MEG Energy Corp. Shareholders, REJECT HUSKY’S OFFER

THE OFFER HIGHLY DO NOT UNDERVALUES DILUTIVE TO MEG TENDER THE COMPANY SHAREHOLDERS YOUR SHARES

If you have already tendered your Common Shares to the Husky offer, you can withdraw them by contacting your broker. For assistance, contact Kingsdale at 1.866.228.8614 or [email protected].

This document is important and requires your immediate attention. If you are in doubt as to how to respond to the Husky Offer, you should consult with your investment dealer, broker, bank manager, lawyer or other professional advisor. Inquiries concerning the information in this document should be directed to Kingsdale Advisors, the Information Agent retained by MEG, by North American toll free phone call to 1-866-228-8614 or by e-mail at [email protected].

DIRECTORS' CIRCULAR

RECOMMENDING REJECTION

of the unsolicited offer by

HUSKY ENERGY INC.

to purchase all of the Common Shares of

MEG ENERGY CORP.

for consideration per Common Share, at the election of each holder, of (i) $11.00 in cash; or (ii) 0.485 of a Husky Share

The MEG Board unanimously concluded that the Husky Offer significantly undervalues the Common Shares, is not in the best interests of MEG or its Shareholders and recommends that you REJECT the Husky Offer and NOT TENDER your Common Shares

NO ACTION IS REQUIRED to REJECT the Husky Offer

If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free Phone Call to 1-866-228-8614 or by email at [email protected].

October 16, 2018

SUMMARY

The information set out below is intended as a summary only and is qualified in its entirety by the more detailed information appearing elsewhere in this Directors' Circular. This Directors' Circular should be read carefully and in its entirety as it provides important information regarding MEG and the Husky Offer. Capitalized terms used but not defined in this Summary have the meanings ascribed thereto in Appendix "B" – Glossary to this Directors' Circular.

Unanimous Recommendation The MEG Board, on recommendation of the Special Committee, has of the MEG Board: unanimously concluded that the Husky Offer significantly undervalues the Common Shares and is not in the best interests of MEG or its Shareholders. Accordingly, for the reasons described in more detail below, the MEG Board UNANIMOUSLY recommends that you REJECT the Husky Offer and NOT TENDER your Common Shares to the Husky Offer. Reasons for Rejection: The Special Committee and the MEG Board carefully reviewed and considered, together with its external financial and legal advisors and with the benefit of their advice, the Husky Offer. The following is a summary of the principal reasons for the UNANIMOUS recommendation of the MEG Board that you REJECT the Husky Offer and NOT TENDER your Common Shares to the Husky Offer. The Special Committee and the MEG Board believe that: x The Husky Offer is inadequate x The Husky Offer's Share Consideration would expose Shareholders to a company with inferior thermal assets, a higher cost structure and slower growth profile than MEG and a controlling shareholder x MEG's financial advisor, BMO Capital Markets, has determined the Husky Offer is inadequate, from a financial point of view, to Shareholders x The market views the Husky Offer as inadequate x Shareholders agree the Husky Offer is inadequate x Sellside analysts and influential commentators agree that the Husky Offer is inadequate x Superior offers are expected to emerge x The Husky Offer is highly conditional and presents substantial completion risk See "Analysis and Reasons for the MEG Board's Conclusion and Recommendation to Reject the Husky Offer". The Husky Offer: Husky has offered to purchase all of the outstanding Common Shares, together with the associated SRP Rights issued and outstanding under the Shareholder Rights Plan, for consideration per Common Share, at the election of the Shareholder, of: (i) $11.00 in cash; or (ii) 0.485 of a Husky Share, subject to pro- ration. As the Husky Offer is open for acceptance until 5:00 p.m. (Toronto time) on January 16, 2019, there is no need for Shareholders to take any action with respect to the Husky Offer at this time. Shareholders who have tendered Common Shares to the Husky Offer and who wish to obtain advice or assistance in withdrawing their Common Shares are urged to contact their broker or Kingsdale Advisors, the Information Agent retained by MEG, by North American toll free phone call to 1-866-228-8614 or by email at [email protected]. ii

Alternatives to the Husky MEG has a robust go-forward business plan that it believes will generate Offer: significant free cash flow and Shareholder value, based on MEG's ownership of high quality SAGD assets. In addition, under the supervision of the Special Committee, MEG's management, with the assistance of its financial and legal advisors, intends to conduct a formal process to explore a full range of strategic alternatives, which may include a merger or partnership with strategic or financial partners, a sale reflecting full and fair value for Shareholders, an acquisition by MEG or the maintenance of the status quo, with a view to maximizing value for all Shareholders. MEG is in the process of establishing a comprehensive data room which will be available to interested parties wishing to transact with MEG that execute a confidentiality agreement. While it is impossible to predict whether any compelling proposals will emerge from these efforts and discussions, the MEG Board believes that MEG and its business are potentially very attractive to other parties in addition to Husky. Rejection of the Husky Offer The directors and officers of MEG have indicated their intention to REJECT the by Directors and Officers: Husky Offer and NOT TENDER their Common Shares to the Husky Offer. iii

QUESTIONS AND ANSWERS ABOUT THE HUSKY OFFER

Capitalized terms used but not defined herein have the meanings ascribed thereto in Appendix "B" – Glossary to this Directors' Circular.

Q: Should I accept the Husky Offer?

A. NO. The MEG Board, on recommendation of the Special Committee, has unanimously concluded that the Husky Offer significantly undervalues the Common Shares and is not in the best interests of MEG or its Shareholders.

The MEG Board UNANIMOUSLY recommends that Shareholders REJECT the Husky Offer and NOT TENDER their Common Shares. Members of the MEG Board and officers of MEG do NOT intend to tender their Common Shares to the Husky Offer, which the MEG Board views as offering insufficient consideration to Shareholders.

Q. How do I reject the Husky Offer?

A. You do not need to do anything. DO NOT TENDER your Common Shares. If you are contacted by Husky or its information or solicitation agent, DO NOT TENDER your Common Shares or complete any documents that Husky or its agents may provide you.

Q. Can I withdraw my Common Shares if I have already tendered?

A. YES. You can withdraw your Common Shares:

(a) At any time before your Common Shares have been taken up by Husky under the Husky Offer;

(b) At any time before the expiration of 10 calendar days from the date upon which either:

(i) a notice of change relating to a change which has occurred in the information contained in the Husky Circular, or any notice of change or notice of variation, in either case, that would reasonably be expected to affect the decision of a Shareholder to accept or reject the Husky Offer (other than a change that is not within the control of Husky or of an affiliate of Husky unless it is a change in a material fact relating to the Husky Shares), in the event that such change occurs before the Expiry Time or after the Expiry Time but before the expiry of all rights of withdrawal in respect of the Husky Offer; or

(ii) a notice of variation concerning a variation in the terms of the Husky Offer (other than a variation consisting solely of an increase in the consideration offered for the Common Shares under the Husky Offer where the Expiry Time is not extended for a period greater than 10 calendar days);

is mailed, delivered, or otherwise properly communicated, but subject to abridgement of that period pursuant to such order or orders as may be granted by applicable courts or regulatory authorities and only if such deposited Common Shares have not been taken up by Husky at the date of the notice; or

(c) If your Common Shares have not been paid for by Husky within three business days after having been taken up by Husky. iv

Q. How do I withdraw my Common Shares?

A. For information on how to withdraw your Common Shares, MEG recommends you contact your broker or Kingsdale Advisors, the Information Agent retained by MEG, by North American toll free phone call to 1- 866-228-8614 or by email at [email protected]. Kingsdale Advisors’ contact information is also listed at the end of this Q&A and on the back cover of this Directors' Circular.

Q. Why does the MEG Board believe that the Husky Offer should be rejected?

A. The MEG Board, on recommendation of the Special Committee, has unanimously concluded that the Husky Offer significantly undervalues the Common Shares and is not in the best interests of MEG or its Shareholders. The MEG Board took into account numerous factors including, but not limited to, the reasons set out below in reaching its UNANIMOUS recommendation that Shareholders REJECT the Husky Offer and NOT TENDER their Common Shares to the Husky Offer:

x The Husky Offer is inadequate x The Husky Offer's Share Consideration would expose Shareholders to a company with inferior thermal assets, a higher cost structure and slower growth profile than MEG and a controlling shareholder x MEG's financial advisor, BMO Capital Markets, has determined the Husky Offer is inadequate, from a financial point of view, to Shareholders x The market views the Husky Offer as inadequate x Shareholders agree the Husky Offer is inadequate x Sellside analysts and influential commentators agree that the Husky Offer is inadequate x Superior offers are expected to emerge x The Husky Offer is highly conditional and presents substantial completion risk See "Analysis and Reasons for the MEG Board's Conclusion and Recommendation to Reject the Husky Offer".

Shareholders are strongly encouraged to carefully review the full explanation of the reasons for the MEG Board's recommendation starting on page 18 of this Directors' Circular, including the opinion of BMO Capital Markets dated October 16, 2018 that, as of that date and based upon and subject to the assumptions, limitations and qualifications contained therein and such other matters as BMO Capital Markets considered relevant, the consideration to be received by the Shareholders pursuant to the Husky Offer is inadequate, from a financial point of view, to the Shareholders.

The full text of the foregoing opinion, setting out the assumptions made, matters considered and limitations and qualifications of the review undertaken in connection with the opinion by BMO Capital Markets is attached as Appendix "A" to this Directors' Circular.

The summary of the opinion of BMO Capital Markets in this Directors' Circular is qualified in its entirety by reference to the full text of the opinion. The opinion is not a recommendation as to whether or not Shareholders should accept or reject the Husky Offer. The opinion is one of a number of factors taken into consideration by the Special Committee and the MEG Board in making its unanimous determination that the Husky Offer significantly undervalues the Common Shares and is not in the best interests of MEG or its Shareholders and to recommend that Shareholders reject the Husky Offer and not tender their Common Shares to the Husky Offer. Please refer to "Opinion of BMO Capital Markets" for further details regarding the opinion.

Q. Did Husky approach the MEG Board privately with its non-binding proposal and, if so, what did the MEG Board do in response?

A. Husky sent a non-binding proposal to MEG indicating its interest in acquiring MEG on financial terms similar to the Husky Offer. The MEG Board engaged financial and legal advisors and thoroughly reviewed Husky's non-binding proposal. The MEG Board also struck a Special Committee to review the proposal. Upon diligent review of the proposal, the Special Committee and the MEG Board determined that the non- binding proposal was inadequate and not in the best interests of MEG or its Shareholders. MEG's Board communicated its views to Husky in an in-person meeting between MEG Board members and executives of Husky. In addition to indicating that MEG believed the non-binding proposal to be inadequate, the MEG directors indicated there were substantial sources of value in MEG's asset base, technology and operations that were not fairly valued by the Husky non-binding proposal. The MEG directors indicated that the proposal was insufficient and there was simply no interest in further discussions at this price level. They suggested that if Husky wished to pursue further discussions it should follow-up with MEG's CEO, Mr. Evans. Husky made no efforts to continue the private conversations and instead launched the Husky Offer publicly on October 2, 2018.

Q. What action is the MEG Board undertaking in response to the Husky Offer?

A. MEG has a robust go-forward business plan that it believes will generate significant free cash flow and Shareholder value, based on MEG's ownership of high quality SAGD assets.

In addition, under the supervision of the Special Committee, MEG's management, with the assistance of its financial and legal advisors, intends to conduct a formal process to explore the full range of strategic alternatives, which may include a merger or partnership with strategic or financial partners, a sale reflecting full and fair value for Shareholders, an acquisition by MEG or the maintenance of the status quo, with a view to maximizing value for all Shareholders. MEG is in the process of establishing a comprehensive data room which will be available to interested parties wishing to transact with MEG that execute a confidentiality agreement.

While it is impossible to predict whether any compelling proposals will emerge from these efforts and discussions, the MEG Board believes that MEG and its business are potentially very attractive to other parties in addition to Husky.

Q. Does the MEG Board own stock in MEG and are the interests of the directors aligned with the Shareholders?

A. As indicated under the heading "Ownership of Securities of MEG", each of the directors of MEG owns Common Shares and has a personal financial interest in maximizing the value of the Common Shares. One member of the MEG Board is currently a partner of an investment fund that owns a significant amount of Common Shares. All of MEG's directors unanimously agree that the Husky Offer significantly undervalues the Common Shares, is not in the best interests of MEG or its Shareholders and recommends that Shareholders reject the Husky Offer and do not tender their Common Shares to the Husky Offer.

Q. My broker advised me to tender my Common Shares. Should I?

A. NO. The MEG Board, upon recommendation of the Special Committee, has UNANIMOUSLY recommended that Shareholders REJECT the Husky Offer and NOT TENDER their Common Shares to the Husky Offer. The Husky Circular states that Husky may retain the services of a soliciting dealer group comprised of members of the Investment Industry Regulatory Organization of Canada and members of the TSX (each, a "Soliciting Dealer") to solicit acceptances of the Husky Offer. Your broker may be a Soliciting Dealer so his or her advice with respect to a decision to tender your Common Shares to the Husky Offer may not be impartial.

Q. Is this a "friendly" take-over bid?

A. NO. In a friendly take-over, the two companies work together to come to an agreement that would enhance shareholder value. Husky, however, initiated its offer without the support of the MEG Board. Given this, the Husky Offer should not be considered a friendly take-over bid. The Special Committee and MEG Board are working, together with MEG's external financial and legal advisors, to develop, review and evaluate a range of strategic alternatives in the best interests of MEG with a view to maximizing value to Shareholders.

Q. Will Husky increase the Husky Offer?

A. MEG does not know if Husky will increase the consideration offered to Shareholders under the Husky Offer. However, given the significant accretion to Husky based on the existing Husky Offer, the MEG Board believes that Husky has the ability to substantially increase its offer as the Husky Offer substantially undervalues the Common Shares and is opportunistic. See "Analysis and Reasons for the MEG Board's Conclusion and Recommendation to Reject the Husky Offer".

Q. Will I have protections if Husky takes up more than 66⅔% of the Common Shares under the Husky Offer and I don't tender my Common Shares?

A. YES. In Canada, applicable corporate law contains protections for minority shareholders, including the right, in certain circumstances, to dissent and demand payment of the fair value of their Common Shares. If by the Expiry Time or within 120 days from the date of the Husky Offer, Husky is successful in acquiring in excess of 90% of the Common Shares pursuant to the Husky Offer, Husky has disclosed its intention to acquire the remaining Common Shares pursuant to Compulsory Acquisition. If Husky is successful in acquiring in excess of 66⅔% of the Common Shares, but less than 90% of the Common Shares or the right of Compulsory Acquisition is not available, Husky has disclosed that it may pursue other means of acquiring the remaining Common Shares not deposited under the Husky Offer pursuant to an amalgamation, statutory arrangement, capital reorganization, amendment to its articles, consolidation or other transaction (as determined by Husky) (a "Subsequent Acquisition Transaction"). You are encouraged to read Section 14 of the Husky Circular, "Acquisition of Common Shares Not Deposited " for an explanation of Husky's intentions and the mechanics of any such acquisition.

Q. Do I have to decide now?

A. NO. You do not have to take any action at this time. The Husky Offer is currently scheduled to expire at 5:00 p.m. (Toronto time) on January 16, 2019 and is subject to a number of conditions that have yet to be satisfied and may never be satisfied. You do not have to take any action until the Expiry Time to ensure that you are able to consider all of the options available to you.

If you have already tendered your Common Shares to the Husky Offer and you decide to withdraw these Common Shares from the Husky Offer, you must allow sufficient time to complete the withdrawal process prior to the expiry of the Husky Offer. For more information on how to withdraw your Common Shares, you should contact your broker or Kingsdale Advisors, the Information Agent retained by MEG, by North American toll free phone call to 1-866-228-8614 or by email at [email protected]. Kingsdale Advisors' contact information is also listed below and on the back cover of this Directors' Circular.

vii

Q. Who do I ask if I have more questions?

A. The MEG Board recommends that you read the information contained in this Directors' Circular carefully. You should contact Kingsdale Advisors, the Information Agent retained by MEG, with any questions or requests for assistance that you may have.

North American Toll Free Phone Call: 1-866-228-8614

E-mail: [email protected] Outside North America, Banks and Brokers Call Collect: 1-416-867-2272

Shareholders are also encouraged to visit our website for up to date information at www.megenergy.com

TABLE OF CONTENTS

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS ...... 8 FORWARD-LOOKING FINANCIAL INFORMATION ...... 12 NOTICE TO NON-CANADIAN SHAREHOLDERS ...... 12 CURRENCY ...... 12 AVAILABILITY OF DISCLOSURE DOCUMENTS...... 13 INFORMATION REGARDING HUSKY ...... 13 NON-IFRS MEASURES ...... 13 OIL AND GAS ADVISORIES ...... 14 MARKET DATA ...... 15 GLOSSARY OF TERMS ...... 15 DIRECTORS' CIRCULAR ...... 16 DIRECTORS' RECOMMENDATION ...... 17 ANALYSIS AND REASONS FOR THE MEG BOARD'S CONCLUSION AND RECOMMENDATION TO REJECT THE HUSKY OFFER ...... 18 CONCLUSION AND RECOMMENDATION ...... 27 REJECTION OF THE HUSKY OFFER ...... 27 OPINION OF BMO CAPITAL MARKETS ...... 27 BACKGROUND TO THE HUSKY OFFER AND RESPONSE OF MEG ...... 28 RESPONSE TO THE HUSKY OFFER AND RECENT DEVELOPMENTS ...... 31 HOW TO WITHDRAW YOUR DEPOSITED COMMON SHARES ...... 33 MEG ENERGY CORP...... 33 OWNERSHIP OF SECURITIES OF MEG ...... 34 INTENTION OF DIRECTORS, OFFICERS AND OTHER SHAREHOLDERS WITH RESPECT TO THE HUSKY OFFER ...... 36 TRADING IN SECURITIES OF MEG...... 36 ISSUANCES OF SECURITIES OF MEG ...... 37 ARRANGEMENTS BETWEEN THE OFFEROR AND THE DIRECTORS, OFFICERS AND SECURITYHOLDERS OF MEG ...... 40 ARRANGEMENTS BETWEEN MEG AND ITS DIRECTORS AND OFFICERS ...... 40 OWNERSHIP OF SECURITIES OF THE OFFEROR ...... 44 INTEREST OF DIRECTORS AND OFFICERS IN MATERIAL TRANSACTIONS WITH THE OFFEROR ...... 45 MATERIAL CHANGES IN THE AFFAIRS OF MEG ...... 45 SHAREHOLDER RIGHTS PLAN ...... 45 OTHER TRANSACTIONS...... 45 OTHER MATERIAL INFORMATION ...... 46 OTHER PERSONS RETAINED IN CONNECTION WITH THE HUSKY OFFER ...... 46 ERRORS, MISLEADING STATEMENTS AND BREACH OF LAWS BY HUSKY ...... 46 STATUTORY RIGHTS ...... 47 APPROVAL OF DIRECTORS' CIRCULAR ...... 47

APPENDIX "A" OPINION OF BMO CAPITAL MARKETS APPENDIX "B" GLOSSARY

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

Certain statements contained in this Directors' Circular may contain forward-looking statements and forward looking information (collectively, "forward-looking information") within the meaning of applicable Canadian securities laws. All statements other than statements of historical fact may be forward-looking statements. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "target", "scheduled", "potential", or other similar words, or statements that certain events or conditions "may", "should", "might" or "could" occur. Forward looking information involves 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, including risks associated with the impact of general economic conditions, industry conditions, governmental regulation, volatility of commodity prices, currency fluctuations, uncertainties related to commodity price, interest rate and foreign exchange rate swap contracts and/or derivative financial instruments that MEG may enter into from time to time to manage its risk related to such prices and rates, imprecision of reserves and resources estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and MEG's ability to access sufficient capital from internal and external sources, the risks discussed in the section entitled "Risk Factors" in MEG's annual information form dated March 8, 2018 for the year ended December 31, 2017 (the "MEG Annual Information Form"), filed with the securities commission or similar regulatory authority in each of the provinces and territories of Canada and MEG's other public disclosure documents, and other factors, many of which are beyond MEG's control. MEG believes the expectations reflected in these forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this Directors' Circular should not be unduly relied upon.

