2 billion at specified commodity prices.

• Annual base dividend of CAD 0.73 per share to be maintained, with Veren shareholders receiving the dividend at closing.

• Forecast net debt at closing is CAD 3.5 billion, with a debt to funds flow ratio of 0.9x, targeting 0.8x or better by year-end 2026.

• $3.5 billion in total credit capacity and CAD 10.1 billion in tax pools, including CAD 900 million in non-capital losses, reducing expected taxes by CAD 65 million in 2025.

Synergies and expected cost savings

• Over CAD 200 million in annual synergies targeted, including $100 million capital, $75 million operating, and $30–35 million corporate savings, expected within 6–12 months post-closing.

• Additional infrastructure synergies expected through network optimization and strategic gas diversification, including LNG opportunities.

• Synergies expected from operating, capital, and corporate efficiencies, including supply chain improvements.

• Additional upside expected as teams integrate and optimize further.