Greenfire Resources has agreed to acquire Canada-based Connacher Oil and Gas in an all-cash transaction valued at approximately C$1.27bn ($900.4m).
Connacher operates as a privately owned thermal oil sands producer focused on the production and sale of bitumen. It has 100% ownership of the Great Divide oil sands project in Alberta, Canada.
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Greenfire, which is listed on both the New York Stock Exchange and the Toronto Stock Exchange, is an oil sands producer with operations in Alberta. The company has two steam-assisted gravity drainage oil production facilities, Hangingstone Expansion and Hangingstone Demo.
The company stated that production from Great Divide is projected to average around 19,500 barrels per day (bpd) in 2026, with a steam-oil ratio of nearly 3.0. The site holds estimated proved plus probable (2P) reserves of around 441 million barrels (mbbl), which corresponds to a 62-year reserve life index.
The Great Divide project is directly adjacent to Greenfire’s Hangingstone assets near Fort McMurray, which is expected to support operational efficiencies.
Greenfire has identified potential annual synergies of around C$30m, to be realised by the end of 2026. The company expects to achieve these through savings across midstream, marketing, operational costs, and general and administrative expenses.
It stated that these synergies represent roughly 19% of Connacher’s stand-alone sustaining free cash flow at a benchmark West Texas Intermediate price of $70.
Upon completion of the acquisition, Greenfire expects combined 2026 production to reach approximately 34,000bpd. 2P reserves are expected to total 850mbbl, leading to a reserves life index of nearly 68 years.
The long-term plan involves increasing output to around 65,000bpd.
The transaction remains subject to customary closing conditions and necessary approvals, with Greenfire anticipating completion in August 2026.
The acquisition is expected to be financed by a draw of roughly C$700m on a C$1bn reserves-based loan, increased from C$275m.
Additionally, a C$575m bridge facility will be in place, which the company plans to repay using proceeds from an anticipated rights offering of Greenfire common shares.
To support the rights offering, Waterous Energy Fund has pledged a standby commitment of at least C$575m.
Greenfire has appointed BMO Capital Markets and National Bank Capital Markets as financial advisers, with Blake, Cassels & Graydon and Scale as legal counsel. For Connacher, the financial adviser is TPH&Co, while the legal adviser is Norton Rose Fulbright Canada.