Specific forward-looking information contained in this Directors' Circular includes, among others, statements pertaining to the following: x the consequences to Shareholders as a result of the Husky Offer; x the ability of MEG to attract other interested parties through the strategic alternatives process; x the availability of superior offers or alternatives emerging from MEG's strategic alternatives process that are capable of maximizing Shareholder value; x the availability of synergies to potential acquirors of MEG; x the belief of the MEG Board that MEG and its businesses are attractive to parties other than Husky; x whether Husky will increase the consideration under the Husky Offer; x whether Husky has the ability to increase the consideration under the Husky Offer and still deliver an accretive transaction to Husky shareholders; x the engagement by Husky of a soliciting dealer group; x whether the Husky Offer will be extended, accelerated or withdrawn; x whether the conditions under the Husky Offer will be satisfied or waived prior to the Expiry Time, including the receipt of all regulatory approvals; x the expected disadvantages to the Shareholders if the Husky Offer is successful; x the impact of the Husky Offer on MEG and its business if it is not completed; x Husky's 5-year operational plan; x expectations respecting MEG's prospects for growth, profitability, debt reduction and creation of Shareholder value; x the anticipated success of MEG's go-forward business plan; x potential egress improvements including access to rail capacity and pipeline improvements, the timing thereof and the effect on heavy oil differentials; x the composition, utilization and value of MEG's tax pools; x the incremental synergies from the use of MEG's tax pools; x timing for the increase to the nameplate capacity of the Lima refinery; x the anticipated future production from MEG's assets; x the anticipated future cash flow, free cash flow and cash flow per share from MEG's assets; REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

x the use of future free cash flow by MEG; x brownfield expansion plans including capital expenditure requirements, timing and sources of funding, capital costs and efficiencies and future production; x plans to invest in incremental OTSG; x potential for further SOR reductions; x expectations that eMVAPEX will provide future capital efficient growth, contribute to lower SOR and enable MEG to redeploy freed-up steam to new wells to increase production and overall production growth; x MEG's ability to endure ongoing commodity price volatility and deleverage by way of production growth; x material compliance with regulations and laws under regulatory and environmental regimes; x the bitumen production and design capacity of MEG's assets; x MEG's capital expenditure programs and future capital requirements; x the estimated quantity and value of MEG's reserves; x MEG's projections of commodity prices, costs and netbacks; x MEG's estimates of future interest and foreign exchange rates; x supply and demand fundamentals for crude oil, bitumen blend, natural gas, electricity, condensate and other diluents; x MEG's access to adequate pipeline capacity; x industry conditions, including with respect to project development; x potential future markets for MEG's products; x the planned construction of MEG's facilities; x the timing for receipt of various regulatory approvals, including receipt of various regulatory approvals for Surmont and May River; x short-term market concerns around near-term impact of egress issues in Western Canada and pending IMO 2010 regulations; x intentions of directors and officers of MEG to reject the Husky Offer and not tender any Common Shares to the Husky Offer; x the payment to officers of MEG pursuant the Change of Control Agreements if the Husky Offer is successful and the officers cease to be employees of MEG; x the issuance of Common Shares pursuant to the outstanding MEG Options, MEG Treasury-Settled RSUs and MEG Treasury-Settled PSUs if the Husky Offer is successful; and x the payments pursuant to MEG Cash-Settled RSUs, MEG Cash-Settled PSUs, and MEG DSUs if the Husky Offer is successful.

Forward looking information is based on, among other things, MEG's expectations regarding its future growth, results of operations, production, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, plans for and results of drilling activity, environmental matters, business prospects and opportunities. Such forward looking information reflects MEG's current beliefs and assumptions and is based on information currently available to it. Statements relating to "reserves" and "resources" are deemed to be forward looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and contingent resources described exist in the quantities predicted or estimated and can be profitably produced in the future.

With respect to forward looking information contained in this Directors' Circular, assumptions have been made regarding, among other things: x one or more of the strategic parties that have expressed interest in participating in the strategic alternative process do participate in the process; x future crude oil, bitumen blend, natural gas, electricity, condensate and other diluent prices; x foreign exchange rates and interest rates; x MEG's ability to obtain qualified staff and equipment in a timely and cost-efficient manner;

REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

x the regulatory framework governing royalties, land use, taxes and environmental matters in the jurisdictions in which MEG conducts and will conduct its business; x MEG's ability to market production of bitumen blend successfully to customers; x MEG's future production levels and SORs; x the applicability of technologies for the recovery and production of MEG's reserves and contingent resources; x the recoverability of MEG's reserves and contingent resources; x operating costs; x future capital expenditures to be made by MEG; x future sources of funding for MEG's capital programs; x MEG's future debt levels; x geological and engineering estimates in respect of MEG's reserves and contingent resources; x the geography of the areas in which MEG is conducting exploration and development activities; x the impact of increasing competition on MEG; and x MEG's ability to obtain financing on acceptable terms.

Many of the foregoing assumptions are subject to change and are beyond MEG's control.

Some of the risks that could affect MEG's future results and could cause results to differ materially from those expressed in the forward-looking information include: x the risk that the Husky Offer may be varied, accelerated or terminated in certain circumstances; x risks relating to the outcome of the Husky Offer; x the risk that the conditions to the Husky Offer may not be satisfied, or to the extent permitted, waived; x the risk that no compelling or superior proposals will emerge from MEG's process to explore strategic alternatives; x operating results; x MEG's status and stage of development; x the concentration of MEG's production in a single project; x the majority of MEG's total reserves and contingent resources are non-producing and/or undeveloped; x uncertainties associated with estimating reserves and resources volumes; x long-term reliance on third parties; x the effect or outcome of litigation; x the effect of any diluent supply constraints and increases in the cost thereof; x operational hazards; x natural hazards such as lightning and fires; x competition for, among other things, capital, the acquisition of reserves and resources, pipeline capacity and skilled personnel; x risks inherent in the SAGD bitumen recovery process; x changes to royalty regimes; x the failure of MEG to meet specific requirements in respect of its oil sands leases; x aboriginal claims; x unforeseen title defects and changes to the mineral tenure framework; x risks arising from future acquisition activities; x sufficiency of funds; x fluctuations in market prices for crude oil, natural gas, electricity and bitumen blend; x general economic, market and business conditions; x volatility of commodity inputs; x variations in foreign exchange rates and interest rates; x hedging strategies; x national or global financial crisis; REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

x environmental risks and hazards and the cost of compliance with environmental legislation and regulations, including greenhouse gas regulations, potential climate change legislation and potential land use regulations; x proposed export and import restrictions; x failure to accurately estimate abandonment and reclamation costs; x the need to obtain regulatory approvals and maintain compliance with regulatory requirements; x 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; x failure to obtain or retain key personnel; x potential conflicts of interest; x changes to tax laws (including without limitation, a potential United States border adjustment tax) and government incentive programs; x the potential for management estimates and assumptions to be inaccurate; x risks associated with establishing and maintaining systems of internal controls; x political risks and terrorist attacks; x risks associated with downgrades in the credit ratings for MEG's securities; x cybersecurity errors, omissions or failures; x restrictions contained in MEG's credit facilities, other agreements relating to indebtedness and any future indebtedness; x any requirement to incur additional indebtedness; x MEG defaulting on its obligations under its indebtedness; and x the inability of MEG to generate cash to service its indebtedness.

The foregoing list of risks, uncertainties and factors is not exhaustive. The effect of any one risk, uncertainty or factor on particular forward-looking information is uncertain because these factors are independent, and management's future course of action would depend on an assessment of all available information at that time. However, based on information available to MEG on the date of this Directors' Circular, management believes that the expectations in the forward-looking information are reasonable, MEG gives no assurances as to future results, levels of activity or achievements.

The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are interdependent, and MEG's future course of action would depend on the assessment of all information at that time.

Although the forward-looking information is based on assumptions which MEG believes to be reasonable, MEG cannot make assurances that actual results will be consistent with such forward looking information. Such forward looking information is made as of the date of this Directors' Circular unless otherwise stated, and MEG assumes no obligation to update or revise such information to reflect new events or circumstances, except as required by applicable Canadian securities laws. Due to the risks, uncertainties and assumptions inherent in forward looking information, readers should not place undue reliance on this forward-looking information.

Certain statements in this Directors' Circular are forward-looking statements with respect to Husky and Husky's expectations with respect to the Husky Offer and MEG. The information was derived from the Husky Circular and other publicly available documents and is subject to the cautionary statements provided by Husky in such documents. See "Information Regarding Husky".

It is MEG's current intention not to disclose developments with respect to its strategic review process until the MEG Board has approved a specific transaction or otherwise determines that disclosure is necessary or appropriate. MEG cautions that there are no assurances or guarantees that a strategic alternatives process will result in a transaction or, if a transaction is undertaken, the terms or timing of such a transaction.

This cautionary statement qualifies all forward-looking information contained in this Directors' Circular. REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

FORWARD-LOOKING FINANCIAL INFORMATION

This Directors' Circular contains future-oriented financial information and financial outlook information (collectively, "FOFI") about MEG's prospective results of operations including, without limitation, cash flow, free cash flow and cash flow per share and various components thereof, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth above. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on FOFI. MEG's actual results, performance or achievement could differ materially from those expressed in, or implied by, these FOFI, or if any of them do so, what benefits MEG will derive therefrom. MEG has included the FOFI in order to provide readers with a more complete perspective on MEG's future operations and such information may not be appropriate for other purposes. MEG disclaims any intention or obligation to update or revise any FOFI statements, whether as a result of new information, future events or otherwise, except as required by law.

NOTICE TO NON-CANADIAN SHAREHOLDERS

The Husky Offer to which this Directors' Circular relates is made for the securities of a Canadian issuer. This Directors' Circular has been prepared by MEG in accordance with disclosure requirements under applicable Canadian law. Shareholders in the United States and otherwise outside of Canada should be aware that these requirements may be different from those of the United States and other jurisdictions. MEG prepares its financial statements in accordance with IFRS. These financial statements may not be comparable to financial statements of United States companies and other non-Canadian companies. It may be difficult for Shareholders in the United States and otherwise outside of Canada to enforce their rights and any claim they may have arising under United States federal securities laws or the securities laws of other non-Canadian jurisdictions since MEG is amalgamated under the laws of the Province of Alberta, the majority of the officers and directors of MEG reside in Canada, some of the experts named herein reside in Canada and a substantial portion of the assets of MEG and the other above mentioned persons are located in Canada. Shareholders in the United States and otherwise outside of Canada may not be able to sue MEG or its officers or directors in a foreign court for violation of United States federal securities laws or the securities laws of other non- Canadian jurisdictions. It may be difficult to compel such parties to subject themselves to the jurisdiction of a foreign court or to enforce a judgment obtained from a court of the United States or other non-Canadian court's judgment. The Husky Offer and the accompanying Directors' Circular have not been approved or disapproved by any United States or other securities regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the accompanying Directors' Circular.

CURRENCY

In this Directors' Circular all amounts are shown in Canadian dollars and where applicable, and unless otherwise indicated, amounts are converted from Canadian dollars to United States dollars and vice versa by applying the daily rate of exchange for conversion of one Canadian dollar to United States dollars as reported by the Bank of Canada on October 16, 2018.

The following table sets forth: (a) the rates of exchange for Canadian dollars, expressed in United States dollars in effect at the end of each of the periods indicated; and (b) the average of exchange rates for Canadian dollars expressed in United States dollars in effect during such period, in the case of the rates for the years ended December 31, 2015 and 2016, based on the noon rates as reported by the Bank of Canada and, in the case of rates for the year ended December 31, 2017, based on the daily average exchange rate reported by the Bank of Canada as being in effect at approximately 4:30 p.m. (Eastern time) on each trading day (on April 29, 2017, the Bank of Canada stopped reporting the noon rate).

Year Ended December 31,

2017 2016 2015 US$ US$ US$ End of Period...... $0.7971 $0.7448 $0.7225 Average...... $0.7701 $0.7548 $0.7820 High...... $0.8245 $0.7972 $0.8527 Low...... $0.7276 $0.6854 $0.7148

On October 16, 2018, the Bank of Canada daily exchange rate for one ($1.00) Canadian dollar was US$0.7729.

AVAILABILITY OF DISCLOSURE DOCUMENTS

MEG is a reporting issuer in each of the provinces and territories of Canada and files its continuous disclosure documents and other documents with the Canadian securities regulatory authorities in each such province and territory. Continuous disclosure documents are available on MEG's SEDAR profile at www.sedar.com.

INFORMATION REGARDING HUSKY

This Directors' Circular also includes information relating to Husky. This information was derived from the Husky Circular and other publicly available documents, as well as certain other third-party sources.

Although MEG has no knowledge that would indicate that any information contained in the documents filed by Husky is untrue or incomplete (except as otherwise set forth herein), MEG does not assume any responsibility for the accuracy or completeness of the information contained in such documents, or for any failure by Husky to disclose events that may have occurred or that may affect the significance or accuracy of any such information, which are unknown to MEG.

NON-IFRS MEASURES

Certain financial measures within this Directors' Circular including cash flow, free cash flow and cash flow per share are non-IFRS measures. These terms are not defined by IFRS and, therefore, may not be comparable to similar measures provided by other companies. These non-IFRS financial measures should not be considered in isolation or as an alternative to, or more meaningful than, MEG's consolidated statement of cash flow as determined in accordance with IFRS, as an indicator of financial performance. Cash flow, free cash flow and cash flow per share are presented to assist management and investors in analyzing performance by MEG in the stated period.

In this Directors' Circular, cash flow has been calculated as net cash provided by (used in) operating activities adjusted for cash provided by (used in) financing activities, net proceeds on dispositions and effect of exchange rate changes on cash and cash equivalents held in foreign currency. 2018 cash flow also includes actual cash and cash equivalents at the beginning of the year and 2019 cash flow also includes estimated cash and cash equivalents at the beginning of the year. Free cash flow has been calculated as cash flow less capital expenditures and other (as that term is used in MEG's financial statements).

The following table provides a reconciliation of net cash provided by (used in) operating activities to cash flow and free cash flow:

6 months ended Year ended $ millions 30-Jun-18 31-Dec-17 Net Cash provided by (used in) operating activities $183 $318 Net Cash provided by (used in) financing activities (1,276) 401(2) Net Proceeds on dispositions 1,503 5 Effect of exchange rate changes on cash and cash equivalents held in foreign currency 3 (7) Cash Flow(1) $413 $718 Net Cash provided by (used in) investing activities 1,190 (405) Less: Net proceeds on dispositions (1,503) (5) Capital Expenditures and Other (313) (411) Free Cash Flow $100 $307

Notes: (1) In 2018 and 2019, cash flow incrementally includes cash on hand at beginning of the year of $463 million and approximately $300 million respectively. (2) In Q1 2017, MEG completed a comprehensive refinancing plan that included the issuance of equity for gross proceeds of $518 million.

The following table shows the key pricing assumptions used in the cash flow and free cash flow estimates included in this Directors' Circular:

2018B 2019F 2020F 2021F 2022F WTI (US$/bbl) $68.00 $70.00 $70.00 $70.00 $70.00 WTI:WCS Differential (US$/bbl) $26.00 $25.00 $22.00 $17.00 $15.00 WTI:AWB Gulf Coast Differential (US$/bbl) $6.75 $4.00 $8.00 $6.75 $6.75 Condensate (% of WTI) (%) 104% 104% 104% 104% 104% Delivered Gas Cost (C$/mcf) $2.00 $2.15 $2.05 $2.20 $2.25 Exchange Rate (C$/US$) 1.29 1.30 1.30 1.30 1.30 Mainline Apportionment (%) 45% 40% 10-15% 5-10% 0%

OIL AND GAS ADVISORIES

The reserves information contained in this Directors' Circular has been prepared in accordance with NI 51-101. The reserves estimates described herein are estimates only and the actual quantities of recoverable bitumen may be greater or less than those estimated. The estimated future net revenues presented in this Directors' Circular do not necessarily represent the fair market value of MEG's reserves. For complete NI 51-101 reserves disclosure, please see the MEG Annual Information Form.

The information concerning petroleum reserves appearing in this Directors' Circular was derived from a report of GLJ dated effective as of December 31, 2017 which has been prepared in accordance with NI 51-101 at that time. The standards of NI 51-101 differ from the standards of the SEC. The SEC generally permits U.S. reporting oil and gas companies in their filings with the SEC, to disclose only proved, probable and possible reserves, net of royalties and interests of others. NI 51-101, meanwhile, permits disclosure of estimates of contingent resources and reserves on a gross basis. In addition, as permitted by NI 51-101, MEG has determined and disclosed the net present value of future net revenue from its reserves using forecast prices and costs. The SEC requires that reserves and related future net revenue be estimated based on historical 12-month average prices and current costs, but permits the optional disclosure of revenue estimates based on different price and cost criteria. As a consequence, information included in this Directors' Circular concerning MEG's reserves and resources and the net present value thereof may not be comparable to information made by public issuers subject to the reporting and disclosure requirements of the SEC.

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, resources and future net revenue from individual properties may not reflect the same confidence level as estimates of reserves, resources and future net revenue 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 the MEG Annual Information Form.

MARKET DATA

This Directors' Circular contains statistical data, market research and industry forecasts that were obtained from government, stock exchange or other industry publications and reports or based on estimates derived from such publications and reports and management's knowledge of, and experience in, the markets in which MEG operates. Government and industry publications and reports generally indicate that they have obtained their information from sources believed to be reliable, but do not guarantee the accuracy and completeness of their information. Often, such information is provided subject to specific terms and conditions limiting the liability of the provider, disclaiming any responsibility for such information, and/or limiting a third party's ability to rely on such information. None of the authors of such publications and reports has provided any form of consultation, advice or counsel regarding any aspect of, or is in any way whatsoever associated with, MEG. Further, certain of these organizations are advisors to participants in the oil sands industry, and they may present information in a manner that is more favourable to that industry than would be presented by an independent source. Actual outcomes may vary materially from those forecast in such reports or publications, and the prospect for material variation can be expected to increase as the length of the forecast period increases. While management believes this data to be reliable, market and industry data is subject to variations and cannot be verified due to limits on the availability and reliability of data inputs, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any market or other survey. Accordingly, the accuracy, currency and completeness of this information cannot be guaranteed. MEG has not independently verified any of the data from third party sources referred to in this Directors' Circular or ascertained the underlying assumptions relied upon by such sources.

GLOSSARY OF TERMS

Certain terms used in this Directors' Circular have the meanings set forth in Appendix "B" – Glossary hereto, unless such terms are defined elsewhere in this Directors' Circular.

DIRECTORS' CIRCULAR

Capitalized terms used but not defined herein have the meanings ascribed thereto in Appendix "B" – Glossary to this Directors' Circular. The information contained in this Directors' Circular is given as of October 16, 2018, except as otherwise indicated.

