Greenfire Resources Ltd. · TSX:GFR
Greenfire Resources — Investor Presentation (October 2023)
36 slides from Greenfire Resources's investor presentation, Oct 10, 2023
Slide 1: Redefining Oil Sands Expectations Corporate Presentation
Redefini n g Oil Sands Expectations Corpo r a te P r es e n t a tion Oct o ber 2 0 2 3 NYSE: GFR
Slide 2: Corporate Snapshot
Greenfire is an intermediate, lower - cost and growth - oriented oil sands producer focused on the sustainable development of its Tier - 1 assets in Western Canada using steam assisted gravity drainage (“SAGD”) CORPORATE SNAPSHOT Key Capital Structure & Company Details 2 Ha n ging st o ne Fac ili t
Slide 3: Asset & Positioning Overview
ASSET & POSITIONING OVERVIEW Concentrated Tier - 1 oil sands resource with two producing SAGD assets and expandable pipeline infrastructure in place Company Profile Two Producing SAGD Assets • Intermediate oil sands producer operating in the Athabasca region • Large Tier - 1 oil sands resource base
Slide 4: Corporate Strategy & Reserves Overview
CORPORATE STRATEGY & RESERVES OVERVIEW Greenfire’s strategy is to implement proven SAGD optimization techniques to maximize the value of its currently underdeveloped Tier - 1 SAGD assets • Acquired conservatively operated SAGD assets with ample opportunities for capital - efficient production growth
Slide 5: Why Own Greenfire Resources
WHY OWN GREENFIRE RESOURCES Slides Corporate Strategy and Differentiation 7 - 9 Intermediate Pure Play Producer with a Differentiated Tier - 1 Oil Sands Reservoir 10 - 13 Two Producing SAGD Facilities with Expandable Pipeline Infrastructure in Place 14 - 20 Industry Established and Capital Efficient
Slide 6: Strategy & Corporate Differentiation
STRATEGY & CORPORATE DIFFERENTIATION
Slide 7: Pure Play Producer with a Differentiated Tier-1 Reservoir: Attributes
PURE PLAY PRODUCER WITH A DIFFERENTIATED TIER 1 RESERVOIR ATTRIBUTES OF A TIER - 1 SAGD RESERVOIR Tier - 1 SAGD reservoirs have no top gas, bottom water or lean zones • These “thief zones” provide an unwanted outlet for steam and reservoir pressure • Thief zones require costly downhole pumps and rec
Slide 8: Productivity & Recovery Benefits of a Tier-1 Reservoir
PURE PLAY PRODUCER WITH A DIFFERENTIATED TIER 1 RESERVOIR PRODUCTIVITY & RECOVERY BENEFITS OF A TIER - 1 RESERVOIR Tier - 1 reservoirs that flow on natural lift are not subject to downhole pump replacement economics, extending well life and increasing expected ultimate recoveries • Given the economi
Slide 9: Structural Cost Advantages of a Tier-1 SAGD Reservoir
PURE PLAY PRODUCER WITH A DIFFERENTIATED TIER 1 RESERVOIR • An illustrative estimate of Greenfire’s operating and capex savings from not having to install, maintain and replace downhole pumps, which assumes: o All Greenfire’s operated SAGD wells are online o One 100 HP downhole pump required per pro
Slide 10: Two Producing SAGD Facilities & Expandable Infrastructure
TWO PRODUCING SAGD FACILITIES & EXPANDABLE INFRASTRUCTURE • The capital expenditure profile for SAGD assets is largely spent upfront to build processing facilities and major infrastructure • Greenfire has two currently producing SAGD facilities: o Expansion Asset o Demo Asset • The Hangingstone Faci
Slide 11: Expansion Asset Highlights
TWO PRODUCING SAGD FACILITIES & EXPANDABLE INFRASTRUCTURE • Since Greenfire acquired the Expansion Asset, capital expenditures have been primarily directed towards major maintenance and quick - payout optimization projects • No new well pairs have been drilled since the facility was commissioned in
Slide 12: Demo Asset Highlights
TWO PRODUCING SAGD FACILITIES & EXPANDABLE INFRASTRUCTURE • Over nearly two decades, declines at the Demo Asset have remained relatively low without drilling any infill or Refill wells ; most recent well pairs drilled in 2013 • Under Greenfire’s operatorship, production per well has increased at the
