Latest news with #Directors'Circular
Cision Canada
9 hours ago
- Business
- Cision Canada
Strathcona Responds to MEG Directors' Circular, Supports MEG Strategic Alternatives Process
CALGARY, AB, June 20, 2025 /CNW/ - Strathcona Resources Ltd. ("Strathcona") today responded to the June 16, 2025 directors' circular ("Directors' Circular") filed by the Board of Directors (the " Board") of MEG Energy Corp. ("MEG") in response to the offer (the " Offer") by Strathcona to acquire all of the issued and outstanding common shares of MEG (the " MEG Shares") not already owned by Strathcona as set out in the Offer to Purchase and Bid Circular dated May 30, 2025 (the " Offer and Circular"). Support For Strategic Alternatives Process Adam Waterous, Executive Chairman of Strathcona, said "Strathcona is delighted that the MEG board has accepted Strathcona's recommendation to initiate a strategic alternatives process for the business and fully supports them contacting other potential acquirers to determine if a superior transaction to Strathcona's offer is available." As MEG's second largest shareholder, Strathcona welcomes the MEG Board's efforts to market-test the Offer against other acquisition proposals and agrees that the MEG Board has a duty to fully investigate each proposal for the business, including the Offer. Strathcona Looks Forward to Engaging with the MEG Board As stated in Strathcona's May 15, 2025 press release, Strathcona remains ready and willing to participate in the MEG strategic alternatives process and looks forward to engaging constructively and in good faith with the MEG Board. As a starting point for this engagement, earlier today Strathcona posted a new presentation on its website titled "MEG Directors' Circular: Fact vs. Fiction" which corrects a variety of errors and misleading statements in the Directors' Circular which MEG and Strathcona shareholders are encouraged to review. Adam Waterous added, "Strathcona looks forward to participating in the strategic alternatives process which will also provide an opportunity for MEG's board to learn more about Strathcona, something which it has declined to do to date. To give the MEG board a head start in understanding our business, we have corrected a variety of inaccuracies contained in their circular." Strathcona's Offer Remains Compelling for both MEG and Strathcona Shareholders Strathcona firmly believes its Offer provides a true win-win for MEG and Strathcona shareholders, uniting two heavy oil "pure plays" into a new Canadian oil champion, while delivering significant accretion to MEG and Strathcona shareholders on all key metrics. The pro forma business would be uniquely positioned in the capital markets as the only 100% oil company in North America with an investment grade balance sheet, 50-year reserves life index, and no exposure to mines or refineries. While Strathcona agrees with MEG's statement in its Directors' Circular that other peer companies could also realize significant synergies from such a transaction, Strathcona believes it is the only peer company which would be able to, upon completion of the transaction, (1) obtain an immediate investment grade credit rating upgrade, (2) immediately join all major Canadian oil and gas stock indexes due its to larger float, and (3) credibly execute on meaningful overhead synergies as evidenced by Strathcona's existing best-in-class overhead costs. Offer Information Strathcona's Offer provides that each holder whose MEG Shares are taken up in the Offer will be entitled to receive 0.62 of a common share in the capital of Strathcona plus C$4.10 per MEG Share in cash. The Offer will be open for acceptance until 5:00 p.m. Mountain Time on Monday, September 15, 2025. More information regarding Strathcona and the Offer can be found on Strathcona's website: Shareholders who have questions or require assistance in depositing MEG Shares to the Offer should contact the Information Agent, Laurel Hill Advisory Group, by email at [email protected] or by phone at 1-877-452-7184 (Toll-Free). About Strathcona Strathcona is one of North America's fastest growing oil producers with operations focused on thermal oil and enhanced oil recovery. Strathcona is built on an innovative approach to growth achieved through the consolidation and development of long-life oil and gas assets. The Strathcona Shares are listed on the Toronto Stock Exchange (TSX: SCR). No Offer or Solicitation This news release is for informational purposes only and does not constitute an offer to buy or sell, or a solicitation of an offer to sell or buy, any securities. The Offer to acquire MEG Shares and issue Strathcona common shares in connection therewith is made solely by, and subject to the terms and conditions set out in, the Offer to Purchase and Circular and accompanying letter of transmittal and notice of guaranteed delivery. The Offer to Purchase and Circular and the related documents, contain important information about the Offer and should be read in its entirety by MEG shareholders Additional Information About the Offer and Where to Find It This news release relates to the Offer. In connection with the Offer, Strathcona has filed and will file relevant materials with the U.S. Securities and Exchange Commission (the "SEC"), including a registration statement on Form F-10 (the "Registration Statement") under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), which includes the Offer and Circular and other documents related to the Offer. This news release is not a substitute for the Registration Statement, the Offer and Circular or any other relevant documents filed with the applicable Canadian securities regulatory authorities or the SEC. MEG shareholders and other interested parties are urged to read the Registration Statement, the Offer and Circular, all documents incorporated by reference therein, all other applicable documents and any amendments or supplements to any such documents when they become available, because they do and will contain important information about Strathcona, MEG and the Offer. The Registration Statement, Offer and Circular and