Offer expired January 16 with minimum tender
condition not met
Husky Energy (TSX: HSE) today announced that its offer for MEG
Energy expired on January 16 and that the minimum tender condition
was not met. Due to insufficient MEG Board and shareholder support,
Husky has decided not to extend its offer.
Since the offer commenced 105 days ago, there
have been several negative surprises in the business and economic
environment, including:
- The Government of Alberta departed
from free market principles, introducing uncertainty through the
imposition of government-mandated production cuts
- Continued lack of meaningful
progress on Canadian oil export pipeline developments
“Given the outcome of the tender process, Husky
will continue to focus on capital discipline and the delivery of
the five-year plan we set out at our Investor Day in May 2018,”
said CEO Rob Peabody. “We are investing in reliable, higher margin
production growth that continues to lower the oil price we need to
break even. Both our Integrated Corridor and high-netback Offshore
businesses receive global pricing and provide insulation from
ongoing commodity price volatility.”
Record daily production rates were achieved at
the Sunrise Energy Project (62,600 barrels per day (bbls/day)
gross) and Tucker Thermal Project (31,700 bbls/day) in the fourth
quarter of 2018. Sunrise has been in operation since 2015, with
significant investments made to enhance production over the past
three years. Husky continues to work with the Alberta government to
mitigate inequities in the curtailment methodology, costs and other
unintended consequences.
Husky’s financial priorities are to maintain a
strong balance sheet, return cash to shareholders through a
dividend and to invest in a deep portfolio of organic projects,
which further improves its resiliency and provides for strong and
stable free cash flow.
All MEG shares that have been tendered to the
offer will be promptly returned to shareholders.
Investor Inquiries: |
Media Inquiries: |
|
|
Dan
Cuthbertson403-523-2395 |
Mel
Duvall403-513-7602 |
Leo
Villegas403-513-7817 |
|
FORWARD-LOOKING STATEMENTS
Certain statements in this news release are
forward-looking statements and information (collectively,
“forward-looking statements”) within the meaning of the applicable
Canadian securities legislation, Section 21E of the United States
Securities Exchange Act of 1934, as amended, and Section 27A of the
United States Securities Act of 1933, as amended. The
forward-looking statements contained in this news release are
forward-looking and not historical facts.
Some of the forward-looking statements may be
identified by statements that express, or involve discussions as
to, expectations, beliefs, plans, objectives, assumptions or future
events or performance (often, but not always, through the use of
words or phrases such as “will likely result”, “are expected to”,
“will continue”, “is anticipated”, “is targeting”, “is estimated”,
“intend”, “plan”, “projection”, “could”, “should”, “aim”, “vision”,
“goals”, “objective”, “target”, “scheduled” and “outlook”).
In particular, forward-looking statements in this news release
include, but are not limited to: Husky’s business strategy and the
potential divestment of the Company’s retail business and Prince
George Refinery and the use of proceeds therefrom.
Although the Company believes that the
expectations reflected by the forward-looking statements presented
in this news release are reasonable, the Company’s forward-looking
statements have been 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 the
Company about itself and the businesses in which it operates.
Information used in developing forward-looking statements has been
acquired from various sources, including third-party consultants,
suppliers and regulators, among others.
Because actual results or outcomes could differ
materially from those expressed in any forward-looking statements,
investors should not place undue reliance on any such
forward-looking statements. By their nature, forward-looking
statements involve numerous assumptions, inherent risks and
uncertainties, both general and specific, which contribute to the
possibility that the predicted outcomes will not occur. Some of
these risks, uncertainties and other factors are similar to those
faced by other oil and gas companies and some are unique to the
Company.
The Company’s Annual Information Form for the
year ended December 31, 2017 and other documents filed with
securities regulatory authorities (accessible through the SEDAR
website www.sedar.com and the EDGAR website www.sec.gov) describe
risks, material assumptions and other factors that could influence
actual results and are incorporated herein by reference.
