CALGARY, Canada--(BUSINESS WIRE)--Greenfire Acquisition Corporation (“GAC” or the “Company”) announces the successful closing of the strategic acquisition of Japan Canada Oil Sands Limited (“JACOS”), which includes a 75% working interest and operatorship of the Hangingstone Expansion site. The definitive sale and purchase agreement to acquire all shares of JACOS, first announced on July 29, 2021 (the “Acquisition”), was executed via a GAC-affiliated special purpose acquisition vehicle named HE Acquisition Corporation (“HAC”).
Strategic Rationale
The strategic Acquisition of JACOS unites the Greenfire Hangingstone asset, held by GAC, with the immediately adjacent Hangingstone Expansion site, which share the same tier one oil sands reservoir. GAC plans to sustainably increase production at Hangingstone Expansion through the site’s existing infrastructure, employing the same safe, efficient, and capital-disciplined operating approach that the Company utilized to optimise conditions at the Greenfire Hangingstone asset. Leveraging its deep oil sands expertise, GAC expects these improvements will lead to a material enhancement in profitability and a step change reduction in the site’s carbon intensity per barrel of oil.
Outlook
Management estimates that the combined production from GAC’s portfolio will be more than 20,000 barrels per day (bbl/d) in the near-term and in excess of 30,000 bbl/d in the mid-term.
Corporate Reorganization
The Acquisition represents a major milestone for GAC and its business strategy, positioning the Company as an intermediate sized and low-cost oil sands producer focused on responsible energy development in Canada. Concurrent with the closing of the acquisition and with a positive outlook in future direction, Greenfire Acquisition Corporation will undergo an internal reorganization, which will result in a new go-forward operating entity of the Hangingstone assets named "Greenfire Resources Operating Corporation" (“GROC”). GROC will remain an operationally focussed company with an emphasis on an entrepreneurial environment and employee ownership, which are key pillars of the Company’s identity. By retaining “Greenfire” in the corporate name, it signifies stakeholders’ support and trust in the Company’s employees to continue creating, enhancing and delivering long term value.
GROC, which is backed by McIntyre Partners and Griffon Partners, continues to see a range of attractive investment opportunities in the oil and gas sector in Canada and internationally.
About Greenfire Resources Operating Corporation
GROC explores, acquires, develops and produces oil and gas in the Canadian energy sector and internationally. In 2020, the Company’s operations team was awarded the Energy Excellence Awards Champion for Project Excellence in Oilsands, voted by its peers to recognize energy excellence and focused on advancement and collaboration with Canada’s energy sector. GROC is well capitalized to seek additional oil and gas assets within Canada.
About McIntyre Partners and Griffon Partners
McIntyre Partners and Griffon Partners are private investment firms focused on long-term investments and acquisitions in the natural resources and infrastructure sectors.
Disclosure Regarding Forward-Looking Statements
This news release includes forward-looking statements within the meaning of applicable securities laws relating to the Company's plans and other aspects of the Company's anticipated future operations, management focus, objectives, strategies, financial, operating and production results. Forward-looking statements typically use words such as "anticipate", "believe", "project", "expect", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future. Although the Company believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and you should not unduly rely on forward-looking statements.
These forward-looking statements are based on various assumptions including, but not limited to, the Company's strategy, plans, focus, objectives, priorities and position; the terms and conditions of the Acquisition; that the Acquisition is synergistic with the Company's existing Hangingstone assets and operations and that the Acquisition will allow the Company to achieve economies of scale and utilize existing operating approach and expertise to optimise conditions at the Hangingstone asset, materially enhance profitability and reduce the site’s carbon intensity per barrel of oil; the benefits of the Acquisition including, without limitation, the estimate that the Acquisition will result in a production levels to more than 20,000 bbl/d in the near-term and in excess of 30,000 bbl/d in the mid-term; the expected timing to affect the internal reorganization of the Company; and ongoing and future stakeholder support of the Company. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. The Company cautions that future events may be affected by a number of factors, many of which are beyond its control and results may vary substantially from what the Company currently foresees.
By their nature, forward-looking statements involve numerous known and unknown risks and uncertainties and other factors that contribute to the possibility that the predicted outcome will not occur, including, without limitation: the impact of general economic conditions; volatility in market prices for crude oil and natural gas; industry conditions; currency fluctuations; imprecision of reserve estimates; liabilities inherent in crude oil and natural gas operations; environmental risks; incorrect assessments of the value of acquisitions and exploration and development programs; competition from other producers; the lack of availability of qualified personnel or other services; changes in income tax laws or changes in royalty rates and incentive programs relating to the oil and gas industry and abandonment and reclamation programs; hazards such as fire, explosion, blowouts, and spills, each of which could result in substantial damage to production facilities, other property and the environment or in personal injury; the Company's ability to access sufficient capital from internal and external sources and failure to realize on the benefits of the Acquisition moving forward.
Management has included the forward-looking statements above and a summary of assumptions and risks related to forward-looking statements provided in this news release in order to provide readers with a more complete perspective on the Company's future operations and such information may not be appropriate for other purposes. Readers are cautioned that the foregoing list of factors is not exhaustive and that the forward-looking statements contained in this news release are made as the date of this news release. The Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