other materials filed or that will be filed by Strathcona with the SEC will be available electronically without charge at the SEC's website at The Registration Statement, Offer and Circular, documents incorporated by reference therein and other relevant documents may also be obtained on request without charge from Strathcona by email at [email protected] or by phone at (403) 930-3000 or Laurel Hill Advisory Group, the information agent for the Offer, by email at [email protected] or by phone at 1-877-452-7184 (Toll-Free), and will also be available electronically at Forward-Looking Information This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities laws and "forward-looking statements" within the meaning of applicable U.S. securities laws (collectively, "forward-looking information") and are prospective in nature. Forward-looking information is not based on historical facts, but rather on current expectations and projections about future events, and is therefore subject to risks and uncertainties that could cause actual results to differ materially from the future results expressed or implied by the forward-looking information. Often, but not always, forward-looking information can be identified by the use of forward-looking words such as "believes", "plans", "expects", "intends" and "anticipates", or variations of such words, and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information contained in this news release includes, but is not limited to, statements relating to: the expected benefits of the Offer and the combination of Strathcona and MEG, both to the MEG shareholders and the Strathcona shareholders; the anticipated benefits that may result from the combination of Strathcona and MEG, including, but not limited to: the size and scale of the combined company; expectations with respect to the capital markets position of the combined company, increased public float and expected reserves life index; the intention of Strathcona to participate in the MEG strategic alternatives process and engage with MEG's Board; the combined company achieving an investment grade credit rating; expectations relating to the combined company's lack of exposure to mines and refineries; the expected potential cost synergies identified by Strathcona in connection with the combination of MEG and Strathcona, including with respect to overhead, interest, capital expenditures and operating costs, among others, and the related benefits thereof; and other anticipated strategic, operational and financial benefits that may result from the combination of Strathcona and MEG. Although Strathcona believes that the expectations reflected by the forward-looking information presented in this news release are reasonable, the forward-looking information is based on assumptions and factors concerning future events that may prove to be inaccurate. Those assumptions and factors are based on information currently available to Strathcona about itself and MEG and the businesses in which they operate. Information used in developing forward-looking information has been acquired from various sources, including third party consultants, suppliers and regulators, among others. The material assumptions used to develop the forward-looking information herein include, but are not limited to: the ability of Strathcona to complete the combination of Strathcona and MEG, pursuant to the Offer or otherwise, integrate Strathcona's and MEG's respective businesses and operations and realize the anticipated strategic, operational and financial benefits synergies from the acquisition of MEG by Strathcona; the conditions of the Offer will be satisfied on a timely basis in accordance with their terms; the anticipated synergies and other anticipated benefits of the Offer will be realized in a manner consistent with Strathcona's expectations; future production rates and estimates of capital and operating costs of the combined company; the combined company's reserves volumes and the net present values thereof; anticipated timing and results of capital expenditures of the combined company; MEG's public disclosure is accurate and that MEG has not failed to publicly disclose any material information respecting MEG, its business, operations, assets, material agreements or otherwise; there will be no material changes to laws and regulations adversely affecting Strathcona's or MEG's operations; and the impact of the current economic climate and financial, political and industry conditions on Strathcona's and MEG's operations will remain consistent with Strathcona's current expectations. Assumptions have also been made with respect to future oil and gas prices, differentials and future foreign exchange and interest rates. Although Strathcona believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that the forward-looking information herein will prove to be accurate. Because actual results or outcomes could differ materially from those expressed in any forward-looking information, readers should not place undue reliance on any such forward-looking information. By its nature, forward-looking information is based on assumptions and involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking information. In particular, there are certain risks related to the consummation of the Offer and the combination of Strathcona and MEG, and the business and operations of MEG and Strathcona (including the business and operations that are currently being conducted and undertaken by Strathcona and those that are expected to be conducted and undertaken by Strathcona upon consummation of the Offer) including, but not limited to: changes in general economic conditions in Canada, the United States and elsewhere; changes in operating conditions (including as a result of weather patterns); the volatility of prices for oil and natural gas and other commodities; commodity supply and demand; fluctuations in foreign exchange and interest rates; changes or proposed changes in applicable tariff rates; availability of financial resources and/or third-party financing; availability of equipment, materials and