20-F - GFR - Equibles

UNITED STATES

SECURITIES AND EXCHANGECOMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

☐

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

☒

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Forthe fiscal year ended December 31, 2023

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number:001-41810

Greenfire ResourcesLtd.

(Exact name of Registrant as specified in its charter)

Not applicable	Alberta

| (Translation of Registrant’s name into English) | (Jurisdiction of incorporation or organization) |

1900 – 205 5thAvenue SW

Calgary, Alberta T2P2V7

(403) 264-9046

(Address of principalexecutive offices)

Robert Logan

1900 – 205 5thAvenue SW

Calgary, AB T2P 2V7

(403) 465-2321

(Name, Telephone, Emailand/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbols	Name of each exchange on which registered

| Common Shares | GFR | New York Stock Exchange |

Securities registeredor to be registered pursuant to Section 12(g) of the Act: None

Securities for whichthere is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

On December 31, 2023, the issuer had 68,642,515 common shares, without par value, outstanding.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐

| Non-accelerated filer | ☒ | Emerging growth company | ☒ |

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐	International Financial<br>Reporting Standards as issued by the International Accounting Standards Board ☒	Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

This annual report on Form 20-F is incorporated by reference into the registrant’s Registration Statements on Form S-8 File No. 333-277054.

TABLE

OF CONTENTS

		Page
Explanatory Note		ii
Cautionary Note Regarding Forward-Looking Statements		iv
Certain Defiled Terms		vi
Part I		1
Item 1.	Identity of Directors, Senior Management and Advisers	1
Item 2.	Offer Statistics and Expected Timetable	1
Item 3.	Key Information	1
Item 4.	Information on the Company	37
Item 4A.	Unresolved Staff Comments	66
Item 5.	Operating and Financial Review and Prospects	66
Item 6.	Directors, Senior Management and Employees	89
Item 7.	Major Shareholders and Related Party Transactions	102
Item 8.	Financial Information	105
Item 9.	The Offer and Listing	106
Item 10.	Additional Information	106
Item 11.	Quantitative and Qualitative Disclosures About Market Risk	121
Item 12.	Description of Securities Other Than Equity Securities	122
Part II		123
Item 13.	Defaults, Dividend Arrearages And Delinquencies	123
Item 14.	Material Modifications To The Rights Of Security Holders And Use Of Proceed	123
Item 15.	Controls And Procedures	123
Item 16.	[Reserved]	123
Item 16A.	Audit Committee Financial Expert	124
Item 16B.	Code Of Ethics	124
Item 16C.	Principal Accountant Fees And Services	124
Item 16D.	Exemptions From The Listing Standards For Audit Committees	124
Item 16E.	Purchases Of Equity Securities By The Issuer And Affiliated Purchasers	125
Item 16F.	Change In Registrant’s Certifying Accountant	125
Item 16H.	Mine Safety Disclosure	125
Item 16I.	Disclosure Regarding Foreign Jurisdictions That Prevent Inspections	125
Item 16J.	Insider Trading Policies	125
Item 16K.	Cybersecurity	125
Part III		128
Item 17.	Financial Statements	128
Item 18.	Financial Statements	128
Item 19.	Exhibits	128
Exhibit Index		128
Signature		130
Index to Financial Statements		F-1

EXPLANATORY

NOTE

On September 20, 2023 (the “Closing Date”) Greenfire Resources Ltd., an Alberta corporation (the “Company”) consummated its previously announced business combination, pursuant to the Business Combination Agreement, dated as of December 14, 2022 (as amended on April 21, 2023, June 15, 2023, and September 5, 2023, the “Business Combination Agreement,” and the transactions contemplated thereby, collectively, the “Business Combination”), with M3-Brigade Acquisition III Corp. (“MBSC”), DE Greenfire Merger Sub Inc., a Delaware corporation and a direct, wholly-owned subsidiary of the Company (“DE Merger Sub”), 2476276 Alberta ULC, an Alberta unlimited liability corporation and a direct, wholly-owned subsidiary of the Company (“Canadian Merger Sub”), and Greenfire Resources Inc., an Alberta corporation (“Greenfire”).

As part of the Business Combination, on the Closing Date (i) Canadian Merger Sub amalgamated with and into Greenfire pursuant to a statutory plan of arrangement (the “Plan of Arrangement”) under the Business Corporations Act (Alberta), with Greenfire continuing as the surviving company (“Surviving Greenfire”), and Surviving Greenfire became a direct, wholly-owned subsidiary of the Company and (ii) DE Merger Sub merged with and into MBSC pursuant to a Delaware statutory merger (the “Merger”), with MBSC continuing as the surviving corporation following the Merger (“Surviving MBSC”), as a result of which Surviving MBSC became a direct, wholly-owned subsidiary of the Company.

On the Closing Date, pursuant to the Plan of Arrangement and prior to the effective time of the Merger (the “Merger Effective Time”), among other things, (i) the holders of common shares of Greenfire (“Greenfire Common Shares”) received, in the aggregate, 43,690,534 common shares in the capital of the Company (the “Common Shares”) and their pro rata share of US$75,000,000 (the “Cash Consideration”), as determined in accordance with the Plan of Arrangement, in exchange for their Greenfire Common Shares, (ii) the holders of warrants to purchase Greenfire Common Shares issued pursuant to the Greenfire’s former equity plan (“Greenfire Performance Warrants”) received 3,617,016 warrants to purchase the Common Shares, with substantially the same terms as the Greenfire Performance Warrants, as adjusted in accordance with the Plan of Arrangement (the “Company Performance Warrants”), and their pro rata share of the Cash Consideration, as determined in accordance with the Plan of Arrangement, in exchange for their Greenfire Performance Warrants, (iii) holders of warrants (“Greenfire Bond Warrants”) to purchase Greenfire Common Shares issued pursuant to the Warrant Agreement, dated August 12, 2021, between GAC Holdco Inc. (n/k/a Greenfire Resources Inc.), as issuer, and The Bank of New York Mellon, as warrant agent, as amended by the First Greenfire Supplemental Warrant Agreement dated December 14, 2022 (the “Bond Warrant Agreement”), received 15,769,183 the Common Shares and a cash payment equal to their pro rata share of the Cash Consideration payable to holders of Greenfire Bond Warrants, each as determined in accordance with the Bond Warrant Agreement and the Plan of Arrangement, in exchange for their Greenfire Bond Warrants. In addition, 5,000,000 Company Warrants (as defined below), were issued to the pre-Plan of Arrangement holders of Greenfire Performance Warrants, Greenfire Bond Warrants, and Greenfire Common Shares, in each case in the numbers determined in accordance with the Plan of Arrangement.

On the Closing Date, at the Merger Effective Time, (i) holders of MBSC Class A common stock, par value $0.0001 per share (the “MBSC Class A Common Shares”) (after giving effect to the stockholder redemptions of the MBSC Class A Common Shares and the issuance of MBSC Class A Common Shares pursuant to the PIPE Financing (as defined below)) received, in aggregate, 4,177,091 Common Shares for their MBSC Class A Common Shares and, (ii) holders of MBSC Class B common stock, par value $0.0001 per share (“MBSC Class B Common Shares”)(after giving effect to certain forfeitures pursuant to the Business Combination Agreement) received, in the aggregate 4,250,000 Common Shares and a cash payment equal to the MBSC Working Capital plus the MBSC Extension Amount (each as defined in the Business Combination Agreement) at the Merger Effective Time; (iii) private placement warrants to purchase shares of MBSC held by M3-Brigade Sponsor III LP, a Delaware limited partnership (the “MBSC Sponsor”) (after giving effect to certain forfeitures pursuant to the Business Combination Agreement) were converted into 2,526,667 warrants to purchase Common Share (the “Company Warrants”).

In addition, immediately prior the Merger Effective time (i) the outstanding units of MBSC were each automatically separated into one MBSC Class A Common Share and one-third of one MBSC Public Warrant and (ii) MBSC redeemed all of the MBSC Public Warrants at $0.50 per MBSC Public Warrant.

Substantially concurrently with the closing of the Business Combination, the Company and MBSC consummated the PIPE Financing pursuant to which 4,177,091 Common Shares were issued to the PIPE Investors for an aggregate purchase price of approximately US$42 million.

Effective as of January 1, 2024, Greenfire Resources Operating Corporation and Surviving Greenfire amalgamated in accordance with the provisions of the ABCA, with the surviving corporation continuing as Greenfire Resources Operation Corporation and as a wholly subsidiary of the Company.

The common shares of the Company are traded on the New York Stock Exchange (“NYSE”) and the Toronto Stock Exchange (“TSX”) under the symbol “GFR”.

INTRODUCTION

Except as otherwise indicated or required by context, references in this Annual Report on Form 20-F (including information incorporated by reference herein, the “Annual Report”) to (i) “we,” “us,” “our,” or the “Company” refer to Greenfire Resources Ltd., an Alberta corporation, and its subsidiaries, (ii) “Greenfire” refers to Greenfire Resources Inc., an Alberta corporation that became a wholly-owned subsidiary of the Company upon the closing of the Business Combination (effective as of January 1, 2024, Greenfire Resources Operating Corporation and Greenfire amalgamated, with the surviving corporation continuing as “Greenfire Resources Operation Corporation”, a wholly-owned subsidiary of the Company, and (iii) CAD$ refers to Canadian dollars. Certain amounts that appear in this Annual Report may not sum due to rounding.

This Annual Report contains (i) the Company’s audited consolidated financial statements as at December 31, 2023 and 2022 and for each of the years in the three-year period ended December 31, 2023 and related notes and (ii) the audited consolidated financial statements of Japan Canada Oil Sands Limited (“JACOS”), the predecessor to Greenfire, for the period from January 1, 2021 to September 17, 2021 and for the year ended December 31, 2020 and related notes (collectively, the “Annual Financial Statements”). The Annual Financial Statements have been prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board (“IFRS”).

Unless otherwise indicated in this Annual Report, all references to: “fiscal 2023” are to the 12-month period ended December 31, 2023, “fiscal 2022” are to the 12-month period ended December 31, 2022, and “fiscal 2021” are to the 12-month period ended December 31, 2021.

iii

CAUTIONARY

NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in this Annual Report constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Forward-looking statements reflect the Company’s current views, as applicable, with respect to, among other things, their respective capital resources, performance and results of operations. Likewise, all of the Company’s statements regarding anticipated growth in operations, anticipated market conditions, demographics, reserves and results of operations are forward-looking statements. In some cases, you can identify these forward-looking statements by the use of terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “scheduled,” “forecasts,” “estimates,” “anticipates” or the negative version of these words or other comparable words or phrases.

The forward-looking statements in this Annual Report reflect the Company’s current views, as applicable, about future events that are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause actual results to differ significantly from those expressed in any forward-looking statement. The transactions and events described in this Annual Report may not happen as described (or they may not happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

●	general economic uncertainty;
●	the Company’s ability to maintain the listing of the Common Shares on the NYSE, the TSX or any other national stock exchange;
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●	potential disruption in the Company’s employee retention as a result of the Business Combination;
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●	potential litigation, governmental or regulatory proceedings, investigations or inquiries involving the Company, including in relation to the Business Combination;
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●	international, national or local economic, social or political conditions that could adversely affect the companies and their business;
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●	the effectiveness of the Company’s internal controls and its corporate policies and procedures;
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●	changes in personnel and availability of qualified personnel;
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●	environmental uncertainties and risks related to adverse weather conditions and natural disasters;
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●	potential write-downs, write-offs, restructuring and impairment or other charges required to be taken by the Company due to the Business Combination;
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●	the limited experience of certain members of the Company’s management team in operating a public company in the United States;
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●	the volatility of the market price and liquidity of the Common Shares;
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●	the volatility of the prices of crude oil, diluted bitumen, non-diluted bitumen and the differentials among various crude oil prices, natural gas and power;
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●	risks associated with the Company’s SAGD operations, including reservoir performance, operating cost increases and various other factors, could adversely affect the Company’s operating results;
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●	risks associated with the recovery of bitumen using SAGD processes, including uncertainty as to whether bitumen will be recovered in the expected volumes and at the expected economics;
●	the Company’s reliance on the Petroleum Marketer;
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●	the risk that the Company’s capital expenditures relating to debottlenecking its production from the Demo Asset and Expansion Asset do not perform as anticipated;
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●	risks associated with estimating quantities of reserves and future net revenues to be derived therefrom;
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●	a failure to achieve anticipated benefits of acquisitions or the need to dispose of non-core assets for less than their carrying value on the financial statements as a result of weak market conditions;
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●	global political events that affect commodity prices;
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●	the risk that the Company’s properties may be subject to actions and opposition by non-governmental agencies;
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●	the risk that the COVID-19 pandemic continues to cause disruptions in economic activity internationally and impact demand for crude oil and bitumen;
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●	risks associated with the Company’s groundwater licenses;
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●	costs associated with abandonment and reclamation that the Company may have to pay;
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●	a failure by the Company to obtain the regulatory approvals it needs for general operating activities or compliance for decommissioning;
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●	the geographical concentration of the Company’s assets;
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●	lack of capacity and/or regulatory constraints on gathering and processing facilities, pipeline systems, trucking and railway lines;
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●	competition with other oil and natural gas companies;
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●	changes to the demand for oil and natural gas products and the rise of petroleum alternatives;
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●	changes to current, or implementation of additional, regulations applicable to the Company’s operations;
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●	changes to royalty regimes;
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●	a failure to secure the services and equipment necessary for the Company’s operations for the expected price, on the expected timeline, or at all;
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●	seasonal weather conditions that may cause operational delays;
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●	changes to applicable tax laws or government incentive programs;
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●	the Company’s ability to obtain financing to fund the acquisition, exploration and development of properties on a timely fashion and on acceptable terms;
●	defects in the title or rights to produce the Company’s properties;
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●	the risk that the Company will be required to surrender lands to the Province of Alberta if annual lease payments are not made;
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●	risk management activities that expose the Company to the risk of financial loss and counter-party risk;
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●	the occurrence of an uninsurable event;
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●	opposition by First Nations groups to the conduct of the Company’s operations, development or exploratory activities;
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●	an inability to recruit and retain a skilled workforce and key personnel;
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●	the impact of climate change and other environmental concerns on demand for the Company’s products and securities;
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●	the potential physical effects of climate change on the Company’s production and costs;
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●	the direct and indirect costs of various GHG and other environmental regulations, existing and proposed;
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●	any breaches of the Company’s cyber-security and loss of, or unauthorized access to, data;
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●	changes to applicable tax laws and regulations or exposure to additional tax liabilities;
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●	the significant increased expenses and administrative burdens that the Company incurs as a public company;
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●	internal control weaknesses and any misstatements of financial statements or the Company’s inability to meet periodic reporting obligations;
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●	foreign currency and interest rate fluctuations; and
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●	failure to comply with anticorruption, economic sanctions, and anti-money laundering laws.
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Additionally, statements relating to “reserves” are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and can be profitably produced in the future. Forward-looking statements are inherently uncertain. Estimates such as expected revenue, production, operating expenses, transportation and marketing expenses, adjusted EBITDA, general and administrative expenses, interest and financing expense, taxes, capital expenditures, adjusted funds flow, net debt, reserves and other measures are preliminary in nature. There can be no assurance that the forward-looking statements will prove to be accurate and reliance should not be placed on these estimates in making your investment decision with respect to our securities.

The forward-looking statements contained herein are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by the forward-looking statements. For a further discussion of the risks and other factors that could cause the Company’s future results, performance or transactions to differ significantly from those expressed in any forward-looking statements, please see the section entitled “Risk Factors.” There may be additional risks that the Company does not presently know or that the Company currently believes are immaterial, that could also cause actual results to differ from those contained in the forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of the assumptions made in making these forward-looking statements prove incorrect, actual results may vary materially from those projected in these forward-looking statements. While such forward-looking statements reflect the Company’s good faith beliefs, they are not guarantees of future performance. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this Annual Report, except as required by applicable law. You should not place undue reliance on any forward-looking statements, which are based only on information currently available to the Company.

CERTAIN DEFINED TERMS

Unless the context otherwise requires, references in this Annual Report to:

●	“2025 Notes” are to Greenfire’s 12.000% Senior Secured Notes, outstanding amounts of which were redeemed concurrently with the Business Combination.
●	“2028 Notes” are to the Company’s 12.0% Senior Secured Notes due 2028, which were issued by the Company concurrently with the Business Combination.
●	“ABCA” are to the Business Corporations Act (Alberta).
●	“Affiliate” are to, with respect to any Person, any other Person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person.
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●	“Amalgamation” are to the amalgamation of Greenfire and Canadian Merger Sub.
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●	“Ancillary Documents” are to the Lock-Up Agreement, the Investor Rights Agreement, the Sponsor Support Agreement, the Subscription Agreements, the Greenfire Shareholder Support Agreement, MBSC Warrant Agreement Amendment and each other agreement, document, instrument and/or certificate executed, or contemplated by the Business Combination Agreement to be executed, in connection with the Transactions.
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●	“APEGA” are to the Association of Professional Engineers and Geoscientists of Alberta.
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●	“Arrangement” are to an arrangement under section 193 of the ABCA on the terms and subject to the conditions set forth in the Plan of Arrangement.
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●	“Arrangement Effective Date” are to the date on which the Articles of Arrangement were filed with the Registrar.
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●	“Arrangement Effective Time” are to the time at which the Articles of Arrangement were filed with the Registrar on the Arrangement Effective Date.
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●	“Articles of Arrangement” are to the articles of arrangement in respect of the Arrangement.
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●	“bbl” are to barrel.
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●	“bbls/d” are to barrels per day.
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●	“bitumen” are to a naturally occurring solid or semi-solid hydrocarbon (a) consisting mainly of heavier hydrocarbons, with a viscosity greater than 10,000 millipascal-seconds (mPa·s) or 10,000 centipoise (cP) measured at the hydrocarbon’s original temperature in the reservoir and at atmospheric pressure on a gas-free basis, and (b) that is not primarily recoverable at economic rates through a well without the implementation of enhanced recovery methods.
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●	“Brigade” are to Brigade Capital Management, LP, a Delaware limited partnership.
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●	“Business Combination” are to the transactions contemplated by the Business Combination Agreement.
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●	“Business Combination Agreement” are to that certain Business Combination Agreement, dated December 14, 2022, as amended on April 21, 2023, June 15, 2023, and September 5, 2023, by and between MBSC, Greenfire, the Company, DE Merger Sub and Canadian Merger Sub, as amended.
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●	“C$,” “CAD$” and “CAD” are to Canadian dollars.
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vii

●	“Canadian Merger Sub” are to 2476276 Alberta ULC, an Alberta unlimited liability corporation and a direct, wholly-owned subsidiary of the Company.
●	“Cantor” are to Cantor Fitzgerald & Co.
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●	“Cash Consideration” are to $75,000,000.
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●	“Closing” are to the closing of the Transactions.
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●	“Closing Date” are to September 20, 2023, the date of Closing.
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●	“Code” are to the U.S. Internal Revenue Code of 1986, as amended.
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●	“Company” are to Greenfire Resources Ltd., an Alberta corporation.
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●	“Company Articles” are to the articles of incorporation of the Company, as may be amended and/or restated from time to time.
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●	“Company Awards” are to, collectively, the Company Options, the Company Share Units and the Company DSUs granted pursuant to the terms of the Company Incentive Plan.
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●	“Company Board” are to the board of directors of the Company.
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●	“Company Bylaws” are to the bylaws of the Company, as may be amended and/or restated from time to time.
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●	“Common Shares” are to the common shares in the capital of the Company.
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●	“Company Incentive Plan” are to the omnibus share incentive plan of the Company providing for the grant of the Company Awards for certain qualified directors, executive officers, employees or consultants of the Company.
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●	“Company Options” means options to purchase the Common Shares granted pursuant to the terms of the Company Incentive Plan.
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●	“Company Performance Warrant Plan” are to the amended and restated performance warrant plan of the Company, which amends and restates the Greenfire Equity Plan.
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●	“Company Performance Warrants” are to warrants to purchase Common Shares with each such warrant entitling the holder to purchase one the Common Share subject to the terms and conditions of the Company Performance Warrant Plan.
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●	“Company Securities” are to the Common Shares and Company Warrants, collectively.
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●	“Company Shareholders” are to the holders of the Common Shares.
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●	“Company Warrants” are to warrants to purchase Common Shares issued to MBSC Sponsor and former securityholders of Greenfire at Closing with each such warrant entitling the holder to purchase one Common Share at an exercise price of $11.50 per Common Share.
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●	“Credit Agreement” refers to a credit agreement, dated as of September 20, 2023, with Bank of Montreal, as agent, and a syndicate of certain other financial institutions as lenders to provide for senior secured extendible revolving credit facilities.
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viii

●	“Consideration” are to, collectively, the Cash Consideration and the Share Consideration.
●	“Court” are to the Alberta Court of King’s Bench.
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●	“CRA” are to the Canada Revenue Agency.
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●	“Crown” are to His Majesty the King in right of Canada or His Majesty the King in right of the Province of Alberta, as the context may require.
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●	“Demo GP” are to Hangingstone Demo (GP) Inc.
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●	“Demo LP” are to Hangingstone Demo Limited Partnership.
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●	“DE Merger Sub” are to DE Greenfire Merger Sub Inc., a Delaware corporation and a direct, wholly-owned subsidiary of the Company.
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●	“Demo Asset” are to the Hangingstone Demonstration Facility, a SAGD thermal oil sands production facility in the Athabasca region of Alberta.
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●	“diluent” are to lighter viscosity petroleum products that are used to dilute bitumen for transportation in pipelines.
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●	“Directors” are to the directors of the Company.
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●	“ESG” are to environmental, social and governance.
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●	“Exchange Act” are to the U.S. Securities Exchange Act of 1934, as amended.
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●	“Excluded MBSC Class A Common Share” are to each MBSC Class A Common Share held in MBSC’s treasury or owned by Greenfire or any other wholly-owned subsidiary of Greenfire or MBSC immediately prior to the Merger Effective Time.
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●	“Expansion Asset” are to the Hangingstone Expansion Facility, a SAGD thermal oil sands production facility in the Athabasca region of Alberta.
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●	“Expansion GP” are to Hangingstone Expansion (GP) Inc.
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●	“Expansion LP” are to Hangingstone Expansion Limited Partnership.
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●	“Forward Purchase Agreement” are to that agreement entered into by MBSC and M3-Brigade III FPA LP, an affiliate of the MBSC Sponsor, dated October 21, 2021, which provides for the purchase of up to $40,000,000 of shares of Class A common stock, for a purchase price of $10.00 per share.
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●	“GAC” are to Greenfire Acquisition Corporation.
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●	“GAC HoldCo” are to GAC HoldCo Inc.
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●	“GHOPCO” are to Greenfire Hangingstone Operating Corporation.
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●	“Governing Documents” are to the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs. For example, the “Governing Documents” of a U.S. corporation are its certificate or articles of incorporation and bylaws and the “Governing Documents” of an Alberta corporation are its certificate and articles of incorporation, bylaws and any unanimous shareholders agreement that may be in force.
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●	“Governmental Entity” means any United States, Canadian, international or other (a) federal, state, provincial, local, municipal or other government entity, (b) governmental or quasi-governmental entity of any nature (including any governmental agency, branch, department, official, bureau, ministry or entity and any court or other tribunal), or (c) body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature, including any arbitrator or arbitral tribunal (public or private).
●	“Greenfire” are to Greenfire Resources Inc., an Alberta corporation.
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●	“Greenfire Board” are to the board of directors of Greenfire.
---	---
●	“Greenfire Bond Warrant” are to, as of any determination time, each warrant to purchase Greenfire Common Shares that is outstanding, unexercised and issued pursuant to the Greenfire Warrant Agreement.
---	---
●	“Greenfire Common Shares” are to the common shares in the authorized share capital of Greenfire.
---	---
●	“Greenfire Enterprise Value” are to $950,000,000.
---	---
●	“Greenfire Equity Plan” are to the Greenfire Resources Inc. Performance Warrant Plan, dated February 2, 2022, as amended from time to time, and the Greenfire Employee Trust established by trust agreement between Greenfire and Greenfire Resources Employment Corporation dated March 7, 2022, as amended from time to time.
---	---
●	“Greenfire Employee Shareholders” are to all holders of Greenfire Common Shares other than the Greenfire Founders.
---	---
●	“Greenfire Founders” are to Annapurna Limited, Spicelo Limited, Modro Holdings LLC and Allard Services Limited.
---	---
●	“Greenfire Net Indebtedness” are to $170,000,000.
---	---
●	“Greenfire Performance Warrant” are to, as of any determination time, each warrant to purchase Greenfire Common Shares issued pursuant to the Greenfire Equity Plan that is outstanding and unexercised, whether vested or unvested.
---	---
●	“Greenfire Performance Warrantholders” are to the holders of the Greenfire Performance Warrants.
---	---
●	“Greenfire Pre-Money Equity Value” are to the (A) the Greenfire Enterprise Value minus (B) Greenfire Net Indebtedness.
---	---
●	“Greenfire Shareholders” are to the holders of Greenfire Common Shares as of any determination time prior to the Merger Effective Time or the Arrangement Effective Time, as applicable.
---	---
●	“Greenfire Supplemental Warrant Agreement” are to the First Supplemental Warrant Agreement, dated December 14, 2022, between Greenfire and The Bank of New York Mellon, as warrant agent amending the Greenfire Warrant Agreement.
---	---
●	“Greenfire Warrant Agreement” are to that certain Warrant Agreement dated as of August 12, 2021 between GAC Holdco Inc. (n/k/a Greenfire Resources Inc.), as issuer and The Bank of New York Mellon, as warrant agent providing for the issuance of Greenfire Bond Warrants.
---	---
●	“Hangingstone Facilities” are to, collectively, the Demo Asset and the Expansion Asset.
---	---
●	“HEAC” are to HE Acquisition Corporation.
---	---

●	“Holder” are to a person who is a beneficial owner of the Company Securities immediately following the Business Combination.
●	“Hydrocarbons” are to crude oil, natural gas, condensate, drip gas and natural gas liquids, coalbed gas, ethane, propane, iso-butane, nor-butane, gasoline, scrubber liquids and other liquids or gaseous hydrocarbons or other substances (including minerals or gases) or any combination thereof, produced or associated therewith.
---	---
●	“IFRS” are to the International Financial Reporting Standards, as issued by the International Accounting Standards Board.
---	---
●	“in situ” are to “in place” and, when referring to oil sands, means a process for recovering bitumen from oil sands by means other than surface mining, such as SAGD.
---	---
●	“Investor Rights Agreement” are to the investor rights agreement into at the Closing by and among the Company, the MBSC Sponsor, the other holders of the MBSC Class B Common Shares, the PIPE Investors and certain Greenfire Shareholders.
---	---
●	“IRS” are to the U.S. Internal Revenue Service.
---	---
●	“ITA” are to the Income Tax Act (Canada) and the regulations made thereunder as amended from time to time.
---	---
●	“JACOS” are to Japan Oil Sands Limited.
---	---
●	“JACOS Acquisition” are to the acquisition of all of the issued and outstanding shares in the capital of JACOS from Canada Oil Sands Co. Ltd., for a purchase price of approximately CAD$347 million on September 17, 2021 by Greenfire through its subsidiary predecessor entities.
---	---
●	“JOBS Act” are to the Jumpstart Our Business Startups Act of 2012.
---	---
●	“Law” are to, to the extent applicable, any federal, state, local, provincial, municipal, foreign, national or supranational statute, law (including statutory, common, civil or otherwise), act, statute, ordinance, treaty, rule, code, regulation, judgment, award, order, decree or other binding directive or guidance issued, promulgated or enforced by a Governmental Entity having jurisdiction over a given matter.
---	---
●	“Letter of Credit Facility” are to certain letter of credit facilities with Trafigura Canada General Partnership and certain other parties that provided for revolving or non-revolving credit loans or other arrangements for the purposes of issuing letters of credit.
---	---
●	“Listing Rules” are to the exchange listing rules of the NYSE.
---	---
●	“Lock-Up Agreement” are to the lock-up agreement by and among the Company, the MBSC Sponsor, and certain Company Shareholders entered into at the Closing.
---	---
●	“MBSC” are to M3-Brigade Acquisition III Corp., a Delaware corporation, prior to the Business Combination.
---	---
●	“MBSC Articles” are to the amended and restated certificate of incorporation of MBSC, adopted on October 21, 2021.
---	---
●	“MBSC Board” are to the board of directors of MBSC.
---	---
●	“MBSC Class A Common Shares” are to MBSC’s Class A common shares, par value $0.0001 per share, which are subject to possible redemption.
---	---

●	“MBSC Class B Common Shares” are to MBSC’s Class B common shares, par value $0.0001 per share.
●	“MBSC Class B Common Share Amount” are to an amount equal to the number of MBSC Class B Common Shares outstanding at the Merger Effective Time (other than any Excluded MBSC Class A Common Shares, and, for the avoidance of doubt, after giving effect to any certain forfeitures pursuant to Section 4.6(a) and Section 4.6(b) of the Business Combination Agreement), multiplied by $10.10.
---	---
●	“MBSC Common Shares” are to the MBSC Class A Common Shares and the MBSC Class B Common Shares.
---	---
●	“MBSC Founder Shares” are to the outstanding MBSC Class B Common Shares.
---	---
●	“MBSC Initial Stockholders” are to the MBSC Sponsor, MBSC’s current executive officers and current independent directors, as well as MBSC’s officers, other current directors and other special advisors.
---	---
●	“MBSC IPO” are to MBSC’s initial public offering of MBSC Units, which closed on October 26, 2021.
---	---
●	“MBSC Private Placement Warrants” are to the warrants issued to the MBSC Sponsor and to Cantor in a private placement simultaneously with the closing of the MBSC IPO.
---	---
●	“MBSC Private Warrant Agreement” are to the Private Warrant Agreement, dated October 21, 2021, between MBSC and Continental Stock Transfer and Trust Company, as warrant agent.
---	---
●	“MBSC Public Shares” are to MBSC Class A Common Shares sold as part of the MBSC Units in the MBSC IPO (whether they were purchased in the MBSC IPO or thereafter in the open market).
---	---
●	“MBSC Public Stockholders” are to the holders of MBSC Public Shares.
---	---
●	“MBSC Public Warrants” are to the MBSC Warrants held by any Persons other than the MBSC Sponsor and Cantor.
---	---
●	“MBSC Sponsor” are to M3-Brigade Sponsor III LP, a Delaware limited partnership.
---	---
●	“MBSC Sponsor Class B Share Forfeitures” are to, immediately prior to the Merger, (i) the forfeiture and cancellation for no consideration of 750,000 MBSC Class B Common Shares held by the MBSC Sponsor and (ii) the forfeiture and cancellation for no consideration of 2,500,000 MBSC Class B Common Shares held by the MBSC Sponsor.
---	---
●	“MBSC Sponsor Warrant Forfeiture” are to, immediately prior to the Merger, the forfeiture and cancellation of 3,260,000 MBSC Private Placement Warrants held by the MBSC Sponsor for no consideration.
---	---
●	“MBSC Stockholder Redemption” are to the right of the holders of MBSC Class A Common Shares to redeem all or a portion of their MBSC Class A Common Shares as set forth in MBSC’s Governing Documents.
---	---
●	“MBSC Stockholders” are to, collectively, the MBSC Initial Stockholders and the MBSC Public Stockholders.
---	---
●	“MBSC Units” are to the units of MBSC sold in the MBSC IPO, each of which consists of one MBSC Class A Common Share and one-third of one MBSC Public Warrant.
---	---

xii

●	“MBSC Warrant Agreements” are to the MBSC Private Warrant Agreement and the MBSC Public Warrant Agreement.
●	“MBSC Warrants” are to each warrant to purchase one MBSC Class A Common Share at an exercise price of $11.50 per share, subject to adjustment, on the terms and subject to the conditions set forth in the MBSC Warrant Agreements.
---	---
●	“McDaniel” are to McDaniel & Associates Consultants Ltd.
---	---
●	“Merger” are to the merger of DE Merger Sub with and into MBSC pursuant to the Business Combination Agreement.
---	---
●	“Merger Effective Time” are to the effective time of the Merger.
---	---
●	“MMBOE” are to one million barrels of oil equivalent.
---	---
●	“NI 51-101” are to the National Instrument 51-101 — Standards of Disclosure for Oil and Gas Activities.
---	---
●	“NOI Proceedings” are to the proceedings commenced on October 8, 2020, by each of GHOPCO and its parent company, Greenfire Oil and Gas Ltd., filing a Notice of Intention to Make A Proposal pursuant to the provisions of the Bankruptcy and Insolvency Act (Canada).
---	---
●	“NOI Transaction” are to the asset purchase agreement between GHOPCO and GAC entered into around December 1, 2020, pursuant to which GAC agreed to acquire the Demo Asset from GHOPCO.
---	---
●	“Non-Canadian Holder” are as defined in the section entitled “Material Canadian Federal Income Tax Considerations.”
---	---
●	“NYSE” are to the New York Stock Exchange.
---	---
●	“PCAOB” are to the Public Company Accounting Oversight Board (United States).
---	---
●	“Person” are to an individual, partnership, corporation, limited partnership, limited liability company, joint stock company, unincorporated organization or association, trust, joint venture or other similar entity, whether or not a legal entity.
---	---
●	“Petroleum Marketer” are to Trafigura Canada General Partnership and Trafigura Canada Limited, collectively.
---	---
●	“PIPE Financing” are to the subscription by certain investors for an aggregate of 4,950,496 MBSC Class A Common Shares for an aggregate purchase price of $50,000,000 pursuant to subscription agreements entered into with MBSC concurrently with the execution of the Business Combination Agreement.
---	---
●	“PIPE Investors” are to the investors participating in the PIPE Financing.
---	---
●	“Plan of Arrangement” are to the Plan of Arrangement made in accordance with the Business Combination Agreement and the Plan of Arrangement or made at the direction of the Court with the prior written consent of MBSC and Greenfire (such agreement not to be unreasonably withheld, conditioned or delayed by either MBSC or Greenfire, as applicable).
---	---
●	“Proposed Amendments” are as defined in the section entitled “Material Canadian Federal Income Tax Considerations.”
---	---
●	“Registrar” are to the Registrar of Corporations for the Province of Alberta or the Deputy Registrar of Corporations appointed under subsection 263(1) of the ABCA.
---	---
●	“Resale Registration Statement” are to the registration statement registering the resale of certain securities held by or issuable to certain existing shareholders of MBSC and Greenfire and the PIPE Investors, to be filed by the Company pursuant to the Investor Rights Agreement.
---	---

xiii

●	“Reservoir” are to a subsurface body of rock having sufficient porosity and permeability to store and transmit fluids.
●	“SAGD” are to steam-assisted gravity drainage, an in-situ thermal oil production extraction technique.
---	---
●	“Sarbanes-Oxley Act” are to the U.S. Sarbanes-Oxley Act of 2002.
---	---
●	“SEC” are to the U.S. Securities and Exchange Commission.
---	---
●	“Securities Act” are to the U.S. Securities Act of 1933, as amended.
---	---
●	“ServiceCo” are to 2373525 Alberta Ltd.
---	---
●	“Share Consideration” are to the aggregate number of Company Consideration Shares equal to the quotient of: (a) the difference of (i) the Greenfire Pre-Money Equity Value, minus (ii) the Cash Consideration, minus (iii) Unpaid Expenses, minus(iv) the MBSC Class B Common Share Amount, divided by (b) $10.10.
---	---
●	“Sponsor Support Agreement” are to the sponsor agreement dated December 14, 2022, by and among the MBSC Sponsor, MBSC, the Company and Greenfire.
---	---
●	“SubCo” are to 2373436 Alberta Ltd.
---	---
●	“Subscription Agreements” are to those certain subscription agreements dated December 14, 2022 entered into by MBSC and the PIPE Investors.
---	---
●	“Surviving Greenfire” are to Greenfire as the surviving corporate entity following the Amalgamation.
---	---
●	“Surviving MBSC” are to MBSC as the survivor corporate entity following the Merger.
---	---
●	“Transactions” are to the transactions contemplated by the Business Combination Agreement, the Plan of Arrangement and the Ancillary Documents.
---	---
●	“Treasury Regulations” means the United States Department of the Treasury regulations issued pursuant to the Code.
---	---
●	“U.S. GAAP” are to generally accepted accounting principles in the United States.
---	---
●	“Unpaid Expenses” are to Unpaid Greenfire Expenses and Unpaid MBSC Expenses, in each case to the extent limited pursuant to Section 2.3(b) of the Business Combination Agreement.
---	---
●	“Unpaid Greenfire Expenses” are to, as of any determination time, the Greenfire Expenses that are unpaid as of immediately prior to the Closing.
---	---
●	“Unpaid MBSC Expenses” are to MBSC Expenses that are unpaid as of immediately prior to the Closing.
---	---
●	“Warrant Agreements” are to the Warrant Agreement and Amended and Restated Warrant Agreement, each dated as of September 20, 2023, by and between Greenfire Resources Ltd., Computershare Inc. and Computershare Trust Company, N.A., governing the Company Warrants.
---	---
●	“WCS” are to Western Canadian Select, which is the broadly used benchmark that reflects heavy oil prices at Hardisty, Alberta and “WCS differentials” are to the difference between WCS and WTI.
---	---
●	“WDB” are to Western Canada Dilbit Blend, a blended stream comprised of Sunrise Dilbit Blend, Hangingstone Dilbit Blend and Leismer Corner Blend.
---	---
●	“WTI” are to West Texas Intermediate, which is the current benchmark for mid-continent North American crude oil prices at Cushing, Oklahoma.
---	---

xiv

PART

Item 1. Identity ofDirectors, Senior Management and Advisers

Not applicable.

Item 2. Offer Statisticsand Expected Timetable

Not applicable.

Item 3. Key Information

A. [Reserved]

B. Capitalizationand Indebtedness

Not applicable.

C. Reasons for theOffer and Use of Proceeds

Not applicable.

D. Risk Factors

Risk Factor Summary

Investing in our securities involves risks. You should carefully consider all of the information set forth in this Annual Report, including the risks described in this section, before making a decision to invest in our securities. Some of the risks related to the Company’s business and industry are summarized below.

●	The prices of crude oil, diluted bitumen, non-diluted bitumen and the differentials<br>among various crude oil prices, natural gas and power are volatile, outside of the Company’s control and affect its revenues, profitability,<br>cash flows and future rate of growth.
●	The Company’s SAGD operations are subject to numerous risks, including<br>reservoir performance, operating cost increases and various other factors, could adversely affect the Company’s operating results.
---	---
●	The Company markets all of its bitumen production and receives all of its<br>revenue from its Petroleum Marketer and as a result if the Petroleum Marketer faced financial difficulty or has other issues marketing<br>the Company’s bitumen production, it could have a serious impact on the Company’s operations and financial position.
---	---
●	If the Company’s capital expenditures relating to debottlenecking its<br>production from the Demo Asset and Expansion Asset do not perform as expected, it could impact the Company’s ability to grow its<br>production.
---	---
●	Shortages and volatility of pricing on commodity inputs or a failure to secure<br>the services and equipment necessary to the Company’s operations for the expected price, on the expected timeline, or at all, may<br>have an adverse effect on the Company’s financial performance and cash flows.
---	---
●	There are numerous uncertainties inherent in estimating quantities of reserves<br>and future net revenues to be derived therefrom, including many factors beyond the Company’s control.
---	---
●	Global political events and political decisions made in Canada may adversely<br>affect commodity prices which in turn affect the Company’s cash flow.
---	---

●	The Company’s properties may be subject<br>to actions and opposition by non-governmental agencies.
●	The successful operation of a portion of the Company’s properties is<br>dependent on third parties.
---	---
●	The Company may be unable to retain existing suppliers.
---	---
●	The Company relies on groundwater licenses, which, if rescinded or the conditions<br>of which are amended, could disrupt its business.
---	---
●	The Company may have to pay certain costs associated with abandonment and<br>reclamation in excess of amounts currently estimated in its consolidated financial statements.
---	---
●	The Company may not be able to obtain the regulatory approvals it needs for<br>general operating activities or compliance for decommissioning.
---	---
●	Due to the geographical concentration of the Company’s assets, the<br>Company may be disproportionately impacted by delays or interruptions in the region in which it operates.
---	---
●	Entrance into new industry-related activities or geographical areas could<br>adversely affect the Company’s future operational and financial conditions.
---	---
●	Lack of capacity and/or regulatory constraints on gathering and processing<br>facilities, pipeline systems, trucking and railway lines may have a negative impact on the Company’s ability to produce and sell<br>its oil and natural gas.
---	---
●	Modification to current, or implementation of additional, regulations and<br>the rise of petroleum alternatives may reduce the demand for oil and natural gas and/or increase the Company’s costs and/or delay<br>planned operations.
---	---
●	Changes to royalty regimes could adversely affect the profitability of the<br>Company’s operations.
---	---
●	A failure to secure the services and equipment necessary to the Company’s<br>operations for the expected price, on the expected timeline, or at all, may have an adverse effect on the Company’s financial performance<br>and cash flows.
---	---
●	Oil and natural gas operations are subject to seasonal weather conditions,<br>and the Company may experience significant operational delays or costs as a result.
---	---
●	The Company’s access to capital may be limited or restricted as a result<br>of factors related and unrelated to it, impacting its ability to conduct future operations and acquire and develop reserves.
---	---
●	The anticipated benefits of acquisitions may not be achieved and the Company<br>may dispose of non-core assets for less than their carrying value on the financial statements as a result of weak market conditions.
---	---
●	The Company’s risk management activities expose it to the risk of financial<br>loss and counter-party risk.
---	---
●	Opposition by First Nations groups to the conduct of the Company’s<br>operations, development or exploratory activities may negatively impact the Company.
---	---
●	Climate change and other environmental concerns could result in increased<br>operating costs and reduced demand for the Company’s products and securities, while the potential physical effects of climate change<br>could disrupt the Company’s production and cause it to incur significant costs in preparing for or responding to those effects.
---	---
●	The Company is subject to laws, rules, regulations and policies regarding<br>data privacy and security which are subject to change and reinterpretation, and could result in claims or increased cost of operations<br>and breaches of the Company’s cyber-security and loss of, or unauthorized access to, data may adversely impact the Company’s<br>operations and financial position
---	---

●	Changes to applicable tax laws and regulations or exposure to additional<br>tax liabilities could adversely affect the Company’s business and future profitability.
●	The Company incurs significant increased expenses and administrative burdens<br>as a public company.
---	---
●	The Company may identify internal control weaknesses in the future or otherwise<br>fail to develop and maintain an effective system of internal controls, which may result in material misstatements of financial statements<br>and/or the Company’s inability to meet periodic reporting obligations.
---	---
●	The Company’s substantial indebtedness could adversely affect the Company’s<br>financial health and a default under any of the Company’s debt instruments could result in the Company being required to repay amounts<br>outstanding thereunder.
---	---
●	The Company is a “foreign private issuer” under U.S. securities<br>laws and therefore is exempt from certain requirements applicable to U.S. domestic registrants listed on the NYSE.
---	---
●	The Company has a limited operating history, which may not be sufficient<br>to evaluate its business and prospects
---	---

Risks Related to theCompany’s Operations and the Oil and Gas Industry

The prices of crudeoil, diluted bitumen, non-diluted bitumen and the differentials among various crude oil prices, natural gas and power are volatile andoutside of the Company’s control and affect its revenues, profitability, cash flows and future rate of growth.

The Company’s revenues, profitability, cash flows and future rate of growth are highly dependent on commodity prices, including with respect to crude oil, diluted bitumen, non-diluted bitumen and the differentials among various crude oil prices, natural gas and power. Commodity prices may fluctuate widely in response to relatively minor changes in the supply of, and demand for, crude oil, diluted bitumen and non-diluted bitumen, natural gas, power, market uncertainty and a variety of additional factors that are beyond the Company’s control, such as:

●	domestic and global supply of, and demand for, crude oil, diluted bitumen, non-diluted bitumen and natural gas, as impacted by economic factors that affect gross domestic product growth rates of countries around the world, including impacts from international trade, pandemics and related concerns;
●	market expectations with respect to the future supply of, and demand for, crude oil, Natural Gas Liquids (“NGLs”) and natural gas and price changes;
---	---
●	global crude oil, diluted bitumen, non-diluted bitumen and natural gas inventory levels;
---	---
●	volatility and trading patterns in the commodity-futures markets;
---	---
●	the proximity, capacity, cost and availability of pipelines and other transportation facilities;
---	---
●	the capacity of refiners to utilize available supplies of crude oil and condensate;
---	---
●	weather conditions affecting supply and demand;
---	---

●	overall domestic and global political and economic conditions;
●	actions of Organization of Petroleum Exporting Countries (“OPEC”), its members and other state-controlled oil companies relating to oil price and production controls;
---	---
●	fluctuations in the value of the U.S. dollar relative to the Canadian dollar;
---	---
●	the price and quantity of crude oil, diluent and LNG imports to and exports from the U.S. and other countries;
---	---
●	the development of new hydrocarbon exploration, production and transportation methods or technological advancements in existing methods, including hydraulic fracturing and SAGD;
---	---
●	capital investments by oil and gas companies relating to the exploration, development and production of hydrocarbons;
---	---
●	social attitudes or policies affecting energy consumption and energy supply;
---	---
●	domestic and foreign governmental regulations, including environmental regulations, climate change regulations and applicable tax regulations;
---	---
●	shareholder activism or activities by non-governmental organizations to limit certain sources of capital for the energy sector or restrict the exploration, development and production of crude oil and natural gas; and
---	---
●	the effect of energy conservation efforts and the price, availability and acceptance of alternative energies, including renewable energy.
---	---

The Company makes price assumptions regarding commodity prices that are used for planning purposes, and a significant portion of its cash outlays, including capital, operating and transportation commitments, are largely fixed in nature. Accordingly, if commodity prices are below the expectations on which these commitments were based, the Company’s financial results are likely to be adversely affected because these cash outlays are not variable in the short term and cannot be quickly reduced to respond to unanticipated decreases in commodity prices. The Company’s risk management arrangements will not fully mitigate the effects of unexpected price fluctuations.

Significant or extended price declines could also materially and adversely affect the amount of diluted and non-diluted bitumen that the Company can economically produce, require the Company to make significant downward adjustments to its reserve estimates or result in the deferral or cancellation of the Company’s growth projects. A reduction in production could also result in a shortfall in expected cash flows and require the Company to reduce capital spending or borrow funds or access the capital markets to cover any such shortfall. Any of these factors could negatively affect the Company’s ability to replace its production and its future rate of growth.

The Company’s financial condition is substantially dependent on, and highly sensitive to, the prevailing prices of crude oil and the differentials among various crude oil prices and natural gas. Low prices for crude oil produced by the Company could have a material adverse effect on the Company’s operations, financial condition and the value and amount of the Company’s reserves.

Prices for crude oil and natural gas fluctuate in response to changes in the supply of, and demand for, crude oil and natural gas, market uncertainty and a variety of additional factors beyond the Company’s control. Crude oil prices are primarily determined by international supply and demand. Factors which affect crude oil prices include the actions of OPEC, the condition of the Canadian, United States, European and Asian economies, government regulation, political stability in the Middle East and elsewhere, the supply of crude oil in North America and internationally, the ability to secure adequate transportation for products, the availability of alternate fuel sources and weather conditions. Natural gas prices, which represent an energy input cost to the Company, are affected primarily in North America by supply and demand, weather conditions, industrial demand, prices of alternate sources of energy and developments related to the market for liquefied natural gas. All of these factors are beyond the Company’s control and can result in a high degree of price volatility. Fluctuations in currency exchange rates further compound this volatility when commodity prices, which are generally set in U.S. dollars, are stated in Canadian dollars.

The Company’s financial performance also depends on revenues from the sale of commodities which differ in quality and location from underlying commodity prices quoted on financial exchanges. The market prices for heavy oil (which includes bitumen blends) are lower than the established market prices for light and medium grades of oil, principally due to the cost of diluent and the higher transportation and refining costs associated with heavy oil. In addition, there is limited pipeline egress capacity for Canadian crude oil to access the American refinery complex or tidewater to access world markets, relative to production rates in Western Canada, and the availability of additional transport capacity via rail is more expensive and variable; therefore, the price for Canadian crude oil is very sensitive to pipeline and refinery outages, which contributes to this volatility. The market for heavy oil is also more limited than for light and medium grades of oil making it further susceptible to supply and demand fluctuations. These factors all contribute to price differentials. Future price differentials are uncertain and any widening in heavy oil differentials specifically could have an adverse effect on the Company’s results of operations, financial condition and prospects.

Decreases to or prolonged periods of low commodity prices, particularly for oil, may negatively impact the Company’s ability to meet guidance targets, maintain our business and meet all of the Company’s financial obligations as they come due. It could also result in the shut-in of currently producing wells without an equivalent decrease in expenses due to fixed costs, a delay or cancellation of existing or future drilling, development or construction programs, unutilized long-term transportation commitments and a reduction in the value and amount of the Company’s reserves.

The Company conducts assessments of the carrying value of the Company’s assets in accordance with IFRS. If crude oil and natural gas forecast prices decline, the carrying value of the Company’s assets could be subject to downward revisions and the Company’s net earnings could be adversely affected.

Risks associatedwith the marketability of oil affecting net production revenue, production volumes and development and exploration activities.

The Company’s ability to market its oil may depend upon its ability to acquire capacity in pipelines that deliver oil to commercial markets or contract for the delivery of oil by rail or truck. Numerous factors beyond the Company’s control do, and will continue to, affect the marketability and price of oil acquired, produced, or discovered by the Company, including:

●	deliverability uncertainties related to the distance the Company’s reserves are from pipelines, railway lines and processing and storage facilities;
●	operational problems affecting pipelines, railway lines and processing and storage facilities; and
---	---
●	government regulation relating to prices, taxes, royalties, land tenure, allowable production and the export of oil.
---	---

Prices for oil and natural gas are subject to large fluctuations in response to relatively minor changes in the supply of, and demand for, oil and natural gas, market uncertainty and a variety of additional factors beyond the control of the Company. These factors include the current state of the world economies, political conditions in the United States, Canada, Europe, China and emerging markets, the actions of OPEC, sanctions imposed on certain oil-producing nations by other countries, governmental regulation, political stability and conflict in the Middle East, Ukraine and elsewhere, the foreign supply and demand of oil and natural gas, risks of supply disruption, the price of foreign imports and the availability of alternative fuel sources. Prices for oil and natural gas are also subject to the availability of foreign markets and the Company’s ability to access such markets. Oil prices are expected to remain volatile as a result of a wide variety of factors, including but not limited to the actions and decisions of OPEC and other factors mentioned herein. A material decline in prices could result in a reduction of the Company’s net production revenue. The economics of producing from bitumen resources may change because of lower prices, which could result in reduced production of diluted and non-diluted bitumen, resulting in a reduction in the Company’s net production revenue and the value of the Company’s reserves. The Company might also elect not to produce from certain wells at lower prices.

All these factors could result in a material decrease in the Company’s net production revenue and a reduction in its production, development and exploration activities. Any substantial and extended decline in the price of oil would have an adverse effect on the Company’s carrying value of its reserves, borrowing capacity, revenues, profitability and cash flows from operations and may have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.

Volatile oil and natural gas prices make it difficult to estimate the value of producing properties for acquisitions and often cause disruption in the market for oil and natural gas-producing properties, as buyers and sellers have difficulty agreeing on such value. Price volatility also makes it difficult to budget for, and project the return on, acquisitions and development and exploitation projects.

Risks associatedwith SAGD operations could adversely affect the Company’s operating results.

The Company’s operating results and the value of its reserves and resources depend, in part, on the price received for diluted bitumen and non-diluted bitumen, as well as the operating costs of the Demo Asset and the Expansion Asset, all of which may significantly vary from the prices and costs that the Company currently anticipates. If such operating costs increase, or if the Company does not achieve its expected production volumes or revenue, the Company’s earnings and cash flow will be reduced, and its business and financial condition may be materially adversely affected. In addition to the other factors and variables discussed herein, principal factors which could affect the Company’s operating results include (without limitation):

●	increases in the price applied to carbon emissions;
●	lower than expected reservoir performance, including, but not limited to, lower oil production rates and/or higher steam oil ratio;
---	---
●	the reliability and maintenance of the Company’s facilities, including timely and cost-effective execution of turnaround activities;
---	---
●	the safety and reliability of pipelines, tankage, trucks, railways and railcars and barges that transport the Company’s products;
---	---
●	the need to replace significant portions of existing wells, referred to as “workovers”, or the need to drill additional wells;
---	---
●	the cost to transport bitumen, diluent and bitumen blend, and the cost to dispose of certain by-products;
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●	reliance on the Petroleum Marketer as our sole third-party commodity marketer to market bitumen blend sales, procure diluent supply and perform logistics management for the Demo Asset and Expansion Asset;
---	---
●	reliance on the Petroleum Marketer as our sole third-party commodity marketer for timely payment of bitumen blend marketed on behalf of the Company;
---	---
●	labor disputes or disruptions, declines in labor productivity or the unavailability of, or increased cost of, skilled labor;
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●	increases in the cost of materials, including in the current inflationary environment;
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●	the availability of water supplies;
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●	effects of inclement and severe weather events, including<br>fire, drought and flooding;
●	the ability to obtain further approvals and permits for future<br>potential projects;
---	---
●	engineering and/or<br>procurement performance falling below expected levels of output or efficiency;
---	---
●	refining markets for the Company’s bitumen blend; and
---	---
●	the cost of chemicals used in the Company’s operations,<br>including, but not limited to, in connection with water and/or oil treatment facilities.
---	---

The recovery ofbitumen using SAGD processes is subject to uncertainty.

Current SAGD technologies for in situ extraction of bitumen or for reservoir injection require significant consumption of natural gas or other inputs to produce steam for use in the recovery process. There can be no assurance that the Company’s operations will produce bitumen at the expected levels or on schedule. The quality and performance of a bitumen reservoir can also impact the steam oil ratio and the timing and levels of production. In addition, the geological characteristics and integrity of bitumen reservoirs are inherently uncertain. The injection of steam into reservoirs under significant pressure may cause fluid containment issues and unforeseen damage to reservoirs, resulting in large steam losses in parts of the reservoir where caprock is compromised. Should these adverse reservoir conditions occur, they would have a negative impact on the Company’s ability to recover bitumen.

The Company’sfuture performance may be affected by the financial, operational, environmental and safety risks associated with the exploration, developmentand production of oil and natural gas.

Oil and natural gas operations involve many risks. The long-term commercial success of the Company depends on its ability to find, acquire, develop and commercially produce oil reserves. Without the continual addition of new reserves, the Company’s existing reserves, and the production from them, will decline over time as the Company produces from such reserves. A future increase in the Company’s reserves will depend on both the ability of the Company to explore and develop its existing properties and its ability to select and acquire suitable producing properties or prospects. the Company may not be able to continue to find satisfactory properties to acquire or participate in. Moreover, management of the Company may determine that current markets, terms of acquisitions, participation or pricing conditions make potential acquisitions or participation uneconomic. The Company may not discover or acquire further commercial quantities of oil and natural gas.

Future oil and natural gas exploration may involve unprofitable efforts from dry wells or wells that are productive but do not produce sufficient petroleum substances to return a profit after drilling, completing, operating and other costs. The completion of a well does not ensure a profit on the investment or recovery of drilling, completion and operating costs.

Drilling hazards, environmental damage and various field operating conditions could greatly increase the cost of operations and adversely affect the production from successful wells. Field operating conditions include, but are not limited to, delays in obtaining governmental approvals or consents, shut-ins of wells resulting from extreme weather conditions, insufficient storage or transportation capacity or geological and mechanical conditions. It is difficult to eliminate production delays and declines from normal field operating conditions, which can negatively affect revenue and cash flow levels to varying degrees.

Oil and natural gas exploration, development and production operations are subject to all the risks and hazards typically associated with such operations, including blowouts, craterings, explosions, uncontrollable flows of natural gas, NGLs or well fluids, fires, pipe, casing or cement failures, abnormal pressure, pipeline leaks, ruptures or spills, vandalism, pollution, releases of toxic gases, adverse weather conditions or natural disasters and other environmental hazards and risks. These typical risks and hazards could result in substantial damage to oil and natural gas wells, production facilities, other property and the environment and cause personal injury or threaten wildlife, all of which could result in liability to the Company.

Oil and natural gas production operations are also subject to geological and seismic risks, including encountering unexpected formations, pressures, reservoir thief zones such as bottom water and top gas and/or water, caprock integrity, premature decline of reservoirs and the invasion of water into producing formations. Losses resulting from the occurrence of any of these risks may have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.

Shortages andvolatility of pricing on commodity inputs could negatively impact the Company’s operating results.

The nature of the Company’s operations results in exposure to fluctuations in diluent, natural gas and electricity prices. Natural gas is a significant component of the Company’s cost structure, as it is used to generate steam for the SAGD process. Diluent, such as condensate, is also one of the Company’s significant commodity inputs and is used to decrease the viscosity of bitumen to allow it to be transported. Electricity is required to power facilities and wells. Historically, the markets for bitumen, diluent, natural gas and electricity have been volatile, and they are likely to continue to be volatile. Shortages of, and increased costs for, these inputs could increase the Company’s marketing and operating costs.

The Company isheavily reliant on the Petroleum Marketer as its sole third-party commodity marketer and a failure of the Petroleum Marketer to fulfillits obligations to the Company could have a significant negative impact on the Company’s operations, costs and cashflow.

The Company has contracted with the Petroleum Marketer as its sole third-party petroleum marketer and as a result faces concentrated counterparty risk if the Petroleum Marketer cannot, or refuses to, fulfill its contractual obligations. The Petroleum Marketer markets all of the Company’s product to buyers and thus is the sole source of all of the Company’s revenue. The Petroleum Marketer also sources and pays for diluent for the Company’s operations, provides security for key pipeline assignments, schedules and executes delivery of blend and diluent by pipeline and is responsible for transport of the Company’s bitumen when product is transported by truck. A failure of the Petroleum Marketer to provide any of those contracted services could have a significant negative impact on the Company’s operations, costs and cashflow.

There are numerousuncertainties inherent in estimating quantities of proved and probable reserves, quantities of contingent resources and future net revenuesto be derived therefrom, including many factors beyond the Company’s control.

The reserves and estimated financial information with respect to certain of the Company’s oil sands leases have been independently evaluated by an independent reserve evaluation firm. These evaluations include several factors and assumptions made as of the date on which the evaluation is made, including but not limited to:

●	geological<br> and engineering estimates, which have inherent uncertainties;
●	the effects<br> of regulation by governmental agencies;
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●	initial<br> production rates;
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●	production<br> decline rates;
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●	ultimate<br> recovery of reserves;
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●	timing<br> and amount of capital expenditures;
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●	marketability<br> of production;
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●	current<br> and forecast prices of diluted and non-diluted bitumen, crude oil, condensate, power and natural gas;
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●	the Company’s<br> ability to transport its product to various markets;
●	operating<br> costs;
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●	abandonment<br> and salvage values; and
---	---
●	royalties<br> and other government levies that may be imposed over the producing life of the reserves.
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Many of these assumptions that are valid at the time of the evaluation may change significantly when new information becomes available and may prove to be inaccurate. Furthermore, different reserve engineers may make different estimates of reserves based on the same data. The Company’s actual production, revenues and expenditures with respect to the Company’s oil sands leases will vary from these evaluations, and those variations may be material.

Reserves and estimates may require revision based on actual production experience. Such figures have been determined based on assumed commodity prices and operating costs. Market price fluctuations of bitumen, diluent and natural gas prices may render the recovery of certain grades of bitumen uneconomic. The present value of the Company’s estimated future net revenue in this report should not be construed as the fair market value of the Company’s reserves.

There is uncertaintyassociated with non-producing or undeveloped reserves.

The Company’s reserves may not ultimately be developed or produced in their entirety, either because it may not be commercially viable to do so or for other reasons. Furthermore, not all of the Company’s undeveloped or developed non-producing reserves may be ultimately produced on the Company’s projected timelines, at the costs the Company has budgeted, or at all. A shortfall in production below could have an adverse effect on the Company’s business, financial condition, results of operations and prospects.

The anticipatedbenefits of acquisitions may not be achieved and the Company may dispose of non-core assets for less than their carrying value on thefinancial statements as a result of weak market conditions.

The Company evaluates and, where appropriate, pursues acquisitions of additional mineral leases or oil and gas assets in the ordinary course of business. Acquisitions of mineral leases, as well as the exploration and development of land subject to such leases, may require substantial capital or the incurrence of substantial additional indebtedness. Furthermore, the acquisition of any additional mineral leases may not ultimately increase the Company’s reserves and contingent resources or result in any additional production of bitumen. If the Company consummates any future acquisitions of mineral leases, it may need to change its anticipated capital expenditure programs and the use of the Company’s capital resources. Management continually assesses the value and contribution of services provided by third parties and the resources required to provide such services. In this regard, non-core assets may be periodically disposed of so the Company can focus its efforts and resources more efficiently. Depending on the market conditions for such non-core assets, certain non-core assets of the Company may realize less on disposition than their carrying value on the financial statements of the Company.

Global politicalevents may adversely affect commodity prices, which in turn affect the Company’s cash flow.

Political events throughout the world that cause disruptions in the supply of oil continuously affect the marketability and price of oil and natural gas acquired or discovered by the Company. Conflicts, or conversely peaceful developments, arising outside of Canada, including changes in political regimes or the parties in power, have a significant impact on the price of oil and natural gas. Any particular event could result in a material decline in prices and result in a reduction of the Company’s net production revenue.

The Company’sproperties may be subject to actions and opposition by non-governmental agencies.

In addition to the risks outlined above related to geopolitical developments, the Company’s oil and natural gas properties, wells and facilities could be subject to physical sabotage or public opposition. Such public opposition could expose the Company to the risk of higher costs, delays or even project cancellations due to increased pressure on governments and regulators by special interest groups including First Nations groups, landowners, environmental interest groups (including those opposed to oil and natural gas production operations) and other non-governmental organizations, blockades, legal or regulatory actions or challenges, increased regulatory oversight, reduced support from the federal, provincial or municipal governments, delays in, challenges to, or the revocation of regulatory approvals, permits and/or licenses, and direct legal challenges, including the possibility of climate-related litigation. The Company may not be able to satisfy the concerns of special interest groups and non-governmental organizations and attempting to address such concerns may require the Company to incur significant and unanticipated capital and operating expenditures. If any of the Company’s properties, wells or facilities are the subject of physical sabotage or public opposition, it may have a material adverse effect on the Company’s business, financial condition, results of operations and prospects. The Company does not have insurance to protect against such risks.

Disruptions causedby the COVID-19 pandemic continue to affect economic activity in Canada and internationally and impact demand for oil, natural gas liquidsand natural gas.

The COVID-19 pandemic, and actions taken in response, resulted in a significant contraction in the global economy. This caused a period of unprecedented disruption in the oil and gas industry and negatively impacted the demand for, and pricing of, energy products, including diluted bitumen and non-diluted bitumen produced by the Company. A consequence of this disruption is that the oil and gas industry experienced a period of market contraction. Furthermore, the oil and gas industry experienced increased counterparty risk. Although the pricing of energy products has begun to trend back towards historical norms, volatility originally resulting from the pandemic persists and disruptions to the oil and gas industry could continue.

Throughout and following the COVID-19 pandemic, inflation has been driven by many factors, including disruptions to local and global supply chains and transportation services. Inflation in Canada has significantly increased labor and capital costs for drilling, construction and equipment. Additionally, increased demand for experienced technical and manual labor in Northern Alberta and delays in procurement of equipment such as steel, tanks, machinery and electrical components can increase the time required to complete projects. Inflation and disruptions to supply chain and transportation services have the potential to disrupt the Company’s operations, projects and financial condition.

There may be further disruption in the demand for certain commodities, which may have a prolonged adverse effect on the Company’s financial condition, operations, income, results from operations and cash flows. Additionally, the effect on local and global economic conditions stemming from the pandemic could also aggravate the other risk factors identified herein, the extent of which is not yet known.

The successfuloperation of a portion of the Company’s properties is dependent on third parties.

The Company’s projects will depend on the availability and successful operation of certain infrastructure owned and operated by third parties or joint ventures with third parties, including (without limitation):

●	pipelines<br> for the transport of natural gas, diluent and diluted bitumen;
●	refinery<br> operators;
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●	power<br> transmission grids supplying and exporting electricity; and
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●	other<br> third-party transportation infrastructure such as roads, rail, airstrips, terminals and vessels.
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The unavailability or decreased capacity of any or all of the infrastructure described above could negatively impact the operation of the Company’s projects, which, in turn, may have a material adverse effect on the Company’s results of operations, financial condition and prospects.

In addition, if any of the Company’s various counterparties experience financial difficulty, it could impact their ability to fund and pursue capital expenditures, carry out their operations in a safe and effective manner and satisfy regulatory requirements with respect to abandonment and reclamation obligations. If such companies fail to satisfy regulatory requirements with respect to abandonment and reclamation obligations, the Company may be required to satisfy such obligations and seek reimbursement from such companies. To the extent that any of such companies go bankrupt, become insolvent or make a proposal or institute any proceedings relating to bankruptcy or insolvency, it could result in such assets being shut-in, the Company potentially becoming subject to additional liabilities relating to such assets and the Company having difficulty collecting revenue due from such operators or recovering amounts owing to the Company from such operators for their share of abandonment and reclamation obligations. Any of these factors could have a material adverse effect on the Company’s financial and operational results.

Firm transportationand storage agreements require the Company to pay demand charges for firm transportation and storage capacities that it does not use.

The Company pays fixed charges for storage and transportation of operating inputs such as natural gas, diluent and electricity, regardless of whether bitumen and blend are being produced. If the Company fails to use its firm transportation and storage capacities due to production shortfalls or otherwise, margins, results of operations and financial performance could be adversely affected.

The Company maybe unable to retain existing suppliers.

The Company may be unable to retain existing suppliers, contractors or employees, unless it provides letters of credit or other financial assurances, the quantum of which may eventually prove to be higher than the Company’s current estimates. The Company may have restricted access to capital and increased borrowing costs. Failure to obtain financing on a timely basis could impair the Company’s ability to retain such suppliers, contractors or employees, which could have a material adverse effect on its operations.

The Company relieson groundwater licenses, which, if rescinded or the conditions of which are amended, could disrupt its business and have a material adverseeffect on its business, financial condition, results of operations and prospects.

The Company relies on access to groundwater, which is obtained under government licenses, to provide the substantial quantities of water required for certain of its operations. The licenses to withdraw water may be rescinded or additional conditions may be added to these licenses. Further, the Company may have to pay increased fees for the use of water in the future, and any such fees may be uneconomic. Finally, new projects or the expansion of existing projects may be dependent on securing licenses for additional water withdrawal, and these licenses may be granted on terms not favorable to the Company, or at all, and such additional water may not be available to divert under such licenses. Any prolonged droughts in the Fort McMurray area could result in the Company’s groundwater licenses being subject to additional conditions or rescission. The Company’s inability to secure groundwater licenses in the future and any amendment to or rescission of, its current licenses may disrupt its business and have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.

The Company mayhave to pay certain costs associated with abandonment and reclamation in excess of amounts currently estimated in its consolidated financialstatements.

The Company will need to comply with the terms and conditions of environmental and regulatory approvals and all legislation regarding the abandonment of its projects and reclamation of the project lands at the end of their economic life, which may result in substantial abandonment and reclamation costs. Any failure to comply with the terms and conditions of the Company’s approvals and legislation may result in the imposition of fines and penalties, which may be material. Generally, abandonment and reclamation costs are substantial and, while the Company accrues a reserve in its financial statements for such costs in accordance with IFRS, such accruals may be insufficient.

In the future, the Company may determine it prudent or be required by applicable Laws, regulations or regulatory approvals to establish and fund one or more reclamation funds to provide for payment of future abandonment and reclamation costs. If the Company establishes a reclamation fund, its liquidity and cash flow may be adversely affected.

Alberta has developed a liability management framework designed to prevent the Government of Alberta from incurring costs associated with suspension, abandonment, remediation and reclamation of wells, facilities and pipelines if a licensee or permit holder is unable to satisfy its regulatory obligations. The implementation of or changes to the requirements of the liability management framework may result in significant increases to the security that must be posted by licensees, increased and more frequent financial disclosure obligations or may result in the denial of license or permit transfers, which could impact the availability of capital to be spent by such licensees which could in turn materially adversely affect the Company’s business and financial condition. In addition, this liability management framework may prevent or interfere with a licensee’s ability to acquire or dispose of assets, as both the vendor and the purchaser of oil and natural gas assets must be in compliance with the liability management framework for the applicable regulatory agency to allow for the transfer of such assets.

The Company maynot be able to obtain the regulatory approvals it needs for general operating activities or compliance for decommissioning.

The construction, operation and eventual decommissioning of the Demo Asset and the Expansion Asset and other potential future projects are and will be conditional upon various environmental and regulatory approvals, permits, leases and licenses issued by governmental authorities, including but not limited to the approval of the Alberta Energy Regulator and the Alberta Ministry of Environment and Protected Areas. There can be no assurance that such approvals, permits, leases and licenses will be granted or, once granted, that they will subsequently be renewed or will not be cancelled or contain terms and conditions which make the Company’s projects uneconomic, or cause the Company to significantly alter its projects. Further, the construction, operation and decommissioning of the Demo Asset and Expansion Asset projects and other potential future projects will be subject to regulatory approvals and statutes and regulations relating to environmental protection and operational safety. There can be no assurance that third parties will not object to the development of such projects during applicable regulatory processes.

Due to the geographicalconcentration of the Company’s assets, the Company may be disproportionately impacted by delays or interruptions in the regionin which it operates.

The Company’s properties and production are focused in the Southern Athabasca region of Northeastern Alberta. As a result, the Company may be disproportionately exposed to the impact of delays or interruptions of production caused by transportation capacity constraints, curtailment of production, availability of equipment, facilities, personnel or services, water shortages, significant governmental regulation, natural disasters, fires, adverse weather conditions, plant closures for scheduled maintenance or interruption of transportation of oil or natural gas produced from the wells in these areas.

In addition, the effect of fluctuations on supply and demand may become more pronounced within the specific geographic oil and gas-producing areas in which the Company’s properties are located, which may cause these conditions to occur with greater frequency or magnify the effect of these conditions on the Company. Due to the concentrated nature of the Company’s portfolio of properties, a number of the Company’s properties could experience one or more of the same conditions at the same time, resulting in a relatively greater impact on the Company’s results of operations than they might have on other companies that have a more diversified portfolio of properties. Such delays or interruptions could have a material adverse effect on the operating results and financial condition of the Company.

Entrance intonew industry-related activities or geographical areas could adversely affect the Company’s future operational and financial conditions.

In the future, the Company may acquire or move into new industry-related activities or new geographical areas or acquire different energy-related assets, and as a result, may face unexpected risks or alternatively, significantly increase its exposure to one or more existing risk factors, which may in turn result in the Company’s future operational and financial conditions being adversely affected.

The Company’soperations may be negatively impacted by factors outside of its control, resulting in operational delays and cost overruns.

Project interruptions may delay expected revenues from operations. Significant project cost overruns could make a project uneconomic. The Company’s ability to execute projects and to market bitumen depends upon numerous factors beyond the Company’s control, including:

●	availability<br> of processing capacity;
●	availability<br> and proximity of pipeline capacity;
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●	availability<br> of trucking sources;
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●	availability<br> of storage capacity;
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●	availability<br> and cost of diluent, natural gas and power;
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●	changes<br> in production or regulation of sulfur and/or sulfur dioxide;
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●	availability<br> of, and the ability to acquire, water supplies needed for drilling and SAGD operations or the Company’s ability to dispose<br> of water used or removed from strata at a reasonable cost and in accordance with applicable environmental regulations;
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●	effects<br> of inclement and severe weather events, including forest fires, drought and flooding;
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●	availability<br> of drilling and related equipment;
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●	loss of<br> wellbore integrity or failure of pressure equipment;
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●	unexpected<br> cost increases;
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●	accidental<br> events;
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●	currency<br> fluctuations;
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●	regulatory<br> changes;
---	---
●	availability<br> and productivity of skilled labor; and
---	---
●	regulation<br> of the oil and natural gas industry by various levels of government and governmental agencies.
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A portion of the Company’s production costs are fixed regardless of current operating levels. As noted, the Company’s operating levels are subject to factors beyond its control that can delay deliveries or increase the cost of operation at particular sites for varying lengths of time. These factors include weather conditions (e.g., extreme winter weather, tornadoes, floods, and the lack of availability of process water due to drought), fires and other natural and man-made disasters, unanticipated geological conditions, including variations in the amount and type of rock and soil overlying the oil or natural gas deposits, variations in rock and other natural materials and variations in geologic conditions.

Fire in the Athabasca region has been a recurring issue and in 2016 resulted in the suspension of operations at the Demo Asset and suspension of construction at the Expansion Asset, as well as suspension of operations at surrounding SAGD facilities due to safety concerns.

The processes that take place in the Company’s facilities and those facilities owned by third parties through which the Company’s production is transported and processed depend on critical pieces of equipment. This equipment may, on occasion, be out of service because of unanticipated failures. In addition, some of these facilities have been in operation for several decades, and the equipment is aged. In the future, the Company may experience additional material shutdowns or periods of reduced production because of equipment failures. Further, remediation of any interruption in production capability may require the Company to make large capital expenditures that could have a negative effect on profitability and cash flows. The Company’s business interruption insurance may not cover all or any of the lost revenues associated with equipment failures. Longer-term business disruptions could result in a loss of customers, which adversely could affect future sales levels and profitability.

Lack of capacityand/or regulatory constraints on gathering and processing facilities, pipeline systems, trucking and railway lines may have a negativeimpact on the Company’s ability to produce and sell its oil and natural gas.

The Company delivers its products through gathering and processing facilities, pipeline systems and may in certain circumstances, deliver by truck and rail. The amount of bitumen that the Company can produce and sell is subject to the accessibility, availability, proximity and capacity of these gathering and processing facilities, pipeline systems, trucking and railway lines. The lack of availability of capacity in any of the gathering and processing facilities, pipeline systems, trucking and railway lines could result in the Company’s inability to realize the full economic potential of its production or in a reduction of the price offered for the Company’s production. The lack of firm pipeline capacity continues to affect the oil and natural gas industry and limit the ability to transport produced oil and gas to market. In addition, the pro-rationing of capacity on inter-provincial pipeline systems continues to affect the ability to export oil and natural gas. Unexpected shutdowns or curtailment of the capacity of pipelines for maintenance or integrity work or because of actions taken by regulators could also affect the Company’s production, operations and financial results.

A portion of the Company’s production may, from time to time, be processed through facilities owned by third parties and over which the Company does not have control. From time to time, these facilities may discontinue or decrease operations as a result of normal servicing requirements or unexpected events. A discontinuation or decrease of operations could have a material adverse effect on the Company’s ability to process its production and deliver the same to market. Midstream and pipeline companies may take actions to maximize their return on investment, which may in turn adversely affect producers and shippers, especially when combined with a regulatory framework that may not always align with the interests of particular shippers.

The Company competeswith other oil and natural gas companies, many of which have greater financial and operational resources.

The Canadian and international petroleum industry is highly competitive in all aspects, including the exploration for, and the development of, new sources of supply, the acquisition of oil production leases and the distribution and marketing of petroleum products. the Company competes with producers of bitumen, synthetic crude oil blends and conventional crude oil. Some of the conventional producers have lower operating costs than the Company, and many of them have greater resources to source, attract and retain the personnel, materials and services that the Company requires to conduct its operations. Other producers may also have substantially greater financial resources, staff and facilities than the Company. Some of these companies not only explore for, develop and produce oil and natural gas, but also carry on refining operations and market oil and natural gas on an international basis. As a result of these complementary activities, some of these competitors may have greater and more diverse competitive resources to draw on than the Company. The Company’s ability to increase its reserves in the future will depend not only on its ability to explore and develop its present properties, but also on its ability to select and acquire other suitable producing properties or prospects for exploratory drilling.

The petroleum industry is characterized by rapid and significant technological advancements and introductions of new products and services using new technologies that may increase the viability of reserves or reduce production costs. Other companies may have greater financial, technical and personnel resources that allow them to implement and benefit from such technological advantages. The Company may not be able to respond to such competitive pressures and implement such technologies on a timely basis, or at an acceptable cost. If the Company does implement such technologies, it may not do so successfully. One or more of the technologies currently used by the Company or implemented in the future may become obsolete. If the Company is unable to use the most advanced commercially available technology, or is unsuccessful in implementing certain technologies, its business, financial condition and results of operations could also be adversely affected in a material way.

The Company also faces competition from companies that supply alternative resources of energy, such as wind and solar power.

Other factors that could affect competition in the marketplace include additional discoveries of hydrocarbon reserves by the Company’s competitors, changes in the cost of production, political and economic factors and other factors outside Greenfire’s control.

Changes to thedemand for oil and natural gas products and the rise of petroleum alternatives may negatively affect the Company’s financial condition,results of operations and cash flow.

Fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to oil and natural gas and technological advances in fuel economy and renewable energy generation systems could reduce the demand for oil, natural gas and liquid hydrocarbons. Recently, certain jurisdictions have implemented policies or incentives to decrease the use of hydrocarbons and encourage the use of renewable fuel alternatives, which may lessen the demand for petroleum products and result in downward pressure on commodity prices. Advancements in energy-efficient products have a similar effect on the demand for oil and natural gas products. The Company cannot predict the impact of changing demand for oil and natural gas products, and any major changes may have a material adverse effect on the Company’s business, financial condition, results of operations and cash flow by decreasing the Company’s profitability, increasing its costs, limiting its access to capital and decreasing the value of its assets.

Modification tocurrent, or implementation of additional, regulations may reduce the demand for oil and natural gas and/or increase the Company’scosts and/or delay planned operations.

The oil and gas industry in Canada is a regulated industry. Various levels of government impose extensive controls and regulations on oil sands and other oil and natural gas operations (including exploration, development, production, pricing, marketing and transportation). Governments may regulate or intervene with respect to exploration and production activities, prices, taxes, royalties and the exportation of bitumen, oil and natural gas. Amendments to these controls and regulations may occur from time to time in response to economic or political conditions. The implementation of new regulations or the modification of existing regulations affecting the oil sands and the oil and natural gas industry could generally reduce demand for bitumen, oil and natural gas and increase the Company’s costs, either of which may have a material adverse effect on the Company’s business, financial condition, results of operations and prospects. Further, the ongoing third-party challenges to regulatory decisions or orders have reduced the efficiency of the regulatory regime, as the implementation of the decisions and orders has been delayed, resulting in uncertainty and interruption to the business of the oil sands and the oil and natural gas industry.

To conduct its operations, the Company will require regulatory permits, licenses, registrations, approvals and authorizations from various governmental authorities at the municipal, provincial and federal levels. The Company may not be able to obtain all permits, licenses, registrations, approvals and authorizations that may be required to conduct operations that it may wish to undertake. In addition, certain federal legislation such as the Competition Act (Canada) and the Investment Canada Act could negatively affect the Company’s business, financial condition and the market value of its securities or its assets, particularly when undertaking, or attempting to undertake, acquisition or disposition activity.

There

has also been increased activism relating to climate change and public opposition to fossil fuels. The federal government and certain provincial governments in Canada have responded to these shifting societal attitudes by adopting ambitious emissions reduction targets and supporting legislation, including measures relating to carbon pricing, clean energy, field and emission standards, and alternative energy incentives and mandates. See “Climate change concerns could result in increased operating expenses and reduced demand for the Company’s products and securities, while the potential physical effects of climate change could disrupt the Company’s production and cause it to incur significant costs in preparing for or responding to those effects” and “Compliance with environmental regulations requires the dedication of a portion of the Company’s financial and operational resources” for additional information. Concerns over climate change, fossil fuel extraction, greenhouse gas (“GHG”) emissions, and water and land-use practices could lead governments to enact additional or more stringent laws and regulations applicable to the Company and other companies in the energy industry in general.

Changes to royaltyregimes could adversely affect the profitability of the Company’s operations.

The Province of Alberta receives royalties on the production of natural resources from lands in which it owns the mineral rights that are linked to price and production levels and that apply to both new and existing thermal oil production projects. There can be no assurances that the Government of Alberta will not adopt new royalty regimes or alter existing royalty regimes, which may render the Company’s projects uneconomical or otherwise adversely affect its results of operations, financial condition or prospects.

A failure to securethe services and equipment necessary to the Company’s operations for the expected price, on the expected timeline, or at all, mayhave an adverse effect on the Company’s financial performance and cash flows.

The Company’s operating costs could escalate and become uncompetitive due to supply chain disruptions, inflationary cost pressures, equipment limitations, escalating supply costs, commodity prices, and additional government intervention through stimulus spending or additional regulations. The Company’s inability to manage costs may impact project returns and future development decisions, which could have a material adverse effect on its financial performance and cash flows.

The cost or availability of oil and gas field equipment may adversely affect the Company’s ability to undertake exploration, development and construction projects. The oil and gas industry is cyclical in nature and is prone to shortages of supply of equipment and services including drilling rigs, geological and geophysical services, engineering and construction services, major equipment items for infrastructure projects and construction materials generally. These materials and services may not be available when required at reasonable prices. A failure to secure the services and equipment necessary for the Company’s operations for the expected price, on the expected timeline, or at all, may have an adverse effect on the Company’s financial performance and cash flows.

Oil and naturalgas operations are subject to seasonal weather conditions, and the Company may experience significant operational delays or costs asa result.

The level of activity in the Canadian oil and natural gas industry is influenced by seasonal weather patterns. Wet weather and spring thaw may make the ground unstable. Consequently, municipalities and provincial transportation departments enforce road bans that restrict the movement of rigs and other heavy equipment, thereby reducing activity levels. Certain oil and natural gas producing areas are located in areas that are inaccessible other than during the winter months because the ground surrounding the sites in these areas consists of swampy terrain. Extreme cold weather, heavy snowfall and heavy rainfall may restrict the Company’s ability to access its properties and cause operational difficulties. In addition, low temperatures increase the viscosity of diluent and bitumen. With higher viscosities, more diluent is required to blend bitumen for pipeline transportation, and bitumen becomes thicker and more difficult to transport by truck, in each case, resulting in increased operating costs. Higher than normal temperatures can negatively affect the operation of equipment used for processing and cooling of product and for inputs, such as natural gas delivery from third parties. Seasonal factors and unexpected weather patterns may lead to declines in exploration and production activity and increased operating costs, which may have an adverse effect on the Company’s business, financial condition and results of operations.

The Company’saccess to capital may be limited or restricted as a result of factors related and unrelated to it, impacting its ability to conduct futureoperations and acquire and develop reserves.

The Company anticipates making substantial capital expenditures for the acquisition, exploration, development and production of bitumen, oil and natural gas reserves in the future. As future capital expenditures will be financed out of cash generated from operations, borrowings and possible future equity sales, the Company’s ability to do so is dependent on, among other factors:

●	the overall<br> state of the capital markets;
●	the Company’s<br> credit rating (if applicable);
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●	commodity<br> prices;
●	production<br> rates;
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●	interest<br> rates;
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●	royalty<br> rates;
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●	tax burden<br> due to currently applicable tax laws and potential changes in tax laws; and
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●	investor<br> appetite for investment in the energy industry and the Common Shares in particular.
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Further, if the Company’s revenues or reserves decline, it may not have access to the capital necessary to undertake or complete future drilling programs. The current conditions in the oil and gas industry have negatively impacted the ability of oil and gas companies to access financing. Debt or equity financing or cash generated by operations may not be available or sufficient to meet these requirements or for other corporate purposes or, if debt or equity financing is available, it may not be on terms acceptable to the Company. The Company may be required to seek additional equity financing on terms that are highly dilutive to existing securityholders. The inability of the Company to access sufficient capital for its operations could have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.

Changes to applicabletax laws or government incentive programs may affect the Company’s operations, financial condition or prospects.

Income tax laws or government incentive programs relating to the oil and gas industry and in particular, the oil sands sector, may in the future be changed or interpreted in a manner that adversely affects the Company’s result of operations, financial condition or prospects. In addition, corporate tax pools may be adjusted due to changes with respect to changes of tax law interpretation or audit.

The Company mayrequire additional financing, from time to time, to fund the acquisition, exploration and development of properties, and its abilityto obtain such financing in a timely fashion and on acceptable terms may be negatively impacted by the current economic and global marketvolatility.

The Company’s cash flow from operations may not be sufficient to fund its ongoing activities at all times and, from time to time, the Company may require additional financing in order to carry out its acquisition, exploration and development activities. Failure to obtain financing on a timely basis could cause the Company to forfeit its interest in certain properties, miss certain acquisition opportunities and reduce its operations. Due to the conditions in the oil and natural gas industry and/or global economic and political volatility, the Company may, from time to time, have restricted access to capital and increased borrowing costs. The current conditions in the oil and natural gas industry have negatively impacted the ability of oil and natural gas companies to access, or the cost of, additional financing.

As a result of global economic and political conditions and the domestic lending landscape, the Company may, from time to time, have restricted access to capital and increased borrowing costs. If the Company’s cash flow from operations decreases as a result of lower commodity prices or otherwise, it will affect the Company’s ability to expend the necessary capital to replace its reserves or to maintain its production. To the extent that external sources of capital become limited, unavailable or available on onerous terms, the Company’s ability to make capital investments and maintain existing assets may be impaired, and its assets, liabilities, business, financial condition and results of operations may be affected materially and adversely. In addition, the future development of the Company’s properties may require additional financing, and such financing may not be available or, if available, may not be available upon acceptable terms. Alternatively, any available financing may be highly dilutive to existing securityholders. Failure to obtain any financing necessary for the Company’s capital expenditure plans may result in a delay in development or production on the Company’s properties.

Defects in thetitle or rights to produce the Company’s properties may result in a financial loss.

The Company’s actual title to and interest in its properties, and its right to produce and sell the products therefrom, may vary from the Company’s records. In addition, there may be valid legal challenges or legislative changes, or prior unregistered agreements, interests or claims of which the Company is currently unaware, that affect the Company’s title to and right to produce petroleum from its properties, which could impair the Company’s activities and result in a reduction of the revenue received by the Company.

If a defect exists in the chain of title or in the Company’s right to produce, or a legal challenge or legislative change arises, it is possible that the Company may lose all, or a portion of, the properties to which the title defect relates and/or its right to produce from such properties. This may have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.

The Company maybe required to surrender lands to the Province of Alberta if annual lease payments are not made.

The Company has two project regions in the Athabasca region of Alberta consisting of oil sands leases, either acquired from the Government of Alberta or from third parties. All of the Company’s leases require annual lease payments to the Alberta provincial government. If the Company does not maintain the annual lease payments, it will lose its ability to explore and develop the properties, and the Company will not retain any kind of interest in the properties.

Risk managementactivities expose the Company to the risk of financial loss and counter-party risk.

The Company has and continues to use physical and financial instruments to hedge a portion of its exposure to fluctuations in commodity prices (potentially including, but not limited to, hedging the index price that approximates the Company’s realized price for its bitumen and benchmark pricing that approximates the price the Company pays for diluent, natural gas and power) and may also use such instruments in respect of exchange and interest rates. If bitumen, diluent, natural gas, power prices, exchange or interest rates increase above or decrease below levels contracted for in any hedging agreements, such hedging arrangements may prevent the Company from realizing the full benefit of such increases or decreases. In addition, the Company’s risk management arrangements may expose it to the risk of financial loss or otherwise have a negative impact on the Company’s results of operations or prospects in certain circumstances, including instances in which:

●	production<br> falls short of the contracted volumes or prices fall significantly lower than projected;
●	there<br> is a widening of price-basis differentials between delivery points for production and the delivery point assumed in the arrangement;
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●	the Company<br> is required to pay a margin call on a derivative instrument based on a market or reference price that is higher than the hedged price;
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●	counterparties<br> to the arrangements or other price risk management contracts become insolvent or otherwise fail to perform under those arrangements;<br> or
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●	a sudden<br> or unexpected event materially impacts market prices for bitumen, diluent, natural gas, power or exchange or interest rates.
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It is an obligation under the indenture governing the 2028 Notes to execute a continuously rolling 12-month commodity price hedging program for at least 50% of its proved developed producing reserve forecast, subject to adjustment in certain circumstances, from its most recent reserve report, which is completed by an independent reserve evaluator. Although the Company has been successful in executing its hedging strategy to meet this obligation in the past, there can be no guarantee that it will continue to be successful in meeting this obligation in the future. Should the Company fail to meet its obligations under the indenture, an event of default may occur and negatively impact the Company’s financial and operating performance.

Not all risksof conducting oil and natural gas opportunities are insurable and the occurrence of an uninsurable event may have a material adverseeffect on the Company.

The operation of the Company’s SAGD production properties and projects have experienced and will continue to be subject to the customary hazards of recovering, transporting and processing hydrocarbons, such as fires, explosions, gaseous leaks, migration of harmful substances, equipment failures, blowouts, spills and other accidents.

In addition, the geological characteristics and integrity of the bitumen reservoirs are inherently uncertain. The injection of steam into reservoirs under significant pressure may result in unforeseen damage to reservoirs that could result in steam blowouts or oil or gaseous leaks. A casualty occurrence might result in the loss of equipment or life, as well as injury, environmental or property damage or the interruption of the Company’s operations.

Although the Company maintains insurance in accordance with industry standards to address certain of these risks, such insurance has limitations on liability and may not be sufficient to cover the full extent of such liabilities. In addition, certain risks are not, in all circumstances, insurable or, in certain circumstances, the Company may elect not to obtain insurance to deal with specific risks due to the high premiums associated with such insurance or other reasons. The payment of any uninsured liabilities would reduce the funds available to the Company. The occurrence of a significant event that the Company is not fully insured against, or the insolvency of the insurer of such event, may have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.

The Company’s insurance policies are generally renewed on an annual basis and, depending on factors such as market conditions, the premiums, policy limits and/or deductibles for certain insurance policies can vary substantially. In some instances, certain insurance may become unavailable or available only for reduced amounts of coverage. Significantly increased costs could lead the Company to decide to reduce or possibly eliminate coverage. In addition, insurance is purchased from a number of third-party insurers, often in layered insurance arrangements, some of whom may discontinue providing insurance coverage for their own policy or strategic reasons. Should any of these insurers refuse to continue to provide insurance coverage, the Company’s overall risk exposure could be increased and the Company could incur significant costs.

The Company relieson its reputation to continue its operations and to attract and retain investors and employees.

Oil sands development receives significant political, media and activist commentary regarding GHG emissions, pipeline transportation, water usage, harm to First Nations communities and potential for environmental damage. Public concerns regarding such issues may directly or indirectly harm the Company’s operations and profitability in a number of ways, including by: (i) creating significant regulatory uncertainty that could challenge the economic modelling of future development; (ii) motivating extraordinary environmental regulation by governmental authorities that could result in changes to facility design and operating requirements, thereby increasing the cost of construction, operation and abandonment; (iii) imposing restrictions on production from oil sands operations that could reduce the amount of bitumen, crude oil and natural gas that the Company is ultimately able to produce from its reserves; and (iv) resulting in proposed pipelines not being able to receive the necessary permits and approvals, which, in turn, may limit the market for the Company’s crude oil and natural gas and reduce its price. Concerns over these issues may also harm the Company’s corporate reputation and limit its ability to access land and joint venture opportunities.

The Company’s business, operations or financial condition may be negatively impacted as a result of any negative public opinion towards the Company or as a result of any negative sentiment toward, or in respect of, the Company’s reputation with stakeholders, special interest groups, political leadership, the media or other entities. Public opinion may be influenced by certain media and special interest groups” negative portrayal of the industry in which the Company operates as well as their opposition to certain oil sands and other oil and natural gas projects. Potential impacts of negative public opinion or reputational issues may include delays or interruptions in operations, legal or regulatory actions or challenges, blockades, increased regulatory oversight, reduced support for, delays in, challenges to, or the revocation of regulatory approvals, permits and/or licenses and increased costs and/or cost overruns. The Company’s reputation and public opinion could also be impacted by the actions and activities of other companies operating in the oil and natural gas industry, particularly other producers, over which the Company has no control. Similarly, the Company’s reputation could be impacted by negative publicity related to loss of life, injury or damage to property and environmental damage caused by the Company’s operations. In addition, if the Company develops a reputation of having an unsafe work site, it may impact the ability of the Company to attract and retain the necessary skilled employees and consultants to operate its business. Opposition from special interest groups opposed to oil and natural gas development and the possibility of climate-related litigation against governments and hydrocarbon companies may impact the Company’s reputation.

Reputational risk cannot be managed in isolation from other forms of risk. Credit, market, operational, insurance, regulatory and legal risks, among others, must all be managed effectively to safeguard the Company’s reputation. Damage to the Company’s reputation could result in negative investor sentiment towards the Company, which may result in limiting the Company’s access to capital, increasing the cost of capital, and decreasing the price and liquidity of the Common Shares.

Opposition byFirst Nations groups to the conduct of the Company’s operations, development or exploratory activities may negatively impact theCompany.

Opposition by First Nations groups to the conduct of the Company’s operations, development or exploratory activities may negatively impact it in terms of public perception, diversion of management’s time and resources, and legal and other advisory expenses, and could adversely impact the Company’s progress and ability to explore and develop properties.

Some First Nations groups have established or asserted treaty, Aboriginal title and Aboriginal rights to a substantial portion of Western Canada. Certain First Nations peoples have filed a claim against the Government of Canada, the Province of Alberta, certain Governmental Entities and the Regional Municipality of Wood Buffalo (which includes the City of Fort McMurray, Alberta) claiming, among other things, Aboriginal title to large areas of lands surrounding Fort McMurray, including lands on which the Company’s assets are located. Such claims, and other similar claims that may be initiated, if successful, could have a material adverse effect on the Company’s assets.

The Canadian federal and provincial governments have a duty to consult with First Nations people when contemplating actions that may adversely affect the asserted or proven Aboriginal or treaty rights and, in certain circumstances, accommodate their concerns. The scope of the duty to consult by federal and provincial governments varies with the circumstances and is often the subject of ongoing litigation. The fulfillment of the duty to consult First Nations people and any associated accommodations may adversely affect the Company’s ability to, or increase the timeline to, obtain or renew, permits, leases, licenses and other approvals, or to meet the terms and conditions of those approvals.

In addition, the Canadian federal government has introduced legislation to implement the United Nations Declaration on the Rights of Indigenous Peoples (“UNDRIP”). Other Canadian jurisdictions have also introduced or passed similar legislation, or begun considering the principles and objectives of UNDRIP, or may do so in the future. The means and timelines associated with UNDRIP’s implementation by the government are uncertain; additional processes may be created, or legislation amended or introduced associated with project development and operations, further increasing uncertainty with respect to project regulatory approval timelines and requirements.

An inability torecruit and retain a skilled workforce and key personnel may negatively impact the Company.

The operations and management of the Company require the recruitment and retention of a skilled workforce, including engineers, technical personnel and other professionals. The loss of key members of such workforce, or a substantial portion of the workforce as a whole, could result in the failure to implement the Company’s business plans which could have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.

The labor force in Alberta, and in the surrounding area, is limited and there can be no assurance that all the required employees with the necessary expertise will be available. Competition for qualified personnel in the oil and natural gas industry is high and the Company may not be able to continue to attract and retain all personnel necessary for the development and operation of its business. The Company does not have any key personnel insurance in effect. Contributions of the existing management team to the immediate and near-term operations of the Company are likely to be of central importance. In addition, certain of the Company’s current employees may have significant institutional knowledge that must be transferred to other employees prior to their departure from the workforce. If the Company is unable to: (i) retain current employees; (ii) successfully complete effective knowledge transfers; and/or (iii) recruit new employees with the requisite knowledge and experience, the Company could be negatively impacted. In addition, the Company could experience increased costs to retain and recruit these professionals.

Restrictions onoperational activities intended to protect certain species of wildlife may adversely affect the Company’s ability to conduct drillingand other operational activities in some of the areas where it operates.

Operations in the Company’s operating areas can be adversely affected by seasonal or permanent restrictions on construction, drilling and well completions activities designed to protect various wildlife. Seasonal restrictions may limit the Company’s ability to operate in protected areas and can intensify competition for drilling rigs, oilfield equipment, services, supplies and qualified personnel, which may lead to periodic shortages when drilling and completion activities are allowed. These constraints and the resulting shortages or high costs could delay the Company’s operations and materially increase the Company’s operating and capital costs. Permanent restrictions imposed to protect endangered species could prohibit development in certain areas or require the implementation of expensive mitigation measures. The designation of previously unprotected species as threatened or endangered in areas where the Company operates could cause the Company to incur increased costs arising from species protection measures or could result in limitations on the Company’s exploration and production activities that could have an adverse impact on the Company’s ability to develop and produce its reserves.

Risks Related toClimate Change and Related Regulation

Compliance withenvironmental regulations requires the dedication of a portion of the Company’s financial and operational resources.

Compliance with environmental legislation may require significant expenditures, some of which may be material. Environmental compliance requirements may result in a curtailment of production or a material increase in the costs of production, development or exploration activities or otherwise have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.

The direct and indirect costs of the various GHG regulations, current and emerging in both Canada and the United States, including any limits on oil sands emissions through the Canadian federal government’s implementation of the Paris Agreement through the GreenhouseGas Pollution Pricing Act, the Clean Fuel Standard, the Alberta Technology Innovation and Emissions Reduction Regulation and any other federal or provincial carbon emission pricing system, may adversely affect the Company’s business, operations and financial results.

Environmental

regulation of GHG emissions in the United States could result in increased costs and/or reduced revenue for oil sands companies such as the Company. At the federal level, the U.S. Environmental Protection Agency (the “EPA”) is currently responsible for regulating GHG emissions, pursuant to the Clean Air Act. The EPA has issued regulations restricting GHG emissions from automobiles and trucks, and administers the Renewable Fuel Standard, which requires specified “renewable fuels” to be blended into U.S. transportation fuel, with increasing volumes coming from lower GHG-emitting fuels over time. While the future regulatory environment in the United States is uncertain, it is possible that fuel suppliers’ GHG emissions will eventually be regulated in the United States. The Company’s operations may be impacted by such regulation, which could impose increased costs on direct and indirect users of the Company’s products, which could result in reduced demand therefore.

Climate changeconcerns could result in increased operating costs and reduced demand for the Company’s products and securities, while the potentialphysical effects of climate change could disrupt the Company’s production and cause it to incur significant costs in preparingfor or responding to those effects.

Global climate issues continue to attract public and scientific attention. Numerous reports, including reports from the Intergovernmental Panel on Climate Change, have engendered concern about the impacts of human activity, especially hydrocarbon combustion, on the global climate. In turn, increasing public, government, and investor attention is being paid to global climate issues and to emissions of GHGs, including emissions of carbon dioxide and methane from the production and use of bitumen, oil, liquids and natural gas. Most countries across the globe, including Canada, have agreed to reduce their carbon emissions in accordance with the Paris Agreement. In addition, during the 2021 United Nations Climate Change Conference in Glasgow, Scotland, Canada’s Prime Minister, Justin Trudeau, made several pledges aimed at reducing Canada’s GHG emissions and environmental impact. Greenfire faces both transition risks and physical risks associated with climate change policy and regulations.

Foreign and domestic governments continue to evaluate and implement policy, legislation, and regulations focused on restricting GHG emissions and promoting adaptation to climate change and the transition to a low-carbon economy. It is not possible to predict what measures foreign and domestic governments may implement in this regard, nor is it possible to predict the requirements that such measures may impose or when such measures may be implemented. However, international multilateral agreements, the obligations adopted thereunder and legal challenges concerning the adequacy of climate-related policy brought against foreign and domestic governments may accelerate the implementation of these measures. Given the evolving nature of climate change policy and the control of GHG emissions and resulting requirements, including carbon taxes and carbon pricing schemes implemented by varying levels of government, it is expected that current and future climate change regulations will have the effect of increasing the Company’s operating costs, and, in the long-term, potentially reducing the demand for oil, liquids, natural gas and related products, resulting in a decrease in the Company’s profitability and a reduction in the value of its assets.

Concerns about climate change have resulted in environmental activists and members of the public opposing the continued extraction and development of fossil fuels, which has influenced investors” willingness to invest in the oil and natural gas industry. Historically, political and legal opposition to the fossil fuel industry focused on public opinion and the regulatory process. More recently, however, there has been a movement to more directly hold governments and oil and natural gas companies responsible for climate change through climate litigation. Claims have been made against certain energy companies alleging that GHG emissions from oil and natural gas operations constitute a public nuisance under certain laws or that such energy companies provided misleading disclosure to the public and investors of current or future risks associated with climate change. As a result, individuals, government authorities, or other organizations may make claims against oil and natural gas companies, including the Company, for alleged personal injury, property damage, or other potential liabilities. While the Company is not currently a party to any such litigation or proceedings, it could be named in actions making similar allegations. An unfavorable ruling in any such case could reduce the demand for the Company’s products and price of securities, impact its operations and have an adverse impact on its financial condition.

Given the perceived elevated long-term risks associated with policy development, regulatory changes, public and private legal challenges, or other market developments related to climate change, there have also been efforts in recent years affecting the investment community, including investment advisors, sovereign wealth funds, banks, public pension funds, universities and other institutional investors, promoting direct engagement and dialogue with companies in their portfolios on climate change action (including exercising their voting rights on matters relating to climate change) and increased capital allocation to investments in low-carbon assets and businesses while decreasing the carbon intensity of their portfolios through, among other measures, divestments of companies with high exposure to GHG-intensive operations and products. Certain stakeholders have also pressured insurance providers and commercial and investment banks to reduce or stop financing and providing insurance coverage to oil and natural gas and related infrastructure businesses and projects. The impact of such efforts requires the Company’s management to dedicate significant time and resources to these climate change-related concerns and may adversely affect the Company’s operations, the demand for and price of the Common Shares and products and may negatively impact the Company’s cost of capital and access to the capital markets.

Emissions, carbon and other regulations impacting climate and climate-related matters are constantly evolving. With respect to ESG and climate reporting, the International Sustainability Standards Board has issued an IFRS Sustainability Disclosure Standard with the aim to develop sustainability disclosure standards that are globally consistent, comparable and reliable. If the Company is not able to meet future sustainability reporting requirements of regulators or current and future expectations of investors, insurance providers, or other stakeholders, its business and ability to attract and retain skilled employees, obtain regulatory permits, licenses, registrations, approvals, and authorizations from various governmental authorities, and raise capital may be adversely affected.

The direct andindirect costs of various GHG regulations, existing and proposed, may adversely affect the Company’s business, operations and financialresults, including demand for the Company’s products.

The Company’s exploration and production facilities and other operations and activities emit GHGs, which require the Company to comply with federal and/or provincial GHG emissions legislation in Canada. Climate change policy is evolving at regional, national and international levels, and political and economic events may significantly affect the scope and timing of climate change measures that are ultimately put in place to prevent climate change or mitigate its effects. The direct or indirect costs of compliance with GHG-related regulations may have a material adverse effect on the Company’s business, financial condition, results of operations and prospects. The Company’s facilities may ultimately be subject to future regional, provincial and/or federal climate change regulations to manage GHG emissions.

Further, while reporting on most ESG information is currently voluntary, in March 2022, the SEC issued a proposed rule that would require public companies to disclose certain climate-related information, including climate-related risks, impacts, oversight and management, financial statement metrics and emissions, targets, goals and plans. While the proposed rule is not yet effective and is expected to be subject to a lengthy comment process, compliance with the proposed rule as drafted could result in increased legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly, and place strain on our personnel, systems and resources.

Although it is not possible at this time to predict how new laws or regulations in the United States and Canada would impact the Company’s business, any such future laws, regulations or legal requirements imposing reporting or permitting obligations on, or limiting emissions of GHGs from, the Company’s equipment and operations could require the Company to incur costs to reduce emissions of GHGs associated with its operations or to purchase emission credits or offsets as well as delays or restrictions in its ability to permit GHG emissions from new or modified sources. The direct or indirect costs of compliance with these regulations may have a material adverse effect on the business, financial condition, results of operations and prospects of the Company. Any such regulations could also increase the cost of consumption, and thereby reduce demand for the bitumen the Company produces. Given the evolving nature of the discourse related to climate change and the control of GHGs and resulting regulatory requirements, it is not possible to predict with certainty the impact on the Company and its operations and financial condition.

