Greenfire Resources has agreed to acquire privately held Connacher Oil and Gas in an all-cash transaction valued at approximately C$1.27 billion (US$900 million), strengthening its position in Alberta’s thermal oil sands sector. The acquisition adds Connacher’s 100%-owned Great Divide oil sands project, located adjacent to Greenfire’s existing Hangingstone operations near Fort McMurray, creating opportunities for operational integration and long-term production growth.
Great Divide is expected to produce approximately 19,500 barrels per day (bpd) during 2026 with a steam-oil ratio of approximately 3.0. The asset contains an estimated 441 million barrels of proved plus probable (2P) reserves, providing an estimated 62-year reserve life. Following the acquisition, Greenfire expects combined production to average approximately 34,000 bpd in 2026 while increasing total 2P reserves to approximately 850 million barrels, extending reserve life to nearly 68 years.
The proximity of Great Divide to Greenfire’s Hangingstone Expansion and Hangingstone Demo steam-assisted gravity drainage (SAGD) facilities is expected to generate meaningful operating efficiencies. Greenfire estimates approximately C$30 million in annual synergies by the end of 2026 through improvements in midstream operations, marketing, operating costs, and general and administrative expenses. The company also outlined a longer-term development strategy that could increase production to approximately 65,000 bpd.
To finance the acquisition, Greenfire will utilize an expanded C$1 billion reserves-based lending facility, drawing approximately C$700 million, along with a C$575 million bridge facility that will later be repaid through a planned rights offering. Waterous Energy Fund has committed to backstop at least C$575 million of the offering, providing financial support for the transaction. Closing is expected in August 2026, subject to customary regulatory approvals and closing conditions.
Industry Impact
This acquisition reflects the continued consolidation of Canada’s oil sands industry around high-quality, long-life assets. For suppliers, contractors, and infrastructure providers, the combined company represents a larger, better-capitalized operator with a long-term development plan that could drive sustained investment in steam-assisted gravity drainage operations, facilities, maintenance, and production optimization across the Fort McMurray region.
Author: phinds