Greenfire Resources (GFR) 15 Nov 242024 Q3 Earnings call transcript

Good morning, ladies and gentlemen. Welcome to the Greenfire Resources Third Quarter 2024 Results Conference Call. [Operator Instructions] I would now like to turn the meeting over to Mr. Robert Loebach, Vice President of Corporate Development and Capital Markets. Please go ahead, Robert.

operator. you, Thank and QX everyone, for us joining Good Earnings thank Conference Greenfire's XXXX Call. for morning, you Please note documents that are Greenfire's financial statements, MD&A our and with EDGAR available and website the on associated filed SEDAR+. on press release

corporate available our is website. updated on has been Our presentation and also

most call and today All financial to company refer working As we amounts our measures. are otherwise the References amounts to outlined Demo such, interest are Canadian dollars encouraged conference And Asset the dollar I facilities otherwise a statements, associated unless references capital in everyone discussed that will Asset as unless stated. MD&A. begin forward-looking Hangingstone collectively. on the remind production expenditures to non-GAAP to review discussed risks and to stated. our this discussion, All basis contains recent and net other refer today listeners Expansion

Greenfire and and Chief Today's Jonathan Robert of hosted Robert Officer; and Development President the members Loebach, Kraljic, Tony Markets. including Officer; myself, Vice President call of by Financial Chief Executive Operating Corporate team, Logan, Capital Kanderka, is Officer; Chief

from team's will prepared remarks, questions a conducting session we'll the open line to be and the Following Q&A we participants.

President turn go and now to Robert, Executive it will Logan. over ahead. Officer, Robert I Chief our please

Thank you, Robert, and good morning, everyone.

the on New York the Greenfire represents has since shares our reported first that quarter year anniversary company Stock This listed as a we public Exchange.

creation to strategy, continue hard Greenfire want and the their value we milestone our the I work shareholder by entire for As team to execute significant celebrate thanking dedication.

to from success prior XXXX. third resolved successfully growth a production day production. XX,XXX of production well of in Asset, increased temperature year-over-year XXXX delivered now day, At up per redrilling downhole increasing the third-party safely planned on unplanned wells of reflects inaugural from generator including of Greenfire were the quarter. Expansion XX% production of that the with QX of XX,XXX which outage QX quarter refill results team both in in per slightly Consolidated sensors, launched X in we consolidated August which This the XXXX. steam campaign over third drilling the quarter. ] the Asset, the failure the in XXXX, these barrels In basis. Production rose at barrels previously by Expansion offset the Higher and completed quarter, in are maintenance the by on an disclosed was refills a [ X annual strong

support XXXX, NCG rates achieved is anticipated pressure at operate co-injection, to rates. disposal Following wells regulatory At the Asset, approval the Demo which reservoir sustained higher was X in to the at facility. asset targeted received production QX of expansion we

well disposal first XXXX. QX The commenced resumed operations second QX the subsequently in XXXX and well operations disposal in

deliverability to steam or annual maintenance We injector also of of support, wells new growth. new at a completed well Asset augment refill Demo drilling one XXXX. in team October to completed planned also of the production the accelerate the The

of Given average day, we XX,XXX below our the year. production to XX,XXX at approximately Demo these anticipate range annual the barrels barrels per for the will guidance for delays day slightly per XX,XXX Asset, XXXX

of production barrels the X consolidated Demo refill and November production per extended-reach day completion approvals barrels With new these and per are now approximately injector operational driving of XXXX. at regulatory behind us, day wells Asset, the well for strong of X,XXX our XX,XXX to the approximately growth

water by recently both to wells will the continue We is disposal further Demo wells handling in as supported December improve improved increase expect production, operational. with capabilities refill which XXXX production in operational

of million of QX guidance relative $XX additional at capital to an range will the Expansion to million expenditure accelerate $XX Given $XX track to plan we to well team's million. Asset previous XXXX increase million record, to successful This $XXX drilling XXXX. drilling the to refill the the

exploring the in strategic potential necessary shareholder Board to not process shareholders. of the third strategic of In determines updates the unless enhance Directors strategic ongoing value. Board process is may or strategic review XXXX transaction initiated the approves intend of quarter appropriate. discounted versus disclosure review that light process the a The peers, a Greenfire number of for does valuation all Board The specific alternatives the a with review SAGD on further pure-play company that provide to its company's is maximize value otherwise or

make Board operational liquidity, potential to In focus our committed and solid management team to goals exploring reducing shareholders. our on well growth maximizing on of Management the debt enhance assets of our additional as ways and to the financial protecting its long-term value. production as and a remains interest the the and strong progress continues strategic meantime, the with