personnel; defaults by counterparties under commercial arrangements to which MEG or Strathcona (or any of their respective subsidiaries) is a party; an inability to procure regulatory approvals in a timely manner or on terms satisfactory to Strathcona; new or changing laws and regulations (domestic and foreign); the risk of failure to satisfy the conditions to the Offer; and the risk that the anticipated synergies and other benefits of the Offer may not be realized. In addition, readers are cautioned that the actual results of Strathcona following the successful completion of the Offer may differ materially from the expectations expressed herein as a result of a number of additional risks and uncertainties. Some of these risks, uncertainties and other factors are similar to those faced by other oil and gas companies and some are unique to Strathcona. Strathcona's annual information form for the year ended December 31, 2024 and other documents filed by Strathcona with the applicable Canadian securities regulatory authorities (available under Strathcona's profile on SEDAR+ at further describe risks, material assumptions and other factors that could influence actual results. The forward-looking information contained in this news release is provided as of the date hereof and Strathcona does not undertake any obligation to update or to revise any of the forward-looking information included herein, except as required by applicable securities laws. The forward-looking information contained in this news release is expressly qualified by this cautionary statement. Oil and Gas Metrics This news release contains metrics commonly used in the crude oil and natural gas industry, including "reserves life index". These terms do not have a standardized meaning and may not be comparable to similar measures presented by other companies, and therefore should not be used to make such comparisons. Readers are cautioned as to the reliability of oil and gas metrics used in this news release. Management of Strathcona uses these oil and gas metrics for its own performance measurements and to provide investors with measures to compare Strathcona's projected performance over time; however, such measures are not reliable indicators of Strathcona's future performance, which may not compare to Strathcona's performance in previous periods, and therefore should not be unduly relied upon. SOURCE Strathcona Resources Ltd.
Cision Canada
4 days ago
- Business
- Cision Canada
MEG Energy's Board Recommends Shareholders Reject the Strathcona Offer and NOT TENDER Their Shares
Offer's share consideration exposes shareholders to a company with inferior assets Selling by WEF and its investors to provide liquidity will put downward pressure on the share price MEG is a uniquely attractive investment opportunity that warrants a premium valuation MEG has initiated a strategic review of alternatives with the potential to surface an offer superior to the Company's compelling standalone plan CALGARY, AB, June 16, 2025 /CNW/ - MEG Energy Corp. (TSX: MEG) ("MEG", or the "Company") announced today that its Board of Directors (the "Board") has determined that Strathcona Resources Ltd.'s ("Strathcona") unsolicited bid to acquire all of the issued and outstanding MEG shares is inadequate, opportunistic, and NOT in the best interests of MEG or its shareholders. View PDF On May 30, 2025, Strathcona made a formal offer to acquire all of the issued and outstanding MEG shares it does not already own for a combination of 0.62 of a Strathcona share and $4.10 in cash per MEG share (the "Offer"). The Offer remains open until September 15, 2025. MEG's Board formed a Special Committee to conduct a thorough evaluation of the Offer with the assistance of financial and legal advisors. Following this review and on the recommendation of the Special Committee, the Board has concluded that the consideration to be received by shareholders under the Offer is inadequate, from a financial point of view, to shareholders, is not in the best interests of the Company or its shareholders, and unanimously recommends that shareholders REJECT the Offer by taking no action and NOT TENDER their shares. "Strathcona's Offer is inadequate by all reasonable measures and is not the right path forward for MEG shareholders," said James McFarland, Chairman of the Board. "A combination with Strathcona would expose shareholders to inferior assets and significant capital markets risks, including a $6 billion overhang resulting from Waterous Energy Fund's ("WEF") 51% ownership in the combined company, which would allow WEF investors to realize liquidity over time." The Board today filed its Directors' Circular, which provides information for shareholders about MEG's prospects and the Board's analysis, deliberations and recommendations. The Directors' Circular is available at and on SEDAR+ at Additional information can be found in the Investor Presentation, which is also available at "MEG has driven substantial transformation over the last few years," said Darlene Gates, MEG's Chief Executive Officer. "With a stronger balance sheet and low-risk growth from our accretive Facility Expansion Project, we are delivering sustainable shareholder returns. Our growing free cash flow supports a robust return of capital program, while our multi-year investment plan provides access to high quality resource and reduces per-barrel costs and sustaining capital." In its Directors' Circular, the Board details the reasons for its recommendations, including: The Offer's share consideration exposes shareholders to a company with inferior assets. MEG's asset portfolio is located in the heart of the Athabasca oil sands region, anchored by Christina Lake, a best-in-class SAGD project with top quartile asset characteristics and approximately five billion barrels of discovered bitumen initially-in-place ("DBIIP") supporting decades of low-risk, attractive growth. Together with undeveloped resource at Surmont, May River and Kirby, MEG has approximately 11 billion barrels of DBIIP. By contrast, Strathcona's assets are scattered, lack scale, and are located in less