Q4 2024 Greenfire Resources Ltd Earnings Call
An opportunity to ask questions.
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Robert: I will now turn the meeting over to Mr. Robert <unk>, Vice President of capital markets. Please go ahead Sir.
Robert Loebach: I will now turn the meeting over to Mr. Robert Loebach, Vice President of Capital Markets. Please go ahead, sir.
Thank you operator.
Speaker Change: Morning, and welcome to Green fires conference call for our Q4 and full year 2024 result.
Robert Loebach: Good morning and welcome to Greenfire's conference call for our Q4 and full year 2024 results. Please note that today's call includes forward-looking statements and references non-GAAP and other financial measures. We encourage you to review the associated risks detailed in our latest MD&A.
Speaker Change: Please note that today's call includes forward looking statements and references non-GAAP and other financial measures.
Speaker Change: We encourage you to review the associated risks detailed in our latest MD&A.
Speaker Change: Unless specified otherwise all monetary figures discussed today are in Canadian dollars.
Robert Loebach: Unless specified otherwise, all monetary figures discussed today are in Canadian dollars. Capital expenditures and production figures presented today are based on our working interests net to Greenfire, unless noted otherwise.
Speaker Change: Capital expenditures and production figures presented today are based on our working interest net to green fire unless noted otherwise.
Speaker Change: Joining us on today's call are key members of the Green prior leadership team.
Robert Loebach: Joining us on today's call are key members of the Greenfire leadership team, including Adam Waterous, Executive Chairman, Colin Germaniuk, President.
Adam Watrous: <unk>, Adam Watrous Executive Chairman, Colin Germanic President.
Tony Crowded: Tony crowded Chief Financial Officer, and Jonathan Kindercare, Chief operating officer.
Robert Loebach: Tony Kraljic, Chief Financial Officer, and Jonathan Kanderka, Chief Operating Officer.
Adam Watrous: Upon the conclusion of our prepared remarks, we will open the floor to questions from participants.
Robert Loebach: Upon the conclusion of our prepared remarks, we will open the floor to questions from participants.
Tony Crowded: I will now hand, the call over to our executive Chairman Adam water.
Robert Loebach: I will now hand the call over to our Executive Chairman, Adam Waterous. Adam, please go ahead.
Speaker Change: Adam Please go ahead.
Speaker Change: Thank you Robert and thanks, everyone for joining our conference call. This morning.
Adam Waterous: Thank you, Robert, and thanks, everyone, for joining our conference call this morning. Obviously, there's been a lot of change at Greenfire over the last few months, with Wes taking control of the board and Colin Germaniuk being appointed president. Colin is a deep experience CID professional with a proven track record of capital efficient organic growth in thermal oil operations. And with Colin in the driver's seat, we remain excited about our investment in Greenfire. Nevertheless, as WEF has looked under the hood, so to speak, over the last two and a half months, it's become clear that the previous stewards of the business were fundamentally running the business for the short run.
Speaker Change: Obviously, there's been a lot of change that green fire over the last few months that with what's taking control of the board and I call on Germany being appointed President.
Speaker Change: Colin is a deeply experienced sales professionals with a proven track record of capital efficient organic growth and thermal oil operations.
Speaker Change: This call and in the driver seat, we remain excited about our investment in Green fire.
Speaker Change: Nevertheless, as Wes has looked under the hood so to speak over the last two and a half months, it's become clear that the previous stewards of the business. We are fundamentally running the business for the short run production.
Speaker Change: Alexia prioritize near term production at the expense of long term net asset value maximization and return on equity.
Adam Waterous: electing to prioritize near-term production ads at the expense of long-term net asset value maximization and return on equity.
Speaker Change: Greenbrier is currently formulating new development plan for the company, which had a high level, we will prioritize drilling new well pairs and undeveloped.
Adam Waterous: Greenfire is currently formulating a new development plan for the company, which at a high level will prioritize drilling new well pairs in undeveloped reservoirs at the expansion asset and managing the base production of the demo asset.
Speaker Change: Reservoir at the expansion asset I imagine the base production at the demo asset.
Speaker Change: Green five will not be giving specific 2025 production or capital guidance at this time.