I hand plans. growth COO, the to our will operational over positioning to discuss now our call and future Jonathan,

the a currently per the or barrels run have facility's online working in differentiates Greenfire What approximately the wells well interest relatively pumps, relatively barrels we this advantage to demonstrates production well sag of XX XXX% believe net XX,XXX levels. Tier-X reservoir. Hangingstone that XX day facilities a cost assets XX,XXX pairs downhole per having combined not estimated compared count drilled of to well, to Robert. high had production The expansion Thanks, basis current with asset per day SAGD XXXX. structural is producing clearly low productivity for with from our producing We other a on

well pairs has XX drilled. currently Demo Asset online The of well pairs X

since results first begun X averaging the day. X,XXX planned the of weeks of first per day refill recently barrels X,XXX estimated with XXXX. Following well drills approximately production production October, November the supporting over the Demo strong new production, we at maintenance production of X wells a the annual are at of marking Asset, Initial new in barrels project first

rates high is -- and promising. recent Expansion continued as production expect levels the December At of well the ramping remaining despite in we believe high per As relatively ramping Assets, both wells, Demo up very up remain improvement well beyond. wells we and we recovery

facilities of expect new we in steam or well SOIs similar achieved available of SAGD per SOI ratios well oil performance existing low assets, the necessarily The This we pairs. With development both advance per new as teens. XX,XXX the and facility supports the future full strong performance and pads the of pad asset. our of -- the our Asset drill the day barrels to sustaining to to Expansion fill strategy Greenfire's at demonstrate production plans drill a facilities to capacity Hangingstone at potential capacity

a updated spend drill at SAGD production future of movements. remain barrels relocation Hangingstone per and Expansion expansion the and expanded the approval existing reserve and plans of Greenfire's the announced XXXX plans recently Demo and the Board operational facility by include development facility as an Asset. as to to Asset which at incorporate well facilities, capacity approximately reactivation the funding company release projects subject an XX% These including We its existing area The to initiatives to second day, half XX,XXX development and November, in report is plan. development an the independent under brownfield projects Greenfire's which expected of updated at to

pricing. Capital the of hedging to exposure hand and now I'll to heavy and call Canadian VP to strategy over Markets, oil Robert Corporate our discuss Loebach, Development

its Thank you, commodity WTI focused to continued Jonathan. approach. on execute Greenfire's hedging

for fixed price XXXX, QX of price under Greenfire's As end just at a day and the a XXXX. swaps barrels of hedging USD of features WTI of barrel a XX,XXX program XX

internally an collars from X,XXX on to first floor program volatile $XX features $XX and barrels our our with capital support generated WTI of X flows in costless of ceiling per fund of ability quarters the program average barrel. These day an of For environment. a contracts XXXX, average a over almost barrel per Greenfire's commodity cash

X,XXX that to for cash differential providing Western WCS flow of free averaging Tidewater. WCS to the to to ] heavy the This export to XXXX, Mountain further pipeline Trans generation for a outlook weighted improved material a year-end Greenfire's the capacity barrels to expected WTI which heavy barrel last $XX XXX% pricing, oil year. Greenfire's support barrel differentials Canadian production from new pipeline day completed differential Canadian supported are potential. with improvements has The adjusted particularly pricing This is in of is $XX oil capacity May current new was pricing, expansion compared winter, benchmarks production. support to linked a in order exposure in Greenfire's in [ thereby added Canada

to I will to Kraljic, Chief Officer, Tony Financial of our over highlights the Greenfire's the discuss call now hand performance. financial

$XX.X the million $XX.X Thank improvement everybody. the $XX.X Greenfire same you, This is reported of million in Robert, net same reported The quarter, EBITDA which $XXX.X also for in of over QX year. achieved significant year. income million last million represents generated loss the of last XXXX. adjusted the from quarter good and morning, a XX% company increase period the in a

year. for $XX.X million expenditures capital X quarter Our totaled quarters the or the million first for of $XX.X the

various at million capital on quarter, XX.] and related activities, the For is for facility projects. allocated X [ $X.X [indiscernible] spent

