Mr. Robert Broen reports

ATHABASCA OIL ANNOUNCES AGREEMENT TO BE ACQUIRED BY CENOVUS ENERGY

Athabasca Oil Corp. has entered into a definitive arrangement agreement with Cenovus Energy Inc., pursuant to which Cenovus will acquire all of the issued and outstanding common shares of Athabasca for $12.00 per Athabasca share in a cash-and-share transaction. The transaction implies an equity value for Athabasca of approximately $5.8-billion and is expected to close in December, 2026.

• $12.00 per share purchase price, represents a 14-per-cent premium to Athabasca's 20-day volume-weighted average trading price;
• Transaction consideration mix of 35-per-cent Cenovus shares and 65-per-cent cash; Athabasca shareholders may elect to receive all cash, all Cenovus shares or any combination of the two, allowing them to tailor elections to their individual investment preferences, subject to pro-ration under the arrangement;
• $5.7-billion enterprise value with compelling metrics of $127,000 per boe/d (barrels of oil equivalent per day) and 10.2 times debt adjusted funds flow, recognizing the industry-leading value creation by Athabasca;
• 25-per-cent premium to Athabasca's proved plus probable after-tax net asset value, accelerating value capture from future growth plans;
• Participation in upside to an increased and accelerated development plan of Athabasca's McMurray thermal and Duvernay assets with exposure to Cenovus's diverse top-tier energy portfolio;
• Substantial synergies from close asset proximity and Cenovus's leading in-situ expertise and scale in the McMurray fairway. Cenovus's broader integrated platform and scale are better positioned to manage continuing fiscal, regulatory, and market-access risks.

"We are immensely proud of what the Athabasca team has built. Through disciplined operational execution, prudent capital allocation and an unwavering focus on per-share value creation, we have transformed Athabasca over the past decade into a financially strong company with a deep portfolio of high-quality assets and delivered exceptional returns for our shareholders," said Rob Broen, president and chief executive officer of Athabasca.

"This transaction recognizes the value our team has created and allows Athabasca shareholders to realize substantial value today, with the opportunity to participate in future upside through Cenovus shares. Cenovus is the right long-term operator for these assets, with the scale, financial capacity, technical expertise, and proven execution record to accelerate their development and realize their long-term potential. This outcome reflects the commitment and execution of our employees, and I want to thank every member of the Athabasca team for their contribution to our success."

Strategic rationale

• Compelling value and transaction metrics: The $12.00-per-share consideration, represents a 14-per-cent premium to Athabasca's 20-day volume-weighted average price using the 0.264 share exchange ratio (see transaction details). The transaction implies compelling metrics1 of $127,000 per boe/d and 10.2 times debt adjusted funds flow based on Athabasca management's forecasts. These metrics compare well with historical corporate energy transactions.
• Recognition of exceptional shareholder value creation: The transaction recognizes the substantial value created by Athabasca, as demonstrated by total shareholder return exceeding 1,000 per cent over the past five years.
• Flexible consideration with value certainty and continued upside: The aggregate consideration mix of 65-per-cent cash and 35-per-cent equity provides Athabasca shareholders with near-term liquidity and value certainty, together with continued upside exposure to Cenovus's broader portfolio of leading in-situ assets including Christina Lake, Foster Creek and Sunrise in the McMurray fairway. Athabasca shareholders have additional election flexibility to prioritize near-term value crystallization, continued participation in future value creation across Cenovus's in-situ and integrated portfolio or a combination of both.
• Meaningful premium to Athabasca's after-tax net asset value: The purchase price represents a premium of 25 per cent to Athabasca's proved plus probable after-tax net asset value. Athabasca shareholders will receive significant and immediate recognition of the value embedded in Athabasca's standalone growth plans, including the Leismer expansion, Corner development and Duvernay Energy.
• Accelerated development of Athabasca's deep thermal resource portfolio: Athabasca's extensive, long-life thermal resource portfolio (1.2 billion barrels proved plus probable reserves and one billion barrels best estimate contingent resource) will benefit from increased and accelerated development under Cenovus's ownership. Cenovus brings an investment-grade balance sheet, leading in-situ operating and development expertise, diversified market access, and a proven record of successfully executing and operating large-scale thermal oil projects. Specifically, Corner phases 2 and 3 and further Leismer expansions are expected to be accelerated relative to the timelines contemplated in Athabasca's stand-alone plan.
• Synergies: Consolidating Cenovus and Athabasca assets in the McMurray fairway is expected to generate significant operational and development synergies to enhance asset value. Cenovus's leading in-situ expertise and scale position it to execute a broader growth strategy in which Athabasca shareholders can participate through their Cenovus shares. Its integrated platform and scale are better positioned to manage continuing fiscal, regulatory, and market-access risks.
• Duvernay consolidation: Cenovus and Athabasca are currently equity partners in Duvernay Energy Corp. The transaction consolidates ownership of Duvernay Energy Corp. under Cenovus, simplifies development planning and complements Cenovus's conventional business. Cenovus will be able to accelerate development, utilizing its strong balance sheet to drive growth and capture value in these top-tier assets.

