Canadian oil and gas producer Husky Energy Inc. has proposed to acquire MEG Energy Corp. for approximately $3.3bn. This proposal values MEG at an implied total enterprise value of $6.4bn, including the assumption of approximately $3.1bn of net debt.
Together Husky and MEG will create a stronger Canadian energy company, headquartered in Calgary, Alberta. The combined company will have total upstream production of more than 410,000 barrels of oil equivalent per day (boe/day) and Downstream refining and upgrading capacity of approximately 400,000 barrels per day (bbls/day), providing for increased free cash flow per share, production growth and a basis for potential future dividend increases.
While Husky remains prepared to engage in discussions with MEG’s Board of Directors to complete the transaction expeditiously for the benefit of MEG shareholders, it intends to commence an offer directly to MEG shareholders by way of a takeover bid so they can determine the future of their investment.
The combined company will be an innovation leader in carbon capture and storage, energy efficiency, enhanced SAGD and diluent reduction technology, with greater opportunities to invest in advanced technologies that reduce CO2 emissions.
In a time of increased market uncertainty, Husky believes the combined company will have an improved opportunity to accelerate new projects in Canada compared to two separate entities.
Now in its 80th year, Husky maintains a strong commitment to Alberta and to Canada, and the communities in which it operates. Husky is one of Canada’s largest private sector investors, with planned Canadian capital expenditures of more than $12bn over its existing five-year plan. Ongoing investments include the West White Rose Project currently under construction in Newfoundland and Labrador, and a growing thermal program in Saskatchewan and Alberta.
For more information visit: www.huskyenergy.ca
3rd October 2018