The Husky Offer

This Directors' Circular responds to the unsolicited offer by Husky to purchase all of the issued and outstanding Common Shares, together with the associated SRP Rights issued and outstanding under the Shareholder Rights Plan, and including any Common Shares that may become issuable after the date of the Husky Offer but prior to the Expiry Time, including pursuant to the exercise or vesting, as applicable, of MEG Options, MEG Treasury-Settled RSUs and MEG Treasury-Settled PSUs, for consideration per Common Share at the election of each Shareholder of: (i) the Cash Consideration; or (ii) the Share Consideration, upon the terms and subject to the conditions set forth in the Husky Circular and in the related Letter of Transmittal. The maximum aggregate Cash Consideration available under the Husky Offer is limited to $1.0 billion (the "Maximum Cash Consideration") and the maximum aggregate Share Consideration available is limited to 107,215,520 Husky Shares (the "Maximum Share Consideration"). The Cash Consideration and the Share Consideration payable under the Husky Offer will be pro-rated on each Take-Up Date as is necessary to ensure that the total aggregate consideration payable under the Husky Offer and any Compulsory Acquisition or Subsequent Acquisition Transaction does not exceed the Maximum Cash Consideration and the Maximum Share Consideration.

The Husky Offer is described in the Husky Circular filed by Husky with the Canadian securities regulatory authorities on October 2, 2018. According to the Husky Circular, the Husky Offer will expire at 5:00 p.m. (Toronto time) on January 16, 2019, unless the Husky Offer is extended, accelerated or withdrawn by Husky in accordance with its terms.

The Husky Offer is subject to a number of conditions, which must be satisfied or, where permitted, waived at 5:00 p.m. (Toronto time) on January 16, 2019 or such earlier or later time during which Common Shares may be deposited under the Husky Offer, excluding the mandatory 10-day extension period or any extension thereafter, which include, among others: (i) there having been validly deposited under the Husky Offer and not withdrawn that number of Common Shares, together with the associated SRP Rights, representing more than 50% of the outstanding Common Shares, excluding those Common Shares beneficially owned, or over which control or direction is exercised, by the Offeror or by any person acting jointly or in concert with the Offeror, which is a non-waivable condition; (ii) there having been validly deposited under the Husky Offer and not withdrawn that number of Common Shares, together with the associated SRP Rights and the Common Shares held by Husky at the Expiry Time, representing at least 66⅔% of the outstanding Common Shares (on a Fully Diluted Basis); (iii) the Offeror having determined, in its sole judgment, that there does not exist and there shall not have occurred or been publicly disclosed since the date of the Husky Offer, a Material Adverse Effect (as defined in the Husky Offer); and (iv) certain regulatory approvals having been obtained and/or waiting periods expired, including the Investment Canada Act Approval, Competition Act Approval, Transportation Act Approval and the HSR Approval. These and other conditions of the Husky Offer are described in Section 4 of the Husky Offer under "Conditions of the Offer".

DIRECTORS' RECOMMENDATION

After careful consideration by the MEG Board, in consultation with its external financial and legal advisors, of the terms and conditions of the Husky Offer, the MEG Board, upon recommendation of the Special Committee, has unanimously concluded that the Husky Offer significantly undervalues the Common Shares and is not in the best interests of MEG or its Shareholders.

DIRECTORS' RECOMMENDATION

The MEG Board unanimously concluded that the Husky Offer significantly undervalues the Common Shares, is not in the best interests of MEG or its Shareholders and recommends that you

REJECT the Husky Offer and NOT TENDER your Common Shares

Any Shareholder who has tendered his or her Common Shares to the Husky Offer should WITHDRAW those Common Shares IMMEDIATELY.

If you have tendered your Common Shares, you can withdraw them. For assistance in withdrawing your Common Shares, you should contact your broker or MEG's Information Agent, Kingsdale Advisors. See "How to Withdraw Your Deposited Common Shares".

North American Toll Free Phone Call: 1-866-228-8614

E-mail: [email protected] Outside North America, Banks and Brokers Call Collect: 1-416-867-2272

ANALYSIS AND REASONS FOR THE MEG BOARD'S CONCLUSION AND RECOMMENDATION TO REJECT THE HUSKY OFFER

The following are the principal reasons for the UNANIMOUS recommendation of the MEG Board to Shareholders to REJECT the Husky Offer and NOT TENDER their Common Shares to the Husky Offer.

1. The Husky Offer is inadequate (a) MEG's stand-alone plan is worth substantially more than the value proposed to be delivered by Husky in the Husky Offer

x MEG owns one of the highest quality SAGD assets in the industry o Christina Lake has among the best-in-class SORs o Regulatory approval is in place at Christina Lake (210,000 bpd), is expected imminently at Surmont (123,000 bpd), and is in progress at May River (164,000 bpd) – in aggregate nearly 500,000 bpd of highly economic resource development o Substantially all capital spent for 113,000 bpd of near-term production o 2.8 billion barrels of proved plus probable reserves (before deduction of royalties) and $18.9 billion of before-tax present value (10% discount rate) of development as assessed by GLJ as of December 31, 2017

MEG'S EXECUTION-READY BROWNFIELD PROJECTS HAVE THE POTENTIAL TO DOUBLE PRODUCTION AT CHRISTINA LAKE BY 2028

PRODUCTION GROWTH AT CHRISTINA LAKE THROUGH BROWNFIELD PROJECTS(1)

250,000 ~210,000 + bpd by 2028(3) 200,000 ~52,000+ bpd

150,000 ~30,000 bpd(2) ~100,000 bpd 17,000 bpd 2018 exit rate 13,000 bpd 100,000 Production (bpd) Production

50,000

- Base Funded Additional Steam eMVAPEX 2B4X Brownfield 2B Brownfield (5th and 6th OTSGs) Expansion Expansion

2018-2019 2020-2022 2023+

Notes: (1) Ultimate timing of expansion projects would be determined based on a number of factors including commodity price environment and resultant availability of funding and approval. (2) Full production contribution from eMVAPEX and capital investment occurs post-2022. (3) Ramp up of production expected to commence in ~2025; reservoir enhancement production adds to follow three years later in 2028.

x MEG has a new Chief Executive Officer, Derek Evans, with a long history of creating value for shareholders and delivering on growth and efficient operations o Mr. Evans has not had the chance to fully communicate publicly the plans and strategies for MEG o The MEG Board is highly confident of Mr. Evans' ability to drive meaningful cash flow generation and growth from MEG's assets over the next several years x MEG's stand-alone plan has the potential to create substantial value for Shareholders without additional external financing x MEG is forecast to generate significant cash available to allocate, net of capital expenditures, from 2019 onward x This substantial cash flow generation affords MEG great flexibility in generating Shareholder value through debt repayment, additional organic growth initiatives or return of capital to Shareholders

MEG EXPECTS TO GENERATE SUBSTANTIAL FREE CASH FLOW

MATERIAL FREE CASH FLOW FROM 2019 ONWARD

Asset Sale Proceeds US$80/bbl WTI Capital Expenditures Cash on Hand US$70/bbl WTI Free Cash Flow(2) (C$ bn) US$60/bbl WTI $2.5 2018 Forecast Cash Flow

$2.0

$1.5

$1.0

$0.5

$0.0 Cash Uses Cash Uses Cash Uses Cash Uses Cash Uses Flow(2)(3) Flow(2)(4) Flow(2) Flow(2) Flow(2) 2018B 2019F(1) 2020F(1) 2021F(1) 2022F(1)

Notes: (1) Preliminary capital program of approximately $500 million targeted for 2019 which remains subject to MEG Board approval; forecasted figures from 2020F through 2022F also remain subject to MEG Board approval. (2) Cash flow and free cash flow are non-IFRS measures. See "Non-IFRS Measures". (3) 2018 forecast cash flow includes nine (9) months of actual figures and three (3) months of forecasted figures based on strip pricing; figures are net of hedging losses; 2018 cash flow also includes forecast cash on hand at the beginning of 2018. (4) 2019 cash flow also includes forecast cash on hand at the beginning of 2019F.

x MEG's team is comprised of technology innovators who have successfully demonstrated the ability to develop proprietary new technologies, such as eMSAGP, to improve capital and operational efficiencies and to enhance environmental performance, having reduced SORs to among the best in the industry at Christina Lake o By lowering operating SORs, steam is freed up from existing operations and redeployed to new wells to grow production at highly attractive economics x MEG's eMVAPEX technology utilizes solvent to reduce the steam requirement in bitumen recovery, which can further lower capital expenditures and operating costs o The pilot programs have been successful, exceeding expectations on lower SORs REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

(b) The timing of the Husky Offer is highly opportunistic and would result in Husky Shareholders capturing MEG's significant upside potential at the expense of current Shareholders

x The value of the Husky Offer is below the market trading price the Common Shares achieved just three months ago, in July 2018 x The Husky Offer is seeking to take advantage of short-term market concerns with respect to near-term egress issues in Western Canada and IMO 2020 regulations o MEG has engaged industry experts to assess the potential implications of IMO 2020 and believes the impact on MEG's business will be both muted and temporary in nature o The combination of expected expansion of rail takeaway capacity to approximately 485,000 bpd in 2019 from approximately 300,000 bpd today and the Enbridge Line 3 expansion, which will add 760,000 bpd of export capacity by early 2020, will have a significantly positive impact on heavy oil differentials Current heavy oil differentials are driven by refinery outages and lower levels of rail moving out of western Canada o MEG has a differentiated marketing strategy, which focuses on maximizing access to world crude oil pricing x The Husky Offer was timed to deny Shareholders the opportunity to fully evaluate the plans, and experience value creation of MEG's new, highly respected CEO, Mr. Evans x MEG is currently at an inflection point of generating material free cash flow supported by an internally- funded growth plan with a compelling risk profile (c) The Husky Offer delivers excessively favourable transaction economics to current Husky Shareholders by failing to offer fair consideration to Shareholders

x The double-digit accretion figures advertised by Husky confirm that Husky has the ability to offer materially higher consideration for the Common Shares x Incremental synergies from Husky's ability to utilize MEG's existing tax pools totaling $7.6 billion, ($5.5 billion of which are immediately available for deduction, worth approximately $5.00 per Common Share) are not properly reflected in the Husky Offer x Husky acknowledges that it plans to use MEG's technology innovation and expertise to apply to its own asset base for the benefit of Husky Shareholders x Husky's Lima refinery is currently being expanded to increase heavy oil processing capacity from 10,000 bpd to 40,000 bpd and processing Husky's own crude oil as opposed to a third party's will allow Husky to capture incremental margin x The Husky Offer is significantly dilutive to Shareholders on a per share basis and would expose Shareholders to production barrels and crude oil reservoirs with inferior economics, limited deliverability and a shorter producing life

UNDER THE HUSKY OFFER, SHAREHOLDERS WOULD REALIZE SIGNIFICANT DILUTION

DILUTIVE TRANSACTION METRICS PER MEG SHARE

358 boe/d / (44%)under Husky Offer (14%) under Husky Offer (75%) under Husky Offer 15% $2.95/sh mm sh. 9.3 boe/sh

11% 199 boe/d / $2.55/sh mm sh.

2.3 boe/sh

Status Pro Status Pro Status Pro Status Pro Quo Forma Quo Forma Quo Forma Quo Forma Cash Flow per Share Production per Share 2P Reserves Production per Share Growth (2020E) (2020E) per Share (2017A-2020E) Notes: (1) Per share dilution assumes an illustrative scenario where 100% of the consideration is received in Husky Shares by a Shareholder. (2) Production and cash flow based on FactSet consensus estimates as compiled on September 28, 2018. (3) Assumes no tax synergies are realized by Husky, which as noted, is an additional benefit to Husky. 2. The Husky Offer's Share Consideration would expose Shareholders to a company with inferior thermal assets, a higher cost structure and slower growth profile than MEG and a controlling shareholder (a) Husky's thermal projects have underperformed x Husky's two oil sands projects, Tucker and Sunrise, have been operational for a number of years (nearly 12 years and 3.5 years, respectively) yet have failed to consistently demonstrate SORs, a key driver of oil sands project economics, materially below 4.0 x MEG's Christina Lake Phases 1 and 2 have achieved a cumulative SOR of 2.1 to date where MEG's eMSAGP technology has been fully applied

HUSKY'S OIL SANDS ASSETS HAVE SUBSTANTIALLY HIGHER STEAM-OIL RATIOS THAN MEG'S CHRISTINA LAKE ASSET

RELATIVE STEAM-OIL RATIO

Husky’s in situ projects 6.6 6.8 8.9 9.4 >10 4.8

5 4.7 4.6 4.6 4.2 4.0 4.0

4 MEG Christina Lake 3.8 3.3 3.1 3.1 2.9 2.9 2.8

3 2.7 2.6 2.5 2.3 2.2 2.2

2 Potential for 1.8 further SOR reduction via

SOR (July 2018 Average) SOR (July 1 eMSAGP and eMVAPEX

Source: Alberta Energy Regulator.

x Operations at Husky's two oil sands projects, Tucker and Sunrise, are only producing at approximately 80% of their design capacity, further impeding economics x MEG's Christina Lake Phases 1 / 2 and 2B reached the combined original design capacity of 25,000 bpd and 35,000 bpd, respectively, in less than a year from the commencement of the steam injection o Christina Lake is currently operating at approximately 67% above the original design capacity of 60,000 bpd through the application of proprietary reservoir technology that continuously lowers SORs and the implementation of highly economic debottlenecking projects

(b) Husky's thermal portfolio within the "Integrated Corridor" is comprised of projects with small reservoirs with a relatively low amount of recoverable oil x Approximately 70% of the planned upstream production growth in Husky's 5-year plan is expected to come from thermal bitumen production, and is mainly supported by its portfolio of future heavy oil projects in the Lloydminster area – this area currently includes 10 projects producing approximately 77,000 bpd, characterized by small reservoirs with a short reserves life, translating into a relatively low amount of recoverable oil and limited scalability x MEG's Christina Lake asset, which is currently producing approximately 100,000 bpd and with construction well underway to increase production by another 13,000 bpd by 2020, has substantially more running room as a single asset and the economy of scale to further reduce costs, having regulatory approval for expansion up to 210,000 bpd

(c) Husky has a higher cash cost structure and lower growth than MEG x In the first half of 2018, MEG achieved lower cash costs than Husky, supported by a higher quality asset base and technological leadership

MEG HAS A MORE ATTRACTIVE CASH COST STRUCTURE THAN HUSKY

H1 2018 COST STRUCTURE (G&A, OPERATING AND TRANSPORTATION COSTS)

Husky G&A Costs(1) MEG G&A Costs(1) Husky Operating and MEG Operating and Transportation Costs Transportation Costs(2)

$18.58/boe MEG’s cost structure is $3/boe or 16% $15.59/bbl $4.80/boe(1) lower than Husky’s $2.75/bbl

$13.78/boe $12.84/bbl

Operating, Transportation Operating, Transportation and G&A Costs and G&A Costs Husky Cost Profile MEG Cost Profile

Source: Q2 2018 financials.

Notes: (1) Excludes stock-based compensation; excludes non-upstream G&A for Husky which equates to approximately $1.78/boe. (2) Net of Power Revenue of $1.39/bbl.

x MEG has achieved year-over-year growth rates superior to Husky and research analysts have recognized MEG's continued superior growth potential going forward x MEG transformed its balance sheet through its comprehensive refinancing in 2017 and the Access Pipeline and Stonefell Terminal Sale in 2018 and, together with its low cost structure, MEG is well positioned to endure any ongoing commodity price volatility while accomplishing organic deleveraging via highly economic production growth

MEG HAS CONSISTENTLY DEMONSTRATED SUPERIOR GROWTH AND THE TREND IS EXPECTED TO CONTINUE

YEAR-OVER-YEAR ANNUAL AVERAGE PRODUCTION GROWTH (%)

MEG Production Growth Husky Production Growth Difference in Production Growth

30% 25% 23%

20% 12% 20% 11% 11% 11% 8% 10% 9% 2% (1%) 6% -- 3% 5% 2% 0% (3%) (4%) (10%) (7%) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Note: (1) 2018 – 2020 forecast production data per FactSet consensus estimates as compiled on September 28, 2018.

(d) Husky is a tightly controlled company x 70% of Husky's equity ownership is concentrated in the hands of a single decision making entity whose interests may not align with those of the minority public market Shareholders 3. MEG's financial advisor, BMO Capital Markets, has determined that the Husky Offer is inadequate, from a financial point of view, to Shareholders

x MEG's financial advisor, BMO Capital Markets confirmed to the Special Committee on October 12, 2018 that it would be in a position to deliver its opinion and on October 16, 2018, BMO Capital Markets delivered its opinion, to the MEG Board, to the effect that, as of the date of the opinion, and based upon and subject to the assumptions, limitations and qualifications contained therein and such other matters as BMO Capital Markets considered relevant, the consideration to be received by the Shareholders pursuant to the Husky Offer is inadequate from a financial point of view to the Shareholders. A copy of the written opinion of BMO Capital Markets, which describes, among other things, the various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken, is attached to this Directors' Circular as Appendix "A". The opinion was provided for the information and assistance of the Special Committee and the MEG Board (in their respective capacities as such) in connection with their evaluation of the Husky Offer. The opinion does not constitute a recommendation to any Shareholder as to whether to tender their Common Shares pursuant to the Husky Offer or as to any other action to be undertaken with respect to any matters relating to the Husky Offer or otherwise

4. The market views the Husky Offer as inadequate x Since Husky announced its intention to launch the unsolicited take-over bid on September 30, 2018, the Common Shares have consistently traded above the implied value of the Husky Offer, clearly showing that the market feels the Husky Offer is inadequate

COMMON SHARES CONTINUE TO TRADE AT A MEANINGFUL PREMIUM TO THE IMPLIED VALUE OF THE HUSKY OFFER

TRADING PERFORMANCE FOLLOWING ANNOUNCEMENT

MEG share price Implied Value of Husky Offer $11.50

$11.00 (C$/Share)

$10.50

$10.00 1-Oct 2-Oct 3-Oct 4-Oct 5-Oct 8-Oct 9-Oct 10-Oct 11-Oct 12-Oct

Source: FactSet.

5. Shareholders agree the Husky Offer is inadequate x Shareholders have indicated that the Husky Offer does not reflect the full and fair value of the Common Shares "A combination with Husky makes strategic sense and it's possible a bidding war will ensue with several other parties entering the mix", Jonathon Jacobson, Co-founder, CEO and CIO of Highfields Capital Management, which owns approximately 9.9% of MEG's Common Shares said in a letter to investors dated Oct. 3. "We think there is a lot of value in MEG, and we will continue to evaluate our options," he said. Scott Deveau and Katherine Burton (Bloomberg, October 4, 2018)

"I think this is going to be the beginning of a bidding war," according to Eric Nuttall, Ninepoint Partners portfolio manager, which owns 2.5 million MEG shares, Nuttall said he wouldn't tender at $11 per share as he expects the price to go higher. Geoffrey Morgan (Financial Post, October 1, 2018) REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

6. Sellside analysts and influential commentators agree that the Husky Offer is inadequate

x A majority of the research analysts providing coverage of the Common Shares currently have a price target in excess of the value of the Husky Offer, reflecting their view that the Husky Offer does not fairly value the Common Shares "However, we can't help but think that Husky's offer for MEG is opportunistic by playing to market access fears. Canadian crude differentials are likely to be a far larger issue over the next 12-18 months than in the ensuing years as market access issues are addressed." Macquarie Research (October 1, 2018)

"In our view, Husky Energy's $6.4 billion hostile take-over bid for MEG Energy constitutes an opportunistically- timed offer, amid high anxiety when it comes to Canada's oil egress situation ... the bigger questions around this deal surround the value proposition offered by Husky -- and whether more shareholder value can ultimately be harnessed over time by MEG remaining independent." RBC, Broker Research 7. Superior offers are expected to emerge

x MEG, through its financial advisor, BMO Capital Markets, has begun an outreach to potential financial and strategic partners to solicit interest in an alternative value maximizing transaction for Shareholders x Based on the interest already received and MEG's high quality asset and team, MEG is confident that one or more superior offers or other more attractive alternatives for Shareholders will emerge prior to the Expiry Time x Husky claims the two companies fit together like a "hand in a glove"; the fact is MEG's high quality assets and technical expertise fit in the portfolios of many companies 8. The Husky Offer is highly conditional and presents substantial completion risk

x The Husky Offer contains numerous conditions which must be satisfied or waived before Husky 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 Husky's sole and unfettered discretion x If Husky does not complete the acquisition of Common Shares tendered to the Husky Offer because one of the numerous discretionary conditions imposed is not fulfilled or waived, the failure of the unsolicited offer could adversely affect the public's perception of MEG and its business x These conditions, in effect, provide Husky with an unfair option to decline or proceed with its offer and Shareholders face a high risk of non-completion

CONCLUSION AND RECOMMENDATION

For the principal reasons outlined above, the MEG Board, on the recommendation of the Special Committee, has unanimously concluded that the Husky Offer significantly undervalues the Common Shares and is not in the best interests of MEG or its Shareholders.