Adam Waterous: Greenfire will not be giving a specific 2025 production or capital guidance at this time.
Colin: Ill now hand, the call over to Colin.
Colin Germaniuk: I will now hand the call over to Colin. Good morning, everyone. And thanks, Adam, for the introduction. I'm very excited to speak with you all today as we embark on a new chapter for our company. Greenfire is currently undergoing a significant transition. I'm privileged to lead this talented group as we work together to reposition our company for sustained success. The many changes we are going to discuss today reflect our commitment to addressing past challenges and seizing new opportunities. As part of this transition, we're moving away from a short term mindset to a strategy focused on long term value creation.
Colin: Good morning, everyone and thanks, Adam for the introduction I'm very excited to speak with you all today as we embark on a new chapter for our company.
Speaker Change: Greenbrier is currently undergoing a significant transition and privileged to lead this talented group as we worked together to reposition our company for sustained success.
Speaker Change: The many changes we are going to discuss today reflect our commitment to addressing past challenges in seizing new opportunities.
Speaker Change: As part of this transition we are moving away from a short term mindset to a strategy focused on long term value creation. This overhaul with center [noise] culture operating strategy and capital structure. The goal is clear we're trying to maximize net value share for asset.
Colin Germaniuk: This overhaul will center culture, operating strategy and capital structure. The goal is clear, we're trying to maximize net value share per asset. and the Asset Portfolio and Enhance Return on Equity for Greenfire Shareholders. This means prioritizing projects and investments that will deliver strong returns, even if they don't yield immediate results. We're committed to building a sustainable future for Greenfire, not chasing quarterly results.
Speaker Change: And the asset portfolio and enhance return on equity for Greenbrier shareholders. This means prioritizing projects and investments that will deliver strong returns even if they don't yield immediate results. We're committed to building a sustainable future for Greenbrier not chasing quarterly results.
Speaker Change: So what does this look like in practice first we're overhauling our culture to prioritize safety regulatory compliance and high performance. This includes embedding a safety first mindset throughout the business.
Colin Germaniuk: So what does this look like in practice? First, we're overhauling our culture to prioritize safety, regulatory compliance, and high performance.
Colin Germaniuk: This includes embedding a safety-first mindset throughout the business, introducing new incentive programs, flattening the organization, and revamping internal processes to strengthen our regulatory compliance system and drive productivity.
Speaker Change: Introducing new incentive programs flattening the organization revamping internal processes to strengthen our regulatory compliance systems and drive productivity.
Speaker Change: Second we are conducting a comprehensive review of our development plans capital expenditures and operational strategies are.
Colin Germaniuk: Second, we're conducting a comprehensive review of our development plans, capital expenditures, and operational strategies, and are in the process of building updated development plans for the Hanging Stone facilities.
Speaker Change: And are in the process of building updated development plans for the hanging stone facilities, we will release, our 2025 guidance and provide further additional details on our new development plans when they are available.
Colin Germaniuk: We will release our 2025 guidance and provide further additional details on our new development plans when they are available.
Speaker Change: And finally, we are reassessing, our capital structure intent and intend to adjusted overtime better position the company.
Colin Germaniuk: And finally, we are reassessing our capital structure and intend to adjust it over time to better position the company for longer-term growth.
Speaker Change: For longer term growth with that let's move to our 2024 operational results in 2025 operational update.
Colin Germaniuk: With that, let's move to our 2024 operational results and 2025 operational update.
Speaker Change: <unk> production in Q4 of 2024 was $19 400 barrels a day, which is a 1% increase above Q3, 2024, and a 12% increase from Q4 of 2023, the full year production averaged 19000 barrels a day.
Colin Germaniuk: Greenfire's production in Q4 2024 was 19,400 barrels a day, which is a 1% increase above Q3 2024 and a 12% increase from Q4 2023. The full year of production averaged 19,000 barrels a day, 19,300 barrels a day, which is a 9% increase over 2023.
Speaker Change: 19300 barrels a day, which is a 9% increase over 2023, driven by our drilling campaign launched in August of 2023.
