Greenfire Acknowledges Receipt of WEF Letter Seeking Control of the Company Without Offering a Premium to Shareholders
Greenfire Resources (NYSE/TSX: GFR) has received a letter from Waterous Energy Fund (WEF), which recently acquired 43.3% of Greenfire's shares, demanding the resignation of all current directors to be replaced by WEF nominees. The Board views this as an attempt to gain control without offering a premium to shareholders. Greenfire has adopted a shareholder rights plan and filed a court application regarding the share sale that gave WEF negative control. The Board expresses concerns about WEF's proposed nominees, noting that four are WEF employees and Strathcona Resources directors, potentially compromising governance standards. The company is evaluating the situation while maintaining its focus on maximizing shareholder value.
Greenfire Resources (NYSE/TSX: GFR) ha ricevuto una lettera da Waterous Energy Fund (WEF), che ha recentemente acquisito il 43,3% delle azioni di Greenfire, richiedendo le dimissioni di tutti gli attuali direttori per essere sostituiti da nominati dal WEF. Il Consiglio considera questo tentativo come un modo per ottenere il controllo senza offrire un premio agli azionisti. Greenfire ha adottato un piano di diritti degli azionisti e ha presentato un'applicazione in tribunale riguardo alla vendita delle azioni che ha dato al WEF un controllo negativo. Il Consiglio esprime preoccupazioni riguardo ai nominati proposti dal WEF, notando che quattro di loro sono dipendenti del WEF e direttori di Strathcona Resources, il che potrebbe compromettere gli standard di governance. L'azienda sta valutando la situazione mantenendo il focus sulla massimizzazione del valore per gli azionisti.
Greenfire Resources (NYSE/TSX: GFR) ha recibido una carta de Waterous Energy Fund (WEF), que adquirió recientemente el 43,3% de las acciones de Greenfire, exigiendo la renuncia de todos los directores actuales para ser reemplazados por nominados de WEF. La Junta considera esto como un intento de obtener el control sin ofrecer una prima a los accionistas. Greenfire ha adoptado un plan de derechos de los accionistas y ha presentado una solicitud judicial relacionada con la venta de acciones que otorgó al WEF un control negativo. La Junta expresa preocupaciones sobre los nominados propuestos por WEF, señalando que cuatro son empleados de WEF y directores de Strathcona Resources, lo que podría comprometer los estándares de gobernanza. La empresa está evaluando la situación mientras mantiene su enfoque en maximizar el valor para los accionistas.
Greenfire Resources (NYSE/TSX: GFR)는 최근 Waterous Energy Fund (WEF)로부터 편지를 받았습니다. WEF는 Greenfire의 주식 43.3%를 인수하였으며, 현재 이사 전원의 사임을 요구하고 WEF의 지명자로 교체할 것을 요구하고 있습니다. 이사회는 이를 주주들에게 프리미엄 없이 통제권을 얻으려는 시도로 보고 있습니다. Greenfire는 주주 권리 계획을 채택하고 WEF에 부정적인 통제를 부여한 주식 판매에 대한 법원 신청을 제출했습니다. 이사회는 WEF의 제안된 지명자들에 대해 우려를 표명하며, 네 명이 WEF 직원이자 Strathcona Resources의 이사로, 이는 거버넌스 기준을 타협할 수 있음을 지적했습니다. 회사는 주주 가치를 극대화하는 데 초점을 유지하면서 상황을 평가하고 있습니다.
Greenfire Resources (NYSE/TSX: GFR) a reçu une lettre de Waterous Energy Fund (WEF), qui a récemment acquis 43,3 % des actions de Greenfire, exigeant la démission de tous les administrateurs actuels au profit de candidats proposés par WEF. Le Conseil considère cela comme une tentative de prendre le contrôle sans offrir de prime aux actionnaires. Greenfire a adopté un plan de droits des actionnaires et a déposé une demande auprès du tribunal concernant la vente d'actions qui a donné à WEF un contrôle négatif. Le Conseil exprime des préoccupations concernant les candidats proposés par WEF, notant que quatre d'entre eux sont des employés de WEF et des directeurs de Strathcona Resources, ce qui pourrait compromettre les normes de gouvernance. L'entreprise évalue la situation tout en maintenant son objectif de maximiser la valeur pour les actionnaires.
