Greenfire Resources Q3 2025 Earnings Call - Transformational Recapitalization and Operational Reset Underway

Conference Operator: Good morning, ladies and gentlemen. Welcome to the Greenfire Resources Third Quarter 2025 Results Conference call. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity for research analysts to ask questions. To join the question queue, you may press star, then one on your telephone keypad, and should you need assistance during the conference call, you may signal an operator by pressing star, then zero. I’ll now turn the meeting over to Robert Loebach, Vice President, Commercial. Please go ahead, Robert.

Robert Loebach, Vice President, Commercial, Greenfire Resources: Thank you, Operator. Good morning, and welcome to Greenfire’s conference call for our Q3 2025 results. Please note that today’s call includes forward-looking statements and references non-GAAP and other financial measures. We encourage you to review the associated risks detailed in our latest MD&A. Unless specified otherwise, all monetary figures discussed today are in Canadian dollars. Capital expenditures and production figures presented today are based on our working interest, net to Greenfire, unless noted otherwise. Joining us on today’s call are key members of the Greenfire team, including Adam Waterous, Executive Chairman; Colin Germaniuk, President; Jonathan Kanderka, Chief Operating Officer; Travis Belach, Vice President, Finance; and Riley Waterous, Principal at WEF and Observer on the Greenfire Board. Upon conclusion of our prepared remarks, we’ll open the floor to questions from research analysts. I’ll now hand the call over to Colin.

Colin Germaniuk, President, Greenfire Resources: Good morning, and thank you, everyone, for joining Greenfire’s Q3 2025 conference call. On this morning’s call, there are three topics I would like to discuss before opening up the call to questions from our analysts. First, I will provide an overview of Greenfire’s recapitalization plan. Second, I will provide an update on Greenfire’s current year operations. Third, I’ll provide a progress update on our longer-term development plans. As we have previously communicated with our stakeholders, it’s no secret that we believe the business today has too much leverage, in part due to the current oil price outlook, but more importantly, due to the significant amount of growth capital that needs to be invested to optimize the assets. At current strip pricing, Greenfire’s heavy growth capital-focused long-range plan means Greenfire is poised to materially outspend cash flow over the next two to three years, increasing our debt balance further.

Accordingly, we have determined that a refinancing transaction which results in not only a change in the structure of Greenfire’s debt, but also an absolute debt reduction of the business, is a critical first step to embarking on our organic growth business plan to fill the plant capacity at the Hanging Stone facilities. With that background, I’m very excited to announce a transformational recapitalization plan for Greenfire, in which we intend to fully repay all of our outstanding senior secured notes via a combination of cash on our balance sheet and a $300 million equity rights offering, which will be fully backstopped by Waterous Energy Fund. A rights offering is an equity capital raise offered to Greenfire’s existing shareholders, whereby each Greenfire shareholder has the opportunity to subscribe for their pro rata share of the offering, in turn giving all shareholders an equal opportunity to participate and avoid being diluted.

In the event any shareholders elect not to take up their pro rata share of the offering, Waterous Energy Fund, serving as the backstop for the transaction, will purchase those unallocated shares to ensure the desired $300 million capital raise is met. In addition, we are also excited to announce that we have secured commitments for an upsized $275 million revolving credit facility with the syndicate of Canadian banks. This credit facility is a conventional reserve-based loan with a two-year term and will have a cost of capital that is approximately one-half of the notes we will be redeeming. At closing of this recapitalization plan, this credit facility is anticipated to be undrawn, and Greenfire is expected to be debt-free.

With regards to the current operations, first and foremost, following strong base well performance at the Hanging Stone facilities, we expect to hit the top end of our 2025 production guidance range, which is 15,000-16,000 barrels a day. We also reaffirm our 2025 capital guidance target of $130 million. Next, I would like to provide an update on Greenfire’s two primary operational challenges in 2025, those being the previously disclosed boiler outage and sulfur emission exceedances. With regards to the boiler outage, Greenfire has successfully restored the failed boiler at the expansion asset ahead of schedule, but has elected to proactively refurbish a second boiler for precautionary purposes. Consequently, we expect to return to full steam capacity at the expansion asset by year-end 2025.

With regards to Greenfire’s sulfur emission exceedances, the company continues to engage with the Alberta Energy Regulator, and we have commenced the installation of sulfur removal facilities at the expansion asset. We expect these sulfur removal facilities will be operational in November 2025, which we anticipate will restore full compliance with emission standards. Finally, I’d like to touch on Greenfire’s 2026 business plan. Greenfire’s Board of Directors has approved a 2026 capital budget of $180 million, with anticipated annual bitumen production of 15,500-16,500 barrels per day. Big picture, despite our expectation that the expansion asset will resume at full steam capacity at year-end 2025, we anticipate production levels to nonetheless be relatively flat in 2026, primarily due to two reasons. One, all of the growth capital projects at the expansion asset are not expected to reach first oil until late Q4 2026.

Two, Greenfire has a planned major turnaround at the expansion asset in May 2026, resulting in a full plant outage for that month. With regards to the specific growth capital projects, as has been previously disclosed, Greenfire anticipates commencing drilling operations at its inaugural SAGD well pad, Pad 7, in November 2025. Pad 7 comprises 13 well pairs, with first oil anticipated in the fourth quarter of 2026. In addition to Pad 7, Greenfire plans to drill new wells at the expansion asset in 2026, including three infill wells and three well pairs from an existing SAGD pad, although first oil from these wells is not expected until 2027. At the demo asset in the fourth quarter of 2025, Greenfire intends to pursue redevelopment opportunities at two existing shut-in well pairs originally drilled in 2010, with associated incremental production coming online in the first half of 2026.

Beyond this redevelopment program, Greenfire’s primary focus at the demo asset remains on base production optimization to sustain current production rates. This concludes our plan remarks for the Q3 conference call, and we will now open it up to questions.

Conference Operator: Thank you. The floor is now open for questions. Again, if you have dialed in and would like to ask a question, please press star one on your telephone keypad to join the queue. If you’d like to remove yourself from the queue, just simply press star one again. There are no questions. I will now turn the conference over to Robert Loebach for closing remarks.

Robert Loebach, Vice President, Commercial, Greenfire Resources: Thank you, Operator. On behalf of Greenfire, we appreciate you joining us in our Q3 2025 results conference call. Have a great day.

Conference Operator: This concludes today’s conference call. You may now disconnect.