Colin Germaniuk: Greenfire's drilling campaign launched in August of 2023. Moving over to 2025, our production to date has averaged 18,000 barrels a day, which is a 7% decrease from the prior quarter. This is a result of operating performance at the expansion offset, which is including impacts from ongoing steam generation equipment repairs, unexpected facility downtime, and natural production declines. Currently, one of our four steam generation units is offline with an associated impact on production of about 1,500 barrels a day to 2,300 barrels a day. We're implementing mitigation strategies to limit production impacts and are developing a comprehensive plan to restore full steam capacity and will provide updates in due course.
Speaker Change: Moving over to 2025 of our production to date has averaged 18000 barrels a day.
Speaker Change: 7% decrease from the prior quarter.
Speaker Change: This is a result of operating performance at the expansion asset, which is including impacts from ongoing steam generation equipment repairs unexpected facility downtime and natural production declines currently one of our four generation units is offline with an associated impact on production of about 1500.
Speaker Change: Barrels a day to 'twenty to 'twenty 300 barrels a day, we're implementing mitigation strategies to limit production and box and are developing a comprehensive plan to restore full steam capacity and will provide updates in due course. Meanwhile, strong performance at the demo offset is partially offset this reduction.
Colin Germaniuk: Meanwhile, strong performance at the demo offset has partially offset this reduction.
Speaker Change: Following a leadership change at Greenbrier, a review identified potential underreporting of sulfur dioxide emissions at the expansion assets.
Colin Germaniuk: Following a leadership change at Greenfire, a review identified potential underreporting of sulfur dioxide emissions at the expansion asset. Greenfire takes its regulatory obligations very seriously, and we immediately reported the potential exceedance to the Elbert Energy Regulator, and we're currently in discussions with them exploring remedies, including potentially adding a sulfur recovery unit to the expansion outset.
Speaker Change: Greenbrier cases, our regulatory obligations very seriously and we immediately reported the potential exceeding to the Alberta energy regulator and we're currently in discussions with them exploring remedies, including potentially adding a sulfur recovery unit to the expansion asset the extent in any potential exceeding and any remedies penalties or orders imposed by the ear are unknown.
Colin Germaniuk: The extent of any potential exceedance and any remedies, penalties, or orders imposed by the AER are unknown at this time.
Speaker Change: At this time.
Speaker Change: Despite these challenges I'm generally optimistic about what lies ahead, we own a high quality saggy asset with substantial value generation potential for its long life and concentrated reserves base that we have.
Colin Germaniuk: Despite these challenges, I'm genuinely optimistic about what lies ahead.
Colin Germaniuk: We own a high quality SAG-E asset with substantial value generation potential for its long life and concentrated reserve space. And we have a strong dedicated team of industry experts who bring experience and a shared commitment to turning things around. These are the foundations of our future success and I'm confident they'll carry us through this transformation.
Speaker Change: A strong and dedicated team of industry experts, who bring experience and a shared commitment to turn things around these are the.
Speaker Change: <unk> of our future success, and I'm confident they'll carry us through this transformation I'll now turn the call over to our Chief operating officer, Jonathan to discuss 2020 for reserves.
Jonathan Kanderka: I'll now turn the call over to our Chief Operating Officer Jonathan to discuss 2024 reserves. Thanks, Colin. Greenfire achieved significant reserve growth in 2024, driven primarily by the inclusion of full-field development plans across the approved land-based asset expansion assets. At year-end 2024, 1P reserves increased by 28% to 235 million barrels, while 2P reserves grew by 72% to 409 million barrels, compared to the previous year. These initiatives have resulted in a 2P Reserve Life Index of 58 years. The updated reserves reflect a before-tax present value discounted at 10% of $2.5 billion for 1P reserves and $3 billion for 2P reserves, making growth of 21% and 25% respectively from year-end 2023.
Speaker Change: I called Greta Greenbrier achieved significant reserve growth in 2024, driven primarily by the inclusion of a full field development plans across the crude <unk>.
Speaker Change: Land base that the expansion assets at year end 2020 for one P reserves increased by 28% to 235 million barrels <unk> reserves grew by 72% to 409 million barrels compared to the previous year.
Speaker Change: These initiatives have resulted in a.
Speaker Change: Two P Reserve life index of 58 years, the updated reserves reflect a before tax present value discounted at 10% of $2 5 billion.