The Company facesphysical risks associated with climate change.

Based on the Company’s current understanding, the potential physical risks resulting from climate change are long-term in nature and the timing, scope, and severity of potential impacts are uncertain. Many experts believe global climate change could increase extreme variability in weather patterns, such as increased frequency of severe weather, rising mean temperature and sea levels and long-term changes in precipitation patterns. Extreme hot and cold weather, heavy snowfall, heavy rainfall and wildfires may restrict the Company’s ability to access its properties and cause operational difficulties, including damage to equipment and infrastructure. Extreme weather also increases the risk of personnel injury as a result of dangerous working conditions. Recent wildfires in Western Canada caused electrical instability of third-party owned infrastructure that resulted in unplanned downtime and contributed to lower production volumes at our facilities. Certain of the Company’s assets are located in locations that are near forests and rivers and a flood or another wildfire may lead to additional and significant downtime and/or damage to the Company’s assets or cause disruptions to the production and transport of its products or the delivery of goods and services in its supply chain, any of which may negatively impact our results of operations and financial condition.

Risks Related toPolitical and other Legal Matters and Regulations

The Company’sbusiness may be adversely affected by political and social events and decisions made in Canada.

The Company’s results can be adversely impacted by political, legal, or regulatory developments in Canada that affect local operations and local and international markets. Changes in government, government policy or regulations, changes in law or interpretation of settled law, third-party opposition to industrial activity generally or projects specifically, and duration of regulatory reviews could impact the Company’s existing operations and planned projects. This includes actions by regulators or political actors to delay or deny necessary licenses and permits for the Company’s activities or restrict the operation of third-party infrastructure that the Company relies on. Additionally, changes in environmental regulations, assessment processes or other laws, and increasing and expanding stakeholder consultation (including First Nations stakeholders), may increase the cost of compliance or reduce or delay available business opportunities and adversely impact the Company’s results.

Other government and political factors that could adversely affect the Company’s financial results include increases in taxes or government royalty rates (including retroactive claims) and changes in trade policies and agreements. Further, the adoption of regulations mandating efficiency standards, and the use of alternative fuels or uncompetitive fuel components could affect the Company’s operations. Many governments are providing tax advantages and other subsidies to support alternative energy sources or are mandating the use of specific fuels or technologies. Governments and others are also promoting research into new technologies to reduce the cost and increase the scalability of alternative energy sources, and the success of these initiatives may decrease demand for the Company’s products.

A change in federal, provincial or municipal governments in Canada may have an impact on the directions taken by such governments on matters that may impact the oil and natural gas industry, including the balance between economic development and environmental policy. The oil and natural gas industry has become an increasingly politically polarizing topic in Canada, which has resulted in a rise in civil disobedience surrounding oil and natural gas development — particularly with respect to infrastructure projects. Protests, blockades and demonstrations have the potential to delay and disrupt the Company’s activities.

The handling ofsecure information for destruction exposes the Company to potential data security risks that could result in monetary damages againstthe Company and could otherwise damage its reputation, and adversely affect its business, financial condition and results of operations.

The protection of customer, employee, and company data is critical to the Company’s business. The regulatory environment in Canada surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and constantly changing requirements. Certain legislation, including the Personal Information Protection and Electronic Documents Act in Canada, require documents to be securely destroyed to avoid identity theft and inadvertent disclosure of confidential and sensitive information. A significant breach of customer, employee, or company data could attract a substantial amount of media attention, damage the Company’s customer relationships and reputation, and result in lost sales, fines, or lawsuits. In addition, an increasing number of countries have introduced and/or increased enforcement of comprehensive privacy laws or are expected to do so. The continued emphasis on information security as well as increasing concerns about government surveillance may lead customers to request the Company to take additional measures to enhance security and/or assume higher liability under its contracts. As a result of legislative initiatives and customer demands, the Company may have to modify its operations to further improve data security. Any such modifications may result in increased expenses and operational complexity, and adversely affect its reputation, business, financial condition and results of operations.

Failure to complywith anti-corruption, economic sanctions, and anti-money laundering laws — including the U.S. Foreign Corrupt PracticesAct of 1977, as amended, the UK Bribery Act 2010, the Canadian Corruption of Foreign Public Officials Act, Criminal Code,Special Economic Measures Act, Justice for Victims of Corrupt Foreign Officials Act, United Nations Act and Freezing Assets of CorruptForeign Officials Act, and similar laws associated with activities outside the United States or Canada — could subjectthe Company to penalties and other adverse consequences.

The Company is subject to governmental export and import control laws and regulations, as well as laws and regulations relating to foreign ownership and economic sanctions. The Company’s failure to comply with these laws and regulations and other anti-corruption laws that prohibit companies, their officers, directors, employees and third-party intermediaries from directly or indirectly promising, authorizing, offering, or providing improper payments or benefits to any person or entity, including any government officials, political parties, and private-sector recipients, for the purpose of obtaining or retaining business, directing business to any person, or securing any advantage could have an adverse effect on the Company’s business, prospects, financial condition and results of operations. Changes to trade policy, economic sanctions, tariffs, and import/export regulations may have a material adverse effect on the Company’s business, financial condition and results of operations. The Company will likely be subject to, and will be required to remain in compliance with, numerous laws and governmental regulations concerning the production, use, and distribution of its products and services. Potential future customers may also require that Greenfire complies with their own unique requirements relating to these matters, including provision of data and related assurance for ESG-related standards or goals. Existing and future environmental, health and safety laws and regulations could result in increased compliance costs or additional operating costs or construction costs and restrictions. Failure to comply with such laws and regulations may result in internal and/or government investigations, substantial fines, or other limitations that may adversely impact the Company’s financial results or results of operation. The Company’s business may also be adversely affected by changes in the regulation of the global energy industry.

Foreign marketsmay impose import restrictions and penalties on high carbon fuels which may impact the price the Company receives for its products.

Some foreign jurisdictions, including the State of California, have attempted to introduce carbon fuel standards that require a reduction in life cycle GHG emissions from vehicle fuels. Some standards propose a system to calculate the life cycle of GHG emissions of fuels to permit the identification and use of lower-emitting fuels. Any foreign import restrictions or financial penalties imposed on the use of bitumen or bitumen blend products may restrict the markets in which the Company may sell its bitumen and bitumen blend products and/or result in the Company receiving a lower price for such products.

Failure to complywith laws relating to labor and employment could subject the Company to penalties and other adverse consequences.

The Company is subject to various employment-related laws in the jurisdictions in which its employees are based. It faces risks if it fails to comply with applicable Canadian federal or provincial wage law or applicable Canadian federal or provincial labor and employment laws, or wage, labor or employment laws applicable to any employees outside of Canada. Any violation of applicable wage laws or other labor or employment-related laws could result in complaints by current or former employees, adverse media coverage, investigations, and damages or penalties which could have a material adverse effect on the Company’s reputation, business, operating results, and prospects. In addition, responding to any such proceeding may result in a significant diversion of management’s attention and resources, significant defense costs, and other professional fees.

Risks Relating tothe Company’s Technology, Intellectual Property and Infrastructure

Unauthorized useof intellectual property may cause the Company to engage in, or be the subject of, litigation.

Due to the rapid development of oil and natural gas technology, including with respect to recovering in situ oil sands resources, in the normal course of the Company’s operations, the Company may become involved in, named as a party to, or be the subject of, various legal proceedings in which it is alleged that the Company has infringed, misappropriated or otherwise violated the intellectual property or proprietary rights of others. The Company may also initiate similar claims against third parties if it believes that such parties are infringing, misappropriating or otherwise violating its intellectual property or proprietary rights. The Company’s involvement in any intellectual property litigation or legal proceedings could (i) result in significant expense, (ii) adversely affect the development of its assets or intellectual property, or (iii) otherwise divert the efforts of its technical and management personnel, whether or not such litigation or proceedings are resolved in the Company’s favor. In the event of an adverse outcome in any such litigation or proceeding, the Company may, among other things, be required to:

●	pay substantial<br> damages and/or cease the development, use, sale or importation of processes that infringe or violate upon the intellectual property<br> rights of a third party;
●	expend<br> significant resources to develop or acquire the non-infringing intellectual property;
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●	discontinue<br> processes incorporating the infringing technology; or
●	obtain<br> licenses to the non-infringing intellectual property.
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However, the Company may not be successful in such development or acquisition of the applicable non-infringing intellectual property, or such licenses may not be available on reasonable terms. In the event of a successful claim of infringement, misappropriation or violation of third-party intellectual property rights against the Company and its failure or inability to obtain a license to continue to use such technology on reasonable terms, the Company’s business, prospects, operating results and financial condition could be materially adversely affected.

Breaches of theCompany’s cyber-security and loss of, or unauthorized access to, data may adversely impact the Company’s operations and financialposition.

The Company is increasingly dependent upon the availability, capacity, reliability and security of the Company’s information technology infrastructure, and the Company’s ability to expand and continually update this infrastructure, to conduct daily operations. the Company depends on various information technology systems to estimate reserve quantities, process and record financial data, manage the Company’s land base, manage financial resources, analyze seismic information, administer contracts with operators and lessees and communicate with employees and third-party partners. The Company currently uses, and may use in the future, outsourced service providers to help provide certain information technology services, and any such service providers may face similar security and system disruption risks. Moreover, following the COVID-19 pandemic, an increased number of the Company’s employees and service providers have been working from home and connecting to its networks remotely on less secure systems, which may further increase the risk of, and vulnerability to, a cyber-security attack or security breach to the Company’s network. In addition, the Company’s ability to monitor its outsourced service providers” security measures is limited and third parties may be able to circumvent those security measures, resulting in the unauthorized access to, misuse, acquisition, disclosure, loss, alteration, or destruction of the Company’s personal, confidential, or other data, including data relating to individuals.

Further, the Company is subject to a variety of information technology and system risks as a part of its operations including potential breakdowns, invasions, viruses, cyber-attacks, cyber-fraud, security breaches, and destruction or interruption of the Company’s information technology systems by third parties or employees. Unauthorized access to these systems by employees or third parties could lead to corruption or exposure of confidential, fiduciary or proprietary information, interruption to communications or operations or disruption to business activities or the Company’s competitive position. In addition, cyber phishing attempts have become more widespread and sophisticated in recent years. If the Company becomes a victim to a cyber phishing attack, it could result in a loss or theft of the Company’s financial resources or critical data and information, or could result in a loss of control of the Company’s technological infrastructure or financial resources. The Company’s employees are often the targets of such cyber phishing attacks by third parties using fraudulent “spoof” emails to misappropriate information or to introduce viruses or other malware through “Trojan horse” programs to the Company’s computers.

Increasingly, social media is used as a vehicle to carry out cyber phishing attacks by nefarious actors. Information posted on social media sites, for business or personal purposes, may be used by attackers to gain entry into the Company’s systems and obtain confidential information. There are significant risks that the Company may not be able to properly regulate social media use by its employees and preserve adequate records of business activities and client communications conducted through the use of social media platforms.

The Company maintains policies and procedures that address and implement employee protocols with respect to electronic communications and electronic devices and conducts annual cyber-security risk assessments. The Company also employs encryption protection of its confidential information, and all computers and other electronic devices. Despite the Company’s efforts to mitigate such cyber phishing attacks through employee education and training, cyber phishing activities may result in unauthorized access, data theft and damage to its information technology infrastructure. The Company applies technical and process controls in line with industry-accepted standards to protect its information, assets and systems. However, these controls may not adequately prevent cyber-security breaches or attacks. As such, the Company may need to continuously develop, modify, upgrade or enhance its information technology infrastructure and cyber-security measures to secure its business, which can lead to increased cyber-security protection costs. Such costs may include making organizational changes, deploying additional personnel and protection technologies, training employees, and engaging third party experts and consultants. These efforts may come at the potential cost of revenues and human resources that could be used to continue to enhance the Company’s business, and such increased costs and diversion of resources may adversely affect operating margins. Disruption of critical information technology services, or breaches of information security, could have a negative effect on the Company’s performance and earnings, as well as its reputation, and any damages sustained may not be adequately covered by the Company’s current insurance coverage, or at all. The impact of any such cyber-security event could have a material adverse effect on the Company’s business, financial condition and results of operations.

The Company issubject to laws, rules, regulations and policies regarding data privacy and security. Many of these laws and regulations are subjectto change and reinterpretation, and could result in claims, changes to its business practices, monetary penalties, increased cost ofoperations or other harm to its business.

The Company is subject to certain laws, regulations, standards, and other actual and potential obligations relating to privacy, data hosting and transparency of data, data protection, and data security. Such laws are evolving rapidly, and the Company expects to potentially be subject to new laws and regulations, or new interpretations of laws and regulations, in the future in various jurisdictions. These laws, regulations, and other obligations, and changes in their interpretation, could require the Company to modify its operations and practices, restrict its activities, and increase its costs. Further, these laws, regulations, and other obligations are complex and evolving rapidly, and despite the Company’s reasonable efforts to monitor its potential obligations, the Company may face claims, allegations, or other proceedings related to its obligations under applicable privacy, data protection, or data security laws and regulations. The interpretation and implementation of these laws, regulations, and other obligations are uncertain for the foreseeable future and could be inconsistent with one another, which may complicate and increase the costs for compliance. As a result, the Company anticipates needing to dedicate substantial resources to comply with such laws, regulations, and other obligations relating to privacy and cyber-security. Despite the Company’s reasonable efforts to comply, any failure or alleged or perceived failure to comply with any applicable Laws, regulations, or other obligations relating to privacy, data protection, or data security could also result in regulatory investigations and proceedings, and misuse of or failure to secure data relating to individuals could also result in claims and proceedings against the Company by Governmental Entities or other third parties, penalties, fines and other liabilities, and may potentially damage the Company’s reputation and credibility, which could adversely affect the Company’s business, operating results, financial condition and prospects.

General Risk FactorsRelated to the Company

The Company isexposed to exchange and interest rate risks.

The Company is exposed to exchange rate risks from its U.S dollar-denominated debts. The Company’s revenues are based on the U.S. dollar, since revenue received from the sale of diluted bitumen and non-diluted bitumen is referenced to a price denominated in U.S. dollars, and the Company incurs most of its operating and other costs in Canadian dollars. As a result, the Company is impacted by exchange rate fluctuations between the U.S. dollar and the Canadian dollar, and any strengthening of the Canadian dollar relative to the U.S. dollar could negatively impact the Company’s operating margins and cash flows.

From time to time, the Company may enter into agreements to fix the exchange rate of Canadian to U.S. dollars or other currencies to offset the risk of revenue losses if the Canadian dollar increases in value compared to other currencies. However, if the Canadian dollar declines in value compared to such fixed currencies, the Company would not benefit from the fluctuating exchange rate.

Default underany of the Company’s debt instruments could result in the Company being required to repay amounts outstanding thereunder.

The Company is required to comply with covenants under the 2028 Notes, the Credit Agreement and EDC Facility and in the event it does not comply with these covenants, the Company’s access to capital could be restricted or repayment could be required. Events beyond the Company’s control may contribute to its failure to comply with such covenants. The acceleration of indebtedness under one agreement may permit acceleration of indebtedness under other agreements that contain cross default or cross-acceleration provisions. In addition, the 2028 Notes may impose operating and financial restrictions on the Company that could include restrictions on the payment of dividends, repurchase or making of other distributions with respect to the Common Shares, incurring of additional indebtedness, the provision of guarantees, the assumption of loans, making of capital expenditures, entering into of amalgamations, mergers, takeover bids or dispositions of assets, among others.

If repayment of all or a portion of the amounts outstanding under the 2028 Notes, the Credit Agreement or EDC Facility is required for any reason, including for a default of a covenant, there is no certainty that the Company would be in a position to make such repayment. Even if the Company is able to obtain new financing in order to make any required repayment under the 2028 Notes, the Credit Agreement or EDC Facility, it may not be on commercially reasonable terms, or terms that are acceptable to the Company. If the Company is unable to repay amounts owing under the 2028 Notes, the Credit Agreement or EDC Facility, the noteholders or lenders, as applicable under such facility could proceed to foreclose or otherwise realize upon the collateral granted to them to secure the indebtedness.

The Company’ssubstantial indebtedness could adversely affect the Company’s financial health.

As of December 31, 2023, the Company had approximately CAD$376.4 million (US$300 million) of debt outstanding, consisting of the principal amount of the 2028 Notes, and CAD$50 million of availability under the facilities pursuant to the Credit Agreement, with no amounts drawn.

The Company’s substantial indebtedness could have important consequences for the Company’s securityholders and a significant effect on the Company’s business. For example, it could:

●	make it<br> more difficult for the Company to satisfy its financial obligations;
●	increase<br> the Company vulnerability to general adverse economic, industry and competitive conditions;
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●	reduce<br> the availability of the Company’s cash flow to fund working capital, capital expenditures and other general corporate purposes<br> because the Company will be required to dedicate a substantial portion of the Company’s cash flow from operations to the payment<br> of principal and interest on the Company’s indebtedness;
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●	limit<br> the Company flexibility in planning for, or reacting to, changes in our business and the industry in which the Company operate;
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●	result<br> in dilution to the Company Shareholders in the event we issue equity to fund the Company’s debt obligations;
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●	place<br> the Company at a competitive disadvantage compared to the Company’s competitors that are less highly leveraged and that, therefore,<br> may be able to take advantage of opportunities that the Company leverage prevents the Company from exploiting; and
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●	limit<br> the Company’s ability to borrow additional funds.
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To the extent the Company is unable to repay the Company’s debt as it becomes due with cash on hand or from other sources, the Company will need to refinance the Company’s debt, sell assets or repay the debt with the proceeds from equity offerings in order to continue in business. Additional indebtedness or equity financing may not be available to the Company in the future for the refinancing or repayment of existing debt, or if available, such additional debt or equity financing may not be available on a timely basis, or on terms acceptable to the Company and within the limitations specified in the Company’s then existing debt instruments. If the Company is unable to make payments on the 2028 Notes or repay amounts owing under the Credit Agreement, the holders of the 2028 Notes or lenders under the Credit Agreement could proceed to foreclose or otherwise realize upon the collateral granted to them to secure that indebtedness.

In addition, the indenture governing the 2028 Notes includes restrictive covenants which restrict the Company’s ability to, among other things:

●	incur,<br> assume or guarantee additional indebtedness; or
●	repurchase<br> capital stock and make other restricted payments, including paying dividends and making investments;
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●	create<br> liens;
●	sell or<br> otherwise dispose of assets, including capital stock of subsidiaries;
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●	pay dividends<br> and enter into agreements that restrict dividends from subsidiaries; and
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●	enter<br> into transactions with affiliates.
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Those restrictive covenants could restrict the Company’s ability to carry on its business and operations or raise additional capital. Interference with the business and operations of the Company or the Company’s ability to raise additional capital could have a material adverse effect on the Company’s business, prospects and its financial and operational condition.

Increased debtlevels may impair the Company’s ability to borrow additional capital on a timely basis to fund opportunities as they arise.

From time to time, the Company may enter into transactions to acquire assets or shares of other entities. These transactions may be financed in whole, or in part, with debt, which may increase the Company’s debt levels above industry standards for oil and natural gas companies of similar size. Depending on future exploration and development plans, the Company may require additional debt financing that may not be available or, if available, may not be available on favorable terms. The Company’s constating documents do not limit the amount of indebtedness that the Company may incur. The level of the Company’s indebtedness from time to time could impair the Company’s ability to obtain additional financing on a timely basis to take advantage of business opportunities that may arise.

Investor confidenceand share value may be adversely impacted if the Company concludes that our internal control over financial reporting is not effective.

Effective internal controls are necessary for the Company to provide reliable financial reports and to help prevent fraud. Although the Company undertakes a number of procedures in order to help ensure the reliability of its financial reports, including those imposed on it under U.S. and Canadian securities laws, the Company cannot be certain that such measures will ensure that it will maintain adequate control over financial processes and reporting. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm the Company’s results of operations or cause it to fail to meet its reporting obligations. If the Company discovers a material weakness, the disclosure of that fact, even if quickly remedied, could reduce investor confidence in its consolidated financial statements and effectiveness of our internal controls, which ultimately could negatively impact the market price of our common shares.

The Companyis a “foreign private issuer” under U.S. securities laws and therefore will be exempt from certain requirements applicableto U.S. domestic registrants listed on the NYSE.

Although the Company is subject to the periodic reporting requirement of the Exchange Act, the periodic disclosure required of foreign private issuers under the Exchange Act is different from periodic disclosure required of U.S. domestic registrants. Therefore, there may be less publicly available information about the Company than is regularly published by or about other companies in the United States. The Company is exempt from certain other sections of the Exchange Act to which U.S. domestic issuers are subject, including the requirement to provide its shareholders with information statements or proxy statements that comply with the Exchange Act. In addition, insiders and large shareholders of the Company are not obligated to file reports under Section 16 of the Exchange Act.

The Company is permitted to follow certain home country corporate governance practices instead of those otherwise required by the NYSE for domestic issuers. A foreign private issuer must disclose in its annual reports filed with the SEC or on its website each NYSE requirement with which it does not comply, followed by a description of its applicable home country practice. The Company has the option to rely on available exemptions under the rules of the NYSE that allow it to follow its home country practice, including, among other things, the ability to opt out of (i) the requirement that the Board be comprised of a majority independent directors, (ii) the requirement that the Company’s independent directors meet regularly in executive sessions and (iii) the requirement that the Company obtain shareholder approval prior to the issuance of securities in connection with certain acquisitions, private placements of securities, or the establishment or amendment of certain share option, purchase or other compensation plans. The Company may elect to follow certain other home country corporate governance practices in lieu of the requirements for U.S. companies listed on the NYSE , as permitted by the rules of the NYSE, in which case the protection that is afforded to our shareholders would be different from that accorded to investors of U.S. domestic issuers.

The Company could lose its status as a “foreign private issuer” under current SEC rules and regulations if more than 50% of the Company’s outstanding voting securities become directly or indirectly held of record by U.S. holders and any one of the following is true: (i) the majority of the Company’s directors or executive officers are U.S. citizens or residents; (ii) more than 50% of the Company’s assets are located in the United States; or (iii) the Company’s business is administered principally in the United States. If the Company loses its status as a foreign private issuer in the future, it will no longer be exempt from the rules described above and, among other things, will be required to file periodic reports and annual and quarterly financial statements as if it were a company incorporated in the United States. If this were to happen, the Company would likely incur substantial costs in fulfilling these additional regulatory requirements and members of the Company’s management would likely have to divert time and resources from other responsibilities to ensuring these additional regulatory requirements are fulfilled.

The Company isan “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make theCommon Shares less attractive to investors.

The Company is an “emerging growth company” (“EGC”), as defined in the JOBS Act, and is eligible for certain exemptions from various requirements that are applicable to other public companies that are not “emerging growth companies”, including, but not limited to, including: (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of SOX; (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements; and (iii) reduced disclosure obligations regarding executive compensation in the Company’s periodic reports and proxy statements. As a result, the Company Shareholders may not have access to certain information they deem important. The Company will remain an “emerging growth company” until the earliest of (a) the last day of the first fiscal year in which the Company’s annual gross revenues exceed $1.235 billion, (b) the date that the Company becomes a “large accelerated filer” as defined in Rule 12b-2 under the U.S. Exchange Act, which would occur if the market value of the Common Shares that are held by non-affiliates exceeds $700 million as of the last business day of the Company’s most recently completed second fiscal quarter, (c) the date on which the Company has issued more than $1.0 billion in nonconvertible debt during the preceding three-year period or (d) the last day of the Company’s fiscal year containing the fifth anniversary of the date of the Company’s first public offering of securities. The Company may choose to rely upon some or all of the available exemptions. When the Company is no longer deemed to be an emerging growth company, the Company will not be entitled to the exemptions provided in the JOBS Act discussed above. The Company cannot predict if investors will find the Common Shares less attractive as a result of the Company’s reliance on exemptions under the JOBS Act. If investors find the Common Shares less attractive as a result, there may be a less active trading market for the Common Shares and the Company share price may be more volatile.

Canadian and U.S. investorsmay find it difficult or impossible to effect service of process and enforce judgments against the Company, the Company directors andexecutive officers.

Certain directors of the Company reside outside of Canada. Consequently, it may not be possible for Canadian investors to enforce judgments obtained in Canada against any person who resides outside of Canada, even if the party has appointed an agent for service of process. Furthermore, it may be difficult to realize upon or enforce in Canada any judgment of a court of Canada against the directors of Greenfire who reside outside of Canada since a substantial portion of the assets of such person may be located outside of Canada.

Similarly, the Company is incorporated under the laws of Alberta, Canada, and most of its officers and directors are not residents of the United States, and substantially all of the assets of the Company are located outside the United States. As a result, it may be difficult for U.S. investors to: (i) effect service of process within the United States upon the Company or those directors and officers who are not residents of the United States; or (ii) realize in the United States upon judgments of courts of the United States predicated upon the civil liability provisions of the United States federal securities laws.

The Companyincurs significant increased expenses and administrative burdens as a public company in the United States and as a “reporting issuer”in Canada, which could have an adverse effect on its business, financial condition and results of operations.

The Company faces, and will continue to face, increased legal, accounting, administrative and other costs and expenses as a public company in the United States that the Company did not incur as a private company. The Sarbanes-Oxley Act, including the requirements of Section 404 thereof, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, PCAOB and the securities exchanges, impose additional reporting and other obligations on public companies. Compliance with public company requirements have and will increase costs and make certain activities more time-consuming. A number of those requirements require the Company to carry out activities the Company has not done previously. In addition, expenses associated with SEC reporting requirements are and will be incurred. Furthermore, if any issues in complying with those requirements are identified (for example, if the auditors identify a significant deficiency or material weaknesses in the internal control over financial reporting), the Company could incur additional costs to rectify those issues, and the existence of those issues could adversely affect its reputation or investor perceptions. In addition, the Company has purchased director and officer liability insurance, which has substantial additional premiums. The additional reporting and other obligations imposed by these rules and regulations increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. Advocacy efforts by shareholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.

The Company additionally faces, increased legal, accounting, administrative and other costs and expenses as a “reporting issuer” in Canada in connection with its compliance with applicable Canadian securities laws. The additional reporting and other obligations imposed by such Canadian securities laws have increased legal and financial compliance costs and the costs of related legal, accounting and administrative activities.

Management estimatesare subject to uncertainty.

In preparing consolidated financial statements in conformity with IFRS, estimates and assumptions are used by management in determining the reported amounts of assets and liabilities, revenues and expenses recognized during the periods presented and disclosures of contingent assets and liabilities known to exist as of the date of the financial statements. These estimates and assumptions must be made because certain information that is used in the preparation of such financial statements is dependent on future events, cannot be calculated with a high degree of precision from data available, or is not capable of being readily calculated based on generally accepted methodologies. In some cases, these estimates are particularly difficult to determine and the Company must exercise significant judgment. Estimates may be used in management’s assessment of items such as fair values, income taxes, stock-based compensation and asset retirement obligations. Actual results for all estimates could differ materially from the estimates and assumptions used by the Company, which could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows and future prospects.

The Company hasa limited operating history, which may not be sufficient to evaluate its business and prospects.

Greenfire commenced operations in April of 2021, when a predecessor entity of Greenfire acquired the Demo Asset, and a predecessor entity of Greenfire acquired the Expansion Asset in September of 2021. The Company had no material operations prior to the Business Combination and has continued the business of Greenfire since the Closing of the Business Combination. As a result, there is a limited operating history on which to base any estimates of future operating costs related to any future development of the Company’s properties, there can be no assurance that the Company’s actual capital and operating costs for any future development activities will not be higher than anticipated and Greenfire’s historical financial statements may not be a reliable basis for evaluating the Company’s business prospects or the value of Common Shares. We cannot give you any assurance that the Company’s strategy will be successful or that the Company will be able to implement that strategy on a timely basis.

Risks Related toOwnership of the Common Shares

Concentrationof ownership among the Company’s existing executive officers, directors and their affiliates may prevent new investors from influencingsignificant corporate decisions.

As of March 26, 2024, the Company’s executive officers, directors and their affiliates, beneficially held approximately 55.5% (including 4,608,131 Common Shares issuable upon exercise of Company Warrants, Company Performance Warrants and Company Awards) of the outstanding Common Shares. As a result, these shareholders are able to exercise a significant level of control over all matters requiring shareholder approval, including the election of directors, any amendment of the Company Articles and the Company Bylaws and approval of significant corporate transactions. This control could have the effect of delaying or preventing a change of control or changes in management and will make the approval of certain transactions difficult or impossible without the support of these shareholders.

A significantportion of the Company’s total outstanding securities may be sold into the market in the near future. This could cause the marketprice of the Common Shares to drop significantly, even if the Company’s business is performing well.

Sales of a substantial number of Common Shares in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of Common Shares and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that such sales may have on the prevailing market price of our Common Shares.

As of December 31, 2023, (i) MBSC Sponsor beneficially owned 6,376,666 Common Shares, representing approximately 9% of the Common Shares (including 2,526,667 Common Shares issuable upon exercise of the Company Warrants); and (ii) the certain other holders of Common Shares party to the Lock-Up Agreement beneficially owned, in the aggregate, 44,522,795 Common Shares, representing approximately 59% of all outstanding Common Shares (including 3,393,751 Common Shares issuable upon exercise of the Company Warrants). The sale of substantial amounts of such Common Shares in the public market by such Company shareholders or the MBSC Sponsor, or the perception that such sales could occur, could harm the prevailing market price of the Common Shares. These sales, or the possibility that these sales may occur, also might make it more difficult for the Company to sell Common Shares in the future at a time and at a price that it deems appropriate. The restrictions of the Lock-up Agreement applicable to MBSC Sponsor and the Company shareholders party thereto applied through March 18, 2024, when those restrictions expired. Following the expiration of the restrictions in the Lock-Up Agreement, MBSC Sponsor and the other Company shareholders party thereto, can sell, or indicate an intention to sell, any or all of their Common Shares in the public market. As a result, the trading price of the Common Shares could decline. In addition, the perception in the market that these sales may occur could also cause the trading price of the Common Shares to decline.

Given the relatively lower purchase prices that certain securityholders paid to acquire Common Shares, those certain securityholders in some instances would earn a positive rate of return on their investment, which may be a significant positive rate of return, depending on the market price of the Common Shares at the time that such certain securityholders choose to sell their Common Shares, at prices where other of our securityholders may not experience a positive rate of return if they were to sell at the same prices. For example, (a) the MBSC Sponsor received its 3,850,000 Common Shares in exchange for MBSC Class B Common Shares, which were originally purchased for a purchase price equivalent to approximately $0.0033 per share and (b) certain other Company shareholders party to the Lock-Up Agreement received their Common Shares in exchange for securities of Greenfire for little consideration.

The last reported sales prices of the Common Shares on the NYSE and TSX on March 25, 2024 was $6.02 and CAD$8.15, respectively. Even though the trading price of the Common Shares is currently significantly below the last reported sales price on the NYSE of $9.37 on the Closing Date of the Business Combination, all of such certain securityholders may have an incentive to sell their Common Shares because they acquired them in exchange for securities acquired for prices lower, and in some cases significantly lower, than the current trading price of the Common Shares and may profit, in some cases significantly so, even under circumstances in which our public shareholders would experience losses in connection with their investment. Investors who have purchased or who will purchase the Common Shares on the NYSE following the Business Combination are unlikely to experience a similar rate of return on the Common Shares they purchase due to differences in the purchase prices and the current trading price. In addition, sales by such securityholders may cause the trading prices of our securities to experience a decline, which decline may be significant. As a result, the sale by certain securityholders may effect sales of Common Shares at prices significantly below the current market price, which could cause market prices to decline further.

Ifsecurities or industry analysts do not publish or cease publishing research or reports about the Company, its business or its market,or if they change their recommendations regarding the Common Shares adversely, the price and trading volume of the Common Shares coulddecline.

The trading market for the Common Shares will be influenced by the research and reports that industry or securities analysts may publish about the Company, its business, its market or its competitors. If any of the analysts who cover the Company change their recommendation regarding the Common Shares adversely, or provide more favorable relative recommendations about the Company’s competitors, the price of the Common Shares would likely decline. If any analyst who covers the Company were to cease their coverage or fail to regularly publish reports on the Company, the Company could lose visibility in the financial markets, which could cause its share price or trading volume to decline.

TheCompany’s sole material asset is its direct equity interest in its subsidiaries, and the Company is accordingly dependent upondistributions from its subsidiaries to pay taxes and cover its corporate and other overhead expenses and pay dividends, if any, on CommonShares.

The Company has no material assets other than its direct equity interest in its subsidiaries. The Company has no independent means of generating revenue. To the extent the Company’s subsidiaries have available cash, the Company will cause such subsidiaries to make distributions of cash to the Company to pay taxes, cover the Company’s corporate and other overhead expenses and pay dividends, if any, on Common Shares. To the extent that the Company needs funds and the Company’s subsidiaries fail to generate sufficient cash flow to distribute funds to the Company or is restricted from making such distributions or payments under applicable law or regulation or under the terms of its financing arrangements, or is otherwise unable to provide such funds, the Company’s liquidity and financial condition could be materially adversely affected.

Theprice at which the Common Shares are quoted on the NYSE and the TSX may increase or decrease due to a number of factors, which may negativelyaffect the price of the Common Shares.

The price at which the Common Shares are quoted on the NYSE may increase or decrease due to a number of factors. The price of the Common Shares may not increase, even if the Company’s operations and financial performance improves. Some of the factors which may affect the price of the Common Shares include:

●	fluctuations<br> in domestic and international markets for listed securities;
●	general<br> economic conditions, including interest rates, inflation rates, exchange rates and commodity<br> and oil prices;
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●	changes<br> to government fiscal, monetary or regulatory policies, legislation or regulation;
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●	inclusion<br> in or removal from market indices;
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●	strategic<br> decisions by the Company or the Company’s competitors, such as acquisitions, divestments,<br> spin-offs, joint ventures, strategic investments or changes in business or growth strategies;
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●	securities<br> issuances by the Company, or share resales by shareholders, or the perception that such issuances<br> or resales may occur;
●	pandemic<br> risk;
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●	the<br> nature of the markets in which the Company operates; and
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●	general<br> operational and business risks.
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Other factors which may negatively affect investor sentiment and influence the Company, specifically or the securities markets more generally include acts of terrorism, an outbreak of international hostilities or tensions, fires, floods, earthquakes, labor strikes, civil wars, natural disasters, outbreaks of disease or other man-made or natural events. The Company will have a limited ability to insure against the risks mentioned above.

Inthe future, the Company may need to raise additional funds which may result in the dilution of shareholders, and such funds may not beavailable on favorable terms or at all.

The Company may need to raise additional capital in the future and may elect to issue shares or engage in fundraising activities for a variety of reasons, including funding acquisitions or growth initiatives. Shareholders may be diluted as a result of such fundraisings.

Additionally, the Company may raise additional funds through the issuance of debt securities or through obtaining credit from government or financial institutions. The Company cannot be certain that additional funds will be available on favorable terms when required, or at all. If the Company cannot raise additional funds when needed, its financial condition, results of operations, business and prospects could be materially and adversely affected. If the Company raises funds through the issuance of debt securities or through loan arrangements, the terms of such securities or loans could require significant interest payments, contain covenants that restrict the Company’s business, or other unfavorable terms.

TheCompany may not pay dividends or make other distributions in the future.

Historically, except pursuant to the Plan of Arrangement, neither the Company nor its predecessors, has paid any dividends. The Company’s ability to pay dividends or make other distributions in the future is contingent on profits and certain other factors, including the capital and operational expenditure requirements of the Company’s business. In addition, the payment of dividends is subject to the approval of the Board and even if the Company is generating profit it may choose to utilize such profit for other purposes, such as paying down debt, capital expenditures or acquisitions, instead of paying dividends. Under the ABCA, a dividend may not be declared or paid by the Company if there are reasonable grounds for believing that the Company is, or would after the payment be, unable to pay its liabilities as they become due, or the realizable value of the Company’s assets would thereby be less than the aggregate of its liabilities and stated capital of all classes. Therefore, dividends may not be paid. See the section entitled “Material Canadian Tax Considerations” for more information regarding the Canadian tax consequences of future Company dividends. Furthermore, please see the subsection entitled “Material U.S. Federal Income Tax Considerations for U.S. Holders-Tax Characterization of Distributions with Respect to CommonShares” for a more detailed discussion with respect to the U.S. federal income tax treatment of the Company’s payment of distributions of cash or other property to U.S. Holders of Common Shares.

Anactive trading market may not develop or be sustained for the Common Shares and there is not expected to be an active market for theCompany Warrants.

Although the Common Shares are currently listed on the NYSE and the TSX, an active trading market for Common Shares may not develop or the price of Common Shares may not increase. There may be relatively few potential buyers or sellers of Common Shares on the NYSE or the TSX at any time. This may increase the volatility of the market price of Common Shares. It may also affect the prevailing market price at which shareholders are able to sell their Common Shares. This may result in shareholders receiving a market price for their Common Shares that is less than the value of their initial investment.

Themarket price of the Common Shares may be subject to fluctuation and/or decline.

Fluctuations in the price of the Common Shares could contribute to the loss of all or part of your investment. If an active market for the Common Shares develops and continues, the trading price of the Common Shares could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond the Company’s control. Any of the factors listed below could have a material adverse effect on the Common Shares and such securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of such securities may not recover and may experience a further decline.

Factors affecting the trading price of the Common Shares may include:

●	actual<br> or anticipated fluctuations in its financial results or the financial results of companies<br> perceived to be similar to the Company;
●	changes<br> in the market’s expectations about the Company’s operating results;
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●	success<br> of competitors;
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●	the<br> Company’s operating results failing to meet the expectation of securities analysts<br> or investors in a particular period;
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●	changes<br> in financial estimates and recommendations by securities analysts concerning the Company<br> or the market in general;
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●	operating<br> and stock price performance of other companies that investors deem comparable to the Company;
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●	changes<br> in laws and regulations affecting the Company’s business;
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●	the<br> Company’s ability to meet compliance requirements;
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●	commencement<br> of, or involvement in, litigation involving the Company;
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●	changes<br> in the Company’s capital structure, such as future issuances of securities or the incurrence<br> of additional debt;
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●	the<br> volume of Common Shares available for public sale;
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●	any<br> major change in the board of directors or management of the Company;
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●	sales<br> of substantial amounts of Common Shares by the Company’s directors, executive officers<br> or significant shareholders, including the Sponsor and PIPE Investors, or the perception<br> that such sales could occur; and
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●	general<br> economic and political conditions such as recessions; fluctuations in interest rates, fuel<br> prices and international currency; and acts of war or terrorism.
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Broad market and industry factors may materially harm the market price of the Common Shares irrespective of their operating performance. The stock market in general and the NYSE have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of the Common Shares, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to the Company could depress the Company’s share price regardless of its business, prospects, financial conditions or results of operations. A decline in the market price of the Common Shares also could adversely affect the Company’s ability to issue additional securities and its ability to obtain additional financing in the future.

The trading price of the securities of oil and natural gas issuers is subject to substantial volatility often based on factors related and unrelated to the financial performance or prospects of the issuers involved. Factors unrelated to the Company’s performance could include macroeconomic developments nationally, within North America or globally, domestic and global commodity prices, and/or current perceptions of the oil and natural gas market. In recent years, the volatility of commodities has increased due, in part, to the implementation of computerized trading and the decrease of discretionary commodity trading. In addition, the volatility, trading volume and share price of issuers have been impacted by increasing investment levels in passive funds that track major indices, as such funds only purchase securities included in such indices. Similarly, the market price of the Common Shares could be subject to significant fluctuations in response to variations in the Company’s operating results, financial condition, liquidity and other internal factors. Accordingly, the price at which the Common Shares will trade cannot be accurately predicted.

Thelisting of our securities on the NYSE did not benefit from the process customarily undertaken in connection with an underwritten initialpublic offering, which could result in diminished investor demand, inefficiencies in pricing and a more volatile public price for oursecurities.

Unlike an underwritten initial public offering of our securities, the initial listing of the Common Shares as a result of the Business Combination did not benefit from the book-building process undertaken by underwriters that helps to inform efficient price discovery with respect to opening trades of newly listed securities or underwriter support to help stabilize, maintain or affect the public price of the new issue immediately after listing.

The lack of such a process in connection with the listing of our securities could result in diminished investor demand, inefficiencies in pricing and a more volatile public price for our securities during the period immediately following the listing than in connection with an underwritten initial public offering.

On February 21, 2024 the Company was notified by the NYSE that the Company was not in compliance with the NYSE’s continued listing standard that requires all listed companies to have a minimum of 400 public stockholders on a continuous basis. Under the NYSE’s rules, the Company has 45 days to present a business plan to the NYSE that demonstrates how the Company intends to cure the deficiency within 18 months of the date of the notice. Throughout this 18-month cure period, the Company’s common shares will continue to be traded on the NYSE, subject to the Company’s compliance with other NYSE listing requirements. The Company believes that the recent listing of the Common Shares on the TSX and the expiration on March 18, 2024 of the Lock-up Agreement covering approximately 65% of the outstanding Common Shares, which occurred subsequent to the date of that notice, will contribute to aiding the Company in meeting the NYSE’s public stockholder requirement, however there can be no assurance that the Company will be able to do so within the required period or that the Company will be able to continue to comply with the NYSE’s other listing requirements.

TheNYSE or TSX may delist Common Shares from trading on their exchanges, which could limit investors’ ability to make transactionsin the Common Shares and subject the Company to additional trading restrictions.

The Common Shares may not continue to be listed on the NYSE or the TSX.

If the NYSE or the TSX delists the Common Shares from trading on its exchange and the Company is not able to list its securities on another national securities exchange, the Company expects that its securities could be quoted on an over-the-counter market. If this were to occur, the Company could face significant material adverse consequences, including:

●	a<br> limited availability of market quotations for the Common Shares;
●	reduced<br> liquidity for the Common Shares;
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●	a<br> determination that Common Shares are a “penny stock” which will require brokers<br> trading in Common Shares to adhere to more stringent rules and possibly result in a reduced<br> level of trading activity in the secondary trading market for the Common Shares;
●	a<br> limited amount of news and analyst coverage; and
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●	a<br> decreased ability to issue additional securities or obtain additional financing in the future.
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The National Securities Markets Improvement Act of 1996, which is a United States federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” If the Common Shares are not listed on the NYSE or another United States national securities exchange, the Common Shares would not qualify as covered securities and the Company would be subject to regulation in each state in which the Company offers its Common Shares because states are not preempted from regulating the sale of securities that are not covered securities.

Item4. Information on the Company

A.History and Development of the Company

The Company is an intermediate-sized oil sands producer focused on responsible energy development in the Athabasca region of Alberta, Canada. The Company is actively developing its existing producing assets using SAGD, an enhanced oil recovery extraction method, to responsibly increase the economic recovery of oil.

The Company is an Alberta corporation incorporated on December 9, 2022, for the purpose of effectuating the Business Combination. Upon the terms and subject to the conditions of the Business Combination Agreement, MBSC, the Company, Canadian Merger Sub, DE Merger Sub and Greenfire effected a series of the transactions that closed on September 20, 2023, as a result of which the Company became the parent of Greenfire and MBSC. For additional information regarding the Business Combination, please see the section entitled “Explanatory Note”.

Following the Business Combination, the Company has continued the business of Greenfire.

GreenfireCorporate History

Effective as of January 1, 2024, Greenfire Resources Operating Corporation and Greenfire amalgamated in accordance with the provisions of the ABCA, with the surviving corporation continuing as Greenfire Resources Operation Corporation and as a wholly subsidiary of the Company.

Greenfire was the result of a number of transactions (collectively referred to herein as the “Reorganization Transactions”) that included: (i) the acquisition of the Demo Asset out of the insolvency proceedings of an unaffiliated corporation named GHOPCO; (ii) a series of incorporations, amalgamations and other reorganization transactions; and (iii) the acquisition JACOS (which held the Expansion Asset). The Reorganization Transactions were completed in the following manner:

Greenfire Acquisition Corporation (“GAC”) was incorporated under the provisions of the ABCA on November 2, 2020. GAC HoldCo Inc. (“GAC HoldCo”) was incorporated under the provisions of the ABCA on June 1, 2021. HE Acquisition Corporation (“HEAC”) was incorporated under the provisions of the ABCA as a wholly-owned subsidiary of GAC HoldCo on July 12, 2021.

On September 9, 2021: (i) 2373436 Alberta Ltd. (“SubCo”), as a wholly-owned subsidiary of GAC HoldCo; (ii) Hangingstone Demo (GP) Inc. (“Demo GP”), as a wholly-owned subsidiary of SubCo; (iii) Hangingstone Expansion (GP) Inc. (“Expansion GP”), as a wholly-owned subsidiary of HEAC; and (iv) 2373525 Alberta Ltd. (“ServiceCo”), as a wholly-owned subsidiary of HEAC, were incorporated under the provisions of the ABCA.

On September 9, 2021, (i) Expansion GP, as general partner, and HEAC, as limited partner, formed Hangingstone Expansion Limited Partnership (“Expansion LP”) and (ii) Demo GP, as general partner, and SubCo, as limited partner, formed Hangingstone Demo Limited Partnership (“Demo LP”).

GAC acquired the Demo Asset from GHOPCO on April 5, 2021 as a result of the proceedings commenced on October 8, 2020, by each of GHOPCO and its parent company, Greenfire Oil and Gas Ltd., filing a Notice of Intention to Make A Proposal pursuant to the provisions of the Bankruptcy and Insolvency Act (Canada) (the “NOI Proceedings”).

On September 16, 2021, GAC, GAC HoldCo and SubCo entered into an amalgamation agreement providing for a triangular amalgamation whereby: (i) GAC and SubCo were combined to form the original iteration of “Greenfire Resources Operating Corporation” (“GAC AmalCo”); (ii) the Demo Asset was transferred (via amalgamation) to GAC AmalCo; and (ii) the shareholders of GAC received a nominal number of common shares of GAC HoldCo.

JACOSAcquisition

On September 17, 2021, the JACOS Acquisition was completed, whereby HEAC acquired all of the issued and outstanding shares of JACOS and thereby took ownership of JACOS’s primary asset, a 75% working interest in the Expansion Asset. On September 17, 2021, JACOS contributed all of its oil and gas assets to Expansion LP and GAC AmalCo contributed all of its oil and gas assets to Demo LP. On September 17, 2021, HEAC and JACOS were amalgamated to form a temporary amalgamated entity (“Temporary AmalCo”) and Temporary AmalCo and GAC AmalCo were amalgamated to form the final iteration of “Greenfire Resources Operating Corporation” (“GROC”).

Following the Reorganization Transactions, GAC HoldCo changed its name to “Greenfire Resources Inc.” and ServiceCo changed its name to “Greenfire Resources Employment Corporation.”

GeneralDevelopment of the Business of Greenfire

Prior to the incorporation of GAC on November 2, 2020, neither Greenfire nor any of its subsidiaries conducted any business or had any operations. The following is a summary description of the development of Greenfire’s business since the incorporation of GAC on November 2, 2020.

Discussionof Initial Incorporation and Financing

The principals of McIntyre Partners and Griffon Partners, each private investment companies, based in the United Kingdom, founded GAC on November 2, 2020 for the purpose of pursuing the acquisition of the Demo Asset pursuant to the NOI Proceedings.

Acquisitionof the Demo Asset

In 2016, a wildfire in Northern Alberta caused the temporary shutdown of a number of oilsands facilities, including the Demo Asset, which was then owned and operated by JACOS. Although there was no physical damage to the facilities and equipment at the Demo Asset, JACOS elected not to restart the facility after the wildfire was contained. JACOS was also planning for and constructing the Expansion Asset at that time. The Demo Asset remained non-operational until 2018.

In 2018, GHOPCO, the unaffiliated predecessor company that owned and operated the Demo Asset prior to GAC, acquired the Demo Asset from JACOS. GHOPCO successfully restarted production in 2018 and operated the facility until May 2020, when GHOPCO shut down operations following the onset of the COVID-19 pandemic. On October 8, 2020, each of GHOPCO and its parent company, Greenfire Oil and Gas Ltd., filed a Notice of Intention to Make A Proposal pursuant to the provisions of the Bankruptcy and Insolvency Act (Canada) (the “NOI Proceedings”) commencing the NOI Proceedings.

Around December 1, 2020, GHOPCO and GAC entered into an asset purchase agreement pursuant to which GAC agreed to acquire the Demo Asset from GHOPCO (the “NOI Transaction”). Despite its similar name, GAC was not affiliated with GHOPCO. On December 18, 2020, pursuant to an Order (the “Insolvency Court Order”) of the Court of Queen’s Bench of Alberta (as it was then called) (the “Court”) approved the NOI Transaction. On April 5, 2021, following receipt of all necessary approvals, GAC completed the acquisition of the Demo Asset pursuant to the terms of the Insolvency Court Order, free and clear of all encumbrances (except those permitted encumbrances set out in the Insolvency Court Order). The total cash consideration paid by GAC for the Demo Asset was CAD$19.7 million. This consideration was comprised of the assumption by GAC of amounts advanced by the Petroleum Marketer to GHOPCO in the NOI Proceedings pursuant to the terms of an interim financing facility. GAC assumed the amounts outstanding under the interim financing pursuant to the terms of a term loan agreement with the Petroleum Marketer.

Following the acquisition of the Demo Asset, GAC employed a substantial majority of the GHOPCO operations team and certain members of the former GHOPCO management team. Following the completion of certain repairs to the Demo Asset, GAC restarted operations at the Demo Asset and worked to increase production with limited capital expenditures, primarily by facility optimization and reservoir management.

Acquisitionof the Expansion Asset

On September 17, 2021, HEAC, as predecessor of GROC, acquired all of the issued and outstanding shares in the capital of JACOS pursuant to the JACOS Acquisition for a purchase price of approximately CAD$347 million. At the time of the JACOS Acquisition, JACOS’s primary asset was a 75% working interest and operatorship in the Expansion Asset.

CorporateInformation

The Company’s principal office is located at 2700, 525-8th Avenue SW, Calgary, Alberta, Canada T2P 1G1, our registered office is located at 1900 – 205 5th Avenue SW, Calgary, Alberta, T2P 2V7 and our telephone number is (403) 264-9046. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The SEC’s website at http://www.sec.gov contains our reports and other information that we file electronically with the SEC. Company’s website is https://www.greenfireres.com.

B.Business Overview

About 80% of Alberta’s bitumen reserves are too deep to be mined and must be extracted in-place (or in-situ) using steam, whereby bitumen is heated and pumped out of the ground, leaving most of the solids behind. In-situ extraction has a much smaller footprint than oil sands mining, uses less water, and does not produce a tailings stream.

SAGD uses a dual-pair of horizontal wells drilled approximately five meters apart, one above the other. Well depth can vary anywhere from 150 to 450 meters and length can be over 1,600 meters. High pressure steam is injected into the top well, or the injection well, and the hot steam heats the surrounding bitumen. As the bitumen warms up, it liquefies and, due to gravity, begins to flow to the lower well, or the producing well. The bitumen and condensed steam emulsion contained in the lower well are pumped to the surface and sent to a processing plant, where the bitumen and water are separated. The recovered water is treated and recycled back into the process and the bitumen is typically diluted with natural gas condensate, and sold to market.

Both the Demo Asset and the Expansion Asset use SAGD to produce bitumen reserves. Both the Demo Asset and Expansion Asset are considered by the Company to be Tier 1 SAGD reservoirs in that they have no top gas, bottom water or lean zones. Top gas, bottom water or lean zones are considered “thief zones” as they provide an unwanted outlet for steam and reservoir pressure. Thief zones require costly downhole pumps and recurring pump replacements to achieve targeted production rates, leading to higher capital and operating expenditures.

PrincipalProperties

HangingstoneExpansion Asset

The Company owns a 75% working interest in the Expansion Asset. The Expansion Asset is located in the southern Athabasca region of Northeastern Alberta, approximately 30 miles southwest of Fort McMurray. JACOS commenced Phase I construction of the Expansion Asset in 2013, investing approximately $1.5 billion of capital to create robust infrastructure to support growth. The Expansion Asset’s first steam occurred in April 2017 and first production occurred in July 2017. The Company estimates that the Expansion Asset has a debottlenecked capacity of 35,000 bbls/d of bitumen production. Since the commencement of production in 2017, 32 well pairs have been developed at the Expansion Asset. The Expansion Asset is pipeline connected for diluted bitumen and diluent, and as a result, all production from the Expansion Asset is transported by pipeline following the blending of bitumen with diluent to meet pipeline specifications.

In 2023, the annual average gross production from the Expansion Asset was 18,439 bbls/d (approximately 13,829 bbls/d net to Greenfire’s working interest) of bitumen. The Company has an interest in 17,730 gross hectares (13,298 net hectares) of land at the Expansion Asset.

HangingstoneDemo Asset

The Company owns a 100% working interest in the Demo Asset, which is approximately three miles from the Expansion Asset. Management estimates that the Demo Asset has a debottlenecked capacity of 7,500 bbls/d of bitumen production. The Demo Asset was originally commissioned in 1999 by JACOS as a demonstration asset to prove the economic viability of enhanced thermal oil recovery. As of December 31, 2023, approximately 40 million barrels of bitumen had been produced at the Demo Asset and the facility has a relatively long history of production.

Bitumen production from the Demo Asset is unique relative to other thermal oil assets in western Canada as it is produced without the use of added diluent or synthetic oils. This attribute results in relatively lower operating expenses when compared to other oilsands assets of similar scale and provides more options in terms of marketing and selling the product. Access to a diluent-free heavy crude oil barrel is also valued by refiners in the United States, which facilitates additional sales points for the Demo Asset’s production, including transportation by rail to the United States to access West Texas Intermediate (“WTI”) indexed pricing, when it is economically viable to do so. Following the JACOS Acquisition, Greenfire constructed a truck offloading facility at the Expansion Asset to accept trucked production volumes from the Demo Asset. Prior to the construction of the truck offloading facility, production from the Demo Asset was required to be trucked over 600 miles round trip to a pipeline salespoint, and following completion of the construction of the truck offloading facility the round trip trucking distance has been reduced to approximately six miles. Aside from enhancing profitability by reducing transportation costs, the reduction of distance trucked reduces emissions associated with the transportation of its production.

In 2023, the gross and net annual average bitumen production from the Demo Asset was 3,810 bbls/d. Greenfire has an interest in 974 hectares of land at the Demo Asset.

UndevelopedProperties

As a result of the JACOS Acquisition, the Company holds significant undeveloped leases at three locations, Chard, Corner, and Liege, all of which are in the Athabasca region of Alberta, Canada. The Company believes that the Chard and Corner properties are potential prospects for future in-situ bitumen production using SAGD processes.

LandAcreage

Developed acreage, as used herein, means those acres spaced or assignable to productive wells. A gross acre is an acre in which a working interest is owned, and a net acre is the result that is obtained when the fractional ownership working interest of a lease is multiplied by gross acres of that lease. The number of net acres is the sum of the fractional working interests owned in gross acres expressed as whole numbers and fractions thereof. Greenfire’s developed acreage consists of the drainage areas of bitumen producing wells.

Undeveloped acreage, as used herein, means acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil or natural gas, regardless of whether or not that acreage contains proven reserves, but does not include undrilled acreage held by production under the terms of a lease. Select undeveloped acreage at the Expansion Asset and Demo Asset contains proved reserves.

All of the Company’s acreage is located in the Province of Alberta and is held indefinitely. There are no near-term undeveloped acreage expirations. The following table shows the Company’s total gross and net mineral rights acreage by asset location as of December 31, 2023:

DevelopedAcreage

Area
Hangingstone	Expansion	75	361	271
Hangingstone	Demo	100	242	242
Total<br> Developed Acreage			604	513

UndevelopedAcreage

Area	Property	Interest<br><br> (%)		Gross<br> <br> Area<br> (Hectares)		Net<br> Area<br> (Hectares)
Hangingstone	Expansion		75		17,369		13,027
Hangingstone	Demo		100		732		732
Corner	Corner North		100		6,516		6,516
Corner	Corner South		12		12,004		1,440
Chard	Chard North		100		7,318		7,318
Chard	Chard West		25		7,800		1,950
Chard	Chard East		25		7,250		1,812
Chard	Chard		25		8,031		2,008
Hangingstone	Gas		100		1,024		1,024
Liege	Liege		25		13,824		3,456
Total Undeveloped Acreage	****	****	****	****	81,867	****	39,283

WellInformation

The Company had 54 gross (46 net) horizontal wells capable of producing bitumen as of each of the years ended December 31, 2023, 2022 and 2021. As of December 31, 2023, the Company had drilled eight new redevelopment infill (“Refill”) wells and drilled two additional Refill wells as of February 2024, to complete its initial ten well program at the Expansion Asset, with the intention of producing bitumen. Refill wells utilize an existing producer wellhead and casing to reduce costs associated with drilling and facilities, with an acceleration of first production anticipated, relative to producing from traditional infill wells. The addition of a Refill well does not change well count as the process utilizes an existing well head and infrastructure. The Company expects that Refill wells will enhance the total bitumen recovery of previously drilled and steamed well pairs, with marginal incremental capital expenditure and minimal geological risk. The SAGD industry has a long-term track record of consistently and effectively producing incremental pre-heated bitumen volumes from infill and Refill wells.

The Company has no exploratory wells and did not drill any dry exploratory or development wells in the last three fiscal years.

As evaluated by McDaniel as of December 31, 2023, proved undeveloped reserves are from planned well locations in the Alberta Energy Regulator (“AER”) approved development area and are within three miles from existing bitumen producing wells at the Demo Asset and Expansion Asset. Development plans include new well pairs that consist of horizontal steam injector wells placed approximately 15 feet (5 meters) above horizontal bitumen production wells in a reservoir that has a minimum of 32 feet (10 meters) of average bitumen net pay and up to over 100 feet (30 meters). Spacing between well pairs at both the Demo Asset and Expansion Asset is approximately 325 feet (100 meters). Future development plans include drilling infill horizontal bitumen production wells between existing and new well pairs.

In order to make the most efficient use of the Company’s steam generating and oil treating facilities, the drilling and steaming of new wells would take place over 30 years. Development of the Company’s proved undeveloped reserves will take place in an orderly manner as additional well pairs and infills are drilled to use available steam when existing well pairs reach the end of their steam injection phase. The forecasted production of the Company’s proved reserves extends approximately 31 years.

Seasonalityof the Business

The level of activity in the Canadian oil and gas industry is influenced by seasonal weather patterns. A mild winter or wet spring may result in limited access and, as a result, reduced operations or a cessation of operations. The Company operates in an area of extreme weather conditions. Cold temperatures affect the properties of diluent and bitumen and may contribute to production difficulties, delivery problems and increased operating costs. Winter driving conditions in Northern Alberta can affect truck transportation of the Company’s bitumen, and cold weather can lead to equipment failure and slowdown. Warmer temperatures can lead to equipment failures and slowdowns not only at the Expansion Asset and Demo Asset but can also affect delivery of operating inputs such as natural gas and cause power price surges.

Municipalities and provincial transportation departments enforce road bans that restrict the movement of drilling rigs and other heavy equipment during periods of wet weather, thereby reducing activity levels. Also, certain oil and natural gas producing areas are located in areas that are inaccessible other than during the winter months because the ground surrounding the sites in these areas consists of swampy terrain. Seasonal factors and unexpected weather patterns may lead to increases or declines in exploration and production activity as well as increases or declines in the demand for the goods the Company produces.

RawMaterials

Production from in-situ oil sands reservoirs using SAGD processes has various inputs including natural gas, power and water to create steam, and condensate as diluent for blending with the bitumen in order to transport the bitumen production via pipeline.

Pursuant to the Expansion Diluent Agreement (as defined below), the Petroleum Marketer has agreed to sell to Greenfire all of the condensate required for Greenfire’s blending with its bitumen production to satisfy pipeline specification. Condensate is locally sourced at Edmonton and delivered to the Expansion Asset via the Inter Pipeline Polaris Pipeline. Production from the Expansion Asset is diluted with condensate to meet pipeline specifications.

The Company produces non-diluted bitumen at the Demo Asset. That is a product that is relatively unique in Alberta’s oilsands. Historically, each barrel of production was transported from the Demo Asset to several locations, with optionality to deliver to both pipeline and rail sales points, depending on the economics of each option at the time of sale. At pipeline connected sales points, Demo Asset bitumen is blended with diluent to reach pipeline specifications. At rail connected terminals, Demo Asset bitumen is moved into railcars and transported to its final sales destination, generally without the need to blend with diluent.

With the construction of the truck offloading facility at the Expansion Asset, most of the bitumen production from the Demo Asset is trucked to the Expansion Asset, blended with diluent and sold into the pipeline. However, from time to time, the Company may choose to transport bitumen from the Demo Asset to other pipeline sales points or by rail if the economics of selling non-diluted bitumen at those sales points are relatively attractive.

Natural gas is a primary energy input cost for the Company. Natural gas is used as fuel to generate steam for SAGD operations. The Company purchases natural gas in Alberta from the AECO system. AECO is the Western Canadian benchmark for natural gas. The AECO Hub gas storage facility in southern Alberta is one of the largest natural gas hubs in North America, with its substantial production and storage capability and extensive network of export pipelines. Generally, natural gas is shipped to the Company’s systems via the NOVA Gas Transmission Ltd. system.

The Company sources water for its SAGD operations from water wells. Condensed steam emulsion is recovered with bitumen from wells, which are processed at the surface to separate the bitumen from water. The recovered water is treated and recycled back into the process. The Company has a water recycling rate of 94%.

Electricity necessary for the operation of the Expansion Asset and Demo Asset is sourced from the Alberta power grid and the Company pays market prices for electricity.

Marketing

The Company has entered into three separate marketing agreements with the Petroleum Marketer as described under the heading “Business — MaterialContracts, Liabilities and Indebtedness — Marketing Agreements.” The Petroleum Marketer purchases all of the Company’s bitumen and blend and provides and arranges transportation via trucks and pipelines for the Company’s products in exchange for a marketing fee.

CustomerBase and Principal Markets

The Company’s revenue from contracts with customers primarily consists of non-diluted and diluted bitumen sales. All of the Company’s diluted and non-diluted bitumen production is produced by the Company in Alberta and is sold to the Petroleum Marketer. As such, substantially all of the Company’s total revenue in the last three fiscal years was from Alberta and provided by the Petroleum Marketer. For a description of the terms of the marketing agreements with the Petroleum Marketer see subsection “—Legal — MaterialContracts, Liabilities and Indebtedness — Marketing Agreements” below.

PrincipalCapital Expenditures

The Company’s principal capital expenditures (excluding capital expenditures relating to the acquisitions of the Demo Asset and Expansion Asset) are set forth in the table below:

	Year ended December 31,
(CAD$ in thousands)	2023		2022			2021
Drilling and completion		22,501		6,942			17
Equipment, facilities and pipelines		7,877		23,329			3,151
Workovers and maintenance capital		1,974		204			831
Geological & geophysical (G&G)		25		(9	)		64
Capitalized and other		1,051		9,126			531
Total Capital expenditures		33,428		39,592			4,594

As at December 31, 2023, the Company had planned approximately CAD$85.2 million of further net capital expenditures in 2024 related to its Refill drilling program and facility optimization activities for the Expansion Asset and Demo Asset, which are described under the heading “—Property, Plant and Equipment Expenditures” in Item 4.D. below. The Company anticipates satisfying these capital commitments with funds from operations.

Maintenance

Partial outages are a recurring event for the Company, typically taking place annually around September. However, steps have been taken to mitigate their impact on production. Pipeline bypasses and tie-in points were installed during the most recent major turnaround in September 2022. These improvements are expected to reduce the annual maintenance-related production impacts going forward. As a result, the major plant maintenance requiring a full plant shutdown is now scheduled every four years, with the next one planned for 2026.

Operations

The following section describes the Company’s: (i) reserves; (ii) operational processes and systems and (iii) cost efficiency of operation.

Reserves

The Company’s 2023 year-end reserves evaluations were conducted by McDaniel with an effective date of December 31, 2023. McDaniel evaluated 100% of the Company’s reserves, which are all located in the Province of Alberta, Canada. First established in 1955, McDaniel has a reputation for consistent and reliable oil and gas consulting services, providing third party reserve reports and certifications for over 60 years with a team of highly skilled and qualified engineers and geoscientists. The technical person primarily responsible for preparing and overseeing the estimates of the Company’s annual reserves evaluation is Mr. Jared Wynveen, the Executive Vice President of McDaniel. Mr. Wynveen graduated from Queen’s University in 2006 with a Bachelor of Science degree in Mechanical Engineering. A professional member of the Association of Professional Engineers and Geoscientists of Alberta (“APEGA”) (Permit No. 3145), Mr. Wynveen brings over 15 years of experience in oil and gas reservoir studies and evaluations. Mr. Wynveen’s education, training and technical expertise along with his years of experience within the oil and gas industry, more than qualify him in accordance with the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information as set forth by the Society of Petroleum Engineers. Mr. Wynveen is proficient in applying industry standard practices to engineering and geoscience evaluations as well as applying SEC and other industry reserve definitions and guidelines.

The primary technical person responsible for overseeing the reserve estimates at the Company is Ms. Crystal Park, the Senior Vice-President, Commercial. Ms. Park graduated from the University of Alberta in 1998 with a Bachelor of Science degree in Chemical Engineering. Ms. Park also holds a Master of Business Administration with a dual specialization in Finance and Global Energy Management from the Haskayne Faculty of the University of Calgary. A professional member with APEGA (Permit No. 66172) since her enrollment in 1998, Ms. Park has over 25 years of related oil and gas industry experience including reserves evaluation and coordination at companies such as AJM Deloitte, Sproule Associates Limited, Enerplus Corporation, and Sunshine Oilsands Ltd. Ms. Park is proficient in applying industry standard practices to engineering and geoscience evaluations as well as applying SEC and other industry reserve definitions and guidelines.

The Company’s internal staff of engineers, geoscience professionals, operations, land, finance and accounting, and, prior to Greenfire’s annual reserves process, marketing personnel, work closely together to ensure the integrity, accuracy and timeliness of data to furnish to, and work with, our independent reserve engineers in their reserve evaluation process. Our internal reserves process follows a rigorous workflow where the multidisciplinary teams come together to vet model assumptions and input before the technical team meets with the independent reserve engineers to review our properties and discuss methods and assumptions used to prepare reserve estimates.

Our internal controls over reserve estimates include reconciliation and review controls, including: an internal review of assumptions used in the estimation; senior executive approval on data inputs provided by the technical staff; reconciliations between the evaluation report and the data provided by the technical staff; and a thorough internal review performed by both management and the executive team over the independent reserve engineers’ evaluation of our oil and gas reserves, prior to the presentation of those reserve estimates to the Company Board.

The Company has implemented certain oversight, review and internal control processes regarding its reserve evaluation, including requiring approval from the Company Board. The Company Board performs the oversight role of the Company’s oil and gas reserves. On a yearly basis, the Company Board will meet with the Company’s management, where the reserves evaluation performed by the independent engineering firm is presented and the Company Board provides its review, analysis and approval of that evaluation.

We establish our proved reserves estimates using standard geological and engineering technologies and computational methods, which are generally accepted by the petroleum industry. We primarily prepare proved reserves additions by analogy using type curves that are based on volumetric and decline curve analysis of producing wells in our and analogous reservoirs. Reasonable certainty is further established over our proved reserve estimates by using one or more of the following methods: geological and geophysical information to establish reservoir continuity between penetrations, analytical and numerical simulations, or other proprietary technical and statistical methods.

The technologies employed by McDaniel use standard engineering methods that are generally accepted by the petroleum industry. The Company employs well logs, production tests, seismic and core data, as well as historical and analogous production trends to develop proved reserves estimations. The disclosures contained in this section providing oil and gas information are prepared in accordance with FASB Accounting Standards Codification topic 932; Extractive Activities — Oil and Gas. Our financial reporting is prepared in accordance with IFRS.

For the purposes of determining proved oil and natural gas reserves under SEC requirements as at December 31, 2023, 2022 and 2021, the Company used the 12-month average price, defined by the SEC as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period.

McDaniel prepared the annual reports on the reserves of the Company as of December 31, 2023, 2022 and 2021, respectively, which were prepared in accordance with guidelines specified in Item 1202(a)(8) of Regulation S-K and in conformity with Rule 4-10(a) of Regulation S-X, and are to be used for inclusion in certain filings of the SEC; such reports are filed as Exhibits 15.1, 15.2 and 15.3 to this Annual Report.

Employeesand Training

As at December 31, 2023, the Company had 165 full and part-time employees (with 35 of those employees at the Company’s principal office in Calgary and the remaining employees on site at the Expansion Asset and/or the Demo Asset), compared to 171 as at December 31, 2022 (with 39 of those employees at the Company’s head office in Calgary and the remaining on site at the Expansion Asset and Demo Asset). All employees were located in Canada, and all pertained to the Company’s core business activity of producing bitumen by SAGD processes from in-situ oil sands reservoirs.

OperationalProcesses and Systems

To assist in managing fluctuations in commodity pricing, the Company seeks to implement cost efficiencies across all of its operations.

Since acquiring the Demo Asset and Expansion Asset in 2021, the Company has sought to improve its operating and transportation expenses and pursue low risk opportunities to further enhance production with limited capital expenditures. The costs of energy and goods and services have increased over the period that the Company has operated the Demo Asset and Expansion Asset. The Company has managed its operating expenses by increasing water handling, surface facility debottlenecking and optimizing workforce and operating processes.

CapitalCost Efficiencies

Since acquiring the Demo Asset and Expansion Asset in 2021, the Company has implemented a modest capital expenditure program focused on surface debottlenecking programs at the Expansion Asset and Demo Asset to enable additional potential capacity for production growth at both existing facilities. As of December 31, 2023, the Company commissioned water disposal wells at both sites to improve water handling capability. These wells are in the process of being conditioned for maximum water disposal which will reduce off site waste disposal expenses. The Company believes that increasing water disposal capability at the Demo Asset and Expansion Asset will optimize fluid handling capacity at the sites which may lead to increased production. As of December 31, 2023, the Company had only approximately 39 of its 56 drilled wells pairs currently online.

RedevelopmentInfill Wells, NCG, and Disposal Wells.

The Company continued to progress its production growth initiatives at the Expansion Asset, including drilling extended reach Refill wells and implementing surface facility debottlenecking projects to restore higher reservoir pressure. The Company successfully drilled eight extended reach Refill wells in 2023 as part of the planned 10 well program, which was successfully completed in first quarter of 2024. These ten extended reach Refill wells had average horizontal lengths of approximately one mile (approximately 1,600 meters). At year-end 2023, five extended reach Refill wells have been on production for over two months at the Expansion Asset and have realized an average monthly production rate of approximately 1,500 bbls/d per well, on a 100% working interest basis, in the second month of production. Greenfire successfully executed multiple NCG debottlenecking initiatives at the Expansion Asset in the second half of 2023, including the commissioning of an NCG compressor in the fourth quarter of 2023 as planned. These completed debottlenecking initiatives have enabled the Company to deliver NCG at higher and more consistent rates for co-injection. With heightened rates of NCG co-injection sustained, the Company expects that higher reservoir pressure will be restored at the Expansion Asset around mid-2024, which management anticipates will support increased production rates.

At the Demo Asset, the Company’s disposal well has been temporarily shut-in since the beginning of October 2023. Remediation work for this well is now complete, and the Company is awaiting regulatory approval to recommence disposal operations, which is expected to increase bitumen production by approximately 1,000 bbls/d at the Demo Asset. Subsequent to the fourth quarter of 2023, the Company initiated a planned seven well extended reach Refill drilling program at the Demo Asset, which is anticipated to conclude in second quarter of 2024.

Additional future drilling plans for the Company are expected to remain focused on exploiting the Company’s existing inventory of pre-heated bitumen locations at the Hangingstone Facilities with Refill wells, which, combined with surface facility optimizations, is anticipated to result in a material increase in production and profitability at the Hangingstone Facilities. To provide cost and service availability certainty for the Company’s planned multi-year drilling program, the Company entered into a two-year take-or-pay drilling commitment with an established SAGD drilling contractor in Western Canada in 2023.

Sustainability

The Company seeks to do business in a responsible, safe and sustainable manner. The Company seeks to continue to improve and strengthen its strategies for air quality, emissions, water, waste, land and biodiversity, risk management, health and safety and First Nations relations. These areas are critical based on their significant impact to building a sustainable company and the Company’s ESG framework. Since the Company acquired the Demo Asset and Expansion Asset, it has focused on optimization efficiencies to improve carbon intensity and reduce waste. To date, the Company’s sustainability program has been focused on the following goals:

●	Improve Assets Carbon Emission Intensity — Optimization and efficiency gains<br> at the Expansion Asset and Demo Asset are reducing carbon emission intensity per barrel.
●	Reduced Diluent Use and Waste — More attentive operations team and processes<br> to operate equipment at enhanced conditions to reduce diluent loss and usage.
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●	Transportation and Travel Mileage — Construction of a truck offloading facility at the<br> Expansion Asset to accept trucked production volumes from the Demo Asset has reduced approximately<br> 620 miles of trucking per truck load of bitumen production from the Demo Asset.
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●	Water Quality and Recycling — the Company operates with higher quality boiler<br> feed water and water quality standards relative to the previous operator. the Company has<br> improved its water recycling performance and is currently recycling 94% of the water used<br> in its steam production operations with minimal water loss replacements.
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●	Fugitive Emissions Monitoring— Annual fugitive emissions studies to proactively<br> identify and rectify any potential leaks.
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The Company intends to continue to evolve its approach to sustainability and to developing ESG focus areas to bring visibility to what the Company feels are key priorities as a Canadian oil sands producer.

Climate,Air & Emissions

The Company is committed to evaluating opportunities to reduce its Scope 1 and Scope 2 greenhouse gas emissions in line with the Canadian government’s national commitments and is evaluating process optimizations and carbon reduction technologies that have the potential to deliver localized solutions.

The Company is constantly monitoring the air quality at and adjacent to its Hangingstone Facilities. The results from this monitoring consistently show compliance with Alberta and Canadian air quality objectives. For 2022 and through 2023, the Company reported zero contraventions with its air quality monitoring.

Water

The Company is actively working to reduce its reliance on non-saline water by optimizing its usage at its Hangingstone Facilities. By recycling 94% used in its steam production operations, the Company minimizes the need for non-saline water to be used to make-up any water shortages within its industrial process. All the Company’s non-saline water is conveyed via dedicated underground pipelines, eliminating the need for trucks and their corresponding emissions.

IndigenousRelations

The Company recognizes the rights of First Nations, Metis, and Inuit peoples and is committed to working collaboratively with First Nation communities in an atmosphere of integrity, honor and respect. The Company continues its collaborative participation in the Indigenous Advisory Group (the “IAG”). Founded by JACOS, the IAG comprises members from various local First Nation communities in the Fort McMurray region, providing valuable traditional knowledge and ensuring the Company upholds the highest possible standards of environmental protection and monitoring. The IAG is a critical instrument in guiding engagement with the local First Nation communities.

The Company also provides scholarships for local First Nations students to train in environmental monitoring programs. These programs increase access to related future employment opportunities, help the development of First Nation entrepreneurial enterprises, promote the transmission of First Nation knowledge within local communities and enhance cultural connections to the land.

The Company is committed to the ongoing development of trust-based equitable and beneficial partnerships with local First Nation communities.

Land &Biodiversity

The Company seeks to minimize its land disturbances by practicing avoidance, using existing land disturbances for future development and reclaiming end-of-life site to equivalent land capacity. Additionally, the Company supports a road reclamation research project at its Demo Asset that is implementing innovative solutions to the remediation and reclamation of local swamps/bogs, commonly referred to as muskeg.

RiskManagement

The Company’s operating team identifies operational risks to the Company in order to implement systems and execute procedures to adequately address those risks and reduce their impact on the Company. This process has been driven on a team basis with each individual team (*i.e.,*Health and Safety, Facilities, or Drilling) identifying, assessing and managing their own operational risks with associated risk matrices. The Company believes that risks related to climate change and the transition to a lower carbon economy will increasingly impact the Company. A net zero economy, supported by the Canadian Net-Zero Emissions Accountability Act (the “CNEAA”) and enacted through new policies, regulations, and standards is emerging in Canada. The Company continues to evaluate key emerging issues that may impact the Canadian energy sector as it moves to align with Canada’s Net-Zero 2050 ambitions.

Health &Safety

The health and safety of the Company’s personnel, including its employees, contractors, and the communities the Company works in, is its highest priority. The Company actively works to ensure that every employee and contractor is aware of, understands, and adheres to the Health and Safety Management System and associated policies. Safety is a shared responsibility of the Company’s leaders, employees, and contractors.

Legal

This section describes legal and other general matters relating to the Company, including insurance, material contracts entered into outside the ordinary course of business, property, plant and equipment, intellectual property rights and legal proceedings, investigations and other regulatory matters, industry conditions and government regulation.

MaterialContracts, Liabilities and Indebtedness

Lettersof Credit

On November 1, 2023, the Company entered into an unsecured $55.0 million letter of credit facility with a Canadian bank that is supported by a performance security guarantee from Export Development Canada (the “EDC Facility”). The EDC facility replaced the cash collateralized credit facility with the Petroleum Marketer.

2028Notes

Concurrently with the Business Combination, the Company closed a private offering of $300 million aggregate principal amount of its 2028 Notes. The 2028 Notes mature on October 1, 2028, and have a fixed coupon of 12.0% per annum, paid semi-annually on April 1 and October 1 of each year, commencing on April 1, 2024. The 2028 Notes are secured by a lien on substantially all the assets of the Company and the guarantors. The Senior Credit Facility ranks senior to the 2028 Notes. For additional details of the terms of the 2028 Notes and the indenture governing the 2028 Notes, see “Item 5. Operating and Financial Review and Prospects — Capital Resources and Liquidity — LongTerm Debt”.

MarketingAgreements

The Company has three separate marketing agreements with Petroleum Marketer. The Petroleum Marketer purchases substantially all of the Company’s bitumen and blend and provides and arranges transportation via trucks and pipelines for the Company’s products and condensate in exchange for a marketing fee.

In April 2021, in conjunction with GAC completing the acquisition of the Demo Asset, the Petroleum Marketer and GAC entered into a marketing agreement (the “Demo Marketing Agreement”) pursuant to which the Petroleum Marketer agreed to purchase 100% of monthly produced bitumen volumes from the Demo Asset. The Demo Marketing Agreement was subsequently amended to replace GAC with GROC. Under the Demo Marketing Agreement, the purchase price is the weighted average of all sales to third parties of the product purchased by Petroleum Marketer. The price is adjusted based on a number of other factors and there are certain other fees and payments payable by GROC. The Demo Marketing Agreement originally had a term expiring on April 1, 2024, but in December 2022, the Demo Marketing Agreement was amended to extend the term until April 1, 2025, in addition to making certain other amendments, all of which became effective upon the closing of the Business Combination. An additional amendment in September 2023 extended the term to April 1, 2026. Under the terms of the Demo Marketing Agreement, under certain circumstances if there is a “Change of Control” (as defined in the Demo Marketing Agreement) of Greenfire or GROC, there will be a fee payable by Greenfire to the Petroleum Marketer, however the Petroleum Marketer agreed to waive that fee for the Business Combination and the other transactions contemplated by the Business Combination Agreement.

In October 2021, in conjunction with Greenfire completing the JACOS Acquisition, the Petroleum Marketer and JACOS (as predecessor to GROC) entered into a marketing agreement (the “Expansion Marketing Agreement”) pursuant to which the Petroleum Marketer agreed to purchase 100% of monthly diluted bitumen volumes from the Expansion Asset. Under the Expansion Marketing Agreement, the purchase price is based on the weighted average of all sales to third parties of the product purchased by Petroleum Marketer. The price is adjusted based on a number of other factors and there are certain other fees and payments payable by Greenfire. The Expansion Marketing Agreement originally had a term expiring in October 2026, but in December 2022, the Expansion Marketing Agreement was amended to extend the term until October 2027, in addition to making certain other amendments. An additional amendment in September 2023 extended the term to October 2028.

In October 2021, in conjunction with Greenfire completing the JACOS Acquisition, the Petroleum Marketer and JACOS (as predecessor to GROC) entered a marketing agreement (the “Expansion Diluent Agreement”) pursuant to which the Petroleum Marketer agreed to sell to Greenfire 100% of the condensate required for Greenfire’s blending with its bitumen production to satisfy pipeline specifications. Under the Expansion Diluent Agreement, the purchase price is based on the weighted average market price for condensate at the time. The price is adjusted based on a number of other factors, and there are certain other fees and payments payable by Greenfire under the terms of the Expansion Diluent Agreement. The Expansion Diluent Agreement originally had a term expiring in October 2026, but in December 2022, the Expansion Marketing Agreement was amended to extend the term until October 2027, in addition to making certain other amendments. An additional amendment in September 2023 extended the term to October 2028.

RiskManagement Contracts

As part of the Company’s normal operations, it is exposed to volatility in commodity prices. In an effort to manage these exposures, the Company uses various financial risk management contracts and physical sales contracts that are intended to reduce the volatility in the Company’s cash flow, as well as to ensure the Company’s ability to service and repay indebtedness.

The 2028 Notes and the Credit Agreement each require the Company, on or prior to the last day of each calendar month, to enter into and maintain at all times hedge arrangements (the “Hedges”) for the consecutive 12-calendar month period commencing from November 1, 2023, in respect of Hydrocarbons, the net notional volumes for no less than 50% of the Company’s reasonably expected output of production of Hydrocarbons; provided, however, that the Hedges shall have a floor price equal to the greater of (i) at least 80% of the price of WTI for such month being hedged and (ii) $55/bbl for such month being hedged. Notwithstanding the foregoing:

●	in<br> the event that (i) the price for WTI is equal to or less than $55/bbl for such month being<br> hedged or (ii) the Company is unable to obtain reasonable additional credit to enter into<br> such hedge arrangement, having used its best efforts to obtain such credit, for such month<br> being hedged, the Company shall not be required to enter into any hedge arrangement for such<br> month;
●	the<br> Company will not be required to enter into any Hedges for any period if, at the beginning<br> of the applicable period, less than $100 million of the aggregate principal amount of the<br> 2028 Notes originally issued remain outstanding; and
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●	the<br> Company will be permitted to monetize any existing hedging obligations for any period if<br> less than $100 million of the aggregate principal amount of the 2028 Notes originally issued<br> remain outstanding.
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Insurance

The Company maintains insurance coverage for damage to its commercial property, third-party liability, and employers” liability, sudden and accidental pollution and other types of loss or damage. The insurance coverage is subject to deductibles that must be met prior to any recovery. Additionally, the insurance is subject to exclusions and limitations, and such coverage may not adequately protect it against liability from all potential consequences and damages. See “Risk Factors — Risks Relating to the Company’sOperations and the Oil and Gas Industry — Not all risks of conducting oil and natural gas opportunities are insurableand the occurrence of an uninsurable event may have a material adverse effect on the Company.”

LegalProceedings, Investigations and Other Regulatory Matters

From time to time, the Company is involved in litigation matters and may be subject to fines or regulatory audits, including in relation to health, safety, security and environment matters, arising in the ordinary course of business. The Company is not currently a party to any litigation, legal proceedings, investigations or other regulatory matters that are likely to have a material adverse effect on the Company’s business, financial position or profitability.

IndustryConditions and Governmental Regulation

Companies operating in the Canadian oil and gas industry are subject to extensive regulation and control of operations (including with respect to land tenure, exploration, development, production, refining and upgrading, transportation, and marketing) as a result of legislation enacted by various levels of government as well as with respect to the pricing and taxation of petroleum and natural gas through legislation enacted by, and agreements among, the federal and provincial governments of Canada, all of which should be carefully considered by investors in the Company. All current legislation is a matter of public record and the Company is unable to predict what additional legislation or amendments governments may enact in the future.

The Company’s assets and operations are regulated by administrative agencies that derive their authority from legislation enacted by the applicable level of government. Regulated aspects of the Company’s upstream oil and natural gas business include all manner of activities associated with the exploration for and production of oil and natural gas, including, among other matters: (i) permits for the drilling of wells and construction of related infrastructure; (ii) technical drilling and well requirements; (iii) permitted locations and access to operation sites; (iv) operating standards regarding conservation of produced substances and avoidance of waste, such as restricting flaring and venting; (v) minimizing environmental impacts, including by reducing emissions; (vi) storage, injection and disposal of substances associated with production operations; and (vii) the abandonment and reclamation of impacted sites. To conduct oil and natural gas operations and remain in good standing with the applicable federal or provincial regulatory scheme, producers must comply with applicable legislation, regulations, orders, directives and other directions (all of which are subject to governmental oversight, review and revision, from time to time). Compliance in this regard can be costly and a breach of the same may result in fines or other sanctions.

The discussion below outlines some of the principal aspects of the legislation, regulations, agreements, orders, directives and a summary of other pertinent conditions that impact the oil and gas industry in Western Canada, specifically in the province of Alberta where the Company’s assets are located. While these matters do not affect the Company’s operations in any manner that is materially different than the manner in which they affect other similarly sized industry participants with similar assets and operations, investors should consider such matters carefully.

Pricingand Marketing in Canada

CrudeOil

Oil producers are entitled to negotiate sales contracts directly with purchasers. As a result, macroeconomic and microeconomic market forces determine the price of oil. Worldwide supply and demand factors are the primary determinant of oil prices, but regional market and transportation issues also influence prices. The specific price that a producer receives will depend, in part, on oil quality, prices of competing products, distance to market, availability of transportation, value of refined products, supply/demand balance and contractual terms of sale.

In February 2022, Russian military forces invaded Ukraine. Ongoing military conflict between Russia and Ukraine has significantly impacted the supply of oil and gas from the region. In addition, certain countries including Canada and the United States have imposed strict financial and trade sanctions against Russia, which sanctions may have far reaching effects on the global economy in addition to the near term effects on Russia. The long-term impacts of the conflict remain uncertain.

On October 7, 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on the Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. Following the attack, Israel’s security cabinet declared war against Hamas and the military campaign against these terrorist organizations has launched a series of responding attacks in Palestine. The outcome of the conflict has the potential to have wide-ranging consequences on the world economy and commodity prices, although the long-term impacts of the conflict remain uncertain.

NaturalGas

Negotiations between buyers and sellers determine the price of natural gas sold in intra-provincial, interprovincial and international trade. The price received by a natural gas producer depends, in part, on the price of competing natural gas supplies and other fuels, natural gas quality, distance to market, availability of transportation, length of contract term, weather conditions, supply/demand balance and other contractual terms of sale. Spot and future prices can also be influenced by supply and demand fundamentals on various trading platforms.

NaturalGas Liquids (“NGLs”)

The pricing of condensates and other NGLs such as ethane, butane and propane sold in intra-provincial, interprovincial and international trade is determined by negotiation between buyers and sellers. The profitability of NGLs extracted from natural gas is based on the products extracted being of greater economic value as separate commodities than as components of natural gas and therefore commanding higher prices. Such prices depend, in part, on the quality of the NGLs, price of competing chemical stock, distance to market, access to downstream transportation, length of contract term, supply/demand balance and other contractual terms of sale.

Exportsfrom Canada

The Canada Energy Regulator (the “CER”) regulates the export of oil, natural gas and NGLs from Canada through the issuance of short-term orders and long-term export licenses pursuant to its authority under the Canadian Energy Regulator Act (the “CERA”). Exporters are free to negotiate prices and other terms with purchasers, provided that the export contracts continue to meet certain criteria prescribed by the CER and the federal government. The Company does not directly enter into contracts to export its production outside of Canada.

TransportationConstraints and Market Access

Capacity to transport production from Western Canada to Eastern Canada, the United States and other international markets has been, and continues to be, a major constraint on the exportation of crude oil, natural gas and NGLs. Although certain pipeline and other transportation projects have been announced or are underway, many proposed projects have been cancelled or delayed due to regulatory hurdles, court challenges and economic and socio-political factors. Due in part to growing production and a lack of new and expanded pipeline and rail infrastructure capacity, producers in Western Canada have experienced low commodity pricing relative to other markets in the last several years.

OilPipelines

Under Canadian constitutional law, the development and operation of interprovincial and international pipelines fall within the federal government’s jurisdiction and, under the CERA, new interprovincial and international pipelines require a federal regulatory review and Cabinet approval before they can proceed. However, recent years have seen a perceived lack of policy and regulatory certainty in this regard such that, even when projects are approved, they often face delays due to actions taken by provincial and municipal governments and legal opposition related to issues such as Indigenous rights and title, the government’s duty to consult and accommodate Indigenous peoples and the sufficiency of all relevant environmental review processes. Export pipelines from Canada to the United States face additional unpredictability as such pipelines also require approvals from several levels of government in the United States.

Producers negotiate with pipeline operators to transport their products to market on a firm or interruptible basis depending on the specific pipeline and the specific substance. Transportation availability is highly variable across different jurisdictions and regions. This variability can determine the nature of transportation commitments available, the number of potential customers and the price received.

SpecificPipeline Updates

The Trans Mountain Pipeline expansion received Cabinet approval in November 2016. Following a period of political opposition in British Columbia, the federal government acquired the Trans Mountain Pipeline in August 2018. Following the resolution of a number of legal challenges and a second regulatory hearing, construction on the Trans Mountain Pipeline expansion commenced in late 2019. Earlier estimated at $12.6 billion, Trans Mountain increased the project budget to $30.9 billion in March 2023. The pipeline is expected to be in service in 2024, an extension from Trans Mountain’s initial December 2022 estimate. The budget increase and in-service date delay have been attributed to, among other things, high global inflation, global supply chain challenges, the widespread flooding in British Columbia in late 2021, and unexpected major archeological discoveries.

In November 2020, the Attorney General of Michigan filed a lawsuit to terminate an easement that allows the Enbridge Line 5 pipeline system to operate below the Straits of Mackinac, attempting to force the lines comprising this segment of the pipeline system to be shut down. Enbridge Inc. stated in January 2021 that it intends to defy the shut down order, as the dual pipelines are in full compliance with U.S. federal safety standards. The Government of Canada invoked a 1977 treaty with the United States on October 4, 2021, triggering bilateral negotiations over the pipeline. In August 2022, the United States District Court for Western Michigan rejected the Attorney General of Michigan’s lawsuit efforts to move the dispute to Michigan state court citing important federal interests at stake in having the dispute heard in federal court. Michigan’s Attorney General appealed that decision, and the United States District Court granted the motion to appeal in February 2023.

In September 2022, the District Court of Wisconsin ruled in favor of the Bad River Band in its dispute with Enbridge Inc. over the Enbridge Line 5 pipeline system in that state. Stopping short of ordering the system to be shut down, the Court ruled that the Bad River Band is entitled to financial compensation, and ordered Enbridge Inc. to reroute the pipeline around Bad River territory within five years.

In December 2023, the Canada Energy Regulator denied Trans Mountain’s pipeline variance application for the Mountain 3 Horizontal Directional Drill (located in the Fraser Valley), however in January 2024, it approved the request with conditions, meaning the Trans Mountain Pipeline expansion can now proceed toward completion in compliance with the order.

NaturalGas and Liquefied Natural Gas (“LNG”)

Natural gas prices in Western Canada have been constrained in recent years due to increasing North American supply, limited access to markets and limited storage capacity. Companies that secure firm access to infrastructure to transport their natural gas production out of Western Canada may be able to access more markets and obtain better pricing. Companies without firm access may be forced to accept spot pricing in Western Canada for their natural gas, which is generally lower than the prices received in other North American regions. The Company consumes natural gas for its SAGD operations and has entered into firm transportation delivery contracts to mitigate its risk of not receiving sufficient amounts of natural gas for its operations.

Required repairs or upgrades to existing pipeline systems in Western Canada have also led to reduced capacity and apportionment of access, the effects of which have been exacerbated by storage limitations. In October 2020, TC Energy Corporation received federal approval to expand the Nova Gas Transmission Line system (the “NGTL System”) and the expanded NGTL System was completed in April 2022.

SpecificPipeline and Proposed LNG Export Terminal Updates

While a number of LNG export plants have been proposed in Canada, regulatory and legal uncertainty, social and political opposition and changing market conditions have resulted in the cancellation or delay of many of these projects. Nonetheless, in October 2018, the joint venture partners of the LNG Canada export terminal announced a positive final investment decision. Once complete, the project will allow producers in northeastern British Columbia to transport natural gas to the LNG Canada liquefaction facility and export terminal in Kitimat, British Columbia via the Coastal GasLink pipeline (the “CGL Pipeline”). With more Alberta and northeastern British Columbia gas egressing through the CGL Pipeline, the NGTL System will have more capacity, resulting in a narrower price relationship between the AECO and New York Mercantile Exchange gas prices. The Company anticipates it will see higher AECO pricing, more in line with the United States market, and generally, higher gas prices overall. Phase 1 of the LNG Canada project reached 70% completion in October 2022, with a completion target of 2025.

In May 2020, TC Energy Corporation sold a 65% equity interest in the CGL Pipeline to investment companies KKR & Co Inc. and Alberta Investment Management Corporation, while remaining the pipeline operator. Despite its regulatory approval, the CGL Pipeline has faced legal and social opposition. For example, protests involving the Hereditary Chiefs of the Wet’suwet’en First Nation and their supporters have delayed construction activities on the CGL Pipeline, although construction is proceeding. As of November 2022, construction of the CGL Pipeline is approximately 80% complete.

Woodfibre LNG Limited (“Woodfire LNG”) issued a notice to proceed with construction of the Woodfibre LNG project to its prime contractor in April 2022. The Woodfibre LNG project is located near Squamish, British Columbia, and upon completion will produce approximately 2.1 million tonnes of LNG per year. Major construction is set to commence in 2023, with substantial completion of the project expected in late 2027. In November 2022, Enbridge Inc. completed a transaction with Pacific Energy Corporation Limited, the owner of Woodfibre LNG Limited, to retain a 30% ownership stake in the project.

In addition to LNG Canada, the CGL Pipeline and the Woodfibre LNG project, a number of other LNG projects are underway at varying stages of progress, though none have reached a positive final investment decision.

MarineTankers

The Oil Tanker Moratorium Act (Canada), which was enacted in June 2019, imposes a ban on tanker traffic transporting crude oil or persistent crude oil products in excess of 12,500 metric tonnes to and from ports located along British Columbia’s north coast. The ban may prevent pipelines from being built to, and export terminals from being located on, the portion of the British Columbia coast subject to the moratorium.

InternationalTrade Agreements

Canada is party to a number of international trade agreements with other countries around the world that generally provide for, among other things, preferential access to various international markets for certain Canadian export products. Examples of such trade agreements include the Comprehensive Economic and Trade Agreement (“CETA”), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and, most prominently, the United States Mexico Canada Agreement (the “USMCA”), which replaced the former North American Free Trade Agreement (“NAFTA”) on July 1, 2020. Because the United States remains Canada’s primary trading partner and the largest international market for the export of oil, natural gas and NGLs from Canada, the implementation of the USMCA could impact Western Canada’s oil and gas industry as a whole, including the Company’s business.

While the proportionality rules in Article 605 of NAFTA previously prevented Canada from implementing policies that limit exports to the United States and Mexico relative to the total supply produced in Canada, the USMCA does not contain the same proportionality requirements. This may allow Canadian producers to develop a more diversified export portfolio than was possible under NAFTA, subject to the construction of infrastructure allowing more Canadian production to reach Eastern Canada, Asia and Europe.

Canada is also party to CETA, which provides for duty-free, quota-free market access for Canadian crude oil and natural gas products to the European Union. Following the United Kingdom’s departure from the European Union on January 31, 2020, the United Kingdom and Canada entered into the Canada-United Kingdom Trade Continuity Agreement (“CUKTCA”), which replicates CETA on a bilateral basis to maintain the status quo of the Canada-United Kingdom trade relationship.

While it is uncertain what effect CETA, CUKTCA or any other trade agreements will have on the petroleum and natural gas industry in Canada, the lack of available infrastructure for the offshore export of crude oil and natural gas may limit the ability of Canadian crude oil and natural gas producers to benefit from such trade agreements.

LandTenure

Mineralrights

With the exception of Manitoba, each provincial government in Western Canada owns most of the mineral rights to the oil and natural gas located within their respective provincial borders. Provincial governments grant rights to explore for and produce oil and natural gas pursuant to leases, licenses and permits (collectively, “leases”) for varying terms, and on conditions set forth in provincial legislation, including requirements to perform specific work or make payments in lieu thereof. The provincial governments in Western Canada conduct regular land sales where oil and natural gas companies bid for the leases necessary to explore for and produce oil and natural gas owned by the respective provincial governments. These leases generally have fixed terms, but they can be continued beyond their initial terms if the necessary conditions are satisfied.

In response to COVID-19, the Government of Alberta, among others, announced measures to extend or continue Crown leases and permits that may have otherwise expired in the months following the implementation of pandemic response measures.

All of the provinces of Western Canada have implemented legislation providing for the reversion to the Crown of mineral rights to deep, non-productive geological formations at the conclusion of the primary term of a disposition. In addition, Alberta has a policy of “shallow rights reversion” which provides for the reversion to the Crown of mineral rights to shallow, non-productive geological formations for new leases and licenses.

In addition to Crown ownership of the rights to oil and natural gas, private ownership of oil and natural gas (i.e. freehold mineral lands) also exists in Western Canada. Rights to explore for and produce privately owned oil and natural gas are granted by a lease or other contract on such terms and conditions as may be negotiated between the owner of such mineral rights and companies seeking to explore for and/or develop oil and natural gas reserves.

An additional category of mineral rights ownership includes ownership by the Canadian federal government of some legacy mineral lands and within Indigenous reservations designated under the Indian Act (Canada). Indian Oil and Gas Canada, which is a federal government agency, manages subsurface and surface leases in consultation with applicable Indigenous peoples, for the exploration and production of oil and natural gas on Indigenous reservations through An Act to Amend the Indian Oil and Gas Act and the accompanying regulations.

Surfacerights

To develop oil and natural gas resources, producers must also have access rights to the surface lands required to conduct operations. For Crown lands, surface access rights can be obtained directly from the government. For private lands, access rights can be negotiated with the landowner. Where an agreement cannot be reached, however, each province has developed its own process that producers can follow to obtain and maintain the surface access necessary to conduct operations throughout the lifespan of a well, including notification requirements and providing compensation to affected persons for lost land use and surface damage. Similar rules apply to facility and pipeline operators.

Royaltiesand Incentives

General

Each province has legislation and regulations in place to govern Crown royalties and establish the royalty rates that producers must pay in respect of the production of Crown resources. The royalty regime in a given province is in addition to applicable federal and provincial taxes and is a significant factor in the profitability of oil sands projects and oil, natural gas and NGL production. Royalties payable on production from lands where the Crown does not hold the mineral rights are negotiated between the mineral freehold owner and the lessee, though certain provincial taxes and other charges on production or revenues may be payable. Royalties from production on Crown lands are determined by provincial regulation and are generally calculated as a percentage of the value of production.

Producers and working interest owners of oil and natural gas rights may create additional royalties or royalty-like interests, such as overriding royalties, net profits interests and net carried interests, through private transactions, the terms of which are subject to negotiation.

Occasionally, both the federal government and the provincial governments in Western Canada create incentive programs for the oil and gas industry. These programs often provide for volume-based incentives, royalty rate reductions, royalty holidays or royalty tax credits and may be introduced when commodity prices are low to encourage exploration and development activity. Governments may also introduce incentive programs to encourage producers to prioritize certain kinds of development or use technologies that may enhance or improve recovery of oil, natural gas and NGLs, or improve environmental performance. In addition, from time-to-time, including during the COVID-19 pandemic, the federal government creates incentives and other financial aid programs intended to assist businesses operating in the oil and gas industry as well as other industries in Canada.

Alberta

Crownroyalties

In Alberta, oil and natural gas producers are responsible for calculating their royalty rate on an ongoing basis. The Crown’s royalty share of production is payable monthly and producers must submit their records showing the royalty calculation.

In 2016, the Government of Alberta adopted a modernized Crown royalty framework (the “Modernized Framework”) that applies to all conventional oil (i.e., not oil sands) and natural gas wells drilled after December 31, 2016 that produce Crown-owned resources. The previous royalty framework (the “Old Framework”) will continue to apply to wells producing Crown-owned resources that were drilled prior to January 1, 2017 until December 31, 2026, following which time they will become subject to the Modernized Framework. The Royalty Guarantee Act (Alberta), came into effect on July 18, 2019, and provides that no major changes will be made to the current oil and natural gas royalty structure for a period of at least 10 years.

Royalties

on production from wells subject to the Modernized Framework are determined on a “revenue-minus-costs” basis. The cost component is based on a drilling and completion cost allowance formula that relies, in part, on the industry’s average drilling and completion costs, determined annually by the Alberta Energy Regulator (the “AER”), and incorporates information specific to each well such as vertical depth and lateral length.

Under the Modernized Framework, producers initially pay a flat royalty of 5% on production revenue from each producing well until payout, which is the point at which cumulative gross revenues from the well equals the applicable Drilling and Completion Cost Allowance. After payout, producers pay an increased royalty of up to 40% that will vary depending on the nature of the resource and market prices. Once the rate of production from a well is too low to sustain the full royalty burden, its royalty rate is gradually adjusted downward as production declines, eventually reaching a floor of 5%.

Under the Old Framework, royalty rates for conventional oil production can be as high as 40% and royalty rates for natural gas production can be as high as 36%. Similar to the Modernized Framework, these rates vary based on the nature of the resource and market prices. The natural gas royalty formula also provides for a reduction based on the measured depth of the well, as well as the acid gas content of the produced gas.

Oil sands production in Alberta is also subject to a royalty regime. Prior to payout of an oil sands project, the royalty is payable on gross revenues and, depending on market prices, the applicable rates are capped at 9%. After payout, the royalty payable is the greater of the gross revenue royalty (described above) and a net revenue royalty based on rates that range from 25% – 40%.

In addition to royalties, producers of oil and natural gas from Crown lands in Alberta are also required to pay annual rentals to the Government of Alberta.

Freeholdroyalties and taxes

Royalty rates for the production of privately owned oil and natural gas are negotiated between the producer and the resource owner. Producers and working interest participants may also pay additional royalties to parties other than the freehold mineral owner where such royalties are negotiated through private transactions.

The Government of Alberta levies annual freehold mineral taxes for production from freehold mineral lands. On average, the tax levied in Alberta is 4% of revenues reported from freehold mineral title properties and is payable by the registered owner of the mineral rights.

Incentives

The Government of Alberta has from time to time implemented drilling credits, incentives or transitional royalty programs to encourage crude oil and natural gas development and new drilling. In addition, the Government of Alberta has implemented certain initiatives intended to accelerate technological development and facilitate the development of unconventional resources, including coalbed methane wells, shale gas wells and horizontal crude oil and natural gas wells.

RegulatoryAuthorities and Environmental Regulation

General

The Canadian oil and gas industry is subject to environmental regulation under a variety of Canadian federal, provincial, territorial, and municipal laws and regulations, all of which are subject to governmental review and revision from time to time. Such regulations provide for, among other things, restrictions and prohibitions on the spill, release or emission of various substances produced in association with certain oil and gas industry operations, such as sulphur dioxide and nitrous oxide. The regulatory regimes set out the requirements with respect to oilfield waste handling and storage, habitat protection and the satisfactory operation, maintenance, abandonment and reclamation of well, facility and pipeline sites. Compliance with such regulations can require significant expenditures and a breach of such requirements may result in suspension or revocation of necessary licenses and authorizations, civil liability, and the imposition of material fines and penalties. In addition, future changes to environmental legislation, including legislation related to air pollution and GHG emissions (typically measured in terms of their global warming potential and expressed in terms of carbon dioxide equivalent (“CO2e”)), may impose further requirements on operators and other companies in the oil and gas industry.