Greenfire Resources (NYSE/TSX: GFR) hat ein Schreiben von Waterous Energy Fund (WEF) erhalten, das kürzlich 43,3% der Anteile von Greenfire erworben hat und den Rücktritt aller aktuellen Direktoren verlangt, um durch WEF-Nominierte ersetzt zu werden. Der Vorstand sieht dies als Versuch, die Kontrolle zu erlangen, ohne den Aktionären eine Prämie anzubieten. Greenfire hat einen Aktionärsrechtsplan verabschiedet und einen Antrag beim Gericht in Bezug auf den Aktienverkauf eingereicht, der WEF negative Kontrolle gegeben hat. Der Vorstand äußert Bedenken hinsichtlich der vorgeschlagenen Nominierungen durch WEF, wobei vier davon WEF-Mitarbeiter und Direktoren von Strathcona Resources sind, was potenziell die Governance-Standards gefährden könnte. Das Unternehmen bewertet die Situation, während es seinen Fokus auf die Maximierung des Aktionärswertes beibehält.
- Company has implemented a shareholder rights plan to protect minority shareholders
- Company reports having Tier-1 SAGD assets and growth plans
- WEF has acquired 43.3% controlling stake at a low premium
- Company currently trades at a discounted valuation compared to SAGD peers
- Strategic review process has been hindered by WEF's actions
Insights
This hostile takeover attempt by WEF raises significant governance concerns. The acquisition of
The company's defensive measures, including the shareholder rights plan ("poison pill") and legal action, are standard protective mechanisms. The court application regarding the share sale to WEF suggests possible irregularities in the transaction with former insiders. The lack of control premium and potential risk of asset transfer to Strathcona at unfavorable terms warrant careful scrutiny from minority shareholders.
This situation presents classic signs of a creeping takeover attempt. WEF's accumulation of a
The parallel with WEF's historical pattern of rolling up acquisitions into Strathcona suggests a possible endgame of absorbing Greenfire without adequate compensation to minority shareholders. The market should expect either a formal hostile bid or continued board pressure to facilitate a below-market transaction.
Calgary, Alberta--(Newsfile Corp. - November 20, 2024) - Greenfire Resources Ltd. (NYSE: GFR) (TSX: GFR) ("Greenfire" or the "Company"), a Calgary-based energy company focused on the production and development of thermal energy resources from the Athabasca region of Alberta, Canada, today confirmed it has received a letter (the "WEF Letter") from Waterous Energy Fund III (Canadian) LP, Waterous Energy Fund III (US) LP, Waterous Energy Fund III (International) LP, Waterous Energy Fund III (Canadian FI) LP and Waterous Energy Fund III (International FI) LP (collectively, "WEF"), which recently announced the acquisition of approximately
Additionally, WEF has submitted a requisition for a special meeting of shareholders to replace the existing Greenfire directors if they do not immediately resign.
Greenfire's Board of Directors (the "Board") has always sought to act in the best interests of Company stakeholders and have taken decisive action to protect the interests of minority shareholders. These actions have included the adoption of a new, limited-purpose shareholder rights plan that is designed to ensure, to the extent possible, that all shareholders of the Company are treated fairly and equally in connection with any unsolicited take-over bid or other attempt to acquire control of Greenfire.
Greenfire has also filed an application to the Court of King's Bench of Alberta to address the sale of shares to WEF from each of Allard Services Limited (a corporation controlled by Julian McIntyre, the former Chair and former director of the Company), Annapurna Limited (a corporation controlled by Venkat Siva, a former director of the Company), and Modro Holdings LLC (collectively, the "Selling Shareholders"). This transaction has delivered negative control to WEF at a very low premium, hindering Greenfire's previously initiated strategic review process, which is intended to maximize value for all shareholders.
Greenfire believes the WEF Letter and proxy contest are the latest efforts by WEF to gain control over Greenfire without paying an appropriate premium for control and without offering liquidity to shareholders. While the Company has attempted to engage with WEF in constructive dialogue, WEF has shown no interest in doing so. Greenfire's Board remains committed to engaging with all shareholders, including WEF, to align on paths forward that would be in the best interests of the Company.
WEF has proposed the nominantion of six directors, with four of these nominees being WEF employees and also directors of Strathcona Resources Ltd. ("Strathcona"), a company controlled by WEF. The Board does not believe the proposed WEF nominees meet the requirements of best governance practices for publicly listed companies. Further, the Board notes that WEF has a history of making acquisitions that have been subsequently vended into Strathcona for shares. Greenfire is concerned that common directors between the two companies could expose Greenfire to a similar outcome, including potentially acquiring the Company without offering an appropriate control premium to Greenfire shareholders.
