Greenfire Resources .(US:GFR)2025-11-04 13:04Production and Sales Performance - Greenfire's Q3 2025 bitumen production averaged 15,757 bbls/d, a decrease of 18% compared to Q3 2024's 19,125 bbls/d[23] - Oil sales for Q3 2025 were $141.1 million, down from $193.6 million in Q3 2024, reflecting a decrease of 27%[23] - Greenfire's average oil sales price for Q3 2025 was $73.24 per bbl, down from $83.01 per bbl in Q3 2024[23] - Oil sales decreased by 27% (or $52.5 million) to $141.1 million for the three months ended September 30, 2025, compared to $193.6 million in the same quarter of 2024[36] - Bitumen production for Q3 2025 was 15,757 bbls/d, slightly up from 15,748 bbls/d in Q2 2025 but down from 19,125 bbls/d in Q3 2024[126] Financial Results - Greenfire's net loss for Q3 2025 was $8.8 million, contrasting with a net income of $58.9 million in Q3 2024[23] - The operating netback for Q3 2025 was $53.3 million, with a per barrel figure of $37.60, compared to $57.8 million and $34.00 per barrel in Q3 2024[23] - Gross profit for the three months ended September 30, 2025, was $14.5 million, down from $76.8 million in the same quarter of 2024[55] - Gross profit for Q3 2025 decreased by $62.2 million to $14.5 million, down from $76.8 million in Q3 2024, primarily due to lower oil sales and losses on risk management contracts[59] - For the nine months ended September 30, 2025, gross profit decreased by $18.6 million to $104.7 million compared to $123.3 million in the same period of 2024, mainly driven by lower oil sales[59] - Net loss for Q3 2025 was $8.8 million, a decrease of $67.7 million from a net income of $58.9 million in Q3 2024, primarily due to unrealized losses on risk management contracts[79] Expenses and Costs - The effective royalty rate decreased to 5.50% and 5.89% for the three and nine months ended September 30, 2025, respectively, down from 7.52% and 7.36% in the same periods of 2024[41] - Diluent expense per barrel decreased by 9% (or $0.79/bbl) to $8.29/bbl for the three months ended September 30, 2025, compared to $9.08/bbl in the same quarter of 2024[46] - Transportation and marketing expense per barrel increased by 10% (or $0.74/bbl) to $8.08/bbl for the three months ended September 30, 2025, compared to $7.34/bbl in the same quarter of 2024[48] - Operating expenses per barrel decreased by 6% (or $1.38/bbl) to $22.52/bbl for the three months ended September 30, 2025, compared to $23.90/bbl in the same quarter of 2024[52] - Depletion and depreciation expenses increased by 17% (or $2.8 million) for the three months ended September 30, 2025, compared to the same period in 2024[54] - General and administrative (G&A) expenses for Q3 2025 were $4.7 million, a decrease of 3% from $4.8 million in Q3 2024, attributed to non-recurring costs in the prior year[61] - G&A expenses for the nine months ended September 30, 2025, increased by 42% to $19.1 million compared to $13.4 million in the same period of 2024, influenced by a new employee incentive structure[62] - Financing and interest expenses decreased by 9% to $14.0 million in Q3 2025 compared to $15.4 million in Q3 2024, and by 19% to $39.4 million for the nine months ended September 30, 2025, compared to $48.6 million in 2024[66] Cash Flow and Liquidity - As of September 30, 2025, Greenfire's cash and cash equivalents stood at $114.7 million, up from $67.4 million at the end of 2024[25] - Cash provided by operating activities in Q3 2025 was $48.8 million, compared to cash used of $17.9 million in Q3 2024, driven by changes in non-cash working capital[112] - For the nine months ended September 30, 2025, cash provided by operating activities was $101.2 million, up from $84.4 million in 2024, attributed to changes in non-cash working capital[113] - The adjusted working capital surplus increased to $114.3 million as of September 30, 2025, from $57.1 million at December 31, 2024, primarily due to an increase in cash and cash equivalents[109] - The company recorded a foreign exchange loss of $5.3 million in Q3 2025, compared to a gain of $4.3 million in Q3 2024, while for the nine months, it recorded a gain of $8.9 million compared to a loss of $7.5 million in 2024[72] Future Outlook and Plans - Greenfire anticipates commencing drilling operations at its Pad 7 in November 2025, with first oil expected in Q4 2026[16] - The company expects annual production in 2026 to average between 15,500 and 16,500 bbls/d, with capital expenditures projected at $180.0 million[21] - The company plans to leverage its resource base and infrastructure to drive capital-efficient production growth, with a focus on SAGD optimization techniques[154] - The company expects to incur long-lead capital spending related to surface facilities at Pad 8, with plans for drilling new wells in 2026[154] Risk Factors - The company faces various risks including oil price volatility, production performance uncertainties, and supply chain disruptions that could impact future results[158] - Key risks include the impact of global conflicts on commodity prices and the oil and gas industry's negative sentiment due to environmental concerns[158] - The company is subject to regulatory compliance costs and potential production curtailments by the Government of Alberta[158] - There are risks associated with the availability and cost of drilling equipment and key personnel, which could affect operational efficiency[158] - Cybersecurity threats pose a risk to the company's information technology systems, potentially impacting operations[158] - The company must navigate Canadian heavy and light oil export capacity constraints, affecting pricing realization[158] - The financial and credit markets have experienced significant volatility, which could adversely affect the company's forward-looking statements[159] Compliance and Internal Controls - Management confirmed no material weaknesses in internal controls over financial reporting during the period ended September 30, 2025[153] - The company has a comprehensive risk management strategy outlined in its 2024 AIF, available for review by stakeholders[160]