Federal

Canadian environmental regulation is the responsibility of both the federal and provincial governments. While provincial governments and their delegates are responsible for most environmental regulation, the federal government can regulate environmental matters where they impact matters of federal jurisdiction or when they arise from projects that are subject to federal jurisdiction, such as interprovincial transportation undertakings, including pipelines and railways, and activities carried out on federal lands. Where there is a direct conflict between federal and provincial environmental legislation in relation to the same matter, the federal law prevails.

The CERA and the Impact Assessment Act (the “IAA”) provide a number of important elements to the regulation of federally regulated major projects and their associated environmental assessments. The CERA separates the CER’s administrative and adjudicative functions. The CER has jurisdiction over matters such as the environmental and economic regulation of pipelines, transmission infrastructure and certain offshore renewable energy projects. In its adjudicative role, the CERA tasks the CER with reviewing applications for the development, construction and operation of many of these projects, culminating in their eventual abandonment.

The IAA relies on a designated project list as a trigger for a federal assessment. Designated projects that may have effects on matters within federal jurisdiction will generally require an impact assessment administered by the Impact Assessment Agency (the “IA Agency”) or, in the case of certain pipelines, a joint review panel comprised of members from the CER and the IA Agency. The impact assessment requires consideration of the project’s potential adverse effects and the overall societal impact that a project may have, both of which may include a consideration of, among other items, environmental, biophysical and socio-economic factors, climate change, and impacts to Indigenous rights. It also requires an expanded public interest assessment. Designated projects specific to the oil and gas industry include pipelines that require more than 45 miles of new rights of way and pipelines located in national parks, large scale in-situ oil sands projects not regulated by provincial GHG emissions caps and certain refining, processing and storage facilities.

The federal government has stated that an objective of the legislative changes was to improve decision certainty and turnaround times. Once a review or assessment is commenced under either the CERA or IAA, there are limits on the amount of time the relevant regulatory authority will have to issue its report and recommendation. Designated projects will go through a planning phase to determine the scope of the impact assessment, which the federal government has stated should provide more certainty as to the length of the full review process.

In May 2022, the Alberta Court of Appeal released its decision in response to the Government of Alberta’s submission of a reference question regarding the constitutionality of the IAA. The Court found the IAA to be unconstitutional in its entirety, stating that the legislation effectively granted the federal government a veto over projects that were wholly within provincial jurisdiction. The Government of Canada appealed the decision to the Supreme Court of Canada, which released its decision in October 2023, and held that the designated projects scheme created by the IAA was unconstitutional as ultra vires of federal jurisdiction. Specifically, the Supreme Court of Canada held that the assessment of projects under the IAA must be limited to the aspects of such projects that fall within federal jurisdiction (such as fisheries), and was overbroad as it attempted to regulate aspects of projects that otherwise fell within exclusive provincial jurisdiction. It remains to be seen how the Canadian federal government will respond to the Supreme Court’s decision, and the implications for the IAA.

Alberta

The AER is the principal regulator responsible for all energy resource development in Alberta. It derives its authority from the ResponsibleEnergy Development Act and a number of related statutes including the Oil and Gas Conservation Act (the “OGCA”), the Oil Sands Conservation Act, the Pipeline Act, and the Environmental Protection and Enhancement Act. The AER is responsible for ensuring the safe, efficient, orderly and environmentally responsible development of hydrocarbon resources, including allocating and conserving water resources, managing public lands, and protecting the environment. The AER’s responsibilities exclude the functions of the Alberta Utilities Commission and the Land and Property Rights Tribunal, as well as the Alberta Ministry of Energy’s responsibility for mineral tenure.

The Government of Alberta relies on regional planning to accomplish its resource development goals. Its approach to natural resource management provides for engagement and consultation with stakeholders and the public and examines the cumulative impacts of development on the environment and communities. While the AER is the primary regulator for energy development, several other governmental departments and agencies may be involved in land use issues, including the Alberta Ministry of Environment and Parks, the Alberta Ministry of Energy, the Aboriginal Consultation Office and the Land Use Secretariat.

The Government of Alberta’s land-use policy sets out an approach to manage public and private land use and natural resource development in a manner that is consistent with the long-term economic, environmental and social goals of the province. It calls for the development of seven region-specific land-use plans in order to manage the combined impacts of existing and future land use within a specific region and the incorporation of a cumulative effects management approach into such plans.

The AER monitors seismic activity across Alberta to assess the risks associated with, and instances of, earthquakes induced by hydraulic fracturing. Hydraulic fracturing involves the injection of water, sand or other proppants and additives under pressure into targeted subsurface formations to fracture the surrounding rock and stimulate oil and natural gas production. In recent years, hydraulic fracturing has been linked to increased seismicity in the areas in which hydraulic fracturing takes place, prompting regulatory authorities to investigate the practice further.

LiabilityManagement

Alberta

The AER administers the Liability Management Framework (the “AD LM Framework”) and the Liability Management Rating Program (the “AB LMR Program”) to manage liability for most conventional upstream oil and natural gas wells, facilities and pipelines in Alberta. The AER is in the process of replacing the AB LMR Program with the AB LM Framework. This change was effected under key new AER directives in 2021, and further updates released in 2022. Broadly, the AB LM Framework is intended to provide a more holistic approach to liability management in Alberta, as the AER found that the more formulaic approach under the AB LMR Program did not necessarily indicate whether a company could meet its liability obligations. New developments under the AB LM Framework include a new Licensee Capability Assessment System (the “AB LCA”), a new Inventory Reduction Program (the “AB IR Program”), and a new Licensee Management Program (“AB LM Program”). Meanwhile, some programs under the AB LMR Program remain in effect, including the Oilfield Waste Liability Program (the “AB OWL Program”), the Large Facility Liability Management Program (the “AB LF Program”) and elements of the Licensee Liability Rating Program (the “AB LLR Program”). The mix between active programs under the AB LM Framework and the AB LMR Program highlights the transitional and dynamic nature of liability management in Alberta. While the province is moving towards the AB LM Framework and a more holistic approach to liability management, the AER has noted that this will be a gradual process that will take time to complete. In the meantime, the AB LMR Program continues to play an important role in Alberta’s liability management scheme.

Complementing the AB LM Framework and the AB LMR Program, Alberta’s OGCA establishes an orphan fund (the “Orphan Fund”) to help pay the costs to suspend, abandon, remediate and reclaim a well, facility or pipeline included in the AB LLR Program and the AB OWL Program if a licensee or working interest participant becomes insolvent or is unable to meet its obligations. Licensees in the AB LLR Program and the AB OWL Program fund the Orphan Fund through a levy administered by the AER. However, given the increase in orphaned oil and natural gas assets, the Government of Alberta has loaned the Orphan Fund approximately $335 million to carry out abandonment and reclamation work. In response to the COVID-19 pandemic, the Government of Alberta also covered $113 million in levy payments that licensees would otherwise have owed to the Orphan Fund, corresponding to the levy payments due for the first six months of the AER’s fiscal year. A separate orphan levy applies to persons holding licenses subject to the AB LF Program. Collectively, these programs are designed to minimize the risk to the Orphan Fund posed by the unfunded liabilities of licensees and to prevent the Government of Alberta from incurring costs to suspend, abandon, remediate and reclaim wells, facilities or pipelines.

The Supreme Court of Canada’s decision in Orphan Well Association v. Grant Thornton (also known as the “Redwater decision”), provides the backdrop for Alberta’s approach to liability management. As a result of the Redwater decision, receivers and trustees can no longer avoid the AER’s legislated authority to impose abandonment orders against licensees or to require a licensee to pay a security deposit before approving a license transfer when any such licensee is subject to formal insolvency proceedings. This means that insolvent estates can no longer disclaim assets that have reached the end of their productive lives (and therefore represent a net liability) in order to deal primarily with the remaining productive and valuable assets without first satisfying any abandonment and reclamation obligations associated with the insolvent estate’s assets. In April 2020, the Government of Alberta passed the Liabilities Management Statutes Amendment Act, which places the burden of a defunct licensee’s abandonment and reclamation obligations first on the defunct licensee’s working interest partners, and second, the AER may order the Orphan Fund to assume care and custody and accelerate the clean-up of wells or sites which do not have a responsible owner. These changes came into force in June 2020.

One important step in the shift to the AB LM Framework has been amendments to Directive 067: Eligibility Requirements for Acquiring and Holding Energy Licences and Approvals (“Directive 067”), which deals with licensee eligibility to operate wells and facilities. All license transfers and the granting of new well, facility and pipeline licenses in Alberta are subject to AER approval. Previously under the AB LMR Program, as a condition of transferring existing AER licenses, approvals and permits, all transfers required transferees to demonstrate that they had a liability management rating of 2.0 or higher immediately following the transfer. If transferees did not have the required rating, they would have to otherwise prove to the satisfaction of the AER that they could meet their abandonment and reclamation obligations, through means such as posting security or reducing their existing obligations. However, amendments from April 2021 to Directive 067 expanded the criteria for assessing licensee eligibility. Notably, the recent amendments increase requirements for financial disclosure, detail new requirements for when a licensee poses an “unreasonable risk” of orphaning assets, and adds additional general requirements for maintaining eligibility.

Alongside changes to Directive 067, the AER introduced Directive 088: Licensee Life-Cycle Management (“Directive 088”) in December 2021 under the AB LM Framework. Directive 088 replaces, to an extent, the AB LLR Program with the AB LCA. Whereas the AB LLR Program previously assessed a licensee based on a liability rating determined by the ratio of a licensee’s deemed asset value relative to the deemed liability value of its oil and gas wells and facilities, the AB LCA now considers a wider variety of factors and is intended to be a more comprehensive assessment of corporate health. Such factors are wide reaching and include: (i) a licensee’s financial health; (ii) its established total magnitude of liabilities; (iii) the remaining lifespan of its mineral resources and infrastructure; (iv) the management of its operations; (v) the rate of closure activities and spending, and pace of inactive liability growth; and (vi) its compliance with administrative and regulatory requirements. These various factors feed into a broader holistic assessment of a licensee under the AB LM Framework. In turn, that holistic assessment provides the basis for assessing risk posed by license transfers, as well as any security deposit that the AER may require from a licensee in the event that the regulator deems a licensee at risk of not being able to meet its liability obligations. However, the liability management rating under the LLR Program is still in effect for other liability management programs such as the AB OWL Program and the AB LF Program, and will remain in effect until a broadened scope of Directive 088 is phased in over time.

In addition to the AB LCA, Directive 088 also implemented other new liability management programs under the AB LM Framework. These include the AB LM Program and the AB IR Program. Under the AB LM Program the AER will continuously monitor licensees over the life cycle of a project. If, under the AB LM Program, the AER identifies a licensee as high risk, the regulator may employ various tools to ensure that a licensee meets its regulatory and liability obligations. In addition, under the AB IR Program the AER sets industry wide spending targets for abandonment and reclamation activities. Licensees are then assigned a mandatory licensee specific target based on the licensee’s proportion of provincial inactive liabilities and the licensee’s level of financial distress. Certain licensees may also elect to provide the AER with a security deposit in place of their closure spend target.

The Government of Alberta followed the announcement of the AB LM Framework with amendments to the Oil and Gas Conservation Rules and the Pipeline Rules in late 2020. The changes to these rules fall into three principal categories: (i) they introduce “closure” as a defined term, which captures both abandonment and reclamation; (ii) they expand the AER’s authority to initiate and supervise closure; and (iii) they permit qualifying third parties on whose property wells or facilities are located to request that licensees prepare a closure plan.

To address abandonment and reclamation liabilities in Alberta, the AER also implements, from time to time, programs intended to encourage the decommissioning, remediation and reclamation of inactive or marginal oil and natural gas infrastructure. In 2018, for example, the AER announced a voluntary area-based closure (the “ABC”) program. The ABC program is designed to reduce the cost of abandonment and reclamation operations though industry collaboration and economies of scale. Parties seeking to participate in the program must commit to an inactive liability reduction target to be met through closure work of inactive assets. To date, the Company has not had abandonment or reclamation activity that has been a part of the ABC program. The Company reviews planned closure activities on a regular basis and continually assesses whether any such activities would include participation in the ABC program in the future.

ClimateChange Regulation

Climate change regulation at each of the international, federal and provincial levels has the potential to significantly affect the future of the oil and gas industry in Canada. These impacts are uncertain and it is not possible to predict what future policies, laws and regulations will entail. Any new laws and regulations (or additional requirements to existing laws and regulations) could have a material impact on the Company’s operations and cash flow.

Federal

Canada has been a signatory to the United Nations Framework Convention on Climate Change (the “UNFCCC”) since 1992. Since its inception, the UNFCCC has instigated numerous policy changes with respect to climate governance. On April 22, 2016, 197 countries, including Canada, signed the Paris Agreement, committing to prevent global temperatures from rising more than 2° Celsius above pre-industrial levels and to pursue efforts to limit this rise to no more than 1.5° Celsius. To date, 189 of the 197 parties to the UNFCCC have ratified the Paris Agreement, including Canada. In 2016, Canada committed to reducing its emissions by 30% below 2005 levels by 2030. In 2021, Canada updated its original commitment by pledging to reduce emissions by 40 – 45% below 2005 levels by 2030, and to net-zero by 2050.

During the course of the 2021 United Nations Climate Change Conference in Glasgow, Scotland, Canada’s Prime Minister Justin Trudeau made several pledges aimed at reducing Canada’s GHG emissions and environmental impact, including: (i) reducing methane emissions in the oil and gas sector to 75% of 2012 levels by 2030; (ii) ceasing export of thermal coal by 2030; (iii) imposing a cap on emissions from the oil and gas sector; (iv) halting direct public funding to the global fossil fuel sector by the end of 2022; and (v) committing that all new vehicles sold in the country will be zero-emission on or before 2040.

The Government of Canada released the Pan-Canadian Framework on Clean Growth and Climate Change in 2016, setting out a plan to meet the federal government’s 2030 emissions reduction targets. On June 21, 2018, the federal government enacted the Greenhouse Gas PollutionPricing Act (the “GGPPA”), which came into force on January 1, 2019. This regime has two parts: an output-based pricing system (“OBPS”) for large industry (enabled by the Output-Based Pricing System Regulations) and a fuel charge (enabled by the Fuel Charge Regulations), both of which impose a price on CO2e emissions. This system applies in provinces and territories that request it and in those that do not have their own equivalent emissions pricing systems in place that meet the federal standards and ensure that there is a uniform price on emissions across the country. Originally under the federal plans, the price was set to escalate by CAD$10 per year until it reached a maximum price of CAD$50/tonne of CO2e in 2022. However, on December 11, 2020, the federal government announced its intention to continue the annual price increases beyond 2022. Commencing in 2023, the benchmark price per tonne of CO2e will increase by $15 per year until it reaches CAD$170/tonne of CO2e in 2030. Effective January 1, 2023, the minimum price permissible under the GGPPA rose to CAD$65/tonne of CO2e.

While several provinces challenged the constitutionality of the GGPPA following its enactment, the Supreme Court of Canada confirmed its constitutional validity in a judgment released on March 25, 2021.

On April 26, 2018, the federal government passed the Regulations Respecting Reduction in the Release of Methane and Certain VolatileOrganic Compounds (Upstream Oil and Gas Sector) (the “Federal Methane Regulations”). The Federal Methane Regulations seek to reduce emissions of methane from the oil and natural gas sector, and came into force on January 1, 2020. By introducing a number of new control measures, the Federal Methane Regulations aim to reduce unintentional leaks and the intentional venting of methane and ensure that oil and natural gas operations use low-emission equipment and processes. Among other things, the Federal Methane Regulations limit how much methane upstream oil and natural gas facilities are permitted to vent. The federal government anticipates that these actions will reduce annual GHG emissions by about 20 megatonnes by 2030.

The federal government has enacted the Multi-Sector Air Pollutants Regulation under the authority of the Canadian EnvironmentalProtection Act, 1999, which regulates certain industrial facilities and equipment types, including boilers and heaters used in the upstream oil and gas industry, to limit the emission of air pollutants such as nitrogen oxides and sulphur dioxide.

In the November 23, 2021 Speech from the Throne, the federal government restated its commitment to achieve net-zero emission by 2050. In pursuit of this objective, the government’s proposed actions include: (i) moving to cap and cut oil and gas sector emissions; (ii) investing in public transit and mandating the sale of zero-emission vehicles; (iii) increasing the federally imposed price on pollution; (iv) investing in the production of cleaner steel, aluminum, building products, cars, and planes; (v) addressing the loss of biodiversity by continuing to strengthen partnerships with First Nations, Inuit, and Métis, to protect nature and the traditional knowledge of those groups; (vi) creating a Canada Water Agency to safeguard water as a natural resource and support Canadian farmers; (vii) strengthening action to prevent and prepare for floods, wildfires, droughts, coastline erosion, and other extreme weather worsened by climate change; and (viii) helping build back communities impacted by extreme weather events through the development of Canada’s first-ever National Adaptation Strategy.

The Canadian Net-Zero Emissions Accountability Act (the “CNEAA”) received royal assent on June 29, 2021, and came into force on the same day. The CNEAA binds the Government of Canada to a process intended to help Canada achieve net-zero emissions by 2050. It establishes rolling five-year emissions-reduction targets and requires the government to develop plans to reach each target and support these efforts by creating a Net-Zero Advisory Body. The CNEAA also requires the federal government to publish annual reports that describe how departments and crown corporations are considering the financial risks and opportunities of climate change in their decision-making. A comprehensive review of the CNEAA is required every five years from the date the CNEAA came into force.

The Government of Canada introduced its 2030 Emissions Reduction Plan (the “2030 ERP”) on March 29, 2022. In the 2030 ERP, the Government of Canada proposes a roadmap for Canada’s reduction of GHG emissions to 40-45% below 2005 levels by 2030. As the first emissions reduction plan issued under the CNEAA, the 2030 ERP aims to reduce emissions by incentivizing electric vehicles and renewable electricity, and capping emissions from the oil and gas sector, among other measures.

On June 8, 2022 the Canadian Greenhouse Gas Offset Credit System Regulations were published in the Canada Gazette. The regulations establish a regulatory framework to allow certain kinds of projects to generate and sell offset credits for use in the federal OBPS through Canada’s Greenhouse Gas Offset Credit System. The system enables project proponents to generate federal offset credits through projects that reduce GHG emissions under a published federal GHG offset protocol. Offset credits can then be sold to those seeking to meet limits imposed under the OBPS or those seeking to meet voluntary targets.

Additionally, on December 7, 2023, the Minister of Environment and Climate Change and the Minister of Energy and Natural Resources, introduced Canada’s draft cap-and-trade framework to limit emissions from the oil and gas sector. The proposed Regulatory Framework for an Oil and Gas Sector Greenhouse Gas Emissions Cap proposes capping 2030 emissions at 35 to 38 percent below 2019 levels, while providing certain flexibilities to emit up to a level around 20 to 23 percent below 2019 levels. The purpose of the proposed cap is to ensure that Canada is on track to meet its target of achieving net-zero by 2050. The federal government collected feedback from the public on the proposed framework until February 5, 2024. It is expected that the regulations will be finalized and released sometime in 2025 with annual reporting required as early as 2026 and a phasing in period taking place between 2026 and 2030. The form of emissions cap on the oil and gas sector and the overall effect of such a cap remain uncertain.

The Government of Canada is also in the midst of developing a carbon capture utilization and storage (“CCUS”) strategy. CCUS is a technology that captures carbon dioxide from facilities, including industrial or power applications, or directly from the atmosphere. The captured carbon dioxide is then compressed and transported for permanent storage in underground geological formations or used to make new products such as concrete. Beginning in 2022, the federal government plans to spend $319 million over seven years to ramp up CCUS in Canada, as this will be a critical element of the plan to reach net-zero by 2050.

Alberta

In December 2016, the Oil Sands Emissions Limit Act came into force, establishing an annual 100 megatonne limit for GHG emissions from all oil sands sites, but the regulations necessary to enforce the limit have not yet been developed. The delay in drafting these regulations has been inconsequential thus far, as Alberta’s oil sands emit roughly 70 megatonnes of GHG emissions per year, well below the 100 megatonne limit.

In June 2019, the fuel charge element of the federal backstop program took effect in Alberta. On January 1, 2023, the carbon tax payable in Alberta increased from $65 to $80 per tonne of CO2e and will continue to increase at a rate of $15 per year until it reaches $170 per tonne in 2030. In December 2019, the federal government approved Alberta’s Technology Innovation and EmissionsReduction (“TIER”) regulation, which applies to large emitters. The TIER regulation came into effect on January 1, 2020 (as amended January 1, 2023) and replaced the previous Carbon Competitiveness Incentives Regulation. The TIER regulation meets the federal benchmark stringency requirements for emissions sources covered in the regulation, but the federal backstop continues to apply to emissions sources not covered by the regulation.

The TIER regulation applies to emitters that emit more than 100,000 tonnes of CO2e per year in 2016 or any subsequent year. The initial target for most TIER-regulated facilities is to reduce emissions intensity by 10% as measured against that facility’s individual benchmark, with a further 2% reduction in each subsequent year. The annual reduction rate applied to oil sands mining, in-situ and upgrading is 4% in 2029 and 2030. The facility-specific benchmark does not apply to all facilities, such as those in the electricity sector, which are compared against the good-as-best-gas standard. Similarly, for facilities that have already made substantial headway in reducing their emissions, a different “high-performance” benchmark is available. Under the TIER regulation, certain facilities in high-emitting or trade exposed sectors can opt-in to the program in specified circumstances if they do not meet the 100,000 tonne threshold. To encourage compliance with the emissions intensity reduction targets, TIER-regulated facilities must provide annual compliance reports. Facilities that are unable to achieve their targets may either purchase credits from other facilities, purchase carbon offsets, or pay a levy to the Government of Alberta.

The Government of Alberta aims to lower annual methane emissions by 45% by 2025. The Government of Alberta enacted the Methane EmissionReduction Regulation on January 1, 2020, and in November 2020, the Government of Canada and the Government of Alberta announced an equivalency agreement regarding the reduction of methane emissions such that the Federal Methane Regulations will not apply in Alberta.

IndigenousRights

Constitutionally mandated government-led consultation with and, if applicable, accommodation of, the rights of Indigenous groups impacted by regulated industrial activity, as well as proponent-led consultation and accommodation or benefit sharing initiatives, play an increasingly important role in the Western Canadian oil and gas industry. In addition, Canada is a signatory to the UNDRIP and the principles set forth therein may continue to influence the role of Indigenous engagement in the development of the oil and gas industry in Western Canada. For example, in November 2019, the Declaration on the Rights of Indigenous Peoples Act (“DRIPA”) became law in British Columbia. The DRIPA aims to align British Columbia’s laws with UNDRIP. In June 2021, the United Nations Declaration on the Rights of Indigenous Peoples Act (“UNDRIP Act”) came into force in Canada. Similar to British Columbia’s DRIPA, the UNDRIP Act requires the Government of Canada to take all measures necessary to ensure the laws of Canada are consistent with the principles of UNDRIP and to implement an action plan to address UNDRIP’s objectives. On June 21, 2022, the Minister of Justice and Attorney General issued the First Annual Progress Report on the implementation of the UNDRIP Act (the “Progress Report”). The Progress Report provides that, as of June 2022, the federal government has sought to implement the UNDRIP Act by, among other things, creating a Secretariat within the Department of Justice to support Indigenous participation in the implementation of UNDRIP (the “Implementation Secretariat”), consulting with Indigenous peoples to identify their priorities, drafting an action plan to align federal laws with UNDRIP’s, and implementing efforts to educate federal departments on UNDRIP principles. On June 21, 2023, the Implementation Secretariat released The United Nations Declaration on the Rights of Indigenous Peoples Act Action Plan with respect to aligning federal laws with UNDRIP.

Continued development of common law precedent regarding existing laws relating to Indigenous consultation and accommodation as well as the adoption of new laws such as DRIPA and UNDRIP Act are expected to continue to add uncertainty to the ability of entities operating in the Canadian oil and gas industry to execute on major resource development and infrastructure projects, including, among other projects, pipelines. The Government of Canada has expressed that implementation of the UNDRIP Act has the potential to make meaningful change in how Indigenous peoples collaborate in impact assessment moving forward, but has confirmed that the current IAA already establishes a framework that aligns with UNDRIP and does not need to be changed in light of the UNDRIP Act.

On June 29, 2021, the British Columbia Supreme Court issued a judgement in Yahey v British Columbia (the “Blueberry Decision”), in which it determined that the cumulative impacts of industrial development on the traditional territory of the Blueberry River First Nation (“BRFN”) in northeast British Columbia had breached the BRFN’s rights guaranteed under Treaty 8. The Blueberry Decision may have significant impacts on the regulation of industrial activities in northeast British Columbia and may lead to similar claims of cumulative effects across Canada in other areas covered by numbered treaties, as has been seen in Alberta.

On January 18, 2023, the Government of British Columbia and the BRFN signed the Blueberry River First Nations Implementation Agreement (the “BRFN Agreement”). The BRFN Agreement aims to address cumulative effects of development on BRFN’s claim area through restoration work, establishment of areas protected from industrial development, and a constraint on development activities. Such measures will remain in place while a long-term cumulative effects management regime is implemented. Specifically, the BRFN Agreement includes, among other measures, the establishment of a $200-million restoration fund by June 2025, an ecosystem-based management approach for future land-use planning in culturally important areas, limits on new petroleum and natural gas development, and a new planning regime for future oil and gas activities. The BRFN will receive $87.5 million over three years, with an opportunity for increased benefits based on petroleum and natural gas revenue sharing and provincial royalty revenue sharing in the next two fiscal years.

The BRFN Agreement has acted as a blueprint for other agreements between the Government of British Columbia and Indigenous groups in Treaty 8 territory. In late January 2023, the Government of British Columbia and four Treaty 8 First Nations — Fort Nelson, Salteau, Halfway River and Doig River First Nations — reached consensus on a collaborative approach to land and resource planning (the “Consensus Agreement”). The Consensus Agreement implements various initiatives including a “cumulative effects” management system linked to natural resource landscape planning and restoration initiatives, new land-use plans and protection measures, and a new revenue-sharing approach to support the priorities of Treaty 8 First Nations communities.

In July 2022, Duncan’s First Nation filed a lawsuit against the Government of Alberta relying on similar arguments to those advanced successfully by the BRFN. Duncan’s First Nation claims in its lawsuit that Alberta has failed to uphold its treaty obligations by authorizing development without considering the cumulative impacts on the First Nation’s treaty rights. The long-term impacts of the Blueberry Decision and the Duncan’s First Nation lawsuit on the Canadian oil and gas industry remain uncertain.

C.Organizational Structure

The Company was formed on December 9, 2022 under the laws of the Province of Alberta for the purpose of effectuating the Business Combination. The Company owns no material assets other than its interests in its wholly-owned subsidiaries.

The following is a chart of our current corporate structure as of the date of this Annual Report:

D.Property, Plants and Equipment

The Company’s headquarters are located in Calgary, Alberta, Canada. The Company’s operating assets are located in the Athabasca region of Alberta, Canada, approximately 30 miles southwest of Fort McMurray, Alberta, Canada. The Company’s principal properties are the Demo Asset and Expansion Asset. In addition, the Company holds approximately 63,766 gross hectares (25,524 net hectares) of undeveloped lands which are also in the Athabasca region.

The Company’s property, plant and equipment (the “PP&E”) primarily relates to its development and production assets, which primarily consist of the Hangingstone Facilities (which are SAGD production facilities) ultimately used to generate bitumen production.

The land included in the PP&E is not owned by the Company. The surface and mineral rights attached to the land are primarily leased from the Government of Alberta pursuant to standard Alberta government lease agreements as described in more detail under the heading “—LandTenure — Mineral rights” in Item 4.B.

Alberta has surface rights owners and mineral rights owners, and some individuals or organizations may own rights to both. Surface rights owners own the surface and substances such as sand and gravel, but not the minerals. The Company or individual who owns the mineral rights owns all mineral substances found on and under the property. There are often different surface and mineral owners on the same land. The mineral owner has the right to explore for and recover the minerals but at the same time must do this in a reasonable manner so as to not significantly affect use of the surface. The Crown owns 81% of mineral rights in Alberta, with the remaining mineral rights largely owned by federal groups (National parks, Indigenous rights, etc.), and legacy companies (Canadian Pacific Railway Limited, Canadian National Railway Company, etc.).

Prior to beginning any development activity, the Company is required to undergo multiple consultations, including environmental and First Nations assessments. These assessments can impact how, and when, the Company proceeds with development activity.

Well and facility assets (including the Hangingstone Facilities) included in the PP&E are owned by the Company in proportion to its working interest in each respective asset. These assets are used to extract and process bitumen produced from the Company’s leased properties.

In association with each of these assets, the Company has a responsibility to safely manage each well it leases and operates, as well as the associated pipelines and facilities. This includes all stages of a well’s life cycle: exploration, development and operation, and end-of-life activities including abandonment, and reclamation. When energy infrastructure has been suspended and is no longer needed, the company that owns it must permanently dismantle it. The provincial requirements for how this is done vary by the type of infrastructure. For example, when a company no longer needs a well to support its oil and gas development, the well must be permanently sealed and taken out of service. This part of the closure process is known as abandonment, and includes both subsurface and surface abandonment activities. After the well is abandoned, the land around it must be returned to its original state, in a process known as reclamation. As part of required reclamation activities, companies have a duty to reduce land disturbance, clean up contamination, salvage, store and replace soil, and revegetate the area to equivalent land capacity.

The Company’s corporate assets include furniture and fixtures, computer hardware and software, and leasehold improvements. Right-of-use assets consist of the Company’s office leases in Calgary.

(CAD$ in thousands)	Development<br> and<br> Production<br> Assets
PP&E, at cost:
Balance – December 31, 2022		1,057,316	629		969	1,058,914
Expenditures on PP&E^(1)^		32,909	(11	)	-	32,898
Right-of-use asset additions		-	-		12,798	12,789
Balance – December 31, 2023		1,090,225	618		13,758	1,104,601
Accumulated depletion, depreciation and impairment
Balance – December 31, 2022		95,572	232		60	95,864
Depletion and depreciation^(2)^		67,580	130		183	67,893
Balance – December 31, 2023		163,152	362		243	163,757
Net book value – December 31, 2022		961,744	397		909	963,050
Net book value – December 31, 2023		927,073	256		13,515	940,844
(1)	Additions for the year<br> ended December 31, 2023, include capital expenditures on the Refill Wells drilling program and facilities improvements at both the<br> Expansion Asset and Demo Asset.
---	---
(2)	No indicators of impairment<br> were identified at December 31, 2023 as such no impairment test was performed.
---	---

Facilityand Infrastructure Planning

The Company estimates that it has debottlenecked facility capacity of approximately 35,000 bbls/d at the Demo Asset and 7,500 bbls/d at the Expansion Asset. The Company is currently planning an approximate CAD$85.2 million net capital expenditure program in 2024, in order to further optimize and grow production, which is expected to be funded with the Company’s cash flow.

Capital Expenditures	2024<br> Expected<br> Net Spend<br> (CADMM)
Demo Asset
Expansion Asset
Total

All values are in US Dollars.

Item4A. Unresolved Staff Comments

None.

Item5. Operating and Financial Review and Prospects

Thefollowing management’s discussion and analysis (“MD&A”) provides information which management believes is relevantto an assessment and understanding of the Company’s consolidated results of operations for the periods described herein, and shouldbe read in conjunction with the Company’s audited annual consolidated financial statements and notes as of and for the years endedDecember 31, 2023, 2022 and 2021. All financial information has been prepared in accordance with IFRS. This MD&A contains forwardlooking information based on management’s current expectations and projections. For information on the material factors and assumptionsunderlying such forward-looking information, refer to Cautionary Note Regarding Forward-Looking Statements and Risk Factors. Certain dollaramounts have been rounded to the nearest million dollars or thousand dollars, as noted, and tables may not add due to rounding. Productionvolumes and per unit statistics are presented throughout this MD&A on a net of the Company’s working interest and before royaltyor “gross” basis. Dollar per barrel ($/bbl) costs are based upon sold bitumen barrels unless otherwise noted. In this section,the “Company,” “we,” or “us” refers to Greenfire Resources Ltd. and its subsidiaries (including Greenfire).“Greenfire,” refers to Greenfire Resources Inc. Certain information called for by this Item 5 with respect to Greenfire andJACOS, including a discussion of the results of operations of Greenfire for the year ended December 31, 2022 compared to the year endedDecember 31, 2021, and a discussion of results of operations of JACOS for the period from January 1, 2021 to September 17, 2021 to theyear ended December 31, 2020, has been reported previously in the Company’s final prospectus filed with the SEC pursuant to Rule424(b)(3) on February 6, 2024 under the section entitled “Management’s Discussion and Analysis of Financial Condition andResults of Operations” and is not repeated herein. Such information can be found on EDGAR at https://www.sec.gov/Archives/edgar/data/1966287/000121390024010570/ea192929-424b3_greenfire.htm#b_016.

Overview

Greenfire was incorporated on June 18, 2021 under the ABCA as a Calgary-based energy company focused on the sustainable production and development of upstream energy resources from the oil sands in the Athabasca region of Alberta, Canada, using in-situ thermal oil production extraction techniques such as steam-assisted gravity drainage at: (i) the Demo Asset; and (ii) the Expansion Asset. Following the Business Combination (described below), the Company has continued the business of Greenfire. The Company has a 100% working interest in the Demo Asset and a 75% working interest in the Expansion Asset.

GAC, the predecessor entity of Greenfire, was incorporated on November 2, 2020 and acquired the Demo Asset on April 5, 2021. HEAC was incorporated on July 12, 2021 and acquired JACOS, including its primary asset, the Expansion Asset, on September 17, 2021. Greenfire, became the ultimate holding company of the Demo Asset and the Expansion Asset through a series of Reorganization Transactions described in Section 4.A. of this Annual Report. Prior to the acquisition of the Demo Asset in April of 2021, neither Greenfire nor any of its subsidiaries had any material operations.

On September 20, 2023, Greenfire, the Company, MBSC and the other parties thereto closed the Business Combination as a result of which, among other things, Greenfire became a wholly-owned subsidiary of the Company. For additional information regarding the Business Combination, please see the section entitled “Explanatory Note” of this Annual Report. The Company had no material operations prior to the Business Combination and following the Business Combination continued the business of Greenfire and its subsidiaries. On January 1, 2024, Greenfire amalgamated with GROC, with the surviving entity continuing as “Greenfire Resources Operating Corporation” and as a wholly-owned subsidiary of the Company.

KeyFactors Affecting Operating Results

The Company believes its performance depends on several factors that present significant opportunities for it but also pose risks and challenges.

CommodityPrices

Prices for crude oil, condensate and natural gas have historically been volatile. This volatility is expected to continue due to the many uncertainties associated with the global political and economic environment, including the supply of, and demand for, crude oil and natural gas and the availability of other energy supplies, both regionally and internationally, as well as the relative competitive relationships of the various energy sources in the view of consumers and other factors.

The market prices of crude oil, condensate and natural gas impact the amount of cash generated from the Company’s operating activities, which, in turn, impact the Company’s financial position and results of operations.

Competition

The petroleum industry is competitive in all of its phases. The Company competes with numerous other entities in the exploration, development, production and marketing of oil. The Company’s competitors include oil and natural gas companies that have substantially greater financial resources, workforce and facilities than those of the Company. Some of these companies not only explore for, develop and produce oil, but also carry on refining operations and market oil and natural gas on an international basis. As a result of these complementary activities, some of these competitors may have greater and more diverse competitive resources to draw on than the Company. The Company’s ability to increase its reserves in the future will depend not only on its ability to explore and develop its present properties, but also on its ability to select and acquire other suitable producing properties or prospects for exploratory drilling. Competitive factors in the distribution and marketing of oil include price, process, and reliability of delivery and storage.

The Company also faces competition from companies that supply alternative resources of energy, such as wind or solar power. Other factors that could affect competition in the marketplace include additional discoveries of hydrocarbon reserves by the Company’s competitors, changes in the cost of production, and political and economic factors and other factors outside of the Company’s control.

The petroleum industry is characterized by rapid and significant technological advancements and introductions of new products and services utilizing new technologies that may increase the viability of reserves or reduce production costs. Other companies may have greater financial, technical and personnel resources that allow them to implement and benefit from such technological advantages. The Company may not be able to respond to such competitive pressures and implement such technologies on a timely basis, or at an acceptable cost. If the Company does implement such technologies, the Company may not do so successfully. One or more of the technologies currently used or implemented in the future by the Company may become obsolete or uneconomic. If the Company is unable to employ the most advanced commercially available technology, or is unsuccessful in implementing certain technologies, its business, financial condition and results of operations could also be adversely affected in a material way.

RoyaltyRegimes

The Company pays royalties in accordance with the established royalty regime in the Province of Alberta. the Company’s royalties are paid to the Crown, which are based on government prescribed pre- and post- payout royalty rates determined on sliding scales and dependent on commodity prices. The Government of Alberta may adopt new royalty regimes, or modify the existing royalty regime, which may have an impact on the economics of the Company’s projects. An increase in royalties would reduce the Company’s earnings and could make future capital investments, or the Company’s operations, less economic.

Impactof COVID-19

The COVID-19 pandemic, which began in early 2020, continues to create uncertainty and negatively impact the commodity price environment by suppressing the continued recovery in global economic activity and demand for hydrocarbon product. It continues to be difficult to forecast and account for the risk posed by the COVID-19 pandemic.

Non-GAAPMeasures

Refer to “—Non-GAAP Measures” for reconciliations and information regarding the following measures and ratios used in this Annual Report: “adjusted EBITDA,” “operating netback,” “adjusted funds flow,” “adjusted free cash flow”,“adjusted working capital,” “net debt,”. “adjusted EBITDA ($/bbl),” “operating netback ($/bbl).”

SelectedFinancial and Operational Highlights

						Year ended <br> December 31,
(CAD thousands, unless otherwise noted)			2022			2023			2022
Bitumen production – Expansion Asset (bbls/d)	14,079			15,710			13,829			16,802
Bitumen production – Demo Asset (bbls/d)	3,256			3,869			3,810			3,701
Bitumen production – Consolidated (bbls/d)	17,335			19,579			17,639			20,503
Oil sales	161,730			180,741			675,970			998,849
Oil sales (CAD/bbl)	71.04			72.18			73.91			96.82
Operating netback(1)	27,353			34,567			132,704			229,694
Operating netback (CAD/bbl)(1)	17.19			19.27			20.56			30.58
Operating expenses	35,084			42,429			148,965			160,826
Operating expenses (CAD/bbl)	22.05			23.65			23.08			21.41
Cash provided (used) by operating activities	25,530			17,322			86,548			164,727
Adjusted funds flow(1) (2)	10,517			16,902			73,206			163,926
Cash provided (used) by investing activities	18,732			(17,316	)		(12,103	)		(63,746	)
Capital expenditures	19,413			12,361			33,428			39,592
Adjusted free cash flow(1)	(8,896	)		4,541			39,778			124,334
Net income (loss) and comprehensive income (loss)	(4,659	)		87,995			(135,671	)		131,698
Per share – basic(2)	(0.07	)		1.80			(2.49	)		2.69
Per share – diluted(2)	(0.07	)		1.25			(2.49	)		1.88
Adjusted EBITDA(1)	23,434			32,528			117,316			218,033

All values are in US Dollars.

(1)	Non-GAAP measures do not have any standardized meaning prescribed by<br>IFRS and may not be comparable with the calculation of similar measures presented by other entities. Refer to the “Non-GAAP Measures”<br>section in this MD&A for further information.
(2)	For the year ended December 31, 2022, the Company’s basic and diluted earnings per share is the net income per common share of Greenfire and the weighted average common shares outstanding has been scaled by the applicable exchange ratio following the completion of the Business Combination.
---	---
(3)	As<br>at December 31, 2023.
---	---

SelectedLiquidity and Balance Sheet Highlights

	December 31,		December 31,
(CAD$ thousands)	2023		2022
Cash and cash equivalents		109,525		35,363
Restricted cash		-		35,313
Available credit facilities^(1)^		50,000		7,000
Face value of Long-term debt^(2)^		396,780		295,173
(1)	As<br>at December 31, 2023, the Company had $50.0 million of available credit under the Senior Credit Facility, which was undrawn as of December<br>31, 2023. As at December 31, 2022 the Company had $15.0 million of available credit under available credit facilities, of which $8.0<br>million was drawn.
---	---
(2)	As<br>at December 31, 2023, the 2028 Notes had a face value of US$300.0 million and have been converted into Canadian dollars as at period<br>end exchange rates. As at December 31, 2022, the 2025 Notes had a face value of US$217.9 million and have been converted into Canadian<br>dollars as at period end exchange rates.
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Resultsof Operations

Comparisonof certain production, financial and operating results for the year ended December 31, 2023 to the year ended December 31, 2022:

Production

The Company’s net average bitumen production was 17,335 bbls/d and 17,639 bbls/d for the three and twelve months ended December 31, 2023, respectively, both lower than 19,579 bbls/d and 20,503 bbls/d from the same respective periods in 2022.

At the Expansion Asset, net average bitumen production was 14,079 bbls/d during the fourth quarter of 2023, lower than the 15,710 bbls/d during the fourth quarter of 2022, mainly due to a combination of lower reservoir pressure resulting from short-term limitations of NCG availability for co-injection from the Company’s natural gas provider during 2023, as well as planned well reductions and well shut-ins to facilitate the Refill wells drilling program. Full year 2023 net average bitumen production was 13,829 bbls/d, lower than the 16,802 bbls/d in the same period in 2022, reflecting a combination of lower reservoir pressure resulting from short-term limitations of NCG availability for co-injection from the Company’s natural gas provider during 2023, unplanned field downtime due to consecutive external power grid outage, and the unplanned well shut-ins noted in the fourth quarter of 2023.

At the Demo Asset, net average bitumen production of 3,256 bbls/d for the fourth quarter of 2023 was lower than 3,869 bbls/d from the same period in 2022 due to the temporary shut-in of the disposal well, while full year net average bitumen production was 3,810 bbls/d and was slightly higher than 3,701 bbls/d from the full year in 2022, mainly due to the continued optimization of water disposal wells that debottlenecked water handling capabilities for the first three quarters of 2023, partially offset by the temporary shut-in of the disposal well in the fourth quarter of 2023. Subject to regulatory approval to recommence disposal operations, management anticipates net average bitumen production at the Demo Asset will increase by approximately 1,000 bbls/d.

	Three months ended<br> December 31,				Year ended<br> December 31,
(Average barrels per day, unless otherwise noted)	2023		2022		2023		2022
Bitumen Production - Expansion Asset		14,079		15,710		13,829		16,802
Bitumen Production - Demo Asset		3,256		3,869		3,810		3,701
Total Bitumen Production		17,335		19,579		17,639		20,503
Total Diluted Bitumen Sales		23,736		25,026		24,052		24,985
Total Non-diluted Bitumen Sales		1,010		2,193		1,006		3,277
Total Sales Volumes		24,746		27,219		25,058		28,264

CommodityPrices

The prices received for the Company’s crude oil production directly impact earnings, cash flow and financial position. The following table shows benchmark pricing of crude oil, natural gas and electricity for the periods indicated:

						Year ended<br> December 31,
Benchmark Pricing			2022			2023			2022
Crude oil (US/bbl)
WTI(1)	78.32			82.65			77.62			94.23
WCS differential to WTI	(21.89	)		(25.89	)		(18.71	)		(18.27	)
WCS(2)	56.43			56.76			58.91			75.96
Edmonton Condensate (C5+)	76.78			83.46			76.79			93.86
Natural gas (CAD/GJ)
AECO 5A	2.18			4.85			2.50			5.04
Electricity (CAD/MWh)
Alberta power pool	81.73			213.64			133.55			161.88
Foreign exchange rate(3)
US:CAD	1.3618			1.3577			1.3495			1.3016

All values are in US Dollars.

(1)	As<br>per NYMEX oil futures contract
(2)	Reflects<br>heavy oil prices at Hardisty, Alberta
---	---
(3)	Annual<br>or quarterly average exchange rates as per the Bank of Canada.
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WCS

Revenue from the Company’s bitumen production is closely linked to WCS, the pricing benchmark for Canadian heavy oil at Hardisty, Alberta. WCS trades at a discount to WTI, which is known as the WCS differential, and fluctuates based on heavy oil production, inventory levels, infrastructure egress capacity and refinery demand in Canada and the United States, among other factors.

Condensate

In order to facilitate pipeline transportation of the Company’s produced bitumen, the Company uses condensate as diluent for blending at the Expansion Asset, which is from Edmonton and delivered via the Inter Pipeline Polaris Pipeline. The price of condensate is historically within approximately 5% of the price of WTI and is typically higher in winter months due to increased diluent requirements in colder temperatures relative to warmer summer months.

Oil Sales

The Company’s oil sales include blended bitumen sales from the Expansion Asset and non-diluted bitumen sales from the Demo Asset. At the Demo Asset each barrel can be transported to multiple potential sales locations, including both pipeline and rail sales points, depending on the economics of each option at the time of sale. During mid-October 2022, the Company commissioned a bitumen truck off-loading facility (“Truck Rack”) at the Expansion Asset that can receive up to approximately 5,000 bbls/d of bitumen production (non-diluted bitumen) from the Demo Asset that is blended with the Expansion Asset production and sold via pipeline.

The Company recorded oil sales of CAD$161.7 million in the fourth quarter of 2023, compared to CAD$180.7 million during the same period in 2022 reflecting lower production volumes in 2023. Full year 2023 oil sales totaled CAD$676.0 million, lower than CAD$998.8 million in 2022 as a result of lower realized WCS benchmark oil prices and lower production volumes.

				Year ended<br> December 31,
(CAD thousands, unless otherwise noted)		2022		2023		2022
Oil Sales	161,730		180,741		675,970		998,849
- (CAD/bbl)	71.04		72.18		73.91		96.82

All values are in US Dollars.

Royalties

Royalties paid by the Company are crown royalties to the Province of Alberta. Alberta oil sands royalty projects are based on government prescribed pre and post payout royalty rates, which are determined on a sliding scale using the Canadian dollar equivalent WTI benchmark price.

Royalties for a pre-payout project are based on a monthly calculation that applies a royalty rate (ranging from one percent to nine percent, based on the Canadian dollar equivalent WTI benchmark price) to the gross revenues from the project. Gross revenues are a function of sales revenues less diluent costs and transportation costs. The Expansion Asset is a pre-payout project.

Royalties for a post-payout project are based on an annualized calculation that uses the greater of: (1) the gross revenues multiplied by the applicable royalty rate (one percent to nine percent, based on the Canadian dollar equivalent WTI benchmark price); or (2) the net revenues of the project multiplied by the applicable royalty rate (25 percent to 40 percent, based on the Canadian dollar equivalent WTI benchmark price). Net revenues are a function of sales revenues less diluent costs, transportation costs, and allowable operating and capital costs. While the Demo Asset is a post-payout project, due to the carry forward of previous years costs, it is currently assessed under scenario (1) discussed above. The Demo Asset may become assessable under scenario (2) in 2024, depending on actual production performance, oil prices and costs.

Fourth quarter 2023 royalties of CAD$3.79/bbl were lower than CAD $4.17/bbl for the same period in 2022, while full year 2023 royalties were CAD$3.67/bbl compared to CAD$6.67/bbl in 2022, all attributable to lower WTI benchmark oil prices.

				Year ended<br> December 31,
(CAD thousands, unless otherwise noted)		2022		2023		2022
Royalties	6,024		7,477		23,706		50,064
- (CAD /bbl)	3.79		4.17		3.67		6.67

All values are in US Dollars.

RiskManagement Contracts

The Company is exposed to commodity price risk on its oil sales and energy operating costs due to fluctuations in market prices. The Company executes a risk management program that is primarily designed to reduce the volatility of revenue and cash flow and ensure sufficient cash flows to service debt obligations and fund the Company’s operations. The Company’s risk management liabilities may consist of hedging instruments such as fixed price swaps and option structures, including costless collars on WTI, WCS differentials, condensate differential, natural gas and electricity swaps. The Company does not use financial derivatives for speculative purposes.

As at December 31, 2023, the Company’s obligations under the indenture governing the 2028 Notes (as outlined under the heading — CapitalResources and Liquidity — Long Term Debt”), include a requirement to maintain 12 consecutive months of commodity hedges on WTI for not less than 50% of the hydrocarbon output under the proved developed producing reserves forecast in the most recent reserves report, as determined by a qualified and independent reserves evaluator. The hedging obligation is in place until the aggregate principal amount of the 2028 Notes outstanding is at or below US$100.0 million, at which point, the Company will no longer be required to enter into subsequent commodity hedges. In the event that WTI is equal or less than US$55/bbl for such month being hedged, the Company is not required to hedge for that month.

The Company’s commodity price risk management program does not involve margin accounts that require posting of margin, including in scenarios of increased volatility in underlying commodity prices. Financial risk management contracts are measured at fair value, with gains and losses on re-measurement included in the consolidated statements of comprehensive income (loss) in the period in which they arise.

Financial contracts

The Company’s financial risk management contracts are subject to master netting agreements that create the legal right to settle the instruments on a net basis. The fair value of the risk management contracts resulted in a net current liability of CAD$0.4 million at December 31, 2023. The following table summarizes the gross asset and liability positions of the Company’s individual risk management contracts that are offset in the consolidated balance sheets:

	As at December 31,					As at December 31,
	2023					2022
(CAD$ thousands)	Asset		Liability			Asset			Liability
Gross amount		-		(417	)		21,375			(48,379	)
Amount offset		-		-			(21,375	)		21,375
Risk management contracts		-		(417	)		-			(27,004	)

Financial contracts settled in the period result in realized gains or losses based on the market price compared to the contract price and the notional volume outstanding. Changes in the fair value of unsettled financial contracts are reported as unrealized gains or losses in the period as the forward markets for commodities fluctuate and as new contracts are executed.

Outstanding Financial Risk Management Contracts at December 31, 2023

	WTI - Costless Collar				Natural Gas - Fixed<br> Price<br> Swaps
Term	Volume<br> (bbls)		Put Strike Price (US/bbl)	Call Strike Price (US/bbl)	Volume (GJs)		Swap Price (CAD/GL)
Q1 2024		877,968				455,000
Q2 2024		877,968				-
Q3 2024		887,800				-
Q4 2024		887,800

All values are in US Dollars.

Realized and Unrealized Risk Management Contracts

In the three and twelve months ended December 31, 2023, the Company recorded total risk management contract gains of CAD$14.8 million and CAD$16.4 million, respectively, compared to total risk management contract gains of CAD $2.2 million and losses of CAD$121.5 million for the same respective periods in 2022.

In the fourth quarter, the Company realized CAD$3.2 million risk management contracts loss (CAD$6.2 million realized gain in the same period of 2022) as market prices for WTI settled at levels above the Company’s risk management contracts during the quarter. CAD$18.0 million unrealized gain on risk management contracts (CAD$4.0 million unrealized loss in the same period of 2022) was primarily a result of the market prices for WTI settling at levels below those set at the end of the third quarter of 2023.

For the year ended December 31, 2023, the Company realized CAD$10.2 million of risk management contracts loss (CAD$122.4 million realized loss in the same period of 2022), primarily a result of the market prices for WTI settling at levels above the Company’s risk management contracts outstanding during 2023, partially offset by gains due to the widening of WCS differentials. CAD$26.6 million of unrealized gain on risk management contracts (CAD$0.9 million unrealized gain in the same period of 2022), was primarily a result of the market prices for WTI settling at levels within the Company’s outstanding risk management contracts, in addition to the settlement of the risk management contracts realized during the first twelve months of 2023.

Realized and Unrealized Gain (Loss) on Commodity Price Risk Management Contracts

	Three months ended<br> December 31,						Year ended<br> December 31,
(CAD$ thousands)	2023			2022			2023			2022
Realized gain (loss)		(3,225	)		6,243			(10,182	)		(122,408	)
Unrealized gain (loss)		18,035			(4,019	)		26,587			930
Risk management contracts gains (losses)		14,810			2,224			16,405			(121,478	)

DiluentExpense

In order to facilitate pipeline transportation of bitumen, the Company uses condensate as diluent for blending at the Expansion Asset and for trucked volumes from the Demo Asset that are delivered to the Truck Rack that is located at the Expansion Asset. The Company’s diluent expense includes the cost of diluent plus the pipeline transportation of the diluent from Edmonton to the Expansion Asset facility via the Inter Pipeline Polaris Pipeline.

The table below shows the Company’s diluent expense in the fourth quarter of 2023 was CAD$17.65/bbl, lower than CAD$19.34/bbl in the comparative period of 2022 and for the full year 2023 was CAD$16.39/bbl, higher than CAD$12.83/bbl in the full year 2022. The factors driving the lower diluent pricing are discussed above under the heading “ – Commodity Prices”.

				Year ended<br> December 31,
(CAD thousands, unless otherwise noted)		2022		2023		2022
Diluent expense	76,768		85,946		304,740		368,015
- (CAD/bbl)	17.65		19.34		16.39		12.83

All values are in US Dollars.

Transportationand Marketing Expense

Transportation expense at the Expansion Asset includes the costs to move production from the facility to the sales point in Edmonton, Alberta, via the Enbridge Lateral Pipeline and Enbridge Waupisoo Pipeline. At the Demo Asset, transportation expenses relate to the trucking of bitumen from the facility to various pipeline and rail sales points, including to the Truck Rack commissioned at the Expansion Asset facility on October 12, 2022.

The Company has an exclusive petroleum marketing contract with the Petroleum Marketer for the Company’s production at the Demo Asset, pursuant to which, in addition to marketing fees, the Company pays royalty incentive and performance fees, among other costs, to the Petroleum Marketer which are oil price- and production volume- dependent. Following the JACOS Acquisition, the Company entered into an exclusive marketing contract with the Petroleum Marketer for the Petroleum Marketer to provide marketing services for the Expansion Asset (the “Expansion Marketing Agreement”), including facilitating all pipeline transportation and storage. The exclusive marketing services at the Expansion Asset expire in October 2028 and include the purchase of all blended bitumen produced, the supply of all diluent and the facilitation of all pipeline transportation and storage costs. The exclusive marketing services at the Demo Asset expire in April 2026 and include the purchase of all bitumen produced, and the facilitation of all bitumen transportation. In addition to the marketing fees, production at the Demo Asset is further subject to additional costs associated with the marketing contract that include royalty incentive and performance fees. See the section under the heading “— Material Contracts, Liabilities and Indebtedness— Marketing Agreements” in Item 4.B. for a further description of the Demo Marketing Agreement and the Expansion Marketing Agreement.

The Company’s transportation and marketing expense was CAD$8.34/bbl and CAD$8.63/bbl in the fourth quarter and year ended December 31, 2023, respectively, lower than CAD$9.23/bbl and CAD$9.03/bbl for the same respective periods in 2022, primarily due to lower oil transportation costs at the Demo Asset from utilizing the Truck Rack.

				Year ended<br> December 31,
(CAD thousands, unless otherwise noted)		2022		2023		2022
Marketing fees(1)	2,419		2,866		10,934		12,441
Oil transportation expense	10,858		13,698		44,739		55,401
Transportation and marketing	13,277		16,566		55,673		67,842
Marketing fees(1) (CAD/bbl)	1.52		1.60		1.69		1.66
Oil transportation expense (CAD/bbl)	6.82		7.64		6.93		7.38
Transportation and marketing (CAD/bbl)	8.34		9.24		8.62		9.04

All values are in US Dollars.

(1)	Marketing<br>fees include marketing fees paid to the Petroleum Marketer and terminal fees.

OperatingExpenses

Operating expenses include energy operating expenses and non-energy operating expenses. Energy operating expenses reflect the cost of natural gas to generate steam and to support reservoir pressure through NCG co-injection to enhance oil production and recovery as well as electricity to operate the Company’s facilities. Non-energy operating expenses relate to production-related operating activities, including staff, contractors and associated travel and camp costs, chemicals and treating, insurance, equipment rentals, maintenance and site administration, among other costs.

The Company’s energy operating expenses for the three months and year ended December 31, 2023 were CAD$7.68/bbl and CAD$8.77/bbl, respectively, which was lower than the comparative periods in 2022 of CAD$12.32/bbl and CAD$11.35/bbl, respectively. The lower per barrel energy operating expenses in 2023, were primarily related to lower natural gas and electricity prices partially offset by lower sales volumes.

Non-energy operating expenses for the fourth quarter and full year 2023 were CAD $14.37/bbl and CAD $14.31/bbl, higher than the comparative periods in 2022 of CAD $11.33/bbl and CAD $10.06/bbl. The higher per barrel non-energy operating expenses in 2023 was primarily the result of the recognition of higher greenhouse gas emission fees, the planned minor turnaround being expensed, and inflationary pressures on the costs of goods and services combined with lower sales volumes for the three months ended December 31, 2023.

				Year ended<br> December 31,
(CAD thousands, unless otherwise noted)		2022		2023		2022
Operating expenses - energy	12,223		22,100		56,624		85,232
Operating expenses - non-energy	22,861		20,329		92,341		75,594
Operating expenses	35,084		42,429		148,965		160,826
Operating expenses - energy (CAD/bbl)	7.68		12.32		8.77		11.35
Operating expenses - non-energy (CAD/bbl)	14.37		11.33		14.31		10.06
Operating expenses (CAD/bbl)	22.05		23.65		23.08		21.41

All values are in US Dollars.

OperatingNetback

Oil sales is a GAAP measure that is the most directly comparable measure to operating netback, which is a non-GAAP measure.

During the three months and year ended December 31, 2023, the Company had oil sales of CAD$161.7 million and CAD$676.0 million, respectively, compared to oil sales of CAD$180.7 million and CAD$998.8 million, during the comparative periods in 2022.

Operating netback for the three and twelve months ended December 31, 2023 was CAD$17.19/bbl and $20.56/bbl, respectively, lower than the same respective periods in 2022 which were CAD$19.27/bbl and CAD$30.58/bbl. The lower per barrel operating netback in the fourth quarter of 2023, compared to the same period in 2022 was primarily due to increased realized loss on risk management contracts and higher non-energy operating costs per barrel due to lower oil sales volumes, partially offset by lower natural gas and power prices. The lower per barrel operating netback in year ended 2023 was mainly due to lower realized WCS benchmark oil prices and higher non-energy operating costs per barrel due to lower oil sales volumes, partially offset by lower realized risk management contract losses, lower gas and power prices and lower royalties, relative to the same period in 2022.

The following table shows a reconciliation of oil sales to operating netback and oil sales ($/bbl) to operating netback ($/bbl) for the periods indicated:

						Year ended<br> December 31,
(CAD thousands, unless otherwise noted)			2022			2023			2022
Oil sales	161,730			180,741			675,970			998,849
Diluent expense	(76,768	)		(85,946	)		(304,740	)		(368,015	)
Transportation and marketing	(13,277	)		(16,566	)		(55,673	)		(67,842	)
Royalties	(6,024	)		(7,477	)		(23,706	)		(50,064	)
Operating expense – energy	(12,223	)		(22,100	)		(56,624	)		(85,232	)
Operating expense – non-energy	(22,862	)		(20,329	)		(92,342	)		(75,594	)
Operating netback(1), excluding realized gain (loss) risk management contracts	30,576			28,324			142,885			352,102
Realized gain (loss) risk management contracts	(3,225	)		6,243			(10,182	)		(122,408	)
Operating netback(1)	27,351			34,567			132,703			229,694
Oil sales (CAD/bbl)	71.04			72.18			73.91			96.82
Diluent expense (CAD /bbl)	(17.65	)		(19.34	)		(16.39	)		(12.83	)
Transportation and marketing (CAD /bbl)	(8.34	)		(9.23	)		(8.63	)		(9.03	)
Royalties (CAD/bbl)	(3.79	)		(4.17	)		(3.67	)		(6.67	)
Operating expense – energy (CAD /bbl)	(7.68	)		(12.32	)		(8.77	)		(11.35	)
Operating expense – non-energy (CAD /bbl)	(14.37	)		(11.33	)		(14.31	)		(10.06	)
Operating netback(1), excluding realized gain (loss) risk management contracts (CAD /bbl)	19.21			15.79			22.14			46.88
Realized gain (loss) risk<br> management contracts (CAD /bbl)	(2.03	)		3.48			(1.58	)		(16.30	)
Operating netback (CAD /bbl)(1)	17.19			19.27			20.56			30.58

All values are in US Dollars.

(1)	Non-GAAP measures do not have any standardized meaning prescribed by<br>IFRS and may not be comparable with the calculation of similar measures presented by other entities. Refer to the “Non-GAAP Measures”<br>section in this MD&A for further information.

General& Administrative Expenses

General and administrative (“G&A”) expenses include head office and corporate costs such as salaries and employee benefits, office rent, independent third-party audit and engineering services, and administrative recoveries earned for operating exploration and development activities on behalf of the Company’s working interest partners, among other costs. G&A expenses primarily fluctuates with head office staffing levels and the level of operated exploration and development activity during the period. G&A may also include expenses related to corporate strategic initiatives, if any.

G&A expenses for the three months and year ended December 31, 2023, were CAD$2.14/bbl and CAD$1.79/bbl, respectively, which was higher than the comparative periods in 2022 of CAD $1.60/bbl and CAD CAD$1.31/bbl, respectively. The increase in G&A expenses per barrel was primarily due to the listing of the Common Shares on the NYSE and related public company expenditures, among other items. The increase in G&A expenses per barrel was also due to lower sales volumes for the three months and year ended December 31, 2023 compared to the same period in 2022.

				Year ended<br> December 31,
(CAD thousands, unless otherwise noted)		2022		2023		2022
General and administrative expenses	3,401		2,874		11,536		9,836
- (CAD/bbl)	2.14		1.60		1.79		1.31

All values are in US Dollars.

Stock-basedCompensation

On September 20, 2023, with the closing of the Business Combination, all outstanding Company Performance Warrants vested and became exercisable. As a result, the remaining unrecognized fair market value of the Company Performance Warrants was immediately recorded as stock-based compensation during the third quarter of 2023. The Company Performance Warrants expire ten years following the date they were original issued as Greenfire performance warrants prior to the closing of the Business Combination.

The Company recorded stock-based compensation of CAD$0 and CAD$9.8 million during the three months and year ended December 31, 2023, respectively, compared to CAD$1.2 million for both of the respective periods during 2022.

				Year ended<br> December 31,
(CAD thousands, unless otherwise noted)		2022		2023		2022
Stock-based compensation	-		1,183		9,808		1,183
- (CAD /bbl)	-		0.66		1.52		0.16

All values are in US Dollars.

Interestand Finance Expenses

Interest and finance expenses include coupon interest, amortization of debt issue costs and debt underwriter fees, issuer discount, redemption premiums on long term debt, interest on revolving credit facility, letter of credit facilities and other interest charges. Coupon interest and required redemption premiums related to long term debt are accrued and paid according to the indenture that governs the 2028 Notes.

Interest and finance expenses for the three and twelve months ended December 31, 2023 were CAD$16.4 million and CAD$110.2 million, respectively, higher than the comparative periods in 2022 of CAD$10.8 million and CAD$77.1 million, mainly due to higher interest incurred on the 2028 Notes. The total interest and finance expense in 2023 of CAD$108.3 million was comprised of CAD$42.1 million of unamortized debt related costs and CAD$19.2 million from the early debt redemption premium (the “Debt Redemption Premium”) on the redemption of our previously issued senior secured notes due in 2025 (the “2025 Notes”).

	Three months ended<br> December 31,				Year ended<br> December 31,
(CAD$ thousands)	2023		2022		2023		2022
Accretion on long-term debt	$	14,056	$	10,002	$	106,435	$	74,176
Other interest		2,078		591		2,873		2,155
Accretion of decommissioning obligations		236		200		906		743
Total interest and finance expenses	$	16,370	$	10,794	$	110,214	$	77,074

Depletionand Depreciation Expense

The Company depletes crude oil properties on a unit-of-production basis over estimated total recoverable proved plus probable (2P) reserves as prepared to the Canadian standard using NI 51-101 and COGEH. The depletion base consists of the historical net book value of capitalized costs, plus the estimated future costs required to develop the Company’s estimated recoverable proved plus probable reserves. The depletion base excludes exploration and the cost of assets that are not yet available for use.

The unit-of-production rate accounts for expenditures incurred to date, together with estimated future development expenditures required to develop those proved reserves. This rate, calculated at a facility level, is then applied to sales volume to determine depletion each period. We believe that this method of calculating depletion charges each barrel of crude oil equivalent sold with its proportionate share of the cost of capital invested over the total estimated life of the related asset as represented by 2P reserves.

The Company’s depletion and depreciation expense for the three months and year ended December 31, 2023 were CAD$10.23/bbl and CAD $10.54/bbl, respectively, which was higher than the comparative periods in 2022 of CAD$9.87/bbl and CAD$9.06/bbl, respectively. The higher per barrel depletion and depreciation expense in 2023, was primarily due to an increase in estimated future development costs as represented by 2P reserves in the Company’s most recent reserve report, relative to the prior reserve report.

				Year ended<br> December 31,
(CAD thousands, unless otherwise noted)		2022		2023		2022
Depletion and depreciation expense	16,273		17,702		68,054		68,027
- (CAD/bbl)	10.23		9.87		10.54		9.06

All values are in US Dollars.

ExplorationExpenses

The Company’s exploration expenses primarily consist of escalating mineral lease rentals on the undeveloped lands. In the three months and year ended December 31, 2023, exploration expenses were CAD$0.5 million and CAD$3.8 million, compared to CAD$0.3 million and CAD$1.8 million for the same respective periods in 2022. The increase in 2023 was primarily due to a one-time regulatory expense associated with the implementation of the Oil Sands Tenure Regulation^.^This regulation, made under the Mines and Minerals Act, is the primary regulation that deals with tenure of oil sands agreements in Alberta. The regulation provides for the issuance and continuation of primary oil sands leases, and the payment of escalating rental when a continued lease does not meet a minimum level of production.

	Three months ended<br> December 31,				Year ended<br> December 31,
(CAD$ thousands, unless otherwise noted)	2023		2022		2023		2022
Exploration expenses		517		347		3,852		1,825

Other(Income) and Expense

Other (income) and expense in the fourth quarter of 2023 reflected income of CAD$1.3 million, compared to income of CAD $1.4 million for the comparative period in 2022. Other (income) and expenses during each of the respective periods are mainly comprised of interest earnings from savings accounts and short-term investments.

In the year ended December 31, 2023, other (income) and expense was income of CAD $2.9 million, compared to income of CAD $0.2 million in 2022, with the difference primarily attributable to higher interest earnings from savings accounts during 2023, compared to 2022, partially offset by expenses related to the JACOS acquisition, among other items.

	Three months ended<br> December 31,						Year ended <br> December 31,
(CAD$ thousands, unless otherwise noted)	2023			2022			2023			2022
Other (income) and expenses		(1,313	)		(1,367	)		(2,905	)		(206	)

ForeignExchange Loss (Gain)

The Company’s foreign exchange loss (gain) is driven by fluctuations in the US dollar to Canadian dollar exchange rate, as it relates to its long-term debt that is denominated in US dollars and is primarily related to the note principal and interest components of the Company’s US dollar denominated debt.

In the three months and year ended December 31, 2023, the Company recorded a foreign exchange gain of CAD$8.1 million and CAD$8.7 million, respectively, compared to a gain of CAD$2.9 million and a loss of CAD$26.1 million for the comparative periods in 2022. The foreign exchange gain during the fourth quarter of 2023 and full year 2023 were mainly due to the Canadian dollar strengthening relative to the US dollar.

	Three months ended<br> December 31,						Year ended<br> December 31,
(CAD$ thousands, unless otherwise noted)	2023			2022			2023			2022
Realized foreign exchange loss (gain)		-			3,675			19,914			5,188
Unrealized foreign exchange loss (gain)		(8,072	)		(6,561	)		(28,638	)		20,911
Foreign exchange loss (gain)		(8,072	)		(2,886	)		(8,724	)		26,099

TransactionCosts

On September 20, 2023, the Company completed the Business Combination with MBSC. The Company expensed CAD$3.8 million and CAD$12.2 million in transaction costs during the three months and year ended December 31, 2023 respectively, compared to CAD$2.8 million for each of the respective comparative periods during 2022. Refer to the section of this Annual Report entitled “Explanatory Note” for more information.

				Year ended<br> December 31,
(CAD thousands, unless otherwise noted)		2022		2023		2022
Transaction costs	3,848		2,769		12,172		2,769
- (CAD/bbl)	10.55		1.54		1.89		0.37

All values are in US Dollars.

Gainon Revaluation of Warrants

On September 20, 2023, and in connection with the Business Combination, the Company issued 5,000,000 Company Warrants to former holders of Greenfire common shares, the Greenfire Bond Warrant holders and Greenfire performance warrant holders and issued 2,526,667 Company Warrants to former holders of MBSC’s private placement warrants. The 7,526,667 outstanding Company Warrants expire five years after issuance and entitle the holder of each Company Warrant to purchase one Common Share at a price of US$11.50. If permitted by the Company, the Company Warrants can be exercised on a cashless basis. The Company Warrants are to be treated as a derivative financial liability in accordance with IFRS 9 and were measured at fair value in accordance with IFRS 13. The Company Warrants will be reassessed at the end of each reporting period with subsequent changes in fair value being recognized through the statement of comprehensive income (loss).

During the three months and year ended December 31, 2023, the Company incurred CAD$2.7 million and CAD$35.0 million in gains on revaluation of warrants, respectively, compared to CAD$0 for the comparative periods in 2022. The gains relate to a decrease of the warrant liability due to a reduction to the closing share price from the close of the Business Combination to December 31, 2023.

	Three months ended<br> December 31,					Year ended<br> December 31,
(CAD$ thousands, unless otherwise noted)	2023			2022		2023			2022
Gain on revaluation of warrants		(2,697	)		-		(34,973	)		-

Taxes

At December 31, 2023, the Company recognized a deferred tax asset of CAD$68.3 million (December 31, 2022 – CAD $87.7 million). As a result of improved commodity prices, the deferred tax asset has been recognized to the extent that it is probable that future taxable income will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

(CAD$ thousands)	Year ended<br> December 31,<br> 2023			Year ended<br> December 31,<br> 2022
Income (loss) before taxes	$	(116,285	)	$	44,017
Expected statutory income tax rate		23.00	%		23.00	%
Expected income tax expense (recovery)		(26,746	)		10,124
Gain on business combination		-			-
Permanent differences		24,149			7,327
Unrecognized deferred income tax (asset) liability		21,983			(105,132	)
Deferred income tax expense (recovery)	$	19,386		$	(87,681	)
(1)	Certain<br>accounts were consolidated into permanent differences for presentation purposes.
---	---

The Company has approximately CAD $1.8 billion in tax pools and loss carry forwards in the year ended December 31, 2023 (December 31, 2022 – CAD $1.8 billion) including approximately CAD $1.4 billion in non-capital losses available for immediate deduction against future income. The Company’s non-capital losses expire between 2033 and 2043.

	Year ended<br> December 31		Year ended<br> December 31
(CAD$ millions)	2023		2022
Undepreciated capital cost		329		321
Canadian oil and gas property expenditures		10		13
Canadian development expenditures		35		36
Canadian exploration expenditures		-		0.3
Federal income tax losses carried forward^(1) (2)^		1,377		1,402
Other^(3)^		90		19
Total Canadian federal tax pools		1,840		1,791

(1)	Federal<br>income tax losses carried forward expire in the following years 2033 - CAD$4.3 million; 2034 - CAD$58.7 million; 2035 - CAD$30.0 million;<br>2037 - CAD$36.2 million; 2038 - CAD$8.3 million; 2039 - CAD$1,232.8 million; 2042 - CAD$2.9 million; 2043 - CAD$3.6 million.
(2)	Provincial<br>income tax losses carry forward is CAD$985.0 million which is lower than the federal income tax losses carried forward due to differences<br>in historical claims at the provincial level.
---	---
(3)	Other<br>includes CAD$27.6 million in capital losses that have been recognized at the full amount as at December 31, 2023.
---	---

NetIncome (loss) and comprehensive income (loss) and Adjusted EBITDA

During the three months ended December 31, 2023, the Company recorded net loss of CAD$4.7 million, compared to net income of CAD$88.0 million, during the same period in 2022. The CAD$92.7 million reduction to net income (loss) and comprehensive income (loss) in 2023 was primarily due to the recognition of a deferred tax asset expense of CAD$25.9 million in 2023, compared to a deferred tax asset recovery of CAD$87.7 million during the fourth quarter of 2022, partially offset by a reduction to listing expense of CAD$4.2 million during the fourth quarter of 2023. The decrease in net income was partially offset by CAD$14.8 million in risk management contract gains in the current quarter, compared to CAD$2.2 million in risk management contract losses in the prior year period, amongst other items.

During the year ended December 31, 2023, the Company recorded a net loss of CAD$135.7 million, compared to net income of CAD$131.7 million, respectively, during the comparative period in 2022. The CAD$267.4 million reduction to net income (loss) and comprehensive income (loss) in 2023 was primarily due to one-time costs of CAD$106.5 million of listing expenses related to the Business Combination, the recognition of a deferred tax asset expense of CAD$19.4 million in 2023, compared to a deferred tax asset recovery of CAD$87.7 million in 2022, as well as a CAD$31.2 million increase in refinancing costs related to the redemption of the 2025 Notes. Additionally, the decrease was also due to CAD$296.5 million in lower oil sales, net of royalties, partially offset by CAD$16.4 million in risk management contract gains in the current year, compared to CAD$121.5 million in risk management contract losses, as well as CAD$63.3 million in higher diluent expense in the prior year, amongst other items.

Net income (loss) and comprehensive income (loss) is a GAAP measure, which is the most directly comparable measure to adjusted EBITDA, which is a non-GAAP measure.

Adjusted EBITDA was CAD$23.4 million in the fourth quarter of 2023, compared to CAD$32.5 million in the same period in 2022, with the year over year decrease primarily due to lower oil sales volumes which more than offset the lower diluent expenses and the recognition of CAD$6.2 million of realized risk management contract gains in 2022, compared to CAD$3.2 million of risk management contract losses during the same period in 2023.

The Company had Adjusted EBITDA of CAD$117.3 million for the year ended December 31, 2023, compared to CAD$218.0 million during 2022, with the decrease primarily due to lower oil sales volumes and lower realized WCS benchmark oil prices which more than offset the lower diluent expenses. Further, the Company recognized CAD$122.4 million of realized risk management contract losses in 2022, compared to CAD$10.2 million in losses during the same period in 2023.

The following table is a reconciliation of net income (loss) and comprehensive income (loss) to adjusted EBITDA for the periods indicated:

						Year<br> ended<br> December 31,
(CAD thousands)			2022			2023			2022
Net income<br> (loss)	(4,659	)		87,995			(135,671	)		131,698
Add (deduct):
Income tax expense (recovery)	25,881			(87,681	)		19,386			(87,681	)
Unrealized (gain) loss risk management contracts	(18,035	)		4,019			(26,587	)		(930	)
Stock-based compensation	-			1,183			9,808			1,183
Financing and interest	16,370			10,794			110,214			77,074
Depletion and depreciation	16,273			17,702			68,054			68,027
Transaction costs	3,848			2,769			12,172			2,769
Listing expense	(4,162	)		-			106,542			-
Gain on revaluation of warrants	(2,697	)		-			(34,973	)		-
Gain on acquisitions	-			-			-			-
Foreign exchange loss (gain)	(8,072	)		(2,886	)		(8,724	)		26,099
Other (income) and<br> expenses	(1,313	)		(1,367	)		(2,905	)		(206	)
Adjusted<br> EBITDA(1)	23,434			32,528			117,316			218,033
Net income (loss) (CAD/bbl)	(2.93	)		49.05			(21.02	)		17.53
Add (deduct):
Income tax recovery (expense) (CAD/bbl)	16.26			(48.87	)		3.00			(11.67	)
Unrealized (gain) loss risk management contracts<br> (CAD/bbl)	(11.33	)		2.24			(4.12	)		(0.12	)
Stock-based compensation (CAD/bbl)	-			0.66			1.52			0.16
Financing and interest (CAD/bbl)	10.29			6.02			17.08			10.26
Depletion and depreciation (CAD/bbl)	10.23			9.87			10.54			9.06
Transaction costs (CAD/bbl)	2.42			1.54			1.89			0.37
Listing expense (CAD/bbl)	(2.62	)		-			16.51			-
Gain on revaluation of warrants (CAD/bbl)	(1.69	)		-			(5.42	)		-
Gain on acquisitions (CAD/bbl)	-			-			-			-
Foreign exchange loss (gain) (CAD/bbl)	(5.07	)		(1.61	)		(1.35	)		3.47
Other (income) and<br> expenses (CAD/bbl)	(0.83	)		(0.76	)		(0.45	)		(0.03	)
Adjusted<br> EBITDA(1) (CAD/bbl)	14.73			18.14			18.18			29.03

All values are in US Dollars.

(1)	Non-GAAP measures do not have any standardized meaning prescribed by<br>IFRS and may not be comparable with the calculation of similar measures presented by other entities. Refer to the “Non-GAAP Measures”<br>section in this MD&A for further information.
(2)	Results<br>are from operations that began at the Expansion Asset after the acquisition of JACOS on September 17, 2021 and at the Demo Asset when<br>it was acquired on April 5, 2021.
---	---

CapitalResources and Liquidity

The Company’s capital management objective is to maintain financial flexibility and sufficient liquidity to execute on planned capital programs, while meeting short and long-term commitments, including servicing and repaying long term debt. The Company strives to actively manage its capital structure in response to changes in economic conditions and further deleverage its balance sheet.

At December 31, 2023, the Company’s capital structure was primarily comprised of cash and cash equivalents, restricted cash, long-term debt and shareholders” equity.

Lower oil sales and production volumes in the year ended December 31, 2023 relative to the prior year were partially offset by the release of CAD$43 million of restricted cash in connection with the EDC Facility and management believes the Company’s current capital resources, including its ability to borrow or raise additional funds, and its ability to manage cash flow and working capital levels, will allow the Company to meet its current and future obligations, to make scheduled interest and principal payments, and to fund the other needs of the business.

However, the Company may be unable to borrow or raise sufficient funds or enter into such other arrangements, when needed, on favorable terms or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our shareholders will be, or could be, diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our shareholders.

Long Term Debt

On August 12, 2021, the Company issued US$312.5 million of 2025 Notes. The 2025 Notes were senior secured notes that had an original issue discount of 3.5%, bore interest at the fixed rate of 12.00% per annum, payable semi-annually, and had a maturity date of August 15, 2025.

On September 20, 2023, in conjunction with the closing of the Business Combination and the issuance of 2028 Notes as described below, the Company redeemed the outstanding balance of CAD$294.6 million (US$217.9 million) on the 2025 Notes at a redemption premium of 106.5%, plus accrued interest of CAD$3.4 million. The total Debt Redemption Premium paid as a result of the early redemption was CAD$19.2 million (US$14.2 million) plus accrued interest of CAD$3.4 million (US$2.5 million). Unamortized debt costs of $42.1 million were also expensed in conjunction with the extinguishment of the debt.

On September 20, 2023, the Company issued US$300.0 million of 2028 Notes. The 2028 Notes are senior secured notes that bear interest at the fixed rate of 12.00% per annum, payable semi-annually on April 1 and October 1 of each year, commencing on April 1, 2024, and mature on October 1, 2028. The 2028 Notes are secured by a lien on substantially all the assets of the Company and its wholly owned subsidiaries, junior in priority to the Senior Credit Facility. Subject to certain exceptions and qualifications, the indenture governing the 2028 Notes contains certain covenants that limit the Company’s ability to, among other things, incur additional indebtedness, pay dividends, redeem stock, make certain restricted payments, and dispose of and transfer assets. The indenture governing the 2028 Notes has a minimum hedging requirement of 50% of the forward 12 calendar month PDP forecasted production as prepared in accordance with the Canadian standards under National Instrument 51-101 – Standards for Disclosure for Oil andGas Activities until principal debt under the 2028 Notes is less than US$100.0 million and limits capital expenditures to US$100.0 million annually until the principal outstanding is less than US$150.0 million.

Under the indenture governing the 2028 Notes, the Company is required to redeem the 2028 Notes at 105% of the principal amount plus accrued and unpaid interest with 75% of Excess Cash Flow (as defined in the indenture governing the 2028 Notes) in six-month periods, with the first period beginning on June 30, 2024. If Consolidated Indebtedness is less than US$150.0 million, the required redemption is reduced to 25% of Excess Cash Flow to be paid in every six-month period until the principal outstanding on the 2028 Notes is less than $100.0 million.

As at December 31, 2023, the carrying value of the Company’s long-term debt was CAD$376.4 million and the fair value was CAD$394.1 million (December 31, 2022 carrying value – CAD$254.4 million, fair value – CAD$315.7 million).

The Company is exposed to foreign exchange rate fluctuations on the principal value and interest payments in respect of the 2028 Notes. As of December 31, 2023, a 10% change to the value of the Canadian dollar relative to the US dollar would result in a foreign exchange gain (loss) of approximately CAD$39.7 million (December 31, 2022 - $29.3 million, December 31, 2021 - CAD$39.6 million).

SeniorCredit Facility

On September 20, 2023, the Company also entered into a senior reserve-based credit facility comprised of an operating facility and a syndicated facility (the “Senior Credit Facility”). Total credit available under the Senior Credit Facility is CAD$50.0 million, comprised of a CAD$20.0 million operating facility and a CAD$30.0 million syndicated facility.

The Senior Credit Facility is a committed facility available on a revolving basis until September 20, 2024, at which point in time it may be extended at the lender’s option. If the revolving period is not extended, the undrawn portion of the facility will be cancelled and any amounts outstanding would be repayable at the end of the non-revolving term, being September 20, 2025. The Senior Credit Facility is subject to a semi-annual borrowing base review, occurring in May and November of each year, with the first review scheduled in May 2024. The borrowing base is determined based on the lender’s evaluation of the Company’s petroleum and natural gas reserves and their commodity price outlook at the time of each renewal.

The Senior Credit Facility is secured by a first priority security interest on substantially all the assets of the Company and is senior in priority to the 2028 Notes. The Senior Credit Facility contains certain covenants that limit the Company’s ability to, among other things, incur additional indebtedness, create or permit liens to exist, make certain restricted payments, and dispose of or transfer assets.

Amounts borrowed under the Senior Credit Facility bear interest at a floating rate based on the applicable Canadian prime rate, US base rate, secured overnight financing rate or bankers’ acceptance rate, plus a margin of 2.75% to 6.25% based on Debt to EBITDA ratio. A standby fee on the undrawn portion of the Senior Credit Facility ranges from 0.6875% to 1.5625% based on Debt to EBITDA ratio. As at December 31, 2023, the Company had no amounts drawn under the Senior Credit Facility.

On November 1, 2023, the Company entered into an unsecured CAD$55.0 million letter of credit facility with a Canadian bank that is supported by a performance security guarantee from Export Development Canada (the “EDC Facility”). The EDC Facility is available on a demand basis and letters of credit issued under this facility incur an issuance and performance guarantee fee of 4.25%. As at December 31, 2023, the Company had CAD$54.3 million drawn under the EDC Facility.

Restricted Cash andLetter of Credit Facilities

In November 2023, the Company replaced the CAD$46.8 million credit facility with the Petroleum Marketer that was used to issue letters of credit related to the Company’s long-term pipeline transportation agreements with the new EDC Facility, which resulted in the release of the $43.3 million of restricted cash.

Working Capital (Deficit)and Adjusted Working Capital

Working capital (deficit) is a GAAP measure that is the most directly comparable measure to adjusted working capital which is a non-GAAP measure.

As at December 31, 2023, working capital increased to CAD$33.5 million from a working capital deficit of CAD$13.4 million as at December 31, 2022, a difference of CAD$46.9 million, primarily due to an increase in cash and cash equivalents from the proceeds from the issuance of the 2028 Notes, as well as a decrease to the current liability portion of risk management contracts.

Adjusted working capital increased to CAD$78.3 million at year-end 2023, from CAD$76.9 million as at December 31, 2022, a difference of CAD$1.4 million, primarily due to an increase in cash and cash equivalents from the proceeds from the issuance of the 2028 Notes, partially offset by the recognition of the fair value of the Company Warrants issued to former holders of Greenfire Common Shares, Greenfire Bond Warrant holders and Greenfire Performance Warrants holders.

The following table shows a reconciliation of working capital (deficit) to adjusted working capital for the periods indicated:

	Year ended			Year ended
	December 31,			December 31,
(CAD$ thousands)	2023			2022
Current assets		163,814			123,527
Current liabilities		(130,283	)		(136,921	)
Working capital (deficit)		33,531			(13,394	)
Current portion of risk management contracts		417			27,004
Current portion of long-term debt		44,321			63,250
Adjusted working capital^(1)^		78,269			76,860
(1)	Non-GAAP measures do not have any standardized meaning prescribed by<br>IFRS and may not be comparable with the calculation of similar measures presented by other entities. Refer to the “—Non-GAAPMeasures” section in this MD&A for further information.
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Cash Flow Summary

The following table shows a summary of cash flows for the periods indicated:

	Three months ended December 31,						Year ended December 31,
(CAD$ thousands, unless otherwise noted)	2023			2022			2023			2022
Cash provided (used) by:
Operating activities		25,530			17,322			86,548			164,727
Financing activities		(51	)		(62,926	)		2			(123,638	)
Investing activities		18,732			(17,316	)		(12,153	)		(63,746	)
Exchange rate impact on cash and cash equivalents held in foreign currency		(713	)		(1,539	)		(285	)		(2,849	)
Change in cash and cash equivalents		43,854			(64,459	)		74,162			(25,506	)

CashProvided (used) by Operating Activities

Cash provided by operating activities in the fourth quarter of 2023 was CAD$25.5 million compared to CAD$17.3 million in the same period in 2022, with the increase primarily due to changes in non-cash working capital and lower diluent expense, partially offset by lower oil sales volumes during the fourth quarter of 2023.

For the year ended December 31, 2023, cash provided by operating activities was CAD$86.5 million compared to CAD$164.7 million in 2022, primarily due to lower realized WCS benchmark oil prices and lower production, partially offset by CAD$10.2 million of realized risk management contract losses in 2023, compared to CAD$122.4 million of realized risk management contract losses in 2022.

Based on current and forecasted production levels, operating expenses, capital expenditures, existing commodity price risk management contracts and current outlook for commodity prices, the Company expects cash from operating activities will be sufficient to cover its operational commitments and financial obligations under the indenture governing the 2028 Notes and the credit agreement governing the Senior Credit Facility in the next 12 months.

Cash Provided (used)by Financing Activities

In 2023, cash used by financing activities in the fourth quarter was CAD$51,000 compared to cash used by financing activities of CAD$62.9 million in the same period in 2022, mainly from a debt principal repayment on the 2025 Notes during the fourth quarter of 2022. During the year ended December 31, 2023, cash provided by financing activities was CAD$2,000 as the issuance of the 2028 Notes offset the redemption of the 2025 Notes and the Business Combination, compared to cash used by financing activities of CAD$123.6 million in the same period in 2022, mainly from debt principal repayments on the 2025 Notes during the year ended 2022.

Cash Provided (used)in Investing Activities

During the three months ended December 31, 2023, cash provided by investing activities was CAD$18.7 million compared to cash used in investing activities of CAD$17.3 million in the same period in 2022, with the difference in 2023 primarily due to the Company transferring CAD$43.3 million in outstanding letters of credit from restricted cash to cash and cash equivalents as part of the EDC Facility. Additionally, the increase to cash provided (used) in investing activities during the fourth quarter of 2023 was partially offset by higher capital expenditures.

Cash used in investing activities during 2023 was CAD$12.1 million compared to cash used in investing activities of CAD$63.7 million in 2022, also attributable to the transfer of CAD$43.3 million in outstanding letters of credit from restricted cash to cash and cash equivalents as part of the EDC Facility, along with lower capital expenditures during the year ended 2023.

Capital Expenditures

Total capital expenditures for the three and twelve months ended December 31, 2023 was CAD$19.4 million (2022 - CAD$12.4 million) and CAD$33.4 million (2022 - CAD$39.6 million). The Company spent CAD$14.9 million and CAD$22.8 million in the fourth quarter, and full year 2023 respectively, on the Refill wells for the drilling program at the Expansion Asset, as well as CAD$4.5 million and CAD$10.6 million spent on various facility projects at the Demo Asset and the Expansion Asset for the same respective periods.

AdjustedFunds Flow and Adjusted Free Cash Flow

Cash provided (used) by operating activities is a GAAP measure that is the most directly comparable measure to adjusted funds flow and adjusted free cash flow, which are non-GAAP measures.

During the three months and year ended December 31, 2023, the Company had cash provided by operating activities of CAD$25.5 million and CAD$86.5 million, respectively, compared to cash provided by operating activities of CAD$17.3 million and CAD$164.7 million, during the comparative periods in 2022.

Adjusted funds flow was CAD$10.5 million, during the three months ended December 31, 2023, compared to CAD$16.9 million, during the same period in 2022. The decrease in adjusted funds flow during the fourth quarter of 2023 was primarily the result of lower oil sales volumes, partially offset by lower diluent expense.

Adjusted funds flow was CAD$73.2 million, during the year ended December 31, 2023, compared to CAD$163.9 million, during the same period in 2022. The decrease in adjusted funds flow during the year ended December 31, 2023, was primarily the result of lower oil sales and lower realized WCS benchmark oil prices, which was partially offset by the Company recognizing CAD$10.2 million of realized risk management contract losses in 2023, compared to CAD$122.4 million in risk management contract losses during the same period in 2022.

During the three months ended December 31, 2023, the Company had negative adjusted free cash flow of CAD$8.9 million, compared to positive adjusted free cash flow of CAD$4.5 million during the same period in 2022. The decrease in adjusted free cash flow during the fourth quarter of 2023 was primarily the result of lower sales volumes and higher capital expenditures, partially offset by lower diluent expense. Adjusted free cash flow during the year ended December 31, 2023 was CAD$39.8 million compared to $124.3 million during the same period in 2022, with the decrease primarily due to lower oil sales and lower realized WCS benchmark oil prices, partially offset by the recognition of CAD$10.2 million of realized risk management contract losses in 2023, compared to CAD$122.4 million in risk management contract losses during the same period in 2022.

The following table shows a reconciliation of cash provided (used) in operating activities to adjusted funds flow and adjusted free cash flow for the periods indicated:

	Three months ended<br> December 31,						Year ended <br> December 31,
(CAD$ thousands)	2023			2022			2023			2022
Cash provided (used) by operating activities		25,530			17,322			86,548			164,727
Transaction costs		3,848			2,769			12,172			2,769
Changes in non-cash working capital		(18,861	)		(3,189	)		(25,514	)		(3,570	)
Adjusted funds flow^(1)^		10,517			16,902			73,206			163,926
Capital expenditures		19,413			12,361			33,428			39,592
Adjusted free cash flow^(1)^		(8,896	)		4,541			39,778			124,334
(1)	Non-GAAP measures do not have any standardized meaning prescribed by<br>IFRS and may not be comparable with the calculation of similar measures presented by other entities. Refer to the “Non-GAAP Measures”<br>in this MD&A for further information.
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Commitments And Contingencies

Management believes its current capital resources, combined with its ability to manage cash flow and working capital levels, will enable the Company to meet its current and future obligations, make scheduled interest and principal payments, and fund other business needs. In the short term, the Company anticipates meeting its cash requirements through a combination of cash on hand, operating cash flows, and potentially accessing available credit facilities. However, the Company acknowledges the potential impact of any adverse changes in economic conditions or unforeseen expenses on its ability to generate adequate cash in the short term.

The Company enters into commitments and contractual obligations in the normal course of operations. The following table is a summary of management’s estimate of the contractual maturities of obligations as at December 31, 2023:

($ thousands)	1 Year
Transportation		31,880	59,517	58,214	203,198	352,809
Office lease commitments^(1)^		299	598	598	1,496	2,992
Drilling services		5,845	8,635	-	-	14,480
Total annual commitments		38,024	68,750	58,812	204,694	370,281
Accounts payable and accrued liabilities		59,850	-	-	-	59,850
Long-term debt - Principal^(2)^		44,321	108,340	244,239	-	396,900
Long-term debt - Interest^(2)^		48,048	74,066	56,349	-	178,463
Risk management contracts		417	-	-	-	417
Lease obligations		157	284	333	1,015	1,789
Decommissioning obligations^(3)^		-	81	6,542	199,911	206,534
Total contractual obligations		152,793	182,771	307,463	200,926	843,953
Total future payments		190,817	251,521	366,275	405,620	1,214,234
(1)	Relates to non-lease components and variable operating cost<br>payments.
---	---
(2)	This represents the estimated principal repayments of the 2028<br>Notes and associated interest payments based on interest and foreign exchange rates in effect on December 31, 2023.
---	---
(3)	These values are undiscounted and will differ from the amounts<br>presented in the 2023 Financial Statements.
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Non-GAAP Measures

In this MD&A and elsewhere in this Annual Report, we refer to certain financial measures (such as adjusted EBITDA, adjusted EBITDA per barrel ($/bbl), operating netback, operating netback per barrel ($/bbl), adjusted funds flow, adjusted free cash flow, adjusted working capital, and net debt) which do not have any standardized meaning prescribed by IFRS. While these measures are commonly used in the oil and natural gas industry, our determination of these measures may not be comparable with calculations of similar measures presented by other issuers. Management believes that these financial measures provide useful information to evaluate the financial results of the Company.

Adjusted EBITDA

Net income (loss) and comprehensive income (loss) is the most directly comparable GAAP measure for adjusted EBITDA, which is a non-GAAP measure. Adjusted EBITDA is calculated as net income (loss) before interest and financing expenses, income taxes, depletion, depreciation and amortization and the transaction and financing cost impacts of the Business Combination and refinancing of the 2025 Notes, and is adjusted for certain non-cash items, or other items that are not considered part of normal business operations. Adjusted EBITDA is used to measure the Company’s profitability from its underlying asset base on a continuing basis. This measure is not intended to represent net income (loss) and comprehensive income (loss) in accordance with IFRS. See the “Results of Operations – Net Income (loss) and comprehensive income (loss)and Adjusted EBITDA” section in this MD&A for a reconciliation of net income (loss) and comprehensive income (loss) to adjusted EBITDA.

Operating Netback

Oil sales is the most directly comparable GAAP measure for operating netback, which is a non-GAAP measure. This measure is not intended to represent oil sales, net earnings or other measures of financial performance calculated in accordance with IFRS. Operating netback is comprised of oil sales, less diluent expense, royalties, operating expense, transportation and marketing expense, adjusted for realized commodity risk management gains or losses, as appropriate. Operating netback is a financial measure widely used in the oil and gas industry as a supplemental measure of a Company’s efficiency and ability to generate cash flow for debt repayments, capital expenditures or other uses. See the “Results of Operations – Operating Netback” section in this MD&A for a reconciliation of oil sales to operating netback.

Adjusted Funds Flow

Cash provided by operating activities is the most directly comparable GAAP measure for adjusted funds flow, which is a non-GAAP measure. This measure is not intended to represent cash provided (used) by operating activities calculated in accordance with IFRS. The adjusted funds flow measure allows management to evaluate the Company’s ability to fund its capital programs and meet its ongoing financial obligations using cash flow internally generated from ongoing operating related activities. We compute adjusted funds flow as cash provided (used) by operating activities, excluding the impact of changes in non-cash working capital, less transaction costs. For a reconciliation of cash provided (used) by operating activities to adjusted funds flow, see the “Capital Resources and Liquidity – AdjustedFunds Flow and Adjusted Free Cash Flow” section in this MD&A.

Adjusted FreeCash Flow

Cash provided (used) by operating activities is the most directly comparable GAAP measure for adjusted free cash flow, which is a non-GAAP measure. Management uses adjusted free cash flow as an indicator of the efficiency and liquidity of its business, measuring its funds after capital investment that is available to manage debt levels and return capital to shareholders. By removing the impact of current period capital expenditures from adjusted free cash flow, management monitors its adjusted free cash flow to inform its capital allocation decisions. We compute adjusted free cash flow as cash provided (used) by operating activities, excluding the impact of changes in non-cash working capital, less transaction costs and capital expenditures. For a reconciliation of cash provided (used) by operating activities to adjusted free cash flow, see “— Capital Resourcesand Liquidity — Adjusted Funds Flow and Adjusted Free Cash Flow” section in this MD&A.

Adjusted WorkingCapital

Working capital (deficit) is a GAAP measure that is the most directly comparable measure to adjusted working capital. These measures are not intended to represent current assets, net earnings or other measures of financial performance calculated in accordance with IFRS. Adjusted working capital is comprised of current assets less current liabilities on the Company’s balance sheet, and excludes the current portion of risk management contracts and current portion of long-term debt, the latter of which is subject to estimates in future commodity prices, production levels and expenses, among other factors. Adjusted working capital is included within the non-GAAP measures because it is a less volatile measure of current assets and current liabilities, after isolating for current portion of long-term debt and current portion of risk management contracts, a surplus of adjusted working capital will result in a future net cash inflow to the business that can be used by management to evaluate the Company’s short-term liquidity and its capital resources available at a point in time. A deficiency of adjusted working capital will result in a future net cash outflow, which may result in the Company not being able to settle short-term liabilities more than current assets. For a reconciliation of working capital (deficit) to adjusted working capital, see “— Capital Resources and Liquidity — Adjusted Working Capital” section in this MD&A.

Net Debt

Long-term debt is a GAAP measure that is the most directly comparable financial statement measure to net debt. These measures are not intended to represent long-term debt calculated in accordance with IFRS. Net debt is comprised of long-term debt, adjusted for current assets and current liabilities on the Company’s balance sheet, and excludes the current portion of risk management contracts and current portion of warranty liability. Management uses net debt to monitor the Company’s current financial position and to evaluate existing sources of liquidity. Net debt is used to estimate future liquidity and whether additional sources of capital are required to fund planned operations.

The following tables show a reconciliation of long-term debt to net debt for the periods indicated:

	Year ended			Year ended
	December 31,			December 31,
(CAD$ thousands)	2023			2022
Long-term debt		(332,029	)		(191,158	)
Current assets		163,814			123,527
Current liabilities		(130,283	)		(136,921	)
Current portion of risk management contracts		417			27,004
Current portion of warrant liability		18,630			-
Net debt		(279,451	)		(177,548	)

Non-GAAP Financial Ratios

Adjusted EBITDA ($/bbl)

Net income (loss) and comprehensive income (loss) is the most directly comparable GAAP measure for adjusted EBITDA ($/bbl), which is a non-GAAP measure. Adjusted EBITDA ($/bbl) is used to measure the Company’s profitability from its underlying asset base on a continuing basis. This measure is not intended to represent net income (loss) and comprehensive income (loss) in accordance with IFRS. Adjusted EBITDA ($/bbl) is calculated by dividing adjusted EBITDA by the Company’s total sales volume in a specified period.

Operating Netback ($/bbl)

Oil sales ($/bbl) is a ratio calculated using oil sales, which is the most directly comparable GAAP measure for operating netback. Operating netback is the non-GAAP financial measure used to calculate operating netback ($/bbl), which is a non-GAAP financial ratio. This measure is not intended to represent oil sales, net earnings or other measures of financial performance calculated in accordance with IFRS. Operating netback ($/bbl) is calculated by dividing operating netback by the Company’s total oil sales volume, in a specified period. Operating netback ($/bbl) is a non-GAAP financial ratio widely used in the oil and gas industry as a supplemental measure of a Company’s efficiency and ability to generate cash flow for debt repayments, capital expenditures or other uses, isolated for the impact of changes in oil sales volume, in a specified period.

Critical AccountingPolicies and Estimates

The Company’s critical accounting policies and estimates are those estimates having a significant impact on the financial position and operations that require management to make judgements, assumptions and estimates in the application of IFRS. Judgements, assumptions and estimates are based on the historical experience and other factors that management believes to be reasonable under current conditions. As events occur and additional information becomes available, these judgements, assumptions and estimates may be subject to change. Detailed disclosure of the material accounting policies and the significant accounting estimates, assumptions and judgements can be found in Note 3 “Material Accounting Policies” in the Company’s financial statements for the period ended December 31, 2023.

Item 6. Directors,Senior Management and Employees

A. Directors andSenior Management

Name	Age	Position
Robert Logan	43	President,<br> Chief Executive Officer and a Director
Tony Kraljic	49	Chief<br> Financial Officer
Albert Ma	42	Senior<br> Vice President, Facilities and Engineering
Kevin Millar	60	Senior<br> Vice President, Operations and Steam Chief
Crystal Park	48	Senior<br> Vice President, Corporate Development
Jonathan Klesch	47	Director
Julian McIntyre	48	Director, Chair of the Company Board
Venkat Siva	41	Director
Matthew Perkal	38	Director
W. Derek Aylesworth	61	Director

Executive Officers

Robert B. Logan,MPBE, P.Eng. — President, Chief Executive Officer and a Director

Mr. Logan is the President and Chief Executive Officer and a director of the Company. Prior to Greenfire’s inception in September, 2021, he was the President and Chief Executive Officer of GAC. Mr. Logan co-founded GHOPCO and its parent company, Greenfire Oil and Gas Ltd., in 2016. From 2016 to 2020, Mr. Logan was the President, Chief Executive Officer and a director of GHOPCO, which previously owned and operated the Demo Asset and entered into the NOI Proceedings in 2020. After the insolvency of GHOPCO, several private actions were commenced by former shareholders and creditors of GHOPCO, against certain directors and officers of GHOPCO, including Mr. Logan, alleging various claims with respect to their losses as shareholders and creditors of GHOPCO and seeking a derivative action. Prior to co-founding GHOPCO, he was the Asset Manager of the West Ells SAGD project from 2011 to 2016 for Sunshine Oilsands Ltd. He has held multiple roles in other thermal oil sands and SAGD developments including at Petrobank Energy Resources Ltd. on the Kerrobert and Whitesands toe-to-heel air injection (THAI) in-situ oil sands projects, the Statoil Canada Ltd. Leismer SAGD projects and with Petrospec Engineering. Mr. Logan graduated with a Bachelor of Science in Petroleum Engineering from the University of Alberta and holds a Master’s Degree in Petroleum Business Engineering from the Delft University of Technology in the Netherlands. He is a member of the Association of Professional Engineers and Geoscientists of Alberta as well as Montana Board of Professional Engineers and Professional Land Surveyors.

Tony Kraljic —Chief Financial Officer

Mr. Kraljic was appointed the Chief Financial Officer of the Company on October, 2023. From July 31, 2023 to September 30, 2023, Mr. Kraljic served as Director, Corporate Strategy of the Company and Greenfire. Prior to joining the Company, Mr. Kraljic was the Chief Financial Officer of Western Zagros Resources Ltd. (“WesternZagros”) from August 2017 to May 2023. Since commencing employment at WesternZagros in August 2012, Mr. Kraljic served as the principal financial officer of WesternZagros and was responsible for Finance and Accounting and Contracts and Procurement. Mr. Kraljic has over 25 years of finance, accounting, and tax experience. He has held multiple roles with CEDA International Corporation, Western Oil Sands Inc., Shell Canada and Arthur Anderson LLP. Mr. Kraljic holds a Bachelor of Commerce degree from the University of British Columbia and is a member of the Institute of Chartered Professional Accountants of Alberta.

Albert Ma, P.Eng.— Vice President, Facilities and Engineering

Mr. Ma is the Senior Vice President, Facilities and Engineering of the Company. Mr. Ma was a Vice President of Engineering at GAC from December 2020 through April 2021, and served as Senior Facilities Engineer at GHOPCO from January 2020 through May 2020. From 2018 to 2019, Mr. Ma was a DCS specialist at GHOPCO. Prior to joining the predecessor companies, he was the Engineering Manager of Surface Systems at Petrospec Engineering for over 13 years. Mr. Ma graduated with a Bachelor of Science in Computer Engineering from the University of Alberta and he is a member of the Association of Professional Engineers and Geoscientists of Alberta.

