Calgary, Alberta--(Newsfile Corp. - May 15, 2024) - Greenfire Resources Ltd. (NYSE: GFR) (TSX: GFR) ("Greenfire" or the "Company"), a Calgary-based energy company focused on the sustainable production and development of thermal energy resources from the Athabasca region of Alberta, Canada, is pleased to announce its operating and financial results for the quarter ended March 31, 2024 ("Q1 2024") and an operational outlook for the second quarter of 2024. The unaudited condensed interim consolidated financial statements and notes thereto for the three months ended March 31, 2024 and 2023 as well as related Management's Discussion and Analysis ("MD&A") will be available on SEDAR+ at , on EDGAR at www.sec.gov/edgar.shtml and on Greenfire's website at .

A conference call to discuss the Q1 2024 results has been scheduled for Thursday, May 16, 2024 at 7:00 a.m. Mountain Time (9:00 a.m. Eastern Time). Access details for the conference call are provided below.

"After successfully drilling three redevelopment infill ("Refill") wells at the Demo Asset, the Company reallocated the drilling rig to the Expansion Asset to continue the redevelopment drilling program given regulatory delays restarting the disposal well at the Demo Asset. This program is expected to be highly economic and is anticipated to have a significant impact on Greenfire's bitumen production in 2024, particularly as reservoir pressure continues to increase at the Expansion Asset following sustained non-condensable gas ("NCG") co-injection activities" said Robert Logan, President and Chief Executive Officer of Greenfire.

"We are pleased to reiterate the Company's previously announced 2024 Outlook, which is expected to drive continued production growth, commence debt repayment and positively position the Company to benefit from a potential re-rating of the Canadian heavy oil barrel as the Trans Mountain Expansion Project ("TMX") became operational in May 2024.

"The current wildfire situation in Northern Alberta has not yet had any material impact on our operations. We have taken all prudent steps to minimize any risks to our staff and our assets, however, should the fires extend into our field for an extended period, there may be negative implications to our business," concluded Mr. Logan.

All dollar amounts reported in this press release are in Canadian dollars unless otherwise noted.

The Company holds a 75% working interest in the Hangingstone Expansion Facility (the "Expansion Asset") and a 100% working interest in the Hangingstone Demonstration Facility (the "Demo Asset" and together with the Expansion Asset, the "Hangingstone Facilities"). Unless indicated otherwise, production volumes and per unit statistics are presented throughout this press release on a "gross" basis as determined in accordance with National Instrument 51-101 - Standards for Disclosure for Oil and Gas Activities, which is the Company's gross working interest basis before deduction of royalties.

Q1 2024 Highlights

• Delivered consolidated bitumen production of 19,667 barrels per day ("bbls/d") in Q1 2024 (20,586 bbls/d - Q1 2023), an increase of over 2,300 bbls/d from the Q4 2023 average of 17,335 bbls/d. These results reflect strong production performance from the Refill drilling program that began in August 2023 and surface facility optimizations at the Expansion Asset, partially offset by unplanned impacts from the five previously disclosed downhole temperature sensor failures.

• Generated Adjusted EBITDA(1) of $39.3 million in Q1 2024 ($13.3 million - Q1 2023), and adjusted funds flow(1) of $27.6 million in Q1 2024 ($3.1 million - Q1 2023). Adjusted EBITDA(1) and adjusted funds flow(1) in the period included realized losses on commodity risk management contracts of $8.8 million ($0.2 million - Q1 2023).

• Invested capital on property, plant and equipment of $31.9 million in Q1 2024 ($2.5 million - Q1 2023), with approximately two thirds of capital expenditures in the period allocated to Refill drilling activities at the Hangingstone Facilities, with the balance of capital spending primarily directed to various facility projects.

• Maintained available liquidity of $140.2 million at March 31, 2024, consisting of:

  • $90.2 million of cash and cash equivalents; and

  • $50.0 million of available credit under a reserve-based credit facility ("Senior Credit Facility").

(1) Non-GAAP measures do not have any standardized meaning prescribed by International Financial Reporting Standards (IFRS") and may not be comparable with the calculation of similar measures presented by other entities. Refer to the discussion under the heading "Non-GAAP and Other Financial Measures" in this press release for further information.

