In short: His second controlled company — "about a billion dollars market cap," thin float, "a lot more similar than different" to early Strathcona. Kept separate because it sits in a fourth, distinct geography: central Athabasca (Strathcona's Cold Lake is the southern end). The plan is the same adjacent-asset aggregation: "you find a good neighborhood, you find a good street, you buy a house, then you buy up the block" — "we think we bought a very good house on the street… now we want to see what else we might be able to aggregate in the neighborhood."
Greenfire is the second company his fund controls — a roughly $1 billion market-cap oil sands producer with a "thin float," meaning very few shares actually trade freely because he owns so much of it. He describes it as Strathcona a couple of years ago: the same playbook, at an earlier stage.
That playbook is a real-estate analogy he states outright: "you find a good neighborhood, you find a good street, you buy a house, then you buy up the block." Buying producers whose land sits next to yours is how you get real savings — one head office instead of two, and the drilling lessons from one asset immediately apply to the other. Greenfire is his fourth "neighborhood," in central Athabasca, geographically separate enough from Strathcona's Cold Lake operations that he deliberately kept it in its own company rather than merging them.
So the thesis is not really about today's barrels — it is that Greenfire is the platform for the next round of aggregation in a region where he thinks he already bought "a very good house on the street." Investors reading it that way should expect further acquisitions in central Athabasca; the host's guess that this points at Athabasca Oil got a deliberate non-answer.
38:40The float is thin. It's about a billion dollars market cap. What are you doing there? How is it similar from Strathcona? How is it different? — So it's a lot more similar than different, in that one of the things that we identified is that there are powerful economies of scale if you can buy adjacent producers.
In short: The oil-sands operator in the ~$1.3B deal "announced yesterday" (acquirer garbled in the transcript, unresolved) — the first-week-of-Q3 M&A that opens the second half.
29:44So — maybe there's a balance that we can find here in terms of building some of these projects. — Another thing that's been going on lately is consolidation and M&A in the Canadian energy sector. I think yesterday they announced the conerure and green fire resources deal. — Yep. — So why is that happening? So what we're seeing here is a lot of consolidation and what it comes down to is Canada is a good place to invest.
In short: Not owned (too illiquid for Smead). Interesting only because of who your partners are — the Waterous energy fund (~60%) and Fairfax's Prem Watsa are involved. Non-oil-sands heavy oil; a small-cap turnaround that could someday fold into Strathcona. "For a smaller investor, take a look."
49:44colme about greenf fire Fairfax disclosed in the annual report that they have a large position looking at the stock seems like a bit of a disaster yeah but it's someone else's disaster that's always the good part in this industry so um we we have an interest in this because obviously the waterous boys uh Adam and Conor and I call them the water spys but they're actually father son if if not all your listeners are aware um and they own a big chunk they own 60% it looks like on Bloomberg correct and and from what we understand
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