Speaker Change: One P reserves and $3 billion for two P reserves, making girls up 21% and 25% respectively from year end 2023, after adjusting for debt and cash this translates to a 23 and 27% increase per share for one <unk> and two P Richards respectively.
Jonathan Kanderka: After adjusting for debt and cash, this translates to a 23% and 27% increase per share for 1P and 2P reserves respectively.
Robert: And now I'll hand, it back over to Robert.
Robert: It's got the hedging program.
Robert: Thank you Jonathan Greenbrier.
Robert: Greenbrier executed it updated Wty hedging program in the first quarter of 2025 to enhance price certainty for a portion of the company's production.
Jonathan Kanderka: Greenfire executed an updated WTI hedging program in the first quarter of 2025 to enhance price certainty for a portion of the company's production.
Speaker Change: Greenbrier replaced its previous Wty costless collar contract, which had an average price range of approximately 57 to $83 a barrel U S with fixed price swaps covering 9400 barrels a day of <unk> at an average price of approximately $101 a barrel Canadian for the full.
Jonathan Kanderka: Greenfire replaced its previous WTI costless collar contract, which had an average price range of approximately $57 to $83 a barrel US, with fixed price swaps covering 9,400 barrels a day of WTI at an average price of approximately $101 a barrel Canadian for the full year of 2025. With this updated hedging program in place, we believe the company is well positioned to make long-term investments to deliver value for shareholders in the current volatile commodity environment.
Speaker Change: Year of 2000 2020 2025.
Speaker Change: With this updated hedging program in place we believe the company is well positioned to make long term investments to deliver value for shareholders in the current volatile commodity environment.
Speaker Change: Now I'll hand, the call over to Tony to discuss Greenbrier financial performance. Thank.
Tony Kraljic: I will now hand the call over to Tony to discuss Greenfire's financial performance. Thank you, Robert. Good morning, everybody. Greenfire's adjusted fund flow for Q4 2024 reached $53 million, contributing to a full year total of $172 million, up significantly from $10.5 million in Q4 of last year and $73.2 million for the full year last year. Capital expenditures were $13.2 million in Q4 and $92 million for the full year. Adjusted free cash flows hit $39.8M in Q4, driven by favorable WCS differentials, as well as reduced operating and capital costs. Adjusted free cash flow for the full year 2024 was $80 million.
Tony Crowded: Thank you Robert and good morning, everybody.
Speaker Change: <unk> as adjusted funds flow for Q4, 2024 reached $53 million, putting our full year total of $172 million.
Speaker Change: Significantly from $10 5 million in Q4 of last year.
Speaker Change: $93 2 million for the full year last year.
Speaker Change: Capital expenditures were $13 2 million in Q4 and $92 million for the full year.
Speaker Change: Adjusted free cash flow was $39 8 million in Q4, driven by favorable WCS differentials as well as reduced operating and capital costs.
Speaker Change: Adjusted free cash flow for the full year 2024 was $80 million.
Speaker Change: The company maintains a robust liquidity of $117 million.
Tony Kraljic: The company maintains a robust liquidity of $117M, including $67M in cash and cash equivalents on hand, and $50M available under a fused credit facility supporting our ongoing business. In July of 2024, Greenfire regained approximately US$61 million of its 2028 note under the Access Cash Flow Speed Mechanism. As of the year-end, no principal repayment was due with next redemption scheduled before September 2025. Following the change of control involving WEP, the company was required to make an offer to repurchase the 2028 note at 101% of their par value for certain to the terms of the note. This offer concluded in February of 2025, and a total of $5,000 U.S.
Speaker Change: $67 million in cash and cash equivalents on hand, and $50 million available under the credit facility supporting our ongoing execution.
Speaker Change: In July of 2020 for Greenbrier regain approximately 61 million U S of a 2028 node entity.
Speaker Change: Excess cash flow sweep mechanism.
Speaker Change: The year end no principal repayments deal with Nex redemption scheduled.
Speaker Change: Before September 2025.
Speaker Change: Following the change of control involving West the company was required to make an offer to repurchase the 2028 note at 101% of their par value for starting to the terms or at all.
