Strathcona Resources is expanding its oil sands footprint in Alberta with the purchase of Greenfire Resources in a deal valued at $1.9 billion to $2.1 billion (CAD 2.7 billion to CAD 2.9 billion).
Both companies announced the agreement on 8 November. The deal is expected to close in early 2027, subject to the necessary shareholder support and regulatory approvals.
The purchase brings together a pair of companies that focus on oil sands and heavy oil. Both companies plan to grow production over the next 5 years through drilling to fill existing facilities and brownfield expansions.
The combined business will have more than 3 billion bbl of proved plus probable oil reserves and will be the fourth-largest steam-assisted gravity drainage operator in Canada, according to Strathcona.
Strathcona said the deal will result in $54 million (CAD 75 million) in synergies within the first year of combined operations associated with lower borrowing costs, procurement efficiencies, and the removal of duplicative costs. The transaction is expected to be approximately 6% accretive to Strathcona’s year-end 2025 proved plus probable net asset value.
Strathcona said it expects to establish a new business unit called SCR Central Athabasca, which will be led by Greenfire President Colin Germaniuk in the role of president of SCR Central Athabasca and supported by the existing Greenfire leadership team leading day-to-day operations of Greenfire’s assets within the new business unit.
Under the agreement, Strathcona will acquire all Greenfire’s outstanding shares, with Greenfire shareholders having the option of receiving 0.25 shares of Strathcona for each share of Greenfire, which equates to $9.09 per Greenfire share, or receiving CAD 11.00 in cash per Greenfire share.