Financial & Operational Highlights

(1) Non-GAAP measures do not have any standardized meaning prescribed by IFRS and may not be comparable with the calculation of similar measures presented by other entities. Refer to the "Non-GAAP and Other Financial Measures" in this press release for further information.

(2) As at March 31, 2024 and March 31, 2023.

Liquidity and Balance Sheet

(1) As at March 31, 2024 the Company had $50.0 million (December 31, 2023 - $50.0 million) of available credit under the Senior Credit Facility, of which nil (December 31, 2023 - nil) was drawn as of March 31, 2024.

(2) As at March 31, 2024, the 2028 Notes (as defined below) had a face value of US$300.0 million (December 31, 2023 - US$300.0 million) and were converted into Canadian dollars as at period end exchange rates.

Operational Update

• In April 2024, consolidated bitumen production averaged approximately 18,360 bbls/d, reflecting temporary production impacts at the Expansion Asset owing to the previously disclosed failure of third-party downhole temperature sensors at five of the ten recently drilled Refill wells, along with production impacts from Refill well drilling operations and the ongoing shut-in of the disposal well at the Demo Asset.

• In response to the recent wildfires in northern Alberta, out of an abundance of caution, Greenfire temporarily evacuated all non-essential personnel from its operated facilities on May 11th. The Company is actively monitoring the situation to ensure the protection and safety of our people and assets as the situation continues to evolve.

Expansion Asset (75% Working Interest, Operator)

• Working Interest Bitumen Production at the Expansion Asset Averaged Approximately 16,020 bbls/d in April 2024: The Company's production in April was impacted by the previously disclosed failure of third-party downhole temperature sensors in five of the ten recently drilled Refill wells. The five Refill wells equipped with downhole temperature sensors that have not failed produced at an average of approximately 1,500 bbls/d per well, on a 100% working interest basis, in April 2024. Greenfire has replaced the failed downhole temperature sensors at three of five Refill wells and expects that the average productivity of these Refill wells will increase to align with the current average productivity of the remaining five Refill wells where temperature sensors have not failed.

• Drilling Rig Redeployed to Maintain Redevelopment Drilling: In response to continued regulatory delays at the Demo Asset, Greenfire redeployed the drilling rig to focus on redevelopment activities at the Expansion Asset. This drilling program is anticipated to conclude in the third quarter of 2024, after which the Company plans to mobilize the drilling rig back to the Demo Asset to drill additional Refill wells.

• NCG Co-injection Continues to Support Higher Reservoir Pressure: Reservoir pressure and well productivity continue to increase at the Expansion Asset as a result of sustained high rates of NCG co-injection following the Company's debottlenecking initiatives undertaken in the second half of 2023. Greenfire expects that targeted reservoir pressure will be restored at the Expansion Asset around mid-2024.

Demo Asset (100% Working Interest, Operator)

• Working Interest Bitumen Production at the Demo Asset Averaged Approximately 2,340 bbls/d in April 2024: The Company's production in April was impacted by Refill well drilling operations as well as the temporary shut-in of the disposal well.

• Timing to Recommence Disposal Well Operations Impacted by Delayed Regulatory Approval: The disposal well at the Demo Asset has been temporarily shut-in since the beginning of October 2023. With required remediation work complete, the disposal well is awaiting regulatory approval to recommence operations.

• Three Refill Wells Drilled; Drilling Rig Reallocated to the Expansion Asset: The Company successfully drilled three extended reach Refill wells with lateral lengths of approximately 2,300 meters, which is 700 meters longer than the Refills recently drilled by Greenfire at the Expansion Asset. A second disposal well was also drilled at the Demo Asset, which is awaiting regulatory approval to commence operations.

Reiterates 2024 Outlook and Reaffirms Commitment to Prioritize Near-Term Debt Repayment

• Greenfire reiterates the previously announced 2024 Outlook, including forecasted ranges for production and capital expenditures, which is underpinned by the Company's production growth plan that is anticipated to result in meaningful adjusted free cash flow generation over the balance of 2024, assuming continued strong commodity pricing, particularly for heavy oil. The evolving wildfire situation in northern Alberta represents a risk to the Company's 2024 Outlook.

