Greenfire Resources Ltd. · TSX:GFR
Greenfire Resources — SPAC Merger (June 2023)
51 slides from Greenfire Resources's SPAC merger presentation, Jun 16, 2023
Slide 1: Greenfire Resources Business Combination with M3-Brigade Acquisition III Corp.
GREENFIRE RESOURCES INC. BUSINESS COMBINATION WITH M3 - BRIGADE ACQUISITION III CORP. UPDATED FOR REVISED FINANCIAL OUTLOOK – JUNE 12, 2023
Slide 2: Disclaimer and Table of Contents
DISCLAIMER TABLE OF CONTENTS General Disclaimer and Confidentiality This confidential investor presentation (this “Presentation”) was prepared by M 3 - Brigade Acquisition III Corp . (the “SPAC” or “MBSC”) and Greenfire Resources Inc . (the “Company” or “Greenfire”) . This Presentation is for its in
Slide 3: Non-IFRS Measures and Forward-Looking Statements
This Presentation also includes references to non - IFRS financial measures . Such non - IFRS measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with IFRS . Non - IFRS measures include : Diluted bitumen sales, Undiluted bitumen sa
Slide 4: Risk Factors Notice
The foregoing list of factors is not exhaustive . You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of MBSC’s registration on Form S - 1 (Registration Nos . 333 - 256017 and 333 - 260423 ), MBSC’s quarterly report on For
Slide 5: Overview of Greenfire Resources
Greenfire Resources is an intermediate - sized and low - cost oil sands producer focused on responsible energy development in Canada OVERVIEW OF GREENFIRE RESOURCES Company Strategy and Highlights: » Opportunistic consolidator of underdeveloped energy assets; demonstrated ability to access capital f
Slide 6: Greenfire Resources & MBSC Business Combination
GREENFIRE RESOURCES & MBSC BUSINESS COMBINATION REALLOCATION OF 2023 CAPITAL EXPENDITURE PROGRAM 6 Greenfire and MBSC Definitive Agreement to Combine : Business Combination Anticipated to Close in Q 3 2023 ▪ On December 15 , 2022 , Greenfire Resources Inc . (“Greenfire”) and M 3 - Brigade Acquisitio
Slide 7: Committed Business Combination Financing
Committed Business Combination Financing of US$100mm; Existing Greenfire Shareholders to Receive US$75mm ▪ Institutional investors providing financing commitments of up to US$100mm to backstop any potential investor redemptions o Financing commitment consists of US$50mm of common equity and US$50mm
Slide 8: Sources & Uses and Pro Forma Ownership: Scenario 1
Sources & Uses ($ millions) Capitalization Table & Pro Forma Ownership (2) Scenario 1 : 100% MBSC Investor Redemptions of SPAC Common Stock PRO - FORMA OWNERSHIP, CAPITALIZATION AND CASH (US DOLLARS) 67% $637 Greenfire Rollover Equity 1 8% 1 70 Rollover Net Debt 8% 75 Secondary Proceeds 5% 43 Sponso
Slide 9: Sources & Uses and Pro Forma Ownership: Scenario 2
PRO - FORMA OWNERSHIP, CAPITALIZATION AND CASH (US DOLLARS) Sources & Uses ($ millions) Scenario 2 : ~67% MBSC Investor Redemptions of SPAC Common Stock Capitalization Table & Pro Forma Ownership (2) 3% 25 Transaction Fees 1 00% $950 Total Uses Sources Amount % Greenfire Rollover Equity Rollover Net
Slide 10: Valuation Relative to Peers
31% 29% 22% 18% 16% 14% 12% (11%) (5%) (10%) (15%) – 35% 30% 25% 20% 15% 10% 5% 6.4x 5.1x 4.6x 3.9x 3.1x 3.0x 2.9x 1.5x 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x VALUATION RELATIVE TO PEERS – 2024E EV / 2024E Unhedged EBITDA (1)(2) 2024E Unhedged Unlevered Free Cash Flow Yield (%) (2)(3) ▪ At Greenfir
Slide 11: Greenfire Resources: Assets, Strategy and Differentiation
GREENFIRE RESOURCES Assets, Strategy and Differentiation
Slide 12: Corporate Strategy & Overview
CORPORATE STRATEGY & OVERVIEW Optimizing two SAGD facilities with the same tier 1 reservoir • Hangingstone Expansion : Redevelopment infill well drilling & debottlenecking surface infrastructure • Hangingstone Demo: Debottlenecking infrastructure & extending reserve life 36136L112 Warrants ID (CUSIP
Slide 13: Comparison to Oilsands Competitors