Kevin Millar — SeniorVice President, Operations and Steam Chief

Mr. Millar is the Senior Vice President, Operations and Steam Chief of the Company. Mr. Millar was the Steam Chief of Greenfire Oil and Gas Ltd. and GHOPCO. Mr. Millar has over 30 years of experience managing in-situ oils and facilities ranging from 5,000 bbls/d such as Sunshine Oilsands to 30,000 bbls/d at Greenfire Hangingstone Expansion, with extensive expertise leading the commissioning and start-up for SAGD Corp., cogeneration and power plants for Connacher Oil and Gas Limited, Pembina Pipelines Corporation, Sunshine Oilsands Ltd., MEG Energy Corp. and Nexen Inc. Mr. Millar holds a First-Class Power Engineer designation from the Southern Alberta Institute of Technology.

Crystal Park —Senior Vice President, Corporate Development

Ms. Park is the Senior Vice President of Corporate Development of the Company. Ms. Park was the Vice President of Business Development at GAC from December 2020 through April 2021 and served as Senior Manager of Business Development at GHOPCO from December 2020 through September 2021. Ms. Park began her engineering career in facilities and production engineering at Crestar and Apache Canada and progressed into roles in corporate development and resource evaluations at AJM Deloitte, Enerplus, and Sunshine Oilsands. She has worked extensively in reserves, economic modelling, and consultant roles for Sproule, Pine Cliff Energy, and Devon Energy. Ms. Park graduated with a Bachelor of Science in Chemical Engineering from the University of Alberta and holds a Masters of Business Administration with a dual specialization in Finance and Global Energy Management from the University of Calgary. She is a member of the Association of Professional Engineers and Geoscientists of Alberta.

Directors

Jonathan Klesch

Mr. Klesch is the founder of Griffon Partners, an investment management company, with an emphasis on natural resources and infrastructure. Prior to founding Griffon Partners, Mr. Klesch spent over 20 years at the Klesch Group, which predominately owns and operates oil refineries. Mr. Klesch has extensive experience in commodities trading and structured finance transactions. Mr. Klesch holds a Bachelor of Arts in Finance from the School of Management at Boston University and has also received specialized training at Harvard Business School.

Julian McIntyre

Mr. McIntyre has been appointed as Chair of the Company Board. Mr. McIntyre is the founder of Arq Limited, an energy and chemicals technology business, which he started in 2015. Mr. McIntyre was also the founder of a large natural gas operator in the Rocky Mountains and founded Rift Petroleum, an African oil and gas exploration and production company that was sold to Tower Resources plc. Prior to that, in 2000, Mr. McIntyre founded Gateway Communications, a pan-African telecoms company that dealt with the provision of satellite and terrestrial private networks for multinationals operating in Africa. Mr. McIntyre holds a Bachelor of Science in Computer Science from the Queen Mary College, University of London.

Venkat Siva

Mr. Siva was the Chief Financial Officer of Arq Limited, an energy and chemicals technology business, founded in 2015, until its reorganization and sale transaction in February 2023. Mr. Siva has managed McIntyre Partners” liquid/illiquids portfolio since 2009. At McIntyre Partners, he leads the due-diligence, deal execution and investment management efforts across several transactions in the energy, bulk commodities and infrastructure sectors. Prior to joining McIntyre Partners, Mr. Siva worked as a corporate finance banker within Goldman Sachs” mergers and acquisition team. Mr. Siva holds a Post Graduate Diploma in Management from the Indian Institute of Management of Bangalore.

Matthew Perkal

Prior to the Business Combination, Matthew Perkal served as MBSC’s Chief Executive Officer and as Executive Vice President of MBSC. Mr. Perkal continues to serve as a member of the management team for Brigade-M3 European Acquisition Corporation and as a Partner and Head of Special Situations and SPACs at Brigade. Mr. Perkal has led MBSC’s industry coverage for various sectors including retail, consumer, gaming and lodging, and has structured and led many of the firm’s successful deals in the private credit space including Barney’s and Sears. Mr. Perkal currently serves on Guitar Center Inc.’s board of directors. Prior to joining Brigade, Mr. Perkal worked at Deutsche Bank as an Analyst in the Leveraged Finance Group. In that capacity, Mr. Perkal also spent time on the Leveraged Debt Capital Markets Desk, selling both bank and bond deals. Mr. Perkal received a BS in Economics with a concentration in Finance and Accounting from the University of Pennsylvania’s Wharton School.

W. Derek Aylesworth

W. Derek Aylesworth has over 30 years of experience in the Canadian oil and gas industry. He has served as the Chief Financial Officer of Seven Generations Energy Ltd., an oil and gas producer operating in western Canada, between March 2018 to April 2021. He has previously served as the CFO of Baytex Energy Corp. (NYSE:and TSX: BTE) between November 2005 until June 2014. Mr. Aylesworth holds a Bachelor of Commerce degree and is a chartered accountant with expertise in taxation and has experience as a tax advisor in both the oil and gas industry and public practice in Calgary.

Other Public CompanyBoard Positions

The following directors of the Company are presently directors of other companies that are “reporting issuers” in a jurisdiction of Canada or the equivalent in another jurisdiction:

Name	Name of Public Company
Robert<br> Logan	None
Jonathan<br> Klesch	None
Julian<br> McIntyre	Advanced Emissions Solutions,<br> Inc. (Nasdaq: ADES)
Venkat<br> Siva	None
Matthew<br> Perkal	None
W. Derek Aylesworth	None

Family Relationships

There are no family relationships between any of the Company’s executive officers and directors.

Penalties or Sanctions,Individual Bankruptcies and Corporate Cease Trade Orders and Bankruptcies

None of the directors or executive officers of the Company, and to the best of the Company’s knowledge, no shareholder that, following completion of the Business Combination, is expected to hold a sufficient number of securities to affect materially the control of the Company, has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority or been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor making an investment decision.

None of the directors or executive officers of the Company, and to the best of the Company’s knowledge, no shareholder that, following the completion of the Business Combination, is expected to hold a sufficient number of securities to affect materially the control of the Company, has, within the 10 years prior to the date of this Annual Report, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of that individual.

Other than as disclosed below, none of the directors or executive officers of the Company, and to the best of the Company’s knowledge, no shareholder that, following the completion of the Business Combination, is expected to hold a sufficient number of securities to affect materially the control of the Company is, as at the date of this Annual Report, or has been within the 10 years before the date of this Annual Report: (a) a director, chief executive officer or chief financial officer of any company that was subject to an order that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer; (b) was subject to an order that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer; or (c) a director or executive officer of any company that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets. For the purposes of this paragraph, “order” means a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, in each case, that was in effect for a period of more than 30 consecutive days.

From 2016 to 2020, Mr. Logan was the President and a director of Greenfire Oil and Gas Ltd. and GHOPCO, which previously owned and operated the Demo Asset and entered into the NOI Proceedings in 2020. After the insolvency of GHOPCO, several private actions were commenced by former shareholders and creditors of GHOPCO, against certain directors and officers of GHOPCO, including Mr. Logan, alleging various claims with respect to their losses as shareholders and creditors of GHOPCO and seeking a derivative action

On August 25, 2023, a group of entities including, but not limited to, Griffon Partners Operation Corp. (“GPOC”) Griffon Partners Holding Corp. (“GPHC”) and Griffon Partners Capital Management Ltd. (“GPCM”), each filed Notices of Intention to Make a Proposal pursuant to the provisions of the Bankruptcy and Insolvency Act (Canada). As at December 31, 2023 Mr. Klesch was a director of each of GPOC, GPHC and GPCM.

Mr. Perkal was a director of Gymboree Group, Inc. (“Gymboree”) from September 29, 2017 through June 26, 2020. On January 16, 2019, Gymboree and 10 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia (Richmond Division).

Greenfire Relationshipsand Related Party Transactions

For each of the fiscal years ended December 31, 2021, and December 31, 2022, Greenfire paid CAD$85,733 and CAD$276,063, respectively, in directors fees to each of Messrs. McIntyre, Siva, and Klesch.

There are no family relationships between any of the Company’s executive officers and directors or director nominees.

Investor Rights Agreement

Concurrently with the Closing, the Company entered into the Investor Rights Agreement with MBSC Sponsor and certain other holders named therein, pursuant to which, among other things, the Company agreed that, until the MBSC Sponsor and its affiliates own less than 3% of all outstanding Common Shares, as adjusted for stock splits, dividends, recapitalizations and similar changes, the MBSC Sponsor will have the right to designate one individual to be included in the slate of nominees recommended by the Company Board or duly constituted committee thereof for election as directors at each applicable annual meeting of the Company Board at which the term of the director nominated by the MBSC Sponsor would expire. If at any time the number of Common Shares, as may be adjusted as described above, owned by the MBSC Sponsor and its affiliates, in the aggregate, fall below 3% of all outstanding Common Shares and 50% of the number of Common Shares held by them as of the Closing, the director nominated by the MBSC Sponsor will resign as a member of the Company Board. The former Greenfire shareholders party to the Investor Rights Agreement also agreed, for so long as the MBSC Sponsor has the right to designate a director to the Company Board, to vote all of their Common Shares in favor of the appointment of such designee. At the Closing, MBSC Sponsor appointed Matthew Perkal as its designee. See “Item 6. Directors, Senior Management andEmployees—A. Directors and Senior Management.”

B. Compensation

The following table sets forth information about certain compensation awarded to, earned by or paid to the Company’s: (i) President and Chief Executive Officer; (ii) Chief Financial Officer; (iii) and the next three highest compensated individuals (collectively referred to as the Company’s “NEOs”) for the year ended December 31, 2023.

			Short-term
(Dollar amounts in CAD)	Salaries &		Benefits
Name	Fees^(1)^		Other^(2)(3)^		Total
Robert Logan	$	436,800.00	$	341,496.87	$	778,296.87
David Phung(4)	$	336,000.00	$	355,578.16	$	691,578.16
Tony Kraljic(4)	$	139,923.04	$	162,829.35	$	302,752.39
Albert Ma	$	337,296.96	$	379,890.34	$	717,187.30
Kevin Millar	$	374,774.40	$	539,616.72	$	914,391.12
Darren Crawford	$	307,315.06	$	313,059.63	$	620,374.69

All values are in US Dollars.

(1)	“Salary and Fees”<br> represents the actual salary amounts paid to executive officers in the fiscal year ending December 31, 2023, in CAD dollars.
(2)	“Other”<br> represents bonuses earned by the executive officers for services in the fiscal year of 2023 and other fringe benefits provided to<br> the executive officers, including vacation, retirement fund matching, flex spending accounts, camp and isolation allowance, travel<br> allowance, health benefits, specialized technical designation compensation, life insurance, dependent life insurance, accidental<br> death in CAD dollars & dismemberment, parking, executive medical assessments, health spending accounts, and additional Best<br> Doctor’s coverage and loan settlements under the long term retention program in CAD dollars.
---	---
(3)	Mr. Phung resigned as Chief<br> Financial Officer, and Mr. Kraljic was appointed as his successor, effective as of October 2023
---	---
(4)	Includes CAD$145,600 paid<br> upon termination of Mr. Phung’s employment in accordance with his employment agreement.
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Philosophy

The Company’s executive compensation program is designed to attract and retain high performing leaders and value creators. In efforts to continue the Company’s path for sustainable growth, the Company Board supports executive compensation that reinforces engagement, continuous improvement and optimizes corporate performance. The Company’s approach to executive compensation is competitive with peer Canadian oil and gas companies where there is substantial upside for high performance and downside for under performance.

The objectives of the program aim to provide competitive wages as compared to the Company’s peers, emphasize pay for performance through an annual short-term incentive program, and at-risk compensation that aligns executive and stakeholder’s interests for value creation. Through this executive compensation program, Greenfire has historically offered NEOs cash compensation in the form of base salary and discretionary bonuses. Greenfire’s NEOs have also historically participated in the Greenfire Equity Plan, pursuant to which they have been entitled to receive equity compensation in the form of Greenfire Performance Warrants upon the happening of certain pre-determined events. In addition to wages and incentive programs, NEOs also received health, dental and wellness benefits, which health, dental and wellness benefits are also provided to all employees of Greenfire.

Pursuant to the Amalgamation, the Greenfire Equity Plan was amended and restated by the Company Performance Warrant Plan. A portion of the Greenfire Performance Warrants outstanding prior to the Business Combination remained outstanding following Closing, and were converted into the Company Performance Warrants governed by the Company Performance Warrant Plan, which entitles the holders thereof to purchase Common Shares in lieu of Greenfire Common Shares. All the Company Performance Warrants were considered to be fully vested and exercisable following the Closing. No further Greenfire Performance Warrants will be granted pursuant to the Company Performance Warrant Plan.

In connection with the Business Combination, the Company adopted the Company Incentive Plan to facilitate the grant of the Company Awards to directors, employees (including executive officers) and consultants of the Company and certain of its affiliates and to enable the Company to obtain and retain the services of these individuals, which is essential to the Company’s long-term success.

Review and Governance

Historically, the Greenfire Board did not have a compensation committee or other committee responsible for establishing or making recommendations with respect to the compensation programs for the executive officers. The compensation of Greenfire’s CEO was set by the Greenfire Board and the compensation of Greenfire’s other NEOs was set by the CEO in consultation with the Greenfire Board.

HistoricalElements of Executive Compensation

Historically, Greenfire strived to ensure that every employee understood how they contributed and impacted the results of the organization. Greenfire's executive compensation framework included a combination of guaranteed and variable pay based on performance. There were three elements to executive officer total compensation with weighted emphasis on variable components of pay for performance and performance based equity compensation.

Greenfire’ compensation framework had three elements: (1) guaranteed pay, (2) incentive compensation, and (3) benefits and other compensation.

(1) Guaranteed Pay — Annual Base Salary

Base salary was the fixed component of total direct compensation for the NEOs, and is intended to attract and retain executives, providing a competitive amount of income certainty. These annual salaries were determined by analyzing similar sized oil and gas companies.

(2) Incentive Compensation — Annual Bonuses and Performance Based Equity Compensation

●	Short-Term Incentive — Annual<br> Bonus

In consultation with Lane Caputo Compensation Inc. (“Lane Caputo”), in December 2023, the Company’s Board determined bonus target levels for the executive officers under a new short-term incentive program with the CEO eligible for a cash bonus of up to the full amount of his base salary, senior vice-presidents eligible for bonuses of up to two-thirds of their respective base salaries and vice-presidents eligible for bonuses of up to one-half of their respective base salaries. The actual amount of the bonuses up to the target level will be determined based on corporate and individual performance, with the amount of the bonuses for executive officers primarily based on corporate performance.

●	Long-Term Incentive — Equity<br> based compensation — Company Incentive Plan

Executive officers historically participated in the Greenfire Equity Plan with all other employees. The purpose of the Greenfire Equity Plan was to provide an incentive to the directors, officers, employees, consultants and other personnel of Greenfire to achieve the longer-term objectives of Greenfire, to give suitable recognition to the ability and profession of such persons who contribute materially to the success of Greenfire, and to attract to and retain in the employ of Greenfire, persons of experience and ability, by providing them with the opportunity to acquire an increased proprietary interest in Greenfire. The Greenfire Performance Warrants contained both time vesting and performance vesting conditions in order to provide a retention incentive and an incentive for holders of the Greenfire Performance Warrants to work towards Greenfire achieving certain corporate performance targets.

(3) Benefits and Other Compensation

The Company provides executives with other compensation in the form of group health, dental and insurance benefits; sick leave (salary continuance) and long-term disability; business travel medical insurance; out of country medical insurance; parking benefits; health care spending account; employee assistance program and life Insurance. The Company offers these benefits consistent with local market practice. The Company also provides field based executives a camp and isolation allowance, travel allowances and compensation to reflect specialized technical designations.

Employment Agreements

Robert Logan, EmploymentAgreement

On January 28, 2021, Robert Logan entered into an executive employment agreement with GAC covering the terms and conditions of his employment as President and Chief Executive Officer. Pursuant to his employment agreement, if terminated without just cause, Mr. Logan would be entitled to severance payments including (i) six months of his salary plus one month of salary for each year of service to Greenfire, and (ii) a pro rata bonus for the severance period based on milestones achieved for the year of termination, as determined by the Greenfire Board. Such payments would be subject to Mr. Logan signing a release of any potential claims. Mr. Logan’s employment agreement contains customary confidentiality and proprietary information provisions, as well as employee and consultant non-solicitation covenants for one year post-termination.

David Phung, EmploymentAgreement

On January 28, 2021, David Phung entered into an executive employment agreement with GAC covering the terms and conditions of his employment as Chief Financial Officer. Pursuant to his employment agreement, if terminated without just cause, Mr. Phung would be entitled to severance payments including (i) six months of his salary plus one month of salary for each year of service to Greenfire, and (ii) a pro-rata bonus for the severance period based on milestones achieved for the year of termination, as determined by the Greenfire Board. Such payments would be subject to Mr. Phung signing a release of any potential claims. Mr. Phung’s employment agreement contains customary confidentiality and proprietary information provisions, as well as employee and consultant non-solicitation covenants for one year post-termination. Mr. Phung resigned as Chief Financial Officer, and Tony Kraljic was appointed as his successor, effective as of September 30, 2023.

Tony Kraljic, EmploymentAgreement

On September 30, 2023, Tony Kraljic entered into an executive employment agreement with Greenfire Resources Employment Corporation covering the terms and conditions of his employment as Chief Financial Officer. Pursuant to his employment agreement, if terminated without just cause, Mr. Kraljic would be entitled to severance payments including (i) six months of his salary plus one month of salary for each year of service to Greenfire, (ii) a pro rata bonus for the severance period based on milestones achieved for the year of termination, as determined by the Greenfire Board, and (iii) fifteen percent (15%) of the annual base salary as of the termination date to compensate for the loss of eligibility for benefits and perquisites of employment. Such payments would be subject to Mr. Kraljic signing a release of any potential claims. Mr. Kraljic’s employment agreement contains customary confidentiality and proprietary information provisions, as well as employee and consultant non-solicitation covenants for one year post-termination.

Albert Ma, EmploymentAgreement

Effective December 21, 2020, Albert Ma entered into an executive employment agreement with Greenfire Hangingstone Operating Corporation, which contract was assigned to Greenfire Resources Employment Corporation effective January 1, 2022, covering the terms and conditions of his employment as Vice President, Facilities and Engineering. Pursuant to his employment agreement, if terminated without just cause, Mr. Ma would be entitled to severance payments including four weeks of his salary, plus other entitlements as set out in the EmploymentStandards Code (Alberta) (the “Alberta Code”). Mr. Ma’s employment agreement contains customary confidentiality and proprietary information provisions.

Kevin Millar, EmploymentAgreement

Effective January 1, 2022, Kevin Millar entered into an executive employment agreement with Greenfire Resources Employment Corporation covering the terms and conditions of his employment as Senior Vice President, Operations. Pursuant to his employment agreement, if terminated without just cause, Mr. Millar would be entitled to severance payment in an amount equal to four weeks of the Average Wages (as defined in Mr. Millar’s employment agreement) as at the termination date for each full or partial year of employment. Such payment in excess of such minimum severance as set out in the Alberta Code would be subject to Mr. Millar signing a release of any potential claims. Mr. Millar’s employment agreement contains customary confidentiality and proprietary information provisions, as well as employee and consultant non-solicitation covenants for one year post-termination.

Darren Crawford,Employment Agreement

Effective January 1, 2022, Darren Crawford entered into an executive employment agreement with Greenfire Resources Employment Corporation covering the terms and conditions of his employment as Vice President, Operations & Projects. Pursuant to his employment agreement, if terminated without just cause, Mr. Crawford would be entitled to severance payment in an amount equal to four weeks of the Average Wages (as defined in Mr. Crawford’s employment agreement) as at the termination date for each full or partial year of employment between the Commencement Date (as defined in Mr. Crawford’s employment agreement) and the Termination Date. Such payment in excess of such minimum severance as set out in the Alberta Code would be subject to Mr. Crawford signing a release of any potential claims. Should Mr. Crawford fail to provide such release, Mr. Crawford shall only be entitled to severance as set out in the Alberta Code. Mr. Crawford’s employment agreement contains customary confidentiality and proprietary information provisions, as well as employee and consultant non-solicitation covenants for one year post-termination.

Compensation ofthe Company’s Directors — Year Ended December 31, 2023

The following table sets forth compensation paid to directors in respect of those positions for the fiscal year ended December 31, 2023.

Director	Annual<br><br> compensation
Julian McIntyre	$	209,804.79
Venkat Siva	$	200,000.00
Jonathan Klesch	$	200,000.00
Matt Perkal^(1)^	$	56,027.40
W. Derek Aylesworth^(1)^	$	32,215.75
David Phung^(2)(3)^		–
Robert Logan^(3)^		–
Total	$	698,047.95

(1)	Messrs. Perkal and Aylesworth<br> became directors of the Company upon the Closing of the Business Combination.
(2)	Mr. Phung served as a director<br> of the Company prior to the Business Combination.
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(3)	Please see disclosure under<br> the heading “—Compensation of the Company’s Executive Officers — Year Ended December 31, 2023” for compensation paid to Messrs. Phung and Logan in their capacities as executive officers.
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Equity Compensation

Pursuant to the Amalgamation, the Greenfire Equity Plan was amended and restated by the Company Performance Warrant Plan. A portion of the Greenfire Performance Warrants outstanding prior to the Business Combination remained outstanding following Closing and were converted into the Company Performance Warrants governed by the Company Performance Warrant Plan, which entitles the holders thereof to purchase the Common Shares in lieu of Greenfire Common Shares. All the Company Performance Warrants were considered to be fully vested and exercisable following the Closing. No further Company Performance Warrants will be granted pursuant to the Company Performance Warrant Plan.

In connection with the Business Combination, the Company adopted the Company Incentive Plan, to facilitate the grant of the Company Awards to directors, employees (including executive officers) and consultants of the Company and certain of its affiliates and to enable the Company to obtain and retain the services of these individuals, which is essential to the Company’s long-term success. The Company Incentive Plan is subject to applicable Laws and stock exchange rules.

C. Board Practices

Election and Appointmentof Directors

Under the Company Articles, the Company Board is to consist of a minimum of one and a maximum of 13 directors. Under the provisions of the ABCA, as the Company is currently a “reporting issuer” in Alberta and Ontario, the Company Board shall not have fewer than three directors.

At any general meeting of the Company Shareholders at which directors are to be elected, a separate vote of the Company Shareholders entitled to vote will be taken with respect to each candidate nominated for director. Pursuant to the ABCA and the Company Bylaws, any vacancy occurring on the Company Board may be filled by a quorum of the remaining directors, subject to certain exceptions. If there is not a quorum of directors, or if there has been a failure to elect the number or minimum number of directors required by the Company Articles, the directors then in office shall, without delay, call a special meeting of Company Shareholders to fill the vacancy, and if they fail to call a meeting or if there are no directors then in office, any the Company Shareholder can call the meeting. Any director appointed in accordance with the preceding sentence will hold office until the next annual meeting of shareholders or until such director’s successor has been duly elected or appointed. The Company directors may, between annual general meetings, appoint one or more additional directors of the Company to serve until the next annual general meeting, but the number of additional directors shall not at any time exceed 1/3 of the number of directors who held office at the expiration of the last annual general meeting of the Company Shareholders.

Pursuant to the Investor Rights Agreement, until such time as the “Sponsor Parties” (as such term is defined in the Investor Rights Agreement) beneficially own, in the aggregate, less than 3% of all outstanding Common Shares, the Company shall take all necessary action such that one individual designated by the MBSC Sponsor (the “MBSC Sponsor Director”) is included in the slate of nominees recommended by the Company Board or duly constituted committee thereof for election as directors at each applicable annual meeting of the Company at which the MBSC Sponsor Director’s term would expire.

Independence ofDirectors

The Common Shares are listed on the NYSE under the ticker symbol “GFR” and on the TSX under the ticker symbol “GFR”. As a result, the Company adheres to the rules of the NYSE and applicable Canadian securities laws in determining whether a director is independent. The Company Board consults with its counsel to ensure that its determinations are consistent with those rules and all relevant securities and other laws and regulations regarding the independence of directors. The listing standards of the NYSE generally define an “independent director” as a person, other than an executive officer of a company or any other individual having a relationship which, in the opinion of the issuer’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Under NI 58-101, a director is considered to be independent if he or she is independent within the meaning of Section 1.4 of NI 52-110. Pursuant to NI 52-110, an independent director is a director who is free from any direct or indirect material relationship with the Company which could, in the view of the Company Board, be reasonably expected to interfere with the exercise of such director’s independent judgement.

The Company Board has determined that Julian McIntyre, Venkat Siva, Matthew Perkal, W. Derek Aylesworth and Jonathan Klesch are considered independent directors. Julian McIntyre has been appointed as Chair of the Company Board. In accordance with the Company Bylaws, the Chair presides at all meetings of the Company Board and, unless otherwise determined, at all meetings of Company Shareholders and to enforce the rules of order in connection with such meetings.

The Company Board will hold meetings of the independent directors or hold in camera sessions during regularly scheduled Company Board meetings where non-independent directors and other members of management of the Company are not present.

Orientation andContinuing Education

The Company does not currently have a formal orientation and education program for new recruits to the Company Board; however, it is anticipated that such orientation and education will be provided on an informal basis to any new directors joining the Company Board. As new directors join the Company Board, it is anticipated that management will provide these individuals with corporate policies, historical information about the Company, as well as information on the Company’s performance and its strategic plan with an outline of the general duties and responsibilities entailed in carrying out their duties. It is anticipated that these procedures will prove to be a practical and effective approach in light of the Company’s particular circumstances, including the size of the Company and the experience and expertise of the members of the Company Board.

Assessments

The Company Board does not presently have a formal process for assessing the effectiveness of the Company Board, its committees or the effectiveness and contributions of individual directors. In the near term, the Company Board expects to adopt appropriate procedures for assessing the effectiveness of the Company Board, its committees and the effectiveness and contributions of individual directors.

Removal of Directors

Subject to the ABCA, the Company Shareholders may by ordinary resolution at a special meeting remove any director or directors from office before the expiration of his or her term of office and may elect any person in his or her stead for the remainder of the director’s term.

Proceedings of Boardof Directors

A resolution in writing signed by all the directors entitled to vote on that resolution at a meeting of directors or committee of directors is as valid as if it had been passed at a meeting of directors or committee of directors. In accordance with the relevant mandates of the Company Board and its committees, it is expected that time will be set aside at every meeting to meet in camera (without management present) to facilitate open and candid discussion.

The Company BoardConflicts of Interest

Any director of the Company who has a material personal interest in a contract or proposed contract of the Company, holds any office or owns any property such that the director might have duties or interests which conflict with, or which may conflict, either directly or indirectly, with the directors’ duties or interests as a director, must give the directors notice of the interest at a meeting of directors.

For purposes of managing any potential conflicts of interest, a director who has a material interest in a matter before the Company Board or any committee on which he or she serves is required to disclose such interest as soon as the director becomes aware of it. In situations where a director has a material interest in a matter to be considered by the Company Board or any committee on which he or she serves, such director may be required to absent himself or herself from the meeting while discussions and voting with respect to the matter are taking place. Directors will also be required to comply with the relevant provisions of the ABCA regarding conflicts of interest.

As previously noted, certain members of the Company Board are also members of the board of directors of other public companies.

Indemnificationand Insurance Obligations of the Company

Under subsection 124(1) of the ABCA, except in respect of an action by or on behalf of the Company to procure a judgment in the Company’s favor, the Company may indemnify the “Indemnified Persons” against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by any such Indemnified Person in respect of any civil, criminal or administrative, investigative or other actions or proceedings in which the Indemnified Person involved by reason of being or having been director or officer of the Company, if the “Discretionary Indemnification Conditions” are met.

Notwithstanding the foregoing, subsection 124(3) of the ABCA provides that an Indemnified Person is entitled to indemnity from the Company in respect of all costs, charges and expenses reasonably incurred by the Indemnified Person in connection with the defense of any civil, criminal, administrative, investigative or other action or proceeding in which the Indemnified Person is involved by reason of being or having been a director or officer of the Company if the “Mandatory Indemnification Conditions” are met. Under subsection 124(3.1) of the ABCA, the Company may advance funds to an Indemnified Person in order to defray the costs, charges and expenses of such a proceeding; however, the Indemnified Person must repay the funds if the Indemnified Person does not fulfill the Mandatory Indemnification Conditions. The indemnification may be made in connection with a derivative action only with court approval and only if the Discretionary Indemnification Conditions are met.

Subject to the aforementioned prohibitions on indemnification, an Indemnified Person will be entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by such person in connection with the defense of any civil, criminal, administrative, investigative or other action or proceeding in which the Indemnified Person is involved by reason of being or having been a director or officer of the corporation or body corporate, if the person seeking indemnity: (i) was not judged by a court or competent authority to have committed any fault or omitted to do anything that the person ought to have done; and (ii) (A) the individual acted honestly and in good faith with a view to the best interests of the corporation; and (B) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that the individual’s conduct was lawful.

As permitted by the ABCA, the Company Bylaws require the Company to indemnify directors or officers of the Company, former directors or officers of the Company or other individuals who, at the Company’s request, act or acted as directors or officers or in a similar capacity of another entity of which the Company is or was a shareholder or creditor (and such individual’s respective heirs and personal representatives) to the extent permitted by the ABCA. Because the Company Bylaws require that indemnification be subject to the ABCA, any indemnification that the Company provides is subject to the same restrictions set out in the ABCA which are summarized, in part, above.

The Company may also, pursuant to subsection 124(4) of the ABCA, purchase and maintain insurance, or pay or agree to pay a premium for insurance, for each person referred to in subsection 124(1) of the ABCA against any liability incurred by such person as a result of their holding office in the Company or a related body corporate.

Board Committees

Audit and ReservesCommittee

The Company Board has established the Audit and Reserves Committee comprised of independent members of the Company Board. In addition to the Audit and Reserves Committee responsibilities relating to audit, accounting and financial matters, the Audit and Reserves Committee is also responsible for matters relating to the Company’s oil and gas reserves reporting and disclosure. Our audit and reserves committee is comprised of W. Derek Aylesworth, Venkat Siva and Matthew Perkal, with Mr. Aylesworth serving as chairman of the committee. Each of the members of the Audit and Reserves Committee is considered “financially literate” and is considered “independent” within the meaning of NI 52–110, the rules of the NYSE and Rule 10A-3 of the Exchange Act.

The Company believes that each of the members of the Audit and Reserves Committee possesses: (a) an understanding of the accounting principles used by the Company to prepare its financial statements; (b) the ability to assess the general application of such accounting principles in connection with the accounting for estimates, accruals and reserves; (c) experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements, or experience actively supervising one or more individuals engaged in such activities; and (d) an understanding of internal controls and procedures for financial reporting.

Mr. Aylesworth is considered an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise.

The mandate of the Audit and Reserves Committee sets out the principal functions of the audit and reserves committee, including:

●	appointing, compensating, retaining, evaluating, terminating<br>and overseeing the Company’s independent registered public accounting firm;
●	discussing with the Company’s independent registered<br>public accounting firm their independence from the Company’s management;
---	---
●	reviewing with the Company’s independent registered<br>public accounting firm the scope and results of their audit;
---	---
●	approving all audit and permissible non-audit services<br>to be performed by the Company’s independent registered public accounting firm;
---	---
●	overseeing the financial reporting process and discussing<br>with the Company’s management and the Company’s independent registered public accounting firm the interim and annual financial<br>statements;
---	---
●	reviewing and monitoring the Company’s accounting principles,<br>accounting policies, financial and accounting controls and compliance with legal and regulatory requirements;
---	---
●	reviewing the Company’s policies on risk assessment<br>and risk management;
---	---
●	reviewing related party transactions;
---	---
●	establishing procedures for the confidential anonymous submission<br>of concerns regarding questionable accounting, internal controls or auditing matters;
---	---
●	assisting the Company’s management in fulfilling its<br>responsibilities under NI 51-101 and applicable U.S. securities laws with respect to the oil and natural gas reserves evaluation<br>process;
---	---
●	reviewing any public disclosure and regulatory filings with<br>respect to any reserves evaluation and related oil and natural gas activities;
---	---
●	acting as the steward of the Company’s operational performance;<br>and
---	---
●	reviewing the Company’s operating, development and portfolio<br>management strategies, capital allocation, budgeting and forecasting and ensuring that the Company has in place an adequate process to<br>review all material capital investments.
---	---

ESG and CompensationCommittee

In the near term, the Company expects to establish the ESG and Compensation Committee of the Company Board comprised entirely of independent directors in accordance with NI 58-101 and the rules of the SEC and the NYSE; however, at the present time, it has not been determined which members of the Company Board will serve on the ESG and Compensation Committee. The Company Board has adopted a mandate for the ESG and Compensation Committee, which details the principal responsibilities of the ESG and Compensation Committee. The ESG and Compensation Committee is expected to be responsible for, among other things, overseeing the selection of persons to be nominated to serve on the Company Board, overseeing the compensation policies and decisions of the Company, and certain other responsibilities relating to ESG.

The ESG and compensation committee is responsible for, among other things:

●	identifying individuals qualified to become members of the<br>Company Board, consistent with criteria approved by the Company Board;
●	evaluating the overall effectiveness of the Company Board<br>and its committees;
---	---
●	reviewing developments in corporate governance compliance<br>and developing and recommending to the Company Board a set of corporate governance guidelines and principles;
---	---
●	reviewing developments relating to sustainability, environmental<br>and social matters and recommending to the Company Board sustainability, environmental and social guidelines and principles;
---	---
●	reviewing and approving corporate goals and objectives with<br>respect to the compensation of Company’s Chief Executive Officer, evaluating the Company’s Chief Executive Officer’s<br>performance in light of these goals and objectives and setting compensation;
---	---
●	reviewing and setting or making recommendations to the Company<br>Board regarding the compensation of the Company’s other executive officers;
---	---
●	reviewing and making recommendations to the Company Board<br>regarding director compensation;
---	---
●	reviewing and approving or making recommendations to the Company<br>Board regarding the Company’s incentive compensation and equity-based plans and arrangements; and
---	---
●	appointing and overseeing any compensation consultants.
---	---

The ESG and compensation committee will consider persons identified by its members, management, directors and others as nominees for election to the Company Board. The guidelines for selecting nominees, which will be specified in the ESG and compensation committee mandate, is expected to generally provide that persons to be nominated should:

●	have demonstrated notable or significant achievements in business,<br>education or public service;
●	possess the requisite intelligence, education and experience<br>to make a significant contribution to the Company Board and bring a range of skills, diverse perspectives and backgrounds to its deliberations;<br>and
---	---
●	have the highest ethical standards, a strong sense of professionalism<br>and intense dedication to serving the interests of the Company Shareholders.
---	---

The ESG and compensation committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the Company Board. The ESG and compensation committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members.

The ESG and compensation committee’s mandate also provides that the ESG and compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and is directly responsible for the appointment, compensation and oversight of the work of any such adviser.

However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the ESG and compensation committee will consider the independence of each such adviser, including the factors required by the NYSE and the SEC.

100

Compensation CommitteeInterlocks and Insider Participation

None of the Company’s proposed officers currently serves, and in the past year has not served, (i) as a member of the compensation committee or the board of directors of another entity, one of whose officers is expected to serve on the Company’s ESG and Compensation Committee, or (ii) as a member of the compensation committee of another entity, one of whose officers is expected to serve on the Company Board.

Risk Oversight

The Company Board will oversee the risk management activities designed and implemented by the Company’s management. The Company Board expects to execute its oversight responsibility both directly and through its committees. The Company Board expects to also consider specific risk topics, including risks associated with its strategic initiatives, business plans and capital structure. The Company’s management, including its executive officers, will be primarily responsible for managing the risks associated with operation and business of the Company and will provide appropriate updates to the Company Board and the Audit and Reserves Committee. Under the mandate of the Audit and Reserves Committee, the Company Board has delegated to the Audit and Reserves Committee oversight of its risk management process, and its other committees will also consider risk as they perform their respective committee responsibilities. All committees will report to the Company Board as appropriate, including when a matter rises to the level of material or enterprise risk.

Code of BusinessConduct and Ethics

The Company has adopted a Code of Conduct and Business Ethics (the “Code”), which is posted on its website, and will post any amendments to, or any waivers from, a provision of the Code on its website, and also intends to disclose any amendments to or waivers of certain provisions of its Code in a manner consistent with NI 58-101 and the applicable rules or regulations of the SEC and the NYSE. A copy of the Code is also available on SEDAR+ at www.sedarplus.ca.

In accordance with the ABCA, directors who are a party to, or are a director or an officer of a person who is a party to, a material contract or material transaction or a proposed material contract or proposed material transaction, are required to disclose the nature and extent of their interest and not vote on any resolution to approve the contract or transaction.

Incentive-BasedCompensation Recovery Policy

Company has adopted an Incentive-Based Compensation Recovery Policy (the “Recovery Policy”) to enable the Company to recover Erroneously Awarded Compensation (as defined in the Recovery Policy) in the event that the Company is required to prepare an Accounting Restatement (as defined in the Recovery Policy). The Recovery Policy provides for the administration thereof by the ESG and Compensation Committee or by the Company Board (as determined by the Company Board). The Recovery Policy is intended to comply with the requirements set forth in Section 303A.14 of the NYSE Listed Company Manual and is available on the Company’s website.

Shareholder Communicationwith the Company Board

The Company Shareholders and interested parties may communicate with the Company Board, the Chair of the Board or any committees thereof, or the independent directors as a group by emailing the Company Board, the Chair of the Board or any committees thereof in care of the Company’s investor relations department at investors@greenfireres.com.

Insider TradingPolicy

The Company has adopted a disclosure and insider trading policy which prohibits its executives, other employees and directors from: (i) trading in its securities while in possession of material undisclosed information about the Company; and (ii) entering into certain derivative-based transactions that involve, directly or indirectly, securities of the Company, during a restricted period. The disclosure and insider trading policy is posted on the Company’s website.

101

Diversity

The Company Board has not adopted any policies that address the identification and nomination of women or other diverse candidates to the Company Board or to management of the Company. The Board recognizes the importance and benefit of having a board of directors and senior management composed of highly talented and experienced individuals having regard to the need to foster and promote diversity among board members and senior management with respect to attributes such as gender, ethnicity and other factors. In support of this goal, the ESG and Compensation Committee intends to, when identifying candidates to nominate for election to the Company Board or appoint as senior management or in its review of senior management succession planning and talent management:

●	consider<br> individuals who are highly qualified, based on their talents, experience, functional expertise<br> and personal skills, character and qualities having regard to Company’s current and<br> future plans and objectives, as well as anticipated regulatory and market developments;
●	consider<br> criteria that promote diversity, including with regard to gender, ethnicity, and other considerations;
---	---
●	consider<br> the level of representation of women on its board of directors and in senior management positions,<br> along with other markers of diversity, when making recommendations for nominees to the Company<br> Board or for appointment as senior management and in general with regard to succession planning<br> for the Company Board and senior management; and
---	---
●	as<br> required, engage qualified independent external advisors to assist the Company Board in conducting<br> its search for candidates that meet the board of directors’ criteria regarding skills,<br> experience and diversity.
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At the present time, there are no women serving on the Company Board and there is one woman serving in an executive officer position, which represents approximately 17% of the number of our executive officer positions.

D. Employees

At December 31, 2023, the Company had 39 full-time employees and 5 consultants located at its Calgary office and 134 full-time employees and 16 contracted operators in various field locations. The Company’s goal is to hire and retain highly qualified and motivated individuals.

E. Share Ownership

See Item “6.B. Compensation” and “Item 7. Major Shareholders and Related Party Transactions.”

F. Disclosure ofa registrant’s action to recover erroneously awarded compensation

Not applicable.

Item 7. Major Shareholdersand Related Party Transactions

A. Major Shareholders

The following table sets forth information regarding the beneficial ownership of the Common Shares as of the date hereof by:

●	each person who is, or<br> is expected to be, the beneficial owner of more than 5% of outstanding the Common Shares;
●	each of the Company’s<br> named executive officers and directors; and
---	---
●	all officers and directors<br> of the Company, as a group.
---	---

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security. A person is also deemed to be a beneficial owner of securities that person has a right to acquire within 60 days including, without limitation, through the exercise of any option, warrant or other right or the conversion of any other security. Such securities, however, are deemed to be outstanding only for the purpose of computing the percentage beneficial ownership of that person but are not deemed to be outstanding for the purpose of computing the percentage beneficial ownership of any other person.

102

The beneficial ownership of the Company is based on 68,707,994 Common Shares issued and outstanding as of March 26, 2024.

Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all Common Shares beneficially owned by them.

Unless otherwise indicated, the address of each Company director and executive officer is c/o Greenfire Resources Ltd., 1900-205 5^th^Avenue SW Calgary, Alberta T2P 2V7.

Name and Address of Beneficial Owners	Number of<br><br> the<br><br> Common<br><br> Shares
Five Percent Holders
M3-Brigade Sponsor III LP^(1)^		3,850,000	9.0	%^(2)^
Brigade Capital Management, LP^(3)^		6,069,560	8.8	%^(4)^
Modro Holdings LLC^(5)^		4,692,909	7.3	%^(6)^
Directorsand Executive Officers of the Company
Robert Logan		3,332,959	7.2	%^(7)^
Tony Kraljic		—	—
Albert Ma		366,428	*
Kevin Millar		271,900	*
Jonathan Klesch^(8)^		5,499,506	8.6	%^(9)^
Julian McIntyre^(10)^		19,871,539	30.5	%^(11)^
Venkat Siva^(12)^		6,599,406	10.3	%^(13)^
Matthew Perkal^(14)^		—	—
W. Derek Aylesworth		—	—
Crystal Park		109,995	*
All Directors and Executive Officers of the Company as a group (10 Individuals)		36,051,733	55.5	%
*	Less than 1%.
---	---
(1)	The business address is<br> 1700 Broadway, 19th Floor, New York, NY 10019. M3-Brigade Sponsor III LP is the record holder of the shares reported<br> herein. The general partner of M3-Brigade Sponsor III LP is M3-Brigade Acquisition Partners III Corp. Mohsin Y. Meghji is the sole<br> director of M3-Brigade Acquisition Partners III Corp. Mr. Meghji may be deemed to have beneficial ownership of the common stock held<br> directly by M3-Brigade Sponsor III LP.
---	---
(2)	Includes the Common Shares<br> issuable upon exercise of 2,526,667 Company Warrants.
---	---
(3)	Brigade Capital Management,<br> LP, a Delaware limited partnership (“Brigade CM”), Brigade Capital Management LLC, a Delaware limited liability company<br> (“Brigade GP”) and Donald E. Morgan, III (collectively, the “Brigade Parties”) have shared voting and dispositive<br> power with respect to 6,069,560 Common Shares (including 194,000 Common Shares issuable upon exercise of Company Warrants) which<br> are held directly by private investment funds and accounts managed by Brigade CM. Brigade GP is the general partner of Brigade<br> CM. Mr. Morgan is the managing member of Brigade GP. The business address of the Brigade Parties is 399 Park Avenue, 16th Floor,<br> New York, NY 10022.
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(4)	Includes the Common Shares<br> issuable upon exercise of 194,000 Company Warrants.
(5)	The business address is<br> 2283 San Ysidro Dr., Beverly Hills, CA 90210.
---	---
(6)	Includes the Common Shares<br> issuable upon exchange of 372,000 Company Warrants.
---	---
(7)	Includes the Common Shares<br>issuable upon exchange of (i) 375,000 Company Warrants, (ii) 1,397,796 Company Performance Warrants and 100 restricted stock units.
---	---
(8)	Owned through Spicelo Limited,<br> a company formed under the laws of Cyprus. The Common Shares and Company Warrants held by Spicelo Limited are subject to a Limited<br> Recourse Guarantee and Securities Pledge Agreement dated July 21, 2022 entered into by Spicelo Limited in favor of certain lenders<br> to a group of entities unrelated to Greenfire that are, together with Spicelo, currently undergoing insolvency proceedings in Canada.<br> In such insolvency proceedings, such lenders have sought to enforce against, and seize, the Common Shares and Company Warrants held<br> by Spicelo Limited. Such lenders have taken the position that if the Common Shares and Company Warrants held by Spicelo Limited are<br> transferred to the lenders such lenders will not be bound by the terms of the Lock-Up Agreement.
---	---
(9)	Includes the Common Shares<br> issuable upon exchange of 435,938 Company Warrants.
---	---
(10)	Owned through Allard Services<br> Limited, a company formed under the laws of the Isle of Man.
---	---
(11)	Includes the Common Shares<br> issuable upon exchange of 1,575,187 Company Warrants.
---	---
(12)	Owned through Annapurna<br> Limited, a company formed under the laws of the Isle of Man.
---	---
(13)	Includes the Common Shares<br> issuable upon exchange of 523,125 Company Warrants.
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103

SignificantChanges in Ownership

To our knowledge, other than as disclosed in the table above, our other filings with the SEC and this Annual Report, there have been no significant changes in ownership of our Common Shares held by any major shareholder during the past three years.

Voting Rights

Except as described under “Item 6. Directors, Senior Management and Employees – Investors Rights Agreement”, none of the Company’s major shareholders have different voting rights.

B. Related Party Transactions

For each of the fiscal years ended December 31, 2021, and December 31, 2022, Greenfire paid CAD$ 85,733 and CAD$276,063, respectively, in directors fees to each of Messrs. McIntyre, Siva, and Klesch.

Transactions Relatedto the Business Combination

Investor Rights Agreement

Concurrently with the Closing, the Company entered into the Investor Rights Agreement with MBSC Sponsor and certain other holders named therein, pursuant to which the Company agreed to file with the SEC (at the Company’s sole cost and expense) the Resale Registration Statement. The Resale Registration Statement was declared effective by the SEC on February 6, 2024. Among other things, in certain circumstances, the holders of “Registrable Securities” (as defined in the Investor Rights Agreement) can demand the Company’s assistance with underwritten offerings and block trades. The holders will also be entitled to customary piggyback registration rights. The Company also agreed that, until the MBSC Sponsor and its affiliates own less than 3% of all outstanding Common Shares, MBSC Sponsor has certain rights to designate a nominee to the Company Board. See the description of the Investor Rights Agreement under the heading “InvestorRights Agreement” in Item 6.A. for more information.

Lock-Up Agreement

As of the Closing Date, the MBSC Sponsor, and certain Greenfire Shareholders were bound by a Lock-Up Agreement pursuant to which, among other things, each of the MBSC Sponsor and the former Greenfire Shareholders party thereto agreed, subject to certain customary exceptions, not to (i) sell or assign, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidation with respect to or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder with respect to, any equity securities of the Company, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any equity securities of the Company, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise or (iii) make any public announcement of any intention to effect any transaction specified in clause (i) or (ii) until the earliest of (a) the date that is 180 days after the Closing Date, (b) the date that the last reported closing price of a Common Share equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-day trading period commencing at least 75 days after the Closing Date, and (c) the date on which the Company completes a liquidation, merger, amalgamation, arrangement, share exchange, reorganization or other similar transaction that results in all the Company Shareholders having the right to exchange their shares of capital stock for cash, securities or other property. The Common Shares and Company Warrants held by Spicelo Limited are subject to a Limited Recourse Guarantee and Securities Pledge Agreement dated July 21, 2022 entered into by Spicelo Limited in favour of certain lenders to a group of entities unrelated to Greenfire that are, together with Spicelo, currently undergoing insolvency proceedings in Canada. In such insolvency proceedings, such lenders have sought to enforce against, and seize, the Common Shares and Company Warrants held by Spicelo Limited. Such lenders have taken the position that if the Common Shares and Company Warrants held by Spicelo Limited are transferred to the lenders such lenders will not be bound by the terms of the Lock-Up Agreement.

104

Interest of Managementand Others in Material Transactions

Except as set out above or described elsewhere in this Annual Report, there are no material interests, direct or indirect, of any of our directors or executive officers, any shareholder that beneficially owns, or controls or directs (directly or indirectly), more than 10% of any class or series of our outstanding voting securities, or any associate or affiliate of any of the foregoing persons, in any transaction within the three years before the date in this Annual Report that has materially affected or is reasonably expected to materially affect us or any of our subsidiaries.

Indebtedness of Directors,Executive Officers and Employees

As of the date of this Annual Report, none of our directors, executive officers, employees, former directors, former executive officers or former employees or any of our subsidiaries, and none of their respective associates, is indebted to us or any of our subsidiaries or another entity whose indebtedness is the subject of a guarantee, support agreement, letter of credit or other similar agreement or understanding provided by us or any of our subsidiaries, except, as the case may be, for routine indebtedness as defined under applicable securities legislations.

C. Interests of Expertsand Counsel

Not applicable.

Item 8. FinancialInformation

A. Consolidated Statementsand Other Financial Information

FinancialStatements

The information included under “Item 18. Financial Statements” of this annual report is referred to and incorporated by reference into this item.

A.7 Legal Proceedings

A.8 Dividend Policy

Except pursuant to the Plan of Arrangement, neither the Company nor its predecessors has paid any dividends to its shareholders. Under the Company Articles, the holders of the Common Shares will be entitled to receive dividends at such times and in such amounts as the Board may in their discretion from time to time declare, subject to the prior rights and privileges attached to any other class or series of shares of the Company. The holders of each series of Company Preferred Shares (if any) will be entitled, in priority to holders of Common Shares and any other shares of the Company ranking junior to the Company Preferred Shares from time to time with respect to the payment of dividends, to be paid rateably with holders of each other series of Company Preferred Shares, the amount of accumulated dividends (if any) specified as being payable preferentially to the holders of such series. Under the ABCA, the Company may not pay a dividend in money or other property if there are reasonable grounds for believing that the Company is, or would after the payment be, unable to pay its liabilities as they become due, or the realizable value of the Company’s assets would thereby be less than the aggregate of its liabilities and stated capital of all classes.

105

The Company currently intends to retain any earnings to fund the development and growth of its business and does not currently anticipate paying dividends. Any decision to pay dividends in the future will be at the discretion of the Board and will depend on many factors including, among others, the Company’s financial condition, fluctuations in commodity prices, production levels, capital expenditure requirements, debt services requirements, operating costs, royalty burdens, foreign exchange rates, contractual restrictions (including other credit facilities), financing agreement covenants, solvency tests imposed by applicable corporate law and other factors that the Board may deem relevant.

B. Significant Changes

Except as disclosed elsewhere in this Annual Report, the Company has not experienced any significant changes since the date of our Annual Financial Statements included in this Annual Report.

Item 9. The Offerand Listing

Not applicable except for Item 9.A.4 and Item 9.C.

The Common Shares have been listed on the NYSE under the symbol “GFR” since September 21, 2023, and on the TSX under the symbol “GFR” since February 8, 2024.

Item 10. AdditionalInformation

A. Share Capital

Not applicable.

B. Memorandum andArticles of Association

The following is a summary of certain important provisions of the Company Articles and certain related sections of the ABCA. Please note that this is only a summary and is not intended to be exhaustive. This summary is subject to, and is qualified in its entirety by reference to, the provisions of the Company Articles and the ABCA.

Directors

Company Directors — Appointmentand Retirement

The Company Bylaws provide that, subject to the limitations and requirements provided in the Company Articles, the number of directors of the Company shall be determined from time to time by resolution of the shareholders of the Company or the Board. The Company Articles provide that the Company will have a board of directors consisting of a minimum of one director and a maximum of 13 directors. Pursuant to the ABCA, as the Company is currently “reporting issuer” in Alberta and Ontario, the Board shall not have fewer than three directors.

106

Directors are generally elected by shareholders by ordinary resolution; however, the Company Articles also provide that the Board may, between annual general meetings of shareholders, appoint one or more additional directors to serve until the next annual general meeting, but the number of additional directors so appointed may not at any time exceed one-third of the number of directors who held office at the expiration of the previous annual general meeting.

The Company Bylaws provide that director nominees may be made at the discretion of the Board as well as by shareholders of the Company if made in accordance with the Advance Notice Provisions of the Company Bylaws. The Advance Notice Provisions in the Company Bylaws set forth the procedure requiring advance notice to the Company from a shareholder who intends to nominate a person for election as a director of the Company. Among other things, the Advance Notice Provisions provide for a deadline by which a shareholder must notify the Company of an intention to nominate directors prior to any meeting of shareholders at which directors are to be elected and specify the information that the nominating shareholder must include in such notice in order for the director nominees to be eligible for nomination and election at the meeting.

Share Capital

The authorized share capital of the Company consists of an unlimited number of the Common Shares and unlimited number of preferred shares (“Company Preferred Shares”), issuable in series.

Share Terms

The Common Shares

Voting Rights

The holders of the Common Shares are entitled to receive notice of, to attend and to one vote per Common Share held at any meeting of shareholders of the Company, except meetings at which only holders of a different class or series of shares of the Company are entitled to vote.

Dividend Rights

Subject to the prior satisfaction of all preferential rights and privileges attached to any other class or series of shares of the Company ranking in priority to the Common Shares in respect of dividends, the holders of the Common Shares are entitled to receive dividends at such times and in such amounts as the Company Board may determine from time to time.

Liquidation

Subject to the prior satisfaction of all preferential rights and privileges attached to any other class or series of shares of the Company ranking in priority to the Common Shares in respect of return of capital on dissolution, upon the voluntary or involuntary liquidation, dissolution or winding-up of the Company or any other distribution of its assets among the shareholders of the Company for the purpose of winding up its affairs (such event, a “Distribution”), holders of the Common Shares shall be entitled to receive all declared but unpaid dividends thereon and thereafter to share rateably in such assets of the Company as are available with respect to such Distribution.

The Company PreferredShares

Issuance in Series

The Board may: (a) at any time and from time to time issue Company Preferred Shares in one or more series, each series to consist of such number of shares as may, before the issuance thereof, be determined by the Board; and (b) from time to time fix, before issuance, the designation, rights, privileges, restrictions and conditions attaching to each series of the Company Preferred Shares including, without limiting the generality of the foregoing: the amount, if any, specified as being payable preferentially to such series on a Distribution; the extent, if any, of further participation on a Distribution; voting rights, if any; and dividend rights (including whether such dividends be preferential, or cumulative or non-cumulative), if any.

107

As of the date of this Annual Report, no Company Preferred Shares are issued and outstanding.

Dividend Rights

The holders of each series of the Company Preferred Shares will be entitled, in priority to holders of the Common Shares and any other shares of the Company ranking junior to the Company Preferred Shares from time to time with respect to the payment of dividends, to be paid rateably with holders of each other series of the Company Preferred Shares, the amount of accumulated dividends, if any, specified as being payable preferentially to the holders of such series.

Liquidation

In the event of a Distribution, the holders of each series of the Company Preferred Shares will be entitled, in priority to holders of the Common Shares and any other shares of the Company ranking junior to the Company Preferred Shares from time to time with respect to payment on a Distribution, to be paid rateably with holders of each other series of the Company Preferred Shares the amount, if any, specified as being payable preferentially to the holders of such series on a Distribution.

Notices

The Company Bylaws provide that, if the Company is not a reporting issuer, a notice of the time and place of each meeting of shareholders of the Company will be sent not less than seven (7) days and not more than sixty (60) days before the meeting to each shareholder entitled to vote at the meeting. As the Company is currently a “reporting issuer”, the Company Bylaws require a notice of the time and place of each meeting of shareholders of the Company to be sent not less than twenty-one (21) days and not more than fifty (50) days before the meeting to each shareholder entitled to vote at the meeting. For the purposes of the ABCA, a “reporting issuer” means a corporation that is a reporting issuer as defined in the Securities Act (Alberta), or a corporation that is a reporting issuer or a substantially similar corporation under the laws of another jurisdiction in Canada.

For the purpose of determining shareholders of the Company entitled to receive notice of or to vote at a meeting of shareholders of the Company, the directors of the Company may fix in advance a date as the record date for such determination, but that record date will not precede by more than fifty (50) days or by less than twenty-one (21) days the date on which such meeting is to be held.

Amendment/Variationof Class Rights

Under the ABCA, certain fundamental changes, such as changes to a corporation’s articles, changes to authorized share capital, continuances out of province, certain amalgamations, sales, leases or other exchanges of all or substantially all of the property of a corporation (other than in the ordinary course of business of the corporation), certain liquidations, certain dissolutions, and certain arrangements are required to be approved by special resolution.

A special resolution under the ABCA is a resolution: (i) passed by a majority of not less than two-thirds of the votes cast by the shareholders who voted in respect of such resolution at a meeting duly called and held for that purpose; or (ii) signed by all shareholders entitled to vote on the resolution; provided that, pursuant to the ABCA, where a corporation is not a reporting issuer, a resolution (whether it is a special resolution or ordinary resolution) in writing signed by holders of at least two-thirds of the shares entitled to vote on that resolution is sufficient for such resolution to become effective.

In certain cases, an action that prejudices, adds restrictions to or interferes with rights or privileges attached to issued shares of a class or series of shares must be approved separately by the holders of the class or series of shares being affected by special resolution.

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Company Directors — Appointmentand Retirement

The Company Bylaws provide that, subject to the limitations and requirements provided in the Company Articles, the number of directors of the Company shall be determined from time to time by resolution of the shareholders of the Company or the Company Board. The Company Articles provide that the Company will have a board of directors consisting of a minimum of one director and a maximum of 13 directors. Pursuant to the ABCA, as the Company is currently a “reporting issuer” in Alberta and Ontario, the Company Board shall not have fewer than three directors.

Directors are generally elected by shareholders by ordinary resolution; however, the Company Articles also provide that the Company Board may, between annual general meetings of shareholders, appoint one or more additional directors to serve until the next annual general meeting, but the number of additional directors so appointed may not at any time exceed one-third of the number of directors who held office at the expiration of the previous annual general meeting.

The Company Bylaws provide that director nominees may be made at the discretion of the Company Board as well as by shareholders of the Company if made in accordance with the **** Advance Notice Provisions of the Company Bylaws. The Advance Notice Provisions in the Company Bylaws set forth the procedure requiring advance notice to the Company from a shareholder who intends to nominate a person for election as a director of the Company. Among other things, the Advance Notice Provisions provide for a deadline by which a shareholder must notify the Company of an intention to nominate directors prior to any meeting of shareholders at which directors are to be elected and specify the information that the nominating shareholder must include in such notice in order for the director nominees to be eligible for nomination and election at the meeting.

Company Directors — Voting

Questions arising at any meeting of the Company Board will be decided by a majority of votes. In the case of an equality of votes, the chair of the meeting will not have a second or casting vote. A resolution in writing signed by all the directors entitled to vote on that resolution at a meeting of directors or committee of directors is as valid as if it had been passed at a meeting of directors or committee of directors, as the case may be. A resolution in writing dealing with all matters required by the ABCA to be dealt with at a meeting of directors, and signed by all the directors entitled to vote at that meeting, satisfies all the requirements of the ABCA relating to meetings of directors.

Powers and Dutiesof Company Directors

Under the ABCA, the directors of the Company are charged with the management, or supervision of the management, of the business and affairs of the Company. In discharging their responsibilities and exercising their powers, the ABCA requires that the directors: (a) act honestly and in good faith with a view to the best interests of the corporation; and (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. These duties are commonly referred to as the directors” “fiduciary duties” of loyalty and care, respectively. Further, the directors” responsibilities may not be delegated (or abdicated) to shareholders and include the obligation to consider the long-term best interests of the corporation and it may be appropriate for the directors to consider (and not unfairly disregard) a broad set of stakeholder interests including the interests of shareholders, employees, suppliers, creditors, consumers, government and the environment.

Directors’ andOfficers’ Indemnity

Under subsection 124(1) of the ABCA, except in respect of an action by or on behalf of the Company to procure a judgment in the Company’s favor, Company may indemnify a current or former director or officer or a person who acts or acted at Company’s request as a director or officer of a body corporate of which the Company is or was a shareholder or creditor and the heirs and legal representatives of any such persons against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by any such Indemnified Person in respect of any civil, criminal or administrative, investigative or other actions or proceedings in which the Indemnified Person is involved by reason of being or having been director or officer of the Company, if (i) the Indemnified Person acted honestly and in good faith with a view to the best interests of the Company, and (ii) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the Indemnified Person had reasonable grounds for believing that such Indemnified Person’s conduct was lawful.

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Notwithstanding the foregoing, subsection 124(3) of the ABCA provides that an Indemnified Person is entitled to indemnity from the Company in respect of all costs, charges and expenses reasonably incurred by the Indemnified Person in connection with the defense of any civil, criminal, administrative, investigative or other action or proceeding in which the Indemnified Person is involved by reason of being or having been a director or officer of the Company, if the Indemnified Person (i) was not judged by a court or competent authority to have committed any fault or omitted to do anything that the person ought to have done, and (ii) fulfills the Indemnification Conditions. Under subsection 124(3.1) of the ABCA, the Company may advance funds to an Indemnified Person in order to defray the costs, charges and expenses of such a proceeding; however, the Indemnified Person must repay the funds if the Indemnified Person does not fulfill the Mandatory Indemnification Conditions. The indemnification may be made in connection with a derivative action only with court approval and only if the Discretionary Indemnification Conditions are met.

Subject to the aforementioned prohibitions on indemnification, an Indemnified Person will be entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by such person in connection with the defense of any civil, criminal, administrative, investigative or other action or proceeding in which the Indemnified Person is involved by reason of being or having been a director or officer of the corporation or body corporate, if the person seeking indemnity: (i) was not judged by a court or competent authority to have committed any fault or omitted to do anything that the person ought to have done; and (ii) (a) the individual acted honestly and in good faith with a view to the best interests of the corporation; and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that the individual’s conduct was lawful.

As permitted by the ABCA, the Company’s Bylaws require the Company to indemnify directors or officers of the Company, former directors or officers of the Company or other individuals who, at the Company’s request, act or acted as directors or officers or in a similar capacity of another entity of which the Company is or was a shareholder or creditor (and such individual’s respective heirs and personal representatives) to the extent permitted by the ABCA. Because the Company’s Bylaws require that indemnification be subject to the ABCA, any indemnification that the Company provides is subject to the same restrictions set out in the ABCA which are summarized, in part, above.

Take Over Provisions

National Instrument 62-104 — Take Over Bids and Issuer Bids (“NI 62-104”) is applicable to the Company and provides that a takeover bid is triggered when a person makes an offer to acquire outstanding voting securities or equity securities of a class made to one or more persons, any of whom are in the local jurisdiction, where the securities subject to the offer to acquire, together with the offeror’s securities, constitute in the aggregate 20% or more of the outstanding securities of that class of securities at the date of the offer to acquire. When a takeover bid is triggered, an offeror must comply with certain requirements. These include making the offer of identical consideration to all holders of the class of security that is the subject of the bid, making a public announcement of the bid in a newspaper and sending out a bid circular to securityholders which explains the terms and conditions of the bid. Directors of an issuer whose securities are the subject of a takeover bid are required to evaluate the proposed bid and circulate a directors” circular indicating whether they recommend to accept or reject the bid or state that they are unable to make, or are not making, a recommendation regarding the bid. Strict timelines must be adhered to. NI 62-104 also contains a number of exemptions to the takeover bid and issuer bid requirements.

Compulsory Acquisitions

Subsection 195(2) of the ABCA provides that, if within the time limited in a takeover bid for its acceptance or within 120 days after the date of a takeover bid, whichever period is shorter, the bid is accepted by the holders of not less than 90% of the shares of any class of shares of a corporation to which the takeover bid relates, other than shares of that class held at the date of the takeover bid by or on behalf of the offeror or an affiliate or associate of the offeror, the offeror is entitled, on the bid being so accepted and on complying with the ABCA, to acquire the shares of that class held by an offeree who does not accept the takeover bid.

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C. Material Contracts

Material ContractsRelating to Our Operations

Following and as a result of the Business Combination, all of our business is conducted through our subsidiaries. Information pertaining to our material contracts is set forth in this Annual Report under “Item 4. Information on the Company” and “Item5. Operating and Financial Review and Prospects,” or elsewhere in this Annual Report.

Material ContractsRelating to the Business Combination

Business CombinationAgreement

The description of the Business Combination Agreement is set forth in the section entitled “Explanatory Note” which information is incorporated herein by reference.

Related Agreements

The description of the material provisions of certain additional agreements entered into pursuant to the Business Combination Agreement is set forth in “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—TransactionsRelated to the Business Combination,” which information is incorporated herein by reference.

D. Exchange Controls

We are not aware of any governmental laws, decrees, regulations or other legislation in Canada that restrict the export or import of capital, including the availability of cash and cash equivalents for use by our affiliated companies, or that affect the remittance of dividends, interest or other payments to non-resident holders of our securities. Any remittances of dividends to residents of the United States and to other non-resident holders are, however, subject to withholding tax. See “Item 10.E. Taxation”.

E. Taxation

The following is a discussion of the material U.S. federal income tax considerations for U.S. Holders (as defined below) with respect to the ownership and disposition of the Common Shares. This discussion applies only to the Common Shares that are held as “capital assets” within the meaning of Section 1221 of the Code for U.S. federal income tax purposes (generally, property held for investment). This discussion is based on the provisions of the Code, U.S. Treasury regulations (“Treasury Regulations”), administrative rulings, and judicial decisions, all as in effect on the date hereof, and all of which are subject to change and differing interpretations, possibly with retroactive effect. Any such change or differing interpretation could significantly alter the tax considerations described herein. The Company has not sought, nor does it intend to seek, any rulings from the IRS with respect to the statements made and the positions or conclusions described in this summary. Such statements, positions and conclusions are not free from doubt, and there can be no assurance that your tax advisor, the IRS, or a court will agree with such statements, positions, and conclusions.

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The following discussion does not purport to be a complete analysis of all potential tax considerations relevant to the ownership or disposition of the Common Shares. In addition, this summary does not address the Medicare tax on certain investment income, U.S. federal estate or gift tax laws, any U.S. state or local or non-U.S. tax laws, any tax treaties or any other tax law. Furthermore, this discussion does not address all U.S. federal income tax considerations that may be relevant to particular U.S. Holders in light of their personal circumstances or that may be relevant to certain categories of U.S. Holders that may be subject to special treatment under the U.S. federal income tax laws, such as:

●	holders of MBSC Class A Common Shares or Class B Common Shares or MBSC Private Placement Warrants prior to the Business Combination;
●	holders of Company Warrants and Company Performance Warrants;
●	banks, insurance companies, or other financial institutions;
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●	tax-exempt or governmental organizations;
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●	dealers in securities or foreign currencies;
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●	persons whose functional currency is not the U.S. dollar;
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●	traders in securities that use the mark-to-market method of accounting for U.S. federal income tax purposes;
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●	“controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax;
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●	regulated investment companies, real estate investment trusts and persons subject to the alternative minimum tax;
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●	entities or arrangements treated as partnerships or other pass-through entities for U.S. federal income tax purposes or holders of interests therein;
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●	persons deemed to sell the Common Shares under the constructive sale provisions of the Code;
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●	persons that acquired the Common Shares through the exercise of employee stock options or otherwise as compensation or through a tax-qualified retirement plan;
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●	persons that hold the Common Shares as part of a straddle, appreciated financial position, synthetic security, hedge, conversion transaction, or other integrated investment or risk reduction transaction;
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●	certain former citizens or long-term residents of the United States;
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●	persons that actually or constructively own 10% or more (by vote or value) of any class of shares of the Company;
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●	the Company’s officers or directors; and
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●	persons who are not U.S. Holders.
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If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds the Common Shares, the tax treatment of a partner in such partnership generally will depend upon the status of the partner, upon the activities of the partnership and upon certain determinations made at the partner level. Accordingly, partners in partnerships (including entities or arrangements treated as partnerships for U.S. federal income tax purposes) holding the Common Shares are urged to consult with and rely solely upon their own tax advisors regarding the U.S. federal income tax consequences to them relating to the matters discussed below.

ALLHOLDERS SHOULD CONSULT WITH AND RELY SOLELY UPON THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAXLAWS (INCLUDING ANY POTENTIAL FUTURE CHANGES THERETO) TO THEIR PARTICULAR SITUATIONS, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANYOTHER TAX LAWS, INCLUDING U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR ANY U.S. STATE OR LOCAL OR NON-U.S. TAX LAWS, OR UNDER ANY APPLICABLEINCOME TAX TREATY.

U.S. Holder Defined

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of the Common Shares, for U.S. federal income tax purposes that is either:

●	an individual who is a citizen or resident of the United States;
●	a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;
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●	an estate the income of which is subject to U.S. federal income tax regardless of its source; or
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●	a trust (i) the administration of which is subject to the primary supervision of a U.S. court and which has one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code) who have the authority to control all substantial decisions of the trust or (ii) that has made a valid election under applicable Treasury Regulations to be treated as a United States person.
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Tax Characterizationof Distributions with Respect to Common Shares

Subject to the PFIC rules discussed below, if the Company pays distributions of cash or other property to U.S. Holders of Common Shares, the gross amount of such distributions (without reduction for any Canadian income tax withheld from such distribution) generally will constitute dividends for U.S. federal income tax purposes to the extent paid from the Company’s current or accumulated earnings and profits, as determined under U.S. federal income tax principles, and will be treated as described in the section entitled “-Distributions Treated as Dividends” below. Distributions in excess of the Company’s current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of the U.S. Holder’s adjusted tax basis in its Common Shares, that will be applied against and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in its Common Shares. Any remaining portion of the distribution will be treated as gain from the sale or exchange of Common Shares and will be treated as described in the section entitled “-Gain or Loss on Sale or Other Taxable Exchange or Dispositionof Common Shares and Warrants” below. However, the Company does not expect to maintain calculations of its earnings and profits in accordance with U.S. federal income tax accounting principles. A U.S. Holder should therefore assume that any distribution by the Company with respect to Common Shares will be reported as dividend income. U.S. Holders are urged to consult with and rely solely upon their own tax advisors with respect to the appropriate U.S. federal income tax treatment of any distribution received from the Company.

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Distributions Treatedas Dividends

Dividends paid by the Company will be taxable to a corporate U.S. Holder at regular rates and will not be eligible for the dividends-received deduction generally allowed to domestic corporations in respect of dividends received from other domestic corporations. Dividends the Company pays to a non-corporate U.S. Holder generally will constitute “qualified dividends” that will be subject to U.S. federal income tax at the lower applicable long-term capital gains tax rate only if (i) Common Shares continue to be readily tradable on the Nasdaq or another established securities market in the United States or the Company is eligible for benefits of a comprehensive income tax treaty with the United States, and (ii) a certain holding period and other requirements are met, including that the Company is not classified as a PFIC during the taxable year in which the dividend is paid or a preceding taxable year with respect to such U.S. Holder. As discussed below, if a U.S. Holder held shares in the Company when it was classified as a PFIC, the Company would generally continue to be treated as a PFIC with respect to such U.S. Holder in a taxable year even if the Company is not classified as a PFIC in such taxable year. If such requirements are not satisfied, a non-corporate U.S. Holder may be subject to tax on the dividend at regular ordinary income tax rates instead of the preferential rate that applies to qualified dividend income. U.S. Holders should consult with and rely solely upon their own tax advisors regarding the availability of the lower preferential rate for qualified dividend income for any dividends paid with respect to Common Shares.

Dividends paid with respect to Common Shares will generally be treated as income from foreign sources for U.S. foreign tax credit purposes and will generally be treated as passive category income or, in the case of certain types of U.S. Holders, general category income for purposes of computing allowable foreign tax credits for U.S. foreign tax credit purposes. Depending on the U.S. Holder’s individual facts and circumstances, a U.S. Holder may be eligible, subject to a number of complex limitations, to claim a foreign tax credit not in excess of any applicable treaty rate in respect of any foreign withholding taxes imposed on dividends received on Common Shares. A U.S. Holder that does not elect to claim a foreign tax credit for foreign tax withheld may, generally, instead claim a deduction, for U.S. federal income tax purposes, in respect of such withholding, but only for a year in which such U.S. Holder elects to do so for all creditable foreign income taxes.

THERULES GOVERNING THE FOREIGN TAX CREDIT ARE COMPLEX, AND THE OUTCOME OF THEIR APPLICATION DEPENDS IN LARGE PART ON THE U.S. HOLDER’SINDIVIDUAL FACTS AND CIRCUMSTANCES. ACCORDINGLY, U.S. HOLDERS ARE URGED TO CONSULT WITH AND RELY SOLELY UPON THEIR OWN TAX ADVISORS REGARDINGTHE AVAILABILITY OF THE FOREIGN TAX CREDIT IN THEIR PARTICULAR CIRCUMSTANCES.

Gain or Loss onSale or Other Taxable Exchange or Disposition of Common Shares

Subject to the PFIC rules discussed below, upon a sale or other taxable disposition of Common Shares, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition and (ii) the U.S. Holder’s adjusted tax basis in the Common Shares. A U.S. Holder’s adjusted tax basis in its Common Shares generally will equal the U.S. Holder’s acquisition cost of its Common Shares or, as discussed below, the U.S. Holder’s initial basis for the Common Shares received upon exercise of Company Warrants, less any prior distributions paid to such U.S. Holder that were treated as a return of capital for U.S. federal income tax purposes (as discussed below).

Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period for the Common Shares so disposed of exceeds one year. If the one-year holding period requirement is not satisfied, any gain on a sale or other taxable disposition of the Common Shares would be subject to short-term capital gain treatment and would be taxed at regular ordinary income tax rates. Long-term capital gains recognized by non-corporate U.S. Holders may be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to limitations.

Cash Exercise ofa Company Warrant

Subject to the PFIC rules discussed below, a U.S. Holder generally will not recognize gain or loss on the acquisition of Common Shares upon the exercise of a Company Warrant for cash. The U.S. Holder’s adjusted tax basis in its Common Shares received upon exercise of a Company Warrant generally will be an amount equal to the sum of the U.S. Holder’s adjusted tax basis in such Company Warrant and the exercise price of such Company Warrant. It is unclear whether a U.S. Holder’s holding period for the Common Shares received upon exercise of the Company Warrant will commence on the date of exercise of the Company Warrant or the immediately following date. In either case, the holding period will not include the period during which the U.S. Holder held the Company Warrant.

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Cashless Exerciseof a Company Warrant

The tax characterization of a cashless exercise of a Company Warrant is not clear under current U.S. federal tax law. Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, there can be no assurance which, if any, of the alternative tax characterizations and resultant tax consequences would be adopted by the IRS or upheld by a court of law. Accordingly, U.S. Holders should consult with and rely solely upon their own tax advisors regarding the tax consequences of a cashless exercise.

Subject to the PFIC rules discussed below, a cashless exercise could potentially be characterized as any of the following for U.S. federal income tax purposes: (i) not a realization event and thus tax-deferred, (ii) a realization event that qualifies as a tax-deferred “recapitalization,” or (iii) a taxable realization event. While not free from doubt, the Company intends to treat any cashless exercise of a Company Warrant occurring after its giving notice of an intention to redeem the Company Warrant for cash, as will be permitted under the terms of the Warrant Agreement, as if the Company redeemed such Company Warrant for shares in a cashless exchange qualifying as a tax-deferred recapitalization. However, there is some uncertainty regarding the Company’s intended tax treatment, and it is possible that a cashless exercise could be characterized differently by the IRS or a court. Accordingly, the tax consequences of all three characterizations are generally described below. U.S. Holders should consult with and rely solely upon their own tax advisors regarding the tax consequences of a cashless exercise.

If a cashless exercise were characterized as either not a realization event or as a realization event that qualifies as a recapitalization, a U.S. Holder would not recognize any gain or loss on the exchange of Company Warrants for Common Shares. A U.S. Holder’s basis in the Common Shares received would generally equal the U.S. Holder’s aggregate basis in the exchanged Company Warrants. If the cashless exercise were not a realization event, it is unclear whether a U.S. Holder’s holding period in the Common Shares would be treated as commencing on the date of exchange of the Company Warrants or on the immediately following date, but the holding period would not include the holding period of the Company Warrants exercised therefor. On the other hand, if the cashless exercise were characterized as a realization event that qualifies as a recapitalization, the holding period of the Common Shares would include the holding period of the Company Warrants exercised therefor.

If the cashless exercise were treated as a realization event that does not qualify as a recapitalization, the cashless exercise could be treated in whole or in part as a taxable exchange in which gain or loss would be recognized by the U.S. Holder. Under this characterization, a portion of the Company Warrants to be exercised on a “cashless basis” would be deemed to have been surrendered in payment of the exercise price of the remaining portion of such Company Warrants, which would be deemed to be exercised. In such a case, a U.S. Holder would effectively be deemed to have sold a number of Company Warrants having an aggregate value equal to the exercise price of the remaining Company Warrants deemed exercised. Subject to the PFIC rules described below, the U.S. Holder would recognize capital gain or loss in an amount generally equal to the difference between the value of the portion of the Company Warrants deemed sold and its adjusted tax basis in such Company Warrants (generally in the manner described in the section entitled “-Gain or Loss on Sale or OtherTaxable Exchange or Disposition of Common Shares and Company Warrants” above), and the U.S. Holder’s adjusted tax basis in the Common Shares received would generally equal the sum of the U.S. Holder’s adjusted tax basis in the remaining Company Warrants deemed exercised and the exercise price of such Company Warrants. It is unclear whether a U.S. Holder’s holding period for the Common Shares would commence on the date of exercise of the Company Warrants or on the date following the date of exercise of the Company Warrants, but the holding period would not include the period during which the U.S. Holder held the Company Warrants. U.S. Holders should consult with and rely solely upon their own tax advisors regarding the tax consequences of a cashless exercise.

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Receipt of Non-U.S.Currency

The gross amount of any dividend distribution that a U.S. Holder must include in income will be the U.S. dollar amount of the payments made in a currency other than U.S. dollars, calculated by reference to the exchange rate in effect on the day such U.S. Holder actually or constructively receives the payment in accordance with its regular method of accounting for U.S. federal income tax purposes regardless of whether the payment is in fact converted into U.S. dollars at that time. If the foreign currency is converted into U.S. dollars on the date of the payment, the U.S. Holder should not be required to recognize any foreign currency gain or loss with respect to the receipt of foreign currency. If, instead, the foreign currency is converted at a later date, any currency gains or losses resulting from the conversion of the foreign currency will be treated as U.S. source ordinary income or loss for U.S. foreign tax credit purposes, and will not be eligible for the special tax rate applicable to qualified dividend income. U.S. Holders are urged to consult their own tax advisors regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.

Passive ForeignInvestment Company Rules

Adverse U.S. federal income tax rules apply to United States persons that hold, or are treated as holding, shares in a foreign (i.e., non-U.S.) corporation classified as a “passive foreign investment company” (a “PFIC”) for U.S. federal income tax purposes.

In general, the Company will be treated as a PFIC with respect to a U.S. Holder in any taxable year in which, after applying certain look-through rules, either:

●	at least 75% of its gross income for such taxable year consists of passive income (e.g., dividends, interest, rents (other than rents derived from the active conduct of a trade or business), and gains from the disposition of passive assets); or
●	the average percentage (ordinarily averaged quarterly over the year) by value of its assets during such taxable year that produce or are held for the production of passive income is at least 50%.
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Because the revenue production of the Company is uncertain, and because PFIC status is based on income, assets and activities for an entire taxable year, there can be no assurance that the Company will not be treated as a PFIC under the income or asset test for the current taxable year or any future taxable year. For purposes of determining whether the Company is a PFIC, the Company will be treated as earning and owning its proportionate share of the income and assets, respectively, of any of its subsidiary corporations in which it owns at least 25% of the value of the subsidiary’s stock. The Company may hold, directly or indirectly, interests in other entities that are PFICs (“Subsidiary PFICs”). If the Company is a PFIC, each U.S. Holder will be treated as owning its pro rata share by value of the stock of any such Subsidiary PFICs.

Although PFIC status is determined annually, an initial determination that the Company is a PFIC for a taxable year will generally apply for subsequent years to a U.S. Holder who held (or is deemed to have held) Common Shares or Company Warrants during a tax year in which the Company was a PFIC, whether or not the Company is classified as a PFIC in those subsequent years. As discussed more fully below, if the Company were to be treated as a PFIC for any taxable year in which a U.S. Holder holds Common Shares or Company Warrants (regardless of whether the Company remains a PFIC for subsequent taxable years), a U.S. Holder would be subject to different tax rules depending on whether the U.S. Holder makes an election to treat the Company as a “qualified electing fund” (a “QEF Election”). As an alternative to making a QEF Election, a U.S. Holder should be able to make a “mark-to-market” election with respect to its Common Shares (but not with respect to Company Warrants), as discussed below. If the Company is a PFIC, a U.S. Holder will be subject to the PFIC rules described herein with respect to any of the Company’s Subsidiary PFICs. However, the mark-to-market election discussed below will likely not be available with respect to shares of such Subsidiary PFICs. In addition, if a U.S. Holder owns Common Shares during any taxable year that the Company is a PFIC, such U.S. Holder must file an annual report with the IRS reflecting such ownership, regardless of whether a QEF Election or a mark-to-market election had been made.

Taxationof U.S. Holders Making a Timely QEF Election. In general, if the Company is treated as a PFIC, a U.S. Holder may be able to avoid the PFIC tax consequences described below in respect of its Common Shares (but not its Company Warrants) by making a timely and valid QEF Election (if eligible to do so) in the first taxable year in which such U.S. Holder held (or was deemed to hold) Common Shares and the Company is classified as a PFIC. Generally, a QEF Election should be made on or before the due date for filing such U.S. Holder’s U.S. federal income tax return for such taxable year.

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If a U.S. Holder timely makes a QEF Election with respect to its Common Shares (such electing U.S. Holder, an “Electing Holder”), each year the Electing Holder will be required to include in its income its pro rata share of the Company’s (and any of the Company’s subsidiaries that are PFIC Subsidiaries) ordinary earnings (as ordinary income) and net capital gains (as long-term capital gain), if any, for the Company’s taxable year that ends with or within the taxable year of the Electing Holder, regardless of whether the Company makes distributions to the Electing Holder (although an Electing Holder generally may make a separate election to defer the payment of taxes on undistributed income inclusions under the qualified electing fund rules, but if deferred, any such taxes will be subject to an interest charge). The Electing Holder’s adjusted tax basis in the shares of the Company would be increased to reflect taxed but undistributed earnings and profits. Distributions of earnings and profits that had been previously taxed would result in a corresponding reduction in the adjusted tax basis in the Electing Holder’s Common Shares and would not be taxed again once distributed. An Electing Holder would generally recognize capital gain or loss on the sale, exchange, or other disposition of its Common Shares, and no additional tax will be imposed under the PFIC rules.

A U.S. Holder would make a QEF Election with respect to any year that the Company and any Subsidiary PFICs are treated as PFICs by filing IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund) with its U.S. federal income tax return for such year. Once made, the QEF Election will apply to all subsequent taxable years of the Electing Holder during which it holds Common Shares, unless the Company ceases to be a PFIC or such election is revoked by the Electing Holder with the consent of the IRS. In order to comply with the QEF Election requirements, an Electing Holder must receive a PFIC annual information statement from the Company. There can be no assurance that the Company will provide to a U.S. Holder such information as the IRS may require, including a PFIC annual information statement, in order to enable such U.S. Holder to make and maintain a QEF Election. There is also no assurance that the Company will have timely knowledge of its status as a PFIC in the future or of the required information to be provided.

Taxationof U.S. Holders Making a “Mark-to-Market” Election. Alternatively, if the Company is treated as a PFIC for any taxable year and, as the Company anticipates, Common Shares are treated as “marketable stock,” a U.S. Holder that holds Common Shares at the close of such U.S. Holder’s taxable year may make a “mark-to-market” election with respect to such shares, provided the U.S. Holder completes and files IRS Form 8621 in accordance with the relevant instructions and related Treasury Regulations. If made, a mark-to-market election would be effective for the taxable year for which the election is made and for all subsequent taxable years, unless Common Shares cease to qualify as “marketable stock” for purposes of the PFIC rules or the IRS consents to the revocation of the election.

If the U.S. Holder makes a valid mark-to-market election for the first taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) Common Shares and in which the Company is treated as a PFIC, such U.S. Holder generally will not be subject to the PFIC rules described below in respect of its Common Shares. Instead, in general, such U.S. Holder would include as ordinary income in each taxable year the excess, if any, of the fair market value of its Common Shares at the end of the taxable year over such U.S. Holder’s adjusted tax basis in its Common Shares. These amounts of ordinary income would not be eligible for the favorable tax rates applicable to qualified dividend income or long-term capital gains. Such U.S. Holder also would be permitted an ordinary loss in respect of the excess, if any, of its adjusted tax basis in its Common Shares over the fair market value of its Common Shares at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. Such U.S. Holder’s tax basis in its Common Shares would be adjusted to reflect any such income or loss amounts. Any gain recognized by such U.S. Holder on the sale, exchange, or other disposition of its Common Shares would be treated as ordinary income, and any loss recognized on the sale, exchange, or other disposition of its Common Shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included in income by the U.S. Holder. A mark-to-market election under the PFIC rules with respect to Common Shares would not apply to a Subsidiary PFIC, and a U.S. Holder would not be able to make such a mark-to-market election in respect of its indirect ownership interest in that Subsidiary PFIC. Consequently, U.S. Holders of Common Shares could be subject to the PFIC rules with respect to income of Subsidiary PFICs, the value of which already had been taken into account indirectly via mark-to-market adjustments. Special rules may apply if a U.S. Holder makes a mark-to-market election for a taxable year after the first taxable year in which the U.S. Holder holds (or is deemed to hold) its Common Shares. Currently, a mark-to-market election may not be made with respect to Company Warrants.

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Taxationof U.S. Holders Not Making a Timely QEF or Mark-to-Market Election. Finally, if the Company were treated as a PFIC for any taxable year, a U.S. Holder who does not make either a QEF Election (including a late QEF Election with a purging election described below) or a mark-to-market election for that year (a “Non-Electing Holder”) would be subject to special rules with respect to (i) any “excess distribution” (generally, the portion of any distributions received by the Non-Electing Holder on its Common Shares during a taxable year in excess of 125% of the average annual distributions received by the Non-Electing Holder during the three preceding taxable years, or, if shorter, the Non-Electing Holder’s holding period for its Common Shares) and (ii) any gain realized on the sale, exchange, or other disposition of its Common Shares. Under these special rules:

●	the Non-Electing Holder’s excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for its Common Shares or Company Warrants;
●	the amount allocated to the Non-Electing Holder’s taxable year in which the Non-Electing Holder received the excess distribution or realized the gain, or to the portion of the Non-Electing Holder’s holding period prior to the first day of the Company’s taxable year for which the Company was a PFIC, would be taxed as ordinary income; and
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●	the amount allocated to each of the other taxable years (or portions thereof) of the Non-Electing Holder would be subject to tax at the highest rate of tax in effect for the Non-Electing Holder for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year (or portion thereof).
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If a U.S. Holder held Common Shares during a period when the Company was treated as a PFIC, but the U.S. Holder did not have a QEF Election in effect with respect to the Company (or held Company Warrants during a period when the Company was treated as a PFIC that were subsequently exercised for Common Shares), then in the event that the Company did not qualify as a PFIC for a subsequent taxable year, the U.S. Holder could elect to cease to be subject to the rules described above with respect to those shares by making a “deemed sale” election with respect to its Common Shares. If the U.S. Holder makes a deemed sale election, the U.S. Holder will be treated, for purposes of applying the rules described in the preceding paragraph, as having disposed of its Common Shares for their fair market value on the last day of the last taxable year for which the Company qualified as a PFIC (the “termination date”). The U.S. Holder would increase its basis in such Common Shares by the amount of the gain on the deemed sale described in the preceding sentence, and the amount of gain would be taxed as an excess distribution. Following a deemed sale election, the U.S. Holder would not be treated, for purposes of the PFIC rules, as having owned Common Shares during a period prior to the termination date when the Company qualified as a PFIC and would not be treated as owning PFIC stock thereafter unless the Company later qualifies as a PFIC. The holding period for such stock would begin the day after the termination date for purposes of the PFIC rules.

THEPFIC RULES (INCLUDING THE RULES WITH RESPECT TO THE QEF ELECTION AND THE MARK-TO-MARKET ELECTION) ARE VERY COMPLEX, ARE AFFECTED BY VARIOUSFACTORS IN ADDITION TO THOSE DESCRIBED ABOVE, AND THEIR APPLICATION IS UNCERTAIN. U.S. HOLDERS ARE STRONGLY URGED TO CONSULT WITH ANDRELY SOLELY UPON THEIR OWN TAX ADVISORS TO DETERMINE THE APPLICATION OF THE PFIC RULES TO THEM IN THEIR PARTICULAR CIRCUMSTANCES AND ANYRESULTING TAX CONSEQUENCES.

Information Reportingand Backup Withholding

Dividends paid to U.S. Holders with respect to Common Shares and proceeds from the sale, exchange, or redemption of the Common Shares may be subject, under certain circumstances, to information reporting and backup withholding. Backup withholding will not apply, however, to a U.S. Holder that (i) is a corporation or entity that is otherwise exempt from backup withholding (which, when required, certifies as to its exempt status) or (ii) furnishes a correct taxpayer identification number and makes any other required certification on IRS Form W-9 (Request for Taxpayer Identification Number and Certification). Backup withholding is not an additional tax. Rather, the U.S. federal income tax liability (if any) of persons subject to backup withholding will be reduced by the amount of tax withheld. If backup withholding results in an overpayment of taxes, a refund generally may be obtained, provided that the required information is timely furnished to the IRS.

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Certain U.S. Holders may be required to file an IRS Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation) to report a transfer of property (including stock, securities, or cash) to the Company. Substantial penalties may be imposed on a U.S. Holder that fails to comply with this reporting requirement, and the period of limitations on assessment and collection of U.S. federal income taxes will be extended in the event of a failure to comply. Furthermore, certain U.S. Holders who are individuals and certain entities will be required to report information with respect to such U.S. Holder’s investment in “specified foreign financial assets” on IRS Form 8938 (Statement of Specified Foreign Financial Assets), subject to certain exceptions. An interest in the Company constitutes a specified foreign financial asset for these purposes. Persons who are required to report specified foreign financial assets and fail to do so may be subject to substantial penalties, and the period of limitations on assessment and collection of U.S. federal income taxes will be extended in the event of a failure to comply. U.S. Holders are urged to consult with and rely solely upon their own tax advisors regarding the foreign financial asset and other reporting obligations and their application to their ownership of the Common Shares.

THEFOREGOING DISCUSSION IS NOT A COMPREHENSIVE DISCUSSION OF ALL OF THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO HOLDERS OF THE COMMON SHARES.SUCH HOLDERS SHOULD CONSULT WITH AND RELY SOLELY UPON THEIR OWN TAX ADVISORS TO DETERMINE THE SPECIFIC TAX CONSEQUENCES TO THEM OF OWNINGTHE COMMON SHARES, INCLUDING THE APPLICABILITY AND EFFECT (AND ANY POTENTIAL FUTURE CHANGES THERETO) OF ANY U.S. FEDERAL, STATE OR LOCALOR NON-U.S. TAX LAWS AND ANY INCOME TAX TREATIES.

Material CanadianFederal Income Tax Considerations

The following summary describes the principal Canadian federal income tax considerations generally applicable to beneficial owners of Company Common Shares with respect to the ownership and disposition of such Company Common Shares and who, at all relevant times, for purposes of the ITA and any applicable income tax convention or treaty: (i) is not, and is not deemed to be, resident in Canada, (ii) deals at arm’s length with the Company, (iii) is not affiliated with the Company, (iv) holds Company Common Shares as capital property, (v) does not use or hold, and is not deemed to use or hold, Company Common Shares in a business carried on in Canada, (vi) does not have a “permanent establishment” or “fixed base” in Canada, (vii) has not entered into, with respect to Company Common Shares, a “derivative forward agreement” or a “dividend rental agreement” each as defined in the ITA (a “Non-Canadian Holder”). Special rules, which are not discussed in this summary, may apply to a Non-Canadian Holder that is an insurer carrying on an insurance business in Canada and elsewhere or that is an “authorized foreign bank” as that term is defined in the ITA.

This summary does not addressthe Canadian tax treatment of any other transactions occurring in connection with the Business Combination, including, but not limitedto, the Amalgamation and the Merger. This summary assumes Common Shares will be listed on a designated stock exchange (which currentlyincludes the TSX and NYSE) at all relevant times.

This summary is based on the current provisions of the ITA and an understanding of the current administrative policies and assessing practices of the CRA published in writing prior to the date hereof. This summary takes into account all specific proposals to amend the ITA publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Proposed Amendments”) and assumes the Proposed Amendments will be enacted in the form proposed. However, no assurances can be given that the Proposed Amendments will be enacted in the form proposed, or at all. This summary does not otherwise take into account or anticipate any changes in the law or administrative policy or assessing practice, whether by legislative, administrative, or judicial action, nor does it take into account tax legislation or considerations of any province, territory, or foreign jurisdiction, which may differ from those discussed herein.

Thesummary is of a general nature only and is not, and is not intended to be, nor should it be construed as, legal or tax advice to any particularholder. This summary is not exhaustive of all Canadian federal income tax considerations. The relevant tax considerations applicable tothe acquiring, holding and disposing of the Common Shares may vary according to the status of the holder, the jurisdiction in which theholder resides or carries on business, and the holder’s own particular circumstances. Accordingly, holders should consult with theirown tax advisors having regard to their own particular circumstances.

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Currency Conversion

Generally, for purposes of the ITA, all amounts relating to the acquisition, holding, or disposition of Company Common Shares must be converted into Canadian dollars based on the exchange rates as determined in accordance with the ITA. The amount of dividends required to be included in the income of, and capital gains or capital losses realized by, a Non-Canadian Holder may be affected by fluctuations in the exchange rates.

Dividends on the Common Shares

Dividends paid or credited, or deemed to be paid or credited, on the Common Shares to a Non-Canadian Holder will be subject to Canadian withholding tax at the rate of 25%, subject to any reduction in the rate of withholding to which the Non-Canadian Holder is entitled under any applicable income tax convention or treaty between Canada and the country in which the Non-Canadian Holder is resident. For example, under the Canada-United States Tax Convention (1980) as amended (the “Treaty”), where the dividends on the Common Shares are considered to be paid to, or derived by, a Non-Canadian Holder that is the beneficial owner of the dividends and is a U.S. resident for the purposes of, and is entitled to benefits of, the Treaty, the applicable rate of Canadian withholding tax is generally reduced to 15%. The Company will be required to withhold the applicable withholding tax from any dividend and remit it to the Canadian government for the Non-Canadian Holder’s account.

Non-Canadian Holders are urged to consult their own tax advisors to determine their entitlement to relief under an applicable income tax treaty or convention.

Disposition of the Common Shares

On a disposition of a Common Share (other than to the Company, unless purchased by the Company in the open market in the manner in which shares are normally purchased by any member of the public in the open market) a Non-Canadian Holder will not be subject to tax under the ITA in respect of any capital gain realized by such Non-Canadian Holder, unless the Common Shares constitute “taxable Canadian property” (as defined in the ITA) of the Non-Canadian Holder at the time of disposition and the Non-Canadian Holder is not entitled to relief under an applicable income tax convention or treaty between Canada and the country in which the Non-Canadian Holder is resident..

Generally, provided the Common Shares are listed on a designated stock exchange (which currently includes the TSX and NYSE) at the time of the disposition by a Non-Canadian Holder, the Common Shares should not constitute taxable Canadian property of such Non-Canadian Holder at such time unless, at any time during the 60-month period immediately preceding the disposition of either Common Shares (a) the Non-Canadian Holder, (b) persons with whom the Non-Canadian Holder did not deal at arm’s length, (c) partnerships in which the Non-Canadian Holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships, or (d) any combination of the persons and partnerships described in (a) through (c), owned 25% or more of the issued shares of any class or series of the capital stock of the Company. Common Shares may also be deemed to be taxable Canadian property in certain other circumstances.

A Non-Canadian Holder that disposes of, or is deemed to have disposed of, a Common Share that constitutes “taxable Canadian property” and is not entitled to relief under an applicable income tax convention or treaty will generally be subject to capital gain or capital loss consequences in Canada. Generally, one-half of any capital gain (a “taxable capital gain”) realized by a Non-Canadian Holder in a taxation year must be included in the Non-Canadian Holder’s income for the year, and one-half of any capital loss (an “allowable capital loss”) realized by a Non-Canadian Holder in a taxation year must be deducted from taxable capital gains realized by the Non-Canadian Holder in that year. Allowable capital losses in excess of taxable capital gains realized in a taxation year generally may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized in such years, to the extent and under the circumstances described in the ITA.

ANon-Canadian Holder contemplating a disposition of the Common Shares that may constitute taxable Canadian property should consult a taxadvisor prior to such disposition.

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F.Dividends and Paying Agents

Not applicable.

G.Statement by Experts

Note applicable.

H. Documents on Display

We are subject to certain of the informational filing requirements of the Exchange Act. Since we are a “foreign private issuer,” we are exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act, with respect to their purchase and sale of our shares. In addition, we are not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we are required to file with the SEC an annual report containing financial statements audited by an independent accounting firm. We may, but are not required, to furnish to the SEC, on Form 6-K, unaudited financial information after each of our first three fiscal quarters. The SEC also maintains a website at http://www.sec.gov that contains reports and other information that we file with or furnish electronically with the SEC. You may read and copy any report or document we file, including the exhibits, at the SEC’s public reference room located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room.

I. Subsidiary Information

Not applicable.

J. AnnualReport to Security Holders.

Not applicable.

Item 11. Quantitativeand Qualitative Disclosures About Market Risk

The Company is exposed to market risk, including the effects of adverse changes in commodity prices and exchange rates. The primary objective of the following information is to provide quantitative and qualitative information about the Company’s potential exposure to market risks. The term “market risk” refers to the risk of loss arising from adverse changes in commodity prices and currency exchange rates. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses. All of the Company’s market risk sensitive instruments were entered into for purposes other than speculative trading. Also, gains and losses on these instruments are generally offset by losses and gains on the offsetting expenses.

Commodity PriceRisk

The Company’s major market risk exposure is in the pricing that we receive for the Company’s bitumen production. Bitumen prices have been volatile and unpredictable for several years, and this volatility may continue in the future. The prices we receive for the Company’s bitumen production depend on many factors outside of its control, such as the strength of the global economy and global supply and demand for oil and gas.

To reduce the impact of fluctuations in bitumen prices on the Company” revenues, we periodically enter into forward, fixed-priced, physical delivery, purchase and sales contracts to manage commodity price risk, as descried above under “Item 5. Operatingand Financial Review and Prospects —Results of Operations—Risk Management Contracts”. The Company plans to continue its practice of entering into such transactions to reduce the impact of commodity price volatility on its cash flow from operations. Future transactions may include price swaps whereby we will receive a fixed price for its production and pay a variable market price to the contract counterparty.

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Currency ExchangeRate Risk

Currency exchange rate risk is the risk that the fair value of future cash flows will fluctuate as a result of changes in foreign exchange rates. The Company’s sales are in Canada and denominated in Canadian dollars, however, Canadian commodity prices are influenced by fluctuations in the Canada to U.S. dollar exchange rate as global oil prices are generally denominated in U.S. dollars.

The Company is also exposed to currency risk in relation to the 2028 Notes, which are denominated in U.S. dollars. To date, realized foreign currency transaction gains and losses have not been material to the Company; financial statements. We have not engaged in the hedging of foreign currency transactions to date, although we may choose to do so in the future.

Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s accounts receivable. The Company is primarily exposed to credit risk from receivables associated with its oil sales. We manage the Company’s credit risk exposure by transacting with high-quality credit worthy counterparties and monitoring credit worthiness and/or credit ratings on an ongoing basis. As of December 31, 2023, the Company was exposed to concentration risk associated with its outstanding trade receivables and joint interest receivable balances as they are held by a single counterparty. The following table shows account receivables for the periods indicated:

	As at December 31,
(CAD$ in thousands)	2023		2022		2021
Trade receivables	$	22,452		22,428		35,020
Joint interest receivables		12,228		11,880		8,942
Accounts receivable	$	34,680		34,308		43,962

Item 12. Descriptionof Securities Other Than Equity Securities

A. DebtSecurities

Not applicable.

B. Warrants and Rights

Company Warrants

Each of the Company Warrants is subject to substantially the same terms and conditions (including exercisability terms) as were applicable to the MBSC Private Placement Warrants prior to the Business Combination, except to the extent such terms or conditions were rendered inoperative by the Business Combination. Accordingly, (A) each Company Warrant is exercisable solely for one Common Share; (B) the per share exercise price for the Common Shares issuable upon exercise of the Company Warrants is $11.50, subject to adjustment, on the terms and conditions set forth in the Warrant Agreements; and (C) each Company Warrant shall expire five years after the date of the Closing of the Business Combination.

The Company has not, and does not intend to, list the Company Warrants on the NYSE, TSX or another securities exchange.

The warrant agent for the Company Warrants is Computershare Trust Company, N.A.

C. Other Securities

Not applicable.

D. American Depositary Shares

Not applicable.

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ITEM 13. DEFAULTS,DIVIDEND ARREARAGES AND DELINQUENCIE

None.

ITEM 14. MATERIALMODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEED

A. - D. Material Modificationsto the Rights of Security Holders

None.

E. Use of Proceeds

None**.**

ITEM 15. CONTROLSAND PROCEDURE

A. - D.

Management’sConclusions Regarding Effectiveness of Disclosure Controls and Procedures

We conducted an evaluation of the effectiveness of our “disclosure controls and procedures” (“Disclosure Controls”), as defined by Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December 31, 2023. The Disclosure Controls evaluation was done under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that such disclosure controls and procedures were effective as at December 31, 2023 to provide reasonable assurance that the information required to be disclosed by the Company in reports it files is recorded, processed, summarized and reported, within the appropriate time periods and is accumulated and communicated to management, as appropriate to allow timely decisions regarding required disclosure.

Management’sReport on Internal Control over Financial Reporting

This Annual Report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the Company’s registered independent public accounting firm due to a transition period established by rules of the SEC for newly public companies.

Changes in InternalControl over Financial Reporting

Our Chief Executive Officer and Chief Financial Officer have evaluated whether there were changes to the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the period covered by this Annual Report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting, and no such changes were identified through their evaluation.

ITEM 16. [RESERVED]

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ITEM 16A. AUDITCOMMITTEE FINANCIAL EXPERT

Our audit and reserves committee is comprised of W. Derek Aylesworth, Venkat Siva and Matthew Perkal with Mr. Aylesworth serving as chairman of the committee. Each of the members of our audit committee each meet the independence requirements under the NYSE corporate governance rules, NI 52-110 and the Exchange Act. We have determined that Mr. Aylesworth is our “audit committee financial expert” within the meaning of Item 407 of Regulation S-K. For information relating to qualifications and experience of each audit committee member, see “Item 6. Directors, Senior Management and Employees”.

ITEM 16B. CODE OFETHICS

Our Board has adopted a code of ethics applicable our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. This code is intended to qualify as a “code of ethics” within the meaning of the applicable rules of the SEC. Our code of ethics is available on our website https://www.greenfireres.com/who-we-are/#governance. Information contained on, or that can be accessed through, our website is not incorporated by reference into this Annual Report.

ITEM 16C. PRINCIPALACCOUNTANT FEES AND SERVICES

Principal AccountantFees and Services

The following table summarizes the fees charged by Deloitte LLP (PCAOB ID: 1208) for certain services rendered to the Company during fiscal 2023 and fiscal 2022.

	For the year ended
CAD$ millions	December 31, <br><br>2023		December 31,<br><br> 2022
Audit fees^(1)^		1,078,560		529,115
Audit-related fees^(2)^		897,730		107,000
Tax fees^(3)^		75,235		175,306
All other fees^(4)^		58,850		-
Total		2,110,375		811,421
(1)	“Audit fees” means the aggregate fees billed in each of the fiscal years for professional services rendered by Deloitte LLP for the audit of our annual financial statements and review of our interim financial statements.
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(2)	“Audit-related fees” includes assurance and related services reasonably related to the financial statement audit and not included in audit services, including those pertaining to the merger transaction.
(3)	“Tax fees” means the aggregate fees billed in each of the fiscal years for professional services rendered by Deloitte LLP for tax compliance and tax advice.
(4)	All other fees not included above.

