Greenfire Resources Q1 2025 Earnings Report

Greenfire Resources EPS Results

• Actual EPS: $0.16
• Consensus EPS: $0.32
• Beat/Miss: Missed by -$0.16
• One Year Ago EPS: N/A

Greenfire Resources Revenue Results

• Actual Revenue: $123.16 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Greenfire Resources Announcement Details

• Quarter: Q1 2025
• Date: 5/6/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, May 7, 2025
• Conference Call Time: 9:00AM ET

Greenfire Resources (NYSE:GFR), together with its subsidiaries, engages in the development, exploration, and operation of oil and gas properties in the Athabasca oil sands region of Alberta. The company operates the Tier-1 oil sands assets located in Western Canada. It utilizes steam-assisted gravity drainage (SAGD) extraction technology, a situ thermal oil recovery process to recover diluted and non- diluted bitumen. The company is headquartered in Calgary, Canada.

Greenfire Resources Q1 2025 Earnings Call Transcript

Key Takeaways

• Greenfire’s expansion asset has underperformed due to an accelerated decline from recent refill wells, a boiler offline from sulfur-related wear, and regulatory sulfur emissions breaches, prompting ordered sulfur removal facilities to be installed by Q4 2025.
• No 2025 capital or production guidance will be provided until these operational challenges are resolved and the development plan is finalized.
• Leadership has driven a cultural overhaul emphasizing integrity, energy, and intelligence, alongside safety initiatives and the addition of experienced SAGD professionals.
• Future development focuses on drilling new long-cycle well pairs in undeveloped reservoirs, with near-term activity northeast of the central processing facility in Q4 2025 and medium-term work southeast targeting the company's largest 2P reserves.
• Greenfire is reviewing its capital structure, viewing its current bond levels as excessive for its size and considering adjustments to optimize long-term financing.

Presentation

[Operator]

morning, ladies and gentlemen. Welcome to the Greenfire Resources First Quarter Results Conference Call. As a reminder, this conference call is being recorded. I would now like to turn the meeting over to Mr. Robert Lobach, Vice President of Capital Markets. Please go ahead, Robert.

[Robert Loebach, Vice President of Capital Markets at Greenfire Resources]

Thank you, operator. Good morning, and welcome to Greenfire's conference call for our Q1 twenty twenty five 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 and A. Unless specified otherwise, all monetary figures discussed today are in Canadian dollars.

[Robert Loebach, Vice President of Capital Markets at Greenfire Resources]

The 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 Greenfire's leadership team, including Adam Wadris, Executive Chairman and Paul Indramanek, President Tony Kraljic, Chief Financial Officer and Jonathan Kindurka, Chief Operating Officer. Upon the conclusion of our prepared remarks, I will open the floor to questions from participants. I will now hand over the call to Adam.

[Adam Waterous, Executive Chairman at Greenfire Resources]

Thank you, Robert, and welcome everyone to Greenfire's Q1 twenty twenty five conference call. Prior to opening up the call to questions, we just have a few brief comments on the business. Let's touch on the bad news first. The punch line is that the current production at Greenfire's expansion asset has been poor and is primarily attributable to three factors. First, Greenfire's twenty twenty three and 2024 refill program has accelerated the base decline profile at the expansion asset.

[Adam Waterous, Executive Chairman at Greenfire Resources]

Second, one of four boilers at our expansion asset has been off line due to wear from sulfur production at the central processing facility. We believe the root cause of the excess sulfur production is due to operating the reservoir at a high pressure and temperature during late life recovery. Third, and related to the second challenge, Greenfire sulfur emissions are currently exceeding the Alberta energy regulators maximum limit. Upon learning of the exceedance, Greenfire immediately reported the breach to the AER and has been in active dialogue with the AER ever since. Greenfire takes its regulatory obligations very seriously and has ordered sulfur removal facilities at the expansion asset with in salute installation and commissioning targeted for Q4 twenty twenty five.