prolific areas with uncompetitive asset characteristics relative to MEG's Christina Lake. Selling by WEF and its investors to provide liquidity will put downward pressure on the share price. WEF's concentrated 51% ownership position introduces substantial and prolonged overhang risk, making the combined company a vehicle for WEF and its LP investors to sell their material ownership over time. Strathcona does not have sufficient trading liquidity for WEF and its LP investors to sell their interest in the market. If Strathcona combines with MEG, WEF will have more liquidity to attempt to sell its $6 billion stake. This selling pressure, or even the perceived risk of such selling pressure, will place immediate and significant downward burden on the share price of the combined company for a prolonged period of time. The Offer is inadequate. The Offer lacks a real premium. Its advertised premium was opportunistically calculated as the best and highest implied premium based on Strathcona's relatively thin trading. Since the announcement of the Offer, MEG shares have consistently traded above the implied value of the Offer, indicating that the market believes it significantly undervalues MEG's shares. In reality, the Offer of 0.62 of a Strathcona share and $4.10 in cash per MEG share does not represent a premium, but a significant discount when measured over periods other than the single day on which Strathcona calculated the advertised premium. Other paths to superior value maximization. MEG is a uniquely attractive investment opportunity: a pure play oil sands producer with best-in-class assets, an innovative team, and attractive growth opportunities. MEG warrants a premium valuation, which the Offer fails to deliver. MEG's Board has authorized the Company to initiate a strategic review of alternatives with the potential to surface an offer superior to the Company's compelling standalone plan. As noted in the Directors' Circular, the Board also considered the following: The standalone plan offers low-risk, visible brownfield growth and free cash flow generation; MEG delivered outsized returns since its rejection of the previous unsolicited offer in 2018; Shareholders have publicly expressed concerns about the value of the Offer; and All research analysts covering MEG have price targets exceeding the value of the Offer. The Board has received a written opinion from MEG's financial advisor, BMO Capital Markets stating that as of June 12, 2025, and based upon and subject to the assumptions, limitations and qualifications contained therein, the consideration offered to MEG shareholders (other than Strathcona and its affiliates) pursuant to the Offer is inadequate from a financial point of view to such shareholders. The Special Committee has received a written opinion from its financial advisor, RBC Capital Markets, to the effect that, as of June 12, 2025, and based upon and subject to the assumptions, limitations and qualifications contained therein and such other matters as RBC Capital Markets considered relevant, the consideration under the Offer is inadequate, from a financial point of view, to the shareholders (other than Strathcona and its affiliates). For the reasons outlined above, and on the recommendation of the Special Committee, the Board has unanimously concluded that the Offer is not in the best interests of MEG or its shareholders. MEG has a robust go-forward business plan that the Board believes will generate significant free cash flow and shareholder value, underpinned by MEG's high quality SAGD assets with decades of growth potential. With a focus on value maximization for MEG shareholders, the Board of Directors has authorized the Special Committee to initiate a strategic review of alternatives with the potential to surface an offer superior to the Company's compelling standalone plan. MEG, through its financial advisor, BMO Capital Markets, has begun an outreach to potential parties to explore and solicit potential interest in an alternative value maximizing transaction for shareholders. NO ACTION is required to reject the Offer. If you have already tendered your shares to the Offer, you can withdraw your shares by contacting your broker or Sodali & Co, the information agent retained by MEG, by toll-free phone call in North America to 1-888-999-2785, or to 1-289-695-3075 for banks, brokers, and callers outside North America or by e-mail at [email protected]. Advisors BMO Capital Markets and Burnet, Duckworth & Palmer LLP are acting as financial advisor and legal advisor, respectively, to the Company and RBC Capital Markets and Norton Rose Fulbright Canada LLP are acting as financial advisor and legal counsel, respectively, to MEG's Special Committee. Forward-Looking Information Certain statements contained in this news release may constitute forward-looking statements within the meaning of applicable Canadian securities laws. These statements relate to future events or MEG's future performance. All statements other than statements of historical fact may be forward-looking statements. The use of any of the words "estimate", "will", "would", "project", "believe", "initiate", "plan", "target", "potential", "growth", "prolonged" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are often, but not always, identified by such words. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. In particular, and without limiting the foregoing, this news release contains forward looking statements with respect to: the belief that a combination with Strathcona would expose shareholders to inferior assets and significant capital markets risks; the risk that Strathcona shareholders would use the combined company's liquidity to sell their shares and the potential for substantial and prolonged overhang risk; the anticipated benefits and results of MEG's multi-year investment plan; expectations in relation to WEF's ownership and the resulting overhang in the combined entity; the anticipated results of WEF using the additional liquidity of the combined entity to sell its $6 billion stake and the results thereof on the share price; the Board's belief that MEG's robust go-forward business plan will general significant free cash flow and shareholder value; the anticipated growth potential of MEG's high quality SAGD assets; the expectations with respect to the strategic review of alternatives, including the anticipated process and expected results therefrom; the price targets from research analysts covering MEG; and other similar statements. Forward-looking information contained in this news release is based on management's expectations and assumptions regarding, among other things: Strathcona and WEF's intentions if the Offer is accepted; future dispositions of Strathcona's assets; future crude oil, bitumen blend, natural gas, electricity, condensate and other diluent prices; that tariffs currently in effect will remain the same; MEG's ability to obtain qualified staff and equipment in a timely and cost-efficient manner; foreign exchange rates and interest rates; the applicability of technologies for the recovery and production of MEG's reserves and contingent resources; the recoverability of MEG's reserves and contingent resources; MEG's ability to produce and market production of bitumen blend successfully to customers; MEG's ability to maintain its dividend and capital programs; MEG's future production levels and steam-to-oil ratios; future capital and other expenditures; MEG's operating costs; anticipated sources of funding for operations and capital investments; the regulatory framework governing royalties, land use, taxes and environmental matters, including federal and provincial climate change policies, in which MEG conducts and will conduct its business; MEG's future debt levels; geological and engineering estimates in respect of MEG's reserves and contingent resources; the geography of the areas in which MEG is conducting exploration and development activities; the impact of increasing competition on MEG; MEG's ability to obtain financing on acceptable terms; and business prospects and opportunities. By its nature, such forward-looking information involves significant known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated. Factors that could cause actual results to vary from forward-looking information or may affect the operations, performance, development and results of MEG's businesses include: the risk that the Offer may be varied, accelerated or terminated in certain circumstances; risks relating to the outcome of the Offer, including the risks associated with WEF's ownership; the risk that the conditions to the Offer may not be satisfied, or to the extent permitted, waived; the risk that no compelling or superior proposals will emerge from MEG's process to explore strategic alternatives; the risk that future opportunities to receive full and fair value and future upside of MEG's shares may not be realized; the risk that operating results will differ from what is currently anticipated; MEG's status and stage of development; the concentration of MEG's production in a single project; the majority of MEG's total reserves and contingent resources are non-producing and/or undeveloped; the uncertainty of reserve and resource estimates; long-term reliance on third parties; the effect or outcome of litigation; the effect of any diluent supply constraints and increases in the cost thereof; the potential delays of and costs of overruns on projects and future expansions of MEG's assets; operational hazards; competition for, among other things, capital, the acquisition of reserves and resources, pipeline capacity and skilled personnel; risks inherent in the bitumen recovery process; changes to royalty regimes; the failure of MEG to meet specific requirements in respect of its oil sands leases; claims made by Indigenous peoples; unforeseen title defects and changes to the mineral tenure framework; risks arising from future acquisition activities; sufficiency of funds; fluctuations in market prices for crude oil, natural gas, electricity and bitumen blend; future sources of insurance for MEG's property and operations; public health crises, similar to the COVID-19 pandemic, including weakness and volatility of crude oil and other petroleum products prices from decreased global demand resulting from public health crises; risk of war (including the conflicts between Russia and Ukraine and Israel, Hamas and Iran); general economic, market and business conditions; volatility of commodity inputs; variations in foreign exchange rates and interest rates; hedging strategies; national or global financial crisis; environmental risks and hazards, including natural hazards such as regional wildfires, and the cost of compliance with environmental legislation and regulations, including greenhouse gas regulations, potential climate change legislation and potential land use regulations; enacted and proposed export and import restrictions, including but not limited to tariffs, export taxes or curtailment on exports; failure to accurately estimate abandonment and reclamation costs; the need to obtain regulatory approvals and maintain compliance with regulatory requirements; the extent of, and cost of compliance with, laws and regulations and the effect of changes in such laws and regulations from time to time including changes which could restrict MEG's ability to access foreign capital; failure to obtain or retain key personnel; potential conflicts of interest; changes to tax laws (including without limitation, a potential United States border adjustment tax) and government incentive programs; the potential for management estimates and assumptions to be inaccurate; risks associated with establishing and maintaining systems of internal controls; risks associated with the tariffs imposed on the import and export of commodities and the possibility that such tariffs may change; political risks and terrorist attacks; risks associated with downgrades in the credit ratings for MEG's securities; cybersecurity errors, omissions or failures; restrictions contained in MEG's credit facilities, other agreements relating to indebtedness and any future indebtedness; any requirement to incur