• The Company remains committed to prioritizing debt repayment and intends to reduce debt in the near-term using 75% of excess cash flow (as defined in the indenture for the Company's Senior Secured Notes due 2028, the "2028 Notes") to semi-annually redeem a portion of the 2028 Notes until total indebtedness is less than US$150 million.

  • The outstanding principal amount of the 2028 Notes is US$300 million or approximately $407 million assuming the U.S. to Canadian dollar exchange rate at the Q1 2024 period end.

• The table below provides a sensitivity for 2024 adjusted funds flow to select market variables relative to the 2024 Outlook and commodity price scenario outlined above, inclusive of Greenfire's existing 2024 hedging program ("2024 Hedging Program").

(1)       The base case for the 2024 adjusted funds flow sensitivity assumes the midpoint of the 2024 Outlook production range of 23,500 bbls/d, WTI of US$80/bbl, WCS differential of US$15/bbl, AECO price of $2.00/GJ, F/X rate of C$1.35/$US, condensate purchased at 100% of WTI and one bbl of bitumen per 1.45 bbls of diluted bitumen sold.

(2)       Non-GAAP measures do not have any standardized meaning prescribed by IFRS and may not be comparable with the calculation of similar measures presented by other entities. Refer to the "Non-GAAP and Other Financial Measures" in this press release for further information.

Greenfire's Growth-oriented Strategy Underpinned by Concentrated Tier-1 SAGD Assets

Greenfire has a large, long-life and relatively low decline Tier-1 oil sands resource base, with two producing and adjacent SAGD assets at the Hangingstone Facilities and expandable pipeline infrastructure in place for diluted bitumen and diluent at the Expansion Asset. The Company's structural cost advantages from its Tier-1 SAGD reservoir at the Hangingstone Facilities, combined with its relatively lower forecasted capital expenditure profile due to its projected multi-year inventory of Refill well targets, is anticipated to result in continued near-term production growth and potential meaningful free cash flow generation. The Company believes that the Hangingstone Facilities offer ample opportunities for additional value generation. In addition to Greenfire's existing commitment to repay debt, the Company intends to formalize and initiate a policy to return capital to its shareholders over time. Greenfire also plans to evaluate and consider additional potential prospects for further production growth, including external acquisitions that compete with the expected returns from its existing Tier-1 SAGD assets, if the Company believes they are accretive to Greenfire's shareholders.

Conference Call Details

Greenfire plans to host a conference call on Thursday, May 16, 2024 at 7:00 a.m. Mountain Time (9:00 a.m. Eastern Time), during which members of the Company's executive team will discuss its Q1 2024 results as well as host a question-and-answer session with investors.

• Date: Thursday, May 16, 2024

• Time: 7:00 a.m. Mountain Time (9:00 a.m. Eastern Time)

• Dial In:

  • North America: 1-844-763-8274

  • International: +1-647-484-8814

Non-GAAP and Other Financial Measures

Certain financial measures in this news release including Adjusted EBITDA (in total, and per bbl), Operating Netback (in total, and per bbl), Adjusted Funds Flow, Adjusted Free Cash Flow), are non-GAAP financial measures or ratios, supplementary financial measures or ratios and capital management measures. These measures are not defined by IFRS and, therefore, may not be comparable to similar measures provided by other companies. These non-GAAP and other financial measures should not be considered in isolation or as an alternative for measures of performance prepared in accordance with IFRS.

For further details of these non-GAAP financial measures or ratios, please refer to the Corporation's MD&A for the three months ended March 31, 2024, which is available on the Corporation's website at  and is also available on the EDGAR and SEDAR+ websites.

Non-GAAP Financial Measures

Adjusted EBITDA

Net income (loss) and comprehensive income (loss) is the most directly comparable GAAP measure for adjusted EBITDA, which is a non-GAAP measure. Adjusted EBITDA is calculated as net income (loss) before interest and financing, income taxes, depletion, depreciation and amortization, the transaction and financing cost impacts of the Company's business combination with M3-Brigade Acquisition III Corp. and bond refinancing and is adjusted for certain non-cash items, or other items that are not considered part of normal business operations. Adjusted EBITDA is used to measure Greenfire's profitability from its underlying asset base on a continuing basis. This measure is not intended to represent net income (loss) and comprehensive income (loss) in accordance with IFRS.

