Mr. Jon McKenzie reports

CENOVUS ANNOUNCES AGREEMENT TO ACQUIRE ATHABASCA OIL CORPORATION

Cenovus Energy Inc. has entered into a definitive arrangement agreement to acquire Athabasca Oil Corp. in a cash and stock transaction with an implied enterprise value of $5.7-billion.

Transaction highlights

• Clear strategic fit with Cenovus's core oil sands business -- adds approximately 45,000 barrels of oil equivalent per day (MBOE/d), including thermal production proximal to Cenovus's Christina Lake, May River and Thornbury assets, expanding the company's position in a core resource fairway;
• High-quality, long-life resource -- over 75 years of proved plus probable reserves life, including high-quality oil sands assets at Leismer and Corner, providing significant growth potential and a pathway to accelerate thermal production to 115,000 barrels per day (Mbbls/d) by 2032;
• Leverages Cenovus's SAGD operating expertise -- application of Cenovus's proven SAGD operating model to Athabasca's assets is expected to enhance reservoir performance, reduce steam-to-oil ratios and accelerate resource recovery. Together with a differentiated project execution record, including the profitable completion of over 30 successful oil sands phase expansions to date, Cenovus is uniquely positioned to optimize the value of the acquired SAGD assets;
• $85-million of annual corporate and commercial synergies -- Cenovus expects to realize approximately $85-million per year of corporate and commercial synergies, with the majority captured in the first full year following closing of the transaction;
• Consolidates scalable Duvernay platform -- consolidates ownership of Duvernay Energy Corp., a high-quality, oil-weighted position in the Kaybob Duvernay, with the option to accelerate development and grow production to a sustainable 20 MBOE/d.

"This transaction strengthens our position in one of the world's premier oil-producing regions and is a natural extension of our oil sands strategy," said Jon McKenzie, Cenovus president and chief executive officer. "Athabasca's high-quality, long-life assets fit well with our portfolio, and provide a clear opportunity to apply our scale and operating expertise to improve performance, grow production and create long-term shareholder value."

Transaction details

Under the terms of the arrangement agreement, Cenovus will acquire all of the issued and outstanding common shares of Athabasca at a price of $12.00 per share, payable in cash and Cenovus common shares. Each Athabasca shareholder (other than dissenting Athabasca shareholders) will have the option to elect to receive, for each Athabasca common share held: (i) $12.00 in cash; (ii) 0.264 of a Cenovus common share; or (iii) such other proportion of cash and Cenovus shares as specified by the Athabasca shareholder. Shareholders who do not make a valid election will be deemed to have elected to receive cash for each of their Athabasca common shares.

All elections will be subject to pro-ration based on a maximum of $4.3-billion in cash, equivalent to 75 per cent of the total consideration, and a maximum of 44.4 million Cenovus common shares, equivalent to 35 per cent of the total consideration. As a result, the aggregate consideration will comprise between 65 per cent and 75 per cent cash and between 25 per cent and 35 per cent Cenovus shares, based on elections made and deemed to be made by Athabasca shareholders. Depending on a particular shareholder's election and pro-rationing, an Athabasca shareholder may ultimately receive entirely cash, entirely Cenovus shares or a combination of both.

Transaction funding

The cash portion of the consideration will be funded with cash on hand and certain short-term borrowings. Cenovus's financial framework and net debt target of $4-billion are to remain unchanged.

Cenovus's net debt at the end of the third quarter was approximately $3.0-billion. Including the cash component of this transaction, year-end 2026 pro forma net debt is expected to be between $5.0-billion to $5.5-billion at strip pricing representing less than 0.5 times adjusted funds flow.

Timing and approvals

The transaction has been unanimously approved by the board of directors of both companies. Athabasca's directors and executive officers have entered into voting and support agreements with Cenovus, pursuant to which they have agreed, subject to their terms, to vote all Athabasca common shares beneficially owned or controlled by them, representing approximately 2.2 per cent of Athabasca's issued and outstanding common shares, in favour of the transaction.

Cenovus expects the acquisition to close in December, 2026, subject to the satisfaction of customary closing conditions, including regulatory approvals and approval of the transaction by Athabasca shareholders. The transaction is not subject to any financing contingency.

Advisers

CIBC Capital Markets is acting as the exclusive financial adviser to Cenovus. McCarthy Tetrault LLP is acting as legal adviser to Cenovus.

Conference call today

Cenovus will host a conference call today, Oct. 5, 2026, starting at 7 a.m. MT (9 a.m. ET).

For analysts wanting to join the call, please register in advance.

To participate in the live conference call, you must complete the on-line registration form in advance of the conference call start time. Register ahead of time to receive a unique PIN to access the conference call via telephone. Once registered, participants can dial into the conference call from their telephone via the unique PIN or click on the "Call Me" option to receive an automated call directly.

An audio webcast will also be available and archived for approximately 30 days.

A slide presentation with further details on the transaction can also be accessed in the investor section of the company's website.

About Cenovus Energy Inc.

Cenovus Energy is an integrated energy company with oil and natural gas production operations in Canada and the Asia Pacific region, and upgrading, refining and marketing operations in Canada and the United States. The company is committed to maximizing value by developing its assets in a safe, responsible and cost-efficient manner, integrating sustainability considerations into its business plans. Cenovus common shares are listed on the Toronto and New York stock exchanges.

We seek Safe Harbor.