0.0x 0.5x 1.0x 1.5x Athabasca Cenovus Suncor MEG Greenfire Q4 2022 Net Debt / 12 Month 2022 Annualized Op Funds Flow $0 $20 $40 $60 MEG Suncor Cenovus Greenfire Athabasca 12 Month Ended Dec. 2022 Op FCF Netback (C$/bbl) 3.0x 2.0x 1.0x 0.0x Greenfire Expansion Athabasca Leismer Suncor Firebag MEG Chr
Slide 14: Company History & Key Partnerships
COMPANY HISTORY & KEY PARTNERSHIPS Greenfire Resources • The Greenfire team received the 2020 Oilsands Energy Excellence Award for the precedent - setting restart of Hangingstone Demo • Acquired operatorship of Hangingstone Expansion in September 2021 Trafigura • One of the world’s largest logistics
Slide 15: Trafigura: A Key Strategic Stakeholder
TRAFIGURA: A KEY STRATEGIC STAKEHOLDER A Symbiotic Relationship • Strategic stakeholder and capital provider • Trafigura is Greenfire’s exclusive production marketer, and provides funding, transportation and logistical support Amplified Commitment • Trafigura assumed transportation and marketing com
Slide 16: Corporate Differentiation & Objectives
Differentiation 1. Opportunistic consolidator of underdeveloped energy assets; Expansion acquired Sept 17, 2021 2. Demonstrated ability to maintain production with limited capital spending, leading to high FCF/bbl 3. Strategic cooperation with Trafigura Objectives 1. Near term : Focus on asset optim
Slide 17: Hangingstone Expansion
0 200 400 600 800 1,000 1,200 1,400 0 5,000 10,000 15,000 20,000 25,000 30,000 Average Bitumen Rate Per Well (bbl/d/well) Bitumen Rate (bbl/d) Hangingstone Expansion (Gross) Bitumen Rate (bbl/d) bbl/d per well Greenfire acquired Expansion in September 2021 Planned Plant Maintenance • Initially doubl
Slide 18: Hangingstone Demo
0 200 400 600 800 1000 0 1,000 2,000 3,000 4,000 5,000 6,000 Average Bitumen Rate Per Well (bbl/d/well) Bitumen Rate (bbl/d) Hangingstone Demo Bitumen Rate (bbl/d) bbl/d per well • Restarted facility and increased production relative to the prior operator rates , with lower costs, by implementing pr
Slide 19: 2023 Reallocated Capital Budget & Production Growth Deferral
2023 REALLOCATED CAPITAL BUDGET & PRODUCTION GROWTH DEFERRAL 19 • The reallocated 2023E capital budget contemplates net capital spending of C$34mm, 13% lower than the 2023 capital budget that was previously approved in November 2022 • Investment concentrated at Hangingstone Expansion, including on d
Slide 20: 2023 Reallocated Budget – Core Capital Projects
2023 REALLOCATED BUDGET – CORE CAPITAL PROJECTS 20 CAPITAL ALLOCATION STRATEGY HANGINGSTONE EXPANSION HANGINGSTONE DEMO • Following a volatile commodity environment in early 2023, Greenfire’s Board of Directors approved a reallocated capital expenditure budget in May 2023 • 2023 capital spending emp
Slide 21: Infill and Redevelopment Infill 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, casing, drilling and cementing a new wellbore, additional costs and time necessary for the build •
Slide 22: Extended Reach Redevelopment Infill Producer Wells
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 • Targeting 1 , 600 meters of total horizontal length across two existing 750 meter SAGD producers •
Slide 23: Water Disposal Wells
Closed Process System Constraints • Limited water handling capabilities • Restricts the number of wells on production Disposal Wells to Improve Capacity • One disposal well in service at both Expansion and Demo • Conditioning process underway to optimize performance for disposal wells • Second dispo
Slide 24: Expansion – Quench & Vapor Handling
Quench Water Constraints • Colder water used to cool produced fluids to reduce vapor and pressure in order to optimize production • Challenge: Pipeline used for cold water delivery partially plugged due to prior operations • Solution: Temporary fix using tanks/pumps, but requiring a longer - term so
Slide 25: Demo – Truck Rack
• Meaningful reduction of road traffic and emissions • Equivalent to roughly 3,400 passenger vehicles removed from the road each year DEMO – TRUCK RACK Truck rack offloading facility has decreased costs, improved optionality and reduced emissions 1,000 Kilometers vs 10 Kilometers • Production from D
Slide 26: Demo – Plant 1 Partial Recommissioning
