Cenovus said a redevelopment well program is an opportunity to add “low-capital, high-return production without additional steam,” and said it has identified over 250 bypassed resource development locations within MEG Christina Lake, similar to what it is drilling on its own Christina Lake assets, as well as Foster Creek.
“This transaction represents a unique opportunity to acquire approximately 110,000 barrels per day of production within some of the highest quality, longest-life oil sands resource in the basin, which sits directly adjacent to our core Christina Lake asset,” said Jon McKenzie, Cenovus president and chief executive officer.
In addition to the Christina Lake assets, the deal includes Surmont, Thornbury, May River, and Kirby assets with combined original oil in place of 5.6 billion bbls, and 120,000 b/d of export pipeline capacity covering 80% of MEG’s blended production.
The company said total oil combined oil sands production is expected to grow to about 850,000 b/d in 2028.
MEG Energy’s path to acquisition
MEG Energy, in a separate release Aug. 22, said the deal would bring forward value from its standalone plan, including the expansion project at Christina Lake growing production capacity to 135,000 b/d, which it said will continue to advance.
The company had been seeking offers after having received an unsolicited bid for the company by Strathcona Resources Ltd. earlier this year that the board determined was not in the best interest of its shareholders.
"After considering the Strathcona unsolicited offer, engaging with multiple parties on proposals, and assessing them against MEG's standalone plan, the Special Committee and the MEG Board unanimously concluded that the proposed transaction with Cenovus represents the best strategic alternative," said James McFarland, chairman of MEG's board of directors.
The deal is expected to close in fourth-quarter 2025, subject to the satisfaction of customary closing conditions, including regulatory approvals and approval of the transaction by MEG shareholders.