Accordingly, the MEG Board UNANIMOUSLY recommends that Shareholders REJECT the Husky Offer and NOT TENDER their Common Shares. Any Shareholder who has tendered his or her Common Shares under the Husky Offer should WITHDRAW those Common Shares.

The foregoing summary of the information and factors considered by the MEG Board in reaching its conclusion and recommendation is not intended to be exhaustive. The members of the Special Committee and the MEG Board evaluated the various factors summarized above in light of their own knowledge of the business, financial condition and prospects of MEG, and based upon the advice of the Special Committee's and the MEG Board's financial and legal advisors. In view of the numerous factors considered in connection with the evaluation of the Husky Offer, the Special Committee and MEG Board did not find it practicable to, and did not, quantify or otherwise attempt to assign relative weight to specific factors in reaching its conclusion and recommendation. In addition, individual members of the Special Committee and MEG Board may have given different weight to different factors. The conclusion and unanimous recommendation of the Special Committee and MEG Board was made after considering all of the information and factors involved.

REJECTION OF THE HUSKY OFFER

To REJECT the Husky Offer, you do not need to do anything. If you have tendered your Common Shares to the Husky Offer, you can withdraw them until they are taken up under the Husky Offer. The MEG Board recommends that you withdraw any tendered Common Shares immediately. See "How to Withdraw Your Deposited Common Shares".

Shareholders should consider the terms of the Husky Offer and the recommendation of the MEG Board contained in this Directors' Circular carefully and come to your own decision whether to accept or reject the Husky Offer. Shareholders who are in doubt as to how to respond to the Husky Offer should consult with your own investment dealer, broker, lawyer or other professional advisor. Acceptance of the Husky Offer may have tax consequences specific to the circumstances of individual Shareholders and you should consult your own professional tax advisors. Inquiries concerning information in this Directors' Circular should be directed to MEG's Information Agent, Kingsdale Advisors, by North American toll free phone call to 1-866-228-8614 or by email at [email protected]. Kingsdale Advisors’ contact information is also listed on the back page of this Directors' Circular.

OPINION OF BMO CAPITAL MARKETS

BMO Capital Markets was formally engaged by MEG to act as financial advisor to MEG and the MEG Board pursuant to an engagement agreement effective July 1, 2018. Under the terms of the engagement agreement, BMO Capital Markets has agreed to provide MEG and the MEG Board with various advisory services in connection with the Husky Offer and, among other things, the provision of its opinion as to the adequacy, from a financial point of view, of the consideration to be received by the Shareholders pursuant to the Husky Offer.

BMO Capital Markets confirmed to the Special Committee on October 12, 2018 that it would be in a position to deliver its opinion and on October 16, 2018, BMO Capital Markets delivered its opinion, to the MEG Board, to the effect that, as of the date thereof, and based upon and subject to the assumptions, limitations and qualifications contained therein and such other matters as BMO Capital Markets considered relevant, the consideration to be received by the Shareholders pursuant to the Husky Offer is inadequate, from a financial point of view, to the Shareholders. REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

A copy of the written opinion of BMO Capital Markets, which describes, among other things, the various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken in connection with the opinion, is attached to this Directors' Circular as Appendix "A".

All summaries and references to the opinion delivered by BMO Capital Markets in this Directors' Circular are qualified in their entirety by reference to the full text of the opinion. The Special Committee and the MEG Board strongly recommend that Shareholders read the written opinion delivered by BMO Capital Markets carefully and in its entirety for a description of the procedures followed, matters considered and limitations and qualifications on the review undertaken. The opinion of BMO Capital Markets addresses only the adequacy of the consideration offered pursuant to the Husky Offer to the Shareholders from a financial point of view. The opinion was provided for the information and assistance of the Special Committee and the MEG Board (in their respective capacities as such) for their exclusive use only in connection with their evaluation of the Husky Offer. The opinion does not constitute a recommendation to any Shareholder as to whether to tender their Common Shares pursuant to the Husky Offer or as to any other action to be undertaken with respect to any matters relating to the Husky Offer or otherwise. The opinion was only one of a number of factors taken into consideration by the Special Committee and MEG Board in making its unanimous determination that the Husky Offer significantly undervalues the Common Shares and is not in the best interests of MEG or its Shareholders and its recommendation that Shareholders reject the Husky Offer and not tender their Common Shares.

Pursuant to the terms of the engagement agreement between BMO Capital Markets and MEG, BMO Capital Markets will receive a fee for rendering the opinion. BMO Capital Markets will also receive certain fees for advisory services under the engagement agreement, a substantial portion of which is contingent upon the completion or non-completion of the Husky Offer or any alternative transaction. MEG has also agreed to reimburse BMO Capital Markets for reasonable out-of-pocket expenses and to indemnify BMO Capital Markets against certain liabilities that might arise out of its engagement.

BMO Capital Markets and certain of its affiliates act as traders and dealers, both as principal and agent, in major financial markets and, as such, may have had and may in the future have positions in the securities of MEG, Husky and their respective affiliates and, from time to time, may have executed or may execute transactions on behalf of MEG, Husky and their respective affiliates for which BMO Capital Markets or such affiliates received or may receive compensation. As investment dealers, BMO Capital Markets and certain of its affiliates conduct research on securities and may, in the ordinary course of business, provide research reports and investment advice to clients on investment matters, including with respect to MEG, Husky and their respective affiliates or the Husky Offer. In addition, Bank of Montreal ("BMO"), of which BMO Capital Markets is a wholly-owned subsidiary, or one or more affiliates of BMO, may provide banking or other financial services to MEG, Husky and their respective affiliates in the ordinary course of business.

BACKGROUND TO THE HUSKY OFFER AND RESPONSE OF MEG

The Husky Circular does not accurately describe the events leading up to the making of the Husky Offer. The MEG Board fully engaged when Husky approached MEG in August, hiring financial and legal advisors and fully evaluating Husky's non-binding proposal for MEG, which was on terms substantially similar to the Husky Offer. After an extensive review of that non-binding proposal, the MEG Board communicated that it believed the non-binding proposal was inadequate and the reasons for the MEG Board reaching that conclusion. In an in-person meeting between two MEG directors and two Husky executives, MEG's directors specifically offered to have an open line of communication and invited further dialogue with Mr. Evans, MEG's newly appointed CEO.

The key events that lead to the Husky Offer are as follows:

On May 2, 2018 Rob Peabody, President & Chief Executive Officer of Husky, requested a meeting with Jeff McCaig, Chair of the MEG Board without reference to any planned topics for discussion. On May 9, 2018, Mr. McCaig met with Mr. Peabody, and at the meeting Mr. Peabody brought to Mr. McCaig's attention his interest in exploring a potential business combination between Husky and MEG, among other topics. Mr. Peabody did not provide Mr. McCaig an REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

indicative price or terms of a potential business combination and advised Mr. McCaig he had not raised the idea of the potential business combination with the Husky Board as he wanted to gauge MEG's interest in the idea before raising it with the Husky Board. Subsequent to their meeting, Mr. McCaig sent an email to Mr. Peabody advising that he intended to inform the MEG Board of the meeting and would then get back to Mr. Peabody to the extent necessary. Mr. McCaig did advise the MEG Board of these discussions and given the lack of specificity provided by Mr. Peabody, received a number of questions from members of the MEG Board. On May 22, 2018, Mr. McCaig contacted Mr. Peabody to request another meeting, subsequently set for June 1, 2018 to clarify some questions that the other directors of MEG had in respect of Husky's proposed business combination.

With the approval of the MEG Board, Mr. McCaig and Mr. Doerr, who was then Interim Chief Executive Officer of MEG, met with Mr. Peabody and David Gardner, Senior Vice President, Business Development of Husky on June 1, 2018 to address the questions raised by members of MEG Board. Mr. Peabody outlined to Mr. McCaig and Mr. Doerr the strategic rationale from Husky's point of view for a business combination between Husky and MEG, but again did not provide any indicative price or terms. Mr. Peabody also indicated that Husky was desirous of entering into a confidentiality agreement and exclusive discussion with MEG. Mr. Peabody advised Mr. McCaig and Mr. Doerr that Husky only wanted to proceed with MEG's support and did not want to bring the concept of a business combination to the Husky Board unless there was interest on the part of the MEG Board. Mr. McCaig and Mr. Doerr advised Mr. Peabody and Mr. Gardner that now that MEG had its comprehensive refinancing and Access Pipeline and Stonefell Terminal Sale behind it, the MEG Board was confident that MEG was poised for significant outperformance and was very comfortable with MEG's business plan and therefore was under no compulsion to consider strategic alternatives but that a high premium offer would need to be considered by the MEG Board, as required to discharge its fiduciary obligations. Mr. McCaig advised Mr. Peabody that Husky's interest in a potential business combination would be brought before the MEG Board at the regularly scheduled annual strategic planning and board meeting on June 13 and 14, 2018.

Strategic planning is one of the primary responsibilities of the MEG Board. The MEG Board regularly reviews MEG's corporate strategy at board meetings, including at its annual strategic planning meeting. Following the successful completion of the comprehensive refinancing undertaken in 2017 and the Access Pipeline and Stonefell Terminal Sale in 2018, the MEG Board and executive management met on June 13 and 14, 2018 for the MEG Board's annual strategic planning meeting to evaluate MEG's business plan, operations and financial condition as well as considering alternatives which may be available to support MEG's corporate strategy and enhance Shareholder value. The MEG Board also received a presentation from BMO Capital Markets which reviewed MEG's positioning in the market and general macro industry analysis. The MEG Board reviewed MEG's strategic plan and the outlook for MEG from an operational and financial perspective and MEG's strategic plan was endorsed by the MEG Board. The MEG Board was of the view that MEG's strategic plan could deliver substantial short and medium term returns to Shareholders. The MEG Board also discussed the overtures from Husky to consider a potential business combination and unanimously agreed on the response that Mr. McCaig would provide to Husky.

On June 18, 2018, Mr. McCaig advised Mr. Peabody that the MEG Board and management had just completed their regularly scheduled annual strategic planning meeting and that all directors had been advised of the discussions with Husky's management. Mr. McCaig advised Mr. Peabody that the MEG Board was not prepared to agree to an exchange of non-public information regarding MEG and its operations nor enter into exclusive discussions with Husky as Mr. Peabody had not provided any specific price or terms associated with the potential business combination for MEG to assess the merits of any such transaction and, in the opinion of MEG's Board, there was sufficient information available in the public domain for Husky to assess the value of MEG's business. Mr. McCaig further advised Mr. Peabody that if Husky chose to send a written proposal regarding a potential transaction between the two companies that it should be sent exclusively to his attention and the MEG Board would give it due consideration.

On August 7, 2018, MEG entered into an agreement with Derek Evans to be the new Chief Executive Officer of MEG. The appointment was announced the following day. This search had been initiated upon the retirement of the former Chief Executive Officer of MEG in the spring of 2018 with the formation of a Search Committee, the members of which were Mr. McCaig (Chair), David Krieger, Dan Farb, James McFarland and Diana McQueen, all of whom were REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

independent directors. The Search Committee, with the assistance of an executive search advisor, conducted an extensive global search for a permanent Chief Executive Officer. The Search Committee short-listed candidates on June 13, 2018 and ultimately unanimously agreed on Derek Evans as the most qualified candidate for the Chief Executive Officer of MEG. The Search Committee entered into contract negotiations with Mr. Evans on July 31, 2018 and completed its negotiations with Mr. Evans on August 7, 2018 and Mr. Evans formally accepted the offer of employment with the exchange of signature pages on August 8, 2018 prior to the open of financial markets.

On the morning of August 8, 2018, after the open of financial markets, Mr. Peabody sent Mr. McCaig a non-binding proposal letter that outlined the terms and conditions of a potential business combination between Husky and MEG, which included a potential purchase price of $11.00 per Common Share, payable in a mix of cash and Husky Shares. The proposal letter was silent on whether the Husky Board was aware of or had approved the submission of the proposal. Mr. McCaig advised Mr. Peabody on August 8, 2018 that, consistent with Mr. McCaig's closing comments to Mr. Peabody during the June 18, 2018 meeting, the MEG Board would consider Husky's proposal and would respond in due course.

On August 10, 2018 the MEG Board met to discuss the receipt of Husky's non-binding proposal and received advice from management, BMO Capital Markets and BJ. At this meeting, the MEG Board agreed to form a Special Committee comprised of Tim Hodgson (Chair), Harvey Doerr, Diana McQueen and Robert Hodgins, all of whom are independent directors, with a mandate, among other things, to assess, consider and review Husky's non-binding proposal, to consider alternative transactions, to manage the process relating to the Husky proposal and seeking alternate transactions, including the responsibility to supervise the negotiations of any agreements with counterparties, and to make recommendations to the full MEG Board. The Special Committee was also given the power to retain financial, legal and other advisors. The MEG Board requested the Special Committee and advisors analyze the non-binding proposal from Husky and report back to the MEG Board.

On August 14, 2018, the Special Committee met to consider Husky's non-binding proposal and received advice from its financial and legal advisors. The Special Committee received detailed presentations from management and BMO Capital Markets concerning the Husky proposal, a broad value analysis of MEG and the Common Shares under various valuation methodologies and advice concerning the value available to Shareholders under MEG's existing business plan. The Special Committee also received legal advice from BJ. The Special Committee met in-camera without management and with and then without advisors. Upon receiving the advice of its legal and financial advisors and considering Husky's non-binding proposal in detail, the Special Committee was unanimously of the view that Husky's non-binding proposal was insufficient and not in the best interests of MEG or its Shareholders, and resolved to make a corresponding recommendation to the MEG Board.

On August 16 and 17, 2018, the MEG Board met again to consider Husky's non-binding proposal, receive and consider the recommendation of the Special Committee and to independently receive and consider the advice of legal and financial advisors. The MEG Board received a detailed presentation from the Special Committee and the Special Committee's recommendation. The MEG Board also received presentations from management and BMO Capital Markets concerning the Husky proposal, a broad value analysis of MEG and the Common Shares under various valuation methodologies and advice concerning the potential value of MEG's existing business plan. The MEG Board met in-camera without management and with and then without advisors. Upon receiving the advice of its legal and financial advisors and considering Husky's non-binding proposal in detail together with the recommendation of the Special Committee, the MEG Board resolved unanimously that Husky's non-binding proposal was insufficient and not in the best interests of MEG or its Shareholders. The MEG Board authorized Mr. McCaig and Mr. Hodgson to meet with representatives of Husky to provide the MEG Board's response.

On August 20, 2018 Mr. McCaig and Mr. Hodgson met with Mr. Peabody and Mr. Gardner to respond to Husky's non- binding proposal. Mr. McCaig and Mr. Hodgson advised Mr. Peabody and Mr. Gardner that the MEG Board, after carefully considering Husky's non-binding proposal and receiving advice from its financial and legal advisors, had unanimously determined that the non-binding proposal was insufficient and not in the best interests of MEG or its Shareholders. Neither Mr. McCaig nor Mr. Hodgson ever indicated that the MEG Board was not interested in further REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

discussions. There was simply no interest in further discussions at this price level as the non-binding proposal was insufficient and if they wished to pursue further discussions on another basis they should contact Mr. Evans who was recently appointed Chief Executive Officer of MEG. On August 20, 2018 the Special Committee met and received a verbal report form Mr. McCaig and Mr. Hodgson on their meeting with Mr. Peabody and Mr. Gardner. There was no further contact between MEG and Husky until September 30, 2018.

On September 30, 2018 a representative of Husky arranged a call between Mr. Evans and Mr. Peabody at 12:00 p.m. (Calgary time) during this call Mr. Evans was advised by Mr. Peabody that Husky intended to commence the Husky Offer by way of a press release at 1:00 p.m. (Calgary time) that afternoon. Husky issued a press release at 1:00 p.m. (Calgary time) on September 30, 2018 announcing its intention to make the Husky Offer. Also on September 30, 2018 MEG issued a news release acknowledging Husky's press release stating that the MEG Board would consider the Husky Offer when received. On October 2, 2018 Husky filed the Husky Circular and related documents on MEG's SEDAR profile and on October 3, 2018 filed a copy of the advertisement on MEG's SEDAR profile, commencing the Husky Offer.

RESPONSE TO THE HUSKY OFFER AND RECENT DEVELOPMENTS

On October 3, 2018 BDP was retained to act as legal advisors to MEG and the MEG Board and BJ continued as advisor to the Special Committee.

On October 12, 2018 the Special Committee met with the executive team of MEG, BMO Capital Markets, BDP and BJ to review and discuss the Husky Offer, to consider the circumstances of MEG in light of the Husky Offer, and to discuss MEG's prospects to continue as an independent entity as well as other strategic alternatives regarding MEG that could provide superior value to Shareholders. The Special Committee received advice from BDP and BJ in respect of its fiduciary duties in the context of a potential change of control transaction. The Special Committee also received a report from management and BMO Capital Markets as to their discussions with a number of Shareholders on their views on the Husky Offer and its adequacy. The Special Committee received a detailed presentation from BMO Capital Markets who also confirmed it would be in a position to deliver its opinion to the MEG Board on October 16, 2018. The Special Committee undertook a broad value analysis of the Common Shares with BMO Capital Markets and management.

The Special Committee then met in-camera without management with BMO Capital Markets, BDP and BJ then with BJ and then without advisors. The Special Committee, having reviewed and evaluated the Husky Offer and the Husky Circular and having received advice from BDP, BJ and BMO Capital Markets in this regard, including a verbal inadequacy opinion of BMO Capital Markets (subsequently delivered in writing), and based on such advice, review and evaluation, concluded that the Husky Offer was not in the best interests of MEG or its Shareholders and recommended to the MEG Board that it recommend that Shareholders reject the Husky Offer and not tender their Common Shares to the Husky Offer.

Also at the October 12, 2018 meeting, the Special Committee formally instructed management and BMO Capital Markets to canvass prospective parties for competing acquisition proposals or other strategic alternatives and to establish a data room containing confidential information relating to MEG's business, operations and financial condition.

