Greenfire is more of a special situation play, but if the event doesnt place, then you get to ride in an Adam Waterous Athabasca Basin oil play. Essentially Adam Waterous through his private equity firm, Waterous Energy Firm, bought a 56% in Greenfire in Q4 2024. They bought around 8.80 and are 35-40% underwater as I type. Now, its almost inevitable GFR gets eaten by Adams main vehicle, Strathcona Resources. It will most likely happen after we find out the near term fate of Meg Energy. Adam has said numerous times he wants all his acquired companies operating under one roof as thats where the synergies take place, i.e. stronger together through ; a lower cost of capital, sharing of data and learnings, employees able to move around as expertise fits, and more production spread over a smaller fixed costs.
I plan on buying alot of GFR shares after TNZ re-rates after there next inevitable deal. I see it as a win-win situation. For AW not to consolidate it into SCR is going against his business strategy of rolling-up single asset companies into a big behometh and getting economies of scale. How and when he does it is up for debate. My guess is it happens after the MEG saga is concluded, or if no deal, then GFR will be swallowed. GFR can also re-finance there bond after October at 106% which I used as a tell-tale signal for consolidation back when AW initially bought. If you ever wanted to see the last managements competence level just look at the way they structured that note. 12% yield and so many convenants that kept the company chained it was unbelievable. If Adam gets MEG, then SCR cost of capital will be very low, Adam estimates 4% ish, which will be >50% lower than GFR will manage as a solo entity. How he buys it is open for debate. Does he do a cash buyout whilst its sitting at $5 and get tax losses for WEF partners, or does he do all equity and enhance WEF ownership of SCR and bring in some extra free-trading shares? I dont know, and I dont mind either way. Id prefer tax free shares of SCR, but if I get a cash premium then I'd probably use that cash to buy into SCR and ride SCR during an oil bull cycle.
I think its likely Adam tries to buy ATH.TO hangingstone asset adjacent to GFR's expansion asset. It produces around 9k bpd and is very undercapitalised. ATH has used it as a cash cow to fix the balance sheet and buyback shares effectively. It needs some TLC, and no doubt there would be some operational synergies by combining the two assets together. ATH has the Corner asset to develop so some extra cash in there bank surely wouldnt go amidst. I guess the two things stopping it are; price and the fact the Calary Country Club will do what it can to stop Adam from getting too big.
The expansion asset is owned 75% by GFR right now, with the remaining 25% being owned by CNOOC, who has said they want to divest there assets from onshore Canada. They also own Long Lake which produces around 50-70k bpd, with capacity for 72k bpd, which I'm sure would fit in nicely with Adam if economics and value were to his liking. I read CNOOC wants to divest from Canada due to fears of Western sanctions one day.
I also read PetroChina wants to divest its MacKay River Oilsands and Dover Oilsands assets. MacKay produces around 10k bpd and Dover is undeveloped 250k bpd project wit 50 years of reserves. These assets dont seem as good a quality, but highlighting more the assets which could be consolidated.