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Researched by Industrial Info Resources (Sugar Land, Texas)--MEG Energy's (Calgary, Alberta) board of directors recommended Monday that its shareholders reject Strathcona Resources Limited's (Calgary) latest bid for the company and stick with Cenovus Energy's (Calgary) offer for the Canadian oil sands producer.
"The revised Strathcona offer remains fundamentally unattractive for MEG shareholders because it fails to address or adequately compensate for the significant risks embedded in Strathcona shares," MEG Board Chairman James McFarland said in a press release. "MEG shareholders would be exposed to inferior assets, an unproven track record, an overvalued Strathcona share price, significant overhang risk, and governance risk."
He continued: "In contrast, the Cenovus transaction delivers an attractive price, upside potential, substantial cash, and value certainty that MEG shareholders deserve."
Strathcona made an initial takeover offer for MEG in May, but MEG's board rejected that offer as inadequate.
On August 22, MEG announced it had entered an agreement for Cenovus to acquire all MEG's shares in a transaction that values MEG at C$28.18 (US$20.43) per share, representing an enterprise value of approximately C$8.2 billion (US$5.94), including assumed debt. The combined company would boast more than 720,000 barrels per day (BBL/d) of output. For more information, see August 25, 2025, article - Cenovus Snatches Up MEG Energy to Create New Oil Sands Titan.
MEG shareholders will vote on the Cenovus bid on October 9.
In early September, Strathcona announced a sweetened offer of C$30.86 (US$22.87) per share. For more on that, see September 9, 2025, article - Strathcona Counters Cenovus Bid for MEG in Canada's Oil Sands.
Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database shows:
Also, MEG said its Christina Lake asset "is a best-in-class SAGD (steam-assisted gravity drainage) project with top-quartile low steam-oil ratio (SOR), cost structure, and significant resource portfolio depth."
Cenovus' offer "brings forward substantial value from MEG's standalone business plan, including the expansion project at Christina Lake," MEG said, adding that Cenovus plans to spend an incremental C$400 million (US$290 million) of capital between 2026 and 2028 to accelerate value and deliver production capacity of 150,000 barrels per day (BBL/d) at Christina Lake by 2028, 15,000 BBL/d above what is expected of the standalone MEG business plan.
"Strathcona, on the other hand, owns a portfolio of much smaller, geographically dispersed assets with a higher cost structure and oil sands assets that operate at SORs approximately 60% higher than those at Christina Lake," MEG said. "Strathcona has built its asset portfolio through acquisitions and has only demonstrated organic production growth in its now-divested Montney segment, noting that production from its heavy oil segment has decreased by 16% from the levels observed when its acquisitions occurred."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
"The revised Strathcona offer remains fundamentally unattractive for MEG shareholders because it fails to address or adequately compensate for the significant risks embedded in Strathcona shares," MEG Board Chairman James McFarland said in a press release. "MEG shareholders would be exposed to inferior assets, an unproven track record, an overvalued Strathcona share price, significant overhang risk, and governance risk."
He continued: "In contrast, the Cenovus transaction delivers an attractive price, upside potential, substantial cash, and value certainty that MEG shareholders deserve."
Strathcona made an initial takeover offer for MEG in May, but MEG's board rejected that offer as inadequate.
On August 22, MEG announced it had entered an agreement for Cenovus to acquire all MEG's shares in a transaction that values MEG at C$28.18 (US$20.43) per share, representing an enterprise value of approximately C$8.2 billion (US$5.94), including assumed debt. The combined company would boast more than 720,000 barrels per day (BBL/d) of output. For more information, see August 25, 2025, article - Cenovus Snatches Up MEG Energy to Create New Oil Sands Titan.
MEG shareholders will vote on the Cenovus bid on October 9.
In early September, Strathcona announced a sweetened offer of C$30.86 (US$22.87) per share. For more on that, see September 9, 2025, article - Strathcona Counters Cenovus Bid for MEG in Canada's Oil Sands.
Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database shows:
- about US$2.9 billion worth of active and proposed projects from Strathcona; click here for a list of detailed project reports
- more than US$9 billion worth of proposed projects from MEG; click here for a list
- more than US$18 billion worth from Cenovus; click here for a list.
Also, MEG said its Christina Lake asset "is a best-in-class SAGD (steam-assisted gravity drainage) project with top-quartile low steam-oil ratio (SOR), cost structure, and significant resource portfolio depth."
Cenovus' offer "brings forward substantial value from MEG's standalone business plan, including the expansion project at Christina Lake," MEG said, adding that Cenovus plans to spend an incremental C$400 million (US$290 million) of capital between 2026 and 2028 to accelerate value and deliver production capacity of 150,000 barrels per day (BBL/d) at Christina Lake by 2028, 15,000 BBL/d above what is expected of the standalone MEG business plan.
"Strathcona, on the other hand, owns a portfolio of much smaller, geographically dispersed assets with a higher cost structure and oil sands assets that operate at SORs approximately 60% higher than those at Christina Lake," MEG said. "Strathcona has built its asset portfolio through acquisitions and has only demonstrated organic production growth in its now-divested Montney segment, noting that production from its heavy oil segment has decreased by 16% from the levels observed when its acquisitions occurred."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
