Strathcona Resources to Acquire Greenfire Resources
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Strathcona Resources Announces Agreement to Acquire Greenfire Resources for $2.7 to $2.9 Billion
Calgary, Alberta, Canada - Strathcona Resources Ltd. (TSX: SCR) and Greenfire Resources Ltd. (TSX: GFR, NYSE: GFR) have entered into a definitive arrangement agreement for Strathcona to acquire all outstanding shares of Greenfire in a transaction valued at approximately $2.7 to $2.9 billion, inclusive of net debt.
Transaction Structure and Options
Under the terms of the agreement, Greenfire shareholders can elect to receive either 0.25 shares of Strathcona or $11.00 in cash per Greenfire share. Waterous Energy Fund (WEF), holding 72 percent of Greenfire and 57 percent of Strathcona, has signed a support agreement to elect the share option.
- Share option equates to $9.09 per Greenfire share based on closing prices.
- Cash option represents a 39 percent premium to Greenfire's closing share price.
- No proration applies to either option.
Transaction Details
Strategic Rationale and Pro Forma Scale
The combined entity will create a leading pure-play heavy oil producer with over 3.0 billion barrels of 2P oil reserves and a 54-year reserves life index. Strathcona expects to realize $75 million in annual run-rate synergies and extend its cash tax horizon through 2031.