Transaction details

The transaction will be completed by way of a plan of arrangement under the Business Corporations Act (Alberta) (the ABCA).

Under the terms of the arrangement, Cenovus will acquire all of the issued and outstanding Athabasca shares for cash and share consideration currently valued at $12.00 per Athabasca share. Athabasca shareholders will have the option to elect to receive (i) $12.00 in cash for each Athabasca share held; (ii) 0.264 of a Cenovus share for each Athabasca share held; 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 default consideration of 100-per-cent cash for their Athabasca shares.

All elections (including deemed elections) will be subject to pro-ration and cash and Cenovus share maximums. The aggregate cash consideration will not exceed 75 per cent of the total consideration payable under the arrangement, and the aggregate share consideration will not exceed 35 per cent of the total consideration payable under the arrangement. Accordingly, the aggregate total 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. Depending on a particular shareholder's election or deemed election and pro-rationing, an Athabasca shareholder may ultimately receive entirely cash, entirely Cenovus shares or a combination of both.

The transaction requires approval by Athabasca's shareholders at a special meeting of Athabasca shareholders to be called to consider and vote on the transaction. The Athabasca meeting is expected to be held in late November, 2026, with the transaction expected to close in December, 2026. Details of the transaction and the required shareholder vote will be included in a management information circular that Athabasca expects to mail to Athabasca shareholders and file on SEDAR+ in early November, 2026. All Athabasca shareholders are urged to read the circular once available as it will contain additional important information concerning the transaction, including the deadline for making elections to receive cash and/or Cenovus shares.

Completion of the transaction is subject to certain conditions set forth in the agreement, including, without limitation, receipt of Athabasca shareholder approval, approval of the Court of King's Bench of Alberta, applicable regulatory and stock exchange approvals, including under the Competition Act (Canada), and other customary closing conditions.

All of the directors and executive officers of Athabasca have entered into voting support agreements with Cenovus pursuant to which they have agreed, subject to the terms thereof, to vote their Athabasca shares in favour of the resolutions approving the transaction.

Recommendation of the Athabasca board of directors

The board of directors of Athabasca, based in part upon the unanimous recommendation of the special committee of the Athabasca board formed to consider the transaction and after seeking and carefully considering advice from its financial and legal advisers, has unanimously determined that the transaction is in the best interests of Athabasca and is fair to Athabasca shareholders. The Athabasca board has determined to unanimously recommend that Athabasca shareholders vote in favour of the resolutions approving the transaction and related matters at the Athabasca meeting.

Advisors and fairness opinions

Peters & Co. Ltd. is acting as exclusive financial adviser to the company and the Athabasca board. Peters & Co. has provided a verbal opinion to the effect that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Athabasca shareholders pursuant to the transaction is fair, from a financial point of view, to Athabasca shareholders.

National Bank of Canada Capital Markets is acting as financial adviser to the special committee and has provided a verbal opinion to the special committee that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Athabasca shareholders pursuant to the transaction is fair, from a financial point of view, to Athabasca shareholders.

Norton Rose Fulbright Canada LLP is acting as legal counsel to the company. Bennett Jones LLP is acting as independent legal counsel to the special committee.

About Athabasca Oil Corp.

Athabasca Oil is a Canadian energy company with a focused strategy on the development of thermal and light oil assets. Situated in Alberta's Western Canadian sedimentary basin, the company has amassed a significant land base of extensive, high-quality resources. Athabasca's light oil assets are held in a private subsidiary (Duvernay Energy Corp.) in which Athabasca owns a 70-per-cent equity interest. Athabasca's common shares trade on the TSX under the symbol ATH.

We seek Safe Harbor.