Greenfire (GFR) is up ~10% since announcing its $1.3B acquisition of Connacher Oil & Gas, which more than doubles pro-forma production and reserves…

… and comes with $30M of year one synergies, given the two companies operate side by side and leverage the same infrastructure.

Even before cutting the fat, the sub-5x multiple paid passes the smell test…

… and with management looking to nearly double production, the transaction should look even better with time.

As we said after recent deals from Tamarack and ARC Resources, consolidation in the patch isn’t done - and with Waterous owning 72% of GFR it’s hard to imagine Strathcona won’t get involved at some point.

About Bullpen: Bullpen Finance Inc. publishes content on Canadian markets and provides paid research coverage of select Canadian issuers. Bullpen is paid in cash by covered issuers, does not accept stock or options, does not hold positions in covered securities, and does not conduct investment banking business. Bullpen and LodeRock Advisors Inc. are affiliated; LodeRock provides investor relations services to issuers, some of whom are covered by Bullpen Research. When a post discusses a covered issuer, a specific disclosure appears at the top of the post. This post is published for general information purposes. It is not personalized investment advice and is not tailored to any individual reader’s circumstances. Bullpen is not a registered investment adviser or dealer. For full disclosures, including analyst certification, jurisdictional statements, and conflict of interest policies, please see our Legal & Disclosures section on our website.

You might be interested in…