Audit Committee Pre-ApprovalPolicies and Procedures

Our audit committee reviews and pre-approves the scope and the cost of audit services related to us and permissible non-audit services performed by the independent auditors, other than those forde minimis services which are approved by the audit committee prior to the completion of the audit. All of the services related to our company provided by Deloitte LLP listed above have been pre-approved by the audit committee.

ITEM 16D. EXEMPTIONSFROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

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ITEM 16E. PURCHASESOF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not applicable.

ITEM 16F. CHANGEIN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G. CORPORATEGOVERNANCE

As a foreign private issuer, we have the option to follow certain home country corporate governance practices rather than those of NYSE, provided that we disclose the requirements we are not following and describe the home country practices we are following. A summary of the significant differences can be found on our website at https://www.greenfireres.com.

ITEM 16H. MINESAFETY DISCLOSURE

Not applicable.

ITEM 16I.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

ITEM 16J.INSIDER TRADINGPOLICIES

We have adopted an insider trading policy, which governs the purchase, sale and other dispositions of our securities by our directors, officers and other employees. This policy promotes compliance with applicable securities laws and regulations, including those that prohibit insider trading. A copy of the Company Disclosure and Trading Policy is filed as an exhibit to this 20-F. See “Item 6.C Board Practices—Insider TradingPolicy”.

ITEM 16K. CYBERSECURITY.

The Company recognizes the importance of cybersecurity in protecting our operations, data, and stakeholders’ interests. In this section, we outline our processes for the assessment, identification, and management of material risks from cybersecurity threats, demonstrating our commitment to an integrated risk management approach.

Integration into OverallRisk Management

The Company’s cybersecurity risk management processes are integral to our overarching risk management framework. Our approach includes:

●	Holistic Assessment: We conduct regular cybersecurity<br>risk assessments to identify potential threats and vulnerabilities within our IT infrastructure, applications, and operational procedures.<br>These assessments are part of our broader risk evaluation efforts, ensuring that cybersecurity risks are evaluated with the same rigor<br>as financial, operational, and reputational risks.
●	Strategic Alignment: Our cybersecurity strategies<br>are aligned with our corporate goals, ensuring that risk management efforts support our business objectives without impeding innovation<br>or operational efficiency.
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●	Continuous Improvement: We periodically review<br>and update our cybersecurity policies and practices to adapt to evolving threats and incorporate best practices.
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Engagement with Consultants,Advisors, or Third Parties

To enhance our cybersecurity defenses, the Company engages with leading cybersecurity consultants, advisors, and third-party service providers. These collaborations enable us to:

●	Leverage Expertise: We work with external experts<br>to validate our security architecture, identify hidden vulnerabilities, and stay ahead of emerging threats.
●	Implement Advanced Solutions: Third-party security<br>solutions are integrated into our cybersecurity framework, providing advanced threat detection, prevention, and response capabilities.
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Management of Third-partyService Provider Risks

Recognizing the potential cybersecurity risks from third-party service providers, the Company employs a comprehensive approach to manage these risks:

●	Due Diligence: We conduct thorough security assessments<br>of all potential third-party service providers before engagement, ensuring they meet our stringent security standards.
●	Contractual Safeguards: Our contracts with third-party<br>providers include specific security requirements and obligations to protect our data and systems.
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●	Ongoing Monitoring: We continuously monitor the<br>security practices of our third-party providers and require immediate notification of any security incidents that could impact on our<br>systems.
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Impact on BusinessStrategy

Cybersecurity threats, if not managed properly, could significantly affect the Company’ strategic objectives, operational effectiveness, and financial stability. We integrate cybersecurity risk considerations into our strategic planning processes, ensuring that potential impacts on our business operations, reputation, and financial condition are adequately assessed and mitigated. We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.

Governance

At the Company, governance of cybersecurity risks is a top priority, ensuring that we protect our stakeholders’ interests while maintaining operational integrity and trust. This section describes our governance structure and processes related to overseeing risks from cybersecurity threats.

Board of Directors’Oversight

The Company’ board of directors plays a crucial role in overseeing our company’s cybersecurity posture. Our approach includes:

●	Dedicated Oversight Structure: The board has<br>established a Risk Management overview for the oversight of cybersecurity risks by conducting quarterly Cybersecurity Reports. This will<br>give the opportunity to review and guide the company’s cybersecurity strategies and policies.

126

●	Regular Updates and Reports: The board (with direction of SVP Engineering) receives regular updates on cybersecurity matters from our IT Manager and third-party consultants, including threat landscapes, incident reports, and mitigation strategies. These updates enable the board to make informed decisions and provide strategic guidance on cybersecurity matters.
●	Expertise and Training: Our board members receive<br>ongoing training in cybersecurity trends and governance best practices to ensure they are well-equipped to oversee these critical risks.
---	---

Management’sRole in Cybersecurity

Management’s responsibility for assessing and handling material risks from cybersecurity threats is defined clearly within the Company. Key aspects include:

●	Designated Leadership: SVP Engineering and IT<br>Manager lead the assessment and management of cybersecurity risks. The SVP Engineering and IT Manager possesses extensive experience in<br>cybersecurity, holding credentials such as Information Security, and reports directly to the CEO & President.
●	Cross-functional Collaboration: SVP Engineering<br>works closely with IT, legal, and business units to ensure a coordinated approach to cybersecurity, encompassing prevention, detection,<br>mitigation, and response strategies.
---	---
●	Informing and Monitoring: Management adopts a<br>proactive stance on cybersecurity, with regular briefings and monitoring systems in place to keep senior leadership informed about the<br>cybersecurity landscape and the company’s posture.
---	---
●	Reporting to the Board: SVP Engineering provides<br>comprehensive reports to the board of directors on a quarterly basis, detailing current cybersecurity risks, recent incidents, and ongoing<br>mitigation efforts.
---	---

127 PART

III

ITEM 17. FINANCIALSTATEMENTS

See Item 18.

ITEM 18. FINANCIALSTATEMENTS

Our Annual Financial Statements are included at the end of this Annual Report.

Item19. Exhibits

ExhibitNumber	Description
1.1.1	Articles of Greenfire Resources Ltd., dated as of December 9, 2022 (incorporated by reference to Exhibit 3.1 of the Company’s Form F-4/A, File No. 333-271381, filed with the SEC on August 11, 2023).
1.1.2*	Amendment to Articles of Greenfire Resources Ltd., dated as of September 19, 2023.
1.2	By-laws of Greenfire Resources Ltd., dated as of December 9, 2022 (incorporated by reference to Exhibit 3.2 of the Company’s Form F-4/A, File No. 333-271381, filed with the SEC on August 11, 2023).
2.1.1†	Business Combination Agreement, dated as of December 14, 2022, as amended on April 21, 2023, by and among M3-Brigade Acquisition III Corp., Greenfire Resources Ltd., DE Greenfire Merger Sub Inc., 2476276 Alberta ULC and Greenfire Resources Inc. (incorporated by reference to Exhibit 2.1.1 of the Company’s Form F-4/A, File No. 333-271381, filed with the SEC on August 11, 2023).
2.1.2	Amendment No. 2 to Business Combination Agreement, dated as of June 15, 2023, among M3-Brigade Acquisition III Corp., Greenfire Resources Ltd., DE Greenfire Merger Sub Inc., 2476276 Alberta ULC and Greenfire Resources Inc. (incorporated by reference to Exhibit 2.1.2 of the Company’s Form F-4/A, File No. 333-271381, filed with the SEC on August 11, 2023).
2.1.3	Amendment No. 3 to Business Combination Agreement, dated as of September 5, 2023, among M3-Brigade Acquisition III Corp., Greenfire Resources Ltd., DE Greenfire Merger Sub Inc., 2476276 Alberta ULC and Greenfire Resources Inc. (incorporated by reference to Exhibit 2.1 of M3-Brigade Acquisition III Corp.’s Form 8-K, File No. 001-40946, filed with the SEC on September 5, 2023).
2.2*	Plan of Arrangement
2.3	Amended and Restated Warrant Agreement, dated as of September 20, 2023, by and between Greenfire Resources Ltd., Computershare Inc. and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 2.3 of the Company’s Shell Company Report on Form 20-F, File No. 001-41810, filed with the SEC on September 27, 2023).
2.4	Warrant Agreement, dated as of September 20, 2023, by and between Greenfire Resources Ltd., Computershare Inc. and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 2.4 of the Company’s Shell Company Report on Form 20-F, File No. 001-41810, filed with the SEC on September 27, 2023).
2.5*	Investor Rights Agreement, dated September 20, 2023, by Greenfire Resources Ltd., the MBSC Sponsor, certain former shareholders of Greenfire Resources, Inc. and certain other investors set forth therein.
2.6*	Lock-Up Agreement, by and among Greenfire Resources Ltd., M3-Brigade Sponsor III LP, and certain former shareholders of Greenfire Resources, Inc.
2.7*	Description of Securities.
4.1	Greenfire Resources Ltd. Amended and Restated Omnibus Share Incentive Plan (incorporated by references to Exhibit 4.4 of the Company Form S-8, File No. 333-277054, filed with the SEC on February 14, 2024).
4.2	Greenfire Resources Ltd. Warrant Plan (incorporated by reference to Exhibit 4.3 of the Company Form S-8, File No. 333-277054, filed with the SEC on February 14, 2024).
4.3	Indenture, dated as of September 20, 2023, among Greenfire Resources Ltd., The Bank of New York Mellon, as Trustee, BNY Trust Company of Canada, as Canadian co-trustee, and Computershare Trust Company of Canada, as collateral agent (incorporated by reference to Exhibit 4.3 of the Company’s Shell Company Report on Form 20-F, File No. 001-41810, filed with the SEC on September 27, 2023).
4.4#	Credit Agreement, dated as of September 20, 2023, among Greenfire Resources Ltd., Bank of Montreal, as administrative agent and the lenders party thereto (incorporated by reference to Exhibit 4.4 of the Company’s Shell Company Report on Form 20-F, File No. 001-41810, filed with the SEC on September 27, 2023).
4.5.1#	Amended and Restated Crude Oil Purchase and Sale Agreement, dated December 3, 2021, between Greenfire Resources Operating Corporation and Trafigura Canada General Partnership (incorporated by reference to Exhibit 10.10.1 of the Company’s Form F-4/A, File No. 333-271381, filed with the SEC on August 7, 2023).

128

4.5.2	Amended and Restated Marketing Agreement Amending Agreement, dated February 23, 2023, between Greenfire Resources Operating Corporation and Trafigura Canada Limited with respect to the purchase and sale of crude oil (incorporated by reference to Exhibit 10.10.2 of the Company’s Form F-4/A, File No. 333-271381, filed with the SEC on August 11, 2023).
4.5.3	Amended and Restated Marketing Agreement Amending Agreement dated September 20, 2023, between Greenfire Resources Operating Corporation and Trafigura Canada Limited (incorporated by reference to Exhibit 10.5.3 of the Company’s Form F-1, File No. 333-275129, filed with the SEC on January 22, 2023).
4.6.1#	Condensate Purchase and Sale Agreement dated September 17, 2021, between Japan Canada Oil Sands Limited (or any successor in interest thereto) and Trafigura Canada General Partnership (incorporated by reference to Exhibit 10.11.1of the Company’s Form F-4/A, File No. 333-271381, filed with the SEC on August 11, 2023).
4.6.2	Amended and Restated Marketing Agreement Amending Agreement dated February 23, 2023, between Greenfire Resources Operating Corporation and Trafigura Canada Limited with respect to the purchase and sale of condensate (incorporated by reference to Exhibit 10.11.2of the Company’s Form F-4/A, File No. 333-271381, filed with the SEC on August 11, 2023).
4.6.3	Amended and Restated Marketing Agreement Amending Agreement dated September 20, 2023, between Greenfire Resources Operating Corporation and Trafigura Canada Limited (incorporated by reference to Exhibit 10.6.3 of the Company’s Form F-1, File No. 333-275129, filed with the SEC on January 22, 2023).
4.7.1#	Amended and Restated Crude Oil Purchase and Sale Agreement — Wellhead, dated September 17, 2021, between Greenfire Acquisition Corporation and Trafigura Canada General Partnership (incorporated by reference to Exhibit 10.12.1 of the Company’s Form F-4/A, File No. 333-271381, filed with the SEC on August 11, 2023).
4.7.2#	Marketing Agreement Amending Agreement dated December 14, 2022, between Greenfire Resources Operating Corporation and Trafigura Canada Limited (incorporated by reference to Exhibit 10.12.2 of the Company’s Form F-4/A, File No. 333-271381, filed with the SEC on August 11, 2023).
4.7.3	Amended and Restated Marketing Agreement Amending Agreement dated September 20, 2023, between Greenfire Resources Operating Corporation and Trafigura Canada Limited (incorporated by reference to Exhibit 10.7.3 of the Company’s Form F-1, File No. 333-275129, filed with the SEC on January 22, 2023).
8.1*	List of Subsidiaries.
11.1*	Greenfire Resources Ltd. Disclosure and Trading Policy.
12.1*	Rule 13a-13(a)/15d-14(a) Certification of Chief Executive Officer.
12.2*	Rule 13a-13(a)/15d-14(a) Certification of Chief Financial Officer
13.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
15.1*	Reserve Report of McDaniel & Associates Consultants Ltd. as to reserves of Greenfire Resources Inc. as of December 31, 2023.
15.2	Reserve Report of McDaniel & Associates Consultants Ltd. as to reserves of Greenfire Resources Inc. as of December 31, 2022 (corrected) (incorporated by reference to Exhibit 99.10 of the Company’s Form F-4/A, File No. 333-271381, filed with the SEC on August 11, 2023).
15.3	Reserve Report of McDaniel & Associates Consultants Ltd. as to reserves of Greenfire Resources Inc. as of December 31, 2021 (corrected) (incorporated by reference to Exhibit 99.11 of the Company’s Form F-4/A, File No. 333-271381, filed with the SEC on August 11, 2023).
15.4*	Consent of Deloitte LLP.
97.1*	Greenfire Resources Ltd. Incentive-Based Compensation Recovery Policy.
101.INS	XBRL Instance Document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).
*	Filed herewith
---	---
†	Schedules to this exhibit have been omitted pursuant to the Instructions as to Exhibits of Form 20-F. The Registrant hereby agrees to furnish a copy of any omitted schedules to the Commission upon request.
#	Portions of this exhibit have been redacted in compliance with Instruction 4 as to Exhibits of Form 20-F. The omitted information is not material and is the type of information that the registrant customarily and actually treats as private and confidential.

129 SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this report on its behalf.

	GREENFIRE RESOURCES LTD.
Date: March<br> 26, 2024	By:	/s/ Robert Logan
	Name:	Robert Logan
	Title:	Chief Executive Officer

130

INDEX TO FINANCIAL STATEMENTS

	Page
Audited Financial Statements of Greenfire Resources Ltd.
Report of Independent Registered Public Accounting Firm	F-2
Consolidated<br> Balance Sheets as at December 31, 2023 and December 31, 2022.	F-3
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2023, December 31, 2022 and December 31, 2021	F-4
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2023, December 31, 2022 and December 31, 2021	F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, December 31, 2022 and December 31, 2021	F-6
Notes to Consolidated Financial Statements	F-7
Supplementary Information for Greenfire Resources Ltd. – oil and gas.	F-36
Audited Financial Statements of Japan Canada Oil Sands Limited
---	---
Report of Independent Registered Public Accounting Firm	F-43
Balance Sheets as at September 17, 2021, December 31, 2020 and January 1, 2020	F-44
Statements of Comprehensive Income (Loss) for the period ended September 17, 2021 and for the year ended December 31, 2020	F-45
Statements of Changes in Shareholders’ Equity (Deficit) for the period ended September 17, 2021 and for the year ended December 31, 2020	F-46
Statements of Cash Flows for the period ended September 17, 2021 and for the year ended December 31, 2020	F-47
Notes to Financial Statements	F-48

F-1

Report of Independent Registered Public Accounting Firm

To the shareholders and the Board of Directors of

Greenfire Resources Ltd.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Greenfire Resources Ltd. and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of comprehensive income (loss), changes in shareholders’ equity (deficit) and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023 and 2022, and its financial performance and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte LLP

Chartered Professional Accountants

Calgary, Canada

March 20, 2024

We have served as the Company’s auditor since 2022.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-2

Greenfire Resources Ltd.

Consolidated Balance Sheets

As at December 31
($CAD thousands)	note		2023		2022
Assets
Current assets
Cash and cash equivalents		7	$	109,525	$	35,363
Restricted cash		8		-		35,313
Accounts receivable		14		34,680		34,308
Inventories		9		13,863		14,568
Prepaid expenses and deposits				5,746		3,975
				163,814		123,527
Non-current assets
Property, plant and equipment		10		941,374		963,050
Deferred income tax asset		12		68,295		87,681
				1,009,669		1,050,731
				1,173,483		1,174,258
Liabilities
Current liabilities
Accounts payable and accrued liabilities		22		59,850		46,569
Current portion of long-term debt		15		44,321		63,250
Warrant liability		20		18,630		-
Taxes payable		5		1,063		-
Current portion of lease liabilities		11		6,002		98
Risk management contracts		14		417		27,004
				130,283		136,921
Non-current liabilities
Long-term debt		15		332,029		191,158
Lease liabilities		11		7,722		865
Decommissioning liabilities		13		8,449		7,543
				348,200		199,566
				478,483		336,487
Shareholders’ equity
Share capital		5,19		158,515		15
Contributed surplus		5,19		9,788		44,674
Retained earnings (deficit)				526,697		793,082
				695,000		837,771
			$	1,173,483	$	1,174,258

Commitments and contingencies (note 18)

See accompanying notes to the consolidatedfinancial statements

These Consolidated Financial Statements wereapproved by the Board of Directors.

Robert Logan, Director	Derek Aylesworth, Director
Greenfire Resources Ltd.	2023 Annual Financial Statements	F-3
---	---

Greenfire Resources Ltd.

Consolidated Statements of Comprehensive Income (Loss)

($CAD thousands, except per share amounts)	note		Year ended<br><br> December 31, <br><br>2023			Year ended<br><br> December 31,<br><br> 2022			Year ended<br><br> December 31,<br><br> 2021
Revenues
Oil sales		16	$	675,970		$	998,849		$	270,674
Royalties		16		(23,706	)		(50,064	)		(9,543	)
Oil sales, net of royalties				652,264			948,785			261,131
Gain (loss) on risk management contracts		14		16,405			(121,478	)		(39,291	)
				668,669			827,307			221,840
Expenses
Diluent expense				304,740			368,015			94,623
Transportation and marketing				55,673			67,842			24,057
Operating expenses				148,965			160,826			59,710
General and administrative				11,536			9,836			3,285
Stock-based compensation				9,808			1,183			-
Financing and interest		17		110,214			77,074			25,050
Depletion and depreciation		10		68,054			68,027			27,071
Exploration and other expenses				3,852			1,825			350
Other (income) expenses				(2,905	)		(206	)		8,373
Transaction costs		5,6		12,172			2,769			10,318
Listing expense		5		106,542			-			-
Gain on revaluation of warrants		20		(34,973	)		-			-
Gain on acquisitions		6		-			-			(693,953	)
Foreign exchange (gain) loss				(8,724	)		26,099			1,512
Total expenses				784,954			783,290			(439,604	)
Net income (loss) before taxes				(116,285	)		44,017			661,444
Income tax recovery (expense)		12		(19,386	)		87,681			-
Net income (loss) and comprehensive income (loss)			$	(135,671	)	$	131,698		$	661,444
Net income (loss) per share
Basic^1^		19	$	(2.49	)	$	2.69		$	15.52
Diluted^1^		19	$	(2.49	)	$	1.88		$	13.75
^1^	For the years ended December 31, 2022 and 2021 the Company’s basic and diluted earnings per share is the net income per common share of Greenfire Resources Inc (see Note 1)., and the weighted average common shares outstanding has been recast by the applicable exchange ratio following the completion of the De-Spac Transaction with MBSC (Note 5.)
---	---

See accompanying notes to the consolidatedfinancial statements

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-4

Greenfire Resources Ltd.

Consolidated Statements of Changes in Shareholders’ Equity

($CAD Thousands, except per share amounts)		Year ended<br> December 31, <br> 2023			Year ended<br> December 31,<br> 2022		Year ended<br> December 31,<br> 2021
Share capital
Balance, beginning of year		$	15		$	15	$	-
Issuance on exercise of bond warrants	5,19		38,911			-		-
Issuance to MBSC shareholders	5,19		62,959			-		-
Issuance of shares for PIPE investment	5,19		56,630			-		-
Shares issued during year	19		-			-		15
Balance, end of year			158,515			15		15
Contributed surplus
Balance, beginning of year			44,674			43,491		-
Stock based compensation	19		9,808			1,183		-
Exercise of performance warrants	5,19		(1,203	)		-		-
Issuance and exercise of bond warrants	5,19		(43,491	)		-		43,491
Balance, end of year			9,788			44,674		43,491
Retained earnings (deficit)
Balance, beginning of year			793,082			661,384		(60	)
Common shares repurchased and cancelled	5,19		(41,464	)		-		-
Dividend on De-Spac transaction	5,19		(59,388	)		-		-
Exercise of bond warrants	5,19		4,580			-		-
Exercise of performance warrants	5,19		1,202			-		-
Issuance of warrants	20		(35,644	)		-		-
Net income (loss) and comprehensive (loss)			(135,671	)		131,698		661,444
Balance, end of year			526,697			793,082		661,384
Total shareholders’ equity		$	695,000		$	837,771	$	704,890

See accompanying notes to the consolidatedfinancial statements

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-5

Greenfire Resources Ltd.

Consolidated Statements of Cash Flows

($CAD Thousands, except per share amounts)		Year ended<br><br> December 31, <br><br>2023			Year ended<br><br> December 31, <br><br>2022			Year ended<br><br> December 31, <br><br>2021
Operating activities
Net income (loss)		$	(135,671	)	$	131,698		$	661,444
Items not affecting cash:
Deferred income taxes	12		19,386			(87,681	)		-
Gain on acquisitions	6		-			-			(693,953	)
Unrealized (gain) loss on risk management contracts	14		(26,587	)		(8,673	)		35,677
Foreign exchange (gain) loss			(8,967	)		26,099			1,512
Depletion and depreciation	10		67,893			67,868			27,996
Stock based compensation	19		9,808			1,183			-
Other non-cash expenses			68			66			3,769
Accretion	13		906			743			298
Amortization of debt issuance costs	17		43,478			29,854			2,152
Debt redemption premium	15,17		19,152			-			-
Gain on revaluation of warrants	20		(34,973	)		-			-
Listing expense	5		106,542			-			-
Change in non- cash working capital	24		25,513			3,570			(6,910	)
Cash provided by operating activities			86,548			164,727			31,985
Financing activities
Issuance of long-term debt net of issuance costs	15		382,454			-			365,591
Repayment of long-term debt	15		(294,647	)		(123,612	)		-
Debt redemption premium	15,17		(19,152	)		-			-
Issuance of common shares	19		67,115			-			15
Common shares repurchased	5,19		(41,464	)		-			-
Dividend on De-Spac transaction	5,19		(59,388	)		-			-
De-Spac transaction costs	5,19		(34,817	)		-			-
Payment of lease liabilities	11		(99	)		(26	)		-
Cash provided (used) by financing activities			2			(123,638	)		365,606
Investing activities
Property, plant and equipment expenditures	10		(33,428	)		(39,592	)		(4,594	)
Cash and cash equivalents acquired in acquisitions	6		-			-			6,918
Acquisitions	6		-			-			(366,454	)
Restricted cash	8		35,313			(26,613	)		(8,140	)
Change in non-cash working capital (accrued additions to PP&E)	24		(13,988	)		2,459			35,742
Cash used in investing activities			(12,103	)		(63,746	)		(336,528	)
Exchange rate<br> impact on cash and cash equivalents held in foreign currency			(285	)		(2,849	)		(194	)
Change in cash and cash equivalents			74,162			(25,506	)		60,869
Cash and cash equivalents, beginning of year			35,363			60,869			-
Cash and cash equivalents, end of year		$	109,525		$	35,363		$	60,869

See accompanying notes to the consolidatedfinancial statements

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-6

Greenfire Resources Ltd.

Notes to the Consolidated Financial Statements

1. CORPORATE INFORMATION

Greenfire Resources Ltd. (the “Company” or “Greenfire”) was incorporated under the laws of Alberta on December 9, 2022. On September 20, 2023, the Company participated in a De-Spac transaction involving a number of entities, including Greenfire Resources Inc. (“GRI”) and M3-Brigade Acquisition III Corp (“MBSC”) (the “De-Spac Transaction”). Refer to Note 5 De-Spac Transaction for additional information. These audited consolidated financial statements are comprised of the accounts of Greenfire and its wholly owned subsidiaries, GRI and MBSC. The prior period amounts presented are those of GRI, which continued as the operating entity, concurrent with recapitalization. As of January 1, 2024, GRI was amalgamated with Greenfire Resources Operation Corporation (“GROC”).

The Company and its subsidiaries are engaged in the exploration, development and operation of oil and gas properties, focused primarily in the Athabasca oil sands region of Alberta. The Company’s corporate head office is located at 1900, 205 5th Avenue SW, Calgary, AB T2P 2V7.

2. BASIS OF PRESENTATION AND STATEMENT OF COMPLIANCE

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). In these consolidated financial statements, all dollars are expressed in Canadian dollars, which is the Company’s functional currency, unless otherwise indicated. These consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments which are measured at fair value. The consolidated financial statements were approved by the Board of Directors on March 20, 2024.

3. MATERIAL ACCOUNTING POLICIES

Principles of consolidation

These consolidated financial statements consist of financial records of the Company and its wholly owned subsidiaries. The Company has two direct subsidiaries, MBSC and GROC which are 100% wholly owned by the Company, as well as several indirect subsidiaries, including, Hangingstone Expansion Limited Partnership (“HELP”) and Hangingstone Demo Limited Partnership (“HDLP”), which were formed by GROC and their general partners Hangingstone Expansion General Partner (“HEGP”) and Hangingstone Demo General Partner (“HDGP”), respectively. The units of HELP and HDLP are allocated at 99.99% to GROC for both entities and 0.01% to HEGP and HDGP, respectively. HEGP and HDGP are wholly owned subsidiaries of GROC, along with Greenfire Resources Employment Corporation. Intercompany transactions and balances between the entities are eliminated upon consolidation.

Joint arrangements

The Company undertakes certain business activities through joint arrangements. Interests in joint arrangements have been classified as joint operations. Joint control exists for contractual arrangements governing the Company’s assets whereby Greenfire has less than 100 per cent working interest, all of the partners have control of the arrangement collectively, and spending on the project requires unanimous consent of all parties that collectively control the arrangement and share the associated risks. A joint operation is established when the Company has rights to the assets and obligations for the liabilities of the arrangement. The Company only recognizes its proportionate share in assets, liabilities, revenues and expenses associated with its joint operations.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-7

Cash and cash equivalents

Cash and cash equivalents include cash-on-hand, deposits held with banks, and other short-term highly liquid investments such as bankers’ acceptances, commercial paper, money market deposits or similar instruments, with a maturity of 90 days or less.

Foreign currency translation

Foreign currency transactions are translated into Canadian Dollars at exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the rate of exchange on the balance sheet date. Any resulting exchange differences are included in the Consolidated Statement of Comprehensive Income (Loss). Nonmonetary assets and liabilities denominated in a foreign currency are measured at historical cost and are translated into the functional currency using the rates of exchange as at the dates of the initial transactions.

Operating segments

The Company has one reportable operating segment which is made up of its oil sands operations based on geographic location (Athabasca oil sands region of Alberta, Canada), nature of the products sold and integration of facilities and operations. The chief operating decision maker is the President and CEO, who reviews operating results at this level to assess financial performance and make resource allocation decisions. The Company determines its operating segments based on the differences in the nature of operations, products sold, economic characteristics and regulatory environments and management. All of the Company’s non-current assets are located in and revenue is earned in Canada.

Financial instruments

Financial assets and financial liabilities are recognized in the Company’s balance sheet when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

All recognized financial assets are measured subsequently in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.

Financial assets that meet the following conditions are measured subsequently at amortized cost:

●	the financial asset is held within a business<br>model whose objective is to hold financial assets in order to collect contractual cash flows; and
●	the contractual terms of the financial asset<br>give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
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Greenfire Resources Ltd.	2023 Annual Financial Statements	F-8
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Financial assets that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI):

●	the financial asset is held within a business<br>model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and
●	the contractual terms of the financial asset<br>give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
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By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).

Classifications are not changed subsequent to initial recognition, except in limited circumstances.

Credit risk arises from the potential that the Company may incur a loss if a counterparty fails to meet its obligations in accordance with agreed terms. Financial assets are assessed at each reporting date to determine whether there is any evidence that credit losses are expected. Credit loss of financial assets is determined by assessing and measuring the expected credit losses of the instruments at each reporting period. The Company measures expected credit losses using a lifetime expected loss allowance model for all trade receivables and contract assets. The credit-loss model groups receivables based on similar credit risk characteristics and the number of days past due in order to estimate and recognize bad debt expenses. When measuring expected credit losses, the Company considers a variety of factors including: evidence of the debtor’s financial condition, history of collections, the term of the receivable and any recent and expected future changes in economic conditions. The Company has not experienced any write-offs of uncollectible receivables; as a result, there are no expected credit losses recognized as at December 31, 2023 (nil for 2022 and 2021).

Financial liabilities

On initial recognition, financial liabilities are classified at amortized cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held-for-trading, is a derivative or is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. A financial liability is derecognized when its contractual obligations are discharged or canceled or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value. On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

The Company may, from time to time, enter into certain financial derivative contracts to manage exposure from fluctuating commodity prices, interest rates or foreign exchange rates between the Canadian and US dollar. Such risk management contracts are not used for trading or speculative purposes. The Company has not designated its risk management contracts as effective hedges and has not applied hedge accounting even though the Company considers all financial derivate contracts to be economic hedges, as such all risk management contracts have been recorded at fair value with changes in fair value being recorded through profit or loss.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-9

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants who are independent, knowledgeable and willing and able to transact would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. The Company is able to classify fair value balances based on the observability of these inputs. The authoritative guidance for fair value measurements establishes three levels of the fair value hierarchy, defined as follows:

●	Level 1: Unadjusted, quoted prices for identical assets or liabilities in active markets;
●	Level 2: Quoted prices in markets that are not considered to be active or financial instruments<br> for which all significant inputs are observable, either directly or indirectly for substantially<br> the full term of the asset or liability; and
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●	Level 3: Significant, unobservable inputs for use when little or no market data exists, requiring<br> a significant degree of judgment.
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The following table summarizes the method by which the Company measures its financial instruments on the consolidated balance sheets and the corresponding hierarchy rating for their derived fair value estimates:

Financial Instrument	Classification & Measurement
Cash and cash equivalents	Amortized cost
Restricted cash	Amortized cost
Accounts receivable	Amortized cost
Risk management contracts	FVTPL
Accounts payable and accrued liabilities	Amortized cost
Warrant liability	FVTPL
Long-term debt	Amortized cost

The carrying values of cash and cash equivalents, restricted cash, accounts receivable and accounts payable and accrued liabilities included on the consolidated balance sheets approximates the fair values of the respective assets and liabilities due to the short-term nature of those instruments.

The estimated fair value of long-term debt has been determined based on period-end trading prices of long-term borrowings on the secondary market (level 2), for further information please refer to Note 15.

The warrants issued were classified as financial liabilities due to a cashless exercise feature and are measured at fair value upon issuance and at each subsequent reporting period with the changes in fair value recorded in the consolidated statement of income (loss). The fair value of these warrants is determined using the Black-Scholes option valuation model.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-10

Common shares are classified as shareholders’ equity. The Company may issue share purchase warrants as a part of debt and/or equity financings. These financial instruments are assessed at the date of issue, based on their underlying terms and conditions, as to whether they are an equity instrument or a derivative financial instrument and if determined to be an equity instrument they are initially recognized in shareholder’s equity at fair value on date of issue. Classifications are not changed after initial recognition and only reassessed when there is a modification in the terms and conditions of the underlying share purchase warrant. Incremental costs directly attributable to the issuance of equity instruments as a deduction from equity, net of any tax effects.

Revenue

Revenue is measured based on consideration to which the Company expects to be entitled in a contract with a customer. The Company recognizes revenue primarily from the sale of diluted and non- diluted bitumen. Revenue is recognized when its single performance obligation is satisfied. This occurs when the product is delivered, control of the product and title or risk of loss transfers to the customer at contractually specified transfer points. This transfer coincides with title passing to the customer and the customer taking physical possession of the commodity. The Company principally satisfies its single performance obligations at a point in time. Transaction prices are determined at inception of the contract and allocated to the performance obligations identified. Payment is generally received in the following month after the sale has occurred.

The Company sells its production pursuant to fixed and variable-priced contracts. The transaction price for variable-priced contracts is based on the commodity price, adjusted for quality, location, or other factors, whereby each component of the pricing formula can be either fixed or variable, depending on the contract terms. Revenue is recognized when a unit of production is delivered to the contract counterparty. The amount of revenue recognized is based on the agreed upon transaction. Royalty expenses are recognized as production occurs.

The Company has long-term marketing agreements with a single counterparty (“Sole Petroleum Marketer”), which has exclusive marketing rights over the Company’s production and diluent purchases at Hangingstone Expansion (“Expansion”), until October 2028 and at Hangingstone Demo (“Demo”), until April 2026. Fees paid to the Sole Petroleum Marketer as part of these agreements include marketing, incentive and royalty fees. These fees are expensed as incurred as transportation and marketing expenses. In addition, the Sole Petroleum Marketer provided letters of credit in support of the Company’s long-term transportation commitment until November 2023. As a result of these marketing agreements, the Company is exposed to concentration and credit risks, as all sales are to a single counterparty.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-11

Inventories

Inventories consist of crude oil products and warehouse materials and supplies. The carrying value of inventory includes direct and indirect expenditures incurred in the normal course of business in bringing an item or product to its existing condition and location. The Company values inventories at the lower of cost and net realizable value on a weighted average cost basis. Net realizable value is the estimated selling price less applicable selling expenses. If the carrying value exceeds net realizable value, a write-down is recognized. A change in circumstances could result in a reversal of the write-down for the inventory that remains on hand in a subsequent period.

Property, plant and equipment (“PP&E”)

PP&E is measured at the cost to acquire, less accumulated depletion and depreciation, and net of any impairment losses. The Company begins capitalizing oil exploration costs after the right to explore has been obtained and includes land acquisition costs, geological and geophysical activities, drilling expenditures and costs incurred for the completion and testing of exploration wells. The Company capitalizes all subsequent investments attributable to the development of its oil assets if the expenditures are considered a betterment and provide a future benefit beyond one year. Costs of planned major inspections, overhaul and turnaround activities that maintain PP&E and benefit future years of operations are capitalized and depreciated on a straight-line basis over the period to the next turnaround. Recurring planned maintenance activities performed on shorter intervals are expensed. Replacements of equipment are capitalized when it is probable that future economic benefits will flow to the Company. The Company’s capitalized costs primarily consist of pad construction, drilling activities, completion activities, well equipment, processing facilities, gathering systems and pipelines. Borrowing costs attributable to long-term development projects are also capitalized.

Capitalized costs are classified as exploration and evaluation (“E&E”) assets if technical feasibility and commercial viability have not yet been established. Technical feasibility and commercial viability are generally deemed to exist when proved reserves are present and the Company has sanctioned the project for commercial development. Capitalized costs are classified as PP&E assets if they are attributable to the development of oil reserves after technical feasibility and commercial viability have been achieved. Once the technical feasibility and commercial viability of E&E assets have been established, the E&E assets are tested for impairment and reclassified to PP&E. The majority of the Company’s PP&E is depleted using the unit-of-production method relative to the Company’s estimated total recoverable proved plus probable (2P) reserves. The depletion base consists of the historical net book value of capitalized costs, plus the estimated future costs required to develop the Company’s estimated recoverable proved plus probable reserves. The depletion base excludes E&E and the cost of assets that are not yet available for use in the manner intended by Management. Corporate assets and other capitalized costs are depreciated over their estimated useful lives primarily using the declining-balance method.

There were no E&E costs as at December 31, 2023, 2022 and 2021.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-12

Provisions and contingent liabilities

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the statement of financial position date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. The Company’s provisions primarily consist of decommissioning liabilities associated with dismantling, decommissioning, and site disturbance remediation activities related to its oil assets.

At initial recognition, the Company recognizes a decommissioning asset and corresponding liability on the balance sheet. Decommissioning liabilities are measured at the present value of expected future cash outflows required to settle the obligations at the balance sheet date, using managements best estimate of expenditures required to settle the liability. Decommissioning liabilities are measured based on the estimated future inflation rate and then discounted to net present value using a credit adjusted risk-free discount rate. Any change in the present value, as a result of a change in discount rate or expected future costs, of the estimated obligation is reflected as an adjustment to the provision and the corresponding item of property, plant and equipment. The liability for decommissioning costs is increased each period through the unwinding of the discount, which is included in finance and interest costs in the consolidated statements of comprehensive income (loss). Decommissioning liabilities are remeasured at each reporting period primarily to account for any changes in estimates or discount rates. Actual expenditures incurred to settle the obligations reduce the liability.

Contingent liabilities reflect a possible obligation that may arise from past events and the existence of which can only be confirmed by the occurrence or non-occurrence of one or more uncertain future events, not wholly within the control of the Company. Contingent liabilities are not recognized on the balance sheet unless they can be measured reliably and the possibility of an outflow of economic benefits in respect of the contingent obligation is considered probable. Disclosure of contingent liabilities is provided when there is a less than probable, but more than remote, possibility of material loss to the Company.

Impairment of non-financial assets

For the purpose of estimating the asset’s recoverable amount, PP&E assets are grouped into Cash Generating Units (“CGU”). A CGU is the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets. The Company’s PP&E assets are currently held in two CGUs. Our Hangingstone Expansion and Demo assets represent our two CGU’s at December 31, 2023 and December 31, 2022.

PP&E assets are reviewed at each reporting date to determine whether there is any indication of impairment. If indicators of impairment exist, the recoverable amount of the asset or CGU is estimated as the greater of value-in-use (“VIU”) and fair value less costs of disposal (“FVLCOD”). VIU is estimated as the discounted present value of the expected future cash flows from continuing use of the asset or CGU. FVLCOD is the amount that would be realized from the disposition of an asset or CGU in an arm’s length transaction between knowledgeable and willing parties. An impairment loss is recognized in earnings or loss if the carrying amount of the asset or CGU exceeds its estimated recoverable amount.

At each reporting period, PP&E, E&E and right-of-use (“ROU”) assets are tested for impairment reversal at the CGU level when facts and circumstances suggest that the recoverable amount of the CGU may exceed the carrying value. Impairment reversal is limited to the carrying amount which would have been recorded had no historical impairment been recorded.

Business combinations

Business combinations are accounted for using the acquisition method of accounting in which identifiable assets acquired and liabilities assumed in a business combination are recognized and measured at their fair value at the date of the acquisition. If the cost of the acquisition is less than the fair value of the net asset acquired, the difference is recognized in net income (loss). If the cost of the acquisition is greater than the fair value of the net assets acquired, the difference is recognized as goodwill.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-13

Leases

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. A lease obligation and corresponding ROU asset are recognized at the commencement of the lease. Lease liabilities are initially measured at the present value of the unavoidable lease payments and discounted using the Company’s incremental borrowing rate when an implicit rate in the lease is not readily available. Interest expense is recognized on the lease obligations using the effective interest rate method. The ROU assets are recognized at the amount of the lease liabilities, adjusted for lease incentives received and initial direct costs, on commencement of the leases. ROU assets are depreciated on a straight-line basis over the lease term. The Company is required to make judgments and assumptions on incremental borrowing rates and lease terms. The carrying balance of the leased assets and lease liabilities, and related interest and depreciation expense, may differ due to changes in market conditions and expected lease terms. Short-term and low value leases have not been included in the measurement of lease liabilities.

Income taxes

Income tax is comprised of current and deferred tax. Income tax expense (recovery) is recognized in the consolidated statement of comprehensive income (loss) except to the extent that it relates to share capital, in which case it is recognized in equity. Current tax is the expected tax payable (receivable) on the taxable income (loss) for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized on the initial recognition of assets or liabilities in a transaction that is not a business combination and does not affect profit, other than temporary differences that arise in shareholder’s equity. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset on the consolidated balance sheet if there is a legally enforceable right to offset and they relate to income taxes levied by the same tax authority. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are not recognized until such time that it is more likely than not that the related tax benefit will be realized.

Stock-based compensation

The Company’s stock-based compensation plans for employees consist of performance warrants. The Company’s stock-based compensation plans are accounted for as equity-settled share-based compensation plans. The fair values of the equity settled awards are initially measured at the date of issuance using the Black-Scholes model using an estimated forfeiture rate, volatility, dividend yield, risk-free rate and expected life. The fair value is recorded as stock-based compensation over the vesting period with a corresponding amount reflected in contributed surplus. When performance warrants are exercised, the cash proceeds along with the amount previously recorded as contributed surplus are recorded as share capital.

Per share information

Basic per share information is calculated using the weighted average number of common shares outstanding during the year. Diluted per share information is calculated using the basic weighted average number of common shares outstanding during the year, adjusted for the number of shares that could have had a dilutive effect on net income during the year had in the-money and outstanding equity compensation units been exercised.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-14

New and amended IFRS Accounting Standards that are effective for the current year

In the current year, the Company has applied a number of amendments to IFRS that are mandatorily effective as of January 1, 2023. These adopted amendments are as follows, with their adoption having no significant impact on the Company’s consolidated financial statements.

Amendments to IAS 1 – Presentation ofFinancial Statements

The amendments change the requirements in IAS 1 with regard to disclosure of accounting policies. The amendments replace all instances of the term ‘significant accounting policies’ with ‘material accounting policy information’. Accounting policy information is material if, when considered together with other information included in an entity’s financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements.

Amendments to IAS 12 – Income Taxes

The amendments introduce a further exception from the initial recognition exemption. Under the amendments, an entity does not apply the initial recognition exemption for transactions that give rise to equal taxable and deductible temporary differences. Depending on the applicable tax law, equal taxable and deductible temporary differences may arise on initial recognition of an asset and liability in a transaction that is not a business combination and affects neither accounting profit nor taxable profit.

Future accounting pronouncements

The Company plans to adopt the following amendments that are effective for annual periods beginning on or after January 1, 2024. The pronouncements will be adopted on their respective effective dates; however, each is not expected to have a material impact on the financial statements.

Amendments to IAS 1 – Presentation of Financial Statements - Classification of Liabilities as Current or Non-current

The amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period, specify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability, explain that rights are in existence if covenants are complied with at the end of the reporting period, and introduce a definition of ‘settlement’ to make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.

Amendments to IAS 1 – Presentation ofFinancial Statements - Classification of Liabilities as Current or Non-current

The amendments specify that only covenants that an entity is required to comply with on or before the end of the reporting period affect the entity’s right to defer settlement of a liability for at least twelve months after the reporting date (and therefore must be considered in assessing the classification of the liability as current or noncurrent). Such covenants affect whether the right exists at the end of the reporting period, even if compliance with the covenant is assessed only after the reporting date (e.g. a covenant based on the entity’s financial position at the reporting date that is assessed for compliance only after the reporting date).

4. ACCOUNTING JUDGEMENTS AND ESTIMATES

The timely preparation of the consolidated financial statements requires that management make estimates and assumptions and use judgement regarding the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during that period. Such estimates primarily relate to unsettled transactions and events as of the date of the consolidated financial statements. The estimated fair value of financial assets and liabilities are subject to measurement uncertainty. In addition, climate change and the evolving worldwide demand for alternative sources of energy that are not sourced from fossil fuels could result in a change in assumptions used in determining the recoverable amount and could affect the carrying value of the related assets. As these issues advance and regulations change, future financial performance may be impacted. This also presents uncertainty and risk with respect to the Company, its performance and estimates and assumptions. The timing in which global energy markets transition from carbon-based sources to alternative energy or when new regulatory practices may be implemented is highly uncertain.

The ongoing geopolitical risks and conflicts have resulted in significant commodity price volatility and increased the level of uncertainty in the Company’s future cash flow. The Company’s gains and losses from its commodity price risk management contracts is likely to be volatile in the current market environment and there is greater emphasis on ensuring operations is uninterrupted and production volumes are delivered to meet these obligations. Additionally, the higher degree of commodity price volatility may increase systemic risk to the global commodities trading and banking businesses, which in turn may increase the Company’s counterparty risk. The Company has not experienced impairment of its receivables and currently has no information that indicates there is elevated risk of impairment in the future.

Accordingly, actual results may differ materially from estimated amounts as future confirming events occur. Significant judgements, estimates and assumptions made by management in the preparation of these consolidated financial statements are outlined below.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-15

Inventories

The Company evaluates the carrying value of its inventory at the lower of cost and net realizable value. The net realizable value is estimated based on current market prices that the Company would expect to receive from the sale of its inventory.

Decommissioning liabilities

The provision for decommissioning liabilities is based upon numerous assumptions including settlement amounts, inflation factors, credit-adjusted discount rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. Actual costs and cash outflows could differ from the estimates as a result of changes in any of the above noted assumptions.

Risk management contracts

The Company utilizes commodity risk management contracts to manage commodity price risk on oil sales and operating expenses. The Company may also utilize foreign exchange risk management contracts to reduce its exposure to foreign exchange risk associated with its interest payments on its US dollar denominated term debt. The calculated fair value of the risk management contracts relies on external observable market data including quoted forward commodity prices and foreign exchange rates. The resulting fair value estimates may not be indicative of the amounts realized at settlement and as such are subject to measurement uncertainty.

Deferred income taxes

The provision for income taxes is based on judgments in applying income tax law and estimates on the timing and likelihood of reversal of temporary differences between the accounting and tax bases of assets and liabilities. The provision for income taxes is based on the Company’s interpretation of the tax legislation and regulations which are also subject to change. The Company recognizes a tax provision when a payment to tax authorities is considered more likely than not. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Income tax filings are subject to audits and reassessments and changes in facts, circumstances and interpretations of the standards which may result in a material increase or decrease in the Company’s provision for income taxes.

Long-term debt

The measurement of the current portion of long-term debt includes assumptions of expected excess cashflows that are based on management’s estimates.

Bitumen reserves

The estimation of reserves involves the exercise of judgment. Forecasts are based on engineering data, estimated future prices, expected future rates of production and the cost and timing of future capital expenditures, all of which are subject to many uncertainties and interpretations. The Company expects that over time its reserves estimates will be revised either upward or downward based on updated information such as the results of future drilling and production. Reserves estimates can have a significant impact on net earnings, as they are a key component in the calculation of depletion and for determining potential asset impairment.

Impairments

CGUs are defined as the lowest grouping of assets that generate identifiable cash inflows that are largely independent of the cash inflows of other assets or groups of assets. The classification of assets into CGUs requires significant judgment and interpretations with respect to the integration between assets, the existence of active markets, external users, shared infrastructures, and the way in which management monitors the Company’s operations. The recoverable amounts of CGUs and individual assets have been determined as the higher of the CGUs or the asset’s fair value less costs of disposal and its value in use. These calculations require the use of estimates and significant assumptions and are subject to changes as new information becomes available including information on future commodity prices, expected production volumes, quantity of proved and probable reserves and discount rates as well as future development and operating expenses. Changes in assumptions used in determining the recoverable amount could affect the carrying value of the related assets and CGUs.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-16

Property, plant and equipment

Producing assets within PP&E are depleted using the unit-of-production method based on estimated total recoverable proved plus probable reserves and future costs required to develop those reserves. There are several inherent uncertainties associated with estimating reserves. By their nature, these estimates of reserves, including the estimates of future prices and costs, and related future cash flows are subject to measurement uncertainty, and the impact on the consolidated financial statements of future periods could be material.

Share purchase warrants

The Company has and may, from time to time, issue share purchase warrants (“warrants”) as a part of debt and or equity financings. These warrants may be initially classified as shareholders’ equity or a derivative financial liability based on the terms and conditions of the underlying agreement. The determination of fair value of the share purchase warrants are primarily derived from the fair value of the underlying common shares. The determination of which methodology is most appropriate to determine the fair value of these warrants involves judgement.

The estimation of fair value could be determined using the binomial model, the Black Scholes model, the residual method or a relative fair value method depending on the terms of the warrant. The inputs to any of these models require estimates related to share price, share price volatility, interest rates, cash flow multiples, dividend yields, and expected life, all subject to judgment and estimation uncertainty due to both internal and external market factors. Changes in assumptions can impact the fair value estimated for such warrants.

5. De-Spac Transaction

On September 20, 2023, Greenfire, GRI, MBSC, DE Greenfire Merger Sub Inc. (“DE Merger Sub”) and 2476276 Alberta ULC (“Canadian Merger Sub”), completed a De-Spac Transaction pursuant to a business combination agreement dated December 14, 2022, as amended (the “Business Combination Agreement”) with MBSC. DE Merger Sub and Canadian Merger Sub were incorporated in December 2022 for the purposes of completing the De-Spac Transaction.

Pursuant to the De-Spac Transaction (i) Canadian Merger Sub amalgamated with and into GRI pursuant to a statutory plan of arrangement (the “Plan of Arrangement”) under the Business Corporations Act (Alberta), with GRI continuing as the surviving corporation and becoming a direct, wholly-owned subsidiary of Greenfire and (ii) DE Merger Sub merged with and into MBSC pursuant to a Delaware statutory merger (the “Merger) with MBSC continuing as the surviving corporation and becoming a direct, wholly-owned subsidiary of Greenfire.

As a result of the De-Spac Transaction, the following occurred:

●	Of the GRI 8,937,518 common shares outstanding, 7,996,165 were converted to 43,690,534 common shares of Greenfire and 941,353 were cancelled in exchange for cash consideration of $70.8 million. Cash consideration was comprised of a dividend paid of $59.4 million and $11.4 million for shares repurchased and cancelled by the Company. The $70.8 million cash consideration was recorded as a reduction to retained earnings.
●	312,500 outstanding GRI bondholder warrants were exchanged for 3,225,810 GRI common shares of which 2,886,048 were converted to 15,769,183 common shares of Greenfire and 339,245 were cancelled in exchange for cash consideration of $25.5 million.<br>This $25.5 million was recorded as a reduction to retained earnings. In conjunction with the share conversion and cancellation, $43.5<br>million was reclassified from contributed surplus to share capital ($38.9 million) and retained earnings ($4.6 million).
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Greenfire Resources Ltd.	2023 Annual Financial Statements	F-17
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●	Of the 739,912 GRI performance warrants outstanding, 661,971 were converted into 3,617,016 Greenfire performance warrants and 77,941 were cancelled for cash consideration of $4.5 million, which was the fair value of the warrants. The $4.5 million was recorded as a reduction to retained earnings. In conjunction with the cancellation, $1.2 million was reclassified from contributed surplus to retained earnings.
●	Greenfire issued an additional 5,000,000 Greenfire warrants to former GRI shareholders, GRI bond warrant holders and performance warrant holders that entitle the holder of each warrant to purchase one common share of Greenfire. The warrants were recorded as a warrant liability on the consolidated balance sheet, see Note 20.
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●	755,707 MBSC Class A common shares held by MBSC’s public shareholders were converted into 755,707 Greenfire common shares.
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●	4,250,000 Class B MBSC common shares were converted into 4,250,000 Greenfire common shares.
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●	MBSC redeemed 10,000,000 MSBC public warrants for cash consideration of $6.7 million (US$5.0 million).
●	2,526,667 MBSC private placements warrants were converted into 2,526,667 Greenfire warrants, which were recorded as a warrant liability on the consolidated balance sheet, see Note 20.
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●	Concurrent with the execution of the Business Combination Agreement, the Company and MBSC had entered into subscription agreements with certain investors (the “PIPE Investors”) pursuant to which the PIPE Investors agreed to purchase Class A common shares of MBSC at a purchase price of US$10.10 per share. MBSC issued 4,177,091 Class A common shares to the PIPE Investors for proceeds of $56.6 million (US$42.2 million) which were converted into Greenfire common shares at the closing of the De-Spac Transaction.
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Greenfire has been identified as the acquirer for accounting purposes. As MBSC does not meet the definition of a business under IFRS 3 Business Combinations, the transaction is accounted for pursuant to IFRS 2, Share Based Payment. On closing of the De-Spac Transaction, the Company accounted for the excess of the fair value of Greenfire common shares issued to MBSC shareholders as consideration, over the fair value of MBSC’s identifiable net assets at the date of closing, resulting in $106.5 million (US$79.4 million) being recognized as a listing expense. The fair value of MBSC Class B common shares exchanged for Greenfire common shares was measured at the market price of MBSC’s publicly traded Class A common shares on September 20, 2023, which was US$9.37 per share. The fair value of MBSC Class A common shares exchanged for Greenfire common shares was measured at the market price of MBSC’s publicly traded Class A common shares on September 20, 2023, which was US$9.37 per share. As part of the De-Spac Transaction, Greenfire acquired marketable securities held in trust, prepaid expenses, accrued liabilities, taxable payable, other liabilities, warrant liability and deferred underwriting fees. The following table reconciles the elements of the listing expense:

( thousands)
Total fair value of consideration deemed to have been issued by Greenfire:
4,250,000 MBSC Class B common shares at US9.37 per common share (US39.8 million)	53,454
755,707 MBSC Class A common shares at US9.37 per common share (US7.1 million)	9,505
Less the following:
Fair value of identifiable net assets of MBSC
Marketable securities held in Trust Account	10,485
Prepaid expenses and deposits	8
Accounts payable and accrued liabilities	(16,262	)
Warrant liability	(17,960	)
Other liability	(5,369	)
Deferred underwriting fee	(13,422	)
Taxes payable	(1,063	)
Fair value of identifiable net assets of MBSC	(43,583	)
Total listing expense	106,542

All values are in US Dollars.

The listing expense is presented in the Consolidated Statement of Comprehensive Income (Loss). For the year ended December 31, 2023, the Company expensed $12.2 million (2022 - $2.8 million) in transaction costs related to the De-Spac.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-18

6. ACQUISITIONS

Acquisition	Acquisition date	Cash consideration (thousands)
GHOPCO	April 5, 2021
JACOS	September 17, 2021
December 31, 2021

All values are in US Dollars.

The Company acquired all the assets of GHOPCO on April 5, 2021 for total cash consideration of $19.7 million. The assets acquired from GHOPCO include oil sands property located in the Hangingstone area of the Athabasca region. The acquisition has been accounted for as a business combination using the acquisition method of accounting. The assets and liabilities assumed are recorded at the estimated fair value on the acquisition date of April 5, 2021.

The Company acquired all the issued and outstanding common shares of JACOS on September 17, 2021 for total cash consideration of $346.7 million. The assets acquired from JACOS include various oil sands properties located in the Hangingstone area of the Athabasca region, which contain various working interest participants. One of the properties acquired, which is a developed and producing oil sands property and generates all of the acquired revenues, includes a 75% interest in a joint operation. The acquisition has been accounted for as a business combination using the acquisition method of accounting. The assets and liabilities assumed are recorded at the estimated fair value on the acquisition date of September 17, 2021.

Both acquisitions were undertaken to increase the Company’s production and reserve base in the Athabasca region, which is its core focus area.

The net assets acquired is based on the estimated fair value of the underlying assets and liabilities acquired as follows:

($ thousands)	GHOPCO Amount			JACOS Amount			Total
Net assets acquired:
PP&E	$	159,000		$	851,389		$	1,010,389
Deferred tax asset		-			32,435			32,435
Cash and cash equivalents		2,507			4,412			6,919
Accounts receivable		188			56,671			56,859
Inventories		-			8,992			8,992
Other current assets		1,111			7,846			8,957
Accounts payable and accrued liabilities		(1,847	)		(27,221	)		(29,068	)
Other current liabilities		-			(684	)		(684	)
Decommissioning liabilities		(217	)		(1,740	)		(1,957	)
Deferred tax liability		(32,435	)		-			(32,435	)
Net assets acquired		128,307			932,100			1,060,407
Less: Gain on acquisitions		108,586			585,367			693,953
Total cash purchase consideration	$	19,721		$	346,733		$	366,454

There was $10.3 million of acquisition transaction costs incurred by the Company and expensed through earnings in the year ended December 31, 2021.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-19

A gain of $108.6 million was recognized on the acquisition of GHOPCO and a gain of $585.4 million was recognized on the acquisition of JACOS. These gains were driven by an increase in oil prices between the offer and closing dates, and optimized views on production and proved and probable reserves. In addition, the market was distressed from low oil prices due to volatility associated with the COVID-19 pandemic at the time of the acquisition.

The estimated proved and probable oil reserves and related cash flows were discounted at a rate based on what a market participant would have paid, which was based on market metrics on recent market transactions at the date of acquisition.

7. CASH AND CASH EQUIVALENTS

As at December 31, 2023, the Company held cash and cash equivalents of $109.5 million (December 31, 2022- $35.4 million). The credit risk associated with the Company’s cash and cash equivalents was considered low as the Company’s balances were held with large Canadian chartered banks.

8. RESTRICTED CASH AND CREDIT FACILITY

During the year ended December 31, 2023, the Company had a $46.8 million credit facility with its Petroleum Marketer (“Credit Facility”), used for issuing letters of credit related to long-term pipeline transportation agreements. The terms required the Company to contribute cash to a cash-collateral account (“Reserve Account”) over 24 months, starting in October 2021. As at December 31, 2022, the Company held $35.3 million in restricted cash. During the year ended December 31, 2023, the Company contributed $8.0 million in restricted cash to the Reserve Account. On November 8, 2023 $43.3 million of restricted cash was released. This release was due to entering a letter of credit facility guaranteed by Export Development Canada (“EDC Facility”), leading to the termination of both the Credit and Demand Facility (see Note 15).

9. INVENTORIES

As at December 31<br> <br>($ thousands)	2023		2022
Oil inventories	$	6,183	$	7,560
Warehouse materials and supplies		7,680		7,008
Inventories	$	13,863	$	14,568

During the year ended December 31, 2023, approximately $567.1 million (December 31, 2022 - $559.8 million. 2021 -$149.8 million) of inventory was recorded within the respective cost components, which are composed of operating expenses, diluent expense, transportation expense and depletion and depreciation in the consolidated statements of comprehensive income (loss). For the years ended December 31, 2023, 2022 and 2021 the Company had no inventory write downs.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-20

10. PROPERTY, PLANT AND EQUIPMENT (“PP&E”)

($ thousands)	Developed<br> and<br> producing		Right-of-use<br><br>assets		Corporate<br> assets			Total
Cost
Balance as at December 31, 2020	$	-	$	-	$	-		$	-
Acquisitions		1,010,014		-		375			1,010,389
Expenditures on PP&E		4,507		-		87			4,594
Change in decommissioning liabilities		2,133		-		-			2,133
Balance as at December 31, 2021		1,016,654		-		462			1,017,116
Additions		39,425		-		167			39,592
Right-of-use asset additions		-		969		-			969
Change in decommissioning liabilities		1,237		-		-			1,237
Balance as at December 31, 2022		1,057,316		969		629			1,058,914
Expenditures on PP&E		33,439		-		(11	)		33,428
Right-of-use asset additions		-		12,789		-			12,789
Balance as at December 31, 2023		1,090,755		13,758		618			1,105,131
Accumulated Depletion, Depreciation and Amortization
Balance as at December 31, 2020		-		-		-			-
Depletion and depreciation ^(1)^		27,949		-		47			27,996
Balance as at December 31, 2021		27,949		-		47			27,996
Depletion and depreciation ^(1)^		67,623		60		185			67,868
Balance as at December 31, 2022		95,572		60		232			95,864
Depletion and depreciation ^(1)^		67,580		183		130			67,893
Balance as at December 31, 2023		163,152		243		362			163,757
Net book Value
Balance at December 31, 2022		961,744		909		397			963,050
Balance at December 31, 2023	$	927,603	$	13,515	$	256		$	941,374
(1)	As at December 31, 2023 $161 of DD&A was capitalized to inventory (December 31, 2022- $766 and 2021 - 925).
---	---

No indicators of impairment were identified at December 31, 2023 and 2022, and as such no impairment test was performed.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-21

11. LEASE LIABILITIES

The Company has recognized the following leases:

($ thousands)	2023			2022			2021
Balance, beginning of year	$	963		$	-		$	-
Additions		12,789			970			-
Interest expense		71			19			-
Payments		(99	)		(26	)		-
Balance, end of year	$	13,724		$	963		$	-
Current portion	$	6,002		$	98		$	-
Non-current portion	$	7,722		$	865		$	-

The Company’s minimum lease payments are as follows:

As at December 31<br> <br>($ thousands)	2023			**<br><br>2022**
Within 1 year	$	6,002		$	98
Within 2 to 5 years		9,252			581
Later than 5 years		1,015			492
Minimum lease payments		16,269			1,171
Amounts representing finance charges		(2,545	)		(208	)
Present value of net minimum lease payments	$	13,724		$	963

During the year ended December 31, 2022, the Company entered into a 7-year term finance lease for new office space, which has been recognized as a right-of-use asset and lease liability at inception in the consolidated balance sheets. During the year ended December 31, 2023, the initial 7-year lease was extended an additional 3 years. The liability was measured at the present value of the remaining lease payments discounted at the Company’s estimated incremental borrowing rate.

During the year ended December 31, 2023, the Company entered into a 2-year drilling contract under which the Company has committed to drill 550 days over 2 years. The lease liability was measured at the present value of the day rate payments discounted at the Company’s estimated incremental borrowing rate.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-22

INCOME TAXES

The following table reconciles the expected income tax expense (recovery) calculated at the Canadian statutory rate of 23% (2022 and 2021 – 23%) to the actual income tax expense (recovery).

($ thousands)	Year ended<br> December 31, <br> 2023			Year ended<br> <br>December 31, 2022			Year ended<br> <br>December 31, 2021
Income (loss) before taxes	$	(116,285	)	$	44,017		$	661,444
Expected statutory income tax rate		23.00	%		23.00	%		23.00	%
Expected income tax expense (recovery)		(26,746	)		10,124			152,132
Gain on business combination		-			-			(159,609	)
Permanent differences		24,149			7,327			15,401
Unrecognized deferred income tax (asset) liability		21,983			(105,132	)		(7,924	)
Deferred income tax expense (recovery)	$	19,386		$	(87,681	)	$	-
($ thousands)	Year ended<br> December 31, <br> 2023			Year ended<br> <br>December 31, 2022			Year ended<br> <br>December 31, 2021
---	---	---	---	---	---	---	---	---	---
Deferred tax asset (liability) related to:
Oil producing assets related to property, plant & equipment	$	(135,800	)	$	(145,838	)	$	(157,900	)
Resource related pools		10,647			11,478			9,815
Corporate non-capital losses carried forward		285,325			291,078			329,650
Corporate capital tax losses carried forward		2,609			3,211			270
Unrealized loss (gain) on financial derivatives		96			6,211			8,206
Share issuance costs		2,594			683			-
Senior secured debenture		6,793			1,792			(3,052	)
Deferred tax asset not recognized		(103,969	)		(80,934	)		(186,989	)
Deferred tax asset	$	68,295		$	87,681		$	-

The Company has approximately $1.8 billion in tax pools and loss carry forwards in the year ended December 31, 2023 (December 31, 2022 – $1.8 billion) including approximately $1.4 billion in non-capital losses available for immediate deduction against future income. The Company’s non-capital losses have an expiry profile between 2033 and 2043.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-23

As at December 31, 2023 the Company had the following federal income tax pools, which may be used to reduce taxable income in future years, limited to the applicable rates of utilization:

****<br><br>($ thousands)	Rate of<br><br> Utilization<br><br> (%)		Amount
Undepreciated capital cost		7-100	$	328,682
Canadian oil and gas property expenditures		10		10,230
Canadian development expenditures		30		34,632
Federal income tax losses carried forward^(1) (2)^		100		1,376,813
Other^(3)^		Various		90,103
			$	1,840,460
(1)	Federal income tax losses carried forward expire in the following years<br>2033 - $4.3 million; 2034 - $58.7 million; 2035 - $30.0 million; 2037 - $36.2 million; 2038 - $8.3 million; 2039 - $1,238.0 million; 2042<br>- $2.9 million; 2043 - $3.6 million.
---	---
(2)	Provincial<br>income tax losses carry forward is $985.0 million which is lower than the federal income tax losses carried forward due to differences<br>in historical claims at the provincial level.
---	---
(3)	Other<br>includes $27.6 million in capital losses that have been recognized at the full amount as at December 31, 2023.
---	---

As at December 31, 2023, the Company has $27.6 million (December 31, 2022 – $2.8 million) of capital losses carried forward that can only be claimed against taxable capital gains.

13. DECOMMISSIONING LIABILITIES

The Company’s decommissioning liabilities result from net ownership interests in oil assets including well sites, gathering systems and processing facilities. The Company estimates the total undiscounted escalated amount of cash flows required to settle its decommissioning liabilities to be approximately $206.5 million (December 31, 2022- $206.5 million). A credit-adjusted discount rate of 12% (December 31, 2022-12%) and an inflation rate of 2.0% (December 31, 2022- 2.0%) were used to calculate the decommissioning liabilities. A 1.0% change in the credit-adjusted discount rate would impact the discounted value of the decommissioning liabilities by approximately $1.1 million with a corresponding adjustment to PP&E or net income (loss). The decommissioning liabilities are estimated to be settled in periods up to year 2071.

A reconciliation of the decommissioning liabilities is provided below:

As at December 31<br> <br>($ thousands)	2023		2022		2021
Balance, beginning of year	$	7,543	$	5,517	$	-
Initial recognition		-		-		1,957
Change in estimated future costs		-		1,283		3,262
Accretion expense		906		743		298
Balance, end of year	$	8,449	$	7,543	$	5,517
Greenfire Resources Ltd.	2023 Annual Financial Statements	F-24
---	---

14. FINANCIAL INSTRUMENTS, FAIR VALUES AND RISK MANAGEMENT

a)	Fair Values of Financial Instruments
As at December 31	2023				2022
---	---	---	---	---	---	---	---	---
($ thousands)	Fair Value		Carrying<br><br> Value		Fair Value		Carrying<br><br> Value
Financial assets at amortized cost:
Cash		109,475		109,475		35,363		35,363
Restricted cash		50		50		35,313		35,313
Accounts receivable		34,680		34,680		34,308		34,308
Financial liabilities at amortized cost:
Accounts payable and accrued liabilities		59,850		59,850		46,569		46,569
Long-term debt (Note 15)		394,082		396,780		315,718		295,173
Financial liabilities at fair value through profit or loss
Risk management contracts		417		417		27,004		27,004
Warrant liability		18,630		18,630		-		-

The fair value of long-term debt was determined based on estimates as at December 31, 2023 and 2022 and is expected to fluctuate given the volatility in the debt markets.

Risk management contracts are level 2 in the fair value hierarchy. The estimated fair value of risk management contracts is derived using third-party valuation models which require assumptions concerning the amount and timing of future cash flows and discount rates. Management’s assumptions rely on external observable market data including forward prices for commodities. The observable inputs may be adjusted using certain methods, which include extrapolation to the end of the term of the contract.

Warrant liabilities are a level 3 in the fair value hierarchy is calculated using a Black-Scholes calculation.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-25

b)	Commodity Risk Management

The Company is exposed to commodity price risk on its oil sales due to fluctuations in market prices. The Company continues to execute a consistent risk management program that is primarily designed to reduce the volatility of revenue and cash flow, generate sufficient cash flows to service debt obligations, and fund the Company’s operations. The Company’s risk management liabilities may consist of hedging instruments such as fixed price swaps and option structures, including costless collars on WTI, WCS differentials, condensate differential, natural gas and electricity swaps. The Company does not use financial derivatives for speculative purposes.

During the year ended December 31, 2023, the Company’s obligations under its New Notes (see note 15) includes a requirement to implement a 12-month forward commodity price risk management program encompassing not less than 50% of the hydrocarbon output under the proved developed producing reserves (“PDP”) forecast in the Company’s most recent reserves report, as determined by a qualified and independent reserves evaluator. This requirement is assessed on a monthly basis for the duration of time that the New Notes remain outstanding.

The Company’s commodity price risk management program does not involve margin accounts that require posting of margin with increased volatility in underlying commodity prices. Financial risk management contracts are measured at fair value, with gains and losses on re-measurement included in the consolidated statements of comprehensive income (loss) in the period in which they arise.

The Company’s financial risk management contracts are subject to master netting agreements that create the legal right to settle the instruments on a net basis. The following table summarizes the gross asset and liability positions of the Company’s individual risk management contracts that are offset in the consolidated balance sheets:

As at December 31	2023					2022
($ thousands)	Asset		Liability			Asset			Liability
Gross amount	$	-	$	(417	)	$	21,375		$	(48,379	)
Amount offset		-		-			(21,375	)		21,375
Risk Management contracts	$	-	$	(417	)	$	-		$	(27,004	)

The following table summarizes the financial commodity risk management gains and losses:

****<br><br>($ thousands)	Year ended December 31, <br> 2023			Year ended<br> <br>December 31, 2022			Year ended<br> <br>December 31, 2021
Realized gain (loss) on risk management contracts	$	(10,182	)	$	(122,408	)	$	(3,614	)
Unrealized gain (loss) on risk management contracts		26,587			930			(35,677	)
Gain (loss) on risk management contracts	$	16,405		$	(121,478	)	$	(39,291	)

As at December 31, 2023, the following financial commodity risk management contracts were in place:

	WTI- Costless Collar				Natural Gas- Fixed Price Swaps
Term	Volume<br><br> (Bbls)		Put Strike Price<br> (US/Bbl)	Call Strike Price<br> (US/Bbl)	Volume<br><br> (GJ)		Swap Price<br> (/GJ)
Q1 2024		877,968				455,000
Q2 2024		877,968				-
Q3 2024		887,800				-
Q4 2024		887,800				-

All values are in US Dollars.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-26

Subsequent to December 31, 2023, Greenfire terminated the above WTI Costless Collar risk management contracts and entered into the following financial commodity risk management contracts:

	WTI- Costless Collar				WTI Fixed Price Swaps
Term	Volume<br><br> (Bbls)		Put Strike<br> Price<br> (US/Bbl)	Call Strike<br> Price<br> (US/Bbl)	Volume<br> <br>(bbls/d)		Swap Price (US/bbl))
Jan – Dec 2024		-				11,500
Q1 2025		640,700				-

All values are in US Dollars.

The following table illustrates the potential impact of changes in commodity prices on the Company’s net income, before tax, based on the financial risk management contracts in place at December 31, 2023:

As at December 31, 2023	Change in WTI		Change in Natural Gas
($ thousands)	Increase of<br> 5.00/bbl	Decrease of<br> 5.00/bbl	Increase of<br> 1.00/GJ	Decrease of<br> 1.00/GJ
Increase (decrease) to fair value of commodity risk management contracts					)

All values are in US Dollars.

The Company’s commodity risk management contracts are held with two large reputable financial institution. As a result, the Company concluded that credit risk associated with its commodity risk management contracts is low.

c)	Credit Risk
As at December 31<br> <br>($ thousands)	2023		2022
---	---	---	---	---
Trade receivables	$	22,452	$	22,428
Joint interest receivables		12,228		11,880
Accounts receivable	$	34,680	$	34,308

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s accounts receivable. The Company is primarily exposed to credit risk from receivables associated with its oil sales. The Company manages its credit risk exposure by transacting with high-quality credit worthy counterparties and monitoring credit worthiness and/or credit ratings on an ongoing basis. Trade receivables from oil sales are generally collected on 25th day of the month following production. Joint interest receivables are typically collected within one to three months of the invoice being issued. The Company has not previously experienced any material credit losses on the collection of accounts receivable.

At December 31, 2023, and December 31, 2022 the Company was exposed to concentration risk associated with its outstanding trade receivables and joint interest receivables balances. Of the Company’s trade receivables at December 31, 2023, 100% was receivable from a single company each (December 31, 2022- 100% was receivable from two companies at approximately 64% and 36% each). At December 31, 2023, 100% of the Company’s joint interest receivables were held by a single company (December 31, 2022- 100% by a single company). Maximum exposure to credit risk is represented by the carrying amount of accounts receivable on the balance sheet. Subsequent to December 31, 2023, the Company has received $4.4 million from its joint interest partner, with the remaining outstanding balance expected to be paid within a reasonable time, as a result there are no material financial assets that the Company considers past due and no accounts have been written off.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-27

d)	Liquidity Risk

The Company’s objective in managing liquidity risk is to maintain sufficient available reserves to meet its liquidity requirements at any point in time. The Company expects to achieve this objective through prudent capital spending, an active commodity risk management program and by maintaining sufficient liquidity to manage periods of volatility within its cash, cash equivalents and available credit facilities.

For 2024, it is anticipated that Greenfire’s capital and operating activities will be funded through cash flow from operating activities and existing cash and cash equivalents. Beyond 2024, depending on the Company’s level of capital spend and the commodity price environment, the Company may require additional funding which could include debt, equity, joint ventures, asset sales or other external financing. The availability of any additional future funding will depend on, among other things, the current commodity price environment, operating performance, the Company’s credit rating and its ability to access the equity and debt capital markets.

The following table details the Company’s contractual maturities of its financial liabilities at December 31, 2023, and December 31. 2022:

	Year ended<br> <br>December 31, 2023				Year ended<br> <br>December 31, 2022
($ thousands)	Less than<br> one year		Greater than <br> one year		Less than<br> one year		Greater than<br> one year
Accounts payable and accrued liabilities	$	59,850	$	-	$	46,569	$	-
Risk management contracts^(1)^		417		-		27,004		-
Lease liabilities^(1)^		6,002		7,722		98		1,075
Long-term debt^(2)^		44,321		332,029		63,250		231,921
Total financial liabilities	$	110,590	$	339,751	$	136,921	$	232,996
(1)	Amounts represent the expected undiscounted cash payments.
---	---
(2)	Amounts represent undiscounted principal only and exclude accrued interest and transaction costs.
---	---

As at December 31, 2023 all material financial liabilities are current except for the long-term portion of the New Notes (Notes 15 and 21) and drilling contract (Note 11). In addition, the Company has provisions and other liabilities as disclosed in Note 20. The Company’s future unrecognized commitments are disclosed in Note 18.

e)	Foreign Currency Risk Management

Foreign currency risk is the risk that a variation in exchange rates between the Canadian dollar and foreign currencies will affect the fair value or future cash flows of the Corporation’s financial assets or liabilities. The Corporation has U.S. dollar denominated long-term debt as described in Note 15. As of December 31, 2023, a 10% change to the value of the Canadian dollar relative to the US dollar would result in a foreign exchange gain (loss) of approximately $39.7 million (December 31, 2022 - $29.3 million, December 31, 2021 - $39.6 million).

f)	Interest Rate Risk

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. The Company is exposed to interest rate risk related to borrowings drawn under the Senior Credit Facility, as the interest charged on the credit facility fluctuates with floating interest rates, Currently no amounts are drawn on the Senior Credit Facility. The New Notes and letters of credit issued are subject to fixed interest rates and are not exposed to changes in interest rates.

LONG-TERM DEBT

Senior Secured Notes

On September 20, 2023 in conjunction with the closing of the De-Spac Transaction and the issuance of the New Notes as described below, GRI redeemed the outstanding balance of $294.6 million (US$217.9 million) on the US$312.5 million 12% senior notes that were issued on August 12, 2021 (the “2025 Notes”) at a redemption premium of 106.5%. The total premium paid as a result of the early redemption was $19.2 million (US$14.2 million) plus accrued interest of $3.4 million (US$2.5 million). Unamortized debt costs of $42.1 million were also expensed in conjunction with the extinguishment of the debt.

On September 20, 2023, Greenfire issued US$300 million of senior secured notes (the “New Notes”). The New Notes bear interest at the fixed rate of 12.00% per annum, payable semi-annually on April 1 and October 1 of each year commencing on April 1, 2024, and mature on October 1, 2028. The New Notes are secured by a first priority lien on substantially all the assets of the Company and its wholly owned subsidiaries. Subject to certain exceptions and qualifications, the indenture governing the New Notes contain certain covenants that limited the Company’s ability to, among other things, incur additional indebtedness, pay dividends, redeem stock, make certain restricted payments, and dispose and transfers of assets. The indenture governing the New Notes contains minimum hedging requirements of 50% of the forward 12 calendar month PDP forecasted production as prepared to the Canadian standard using NI 51-101 until principal debt is less than US$100 million and limit capital expenditures to CAD$100 million annually until the principal outstanding is less than US$150 million. The New Notes are not subject to any financial covenants.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-28

Under the indenture governing the New Notes, the Company is required to redeem the New Notes at 105% of the principal amount plus accrued and unpaid interest with 75% of Excess Cash Flow (as defined in the New Notes Indenture) every six-months, with the first payment due by August 15, 2024. If consolidated indebtedness is less than US$150 million, the required redemption is reduced to 25% of Excess Cash Flow to be paid for every six-month period until the principal owing on the New Notes is US$100 million

The Company is exposed to foreign exchange rate fluctuations on the principal value and interest payments in respect of its New Notes. As of December 31, 2023, a 10% change to the value of the Canadian dollar relative to the US dollar would result in a foreign exchange gain (loss) of approximately $39.7 million (December 31, 2022 - $29.3 million, December 31, 2021 - $39.6 million).

The New Notes are subject to fixed interest rates and are not exposed to changes in interest rates.

As at December 31, 2023, the carrying value of the Company’s long-term debt was $376.4 million and the fair value was $394.1 million (December 31, 2022 carrying value – $254.4 million, fair value – $315.7 million).

As at December 31, 2023 the Company was compliant with all covenants.

As at December 31 ( thousands)			2022
US dollar denominated debt:
Redeemed 12.00% senior notes issued at 96.5% of par (US217.9 million at December 31, 2022)(1)	-		$	295,173
Unamortized debt discount and debt issue costs	-			(40,765	)
New 12.00% senior notes issued at 98% of par (300 million at December 31, 2023)(1)	396,780			-
Unamortized debt discount and debt issue costs	(20,430	)		-
Total term debt	376,350		$	254,408
Current portion of long-term debt	44,321			63,250
Long-term debt	332,029		$	191,158

All values are in US Dollars.

(1)	The U.S. dollar denominated<br>debt was translated into Canadian dollars as at period end exchange rates.

Greenfire may redeem some or all of the New Notes after October 1, 2025, at 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest plus a “make whole” premium, as set out in the table below. In addition, at any time before October 1, 2025, the Company may redeem up to 40% of the aggregate principal amount of the notes using the net proceeds from certain equity issuances as a redemption price equal to 112% of the principal amount plus accrued and unpaid interest.

The following table discloses the redemption amount including the “make whole” premium on redemption of the New Notes:

	US300<br> million<br> 12.00%<br> senior<br> notes
On or after October 1, 2025 to October 1, 2026
On or after October 1, 2026 to October 1, 2027
On or after October 1, 2027

All values are in US Dollars.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-29

Senior Credit Facility

On September 20, 2023, Greenfire entered into a reserve-based credit facility (the “Senior Credit Facility”) comprised of an operating facility and a syndicate facility. Total credit available under the Facility is $50 million comprising of $20 million operating facility and $30 million syndicated facility.

The Senior Credit Facility is a committed facility available on a revolving basis until September 20, 2024, at which point in time it may be extended at the lender’s option. If the revolving period is not extended, the undrawn portion of the facility will be cancelled and any amounts outstanding would be repayable at the end of the non-revolving term, being September 30, 2025. The Revolving Facility is subject to a semi-annual borrowing base review, occurring in May and November of each year. The borrowing base is determined based on the lender’s evaluation of the Company’s petroleum and natural gas reserves and their commodity price outlook at the time of each renewal.

The Senior Credit Facility is secured by a first priority security interest on substantially all the assets of the Corporation and is senior in priority to the New Notes. The Senior Credit Facility contains certain covenants that limit the Company’s ability to, among other things, incur additional indebtedness, create or permit liens to exist, make certain restricted payments, and dispose of or transfer assets. The Senior Credit Facility is not subject to any financial covenants.

As at December 31, 2023, amounts borrowed under the Senior Credit Facility bear interest at a floating rate based on the applicable Canadian prime rate, US base rate, secured overnight financing rate or bankers’ acceptance rate, plus a margin of 2.75% to 6.25% based on Debt to EBITDA ratio. A standby fee on the undrawn portion of the Senior Credit Facility ranges from 0.6875% to 1.5625% based on Debt to EBITDA ratio. As at December 31, 2023, the Company had no amounts drawn under the Senior Credit Facility.

Letter of Credit Facility

During the fourth quarter of 2023, Greenfire entered into an unsecured $55 million letter of credit facility with a Canadian bank that is supported by a performance security guarantee from the EDC Facility. The EDC Facility is available on a demand basis and letters of credit issued under this facility incur an issuance and performance guarantee fee of 4.25%. As at December 31, 2023, the Company had $54.3 million in letters of credit outstanding under the Letter of Credit Facility.

16. REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company’s revenue from contracts with customers consists of diluted and non-diluted bitumen sales.

Greenfire’s oil sales include blended bitumen sales from the Expansion Asset and the Demo Asset as well as non-diluted bitumen sales trucked from the Demo Asset. At the Demo Asset, each barrel can be transported to several locations, including both pipeline and rail sales points, depending on the economics of each option at the time of sale. Greenfire’s oil sales are generally sold under variable price contracts and are based on the commodity market price, adjusted for quality, location or other factors. Greenfire is required to deliver nominated volumes of oil to the contract counterparty. Each barrel equivalent of commodity delivered is considered to be a distinct performance obligation. The amount of revenue recognized is based on the agreed transaction price and is recognized as performance obligations are satisfied, therefore resulting in revenue recognition in the same month as delivery. Revenues are typically collected on the 25th day of the month following production.

****<br><br>($ thousands)	Yearended December 31, 2023		YearendedDecember 31, 2022		YearendedDecember 31, 2021
Diluted bitumen sales	$	652,812	$	890,400	$	212,225
Bitumen sales		23,158		108,449		58,449
Oil sales	$	675,970	$	998,849	$	270,674
Greenfire Resources Ltd.	2023 Annual Financial Statements	F-30
---	---

17. FINANCING AND INTEREST

($ thousands)	Year ended<br><br> December 31, <br><br>2023		Year ended<br><br> December 31, <br><br>2022		Year ended<br><br> December 31, <br><br>2021
Accretion on long-term debt	$	106,435	$	74,176	$	22,186
Other and cash interest		2,873		2,155		1,926
Accretion on decommissioning liabilities		906		743		298
Financing and interest expense	$	110,214	$	77,074	$	25,050

The total interest and finance expense of $108.3 million during the year ended December 31, 2023, included $42.1 million of accelerated unamortized debt related costs and $19.2 million of debt redemption premiums on the redemption of the 2025 Notes.

18. COMMITMENTS AND CONTINGENCIES

The following table summarizes the Company’s estimated future unrecognized commitments associated with firm transportation agreements as at December 31, 2023:

($ thousands)	Remaining<br><br> 2024		2025		2026		2027		2028		Beyond<br><br> 2028		Total
Transportation		31,880		30,561		28,956		29,044		29,170		203,198		352,809
Total	$	31,880	$	30,561	$	28,956	$	29,044	$	29,170	$	203,198	$	352,809

19. SHARE CAPITAL AND WARRANTS

Share capital

As at December 31, 2023 the Company’s authorized share capital consists of an unlimited number of common shares without a nominal or par value. The following table along with note 5 summarizes the changes to the Company’s common share capital:

	Number of shares		Amount(000’s)
Shares outstanding
Balance, December 31, 2021 and 2022		1
Issuance of new common shares per De-Spac Transaction		43,690,533
Issuance for exercise of bond warrants		15,769,183
Issuance to MBSC shareholders – Class A and Class B		5,005,707
Issuance of new common shares for PIPE investment		4,177,091
Balance, December 31, 2023		68,642,515

All values are in US Dollars.

Bondholder warrants

As at December 31, 2022, GFI had 312,500 bondholder warrants outstanding which entitled the holders of these warrants, in aggregate, the right to purchase 25% of GFI’s issued and outstanding common shares commencing October 18, 2021 at $0.01 per shares. As at December 31, 2022, the bondholders had the right to acquire 2,983,866 common shares of GRI at $0.01 per share based on an exchange ratio of 9.55.

On September 20, 2023, with the closing of the De-Spac Transaction the 312,500 outstanding bondholder warrants were exchanged into 3,225,810 GRI common shares of which 2,886,565 were exchanged for 15,769,183 common shares of Greenfire and 339,245 were cancelled in exchange for cash consideration of $25.5 million.

As at December 31, 2023 there were no bondholder warrants remaining.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-31

Per share amounts

The Company uses the treasury stock method to determine the dilutive effect of performance and bondholder warrants. Under this method, only “in-the-money” dilutive instruments impact the calculation of diluted income (loss) per share. Net income (loss) per share was calculated using the historical weighted average shares outstanding, scaled by the applicable exchange ratio following the completion of the De-Spac Transaction.

The following table summarizes the Company’s basic and diluted net income (loss) per share:

	Year ended<br><br> December 31, <br><br>2023			Year ended<br><br> December 31, <br><br>2022		Year ended<br><br> December 31, <br><br>2021
Weighted average shares outstanding- basic		54,425,083			48,911,099		42,609,296
Dilutive effect of bond and performance warrants		-			21,019,068		5,488,834
Weighted average shares outstanding- diluted		54,425,083			69,930,167		48,098,130
Basic $ per share	$	(2.49	)	$	2.69	$	15.52
Diluted $ per share	$	(2.49	)	$	1.88	$	13.75

In computing the diluted net loss per share for the year ended December 31, 2023, the Company excluded the effect of 7,526,667 New Greenfire Warrants and 3,617,016 Performance Warrants as their effect in anti-dilutive. (December 31, 2022 and 2021 no warrants were excluded).

Performance warrants

In February 2022, the Company implemented a warrant plan (“Performance Warrants”) as part of the Company’s long-term incentive plan for employees and service providers. These Performance Warrants had both performance and time vesting criteria before there is the ability to exercise the option to purchase one common share of the Company for each Performance Warrant. On September 20, 2023 with the closing of the De-Spac Transaction there were 739,912 GRI performance warrants outstanding, 661,971 were converted into 3,617,016 Greenfire performance warrants and 77,941 were cancelled for cash consideration of $4.5 million.

The table below summarizes the outstanding warrants as if the warrant exchange ratio used to exchange GRI common shares into Greenfire common shares had occurred on January 1, 2022 and equates to the total common shares issuable to performance warrant holders:

	Year ended <br><br>December 31, <br><br>2023				Year ended <br><br>December 31, <br><br>2022
	Number of<br><br> Warrants			Weighted<br> Average Exercise<br> Price <br>US	Number of<br><br> Warrants			Weighted<br> Average Exercise<br> Price <br>US
Performance Warrants outstanding
Balance, beginning of period		3,895,449				-
Performance warrants issued		186,257				4,159,546
Performance warrants forfeited		(38,820	)			(264,097	)
Performance warrants cancelled		(425,870	)			-
Balance, end of period		3,617,016				3,895,449
Common shares issuable on exchange		3,617,016				3,895,449

All values are in US Dollars.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-32

The fair market value of the performance warrants was $11.0 million on the date of issuance. The exchange of the GRI performance warrants to Greenfire performance warrants did not result in an increase to the fair value of the warrants, therefore no additional expense was recorded. The fair value of each performance warrant was estimated on its grant date using the Black Scholes Merton valuation model with the following assumptions:

	2023<br> Assumptions
Average risk-free interest rate		4.2	%	1.46	%
Average expected dividend yield		-		-
Average expected volatility^1^		70	%	60	%
Average expected life (years)		2-5		3-5
^1^	Expected volatilityhas been based on historical share volatility of similar market participants
---	---

The performance warrants expire 10 years after the issuance date. On September 20, 2023, with the closing of the De-Spac Transaction, all outstanding performance warrants vested and became exercisable. As a result, the remaining unrecognized fair market value of the performance warrants was immediately recorded as stock-based compensation, and a total of $9.2 million was expensed. For the year ended December 31, 2023, the Company recorded $9.8 million (2022-$1.2 million, 2021 -$nil) of stock-based compensation related to the performance warrant plan.

20. WARRANT LIABILITY

On September 20, 2023, Greenfire issued 5,000,000 warrants to GRI common shareholders, bond warrant holders and performance warrant holders (the “New Greenfire Warrants”). The New Greenfire Warrants expire 5 years after issuance and entitle the holder of each warrant to purchase one common share of Greenfire at a price of US$11.50. Greenfire, can at its option, require the holder of the New Greenfire Warrants to exercise on a cashless basis. The 5,000,000 New Greenfire Warrants issued to the former GRI common shareholders and bondholders are to be treated as a derivative financial liability in accordance with IFRS 9 – Financial Instruments and were measured at fair value in accordance with IFRS 13 – Fair Value Measurement. These New Greenfire Warrants had a fair value of $35.6 million at the date of issuance and were recorded as a liability with a corresponding amount booked to retained earnings. The New Greenfire Warrants will be reassessed at the end of each reporting period with subsequent changes in fair value being recognized through the statement of comprehensive income (loss).

In addition, Greenfire as part of the De-Spac Transaction assumed and exchanged 2,526,667 MBSC Class B Private Warrants for 2,526,667 New Greenfire Warrants. The New Greenfire Warrants issued to the MBSC Class B warrant holders were deemed to be an exchange of two financial liabilities at fair value. The fair value of the MBSC Class B Private Warrants was $18.0 million. Both sets of warrants have an exercise price of US$11.50 with both underlying securities trading at or valued at a similar price. As both sets of warrants are deemed to be economically equivalent, no gain or loss was recorded on the exchange. The exchanged warrants will be reassessed at the end of each reporting period with subsequent changes in fair value being recognized through the statement of comprehensive income (loss).

On December 31, 2023, the 7,526,667 outstanding New Greenfire Warrants were revalued based on the closing share price of US$4.86 per common share of Greenfire During the year ended December 31, 2023, the fair value of the warrant liability decreased by $35.0 million. The following table reconciles the warrant liability.

	Year ended <br> December 31, <br> 2023					Year ended <br> December 31, <br> 2022
($ thousands)	Number of<br> Warrants		Amount			Number of<br> Warrants		Amount
Balance, beginning of year		-	$	-			-	$	-
Warrants issued		5,000,000		35,644			-		-
MBSC warrants converted		2,526,667		17,959
Change in fair value		-		(34,973	)		-		-
Balance, end of period		7,526,667	$	18,630			-	$	-
Common shares issuable on exercise		7,526,667		-			-		-
Greenfire Resources Ltd.	2023 Annual Financial Statements	F-33
---	---

The fair value of each warrant was estimated on its grant date using the Black Scholes Merton valuation model with the following assumptions:

	2023<br> Assumptions
Average risk-free interest rate		4.2	%
Average expected dividend yield		-
Average expected volatility ^(1)^		70	%
Average expected life (years)		5
^(1)^	Expected volatilityhas been based on historical share volatility of similar market participants
---	---

21. CAPITAL MANAGEMENT

The Company’s net managed capital consists primarily of cash and cash equivalents, long-term debt and shareholders’ equity. The current priorities for managing liquidity risk include managing working capital to ensure interest and debt repayment, and to fund the Company’s operations and the capital program. In the current commodity price environment and in conjunction with the Company’s commodity price risk management program, management believes its current capital resources and cash flow will allow the Company to meet its current and future obligations over the next 12 months. Capital expenditures and debt repayment are expected to be funded by cash-on-hand and out of cash flow. The Company’s capital structure consists of the following:

As at December 31<br> ($ thousands)	2023			2022
Face value of term debt (Note 15)	$	396,780		$	295,173
Shareholders’ equity		712,940			837,771
Working capital, excluding current portion of term debt, warrant liability and risk management contracts		(96,899	)		(76,860	)
Net managed capital	$	1,012,821		$	1,056,084

Net managed capital is not a standardized measure and may not be comparable with the calculation of similar measures by other companies.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-34

22. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The components of accounts payable and accrued liabilities were:

As at December 31<br><br> ($ thousands)	2023		2022
Trade payables	$	6,303	$	3,367
Accrued payables		35,994		30,401
Accrued employee annual incentive plans		4,435		4,463
Accrued interest payable		13,118		8,338
Accounts payable and accrued liabilities	$	59,850	$	46,569

23. RELATED PARTY TRANSACTIONS

The Company’s related parties primarily consist of key management personnel. The Company considers directors and officers of Greenfire Resources Ltd. as key management personnel.

($ thousands)	Year ended<br><br> December 31, <br><br>2023		Year ended<br><br> December 31, <br><br>2022		Year ended<br><br> December 31, <br><br>2021
Salaries, benefits, and director fees	$	3,808	$	1,978	$	873

24. SUPPLEMENTAL CASH FLOW INFORMATION

The following table reconciles the net changes in non-cash working capital and other liabilities from the consolidated balance sheet to the consolidated statement of cash flows:

($ thousands)	Year ended December 31, 2023			Year ended December 31, 2022			Year ended December 31, 2021
Change in accounts receivable	$	(372	)	$	9,654		$	(43,962	)
Change in inventories		705			1,349			(15,917	)
Change in prepaid expenses and deposits		(1,763	)		6,537			(10,512	)
Change in accounts payable and accrued liabilities		13,048			(10,859	)		57,367
Working capital acquired (note 6)		-			-			41,856
		11,618			6,681			28,832
Other items impacting change in non-cash working capital: Unrealized foreign exchange loss in accounts payable		(93	)		(652	)		-
		11,525			6,029			28,832
Related to operating activities		25,513			3,570			(6,910	)
Related to investing activities (accrued additions to PP&E)		(13,988	)		2,459			35,742
Net change in non-cash working capital	$	11,525		$	6,029		$	28,832
Cash interest paid (included in operating activities)	$	(39,955	)	$	(51,129	)	$	(1,926	)
Cash interest received (included in operating activities)	$	2,976		$	620		$	21
Greenfire Resources Ltd.	2023 Annual Financial Statements	F-35
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Supplementary information for Greenfire Resources Ltd. – oil and gas (unaudited)

SUPPLEMENTARY INFORMATION FOR GREENFIRE RESOURCESLTD. – OIL AND GAS

SUPPLEMENTARY OIL AND GAS INFORMATION FOR THEFISCAL YEAR ENDEDDECEMBER 31, 2023 (UNAUDITED)

This supplementary crude oil and natural information is provided in accordance with the United States Financial Accounting Standards Board (“FASB”) Topic 932- “Extractive Activities- Oil and Gas” and where applicable, financial information is prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

The information set out herein is unaudited and is presented on a consolidated basis net of the Company’s share. For the purposes of determining proved oil and natural gas reserves under SEC requirements as at December 31, 2023, 2022 and 2021, the Company used the 12-month average price, defined by the SEC as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period.

Reserve Information

The Company’s 2023, 2022 and 2021 year-end reserves evaluations were conducted by McDaniel & Associates Consultants Ltd. (“McDaniel”) with an effective date of December 31, 2023, December 31, 2022 and December 31, 2021, respectively. McDaniel evaluated 100% of the Company’s reserves located in Alberta, Canada.

**Proved reserves.**Proved reserves are those quantities of bitumen, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible — from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations — prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

**Developed reserves.**Developed reserves are reserves that can be expected to be recovered:

i.	Through existing wells with existing equipment and operating<br>methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and
ii.	Through installed extraction equipment and infrastructure<br>operational at the time of the reserves estimate if the extraction is by means not involving a well.
---	---

**Undeveloped reserves.**Undeveloped reserves are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.

The Company cautions users of this information as the process of estimating reserves is subject to uncertainty. The reserves are based on economic and operating conditions. Therefore, changes can be made to future assessments as a result of a number of factors, which can include new technology, changing economic conditions and development activity. Net reserves presented in this section represent the Company’s working interest share of the gross remaining reserves, after deduction of any crown, freehold and overriding royalties. Such royalties are subject to change by legislation or regulation and can also vary depending on production rates, selling prices and timing of initial production.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-36

Summary of CorporateReserves

The following tables are summaries of the Company’s estimated proved reserves at December 31, 2023, 2022, and 2021 as reconciled between the three years:

Constant Prices and Costs (unaudited)	Bitumen^(2)^ (mbbl)			Barrels of Oil<br> Equivalent<br> (mboe)
Net Proved Developed and Proved Undeveloped Reserves^(1)^
December 31, 2020
Developed		0			0
Undeveloped		0			0
Total – December 31, 2020		0			0
Extensions & Discoveries		0			0
Improved Recovery		0			0
Technical Revisions		0			0
Acquisitions		172,580			172,580
Dispositions		0.0			0.0
Production – 2021		(2,820	)		(2,820	)
December 31, 2021		169,760			169,760
(1)	Numbers may not add due to rounding.
---	---
(2)	Bitumen, as defined by the SEC, “is petroleum in a solid or semi-solid state<br>in natural deposits with a viscosity greater than 10,000 centipoise measured at original temperature in the deposit and atmospheric pressure,<br>on a gas free basis.” Under this definition, all of the Company’s thermal and primary heavy crude oil reserves have been classified<br>as bitumen.
---	---
Constant Prices and Costs (unaudited)	Bitumen^(2)^ (mbbl)			Barrels of Oil<br> Equivalent<br> (mboe)
---	---	---	---	---	---	---
Net Proved Developed and Proved Undeveloped Reserves^(1)^
December 31, 2021
Developed		37,792			37,792
Undeveloped		131,968			131,968
Total – December 31, 2021		169,720			169,720
Extensions & Discoveries		0.0			0.0
Improved Recovery		0.0			0.0
Technical Revisions		(16,431	)		(16,431	)
Acquisitions		0.0			0.0
Dispositions		0.0			0.0
Production – 2022		(7,117	)		(7,117	)
December 31, 2022		146,212			146,212
(1)	Numbers may not add due to rounding.
---	---
(2)	Bitumen, as defined by the SEC, “is petroleum in a solid or semi-solid state<br>in natural deposits with a viscosity greater than 10,000 centipoise measured at original temperature in the deposit and atmospheric pressure,<br>on a gas free basis.” Under this definition, all of the Company’s thermal and primary heavy crude oil reserves have been classified<br>as bitumen.
---	---
Greenfire Resources Ltd.	2023 Annual Financial Statements	F-37
---	---
Constant Prices and Costs (unaudited)	Bitumen^(2)^ (mbbl)			Barrels of Oil<br> Equivalent<br> (mboe)
---	---	---	---	---	---	---
Net Proved Developed and Proved Undeveloped Reserves^(1)^
December 31, 2022
Developed		30,440			30,440
Undeveloped		115,773			115,773
Total – December 31, 2022		146,212			146,212
Extensions & Discoveries		5,297			5,297
Improved Recovery		0			0
Technical Revisions		7,282			7,282
Acquisitions		0			0
Dispositions		0			0
Production – 2023		(6,212	)		(6,212	)
December 31, 2023		152,579			152,579
December 31, 2023
Developed		27,598			27,598
Undeveloped		124,981			124,981
Total – December 31, 2023		152,579			152,579
(1)	Numbers may not add due to rounding.
---	---
(2)	Bitumen, as defined by the SEC, “is petroleum in a solid or semi-solid state<br>in natural deposits with a viscosity greater than 10,000 centipoise measured at original temperature in the deposit and atmospheric pressure,<br>on a gas free basis.” Under this definition, all of the Company’s thermal and primary heavy crude oil reserves have been classified<br>as bitumen.
---	---

In 2021, the Company’s production, net of royalties, was 2.8 MMBOE after the acquisitions of the Demo Asset and Expansion Asset.

In 2021, the Company’s proved reserves increased by 172.6 MMBOE, which was the result of the acquisitions of the Demo Asset and Expansion Asset.

In 2022, the Company’s production, net of royalties, was 7.1 MMBOE.

In 2022, the Company’s proved reserves decreased by 16.4 MMBOE, which was the result of:

(i)	a decrease of 26.2 MMBOE resulting from higher prices used<br>in 2022 causing higher royalty rates, which reduces net reserves volumes, offset by
(ii)	revisions, other than price, of 9.8<br>MMBOE, approximately 15% of which (1.5 MMBOE) attributed to positive performance revisions at the producing pads and approximately<br>85% of which (8.3 MMBOE) attributed to increased operating costs (non-energy and updates in the TIER regulatory costs) and capital<br>costs during the reporting period (as capital costs increase, net reserves volumes increases because royalties decrease).
---	---
Greenfire Resources Ltd.	2023 Annual Financial Statements	F-38
---	---

In 2023, the Company’s production, net of royalties, was 6.2 MMBOE.

In 2023, the Company’s proved reserves increased by 6.4 MMBOE, which was the result of:

(i)	increase of 5.3 MMBOE from extensions due to the inclusion<br>of additional undeveloped wells at the Demo property that were not previously included in reserves.
(ii)	increase of 9.3 MMBOE due to lower realized prices causing<br>lower royalty rates, which increases net reserves volumes, offset by
---	---
(iii)	revisions other than price of -2.0 MMBOE, where -2.7<br>MMBOE attributed to negative performance revisions at the producing pads and changes to the undeveloped development<br>plan were partially offset by +0.7 MMBOE due to increased operating costs and capital costs during the reporting period<br>(as capital and operating costs increase, net reserves volumes increases because royalties decrease).
---	---

Steam generation represents a large proportion of the Company’s capital and operating costs. Therefore, development plans anticipate that, in order to make the most efficient use of the Company’s steam generating and oil treating facilities, the drilling and steaming of new wells would take place over 30 years. Development of the Company’s proved undeveloped reserves will take place in an orderly manner as additional well pairs are drilled to use available steam when existing well pairs reach the end of their steam injection phase. The forecasted production of the Company’s proved reserves extends approximately 31 years. This approach means that it will take longer than five years to develop most of the Company’s proved undeveloped reserves.

Proved reserves are estimated based on the average first-day-of-month prices during the 12-month period for the respective year.

The average prices used to compute proved reserves at December 31, 2023 were WTI: $78.21 per bbl, WCS: CAD$79.89 per bbl, Edmonton C5+ CAD$104.16 per bbl, Henry Hub: $2.59 per MMBtu, and AECO Spot: CAD$2.84 per MMBtu.

The average prices used to compute proved reserves at December 31, 2022 were WTI: $94.14 per bbl, WCS: CAD$97.68 per bbl, Edmonton C5+ CAD$120.59 per bbl, Henry Hub: $6.25 per MMBtu, and AECO Spot: CAD$5.62 per MMBtu.

The average prices used to compute proved reserves at December 31, 2021 were WTI: $66.55 per bbl, WCS: CAD$66.43 per bbl, Edmonton C5+ CAD$83.96 per bbl, Henry Hub: $3.64 per MMBtu, and AECO Spot: CAD$3.57 per MMBtu. Prices for bitumen, oil, diluent and natural gas are inherently volatile.

Changes to the Company’s proved undeveloped reserves during 2021 are summarized in the table below:

	Barrels of Oil Equivalent (mboe)^(1)^
December 31, 2020		0
Extensions and discoveries		0
Technical revisions		0
Acquisitions		131,968.2
Conversions to developed		0
December 31, 2021		131,968.2
(1)	Numbers may not add due to rounding.
---	---

Changes to the Company’s proved undeveloped reserves during 2022 are summarized in the table below:

	Barrels of Oil Equivalent (mboe)^(1)^
December 31, 2021		131,968
Extensions and discoveries		0
Technical revisions		(16,196	)
Conversions to developed		0
December 31, 2022		115,773
(1)	Numbers may not add due to rounding.
---	---
Greenfire Resources Ltd.	2023 Annual Financial Statements	F-39
---	---

Changes to the Company’s proved undeveloped reserves during 2023 are summarized in the table below:

	Barrels of Oil Equivalent (mboe)^(1)^
December 31, 2022		115,773
Extensions and discoveries		5,297
Technical revisions		6,998
Conversions to developed		(3,087	)
December 31, 2023		124,981
(1)	Numbers may not add due to rounding.
---	---

In 2021, the Company’s proved undeveloped reserves increased by approximately 132 MMBOE, which was the result of the acquisitions of the Demo Asset and the Expansion Assets.