Slide 13: Expandable Regional Infrastructure & Optionality
TWO PRODUCING SAGD FACILITIES & EXPANDABLE INFRASTRUCTURE EXPANDABLE REGIONAL INFRASTRUCTURE & OPTIONALITY Hangingstone Facilities are connected to major pipeline systems without outsized take - or - pay commitments Diluted Bitumen Transportation • Expansion Asset to Cheecham via Enbridge Lateral •
Slide 14: Greenfire Resources 2023 Development Plan
CAPITAL EFFICIENT PRODUCTION GROWTH PLAN GREENFIRE RESOURCES 2023 DEVELOPMENT PLAN 1 9 . 0 2 3 . 1 2 0 . 5 $ 4 $ 9 $ 4 0 $ 3 4 ~20 -- $ 10 $ 20 $ 30 $ 4 0 $ 50 -- 5 10 15 20 25 30 Q1 - Q3 2021 Q4 2021 2022A 2023E (1) Specified financial measures do not have any standardized meaning prescribed by IFR
Slide 15: Expansion Asset - Restoring Higher Reservoir Pressure
CAPITAL EFFICIENT PRODUCTION GROWTH PLAN • Industry has proven the ability to increase SAGD reservoir pressure with non - condensable gas (“NCG”) co - injection • In two separate instances, Greenfire previously utilized NCG co - injection to restore higher reservoir pressure and increase productivit
Slide 16: Infill & Refill Producer Wells
CAPITAL EFFICIENT PRODUCTION GROWTH PLAN Infill & redevelopment infill (“Refill”) producer wells Infill Producer Wells: • Drill additional infill producer between two existing well pairs to produce incremental pre - heated bitumen between SAGD wellpairs • Requires procuring an additional wellhead, c
Slide 17: Extended Reach Refill - Productivity & Cost Advantages
CAPITAL EFFICIENT PRODUCTION GROWTH PLAN Extended Reach Refill Producer Wells – Additional Productivity and Cost Benefits: • Utilize a single Refill producer across two existing SAGD producer pads to access incremental pre - heated bitumen o Targeting 1,600 meters of total horizontal length across t
Slide 18: Industry Realizing Economic Benefits from Refill Wells
CAPITAL EFFICIENT PRODUCTION GROWTH PLAN INDUSTRY REALIZING ECONOMIC BENEFITS FROM REFILL WELLS Source: geoSCOUT, Enverus, AER Note: Refill well counts include wells drilled closer than 10m to original producer (which could be classified as re - drills) Capital efficiency comparison of primary, infi
Slide 19: Industry Productivity Track Record with Refill Wells
CAPITAL EFFICIENT PRODUCTION GROWTH PLAN 10% 1% 11% 25% 2% 3% 18% 7% 10% 11% 16% 3% 33% 15% 17% 90% 82% 84% 88% 73% 72% 65% 85% 80% GRE E NFI R E ATH CN Q CVE CNOOC COP M E G S TRATHCONA SU Production Rate (bbl/d) INDUSTRY PRODUCTIVITY TRACK RECORD WITH REFILL WELLS Source: geoSCOUT, Enverus, AER No
Slide 20: Industry Refill Well Productivity Improvements
CAPITAL EFFICIENT PRODUCTION GROWTH PLAN 0 500 1 , 00 0 1 , 50 0 2 , 00 0 2 , 50 0 3 , 00 0 One - Mile Normalized First 12 Months Average Production Rate (bbl/d/mile) 2021 & 2022 Wells INDUSTRY REFILL WELL PRODUCTIVITY IMPROVEMENTS First 12 Months Average Production Rate by Type Pr im ary I n f i ll
Slide 21: Free Cash Flow Generation & Heavy Oil Upside Potential
STRONG FREE CASH FLOW GENERATION + MATERIAL EXPOSURE TO CANADIAN HEAVY OIL PRICES FREE CASH FLOW GENERATION & HEAVY OIL UPSIDE POTENTIAL Hangingstone Facilities FCF Generation • The capital expenditure profile for SAGD assets is largely spent upfront to build processing facilities and major infrastr
Slide 22: Canadian Heavy Oil Differentials and Pipeline Egress
STRONG FREE CASH FLOW GENERATION + MATERIAL EXPOSURE TO CANADIAN HEAVY OIL PRICES Canadian product differentials are expected to be relatively less volatile moving forward as the Western Canadian basin will be long pipeline egress with the potential for further capacity increases over time • Trans M
Slide 23: North American Heavy Oil Pipelines & Markets
STRONG FREE CASH FLOW GENERATION + MATERIAL EXPOSURE TO CANADIAN HEAVY OIL PRICES NORTH AMERICAN HEAVY OIL PIPELINES & MARKETS Source: BMO Capital Markets; EIA PADD I PADD II PADD III P A DD I V PADD V D e l i v e r y P i p e l i ne s Other Pipelines Canada Heavy Oil Exports to U.S. (mmbbl/d) 3.5 3.