Speaker Change: It also concluded in February of 2025, and a total of 5000 U S. In aggregate principal amount of 2028.
Tony Kraljic: in equity principal amounts at the 2028 note was badly tendered and redeemed by the company.
Speaker Change: That will be tendered and redeemed by the company.
Speaker Change: In Q1 2025 with the support of the company's bondholders.
Tony Kraljic: In Q1 2025, with the support of the company's bondholders, Greenfire completed an amendment to the 2028 NOAA debenture. This raised the permitted capital expenditures under the 2028 note from $100 million Canadian up to $150 million US over any 12-month period. This is expected to better position the company for operational stability and long-term growth.
Speaker Change: <unk> completed an amendment to the 2028 debenture.
Speaker Change: This way the permitted capital expenditures under the 2028.
Speaker Change: $100 million Canadian dollars up to $150 million over any 12 month period.
Speaker Change: This is expected to better position the company for operational stability and long term growth.
Speaker Change: Over time, we plan to reevaluate our capital structure to better serve our shareholders.
Tony Kraljic: Over time, we plan to re-evaluate our capital structure to better serve Greenfire shareholders. In addition to strong liquidity, the company remained well positioned with $1.6 billion in federal taxables, lower pre-payout royalty rates at expansion assets due to substantial unrecovered royalty balances, and no goes for the writing royalty obligations at a hanging stone facility.
Speaker Change: In addition to strong liquidity the company remains well positioned with $1 6 billion in federal taxable.
Speaker Change: Lower prepaid royalty rate that expansion assets.
Speaker Change: <unk> Unrecovered royalty balances and no horse overwriting royalty obligations of the hanging some facilities.
Speaker Change: With that I'd like to turn it over to the operator to open line for questions.
Operator: With that, I'd like to turn it over to the operator to open the line for questions.
Speaker Change: Thank you we will now begin the question and answer session.
Operator: We will now begin the question and answer session.
Speaker Change: Ask a question you May press Star then one on your telephone keypad.
Operator: To ask a question, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request.
Speaker Change: You will hear a tone acknowledging your request.
Speaker Change: If youre using a speakerphone please pick up your handset before pressing any keys.
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Speaker Change: To withdraw your question. Please press Star then two.
Operator: To withdraw your question, please press star then two.
Speaker Change: We will pause for just a moment that's callers in the queue.
Operator: We will pause for just a moment as callers join the queue. And once again, ladies and gentlemen, that's farther than one if you have a question.
Speaker Change: And once again, ladies and gentlemen, I'm starting to wonder if you have a question, we'll pause for another moment, while we assemble our roster.
Operator: We'll pause for another moment while we assemble our roster.
Speaker Change: And today's first question comes from Michael Bowen at Soma. Please go ahead.
Michael Bowen: And today's first question comes from Michael Bowen at SONA. Please go ahead. Hi, I'd just like to ask, in terms of what you've found and now you are in, uh...
Michael Bowen: Hi, I just wanted to ask in terms of what you found and now you are in a.
Speaker Change: The operations shall we say.
Unknown Attendee: and Amit Sharma.
Speaker Change: So it's a wash and you expect it all how would you describe the state of them.
Speaker Change: No why is it taking so long to put together a formal business plan.
Speaker Change: On the previous management our guidance essentially.
Speaker Change: So I'd say its out of Marcus here I'll take that call I'll take that question.
Adam Waterous: It's Adam Waterous speaking. I'll take that question. We tried to get some sense. The previous business plan was designed to optimize short-term performance and optimize production while minimizing capital. And on the face of it, that sounds maybe like a reasonable objective. If you take that sort of objective to extremes, You can lead to degradation of long-term net asset value. We have a very different objective as an investor, and what we're trying to do is compound per share net asset value and optimize return on equity at the same time. And that can end up being quite a dramatic difference in terms of how you allocate capital, how you develop the resource.
Speaker Change: The.
Speaker Change: We tried to get some sense are the previous business plan.
Speaker Change: It was designed to optimize short term performance.
Speaker Change: And optimize our production while minimizing capital.
Speaker Change: And.
Speaker Change: Oh in the face of it that sounds maybe like a reasonable objective.