In 2022, the Company’s proved undeveloped reserves decreased by 16.2 MMBOE, which was the result of:

(i)	A decrease of 23.8 MMBOE resulting from higher prices used<br>in 2022 causing higher royalty rates, which reduces net reserves volumes, offset by
(ii)	Positive revisions, other than price, of 7.6 MMBOE attributed<br>to increased operating costs (non-energy and updates in the TIER regulatory costs) and capital costs during the reporting period<br>(as capital costs increase, net reserves volumes increases because royalties decrease).
---	---

In 2023, the Company’s proved undeveloped reserves increased by 9.2 MMBOE, which was the result of:

(i)	increase of 5.3 MMBOE from extensions due to the inclusion<br>of additional undeveloped wells at the Demo property that were not previously included in reserves
(ii)	increase of 8.5 MMBOE resulting from lower realized prices causing lower royalty rates, offset by
---	---
(iii)	revisions other than price of -1.5 MMBOE, where -2.4 MMBOE<br>attributed to negative performance revisions at the producing pads and changes to the undeveloped development plan were partially offset<br>by +0.9 MMBOE due to increased operating costs and capital costs during the reporting period (as capital and operating costs increase,<br>net reserves volumes increases because royalties decrease).
---	---
(iv)	movement of 3.1 MMBOE from undeveloped into proven developed<br>producing due to eight Refill wells drilled in 2023
---	---

No changes to the reserve booking have been made as a result of the removal of uneconomic or undeveloped locations due to changes in a previously adopted development plan.

Standardized Measure of Discounted Future NetCash Flows Relating to Proved Reserves

The future net revenues and net present values presented in this summary were calculated using constant prices and costs based on the average first-day-of-the-month petroleum product prices for the 12 months of 2023, 2022 and 2021, with no inflation of operating or capital costs, and were presented in Canadian dollars. All of the future net revenues and net present value estimates in this summary are presented before income taxes. A 10% discount factor was applied to the future net cash flows. Future development costs used in the calculation of future net revenue includes the costs to settle the asset retirement obligations for each period presented. The future net revenues presented in this summary may not necessarily represent the fair market value of the reserves estimates. The Company’s management does not rely upon the following information in making investment and operating decisions. Such decisions are based upon a wide range of factors, including estimates of probable as well as proved reserves, and varying price and cost assumptions considered more representative of a range of possible economic conditions that may be anticipated. The prescribed discount rate of 10% may not appropriately reflect interest rates.

Greenfire Resources Ltd.	2023 Annual Financial Statements	F-40

The following table summarizes the standardized measure of discounted future net cash flows relating to proved reserves, for the years ended December 31, 2023, 2022 and 2021:

	For the year ended<br> December 31,
(CAD$ in millions) (unaudited)	2023			2022			2021
Future cash inflows		8,072			10,276			7,168
Future production costs		2,771			3,491			2,448
Future development/abandonment costs		1,208			1,274			1,144
Deferred income taxes		774			1,053			361
Future net cash flows		3,320			4,458			3,215
Less 10% annual discount factor		(1,728	)		(2,361	)		(1,778	)
Standardized measure of discounted future net cash flows		1,592			2,097			1,437

The following table reconciles the changes in standardized measure of future net cash flows discounted at 10% per year relating to proved bitumen, heavy oil and natural gas producing reserves:

	For the year ended<br> December 31,
(CAD$ in millions) (unaudited)	2023			2022			2021
Standardized measure of discounted future net cash flows at beginning<br> of year		2,097			1,437			0
Oil and gas sales during period net of production costs and royalties^(1)^		(459	)		(726	)		(179	)
Changes due to prices^(2)^		(567	)		1,175			0
Development costs during the period^(3)^		33			39			5
Changes in forecast development costs^(4)^		(27	)		(149	)		(401	)
Changes resulting from extensions, infills and improved recovery^(5)^		94			0			0
Changes resulting from discoveries^(2)^		0			0			0
Changes resulting from acquisition of reserves^(5)^		0			0			1,486
Changes resulting from disposition of reserves^(5)^		0			0			0
Accretion of discount^(6)^		240			149			0
Net change in income tax^(7)^		253			(682	)		(209	)
Changes resulting from other changes and technical reserves revisions plus effects on timing^(8)^		(71	)		864			735
Standardized measure of discounted future net cash flows at end of year		1,592			2,097			1,437
(1)	Company actual before income taxes, excluding general and<br>administrative expenses.
---	---
(2)	The impact of changes in prices and other economic factors<br>on future net revenue.
---	---
(3)	Actual capital expenditures relating to the exploration,<br>development and production of oil and gas reserves.
---	---
(4)	The change in forecast development costs.
---	---
(5)	End of period net present value of the related reserves.
---	---
(6)	Estimated as 10 percent of the beginning of period net present<br>value.
---	---
(7)	The difference between forecast income taxes at beginning<br>of period and the actual taxes for the period plus forecast income taxes at the end of the period
---	---
(8)	Includes changes due to revised production profiles, development<br>timing, operating costs, royalty rates and actual prices received versus forecast, etc.
---	---
Greenfire Resources Ltd.	2023 Annual Financial Statements	F-41
---	---

The following table summarizes net capitalized costs relating to petroleum and natural gas producing activities, as at December 31, 2023, 2022 and 2021:

	As of December 31,
(CAD$ in millions) (unaudited)	2023			2022			2021
Proved oil and gas properties		1,091			1,058			1,017
Unproved oil and gas properties		0			0			0
Total capitalized costs		1,091			1,058			1,017
Accumulated depletion and depreciation		(163	)		(96	)		(28	)
Net Capitalized Costs		928			962			989

The following table summarizes costs incurred in petroleum and natural gas property acquisitions, exploration and development activities, for the years ended December 31, 2023, 2022 and 2021:

	For the year ended<br> December 31,
(CAD$ in millions) (unaudited)	2023		2022		2021
Property acquisition (disposition) costs
Proved oil and gas properties – acquisitions		0.0		0		1,010
Proved oil and gas properties – dispositions		0.0		0		0
Unproved oil and gas properties		0.0		0		0
Exploration costs		0.0		0		0
Development costs		33		41		7
Total Expenditures		33		41		1,017
Greenfire Resources Ltd.	2023 Annual Financial Statements	F-42
---	---

REPORT

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of Greenfire Resources Inc.

Opinionon the Financial Statements

We have audited the accompanying balance sheets of Japan Canada Oil Sands Limited (the “Company”) as at September 17, 2021, December 31, 2020 and January 1, 2020, the related statements of comprehensive income (loss), shareholders’ equity (deficit), and cash flows, for the period ended September 17, 2021 and the year ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as at September 17, 2021, December 31, 2020 and January 1, 2020, and its financial performance and its cash flows for the period ended September 17, 2021 and year ended December 31, 2020, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basisfor Opinion

/s/ Deloitte LLP

Chartered Professional Accountants

Calgary, Canada

April 21, 2023

We have served as the Company’s auditor since 2022.

F-43

Japan

Canada Oil Sands Limited Balance Sheets

As at <br><br>($CAD 000’s)	note	September 17, <br> 2021			December 31, <br> 2020			January 1, <br> 2020
Assets
Current assets
Cash and cash equivalents	6	$	4,412		$	46,743		$	159,591
Restricted cash			500			—			672
Accounts receivable	7		56,517			29,113			30,565
Inventories	8		7,438			7,440			18,550
Due from related parties			—			6			18
Prepaid expenses and deposits			4,285			2,594			2,446
			73,152			85,896			211,842
Non-current assets
Property, plant and equipment	9		298,457			292,855			640,757
Right of use asset	10		487			841			1,372
			298,944			293,696			642,129
Total assets		$	372,096		$	379,592		$	853,971
Liabilities
Current liabilities
Accounts payable and accrued liabilities			27,149			51,838			56,260
Current portion of long-term debt	16		—			76,392			77,928
Current portion of lease liability	10		521			544			493
Due to related parties			—			1,007			1,009
			27,670			129,781			135,690
Non-current liabilities
Long-term debt	16		—			608,249			698,144
Long-term lease liability	10		—			335			879
Decommissioning obligation	12		7,920			7,728			7,147
			7,920			616,312			706,170
Total liabilities			35,590			746,093			841,860
Shareholders’ equity
Share capital	22		1,609,045			1,010,871			1,010,871
Retained earnings (deficit)			(1,272,539	)		(1,377,372	)		(998,760	)
			336,506			(366,501	)		12,111
Total equity and liabilities		$	372,096		$	379,592		$	853,971

Commitmentsand contingencies (note 19)

Subsequentevents (note 23)

See

accompanying notes to the financial statements

TheseFinancial Statements were approved by the Board of Directors.

Robert<br> Logan, Director	David<br> Phung, Director

F-44

Japan

Canada Oil Sands Limited Statements of Comprehensive Income (Loss)

($CAD 000’s, except per share amounts)	note	Period ended <br> September 17, <br> 2021			Year ended <br> December 31, <br> 2020
Revenues
Oil sales		$	382,635		$	279,248
Royalties			(7,178	)		(2,019	)
Oil sales, net of royalties			375,457			277,229
Interest income	13		43			925
Other income	13		985			1,684
			376,485			279,838
Expenses
Diluent expense	17		171,174			158,272
Transportation and marketing	17		27,853			39,368
Operating expenses	17		56,479			67,409
General and administrative			6,793			5,680
Financing and interest	18		11,154			21,602
Depletion and depreciation	9,10		78,267			108,379
Impairment (recovery)	9		(73,252	)		270,000
Exploration			(383	)		3,352
Foreign exchange gain			(6,433	)		(15,612	)
Total expenses			271,652			658,450
Net income (loss) and comprehensive income (loss)		$	104,833		$	(378,612	)
Net income (loss) per share
Basic	22	$	3.46		$	(12.50	)
Diluted	22	$	3.46		$	(12.50	)

See

accompanying notes to the financial statements

F-45

Japan

Canada Oil Sands Limited Statements of Changes in Shareholders’ Equity (Deficit)

($CAD 000’s)	note	Period Ended <br> September 17, <br> 2021			Year Ended <br> December 31, <br> 2020
Share capital
Beginning balance	22	$	1,010,871		$	1,010,871
Capital contributions	22		645,674			—
Return of capital			(47,500	)
Ending balance			1,609,045			1,010,871
Deficit
Beginning balance			(1,377,372	)		(998,760	)
Net income (loss)			104,833			(378,612	)
Ending balance			(1,272,539	)		(1,377,372	)
Total shareholders’ equity		$	336,506		$	(366,501	)

See

accompanying notes to the financial statements

F-46

Japan

Canada Oil Sands Limited Statements of Cash Flows

($CAD 000’s)	note	Period Ended <br> September 17, <br> 2021			Year ended <br> December 31, <br> 2020
Operating activities
Net income (loss)		$	104,833		$	(378,612	)
Items not affecting cash:
Depletion and depreciation	9,10		78,267			108,379
Impairment (recovery)	9		(73,252	)		270,000
Inventory markdown			(226	)		(438	)
Accretion	12		320			444
Unrealized foreign exchange gain			(6,238	)		(15,512	)
Amortization of debt issuance costs	16,18		2,887			321
Decommissioning obligation settlements			(52	)		(31	)
Other non-cash items			(76	)		(50	)
Change in non-cash working capital	21		(61,929	)		8,812
Cash generated from (used) by operating activities			44,534			(6,687	)
Financing activities
Repayment of long-term debt	16		(341,432	)		(79,086	)
Lease liability payments	10		(358	)		(493	)
Capital contributions	22		304,570			—
Return of capital			(47,500	)
Cash used by financing activities			(84,720	)		(79,579	)
Investing activities
Property, plant and equipment expenditures	9		(9,757	)		(27,478	)
Change in non-cash working capital (accrued additions to PP&E)			6,866			(2,622	)
Cash used in investing activities			(2,891	)		(30,100	)
Exchange rate impact on cash and cash equivalents held in foreign currency			1,246			2,846
Change in cash and cash equivalents	6		(41,831	)		(113,520	)
Cash and cash equivalents, beginning	6		46,743			160,263
Cash and cash equivalents, end	6	$	4,912		$	46,743

See

accompanying notes to the financial statements

F-47

Japan

Canada Oil Sands Limited Notes to the Financial Statements

1.	CORPORATEINFORMATION

Japan Canada Oil Sands Limited (“JACOS” or the “Company”) is a corporation incorporated under the Canada Business Corporations Act. The Company is engaged in the exploration, development and operation of oil and gas properties, and focuses primarily in the Athabasca oil sands region of Alberta. The Company’s corporate head office was located at 2300, 639 5 Ave SW, Calgary, Alberta T2P 0M9. The Company was a wholly-owned subsidiary of Canada Oil Sands Co., Ltd. (“CANOS” or the “Parent Company”). The overall ownership structure of JACOS and related parties of JACOS is as follows:

Company Name	Relationship to JACOS	Purpose
Japan<br> Petroleum Exploration Co Ltd (Japex)	Parent<br> of CANOS	Debt<br> guarantee fees
Canada<br> Oil Sands Ltd (CANOS)	Parent<br> of JACOS	Expat<br> services and plant and equipment reimbursements
Japex<br> Canada Ltd	Subsidiary<br> of Japex	Administrative<br> cost reimbursements for corporate filings
JGI<br> Inc.	Subsidiary<br> of Japex	Geological<br> exploration services
Japex<br> Montney Ltd	Subsidiary<br> of Japex	Administrative<br> cost reimbursement for payroll services

2.	BASISOF PRESENTATION AND STATEMENT OF COMPLIANCE

The financial statements represent the Company’s initial presentation of its results and financial position under International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). The financial statements were prepared in accordance with IFRS as issued by the IASB.

A summary of Company’s significant accounting policies under IFRS is presented in Note 3. These policies have been retrospectively and consistently applied except where specific exemptions permitted an alternative treatment upon transition to IFRS in accordance with IFRS 1 as disclosed in Note 5.

An explanation of how the transition to IFRS has affected the reported balance sheet, changes to shareholders’ equity, income and comprehensive income (loss), and cash flows of the Company is provided in Note 5.

On September 17, 2021 the Company was acquired by Greenfire Resources Inc. As a result, these financial statements present the Company’s financial position at September 17, 2021 and the results of its financial performance and changes in its financial position for the period then ended. Comparative information presented in these financial statements is for the twelve-month fiscal year which ended December 31, 2020. As such, certain amounts in the financial statements are not entirely comparable.

In these financial statements, all dollars are expressed in Canadian dollars, which is the Company’s functional currency, unless otherwise indicated. These financial statements have been prepared on a historical cost basis, except for certain financial instruments which are measured at their estimated fair value.

These financial statements were approved by the Board of Directors on April 19, 2023.

3.	SIGNIFICANTACCOUNTING POLICIES

Jointarrangements

The Company undertakes certain business activities through joint arrangements. Interests in joint arrangements have been classified as joint operations. A joint operation is established when the Company has rights to the assets and obligations for the liabilities of the arrangement. The Company only recognizes its proportionate share in assets, liabilities, revenues and expenses associated with its joint operations.

F-48

Japan

Canada Oil Sands Limited Notes to the Financial Statements

3.	SIGNIFICANTACCOUNTING POLICIES (cont.)

Foreigncurrency translation

Foreign currency transactions are translated into Canadian Dollars at exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities that are denominated in foreign currencies are translated to the functional currency using the exchange rate as of the balance sheet date. The resulting translation differences arising from monetary assets and liabilities denominated in foreign currencies are included in the Statement of Comprehensive Income (Loss).

Operatingsegments

The Company determines its operating segments based on the differences in the nature of operations, products sold, economic characteristics and regulatory environments and management. As the Company only has operations in the Athabasca region, the Company has determined that the Company’s assets, liabilities and operating results for the development and production of bitumen from the oil sands located in the Athabasca region is the Company’s only operating segment.

Financialinstruments and fair value measurement

Fair value is the price that would be received when selling an asset or paid to transfer a liability in an orderly transaction between market participants in its principal or most advantageous market at the measurement date.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are further categorized using a three-level hierarchy that reflects the significance of the lowest level of inputs used in determining fair value:

●	Level<br>1 — Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active<br>markets are those in which transactions occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
●	Level 2 — Pricing<br>inputs are other than quoted prices in active markets included in Level 1. Prices in Level 2 are either directly or indirectly observable<br>as of the reporting date. Level 2 valuations are based on inputs, including quoted forward prices for commodities, time value, and volatility<br>factors, which can be substantially observed or corroborated in the marketplace.
---	---
●	Level 3 — Valuations<br>in this level are those with inputs for the asset or liability that are not based on observable market data.
---	---

At each reporting date, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing the level of classification for each financial asset and financial liability measured or disclosed at fair value in the financial statements based on the lowest level of input that is significant to the fair value measurement as a whole. Assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy.

The following table summarizes the method by which the Company measures its financial instruments on the balance sheets and the corresponding hierarchy rating for their derived fair value estimates:

Financial Instrument	Fair Value<br> Hierarchy	Classification &<br> Measurement
Cash and cash equivalents	Level 1	Amortized cost
Restricted cash	Level 1	Amortized cost
Accounts receivable	Level 2	Amortized cost
Due from related parties	Level 2	Amortized cost
Accounts payable	Level 2	Amortized cost
Due to related parties	Level 2	Amortized cost
Long-term bank loans payable	Level 2	Amortized cost

F-49

Japan

Canada Oil Sands Limited Notes to the Financial Statements

3.	SIGNIFICANTACCOUNTING POLICIES (cont.)

FinancialInstruments

Classificationand Measurement of Financial Instruments

JACOS’s financial assets and financial liabilities are classified into two categories: Amortized Cost and Fair Value through Profit and Loss (“FVTPL”). The classification of financial assets is determined by their context in the Company’s business model and by the characteristics of the financial asset’s contractual cash flows. The Company does not classify any of its financial instruments as Fair Value through Other Comprehensive Income.

Financial assets and financial liabilities are measured at fair value on initial recognition, which is typically the transaction price, unless a financial instrument contains a significant financing component. Subsequent measurement is dependent on the financial instrument’s classification.

●

Amortized Cost Cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable and accrued liabilities, and long-term debt are measured at amortized cost. The contractual cash flows received from the financial assets are solely payments of principal and interest and are held within a business model whose objective is to collect the contractual cash flows. The financial assets and financial liabilities are subsequently measured at amortized cost using the effective interest method.

●

FVTPL Risk management contracts, all of which are derivatives, are measured initially at FVTPL and are subsequently measured at fair value with changes in fair value immediately charged to the statements of comprehensive income (the “statements of income”). The Company did not have any risk management contracts as at September 17, 2021, December 31, 2020 or January 1, 2020.

---

Impairmentof Financial Assets

Impairment of financial assets carried at amortized cost is determined by measuring the assets’ expected credit loss (“ECL”). Accounts receivable are due within one year or less; therefore, these financial assets are not considered to have a significant financing component and a lifetime ECL is measured at the date of initial recognition of the accounts receivable. ECL allowances have not been recognized for cash and cash equivalents due to the virtual certainty associated with their collection.

The ECL pertaining to accounts receivable is assessed at initial recognition and this provision is re-assessed at each reporting date. ECLs are a probability-weighted estimate of possible default events related to the financial asset (over the lifetime or within 12 months after the reporting period, as applicable) and are measured as the difference between the present value of the cash flows due to JACOS and the cash flows the Company expects to receive, including cash flows expected from collateral and other credit enhancements that are a part of contractual terms. The carrying amounts of financial assets are reduced by the amount of the ECL through an allowance account and losses are recognized as an impairment of financial assets in the statements of income.

Based on industry experience, the Company considers its commodity sales and joint interest accounts receivable to be in default when the receivable is more than 90 days past due. Once the Company has pursued collection activities and it has been determined that the incremental cost of pursuing collection outweighs the benefits, JACOS derecognizes the gross carrying amount of the financial asset and the associated allowance from the balance sheets.

Derecognitionof Financial Liabilities

A financial liability is derecognized when the obligation under the liability is discharged or canceled or expires. If an amendment to a contract or agreement comprises a substantial modification, JACOS will derecognize the existing financial liability and recognize a new financial liability, with the difference recognized as a gain or loss in the statements of income. If the modification results in the derecognition of a liability any associated fees are recognized as part of the gain or loss. If the modification is not deemed to be substantial, any associated fees adjust the liability’s carrying amount and are amortized over the remaining term.

F-50

Japan

Canada Oil Sands Limited Notes to the Financial Statements

3.	SIGNIFICANTACCOUNTING POLICIES (cont.)

Derivativeinstruments and hedging activities

The Company periodically enters into derivative contracts to manage its exposure to commodity price and foreign exchange risks. These derivative contracts, which are generally placed with major financial institutions, may take the form of forward contracts, futures contracts, swaps, or options. The reference prices, upon which the commodity derivative contracts are based, reflect various market indices that have a high degree of historical correlation with actual prices received by the Company for its oil production.

Derivatives are initially recognized at fair value on the date a contract is entered into and are subsequently re-measured at their fair value. The Company’s derivative instruments, while providing effective economic hedges, are not designated as hedges for accounting purposes. Changes in the fair value of any derivatives that are not designated as hedges for accounting purposes are recognized within net income (loss) and comprehensive income (loss) consistent with the underlying nature and purpose of the derivative instruments.

Revenue

Royalty expenses are recognized as production occurs.

Interestincome

Interest income on cash and cash equivalents and restricted cash, is recorded as earned. For outstanding investments that mature in future periods, income is accrued up to the end of the applicable reporting period based on the terms and conditions of the individual instruments.

Cashand cash equivalents

The Company considers all cash on hand, depository accounts held by banks, money market accounts and highly liquid investments with an original maturity of three months or less to be cash equivalents. The types of financial instruments in which the Company currently invests in include term deposits and guaranteed investment certificates.

Accountsreceivable

Accounts receivable are amounts due from customers from the rendering of services or sale of goods in the ordinary course of business. Accounts receivables are classified as current assets if payment is due within one year or less. Accounts receivables are recognized initially at fair value and subsequently measured at amortized cost.

Inventories

F-51

Japan

Canada Oil Sands Limited Notes to the Financial Statements

3.	SIGNIFICANTACCOUNTING POLICIES (cont.)

Property,plant and equipment (“PP&E”)

PP&E is measured at cost to acquire, less accumulated depletion and depreciation, and net of any impairment losses. The Company begins capitalizing oil exploration costs after the right to explore has been obtained and includes land acquisition costs, geological and geophysical activities, drilling expenditures and costs incurred for the completion and testing of exploration wells. The Company capitalizes all subsequent investments attributable to the development of its oil assets if the expenditures are considered a betterment and provide a future benefit beyond one year. The Company’s capitalized costs primarily consist of pad construction, drilling activities, completion activities, well equipment, processing facilities, gathering systems and pipelines. Borrowing costs attributable to long-term development projects are also capitalized.

Capitalized costs are classified as exploration and evaluation (“E&E”) assets if technical feasibility and commercial viability have not yet been established. Technical feasibility and commercial viability are generally deemed to exist when proved reserves are present and the Company has sanctioned the project for commercial development. Capitalized costs are classified as PP&E assets if they are attributable to the development of oil reserves after technical feasibility and commercial viability have been achieved. Once the technical feasibility and commercial viability of E&E assets have been established, the E&E assets are tested for impairment and reclassified to PP&E. The majority of the Company’s PP&E is depleted using the unit-of-production method relative to the Company’s estimated total recoverable proved plus probable (“2P”) reserves. The depletion base consists of the historical net book value of capitalized costs, plus the estimated future costs required to develop the Company’s estimated recoverable proved plus probable reserves. The depletion base excludes E&E and the cost of assets that are not yet available for use in the manner intended by Management. Corporate assets and other capitalized costs are depreciated over their estimated useful lives primarily using the declining-balance method**.**

There were no E&E costs as at September 17, 2021, December 31, 2020 or January 1, 2020.

Provisionsand contingent liabilities

At initial recognition, the Company recognizes a decommissioning asset and corresponding liability on the balance sheet. Decommissioning obligations are measured at the present value of expected future cash outflows required to settle the obligations. Decommissioning liabilities are measured based on the approximate historical inflation rate and then discounted to net present value using a credit adjusted risk-free discount rate. Any change in the present value, as a result of a change in discount rate or expected future costs, of the estimated obligation is reflected as an adjustment to the provision and the corresponding item of property, plant and equipment. The liability for decommissioning costs is increased each period through the unwinding of the discount, which is included in finance and interest costs in the statements of comprehensive income (loss). Decommissioning liabilities are remeasured at each reporting period primarily to account for any changes in estimates or discount rates. Actual expenditures incurred to settle the obligations reduce the liability.

F-52

Japan

Canada Oil Sands Limited Notes to the Financial Statements

3.	SIGNIFICANTACCOUNTING POLICIES (cont.)

Impairmentof non-financial assets

For the purpose of estimating the asset’s recoverable amount, PP&E assets are grouped into cash generating units (“CGU”s). A CGU is the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets. The Company’s PP&E assets are currently held in one CGU.

At each reporting period, PP&E, E&E and right-of-use assets are tested for impairment reversal at the CGU level when there are indicators that a previous impairment recorded has been reversed. Impairment reversal is limited to the carrying amount which would have been recorded had no historical impairment been recorded.

Leases

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. A lease obligation and corresponding right-of-use asset are recognized at the commencement of the lease. Lease liabilities are initially measured at the present value of the unavoidable lease payments and discounted using the Company’s incremental borrowing rate when an implicit rate in the lease is not readily available. Interest expense is recognized on the lease obligations using the effective interest rate method. The right-of-use assets are recognized at the amount of the lease liabilities, adjusted for lease incentives received and initial direct costs, on commencement of the leases. Right-of-use assets are depreciated on a straight-line basis over the lease term. The Company is required to make judgments and assumptions on incremental borrowing rates and lease terms. The carrying balance of the leased assets and lease liabilities, and related interest and depreciation expense, may differ due to changes in market conditions and expected lease terms. Short-term and low value leases have not been included in the measurement of lease liabilities.

Incometaxes

Income tax is comprised of current and deferred tax. Income tax expense is recognized in the statement of income (loss) except to the extent that it relates to share capital, in which case it is recognized in equity. Current tax is the expected tax payable (receivable) on the taxable income (loss) for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

F-53

Japan

Canada Oil Sands Limited Notes to the Financial Statements

3.	SIGNIFICANTACCOUNTING POLICIES (cont.)

Deferred tax assets and liabilities are offset on the balance sheet if there is a legally enforceable right to offset and they relate to income taxes levied by the same tax authority. A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilized. Deferred tax assets are reviewed at each reporting date and are not recognized until such time that it is more likely than not that the related tax benefit will be realized.

Pershare information

Basic per share information is calculated using the weighted average number of common shares outstanding during the year. Diluted per share information is calculated using the basic weighted average number of common shares outstanding during the year, as the Company did not have shares which could have had a dilutive effect on net income during the year.

Investmenttax credits

Investment tax credits are deducted from the related expenditures when there is reasonable assurance that they are recoverable.

Transportation

In order to facilitate pipeline transportation, the Company uses condensate as diluent for blending with the Company’s bitumen. Transportation costs include expenses related to third-party pipelines and terminals used to transport blended bitumen.

4.	SIGNIFICANTACCOUNTING JUDGEMENTS AND ESTIMATES

The timely preparation of the financial statements requires that management make estimates and assumptions and use judgement regarding the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during that period. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. The estimated fair value of financial assets and liabilities are subject to measurement uncertainty. Accordingly, actual results may differ materially from estimated amounts as future confirming events occur. Significant judgements, estimates and assumptions made by management in the preparation of these financial statements are outlined below.

Inventories

The Company evaluates the carrying value of its inventory at the lower of cost and net realizable value. The net realizable value is estimated based on current market prices less selling costs that the Company would expect to receive from the sale of its inventory.

Decommissioningobligations

The provision for decommissioning obligations is based upon numerous assumptions including settlement amounts, inflation factors, credit-adjusted discount rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. Actual costs and cash outflows could differ from the estimates as a result of changes in any of the above noted assumptions.

IncomeTaxes

The provision for income taxes is based on judgments in applying income tax law and estimates on the timing and likelihood of reversal of temporary differences between the accounting and tax bases of assets and liabilities. The provision for income taxes is based on the Company’s interpretation of the tax legislation and regulations which are also subject to change. Deferred tax assets are recognized when it is considered probable that deductible temporary differences will be recovered in future periods, which requires management judgment. Deferred tax liabilities are recognized when it is considered probable that temporary differences will be payable to tax authorities in future periods, which requires management judgment. Income tax filings are subject to audit and re-assessment and changes in facts, circumstances and interpretations of the standards may result in a material change to the Company’s provision for income taxes. Estimates of future income taxes are subject to measurement uncertainty. Deferred income tax assets are assessed by management at the end of the reporting period to determine the likelihood that they will be realized from future earnings.

F-54

Japan

Canada Oil Sands Limited Notes to the Financial Statements

4.	SIGNIFICANTACCOUNTING JUDGEMENTS AND ESTIMATES (cont.)

Bitumenreserves

Impairments

CGU’s are defined as the lowest grouping of assets that generate identifiable cash inflows that are largely independent of the cash inflows of other assets or groups of assets. The classification of assets into CGU’s requires significant judgment and interpretations with respect to the integration between assets, the existence of active markets, external users, shared infrastructures, and the way in which management monitors the Company’s operations. The recoverable amounts of CGU’s and individual assets have been determined as the higher of the CGU’s or the asset’s fair value less costs of disposal and its value in use. These calculations require the use of estimates and significant assumptions and are subject to changes as new information becomes available including information on future commodity prices, expected production volumes, quantity of proved and probable reserves and discount rates as well as future development and operating costs. Changes in assumptions used in determining the recoverable amount could affect the carrying value of the related assets and CGU’s.

Property,plant and equipment

Producing assets within PP&E are depleted using the unit-of-production method based on estimated total recoverable proved plus probable reserves and future costs required to develop those reserves. There are several inherent uncertainties associated with estimating reserves. By their nature, these estimates of reserves, including the estimates of future prices and costs, and related future cash flows are subject to measurement uncertainty, and the impact on the financial statements of future periods could be material.

Jointarrangements

Judgement is required to determine when the Company has joint control of a contractual arrangement, which requires a continuous assessment of the relevant activities and when the decisions in relation to those activities require unanimous consent. Judgement is also required to classify a joint arrangement as either a joint operation or a joint venture when the arrangement has been structured through a separate vehicle. Classifying the arrangement requires the Company to assess its rights and obligations arising from the arrangement. Specifically, the Company considers the legal form of the separate vehicle, the terms of the contractual arrangement and other relevant facts and circumstances. This assessment often requires significant judgement, and a different conclusion on joint control, or whether the arrangement is a joint operation or a joint venture, may have a material impact on the accounting treatment.

Leases — estimatingthe incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (“IBR”) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ‘would have to pay’, which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates.

F-55

Japan

Canada Oil Sands Limited Notes to the Financial Statements

4.	SIGNIFICANTACCOUNTING JUDGEMENTS AND ESTIMATES (cont.)

Other

The COVID-19 pandemic, which began in early 2020, continues to create uncertainty and negatively impact the commodity price environment by suppressing the continued recovery in global economic activity and demand for hydrocarbon products. It continues to be difficult to forecast and account for the risk posed by the COVID-19 pandemic.

5.	FIRST-ADOPTIONOF IFRS

These financial statements, for the period ended September 17, 2021 are the first financial statements the Company has prepared in accordance with IFRS. For the periods from January 1, 2011, up to and including the year ended December 31, 2020, the Company prepared its financial statements in accordance with US GAAP.

Accordingly, the Company has prepared financial statements that comply with IFRS applicable as at September 17, 2021, together with the comparative period data for the year ended December 31, 2020, as described in the summary of significant accounting policies. In preparing the financial statements, the Company’s opening balance sheet was prepared as at January 1, 2020, the Company’s date of transition to IFRS. This note explains the principal adjustments made by the Company in restating its US GAAP financial statements, including the balance sheet as at January 1, 2020 and the financial statements as of, and for, the year ended December 31, 2020 and the period ended September 17, 2021.

Exemptionsapplied

IFRS 1 First-time Adoption of International Financial Reporting Standards sets forth guidance for the initial adoption of IFRS. Under IFRS 1 the standards are applied retrospectively at the transitional balance sheet date with all adjustments to assets and liabilities recognized in retained earnings unless certain exemptions are applied. The Company has applied the following optional exemptions to its opening balance sheet dated January 1, 2020:

●

The estimates at January 1, 2020, and at December 31, 2020, are consistent with those made for the same dates in accordance with US GAAP (after transitional adjustments to reflect any differences in accounting policies). The estimates used by the Company to present these amounts in accordance with IFRS reflect conditions at January 1, 2020, the date of transition to IFRS and as at December 31, 2020.

The Company has assessed the classification and measurement of financial assets on the basis of the facts and circumstances that exist at January 1, 2020.

The Company has elected to measure oil and gas assets at January 1, 2020 on the following basis:

●	Deemed<br>costs
●	IFRS<br>requires that property, plant and equipment associated with oil and natural gas development and production be monitored and depreciated<br>at a more granular level than was required under full costs accounting allowable under US GAAP. Upon adoption of IFRS the Company<br>elected to use fair value as deemed cost of PP&E. The fair value was determined using fair value less cost to sell based on<br>a discounted future cash flows of proved plus probable reserves using forecast prices and costs.
---	---
●	Leases
---	---
●	Lease<br>liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing<br>rate at January 1, 2020. Hindsight was applied in determining the lease term for leases with extension options. Right-of-use assets<br>were measured at the amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease payments relating<br>to that lease recognized in the balance sheet immediately before January 1, 2020
---	---

F-56

Japan

Canada Oil Sands Limited Notes to the Financial Statements

5.	FIRST-ADOPTIONOF IFRS (cont.)

●	Decommissioning<br>Liabilities
●	The<br>Company has measured all decommissioning obligations at January 1, 2020. There is no difference between this amount and the US GAAP<br>carrying amount and therefore no adjustment has been made to retained earnings in respect of this exemption.
---	---
●	The<br>adoption of IFRS has not changed the Company’s actual cash flows, it has resulted in changes to the Company’s reported financial<br>position and results of operations. In order to allow the users of the financial statements to better understand these changes, the Company’s<br>balance sheets at January 1, 2020, and December 31, 2020 as prepared under US GAAP and statements of comprehensive income for<br>the year ended December 31, 2020, as prepared under US GAAP, have been reconciled to IFRS, with the resulting differences explained.
---	---

BalanceSheetAs at January 1, 2020

($CAD thousands)	note	US GAAP			Effect of<br> transition to<br> IFRS			IFRS
Assets
Current assets
Cash and cash equivalents		$	159,591		$	—		$	159,591
Restricted cash			672						672
Accounts receivable			30,565			—			30,565
Inventories			18,550			—			18,550
Due from related parties			18			—			18
Prepaid expenses and deposits			2,446			—			2,446
			211,842			—			211,842
Non-current assets
Property, plant and equipment	A		1,500,757			(860,000	)		640,757
Right of use asset	C		—			1,372			1,372
Deferred tax	D		67,673			(67,673	)		—
			1,568,430			(926,301	)		642,129
Total assets		$	1,780,272		$	(926,301	)	$	853,971
Liabilities
Current liabilities
Accounts payable and accrued liabilities			56,260			—			56,260
Current portion of long-term debt			77,928			—			77,928
Current portion of lease liability	C		—			493			493
Due to related parties			1,009			—			1,009
			135,197			493			135,690
Non-current liabilities
Long-term debt			698,144			—			698,144
Long-term lease liability	C		—			879			879
Decommissioning obligations			7,147			—			7,147
			705,291			879			706,170
Total liabilities			840,488			1,372			841,860
Shareholders’ equity
Share capital			1,010,871			—			1,010,871
Deficit	A		(71,087	)		(927,673	)		(998,760	)
			939,784			(927,673	)		12,111
Total equity and liabilities		$	1,780,272		$	(926,301	)	$	853,971

F-57

Japan

Canada Oil Sands Limited Notes to the Financial Statements

5.	FIRST-ADOPTIONOF IFRS (cont.)

BalanceSheetAs at December 31, 2020

($CAD thousands)	note	US GAAP			Effect of transition to IFRS			IFRS
Assets
Current assets
Cash and cash equivalents		$	46,743		$	—		$	46,743
Accounts receivable			29,113			—			29,113
Inventories			7,440			—			7,440
Due from related parties			6			—			6
Prepaid expenses and deposits			2,594			—			2,594
			85,896			—			85,896
Non-current assets
Property, plant and equipment	A,B		1,443,639			(1,150,784	)		292,855
Right of use asset	C		—			841			841
Deferred tax			67,247			(67,247	)		—
			1,510,886			(1,217,190	)		293,696
Total assets		$	1,596,782		$	(1,217,190	)	$	379,592
Liabilities
Current liabilities
Accounts payable and accrued liabilities			51,838			—			51,838
Current portion of long-term debt			76,392			—			76,392
Current portion of lease liability	C		—			544			544
Due to related parties			1,007			—			1,007
			129,237			544			129,781
Non-current liabilities
Long-term debt			608,249			—			608,249
Long-term lease liability	C		—			335			335
Decommissioning obligations			7,728			—			7,728
			615,977			335			616,312
Total liabilities			745,214			879			746,093
Shareholders’ equity
Share capital			1,010,871			—			1,010,871
Deficit	A,B,C		(159,303	)		(1,218,069	)		(1,377,372	)
			851,568			(1,218,069	)		(366,501	)
Total equity and liabilities		$	1,596,782		$	(1,217,190	)	$	379,592

F-58

Japan

Canada Oil Sands Limited Notes to the Financial Statements

5.	FIRST-ADOPTIONOF IFRS (cont.)

Statementof comprehensive incomeFor the year ended December 31, 2020

($CAD thousands, except per share amounts)	note	US GAAP			Effect of transition to IFRS			IFRS
Revenue
Oil sales		$	279,248		$	—		$	279,248
Royalties			(2,019	)		—			(2,019	)
			277,229			—			277,229
Interest income			925			—			925
Other income			1,684			—			1,684
			279,838			—			279,838
Expenses
Diluent expense			158,272			—			158,272
Transportation and marketing			39,368			—			39,368
Operating expenses			67,409			—			67,409
General and administrative	C		6,250			(570	)		5,680
Financing and interest	C		21,525			77			21,602
Depletion and depreciation	B,C		87,064			21,315			108,379
Impairment	A		—			270,000			270,000
Exploration and other expenses			3,352			—			3,352
Foreign Exchange loss/(gain)			(15,612	)		—			(15,612	)
			367,628			290,822			658,450
Loss before income taxes		$	(87,790	)	$	(290,822	)	$	(378,612	)
Deferred income taxes			427			(427	)		—
Net loss and comprehensive loss		$	(88,217	)	$	(290,395	)	$	(378,612	)
Loss per share
Basic		$	(2,91	)	$	(9.58	)	$	(12.49	)
Diluted		$	(2.91	)	$	(9.58	)	$	(12.49	)

A Impairmentof property, plant and equipment (“PP&E”)

In accordance with IFRS, impairment tests of PP&E must be performed at the CGU level as opposed to the entire PP&E balance which was required under US GAAP through the full cost ceiling test. Impairment is recognized if the carrying value exceeds the recoverable amount for a CGU. Upon adoption of IFRS the Company elected to use fair value as deemed cost of PP&E. The fair value was determined using fair value less cost to sell based on a discounted future cash flows of proved plus probable reserves using forecast prices and costs. A fair value adjustment of $860 million was recognized on transition as of January 1, 2020.

For the year ended December 31, 2020, as a result of decreased forward oil prices which impacted the fair value less costs to sell derived from the Company’s reserves, an impairment charge of $270 million was recognized based on discounted future cash flows of proved plus probable reserves using forecast prices and costs at 16 percent.

B Depletionof PP&E

Upon transition to IFRS, the Corporation adopted a policy of depleting bitumen interests on a unit of production basis over proved plus probable reserves. The depletion policy under the previous GAAP was based on units of production over proved reserves. In addition, under US GAAP future development costs were not included in the depletion calculation. There was no impact of this difference on adoption of IFRS as at January 1, 2020 as a result of the IFRS 1 election, as discussed in note above. For the year ended December 31, 2020 depletion and depreciation was increased by $20.7 million as a result of changes to the depletion calculation.

F-59

Japan

Canada Oil Sands Limited Notes to the Financial Statements

5.	FIRST-ADOPTIONOF IFRS (cont.)

C Leases

Under US GAAP, the Company had not adopted ASC 842 Leases. As a result, leases were classified as a finance lease or an operating lease. Operating lease payments are recognized as an operating expense in profit or loss on a straight-line basis over the lease term. Under IFRS, as explained in Note 3, a lessee applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets and recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. At the date of transition to IFRS, the Company applied the transitional provision and measured lease liabilities at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate at the date of transition to IFRS. Right-of-use assets were measured at the amount equal to the lease liabilities adjusted by the amount of any prepaid or accrued lease payments. As a result, the Company recognized an increase of $1.4 million in lease liabilities and $1.4 million in right-of-use assets. In addition, depreciation increased by $0.5 million, finance costs increased by $0.1 million and general and administration costs decreased by $0.6 million for the period ended December 31, 2020.

D Deferredtax

The various transitional adjustments resulted in various temporary differences. According to the accounting policies in Note 3, the Company has to recognize the tax effects of such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity.

E Statementof cash flows

Under US GAAP, a lease is classified as a finance lease or an operating lease. Cash flows arising from operating lease payments are classified as operating activities. Under IFRS, a lessee generally applies a single recognition and measurement approach for all leases and recognizes lease liabilities. Cash flows arising from payments of principal portion of lease liabilities are classified as financing activities. Therefore, cash outflows from operating activities decreased by $0.1 million and cash outflows from financing activities increased by the same amount for the period ended December 31, 2020.

F Functionalcurrency

Under IFRS, the framework used to determine the functional currency is similar to that used to determine the currency of measurement under US GAAP; however, under IFRS, the indicators for determining the functional currency are broken down into primary and secondary indicators. Primary indicators are closely linked to the primary economic environment in which the entity operates. Secondary indicators provide supporting evidence to determine an entity’s functional currency. Primary indicators receive more weight under IFRS than US GAAP. In 2019 the Company’s revenue contracts had changed from primarily being US dollar denominated to Canadian dollar denominated. The change in revenue contracts resulted in cash flows being driven primarily by the Canadian dollar. Due to the change in the primary economic environment in which the Company operates, management has concluded that the functional currency of the Company under IFRS is the Canadian dollar. Under US GAAP, the functional currency of the Company was the US dollar.

Accordingly, all non-monetary assets and liabilities have been converted to the Canadian dollar at their respective historical rates.

6. CASH

AND CASH EQUIVALENTS

As at September 17, 2021, the Company held cash of $4.4 million and $0.5 million in restricted cash (December 31, 2020 — cash of $46.7 million, January 1, 2020 — cash of $159.6 million and $0.7 million restricted cash). The credit risk associated with the Company’s cash and cash equivalents was considered low as the Company’s balances were held with large Canadian or Provincial chartered banks.

JACOS has long-term pipeline transportation contracts in place which are subject to credit requirements requiring letters of credit to guarantee future payments under the contracts. Prior to the corporate divestiture to Greenfire Resources Inc. JACOS had approximately $51 million in letters of credit outstanding in relation to these long-term pipeline transportation agreements. The annual guarantee fees incurred is calculated at an interest rate of 0.8%.

F-60

Japan

Canada Oil Sands Limited Notes to the Financial Statements

7.	ACCOUNTSRECEIVABLE

As at<br><br> ($000’s)	September 17,<br><br> 2021		December 31,<br><br> 2020		January 1,<br> 2020
Accounts receivable	$	56,517	$	29,113	$	30,565

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s accounts receivable. The Company is primarily exposed to credit risk from receivables associated with its oil sales. The Company’s customer base consisted of large integrated energy companies. The Company manages its credit risk exposure by transacting with high-quality credit worthy counterparties and monitoring credit worthiness and/or credit ratings on an ongoing basis.

At September 17, 2021, December 31, 2020 and January 1, 2020, credit risk from the Company’s outstanding accounts receivable balances was considered low due to a history of collections and the receivables that were held by credit worthy counterparties. There were no overdue balances for the above ending periods.

8.	INVENTORIES

As at<br><br> ($000’s)	September 17, <br><br>2021		December 31,<br><br> 2020		January 1,<br> 2020
Oil inventories	$	5,559	$	5,703	$	17,114
Warehouse materials and supplies		1,879		1,737		1,436
Inventories	$	7,438	$	7,440	$	18,550

During the period ended September 17, 2021, approximately $171 million (December 31, 2020 — $158 million) of purchased inventory was recorded in diluent expense in the statements of comprehensive income (loss).

9.	PROPERTY,PLANT AND EQUIPMENT (“PP&E”)

$(000’s)	Petroleum properties and related equipment		Furniture and other equipment	Total
Cost
Balance as at January 1, 2020	637,755		3,002	640,757
Expenditures on PP&E	27,385		310	27,695
Balance as at December 31, 2020	665,140		3,312	668,452
Expenditures on PP&E	9,755		2	9,757
Balance as at September 17, 2021	674,895		3,314	678,209
Accumulated DD&A
Balance as at January 1, 2020	—		—	—
Depletion and depreciation	105,075		522	105,597
Impairment	270,000		—	270,000
Balance as at December 31, 2020	375,075		522	375,597
Depletion and depreciation	77,083		324	77,407
Impairment reversal	(73,252	)	—	(73,252	)
Balance as at September 17, 2021	378,906		846	379,752
Net book Value
Balance at January 1, 2020	637,755		3,002	640,757
Balance at December 31, 2020	290,065		2,790	292,855
Balance at September 17, 2021	295,989		2,468	298,457

F-61

Japan

Canada Oil Sands Limited Notes to the Financial Statements

9.	PROPERTY,PLANT AND EQUIPMENT (“PP&E”) (cont.)

For the period ended September 17, 2021, due to increases in forward oil prices, a test for impairment reversal was completed. The recoverable value was based on fair value less costs of disposal (“FVLCOD”). FVLCOD is the amount that would be realized from the disposition of an asset or CGU in an arm’s length transaction between knowledgeable and willing parties. As JACOS had a sales agreement is place with Greenfire Resources Inc., the asset was written up to the value assigned in the agreement, which was approximately $298.5 million.

At December 31, 2020, due to the continued depressed oil prices as a result of the COVID-19 pandemic, the Company determined that there were indicators of impairment for its CGU. The recoverable amount was not sufficient to support the carrying amount which resulted in an impairment of $270 million. The recoverable amount was based on its FVLCOD which was estimated using a discounted cash flow model of proved plus probable cash flows from an independent reserve report prepared as at December 31, 2020.

The recoverable amount of the Company’s CGU was calculated at December 31, 2020 using the following benchmark reference prices for the years 2021 to 2028 adjusted for commodity differentials specific to the Company. The prices and costs subsequent to 2029 have been adjusted for inflation at an annual rate of 2%.

	2021		2022		2023		2024		2025		2026		2027		2028
WCS heavy oil (CA$/bbl)	$	45.16	$	49.67	$	53.95	$	57.92	$	59.09	$	60.26	$	61.47	$	62.70
WTI crude oil (US$/bbl)	$	48.00	$	51.50	$	54.50	$	57.79	$	58.95	$	60.13	$	61.33	$	62.56

The following table demonstrates the sensitivity of the estimated recoverable amount of the Company’s CGU to possible changes in key assumptions inherent in the estimate.

$(000’s)	Amount		Impairment		Change in discount rate of 1%		Change in diluted bitumen pricing of 2.50
Hangingstone Expansion CGU	$	290,065	$	270,000	$	21,500

All values are in US Dollars.

10.	LEASES

The Company has recognized the following leases:

$(000’s)	Total
Lease obligation at January 1, 2020	$	1,372
Interest expense		77
Payments		(570	)
Balance as at December 31, 2020		879
Interest expense		32
Payments		(390	)
Balance as at September 17, 2021	$	521

The Company has recognized the following right of use asset:

$(000’s)	Total
Right of use at January 1, 2020	$	1,372
Depreciation		(531	)
Balance as at December 31, 2020		841
Depreciation		(354	)
Balance as at September 17, 2021	$	487

The Company incurs lease payments related to its head office. The lease will expire in July 2022. The Company has recognized a lease liability measured at the present value of the remaining lease payments using the Company’s weighted-average incremental borrowing rate of 7%.

F-62

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Canada Oil Sands Limited Notes to the Financial Statements

11.	INCOMETAXES

The Company has $1.6 billion in unclaimed federal tax deductions and $1.2 billion in unclaimed provincial tax deductions that are available indefinitely to be applied against income generated from oil and gas activities.

The Company has obtained investment tax credits, which will expire as follows:

(000’s)
2039	143
Total	143

All values are in US Dollars.

Although management considers the investment tax credits claimed to be reasonable and appropriate, they are subject to assessment in the future at such time as they are used to reduce income taxes otherwise payable and portions of the claims could be disallowed.

The Company has accumulated Federal Non-Capital Loss Carryforward that will expire as follows:

(000’s)
2035	38,453
2036	187,478
2037	58,725
2038	29,991
2040	36,168
2041	1,232,793
Total	1,583,608

All values are in US Dollars.

The Company has accumulated Provincial Non-Capital Loss Carryforward that will expire as follows:

(000’s)
2036	76,903
2037	58,725
2038	29,991
2040	25,968
2041	999,628
Total	1,191,215

All values are in US Dollars.

Income tax expense is summarized as follows:

(000’s)	For the period ended September 17, 2021			For the year ended December 31, 2020
Income (loss) before taxes	104,833			(378,612	)
Expected statutory income tax rate	23	%		24	%
Expected income tax expense (recovery)	24,112			(90,867	)
Permanent differences	(731	)		(1,530	)
Effect of Alberta provincial tax rate change	—			12,877
Unrecognized deferred tax assets	(23,381	)		79,520
Deferred income tax expense (recovery)	—		$	—

All values are in US Dollars.

F-63

Japan

Canada Oil Sands Limited Notes to the Financial Statements

12.	DECOMMISSIONINGOBLIGATIONS

The Company’s decommissioning obligations result from net ownership interests in oil assets including well sites, gathering systems and processing facilities. The Company estimates the total undiscounted escalated amount of cash flows required to settle its decommissioning obligations to be approximately $97 million. A credit-adjusted discount rate of 7% and an inflation rate of 1.8% were used to calculate the decommissioning obligations. A 1.0% change in the credit-adjusted discount rate would impact the discounted value of the decommissioning obligations by approximately $0.3 million with a corresponding adjustment to PP&E or net income (loss). The decommissioning obligations are estimated to be settled in periods up to year 2075.

A reconciliation of the decommissioning liabilities is provided below:

As at <br><br>$(000’s)	September 17, <br><br>2021			December 31, <br><br>2020
Beginning balance	$	7,728		$	7,147
Change in estimate		(75	)		167
Liabilities settled in the year		(53	)		(30	)
Accretion expense		320			444
Ending balance	$	7,920		$	7,728

13.	OTHERINCOME AND EXPENSES

(000’s)	For the period ended September 17, 2021		For the year ended December 31, 2020
Interest income	43	$	925
Gross overriding royalty	935		39
Other	50		1,645
Other income	1,028	$	2,609

All values are in US Dollars.

14.	FINANCIALRISK MANAGEMENT

The Company is exposed to financial risk on its financial instruments including cash and cash equivalents, short-term investments, accounts receivable, due from related parties, prepaid expenses and deposits, accounts payable and due to related parties, and long-term banks loans payable. The Company manages its exposure to financial risks by operating in a manner that minimizes its exposure to the extent practical. The Company’s financial instruments as at September 17, 2021 and December 31, 2020 include accounts receivable, accounts payable and accrued liabilities. The fair value of accounts receivable, accounts payable and accrued liabilities approximate their carrying amounts due to its short-term maturity.

The main financial risks affecting the Company are discussed below:

Creditrisk

Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial instruments on hand as at the balance sheet date. The Company’s financial instrument subject to credit risk is accounts receivable.

The maximum exposure to credit risk is represented by the carrying amount of each financial asset on the balance sheet. On an ongoing basis, the Company assesses whether there should be any impairment of the financial instruments. There are no material financial instruments that the Company considers past due.

F-64

Japan

Canada Oil Sands Limited Notes to the Financial Statements

14.	FINANCIALRISK MANAGEMENT (cont.)

Liquidityrisk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they are due. The Company actively manages its liquidity through cost control and debt management policies. Such strategies include continuously monitoring forecast and actual cash flows. The Company relies on additional funding from Canada Oil Sands Co, Ltd (Parent Company). The nature of the oil and gas industry is very capital intensive. As a result, the Company prepares annual capital expenditure budgets and utilizes authorizations for expenditures for projects to manage capital expenditures. Please refer to note 16 “Long-term Debt” for additional information on liquidity risk.

Accounts payable is considered due to suppliers in one year or less while bank debt is repaid in semi-annual equal installments, which began in June 2020 and will end in December 2029. Further, interest is paid semi-annually on the outstanding principal amount during the term of the loan.

Marketrisk

Market risk is the risk of loss that might arise from changes in market factors such as interest rates, foreign exchange rates and equity prices.

●	Interest<br>rate risk

Interest rate risk arises because of the fluctuation in interest rates. The Company’s objective in managing interest rate risk is to minimize the interest expense on liabilities and debt. The Company does not believe that the results of operations or cash flows would be affected to any significant degree by a sudden change in market interest rates.

●	Foreign<br>currency risk

The Company’s debt is denominated in US dollars. As well, the Company has certain revenue contracts which are denominated and settled in US dollars. The Company manages the risk of foreign exchange fluctuations by monitoring its’ US dollar cash flow. The net carrying value of these US dollar denominated balances is as follows:

As at<br><br> $(000’s CAD)	September 17,<br><br> 2021		December 31,<br><br> 2020		January 1,<br> 2020
Cash	$	2,198	$	37,302	$	120,256
Accounts Receivable	$	16,023	$	6,577	$	14,767
Long-term debt		—	$	684,641	$	776,073

If there was a 1% strengthening or weakening of the Canadian dollar against the US dollar, the corresponding impact would be as follows:

As at<br><br> $(000’s CAD)	September 17,<br> 2021		December 31,<br> 2020		January 1,<br> 2020
Cash	$	22	$	373	$	1,203
Accounts receivable	$	160	$	66	$	148
Long-term debt		—	$	6,846	$	7,761
●	Commodity<br>price risk
---	---

Commodity price risk arises due to fluctuations in commodity prices. Management believes it is prudent to manage the variability in cash flows by occasionally entering into hedges. The Company utilizes various types of derivatives and financial instruments, such as swaps and options, and fixed-price normal course of business purchase and sale contracts to manage fluctuations in cash flows. As at September 17, 2021, the Company has no outstanding derivatives in place.

F-65

Japan

Canada Oil Sands Limited Notes to the Financial Statements

15.	CAPITALMANAGEMENT

The Company’s capital consists primarily of shareholders equity, working capital and long-term debt. The Company manages its capital structure to maximize financial flexibility by making adjustments in light of changes in economic conditions and the risk characteristics of the underlying assets. Each potential investment opportunity is assessed to determine the nature and amount of capital required together with the relative proportions of debt and equity to be deployed to ensure that the Company will be able to continue as a going concern and to provide a return to shareholders through exploring and developing its assets. As the Company is in the early stages of these activities, it will meet its capital requirements through continued funding from the existing shareholder or the ultimate parent company. The Company does not presently utilize any quantitative measures to monitor its capital and is not subject to any externally imposed capital requirements.

16.	LONG-TERMDEBT

As at<br><br> $(000’s CAD)	September 17,<br><br> 2021		December 31, <br><br>2020			January 1,<br> 2020
US dollar denominated debt:
LIBOR plus 0.1%	$	—	$	343,764		$	389,640
LIBOR plus 1.0%		—	$	343,764		$	389,640
Amortization of debt issuance costs and issuer discount		—		(2,887	)		(3,207	)
Total term debt	$	—	$	684,641		$	776,073
Current portion of long-term debt	$	—	$	76,392		$	77,928
Long-term debt	$	—	$	608,249		$	698,144

Interest is paid semi-annually on the outstanding principal amount during the life of the loan. The principal repayment schedule included semi-annual equal installments, which began in June 2020 and was scheduled to end in December 2029.

As a condition of Greenfire Resources Inc. acquiring all of the issued and outstanding shares of the Company, all outstanding bank debt was required to be settled prior to September 17, 2021. In order to facilitate the settlement of the outstanding loans, on September 9, 2021 CANOS contributed additional capital to the Company, thus increasing the value of their stated capital. Approximately $305 million of the debt was repaid with the remaining balance of $341 million in debt being assumed by the Parent Company. No additional shares were issued.

17.	DILUENT,TRANSPORTATION & MARKETING AND OPERATING EXPENSES

(000’s)	For the period ended September 17, 2021		For the year ended December 31, 2020
Diluent expense	171,174	$	158,272
Transportation and marketing	27,853		39,368
Operating expenses	56,479		67,409
Total expenses	255,506	$	265,049

All values are in US Dollars.

Diluent, transportation & marketing and operating expenses are costs incurred in the field that are required in order to produce and get bitumen to a sales market.

F-66

Japan

Canada Oil Sands Limited Notes to the Financial Statements

18.	FINANCINGAND INTEREST

(000’s)	For the period ended September 17, 2021		For the year ended December 31, 2020
Accretion on long-term debt	7,455	$	13,791
Guarantee fees	3,348		7,290
Interest on settlement of lease liability	31		77
Accretion on decommissioning liabilities	320		444
Financing and interest expense	11,154	$	21,602

All values are in US Dollars.

19.	COMMITMENTSAND CONTINGENCIES

The Company has lease commitments related to office premises (Note 10). The Company also has transportation agreements mainly related to pipeline transportation services. Future minimum amounts payable under these commitments are as follows:

$(000’s)
Office leases	155	361	—	—	—	—	—	516
Transportation	7,804	30,027	30,111	30,231	29,175	28,110	249,569	405,567
Total	7,959	30,388	30,111	30,231	29,175	28,110	249,569	406,083

The Company is currently involved in legal claims associated with the normal course of operations and it believes that any liabilities that might arise from such matters, to the extent not provided for, are not likely to have a material effect on its financial statements**.**

20.	RELATEDPARTY TRANSACTIONS

The following related party transactions occurred in the normal course of business and are recorded as income (expense) or capital items in the Company’s financial statements.

(000’s)	For the period ended September 17, 2021			For the year ended December 31, 2020
Operating, general and administrative expenses and financing(a)	(3,140	)	$	(4,888	)
Exploration expenses(b)	(89	)		—
Plant and equipment expenditure(c)	(15	)		(47	)
Other income(d)	11			12
Reimbursement for costs incurred on behalf of related parties(e)	82			50
Services provided by management(f)	(493	)		(4,922	)

All values are in US Dollars.

(a)	These<br>costs were paid to the Parent Company for expat services and to Japan Petroleum Exploration Co., Ltd. for guarantee fees.
(b)	All<br>exploration expenses were paid to JGI, Inc.
---	---
(c)	Reimbursements<br>to the Parent Company for plant and equipment costs.
---	---
(d)	The<br>Company also provided accounting and other management services to Japex Canada Ltd and Japex Montney Ltd.
---	---
(e)	Reimbursement<br>from the Parent Company and Japex Montney Ltd. for miscellaneous costs which were incurred by the Company.
---	---
(f)	One<br>of the Company’s external directors is employed by Bennett Jones L.L.P. The firm provides legal advisory services to the Company.<br>The above amounts represent amounts paid to Bennett Jones L.L.P. for legal services.
---	---

F-67

Japan

Canada Oil Sands Limited Notes to the Financial Statements

20.	RELATEDPARTY TRANSACTIONS (cont.)

The following related party amounts were outstanding:

As at $(000’s)	September 17,<br><br> 2021		December 31, <br><br>2020		January 1,<br> 2020
Due from:
Japex Canada Ltd.	$	—	$	6	$	18
	$	—	$	6	$	18
Due to:
Japan Petroleum Exploration Co., Ltd.	$	—	$	712	$	788
Canada Oil Sands Co., Ltd.		—		235		221
JGI, Inc.		—		60		—
	$	—	$	1,007	$	1,009

The corporation considers directors and officers of the Company as key management personnel.

(000’s)	For the period ended September 17, 2021		For the year ended December 31, 2020
Salaries, benefits, and director fees	3,886	$	3,207

All values are in US Dollars.

21.	SUPPLEMENTALCASH FLOW INFORMATION

The following table reconciles the net changes in non-cash working capital and other liabilities from the balance sheet to the statement of cash flows:

(000’s)	For the period ended September 17, 2021			For the year ended December 31, 2020
Change in accounts receivable	(27,404	)	$	1,452
Change in inventories	(278	)		9,298
Change in due from related parties	6			12
Change in prepaid expenses and deposits	(1,691	)		(148	)
Change in accounts payable and accrued liabilities	(24,689	)		(4,422	)
Change in due to related parties	(1,007	)		(2	)
	(55,063	)	$	6,190
Related to operating activities	(61,929	)	$	8,812
Related to investing activities (accrued additions to PP&E)	6,866		$	(2,622	)
Net change in non-cash working capital	(55,063	)	$	6,190
Cash interest paid (included in operating activities)	7,947		$	20,837
Cash interest received (included in operating activities)	43		$	925

All values are in US Dollars.

F-68

Japan

Canada Oil Sands Limited Notes to the Financial Statements

22.	SHARECAPITAL

31,000,000 common shares are authorized to be issued.

	Period ended<br> September 17, 2021					Year ended<br> December 31, 2020
$(000’s)	Number of<br><br> shares		Amount			Number of<br><br> shares		Amount
Shares outstanding
Balance, beginning of period		30,302,083	$	1,010,871			30,302,083	$	1,010,871
Return of capital		—		(47,500	)		—		—
Capital contribution		—		645,674			—		—
Balance, end of period		30,302,083	$	1,609,045			30,302,083	$	1,010,871

As a condition of Greenfire Resources Inc. acquiring all of the issued and outstanding shares of the Company, The JBIC loan and Mizuho loan were required to be settled prior to September 17, 2021. In order to facilitate the settlement of the outstanding loans, on September 9, 2021 CANOS contributed additional capital to the Company, thus increasing the value of their stated capital. This was completed with two separate transactions. In the first transaction CANOS provided JACOS with a $305 million capital contribution to repay the half of the outstanding loans. In the second transaction CANOS assumed the remaining outstanding debt of $341 million in exchange for additional stated capital in JACOS. No additional shares were issued with the transactions. In August 2021, $47.5 million of capital was returned to CANOS.

	Period ended September 17, 2021		Year ended December 31, 2020
Weighted average shares outstanding-basic and diluted		30,302,083		30,302,083

23.	SUBSEQUENTEVENTS

In the first half of 2021 the Company initiated a strategic alternatives process. Such alternatives may have included a corporate sale or sale of the Company’s assets. On September 17, 2021, Greenfire Resources Inc. acquired all the issued and outstanding common shares of the Company in exchange for $346 million.

F-69

Exhibit 1.1(2)

	ARTICLES OF AMENDMENT<br><br> <br><br><br> <br>Business Corporations Act<br><br> <br>(Alberta)<br><br> <br>Section 29 or 177
	1.	Name of Corporation:<br><br> <br><br><br> <br>Greenfire Resources Ltd.	2.	Corporate AccessNumber:<br><br> <br>**<br><br> <br>2024778934**
3.	The Articles of the above named corporation are amendedas follows:
---	---

Pursuant to subsection 173(1)(n) of the Business Corporations Act (Alberta), the Articles of Greenfire Resources Ltd. (the “Corporation”) be and are hereby amended by deleting the current Schedule “B” referred to in the Articles of the Corporation in its entirety and replacing it with the attached Schedule “B”, so that the attached Schedule “B” reflects the current Schedule “B” of the Articles of the Corporation.

Bryce Safton	(Signed) “Bryce Safton”
Name of Person Authorizing (please print)	Signature
Solicitor	September 19, 2023
Title (please print)	Date

This information is being collected for purposes of corporate registry records in accordance with the Business Corporations Act. Questions about the collection of this information can be directed to the Freedom of Information and Protection of Privacy Co-ordinator for Alberta Registries, Research and Program Support, 3^rd^ Floor, Commerce Place, 10155 – 102 Street, Edmonton, Alberta T5J 4L4, (780) 422-7330.

SCHEDULE “B”

a.	To the fullest extent permitted by applicable law (i) M3-Brigade Sponsor III LP<br>(the “Sponsor”) and its Affiliates, including for greater certainty any individuals nominated by the Sponsor or its Affiliates<br>to the Board of Directors of the Corporation (each, a “Sponsor Director”) have the right to, and shall have no duty (fiduciary,<br>contractual or otherwise) not to, directly or indirectly engage in and possess interests in other business ventures of every type and<br>description, including those engaged in the same or similar business activities or lines of business as the Corporation or any of its<br>subsidiaries or deemed to be competing with the Corporation or any of its subsidiaries, on its own account, or in partnership with, or<br>as an employee, officer, director or shareholder of any other person, with no obligation to offer to the Corporation or any of its subsidiaries,<br>or any other investor or holder of equity interests of the Corporation the right to participate therein (ii) the Sponsor, its Affiliates<br>and each Sponsor Director may invest in, or provide services to, any person that directly or indirectly competes with the Corporation<br>or any of its subsidiaries; and (iii) in the event that the Sponsor, its Affiliates or any Sponsor Director, respectively, acquires knowledge<br>of a potential transaction or matter (unless, with respect to any such Sponsor Director, such transaction or matter is expressly presented<br>to such Sponsor Director solely in such person’s capacity as a director of the Corporation) that may be a corporate or other business<br>opportunity for the Corporation or any of its subsidiaries, such person shall have no duty (fiduciary, contractual or otherwise) to communicate<br>or present such corporate opportunity to the Corporation or any of its subsidiaries or holder of equity interests of the Corporation,<br>as the case may be, and, notwithstanding any provision of these Articles of Incorporation to the contrary, shall not be liable to the<br>Corporation or any of its subsidiaries or any other holder of equity interests of the Corporation (or its respective affiliates) for breach<br>of any duty (fiduciary, contractual or otherwise) by reason of the fact that such person, directly or indirectly, pursues or acquires<br>such opportunity for itself, directs such opportunity to another person or does not present such opportunity to the Corporation or any<br>of its subsidiaries or any other holder of equity interests of the Corporation (or its respective affiliates). For the purpose of this<br>Schedule “B”, “Affiliate” shall mean, (A) the Sponsor’s affiliates, (B) any portfolio company in which the<br>Sponsor or any of the Sponsor’s affiliates or investment fund affiliates have made a debt or equity investment (and vice versa) or (C)<br>any of their respective limited partners, non-managing members or other similar direct or indirect investors.
b.	The directors of the Corporation may, without authorization of the shareholders:
---	---
(i)	borrow money on the credit of the Corporation;
---	---
(ii)	issue, reissue, sell or pledge debt obligations of the Corporation;
---	---
(iii)	subject to the Business Corporations Act (Alberta), give a guarantee on<br>behalf of the Corporation to secure performance of an obligation of any person; and
---	---
(iv)	mortgage, hypothecate, pledge or otherwise create a security interest in all or<br>any property of the Corporation, owned or subsequently acquired, to secure any obligation of the Corporation.
---	---
c.	The directors may, by resolution, delegate the powers referred to in subsection<br>(b) hereof to a director, a committee of directors or an officer.
---	---
d.	The directors may, between annual general meetings, appoint one or more additional<br>directors of the Corporation to serve until the next annual general meeting, but the number of additional directors shall not at any time<br>exceed 1/3 of the number of directors who held office at the expiration of the last annual general meeting of the Corporation.
---	---

EXhibit2.2

PLAN OF ARRANGEMENT

UNDER SECTION 193 OF THE

BUSINESS CORPORATIONSACT (Alberta)

Article 1

INTERPRETATION

1.1	Definitions

Unless the context otherwise requires, the following words and phrases used in this Plan of Arrangement shall have the meanings hereinafter set out:

“ABCA” means the Business Corporations Act (Alberta).

“Affected Person” has the meaning ascribed to such term in Section 6.2(a).

“Aggregate Equity Value” means the sum of (i) $75,000,000, plus (ii) the Aggregate Value of the Share Consideration.

“Aggregate Equity Value per Share” means the aggregate value per Company Share to be received pursuant to this Plan of Arrangement, equal to the quotient of (i) Aggregate Equity Value, divided by (ii) the sum of (A) aggregate number of Company Shares outstanding immediately prior to the Effective Time, plus (B) the aggregate number of Company Shares issuable on full exercise (if the Bond Warrant Exercise Price was being paid in cash) of the Company Bond Warrants outstanding immediately prior to the Effective Time multiplied by the Bond Warrant Cashless Exercise Ratio (provided that for the purpose of the Bond Warrant Cashless Exercise Ratio, the Bond Warrant Fair Market Value shall be deemed to be the Estimated Aggregate Equity Value per Share), plus (C) the aggregate number of Company Shares that would be issuable on full exercise (if the Performance Warrant Exercise Price was being paid in cash) of the Company Performance Warrants outstanding immediately prior to the Effective Time multiplied by the Performance Warrant Cashless Exercise Ratio (provided that for the purpose of the Performance Warrant Cashless Exercise Ratio the Performance Warrant Market Price per Company Share shall be deemed to be the Estimated Aggregate Equity Value per Share).

“Aggregate Value of the Share Consideration” means the product of (i) the number of Consideration Shares comprising the Share Consideration, multiplied by (ii) $10.10.

“Amalco” has the meaning ascribed to such term in Section 3.1(l).

“Amalco Preferred Shares” means the preferred shares in the capital of Amalco.

“Ancillary Documents” has the meaning given to such term in the Business Combination Agreement.

“Arrangement” means an arrangement under Section 193 of the ABCA on the terms and subject to the conditions set forth in this Plan of Arrangement, subject to any amendments or variations to this Plan of Arrangement made in accordance with the terms of the Business Combination Agreement and this Plan of Arrangement or made at the direction of the Court in accordance with the Interim Order or Final Order with the prior written consent of SPAC and the Company, each such consent not to be unreasonably withheld, conditioned or delayed.

“Arrangement DissentRights” has the meaning ascribed to such term in Section 4.1(a).

“Articles of Arrangement” means the articles of arrangement in respect of the Arrangement required under Subsection 193(10) of the ABCA to be sent and filed with the Registrar after the Final Order has been granted, which shall include this Plan of Arrangement and otherwise be in form and content satisfactory to the Company and SPAC, each acting reasonably.

“Bond Warrant CashlessExercise Ratio” has the meaning ascribed to “Cashless Exercise Ratio” in the Company Warrant Agreement.

“Bond Warrant ExercisePrice” has the meaning ascribed to “Exercise Price” in the Company Warrant Agreement.

“Bond Warrant FairMarket Value” has the meaning ascribed to “Fair Market Value” in the Company Warrant Agreement.

“Broker” has the meaning ascribed to such term in Section 6.2(b)(i).

“Business CombinationAgreement” means the business combination agreement made as of December 14, 2022 by and among SPAC, PubCo, Merger Sub, Canadian Merger Sub and the Company, including all exhibits and schedules annexed thereto, as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof.

“Business Day” means a day, other than a Saturday or Sunday, on which commercial banks in New York, New York, Wilmington, Delaware and Calgary, Alberta are open for the general transaction of business.

“Canadian Merger Sub” means 2476276 Alberta ULC*,* an Alberta unlimited liability corporation, and a direct, wholly owned subsidiary of PubCo.

“Canadian Merger SubCommon Shares” means the common shares in the capital of Canadian Merger Sub.

“Cash Consideration” means $75,000,000.

“Cash Percentage” means the percentage equal to 100 multiplied by the number equal to the quotient of (i) the Cash Consideration, divided by (ii) the Aggregate Equity Value.

“Certificate of Arrangement” means the certificate or other proof of filing to be issued by the Registrar pursuant to Subsection 193(11) or Subsection 193(12) of the ABCA in respect of the Articles of Arrangement on the Closing Date.

“Class A Consideration” has the meaning given to such term in the Business Combination Agreement.

“Class B Consideration” has the meaning given to such term in the Business Combination Agreement.

“Closing” has the meaning given to such term in the Business Combination Agreement.

“Closing Conditions” means the conditions precedent set out in Article IX of the Business Combination Agreement.

“Closing Date” means the date on which Closing occurs in accordance with Section 2.1 of the Business Combination Agreement.

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Company” means Greenfire Resources Inc., an Alberta corporation.

“Company Amalgamation” has the meaning ascribed to such term in Section 3.1(l).

“Company AmalgamationEffective Time” has the meaning ascribed to such term in Section 3.1(l).

“Company ArrangementResolution” means a special resolution of the Company Shareholders and the Company Performance Warrantholders in respect of the Arrangement to be approved by Written Resolution or considered at the Company Securityholders Meeting, in substantially the form attached to the Business Combination Agreement as Exhibit E.

“Company Bond Warrant” means, as of any determination time, each warrant to purchase Company Shares that is outstanding, unexercised and issued pursuant to the Company Warrant Agreement.

“Company DissentingShareholder” means a registered holder of Company Shares who dissents in respect of the Company Arrangement Resolution in strict compliance with the Arrangement Dissent Rights, and who is ultimately entitled to be paid fair value for their Company Shares.

“Company Dividend” has the meaning ascribed to such term in Section 3.1(f).

“Company Employee Shareholders” means all holders of the Company Shares immediately prior to the Effective Time other than the Company Founders.

“Company Equity Plan” means the Greenfire Resources Inc. Performance Warrant Plan, dated February 2, 2022, as amended from time to time.

“Company Expenses” has the meaning given to such term in the Business Combination Agreement.

“Company Founders” means Annapurna Limited, Spicelo Limited, Modro Holdings LLC and Allard Services Limited.

“Company PerformanceWarrant” means, as of any determination time, each warrant to purchase Company Shares issued pursuant to the Company Equity Plan that is outstanding and unexercised, whether vested or unvested.

“Company PerformanceWarrantholders” means the holders of the Company Performance Warrants.

“Company PreferredShares” has the meaning ascribed to such term in Section 3.1(d).

“Company Required Approval” has the meaning given to such term in the Business Combination Agreement.

“Company Securityholders” means collectively, the Company Shareholders and Company Performance Warrantholders.

“Company Securityholders Meeting” means a special meeting of the Company Shareholders and Company Performance Warrantholders, including any adjournment or postponement thereof in accordance with the terms of the Business Combination Agreement, that may be convened as provided by the Business Combination Agreement and the Interim Order to permit the Company Securityholders to consider, and if deemed advisable approve, the Company Arrangement Resolution.

“Company Shareholders” means the holders of Company Shares as of any determination time prior to the Company Amalgamation Effective Time.

“Company Shares” means the common shares in the capital of the Company.

“Company Warrant” means, as of any determination time, each Company Bond Warrant and each Company Performance Warrant.

“Company Warrant Agreement” means that certain Warrant Agreement, dated as of August 12, 2021 between GAC Holdco Inc. (n/k/a Greenfire Resources Inc.), as issuer and The Bank of New York Mellon, as warrant agent, as may be amended from time to time.

“Compensatory ShareIssuance Agreement” means the agreement to be entered into among PubCo, Merger Sub and SPAC at the Effective Time (as defined in the Business Combination Agreement) of the Merger in a form to be mutually agreed on, each acting reasonably.

“Consideration Shares” means the PubCo Common Shares comprising the Share Consideration.

“Court” means the Court of King’s Bench of Alberta, or other court as applicable.

“Depositary” means one or more banks or trust companies jointly selected by the Company and the SPAC, each acting reasonably, to act as depositary and/or paying agent, which Depositary will perform the duties described in one or more depositary and/or paying agent agreements, each in form and substance reasonably acceptable to the Company and the SPAC; provided that notwithstanding the foregoing, the Company and the SPAC may agree that the Company and/or PubCo will perform certain depositary and/or paying agent duties, in which case references to the Depositary shall also include the Company and/or PubCo in such capacity, where applicable.

“Effective Date” means the date on which the Articles of Arrangement are filed with the Registrar.

“Effective Time” means the time at which the Articles of Arrangement are filed with the Registrar on the Effective Date.

“Employee Cash Consideration” means an amount equal to the product of (i) the Cash Percentage, multiplied by (ii) the Aggregate Equity Value per Share, multiplied by (iii) aggregate number of Company Shares outstanding held by the Company Employee Shareholders (less any Company Shares held by Company Dissenting Shareholders) immediately prior to the Effective Time.

“Employee Trust” means the trust to be established for the benefit of the Company Employee Shareholders.

“Employee Trust Debt” means an amount equal to the Employee Cash Consideration.

“Employee Trust Note” means a promissory note owing from PubCo to the Employee Trust with a principal amount equal to the Employee Trust Debt and is payable on demand.

“Equity Securities” means any share, share capital, capital stock, partnership, membership, joint venture or similar interest in any Person (including any stock appreciation, phantom stock, profit participation or similar rights), and any option, warrant, restricted share units, right or security (including debt securities) convertible, exchangeable or exercisable therefor.

“Estimated AggregateEquity Value per Share” means the Aggregate Equity Value per Share as estimated by the Company and agreed to by the SPAC with the Company delivering such estimate in conjunction with the Payment Spreadsheet in accordance with Section 2.2(a) of the Business Combination Agreement with the Company and the SPAC following the procedures in Section 2.2(a) of the Business Combination Agreement to agree on the Estimated Aggregate Equity Value per Share.

“Exchanged CompanyPreferred Shares” means a number of Company Preferred Shares held by each Company Employee Shareholder equal to the product of (i) the number of Company Preferred Shares held by such Company Employee Shareholder, multiplied by (ii) the Share Percentage.

“FinalOrder” means the final order of the Court pursuant to Section 193 of the ABCA, in a form acceptable to the Company and SPAC, each acting reasonably, approving the Arrangement, as such order may be amended, modified, supplemented or varied by the Court, provided that any such amendment is reasonably acceptable to each of the Company and SPAC, or with the consent of both the Company and SPAC, each such consent not to be unreasonably withheld, conditioned or delayed, at any time prior to the Effective Time or, if appealed, then, unless such appeal is withdrawn, abandoned or denied, as affirmed or as amended, on appeal, provided that any such amendment is acceptable to each of both the Company and SPAC, each acting reasonably.

“FoundersDividend Amount” means an amount equal to the product of (i) the Cash Percentage, multiplied by (ii) the Aggregate Equity Value per Share, multiplied by (iii) aggregate number of Company Shares outstanding held by the Company Founders immediately prior to the Effective Time.

“Governmental Entity” means any United States, Canadian, international or other (a) federal, state, provincial, local, municipal or other government entity, (b) governmental or quasi-governmental entity of any nature (including any governmental agency, branch, department, official, bureau, ministry or entity and any court or other tribunal), or (c) body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature, including any arbitrator or arbitral tribunal (public or private).

“Intended Tax Treatment” has the meaning given to such term in the Business Combination Agreement.

“Interim Order” means the interim order of the Court contemplated by Section 3.1(a) of the Business Combination Agreement and made pursuant to Section 193 of the ABCA, in a form acceptable to the Company and SPAC, each acting reasonably, providing for, among other things, obtaining the Company Required Approval, as the same may be amended, modified, supplemented or varied by the Court, provided that any such amendment is reasonably acceptable to each of the Company and SPAC, or with the consent of SPAC and the Company, each such consent not to be unreasonably withheld, conditioned or delayed.

“Law” means, to the extent applicable, any federal, state, local, provincial, municipal, foreign, national or supranational statute, law (including statutory, common, civil or otherwise), act, statute, ordinance, treaty, rule, code, regulation, judgment, award, order, decree or other binding directive or guidance issued, promulgated or enforced by a Governmental Entity having jurisdiction over a given matter.

“Letters of Transmittal” means, if determined necessary by the Company (i) a letter of transmittal to be sent by the Company to Company Shareholders and/or (ii) a letter of transmittal to be sent by the Company to the Company Performance Warrantholders; in each case, in connection with the Arrangement.

“Lien” means any mortgage, pledge, security interest, encumbrance, lien, license or sub-license, charge or other similar encumbrance or interest (including, in the case of any Equity Securities, any voting, transfer or similar restrictions).

“Merger” has the meaning given to such term in the Business Combination Agreement.

“Merger Sub” means DE Greenfire Merger Sub Inc., a Delaware corporation and a direct, wholly owned subsidiary of PubCo.

“Other WithholdingAgent” has the meaning ascribed to such term in Section 6.2(a).

“Parties” means, collectively, the parties to the Business Combination Agreement and “Party” refers to any one of them.

“Payment Spreadsheet” has the meaning given to such term in the Business Combination Agreement.

“Performance WarrantCashless Exercise Ratio” means the ratio obtained by (i) (A) the Performance Warrant Market Price minus (B) the Performance Warrant Exercise Price, divided by (ii) the Performance Warrant Market Price.

“Performance WarrantExercise Price” means the exercise price for each Company Performance Warrant as set out in the warrant certificate representing each such Company Performance Warrant.

“Performance WarrantMarket Price” has the meaning ascribed to “Market Price” in the Company Equity Plan.

“Person” means an individual, partnership, corporation, limited partnership, limited liability company, joint stock company, unincorporated organization or association, trust, joint venture or other similar entity, whether or not a legal entity.

“Plan of Arrangement” means this Plan of Arrangement, subject to any amendments or variations to such plan made in accordance with the Business Combination Agreement and this Plan of Arrangement or made at the direction of the Court in the Final Order with the prior written consent of SPAC and the Company (such agreement not to be unreasonably withheld, conditioned or delayed by either SPAC or the Company, as applicable).

“Post-Closing Directors” means the following individuals: Robert Logan; Jonathan Klesch; Julian McIntyre; Venkat Siva; Matthew Perkal; and William Derek Aylesworth.

“PubCo” means Greenfire Resources Ltd., an Alberta corporation.

“PubCo Common Shares” means the common shares in the capital of PubCo.

“PubCo PerformanceWarrant Plan” means the Performance Warrant Plan of PubCo, as contemplated by the Business Combination Agreement, which amends and restates the Company Equity Plan.

“PubCo PerformanceWarrants” means warrants to purchase PubCo Common Shares with each such warrant entitling the holder to purchase one PubCo Common Share subject to the terms and conditions of the PubCo Performance Warrant Plan.

“PubCo Warrant” means each warrant to purchase one PubCo Common Share at an exercise price of $11.50 per share, subject to adjustment, on the terms and subject to the conditions set forth in the PubCo Warrant Agreement.

“PubCo Warrant Agreement” means the Warrant Agreement, dated as of October 21, 2021, by and between SPAC and Continental Stock Transfer & Trust Company, as trustee, as amended or amended and restated, and as assumed by PubCo at the Closing.

“Registrar” means the Registrar of Corporations for the Province of Alberta or the Deputy Registrar of Corporations appointed under section 263 of the ABCA.

“Share Consideration” has the meaning given to such term in the Business Combination Agreement.

“Share Exchange Ratio” means the ratio obtained by (i) the number of Consideration Shares comprising the Share Consideration, divided by (ii) the sum of (A) aggregate number of Company Shares outstanding immediately prior to the Company Amalgamation Effective Time, plus (B) the aggregate number of Company Shares issuable on full exercise (if the Performance Warrant Exercise Price was being paid in cash) of the Company Performance Warrants outstanding immediately prior to the Company Amalgamation Effective Time.

“Share Percentage” means the percentage equal to 100 multiplied by the number equal to the quotient of (i) the Aggregate Value of the Share Consideration, divided by (ii) the Aggregate Equity Value.

“Shareholder Agreement” means the Shareholders Agreement between the Company and certain of the Company Shareholders dated August 5, 2021.

“SPAC” means M3-Brigade Acquisition III Corp., a Delaware corporation.

“SPAC Class A Shares” means the Class A common stock of SPAC, with a par value $0.0001 per share.

“SPAC Class B Shares” means the Class B common stock of SPAC, with a par value $0.0001 per share.

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership or other legal entity of which (a) if a corporation, a majority of the total voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof, or (b) if a limited liability company, partnership, association or other business entity (other than a corporation), a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person or a combination thereof and for this purpose, a Person or Persons own a majority ownership interest in such a business entity (other than a corporation) if such Person or Persons shall be allocated a majority of such business entity’s gains or losses or shall be a, or control any, managing director or general partner of such business entity (other than a corporation).

“Supplemental WarrantAgreement” means the First Supplemental Warrant Agreement to be entered into between the Company and The Bank of New York Mellon, as warrant agent, amending the Company Warrant Agreement.

“Supporting CompanyShareholder” has the meaning given to such term in the Business Combination Agreement.

“Surviving Company” has the meaning given to such term in the Business Combination Agreement.

“Tax Act” means the Income Tax Act (Canada) and the regulations promulgated thereunder.

“Taxes” has the meaning given to such term in the Business Combination Agreement.

“Transactions” means the transactions contemplated by the Business Combination Agreement, this Plan of Arrangement and the Ancillary Documents.

“Withholding Obligation” has the meaning ascribed to such term in Section 6.2(a).

“Written Resolution” has the meaning given to such term in the Business Combination Agreement.

“Written ResolutionDeadline” has the meaning given to such term in the Business Combination Agreement.

1.2	Interpretation

In this Plan of Arrangement, unless otherwise expressly stated or the context otherwise requires:

(a)	the division of this Plan of Arrangement into Articles and Sections and the further division thereof into<br>subsections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation<br>of this Plan of Arrangement. Unless otherwise indicated, any reference in this Plan of Arrangement to an Article, Section or subsection<br>refers to the specified Article, Section or subsection to this Plan of Arrangement;
(b)	the terms “hereof”, “herein”, “hereunder” and similar expressions<br>refer to this Plan of Arrangement and not to any particular section or other portion hereof and include any agreement or instrument supplementary<br>or ancillary hereto;
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(c)	time periods within or following which any payment is to be made or act is to be done shall be calculated<br>by excluding the day on which the period commences and including the day on which the period ends. Where the last day of any such time<br>period is not a Business Day, such time period shall be extended to the next Business Day following the day on which it would otherwise<br>end;
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(d)	words importing the singular number only shall include the plural and vice versa and words importing the<br>use of any gender shall include all genders;
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(e)	the word “including” means “including, without limiting the generality of the foregoing”;
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(f)	a reference to a statute is to that statute as now enacted or as the statute may from time to time be<br>amended, re-enacted or replaced and includes any regulation, rule or policy made thereunder;
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(g)	references to “$” or “dollar” or “US$” shall be references to United<br>States dollars and references to “CAD$” and “Canadian dollar” shall be references to Canadian dollars; for the<br>purposes of converting various amounts from Canadian dollars to United States dollars or from United States dollars to Canadian dollars<br>for the purposes of the calculations in this Plan of Arrangement, a Canadian dollar to United States dollar exchange rate shall be selected<br>by the Company and agreed to by the SPAC with the Company delivering such exchange rate in conjunction with the Payment Spreadsheet in<br>accordance with Section 2.2(c) of the Business Combination Agreement with the Company and the SPAC following the procedures in Section<br>2.2(c) of the Business Combination Agreement to agree on such exchange rate;
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(h)	no Party to the Business Combination Agreement, nor its respective counsel, shall be deemed the drafter<br>of this Plan of Arrangement for purposes of construing the provisions hereof, and all provisions of this Plan of Arrangement shall be<br>construed according to their fair meaning and not strictly for or against any Party.
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Article 2

BUSINESS COMBINATION AGREEMENT AND BINDING EFFECT

2.1	Business Combination Agreement

This Plan of Arrangement is made pursuant to and subject to the provisions of the Business Combination Agreement and constitutes an arrangement as referred to in Section 193 of the ABCA. If there is any inconsistency or conflict between the provisions of this Plan of Arrangement and the provisions of the Business Combination Agreement, the provisions of this Plan of Arrangement shall govern.

2.2	Binding Effect

This Plan of Arrangement and the Arrangement, upon the filing of the Articles of Arrangement and the issuance of the Certificate of Arrangement, shall become effective commencing at the Effective Time and shall be binding without any further authorization, act or formality on the part of the Court or any Person, on the Company Shareholders (including Company Dissenting Shareholders), Company Performance Warrantholders, the holders of any Company Bond Warrants, the holders of any SPAC Class A Shares, the holders of any SPAC Class B Shares, the Company, SPAC, the Surviving Company, Merger Sub, Canadian Merger Sub, and PubCo, from and after the Effective Time.

2.3	Filing of Articles of Arrangement

The Certificate of Arrangement shall be conclusive evidence that the Arrangement has become effective and that each of the steps, events or transactions set out in Section 3.1 and, subject to the satisfaction or waiver of the Closing Conditions, Section 3.1, have become effective in the sequence and at the times set out therein.

Article 3

ARRANGEMENT

3.1	Effective Time Transactions

Commencing at the Effective Time on the Closing Date, the following transactions shall occur and shall be deemed to occur at the times and in the order set out below without any further authorization, act or formality required on the part of any Person, except as otherwise expressly provided herein:

(a)	the Shareholder Agreement shall be terminated;
(b)	each Company Share held by Company Dissenting Shareholders shall be deemed to have been transferred to<br>the Company (free and clear of any Liens) and:
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(i)	such Company Dissenting Shareholders shall cease to be holders of such Company Shares or to have any rights<br>as holders of such Company Shares other than the right to be paid fair value for such Company Shares, as set out in Section 4.1 hereof;
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(ii)	all such Company Shares acquired shall be cancelled and, in connection therewith, the stated capital account<br>maintained by the Company for the Company Shares shall be reduced by an amount equal to the result obtained by multiplying the stated<br>capital of the Company Shares immediately prior to giving effect to this Section 3.1(b), by the number of Company Shares so cancelled<br>divided by the number of issued and outstanding Company Shares immediately prior to giving effect to this Section 3.1(b); and
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(iii)	such Company Dissenting Shareholders’ names shall be removed as the holders of such Company Shares<br>from the registers of Company Shares maintained by or on behalf of the Company;
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(c)	PubCo shall lend the Employee Trust an amount equal to the Employee Trust Debt;
(d)	the articles of the Company shall be amended to create a new class of shares that the Company is authorized<br>to issue, to be designated as “Preferred Shares, Series 1” (the “Company Preferred Shares”), which shares<br>shall be unlimited in number and have attached thereto the rights, privileges, restrictions and conditions set out in Schedule A to this<br>Plan of Arrangement;
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(e)	each Company Share held by Company Employee Shareholders shall be deemed to be transferred to the Company<br>(free and clear of any Liens), and in exchange each Company Employee Shareholder shall be issued one (1) Company Preferred Share (free<br>and clear of any Liens) for each Company Share so exchanged, and (i) the Company Employee Shareholders shall cease to have any rights<br>as the registered holders of Company Shares; and (ii) each such Company Share held by the Company shall be cancelled in accordance with<br>the ABCA;
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(f)	the Company shall declare and pay on the remaining Company Shares a dividend (the “Company Dividend”)<br>in an aggregate amount equal to the Founders Dividend Amount which dividend shall be payable to the Company Founders on a pro rata basis<br>based on the number of Company Shares held by each of such Company Founders;
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(g)	all of the outstanding Company Shares shall be consolidated such that immediately following such consolidation<br>the number of outstanding Company Shares shall equal the number obtained by the product of (i) the number of outstanding Company Shares<br>immediately prior to such consolidation, multiplied by (ii) the Share Percentage; provided that notwithstanding the provisions<br>of any agreement, certificate, equity plan or other document that provides for the issuance of Company Shares on conversion, exercise<br>or exchange of securities or other rights outstanding under such agreements, certificates, equity plans or other documents including,<br>without limitation, the Company Equity Plan and the Company Warrant Agreement, the consolidation under this Section 3.1(g) shall not result<br>in the adjustment of the number of Company Shares issuable (or any associated exercise or conversion price) pursuant to any outstanding<br>securities or other rights that are convertible, exercisable or exchangeable into Company Shares;
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(h)	the Exchanged Company Preferred Shares held by Company Employee Shareholders shall be deemed to be transferred<br>to the Company (free and clear of any Liens), and in exchange each Company Employee Shareholder shall be issued one (1) Company Share<br>(free and clear of any Liens) for each Exchanged Company Preferred Share so exchanged and the Company Employee Shareholders shall cease<br>to have any rights as the registered holders of such Exchanged Company Preferred Shares;
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(i)	in accordance with the terms of the Company Warrant Agreement, as amended by the Supplemental Warrant<br>Agreement, the Cash Percentage of Company Bond Warrants held by each holder of Company Bond Warrants shall be deemed to be cancelled in<br>exchange for payment by the Company of an amount equal to the Aggregate Equity Value per Share less the Bond Warrant Exercise Price for<br>each such Company Bond Warrant that is cancelled;
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(j)	the Cash Percentage of Company Performance Warrants held by each Company Performance Warrantholder shall<br>be deemed to be cancelled in exchange for payment by the Company of an amount equal to the Aggregate Equity Value per Share less the Performance<br>Warrant Exercise Price for each such Company Performance Warrant that is cancelled;
(k)	each Company Bond Warrant outstanding immediately prior to this Section 3.1(k) shall be deemed to be exercised<br>for Company Shares pursuant to the terms of the Company Warrant Agreement as amended by the Supplemental Warrant Agreement, and each former<br>holder of Company Bond Warrants outstanding immediately prior to this Section 3.1(k) shall receive Company Shares on a net basis, such<br>that, without the exchange of any funds, the holder of Company Bond Warrants immediately prior to the operation of this Section 3.1(k)<br>shall receive such number of Company Shares as shall equal the product of (A) the number of Company Shares for which such Company Bond<br>Warrant is exercisable as of the date of exercise (if the Bond Warrant Exercise Price were being paid in cash) multiplied by (B)<br>the Bond Warrant Cashless Exercise Ratio; provided that for the purpose of the Bond Warrant Cashless Exercise Ratio the Bond Warrant Fair<br>Market Value per Company Share shall be deemed to be the Aggregate Equity Value per Share;
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(l)	immediately following the step contemplated by Section 3.1(k) (the “Company Amalgamation EffectiveTime”), Canadian Merger Sub shall amalgamate with and into the Company (the “Company Amalgamation”) to form<br>one corporate entity with the same effect as if they had amalgamated under the ABCA except that the separate legal existence of the Company<br>shall not cease and the Company shall survive the Company Amalgamation notwithstanding the issue by the Registrar of a certificate of<br>amalgamation and the assignment of a new corporate access number (and for the avoidance of doubt, (i) the Company Amalgamation is intended<br>to qualify as an amalgamation for the purposes of the ABCA and as defined in subsection 87(1) of the Tax Act, be governed by subsections<br>87(1), 87(2), 87(4), 87(5) and 87(9) of the Tax Act, as applicable, and (ii) for U.S. federal income tax purposes, it is intended that<br>the Company Amalgamation, taken together with the Merger (and any other relevant transactions as set forth in the Business Combination<br>Agreement), qualify for the Intended Tax Treatment, and upon the Company Amalgamation becoming effective:
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(i)	the legal existence of the Company shall survive and continue with the Company being referred to herein<br>after the Company Amalgamation as “Amalco”;
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(ii)	the separate legal existence of Canadian Merger Sub shall cease without Canadian Merger Sub being liquidated<br>or wound up, and the property, rights and interests of Canadian Merger Sub shall become the property, rights and interests and obligations<br>of Amalco;
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(iii)	Amalco shall continue to be liable for the liabilities and obligations of each of Canadian Merger Sub<br>and the Company;
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(iv)	any existing cause of action, claim or liability to prosecution of the Canadian Merger Sub and the Company<br>is unaffected by the Company Amalgamation;
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(v)	a civil, criminal or administrative action or proceeding pending by or against either Canadian Merger<br>Sub or the Company prior to the Company Amalgamation may be continued to be prosecuted by or against Amalco;
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(vi)	a conviction against, or a ruling, order or judgment in favour of or against, either Canadian Merger Sub<br>or the Company may be enforced by or against Amalco;
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(vii)	the name of Amalco shall continue to be “Greenfire Resources Inc.”;
(viii)	the registered office of Amalco shall continue to be the same registered office as the Company;
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(ix)	the articles of amalgamation of Amalco will continue to be the same as the articles of incorporation of<br>the Company and the certificate of amalgamation of Amalco is deemed to be the certificate of incorporation of Amalco;
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(x)	the by-laws of Amalco shall continue to be the same as the by-laws of the Company;
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(xi)	the directors of the Company immediately prior to the Company Amalgamation shall continue to be the initial<br>directors of Amalco, to hold office until the next annual meeting of the shareholders of Amalco or until their successors are elected<br>or appointed;
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(xii)	each Company Preferred Share outstanding immediately prior to the Company Amalgamation Effective Time<br>shall be converted into one (1) Amalco Preferred Share (free and clear of any Liens) and the holders of the Company Preferred Shares shall<br>cease to have any rights as the registered holders of Company Preferred Shares;
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(xiii)	each Company Share outstanding immediately prior to the Company Amalgamation Effective Time shall be converted<br>into PubCo Common Shares, and each holder of Company Shares immediately prior to the Company Amalgamation Effective Time shall be issued<br>such number of PubCo Common Shares (free and clear of any Liens) as is equal to the number of Company Shares held by such holder immediately<br>prior to the Company Amalgamation multiplied by the Share Exchange Ratio, and the holders of the Company Shares shall cease to have any<br>rights as the registered holders of Company Shares;
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(xiv)	each Canadian Merger Sub Common Share shall be converted into one (1) common share of Amalco;
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(xv)	each Company Performance Warrant outstanding immediately prior to the Company Amalgamation Effective Time<br>shall be converted into such number of PubCo Performance Warrants as is equal to the number of Company Performance Warrants held by such<br>holder immediately prior to the Company Amalgamation Effective Time multiplied by the Share Exchange Ratio (and each such PubCo Performance<br>Warrant shall entitle the holder to purchase one (1) PubCo Common Share at an exercise price equal to the exercise price of the Company<br>Performance Warrant prior to such conversion divided by the Share Exchange Ratio), and each Company Performance Warrant so converted shall<br>be, and shall be deemed to be, cancelled; the Company Equity Plan shall be deemed to be amended and restated by the PubCo Performance<br>Warrant Plan and the rights and obligations of the Company pursuant to the Company Equity Plan shall become the rights and obligations<br>of PubCo as amended and restated by the PubCo Performance Warrant Plan and the Company shall have no further obligations under the Company<br>Equity Plan;
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(xvi)	an amount equal to the aggregate paid-up capital (for the purposes of the Tax Act) of the Company Shares<br>outstanding immediately prior to the Company Amalgamation Effective Time (excluding, for the avoidance of doubt, any Company Share in<br>respect of which the holder exercises Arrangement Dissent Rights) shall be added to the stated capital of the PubCo Common Shares;
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(xvii)	an amount equal to the aggregate paid-up capital (for the purposes of the Tax Act) of the Canadian Merger<br>Sub Common Shares outstanding immediately prior to the Company Amalgamation Effective Time shall be added to the stated capital of Amalco;<br>and
(xviii)	an amount equal to the aggregate paid-up capital (for the purposes of the Tax Act) of the Company Preferred<br>Shares outstanding immediately prior to the Company Amalgamation Effective Time shall be added to the stated capital of the Amalco Preferred<br>Shares;
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(m)	immediately following the step contemplated by Section 3.1(l), each issued and outstanding Amalco Preferred<br>Share shall be, and shall be deemed to be, transferred to the Employee Trust (free and clear of any Liens) in exchange for the Employee<br>Cash Consideration to be paid by the Employee Trust to such holders of the Amalco Preferred Shares pro rata based on the number of Amalco<br>Preferred Shares held by each such holder of Amalco Preferred Shares, and such former holders of Amalco Preferred Shares shall cease to<br>be holders of Amalco Preferred Shares and the name of such holders shall be removed from the register of holders of Amalco Preferred Shares,<br>and the Employee Trust shall become the holder of the Amalco Preferred Shares so exchanged and shall be added to the register of holders<br>of Amalco Preferred Shares in respect of such Amalco Preferred Shares;
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(n)	immediately following the step contemplated by Section 3.1(m), each issued and outstanding Amalco Preferred<br>Share held by the Employee Trust shall be, and shall be deemed to be, transferred to PubCo (free and clear of any Liens) in exchange for<br>the Employee Trust Note; and the Employee Trust shall cease to be a holder of Amalco Preferred Shares and the name of the Employee Trust<br>shall be removed from the register of holders of Amalco Preferred Shares, and PubCo shall become the holder of the Amalco Preferred Shares<br>so exchanged and shall be added to the register of holders of Amalco Preferred Shares in respect of such Amalco Preferred Shares;
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(o)	upon issuance of the Employee Trust Note as contemplated by Section 3.1(n), the Employee Trust Debt owing<br>by the Employee Trust to PubCo, shall be deemed to be satisfied by way of set-off against the principal amount of the Employee Trust Note,<br>and the Employee Trust Note shall be deemed to be paid and settled in full, and cancelled;
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(p)	the one (1) PubCo Common Share held by Amalco shall be cancelled for no consideration;
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(q)	5,000,000 PubCo Warrants shall be issued to the holders of PubCo Common Shares and PubCo Performance Warrants<br>such that:
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(i)	a number of PubCo Warrants shall be issued to the holders of PubCo Common Shares equal to the product<br>of (A) 5,000,000 multiplied by (B) the number of PubCo Common Shares outstanding, divided by (C) the number of PubCo Common<br>Shares outstanding plus the number of PubCo Performance Warrants outstanding, on a pro rata basis based on the number of PubCo<br>Common Shares held by each such holder;
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(ii)	a number of PubCo Warrants shall be issued to the holders of PubCo Performance Warrants equal to the product<br>of (A) 5,000,000 multiplied by (B) the number of PubCo Performance Warrants outstanding, divided by (C) the number of PubCo<br>Common Shares outstanding plus the number of PubCo Performance Warrants outstanding, on a pro rata basis based on the number of<br>PubCo Performance Warrants held by each such holder;
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(r)	Merger Sub shall merge with and into SPAC in accordance with the Business Combination Agreement and, as<br>part of the Merger, PubCo shall issue such number of PubCo Common Shares as comprise the Class A Consideration and Class B Consideration<br>to the former holders of the SPAC Class A Shares and the SPAC Class B Shares;
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(s)

at the Effective Time (as defined in the Business Combination Agreement) of the Merger, in consideration of the issuance of the PubCo Common Shares in the Merger pursuant to Section 3.1(r), the Surviving Company will issue 109,999,999 fully paid, non-assessable shares of the common stock of the Surviving Company to PubCo pursuant to the Compensatory Share Issuance Agreement, which Surviving Company shares will have an aggregate fair market value equal to the fair market value of the PubCo Common Shares issued by PubCo pursuant to Section 3.1(r) as part of the Merger; and

(t)

the directors of PubCo immediately prior to the Effective Time shall resign and be replaced by the Post-Closing Directors, to each hold office until their respective term expires in accordance with the articles of incorporation of PubCo, or until their successors are elected or appointed.