Greenfire currently trades at a discounted valuation relative to existing pure play SAGD peers, despite the Company's view that Greenfire has differentiated Tier-1 SAGD assets, growth plans and positioning to continue to benefit from improved Canadian heavy oil market dynamics.
There is no action for Greenfire shareholders to take at this time.
The Board is carefully evaluating the WEF Letter and requisition in consultation with its financial and legal advisors. This includes assessing the qualifications and independence of the proposed nominees and the potential impact on Greenfire's corporate governance. Foremost, the Board will ensure that the interests of all Greenfire shareholders, including minority shareholders, are considered in its assessment.
As this assessment progresses, the Board will provide a recommendation regarding any necessary actions Greenfire shareholders should take. Greenfire's Board remains focused on maximizing long-term value for the Company and the benefit of all shareholders.
About Greenfire
Greenfire is an intermediate, lower-cost and growth-oriented Athabasca oil sands producer with concentrated Tier-1 assets that use steam assisted gravity drainage extraction methods. The Company is operationally focused with an emphasis on an entrepreneurial environment and a high level of employee ownership. Greenfire Common Shares are listed on the New York Stock Exchange and Toronto Stock Exchange under the symbol "GFR". For more information, visit greenfireres.com or find Greenfire on LinkedIn and X.
Shareholder Questions
Shareholders who have questions may contact Greenfire's strategic shareholder communications advisor:
Laurel Hill Advisory Group
Toll Free: 1-877-452-7184 (for shareholders in North America)
International: +1-416-304-0211 (for shareholders outside Canada and the US)
By Email: assistance@laurelhill.com
Contact Information
Greenfire Resources Ltd.
205 5th Avenue SW
Suite 1900
Calgary, AB T2P 2V7
investors@greenfireres.com
greenfireres.com
FORWARD-LOOKING STATEMENTS ADVISORY
This press release contains certain forward-looking statements or forward-looking information within the meaning of the United States federal securities laws and applicable Canadian securities laws (collectively, "forward-looking statements"). Forward-looking statements relate to future events or Greenfire's future performance. All information other than statements of historical fact are forward-looking statements. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "targeting", "forecast," "strategy," "future," "opportunity," "plan," "potential," "may," "should," "will," "can," "could," "would," "will be," "to be," "to include," "to align," "will continue," "will likely result," and similar expressions. In addition to other forward-looking statements herein, there are forward-looking statements in this press release relating to, among other things, further communication relating the WEF Letter and requisition; potential for dialogue between the Company and WEF; the intent of the Board to carefully evaluate the WEF Letter and requisition in consultation with its financial and legal advisors; Greenfire's expectations with respect to the strategic review process; the intentions, strategy, growth plans and future actions of the Company; Greenfire's belief that the Company's Tier-1 assets represent a structural cost advantage; Greenfire's expected benefits from the completion of the Trans Mountain Expansion Project (TMX) and improving market dynamics for Canadian heavy oil. There may be a risk that WEF may not be willing to participate in dialogue with the Company and there is no certainty that the strategic review process will result in a transaction or any other transaction.
You should carefully consider all of the risks and uncertainties described in the "Risk Factors" section of the Company's annual report on Form 20-F dated March 26, 2024, which is available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov/edgar.shtml and in other documents filed by Greenfire from time to time on SEDAR+ and with the United States Securities and Exchange Commission. Forward-looking statements are statements about the future and are inherently uncertain. The Company does not intend, and does not assume any obligation, to update any forward-looking statements, other than as required by applicable law. For all of these reasons, the Company's securityholders should not place undue reliance on forward-looking statements.
Oil and Gas Terms
This press release uses the term Tier-1 SAGD reservoir to describe the bitumen reservoirs that Greenfire has an interest in. The term Tier-1 SAGD reservoir refers to SAGD reservoirs that have no top gas, bottom water, or lean zones, commonly referred to as "thief zones". Thief zones provide an unwanted outlet for steam and reservoir pressure. Thief zones require costly downhole pumps and recurring pump replacements to achieve targeted production rates, leading to higher capital and operating expenditures. Tier-1 wells flow to surface with natural lift; not requiring downhole pumps or gas lift.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/230799
FAQ
What percentage stake did Waterous Energy Fund acquire in Greenfire Resources (GFR)?
What action has Greenfire Resources (GFR) taken to protect minority shareholders?
How many directors has WEF proposed to nominate for Greenfire Resources (GFR)?