Speaker Change:
Speaker Change: If he takes.
Speaker Change: Take that sort of objective two extremes.
Speaker Change: You can lead to a degradation of long term net asset value.
Speaker Change: We have a very different objectives.
Speaker Change: As an investor and what we're trying to do.
Speaker Change: Is compounds our per share net asset value.
Speaker Change: Optimize that we're trying to aggregate the same time.
Speaker Change: And that can end up being quite a dru.
Speaker Change: Dramatic difference in terms of how you allocate capital how you develop the resource.
Speaker Change: So.
Speaker Change: Hi.
Unknown Attendee: So, uh...
Speaker Change: I think there maybe two implications.
Adam Waterous: I think there are maybe two implications.
Speaker Change: For that.
Speaker Change: I bet you you could expect.
Adam Waterous: for that that you could expect. One is that when we ultimately determine what our capital spending program is going to be, development program is, it's going to look very different than the previous management development plan.
Speaker Change: One is that a when we ultimately determine what our capital spending program is going to be a development program is it's going to look very different.
Speaker Change: Then.
Speaker Change: The previous management development plan.
Speaker Change: The second thing I would also tell you is that.
Adam Waterous: The second thing I would also tell you is that One of the Unknown Attendee, Jonathan Kanderka, Robert Loebach, Adam Waterous, Colin Germaniuk, Greenfire It was extremely capital constrained, would be I think an adequate a fair description. And sometimes when you are extremely cap-constrained, you make decisions which are not in the long-term interest of compounding per share value. And let me give you maybe a simplistic mental picture. You know, If you're running a car... You don't go for your regularly scheduled oil change, you can save some money. You actually maybe save some money for a while, but ultimately it catches up on you.
Speaker Change:
Speaker Change: One of the.
Speaker Change: Dynamics that Todd.
Speaker Change: The company had been operating under is.
Speaker Change: It was extremely capital constrained would be I think are adequate tab.
Speaker Change:
Speaker Change: A fair description.
Speaker Change: And.
Speaker Change: Sometimes when you are extremely capital constrained.
Speaker Change: You make decisions, which are not in the long term interests of compounding per share value.
Speaker Change:
Speaker Change: And let me give you maybe a simplistic mental picture.
Speaker Change: You know.
Speaker Change: You're running a car.
Speaker Change: And.
Speaker Change:
Speaker Change: You don't.
Speaker Change: So for your regularly scheduled oil change you can save some money.
Speaker Change: You actually maybe it takes a while for awhile.
Speaker Change: But ultimately it catches up on you.
Speaker Change: And so we'll be very focused now on going through regular oil changes.
Adam Waterous: And so we'll be very focused now on going through regular oil changes. and using fluid maintenance procedures. So that's how we think about it. All of that. I mean, it is.
Speaker Change: And.
Speaker Change: That's absolutely maintenance.
Speaker Change: So that's how that's how we think about it.
Speaker Change: Hopefully that.
Speaker Change: I mean, it is but I mean is the state of the business and the fact that we've got another step down in production in January.
Unknown Attendee: But, I mean, as the state of the business and the fact that we've got another step down in production in January, worse than you expect.
Speaker Change: Worse than you expected.
Speaker Change:
Speaker Change: I would say.
Adam Waterous: Hi. I would say. I'll tell you what, we're very positive on the resource. The resource is We think it has long-term development potential. I would say a fair comment is that... The business had been managed for the short term to an even greater degree than we would have expected. I think that would be a fair comment. It was managed.
Speaker Change: Right.
Speaker Change: I'll tell you what they were just pause we're very positive on the resource.
Speaker Change: The resource is.
Speaker Change: What we think is long term.
Speaker Change: Relevant potential.
Speaker Change: Hum.
Speaker Change: I would say a fair comment is that.
Speaker Change: The business had been managed for the short term.
Speaker Change: To an even greater degree than we would've expected.
Speaker Change: And.
Speaker Change:
Speaker Change: I thought that that would be it.
Speaker Change: Sure.
Speaker Change: It's it was nice.
Speaker Change: I wouldn't necessarily either prevent or it is the opposite of how we would've mashes business the opposite.
Adam Waterous: I would just say that it is the opposite of how we would have managed this business. The opposite.
