The large-cap CVE (+40%) has outperformed the sector and the broader market (+21%) over the same period. The $44.6 billion company will soon be Canada’s second-largest oil and gas producer after emerging victorious from an intense bidding war. Industry experts believe the five-month battle has reshaped the country’s oil patch.
On November 6, 2025, MEG energy shareholders approved the proposed acquisition of Cenovus Energy. The transaction is valued at $8.6 billion. The recommendations of market analysts are from ‘buy’ to ‘strong buy’ after the approved merger. Many of them have raised their price targets.
At the time of writing, CVE is trading at $25.40 per share and pays a 3.1% dividend. The highest price target for the next twelve months is $32 (+26%). An investment of $6,985 (275 shares) will generate $218.63 in passive income in one year.
Favorable transaction
The general feeling about the transaction is that Cenovus Energy will benefit from the momentum and strong longer-term upward trend. Both companies believe that the proximity to their oil sands properties will result in significant cost savings and operational efficiencies. It is a consolidation of the highest quality resources in the oil sands.
Cenovus expects daily oil sands production of 720,000 barrels of oil equivalent (boe/d) following the merger. The MEG Energy portfolio adds 110,000 barrels. Management said production could grow to 850,000 boe/d by 2028.
Strathcona, the former rival that won over MEG Energy, has expressed its support for the deal. Pursuant to a voting support agreement, the company has agreed to vote its MEG common stock in favor of the transaction. Meanwhile, Cenovus will sell certain assets to Strathcona and obtain proceeds of up to $150 million.
Financial highlights
This year was special for Cenovus Energy, especially in the areas of upstream production and crude oil refining. Upstream production of 832,900 barrels of oil equivalent per day in Q3 2025 was the highest ever recorded in the oil sands segment. U.S. crude oil refining throughput of 605,300 barrels per day, at 99% utilization, was also a record high.
Jon McKenzie, President & CEO of Cenovus, said: “We delivered record volumes in both our Upstream and Downstream operations this quarter, while maintaining our commitment to safe, reliable and cost-effective operations.”
In the three months ended September 30, 2025, revenues fell 4.5% year over year to $13.2 billion, while net income rose 56.8% to $1.3 billion compared to the third quarter of 2024.
“Our major growth projects are all nearing completion and our Downstream business is reaching its potential with consistently strong operating performance this quarter,” McKenzie added. Cenovus Energy will evaluate further upside opportunities.
Cenovus pays quarterly dividends and boasts an impressive track record. It has never missed a payment in 52 consecutive quarters, or 13 years.
The spine
The oil sands activities are the backbone of Cenovus Energy. Through asset development and operational strategy, it can maintain and increase its competitive advantage. More importantly, long-lived, low-return oil sands assets provide predictable, high-margin production. This should be an important consideration for potential investors.
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