The following table is a reconciliation of net income (loss) net income (loss) and comprehensive income (loss) to adjusted EBITDA(1).

Adjusted EBITDA(1)

(1) Non-GAAP measures do not have any standardized meaning prescribed by IFRS and may not be comparable with the calculation of similar measures presented by other entities. Refer to the "Non-GAAP and Other Financial Measures" in this press release for further information.

Operating Netback

Oil sales is the most directly comparable GAAP measure for operating netback, which is a non-GAAP measure. This measure is not intended to represent oil sales, net earnings or other measures of financial performance calculated in accordance with IFRS. Operating netback is comprised of oil sales, less diluent expense, royalties, operating expense, transportation and marketing expense, adjusted for realized commodity risk management gains or losses, as appropriate. Operating netback is a financial measure widely used in the oil and gas industry as a supplemental measure of a Company's efficiency and ability to generate cash flow for debt repayments, capital expenditures or other uses.

The following table is a reconciliation of oil sales to operating netback.

Operating Netback(1)

(1) Non-GAAP measures do not have any standardized meaning prescribed by IFRS and may not be comparable with the calculation of similar measures presented by other entities. Refer to the "Non-GAAP and Other Financial Measures" in this press release for further information.

Adjusted Funds Flow and Adjusted Free Cash Flow

Cash provided (used) by operating activities is the most directly comparable GAAP measure for adjusted funds flow and adjusted free cash flow, which are non-GAAP measures. These measures are not intended to represent cash provided (used) by operating activities calculated in accordance with IFRS.

The adjusted funds flow measure allows management and others to evaluate the Company's ability to fund its capital programs and meet its ongoing financial obligations using cash flow internally generated from ongoing operating related activities. We compute adjusted funds flow as cash provided (used) by operating activities, excluding the impact of changes in non-cash working capital, less transaction costs.

Management uses adjusted free cash flow as an indicator of the efficiency and liquidity of its business, measuring its funds after capital investment that is available to manage debt levels and return capital to shareholders. By removing the impact of current period capital expenditures from adjusted free cash flow, management monitors its adjusted free cash flow to inform its capital allocation decisions. We compute adjusted free cash flow as cash provided (used) by operating activities, excluding the impact of changes in non-cash working capital, less transaction costs and capital expenditures.

The following table is a reconciliation of cash provided (used) by operating activities to adjusted funds flow and adjusted free cashflow.

Adjusted Funds Flow(1) and Adjusted Free Cash Flow(1)

(1) Non-GAAP measures do not have any standardized meaning prescribed by IFRS and may not be comparable with the calculation of similar measures presented by other entities. Refer to the "Non-GAAP and Other Financial Measures" in this press release for further information.

Non-GAAP Financial Ratios

Adjusted EBITDA ($/bbl)

Net income (loss) and comprehensive income (loss) is the most directly comparable GAAP measure for adjusted EBITDA ($/bbl), which is a non-GAAP measure. Adjusted EBITDA ($/bbl) is used to measure Greenfire's profitability from its underlying asset base on a continuing basis. This measure is not intended to represent net income (loss) and comprehensive income (loss) in accordance with IFRS. Adjusted EBITDA ($/bbl) is calculated by dividing adjusted EBITDA by the Company's total sales volume in a specified period.

Operating Netback ($/bbl)

Oil sales ($/bbl) is a ratio calculated using oil sales, which is the most directly comparable GAAP measure for operating netback. Operating netback is the non-GAAP financial measure used to calculate operating netback ($/bbl), which is a non-GAAP financial ratio. This measure is not intended to represent oil sales, net earnings or other measures of financial performance calculated in accordance with IFRS. Operating netback ($/bbl) is calculated by dividing operating netback by the Company's total oil sales volume, in a specified period. Operating netback ($/bbl) is a non-GAAP financial ratio widely used in the oil and gas industry as a supplemental measure of a Company's efficiency and ability to generate cash flow for debt repayments, capital expenditures or other uses, isolated for the impact of changes in oil sales volume, in a specified period.