05:27 PM EDT, 10/10/2025 (MT Newswires) -- Strathcona Resources ( STHRF ) , after trade Friday, said it is ending its takeover bid for MEG Energy ( MEGEF ) because it believes the "conditions to its offer, or any reasonably improved offer, are no longer capable of being satisfied" as a result of the revised arrangement agreement between the MEG board of directors and Cenovus Energy Inc. ( CVE ) .

SCR also provided details on a meeting of shareholders to approve a special distribution of $10.00 per share, as previously disclosed, and a corporate update that, among other things, says SCR will, after the sale of MEG, be the only pure play oil company in North America producing more than 50 Mbbls/d without mines or refineries.

In addition, SCR announced that certain limited partnerships managed by Waterous Energy Fund (WEF), which collectively own approximately 79.6% of the outstanding shares, intends to complete an additional series of share pass-through transactions to its limited partners, in accordance with its prior stated intentions and in a similar manner as it did in January 2025. WEF expects to distribute up to approximately 13% of the outstanding shares of Strathcona to its limited partners in two stages, with approximately 5% expected to be distributed in November 2025 and up to an additional 8% in early 2026. Following completion of the share pass-through transactions, WEF's ownership in Strathcona will decrease from 79.6% to approximately 66.6%. No member of the WEF general partner, or any WEF employee, receiving shares as part of the pass-through has plans to sell any shares following the distribution at this time.

On the big news, termination of the MEG Offer, SCR said on the back of a failed shareholder vote, the MEG board's call to waive Cenovus' standstill and allow it to vote shares acquired after the record date in favour of its own transaction is "anti-competitive." As a result, Strathcona has terminated the offer and will return all MEG shares already tendered.

In its corporate update, Strathcona remains committed to its prior disclosed long-range plan of organic growth from 120 Mbbls/d to 195 Mbbls/d by 2031 (a 10% CAGR), made possible by its long reserves life index (29 years proved, 49 years proved plus probable), high margin production, and deep inventory of low breakeven drilling locations. It said 100% of the planned growth is expected to come from Strathcona's SAGD properties, with approximately 9 Mbbls/d coming from filling existing facility capacity and approximately 66 Mbbls/d from three brownfield SAGD projects. The majority of Strathcona's incremental production growth will be sold in the U.S. Gulf Coast via Strathcona's owned and operated Hamlin Rail Terminal and new long-haul pipeline capacity. As part of this long-range plan, Strathcona's board of directors has approved a 2026 capital budget of $1.0 billion, with associated production guidance of 115 Mbbls/d to 125 Mbbls/d and exit production of approximately 130 Mbbls/d.

Upon completion of the special distribution, Strathcona expects to have approximately $2.0 billion in debt net of marketable securities, and more than $1.0 billion in available liquidity. Excess free cash flow, above Strathcona's existing base dividend of $0.30 per share, per quarter, will be allocated opportunistically between debt repayment, M&A and further shareholder returns.

Friday's move by SCR comes after the MEG board previously rejected SCR's Sept. 8 announcement around an amended and extended offer to acquire MEG. Its amended offer equated to $30.86 per MEG share and an 11% premium to the agreement entered into by MEG and Cenovus announced August 22, 2025, valued at $27.79 per MEG share, in each case based on the one-day volume-weighted average share prices of SCR and Cenovus September 5, 2025. That amended offer reflected a 10% increase to SCR's original offer, which was valued at $28.02 per MEG share as of September 5, 2025.

The Canadian Press earlier this week noted the Cenovus proposal values MEG at about $8.6 billion, including assumed debt, up from its earlier offer valued at $7.9 billion. It also noted Strathcona already held a 14.2% interest in the company, and was offering 0.80 of a share for each MEG share it did not already own. Under the Strathcona deal, MEG shareholders would own 43% of the new entity. SCR valued MEG at $7.6 billion.

SCR was down 3.9% in Canada today, amid big losses across the broader index.