additional indebtedness; MEG defaulting on its obligations under its indebtedness; and the inability of MEG to generate cash to service its indebtedness. Although MEG believes that the assumptions used in such forward-looking statements and information are reasonable, there can be no assurance that such assumptions will be correct. Accordingly, readers are cautioned that the actual results achieved may vary from the forward-looking information provided herein and that the variations may be material. Readers are also cautioned that the foregoing list of assumptions, risks and factors is not exhaustive. Further information regarding the assumptions and risks inherent in the making of forward-looking statements and in respect of the Offer can be found under the heading " Cautionary Statement on Forward-Looking Statements" in the Directors' Circular, along with MEG's other public disclosure documents which are available through the Company's website at and through the SEDAR+ website at The forward-looking information included in this news release is expressly qualified in its entirety by the foregoing cautionary statements. Unless otherwise stated, the forward-looking information included in this news release is made as of the date of this news release and MEG assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances, except as required by law. Advisory Regarding Oil and Gas Information The information concerning MEG's DBIIP estimates in this news release was derived from: (1) a report of GLJ dated effective as of December 31, 2024 assessing and evaluating the proved and probable reserves and certain contingent resources of MEG's Christina Lake property, which has been prepared in accordance with National Instrument 51-101 and in accordance with the procedures and standards contained in the Canadian Oil and Gas Evaluation Handbook (the " Reserves and Contingent Resources Report"); and (2) a report of GLJ dated effective as of May 31, 2025 assessing and evaluating the discovered bitumen initially in place of MEG's Surmont, May River, Thornbury and Kirby assets (the " DBIIP Report"), which has been prepared in accordance with the procedures and standards contained in the Canadian Oil and Gas Evaluation Handbook. Such DBIIP estimates described in this news release are estimates only and the actual quantities of recoverable bitumen and other product types may be greater or less than those estimated. There are significant differences in the criteria associated with the classification of reserves and contingent resources. Contingent resource estimates involve additional risk, specifically the risk of not achieving commerciality, not applicable to reserves estimates. There is no certainty that it will be commercially viable to produce any portion of the resources. The estimates of reserves and resources from individual properties may not reflect the same confidence level as estimates of reserves and resources for all properties, due to the effects of aggregation. Further information regarding the estimates and classification of MEG's reserves and resources is contained within MEG's public disclosure documents on file with Canadian securities regulatory authorities, and in particular, within MEG's annual information form dated February 27, 2025 for the year ended December 31, 2024 available through the SEDAR+ website at With respect to MEG's oil sands assets, DBIIP is equivalent to discovered petroleum initially-in-place, which is defined in the Canadian Oil and Gas Evaluation Handbook as the quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of discovered petroleum initially-in-place includes production, reserves and contingent resources; the remainder is unrecoverable. Bitumen in place should not be confused with bitumen "reserves" that are the technically and economically recoverable portion of it. There is no certainty that it will be commercially viable to produce any portion of the resources described by the estimated DBIIP. The DBIIP estimates have not been risked for the chances of development. There are no recovery projects defined for the volumes of DBIIP. Given the insufficient data to determine an expected recovery factor, a contingent or prospective resource or reserve amount cannot be estimated. The key variables relevant to the DBIIP evaluation are porosity, reservoir thickness, pressure, water saturation and gas composition which have increasing uncertainty with distance from existing wells. There are numerous uncertainties inherent in estimating DBIIP, including the accuracy of each input underlying the DBIIP calculations and the reliability of the data used to estimate the DBIIP. The accuracy of the DBIIP estimates is, in part, a function of the quality and quantity of available data and of engineering and geological interpretation and judgment. The availability of additional data and analysis would necessitate revisions. Such revisions may be material. DBIIP is the most specific assignable category for the resources in MEG's Surmont, Thornbury, May River and Kirby projects as these growth properties are not in MEG's short-term development strategy and MEG has not commissioned a current independent qualified reserves evaluator to support any more specific assignable categories. This news release discloses DBIIP of approximately 5 bn bbl for MEG's Christina Lake project. More specifically, the DBIIP estimate for MEG's Christina Lake project is 5,306.8 MMbbl, which is comprised of: proved plus probable bitumen reserves of 1,938.9 MMbbl on a MEG gross basis, risked best estimate contingent resources (with a project maturity sub-class development pending) of 912.4 MMbbl on a MEG gross basis, 2,057.5 MMbbl of unrecoverable portions of DBIIP (which includes 47.3 MMbbl of unrisked best estimate contingent resources) and 398.0 MMbbl of cumulative production, all as per the Reserves and Contingent Resources Report. Abbreviations MMbbl million barrels of oil bn bbl billions of barrels of oil For media inquiries, please contact: Jim Campbell Vice President, Communications and External Relations T 403.775.1117 SOURCE MEG Energy Corp.