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Article 4

DISSENT RIGHTS

4.1	Dissent Rights
(a)	Pursuant to the Interim Order, a Company Shareholder may exercise dissent rights with respect to the Company<br>Shares held by such holder (“Arrangement Dissent Rights”) in connection with the Arrangement pursuant to and in accordance<br>Section 191 of the ABCA, all as the same may be modified by the Interim Order, the Final Order and this Section 4.1(a); provided that<br>the written notice of dissent to the Company Arrangement Resolution, contemplated by Subsection 191(5) of the ABCA must be sent to and<br>received by the Company not later than 5:00 P.M. (Calgary time) on the Business Day that is two (2) Business Days before either (A) the<br>Written Resolution Deadline, or (b) if the Company and SPAC determine to call and hold the Company Securityholders Meeting, the Company<br>Securityholders Meeting. Company Shareholders who exercise Arrangement Dissent Rights and who:
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(i)	are ultimately determined to be entitled to be paid fair value from the Company for the Company Shares<br>in respect of which they have exercised Arrangement Dissent Rights, will, notwithstanding anything to the contrary contained in Section<br>191 of the ABCA, be deemed to have irrevocably transferred such Company Shares to the Company pursuant to Section 3.1(b) in consideration<br>of such fair value, and in no case will the Company, Amalco, SPAC, Merger Sub, Canadian Merger Sub, PubCo, or any other Person be required<br>to recognize such holders as holders of Company Shares after the Effective Time, and each Company Dissenting Shareholder will cease to<br>be entitled to the rights of a Company Shareholder in respect of the Company Shares in relation to which such Company Dissenting Shareholder<br>has exercised Arrangement Dissent Rights and the securities register of the Company shall be amended to reflect that such former holder<br>is no longer the holder of such Company Shares as at and from the Effective Time; or
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(ii)	are ultimately not entitled, for any reason, to be paid fair value for the Company Shares in respect of<br>which they have exercised Arrangement Dissent Rights, will be deemed to have participated in the Arrangement on the same basis as a Company<br>Shareholder who has not exercised Arrangement Dissent Rights.
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(b)	For greater certainty, in addition to any other restrictions in the Interim Order and under Section 191<br>of the ABCA, none of the following shall be entitled to exercise Arrangement Dissent Rights: (i) Company Shareholders who vote or have<br>instructed a proxyholder to vote such Company Shares in favour of the Company Arrangement Resolution; (ii) Company Shareholders who have<br>executed and returned a copy of the Written Resolution to the Company; and (iii) any other Person who is not a registered holder of Company<br>Shares immediately prior to the date that the Company Required Approval is received for the Company Arrangement Resolution either pursuant<br>to the Written Resolution or at the Company Securityholders’ Meeting. A Person may only exercise Arrangement Dissent Rights in respect<br>of all, and not less than all, of such Person’s Company Shares.
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Article 5

CERTIFICATES AND PAYMENTS

5.1	Certificates and Payments
(a)	At or before the Effective Time:
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(i)	the Company shall deposit, or cause to be deposited, in escrow with the Depositary:
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(A)	for the benefit of and to be held on behalf of the Company Shareholders entitled to receive the Company<br>Dividend pursuant to Section 3.1(f), the Founders Dividend Amount;
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(B)	for the benefit of and to be held on behalf of the holders of Company Bond Warrants pursuant to Section<br>3.1(i), an amount equal to the aggregate of the Aggregate Equity Value per Share less the Bond Warrant Exercise Price for each such Company<br>Bond Warrant that is to be cancelled pursuant to Section 3.1(i); and
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(C)	for the benefit of and to be held on behalf of the Company Performance Warrantholders pursuant to Section<br>3.1(j), an amount equal to the Aggregate Equity Value per Share less the Performance Warrant Exercise Price for each such Company Performance<br>Warrant that is to be cancelled pursuant to Section 3.1(j);
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(ii)	PubCo shall deposit, or cause to be deposited, in escrow with the Depositary for the benefit of and to<br>be held on behalf of the Company Shareholders entitled to receive the PubCo Common Shares pursuant to Section 3.1(l)(xiii), certificates<br>representing, or other evidence regarding the issuance of, the PubCo Common Shares that such Company Shareholders are entitled to receive<br>under the Arrangement (calculated without reference to whether any Company Shareholder has exercised Arrangement Dissent Rights);
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(iii)	PubCo shall deposit, or cause to be deposited, in escrow with the Depositary for the benefit of and to<br>be held on behalf of the Company Shareholders and Company Performance Warrantholders entitled to receive the PubCo Warrants pursuant to<br>Section 3.1(q) certificates representing, or other evidence regarding the issuance of, the PubCo Warrants that such Company Shareholders<br>and Company Performance Warrantholders are entitled to receive under the Arrangement; and
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(iv)	the Employee Trust shall deposit, or cause to be deposited, in escrow with the Depositary for the benefit<br>of and to be held on behalf of the holders of Amalco Preferred Shares entitled to receive the Employee Cash Consideration pursuant to<br>Section 3.1(m), an amount equal to the aggregate Employee Cash Consideration for each Amalco Preferred Shares that are to be cancelled<br>pursuant to Section 3.1(m).
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(b)	Upon the surrender to the Depositary of a certificate (or where applicable, confirmation of book-entry<br>only entries) which immediately prior to the Company Amalgamation Effective Time represented outstanding Company Shares, Company Bond<br>Warrants or Company Performance Warrants, as applicable, together with a duly completed and executed Letter of Transmittal (if required<br>by the Company) and such additional documents and instruments as the Depositary may reasonably require (if any), the Depositary shall<br>deliver:
(i)	with respect to a Company Employee Shareholder, book-entry only entries representing the PubCo Common<br>Shares and PubCo Warrants that such Company Employee Shareholder is entitled to and payment by cheque or wire transfer representing such<br>Company Employee Shareholders pro rata entitlement to the Employee Cash Consideration;
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(ii)	with respect to a Company Founder, book-entry only entries and/or certificates representing the PubCo<br>Common Shares and PubCo Warrants that such Company Founder is entitled to and payment by cheque or wire transfer representing such Company<br>Founder’s pro rata entitlement to the Founders Dividend Amount;
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(iii)	with respect to a holder of Company Performance Warrants, book-entry only entries representing the PubCo<br>Warrants that such holder of Company Performance Warrants is entitled to, certificates representing the PubCo Performance Warrants that<br>such holder of Company Performance Warrants is entitled to (unless the Company determines in its sole discretion to retain such certificates<br>for safekeeping), and payment by cheque or wire transfer representing the Aggregate Equity Value per Share less the Performance Warrant<br>Exercise Price for each such Company Performance Warrant held by such holder that is to be cancelled pursuant to Section 3.1(j);
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(iv)	with respect to a holder of Company Bond Warrants, book-entry only entries representing the PubCo Common<br>Shares and PubCo Warrants that such holder of Company Bond Warrants is entitled to and payment by cheque or wire transfer representing<br>the Aggregate Equity Value per Share less the Bond Warrant Exercise Price for each such Company Bond Warrant held by such holder that<br>is to be cancelled pursuant to Section 3.1(i).
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(c)	Until surrendered as contemplated by this Article 5, each certificate which immediately prior to<br>the Effective Time represented outstanding Company Shares or Company Warrants shall be deemed at all times after the Effective Time to<br>represent only the right to receive upon such surrender the PubCo Common Shares, PubCo Performance Warrants, PubCo Warrants and/or cash<br>payment which such holder is entitled to receive pursuant to Section 5.1(a)(i).
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(d)	Any certificate formerly representing Company Shares or Company Warrants that is not deposited, together<br>with all other documents required hereunder, on or before the last Business Day before the third anniversary of the Closing Date, and<br>any right or claim by or interest of any kind or nature, including the right of a former Company Shareholder, Company Performance Warrantholder<br>or holder of Company Bond Warrants to receive certificates (or where applicable, confirmation of book-entry only entries) representing<br>PubCo Common Shares, PubCo Performance Warrants or PubCo Warrants, or any portion of the Cash Consideration, to which such holder is entitled<br>pursuant to the Arrangement, shall terminate and be deemed to be surrendered and forfeited to PubCo for no consideration and such forfeited<br>PubCo Common Shares, PubCo Performance Warrants and PubCo Warrants shall be deemed to be cancelled.
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(e)	No Company Shareholder, Company Performance Warrantholder or holder of Company Bond Warrants shall be<br>entitled to receive any consideration with respect to the Company Shares or the Company Warrants other than the consideration to which<br>such holder is entitled to receive under the Arrangement and, for greater certainty, no such holder will be entitled to receive any interest,<br>dividend, premium or other payment in connection therewith.
(f)	All dividends payable with respect to any PubCo Common Share allotted and issued pursuant to this Plan<br>of Arrangement for which a certificate has not been issued shall be paid or delivered to the Depositary to be held by the Depositary in<br>trust for the registered holder thereof. The Depositary shall pay and deliver to any such registered holder, as soon as reasonably practicable<br>after application therefor is made by the registered holder to the Depositary in such form as the Depositary may reasonably require, such<br>dividends and any interest thereon to which such holder is entitled, net of applicable withholding and other taxes.
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(g)	In no event shall any Person be entitled to a fractional PubCo Common Share, PubCo Warrant or PubCo Performance<br>Warrant. Where the aggregate number of PubCo Common Shares, PubCo Warrants or PubCo Performance Warrants to be issued to a Person pursuant<br>to the Plan of Arrangement would result in a fraction of a PubCo Common Share, PubCo Warrant or PubCo Performance Warrant being issuable,<br>the number of PubCo Common Shares, PubCo Warrants or PubCo Performance Warrants to be received by such Person shall be rounded up or down<br>to the nearest whole PubCo Common Share, PubCo Warrant or PubCo Performance Warrant, with a fraction of 0.5 rounded up. No cash settlements<br>shall be made with respect to fractional securities eliminated by rounding. Cash payments made to any Person pursuant to the Arrangement<br>will be rounded up to the nearest cent.
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5.2	Lost Certificates
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In the event that any certificate which immediately prior to the Effective Time represented one or more outstanding Company Shares or Company Warrants that were transferred pursuant to Section 3.1 shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such certificate to be lost, stolen or destroyed, the Depositary shall pay or issue to such Person the consideration such Person would have been entitled to receive pursuant to the Arrangement had such share certificate not been lost, stolen or destroyed. The Person to whom such consideration is to be delivered shall, as a condition precedent to the delivery of such consideration, give a bond satisfactory to the Company, SPAC and the Depositary (acting reasonably) in such sum as the Company and SPAC may direct, or otherwise indemnify the Company and SPAC in a manner satisfactory to Company and SPAC, acting reasonably, against any claim that may be made against Company and SPAC with respect to the certificate alleged to have been lost, stolen or destroyed.

Article 6

EFFECT OF THE ARRANGEMENT; WITHHOLDINGS

6.1	Effect of Arrangement

From and after the Effective Time: (a) this Plan of Arrangement shall take precedence and priority over any and all Company Shares and Company Warrants issued prior to the Effective Time; (b) the rights and obligations of the Company Shareholders, Company Performance Warrantholders, holders of any Company Bond Warrants, holders of any SPAC Class A Shares, holders of any SPAC Class B Shares, the Company, the Supporting Company Shareholders, SPAC, the Surviving Company, Merger Sub, Canadian Merger Sub, and PubCo, and any transfer agent or other exchange agent therefor in relation thereto, shall be solely as provided for in this Plan of Arrangement; and (c) all actions, causes of action, claims or proceedings (actual or contingent and whether or not previously asserted) based on or in any way relating to any Company Shares and Company Warrants shall be deemed to have been settled, compromised, released and determined without liability except as set forth in this Plan of Arrangement.

6.2	Withholdings
(a)	Notwithstanding anything to the contrary contained herein, each of the Parties, the Depositary and any<br>other Person that has any withholding obligation with respect to any amount paid or deemed paid or transaction hereunder (any such Person,<br>an “Other Withholding Agent”) shall be entitled to deduct and withhold or direct a Party, the Depositary or any Other<br>Withholding Agent to deduct and withhold on their behalf, from any consideration paid, deemed paid or otherwise deliverable to any Person<br>under this Plan of Arrangement (an “Affected Person”), such amounts as are required to be deducted or withheld under<br>the Tax Act, the Code or any provision of any applicable Tax Law (a “Withholding Obligation”). Such deducted or withheld<br>amounts shall be timely remitted to the appropriate Governmental Entity as required by applicable Law. To the extent that amounts are<br>so deducted or withheld and remitted to the appropriate Governmental Entity, such deducted or withheld amounts shall be treated for all<br>purposes of this Plan of Arrangement as having been paid to the Affected Person to whom such amounts would otherwise have been paid or<br>deemed paid.
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(b)	The Parties, the Depositary and any Other Withholding Agent shall also have the right to:
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(i)	withhold and sell, or direct a Party, the Depositary or any Other Withholding Agent to withhold and sell<br>on their behalf, on their own account or through a broker (the “Broker”), and on behalf of any Affected Person; or
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(ii)	require the Affected Person to irrevocably direct the sale through a Broker and irrevocably direct the<br>Broker to pay the proceeds of such sale to a Party, the Depositary or any Other Withholding Agent as appropriate (and, in the absence<br>of such irrevocable direction, the Affected Person shall be deemed to have provided such irrevocable direction),
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such number of PubCo Common Shares delivered or deliverable to such Affected Person pursuant to this Plan of Arrangement as is necessary to produce sale proceeds (after deducting commissions payable to the Broker and other costs and expenses) sufficient to fund any Withholding Obligations. Any such sale of PubCo Common Shares shall be affected on a public market (or in such other manner as determined appropriate by the Parties acting reasonably) and as soon as practicable following the Closing Date. Each of the Parties, the Depositary, the Broker or any Other Withholding Agent, as applicable, shall act in a commercially reasonable manner in respect of any Withholding Obligation; however, none of the Parties, the Depositary, the Broker or any Other Withholding Agent will have or be deemed to have any fiduciary duty to any shareholder of PubCo, any stockholder of SPAC, any Company Shareholder, any holder of Company Bond Warrants or any Company Performance Warrantholder and will not be liable for any loss arising out of any sale of such PubCo Common Shares, including any loss relating to the manner or timing of such sales, the prices at which the PubCo Common Shares are sold or otherwise.

Article 7

AMENDMENTS

7.1	Amendments
(a)	The Company or SPAC may amend, modify and/or supplement this Plan of Arrangement at any time and from<br>time to time prior to the Effective Time, provided that each such amendment, modification and/or supplement must:
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(i)	be set out in writing;
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(ii)	be approved by the Company and SPAC, each acting reasonably; and
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(iii)	be filed with the Court and, if made following receipt of the Company Required Approval, whether by Written<br>Resolution or at the Company Securityholders Meeting, be communicated to the Company Shareholders and/or Company Performance Warrantholders<br>if and as required by the Court.
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(b)	Any amendment, modification or supplement to this Plan of Arrangement may be proposed by the Company or<br>SPAC at any time prior to receipt of the Company Required Approval, whether by Written Resolution or at the Company Securityholders Meeting,<br>with or without any other prior notice or communication, and if so proposed and accepted by the Persons executing the Written Resolution<br>or voting at the Company Securityholders Meeting (if applicable), shall become part of this Plan of Arrangement for all purposes.
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(c)	Any amendment, modification or supplement to this Plan of Arrangement that is approved or directed by<br>the Court following receipt of the Company Required Approval, whether by Written Resolution or at the Company Securityholders Meeting,<br>shall be effective only if: (i) it is consented to in writing by each of the Company and SPAC (in each case, acting reasonably);<br>and (ii) if required by the Court, it is consented to by some or all of the Company Shareholders and/or Company Performance Warrantholders<br>voting in the manner directed by the Court.
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(d)	Any amendment, modification or supplement to this Plan of Arrangement may be made following the Closing<br>Date unilaterally by PubCo, provided that it concerns a matter which, in the reasonable opinion of PubCo, is of an administrative nature<br>required to better give effect to the implementation of this Plan of Arrangement and is not adverse to the economic interest of any former<br>holder of Company Shares or any former holder of Company Warrants.
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(e)	This Plan of Arrangement may be withdrawn prior to the Effective Time in accordance with the Business<br>Combination Agreement.
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Article 8

FURTHER ASSURANCES

8.1	Further Assurances

Notwithstanding that the transactions and events set out herein shall occur and be deemed to occur in the order set out in this Plan of Arrangement without any further act or formality, each of the Parties to the Business Combination Agreement shall make, do and execute, or cause to be made, done and executed, all such further acts, deeds, agreements, transfers, assurances, instruments or documents as may reasonably be required by any of them in order further to document or evidence any of the transactions or events set out therein.

SCHEDULE “A” TO THE PLAN OF ARRANGEMENT

COMPANY ARTICLES OF AMENDMENT

The capital of the Corporation is divided into the classes set forth below having the respective rights and being subject to the respective restrictions, preferences, conditions and limitations hereinafter set forth.

The number of shares of each class is unlimited and the said classes of the Corporation’s authorized capital are:

(a)	Common<br>Shares (“Common Shares”) without nominal or par value which may be issued and allotted by the directors of the Corporation<br>from time to time for such consideration as may be fixed from time to time by such directors and otherwise having the designation, rights,<br>restrictions, conditions and limitations as are hereinafter provided; and
(b)	non-cumulative<br> redeemable Preferred Shares (“Preferred Shares”) without nominal or par<br> value and otherwise having the designation, rights, restrictions, conditions and limitations<br> as are hereinafter provided.
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The rights, restrictions, conditions and limitations attached or related to the aforesaid classes of the Corporation’s authorized capital are as follows:

I.	COMMON<br>SHARES

Unlimited number of Common Shares without nominal or par value to which shares shall be attached the following rights (i) to vote at any meeting of shareholders of the Corporation; (ii) to receive any dividend declared by the Corporation; and (iii) to receive the remaining property of the Corporation upon dissolution.

II.	PREFERRED<br>SHARES
2.1	Issuance<br>in Series
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The directors shall at any time and from time to time issue Preferred Shares in one or more series, each series to consist of an unlimited number of shares having the rights, privileges, restrictions and conditions as contained herein. Each such series of shares shall be designated consecutively commencing at Preferred Shares, Series I.

2.2	Stated<br>Capital Account
(a)	In<br> accordance with the provisions of subsection 28(3) of the Business Corporations Act<br> (Alberta), on the issuance of Preferred Shares of any particular series in exchange for property,<br> or shares of another class, or pursuant to an amalgamation referred to in section 182 of<br> the Business Corporations Act (Alberta) or an arrangement referred to in paragraphs<br> 193(1)(b) or (c) of the Business Corporations Act (Alberta), the directors of the<br> Corporation may add to the stated capital account maintained for the Preferred Shares of<br> that particular series the whole or any part of the amount of the consideration received<br> by the Corporation in the exchange.
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(b)	In<br> accordance with the provisions of subsection 44(2) of the Business Corporations Act<br> (Alberta), if Preferred Shares of any particular series are issued as payment of a dividend,<br> the directors may add all or a part of the value of those shares to the stated capital account<br> maintained or to be maintained for its Preferred Shares of that series.
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A-1

2.3	Redemption<br>Amount
(a)	The<br> price or consideration payable entirely in lawful money of Canada at which the Preferred<br> Shares of any particular series shall be redeemed (the “Redemption Amount”)<br> shall be set by the directors at the time of issuance.
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(b)	Where<br> the Preferred Shares of the particular series are issued as partial or total consideration<br> for the purchase by the Corporation of any assets or the conversion or exchange of any shares<br> (the “Purchased Assets”), the Redemption Amount shall be the amount of consideration<br> received therefor as determined by the directors of the Corporation at the time of issuance<br> of the Preferred Shares of the particular series and adjusted by the directors at any time<br> or times so as to ensure that the Redemption Amount of such Preferred Shares of such particular<br> series issued as partial or total consideration for the purchase by the Corporation of the<br> Purchased Assets shall equal the difference between the fair market value of the Purchased<br> Assets as at the date of purchase, conversion, or exchange by the Corporation and the aggregate<br> value of non-share consideration, if any, issued by the Corporation as partial consideration<br> for the Purchased Assets.
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(c)	For<br> greater certainty, such fair market value shall be determined by the directors of the Corporation<br> upon such expert advice as they deem necessary. Should, however, any competent taxing authority<br> at any time issue or propose to issue any assessment or assessments that impose or would<br> impose any liability for tax on the basis that the fair market value of the Purchased Assets<br> is other than the amount approved by the directors and if the directors or a competent Court<br> or tribunal agree with such revaluation and all appeal rights have been exhausted or all<br> times for appeal have expired without appeals having been taken or should the directors of<br> the Corporation otherwise determine that the fair market value of the Purchased Assets is<br> other than the amount previously approved by the directors, then the Redemption Amount of<br> the Preferred Shares of the particular series shall be adjusted nunc pro tunc pursuant<br> to the provisions of this paragraph to reflect the agreed upon fair market value and all<br> necessary adjustments, payments and repayments as may be required shall forthwith be made<br> between the proper parties.
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2.4	Voting<br>Rights
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(a)	Subject<br> to the Business Corporations Act (Alberta) and to paragraph (b), the holders of the<br> Preferred Shares of any particular series shall not, as such, be entitled to receive notice<br> of or to attend or vote at any meeting or meetings of the shareholders of the Corporation.
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(b)	Any<br> preference, right, condition or limitation attaching to the Preferred Shares of any particular<br> series can only be amended by a special resolution of the holders of each class of shares<br> of the Corporation each voting separately as a class.
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A-2

2.5	Dividend<br>Rights

When and if declared by the directors of the Corporation in their discretion, the holders of Preferred Shares of any particular series in any calendar year shall be entitled to receive out of the net profits or surplus of the Corporation properly applicable to the payment of dividends, a non-cumulative dividend at an annual rate equal to the prescribed rate of interest for the purposes of subsection 256(1.1) of the Income Tax Act (Canada) as at the time of issuance of the first Preferred Shares of such particular series on the Redemption Amount thereof; provided that subject to Article 1 dividends may be paid on the Common Shares without annual dividends having been declared on the Preferred Shares of any particular series; and further provided always that no dividends shall at any time be declared on issued and outstanding Preferred Shares of any particular series if the result of the payment of the dividend once declared would be to impair the ability of the Corporation immediately thereafter to redeem all of the issued and outstanding Preferred Shares.

2.6	Return<br>of Capital

Upon the liquidation, dissolution or winding-up of the Corporation, whether voluntary or otherwise, or other distribution of the assets of the Corporation or repayment of capital to its shareholders for the purpose of winding up its affairs, the holders of each series of the Preferred Shares shall be entitled to receive for each such share, in priority to the holders of the Common Shares, the Redemption Amount per share together with all declared but unpaid dividends thereon (herein referred to as the “Redemption Price”). After the payment to the holders of each series of Preferred Shares of the Redemption Price for each such share as aforesaid, the holders of each series of Preferred Shares shall have no right or claim to any of the remaining assets of the Corporation.

2.7	Parity<br>Relationship

If upon distribution of the remaining assets of the Corporation upon any liquidation, dissolution or winding up, whether voluntary or otherwise, or other distribution of the assets of the Corporation or repayment of capital to shareholders of the Corporation for the purpose of winding up its affairs, the assets of the Corporation shall be insufficient to permit payment in full to the holders of the Preferred Shares, the remaining assets of the Corporation shall be distributed to the holders of the Preferred Shares ratably in proportion to the amounts distributable to them as provided in Section 2.6.

2.8	Redemption

The Corporation may, upon giving notice as hereinafter provided in Section 2.10 redeem or purchase the whole or any part of the Preferred Shares of any series held by one or more shareholders on payment for each share to be redeemed or purchased of the lesser of:

(a)	the<br> aggregate Redemption Price of such shares being redeemed or purchased at the particular time;<br> and
(b)	the<br> realizable value of the net assets of the Corporation immediately before such redemption<br> or purchase as the case may be.
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2.9	Retraction<br>Privilege
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Upon written notice of any holder of Preferred Shares of any series which notice shall contain the information required by Section 2.10 and which shall be signed by the holder or his duly authorized attorney (in which case evidence of such authorization satisfactory to the Corporation shall accompany the notice) the Corporation shall, within ten days (or such other period of time as may be set at the time of issuance of the said Preferred Shares of that series) following the receipt of such notice at the registered office of the Corporation redeem or purchase all or such portion of the outstanding Preferred Shares of that series included in such notice, for the sum equal to the aggregate Redemption Price in the manner provided in Section 2.10.

A-3

2.10	Manner<br>of Redemption or Purchase
(a)	The<br> redemption or purchase of Preferred Shares of each series shall be made in the following<br> manner:
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(i)	The<br> Corporation shall, at least 30 days (or such other period of time as may be set at the time<br> of issuance of the said Preferred Shares) before the date specified for redemption or purchase<br> or such lesser period of time as may be unanimously agreed upon by the holders of all Preferred<br> Shares of each series then being redeemed or purchased, mail to each person, who at the date<br> of mailing, is the registered holder of the Preferred Shares of each series to be redeemed<br> or purchased, a notice in writing of the intention of the Corporation to redeem or purchase<br> such Preferred Shares of such series. Such notice shall be mailed to each such shareholder<br> at his address as it appears on the books of the Corporation, or in the event the address<br> of any such shareholder not so appearing, then the last known address of such shareholder,<br> provided, however, that an accidental failure or omission to give such notice to one or more<br> of such shareholders shall not affect the validity of such redemption or purchase as to the<br> other holders.
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(ii)	Such<br> notice shall set out the Redemption Price, whether the shares are being redeemed pursuant<br> to Section 36 of the Business Corporations Act (Alberta), or whether the shares are<br> being purchased pursuant to Section 34 of the Business Corporations Act (Alberta),<br> and the date on which redemption or purchase is to take place, and, if only part of the shares<br> held by the person to whom it is addressed are to be redeemed or purchased, the number thereof<br> so to be redeemed or purchased.
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(iii)	On<br> or after the date so specified for redemption or purchase, the Corporation shall pay or cause<br> to be paid to or to the order of the registered holders of the Preferred Shares of each series<br> to be redeemed or purchased, the Redemption Price thereof on presentation and surrender at<br> the head office of the Corporation, or any other place designated in such notice, of the<br> certificates for the Preferred Shares of each series called for redemption or purchase and<br> the certificates for such shares shall thereupon be cancelled and the shares represented<br> thereby be deemed to be redeemed or purchased. If only part of the shares represented by<br> any certificate are redeemed or purchased, a new certificate for the balance shall be issued<br> at the expense of the Corporation.
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(iv)	From<br> and after the date specified in any such notice, the Preferred Shares of each series called<br> for redemption or purchase shall cease to be entitled to dividends, and the holders thereof<br> shall not be entitled to exercise any of their rights of shareholders in respect thereof;<br> unless payment of the Redemption Price shall not be made upon the presentation of certificates<br> in accordance with the foregoing provisions, in which case the rights of the holders shall<br> remain unaffected.
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A-4

(v)	The<br> Corporation shall have the right at any time after mailing of the notice of its intention<br> to redeem or purchase any Preferred Shares of each series to deposit to a special account<br> in any chartered bank or any trust company in Canada named in such notice, the Redemption<br> Price of the shares so called for redemption or purchase, or the Redemption Price of such<br> number of said shares represented by certificates which have not at the date of such deposit<br> been surrendered by the holders thereof in connection with such redemption or purchase. The<br> deposit shall be made in such a manner that it will be paid without interest to or to the<br> order of the respective holders of such Preferred Shares of each series called for redemption<br> or purchase upon presentation and surrender to such bank or trust company of the share certificate<br> or certificates representing the same, and upon such deposit being made or upon the date<br> specified for the redemption or purchase in such notice, whichever is the later, the Preferred<br> Shares of each series in respect whereof such deposit shall have been made and be deemed<br> to be redeemed or repurchased and the rights of the holder thereof after such deposit or<br> such redemption or purchase date, as the case may be, shall be limited to receiving without<br> interest their proportionate share of the total Redemption Price so deposited against presentation<br> and surrender of the said certificates held by them respectively, and any interest allowed<br> on any such deposit shall belong to the Corporation.
(b)	If<br> only part of the outstanding Preferred Shares of a particular series are to be redeemed or<br> purchased at the option of the Corporation at any one time, the directors may, subject to<br> any contrary rights or restrictions set at the time of issuance of any Preferred Shares of<br> such series, in their absolute discretion determine the Preferred Shares of that series so<br> to be redeemed or purchased and such redemption or purchase need not be pro- rata to the<br> holding of any member or on any other fixed basis.
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III.	MISCELLANEOUS
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The capital of the Corporation may be increased, divided, converted, consolidated and dealt with from time to time and any shares of the original capital when dealt with in accordance or new capital may be issued having attached thereto any preferred, special, qualified or deferred rights, privileges, conditions or restrictions including any preference or priority in the payment of dividends or the distribution of assets, voting or otherwise over any other shares, whether common or preferred, and whether issued or not, and the articles of the Corporation may be varied as far as necessary to give effect thereto in accordance with the law then prevailing.

A-5

COMPANYPREFERRED SHARES, SERIES 1 PROVISIONS

The first series of Preferred Shares of the Corporation shall consist of an unlimited number of shares and shall be designated “Preferred Shares, Series 1”. In addition to the rights, privileges, restrictions and conditions attaching the Preferred Shares as a class, the Preferred Shares, Series 1 shall have attached thereto the rights, privileges, restrictions and conditions hereinafter set forth:

1.	Definitions

“AggregateEquity Value per Share” means CAD$76.59

2.	RedemptionAmount

The redemption price of a particular Preferred Share, Series 1 shall be equal to the Aggregate Equity Value per Share (the “RedemptionPrice”).

A-6

Exhibit 2.5

EXECUTION VERSION

INVESTOR RIGHTS AGREEMENT

THIS INVESTOR RIGHTS AGREEMENT (this “Agreement”), dated as of September 20, 2023, is made and entered into by Greenfire Resources Ltd., an Alberta corporation (the “Company”), M3-Brigade Sponsor III LP, a Delaware limited partnership (the “Sponsor”), certain former shareholders of Greenfire Resources Inc., an Alberta corporation (“Greenfire”), who received Company Common Shares and/or Company Warrants pursuant to the Business Combination Agreement, set forth on Schedule 1 hereto (such holders, the “Greenfire Holders”) and the parties set forth on Schedule 2 hereto (collectively, the “Investor Holders” and, collectively with the Sponsor, the Greenfire Holders and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 6.2 or Section 6.10 of this Agreement, the “Holders” and each, a “Holder”). Capitalized terms used but not defined herein shall have the meaning assigned to such terms in the Business Combination Agreement (as defined below).

RECITALS

WHEREAS, the Company has entered into that certain Business Combination Agreement, dated as of December 14, 2022, by and among the Company, M-3 Brigade Acquisition III Corp., a Delaware corporation (“SPAC”), Greenfire, DE Greenfire Merger Sub Inc., a Delaware corporation and 2476276 Alberta ULC, an Alberta unlimited liability corporation (as it may be amended, supplemented or restated from time to time, the “Business Combination Agreement”);

WHEREAS, immediately prior to the closing of the transactions contemplated by the Business Combination Agreement (the “Closing”) (after giving effect to certain forfeitures pursuant to the Business Combination Agreement), the Sponsor held 3,850,000 shares of SPAC Class B Shares;

WHEREAS, in connection with the Closing (after giving effect to certain forfeitures pursuant to the Business Combination Agreement), the Sponsor’s SPAC Class B Shares were converted and exchanged for 3,850,000 Company Common Shares;

WHEREAS, SPAC and the Sponsor are party to that certain Private Placement Warrants Purchase Agreement, dated as of October 21, 2021, pursuant to which the Sponsor purchased 5,786,667 SPAC Warrants in a private placement transaction occurring simultaneously with the closing of SPAC’s initial public offering;

WHEREAS, in connection with the Closing (after given effect to certain forfeiture pursuant to the Business Combination Agreement), the Sponsor’s SPAC Warrants were converted and exchanged for 2,526,667 Company Warrants;

WHEREAS, pursuant to the Plan of Arrangement, the Greenfire Holders received an aggregate of 41,129,044 Company Common Shares and 3,260,239 Company Warrants;

WHEREAS, on the date hereof, the Investor Holders (other than HT Investments, LLC, a Delaware limited liability company) purchased an aggregate of 4,177,091 Company Common Shares in a transaction exempt from registration under the Securities Act pursuant to the respective Subscription Agreements, entered into by and between the Company, SPAC and each of the Investor Holders (each, a “Subscription Agreement” and, collectively, the “Subscription Agreements”).

WHEREAS, SPAC, the Sponsor is party to that certain Registration Rights Agreement dated as of October 21, 2021 (the “Existing RegistrationRights Agreement”), pursuant to which, among other matters, the Sponsor was granted certain registration rights with respect to SPAC securities then held by the Sponsor; and

NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:

“AdditionalHolder” shall have the meaning given in Section 6.10.

“AdditionalHolder Shares” shall have the meaning given in Section 6.10.

“AdverseDisclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or the Chief Financial Officer of the Company, after consultation with counsel to the Company, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any Prospectus, in light of the circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration Statement were not being filed, declared effective or used, as the case may be, and (iii) the Company has a bona fide business purpose for not making such information public.

“Agreement” shall have the meaning given in the Preamble hereto.

“BlockTrade” shall have the meaning given in Section 2.4.1.

“Board” shall mean the Board of Directors of the Company.

“Business Combination Agreement” shall have the meaning given in the Recitals hereto.

“Closing” shall have the meaning given in the Recitals hereto.

“Closing Date” shall have the meaning given in the Business Combination Agreement.

“Commission” shall mean the Securities and Exchange Commission.

“Company” shall have the meaning given in the Preamble hereto and includes the Company’s successors by recapitalization, merger, consolidation, spin-off, reorganization or similar transaction.

“Company Common Shares” means the common shares in the capital of the Company.

“CompanyConvertible Notes” means the 9.00% convertible senior notes due 2028 of the Company.

“CompanyGoverning Documents” means the certificate and articles of incorporation and by-laws of the Company, as they may be amended from time to time.

“Company Warrants” means warrants to purchase Company Common Shares, whether vested or unvested.

“Competing Registration Rights” shall have the meaning given in Section 6.7.

“Demanding Holder” shall have the meaning given in Section 2.1.4.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

“ExistingRegistration Rights Agreement” shall have the meaning given in the Recitals hereto.

“Form F-1 Shelf” shall have the meaning given in Section 2.1.1.

“Form F-3 Shelf” shall have the meaning given in Section 2.1.1.

“Greenfire” shall have the meaning given in the Preamble hereto.

“Greenfire Holders” shall have the meaning given in the Preamble hereto.

“Holder Information” shall have the meaning given in Section 4.1.2.

“Holders” shall have the meaning given in the Preamble hereto, for so long as such person or entity holds any Registrable Securities.

“Independent Director” means a director who is “independent” for the purposes of the listing and corporate governance rules and regulations of NYSE.

“Investor Holders” shall have the meaning given in the Preamble hereto.

“Joinder” shall have the meaning given in Section 6.10.

“Maximum Number of Securities” shall have the meaning given in Section 2.1.5.

“MinimumOwnership Threshold” shall have the meaning given in Section 5.1.1.

“Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus or necessary to make the statements in a Registration Statement or Prospectus (in the case of a Prospectus, in light of the circumstances under which they were made) not misleading.

“NecessaryAction” means, with respect to any party and a specified result, all actions (to the extent such actions are not prohibited by applicable law and within such party’s control, and in the case of any action that requires a vote or other action on the part of the Board to the extent such action is consistent with fiduciary duties that the Company’s directors may have in such capacity) necessary to cause such result, including (a) calling special meetings of shareholders, (b) voting or providing a written consent or proxy, if applicable in each case, with respect to Company Common Shares (including any Underlying Common Shares), (c) causing the adoption of shareholders’ resolutions and amendments to the Company Governing Documents, (d) executing agreements and instruments, (e) making, or causing to be made, with governmental or regulatory entities or authorities, all filings, registrations or similar actions that are required to achieve such result and (f) nominating or appointing certain persons (including to fill vacancies) and providing the same level of efforts and provide the same level of support as is used and/or provided for the other director nominees of the Company for election of such persons to the Board in connection with the annual or special meeting of shareholders of the Company.

“NYSE” shall mean the New York Stock Exchange.

“PermittedTransferees” shall mean any person or entity to whom a Holder of Registrable Securities transfers such Registrable Securities, including prior to the expiration of any lock-up period applicable to such Registrable Securities (provided, in each case, such transfer is not prohibited by any applicable agreement between such Holder and/or their respective Permitted Transferees and the Company), and any transferee thereafter.

“PiggybackRegistration” shall have the meaning given in Section 2.2.1.

“Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.

“RegistrableSecurity” shall mean (a) any outstanding Company Common Shares (including any Company Common Shares distributable pursuant to the Business Combination Agreement and any Company Common Shares issued or issuable upon the exercise or conversion of any other security (including the Underlying Common Shares)) held by a Holder immediately following the Closing; (b) any outstanding Company Warrants (including any Company Common Shares issued or issuable upon the exercise of Company Warrants); (c) any Additional Holder Shares; (d) any Company Common Shares acquired by a Holder following the date hereof to the extent that such securities are (i) “restricted securities” (as defined in Rule 144), (ii) held by an “affiliate” (as defined in Rule 144) of the Company or (iii) otherwise cannot be sold pursuant to Rule 144 or any successor rule promulgated under the Securities Act (with no volume or other restrictions or limitations including as to manner or timing of sale); (e) any equity securities (including the Company Common Shares issued or issuable upon the exercise of any such equity security) of the Company issuable upon conversion of any working capital loans in an amount up to $1,500,000 made to the Company by a Holder (including the Working Capital Warrants and Company Common Shares issued or issuable upon the exercise of the Working Capital Warrants); and (f) any other equity security of the Company or any of its subsidiaries issued or issuable with respect to any securities referenced in clause (a), (b), (c), (d) or (e) above by way of a share dividend or share split or in connection with a recapitalization, merger, consolidation, spin-off, reorganization or similar transaction; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities upon the earliest to occur of: (A) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement by the applicable Holder; (B) so long as such Holder and its affiliates beneficially own less than one percent (1%) of the outstanding Company Common Shares (including any Underlying Common Shares), new certificates for such securities not bearing (or book entry positions not subject to) a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such securities shall have ceased to be outstanding; (D) so long as such Holder and its affiliates beneficially own less than one percent (1%) of the outstanding Company Common Shares (including any Underlying Common Shares) in the aggregate, such securities may be sold without registration pursuant to Rule 144 or any successor rule promulgated under the Securities Act (but with no volume or other restrictions or limitations including as to manner or timing of sale or the availability of current public information); (E) such securities have been sold without registration pursuant to Section 4(a)(1) of the Securities Act or Rule 145 promulgated under the Securities Act or any successor rules promulgated under the Securities Act; and (F) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.

“Registration” shall mean a registration, including any related Shelf Takedown, effected by preparing and filing a registration statement, Prospectus or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.

“RegistrationExpenses” shall mean the reasonable documented, out-of-pocket expenses of a Registration, including, without limitation, the following:

(A) all registration, listing and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any national securities exchange on which the Company Common Shares or Company Warrants are then listed;

(B) fees and expenses of compliance with securities or “blue sky” laws (including reasonable fees and disbursements of outside counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities and the fees and expenses of any “qualified independent underwriter” as such term is defined in FINRA Rule 5121);

(D) fees and disbursements of counsel for the Company;

(E) fees and disbursements of all independent registered public accountants of the Company, retained by the Company and any other persons, including special experts, incurred in connection with such Registration;

(F) all expenses in connection with the preparation, printing and filing of a Registration Statement, any Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to any Holders, underwriters and dealers and all expenses incidental to delivery of the Registrable Securities;

(G) the expenses incurred in connection with making “road show” presentations and holding meetings with potential investors to facilitate the sale of Registrable Securities in an Underwritten Offering; and

(H) in an Underwritten Offering, reasonable fees and expenses of one (1) legal counsel selected by the majority-in-interest of the Demanding Holders on an as-converted basis (including any Underlying Common Shares).

“RegistrationStatement” shall mean any registration statement that covers Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.

“RequestingHolders” shall have the meaning given in Section 2.1.5.

“SecuritiesAct” shall mean the Securities Act of 1933, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

“Shelf” shall mean the Form F-1 Shelf, the Form F-3 Shelf or any Subsequent Shelf Registration Statement, as the case may be.

“ShelfRegistration” shall mean a registration of securities pursuant to a registration statement filed with the Commission in accordance with and pursuant to Rule 415 promulgated under the Securities Act (or any successor rule then in effect).

“Shelf Takedown” shall mean an Underwritten Shelf Takedown or any proposed transfer or sale using a Registration Statement, including a Piggyback Registration or Block Trade.

“SPAC” has the meaning given to such term in the Recitals hereto.

“Sponsor” shall have the meaning given in the Preamble hereto.

“SponsorDirector” shall have the meaning given in Section 5.1.1.

“SponsorParties” means each of the Sponsor, its affiliates, its direct or indirect partners, members or equity holders, any of its or their officers, directors or employees and, with respect to such officers, directors or employees, any Permitted Transferees of such officers, directors or employees but excluding the Investor Holders and any Person which any Investor Holder Transfers any equity interest in the Company.

“SubscriptionAgreements” shall have the meaning given in the Recitals hereto.

“SubsequentShelf Registration Statement” shall have the meaning given in Section 2.1.2.

“Transfer” shall mean the (a) sale or assignment of, offer to sell, contract or agreement to sell, hypothecation, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b).

“UnderlyingCommon Shares” means any Company Common Shares issuable upon conversion of Company Convertible Notes.

“Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.

“UnderwrittenOffering” shall mean a Registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public (including for the avoidance of doubt a Block Trade).

“UnderwrittenShelf Takedown” shall have the meaning given in Section 2.1.4.

“WithdrawalNotice” shall have the meaning given in Section 2.1.6.

“WorkingCapital Warrants” shall mean the warrants to purchase Company Common Shares, if any, that are converted from loans made to SPAC of up to $1,500,000 by the Sponsor or an affiliate of the Sponsor or certain of SPAC’s officers and directors from time to time.

ARTICLE II

REGISTRATIONS AND OFFERINGS

2.1	Shelf Registration.

2.1.1 Filing. As soon as practicable but no later than 30 calendar days following the Closing Date, the Company shall submit to or file with the Commission a Registration Statement for a Shelf Registration on Form F-1 (the “Form F-1 Shelf”) or a Registration Statement for a Shelf Registration on Form F-3 (the “Form F-3 Shelf”), if the Company is then eligible to use a Form F-3 Shelf, in each case, covering the resale of all the Registrable Securities (determined as of two (2) business days prior to such submission or filing) on a delayed or continuous basis and shall use its commercially reasonable efforts to have such Shelf declared effective as soon as practicable after the submission or filing thereof, but no later than the earlier of (a) the ninetieth (90^th^) calendar day following the submission or filing date thereof if the Commission notifies the Company that it will “review” the Registration Statement and (b) the tenth (10^th^) business day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review. Such Shelf shall provide for the resale of the Registrable Securities included therein pursuant to any method or combination of methods legally available to, and requested by, any Holder named therein. The Company shall maintain a Shelf in accordance with the terms hereof, and shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements as may be necessary to keep a Shelf continuously effective, available for use to permit the Holders named therein to sell their Registrable Securities included therein and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. In the event the Company files a Form F-1 Shelf, the Company shall use its commercially reasonable efforts to convert the Form F-1 Shelf (and any Subsequent Shelf Registration Statement) to a Form F-3 Shelf as soon as practicable after the Company is eligible to use Form F-3. The Company’s obligation under this Section 2.1.1, shall, for the avoidance of doubt, be subject to Section 3.4. The Company shall, if requested by the Holder, use its commercially reasonable efforts to: (i) cause the removal of any restrictive legend related to compliance with the federal securities laws set forth on the Registrable Securities; (ii) cause its legal counsel to deliver an opinion, if necessary, to the transfer agent in connection with the instruction under subclause (i) to the effect that removal of such legends in such circumstances may be effected in compliance with the Securities Act; and (iii) issue Registrable Securities without any such legend in certificated or book-entry form or by electronic delivery through The Depository Trust Company, at the Holder’s option, within two (2) business days of such request, if (A) the Registrable Securities are registered for resale under the Securities Act and no suspension of the effectiveness of such registration statement, or of sales thereunder, is then in effect, (B) the Registrable Securities may be sold by the Holder without restriction under Rule 144 (excluding the public information requirement set forth in Rule 144(c)), including without limitation, any volume, manner of sale or similar requirements, or (C) the Holder has sold or transferred, or proposes to sell or transfer within five (5) business days of such request, Registrable Securities pursuant to the Registration Statement or in compliance with Rule 144. The Company’s obligation to remove legends under this Section 2.1.1 may be conditioned upon the Holder timely providing such representations and other documentation as are reasonably necessary and customarily required in connection with the removal of restrictive legends related to compliance with the federal securities laws.

2.1.2 Subsequent Shelf Registration. If any Shelf ceases to be effective under the Securities Act for any reason at any time while Registrable Securities are still outstanding, the Company shall, subject to Section 3.4, use its commercially reasonable efforts to as promptly as is reasonably practicable cause such Shelf to again become effective under the Securities Act (including using its commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness of such Shelf), and shall use its commercially reasonable efforts to as promptly as is reasonably practicable amend such Shelf in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of such Shelf or file an additional registration statement as a Shelf Registration (a “SubsequentShelf Registration Statement”) registering the resale of all Registrable Securities (determined as of two (2) business days prior to such filing). If a Subsequent Shelf Registration Statement is filed, the Company shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration Statement to become effective under the Securities Act as promptly as is reasonably practicable after the filing thereof (it being agreed that the Subsequent Shelf Registration Statement shall be an automatic shelf registration statement (as defined in Rule 405 promulgated under the Securities Act) if the Company is a well-known seasoned issuer (as defined in Rule 405 promulgated under the Securities Act) at the most recent applicable eligibility determination date) and (ii) keep such Subsequent Shelf Registration Statement continuously effective, available for use to permit the Holders named therein to sell their Registrable Securities included therein and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. Any such Subsequent Shelf Registration Statement shall be on Form F-3 to the extent that the Company is eligible to use such form. Otherwise, such Subsequent Shelf Registration Statement shall be on another appropriate form. The Company’s obligation under this Section 2.1.2, shall, for the avoidance of doubt, be subject to Section 3.4.

2.1.3 Additional Registrable Securities. Subject to Section 3.4, in the event that any Holder holds Registrable Securities that are not registered for resale on a delayed or continuous basis, the Company, upon written request of the Sponsor, a Greenfire Holder or an Investor Holder, shall use its commercially reasonable efforts to cause the resale of such Registrable Securities to be covered by either, at the Company’s option, any then available Shelf (including by means of a post-effective amendment) or by filing a Subsequent Shelf Registration Statement and cause the same to become effective as soon as practicable after such filing and such Shelf or Subsequent Shelf Registration Statement shall be subject to the terms hereof; provided, however, that the Company shall only be required to cause such Registrable Securities to be so covered twice per calendar year for each of the Sponsor, each Greenfire Holder and each Investor Holder; provided, further, that prior to making such filing with respect to any written request by a Holder, the Company shall notify the other Holders and provide such other Holders a reasonable opportunity to include additional Registrable Securities held by such other Holders in such filing.

2.1.4 Requests for Underwritten Shelf Takedowns. Subject to Section 3.4, at any time and from time to time when an effective Shelf is on file with the Commission, the Sponsor, an Investor Holder or a Greenfire Holder (any of the Sponsor, an Investor Holder or a Greenfire Holder being, in such case, a “Demanding Holder”) may request to sell all or any portion of its Registrable Securities in an Underwritten Offering that is registered pursuant to the Shelf (each, an “Underwritten ShelfTakedown”); provided that the Company shall only be obligated to effect an Underwritten Shelf Takedown if such offering shall include Registrable Securities proposed to be sold by the Demanding Holder, either individually or together with other Demanding Holders, with a total offering price reasonably expected to exceed, in the aggregate, (x) $10.0 million or (y) all remaining Registrable Securities held by the Demanding Holder (the “Minimum Takedown Threshold”). All requests for Underwritten Shelf Takedowns shall be made by giving written notice to the Company, which shall specify the approximate number of Registrable Securities proposed to be sold in the Underwritten Shelf Takedown. Subject to Section 2.4.4, the Underwriters for such offering (which shall consist of one or more reputable nationally recognized investment banks) shall be selected by the majority-in-interest of the Demanding Holders on an as-converted basis (including any Underlying Common Shares), subject to the Company’s prior approval (which shall not be unreasonably withheld, conditioned or delayed). The Sponsor, an Investor Holder and a Greenfire Holder may each demand not more than (i) one (1) Underwritten Shelf Takedown pursuant to this Section 2.1.4 within any six (6)-month period or (ii) two (2) Underwritten Shelf Takedowns pursuant to this Section 2.1.4 in any twelve (12)-month period; provided, however, that Company shall not be required to effect an aggregate of more than four Underwritten Shelf Takedowns pursuant to this Section 2.1.4 in any twelve (12)-month period. Notwithstanding anything to the contrary in this Agreement, the Company may effect any Underwritten Offering pursuant to any then effective Registration Statement, including a Form F-3, that is then available for such offering.

2.1.5 Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Shelf Takedown, in good faith, advises the Company, the Demanding Holders and the Holders requesting piggy back rights pursuant to this Agreement with respect to such Underwritten Shelf Takedown (the “Requesting Holders”) (if any) in writing that the dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other Company Common Shares (including any Underlying Common Shares) or other equity securities that the Company desires to sell and the Company Common Shares (including any Underlying Common Shares) or other equity securities, if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights held by any other stockholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, before including any Company Common Shares or other equity securities proposed to be sold by Company or by other holders of Company Common Shares or other equity securities, the Registrable Securities of the Demanding Holders and the Requesting Holders (if any) (pro rata based on the respective number of Registrable Securities that each Demanding Holder and Requesting Holder (if any) has requested be included in such Underwritten Shelf Takedown and the aggregate number of Registrable Securities that the Demanding Holders and Requesting Holders have requested be included in such Underwritten Shelf takedown) that can be sold without exceeding the Maximum Number of Securities.

2.1.6 Withdrawal. Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used for marketing such Underwritten Shelf Takedown, any Demanding Holder initiating an Underwritten Shelf Takedown shall have the right to withdraw from such Underwritten Shelf Takedown for any or no reason whatsoever upon written notification (a “Withdrawal Notice”) to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Underwritten Shelf Takedown; provided that the Sponsor, an Investor Holder or a Greenfire Holder may elect to have the Company continue an Underwritten Shelf Takedown if the Minimum Takedown Threshold would still be satisfied by the Registrable Securities proposed to be sold in the Underwritten Shelf Takedown by the Sponsor, the Investor Holders, the Greenfire Holders or any of their respective Permitted Transferees, as applicable. If withdrawn by a Demanding Holder, the Sponsor, an Investor Holder or a Greenfire Holder may elect to continue an Underwritten Shelf Takedown pursuant to the proviso in the immediately preceding sentence and such Underwritten Shelf Takedown shall instead count as an Underwritten Shelf Takedown demanded by the Sponsor, such Investor Holder or such Greenfire Holder, as applicable, for purposes of Section 2.1.4. Following the receipt of any Withdrawal Notice, the Company shall promptly forward such Withdrawal Notice to any other Holders that had elected to participate in such Shelf Takedown and shall not include the Registrable Securities of such withdrawing Demanding Holder in the applicable registration and such Registrable Securities shall continue to be Registrable Securities for all purposes of this Agreement (subject to the other terms and conditions of this Agreement). Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Shelf Takedown prior to its withdrawal under this Section 2.1.6.

2.2	Piggyback Registration.

2.2.1 Piggyback Rights. Subject to Section 2.4.3, if the Company or any Holder proposes to conduct a registered offering of, or if the Company proposes to file a Registration Statement under the Securities Act with respect to the Registration of, equity securities, or securities or other obligations exercisable or exchangeable for, or convertible, into equity securities, for its own account or for the account of shareholders of the Company (or by the Company and by the shareholders of the Company including, without limitation, an Underwritten Shelf Takedown pursuant to Section 2.1), other than a Registration Statement (or any registered offering with respect thereto) (i) filed in connection with any employee share option or other benefit plan, (ii) on Form F-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), (iii) for an offering of debt that is convertible into equity securities of the Company, (iv) for a dividend reinvestment plan or (v) filed in connection with a Block Trade, then the Company shall give written notice of such proposed offering to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) days before the anticipated filing date of such Registration Statement or, in the case of an Underwritten Offering pursuant to a Shelf Registration, the applicable “red herring” prospectus or prospectus supplement used for marketing such offering (or such shorter period of days (but not less than two (2) days) as may be agreed by holders of at least 25% of the outstanding Registrable Securities on an as-converted basis (including any Underlying Common Shares)), which notice shall (A) describe the amount and type of securities to be included in such offering, the proposed filing date, the intended method(s) of distribution, the name of the proposed managing Underwriter or Underwriters, if any, in such offering and to the extent then known a good faith estimate of the proposed minimum offering price, and (B) offer to all of the Holders of Registrable Securities the opportunity to include in such registered offering such number of Registrable Securities as such Holders may request in writing within five (5) days (or such shorter period of days (but not less than one (1) day) as may be agreed by holders of at least 25% of the outstanding Registrable Securities on an as-converted basis (including any Underlying Common Shares)) after receipt of such written notice (such registered offering, a “Piggyback Registration”). Subject to Section 2.2.2, the Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and, if applicable, shall use its commercially reasonable efforts to cause the managing Underwriter or Underwriters of such Piggyback Registration to permit the Registrable Securities requested by the Holders pursuant to this Section 2.2.1 to be included therein on the same terms and conditions as any similar securities of the Company included in such registered offering and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. The inclusion of any Holder’s Registrable Securities in a Piggyback Registration shall be subject to such Holder’s agreement to enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering.

2.2.2 Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of Company Common Shares or other equity securities that the Company desires to sell, taken together with (i) the Registrable Securities as to which registration has been requested pursuant to Section 2.2.1, and (ii) the Company Common Shares or other equity securities, if any, of other persons or entities (other than the Holders of Registrable Securities hereunder) that the Company is obligated to register in a Registration pursuant to separate written contractual piggy-back registration rights held by such persons or entities, exceeds the Maximum Number of Securities, then:

(a) if the Registration or registered offering is undertaken for the Company’s account, the Company shall include in any such Registration or registered offering (A) first, the Company Common Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to Section 2.2.1, pro rata, based on the respective number of Registrable Securities that each Holder has requested be included in such Underwritten Offering and the aggregate number of Registrable Securities that the Holders have requested to be included in such Underwritten Offering, which can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Company Common Shares or other equity securities, if any, of other persons or entities that the Company is obligated to register in a Registration pursuant to separate written contractual piggy-back registration rights held by such persons or entities, which can be sold without exceeding the Maximum Number of Securities; or

(b) if the Registration or registered offering is pursuant to a demand by persons or entities other than the Holders of Registrable Securities (and not undertaken for the Company’s account), then the Company shall include in any such Registration or registered offering (A) first, the Company Common Shares or other equity securities, if any, of such requesting persons or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities, subject to Section 5.7; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to Section 2.2.1, pro rata, based on the respective number of Registrable Securities that each Holder has requested be included in such Underwritten Offering and the aggregate number of Registrable Securities that the Holders have requested to be included in such Underwritten Offering, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Company Common Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the Company Common Shares or other equity securities, if any, of other persons or entities that the Company is obligated to register in a Registration pursuant to separate written contractual piggy-back registration rights held by such persons or entities, which can be sold without exceeding the Maximum Number of Securities; and

(c) if the Registration or registered offering and Underwritten Shelf Takedown is pursuant to a request by Holder(s) of Registrable Securities pursuant to Section 2.1, then the Company shall include in any such Registration or registered offering securities in the priority set forth in Section 2.1.5.

2.2.3 Piggyback Registration Withdrawal. Any Holder of Registrable Securities (other than a Demanding Holder, whose right to withdraw from an Underwritten Shelf Takedown, and related obligations, shall be governed by Section 2.1.6) shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback Registration or, in the case of a Piggyback Registration pursuant to a Shelf Registration, the filing of the applicable “red herring” prospectus or prospectus supplement with respect to such Piggyback Registration used for marketing such transaction. The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons or entities pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration (which, in no circumstance, shall include a Shelf or other Registration pursuant to Section 2.1) at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this Section 2.2.3.

2.2.4 Unlimited Piggyback Registration Rights. For purposes of clarity, subject to Section 2.1.6, any Piggyback Registration effected pursuant to Section 2.2 shall not be counted as a demand for an Underwritten Shelf Takedown under Section 2.1.4.

2.3 Market Stand-off. In connection with any Underwritten Offering of equity securities of the Company pursuant to this Agreement (other than a Block Trade) in which a Holder participates, such Holder agrees that it shall not Transfer any Company Common Shares or other equity securities of the Company (other than those included in such offering pursuant to this Agreement), without the prior written consent of the Company, during the ninety (90)-day period (or such shorter time agreed to by the managing Underwriters) beginning on the date of pricing of such offering, except as expressly permitted by the applicable lock-up agreement or in the event the managing Underwriters otherwise agree by written consent. Each such Holder agrees to execute a customary lock-up agreement in favor of the Underwriters to such effect (in each case on substantially the same terms and conditions as all such Holders).

2.4 Block Trades.

2.4.1 Notwithstanding any other provision of this Article II, but subject to Section 3.4, at any time and from time to time when an effective Shelf is on file with the Commission, if a Demanding Holder wishes to engage in an underwritten registered offering not involving a “roadshow,” i.e., an offering commonly known as a “block trade” (a “Block Trade”), with a total offering price reasonably expected to exceed, in the aggregate, either (x) $5.0 million or (y) all remaining Registrable Securities held by the Demanding Holder, then such Demanding Holder shall notify the Company of its request to engage in a Block Trade and, subject to Section 3.1.8 or the waiver thereof by such Demanding Holder, the Company shall as expeditiously as possible use its commercially reasonable efforts to facilitate such Block Trade; provided that such Demanding Holder shall use commercially reasonable efforts to work with the Company and any Underwriters prior to making such request in order to facilitate preparation of the registration statement, prospectus and other offering documentation related to the Block Trade.

2.4.2 Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used in connection with a Block Trade, the Demanding Holders initiating such Block Trade shall have the right to submit a Withdrawal Notice to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Block Trade. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Block Trade prior to its withdrawal under this Section 2.4.2.

2.4.3 Notwithstanding anything to the contrary in this Agreement, Section 2.2 shall not apply to a Block Trade initiated by a Demanding Holder pursuant to this Agreement.

2.4.4 The Demanding Holder in a Block Trade shall have the right to select the Underwriters for such Block Trade (which shall consist of one or more reputable nationally recognized investment banks).

2.4.5 A Holder may make no more than two Block Trade demands in respect of Block Trades pursuant to this Section 2.4 within any six-month period or four Block Trade demands in any 12-month period. For the avoidance of doubt, any Block Trade effected pursuant to this Section 2.4 shall not be counted as a demand for an Underwritten Shelf Takedown pursuant to Section 2.1.4.

ARTICLE III

COMPANY PROCEDURES

3.1 General Procedures. In connection with any Shelf and/or Shelf Takedown, the Company shall use its commercially reasonable efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto, including, using its commercially reasonable efforts, as promptly as reasonably practicable, to:

3.1.1 prepare and file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities have ceased to be Registrable Securities;

3.1.2 without limiting the provisions set forth in Section 2.1.3, prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be reasonably requested by any Holder that holds at least one percent (1%) of the Registrable Securities registered on such Registration Statement or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;

3.1.3 prior to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, if requested, furnish without charge to the Underwriters, if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), any free writing prospectus (as defined in Rule 405 of the Securities Act) and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or the legal counsel for any such Holders may request (including any comment letter from the Commission), and all such documents shall be subject to the review and reasonable comment of such counsel who shall, if requested, have a reasonable opportunity to participate in the preparation of such documents in order to facilitate the disposition of the Registrable Securities owned by such Holders;

3.1.4 prior to any public offering of Registrable Securities, use its commercially reasonable efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request (or provide evidence satisfactory to such Holders that the Registrable Securities are exempt from such registration or qualification) and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;

3.1.5 cause all such Registrable Securities to be listed on each national securities exchange on which similar securities issued by the Company are then listed and, if no such securities are so listed, use commercially reasonable efforts to cause such Registrable Securities to be listed on NYSE or the Nasdaq Stock Market;

3.1.6 provide a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;

3.1.7 advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;

3.1.8 at least five (5) days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus (or such shorter period of time as may be (a) necessary in order to comply with the Securities Act, the Exchange Act, and the rules and regulations promulgated under the Securities Act or Exchange Act, as applicable or (b) advisable in order to reduce the number of days that sales are suspended pursuant to Section 3.4), furnish a copy thereof to each seller of such Registrable Securities or its counsel (excluding any exhibits thereto and any filing made under the Exchange Act that is to be incorporated by reference therein);

3.1.9 notify the Holders in writing upon receiving notice of any of the following events: (A) the filing of the Registration Statement, any Prospectus and any amendment or supplement thereto, and, with respect to the Registration Statement or any post-effective amendment thereto, when the same has become effective; (B) any request by the Commission or any other U.S. or state governmental authority for amendments or supplements to the Registration Statement or any Prospectus or for additional information; (C) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction or the initiation or threat of any proceeding for such purpose; (D) if at any time the representations and warranties of the Company contained in any underwriting agreement contemplated by Section 3.1.13 below cease to be true and correct in any material respect; provided that notice shall only be required if required to be given to the underwriters pursuant to such underwriting agreement; and (E) at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4;

3.1.10 in the event of an Underwritten Offering or a sale by a broker, placement agent or sales agent pursuant to such Registration, (A) permit representatives of the Holders, the Underwriters or other financial institutions facilitating such Underwritten Offering or Transfer, if any, and any attorney, broker, consultant, agent or accountant retained by such Holders or Underwriter to participate, at each such person’s or entity’s own expense, in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, financial institution, attorney, broker, consultant, agent or accountant in connection with the Registration, including to enable them to exercise their due diligence responsibility; provided, however, that such representatives, Underwriters or financial institutions agree to confidentiality arrangements in form and substance reasonably satisfactory to the Company prior to the release or disclosure of any such information and (B) cause the officers, directors and employees of the Company and its subsidiaries (and use its commercially reasonable efforts to cause its auditors) to participate in customary due diligence calls;

3.1.11 obtain a “cold comfort” letter from the Company’s independent registered public accountants in the event of an Underwritten Offering or a sale by a broker, placement agent or sales agent pursuant to such Registration (subject to such broker, placement agent or sales agent providing such certification or representation reasonably requested by the Company’s independent registered public accountants and the Company’s counsel) in customary form and covering such matters of the type customarily covered by “cold comfort” letters as the managing Underwriter may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating Holders on an as-converted basis (including any Underlying Common Shares);

3.1.12 in the event of an Underwritten Offering, on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion and negative assurance letter, dated such date, of counsel representing the Company for the purposes of such Registration, addressed to the participating Holders, the broker, placement agents or sales agent, if any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the participating Holders, broker, placement agent, sales agent or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters;

3.1.13 in an Underwritten Offering, enter into an underwriting agreement in form, scope and substance as is customary in underwritten offerings and in connection therewith, (A) make representations and warranties to the Holders of such Registrable Securities and the Underwriters, if any, with respect to the business of the Company and its subsidiaries, and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers in underwritten offerings, and, if true, confirm the same if and when requested, (B) include in the underwriting agreement indemnification provisions and procedures substantially to the effect set forth in Article IV hereof with respect to the Underwriters and all parties to be indemnified pursuant to said Article except as otherwise agreed by the majority-in-interest of the participating Holders on an as-converted basis (including any Underlying Common Shares) and (C) deliver such documents and certificates as are reasonably requested by a majority-in-interest of the aggregate number of Registrable Securities held by the participating Holders on a fully-diluted as-converted basis (including any Underlying Common Shares), their counsel and the Underwriters to evidence the continued validity of the representations and warranties made pursuant to sub-clause (A) above and to evidence compliance with any customary conditions contained in the underwriting agreement;

3.1.14 in the event of any Underwritten Offering or sale by a broker, placement agent or sales agent pursuant to such Registration, enter into and perform its obligations under an underwriting or other purchase or sales agreement, in usual and customary form, with the managing Underwriter or the broker, placement agent or sales agent of such offering or sale;

3.1.15 make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule then in effect);

3.1.16 with respect to an Underwritten Offering pursuant to Section 2.1.4, make available senior executives of the Company to participate in meetings with analysts or customary “road show” presentations that may be reasonably requested by the Underwriter in such Underwritten Offering;

3.1.17 cooperate with the participating Holders and the Underwriters, brokers or agents, if any, to facilitate the timely preparation and delivery of certificates (if such securities are certificated and which shall not bear any restrictive legends unless required under applicable law) representing securities sold under any Registration Statement, and enable such securities to be in such denominations and registered in such names as such Holders, Underwriters, brokers or agents, may request and keep available and make available to the Company’s transfer agent prior to the effectiveness of such Registration Statement a supply of such certificates (if such securities are certificated);

3.1.18 if required, file the applicable Registration Statement with FINRA within three (3) business days of the date such Registration Statement is filed with or submitted to the SEC, and cooperate with each participating Holder and Underwriter, if any, and their respective counsels in connection with any other filings required to be made with FINRA; and

3.1.19 otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the participating Holders, consistent with the terms of this Agreement, in connection with such Registration.

Notwithstanding the foregoing, the Company shall not be required to provide any documents or information to an Underwriter, broker, sales agent or placement agent if such Underwriter, broker, sales agent or placement agent has not then been selected as an Underwriter, broker, sales agent or placement agent, as applicable, with respect to the applicable Underwritten Offering or other offering involving a Registration.

3.2 Registration Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the Holders shall bear all Underwriters’ commissions and discounts, brokerage fees, Underwriter marketing costs, transfer taxes and, other than as set forth in the definition of “Registration Expenses,” all fees and expenses of any legal counsel representing the Holders.

3.3 Requirements for Participation in Registration Statement in Offerings. Notwithstanding anything in this Agreement to the contrary, if any Holder does not provide the Company with its requested Holder Information, the Company may exclude such Holder’s Registrable Securities from the applicable Registration Statement or Prospectus if the Company determines, based on the advice of counsel, that such information is necessary to effect the registration and such Holder continues thereafter to withhold such information. No person or entity may participate in any Underwritten Offering or other offering for equity securities of the Company pursuant to a Registration initiated by the Company hereunder unless such person or entity (i) agrees to sell such person’s or entity’s securities on the basis provided in any underwriting, sales, distribution or placement arrangements approved by the Company and (ii) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting or other agreements and other customary documents as may be reasonably required under the terms of such underwriting, sales, distribution or placement arrangements. The exclusion of a Holder’s Registrable Securities as a result of this Section 3.3 shall not affect the registration of the other Registrable Securities to be included in such Registration.

3.4	Suspension of Sales; Adverse Disclosure; Restrictions on Registration Rights.

3.4.1 Upon receipt of written notice from the Company that: (a) a Registration Statement or Prospectus contains a Misstatement; or (b) any request by the Commission for any amendment or supplement to any Registration Statement or Prospectus or for additional information or of the occurrence of an event requiring the preparation of a supplement or amendment to such Prospectus so that, as thereafter delivered to the purchasers of the securities covered by such Registration Statement or Prospectus, such Registration Statement or Prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, each of the Holders shall forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement covering such Registrable Securities until it has received copies of a supplemented or amended Prospectus (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice) or until it is advised in writing by the Company that the use of the Prospectus may be resumed, and, if so directed by the Company, each such Holder will deliver to the Company all copies, other than permanent file copies then in such Holder’s possession, of the most recent Prospectus covering such Registrable Securities at the time of receipt of such notice. In the event that a Holder exercises a demand right pursuant to Section 2.1 and the related offering is expected to, or may, occur during a quarterly earnings blackout period of the Company (such blackout periods determined in accordance with the Company’s written insider trading compliance program adopted by the Board), the Company and such Holder shall act reasonably and work cooperatively in view of such quarterly earnings blackout period.

3.4.2 Subject to Section 3.4.3, if the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would (a) require the Company to make an Adverse Disclosure, (b) require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control, or (c) in the good faith judgment of the majority of the Board, be seriously detrimental to the Company and as a result it is essential to defer such filing, initial effectiveness or continued use at such time, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time determined in good faith by the Company to be necessary for such purpose. In the event the Company exercises its rights under this Section 3.4.2, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities until such Holder receives written notice from the Company that such sales or offers of Registrable Securities may be resumed, and in each case maintain the confidentiality of such notice and its contents.

3.4.3 (a) During the period starting with the date thirty (30) days prior to the Company’s good faith estimate of the date of the filing of, and ending on a date ninety (90) days after the effective date of, a Company-initiated Registration, and provided that the Company continues to actively employ, in good faith, all reasonable efforts to maintain the effectiveness of the applicable Shelf, the Company may, upon giving prompt written notice of such action to the Holders, delay any other registered offering pursuant to Section 2.1.4 and, (b) during the period starting with the date fifteen (15) days prior to the Company’s good faith estimate of the date of the filing of, and ending on a date forty five (45) days after the effective date of, a Company-initiated Registration, and provided that the Company continues to actively employ, in good faith, all reasonable efforts to maintain the effectiveness of the applicable Shelf, the Company may, upon giving prompt written notice of such action to the Holders, delay any other registered offering pursuant to Section 2.4.

3.4.4 The right to delay or suspend any filing, initial effectiveness or continued use of a Registration Statement pursuant to Section 3.4.2 or a registered offering pursuant to Section 3.4.3 shall be exercised by the Company, in the aggregate, on not more than three (3) occasions, or for more than 90 consecutive calendar days, or for more than 120 total calendar days, in each case during any twelve-month period.

3.5 Reporting Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings; provided that any documents publicly filed or furnished with the Commission pursuant to the Electronic Data Gathering, Analysis and Retrieval System shall be deemed to have been furnished or delivered to the Holders pursuant to this Section 3.5. The Company further covenants that it shall (i) take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Company Common Shares, Company Preferred Shares or Company Warrants held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule then in effect) and (ii) certify to the Holders in writing that it has filed current Form 10 information with the Commission within four (4) Business Days of the Closing. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.

ARTICLE IV

INDEMNIFICATION AND CONTRIBUTION

4.1	Indemnification.

4.1.1 The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers, directors, partners, members and agents and each person or entity who controls such Holder (within the meaning of the Securities Act), against all losses, claims, damages, liabilities and out-of-pocket expenses (including, without limitation, reasonable outside attorneys’ fees and reasonable expenses of investigation) arising out of, resulting from or based upon any untrue or alleged untrue statement of material fact contained in or incorporated by reference in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information or affidavit so furnished in writing to the Company by such Holder expressly for use therein. The Company shall indemnify the Underwriters, their officers and directors and each person or entity who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to the indemnification of the Holder.

4.1.2 In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish (or cause to be furnished) to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus (the “Holder Information”) and, to the extent permitted by law, shall indemnify the Company, its directors, officers, partners, members and agents and each person or entity who controls the Company (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and out-of-pocket expenses (including, without limitation, reasonable outside attorneys’ fees and reasonable expenses of investigation) arising out of, resulting from or based upon any untrue or alleged untrue statement of material fact contained or incorporated by reference in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement is contained in (or not contained in, in the case of an omission) any Holder Information so furnished in writing by or on behalf of such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds actually received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors and each person or entity who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of the Company.

4.1.3 Any person or entity entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s or entity’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Article IV for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation, unless (1) such indemnified party reasonably objects to such assumption on the grounds that there may be defenses available to it which are different from or in addition to the defenses available to such indemnifying party, (2) the indemnifying party shall have failed within a reasonable period of time to assume such defense or, having assumed such defense, has not conducted the defense of such claim actively and diligently or (3) the named parties in any such proceeding (including any impleaded parties) include both the indemnified party and the indemnifying party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interest between them, in which case the indemnified party shall be promptly reimbursed by the indemnifying party for the expenses incurred in connection with retaining one separate legal counsel, in addition to any necessary local counsel (for the avoidance of doubt, for all indemnified parties in connection therewith). If such defense is assumed, (A) the indemnifying party shall keep the indemnified party informed as to the status of such claim at all stages thereof (including all settlement negotiations and offers), promptly submit to such indemnified party copies of all pleadings, responsive pleadings, motions and other similar legal documents and paper received or filed in connection therewith, permit such indemnified party and their respective counsels to confer with the indemnifying party and its counsel with respect to the conduct of the defense thereof, and permit indemnified party and its counsel a reasonable opportunity to review all legal papers to be submitted prior to their submission and (B) the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). In any action hereunder as to which the indemnifying party has assumed the defense thereof with counsel satisfactory to the indemnified party, the indemnified party shall continue to be entitled to participate in the defense thereof, with counsel of its own choice, but the indemnifying party shall not be obligated hereunder to reimburse the indemnified party for the costs thereof. No indemnifying party shall, without the prior written consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement includes a statement or admission of fault, culpability or failure to act on the part of such indemnified party or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation that shall be in form and substance satisfactory to such indemnified party.

4.1.4 The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person or entity of such indemnified party and shall survive the transfer of securities.

4.1.5 If the indemnification provided under Section 4.1 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and out-of-pocket expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and out-of-pocket expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by (or not made by, in the case of an omission), or relates to information supplied by (or not supplied by in the case of an omission), such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under this Section 4.1.5 shall be limited to the amount of the net proceeds actually received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in Sections 4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees, charges or out-of-pocket expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.1.5 were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this Section 4.1.5. No person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 4.1.5 from any person or entity who was not guilty of such fraudulent misrepresentation.

4.1.6 The obligations of the parties under this Article IV shall be in addition to any liability which any party may otherwise have to any other party.

ARTICLE V

GOVERNANCE

5.1	Board of Directors.

5.1.1 Sponsor Representation. Until the later of: (i) immediately prior to the third annual meeting of shareholders of the Company following the initial Sponsor Director’s election (or appointment) to the Board, and (ii) such time as the Sponsor Parties beneficially own, in the aggregate, less than 3% of all outstanding Company Common Shares (which shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to Company Common Shares prior to such time) (the “Minimum Ownership Threshold”), the Company shall take all Necessary Action such that one individual designated by the Sponsor (the “Sponsor Director”) is included in the slate of nominees recommended by the Board or duly constituted committee thereof for election as directors at each applicable annual meeting of the Company at which the Sponsor Director’s term would expire, and shall use the level of efforts and provide the same level of support with respect to the election of the Sponsor Director at any such meeting of shareholders as is used and/or provided for the election of the other director nominees of the Company at such meeting. Notwithstanding anything to the contrary in this Agreement, or the Company Governing Documents, the nomination procedures in Section 3.12 of the by-laws of the Company shall not apply to the Sponsor Director, who shall instead be designated by the Sponsor in a written notice delivered to the Company. The initial Sponsor Director is Matthew Perkal and shall be added to the Board pursuant to, and in accordance with, Section 8.15(a) of the Business Combination Agreement. The Company’s obligations pursuant to this Section 5.1.1 shall be subject to the Sponsor Director providing (i) any information that is reasonably required to be disclosed in any filing, report or disclosure under any rule or regulation of the Commission, NYSE, the Toronto Stock Exchange (or other Canadian stock exchange) if the Company’s securities are listed on any such exchange, or applicable law (including applicable Canadian securities laws), (ii) any information that is reasonably required in connection with determining that the Sponsor Director is or would be an Independent Director, (iii) if required by applicable law, such individual’s written consent to being named in a proxy statement as a nominee and to serving as director if elected and (iv) an undated resignation letter, which the Company agrees shall not be dated or become effective until the date that the Sponsor Director’s resignation is required pursuant to Section 5.1.2.

5.1.2 Removal; Vacancies.

(a) If at any time the number of Company Common Shares (which shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to Company Common Shares prior to such time) owned by the Sponsor Parties, in the aggregate, falls below (i) 50% of the number of Company Common Shares held by them as of the Closing Date and (ii) the Minimum Ownership Threshold, Sponsor shall cause the Sponsor Director to promptly resign as a member of the Board and the nomination rights in Section 5.1.1 shall terminate.

(b) Until such time as the Sponsor Parties in the aggregate no longer meet the Minimum Ownership Threshold, the Sponsor shall have the exclusive right to designate a director for election or appointment, as applicable, to the Board to fill a vacancy created by reason of death, removal or resignation of the Sponsor Director, and the Company shall take all Necessary Action to nominate or cause the Board to appoint, as applicable, a replacement director designated by the Sponsor to fill any such vacancy as promptly as practicable after such designation.

5.1.3 Reimbursement of Expenses; Indemnification; Amendments. For so long as any Sponsor Director serves as a director of the Company, (i) the Company shall provide such Sponsor Director with the same expense reimbursement, benefits, indemnity, exculpation and other arrangements provided to the other directors of the Company; provided that is expressly understood that any Sponsor Director shall not receive any cash or equity compensation that is paid or payable to directors and (ii) the Company shall not following the Effective Time amend, alter, repeal or waive (x) any right to indemnification or exculpation covering or benefiting any Sponsor Director nominated pursuant to this Agreement as and to the extent consistent with applicable law, the Company Governing Documents and any indemnification agreements with directors (whether such right is contained in the Company Governing Documents or another document) (except to the extent such amendment or alteration does not adversely affect the right to indemnification or exculpation covering or benefiting any Sponsor Director) or (y) any provision of the Company Governing Documents if the purpose of such amendment, alteration, repeal or waiver is to adversely affects the rights or obligations of the Sponsor or any Sponsor Director pursuant to this Section 5.

5.1.4 Greenfire Holder Support for Sponsor Director. For so long as the Sponsor is entitled pursuant to this Section 5 to designate a Sponsor Director to be included in the slate of nominees recommended by the Board or duly constituted committee thereof for election as directors at each applicable annual meeting of the Company, each Greenfire Holder hereby unconditionally and irrevocably agrees that, at any meeting of the shareholders of the Company (or any adjournment or postponement thereof), and in any action by written consent of the shareholders of the Company distributed by the Board or otherwise undertaken in connection with or as contemplated by this Section 5 (which written consent shall be delivered promptly and in any event within fifteen business days of receipt from the Company), such Greenfire Holder shall, if a meeting is held, appear at the meeting, in person or by proxy, or otherwise cause its Company Common Shares to be counted as present thereat for purposes of establishing a quorum, and such Greenfire Holder shall: (a) vote or provide consent (or cause to be voted or consented), in person or by proxy, all of its Company Common Shares in favour of the appointment of the Sponsor Director as a director of the Company for the ensuing year; and (b) in a contested vote for a fixed slate of directors, withhold its vote against any director nominee that is not the Sponsor Nominee or one of the director nominees nominated by the Company.

5.1.5 Sponsor Parties’ Information. Upon written request of the Company from time to time, acting reasonably, the Sponsor shall provide a written representation to the Company regarding the total number of Company Common Shares owned by the Sponsor Parties in order to confirm that the Sponsor Parties collectively hold a sufficient number of Company Common Shares to meet the Minimum Ownership Threshold and/or the requirements of Section 5.1.2(a)(i) as of the date specified in such written request.

5.2 Company Cooperation; Policies. The Sponsor acknowledges that, subject to Sections 5.3, 5.4 and 5.5, any Sponsor Director and its affiliates, if applicable, will be subject to all applicable corporate governance, conflict of interest, confidentiality and insider trading policies and guidelines of the Company, each as approved by the Board from time to time to the extent such policies and guidelines are applicable to all non-executive directors. For so long as any Sponsor Director is serving or participating on the Board, (i) any share ownership requirement for any Sponsor Director serving on the Board will be deemed satisfied by the securities owned by the Sponsor Parties and under no circumstances shall any of such policies, procedures, processes, codes, rules, standards and guidelines impose any restrictions on the transfers of securities by the Sponsor Parties and (ii) under no circumstances shall any policy, procedure, code, rule, standard or guideline applicable to the Board be violated by any Sponsor Director (x) accepting an invitation to serve on another board of directors of a company whose principal lines(s) of business do not compete with the principal line(s) of business of the Company or failing to notify an officer or director of the Company prior to doing so, or (y) receiving compensation from the Sponsor or its affiliates, and, in each case of (i) and (ii), it is agreed that any such policies in effect from time to time that purport to impose terms inconsistent with this Section 5.2 shall not apply to the Sponsor or any Sponsor Director to the extent inconsistent with this Section 5.2.

5.3 Sharing of Information. To the extent permitted by applicable law, each of the Company and the Investor Holders agrees and acknowledges that any Sponsor Director may share confidential, non-public information about the Company and its subsidiaries (“ConfidentialInformation”) with the Sponsor; provided, however, that the Sponsor acknowledges and agrees the disclosure of any Confidential Information by any Sponsor Director will be subject in all cases to his or her fiduciary duties to the Company and applicable corporate governance, conflict of interest, confidentiality and insider trading policies and guidelines of the Company. Notwithstanding the foregoing, nothing in this Agreement shall prohibit the Sponsor from disclosing Confidential Information (x) to any affiliate or representative of the Sponsor; provided, that such person shall be bound by an obligation of confidentiality with respect to such Confidential Information and the Sponsor shall be responsible for any breach of this Section 5.3 by any such person or (y) if such disclosure is made to a governmental or regulatory authority with jurisdiction over the Sponsor in connection with a routine audit or examination that is not specifically directed at the Company or the Confidential Information. No Confidential Information shall be deemed to be provided to any person, including any affiliate of the Sponsor unless such Confidential Information is actually provided to such person.

5.4 Inspection. Until such time as the Sponsor Parties beneficially own, in the aggregate, less than the Minimum Ownership Threshold, the Company shall permit the Sponsor Parties, at the Sponsor’s expense, to visit and inspect the Company’s properties; examine its books of account and records; and discuss the Company’s affairs, finances, and accounts with its officers, upon reasonable notice during normal business hours of the Company as may be reasonably requested by such Sponsor Party; provided, however, that the Company shall not be obligated pursuant to this Section 5.4 to provide access to any information the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel with respect to such Confidential Information.

ARTICLE VI

MISCELLANEOUS

6.1 Notices. Any notice or communication under this Agreement must be in writing and given by (i) deposit in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (ii) delivery in person or by courier service providing evidence of delivery, or (iii) transmission by hand delivery, electronic mail or facsimile. Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given, served, sent, and received, (i) in the case of mailed notices, on the third business day following the date on which it is mailed and, (ii) in the case of notices delivered by courier service, hand delivery, electronic mail or facsimile, at such time as it is delivered to the addressee (with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon presentation. Any notice or communication under this Agreement must be addressed, if to the Company, to: c/o Greenfire Resources Ltd. 1900 – 205 5th Avenue SW, Calgary, AB T2P 2V7; Attn: David Phung, email: DPHung@greenfireres.com and Robert Loebach, email: RLoebach@greenfireres.com; with a copy, which shall not constitute notice, to Carter Ledyard & Milburn LLP, 28 Liberty Street, 41st Floor, New York, New York, 10005, Attn: Guy P. Lander, email: lander@clm.com; and, if to any Holder, at such Holder’s address, electronic mail address or facsimile number as set forth in the Company’s books and records. Any party may change its address for notice at any time and from time to time by written notice to the other parties hereto, and such change of address shall become effective upon delivery of such notice as provided in this Section 6.1.

6.2 Assignment; No Third Party Beneficiaries.

6.2.1 This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.

6.2.2 Subject to Section 6.2.4 and Section 6.2.5, this Agreement and the rights, duties and obligations of a Holder hereunder may be assigned in whole or in part to such Holder’s Permitted Transferees; provided that, with respect to the Greenfire Holders, the Investor Holders and the Sponsor, the rights hereunder that are personal to such Holders may not be assigned or delegated in whole or in part, except that (x) each of the Greenfire Holders shall be permitted to transfer its rights hereunder as the Greenfire Holders to one or more affiliates or any direct or indirect partners, members or equity holders of such Greenfire Holder (it being understood that no such transfer shall reduce any rights of such Greenfire Holder or such transferees), (y) each of the Investor Holders shall be permitted to transfer its rights hereunder as the Investor Holders to one or more affiliates or any direct or indirect partners, members or equity holders of such Investor Holder (it being understood that no such transfer shall reduce any rights of such Investor Holder or such transferees) and (z) the Sponsor shall be permitted to transfer its rights hereunder as the Sponsor to one or more affiliates or any direct or indirect partners, members or equity holders of the Sponsor and any such transferee shall thereafter have all rights and obligations of the Sponsor hereunder (it being understood that no such transfer shall reduce any rights of the Sponsor or such transferees).

6.2.3 This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the Holders, which shall include Permitted Transferees.

6.2.4 This Agreement shall not confer any rights or benefits on any persons or entities that are not parties hereto, other than as expressly set forth in this Agreement.

6.2.5 No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have received (i) written notice of such assignment as provided in Section 6.1 hereof and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this Section 6.2 shall be null and void.

6.3 Counterparts. This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement or any document to be signed in connection with this Agreement shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.

6.4 Governing Law; Venue. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT (1) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AND (2) THE VENUE FOR ANY ACTION TAKEN WITH RESPECT TO THIS AGREEMENT SHALL BE ANY STATE OR FEDERAL COURT IN NEW YORK COUNTY IN THE STATE OF NEW YORK.

6.5 TRIAL BY JURY. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

6.6 Amendments and Modifications. Upon the written consent of (a) the Company and (b) the Holders of a majority of the total Registrable Securities on an as-converted basis (including any Underlying Common Shares), compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that, notwithstanding the foregoing, any amendment hereto or waiver hereof shall also require the written consent of the Sponsor so long as the Sponsor and its affiliates hold, in the aggregate, at least one percent (1%) of the outstanding Company Common Shares (including any Underlying Common Shares); provided, further, that notwithstanding the foregoing, any amendment hereto or waiver hereof shall also require the written consent of each Investor Holder so long as such Investor Holder and its respective affiliates hold, in the aggregate, at least one percent (1%) of the outstanding Company Common Shares (including any Underlying Common Shares); provided, further, that notwithstanding the foregoing, any amendment hereto or waiver hereof shall also require the written consent of each Greenfire Holder so long as such Greenfire Holder and its affiliates hold, in the aggregate, at least one percent (1%) of the outstanding Company Common Shares (including any Underlying Common Shares); and provided, further, that any amendment hereto or waiver hereof that adversely affects one Holder, solely in its capacity as a holder of the shares of capital of the Company, in a manner that is different from the other Holders (in such capacity) shall require the consent of the Holder so affected. No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party. Notwithstanding anything herein to the contrary, any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party.

6.7 Other Registration Rights. The Company represents and warrants that no person or entity, other than a Holder of Registrable Securities, has any right to require the Company to register any securities of the Company for sale or to include such securities of the Company in any Registration Statement filed by the Company for the sale of securities for its own account or for the account of any other person or entity. For so long as (a) the Sponsor and its affiliates hold, in the aggregate, at least one percent (1%) of the outstanding Company Common Shares (including any Underlying Common Shares), the Company hereby agrees and covenants that it will not grant rights to register any Company Common Shares (or securities convertible into or exchangeable for Company Common Shares (including any Underlying Common Shares)) pursuant to the Securities Act that are more favorable, pari passu or senior to those granted to the Holders hereunder (such rights “Competing Registration Rights”) without the prior written consent of the Sponsor, (b) an Investor Holder and its affiliates hold, in the aggregate, at least one percent (1%) of the outstanding Company Common Shares (including any Underlying Common Shares), the Company hereby agrees and covenants that it will not grant Competing Registration Rights without the prior written consent of such Investor Holder, and (c) a Greenfire Holder and its affiliates hold, in the aggregate, at least one percent (1%) of the outstanding Company Common Shares (including any Underlying Common Shares), the Company hereby agrees and covenants that it will not grant Competing Registration Rights without the prior written consent of such Greenfire Holder. Further, the Company represents and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions and in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.

6.8 Term. Subject to the immediately following sentence, this Agreement shall terminate, with respect to any Holder, on the date that such Holder no longer holds any Registrable Securities. Sections 5.1 and 5.4 of this Agreement shall terminate upon such time as the Sponsor Parties, in the aggregate, no longer meet the Minimum Ownership Threshold. Notwithstanding anything herein to the contrary, the provisions of Sections 3.2 and 3.5, Article IV, Sections 5.1.3, 5.2 (solely to the extent the applicable corporate governance, conflict of interest, confidentiality and insider trading policies and guidelines of the Company as of the date any Sponsor Director no longer serves on the Board apply by their terms to a former member of the Board), 5.3, 5.4 and Article VI shall survive any termination.

6.9 Holder Information. Each Holder agrees, if requested in writing, to represent to the Company the total number of Registrable Securities held by such Holder in order for the Company to make determinations hereunder.

6.10 Additional Holders; Joinder. In addition to persons or entities who may become Holders pursuant to Section 6.2, subject to the prior written consent of each of the Sponsor, each Greenfire Holder and each Investor Holder (in each case, so long as such Holder and its affiliates hold, in the aggregate, at least one percent (1%) of the outstanding Company Common Shares (including any Underlying Common Shares)), the Company may make any person or entity who acquires Company Common Shares or rights to acquire Company Common Shares after the date hereof a party to this Agreement (each such person or entity, an “Additional Holder”) by obtaining an executed joinder to this Agreement from such Additional Holder in the form of Exhibit A attached hereto (a “Joinder”). Such Joinder shall specify the rights and obligations of the applicable Additional Holder under this Agreement. Upon the execution and delivery and subject to the terms of a Joinder by such Additional Holder, the Company Common Shares then owned, or underlying any rights then owned, by such Additional Holder (the “Additional Holder Shares”) shall be Registrable Securities to the extent provided herein and therein and such Additional Holder shall be a Holder under this Agreement with respect to such Additional Holder Shares.

6.11 Severability. It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

6.12 Specific Performance. Each of the parties acknowledges and agrees that the other parties would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached or violated. Accordingly, to the fullest extent permitted by law, each of the parties agrees that, without posting bond or other undertaking, the other parties will be entitled to an injunction or injunctions to prevent breaches or violations of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action, claim or suit in addition to any other remedy to which it may be entitled, at law or in equity. Each party further agrees that, in the event of any action for specific performance in respect of such breach or violation, it will not assert that the defense that a remedy at law would be adequate.

6.13 Entire Agreement; Termination of Existing Registration Rights Agreement. This Agreement constitutes the full and entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter. Upon the Closing, the Existing Registration Rights Agreement shall no longer be of any force or effect.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

COMPANY:
GREENFIRE RESOURCES LTD.
By:	/s/<br> David Phung
	Name:	David Phung
	Title:	Chief Financial Officer

[SignaturePage to Investor Rights Agreement]

HOLDER:
M3-Brigade<br> Sponsor III LP
By:<br> M3-Brigade Acquisition Partners III Corp., <br><br> its general partner
By:	/s/<br> Mohsin Y. Meghji
Name:	Mohsin<br> Y. Meghji
Title:	Authorized<br> Person

[SignaturePage to Investor Rights Agreement]

HOLDER:
Thebes Offshore<br> Master Fund, LP
By:	/s/ Adam Miller
	Name:	Adam Miller
	Title:	President & COO

[SignaturePage to Investor Rights Agreement]

HOLDER:
Luxor Gibraltar,<br> LP - Series I
By:	/s/<br> Adam Miller
	Name:	Adam Miller
	Title:	President & COO

[SignaturePage to Investor Rights Agreement]

HOLDER:
Luxor Capital<br> Partners, LP
By:	/s/<br> Adam Miller
	Name:	Adam Miller
	Title:	President & COO

[Signature Page to Investor Rights Agreement]

HOLDER:
Luxor Capital<br> Partners Offshore Master Fund, LP
By:	/s/<br> Adam Miller
	Name:	Adam Miller
	Title:	President & COO

[Signature Page to Investor Rights Agreement]

HOLDER:
Trafigura<br> Canada Limited
By:	/s/<br> Iain Singer
	Name:	Iain<br> Singer
	Title:	Director

[Signature Page to Investor Rights Agreement]

HOLDER:
CF Principal Investments LLC
By:	/s/<br> Mark Kaplan
	Name:	Mark Kaplan
	Title:	Global COO

[Signature Page to Investor Rights Agreement]

HOLDER:
Brigade Capital Management, LP<br><br> <br>as Investment<br> Manager on Behalf of its Various Funds and Accounts
By:	/s/ Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	Chief Financial Officer

[Signature Page to Investor Rights Agreement]

HOLDER:
Future Directions<br> Credit Opportunities Fund
By:	/s/<br> Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment<br> Advisor

[Signature Page to Investor Rights Agreement]

HOLDER:
Brigade Credit Fund II Ltd.
By:	/s/ Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment Advisor

[Signature Page to Investor Rights Agreement]

HOLDER:
Brigade Collective Investment Trust – Brigade<br>Diversified Credit CIT
By:	/s/ Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment Advisor

[Signature Page to Investor Rights Agreement]

HOLDER:
Brigade High Income Fund
By:	/s/ Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment Advisor

[Signature Page to Investor Rights Agreement]

HOLDER:
Brigade High Yield Fund Ltd.
By:	/s/ Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment Advisor

[Signature Page to Investor Rights Agreement]

HOLDER:
Big River Group Fund SPC LLC
By:	/s/ Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment Advisor

[Signature Page to Investor Rights Agreement]

HOLDER:
Northrop Grumman Pension Master Trust
By:	/s/ Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment Advisor

[Signature Page to Investor Rights Agreement]

HOLDER:
JPMorgan Chase Retirement Plan Brigade
By:	/s/ Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment Advisor

[Signature Page to Investor Rights Agreement]

HOLDER:
Los Angeles County Employees Retirement Association
By:	/s/ Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment Advisor

[Signature Page to Investor Rights Agreement]

HOLDER:
Brigade Leveraged Capital Structures Fund Ltd.
By:	/s/ Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment Advisor

[Signature Page to Investor Rights Agreement]

HOLDER:
Brigade-SierraBravo Fund LP
By:	/s/ Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment Advisor

[Signature Page to Investor Rights Agreement]

HOLDER:
Panther<br> BCM LLC
By:	/s/<br> Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment<br> Advisor

[SignaturePage to Investor Rights Agreement]

HOLDER:
SC<br> CREDIT OPPORTUNITIES MANDATE, LLC
By:	/s/<br> Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment<br> Advisor

[SignaturePage to Investor Rights Agreement]

HOLDER:
SEI<br> Institutional Managed Trust - Multi- Strategy Alternative Fund
By:	/s/<br> Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment<br> Advisor

[SignaturePage to Investor Rights Agreement]

HOLDER:
The<br> Coca-Cola Company Master Retirement Trust
By:	/s/<br> Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment<br> Advisor

[SignaturePage to Investor Rights Agreement]

HOLDER:
Brigade<br> Loan Fund Ltd.
By:	/s/<br> Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment<br> Advisor

[SignaturePage to Investor Rights Agreement]

HOLDER:
City<br> of Phoenix Employees’ Retirement Plan
By:	/s/<br> Patrick Criscillo
	Name:	Patrick Criscillo
	Title:	CFO, Brigade Capital Management, LP, as Investment<br> Advisor

[SignaturePage to Investor Rights Agreement]

HOLDER:
HT INVESTMENTS, LLC
By:<br> Fortinbras Enterprises LP, as attorney-in-fact
By:	/s/<br> Ben Black
	Name:	Ben Black
	Title:	Founder & Managing Partner

[SignaturePage to Investor Rights Agreement]

HOLDER:
ALLARD<br> SERVICES LIMITED
By:	/s/ Jamie<br> Gordon Kean
Name:	Jamie Gordon Kean
Title:	Director
By:	/s/ Rebecca<br> Alice Winter
Name:	Rebecca Alice Winter
Title:	Director

[SignaturePage to Investor Rights Agreement]

HOLDER:
ANNAPURNA LIMITED
By:	/s/<br> Venkat Siva
Name:	Venkat Siva
Title:	Director

[SignaturePage to Investor Rights Agreement]

HOLDER:
SPICELO LIMITED
By:	/s/<br> Ioannis C Charalambides
Name:	Ioannis C Charalambides
Title:	Manager

[SignaturePage to Investor Rights Agreement]

HOLDER:
MODRO<br> HOLDINGS LLC
By:	/s/<br> Joseph Pehar
Name:	Joseph Pehar
Title:	Manager

[SignaturePage to Investor Rights Agreement]

HOLDER:
ROBERT LOGAN
By:	/s/<br> Robert Logan
	Robert Logan

[SignaturePage to Investor Rights Agreement]

HOLDER:
ROBERT LOGAN FAMILY TRUST
By:	/s/ Robert<br> Logan
Name:	Robert Logan
Title:	Trustee
By:	/s/ Stephanie<br> Logan
Name:	Stephanie Logan
Title:	Trustee

[SignaturePage to Investor Rights Agreement]

HOLDER:
DAVID PHUNG
By:	/s/ David<br> Phung
	David Phung

[SignaturePage to Investor Rights Agreement]

HOLDER:
DAVID PHUNG FAMILY TRUST
By:	/s/ David<br> Phung
Name:	David Phung
Title:	Trustee
By:	/s/ Maxime<br> Chin
Name:	Maxime Chin
Title:	Trustee

[SignaturePage to Investor Rights Agreement]

Schedule1

GreenfireHolders

1.	Allard<br> Services Limited
2.	Annapurna<br> Limited
---	---
3.	Spicelo<br> Limited
---	---
4.	Modro<br> Holdings LLC
---	---
5.	Robert<br> Logan
---	---
6.	Robert<br> Logan Family Trust
---	---
7.	David<br> Phung
---	---
8.	David<br> Phung Family Trust
---	---

Schedule2

InvestorHolders

1.	Trafigura<br> Canada Limited
2.	CF<br> Principal Investments LLC
---	---
3.	Luxor<br> Gibraltar, LP - Series I
---	---
4.	Luxor<br> Capital Partners, LP
---	---
5.	Luxor<br> Capital Partners Offshore Master Fund, LP
---	---
6.	Thebes<br> Offshore Master Fund, LP
---	---
7.	Future<br> Directions Credit Opportunities Fund
---	---
8.	Brigade<br> Credit Fund II Ltd.
---	---
9.	Brigade<br> Collective Investment Trust - Brigade Diversified Credit CIT
---	---
10.	Brigade<br> High Income Fund
---	---
11.	Brigade<br> High Yield Fund Ltd.
---	---
12.	Big<br> River Group Fund SPC LLC
---	---
13.	Brigade<br> Loan Fund Ltd.
---	---
14.	City<br> of Phoenix Employees’ Retirement Plan
---	---
15.	Northrop<br> Grumman Pension Master Trust
---	---
16.	JPMorgan<br> Chase Retirement Plan Brigade
---	---
17.	Los<br> Angeles County Employees Retirement Association
---	---
18.	Brigade<br> Leveraged Capital Structures Fund Ltd.
---	---
19.	Brigade-SierraBravo<br> Fund LP
---	---
20.	Panther<br> BCM LLC
---	---
21.	SC<br> CREDIT OPPORTUNITIES MANDATE, LLC
---	---
22.	SEI<br> Institutional Managed Trust - Multi-Strategy Alternative Fund
---	---
23.	The<br> Coca-Cola Company Master Retirement Trust
---	---
24.	HT<br> Investments, LLC
---	---

ExhibitA

INVESTOR RIGHTS AGREEMENT JOINDER

The undersigned is executing and delivering this joinder (this “Joinder”) pursuant to the Investor Rights Agreement, dated as of September 20, 2023 (as the same may hereafter be amended, the “Investor Rights Agreement”), by and among Greenfire Resources Ltd., an Alberta corporation (the “Company”), and the other persons or entities named as parties therein. Capitalized terms used but not otherwise defined herein shall have the meanings provided in the Investor Rights Agreement.

By executing and delivering this Joinder to the Company, and upon acceptance hereof by the Company upon the execution of a counterpart hereof, the undersigned hereby agrees to become a party to, to be bound by, and to comply with the Investor Rights Agreement as a Holder of Registrable Securities in the same manner as if the undersigned were an original signatory to the Investor Rights Agreement, and the undersigned’s Company Common Shares or other equity securities that the Company shall be included as Registrable Securities under the Registration Rights Agreement to the extent provided therein[; provided, however, that the undersigned and its permitted assigns (if any) shall not have any rights as a Holder, and the undersigned’s (and its transferees’) Company Common Shares or other equity securities that the Company shall not be included as Registrable Securities, for purposes of the Excluded Sections.

For purposes of this Joinder, “Excluded Sections” shall mean [ ].]

Accordingly, the undersigned has executed and delivered this Joinder as of the day of , 20__.

Signature of Shareholder
Print Name of Shareholder
Its:
Address: ______________________________
________________Agreed<br> and Accepted as of
__________, 20__
[●]
---
By:
Name:
Its:

Exhibit2.6

EXECUTION VERSION

LOCK-UPAGREEMENT

THIS LOCK-UP AGREEMENT (this “Agreement”) is made and entered into as of September 20, 2023, by and between Greenfire Resources Inc., an Alberta corporation (the “Company”), and each of M3-Brigade Sponsor III LP, a Delaware limited partnership (the “Sponsor”) and the Persons set forth on Schedule 1 hereto (the “Company Holders”). The Sponsor, the Company Holders and any Person who hereafter becomes a party to this Agreement pursuant to Section 2 are referred to herein, individually, as a “Holder” and, collectively, as the “Holders.”

WHEREAS, capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to such terms in that certain Business Combination Agreement, dated as of December 14, 2022 (as it may be amended or supplemented from time to time, the “Business Combination Agreement”), by and between the Company, M3-Brigade Acquisition III Corp., a Delaware corporation, Greenfire Resources Inc., an Alberta corporation, 2476276 Alberta ULC, an Alberta unlimited liability corporation and DE Greenfire Merger Inc., a Delaware corporation; and

WHEREAS, in connection with the transactions contemplated by the Business Combination Agreement, and in view of the valuable consideration to be received by the parties thereunder, the Company and each of the Holders desire to enter into this Agreement, pursuant to which the Holders’ Lock-Up Securities shall become subject to limitations on Transfer as set forth herein.

NOW,THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and intending to be legally bound hereby, the Company hereby agrees with each of the Holders as follows:

1. Definitions. The terms defined in this Section 1 shall, for all purposes of this Agreement, have the respective meanings set forth below:

(a) “Lock-UpPeriod” shall mean the period beginning on the Closing Date and ending on the earliest of (i) the date that is 180 days after the Closing Date, (ii) the date on which the last reported closing price of a PubCo Common Share equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any twenty (20) trading days within any thirty (30)-trading day period commencing at least seventy-five (75) days after the Closing Date and (iii) the date on which the Company completes a liquidation, merger, amalgamation, arrangement, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their shares of capital stock for cash, securities or other property.

(b) “Lock-UpSecurities” shall mean, collectively, the Lock-Up Shares and Lock-Up Warrants.

(c) “Lock-UpShares” shall mean the PubCo Common Shares held by the Sponsor and the Company Holders immediately following the Closing (other than PubCo Common Shares acquired in the public market).

(d) “Lock-UpWarrants” shall mean the PubCo Warrants held by the Sponsor and the Company Holders immediately following the Closing (other than PubCo Warrants acquired in the public market).

(e) “PermittedTransferee” shall mean any Person to whom a Holder is permitted to Transfer Lock-Up Securities prior to the expiration of the Lock-Up Period pursuant to Section 2(b).

(f) “Transfer” shall mean the (i) sale or assignment of, offer to sell, contract or agreement to sell, hypothecation, pledge, grant of any option to purchase or other disposal of or agreement to dispose of; directly or indirectly, or establishment or increase of a put equivalent position or liquidation or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any security, (ii) entry into any swap or other arrangement that transfers to another Person, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) public announcement of any intention to effect any transaction specified in clause (i) or (ii).

Lock-Up Provisions.

(a) Subject to Section 2(b), each Holder agrees that it shall not Transfer any Lock-Up Securities until the end of the Lock-Up Period applicable to such Holder.

(b) Notwithstanding the provisions set forth in Section 2(a), each Holder or its respective Permitted Transferees may Transfer the Lock-Up Securities during the Lock-Up Period (i) to (A) any direct or indirect partners, members or equity holders of the Sponsor, any affiliates of the Sponsor or any related investment funds or vehicles controlled or managed by such Persons or their respective affiliates or (B) the Company Holders or any direct or indirect partners, members or equity holders of the Company Holders, any affiliates of the Company Holders or any related investment funds or vehicles controlled or managed by such Persons or their respective affiliates; (ii) in the case of an individual, by gift to a member of such individual’s immediate family or to a trust, the beneficiary of which is such individual or a member of such individual’s immediate family or an affiliate of such Person, or to a charitable organization; (iii) in the case of an individual, by virtue of laws of descent and distribution upon death of such individual; (iv) in the case of an individual, pursuant to a qualified domestic relations order, divorce settlement, divorce decree or separation agreement; (v) to a nominee or custodian of a Person to whom a Transfer would be permitted under clauses (i) through (iv) above; (vi) to the partners, members or equityholders of such Holder by virtue of the Sponsor’s organizational documents, as amended; (vii) in connection with a pledge of PubCo Common Shares, or any other securities convertible into or exercisable or exchangeable for PubCo Common Shares, to a financial institution, including the enforcement of any such pledge by a financial institution; (viii) to the Company; (ix) as forfeitures of PubCo Common Shares pursuant to a “net” or “cashless” exercise of stock options; (x) as forfeitures of PubCo Common Shares to satisfy tax withholding requirements upon the vesting of equity-based awards granted pursuant to an equity incentive plan; (xi) in connection with a liquidation, merger, share exchange, reorganization, tender offer approved by the Board of Directors of the Company or a duly authorized committee thereof or other similar transaction which results in all of the Company’s shareholders having the right to exchange their PubCo Common Shares for cash, securities or other property subsequent to the Closing Date; or (xii) in connection with any legal, regulatory or other order; provided, however, that in the case of clauses (i) through (vi), such Permitted Transferees must enter into a written agreement with the Company agreeing to be bound by the transfer restrictions in this Section 2.