On October 16, 2018 the MEG Board met and received the report of the Special Committee and presentations from the executive team of MEG, BMO Capital Markets and BDP to review and discuss the Husky Offer, to consider the circumstances of MEG in light of the Husky Offer, and to discuss MEG's prospects to continue as an independent entity as well as other strategic alternatives regarding MEG that could provide superior value to Shareholders. The MEG Board was advised by BDP in respect of its fiduciary duties in the context of a potential change of control transaction. The MEG Board also received a report from management and BMO Capital Markets as to their discussions with a number of Shareholders on their views on the Husky Offer and its adequacy. The MEG Board received a detailed presentation from BMO Capital Markets in support of its opinion as well as a presentation from management. The REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

MEG Board undertook a broad value analysis of the Common Shares with BMO Capital Markets and management. Also at the meeting on October 16, 2018 the MEG Board reviewed Mr. Evans' offer of employment which provided, among other things, that the MEG Board must provide Mr. Evans with an annual grant under the MEG LTI Plans with a target value of $1.8 million (the "LTI Annual Target"). The MEG Board, on the recommendation of the Compensation Committee and counsel, agreed with Mr. Evans to provide a contingent bonus arrangement in satisfaction of the LTI Annual Target whereby Mr. Evans would receive, on the first to occur of: (i) in the event of a Change of Control prior to June 1, 2019 at a price of not less $11.00 per Common Share, the LTI Annual Target in cash plus additional payments equal to $400,000 for each additional $1.00 per Common Share above $11.00 per Common Share payable on such Change in Control (pro-rated on a straight line basis to the actual per Common Share amount); or (ii) in the event there is no Change in Control at a price in excess of $11.00 per Common Share on or before June 1, 2019, a discretionary cash bonus reflecting Mr. Evans' contributions during his first year, with a target bonus level equal to the LTI Annual Target. The MEG Board believes this arrangement is economically equivalent, or more favorable to MEG, than the originally contemplated grant under the MEG LTI Plans in the offer of employment and provide Mr. Evans with appropriate incentives to maximize value for Shareholders. Accordingly, the MEG Board cancelled all of the MEG Options, MEG PSUs and MEG RSUs granted to Mr. Evans with respect to 2018. See "Arrangements Between MEG and its Directors and Officers – Change of Control Agreements with Officers".

The MEG Board met in-camera without management and with and then without advisors. Based upon the MEG Board's review and evaluation of the Husky Offer and the Husky Circular, the report and recommendation of the Special Committee and advice from BDP and BMO Capital Markets in this regard, including a verbal inadequacy opinion of BMO Capital Markets (subsequently delivered in writing), the MEG Board concluded that the Husky Offer significantly undervalues the Common Shares, is not in the best interests of MEG or its Shareholders and resolved to recommend that Shareholders reject the Husky Offer and not tender their Common Shares to the Husky Offer.

SUMMARY OF BACKGROUND AND RESPONSE TO HUSKY OFFER When May – June 2018 August 8, 2018 September 30, 2018 What Happened Husky's CEO informally expressed MEG received a proposal from Husky Husky took their insufficient offer of interest in a business combination with for $11.00 per Common Share $11.00 per Common Share directly to MEG x Proposal was non-binding: the Shareholders x Did not provide an indicative price o Not Husky Board approved x No contact between MEG and x The idea had not been brought to the o Conditional on due diligence Husky since prior interactions Husky Board x Asked MEG to share confidential information and enter exclusive negotiations

MEG's Actions The MEG Board considered and MEG formed the Special Committee The MEG Board has again carefully concluded the informal approach and hired legal and financial advisors considered and concluded that the absent value indication did not warrant Husky Offer is still insufficient and exclusive discussion After careful consideration, the MEG not in the best interests of MEG or its Board unanimously decided the Husky Shareholders proposal was insufficient, sent representatives to meet in person with MEG is undertaking a strategic Husky and asked Husky to follow up alternatives process to capture with Derek Evans, newly appointed market value of business CEO, if it wanted to pursue further discussions

The $11.00 per Common Share consideration contemplated in Husky's August 2018 non-binding proposal was not sufficient and is still not sufficient

HOW TO WITHDRAW YOUR DEPOSITED COMMON SHARES

To reject the Husky Offer, you should do nothing. Shareholders who have already tendered their Common Shares to the Husky Offer can withdraw them at any time before their Common Shares have been taken up and paid for by Husky pursuant to the Husky Offer.

Shareholders who hold Common Shares through a brokerage firm should contact their broker to withdraw their Common Shares on their behalf. If the Common Shares have been deposited pursuant to the procedures for book-entry transfer, as set out in Section 3 of the Husky Offer, "Manner of Acceptance – Acceptance by Book-Entry Transfer", any notice of withdrawal must specify the name and number of the account at CDS Clearing and Depositary Services Inc. ("CDS") or the Depository Trust Company ("DTC"), as applicable, to be credited with the withdrawn Common Shares and otherwise comply with the procedures of CDS or DTC, as applicable.

For assistance in withdrawing your Common Shares, you should contact your broker or Kingsdale Advisors, the Information Agent retained by MEG, by North American toll free phone call to 1-866-228-8614 or by email at [email protected].

MEG ENERGY CORP.

General

MEG is an oil sands company focused on sustainable in situ oil sands development and production in the southern Athabasca oil sands region of Northeastern Alberta, Canada. MEG is actively developing enhanced oil recovery projects that utilize SAGD extraction methods. MEG is not engaged in oil sands mining.

MEG's head office is located at 25th Floor, 600 – 3rd Avenue S.W., Calgary, Alberta, Canada T2P 0G5 and its registered office is located at 4500, 855 – 2nd Street S.W., Calgary, Alberta, Canada T2P 4K7.

MEG Energy (U.S.) Inc. ("MEG US"), a wholly-owned subsidiary of MEG, was incorporated on June 26, 2012 under the Delaware General Corporation Law. MEG US is the corporate vehicle used for MEG's marketing-related activities in the United States. MEG US is MEG's only subsidiary.

Share Capital

MEG is authorized to issue an unlimited number of Common Shares and an unlimited number of Preferred Shares.

The holders of Common Shares are entitled to: (i) one vote at all meetings of Shareholders except meetings at which only holders of a specified class of share are entitled to vote; (ii) subject to the prior rights and privileges attaching to any other class of shares, the right to receive any dividend on the Common Shares declared by MEG; and (iii) subject to the prior rights and privileges attaching to any other class of shares, the right to receive the remaining property of MEG upon dissolution. See also "Shareholder Rights Plan".

As at October 16, 2018, there were 296,820,738 Common Shares issued and outstanding and no Preferred Shares were outstanding.

The Common Shares trade on the TSX under the symbol "MEG". On September 28, 2018, the last trading day before Husky announced its intention to make the Husky Offer, the closing price of the Common Shares on the TSX was $8.03. On October 1, 2018, the last trading day prior to the commencement of the Husky Offer, the closing price of the Common Shares on the TSX was $11.07.

OWNERSHIP OF SECURITIES OF MEG

The following table and the table under "Principal Holders of Common Shares of MEG" sets out the names and positions of each director and officer of MEG and the number and percentage of Common Shares, MEG Options, MEG Treasury-Settled RSUs, MEG Treasury-Settled PSUs and MEG DSUs beneficially owned, or over which control or direction is exercised by each such person and, where known after reasonable enquiry, by each associate or affiliate of any insider of MEG, each associate or affiliate of MEG, any insider of MEG other than a director or officer of MEG and each person acting jointly or in concert with MEG as of October 16, 2018. See also "Principal Holders of Common Shares ".

Securities Beneficially Owned or Controlled

Number / Percentage of Number / Number / MEG Number / Percentage of Percentage of Treasury- Number / Percentage of MEG MEG Treasury- Settled Percentage of Name Position Common Shares(1) Options(2) Settled RSUs (3)(4) PSUs(5)(6) MEG DSUs(7) Derek Evans President, Chief 90,000/0.030 Nil Nil Nil Nil Executive Officer and Director Eric L. Toews Chief Financial Officer 102,217/0.034 570,705/6.60 93,351/1.54 65,616/10.22 Nil Chi-Tak Yee Chief Operating 80,265/0.027 666,782/7.72 101,958/1.68 81,636/12.72 Nil Officer Grant Borbridge Senior Vice President, 22,053/0.007 205,670/2.38 46,938/0.77 36,277/5.65 Nil Legal and General Counsel and Corporate Secretary Aidan Mills Vice President, 15,859/0.005 33,180/0.38 25,935/0.43 20,965/3.27 Nil Downstream John Nearing Vice President, 11,920/0.004 184,600/2.14 33,088/0.54 23,307/3.63 Nil Finance and Corporate Services John M. Rogers Vice President, 87,491/0.029 338,000/3.91 61,520/1.01 42,419/6.61 Nil Investor Relations and External Communications Chris Sloof Vice President, 33,761/0.011 252,000/2.92 35,436/0.58 25,066/3.90 Nil Projects Jeremy Gizen Vice President, 2,250/0.001 140,501/1.63 32,597/0.54 22,680/3.53 Nil Subsurface Operations, Environmental & Regulatory Duane Monea Vice President, 1,472/0.000 210,600/2.44 37,009/0.61 25,515/3.97 Nil Government and Public Affairs Ted Lamb Vice President, 13,543/0.004 160,700/1.86 41,653/0.69 17,678/2.75 Nil Operations Sorin Bujor Vice President, 6,081/0.002 218,100/2.52 35,414/0.58 24,406/3.80 Nil Resource Development Tara McCool Vice President, People 23,277/0.008 82,900/0.96 19,089/0.31 14,491/2.26 Nil & Corporate Identity Jeffrey J. McCaig Chairman of the Board 583,443/0.197 Nil 15,453/0.25 Nil 67,261/19.62 Harvey Doerr Director 53,336/0.018 6,500/0.08 9,566/0.16 Nil 31,403/9.16 Robert B. Director 11,796/0.004 6,500/0.08 16,316/0.27 Nil 38,153/11.13 Hodgins REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

Number / Percentage of Number / Number / MEG Number / Percentage of Percentage of Treasury- Number / Percentage of MEG MEG Treasury- Settled Percentage of Name Position Common Shares(1) Options(2) Settled RSUs (3)(4) PSUs(5)(6) MEG DSUs(7) Timothy E. Director 12,783/0.004 Nil 9,566/0.16 Nil 39,076/11.40 Hodgson William R. Director 225,000/0.076 Nil 16,316/0.27 Nil 32,326/9.43 Klesse David B. Krieger Director 16,240/0.005 6,500/0.08 9,566/0.16 Nil 44,903/13.10 (9) James D. Director 23,039/0.008 6,500/0.08 9,566/0.16 Nil 44,903/13.10 McFarland Diana J. Director 10,042/0.003 Nil 11,570/0.19 Nil 44,750/13.06 McQueen

Notes: (1) As of October 16, 2018, there were 296,820,738 Common Shares outstanding. (2) As of October 16, 2018, there were 8,642,567 MEG Options outstanding. (3) As of October 16, 2018, there were 6,079,861 MEG Treasury-Settled RSUs outstanding. (4) In addition to the MEG Treasury-Settled RSUs listed above, as of October 16, 2018, Mr. Toews owns 20,117 MEG Cash-Settled RSUs (1.44% of the outstanding MEG Cash-Settled RSUs), Mr. Yee owns 19,743 MEG Cash-Settled RSUs (1.41% of the outstanding MEG Cash-Settled RSUs), Mr. Borbridge owns 9,394 MEG Cash-Settled RSUs (0.67% of the outstanding MEG Cash-Settled RSUs), Mr. Nearing owns 7,121 MEG Cash-Settled RSUs (0.51% of the outstanding MEG Cash-Settled RSUs), Mr. Rogers owns 13,447 MEG Cash- Settled RSUs (0.96% of the outstanding MEG Cash-Settled RSUs), Mr. Sloof owns 7,601 MEG Cash-Settled RSUs (0.54% of the outstanding MEG Cash-Settled RSUs), Mr. Gizen owns 6,400 MEG Cash-Settled RSUs (0.46% of the outstanding MEG Cash-Settled RSUs), Mr. Monea owns 8,085 MEG Cash-Settled RSUs (0.58% of the outstanding MEG Cash-Settled RSUs), Mr. Lamb owns 10,641 MEG Cash-Settled RSUs (0.76% of the outstanding MEG Cash-Settled RSUs), Mr. Bujor owns 7,748 MEG Cash-Settled RSUs (0.55% of the outstanding MEG Cash-Settled RSUs), Ms. McCool owns 8,060 MEG Cash-Settled RSUs (0.58% of the outstanding MEG Cash- Settled RSUs), Mr. McCaig owns 5,863 MEG Cash-Settled RSUs (0.42% of the outstanding MEG Cash-Settled RSUs), Mr. Doerr owns 34,783 MEG Cash-Settled RSUs (2.49% of the outstanding MEG Cash-Settled RSUs), Mr. Hodgins owns 3,630 MEG Cash-Settled RSUs (0.26% of the outstanding MEG Cash-Settled RSUs), Mr. Hodgson owns 3,742 MEG Cash-Settled RSUs (0.27% of the outstanding MEG Cash-Settled RSUs), Mr. Klesse owns 3,742 MEG Cash-Settled RSUs (0.27% of the outstanding MEG Cash-Settled RSUs), Mr. Krieger owns 3,630 MEG Cash-Settled RSUs (0.26% of the outstanding MEG Cash-Settled RSUs), Mr. McFarland owns 3,630 MEG Cash- Settled RSUs (0.26% of the outstanding MEG Cash-Settled RSUs) and Ms. McQueen owns 3,630 MEG Cash-Settled RSUs (0.26% of the outstanding MEG Cash-Settled RSUs). As at October 16, 2018, Messrs. Evans and Mills do not own any MEG Cash-Settled RSUs. (5) As of October 16, 2018, there were 641,916 MEG Treasury-Settled PSUs outstanding. (6) In addition to the MEG Treasury-Settled PSUs listed above, as of October 16, 2018, Mr. Toews owns 261,378 MEG Cash-Settled PSUs (9.12% of the outstanding MEG Cash-Settled PSUs), Mr. Yee owns 256,515 MEG Cash-Settled PSUs (8.95% of the outstanding MEG Cash-Settled PSUs), Mr. Borbridge owns 122,035 MEG Cash-Settled PSUs (4.26% of the outstanding MEG Cash-Settled PSUs), Mr. Mills owns 38,954 MEG Cash-Settled PSUs (1.36% of the outstanding MEG Cash-Settled PSUs), Mr. Nearing owns 92,509 MEG Cash- Settled PSUs (3.23% of the outstanding MEG Cash-Settled PSUs), Mr. Rogers owns 174,670 MEG Cash-Settled PSUs (6.09% of the outstanding MEG Cash-Settled PSUs), Mr. Sloof owns 98,755 MEG Cash-Settled PSUs (3.44% of the outstanding MEG Cash-Settled PSUs), Mr. Gizen owns 88,446 MEG Cash-Settled PSUs (3.08% of the outstanding MEG Cash-Settled PSUs), Mr. Monea owns 105,062 MEG Cash-Settled PSUs (3.66% of the outstanding MEG Cash-Settled PSUs), Mr. Lamb owns 18,938 MEG Cash-Settled PSUs (0.66% of the outstanding MEG Cash-Settled PSUs), Mr. Bujor owns 100,608 MEG Cash-Settled PSUs (3.51% of the outstanding MEG Cash- Settled PSUs) and Ms. McCool owns 36,079 MEG Cash-Settled PSUs (1.26% of the outstanding MEG Cash-Settled PSUs). As of October 16, 2018, Mr. Evans and the non-executive directors of MEG do not own any MEG Cash-Settled PSUs. (7) As of October 16, 2018, there were 342,775 MEG DSUs outstanding. (8) The information as to securities beneficially owned, directly or indirectly, or over which control or direction is exercised, not being within the knowledge of MEG, has been furnished by the respective directors and officers. (9) Mr. Krieger is currently the Managing Director of Warburg Pincus LLC ("WP LLC"). To the knowledge of MEG, a total of 15,986,580 Common Shares are legally and beneficially owned by WP X LuxCo S.a.r.l. ("WPX Luxco"), an affiliate of WP LLC. Mr. Krieger disclaims beneficial ownership of all Common Shares owned by WPX Luxco.

INTENTION OF DIRECTORS, OFFICERS AND OTHER SHAREHOLDERS WITH RESPECT TO THE HUSKY OFFER

To the knowledge of the directors and officers of MEG, after reasonable enquiry, as at October 16, 2018, none of the directors and officers of MEG, the associates or affiliates of any insider of MEG, the associates or affiliates of MEG, other insiders of MEG or any other person or company acting jointly or in concert with MEG have accepted or indicated their intention to accept the Husky Offer.

TRADING IN SECURITIES OF MEG

During the six (6) month period preceding the date hereof, none of MEG, the directors, officers or other insiders of MEG nor, to the knowledge of the directors and officers of MEG, after reasonable enquiry, any associate or affiliate of an insider of MEG, any associate or affiliate of MEG or any person or company acting jointly or in concert with MEG, has traded any Common Shares except as set forth below. Price per Number of Common Share Name Date of Trade Nature of Transaction Common Shares ($) Derek Evans September 27, 2018 Acquisition in the public market 20,000 8.085 September 18, 2018 Acquisition in the public market 20,000 7.20 August 30, 2018 Acquisition in the public market 50,000 8.571 Eric Toews June 1, 2018 Disposition in the public market 41,327 8.78 Chi-Tak Yee June 1, 2018 Disposition in the public market 39,273 8.78 Grant Borbridge June 1, 2018 Disposition in the public market 13,609 8.78 John Nearing June 1, 2018 Disposition in the public market 20,646 8.78 John Rogers June 1, 2018 Disposition in the public market 36,239 8.78 Christopher Sloof June 1, 2018 Disposition in the public market 18,342 8.78 Ted Lamb June 12, 2018 Disposition in the public market(1) 3,800 10.04 June 12, 2018 Disposition in the public market(1) 4,300 10.05 June 12, 2018 Disposition in the public market(1) 1,000 10.06 June 12, 2018 Disposition in the public market(1) 900 10.07 June 1, 2018 Disposition in the public market 9,331 8.78 Sorin Bujor June 20, 2018 Disposition in the public market(1) 5,000 10.17 June 20, 2018 Disposition in the public market(1) 5,000 10.20 June 20, 2018 Disposition in the public market(1) 5,000 9.95 June 20, 2018 Disposition in the public market(1) 3,000 10.10 June 18, 2018 Disposition in the public market 5,000 9.72 June 1, 2018 Disposition in the public market 11,194 8.78 May 14, 2018 Disposition in the public market(1) 5,000 8.92 May 14, 2018 Disposition in the public market(1) 12,000 8.97 Harvey Doerr June 1, 2018 Disposition in the public market 2,958 8.78 Robert Hodgins June 1, 2018 Disposition in the public market 5,945 8.78 William Klesse August 28, 2018 Acquisition in the public market 10,700 US$6.3899 August 28, 2018 Acquisition in the public market 100 US$6.38 August 28, 2018 Acquisition in the public market 10,600 US$6.3672 August 28, 2018 Acquisition in the public market 1,600 US$6.364 August 28, 2018 Acquisition in the public market 2,000 US$6.358 August 28, 2018 Acquisition in the public market 13,000 US$6.2867 August 28, 2018 Acquisition in the public market 10,000 US$6.2746 August 28, 2018 Acquisition in the public market 2,000 US$6.264 June 1, 2018 Disposition in the public market 4,783 8.78 Notes: (1) Other than noted above, all dispositions in the public market were made in respect of the satisfaction of withholdings taxes pursuant to the exercise, or vesting and settlement of MEG Options, MEG Treasury-Settled RSUs and MEG Treasury-Settled PSUs, as applicable. See "Issuances of Securities of MEG". Trades made by Mr. Bujor on June 18, 2018, June 20, 2018 and May 14, 2018 and by Mr. Lamb on June 12, 2018 were made for purposes other than the satisfaction of withholding taxes as described above. (2) This table does not include the issuances of Common Shares pursuant to the exercise, or vesting and settlement of MEG Options, MEG Treasury-Settled RSUs and MEG Treasury-Settled PSUs, as applicable. See "Issuances of Securities of MEG". REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

ISSUANCES OF SECURITIES OF MEG

Except as set out below, no Common Shares or securities convertible into Common Shares have been issued to the directors, officers and any other insiders of MEG during the two (2) years preceding the date of this Directors' Circular.