$XX.X in QX cash which Adjusted changes $XX funds million, $XX.X of XXXX to quarter million capital ahead was of a our the was working realized $X.X for due sales redemption. used impact to contracts collection was July management acceleration QX XXXXX, debt included million risk oil of the on flow of million. operating in of the noncash Also, of loss June, commodity while in activities the

were to flow cash $X.X free able the in adjusted We in [ generate quarter. million ]

consisting business $XX $XX.X our the maintains as same to slightly million and which liquidity, continued pricing a lower available less in as a strong available financial our of is significant year, credit it the growth. of given plan. gives under last Greenfire cash $XX.X generated facility, in result the us million with of executing commodity period million on $XX.X it's flexibility of well equivalents continue While senior cash and production than million investments solid favorable position credit

our XX% reduce of in redeemed July to to to use part we flow has XX XXXX, the principal of excess XX.X our XXXX from ] of XXXX reducing XXX portions the our notes reduced notes, Notably, USD million the by million. semiannually million commitment XXX USD XX% of or As $XXX balance of to continue plan million million. USD until we to cash debt, CAD consolidated [ reading debt to

day, with associated at expansion of unrecovered obligations capacity pools, overriding Hangingstone no Greenfire balances barrels is positively corporate lower a royalty processing XX,XXX a royalty facilities. any at and the of gross our positioned asset pre-payout the royalty billion tax current sizable $X.X rate of with

growth our shareholder requirements support to anticipated If Tier which, low long-term Greenfire. X increased capital to sustaining relatively programs. combined significant of for cash a facilities these XX,XXX XX,XXX flow existing capacity the a capacity a XX,XXX plans Jonathan barrels barrels we future by gross further barrels production day to optimize announced to initiatives or Hangingstone increase As mentioned, with with net sanctioned, to projects and improvements future XX% further is of our future reservoir, day allow recently cost structure expected generation day growth SAGD growth Greenfire's production are to potential return

to for With that, over questions. up open I'll turn the it line operator the to

Instructions] is [Operator first Wangler Jason The question from Imperial Capital. with

at I the know what but activity reserve just is as kind come curious, of kind kind how obviously, just, look you're kind repeatable this report not necessarily of thinking had this you you've the a I year, and next suppose. relatively that learned success with I next soon, will the Is was of year, you're into an of year? something I here but what drilling you've program looking you it? head number, just for level, guess, Or at as out CapEx

to me? maybe off. feel Thanks, you can kick jump why don't free I Jonathan, in with that Jason.

you between of the many next both targets, there's successful targets Demo. we've XX refill had including The said, There's targets increasing a recently around here, north little do our Jonathan, as a at still terms In pad. bit want sites. very part getting refill And left. with program, to program you add additional details please? pairs that well ready as production be in will XXXX the sustaining for more as maybe of

can included the going at XXXX targets refills. even focused and reservoir Demo, SMR pairs are will that the said, operating refills be then [ so excited that ] majority pads the and the we're the the have, of final Robert are ] asset back Yes, sure. sustaining going levels really on potential refills work The to at primarily achieved And program, to SAGD the the life. get get earlier on new [ then to prove as that we well we're in in we its expansion well

up, pretty sweep. cash on to after looks side. you flows like Okay. just, are financial The obviously first cash Is guess, can anything The I continue stated. They're believe built cash just million Great. at the up, of as you're it good. more there flexibility? the road the kind just you if USD guys pretty build there? And of or then thinking thoughts doing? is It sweeps have be I much threshold, the else wanted of then so. guys had Or And other every there's you sweep map of obviously, it's Or do now X the of there. kind the see as you XXX to or that's then get months to kind you that, I or

Tony, do take to that you want one?

to. Jason, for Thanks, Happy the question.

continue to deleveraging directive our a the focus on forward, That's continue company. we prime to As of move we debt.

Our debt for the X-year next comes is to available refinancing October. which anniversary potential mark, up

So that something we're in point is to move we considering out as that time.

that company. and ahead of to to to probably the [ continue And ship and we'll looking start pace, be to finance shareholder focus on for our time million returns. appropriate us, change of We allocation we at able to ]. look that's have debt a cash capital that XX% $XXX the to retention that XX% capital flows we'll strong program that the from Once deal hit through and

Nicolas The is from next ]. question [ Sekaran

really quarter. Guys, good

steam to August. to steam related needing it breakup was it production be be the performance wanted color lagged November. and expansion, look Can give maybe related post early stronger you going didn't forward? performance is if to you than going where post up? any or at turnaround generator you the And designed? the as wells working chamber is Just And was the not this to Or downtime, do that how that heated refill on December versus to at has ask say seem to

do Jonathan, off and at works. going maybe start then is And hit to the Demo the be Expansion, I what to you in Maybe, with production want seeing sure. we're there? if on For that what can

are refills on question. at just very did for results the Thanks XXX%. factored very outage. that Initial October after promising. the new Yes, -- were The we Demo we

first for average. has at the day X,XXX first come weeks online X The well barrels on a

other more, was turning We to over expect continued a refills and further well, X inject putting start top through And increases well. well from an can growth that refill contributing pair as of expect December then -- The X production the beyond. we to by it. the SAGD