Business Wire
06-05-2025
- Business
- Business Wire
Sierra Metals Responds to Alpayana's Increased Offer; Makes No Recommendation to Shareholders
TORONTO--(BUSINESS WIRE)-- Sierra Metals Inc. (TSX: SMT | OTCQX: SMTSF | BVL: SMT) (" Sierra Metals" or the " Company") provides an update in respect of the press release and notice of variation and extension dated May 1, 2025 (the " Notice of Variation"), filed by Alpayana S.A.C. (" Alpayana"), announcing an increase to the offer price for its proposed take-over bid to acquire all of the common shares of the Company (" Common Shares") from C$1.11 to C$1.15 per Common Share (the " Revised Offer"). The Board of Directors of Sierra Metals (the " Board"), after consultation with its independent legal and financial advisors and based on the unanimous recommendation of the Special Committee of independent directors of the Board (the " Special Committee"), has unanimously determined to make NO RECOMMENDATION as to whether holders of Common Shares (" Shareholders") should accept or reject the Revised Offer (the " Revised Recommendation"). The Board notes that it had hoped to reach agreed terms with Alpayana for a supported transaction. Following the termination of those discussions, the Board makes its Revised Recommendation due to a number of factors, including, but not limited to, the continued extensive conditionality and uncertainty attached to the Revised Offer, noting that the Revised Offer continues to contain conditions which Alpayana is aware cannot be satisfied (as described further below). The Board will provide greater context regarding the Revised Recommendation in a Notice of Change to Directors' Circular (the " Notice of Change") to be filed on SEDAR+ ( under Sierra's issuer profile. The Notice of Change will also be mailed to all persons required to be sent a copy under applicable securities laws. The Board encourages Shareholders, including those who may have already accepted the Revised Offer and who may lawfully withdraw their deposited Common Shares, to consider the Revised Offer and the information contained in the Notice of Change carefully and make their own decisions regarding whether or not to accept the Revised Offer. Unless extended, the Revised Offer expires at 5:00 p.m. (Toronto time) on May 12, 2025. The Notice of Change will include a letter to shareholders from the Board, which will summarize the principal factors considered by the Board in reaching its recommendation, set out below. Sierra Metals and BMO Conducted an Exhaustive Strategic Review. Since December 16, 2024, the date that Alpayana announced its intention to make its original offer at an offer price of C$0.85 in cash per Common Share (the " Original Offer"), the Special Committee, with the assistance of the Company's management and BMO Nesbitt Burns Inc. (" BMO"), has worked to actively pursue a broad range of strategic alternatives in order to identify other options that may be in the best interests of Sierra Metals and its Shareholders, and that might have resulted in a transaction superior to the Original Offer. The Special Committee considered the outcome of this process, the range of other strategic alternatives available to Sierra Metals and the Revised Offer and concluded that the Revised Offer represented the best alternative available to Sierra Metals and its Shareholders. Significant Premium to Market Price. The Revised Offer of C$1.15 per Common Share represents a premium of approximately 49% to the closing price of the Common Shares on the Toronto Stock Exchange on December 13, 2024 (the last trading day prior to the public disclosure of the Original Offer). The premium to Sierra Metals' Shareholders is effectively higher when considering that the share price for peers of Sierra Metals has declined 11%, since the Original Offer. The Revised Offer also represents a 35% increase from the Original Offer of C$0.85 per Common Share. 100% Liquidity and Certainty of Value. The Revised Offer provides 100% cash consideration for the Common Shares, giving Shareholders certainty of value and immediate liquidity at an attractive price in the face of volatile markets. Project Execution and Development Risk. The Board and the Special Committee believe that the Revised Offer provides Shareholders with a fair value for the Company's portfolio of projects, including both the Bolivar and Yauricocha mines, without the long-term risks associated with the development and execution of operational improvements at both Bolivar and Yauricocha. BMO Fairness Opinion. BMO provided the Special Committee with a written opinion to the effect that, as of the date of such opinion, subject to the assumptions, limitations and qualifications set out therein, the consideration proposed to be received by Shareholders (other than Alpayana) under the Revised Offer is fair, from a financial point of view, to Shareholders. The Board Believes in the Potential Upside of the Company's Assets. In the event that the Revised Offer is not successful, the Board believes in the potential of the Company to continue on a stand-alone basis. Specifically, the Company's two copper producing assets, the Yauricocha mine in Peru and the Bolivar mine in Mexico, both contain significant near mine, brownfield and greenfield exploration potential that could be leveraged to drive significant long-term value for the Company. At Yauricocha, the Company obtained the permit to mine below level 1120 where 95% of the mine's current mineral reserves sit, allowing the mine to operate at full capacity (currently 3,600 tpd) since Q4 2024. The Company believes there is significant exploration opportunity below level 1120 as the geology appears open in all directions. Sierra Metals is also confident in its exploration efforts at Bolivar and its ability to deliver additional mineral resources to support the Company's plan to increase production capacity from 5,000 tpd to 7,500 tpd in the mid-term. The Revised Offer Remains Highly Conditional. The Revised Offer contains a significant number of conditions which must be satisfied or waived before Alpayana is obligated to take up and pay for any Common Shares tendered. Many of the conditions are not subject to materiality thresholds or reasonableness standards or any other objective criteria, but rather are in Alpayana's sole