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, consolidating prolific assets in the Montney and Duvernay, and expanding free cash flow in Saskatchewan.

• Combined entity becomes the seventh largest oil and gas producer in Canada and the largest producer in Alberta Montney and Kaybob Duvernay, with 1.5 million acres and significant overlap in unconventional and conventional assets.

• Decades of profitable and sustainable growth expected from a premium inventory of over 11,700 drilling locations and over 4,800 inventory locations, supporting a long-term growth runway.

• Asset overlap in Saskatchewan and complementary positions in Alberta Montney and Kaybob Duvernay enhance operational synergies and growth potential.

• 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, inclusive of net debt; Veren shareholders receive 1.05 Whitecap shares per Veren share, with pro forma ownership of 48% Whitecap and 52% Veren.

• Combined company expects run-rate funds flow of CAD 3.8 billion and free funds flow of CAD 1.2 billion annually at CAD 70 WTI and CAD 2 AECO.

• Net debt forecast at CAD 3.5 billion on closing (0.9x debt to funds flow), targeting CAD 2.5–3 billion long-term, with $3.5 billion in total credit capacity committed.

• Annual dividend of CAD 0.73 per share to be maintained, representing a 67% increase for Veren shareholders.

• CAD 10.1 billion in tax pools, including CAD 900 million in non-capital losses, enabling tax savings of CAD 65 million in 2025.

Synergies and expected cost savings

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

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

• Additional upside expected as teams integrate and optimize asset base.