Common Shares Price per Common Common Shares Share(1)(2) Name Nature of Issue Issued ($) Date Issued Eric Toews Vesting of MEG Treasury-Settled PSUs 24,531 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 30,382 8.78 June 1, 2018 Vesting of MEG Treasury-Settled PSUs 10,612 5.23 June 1, 2017 Vesting of MEG Treasury-Settled RSUs 5,122 5.23 June 1, 2017 Vesting of MEG Treasury-Settled RSUs 5,308 7.51 December 1, 2016 Chi-Tak Yee Vesting of MEG Treasury-Settled PSUs 24,438 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 29,866 8.78 June 1, 2018 Vesting of MEG Treasury-Settled PSUs 11,333 5.23 June 1, 2017 Vesting of MEG Treasury-Settled RSUs 5,226 5.23 June 1, 2017 Grant Borbridge Vesting of MEG Treasury-Settled PSUs 12,993 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 14,397 8.78 June 1, 2018 Vesting of MEG Treasury-Settled PSUs 4,638 5.23 June 1, 2017 Vesting of MEG Treasury-Settled RSUs 2,552 5.23 June 1, 2017 Vesting of MEG Treasury-Settled RSUs 1,760 7.51 December 1, 2016 John Nearing Vesting of MEG Treasury-Settled PSUs 9,746 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 10,900 8.78 June 1, 2018 Vesting of MEG Treasury-Settled PSUs 4,064 5.23 June 1, 2017 Vesting of MEG Treasury-Settled RSUs 2,010 5.23 June 1, 2017 John Rogers Vesting of MEG Treasury-Settled PSUs 15,993 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 20,246 8.78 June 1, 2018 Vesting of MEG Treasury-Settled PSUs 6,069 5.23 June 1, 2017 Vesting of MEG Treasury-Settled RSUs 3,200 5.23 June 1, 2017 Christopher Sloof Vesting of MEG Treasury-Settled PSUs 14,399 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 12,189 8.78 June 1, 2018 Vesting of MEG Treasury-Settled PSUs 6,011 5.23 June 1, 2017 Vesting of MEG Treasury-Settled RSUs 2,971 5.23 June 1, 2017 Jeremy Gizen Exercise of MEG Options 12,666 4.52 June 13, 2018 Exercise of MEG Options 18,333 6.52 June 7, 2018 Vesting of MEG Treasury-Settled PSUs 8,931 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 10,729 8.78 June 1, 2018 Vesting of MEG Treasury-Settled PSUs 3,725 5.23 June 1, 2017 Vesting of MEG Treasury-Settled RSUs 1,842 5.23 June 1, 2017 Duane Monea Vesting of MEG Treasury-Settled PSUs 10,016 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 12,235 8.78 June 1, 2018 Vesting of MEG Treasury-Settled PSUs 4,172 5.23 June 1, 2017 Vesting of MEG Treasury-Settled RSUs 2,065 5.23 June 1, 2017 Ted Lamb Vesting of MEG Treasury-Settled RSUs 18,780 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 7,098 5.23 June 1, 2017 Sorin Bujor Exercise of MEG Options 10,000 4.53 June 20, 2018 Vesting of MEG Treasury-Settled PSUs 10,665 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 11,860 8.78 June 1, 2018 Vesting of MEG Treasury-Settled PSUs 5,205 5.23 June 1, 2017 Vesting of MEG Treasury-Settled RSUs 2,324 5.23 June 1, 2017 Tara McCool Vesting of MEG Treasury-Settled RSUs 7,206 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 2,823 5.23 June 1, 2017 Jeffrey McCaig Vesting of MEG Treasury-Settled RSUs 8,888 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 1,906 5.23 June 1, 2017

Price per Common Common Shares Share(1)(2) Name Nature of Issue Issued ($) Date Issued Harvey Doerr Vesting of MEG Treasury-Settled RSUs 5,945 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 1,906 5.23 June 1, 2017 Robert Hodgins Vesting of MEG Treasury-Settled RSUs 5,945 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUS 1,906 5.23 June 1, 2017 Timothy Hodgson Vesting of MEG Treasury-Settled RSUs 4,783 8.78 June 1, 2018 William Klesse Vesting of MEG Treasury-Settled RSUs 4,783 8.78 June 1, 2018 David Krieger Vesting of MEG Treasury-Settled RSUs 5,945 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 1,906 5.23 June 1, 2017 James McFarland Vesting of MEG Treasury-Settled RSUs 5,945 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 1,906 5.23 June 1, 2017 Diana McQueen Vesting of MEG Treasury-Settled RSUs 4,783 8.78 June 1, 2018 Vesting of MEG Treasury-Settled RSUs 2,005 5.63 December 1, 2017 Vesting of MEG Treasury-Settled RSUs 2,004 7.51 December 1, 2016

Notes: (1) Represents the exercise price of the MEG Options or the grant price of the MEG Treasury-Settled RSUs or MEG Treasury Settled PSUs, as applicable. (2) No funds are received by MEG upon the issuance of Common Shares pursuant to the vesting and settlement of MEG Treasury-Settled RSUs and MEG Treasury-Settled PSUs.

MEG Options

MEG Option Number of MEG Options Exercise Price Name Granted ($) Date Granted Derek Evans 80,300 8.41 August 10, 2018 Eric Toews 136,482 8.24 August 27, 2018 49,300 9.63 June 14, 2018 107,900 4.53 June 15, 2017 Chi-Tak Yee 136,482 8.24 August 27, 2018 61,300 9.63 June 14, 2018 105,900 4.53 June 15, 2017 Grant Borbridge 27,200 9.63 June 14, 2018 50,400 4.53 June 15, 2017 Aidan Mills 15,800 9.63 June 14, 2018 17,380 7.08 March 1, 2017 John Nearing 17,500 9.63 June 14, 2018 38,200 4.53 June 15, 2017 John Rogers 31,900 9.63 June 14, 2018 72,100 4.53 June 15, 2017 Chris Sloof 18,900 9.63 June 14, 2018 40,800 4.53 June 15, 2017 Jeremy Gizen 17,100 9.63 June 14, 2018 38,000 4.53 June 15, 2017 Duane Monea 19,200 9.63 June 14, 2018 43,400 4.53 June 15, 2017 Ted Lamb 13,300 9.63 June 14, 2018 25,900 4.53 June 15, 2017 Sorin Bujor 18,400 9.63 June 14, 2018 41,500 4.53 June 15, 2017 Tara McCool 10,900 9.63 June 14, 2018 20,800 4.53 June 15, 2017

MEG Treasury-Settled RSUs

Number of MEG Treasury-Settled RSUs Name Granted Date Granted Expiry Date Derek Evans 64,210 August 10, 2018 August 10, 2021 Eric Toews 39,370 June 14, 2018 June 14, 2021 80,971 June 15, 2017 June 15, 2020 Chi-Tak Yee 48,982 June 14, 2018 June 14, 2021 79,463 June 15, 2017 June 15, 2020 Grant Borbridge 21,736 June 14, 2018 June 14, 2021 37,802 June 15, 2017 June 15, 2020 Aidan Mills 12,579 June 14, 2018 June 14, 2021 20,033 June 15, 2017 June 15, 2020 John Nearing 13,984 June 14, 2018 June 14, 2021 28,656 June 15, 2017 June 15, 2020 John Rogers 25,452 June 14, 2018 June 14, 2021 54,102 June 15, 2017 June 15, 2020 Christopher Sloof 15,040 June 14, 2018 June 14, 2021 30,594 June 15, 2017 June 15, 2020 Jeremy Gizen 13,608 June 14, 2018 June 14, 2021 28,483 June 15, 2017 June 15, 2020 Duane Monea 15,309 June 14, 2018 June 14, 2021 32,550 June 15, 2017 June 15, 2020 Ted Lamb 13,607 June 14, 2018 June 14, 2021 42,068 June 15, 2017 June 15, 2020 Sorin Bujor 14,644 June 14, 2018 June 14, 2021 31,155 June 15, 2017 June 15, 2020 Tara McCool 8,695 June 14, 2018 June 14, 2021 15,590 June 15, 2017 June 15, 2020 Jeffrey McCaig 23,179 June 15, 2017 June 15, 2020 Harvey Doerr 14,349 June 15, 2017 June 15, 2020 Robert Hodgins 6,750 June 14, 2018 June 14, 2021 14,349 June 15, 2017 June 15, 2020 Timothy Hodgson 14,349 June 15, 2017 June 15, 2020 William Klesse 6,750 June 14, 2018 June 14, 2021 14,349 June 15, 2017 June 15, 2020 David Krieger 14,349 June 15, 2017 June 15, 2020 James McFarland 14,349 June 15, 2017 June 15, 2020 Diana McQueen 14,349 June 15, 2017 June 15, 2020

MEG Treasury-Settled PSUs

Number of MEG Treasury-Settled PSUs Name Granted Date Granted Expiry Date Derek Evans 107,016 August 10, 2018 August 10, 2021 Eric Toews 65,616 June 14, 2018 June 14, 2021 Chi-Tak Yee 81,636 June 14, 2018 June 14, 2021 Grant Borbridge 36,227 June 14, 2018 June 14, 2021 Aidan Mills 20,965 June 14, 2018 June 14, 2021 John Nearing 23,307 June 14, 2018 June 14, 2021 John Rogers 42,419 June 14, 2018 June 14, 2021 Christopher Sloof 25,066 June 14, 2018 June 14, 2021 Jeremy Gizen 22,680 June 14, 2018 June 14, 2021 Duane Monea 25,515 June 14, 2018 June 14, 2021 REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

Number of MEG Treasury-Settled PSUs Name Granted Date Granted Expiry Date Ted Lamb 17,678 June 14, 2018 June 14, 2021 Sorin Bujor 24,406 June 14, 2018 June 14, 2021 Tara McCool 14,491 June 14, 2018 June 14, 2021

ARRANGEMENTS BETWEEN THE OFFEROR AND THE DIRECTORS, OFFICERS AND SECURITYHOLDERS OF MEG

There are no agreements, commitments or understandings made or, to the knowledge of the directors and officers of MEG, proposed to be made between Husky and any of the directors or officers of MEG, including any agreement, commitment or understanding including pursuant to which a payment or other benefit is proposed to be made or given by way of compensation for loss of office or as to any such person remaining in or retiring from office if the Husky Offer is successful. No director or officer of MEG is a director or officer of Husky or of any subsidiary of Husky.

To the knowledge of the directors and officers of MEG, there are no agreements, commitments or understandings made or proposed to be made between Husky and any securityholder of MEG relating to the Husky Offer.

ARRANGEMENTS BETWEEN MEG AND ITS DIRECTORS AND OFFICERS

Other than as described in this Directors' Circular, no agreement, commitment or understanding has been made, or is proposed to be made, between MEG and any of its directors or officers, including pursuant to which a payment or other benefit is to be made or given by way of compensation for loss of office or as to their remaining in or retiring from office if the Husky Offer is successful.

Change of Control Agreements with Officers

MEG has Change of Control Agreements with each of Messrs. Evans, Toews, Yee, Borbridge, Mills, Nearing, Rogers, Sloof, Gizen, Monea, Lamb, Bujor and Ms. McCool. The Change of Control Agreements require a "double trigger" before payment of the officer's Retiring Allowance (as defined below) is due, which means both a Change of Control and involuntary termination (including by way of constructive dismissal) must occur for any payment of benefits.

A "Change of Control" under the Change of Control Agreements is defined as any of the following: (i) the acceptance by Shareholders, representing more than 50% of the issued and outstanding Common Shares, of any offer for any or all of the Common Shares; (ii) the acquisition by whatever means by a person or persons acting jointly or in concert, directly or indirectly, of the beneficial ownership of, or control or direction over, more than 50% of the issued and outstanding Common Shares (other than pursuant to certain bona fide reorganizations); (iii) the passing of a resolution by the Shareholders to substantially liquidate the assets or wind-up or significantly rearrange the affairs of MEG (other than pursuant to certain bona fide reorganizations); (iv) the sale by MEG of all or substantially all of its assets (other than to an affiliate of MEG); (v) individuals who were proposed as nominees to become directors of MEG immediately prior to a meeting of the Shareholders involving a contest for, or an item of business relating to the election of directors of MEG, not constituting a majority of the directors of MEG following such election; or (vi) any other event which, in the opinion of the MEG Board, reasonably constitutes a change of control of MEG.

The Change of Control Agreements provide that if a Change of Control occurs, and within 180 days immediately following a Change of Control an event or events occur that constitute Good Reason, the officer shall have the right, for a period of 60 days following the event or events that constitute Good Reason to elect to terminate his or her employment with MEG upon providing MEG with seven days advance written notice of the termination date. "Good Reason" is any material adverse change by MEG, without the agreement of the applicable officer, in the annual base salary or in any of the officer's duties, powers, rights, discretions, title or lines of reporting, such that immediately after

such change or series of changes, the responsibilities and status of the officer, taken as a whole, are not at least substantially equivalent to those assigned to the officer immediately prior to such change.

If: (a) the officer terminates his or her employment with MEG following an event or events that constitute Good Reason that occurs within 180 days immediately following a Change of Control; or (b) MEG terminates the officer's employment with MEG other than for just cause within 180 days immediately following a Change of Control; MEG shall pay the officer, within 15 business days of the termination date, a retiring allowance (the "Retiring Allowance") which, depending on the position held, consists of:

x the officer's annual base salary as at the termination date multiplied by either 2.0 or 1.5, as applicable; plus

x an amount equal to the average of the annual bonus payments paid to the officer in the two full calendar years immediately preceding the termination date, or in certain cases, if the officer has been employed for less than two years, an amount equal to such officer's target bonus, multiplied by either 2.0 or 1.5, as applicable; plus;

x an amount equal to 15% of the officer's annual base salary as at the termination date multiplied by either 2.0 or 1.5, as applicable, to compensate the officer for the loss of benefits; plus

x an amount equal to 12% of the officer's annual base salary as at the termination date, multiplied by either 2.0 or 1.5, as applicable, to compensate the officer for the loss of participation in MEG's savings plan; plus

x an amount equal to the annual perquisite allowance of the officer as at the termination date, multiplied by either 2.0 or 1.5, as applicable, to compensate the officer for the loss of the annual perquisite allowance.

The Change of Control Agreements of Messrs. Evans, Toews, Yee and Borbridge contain multipliers of 2.0 while the Change of Control Agreements of Messrs. Mills, Nearing, Rogers, Sloof, Gizen, Monea, Lamb, Bujor and Ms. McCool contain multipliers of 1.5.

In exchange for payment of the Retiring Allowance, the officer is required to provide to MEG a full and final release, in a form satisfactory to MEG.

If the officer elects to terminate his or her employment with MEG within 60 days of an event or events that constitute Good Reason which in turn occurred within 180 days following the occurrence of a Change of Control, the officer shall, at the request of MEG, continue the officer's employment with MEG for a period of up to three months at the officer's then existing compensation package, including benefits, to assist MEG in an orderly transition. The amount paid to the officer in this regard will not reduce the Retiring Allowance to which the officer is entitled.

If the officer becomes entitled to payment of the Retiring Allowance, the applicable Change of Control Agreement will terminate immediately upon payment of the Retiring Allowance. The Retiring Allowance is deemed to constitute liquidated damages and not a penalty, and the officer will not be required to mitigate his damages.

In the event that Husky takes up and pays for the Common Shares pursuant to the Husky Offer and an officer terminates his or her employment for Good Reason or his or her employment is terminated by MEG other than for just cause, such officer would be entitled to the Retiring Allowance as set out in the table below.

The table below sets out the estimated incremental payments each named officer would be entitled to receive if there had been a Change Of Control (and, if the Retiring Allowance was triggered) on October 16, 2018.

Unvested MEG Total Unvested RSU and Contingent Savings Annual Aggregate MEG MEG Bonus Base Bonus Benefits Plan Perquisite Retiring Options PSU Arrangement Salary Value Value Value Allowance Allowance(1) Value(2)(5) Value(2)(5) Value(6) Name ($) ($) ($) ($) ($) ($) ($) ($) ($) Derek 1,200,000 1,200,000 180,000 144,000 28,000 2,752,000 Nil Nil 1,800,000 Evans Eric L. 842,504 422,354 126,376 101,100 28,000 1,520,334 1,038,821 4,845,082 Nil Toews Chi-Tak 848,290 409,716 127,244 101,795 28,000 1,515,044 1,044,237 5,058,372 Nil Yee Grant 698,414 244,750 104,762 83,810 28,000 1,159,736 314,988 2,360,534 Nil Borbridge Aidan 465,885 279,531 69,883 55,906 21,000 892,205 67,067 944,394 Nil Mills John 449,480 131,138 67,422 53,938 21,000 722,977 234,442 1,716,275 Nil Nearing John M. 542,244 181,223 81,337 65,069 21,000 890,873 441,013 3,212,616 Nil Rogers Chris Sloof 482,759 156,044 72,414 57,931 21,000 790,148 250,709 1,835,438 Nil Nil Jeremy 436,800 158,400 65,520 52,416 21,000 734,136 228,406 1,651,353 Gizen Nil Duane 390,000 114,469 58,500 46,800 21,000 630,769 265,475 1,932,381 Monea Ted Lamb 435,000 112,141 65,250 52,200 21,000 685,591 161,451 978,010 Nil Sorin Bujor 431,497 145,339 64,725 51,780 21,000 714,340 253,941 1,849,936 Nil Nil Tara 367,224 117,092 55,084 44,067 21,000 604,467 128,549 854,909 McCool Notes: (1) The "Total Aggregate Retiring Allowance" for each individual is the aggregate of Base Salary, Bonus Value, Benefits Value, Savings Plan Value and Annual Perquisite Allowance as set forth opposite such individual's name. (2) See "MEG's Long Term Incentive Plans" for a description of the effect of a Change of Control on each officer's outstanding MEG Options, MEG RSUs and MEG PSUs. (3) The Change of Control Agreements of Messrs. Evans, Toews, Yee and Borbridge contain multipliers of 2.0 while the Change of Control Agreements of Messrs. Mills, Nearing, Rogers, Sloof, Gizen, Monea, Lamb, Bujor and Ms. McCool contain multipliers of 1.5. (4) The total value of the unvested MEG Options that are expected to vest upon a Change of Control has been calculated using a reference price of $11.00 per Common Share. The following officers also have vested "in-the-money" MEG Options with the following aggregate values: Mr. Toews has vested MEG Options with a value of $491,044; Mr. Yee has vested MEG Options with a value of $481,959; Mr. Borbridge has vested MEG Options with a value of $229,356; Mr. Mills has vested MEG Options with a value of $22,709; Mr. Nearing has vested MEG Options with a value of $173,775; Mr. Rogers has vested MEG Options with a value of $328,121; Mr. Sloof has vested MEG Options with a value of $185,656; Mr. Monea has vested MEG Options with a value of $197,531; Mr. Lamb has vested MEG Options with a value of $118,871; Mr. Bujor has vested MEG Options with a value of $124,256 and Ms. McCool has vested MEG Options with a value of $92,640. Mr. Gizen does not have vested "in-the-money" MEG Options. The foregoing values of vested MEG Options is calculated using a reference price of $11.00 per Common Share. (5) The total value of the unvested MEG RSUs and MEG PSUs that are expected to vest upon a Change of Control has been calculated using a reference price of $11.00 per Common Share. (6) On October 16, 2018, the MEG Board, on the recommendation of the Compensation Committee and counsel agreed with Mr. Evans to a bonus arrangement in satisfaction of the LTI Annual Target whereby Mr. Evans would receive, on the first to occur of: (i) in the event of a Change of Control prior to June 1, 2019 at a price of not less $11.00 per Common Share, the LTI Annual Target in cash plus additional payments equal to $400,000 for each additional $1.00 per Common Share above $11.00 per Common Share payable on such Change in REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

Control (pro-rated on a straight line basis to the actual per Common Share amount); or (ii) in the event there is no Change in Control at a price in excess of $11.00 per Common Share on or before June 1, 2019, a discretionary cash bonus reflecting Mr. Evans' contributions during his first year, with a target bonus level equal to the LTI Annual Target.

