Just a month after Cenovus bought Athabasca for $5.7B, we’ve got more heavy oil consolidation - with Strathcona (SCR) acquiring Greenfire in a $2.8B deal which adds 30% to production…

… and 40% to reserves, while increasing the pro-forma entity’s reserve life index to 54 years (the longer the duration the better).

With $2.8B of tax pools and $75M of run-rate synergies, there’s a clear financial rationale to the deal (which we saw coming)…

… but the real benefit lies in its enhanced scale, which gives Strathcona the firepower to chase larger capital projects like its $3B Northern Express partnership with CN Rail - which if approved would send 250K barrels to BC’s northern coast…

… increasing access to Asian markets together with the Pacific Link pipeline, though it still has the tanker ban to deal with.

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