Greenfire Resources Ltd Stock Price, News & Analysis

Greenfire Resources announces a significant 72% increase in Total Proved and Probable (2P) reserves with a net present value after-tax of $2.7 billion, or $32.89 per diluted share net of debt. The updated reserves report by McDaniel & Associates shows Total Proved (1P) Reserves of approximately 235 million barrels of bitumen with an NPV10 AT of $2.2 billion.

The evaluation includes the Hangingstone Expansion Facility and Demonstration Facility, recognizing existing production capacities of 35,000 bbl/d at the existing plant, planned 15,000 bbl/d Brownfield Expansion, and 10,000 bbl/d at the Demo Asset. A separate Management Accelerated Development Scenario, including the McKay CPF relocation, shows potential for additional value of $357 million.

Waterous Energy Fund (WEF), owning 43% of Greenfire Resources (TSX/NYSE: GFR), has requisitioned a special meeting to replace the entire board of directors. WEF cites three main reasons: consistently poor performance, with production missing targets by 29-42% while capital expenditure increased 494%; board self-enrichment through consulting agreements and change-of-control benefits; and wasteful resource management through multiple shareholder rights plans and legal actions. WEF proposes six new directors and aims to hold the meeting by January 2025. The company's stock has underperformed with a -31.3% return since its de-SPAC transaction, compared to the XEG index's +10.7%.

Greenfire Resources (NYSE/TSX: GFR) has received a letter from Waterous Energy Fund (WEF), which recently acquired 43.3% of Greenfire's shares, demanding the resignation of all current directors to be replaced by WEF nominees. The Board views this as an attempt to gain control without offering a premium to shareholders. Greenfire has adopted a shareholder rights plan and filed a court application regarding the share sale that gave WEF negative control. The Board expresses concerns about WEF's proposed nominees, noting that four are WEF employees and Strathcona Resources directors, potentially compromising governance standards. The company is evaluating the situation while maintaining its focus on maximizing shareholder value.

Greenfire Resources reported strong Q3 2024 results with consolidated production of 19,125 bbls/d, up 30% year-over-year. The company generated oil sales of $193.6M, adjusted EBITDA of $53.4M, and net income of $58.9M. November 2024 production is estimated at 21,275 bbls/d. The company redeemed $84.3M of its 2028 Notes in July, leaving $322.6M outstanding. Capital expenditures totaled $21.2M in Q3. The Board initiated a strategic review process to explore value-maximizing options, with Waterous Energy Fund acquiring 43.3% of outstanding shares. Annual production for 2024 is expected to average 19,500 bbls/d, slightly below guidance due to regulatory delays and extended steam circulation requirements.

Greenfire Resources (NYSE: GFR) (TSX: GFR) announces that the Toronto Stock Exchange (TSX) has deferred consideration of its new shareholder protection rights plan agreement from November 2024. The deferral will remain until the TSX is satisfied that securities commissions won't intervene under National Policy 62-202. This new plan was adopted following the Alberta Securities Commission's cease trade order on November 6, 2024, affecting all securities under Greenfire's previous rights plan from September 18, 2024. Despite the TSX's deferred consideration, the new rights plan remains in effect.

Waterous Energy Fund Management Corp. has closed its acquisition of 43.3% of Greenfire Resources 's shares. The transaction involved purchasing 29,988,854 common shares for USD$8.05 per share, totaling approximately USD$241,261,721. The acquisition follows a decision by the Alberta Securities Commission on November 6, 2024, which granted WEF's application to cease trade Greenfire's initial shareholder rights plan and dismissed Greenfire's cross-application to cease trade the transaction.

Greenfire Resources (NYSE: GFR) has filed an injunction to halt the sale of 43.3% of shares to Waterous Energy Fund Management (WEF) following Alberta Securities Commission's decision to cease trade the company's shareholder rights protection plan. The company believes WEF's ownership could hinder its strategic review process and value maximization efforts. Several interested parties have indicated reduced interest in pursuing deals with Greenfire if the WEF transaction completes.

In response, Greenfire has adopted a new -purpose shareholder protection rights plan to ensure fair treatment of shareholders and protect the strategic review process. The company is also pursuing growth initiatives, including plans to utilize unused production capacity and implement facility expansions at its Hangingstone assets.

Greenfire Resources (NYSE/TSX: GFR) provides updates on its strategic review process initiated in July 2024. TD Securities was engaged as financial advisor, and the company is exploring a corporate sale with interest from multiple parties. The Special Committee has also engaged TPH&Co to support the evaluation of strategic alternatives. The company's updated reserves report by McDaniel & Associates is expected in the second half of November 2024, which will assess modern drilling practices, SAGD technologies, and development plans. Q3 2024 financial results will be released after markets close on November 14, 2024, followed by a conference call on November 15.

Greenfire Resources (NYSE: GFR) (TSX: GFR) has announced future growth plans aimed at increasing net facility production capacity by 74%, potentially adding significant value for shareholders. The company plans to implement a modernized SAGD drilling strategy, consolidate well pads into a Super Pad design, and expand existing facilities. Key highlights include:

• Potential brownfield expansion of the Expansion Asset to add 11,300 bbls/d capacity
• Relocation of a recently acquired SAGD facility to add another 11,300 bbls/d
• Increase production capacity at the Demo Asset by 2,500 bbls/d to 10,000 bbls/d

These initiatives are expected to increase Greenfire's production capacity to approximately 58,800 bbls/d (75,000 bbls/d, 100% working interest). The company anticipates cost structure improvements and increased free cash flow generation potential from these plans.