MEG's Long Term Incentive Plans

The following is a summary only of the treatment of MEG Options, MEG RSUs, MEG PSUs and MEG DSUs on a Change of Control pursuant to the provisions of each of the MEG Option Plan, MEG RSU Plans and MEG DSU Plan or the applicable agreements in respect thereof and is qualified entirely by the text of each of such plans. For a more comprehensive description of the terms of each plan, please refer to MEG's management information circular and proxy statement dated April 24, 2018 and filed on SEDAR.

MEG Options

The outstanding MEG Options have been issued pursuant to the MEG Option Plan. As of October 16, 2018, the directors and officers of MEG hold an aggregate of 2,276,937 MEG Options.

Pursuant to the MEG Option Plan, in the event of a Change of Control or a determination by the MEG Board that a Change of Control is expected to occur, all outstanding MEG Options shall vest and be immediately exercisable and, to the extent the holder does not cease to be actively employed or provide services to MEG and its subsidiaries on or before the Change of Control which results in an earlier expiration of such officer's MEG Options, each holder shall have the right to exercise such MEG Options at any time up to and including (but not after) the earlier of: (i) the date which is 90 days following the date of such Change of Control, or such earlier time as may be established by the MEG Board, in its absolute discretion; and (ii) the expiry date of such MEG Options.

Further, in the event of: (i) the acquisition by any person or group of persons acting jointly or in concert, directly or indirectly, of such number of Common Shares as entitle such person(s) to acquire, pursuant to the compulsory acquisition provisions of the ABCA or such other comparable legislation applicable to MEG at the time, all remaining Common Shares not already acquired by the person(s); or (ii) the receipt of all required shareholder, regulatory and court approvals for an amalgamation, arrangement, consolidation, merger or other business combination pursuant to which such person(s) will, directly or indirectly, upon completion thereof, acquire all of the issued and outstanding Common Shares, MEG may at its election, effective on the sending of notice to the remaining holders of MEG Options, terminate such MEG Options for their in-the-money value (based upon the consideration offered under the transaction), payable in Common Shares.

In the event that the conditions in the Husky Offer are satisfied or waived and Husky takes up and pays for the Common Shares, Husky would own a majority of the issued and outstanding Common Shares and as a result all unvested MEG Options would vest and become immediately exercisable on the terms and conditions set forth above. If Husky takes up and pays for at least 90% of the outstanding Common Shares under the Husky Offer within a 120 day period of the commencement of the Husky Offer, MEG may, at its election and upon giving notice, terminate all outstanding MEG Options for their in-the-money value, payable in Common Shares.

MEG RSUs and MEG PSUs

The outstanding MEG RSUs and MEG PSUs have been granted pursuant to the MEG RSU Plans. As of October 16, 2018, the directors and officers of MEG hold an aggregate of 496,145 MEG Treasury-Settled RSUs, 140,073 MEG Cash-Settled RSUs, 295,236 MEG Treasury-Settled PSUs and 1,044,816 MEG Cash-Settled PSUs.

The MEG RSU Plans provide that, for holders of MEG RSUs and MEG PSUs, the occurrence of an event of a Change of Control or a determination by the MEG Board that a Change of Control is expected to occur, will result in the vesting of all outstanding MEG RSUs and MEG PSUs and, provided that the holder does not cease to be a director, actively employed or providing consultancy services to MEG or its subsidiaries on or before the Change of Control which

results in an earlier expiration date of such holder's MEG RSUs and MEG PSUs, the payout of all outstanding MEG RSUs and MEG PSUs will occur upon the occurrence of the Change of Control.

Notwithstanding anything to the contrary in the MEG RSU Plans, a determination by the MEG Board that a Change of Control is expected to occur will not result in the vesting of the MEG RSUs or MEG PSUs held by a US Participant (as defined the in the MEG RSU Plans) and it is only when circumstances constitute a "change in control event" under Section 409A of the Internal Revenue Code of 1986, as amended, that such US Participant's MEG RSUs and MEG PSUs vest and become payable.

With respect to MEG PSUs, the number of MEG PSUs that will vest and be paid out will be calculated using the multiplier that has already been determined in respect of any MEG PSUs that were eligible to vest prior to the occurrence of the Change of Control and by using a multiplier of 1.0 in respect of any MEG PSUs that had not yet become eligible to vest as at the occurrence of the Change of Control.

In the event that the conditions in the Husky Offer are satisfied and Husky takes up and pays for the Common Shares, Husky would own a majority of the issued and outstanding Common Shares and as a result all unvested MEG RSUs and MEG PSUs (including those held by US Participants) would vest and be payable (whether in cash or Common Shares) on the date of the Change of Control.

MEG DSUs

MEG has a MEG DSU Plan for non-management directors. As of October 16, 2018, the non-management directors of MEG own an aggregate of 342,775 MEG DSUs.

A MEG DSU is a unit of participation in the MEG DSU Plan, equivalent in value to a Common Share at the time of grant, and credited by means of a bookkeeping entry to a director's account, which entitles the holder thereof, at the time specified in the MEG DSU Plan, to receive the cash equivalent of one Common Share or, if MEG so determines, in its discretion, a Common Share acquired on the open market, subject to the provisions of the MEG DSU Plan.

On the third business day after the date on which a director ceases to be a director of MEG or its subsidiaries (the "Redemption Date"), the former director shall become entitled to receive from MEG a cash payment equal to the product of the number of MEG DSUs recorded in the former director's account multiplied by the five day volume weighted average trading price of the Common Shares on the TSX immediately prior to the Redemption Date, less applicable withholding taxes. Notwithstanding anything to the contrary in the MEG DSU Plan, the Redemption Date for any US Participant (as defined in the MEG DSU Plan) shall be the date on which a director ceases to be a director of MEG or its subsidiaries.

In the event that the conditions in the Husky Offer are satisfied and Husky takes up and pays for the Common Shares, Husky would own a majority of the issued and outstanding Common Shares, Husky would be in a position to replace all members of the MEG Board and as a result, all MEG DSUs will become payable on the third business day after the director ceases to be a director of MEG.

OWNERSHIP OF SECURITIES OF THE OFFEROR

None of MEG or the directors or officers of MEG or, to their knowledge after reasonable enquiry, any associate or affiliate of an insider of MEG, any affiliate or associate of MEG, any insider of MEG who is not a director or officer of MEG or any person acting jointly or in concert with MEG, beneficially owns, or exercises control or direction over, any securities of Husky.

INTEREST OF DIRECTORS AND OFFICERS IN MATERIAL TRANSACTIONS WITH THE OFFEROR

None of the directors or officers of MEG and their associates and, to the knowledge of the directors and officers of MEG, after reasonable enquiry, no person who owns more than 10% of any class of equity securities of MEG for the time being outstanding has any interest in any material transaction to which Husky is a party.

MATERIAL CHANGES IN THE AFFAIRS OF MEG

Except as publicly disclosed, the directors and officers of MEG are not aware of any information that indicates any material change in the affairs of MEG since the date of its last published financial statements, being its unaudited financial statements for the quarter ended June 30, 2018.

SHAREHOLDER RIGHTS PLAN

In connection with the initial public offering of Common Shares on August 6, 2010, MEG adopted the Shareholder Rights Plan. At the annual and special meeting of Shareholders held on May 25, 2017, Shareholders passed a resolution extending the term of the Shareholder Rights Plan until the annual meeting of Shareholders to be held in 2020.

The objective of the Shareholder Rights Plan is to ensure, to the extent possible, that all Shareholders are treated equally and fairly in connection with any take-over bid or similar proposal to acquire the Common Shares and to provide the MEG Board with sufficient time to evaluate any unsolicited take-over bid and develop alternatives to maximize Shareholder value. The Shareholder Rights Plan discourages the making of any unsolicited take-over bid by creating the potential of significant dilution to any offeror who does so. This is done through the issuance to all Shareholders of SRP Rights at a significant discount to the then prevailing market prices, which could, in certain circumstances, become exercisable by all Shareholders other than an offeror and its associates, affiliates and joint actors.

In connection with the adoption of the Shareholder Rights Plan, MEG issued one SRP Right in respect of each Common Share outstanding at the close of business on August 6, 2010 (the "Effective Date") and authorized the issuance of one SRP Right in respect of each additional Common Share issued after the Effective Date and prior to the earlier of the Separation Time (as defined in the Shareholder Rights Plan Agreement that governs the Shareholder Rights Plan) and the time at which the SRP Rights expire and terminate. The SRP Rights trade with and are represented by Common Share certificates, including certificates issued prior to the Effective Date.

MEG does not believe that the Husky Offer is a "permitted bid" (as defined in the Shareholder Rights Plan), as the Husky Offer, as presently constituted, has not been made to Shareholders resident in the state of New York. See "Errors, Misleading Statements and Breach of Laws by Husky". The MEG Board resolved to extend the Separation Time in respect of the Husky Offer to January 15, 2019.

OTHER TRANSACTIONS

Other than as described or referred to in this Directors' Circular, no negotiations are underway in response to the Husky Offer which relate to or would result in: (i) an extraordinary transaction such as a merger or reorganization involving MEG or a subsidiary of MEG; (ii) the purchase, sale or transfer of a material amount of assets by MEG or a subsidiary of MEG; (iii) a take-over bid or other acquisition of securities of MEG by any person other than Husky; (iv) a bid by MEG for its own securities or for those of another issuer; or (v) any material change in the present capitalization or dividend policy of MEG.

Other than as described or referred to in this Directors' Circular, there is no transaction, MEG Board resolution, agreement in principle or signed contract of MEG which has occurred in response to the Husky Offer and that related to one of the matters set forth in the preceding paragraph. Notwithstanding the foregoing, the MEG Board may in the future engage in negotiations in response to the Husky Offer that could have one or more of the effects specified in the preceding paragraph. The MEG Board has determined that disclosure with respect to the parties to, and the possible REJECT THE HUSKY OFFER TAKE NO ACTION – DO NOT TENDER YOUR COMMON SHARES If you have already tendered your Common Shares to the Husky Offer, you can withdraw your Common Shares by contacting your broker or Kingsdale Advisors, by North American Toll Free phone call to 1-866-228-8614 or by email at [email protected]

terms of, any transactions or proposals of the type referred to in the preceding paragraph might jeopardize any discussions or negotiations that MEG may conduct. Accordingly, MEG does not intend to disclose the possible terms of any such transaction or proposal until an agreement in principle relating thereto has been reached or as otherwise may be required by applicable law.

OTHER MATERIAL INFORMATION

Except as noted below or as otherwise described or referred to in this Directors' Circular, or which is otherwise publicly disclosed, no other information is known to the directors or officers of MEG that would reasonably be expected to affect the decision of the Shareholders to accept or reject the Husky Offer.

OTHER PERSONS RETAINED IN CONNECTION WITH THE HUSKY OFFER

In addition to the external legal advisors, Burnet, Duckworth & Palmer LLP, Bennett Jones LLP and Latham & Watkins LLP and financial advisors, BMO Capital Markets, MEG has retained the persons described below in connection with the Husky Offer.

MEG has retained Kingsdale Advisors as its Information Agent in connection with the Husky Offer and certain related matters. Kingsdale Advisors will receive reasonable and customary compensation for its services and reimbursement for its reasonable out-of-pocket expenses. MEG has agreed to indemnify Kingsdale Advisors against certain liabilities arising out of or in connection with the engagement.

MEG has also retained Bayfield Strategy, Inc. ("Bayfield") to provide communications consulting services, including in connection with the Husky Offer and certain related matters. Bayfield will receive reasonable and customary compensation for its services and will be reimbursed for its reasonable out-of-pocket expenses. MEG has agreed to indemnify Bayfield against certain liabilities arising out of or in connection with the engagement.

MEG has also retained Spotlight Advisors, LLC ("Spotlight") to provide consulting services, including shareholder engagement in connection with the Husky Offer and certain related matters. Spotlight will receive reasonable and customary compensation for its services and will be reimbursed for its reasonable out-of-pocket expenses. MEG has agreed to indemnify Spotlight against certain liabilities arising out of or in connection with the engagement.

Except as set forth above, neither MEG nor any person acting on its behalf has employed, retained or agreed to compensate any person making solicitations or recommendations to Shareholders in connection with the Husky Offer.

ERRORS, MISLEADING STATEMENTS AND BREACH OF LAWS BY HUSKY

The Husky Offer does not comply with the take-over bid regime

According to the Husky Circular, Shareholders resident in 34 U.S. states (each a "Restricted State") are not eligible to elect to receive Husky Shares under the Husky Offer unless such Shareholders are "exempt institutional investors" under their respective state laws. Under section 2.23 of NI 62-104, Husky is required to offer all Shareholders identical consideration which Husky has not done based on the terms of the Husky Offer.

Furthermore, any Shareholder who is resident in New York is currently not entitled to receive Husky Shares under the Husky Offer pending Husky taking any steps required to permit it to offer Husky Shares to such Shareholders. On this basis, the Husky Offer, as presently constituted, has not been made to Shareholders resident in New York, which is a violation of section 2.8 of NI 62-104. In addition, on this basis the Husky Offer is not a "permitted bid" under the Shareholder Rights Plan, which requires that a "permitted bid" be made to all Shareholders. See "Shareholder Rights Plan". MEG believes that a significant number of Shareholders are resident in the U.S.

Based on the terms of the Husky Offer, and for the reasons noted above, Shareholders resident in the Restricted States and New York are either being denied an opportunity to participate in the Husky Offer on the same basis as other Shareholders, or have not yet received the Husky Offer.

Husky fails to provide details regarding their credit facilities

Husky states that the Cash Consideration may be funded through Husky's cash on hand or through it's revolving syndicated credit facilities (the "Husky Facilities"). Item 12 of the Take-over Bid Circular Form requires the offeror to disclose, among other things, the name of the lender and the circumstances under which amounts drawn under the offeror's facilities must be repaid, if the funds used for payment of the deposited securities are borrowed. The Husky Circular does not disclose the name of the lender(s) under the Husky Facilities nor the circumstances under which the amounts drawn under the Husky Facilities must be repaid.

Details surrounding D.F. King's engagement are not disclosed

Item 24 of the Take-over Bid Circular Form, requires Husky to disclose the particulars of the compensation arrangements with any persons retained to make solicitations on its behalf. The Husky Circular does not provide any information in respect of D.F. King's compensation arrangements with Husky other than that it will receive reasonable and customary compensation from Husky for the discharge of its services.

STATUTORY RIGHTS

Securities legislation in the provinces and territories of Canada provides securityholders of MEG with, in addition to any other rights they may have at law, one or more rights of rescission, price revision or to damages, if there is a misrepresentation in a circular or notice that is required to be delivered to those securityholders. However, such rights must be exercised within prescribed time limits. Securityholders should refer to the applicable provisions of the securities legislation of their province or territory for particulars of those rights or consult a lawyer.

APPROVAL OF DIRECTORS' CIRCULAR

The content of this Directors' Circular has been approved and the delivery thereof has been authorized by the MEG Board.

CERTIFICATE

Dated: October 16, 2018

The foregoing contains no untrue statement of a material fact and does not omit to state a material fact that is required to be stated or that is necessary to make a statement not misleading in the light of the circumstances in which it was made.

On behalf of the Board of Directors

(Signed)"Jeffrey J. McCaig" (Signed) "James D. McFarland" Jeffrey J. McCaig James D. McFarland Chair and Director Director

APPENDIX "A"

OPINION OF BMO CAPITAL MARKETS

October 16, 2018 The Special Committee of the Board of Directors and the Board of Directors MEG Energy Corp. 2500, 600 – 3 Avenue SW Calgary, Alberta T2P 0G5

To the Special Committee of the Board of Directors and the Board of Directors of MEG Energy Corp.: BMO Nesbitt Burns Inc. (“BMO Capital Markets” or “we” or “us”) understands that Husky Energy Inc. (the “Acquiror”) has made a take-over bid offer (the “Offer”) to acquire all of the issued and outstanding common shares (the “Shares”) of MEG Energy Corp. (the “Company”), together with the associated rights (the “SRP Rights”) issued and outstanding under the shareholder rights plan of the Company, and including Shares that may become issued and outstanding after the date of the Offer, October 2, 2018, but prior to the expiry date of the Offer, currently January 16, 2019, upon the exercise of the options awarded pursuant to the Company’s amended and restated stock option plan or upon any other exercise, exchange or conversion of securities of the Company into Shares (other than pursuant to the SRP Rights). The consideration per Share offered pursuant to the Offer is, at the choice of each holder of the Shares (the “Shareholders”), (i) $11.00 in cash (the “Cash Consideration”); or (ii) 0.485 of the Acquiror’s common share (the “Share Consideration”), subject, in each case, to pro ration as provided for in the Acquiror’s take-over bid circular dated October 2, 2018 (the “Take-over Bid Circular”). We understand further that the maximum amount of cash available under the Offer is $1.0 billion and the total number of common shares of the Acquiror available under the Offer is 107,215,520. We are expressing no opinion as to the pro ration procedures and limitations provided for in the Take-over Bid Circular. The terms and conditions of the Offer are set out in the Take-over Bid Circular and the related Letter of Transmittal and Notice of Guaranteed Delivery, which have been filed and are available on SEDAR under the Company’s profile at www.sedar.com. BMO Capital Markets understands that a special committee (the “Special Committee”) of the board of directors of the Company (the “Board of Directors”) has been constituted to consider, among other things, the Offer and make recommendations thereon to the Board of Directors. We have been retained to provide financial advice to the Company, including our opinion (the “Opinion”) to the Special Committee and the Board of Directors as to the adequacy, from a financial point of view, of the consideration to be received by the Shareholders pursuant to the Offer.

ENGAGEMENT OF BMO CAPITAL MARKETS

The Company initially contacted BMO Capital Markets regarding a potential advisory assignment in July 2018 to provide financial advisory and related services. BMO Capital Markets was formally engaged by the Company pursuant to an agreement effective July 1, 2018 (the “Engagement Agreement”). Under the terms of the Engagement Agreement, BMO Capital Markets has agreed to provide the Company and the Board of Directors with various advisory services in connection with the Offer including, among other things, the provision of the Opinion. BMO Capital Markets will receive a fee for rendering the Opinion. We will also receive certain fees for our advisory services under the Engagement Agreement, a substantial portion of which is contingent upon the completion or non-completion of the Offer or any alternative transaction. The Company has also agreed to reimburse us for our reasonable out-of-pocket expenses and to indemnify us against certain liabilities that might arise out of our engagement.

