Husky Energy Reaffirms Commitment to Full and Fair Offer for MEG Energy

Posted by OilVoice Press - OilVoice


Husky's Offer is a Premium Valuation

MEG's Share Price Would Be Substantially Lower Absent the Offer

Delivers Immediate Value With Comparable Upside and Much Less Risk

CALGARY, Alberta, Nov. 05, 2018 (GLOBE NEWSWIRE) -- Husky Energy (TSX:HSE) today reaffirms its commitment to the full and fair Offer to acquire MEG Energy as outlined on October 2, 2018, and comments on MEG's recent statements and third quarter results.

“MEG's results reinforce our view that it has a quality asset base and a dedicated operating team, but it remains constrained by a highly levered balance sheet and lack of integration,” said CEO Rob Peabody. “MEG continues to deliver negative free cash flow, and its assertions it can reverse this trend in the future rely on continued high oil prices and narrow heavy oil differentials.”

MEG shareholders should be aware MEG's stand-alone plan comes with a high level of risk.

“History shows production growth has not delivered value for MEG shareholders, and MEG's new plan to double production by 2028 is more of the same,” Peabody added. “Simply put, MEG cannot grow its way out of its problems. We are offering immediate value, while MEG once again asks its investors for patience.

“Our Offer represents an opportunity to participate in a stronger and more resilient combined company, while receiving a premium and retaining material upside.”

Husky remains confident its Offer is, and will remain, the best option to maximize value for MEG shareholders.

Husky encourages MEG shareholders to consider the following as they evaluate MEG's future prospects.


  • 7.5 times EV/consensus 2019E EBITDA multiple, compared to MEG's peer group multiple of 4.6 times
  • 66% premium to MEG's closing price over the last three years
  • 71% premium to MEG's closing price over the last two years
  • A value which exceeds MEG's closing price on 96% of the trading days over the last three years

1 Based on an implied acquisition price of $11.00 per MEG share as at the date of the Offer.


MEG's share price has increased significantly as a direct result of Husky's Offer, while shares of MEG's peers and heavy oil prices have fallen substantially over the same period. Absent the Offer, MEG shares would trade at a price well below current levels.


Husky's integrated operations and committed export pipeline capacity result in greater value capture and reduced exposure to Canadian heavy oil prices. MEG shareholders will also gain exposure to Husky's high-netback Offshore business and fixed-price contracts, providing more stability in funds from operations. The majority of Husky's production achieves global pricing.

MEG shareholders will also participate in Husky's dividend yield, which is currently 2.8 percent, with potential for future increases as free cash flow grows.


The regulatory approval process continues to advance. The Canadian Commissioner of Competition has issued a “no action” letter confirming that at this time he does not intend to challenge the transaction pursuant to the Competition Act. In addition, the U.S. Federal Trade Commission has granted Husky early termination of the required waiting period under the U.S. Hart-Scott-Rodino Act. All other required regulatory approvals are expected to be received by the end of the year.


Husky remains committed to realizing this unique opportunity and stands ready to engage with MEG to quickly complete this transaction and deliver value to all shareholders, sooner.

The Offer will be open for acceptance until 5 p.m. Eastern Time (3 p.m. Mountain Time) on Wednesday, January 16, 2019.

New service from OilVoice
Trip Shepherd is for companies who need to track their staff in areas of risk.
It's free to use, so we invite you to try it.

Husky EnergyMEG EnergyTSXOffer

More items from oilvoice

Cyber Security Experts Unite to Protect Europe’s Critical Industries

CS4CA Summit Returns to London this October Staying abreast of fast-paced industry developments is crucial for cyber security professionals. And while one can learn a lot from publications and social media, it's hard to beat the value of insights gained first-hand from peers. This is why 150+ IT ...

OilVoice Press - OilVoice

Posted 8 months agoPress > cybereurope

Africa E&P Summit

The organisers of the Africa E&P Summit are bringing together Africa's leading exploration companies and governments, just one of the many reasons why you should be attending frontier's event that they are organising and hosting in London at the IET: Savoy Place, 22-23 May. Over 200 key senior exec ...

OilVoice Press - OilVoice

Posted 1 year agoPress > Africasummitoil summit +2

Equinor Deepens in Offshore Wind in Poland

Equinor has exercised an option to acquire a 50 % interest in the offshore wind development project Bałtyk I in Poland from Polenergia. This transaction is a follow-up of the agreement between the two companies which came into force in May 2018 , by which Equinor acquired a 50 % inter ...

OilVoice Press - OilVoice

Posted 1 year agoPress > EquinorEquinor EnergyPoland +2

Nigeria has highest capex on crude and natural gas projects in sub-Saharan Africa Over Next Seven Years, says GlobalData

Nigeria accounts for more than 34% of the proposed capital expenditure (capex) on planned and announced crude and natural gas projects in the sub-Saharan Africa over the period 2018–2025, according to GlobalData , a leading data and analytics company. The company's report: ‘H2 2018 Production ...

OilVoice Press - OilVoice

Posted 1 year agoOpinion > GlobalDataNigeriaCrude +5

CNOOC Signs Strategic Cooperation Agreements with 9 International Oil Companies

HONG KONG, Dec. 18, 2018 /PRNewswire/ -- CNOOC Limited (the "Company", SEHK: 00883, NYSE: CEO, TSX: CNU) announced today that its parent company, China National Offshore Oil Corporation (CNOOC), has signed Strategic Cooperation Agreements with 9 international oil companies including: Chevron, Conoco ...

OilVoice Press - OilVoice

Posted 1 year agoPress > CNOOCChina National Offshore Oil CorporationChevron +11
All posts from oilvoice