-- what we cooler initially recovery that, therefore, we than we're thought, reason for the of encounter more temperatures had in and have us. So front and

doing I'll So more over we'll to for of at Asset Demo very you excited refills. these the same. XXXX, Robert, expansion. the And then pass be for

Yes. Awesome.

has We've barrels as barrels as been good been mean, I on. So per day, XX,XXX to with that day you've turned only seen, XX,XXX on. X,XXX almost XX the per wells in production per well very barrels day, that's per XX,XXX high averaging as

So gas including capabilities, what's on handling we've produced got coming the debottlenecks produced handling limiting QX. here, water the us some and is which

the to we short to some As tie there. be in, take outages those into tie have to able well adds we

come see to the at expect production these online. as we so And continued growth debottlenecks expansion

has productivity, been have guys they've earlier? more Got maybe you Or there refill drill that it. expecting come why well that's on stabilizing to levels is the on to I it that And is wells. the you everything, were guess, after still changes

happy that's mean, targets we're while quite There over been day, first going And we there they've a with to barrels And of the coming refills is I days, a first is as well. mean, lot which high. been I for happening. more that's on think on year. on, per the decline now the have were I have out No, some the over they decline for productivity natural. is XXX X,XXX bring wells.

day. is as of just job possible And us that. an optimize doing the site produce oil as and it's to the much team So trying every incredible

at [ next The is ] ]. [ Jotun from Ed question

X ago, day the coming averaged months. in you of extended barrels refills -- put [indiscernible]? at said so did minute first then the more the a by little X,XXX barrels -- reach your you I presentation, for recent recently, like X,XXX bit around they're a the hear you a in a that But wells, on more in as discussion day showed X,XXX in I'm XXXX, terms confused as just

wells when than that have X,XXX the that. day well, Obviously, are Logan turned the about refill Robert higher that wells than per are No, barrels turned of XX I was Ed, here. the are wells that and that's on are that we the average talking per lower XX on. other

Yes, well.s the older

guess you grow well their the the I continue these on given these But than industry especially wells, a industry, is, at per look of is age the the point the wells their which Yes. rest as of when what we factor, recovery to for outstanding absolutely the us basis, is higher site. productivity and really exciting are within much

Robert. you Thank that, clarifying Yes. Absolutely. for

leave just elaborate wanting a year, anything, cash you -- CapEx. just the just you know Do you up mean, something? bit should $XXX putting how question the So it where year ultimately previous XX,XXX was to at I get by or I next current to think or current think let's you're constraints can I you actual -- the of said thinking little not you I of for I'm then? production but -- be on to could million a capacity like out fill think flow barrels -- guidance

Tony, you then I kick to in. can off do fill want and

Yes.

XXXX, to As you of to we will. the easier bring if we're those going be half focused the refill barrels look year, on, front to targets the on in

be to up bit new a colder will move looking As and back sustaining to heat into we reservoir the reservoir. we're a time take which half, pads, new open more to going up to move

a plant we target capacity we fill XXXX in in the to that and hit new So XXXX. as into end to looking towards max will the of move We'll well don't pad expect 'XX. back sustaining

questions as debt. I on figure Am your you guess line can balance help if the last what you're I -- sheet is helpful. of very short-term understand for wondered showing That's X Okay, okay. me -- view, of as think -- next X-month to you I point the going X you're payments? of projecting current owe over your note what about think can high-level a basically the that under you're question from what terms

accounting current next portion Under the XX the requirements, the in months. expected what debt pay you're Both. of to is

the portion XX but So the number That's on XX assumption, current amount you're repaid be is estimated a the debt. would the over seeing the fair yes, in over that next months. months,

Okay.

are which the -- subsequent... the So

The next few [indiscernible].

prepay so can't -- any going above anymore. And XXX that's USD that's on that I 'XX, looks -- really yes, can't you more you -- voluntarily prepay the just until interestingly, But October -- you Okay. voluntarily to million, Is it that like. get guess any correct?

Yes. correct. is That

Yes. such -- are easily debt All right. easily on to you Well, I what it's could probably metrics seems mean anyway, minus sense with your even that that you -- now. now, you have better me could

seems it between oil So a should prices -- long now you like October, refinancing. as good to crash as get able and be don't be

So that. to we're forward looking

This remarks. question-and-answer to concludes like back session. Robert turn Loebach closing for the the I'd to any over conference

Thank a Greenfire, XXXX On you quarter on operator. behalf conference call. third today appreciate you, joining great of our we day. earnings all us Have

This brings today's to a close. conference

lines. a your have for and day. you Thank disconnect pleasant participating, may You