Speaker Change: Okay.
Speaker Change: I'm so sorry.
Speaker Change: Our expectation is that.
Adam Waterous: So, so, for expectation, that I can give you some sentences of how we thought about it.
Speaker Change: I gave you some sentences in how we thought about it.
Speaker Change: Okay.
Speaker Change: And what do you think about the old monitoring team is planning on maintaining production was supposed to be much higher.
Unknown Attendee: And what do you think about the old management team's plan? I mean, clearly production was supposed to be much higher than it ended up. Was it fantasy really to aim for that type of production level over that time frame in Europe?
Speaker Change: And then I ended up.
Speaker Change:
Speaker Change: Was it fun to see really to aim for that type of production level without timeframe in your opinion.
Speaker Change: I've got to answer it that there's high maybe go back quite settled earlier.
Adam Waterous: I'd like to answer this, to try and maybe go back to what I said a little bit earlier, the development plan that we will ultimately provide will be radically different than the previous management teams. So that, I think, gives you some perspective of what I thought of the last management team's development plan.
Speaker Change: The development plan that we will ultimately provide.
Speaker Change: <unk> will be radically different than the previous management teams. So that gives you some perspective of what I thought the last management teams at all of the glass.
Speaker Change: Okay.
Speaker Change: Listen thank you very much for your time.
Unknown Attendee: Listen, thank you very much for your time.
Speaker Change: Thank you and our next question today comes from Nick I'm, Sorry, I'm, a private investor. Please go ahead.
Nick Asterian: And our next question today comes from Nick Asterian, a private investor. Please go ahead. Hey, thanks, guys. And I appreciate all the help and the color on this stuff. Two questions I have.
Speaker Change: Hey, Thanks, guys.
Speaker Change:
Speaker Change: Appreciate all the color on this stuff.
Speaker Change: Two questions I have one is on capital allocation and one is an operation on.
Nick Asterian: One is on capital allocation and one is on operations. On capital allocation, how do you guys see prioritizing stabilizing the core business and the existing business versus future potential acquisitions? And I ask that just because...
Speaker Change: On capital allocation, how do you guys see stabilizing prioritizing stabilizing the core business and the existing business versus future potential acquisition.
Speaker Change: I ask that just because.
Speaker Change: No you guys up water and you know obviously, a private equity fund them with scrap Kona your track record had been buying a bunch of businesses and then on operation is there any permanent damage or any structural issues.
Unknown Attendee: Unknown Attendee, Jonathan Kanderka, Robert Loebach, Adam Waterous, Colin Germaniuk, Greenfire Is there anything else that, you know, perhaps the long-term net asset value is permanently impaired from?
Speaker Change: Surrounding their drilling plan that they had put in place, but hadn't quite panned out on on productivity or.
Speaker Change: Is there anything else that you know, perhaps the long term net asset value is permanently impaired from so that's my two questions.
Adam Waterous: So that's my two questions. So this is Adam Waterous again.
Speaker Change: Southern Sudan, and watches again I'll take that.
Speaker Change: Questions on acquisition, then I'll turn it over the call to talk about.
Adam Waterous: I'll take the questions on acquisition, then I'll turn it over to Colin to talk about capital spending and the impact on value. We like a few things that have attracted us to Greenfire. One, as I mentioned previously, is the resource. We think that over time it can be effectively and profitably developed. The second thing we like about Greenfire is we do like the neighborhood.
Speaker Change: <unk>.
Speaker Change: Capital spending and the impact on our value add.
Speaker Change: No.
Speaker Change: But we like a few things.
Speaker Change: It's attracted us to bring environment, one as I mentioned previously is the resource.
Speaker Change: We think that.
Speaker Change: Over time, it can be effectively and profitably develop.
Speaker Change: The second thing we like about Green part is we do like the neighborhood.
Speaker Change: From our firm's perspective. This is a personal investment we've made in the Athabasca region, we'd like to take the business in general. This is the fifth safety business that our firm has bought over the last five years and this is.