discretion. Further, Alpayana is aware that certain conditions of the Revised Offer, as further set out below, cannot be satisfied. The Revised Offer contains a condition that no shareholder rights plan or similar plan shall have been adopted by the Company. On December 16, 2024, Alpayana announced its intention to make the Original Offer. Following this announcement, on December 30, 2024, Sierra Metals entered into a shareholder rights plan to ensure that all Shareholders are treated fairly in connection with any take-over bid. Later, on December 30, 2024, Alpayana formally commenced the Original Offer, which contained a condition that no shareholder rights plan or similar plan should have been adopted by the Company, despite the fact that such condition could not have been satisfied at the time the Original Offer was formally commenced. This condition remains in the Revised Offer. The Revised Offer contains a condition that the Company shall not have adopted or amended, or taken any other action with respect to, any bonus, profit sharing, incentive, salary or other compensation plan, severance, change in control, employment or other employee benefit plan, agreement, fund or arrangement for the benefit of any officer, director or consultant, except for limited exceptions. Following the Original Offer, which the Board determined to be highly opportunistic, well below the fair value of the Company and which BMO had determined to be inadequate, from a financial point of view, to the Shareholders, the Board determined to make amendments to the employment agreements of certain officers of the Company, to provide such officers with adequate protection in the event that such officers are terminated without cause within 12 months of a change of control and to ensure the continued retention of such officers as a result of the turbulence and uncertainty created by the opportunistic offer. The particulars of such change of control provisions were fully described in the Directors' Circular of the Company dated January 13, 2025 under the heading " Arrangements Between Sierra and its Directors and Officers – Compensation Agreements and Arrangements". Such changes are customary in connection with unsolicited takeover bids and were necessary for retention purposes to allow the Company to continue to operate while the Board assessed the Original Offer and potential alternatives. Alpayana was aware of these change of control provisions at the time it made the Revised Offer, however, such condition remains in the Revised Offer. The Revised Offer contains a condition that the Company shall not have issued, sold, granted or awarded any Common Shares or other equity or voting interests or any options or rights to acquire Common Shares. Following the conclusion of the financial year-ended December 31, 2024, as part of the Company's regular compensation process, the Company issued an aggregate of 2,370,956 restricted share units to senior management as part of their performance bonuses for the year ended December 31, 2024. Such grants were made in the ordinary course, consistent with past practice and properly disclosed via the System for Electronic Disclosure by Insiders (SEDI). Alpayana was aware of these issuances, and the timing thereof, at the time it made the Revised Offer, however, such condition remains in the Revised Offer. Alpayana was aware that the above noted conditions could not be satisfied at the time it made the Revised Offer. However, it has not elected to waive such conditions in connection with the Revised Offer. As a result, tendering Common Shares to the Revised Offer, in effect, constitutes the grant to Alpayana of a unilateral and discretionary option to acquire all of the Common Shares and there can be no certainty that Alpayana will waive such conditions and take up and pay for the Common Shares. About Sierra Metals Sierra Metals is a Canadian mining company focused on copper production with additional base and precious metals by-product credits at its Yauricocha Mine in Peru and Bolivar Mine in Mexico. The Company is intent on safely increasing production volume and growing mineral resources. Sierra Metals has recently had several new key discoveries and still has many more exciting brownfield exploration opportunities in Peru and Mexico that are within close proximity to the existing mines. Additionally, the Company has large land packages at each of its mines with several prospective regional targets providing longer-term exploration upside and mineral resource growth potential. Forward-Looking Statements This news release contains forward-looking information within the meaning of Canadian securities legislation. Forward-looking information relates to future events or the anticipated performance of Sierra Metals and reflect management's expectations or beliefs regarding such future events and anticipated performance based on an assumed set of economic conditions and courses of action. In certain cases, statements that contain forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur" or "be achieved" or the negative of these words or comparable terminology. By its very nature forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual performance of Sierra Metals to be materially different from any anticipated performance expressed or implied by such forward-looking information. Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, the risks described under the heading "Risk Factors" in the Company's annual information form dated March 26, 2025 for its fiscal year ended December 31, 2024 and other risks identified in the Company's filings with Canadian securities regulators, which are available at The risk factors referred to above are not an exhaustive list of the factors that may affect any of the Company's forward-looking information. Forward-looking information includes statements about the future and is inherently uncertain, and the Company's actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company's statements containing forward-looking information are based on the beliefs, expectations, and opinions of management on the date the statements are made, and the Company does not assume any obligation to update such forward-looking information if circumstances or management's beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.