CREDENTIALS OF BMO CAPITAL MARKETS

BMO Capital Markets is one of North America’s largest investment banking firms, with operations in all facets of corporate and government finance, mergers and acquisitions, equity and fixed income sales and trading, investment research and investment management. BMO Capital Markets has been a financial advisor in a significant number of transactions throughout North America involving public and private companies in various industry sectors, including the oil & gas sector, and has extensive experience in preparing fairness opinions. The Opinion represents the opinion of BMO Capital Markets, the form and content of which have been approved for release by a committee of our officers who are collectively experienced in merger and acquisition, divestiture, restructuring, valuation, fairness opinion and capital markets matters.

INDEPENDENCE OF BMO CAPITAL MARKETS

Neither BMO Capital Markets, nor any of our affiliates, is an insider, associate or affiliate (as those terms are defined in the Securities Act (Ontario) or the rules made thereunder) of the Company, the Acquiror, or any of their respective associates or affiliates (collectively, the “Interested Parties”). BMO Capital Markets has not been engaged to provide any financial advisory services nor has it participated in any financings involving the Interested Parties within the past two years, other than, with respect to the Company, (i) acting as financial advisor to the Company pursuant to the Engagement Agreement, (ii) providing other banking services, including foreign exchange and commodities hedging services for the Company, (iii) acting as financial advisor to the Company in connection with the Company’s C$1.61 billion sale of its Access Pipeline and Stonefell Terminal in March 2018, (iv) acting as financial advisor to the Company in connection with the Company’s comprehensive refinancing plan announced in January 2017, (v) acting as lead bookrunner on the Company’s C$518 million issuance of subscription receipts that closed in January 2017, (vi) acting as joint bookrunner on the Company’s US$750 million offering of senior secured second lien notes that closed in January 2017, (vii) acting as joint lead arranger and joint bookrunner on the refinancing of the Company’s US$1.2 billion Term Loan B that closed in January 2017, (viii) acting as joint lead arranger and joint lead bookrunner with respect to the Company’s US$1.4 billion revolving credit facility, and, with respect to the Acquiror, (i) serving as a lender to the Acquiror under its two C$2 billion revolving committed syndicated credit facilities due 2020 and 2022, (ii) participating in certain of the Acquiror’s bilateral and treasury facilities, (iii) serving as a lender to an affiliate of the Acquiror in its combined term/operating facilities, (iv) acting as financial advisor to the Acquiror in connection with the Acquiror’s US$435 million acquisition of a 50,000 barrel-per-day permitted capacity refinery located in Superior, Wisconsin in November 2017, and (v) acting as joint bookrunner on the Acquiror’s C$750 mm offering of notes that closed in March 2017. Other than as set forth above, there are no understandings, agreements or commitments between BMO Capital Markets and any of the Interested Parties with respect to future business dealings. BMO Capital Markets may, in the future, in the ordinary course of business, provide financial advisory, investment banking, or other financial services to one or more of the Interested Parties from time to time. BMO Capital Markets and certain of our affiliates act as traders and dealers, both as principal and agent, in major financial markets and, as such, may have had and may in the future have positions in the securities of one or more of the Interested Parties and, from time to time, may have executed or may execute transactions on behalf of one or more Interested Parties for which BMO Capital Markets or such affiliates received or may receive compensation. As investment dealers, BMO Capital Markets and certain of our affiliates conduct research on securities and may, in the ordinary course of business, provide research reports and investment advice to clients on investment matters, including with respect to one or more of the Interested Parties or the Offer. In addition, Bank of Montreal (“BMO”), of which BMO Capital Markets is a wholly-owned subsidiary, or one or more affiliates of BMO, may provide banking or other financial services to one or more of the Interested Parties in the ordinary course of business.

SCOPE OF REVIEW

In connection with rendering the Opinion, we have reviewed and relied upon, or carried out, among other things, the following: 1. the Take-over Bid Circular;

2. a draft of the Company’s Directors’ Circular dated October 15, 2018 (the “Directors’ Circular”);

3. certain publicly available information relating to the business, operations, financial condition and trading history of the Company and the Acquiror and other selected public companies we considered relevant;

4. certain internal financial, operating, corporate and other information prepared or provided by or on behalf of the Company relating to the business, operations and financial condition of the Company;

5. internal management forecasts, projections, estimates and budgets prepared or provided by or on behalf of management of the Company;

6. discussions with management of the Company relating to the Company’s current business, plans, financial condition and prospects;

7. the independent engineering report prepared by GLJ Petroleum Consultants Ltd. ("GLJ") which was prepared for the Company and dated effective December 31, 2017, with a preparation date of February 9, 2018;

8. discussions with legal counsel to the Special Committee and the Board of Directors;

9. public information with respect to selected precedent transactions we considered relevant;

10. historical commodity prices and the impact of various commodity pricing assumptions on the business, prospects and financial forecasts of the Company and the Acquiror;

11. various reports published by equity research analysts, industry sources and credit rating agencies we considered relevant;

12. a letter of representation as to certain factual matters and the completeness and accuracy of certain information upon which the Opinion is based, addressed to us and dated as of the date hereof, provided by senior officers of the Company; and

13. such other information, investigations, analyses and discussions as we considered necessary or appropriate in the circumstances.

BMO Capital Markets has not, to the best of its knowledge, been denied access by the Company to any information under the Company’s control requested by BMO Capital Markets.

ASSUMPTIONS AND LIMITATIONS

We have relied upon and assumed the completeness, accuracy and fair presentation of all financial and other information, data, advice, opinions, representations and other material obtained by us from public sources or provided to us by or on behalf of the Company or otherwise obtained by us in connection with our engagement (the “Information”). The Opinion is conditional upon such completeness, accuracy and fair presentation. We have not been requested to, and have not assumed any obligation to, independently verify the completeness, accuracy or fair presentation of any such Information. We have assumed that forecasts, projections, estimates and budgets provided to us and used in our analyses were reasonably prepared on bases reflecting the best currently available assumptions, estimates and

3 judgments of management of the Company, having regard to the Company’s business, plans, financial condition and prospects. Senior officers of the Company have represented to BMO Capital Markets in a letter of representation delivered as of the date hereof, among other things, that: (i) the Information in respect of the Company or any of its subsidiaries provided to BMO Capital Markets orally by, or in the presence of, an officer or employee of, the Company, or in writing by the Company or any of its subsidiaries (as defined in National Instrument 45-106 – Prospectus and Registration Exemptions) or any of its or their representatives in connection with our engagement was, at the date the Information was provided to BMO Capital Markets, and is, as of the date hereof, complete, true and correct in all material respects, and did not and does not contain a misrepresentation (as defined in the Securities Act (Ontario)); and (ii) since the dates on which the Information was provided to BMO Capital Markets, except as disclosed in writing to BMO Capital Markets, there has been no material change, financial or otherwise, in the financial condition, assets, liabilities (contingent or otherwise), business, operations or prospects of the Company or any of its subsidiaries, and no change has occurred in the Information or any part thereof which would have or which could reasonably be expected to have a material effect on the Opinion. In preparing the Opinion, we have made several assumptions, including that all of the conditions to the Offer will be met and that the disclosure provided or incorporated by reference in the Take-over Bid Circular and the draft Directors’ Circular that we reviewed, with respect to the Company, the Acquiror and the Offer is true, complete and correct in all material respects, and that the final version of the Directors’ Circular will not differ in any material respect from the draft Directors’ Circular that we reviewed. The Opinion is rendered on the basis of securities markets, economic, financial and general business conditions prevailing as of the date hereof and the condition and prospects, financial and otherwise, of the Company and the Acquiror as they are reflected in the Information and as they have been represented to BMO Capital Markets in discussions with management of the Company and its representatives. In our analyses and in preparing the Opinion, BMO Capital Markets made numerous judgments and assumptions with respect to industry performance, general business, market and economic conditions and other matters, many of which are beyond our control or that of any party involved in the Offer. The Opinion is provided to the Special Committee and the Board of Directors for its exclusive use only in considering the Offer and may not be used or relied upon by any other person or for any other purpose without our prior written consent. The Opinion does not constitute a recommendation as to whether any Shareholder should tender their shares to the Offer or act on any matter relating to the Offer. Except for the inclusion of the Opinion in its entirety and a summary thereof (in a form acceptable to us) in the Company’s Directors’ Circular, the Opinion is not to be reproduced, disseminated, quoted from or referred to (in whole or in part) without our prior written consent. We have not been asked to prepare and have not prepared a formal valuation or appraisal of the securities or assets of the Company, the Acquiror, or of any of their affiliates, and the Opinion should not be construed as such. The Opinion is not, and should not be construed as, advice as to the price at which the securities of the Company or the Acquiror may trade at any time. BMO Capital Markets was not engaged to review any legal, tax or regulatory aspects of the Offer and the Opinion does not address any such matters. We have relied upon, without independent verification, the assessment by the Company and its legal and tax advisors with respect to such matters. In addition, the Opinion does not address the relative merits of the Offer as compared to any strategic alternatives that may be available to the Company. The Opinion is rendered as of the date hereof and BMO Capital Markets disclaims any undertaking or obligation to advise any person of any change in any fact or matter affecting the Opinion which may come or be brought to the attention of BMO Capital Markets after the date hereof. Without limiting the foregoing, if we learn that any of the information we relied upon in preparing the Opinion was inaccurate, incomplete or misleading in any material respect, BMO Capital Markets reserves the right to change or withdraw the Opinion.

CONCLUSION

Based upon and subject to the foregoing, BMO Capital Markets is of the opinion that, as of the date hereof, the consideration to be received by the Shareholders pursuant to the Offer is inadequate from a financial point of view to the Shareholders.

Yours truly,

BMO Nesbitt Burns Inc.

APPENDIX "B"

GLOSSARY

In the Directors' Circular, the following terms shall have the meanings set forth below, unless the subject matter or context is inconsistent therewith or such terms are otherwise defined in the Directors' Circular.

"ABCA" means the Business Corporations Act (Alberta), as amended;

"Access Pipeline and Stonefell Terminal Sale" means the sale of: (i) MEG's 50% interest in the Access Pipeline and in Access Pipeline Inc.; and (ii) MEG's 100% interest in the Stonefell Terminal, to Wolf Midstream Inc. on March 22, 2018;

"affiliate" has the meaning ascribed to that term in NI 62-104;

"ARC" means an advance ruling certificate pursuant to Section 102 of the Competition Act;

"associate" has the meaning ascribed to that term in NI 62-104;

"BMO Capital Markets" means BMO Nesbitt Burns Inc., financial advisor to MEG;

"BDP" means Burnet, Duckworth & Palmer LLP, legal counsel to MEG and the MEG Board;

"BJ" means Bennett Jones LLP, legal counsel to the Special Committee;

"Cash Consideration" means $11.00 in cash per Common Share;

"CDS" has the meaning provided under the heading "How to Withdraw Your Deposited Common Shares";

"Change of Control" means "Change of Control" as defined in the Change of Control Agreements;

"Change of Control Agreements" means the change of control agreements between certain officers of MEG and MEG, as more fully described under the heading "Arrangements between MEG and its Directors and Officers";

"Common Shares" means the common shares in the capital of MEG;

"Commissioner" means the Commissioner of Competition appointed under subsection 7(1) of the Competition Act or any person duly authorized to perform duties on behalf of the Commissioner of Competition;

"Compensation Committee" means the compensation committee of the MEG Board;

"Competition Act" means the Competition Act (Canada), as amended;

"Competition Act Approval" means, with respect to the transactions contemplated by the Husky Offer, either (i) receipt by the Offeror of an ARC or (ii) the expiry, termination or waiver of the waiting period under Part IX of the Competition Act and the receipt of a No-Action Letter;

"Competition Tribunal" means the tribunal established by subsection 3(1) of the Competition Tribunal Act (Canada);

"Compulsory Acquisition" means the acquisition of the remainder of the Common Shares by way of compulsory acquisition pursuant to Part 16 of the ABCA;

"Directors' Circular" means this directors' circular of MEG dated October 16, 2018;

"DOJ" means the Antitrust Division of the Department of Justice;

"DTC" has the meaning provided under the heading "How to Withdraw Your Deposited Common Shares";

"eMSAGP" means enhanced Modified Steam and Gas Push1;

"eMVAPEX" means Enhanced Modified Vapour Extraction;

"Expiry Time" means 5:00 p.m. (Toronto time) on January 16, 2019, or such earlier or later time or times and date or dates as may be fixed by Husky from time to time pursuant to Section 5 of the Husky Offer, "Extension, Variation or Change in the Offer";

"FTC" means the U.S. Federal Trade Commission;

"Fully Diluted Basis" means, with respect to the number of outstanding Common Shares at any time, the number of Common Shares that would be outstanding if all rights to acquire Common Shares (including MEG Options, MEG Treasury-Settled RSUs and MEG Treasury-Settled PSUs, whether vested or unvested) were exercised or settled, as applicable;

"GLJ" means GLJ Petroleum Consultants Ltd., MEG's independent reserves evaluator;

"HSR Act" means the United States Hart-Scott-Rodino Improvements Act of 1976, as amended;

"HSR Approval" means the expiration or early termination of any waiting period, and any extension thereof, applicable to the completion of the transaction contemplated by the Husky Offer under the HSR Act and neither the FTC nor the DOJ shall have commenced proceedings under an applicable antitrust statute to prevent the consummation of the Husky Offer that have not been resolved;

"Husky" or the "Offeror" means Husky Energy Inc.;

"Husky Board" means the board of directors of Husky as constituted from time to time;

"Husky Circular" means the Husky Offer and the accompanying take-over bid circular of Husky dated October 2, 2018;

"Husky Offer" means the formal take-over bid by Husky dated October 2, 2018, as set forth in and forming part of the Husky Circular, for consideration per Common Share, at the election of the holder of (i) Cash Consideration; or (ii) Share Consideration, subject to pro-ration;

"Husky Shareholder" means a holder of Husky Shares;

"Husky Shares" means common shares in the capital of Husky;

"IFRS" has the meaning provided under the heading "Non-IFRS Measures";

"IMO" means International Maritime Organization;

"Information Agent" or "Kingsdale Advisors" means Kingsdale Advisors, the information agent retained by MEG in connection with the Husky Offer;

"Investment Canada Act" means the Investment Canada Act (Canada), as amended;

"Investment Canada Act Approval" means the responsible Minister under the Investment Canada Act (the "Minister of Innovation, Science and Economic Development") having sent a notice to Husky stating that the

Minister of Innovation, Science and Economic Development is satisfied that the transactions contemplated by the Husky Offer are likely to be of net benefit to Canada or the Minister of Innovation, Science and Economic Development having been deemed to be satisfied that the transactions contemplated by the Husky Offer are likely to be of net benefit to Canada;

"Letter of Transmittal" means the letter of transmittal in the form accompanying the Husky Offer;

"MEG" means MEG Energy Corp., a corporation existing under the ABCA;

"MEG Board" means the board of directors of MEG as constituted from time to time;

"MEG Cash-Settled PSUs" means the performance share units awarded pursuant to the MEG Cash-Settled RSU Plan, including any related dividend equivalent units;

"MEG Cash-Settled RSU Plan" means MEG's amended and restated Cash-Settled RSU plan;

"MEG Cash-Settled RSUs" means the restricted share units awarded pursuant to the MEG Cash-Settled RSU Plan, including any related dividend equivalent units;

"MEG DSU Plan" means the MEG Directors Deferred Share Unit Plan;

"MEG DSUs" means deferred share units awarded pursuant to the MEG DSU Plan, including any related dividend equivalent units;

"MEG LTI Plans" means the MEG Option Plan and the MEG RSU Plans;

"MEG Option Plan" means MEG's amended and restated stock option plan;

"MEG Options" means options awarded pursuant to the MEG Option Plan;

"MEG PSUs" means, together, the MEG Treasury-Settled PSUs and the MEG Cash-Settled PSUs;

"MEG RSUs" means, together, the MEG Treasury-Settled RSUs and the MEG Cash-Settled RSUs;

"MEG RSU Plans" means together, the MEG Cash-Settled RSU Plan and the MEG Treasury-Settled RSU Plan;

"MEG Treasury-Settled PSUs" means the performance share units awarded pursuant to the MEG Treasury-Settled RSU Plan, including any related dividend equivalent units;

"MEG Treasury-Settled RSU Plan" means MEG's amended and restated Treasury-Settled RSU Plan;

"MEG Treasury-Settled RSUs" means the restricted share units awarded pursuant to the MEG Treasury-Settled RSU Plan, including any related dividend equivalent units;

"NI 51-101" means National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities, as amended;

"NI 62-104" means National Instrument 62-104 – Take-Over Bids and Issuer Bids, as amended;

"No-Action Letter" means a letter indicating that the Commissioner does not, at that time, intend to challenge the transaction by making an application to the Competition Tribunal under Section 92 of the Competition Act while reserving the Commissioner's statutory right to challenge the transaction under Section 92 of the Competition Act before the Competition Tribunal at any time within one year of the transaction being completed;

"Non-IFRS Measures" has the meaning provided under the heading "Non-IFRS Measures";

"Preferred Shares" means the preferred shares, issuable in series, of MEG;

"SAGD" means steam-assisted gravity drainage;

"SEC" means the United States Securities and Exchange Commission;

"SEDAR" means the System for Electronic Document Analysis and Retrieval;

"Separation Time" has the meaning given to it under the heading "Shareholder Rights Plan";

"Shareholder" means a holder of Common Shares;

"Share Consideration" means 0.485 of a Husky Share per Common Share;

"Shareholder Rights Plan" means the amended and restated shareholder rights plan agreement dated as of May 25, 2017, amending and restating the amended and restated shareholder rights plan agreement dated as of May 1, 2014, between MEG and the SRP Rights Agent, and any shareholder rights plan adopted by MEG after that date;

"SOR" means steam-oil ratio;

"Special Committee" means the special committee of independent directors established by the MEG Board to assist and make recommendations in respect of, among other things, the Husky Offer, and consisting of Messrs. Doerr, Hodgins, Hodgson and Ms. McQueen with Mr. McCaig as an ex-officio member;

"SRP Rights" means the rights issued pursuant to the Shareholder Rights Plan, and "SRP Right" means any one of them;

"SRP Rights Agent" means Computershare Trust Company of Canada, the rights agent under the Shareholder Rights Plan;

"subsidiary" has the meaning given to it under the Securities Act (Alberta);

"Take-over Bid Circular Form" means Form 62-104F1 – Take-over Bid Circular;

"Take-Up Date" means a date upon which the Offeror takes up or acquires Common Shares pursuant to the Husky Offer;

"Transportation Act" means the Canada Transportation Act (Canada), as amended;

"Transportation Act Approval" means receipt by the Offeror of (i) written confirmation from the Minister of Transport that in the Minister's opinion the transactions contemplated by the Husky Offer do not raise issues with respect to the public interest as it relates to national transportation, or (ii) if the Minister of Transport is of the opinion that the transactions contemplated by the Husky Offer raise issues with respect to the public interest as it relates to national transportation, the approval of the Governor-in-Council on terms satisfactory to the Offeror; and

"TSX" means the Toronto Stock Exchange.

Words importing the singular include the plural and vice versa and words importing any gender include all genders.

Any questions and requests for assistance may be directed to 0(*(QHUJ\&RUS·V,QIRUPDWLRQ$JHQW Kingsdale Advisors

North American Toll Free Phone 1.866.228.8614

E-mail: [email protected]

Fax: 416.867.2271 Toll Free Facsimile: 1.866.545.5580

Outside North America, Banks and Brokers Call Collect: 416.867.2272

For updated information Shareholders are encouraged to visit our website at www.megenergy.com