Plant 1 Partial Recommissioning • Decommissioned in 2015 by prior operator • Potential to recommission the oil processing equipment to handle additional production Timing and Impact • Timing dependent on regulatory approval, performance of the disposal well currently in operation and new disposal we
Slide 27: 2023E EBITDA Sensitivity to Production Levels & WTI Prices
2023E EBITDA SENSITIVITY TO PRODUCTION LEVELS & WTI PRICES (EBITDA IN US DOLLARS) 27 Annual 2023 EBITDA (US$mm) at Various Production Levels Production at Target Debottlenecked Capacity (1) 2023E Budget Exit Production Annualized 2023E Budget Production 32.3 mbbl/d 25.1 mbbl/d 20.4 mbbl/d $242 $156
Slide 28: Appendix
APPENDIX Management Team, Asset Benchmarking & Additional Strategic Details
Slide 29: Greenfire Resources Management Team
GREENFIRE RESOURCES MANAGEMENT TEAM Prior Employers Team Member Robert Logan MPBE, P.Eng., PE President and CEO David Phung P.Eng., CFA CFO Kevin Millar C.E.T. SVP Operations & Steam Chief Albert Ma P.Eng. SVP Engineering Crystal Park P.Eng., MBA SVP Corporate Development 29
Slide 30: Overview of M3-Brigade Acquisition III Corp.
William Gallagher Executive Vice President Matthew Perkal Chief Executive Officer Charles Garner Executive Vice President & Secretary OVERVIEW OF M3 - BRIGADE ACQUISITION III CORP. Deep Expertise and Partnership Overview of our Sponsors ▪ M3 - Brigade Acquisition III Corp. (“M3 - Brigade” or “MBSC”)
Slide 31: Steam Assisted Gravity Drainage (SAGD)
STEAM ASSISTED GRAVITY DRAINAGE (“SAGD”) Enhanced oil extraction method where bitumen is heated and pumped out of 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 - situ) usi
Slide 32: Asset Map & Geographic Overview
ASSET MAP & GEOGRAPHIC OVERVIEW Hangingstone Demo Hangingstone Expansion 50 km south of Fort McMurray, Northern Alberta, Canada Christina Lake Firebag Hangingstone Ft. McMurray MacKay Christina Lake Demo Expansion 2 of 5 Tier - 1 SAGD reservoirs Hangingstone Demo Capacity: 7.5 mbbl/d (100% Greenfire
Slide 33: 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 recurring pump replacements to achieve targeted production rates, leading to higher capital and opex sp
Slide 34: SAGD Benchmarking: Facility Production Relative to Capacity
Recent Production and Capacity (mbbl/d) 0 50 100 150 200 250 300 350 400 Christina Lake - Cenovus Christina Lake - MEG Energy Jackfish - Canadian Natural Resources Foster Creek - Cenovus Surmont - ConocoPhillips Firebag - Suncor MacKay River - Suncor Hangingstone Expansion - Greenfire Leismer - Atha
Slide 35: SAGD Benchmarking: Production per Well Pair
Production Per Producing Well Pair (bbl/d) 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 BlackGold - Harvest Operations Kirby - Canadian Natural Resources Jackfish - Canadian Natural Resources Christina Lake - MEG Energy Leismer - Athabasca Oil Corp Hangingstone - Athabasca Oil Corp Orion -
Slide 36: SAGD – Competitor Positioning, Spending & Production
SAGD – COMPETITOR POSITIONING, SPENDING & PRODUCTION Total In - Situ Bitumen Production (mmbbl/d) Total Expenditures for In - Situ Operations (C$ billion) Christina Lake Foster Creek Christina Lake Sunrise Firebag MacKay River Black Gold Jackfish Kirby Surmont Long Lake / Kinosis Hangingstone Expans
Slide 37: Regional Infrastructure
REGIONAL INFRASTRUCTURE Greenfire Assets near major pipeline systems, with a combination of firm and interruptible transportation for blend and diluent without being burdened by unmanageable long - term commitments Blend Transportation • Expansion to Cheecham via the Enbridge Lateral • 54 mbbl/d dil
Slide 38: Markets & Regional Pricing
Marketing strategy focuses on Edmonton as sales point • Providing access to North American markets including heavy oil refining destinations in the US Midwest and Gulf Coast via Enbridge or Keystone pipeline networks • Future opportunity to market volumes west via the Trans Mountain Expansion Projec
Slide 39: North American Heavy Oil Pipelines & Markets