Slide 24: Strategic Priorities - Growth, Debt Reduction and Shareholder Returns
STRATEGIC PRIORITIES – GROWTH, DEBT REDUCTION AND FUTURE SHAREHOLDER RETURNS STRATEGIC PRIORITIES FOR FREE CASH FLOW 1. Production Growth & Debt Reduction • Concurrent with Greenfire’s near - term production growth plans at the Hangingstone Facilities, the Company will continue to prioritize debt re
Slide 25: Additional Strategic Considerations & Appendix
ADDITIONAL STRATEGIC CONSIDERATIONS & APPENDIX
Slide 26: Methodical Approach to Commodity Risk Management
METHODICAL APPROACH TO COMMODITY RISK MANAGEMENT COMMODITY RISK MANAGEMENT • Greenfire’s approach to commodity risk management is to methodically hedge WTI on a rolling 12 - month basis • The objective of this risk management strategy is to ensure sufficient downside protection while maintaining a d
Slide 27: Sustainability
SUSTAINABILITY COMMITMENT TO SUSTAINABILITY Reduced Diluent Use & Waste Attentive operations team and processes operate equipment at enhanced conditions to target reduced diluent loss and usage. Greenfire’s production growth and optimizations are targeting greater operational efficiencies ENVIRONMEN
Slide 28: Capitalization Details
CAPITALIZATION DETAILS CORPORATE CAPITALIZATION 28 Share Structure (millions of shares) US$340 MM Market Capitalization (outstanding) 1 68.7 Issued & outstanding 7.5 Warrants 2 @ US$11.50 3.6 Performance Warrants 3 79.8 Fully Diluted US$300MM 12% Senior Secured Notes Due 10/01/2028 Issued September
Slide 29: Select Historical Financial Data
SELECT HISTORICAL FINANCIAL DATA SELECT HISTORICAL FINANCIALS - FY 2022 & H1 2023 (3) Diluent expense per barrel of bitumen sold 29 H 1 2 0 23 FY 2022 $75 $94 WTI ($US/bbl) ($20) ($18) WCS Differential ($US/bbl) 1.35 1.30 FX (C$/US$) 19.3 20.5 Consolidated Net Production (mbbl/d) C$/bbl (1) C$ MM C$
Slide 30: Independent Reserves - Canadian Standards
ADDITIONAL INFORMATION, RESERVES DETAILS AND ESG 2022 year - end NI 51 - 101 compliant reserves at January 2023 3CA pricing ▪ McDaniel and Associates prepared independent reserves evaluations for Hangingstone Expansion and Demo in accordance with National Instrument 51 - 101 Standards of Disclosure
Slide 31: Independent Reserves - US Standards
ADDITIONAL INFORMATION, RESERVES DETAILS AND ESG 2022 year - end SEC compliant reserves at 2022 historical pricing ▪ McDaniel and Associates prepared independent reserves evaluations for Greenfire Resources in accordance with and United States Securities and Exchange Commission (“SEC”) requirements,
Slide 32: Steam Assisted Gravity Drainage (SAGD)
ADDITIONAL INFORMATION, RESERVES DETAILS AND ESG Enhanced oil extraction method where bitumen is heated and recovered from the ground, leaving most residual solids behind SAGD In - situ Oil Sands Extraction • ~80% of Alberta's bitumen is too deep for mining and must be extracted in - place (or in -
Slide 33: Canadian Energy Environmental Leadership
ADDITIONAL INFORMATION, RESERVES DETAILS AND ESG CANADIAN ENERGY ENVIRONMENTAL LEADERSHIP • Canada places #1 when independently ranked vs. top reserve holding countries on governance, social progress and environmental performance • Alberta’s energy sector has virtually eliminated non - routine flari
Slide 34: General Disclaimer
General Disclaimer This investor presentation (this "Presentation") was prepared by Greenfire Resources Ltd . (the "Company" or "Greenfire") . This Presentation is for its intended audience and for informational purposes only . The information contained herein does not purport to be all - inclusive
Slide 35: Forward-Looking Statements
Forward - Looking Statements This presentation may contain certain forward - looking statements within the meaning of United States federal securities laws and applicable Canadian securities laws . These forward - looking statements generally are identified by the words "believe," "project," "expect
Slide 36: Specified Financial Measures
SPECIFIED FINANCIAL MEASURES 36 Certain financial measures in this presentation do not have a standardized meaning prescribed by IFRS and, therefore, are considered Specified Financial Measures. These Specified Financial Measures may not be comparable to similar measures presented by other issuers.
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