Adam Waterous: From our firm's perspective, this is the first investment we've made in the Athabasca region. We like the SAG-V business in general. This is the SAG-V business that our firm has bought over the last five years. This is right in the heart of SAG-V country, so to speak. Whether or not we might be able to make any further acquisitions is indeterminate, but we do like the neighborhood. We think that's one of the positives about Greenfire.
Speaker Change: Yeah right right in the heart of Staggy countries. So to speak so we liked it felt like it now.
Speaker Change: Whether or not.
Speaker Change: With that I'd be able to make any further acquisitions.
Speaker Change: This isn't a determinant.
Speaker Change: But we do like the.
Speaker Change: The neighborhood and we think that that's one of the positives.
Speaker Change: About.
Speaker Change: We empower our question Avi.
Speaker Change: Yeah, it's all of US a call and answer that yeah. Its call on German eye care of that.
Speaker Change: To your question about the reservoir damage as a result of drilling.
Adam Waterous: Was the reservoir damaged as a result of drilling? The answer is no.
Speaker Change: And the answer is no you can damage the reservoir.
Adam Waterous: You can't damage a reservoir. through drilling operations. You know, performance might not have been where the previous management expected it to, but there's no reservoir damage. We still like, still very much like the quality of this asset. And, you know, our near term development plans will be going to undeveloped reservoir.
Speaker Change: Through drilling operations.
Speaker Change: <unk> might not have been where the previous management expected it to but Oh, there's no reservoir damage, we're still like still very much like the quality of the asset.
Speaker Change: Our near term development plans will be going to a kind of undeveloped reservoir.
Speaker Change: Gotcha so.
Speaker Change: And then to double click on that what was the problem with the with the drilling plan in the last couple you know the last year or so but its too ambitious and they had you know all these maintenance issues that were catching up with them or what do you think you can fill in the reservoir engineering and design plan totally off base based off of.
Unknown Attendee: Gotcha.
Unknown Attendee: So so and then to double click on that, was was the problem with the with the drilling plan the last couple, you know, the last year or so? Was it too ambitious and they had, you know, all these maintenance issues that were catching up with them?
Adam Waterous: Or was the infill and the reservoir Unknown Attendee, Jonathan Kanderka, Robert Loebach, Adam Waterous, Colin Germaniuk, Greenfire I think directionally the plan might have made sense, but they were drilling into a reservoir that had very high recovery factors already. I think the remaining oil was, the remaining productivity was kind of less than what they originally expected. And from a cost perspective, drilling into a very high pressure reservoir is is, it just adds more capital.
Speaker Change: I'd say the steam chamber size in the dimensions of the reservoir or is it kind of not they did not make sense that they were drilling so long in that and they shouldn't have expected you know high productivity at scale.
Speaker Change: Okay.
Speaker Change: I think directionally that the.
Speaker Change: The plan.
Speaker Change: Might have made sense, but they were drilling into a reservoir that has very high recovery factors.
Speaker Change: Got it.
Speaker Change: So I think the remaining oil was remaining productivity.
Speaker Change: Kind of less than what they originally.
Speaker Change: Expected and.
Speaker Change: From a cost perspective drilling into a very high pressure reservoirs.
Speaker Change: Is it just adds more capital towards it.
Speaker Change: Some cost overruns there.
Speaker Change: Gotcha. Thank you that's all that's all for me.
Unknown Attendee: Unknown Attendee, Jonathan Kraljic, Greenfire Gotcha.
Unknown Attendee: That's all for me.
Speaker Change: Thank you and this concludes the question and answer session I'd like to turn the conference back over to Robert Rohbock for closing remarks.
Robert Loebach: And this concludes the question and answer session. I'd like to turn the conference back over to Robert Loebach for closing remarks.
Robert Rohbock: Thank you operator on behalf of Greenbrier. We appreciate you joining us today for our fourth quarter and full year of 2024 results conference call have a great day.
Robert Loebach: Thank you, operators. On behalf of Greenfire, we appreciate you joining us today for our fourth quarter and full year 2024 results conference call.
Robert Loebach: Have a great day.
Speaker Change: Thank you. This concludes today's conference call. We thank you all for your participation you may now disconnect your lines and have a wonderful day.
Operator: This concludes today's conference call. We thank you all for your participation.
Operator: You may now disconnect your lines and have a wonderful day.