[Adam Waterous, Executive Chairman at Greenfire Resources]

Given these challenges, it would be premature to provide 2025 capital or production guidance at this time. So that is a snapshot of the current challenges, which, of course, we are laser focused on addressing. Now let's turn to some brighter news, which is the high quality work we have progressed on Greenfire's future development plan.

[Adam Waterous, Executive Chairman at Greenfire Resources]

I will now turn it over to Colin to touch on this.

[Colin Germaniuk, President at Greenfire Resources]

Thanks, Adam. Before I touch on our future development plans, I want to highlight that an integral part of Greenfire's strategy since I joined has been a cultural overhaul, which is gaining momentum. At Greenfire, we are focused on attracting top performing individuals with a constant focus on our IEI mantra, that is integrity, energy and intelligence and in that order of importance. We have introduced initiatives to embed a safety first mindset and elevate performance across all levels of the organization.

[Colin Germaniuk, President at Greenfire Resources]

Following the recent organizational restructuring, we have added professionals of proven track records in SAGD to support Greenfire's development. Now I'd like to provide a small preview on our future development plans, which we're very excited about. We're going to be focusing on drilling new long cycle well pairs in undeveloped reservoir at the expansion asset. Our near term priority is to drill wells just Northeast of the Greenfire Central processing facility. The region contains well delineated reservoir directly offsetting existing production, and we plan to start drilling as soon as Q4 twenty twenty five.

[Colin Germaniuk, President at Greenfire Resources]

As we look into the medium term, our next priority will be to develop reservoir that is just Southeast of the Greenfire's CPF and contains the largest amount of undeveloped 2P reserves in the company. Our governing approach with this multiyear development plan is to ensure that capital decisions align with our goal of maximizing net asset value per share and deliver strong returns for Greenfire shareholders. We will provide the details of the new development plan once it's finalized. We'll now open it up for Q and A.

[Operator]

Thank you. We will now take questions from the telephone lines. Our first question is from Jason Wangler from Imperial Capital. Please go ahead.

[Jason Wangler, Managing Director at Imperial Capital LLC]

Good morning. Just understand obviously what you're talking about as far as kind of going forward with the development program. Can you just talk about this year kind of obviously the production drop? We kind of at a level that you think stabilizing? Or where do you think the production kind of goes until you start to ramp back up on the drilling side?

[Colin Germaniuk, President at Greenfire Resources]

Yes, it's a good question. Through the first quarter and into April, we've seen some declines. Our base production is high recovery factor. We drilled some refills over the last couple of years. So we have pretty steep declines in Q1.

[Colin Germaniuk, President at Greenfire Resources]

We do expect those declines to shallow out a bit, but we do expect production to decline a little bit throughout the year. But we can't really provide any specific numbers or guidance until we finalize our plans.

[Jason Wangler, Managing Director at Imperial Capital LLC]

Okay. And maybe just on the financial side, I saw in the slide you guys kind of mentioned the bonds specifically maybe something that I think you guys are looking at talking about I guess the entire capital structure. Can you talk about what you're thinking about how you optimize that part of the business as you kind of also are working on the production side as well?

[Adam Waterous, Executive Chairman at Greenfire Resources]

Sure. This is Adam Marshall. I'll take that. So we think that generally speaking, the business the amount of bonds is not appropriate for the size of the business today. And so we look at those as being transitory.

[Adam Waterous, Executive Chairman at Greenfire Resources]

We haven't made a decision yet on what we're going to do, but we don't think that those bonds are an appropriate part of the long term capital structure of the business. I appreciate it. Thank you.

[Operator]

Thank We have no further questions registered at this time. I would now like to turn the meeting back over to Mr. Lobach.

[Robert Loebach, Vice President of Capital Markets at Greenfire Resources]

Thank you, operator. On behalf of Greenfire, we appreciate you joining us on our Q1 twenty twenty five results conference call. Have a great day.

[Operator]

Thank you. The conference has now ended. Please disconnect your lines at this time and we thank you for your participation. This

Participants

Executives

• Robert Loebach, Vice President of Capital Markets
• Adam Waterous, Executive Chairman
• Colin Germaniuk, President

Analysts

• Jason Wangler, Managing Director at Imperial Capital LLC