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Proposed Acquisition of MEG Energy – Husky Energy Inc.

Husky Energy Inc. · Oct 1, 2018 · 18 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 1
  2. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 2
    Value Creation Opportunity For All Shareholders Better Together Benefits to MEG Shareholders Benefits to Husky Shareholders 44% premium over MEGs 10-day volume-weighted Accretive on per-share metrics in five-year plan: average share…
  3. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 3
    Proposed Combination With MEG Better Together Transaction Acquisition of all outstanding common shares of MEG Enterprise value of 6.4 billion, including the assumption of approximately 3.1 billion of net debt 1 Acquisition price of…
  4. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 4
    MEG Has Quality Assets and Capabilities But . . . Strong Historical Production Growth2 High Quality Assets 100 10 Christina Lake is a top quality asset 90 9 100 mbbls/day exit 80 8 production rate1 Current steam-oil ratio of…
  5. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 5
    . . . MEG Has Failed To Create Shareholder Value Historical Total Shareholder Returns (TSR)1 TSR Since July 2010 MEG IPO1 18 % 80 % 60 % (7)% (15)% 40 % (40)% Total Shareholder Return (%) 20 % 18 % (77)% 0% Husky MEG WTI…
  6. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 6
    MEG Has Limited Financial Flexibility MEGs High Debt Burden Below Investment Significant Leverage High Debt Metrics High Servicing Costs Grade Rating Net Market Cap 5.0x 10.02/bbl B3 BB- Debt Forecast 2018F Net Finance…
  7. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 7
    MEG Exposed To Heavy Oil Differentials Majority of MEGs production remains exposed to Canadian heavy oil differentials Outlook for heavy oil differentials remains wide, with 30% further risks associated with new IMO sulphur limits…
  8. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 8
    Deal Delivers MEGs Financial Targets TODAY . . . Plus Much More MEGs Five Strategic Priorities to Build Achieved Through Combination a Sustainable Business by 20201 Optimize Expected investment-grade credit ratings 2-3x net…
  9. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 9
    Combination Enhances Huskys Value Proposition Better Together: Resilient and Well Positioned to Capture Upside MEGs low-cost production and Huskys Acquisition meets Huskys integrated business maximizes margin return thresholds…
  10. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 10
    Combined Top-Tier, High Netback Thermal Projects Better Together Generating The Highest Cash Flow Per Barrel from Thermal Projects1 30 Top 3 Canadian Thermal Producer 10 active projects 2017 Bitumen Operating Netbacks3 (/bbl)…
  11. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 11
    Deal Increases Long-Life Production, Lowers Costs Better Together Long-Life Thermal Production1 Cost Structure2 Long Life Thermal Production, % of Total Proportion of Production Below 11/boe Operating Cost Current 21% 43%…
  12. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 12
    Realizing Full Benefits From Integration Better Together 90% Downstream Coverage1 (End 2020F) Combined Midstream and Downstream Network 400 300 400 375 200 mbbls/day mbbls/day Lloyd Refining 100 Complex 0 Combined 2020F Combined…
  13. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 13
    Synergies Drive Stronger Free Cash Flow Better Together Near-Term Realizable Synergies Annual Impact to Free Cash Flow Debt refinancing Financial Other financial synergies 100M Additional margin capture through Huskys Operational…
  14. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 14
    Accretive To Husky On All Metrics At Strip Pricing Better Together 2019F 2020F+ Metrics1 Combined 2019F2 Accretion/Share2 Accretion/Share 3 Funds from operations 6 billion 0-5% 5-10% 3 Free cash flow 1.5 billion 0-5% 10-15%…
  15. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 15
    Stronger Company Creates More Investments, Jobs Better Together: Strengthening Communities, Improving Environmental Stewardship A stronger, more competitive Canadian company with the ability to accelerate investments, including…
  16. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 16
    Process Circular expected to be filed Tuesday, October 2, 2018 The Offer will be open for acceptance until 5 p.m. ET (3 p.m. MT) on Wednesday, January 16, 2019 Registered MEG shareholders wanting to benefit from the Offer must…
  17. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 17
    Better Together A Compelling Proposal Creates A Stronger, Combined Canadian Energy Company Immediate 44% premium for MEG shareholders Shareholders who receive Husky shares can expect higher dividend payouts and higher total returns…
  18. Proposed Acquisition of MEG Energy – Husky Energy Inc. – slide 18

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