NORTH AMERICAN HEAVY OIL PIPELINES & MARKETS Canada Heavy Oil Exports to U.S. (mmbbl/d) U.S. Heavy Oil Imports by Country (mmbbl/d) PADD I PADD II PADD III PADD IV PADD V Delivery Pipelines Other Pipelines Source: BMO Capital Markets; EIA 39
Slide 40: Canadian Crude Takeaway Capacity vs. Supply
• Canadian product differentials are expected to be relatively less volatile moving forward as the Western Canadian basin is long pipeline egress with the potential for phased expansions over time • Trans Mountain Expansion pipeline projected to come online around Q1 2024, forecasted to add ~590 mbb
Slide 41: Sustainability – Environmental
SUSTAINABILITY - ENVIRONMENTAL Reduced Diluent Use & Waste More attentive operations team and processes operate equipment at enhanced conditions to target reduced diluent loss and usage. Fugitive Emissions Monitoring Annual fugitive emissions studies to proactively identify and rectify any leaks. Gr
Slide 42: Canadian Energy & ESG
CANADIAN ENERGY & ESG • 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 flaring and is now one of the lowest flaring producers in the world , des
Slide 43: Hedging & Risk Management
Risk management program mandates hedging at least 50% of corporate PDP bitumen volumes on a rolling 12 - month basis, tested quarterly • WTI Hedges • 76% puts: US$50/bbl Strike • 24% puts: US$60/bbl Strike • 55% calls sold: averaging ~US$87/bbl • WCS Differential Hedges • 100% swaps: averaging ~US$1
Slide 44: Independent Reserves Overview – Canadian Standards
$1,034 $411 PDP PUD PROB $710 ~C$2,155 million 35 148 56 PDP PUD PROB INDEPENDENT RESERVES OVERVIEW CANADIAN STANDARDS: 2022 NI 51 - 101 COMPLIANT RESERVES AT JANUARY 2023 3CA PRICING ▪ McDaniel and Associates prepared independent reserves evaluations for Hangingstone Expansion and Demo in accordanc
Slide 45: Independent Reserves Overview – US Standards
30 116 PDP PUD INDEPENDENT RESERVES OVERVIEW UNITED STATES STANDARDS: 2022 SEC COMPLIANT RESERVES AT 2022 HISTORICAL PRICING ▪ McDaniel and Associates prepared independent reserves evaluations for Greenfire Resources in accordance with and United States Securities and Exchange Commission (“SEC”) req
Slide 46: Historical Financials & Operating Cost Structure
HISTORICAL FINANCIALS & OPERATING COST STRUCTURE (Canadian Dollars) ▪ Quarterly Results : Cash Operating Netback: o C$ Thousands and C$ Per Bitumen Barrel Sold (1) Specified financial measures do not have any standardized meaning prescribed by IFRS and may not be comparable with the calculation of s
Slide 47: Pro Forma Ownership Analysis Sensitivity
Notes: (1) Represents fully vested amount of founder shares. (2) PIPE is reduced dollar - for - dollar on a pro rata basis by the amount of SPAC proceeds after giving effect to redemptions, with convertible debt being reduced first 47 PRO - FORMA OWNERSHIP ANALYSIS SENSITIVITY (US Dollars) ($ in mil
Slide 48: Specified Financial Measures
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. Diluted bitumen sales - comprise
Slide 49: Canadian Purchasers' Rights of Action
CANADIAN PURCHASERS' RIGHTS OF ACTION The following statutory rights of action for damages or rescission will only apply to a purchase of securities in the event that the foregoing investor presentation is deemed to be an offering memorandum pursuant to applicable securities legislation in the Provi
Slide 50: Rights of Action – Manitoba Purchasers Only
Rights of Action – Manitoba Purchasers Only The right of action for rescission or damages described herein is conferred by section 141 . 1 of The Securities Act (Manitoba) (the "Manitoba Act") . The Manitoba Act provides, in the relevant part, that in the event that an offering memorandum together w
Slide 51: Rights of Action – Saskatchewan Purchasers Only
Rights of Action – Saskatchewan Purchasers Only The right of action for rescission or damages described herein is conferred by section 138 of The Securities Act, 1988 (Saskatchewan) (the "Saskatchewan Act") . The Saskatchewan Act provides, in the relevant part, that in the event that the offering me