New factors emerge from time to time and it is
not possible for management to predict all of such factors and to
assess in advance the impact of each such factor on the Company’s
business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statement. The impact of any one
factor on a particular forward-looking statement is not
determinable with certainty as such factors are dependent upon
other factors, and the Company’s course of action would depend upon
management’s assessment of the future considering all information
available to it at the relevant time. Any forward-looking statement
speaks only as of the date on which such statement is made and,
except as required by applicable securities laws, the Company
undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated
events.
NON-GAAP MEASURES
This news release contains reference to the term
“free cash flow”, which does not have a standardized meaning
prescribed by International Financial Reporting Standards (“IFRS”)
and is therefore unlikely to be comparable to similar measures
presented by other issuers. This measure is not used to
enhance reported financial performance or position. This measure is
a useful complementary measures in assessing financial performance,
efficiency and liquidity.
Free cash flow is a non-GAAP measure, which
should not be considered an alternative to, or more meaningful
than, cash flow – operating activities as determined in
accordance with IFRS, as an indicator of financial performance.
Free cash flow is presented to assist management and investors in
analyzing operating performance by the business in the stated
period.
Free cash flow equals cash flow – operating
activities plus change in non-cash working capital less capital
expenditures and investment in joint ventures.
NOTICE TO U.S. HOLDERS OF MEG
SHARES
Consistent with applicable U.S.
securities laws, the Company is providing the following
advisory:
The Company has filed a registration
statement covering the offer and sale of the Company’s shares in
the acquisition with the United States Securities and Exchange
Commission (the “SEC”) under the U.S. Securities Act of 1933, as
amended. Such registration statement covering such offer and
sale includes various documents related to such offer and
sale. THE COMPANY URGES INVESTORS AND SHAREHOLDERS OF MEG TO
READ SUCH REGISTRATION STATEMENT AND ANY AND ALL OTHER RELEVANT
DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH SUCH
OFFER AND SALE OF THE COMPANY’S SHARES AS THOSE DOCUMENTS BECOME
AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION. You are able to obtain a free copy of such
registration statement, as well as other relevant filings regarding
the Company or such transaction involving the issuance of the
Company’s shares, at the SEC’s website (www.sec.gov) under the
issuer profile for the Company, or on request without charge from
the Senior Vice President, General Counsel & Secretary of the
Company, at 707 8th Avenue S.W. Calgary, Alberta or by telephone at
403-298-6111.
The Company is a foreign private issuer
and is permitted to prepare the offer to purchase and takeover bid
circular and related documents in accordance with Canadian
disclosure requirements, which are different from those of the
United States. The Company prepares its financial statements
in accordance with Canadian generally accepted accounting
principles, and they may be subject to Canadian auditing and
auditor independence standards. They may not be comparable to
financial statements of United States companies.
Shareholders of MEG
should be aware that owning the Company’s shares may subject them
to tax consequences both in the United States and in
Canada. The offer to purchase and takeover
bid circular (or any applicable supplement) may not describe these
tax consequences fully. MEG shareholders
should read any tax discussion in the offer to purchase and
takeover bid circular (or any applicable supplement), and holders
of MEG shares are urged to consult their tax
advisors.
A MEG shareholder’s
ability to enforce civil liabilities under the United States
federal securities laws may be affected adversely because the
Company is incorporated in Alberta, Canada, some or all of the
Company’s officers and directors and some or all of the experts
named in the offering documents reside outside of the United
States, and all or a substantial portion of the Company’s assets
and of the assets of such persons are located outside the United
States. MEG shareholders in the United States may
not be able to sue the Company or the Company’s officers or
directors in a non-U.S. court for violation of United States
federal securities laws. It may be difficult to compel such
parties to subject themselves to the jurisdiction of a court in the
United States or to enforce a judgment obtained from a court of the
United States.
NEITHER THE SECURITIES EXCHANGE
COMMISSION NOR ANY STATE SECURITIES REGULATOR HAS OR WILL HAVE
APPROVED OR DISAPPROVED THE COMPANY’S SHARES OFFERED IN THE
OFFERING DOCUMENTS, OR HAS OR WILL HAVE DETERMINED IF ANY OFFERING
DOCUMENTS ARE TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.