(c) In order to enforce this Section 2, the Company may impose stop-transfer instructions with respect to the Lock-Up Securities until the end of the Lock-Up Period; provided that such instructions permit the transfers contemplated by clause (b) above.

(d) For the avoidance of doubt, each Holder shall retain all of its rights as a securityholder of the Company with respect to the Lock-Up Securities during the Lock-Up Period, including the right to vote any Lock-Up Shares that such Holder is entitled to vote, as applicable.

(e) If any Holder is granted a release or waiver from any lock-up agreement (such holder, a “Triggering Holder”) executed in connection with the Closing prior to the expiration of the Lock-Up Period, then the undersigned shall also be granted an early release from its obligations hereunder on the same terms and on a pro-rata basis with respect to such number of Lock-Up Shares or Lock-Up Warrants, as applicable, rounded down to the nearest whole Lock-Up Share or Lock-Up Warrant, as applicable equal to the product of (i) the total percentage of Lock-Up Shares or Lock-Up Warrants, as applicable, held by the Triggering Holder immediately following the consummation of the Closing that are being released from the lock-up agreement multiplied by (ii) the total number of Lock-Up Shares or Lock-Up Warrants, as applicable, held by the undersigned immediately following the consummation of the Closing; provided that the foregoing shall not be applicable with respect to a release or waiver of any Holder that holds less than an aggregate of 50,000 PubCo Common Shares or PubCo Warrants.

(f) The lock-up provisions in this Section 2 shall, with respect to any Holder, supersede the lock-up provisions contained in Sections 7(a) and 7(b) of that certain letter agreement dated as of October 21, 2021 by and among the Company, the Sponsor and certain of the Company’s current and former officers and directors (the “Prior Agreement”) with respect to such Holder and such provisions of the Prior Agreement shall be of no further force or effect with respect to such Holder.

Miscellaneous.

(a) Governing Law. This Agreement, and all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement) will be governed by and construed in accordance with the internal laws of the State of Delaware applicable to agreements executed and performed entirely within such State.

(b) Consent to Jurisdiction and Service of Process. ANY PROCEEDING OR ACTION BASED UPON, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY MUST BE BROUGHT IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE (OR, ONLY TO THE EXTENT SUCH COURT DOES NOT HAVE SUBJECT MATTER JURISDICTION, THE SUPERIOR COURT OF THE STATE OF DELAWARE OR, IF IT HAS OR CAN ACQUIRE JURISDICTION, IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE), AND EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY (I) CONSENTS AND SUBMITS TO THE EXCLUSIVE JURISDICTION OF EACH SUCH COURT IN ANY SUCH PROCEEDING OR ACTION, (II) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO PERSONAL JURISDICTION, VENUE OR TO CONVENIENCE OF FORUM, (III) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH PROCEEDING OR ACTION SHALL BE HEARD AND DETERMINED ONLY IN ANY SUCH COURT AND (IV) AGREES NOT TO BRING ANY PROCEEDING OR ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY OTHER COURT. SERVICE OF PROCESS WITH RESPECT THERETO MAY BE MADE UPON ANY PARTY TO THIS AGREEMENT BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS AS PROVIDED IN SECTION 3(h), WITHOUT LIMITING THE RIGHT OF A PARTY TO SERVE PROCESS IN ANY OTHER MATTER PERMITTED BY APPLICABLE LAWS.

(c) Waiver of Jury Trial. EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 3(c).

(d) Assignment; Third Parties. This Agreement and all of the provisions hereof will be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and permitted assigns. This Agreement and all obligations of a Holder are personal to such Holder and may not be transferred or delegated at any time. Nothing contained in this Agreement shall be construed to confer upon any person who is not a signatory hereto any rights or benefits, as a third party beneficiary or otherwise.

(e) Specific Performance. Each Holder acknowledges that its obligations under this Agreement are unique, recognizes and affirms that in the event of a breach of this Agreement by such Holder, money damages will be inadequate and the Company will have no adequate remedy at law, and agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by such Holder in accordance with their specific terms or were otherwise breached. Accordingly, the Company shall be entitled to an injunction or restraining order to prevent breaches of this Agreement by a Holder and to enforce specifically the terms and provisions hereof, without the requirement to post any bond or other security or to prove that money damages would be inadequate, this being in addition to any other right or remedy to which such party may be entitled under this Agreement, at law or in equity.

(f) Amendment; Waiver. Upon (i) the approval of a majority of the total number of directors serving on the Board of Directors of the Company and (ii) the written consent of the Holders of a majority of the total Lock-Up Shares, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived by the Company, or any of such provisions, covenants or conditions may be amended or modified, so long as no Holder is impacted disproportionately than any other Holder by such waiver, amendment or modification; provided, however, that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects a Holder, solely in its capacity as a holder of Lock-Up Shares, shall require the consent of the Holder so affected. No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.

(g) Interpretation. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement. In this Agreement, unless the context otherwise requires: (i) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (ii) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words “without limitation”; (iii) the words “herein,” “hereto,” and “hereby” and other words of similar import in this Agreement shall be deemed in each case to refer to this Agreement as a whole and not to any particular section or other subdivision of this Agreement; and (iv) the term “or” means “and/or”. The parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

(h) Notices. All notices and other communications among the parties hereto shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid or (iii) when delivered by FedEx or other nationally recognized overnight delivery service, addressed, if to the Company c/o Greenfire Resources Inc.. 1900 – 205 5th Avenue SW, Calgary, AB T2P 2V7; Attn: David Phung, email: DPHung@greenfireres.com and Robert Loebach, email: RLoebach@greenfireres.com; with a copy, which shall not constitute notice, to Carter Ledyard & Milburn LLP, 28 Liberty Street, 41^st^ Floor, New York, New York, 10005, Attn: Guy P. Lander, email: lander@clm.com; and if to any Holder, at such Holder’s address or email address as set forth in the Company’s books and records.

(i) Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

(j) Entire Agreement. This Agreement constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled. Notwithstanding the foregoing, nothing in this Agreement (other than Section 2(f)) shall limit any of the rights, remedies or obligations of the Company or any of the Holders under any other agreement between any of the Holders and the Company, and nothing in any other agreement, certificate or instrument shall limit any of the rights, remedies or obligations of any of the Holders or the Company under this Agreement.

(k) Several Liability. The liability of any Holder hereunder is several (and not joint). Notwithstanding any other provision of this Agreement, in no event will any Holder be liable for any other Holder’s breach of such other Holder’s obligations under this Agreement.

(l) Counterparts. The undersigned hereby consents to receipt of this Agreement in electronic form and understands and agrees that this Agreement may be signed electronically. In the event that any signature is delivered by facsimile transmission, electronic mail or otherwise by electronic transmission evidencing an intent to sign this Agreement, such facsimile transmission, electronic mail or other electronic transmission shall create a valid and binding obligation of the undersigned with the same force and effect as if such signature were an original. Execution and delivery of this Agreement by facsimile transmission, electronic mail or other electronic transmission is legal, valid and binding for all purposes.

[Remainderof Page Intentionally Left Blank; Signature Pages Follow]

IN WITNESS WHEREOF, the parties have executed this Lock-Up Agreement as of the date first written above.

COMPANY:
GREENFIRE RESOURCES LTD.
By:	/s/ David Phung
Name:	David Phung
Title:	Chief Financial Officer
HOLDER:
M3-BRIGADE SPONSOR III LP
By:	M3-Brigade Acquisition Partners III Corp., its general partner
By:	/s/ Mohsin Y. Meghji
Name:	Mohsin Y. Meghji
Title:	Authorized Person

[Signature Page to Lock-Up Agreement]

HOLDER:
DAVID PHUNG
By:	/s/ David Phung
	David Phung

[Signature Page to Lock-Up Agreement]

HOLDER:
DAVID PHUNG FAMILY TRUST
By:	/s/ David Phung
Name:	David Phung
Title:	Trustee
By:	/s/ Maxime Chin
Name:	Maxime Chin
Title:	Trustee

[Signature Page to Lock-Up Agreement]

HOLDER:
SPICELO LIMITED
By:	/s/<br> loannis C. Charalambides
Name:	loannis C. Charalambides
Title:	Director

[Signature Page to Lock-Up Agreement]

HOLDER:
ANNAPURNA LIMITED
By:	/s/ Venkat Siva
Name:	Venkat Siva
Title:	Director

[Signature Page to Lock-Up Agreement]

HOLDER:
MODRO HOLDINGS LLC
By:	/s/ Joseph Pehar
Name:	Joseph Pehar
Title:	Manager

[Signature Page to Lock-Up Agreement]

HOLDER:
ROBERT LOGAN
By:	/s/ Robert Logan
	Robert Logan

[Signature Page to Lock-Up Agreement]

HOLDER:
ROBERT LOGAN FAMILY TRUST
By:	/s/ Robert Logan
Name:	Robert Logan
Title:	Trustee
By:	/s/ Stephanie Logan
Name:	Stephanie Logan
Title:	Trustee

[Signature Page to Lock-Up Agreement]

HOLDER:
ALLARD SERVICES LIMITED
By:	/s/ Jamie Gordon Kean
Name:	Jamie Gordon Kean
Title:	Director
By:	/s/ Rebecca Alice Winter
Name:	Rebecca Alice Winter
Title:	Director

[Signature Page to Lock-Up Agreement]

SCHEDULE 1

COMPANY HOLDERS

1.	Allard<br>Services Limited
2.	Annapurna<br>Limited
---	---
3.	Spicelo<br>Limited
---	---
4.	Modro<br>Holdings LLC
---	---
5.	Robert<br>Logan
---	---
6.	Robert<br>Logan Family Trust
---	---
7.	David<br>Phung
---	---
8.	David<br>Phung Family Trust
---	---

Sch. 1-1

Exhibit 2.7

DESCRIPTION OF COMMONSHARES

The Company is authorized to issue and unlimited number of Common Shares. As of March 26, 2024, there were 68,707,994 Common Shares issued and outstanding. The Common Shares are listed on the NYSE under the ticker symbol “GFR” and on the TSX under the ticker symbol “GFR”.

Voting Rights

Dividend Rights

Subject to the prior satisfaction of all preferential rights and privileges attached to any other class or series of shares of the Company ranking in priority to the Common Shares in respect of dividends, the holders of the Common Shares are entitled to receive dividends at such times and in such amounts as the Company Board may determine from time to time.

Liquidation

Subject to the prior satisfaction of all preferential rights and privileges attached to any other class or series of shares of the Company ranking in priority to the Common Shares in respect of return of capital on dissolution, upon the voluntary or involuntary liquidation, dissolution or winding-up of the Company or any other distribution of its assets among the shareholders of the Company for the purpose of winding up its affairs (such event, a “Distribution”), holders of the Common Shares shall be entitled to receive all declared but unpaid dividends thereon and thereafter to share rateably in such assets of the Company as are available with respect to such Distribution.

Notices

Amendment/Variationof Class Rights

Company Directors — Appointmentand Retirement

The Company Bylaws provide that, subject to the limitations and requirements provided in the Company Articles, the number of directors of the Company shall be determined from time to time by resolution of the shareholders of the Company or the Company Board. The Company Articles provide that the Company will have a board of directors consisting of a minimum of 1 director and a maximum of 13 directors. Pursuant to the ABCA, as the Company is currently a “reporting issuer” in Alberta and Ontario, the Company Board shall not have fewer than 3 directors.

Company Directors — Voting

Powers and Dutiesof Company Directors

Directors’ andOfficers’ Indemnity

Under subsection 124(1) of the ABCA, except in respect of an action by or on behalf of the Company to procure a judgment in the Company’s favor, the Company may indemnify a current or former director or officer or a person who acts or acted at the Company’s request as a director or officer of a body corporate of which the Company is or was a shareholder or creditor and the heirs and legal representatives of any such persons against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by any such Indemnified Person in respect of any civil, criminal or administrative, investigative or other actions or proceedings in which the Indemnified Person is involved by reason of being or having been director or officer of the Company, if (i) the Indemnified Person acted honestly and in good faith with a view to the best interests of the Company, and (ii) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the Indemnified Person had reasonable grounds for believing that such Indemnified Person’s conduct was lawful.

Notwithstanding the foregoing, subsection 124(3) of the ABCA provides that an Indemnified Person is entitled to indemnity from the Company in respect of all costs, charges and expenses reasonably incurred by the Indemnified Person in connection with the defense of any civil, criminal, administrative, investigative or other action or proceeding in which the Indemnified Person is involved by reason of being or having been a director or officer of the Company, if the Indemnified Person (i) was not judged by a court or competent authority to have committed any fault or omitted to do anything that the person ought to have done, and (ii) fulfills the Indemnification Conditions. Under subsection 124(3.1) of the ABCA, the Company may advance funds to an Indemnified Person in order to defray the costs, charges and expenses of such a proceeding; however, the Indemnified Person must repay the funds if the Indemnified Person does not fulfill the Mandatory Indemnification Conditions. The indemnification may be made in connection with a derivative action only with court approval and only if the Discretionary Indemnification Conditions are met.

Subject to the aforementioned prohibitions on indemnification, an Indemnified Person will be entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by such person in connection with the defense of any civil, criminal, administrative, investigative or other action or proceeding in which the Indemnified Person is involved by reason of being or having been a director or officer of the corporation or body corporate, if the person seeking indemnity: (i) was not judged by a court or competent authority to have committed any fault or omitted to do anything that the person ought to have done; and (ii) (a) the individual acted honestly and in good faith with a view to the best interests of the corporation; and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that the individual’s conduct was lawful.

Take Over Provisions

National Instrument 62-104 — Take Over Bids and Issuer Bids (“NI 62-104”) is applicable to the Company and provides that a takeover bid is triggered when a person makes an offer to acquire outstanding voting securities or equity securities of a class made to one or more persons, any of whom are in the local jurisdiction, where the securities subject to the offer to acquire, together with the offeror’s securities, constitute in the aggregate 20% or more of the outstanding securities of that class of securities at the date of the offer to acquire. When a takeover bid is triggered, an offeror must comply with certain requirements. These include making the offer of identical consideration to all holders of the class of security that is the subject of the bid, making a public announcement of the bid in a newspaper and sending out a bid circular to securityholders which explains the terms and conditions of the bid. Directors of an issuer whose securities are the subject of a takeover bid are required to evaluate the proposed bid and circulate a directors’ circular indicating whether they recommend to accept or reject the bid or state that they are unable to make, or are not making, a recommendation regarding the bid. Strict timelines must be adhered to. NI 62-104 also contains a number of exemptions to the takeover bid and issuer bid requirements.

Compulsory Acquisitions

Exhibit 8.1

LIST OF SUBSIDIARIES OF GREENFIRE RESOURCESLTD.

Name	Jurisdiction of Incorporation
M3-Brigade Acquisition III, LLC	Delaware
Greenfire Resources Operating Corporation	Alberta
Greenfire Resources Employment Corporation	Alberta
Hangingstone Demo (GP) Inc.	Alberta
Hangingstone Expansion (GP) Inc.	Alberta
Hangingstone Expansion Limited Partnership	Alberta
Hangingstone Demo Limited Partnership	Alberta

Exhibit11.1

GREENFIRE RESOURCES LTD.

DISCLOSURE AND TRADING POLICY

Objectiveand Scope

The objective of the Disclosure and Trading Policy (the “Policy”) is to ensure that the communications of Greenfire Resources Ltd. (“Greenfire”) with the public are:

●	timely,<br>factual, full, true and plain disclosure; and
●	broadly<br>disseminated in accordance with all applicable legal and regulatory requirements.
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The Policy documents the disclosure policies and practices of Greenfire and aims to promote an understanding of the legal requirements among Greenfire’s directors, officers and employees. In addition the Policy outlines the relevant trading restrictions and policies applicable to Greenfire’s directors, officers and employees.

This policy is also intended to assist the President and Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) of Greenfire in making certifications with respect to the disclosure controls of Greenfire required under National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings and to assist any director or officer of Greenfire in the conduct of the reasonable investigation required to provide a defense to any action against such director or officer based on a misrepresentation or failure to make timely disclosure.

This Policy extends to all directors, officers and employees of Greenfire, those authorized to speak on its behalf and all other insiders and covers all disclosure, including disclosure made in:

●	all<br>statutorily mandated documents filed with securities regulators.
●	all<br>written statements made in non-mandated documents such as letters to shareholders, presentations by senior management and information<br>contained on Greenfire’s website and in other electronic communications.
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●	all<br>oral statements including oral statements made in meetings and telephone conversations with analysts and investors, interviews with the<br>media as well as speeches, press conferences and conference calls.
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●	any<br>other communication, the content of which would reasonably be expected to affect the market value or price of any security of Greenfire.
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Disclosure Committee

Greenfire has established a Disclosure Committee consisting of Greenfire’s CEO, CFO, SVP Corporate Development, VP Finance, and Director of Corporate Development & Capital Markets. The Disclosure Committee may invite participation and input by other members of management. The mandate of the Disclosure Committee is attached as Appendix A to this Policy.

The Disclosure Committee has been established with the responsibility of overseeing Greenfire’s disclosure and external communication practices. The Disclosure Committee will meet or converse as required. The Disclosure Committee shall have the authority to retain experts, including lawyers, accountants, engineers and other persons, to assist the Disclosure Committee as they deem necessary.

It is essential that the members of the Disclosure Committee be kept fully apprised of all pending material developments concerning Greenfire in order to evaluate and discuss those events and to determine the appropriateness and timing of public release of information. If any officer, director or employee of Greenfire becomes aware of any information which may constitute material information they must forthwith advise one of the members of the Disclosure Committee. If any officer, director or employee is unsure whether or not information is material, they should immediately contact a member of the Disclosure Committee before disclosing it to anyone. The Disclosure Committee shall determine materiality and how that information will be controlled.

The Disclosure Committee will ensure that the Board is promptly and fully informed regarding potential disclosure issues facing Greenfire as they may arise from time to time. This includes circumstances in which aspects of potentially material information or any underlying matter may not then be known or fully known, investigation or analysis of potentially material information or an underlying matter remains to be fully determined.

All written public disclosures shall be reviewed by the Disclosure Committee. All such disclosures shall also be reviewed and approved by the Board or a committee of the Board if required by law, this Policy or any other policies of Greenfire. In any event the following documents will be reviewed in whole or part by the appropriate committee of the Board and recommended for approval by the Board or reviewed and approved by the Board:

●	annual<br>and interim financial statements and related management’s discussion and analysis of operations and related press releases and<br>Form 6-K filings.
●	information<br>circulars for any meetings of shareholders and related press releases and Form 6-K filings.
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●	annual<br>information form for Greenfire, including all reserves disclosure mandated under National Instrument 51-101 – Standards of Disclosurefor Oil and Gas Activities.
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●	annual<br>report on Form 20-F, including all reserves disclosure mandated by Subpart 1200 of Regulation S-K, or annual report on Form 40-F, as<br>applicable.
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●	any<br>press release containing material information relating to Greenfire and related Form 6-K filings except for routine press releases or<br>where immediate release is required to comply with law or the rules of any stock exchange where Greenfire’s securities are listed.
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●	any<br>take-over bid circulars, director’s circular or rights offering circular and related Form 6-K filings.
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●	any<br>prospectus, offering document or registration statement.
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●	any<br>environmental, social and governance or sustainability report and related Form 6-K filings.
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The Disclosure Committee will recommend changes to this Policy as needed to comply with changing regulatory requirements.

Determining Materiality

Material information is any information relating to the business and affairs of Greenfire that results in, or would reasonably be expected to result in, a significant change in the market price or value of Greenfire’s listed securities, or that would reasonably be expected to have a significant influence on a reasonable investor’s investment decisions. Material information may include, but is not limited to, the following:

●	changes<br>in corporate structure.
●	changes<br>in capital structure.
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●	changes<br>in financial results.
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●	changes<br>in business and operations, including changes in productions and reserves.
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●	acquisitions<br>and dispositions.
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●	changes<br>in credit arrangements.
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●	changes<br>in environmental or safety related incidents.
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It is the Disclosure Committee’s responsibility to determine what information is material in the context of Greenfire’s affairs. The Disclosure Committee must take into account a number of factors in making judgments concerning the materiality of information. Factors include the nature of the information itself, the volatility of Greenfire’s securities and prevailing market conditions.

In complying with the requirement to disclose material information under applicable laws and stock exchange rules, Greenfire will adhere to the following basic disclosure principles:

●	subject<br>to certain exceptions, material information will be publicly disclosed immediately via approved news release.
●	disclosure<br>will include any information, the omission of which would make the rest of the disclosure misleading, and will provide sufficient detail<br>to permit investors to appreciate the substance and importance of the information.
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●	unfavourable<br>information will be disclosed just as promptly and completely as favourable information.
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●	selective<br>disclosure is not acceptable. If previously undisclosed material information has been inadvertently disclosed to any person who is not<br>bound by an express confidentiality obligation, such information will be broadly disclosed immediately via news release. Disclosure made<br>to analysts cannot be protected by a confidentiality agreement.
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●	if<br>material information that is not in the public domain is to be announced at an analyst or shareholder meeting or a news conference, its<br>announcement must be co-ordinated with a general public announcement by news release.
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●	derivative<br>information (which is information extracted from a document filed on behalf of another person or company) which is included in a document<br>or oral statement should include a reference identifying the document that was the source of the information.
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●	dissemination<br>of information via Greenfire’s website or through social media alone does not constitute adequate disclosure of material information.
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●	disclosure<br>must be corrected immediately if it is subsequently discovered that earlier disclosure contained a material error at the time it was<br>given.
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Disclosure Controls and Procedures

The Disclosure Committee and/or Board shall establish specific procedures and timetables which shall be adhered to by Greenfire and its employees for the preparation of all disclosure statements, and, wherever practicable, their review by such personnel, the auditors and external legal counsel, as the Disclosure Committee and/or Board may determine and, ultimately their dissemination in compliance with this Policy. In addition to review of all disclosure statements, the Disclosure Committee and/or Board may employ questionnaires to directors and officers, formal or informal due diligence sessions, certifications of officers and involvement of experts. The Disclosure Committee and/or Board may elect to, at any time, adopt controls and procedures that are different than those which have been previously established, provided that such controls and procedures are, in the opinion of the Disclosure Committee and/or Board, satisfactory to ensure that disclosure statements are disclosed in compliance with this Policy.

The disclosure controls and procedures will involve the following:

●	identification<br>of all continuous disclosure requirements under securities laws, rules and policies applicable to Greenfire.
●	identification<br>of the individuals responsible for preparing reportable information and individuals, whether internal or external, responsible for reviewing<br>reports or portions of reports to verify disclosure made with respect to their areas of responsibility or expertise.
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●	establishment<br>of timetables for the preparation and adequate review of reportable information.
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●	procedures<br>for obtaining “sign-off” on disclosure of reportable information and receipt of written consents from all experts whose reports<br>are included or referred to in any disclosure.
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●	procedures<br>for the identification and timely reporting to the Disclosure Committee and/or the Board of information which may constitute material<br>information or which may constitute a material change to previously disclosed material information, including the identification of individuals<br>who are likely to learn first about events outside the control of Greenfire that may give rise to material information.
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●	procedures<br>for the identification and reporting to the Audit and Reserves Committee of the Board of any fraud, whether or not material, that involves<br>management or other employees who have a significant role in Greenfire’s internal controls.
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●	documenting<br>the procedures followed with respect to the release of each disclosure made in writing and for the review of any disclosure made orally.
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●	procedures<br>and monitoring for the handling of information (material and non-material) provided via Greenfire’s social media accounts.
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●	ongoing<br>evaluation of Greenfire’s disclosure controls and procedures.
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Trading Restrictions and Blackout Periods

It is illegal for anyone with knowledge of material information affecting a public issuer that has not been publicly disclosed to purchase or sell securities of that issuer or to purchase or sell a “call” or “put” or any other derivative security in respect of the securities of such issuer. It is also illegal for anyone to inform any other person of material non-public information, except in the necessary course of business and where approved by the Disclosure Committee.

Trading blackout periods will apply to all directors and officers and those employees designated by the Disclosure Committee and/or the Board who participate in the preparation of Greenfire’s financial statements or reserves evaluations, or who are otherwise privy to non-public material financial or operational information relating to Greenfire during periods when financial statements or reserves audits are being prepared but results have not yet been publicly disclosed. Regularly scheduled trading blackouts will commence on the 15^th^ calendar day after the end of each financial quarter and on the 30^th^ calendar day after the end of the financial year and ending two business days following the issuance of a press release disclosing the results for the period.

Blackout periods may also be prescribed from time to time by the Disclosure Committee and/or the Board as a result of special circumstances relating to Greenfire when directors, officers and employees would be precluded from trading in its securities. All parties with knowledge of such special circumstances should be covered by the blackout. These parties may include external advisors such as legal counsel, investment bankers, and other professional advisors, and counter-parties in negotiations of material potential transactions. In extraordinary circumstances, the Disclosure Committee and/or the Board may grant a waiver of the blackout period to a director, officer or employee.

In addition, in connection with a takeover bid, issuer bid, prospectus offering, “restricted” private placement, amalgamation, arrangement, capital reorganization or similar transaction, subject to certain limited exemptions under applicable securities laws and stock exchange rules, neither Greenfire nor any director, officer or other insider of Greenfire who is acting jointly or in concert with Greenfire for the particular transaction shall bid for or purchase a “restricted security” for their own account or for an account over which they exercise control or direction or attempt to induce or cause any person or company to purchase a restricted security. A restricted security for this purpose is the securities offered pursuant to the prospectus or “restricted” private placement offer or offered by Greenfire pursuant to any securities exchange takeover bid, any security of Greenfire subject to an issuer bid, a security of Greenfire issuable pursuant to an amalgamation, arrangement, capital reorganization or similar transaction in relation to which proxies are being solicited from security holders that will receive the offered security, or a “connected security” of any such securities. These restrictions shall apply:

(i)	in<br>the case of a “restricted” private placement or prospectus offering, commencing on the date that is two trading days prior<br>to the date that the offering price of the offered securities is determined and ending on the date that the selling process in respect<br>of the offering ends and all stabilization arrangements relating to the offered security are terminated;
(ii)	in<br>the case of a take over bid or issuer bid, commencing on the date of dissemination of the take over bid or issuer bid circular and ending<br>on the termination of the period during which the securities may be deposited under the bid, including any extension thereof, or the<br>withdrawal of the bid; and
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(iii)	in<br>the case of an amalgamation, arrangement, capital reorganization or other similar transaction, commencing on the date that the information<br>circular for such transaction is disseminated and ending on the date of approval of the transaction by securityholders that will receive<br>the offered security or the termination of the transaction.
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A member of the Disclosure Committee should be consulted if there is any question as to when these restrictions shall have ceased to apply in any particular circumstance. Legal counsel shall be consulted prior to any discussions, written or otherwise, with any stakeholder.

Insider Trading

In conjunction with regulatory requirements, it is the policy of Greenfire that once a person or company becomes a “reporting insider” of Greenfire, their security holdings, and any change therein, must be reported to the appropriate securities commissions.

The responsibility for compliance with insider reporting obligations rests with the reporting insiders and not with Greenfire. Greenfire has an interest in monitoring the holdings of all of its “insiders” (including reporting insiders) and ensuring that insider holdings are accurately reported in all securities filings of Greenfire and as the identity of insiders and the size of their holdings may be relevant in determining whether Greenfire is permitted, under applicable securities laws and stock exchange rules to undertake certain corporate transactions.

Greenfire will establish and maintain a system for ensuring compliance by reporting insiders with their reporting obligations.

Insider Filings

An initial filing must be completed electronically on the System for Disclosure by Insiders (“SEDI”) within 10 days after the date on which the person or corporation became a reporting insider of Greenfire. An initial filing is not required, however, when a person becomes a reporting insider if the person has no direct or indirect beneficial ownership, control or direction over securities of Greenfire.

A person or corporation who is a reporting insider must report any changes in their direct or indirect beneficial ownership of or control or direction over securities of the reporting issuer electronically on SEDI within 5 days after the date such change takes place. A copy of the insider filing must also be sent to the CFO of Greenfire where a reporting insider has bought or sold securities of Greenfire.

Insider reports that are filed late will incur a late fee of $50/day up to a maximum of $1,000 per calendar year. Greenfire is not responsible for monitoring the timeliness of a reporting insider’s filings and will not be obligated to reimburse any late fees incurred by any reporting insider.

If a person or corporation that is subject to this Policy is uncertain as to whether they are an “insider” and/or “reporting insider” of Greenfire, they should contact the CFO of Greenfire. The Corporate Secretary will be pleased to assist any reporting insider with insider filings.

Prohibition on Trading – “Special Relationship”

Under applicable securities legislations a person in “special relationships” with a public issuer is prohibited from trading in securities of that public issuer. From time to time, Greenfire will be considered to be in a “special relationship” with other public issuers as a result of receiving confidential information in connection with potential mergers, acquisitions or dispositions of significant assets, or purchases of securities. Directors, officers and employees of Greenfire and subsidiaries of Greenfire will also be considered to be in a “special relationship” and may not trade in securities of such public issuers once they have any knowledge relating to such public issuer. In addition, the Board considers it inappropriate for any director, officer or employee of Greenfire or a subsidiary of Greenfire to trade in the securities of any public issuer based upon information obtained, whether from public or confidential sources, in the course of their employment while Greenfire is considering a merger, acquisition or significant asset purchase or sale with such public issuers.

Maintaining Confidentiality

Any employee of Greenfire privy to confidential information is prohibited from communicating such information to anyone else, unless it is necessary to do so in the course of business. Efforts will be made to limit access to confidential information to only those who need to know the information and those persons will be advised that the information is to be kept confidential.

Outside parties privy to undisclosed material information concerning Greenfire must be told that they must not divulge such information to anyone else, other than in the necessary course of business, and that they may not trade in Greenfire’s securities until the information is publicly disclosed.

To prevent the misuse or inadvertent disclosure of material information, the following procedures should be observed at all times:

●	documents<br>and files containing confidential information should be kept in a safe place, with access restricted to individuals who “need to<br>know” that information in the necessary course of business. Code names should be used if necessary.
●	confidential<br>matters should not be discussed in places where the discussion may be overheard, such as elevators, hallways, restaurants, airplanes<br>or taxis.
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●	confidential<br>matters should not be discussed on cell phones in public spaces.
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●	confidential<br>matters should not be read or displayed in public places and should not be discarded where others can retrieve them.
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●	employees<br>must ensure they maintain the confidentiality of information in their possession outside of the office as well as inside the office.
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●	transmission<br>of documents by electronic means, such as by fax, e-mail, or directly from one computer to another, should be made only where it is reasonable<br>to believe that the transmission can be made and received under secure conditions.
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●	unnecessary<br>copying of confidential documents should be avoided and documents containing confidential information should be promptly removed from<br>conference rooms and work areas after meetings have concluded. Extra copies of confidential documents should be shredded or otherwise<br>destroyed.
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●	access<br>to confidential electronic data should be restricted through the use of passwords.
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Confidential Material Information

In certain circumstances the Disclosure Committee and/or the Board may determine that disclosure of certain information would be unduly detrimental to Greenfire (for example, if releasing the information would prejudice negotiations in a corporate transaction), in which case, the information will be kept confidential until the Disclosure Committee and/or the Board determines it is appropriate to publicly disclose. In such circumstances, the Disclosure Committee and/or the Board may cause a confidential material change report to be filed with the applicable securities regulators and will periodically (at least every 10 calendar days) review its decision to keep the information confidential.

Where disclosure of a material change is delayed, Greenfire must maintain complete confidentiality. During the period before a material change or material fact is disclosed, market activity in Greenfire’s securities should be carefully monitored. Any unusual market activity may mean that news of the matter has been leaked and that certain persons are taking advantage of it. If the confidential material change or material fact, or rumours about it, have leaked or appear to be impacting the price of the securities, Greenfire should immediately take steps to ensure that a full public announcement is made. This would include contacting the relevant stock exchange’s market surveillance division and asking that trading be halted pending the issuance of a news release.

Where a material change or material fact is being kept confidential, persons with knowledge of the material change or material fact may not use such information in purchasing or selling its securities. Such information should not be disclosed to any person or company, except in the necessary course of business. If Greenfire discloses material information under the “necessary course of business” exception, it should make sure that those receiving the information understand that they are now in a “special relationship” with Greenfire and cannot pass the information on to anyone else (other than in the “necessary course of business”), or trade on the information, until it has been generally disclosed. In such circumstances, the feasibility of having such parties enter into a confidentiality agreement with Greenfire should be considered.

Designated Spokespersons

Greenfire has designated the following spokespersons responsible for communication with the investment community, regulators and the media:

●	the<br>CEO;
●	the<br>CFO;
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●	the<br>Director, Corporate Development and Capital Markets; and
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●	where<br>applicable, the Chair of the Board.
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The individuals listed above may, from time to time designate others within Greenfire to speak on behalf of Greenfire, as back-ups or to respond to specific inquiries.

Employees and directors who are not authorized spokespersons must not respond under any circumstances to inquiries from the investment community, the media or others, unless specifically asked to do so by an authorized spokesperson. All such inquiries should be referred to one of the designated spokespersons.

News Releases

Once the Disclosure Committee and/or the Board determines that a development is material, it will authorize the issuance of a news release, unless the Disclosure Committee and/or the Board determines that such development should remain confidential for a period of time, in which case appropriate confidential filings may be made and controls of the inside information will be instituted. Should material undisclosed information be inadvertently disclosed on a selective basis, Greenfire will issue a news release as soon as practicable in order to fully disclose that information. Pending the public release of any such material information, the parties who have knowledge of the information should be advised that the information is material and has not been generally disclosed.

If the stock exchange(s) upon which Greenfire’s securities are listed are open for trading at the time of a proposed announcement, Greenfire will endeavour to provide prior notice of a news release announcing material information to the market surveillance division of the exchange to enable market surveillance to determine if a trading halt is in order. If a news release announcing material information is issued outside of trading hours, Greenfire will endeavour to provide notice to market surveillance before the news release is issued.

News releases containing guidance and financial results will be reviewed by the Board prior to issuance, annual and interim financial results will be publicly released as soon as practicable following Board approval of the applicable press release and related financial statements.

News releases will be disseminated through an approved news wire service that provides simultaneous national distribution. News releases will also be posted on Greenfire’s website after release over the news wire.

Conference Calls

Conference calls may be held to enable management to discuss quarterly earnings and major corporate developments. Conference calls shall be simultaneously accessible to all interested parties, whether they actively participate by telephone, or merely listen in by telephone or through an Internet webcast. Each such call will be preceded by a news release setting out relevant material information. At the beginning of the call, a spokesperson of Greenfire will provide appropriate cautionary language respecting any forward-looking information, and will direct participants to publicly available documents containing the assumptions, sensitivities and a full discussion of the risks and uncertainties. In advance of a conference call or industry conference call, to the extent practicable, Greenfire will endeavour to script comments and responses to anticipated questions to identify material information that should be publicly disclosed and will limit comments and responses to non-material information and material information that has previously been publicly disclosed.

Greenfire will provide advance notice of any conference call and webcast by issuing a news release announcing the date and time and providing information on how interested parties may access the call and webcast. In addition, Greenfire may invite analysts, institutional investors, the media and other interested parties to participate. Subject to any technical difficulties, an audio recording of the conference call and/or an archived audio webcast will be made available for a minimum of 72 hours following the call.

The Disclosure Committee may hold a debriefing meeting immediately after the conference call and if such debriefing uncovers selective disclosure of previously undisclosed material information, Greenfire will immediately disclose such information broadly via news release.

Rumours

Greenfire does not comment, affirmatively or negatively, on rumours. Greenfire’s spokespersons will respond consistently to any rumours with the following comment: “It is our policy not to comment on market rumours or speculation.”

Should the stock exchange(s) on which Greenfire’s securities are listed request that Greenfire make a definitive statement in response to a market rumour that is causing significant volatility in the securities of Greenfire, the Disclosure Committee and/or the Board will consider the matter and decide whether to make a policy exception. If the rumour is true, in whole or in part, Greenfire will immediately issue a news release disclosing the relevant information.

Contacts with Analysts, Investors and the Media

Meetings with analysts and significant investors are an important element of Greenfire’s investor relations program. Greenfire will meet with analysts and investors on an individual or small group basis as needed and will initiate contacts or respond to analyst and investor calls in accordance with this Policy.

Disclosure in individual or group meetings does not constitute adequate disclosure of information that is considered to be material non-public information. If Greenfire intends to announce material information at an analyst or shareholder meeting conference call, the announcement must be preceded by a news release. Material prepared for any such meetings should be reviewed by a member of the Disclosure Committee prior to the meeting with a view to eliminating inadvertent selective disclosure and verifying the accuracy of any such materials.

Greenfire will provide only non-material information through individual and group meetings, in addition to regular publicly disclosed information. Greenfire cannot alter the materiality of information by breaking down the information into smaller, non-material components.

Spokespersons should keep notes of telephone conversations with analysts and investors. Where practicable, more than one representative of Greenfire should be present at all individual and group meetings. A debriefing should be held after such meetings and if such debriefing uncovers selective disclosure of previously undisclosed material information, Greenfire will immediately disclose such information broadly via a news release.

Reviewing Analyst Draft Reports and Models

It is Greenfire’s policy to review, upon request, analysts’ draft research reports or models. Greenfire will review the report or model for the purpose of pointing out errors in factual content only based on publicly disclosed information. It is Greenfire’s policy, when an analyst inquires with respect to his or her estimates, to question an analyst’s assumptions if the estimate is a significant outlier among the range of estimates or Greenfire’s published earnings guidance. Greenfire will limit its comments in responding to such inquiries to non-material information. Greenfire will not confirm, or attempt to influence, an analyst’s opinions or conclusions and will not express comfort with the analyst’s model and earnings estimates.

So as not to endorse an analyst’s report or model, Greenfire will provide its comments orally or will attach a disclaimer to written comments to indicate the report was reviewed only for factual accuracy,

Distributing Analyst Reports

Analyst reports are proprietary products of the analyst’s firm. Re-circulating an analyst’s report may be viewed as an endorsement by Greenfire of the report. For these reasons, Greenfire will not provide analyst reports through any means to persons outside of Greenfire, including posting such information on its website. Greenfire may post on its website a complete list, regardless of the recommendation, of all the investment firms and analysts who provide research coverage on Greenfire. If provided, such list will not include links to the analysts’ or any other third party websites or publications.

Greenfire may distribute analyst reports internally to: (i) directors and senior officers; (ii) Greenfire’s financial and professional advisors; and (iii) employees of Greenfire.

Forward-Looking Information

Should Greenfire elect to disclose forward-looking information (“FLI”) in continuous disclosure documents, speeches, conference calls, etc., the following guidelines will be observed:

●	the<br>information, if deemed material will be broadly disseminated in accordance with this Policy.
●	the<br>information will be published only if there is a reasonable basis for drawing the conclusions or making the forecast and projection and<br>will be clearly identified as forward-looking.
---	---
●	Greenfire<br>will identify material assumptions used in the preparation of the FLI.
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●	the<br>information will be accompanied by meaningful cautionary statements and statements proximate to such information that identifies, in<br>specific terms, the risks and uncertainties that may cause the actual results to differ materially from those projected in the statement,<br>which may include a sensitivity analysis to indicate the extent to which different business conditions from the underlying assumptions<br>may affect the actual outcome.
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●	public<br>oral statements also require a cautionary statement that actual results could differ materially and a reference to material factors and<br>assumptions that could cause actual results to differ materially and that such factors or assumptions are contained in a readily available<br>document.
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●	the<br>information will be accompanied by a statement that disclaims Greenfire’s intention or obligation to update or revise the FLI, whether<br>as a result of new information, future events or otherwise except as required by applicable securities laws. Notwithstanding this disclaimer,<br>should subsequent events prove past statements about current trends to be materially off target, Greenfire may issue a news release explaining<br>the reasons for the difference; in such cases, Greenfire will update its guidance on the anticipated impact on production (or other key<br>metrics).
---	---

Correcting Disclosure

Any director, officer or employee of Greenfire who believes that any public disclosure of Greenfire, including any documents released by Greenfire or any public oral statements, contains a misrepresentation, shall promptly notify a member of the Disclosure Committee and/or the Board of such misrepresentation, and such member shall inform the Board and subject to the Board determining that a document released by Greenfire contains a misrepresentation shall take appropriate steps to correct such misrepresentation promptly, and in any event within two business days. In addition, any director, officer or employee who has concerns about whether or not information is undisclosed material information, should contact a member of the Disclosure Committee and/or the Board in respect of such matter.

Quiet Periods

In order to avoid the potential for selective disclosure, or the perception or appearance of selective disclosure, Greenfire will observe quiet periods prior to quarterly earnings announcements or when material changes are pending. During a quiet period Greenfire will not initiate or participate in any meetings or telephone contacts with analysts and investors and no earnings guidance will be provided to anyone, other than responding to unsolicited inquiries concerning factual matters. The quiet period commences 10 calendar days before the planned release of financial results and ends on the first business day following the issuance of a news release disclosing the financial results.

Additional quiet periods may be established from time to time by Greenfire as a result of special circumstances relating to Greenfire. The existence of a special purpose quiet period will be communicated by a means approved by the Disclosure Committee and/or the Board (which may include email).

If Greenfire is invited to participate, during a quiet period, in investment meetings or conferences organized by others, the Disclosure Committee and/or the Board will determine, on a case-by-case basis, if it is advisable to accept these invitations. If accepted, caution will be exercised to avoid selective disclosure of any material undisclosed information.

Responsibility for Electronic Communication

This Policy applies to electronic communications. Accordingly, directors, officers and personnel responsible for written and oral public disclosures are also responsible for electronic communications.

Greenfire will continuously update the investor relations section of Greenfire’s website and will monitor all information placed on the website for accuracy, completeness, currency and compliance with relevant securities laws.

The Disclosure Committee must approve all links from Greenfire’s website to a third party website. Any such links will include a notice that advises the reader that he or she is leaving Greenfire’s website and that Greenfire is not responsible for the contents of the other site.

Investor relations material will be contained within a separate section of Greenfire’s website and will include a notice to the reader that the information posted was considered accurate at the time of posting, but may be superseded by subsequent disclosures or become inaccurate over time. All data posted to the website, including text and audiovisual material, will identify the date such material was issued. Any material changes in information will be updated as soon as possible.

Disclosure on Greenfire’s website alone does not constitute adequate disclosure of information that is considered material non-public information. Any disclosures of material information on the website will be preceded by the issuance of a news release. Greenfire will, however, endeavour to concurrently post to its website all material documents filed on SEDAR and, if applicable, EDGAR in an effort to improve investor access to its information. Where practicable, Greenfire will also endeavour to post on its website all supplemental information as given to analysts, institutional investors and other market professionals such as data books, fax sheets, slides of investor presentations and other relevant materials. Responses to electronic inquiries will be provided as appropriate. Only public information or information that could otherwise be disclosed in accordance with this Policy will be utilized in responding to electronic queries.

In order to avoid inadvertent disclosure of material undisclosed information, employees are prohibited from participating in Internet chat rooms or newsgroup discussions on matters pertaining to Greenfire’s activities or its securities. Employees who encounter a discussion pertaining to Greenfire should advise a member of the Disclosure Committee immediately, so the discussion may be monitored.

Each employee’s corporate email address is, in fact, an address of Greenfire. Therefore, all correspondence received and sent by email is to be considered correspondence of Greenfire.

As there are constant developments regarding electronic disclosure of material information by issuers, the Disclosure Committee will monitor such developments and the impact of all such developments on Greenfire’s disclosure practices and this Policy.

APPENDIX A — DISCLOSURE COMMITTEE MANDATE

●	To<br>review, on an ongoing basis, Greenfire’s Disclosure and Trading Policy (the “Policy”) to ensure that it addresses Greenfire’s<br>principal business risks, changes in operations or structure, and facilitates compliance with applicable legislative and regulatory reporting<br>requirements.
●	To<br>design a set of “disclosure controls and procedures” to provide reasonable assurance that:
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●	the<br> Disclosure Policy is effectively implemented across all business units and corporate functions;<br> and
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●	information<br> of a material nature is accumulated and communicated to senior management, including the<br> President and Chief Executive Officer and the Chief Financial Officer, to allow timely decisions<br> on required disclosures and certification.
---	---
●	To<br>review prior to issuance or submission to the Audit Committee (or other appropriate committee of the Board) or Board:
---	---
●	annual<br> and interim filings, management information circulars, material change reports, annual information<br> forms, and any other information filed with securities regulators;
---	---
●	news<br> releases containing financial information, earnings guidance, information about material<br> acquisitions or dispositions, or other information material to investors;
---	---
●	presentations<br> and reports containing financial information broadly disseminated to analysts, creditors<br> and investors, including financial information displayed on Greenfire’s website; and
---	---
●	oral<br> disclosures requiring review pursuant to the Policy.
---	---
●	To<br>direct and supervise an annual evaluation of the effectiveness of Greenfire’s disclosure controls and procedures.
---	---
●	To<br>monitor compliance with the Policy.
---	---
●	To<br>educate Greenfire’s directors, officers and employees on disclosure issues and the Policy.
---	---
●	To<br>monitor the disclosure made on Greenfire’s website.
---	---
●	To<br>bring to the attention of the President and Chief Executive Officer, and the Chief Financial Officer all relevant information with respect<br>to the Committee’s activities, the annual or interim filings, and the evaluation of the effectiveness of Greenfire’s disclosure controls<br>and procedures.
---	---

Approvedby the Board of Directors on September 20, 2023.

Exhibit 12.1

CERTIFICATION

I, Robert Logan, certify that:

1.	I have reviewed this annual report on Form 20-F of Greenfire Resources Ltd.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4.	The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:
a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
---	---
b)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c)	Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
5.	The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
---	---
a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
---	---
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: March 26, 2024

By:	/s/ Robert Logan
	Robert Logan
	Chief Executive Officer

Exhibit 12.2

CERTIFICATION

I, Tony Kraljic, certify that:

1.	I have reviewed this annual report on Form 20-F of Greenfire Resources Ltd.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4.	The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:
a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
---	---
b)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c)	Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
5.	The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
---	---
a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
---	---
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: March 26, 2024

By:	/s/ Tony Kraljic
	Tony Kraljic
	Chief Financial Officer

Exhibit 13.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANTTO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this annual report on Form 20-F of Greenfire Resources Ltd. (the “Company”) for the fiscal year ended December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert Logan, Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(i)	The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and
(ii)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 26, 2024

By:	/s/ Robert Logan
	Robert Logan
	Chief Executive Officer
	(Principal Executive Officer)

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 20-F or as a separate disclosure document.

Exhibit 13.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANTTO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this annual report on Form 20-F of Greenfire Resources Ltd. (the “Company”) for the fiscal year ended December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tony Kraljic, Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(i)	The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and
(ii)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 26, 2024

By:	/s/ Tony Kraljic
	Tony Kraljic
	Chief Financial Officer
	(Principal Financial Officer)

Exhibit 15.1

GREENFIRE RESOURCES LTD.HANGINGSTONE PROPERTIES

Evaluation of Bitumen ReservesBased on Constant Prices and CostsAs of December 31, 2023

GREENFIRE RESOURCES LTD.HANGINGSTONE PROPERTIES

Evaluation of Bitumen ReservesBased on Constant Prices and CostsAs of December 31, 2023

Prepared For:

Greenfire Resources Ltd.1900, 205 – 5^th^ Avenue SWCalgary, AlbertaT2P 2V7

Prepared By:

McDaniel & Associates Consultants Ltd.2000, 525 – 8^th^ Avenue SWEighth Avenue Place, East TowerCalgary, AlbertaT2P 1G1

March 2024

GREENFIRE RESOURCES LTD.

HANGINGSTONE PROPERTIES

TABLE OF CONTENTS

Covering Letter
Certificates of Qualification
Evaluation Methodology
APPENDIX 1 BITUMEN NETBACK PRICING
McDaniel December 2023 SEC Prices and Costs
APPENDIX 2 ECONOMIC DETAIL – CORPORATE CONSOLIDATION
McDaniel December 2023 SEC Prices and Costs
APPENDIX 3 GEOLOGICAL MAPPING

March 20, 2024

**Greenfire Resources Ltd.**1900, 205 – 5^th^ Avenue SW

Calgary, Alberta

T2P 2V7

Attention:	Mr. Robert B. Logan, President, CEO and Director
Reference:	Greenfire Resources Ltd. – Hangingstone Properties
---	---

Evaluation of Bitumen Reserves

Constant Prices and Costs

Dear Sir:

Pursuant to your request, we have prepared an evaluation of the proved bitumen reserves and the net present values of these reserves for the petroleum interests of Greenfire Resources Ltd. – Hangingstone Properties, hereinafter referred to as the “Company”, as of December 31, 2023. The reserves estimates and future net revenue forecasts have been prepared and presented in accordance with U.S. Securities Exchange Commission (SEC) standards. The completion date of our report is March 20, 2024. This report was prepared in accordance with guidelines specified in Item 1202(a)(8) of Regulation S-K and is to be used for inclusion in certain filings of the SEC.

The future net revenues and net present values presented in this report were calculated using constant prices and costs based on the average first-day-of-the-month petroleum product prices for the 12 months of 2023 with no inflation of operating or capital costs and were presented in Canadian dollars. The future net revenues and net present value estimates in this report are presented before and after income taxes at the corporate level. The future net revenues presented in this report may not necessarily represent the fair market value of the reserves estimates.

The properties evaluated in this report were indicated to include 100 percent of the Company’s petroleum interests in Alberta, Canada.

2000, Eighth Avenue Place, East Tower, 525 – 8 Avenue SW, Calgary AB T2P 1G1 Tel: (403) 262-5506 Fax: (403) 233-2744

Greenfire Resources Ltd. – Hangingstone Properties	Page 2
Constant Prices and Costs	March 20, 2024

The Company’s share of remaining reserves and net present values are presented on a total Company basis in Table 2-1 of Appendix 2. Tables summarizing the reserves, production and revenues for the various reserves classes are presented in Appendix 2. Detailed net bitumen pay maps for the McMurray Formation are presented within Appendix 3. Discussions of the assumptions and methodology employed to prepare the reserves estimates and future revenue forecasts are also contained in the “Evaluation Methodology” section.

In preparing this report, we relied upon factual information including ownership, technical well data, production, prices, revenues, operating costs, capital costs, contracts, and other relevant data from public sources as well as non-public data supplied by the Company. The extent and character of all factual information supplied by the Company were relied upon by us in preparing this report and has been accepted as represented without independent verification. We have relied upon representations made by the Company as to the completeness and accuracy of the data provided and that no material changes in the performance of the properties has occurred nor is expected to occur, from that which was projected in this report, between the date that the data was obtained for this evaluation and the date of this report, and that no new data has come to light that may result in a material change to the evaluation of the reserves presented in this report. We used all methods and procedures as it considered necessary under the circumstances to prepare the report. Assumptions, data, methods and procedures are appropriate for the purpose served by the report.

The reserves estimates presented in this report were prepared on the basis of an overall evaluation of the reserves of the Company. The reserves estimates for all properties evaluated in the report meet the requirements for reasonable certainty in Rule 4-10(a)(24) of Regulation S-X.

Greenfire Resources Ltd. – Hangingstone Properties	Page 3
Constant Prices and Costs	March 20, 2024

We reserve the right to revise any estimates provided herein if any relevant data existing prior to preparation of this report was not made available, if any data between the effective date of the evaluation and the date of this report were to vary significantly from that forecast, or if any data provided was found to be erroneous.

Sincerely,

McDANIEL & ASSOCIATES CONSULTANTS LTD.APEGA PERMIT NUMBER: P3145

/s/ Jared W. B. Wynveen, P.Eng.	/s/ Josée C. Arpin, P.Eng.
Jared W. B. Wynveen, P.Eng.	Josée C. Arpin, P.Eng.
March 20, 2024
/s/ David G. Jenkinson, P.Geol.	/s/ Wesley P. Feick, P.Geo.
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David G. Jenkinson, P.Geol.	Wesley P. Feick, P.Geo.
March 20, 2024

CERTIFICATE OF QUALIFICATION

I, Jared W. B. Wynveen, Petroleum Engineer of 2000, 525 – 8^th^ Avenue SW, Calgary, Alberta, Canada hereby certify:

1.	That I am an Executive Vice President of McDaniel & Associates<br>Consultants Ltd., APEGA Permit Number P3145, which Company did prepare, at the request of Greenfire Resources Ltd., the report entitled<br>“Greenfire Resources Ltd., Hangingstone Properties, Evaluation of Bitumen Reserves, Based on Constant Prices and Costs, As of December<br>31, 2023”, dated March 20, 2024, and that I was involved in the preparation of this report. I am also registered as a Responsible<br>Member as outlined by APEGA for McDaniel & Associates Consultant Ltd. APEGA Permit Number 3145.
2.	That I attended the Queen’s University in the years 2002<br>to 2006 and that I graduated with a Bachelor of Science degree in Mechanical Engineering, that I am a registered Professional Engineer<br>with the Association of Professional Engineers and Geoscientists of Alberta and that I have in excess of 15 years of experience in oil<br>and gas reservoir studies and evaluations.
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3.	That I have no direct or indirect interest in the properties<br>or securities of Greenfire Resources Ltd., nor do I expect to receive any direct or indirect interest in the properties or securities<br>of Greenfire Resources Ltd., or any affiliate thereof.
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4.	That the aforementioned report was not based on a personal field examination of the properties in<br> question, however, such an examination was not deemed necessary in view of the extent and accuracy of the information available on<br> the properties in question.
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APEGA ID 89207

Calgary, Alberta

Dated: March 20, 2024

CERTIFICATE OF QUALIFICATION

I, Josée C. Arpin, Petroleum Engineer of 2000, 525 – 8^th^ Avenue SW, Calgary, Alberta, Canada hereby certify:

1.	That I am a Senior Evaluation Engineer of McDaniel & Associates<br>Consultants Ltd., APEGA Permit Number P3145, which Company did prepare, at the request of Greenfire Resources Ltd., the report entitled<br>“Greenfire Resources Ltd., Hangingstone Properties, Evaluation of Bitumen Reserves, Based on Constant Prices and Costs, As of December<br>31, 2023”, dated March 20, 2024, and that I was involved in the preparation of this report.
2.	That I attended the University of Calgary in the years 2012<br>to 2017 and that I graduated with a Bachelor of Science in Oil and Gas Engineering, and that I am a registered Professional Engineer<br>with the Association of Professional Engineers and Geoscientists of Alberta and that I have in excess of six years of experience in oil<br>and gas reservoir studies and evaluations.
---	---
3.	That I have no direct or indirect interest in the properties<br>or securities of Greenfire Resources Ltd., nor do I expect to receive any direct or indirect interest in the properties or securities<br>of Greenfire Resources Ltd., or any affiliate thereof.
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4.	That the aforementioned report was not based on a personal field<br>examination of the properties in question, however, such an examination was not deemed necessary in view of the extent and accuracy of<br>the information available on the properties in question.
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APEGA ID 205608

Calgary, Alberta

Dated: March 20, 2024

CERTIFICATE OF QUALIFICATION

I, David G. Jenkinson, Petroleum Geologist of 2000, 525 – 8^th^ Avenue SW, Alberta, Canada hereby certify:

1.	That I am an Executive Vice President for McDaniel & Associates<br>Consultants Ltd., APEGA Permit Number P3145, which Company did prepare, at the request of Greenfire Resources Ltd., the report entitled<br>“Greenfire Resources Ltd., Hangingstone Properties, Evaluation of Bitumen Reserves, Based on Constant Prices and Costs, As of December<br>31, 2023”, dated March 20, 2024, and that I was involved in the preparation of this report. I am also registered as a Responsible<br>Member as outlined by APEGA for McDaniel & Associates Consultant Ltd. APEGA Permit Number 3145.
2.	That I attended the University of Saskatchewan in the years<br>2000 to 2004, graduating with a Bachelor of Science degree in Geology; that I am a registered Professional Geologist with the Association<br>of Professional Engineers and Geoscientists of Alberta and that I have in excess of 15 years of experience in oil and gas reservoir studies<br>and evaluations.
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3.	That I have no direct or indirect interest in the properties<br>or securities of Greenfire Resources Ltd., nor do I expect to receive any direct or indirect interest in the properties or securities<br>of Greenfire Resources Ltd., or any affiliate thereof.
---	---
4.	That the aforementioned report was not based on a personal field<br>examination of the properties in question, however, such an examination was not deemed necessary in view of the extent and accuracy of<br>the information available on the properties in question.
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APEGA ID 81046

Calgary, Alberta

Dated: March 20, 2024

CERTIFICATE OF QUALIFICATION

I, Wesley P. Feick, Petroleum Geologist of 2000, 525 – 8^th^ Avenue SW, Calgary, Alberta, Canada hereby certify:

1.	That I am an Associate for McDaniel & Associates Consultants<br>Ltd., APEGA Permit Number P3145, which Company did prepare, at the request of Greenfire Resources Ltd., the report entitled “Greenfire<br>Resources Ltd., Hangingstone Properties, Evaluation of Bitumen Reserves, Based on Constant Prices and Costs, As of December 31, 2023”,<br>dated March 20, 2024, and that I was involved in the preparation of this report.
2.	That I attended the University of Alberta in the years 2002<br>to 2006, graduating with a Bachelor of Science degree in Geology; that I am a registered Professional Geoscientist with the Association<br>of Professional Engineers and Geoscientists of Alberta and that I have in excess of 15 years of experience in oil and gas reservoir studies<br>and evaluations.
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3.	That I have no direct or indirect interest in the properties<br>or securities of Greenfire Resources Ltd., nor do I expect to receive any direct or indirect interest in the properties or securities<br>of Greenfire Resources Ltd., or any affiliate thereof.
---	---
4.	That the aforementioned report was not based on a personal field<br>examination of the properties in question, however, such an examination was not deemed necessary in view of the extent and accuracy of<br>the information available on the properties in question.
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APEGA ID 82556

Calgary, Alberta

Dated: March 20, 2024

GREENFIRE RESOURCES LTD.HANGINGSTONE PROPERTIES

Evaluation of Bitumen ReservesBased on Constant Prices and CostsAs of December 31, 2023

Evaluation Methodology

INTRODUCTION

Estimates of the proved bitumen reserves and the associated net present values before and after income taxes attributable to the properties of the Company have been presented in this report as of December 31, 2023. Reserves estimates were prepared for the Hangingstone properties in which the Company was indicated to have an interest in Western Canada based on detailed studies of the reservoir and performance characteristics as well as historical revenues and costs.

The basic information employed in the preparation of this report was obtained from the Company’s files, public sources and from our own non-confidential files. A field inspection of the properties was not conducted in view of the generally accepted reliability of the data sources for Western Canadian properties.

The effective date of this report is December 31, 2023. The reserves estimates presented herein were based upon a number of factors and assumptions, including the operating and economic conditions and development status as of that date except for changes planned for the immediate future or in the process of implementation, commodity prices, future operating and capital costs, availability of future capital, and the assumed effects of regulation by governmental agencies, including with respect to royalty payments, all of which may vary considerably from actual results. The reserves estimates and future net revenue forecasts have been prepared and presented in accordance with U.S. Securities Exchange Commission (SEC) standards. A brief review of the methodology employed in arriving at the reserves and net present value estimates is presented in this section.

RESERVES ESTIMATES

There are numerous uncertainties inherent in estimating economically recoverable quantities of oil, natural gas liquids (NGLs) and natural gas reserves, including many factors beyond our control. All oil, NGLs and natural gas reserve estimates are uncertain to some degree, and classifications of oil, NGLs and natural gas reserves are only attempts to define the degree of uncertainty involved. For those reasons, estimates of the quantity of oil, NGLs and natural gas economically recoverable from a group of properties and the classification of such oil, NGLs and natural gas reserves, when prepared by different engineers or by the same engineers at different times, may vary substantially. Additionally, estimates with respect to oil, NGLs and natural gas reserves are often based upon volumetric calculations and upon analogy to similar types of reserves, rather than upon actual production history. Oil, NGLs and natural gas reserve estimates based on these methods are generally less reliable than those based on actual production history. Subsequent evaluation of the same reserves based upon production history will result in variations in the estimated reserves and these variations may be material.

Greenfire Resources Ltd. – Hangingstone Properties	Page 2
Constant Prices and Costs	March 20, 2024

Crude Oil

The crude oil reserves estimates presented in this report were based on a review of the volumetric data and performance characteristics of the individual wells and reservoirs in question. Volumetric estimates of the original oil-in-place were based on individual well petrophysical interpretations, geological studies of pool configurations, and in some cases on published estimates. In those cases where indicative oil production decline and/or increasing gas-oil and oil cut trends were evident, the remaining reserves were determined by extrapolating these trends to economic limiting conditions. Where definitive production information was not yet available, the reserves estimates were usually volumetrically determined using recovery factors based on analogy with similar wells or reservoirs or on estimates of recovery efficiencies. The cumulative production figures were taken from published sources or from records of the Company and estimated for those recent periods where such data were not available.

Natural Gas and Products

The natural gas reserves estimates for non-associated gas and gas cap pools were based on a study of the volumetric data and performance characteristics of the individual wells and reservoirs in question. Volumetric estimates of the initial gas-in-place were based on individual well petrophysical interpretations, geological studies of the pools and areas, and in some cases on published estimates. Material balance estimates of the initial gas-in-place were employed where sufficient information was available for a reliable estimate. The reserves recoverable from the currently producing properties were estimated from studies of production performance characteristics and/or reservoir pressure histories. In those cases where indicative gas production decline and/or increasing oil-gas ratio and water-gas ratio trends were evident, the remaining reserves were determined by extrapolating these trends to economic limiting conditions. In cases of competitive drainage in multi-well pools the reserves were based on an analysis of the relevant factors relating to the future pool depletion by existing and possible future wells. The recovery factors for the non-producing properties were estimated from a consideration of test rates, reservoir pressures and by analogy with similar wells or reservoirs.

Natural gas reserves estimates for solution gas production from producing crude oil properties were based on an analysis of producing gas-oil ratios and existing sales gas recoveries. Solution gas reserves were assigned to non-producing oil properties where there was a likelihood of those reserves being recovered and sold from existing facilities or facilities that are expected to be available in the near future.

The natural gas products reserves estimates for the producing properties were based on historical and anticipated future recoveries of these products from the natural gas reserves. The natural gas products recoveries from the non-producing natural gas reserves were estimated from gas analyses, well test information and from analogy with similar reservoirs. Natural gas products reserves were only assigned to non-producing properties in those cases where there was a likelihood that the gas production would be processed through existing facilities capable of extracting these products or where such a facility will be available in the near future.

Greenfire Resources Ltd. – Hangingstone Properties	Page 3
Constant Prices and Costs	March 20, 2024

SEC RESERVES DEFINITIONS

The proved reserves and net present values estimates presented in this report were prepared to comply with the United States Securities and Exchange Commission (SEC) reserves definitions.

Proved oil and gas reserves. Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations — prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

(i)	The area of the reservoir considered as proved includes:
a.	The area identified by drilling and limited by fluid contacts,<br>if any, and
---	---
b.	Adjacent undrilled portions of the reservoir that can, with<br>reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available<br>geoscience and engineering data.
---	---
(ii)	In the absence of data on fluid contacts, proved quantities<br>in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration unless geoscience, engineering, or performance<br>data and reliable technology establishes a lower contact with reasonable certainty.
---	---
(iii)	Where direct observation from well penetrations has defined<br>a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally<br>higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact<br>with reasonable certainty.
---	---

Greenfire Resources Ltd. – Hangingstone Properties	Page 4
Constant Prices and Costs	March 20, 2024
(iv)	Reserves which can be produced economically through application<br>of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when:
---	---
a.	Successful testing by a pilot project in an area of the reservoir<br>with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous<br>reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the<br>project or program was based; and
---	---
b.	The project has been approved for development by all necessary<br>parties and entities, including governmental entities.
---	---

(v)

Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

Developed oil and gas reserves. Developed oil and gas reserves are reserves of any category that can be expected to be recovered:

(i)	Through existing wells with existing equipment and operating<br>methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and
(ii)	Through installed extraction equipment and infrastructure operational<br>at the time of the reserves estimate if the extraction is by means not involving a well.
---	---

Undeveloped oil and gas reserves. Undeveloped oil and gas reserves are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.

(i)	Reserves on undrilled acreage shall be limited to those directly<br>offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology<br>exists that establishes reasonable certainty of economic producibility at greater distances.
(ii)	Undrilled locations can be classified as having undeveloped<br>reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific<br>circumstances, justify a longer time.
---	---
(iii)	Under no circumstances shall estimates for undeveloped reserves<br>be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless<br>such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, or by other evidence using<br>reliable technology establishing reasonable certainty.
---	---

Greenfire Resources Ltd. – Hangingstone Properties	Page 5
Constant Prices and Costs	March 20, 2024

Reasonable certainty. If deterministic methods are used, reasonable certainty means a high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90 percent probability that the quantities actually recovered will equal or exceed the estimate. A high degree of confidence exists if the quantity is much more likely to be achieved than not, and, as changes due to increased availability of geoscience (geological, geophysical, and geochemical), engineering, and economic data are made to estimated ultimate recovery (EUR) with time, reasonably certain EUR is much more likely to increase or remain constant than to decrease.

NET PRESENT VALUE ESTIMATES

The net present values of the bitumen reserves were obtained by employing future production and revenue analyses. The future crude oil production was generally predicated on the anticipated performance characteristics of the individual wells and reservoirs in question. The future natural gas production was also predicated on the anticipated performance characteristics of the individual wells and reservoirs in question with an allowance for any gas sales contract or gas processing facility restrictions. In those areas where shut-in natural gas reserves exist, the commencement of production was based on the proximity to a pipeline connection and the relevant factors relating to the future marketing of the reserves. The future production of gas-cap reserves was assumed to occur near the end of the oil producing life. Solution gas production was based on the forecast of the oil producing rates and current and forecast sales gas-oil ratios. The natural gas products production forecasts were based on the anticipated recoveries of these products from the produced natural gas.

The Company’s share of future crude oil revenue was derived by employing the Company’s share of production and the indicated reference crude oil price less the historical quality and transportation price differential for each respective field. The initial benchmark price for Western Canadian Select Heavy Oil was $79.89CAD/bbl, with average realized prices after adjustments for location and quality differentials of $52.73CAD/bbl on a Total Proved basis. The indicated natural gas prices with an adjustment for the heating value of the gas were employed to calculate the Company’s share of future natural gas revenues. The indicated reference natural gas products prices with adjustments to reflect historical price differentials realized by the Company in each respective property were employed to calculate the Company’s share of future natural gas products revenues. The initial benchmark price for AECO Spot was $2.84CAD/MMBtu and the average realized gas price was $3.09CAD/MMBtu on a Total Proved basis. Royalties and mineral taxes payable to the Crown were estimated based on the methods in effect as of December 31, 2023. Freehold and overriding royalties payable to others were estimated based on the indicated applicable rates. In those cases where a proportionate share of the natural gas gathering and processing charges were indicated to be payable by the Crown or royalties owned by others, these charges have been deducted in determining the net royalties payable.

Greenfire Resources Ltd. – Hangingstone Properties	Page 6
Constant Prices and Costs	March 20, 2024

The forecast Before Tax cashflows and Net Present Values include the recently amended Canadian Federal Carbon Tax schedule which increases from $65/ton in 2023 to $170/ton in 2030. In Alberta, an allowance has been included for changes to Technology Innovation and Emissions Reduction (TIER) regulation announced in December 2022.

In all cases, estimates of the applicable capital expenditures and operating costs with no allowance for inflation were deducted in arriving at the Company’s share of future net revenues. An allowance for future abandonment, decommissioning and reclamation (ADR) costs were included in this report. ADR costs related to the proved undeveloped reserves presented in the report have been included. ADR costs include but are not limited to items such as: producing wells, suspended wells, service wells, gathering systems, facilities, and surface land development. These costs and their respective timing have been supplied and represented by the Company and incorporated into this report without review. The ADR costs were included for all Company properties. The net present values were then obtained by employing 5, 8, 10, 12, 15, 20 and 25 percent nominal annual discount rates compounded annually.

The Company’s share of remaining reserves and net present values are presented on a total Company basis in Table 2-1 of Appendix 2.

The information relating to estimated proved reserves of the bitumen reserves contained in this report has been prepared in accordance with Paragraphs 932-235-50-4, 932-235-50-6, 932-235-50-7, 932-235-50-9, 932-235-50-30 and 932-235-50-31 of the Accounting Standards Update 932-235-50, Extractive Industries – Oil andGas (Topic 932): Oil and Gas Reserve Estimation and Disclosures (January 2010) of the Financial Accounting Standards Board and Rules 4–10(a) (1)–(32) of Regulation S–X and Rules 302(b), 1201, and 1202(a) (1), (2), (3), (4), (5), (8) of Regulation S-K of the Securities and Exchange Commission.

The future net revenues and net present value estimates in this report are presented before and after income taxes at the corporate level. The estimates of future income taxes were based on our understanding of current Canadian Oil and Gas tax calculations; however, income tax experts should be consulted before relying on any of the income tax estimates presented in this report.

Summaries of the Company’s share of remaining reserves together with forecast future revenues, royalties, taxes, operating and capital costs, abandonments, decommissioning and reclamation costs, future net revenue, income taxes and net present values are presented in detailed tabulations for each reserves category in Appendix 2.

APPENDIX 1

Netback Pricing Forecast and Calculations

Greenfire Resources Ltd.

Evaluation of Hangingstone Properties

Based on McDaniel December 2023 SEC Prices andCostsAs of December 31, 2023

McDaniel & Associates Consultants Ltd. Hangingstone Demo Oil Sands Price Forecast Based on 2023YE SEC Pricing Utilizing Historical Product and Transportation Offsets	Table 1 - 1
										Alberta	Alberta<br><br> Bow River											HARDISTY<br> DELIVERY		AB<br> TIER
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Year	U.S./<br> <br> Canada <br> Exchange		Inflation<br><br> %/year		WTI Price US/bbl	Edmonton<br> MSW1 CDN/bbl	WCS<br> at Hardisty2 CDN/bbl	WCS<br> at<br> Hardisty <br> % of WTI		Bow River<br> Hvy at Hardisty3 CDN/bbl	Hvy<br> at<br> Hardisty <br> % of<br> WTI		LLB<br> at Hardisty4 CDN/bbl	LLB<br> at<br> Hardisty <br> % of WTI		Edmonton<br> C5+5 CDN/bbl	Diluent<br> at Edmonton5 CDN/bbl	Diluent<br> at Fieldgate CDN/bbl	SCO<br> at Edmonton6 CDN/bbl	SCO at Edmonton<br> <br>% of WTI		WCS<br> DilBit at Hardisty CDN/bbl	Netback<br> Bitumen at Fieldgate7 CDN/bbl	Emissions<br> Cost /tonne CO2e	Natural<br> Gas at AECO CDN/MMBtu	Natural<br> Gas at Fieldgate CDN/MMBtu
2000		0.674										76.4			72.5						100.0
2001		0.646										62.4			58.4						100.3
2002		0.637										77.3			74.7						100.5
2003		0.716										75.4			71.9						100.2
2004		0.770										69.9			68.4						98.9
2005		0.826										65.5			62.5						103.1
2006		0.880										68.5			66.8						97.2
2007		0.935										68.9			66.6						102.2
2008		0.943							78.5			79.8			77.9						101.2
2009		0.880							83.6			85.9			83.1						98.5
2010		0.971							82.1			83.7			81.8						98.9
2011		1.012							82.0			83.6			81.7						108.9
2012		1.000							77.7			78.9			77.5						98.2
2013		0.971							74.6			75.9			74.8						99.2
2014		0.906							77.1			78.3			76.5						98.9
2015		0.780							71.6			73.7			71.0						99.9
2016		0.760							68.5			70.7			69.5						102.0
2017		0.770							76.7			78.7			74.4						102.8
2018		0.770							59.2			60.8			58.2						89.8
2019		0.755							77.8			79.5			76.2						99.6
2020		0.745							67.2			69.3			67.6						91.4
2021		0.800							81.0			81.6			81.3						97.9
2022		0.770							80.5			80.6			80.7						104.9
2023		0.740							76.0			76.1			76.2						104.3
2024		0.741		0.0					75.6			76.1			75.2						101.8
2025		0.741		0.0					75.6			76.1			75.2						101.8
2026		0.741		0.0					75.6			76.1			75.2						101.8
2027		0.741		0.0					75.6			76.1			75.2						101.8
2028		0.741		0.0					75.6			76.1			75.2						101.8
2029		0.741		0.0					75.6			76.1			75.2						101.8
2030		0.741		0.0					75.6			76.1			75.2						101.8
2031		0.741		0.0					75.6			76.1			75.2						101.8
2032		0.741		0.0					75.6			76.1			75.2						101.8
2033		0.741		0.0					75.6			76.1			75.2						101.8
2034		0.741		0.0					75.6			76.1			75.2						101.8
2035		0.741		0.0					75.6			76.1			75.2						101.8
2036		0.741		0.0					75.6			76.1			75.2						101.8
2037		0.741		0.0					75.6			76.1			75.2						101.8
2038		0.741		0.0					75.6			76.1			75.2						101.8
2039		0.741		0.0					75.6			76.1			75.2						101.8
2040		0.741		0.0					75.6			76.1			75.2						101.8
2041		0.741		0.0					75.6			76.1			75.2						101.8
2042		0.741		0.0					75.6			76.1			75.2						101.8
2043		0.741		0.0					75.6			76.1			75.2						101.8
2044		0.741		0.0					75.6			76.1			75.2						101.8
2045		0.741		0.0					75.6			76.1			75.2						101.8
2046		0.741		0.0					75.6			76.1			75.2						101.8
2047		0.741		0.0					75.6			76.1			75.2						101.8
2048		0.741		0.0					75.6			76.1			75.2						101.8
Thereafter		0.741		0.0					75.6			76.1			75.2						101.8

All values are in US Dollars.

NOTES:

1	40 degree API, 0.5 wt% sulphur
2	WCS at Hardisty with density of 928.7 kg/m^3^, API<br>of 20.7° and sulphur of 3.52 wt% as per 5 year average crude assay, www.crudemonitor.ca
---	---
3	BRN at Hardisty with density of 923.2kg/m^3^, API<br>of 21.7° and sulphur of 2.77 wt% as per 5 year average crude assay, www.crudemonitor.ca
---	---
4	LLB at Hardisty with density of 928.2 kg/m^3^, API<br>of 20.8° and sulphur of 3.53 wt% as per 5 year average crude assay, www.crudemonitor.ca
---	---
5	Edmonton C5+ price is based EPL segregated condensate price<br>(725 kg/m^3^ and 0.2 wt% sulphur) and historical average premium to Edmonton MSW. Diluent price includes a premium to the posted<br>price and has been adjusted for naphtha-quality diluent of 720 kg/m^3^
---	---
6	Sweet Synthetic Crude Oil at Edmonton
---	---
7	Blend ratio of diluent to bitumen assumed to be 0.31 bbl<br>: 0.69 bbl based on bitumen assay
---	---
Greenfire HS Demo Model - YE2023 SEC.xlsm	2024-02-14
---	---
McDaniel & Associates Consultants Ltd. Hangingstone Expansion Oil Sands Price ForecastBased on 2023YE SEC Pricing Utilizing Historical Product and Transportation Offsets	Table 1 - 2
---	---
****	****		****					****		Alberta	Alberta			****						****		HARDISTY<br> DELIVERY		AB TIER
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Year	U.S./ Canada Exchange		Inflation %/year		WTI Price US/bbl	Edmonton<br> MSW1 CDN/bbl	WCS<br> at<br> Hardisty2 CDN/bbl	WCS at Hardisty % of WTI		Bow River<br> <br> Hvy at Hardisty3 CDN/bbl	Bow River Hvy at Hardisty % of WTI		LLB<br> at<br> Hardisty4 CDN/bbl	LLB at Hardisty % of WTI		Edmonton<br> C5+5 CDN/bbl	Diluent<br> at<br> Edmonton5 CDN/bbl	Diluent<br> at<br> Fieldgate CDN/bbl	SCO<br> at<br> Edmonton6 CDN/bbl	SCO at Edmonton<br> <br>% of WTI		WCS<br> DilBit at<br> Hardisty CDN/bbl	Netback<br> Bitumen at<br> Fieldgate7<br> CDN/bbl	Emissions <br>Cost /tonne<br>CO2e	Natural<br> Gas at AECO CDN/MMBtu	Natural<br> Gas at Fieldgate CDN/MMBtu
2000		0.674										76.4			72.5						100.0
2001		0.646										62.4			58.4						100.3
2002		0.637										77.3			74.7						100.5
2003		0.716										75.4			71.9						100.2
2004		0.770										69.9			68.4						98.9
2005		0.826										65.5			62.5						103.1
2006		0.880										68.5			66.8						97.2
2007		0.935										68.9			66.6						102.2
2008		0.943							78.5			79.8			77.9						101.2
2009		0.880							83.6			85.9			83.1						98.5
2010		0.971							82.1			83.7			81.8						98.9
2011		1.012							82.0			83.6			81.7						108.9
2012		1.000							77.7			78.9			77.5						98.2
2013		0.971							74.6			75.9			74.8						99.2
2014		0.906							77.1			78.3			76.5						98.9
2015		0.780							71.6			73.7			71.0						99.9
2016		0.760							68.5			70.7			69.5						102.0
2017		0.770							76.7			78.7			74.4						102.8
2018		0.770							59.2			60.8			58.2						89.8
2019		0.755							77.8			79.5			76.2						99.6
2020		0.745							67.2			69.3			67.6						91.4
2021		0.800							81.0			81.6			81.3						97.9
2022		0.770							80.5			80.6			80.7						104.9
2023		0.740							76.0			76.1			76.2						104.3
2024		0.741		0.0					75.6			76.1			75.2						101.8
2025		0.741		0.0					75.6			76.1			75.2						101.8
2026		0.741		0.0					75.6			76.1			75.2						101.8
2027		0.741		0.0					75.6			76.1			75.2						101.8
2028		0.741		0.0					75.6			76.1			75.2						101.8
2029		0.741		0.0					75.6			76.1			75.2						101.8
2030		0.741		0.0					75.6			76.1			75.2						101.8
2031		0.741		0.0					75.6			76.1			75.2						101.8
2032		0.741		0.0					75.6			76.1			75.2						101.8
2033		0.741		0.0					75.6			76.1			75.2						101.8
2034		0.741		0.0					75.6			76.1			75.2						101.8
2035		0.741		0.0					75.6			76.1			75.2						101.8
2036		0.741		0.0					75.6			76.1			75.2						101.8
2037		0.741		0.0					75.6			76.1			75.2						101.8
2038		0.741		0.0					75.6			76.1			75.2						101.8
2039		0.741		0.0					75.6			76.1			75.2						101.8
2040		0.741		0.0					75.6			76.1			75.2						101.8
2041		0.741		0.0					75.6			76.1			75.2						101.8
2042		0.741		0.0					75.6			76.1			75.2						101.8
2043		0.741		0.0					75.6			76.1			75.2						101.8
2044		0.741		0.0					75.6			76.1			75.2						101.8
2045		0.741		0.0					75.6			76.1			75.2						101.8
2046		0.741		0.0					75.6			76.1			75.2						101.8
2047		0.741		0.0					75.6			76.1			75.2						101.8
2048		0.741		0.0					75.6			76.1			75.2						101.8
Thereafter		0.741		0.0					75.6			76.1			75.2						101.8

All values are in US Dollars.

NOTES:

1	40 degree API, 0.5 wt% sulphur
2	WCS at Hardisty with density of 928.7 kg/m^3^, API<br>of 20.7° and sulphur of 3.52 wt% as per 5 year average crude assay, www.crudemonitor.ca
---	---
3	BRN at Hardisty with density of 923.2kg/m^3^, API<br>of 21.7° and sulphur of 2.77 wt% as per 5 year average crude assay, www.crudemonitor.ca
---	---
4	LLB at Hardisty with density of 928.2 kg/m^3^, API<br>of 20.8° and sulphur of 3.53 wt% as per 5 year average crude assay, www.crudemonitor.ca
---	---
5	Edmonton C5+ price is based EPL segregated condensate price<br>(725 kg/m^3^ and 0.2 wt% sulphur) and historical average premium to Edmonton MSW. Diluent price includes a premium to the posted<br>price and has been adjusted for naphtha-quality diluent of 720 kg/m^3^
---	---
6	Sweet Synthetic Crude Oil at Edmonton
---	---
7	Blend ratio of diluent to bitumen assumed to be 0.31 bbl<br>: 0.69 bbl based on bitumen assay
---	---
Greenfire HS Expansion Model - YE2023 SEC.xlsm	2024-02-14
---	---

APPENDIX2

Reserves Detail – Corporate Consolidation

Greenfire Resources Ltd.

Evaluation of Hangingstone Properties

Based on McDaniel December2023 SEC Prices and CostsAs of December 31, 2023

Prices: 23YE SEC<br> Pricing <br> Eff. Date: December 31, 2023 <br> Currency: CAD	Greenfire Resources Ltd.<br><br> <br>Summary of Reserves and Net Present Values SEC Prices as of December 31, 2023	Table 2 - 1

HangingstoneConsolidated - MCM EX

Reserves - Dilbit Pricing, Natural Gas as Fuel

Summary of volumes

	Bitumen Sales
Classification and Product	Gross^1^<br> Mbbl		RI^2^ <br>Mbbl		Net^3^ <br>Mbbl
Proved Developed Producing - Bitumen		30,886		-		27,598
Proved Undeveloped - Bitumen		152,396		-		124,981
Total Proved - Bitumen		183,282		-		152,579

Summary of Net Present Values Before Income Taxes

	Cdn MM Dollars
Classification and Product	0.0%	5.0%		8.0%		10.0%		12.0%		15.0%		20.0%		25.0%
Proved Developed Producing - Bitumen			795		755		728		703		668		617		573
Proved Undeveloped - Bitumen			1,787		1,314		1,090		917		722		509		374
Total Proved - Bitumen			2,582		2,068		1,819		1,620		1,391		1,125		947
Probable - Bitumen
Total Proved + Probable - Bitumen

All values are in US Dollars.

Summary of Net Present Values After Income Taxes

	Cdn MM Dollars
Classification and Product	0.0%	5.0%		8.0%		10.0%		12.0%		15.0%		20.0%		25.0%
Proved Developed Producing - Bitumen			795		755		728		703		668		617		573
Proved Undeveloped - Bitumen			1,391		1,033		863		731		581		414		308
Total Proved – Bitumen			2,185		1,788		1,592		1,434		1,249		1,031		880

All values are in US Dollars.

Summary of Net Present Values Before Income Taxes - Per UnitBasis

	Cdn /bbl of Produced Bitumen
Classification and Product	0.0%	5.0%		8.0%		10.0%		12.0%		15.0%		20.0%		25.0%
Proved Developed Producing - Bitumen			25.73		24.43		23.58		22.77		21.64		19.96		18.54
Proved Undeveloped - Bitumen			11.73		8.62		7.15		6.02		4.74		3.34		2.45
Total Proved - Bitumen			14.09		11.29		9.92		8.84		7.59		6.14		5.16

All values are in US Dollars.

Summary of Net Present Values After Income Taxes - Per UnitBasis

	Cdn /bbl of Produced Bitumen
Classification and Product	0.0%	5.0%		8.0%		10.0%		12.0%		15.0%		20.0%		25.0%
Proved Developed Producing - Bitumen			25.73		24.43		23.58		22.77		21.64		19.96		18.54
Proved Undeveloped - Bitumen			9.12		6.78		5.67		4.79		3.81		2.72		2.02
Total Proved - Bitumen			11.92		9.75		8.68		7.82		6.82		5.62		4.80

All values are in US Dollars.

1	Gross volumes include working interest volumes before royalty<br>deductions
2	Royalty interest volumes
---	---
3	Net volumes are defined as gross volumes, less royalty deductions<br>payable
---	---
Greenfire HS Consolidated Model - YE2023 SEC - 1P Only	2024-03-08
---	---
Prices: 23YE SEC<br> Pricing <br> Eff. Date: December 31, 2023 <br> Currency: CAD	Greenfire Resources Ltd. Summary of Reserves, Resources and Net Present Value SEC Prices as of December 31, 2023 Remaining Reserves and Resources Hangingstone Consolidated - MCM EX	Table 2 - 2
---	---	---
	Light and Medium Oil				Heavy Oil				Bitumen				Natural Gas				Natural Gas Liquids				Sulphur
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Classification	Gross (Mbbl)		Net (Mbbl)		Gross (Mbbl)		Net (Mbbl)		Gross (Mbbl)		Net (Mbbl)		Gross (MMcf)		Net (MMcf)		Gross (MMcf)		Net (MMcf)		Gross (Mlt)		Net (Mlt)
Proved Developed Producing		-		-		-		-		30,886		27,598		-		-		-		-		-		-
Proved Developed Non- Producing		-		-		-		-		-		-		-		-		-		-		-		-
Proved Undeveloped		-		-		-		-		152,396		124,981		-		-		-		-		-		-
Total Proved		-		-		-		-		183,282		152,579		-		-		-		-		-		-

Net Present Values of Future Net Revenue

	Before Income Tax Discounted at (%/year)					After Income Tax Discounted at (%/year)
	@0%	@5%	@10%	@15%	@20%	@0%	@5%	@10%	@15%	@20%
Classification	(MM)	(MM)	(MM)	(MM)	(MM)	(MM)	(MM)	(MM)	(MM)	(MM)
Proved Developed Producing
Proved Developed Non- Producing
Proved Undeveloped
Total Proved

All values are in US Dollars.

Greenfire HS Consolidated Model - YE2023 SEC - 1P Only	2024-03-08
Prices: 23YE<br> SEC Pricing <br><br> Eff. Date: December 31, 2023 <br><br> Currency: CAD	Greenfire Resources Ltd. Undiscounted Future Net Revenue SEC Prices as of December 31, 2023 Total Reserves and Resources Hangingstone Consolidated - MCM EX	Table 2 - 3
---	---	---
	Sales		Operating	Total Development	Well Abandonment	Future Net<br>Revenue	Income	Future Net<br>Revenue
---	---	---	---	---	---	---	---	---
	Revenue1	Royalties2	Costs	Costs	Costs	Before Tax	Taxes	After Tax
Classification	M	M	M	M	M	M	M	M
Total Proved

All values are in US Dollars.

1	Sales Revenue includes all non-producing income.
2	Royalties includes any net profits interests paid.
---	---
Greenfire HS Consolidated Model - YE2023 SEC - 1P Only	2024-03-08
---	---
Prices: 23YE SEC Pricing <br><br>Eff. Date: December 31, 2023 <br><br>Currency: CAD	Greenfire Resources Ltd. Oil & Gas Reserves and Resources and Net Present Values by Production Group SEC Prices as of December 31, 2023 Total Reserves and Resources	Table 2 - 4
---	---	---
																	Net Present Value of Future Net Revenue			Unit	BOEs^3^
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Oil				Gas^1^				NGL				Bitumen				Before Income Taxes4			Values2	(Value
Group by Category	Gross<br><br> (Mbbl)		Net<br><br> (Mbbl)		Gross<br><br> (MMcf)		Net<br><br> (MMcf)		Gross<br><br> (Mbbl)		Net<br><br> (Mbbl)		Gross<br><br> (Mbbl)		Net<br><br> (Mbbl)		5%<br>MM	10%<br>MM	15%<br>MM	/bbl<br>/Mcf	Conversion)<br><br>(Mbbl)
Light and Medium Oil (Including Associated Gas and Byproducts)
Proved Developed Producing		-		-		-		-		-		-		-		-						-
Proved Developed Non- Producing		-		-		-		-		-		-		-		-						-
Proved Undeveloped		-		-		-		-		-		-		-		-						-
Total Proved		-		-		-		-		-		-		-		-						-
Heavy Oil & Bitumen (Including Associated Gas and Byproducts)
Proved Developed Producing		-		-		-		-		-		-		30,886		27,598						N/A
Proved Developed Non- Producing		-		-		-		-		-		-		-		-						-
Proved Undeveloped		-		-		-		-		-		-		152,396		124,981						N/A
Total Proved		-		-		-		-		-		-		183,282		152,579						N/A
Non-Associated Gas (Including Byproducts)
Proved Developed Producing		-		-		-		-		-		-		-		-						-
Proved Developed Non- Producing		-		-		-		-		-		-		-		-						-
Proved Undeveloped		-		-		-		-		-		-		-		-						-
Total Proved		-		-		-		-		-		-		-		-						-

All values are in US Dollars.

1	Gas reserves/resources included in Light, Medium and Heavy<br>Oil are Solution Gas reserves only.
2	Unit values are calcuated using the 10% discount rate divided<br>by the Major Product Type net reserves/resources for each group.
---	---
3	BOEs are calculated by dividing the unit values of Light<br>and Medium Oil reserves/resources by the unit values of the other major product type reserves/resources for each classification. This<br>results in BOEs calculated on a value basis.
---	---
4	Processing income included where applicable.
---	---
Greenfire HS Consolidated Model - YE2023 SEC - 1P Only	2024-03-08
---	---
Prices:<br> 23YE SEC Pricing <br> Eff. Date: December 31, 2023 <br> Currency: CAD	Greenfire Resources Ltd.<br><br> <br>Future Capital and Abandonment Costs SEC Prices as of December 31, 2023	Table 2 - 5
---	---	---

Hangingstone Consolidated - MCM EX


Capital Cost Forecast (M)
Total Proved
Undiscounted	85,177	105,850	52,275	30,975	39,225	44,715	46,255	35,995	51,505	42,380	41,390	52,130	51,140	44,630	51,140	321,215	1,095,997
Discounted @10%	81,213	91,749	41,192	22,189	25,544	26,472	24,895	17,611	22,909	17,137	15,215	17,421	15,536	12,326	12,840	55,647	499,898
Low Estimate Resouces
Undiscounted	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Discounted @10%	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Best Estimate Resources
Undiscounted	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Discounted @10%	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Abandonment Cost Forecast (M)
Total Proved
Undiscounted	-	-	-	572	-	-	-	466	1,659	5,042	1,788	2,789	3,373	680	2,601	92,649	111,619
Discounted @10%	-	-	-	410	-	-	-	228	738	2,039	657	932	1,025	188	653	3,809	10,679
Low Estimate Resouces
Undiscounted	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Discounted @10%	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Best Estimate Resources
Undiscounted	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Discounted @10%	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-

All values are in US Dollars.

Greenfire HS Consolidated Model - YE2023 SEC - 1P Only	2024-03-08
Prices: 23YE SEC<br> Pricing <br> Eff. Date: December 31, 2023 <br> Currency: CAD	Greenfire Resources Ltd. Reconciliation of Reserves - Before Royalties SEC Prices as of December 31, 2023 Hangingstone Consolidated - MCM EX	Table 2 - 6
---	---	---
****	****			****		****			MOVEMENT		****			****		****		****		****
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
****	****	Opening<br><br>Balance		Revisions		****	MOVEMENT<br><br>FROM PA		FROM UNDEV		****	MOVEMENTFROM NP		Economic Factors		Extensions		Production		****	Closing<br><br>Balance
Project	Classification	(Mbbl)		(Mbbl)		****	(Mbbl)		(Mbbl)		****	(Mbbl)		(Mbbl)		(Mbbl)		(Mbbl)		****	(Mbbl)
Hangingstone Area	Proved Developed Producing - Bitumen		35,360		(1,986	)		-		3,951			-		-		-		(6,438.2	)		30,886
	Proved Non- Producing Reserves - Bitumen		-		-			-		-			-		-		-		-			-
	Proved Undeveloped Reserves - Bitumen		148,007		1,543			-		(3,951	)		-		-		6,797		-			152,396
	Total Proved Reserves - Bitumen		183,367		(444	)		-		-			-		-		6,797		(6,438.2	)		183,282
Greenfire HS Consolidated Model - YE2023 SEC - 1P Only	2024-03-08
---	---
Prices: 23YE SEC<br> Pricing <br> Eff. Date: December 31, 2023 <br> Currency: CAD	Greenfire Resources Ltd. Reconciliation of Reserves - After Royalties SEC Prices as of December 31, 2023 Hangingstone Consolidated - MCM EX	Table 2 - 7
---	---	---
****	****			****		****			MOVEMENT		****			****		****		****		****
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
****	****	Opening<br><br>Balance		Revisions		****	MOVEMENT<br><br>FROM PA		FROM UNDEV		****	MOVEMENTFROM NP		Economic Factors		Extensions		Production		****	Closing<br><br>Balance
Project	Classification	(MBbl)		(MBbl)		****	(MBbl)		(MBbl)		****	(MBbl)		(MBbl)		(MBbl)		(MBbl)		****	(MBbl)
Hangingstone Area	Proved Developed Producing - Bitumen		30,440		(430	)		-		3,087			-		713		-		(6,212.3	)		27,598
	Proved Non- Producing Reserves - Bitumen		-		-			-		-			-		-		-		-			-
	Proved Undeveloped Reserves - Bitumen		115,773		(1,547	)		-		(3,087	)		-		8,545		5,297		-			124,981
	Total Proved Reserves - Bitumen		146,212		(1,976	)		-		-			-		9,258		5,297		(6,212.3	)		152,579
Greenfire HS Consolidated Model - YE2023 SEC - 1P Only	2024-03-08
---	---
Prices: 23YE SEC<br> Pricing <br> Eff. Date: December 31, 2023 <br> Currency: CAD	Greenfire Resources Ltd. Forecast of Company Share Production and Revenues SEC Prices as of December 31, 2023 Proved Developed Producing Hangingstone Consolidated - MCM EX	Table 2 - 8
---	---	---

Reserves - Dilbit Pricing, Natural Gas as Fuel

NOTE: ALL VALUES SHOWN AS COMPANY-SHARE

Year
2024	45	21,288	7,770	25,520	3.28	3.28	7.2
2025	43	17,181	6,271	21,364	3.41	3.34	9.6
2026	43	12,986	4,740	17,151	3.62	3.41	11.2
2027	43	9,857	3,598	13,842	3.85	3.48	11.8
2028	43	7,455	2,721	11,050	4.06	3.54	12.5
2029	43	5,576	2,035	8,735	4.29	3.60	12.9
2030	41	4,012	1,464	6,618	4.52	3.65	13.3
2031	28	2,518	919	4,353	4.74	3.68	14.7
2032	23	1,664	607	3,108	5.12	3.71	14.4
2033	14	1,037	378	2,078	5.49	3.73	16.8
2034	6	497	181	1,138	6.28	3.75	18.7
2035	6	422	154	976	6.33	3.76	18.3
2036	2	70	25	134	5.25	3.76	14.1	)	)	)	)	)	)	)	)	)	)	)	)
2037	2	56	20	110	5.40	3.76	11.9
2038	-	-	-	-	-	3.76	-	)	)	)	)	)	)	)	)	)	)	)	)
2039	-	-	-	-	-	3.76	-
2040	-	-	-	-	-	3.76	-	)	)	)	)	)	)	)	)	)	)	)	)
2041	-	-	-	-	-	3.76	-
2042	-	-	-	-	-	3.76	-
2043	-	-	-	-	-	3.76	-	)	)	)	)	)	)	)	)	)	)	)	)
2044	-	-	-	-	-	3.76	-
2045	-	-	-	-	-	3.76	-
2046	-	-	-	-	-	3.76	-
2047	-	-	-	-	-	3.76	-	)	)	)	)	)	)	)	)	)	)	)	)
2048	-	-	-	-	-	3.76	-
2049	-	-	-	-	-	3.76	-
2050	-	-	-	-	-	3.76	-
2051	-	-	-	-	-	3.76	-
2052	-	-	-	-	-	3.76	-
2053	-	-	-	-	-	3.76	-
2054	-	-	-	-	-	3.76	-
2055	-	-	-	-	-	3.76	-
2056	-	-	-	-	-	3.76	-
2057	-	-	-	-	-	3.76	-
2058	-	-	-	-	-	3.76	-
2059	-	-	-	-	-	3.76	-
2060	-	-	-	-	-	3.76	-
2061	-	-	-	-	-	3.76	-
2062	-	-	-	-	-	3.76	-
2063	-	-	-	-	-	3.76	-
2064	-	-	-	-	-	3.76	-
2065	-	-	-	-	-	3.76	-
2066	-	-	-	-	-	3.76	-
2067	-	-	-	-	-	3.76	-
2068	-	-	-	-	-	3.76	-
2069	-	-	-	-	-	3.76	-
2070	-	-	-	-	-	3.76	-
2071	-	-	-	-	-	3.76	-
2072	-	-	-	-	-	3.76	-
2073	-	-	-	-	-	3.76	-
TOTALS			30,886	116,177		3.76	10.6

All values are in US Dollars.

Greenfire HS Consolidated Model - YE2023 SEC - 1P Only	2024-03-08
Prices:<br> 23YE SEC Pricing <br> Eff. Date: December 31, 2023 <br> Currency: CAD	Greenfire Resources Ltd. Forecast of Volumes and Capital Costs SEC Prices as of December 31, 2023 Proved Developed Producing Hangingstone Consolidated - MCM EX	Table 2 - 9
---	---	---
****	****		VOLUMES FORECAST GROSS LEASE BASIS						CAPITAL COSTS GROSS LEASE BASIS														CAPITAL<br> COSTS<br> CO. SHARE BASIS
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Year	Project<br><br> Year		Producing<br><br> McM SAGD<br><br> Pairs<br> #		McM<br><br> Production<br> Rate<br> bopd		Project<br><br> Capacity<br> Calendar Day<br> bopd			Drilled<br><br> Delineation<br> Wells<br> #		Drilled<br><br> SAGD<br> Pairs<br> #		Drilled<br><br> Infill<br> Wells<br> #		Delineation<br> Wells M 2023	SAGD<br> Pairs M 2023	Infill<br> Wells M 2023	SAGD<br> Facilities M 2023	Maintenance<br> Costs M 2023	Total<br> M 2023	Total<br> M Current	Total<br> M 2023	Total<br> M Current
2024		1		53		27,000		30,000			-		-		-
2025		2		51		21,612		21,612			-		-		-
2026		3		51		16,169		16,169			-		-		-
2027		4		51		12,116		12,116			-		-		-
2028		5		51		9,033		9,033			-		-		-
2029		6		51		6,700		6,700			-		-		-
2030		7		49		4,770		4,770			-		-		-
2031		8		33		2,904		2,904			-		-		-
2032		9		27		1,912		1,912			-		-		-
2033		10		16		1,123		1,123			-		-		-
2034		11		6		497		497			-		-		-
2035		12		6		422		422			-		-		-
2036		13		2		70		70			-		-		-
2037		14		2		56		56			-		-		-
2038		15		-		-		-			-		-		-
2039		16		-		-		-			-		-		-
2040		17		-		-		-			-		-		-
2041		18		-		-		-			-		-		-
2042		19		-		-		-			-		-		-
2043		20		-		-		-			-		-		-
2044		21		-		-		-			-		-		-
2045		22		-		-		-			-		-		-
2046		23		-		-		-			-		-		-
2047		24		-		-		-			-		-		-
2048		25		-		-		-			-		-		-
2049		26		-		-		-			-		-		-
2050		27		-		-		-			-		-		-
2051		28		-		-		-			-		-		-
2052		29		-		-		-			-		-		-
2053		30		-		-		-			-		-		-
2054		31		-		-		-			-		-		-
2055		32		-		-		-			-		-		-
2056		33		-		-		-			-		-		-
2057		34		-		-		-			-		-		-
2058		35		-		-		-			-		-		-
2059		36		-		-		-			-		-		-
2060		37		-		-		-			-		-		-
2061		38		-		-		-			-		-		-
2062		39		-		-		-			-		-		-
2063		40		-		-		-			-		-		-
2064		41		-		-		-			-		-		-
2065		42		-		-		-			-		-		-
2066		43		-		-		-			-		-		-
2067		44		-		-		-			-		-		-
2068		45		-		-		-			-		-		-
2069		46		-		-		-			-		-		-
2070		47		-		-		-			-		-		-
2071		48		-		-		-			-		-		-
2072		49		-		-		-			-		-		-
2073		50		-		-		-			-		-		-
Total											-		-		-

All values are in US Dollars.

Delineation Well Cost:	$	425,000	(2023 Dollars)
Individual Well Pair Cost (incl. Pads & Gathering System):	$	7,650,000	(2023 Dollars)
Initial Project Cost, expressed as $/bbl of daily bitumen capacity:	$	-	(2023 Dollars)
Total Project Cost, expressed as $/bbl of daily bitumen capacity:	$	990	(2023 Dollars)
Total Project Cost, expressed as $/bbl of recoverable bitumen:	$	0.96	(2023 Dollars)

Capital costs associated with transportation pipelinesare not included.

Greenfire HS Consolidated Model - YE2023 SEC - 1P Only	2024-03-08
Prices: 23YE SEC Pricing <br><br>Eff. Date: December 31, 2023 <br><br>Currency: CAD	Greenfire Resources Ltd.<br><br> <br>Forecast of Company Share Production and Revenues<br><br> <br>SEC Prices as of December 31, 2023<br><br> <br>Proved Undeveloped Reserves<br><br> <br>Hangingstone Consolidated - MCM EX	Table 2 - 10
---	---	---

NOTE:ALL VALUES SHOWN AS COMPANY-SHARE

Reserves - Dilbit Pricing, Natural Gas as Fuel

Year
2024	6	1,939	708	2,199	3.11	3.11	7.2	)		)	)	)	)	)	)	)	)	)	)	)	)	)	)
2025	22	7,254	2,648	6,729	2.54	2.66	2.4	)		)	)	)	)	)	)	)	)	)	)	)	)	)	)
2026	33	13,520	4,935	14,883	3.02	2.87	8.6	)
2027	35	16,561	6,045	18,732	3.10	2.97	12.0
2028	38	16,108	5,879	19,916	3.39	3.09	10.6
2029	40	16,224	5,922	20,624	3.48	3.18	10.1
2030	41	17,190	6,274	21,614	3.44	3.23	9.3
2031	43	18,559	6,774	22,404	3.31	3.24	8.5
2032	46	18,473	6,743	22,219	3.30	3.25	8.2
2033	52	18,854	6,882	22,762	3.31	3.26	12.5
2034	54	19,114	6,976	22,301	3.20	3.25	22.6
2035	57	18,902	6,899	21,838	3.17	3.24	21.6
2036	58	18,476	6,744	21,661	3.21	3.24	21.3
2037	56	18,672	6,815	21,621	3.17	3.23	22.2
2038	58	18,786	6,857	21,169	3.09	3.22	21.8
2039	60	18,861	6,884	21,472	3.12	3.21	22.4
2040	58	18,767	6,850	21,104	3.08	3.21	20.8
2041	61	18,817	6,868	21,255	3.09	3.20	21.4
2042	63	18,883	6,892	21,054	3.05	3.19	22.0
2043	63	18,343	6,695	20,454	3.06	3.18	25.0		)
2044	60	16,394	5,984	17,493	2.92	3.17	24.9
2045	58	13,938	5,087	14,753	2.90	3.16	23.2
2046	56	12,434	4,538	12,682	2.79	3.15	22.9
2047	56	11,358	4,146	11,246	2.71	3.14	22.3		)
2048	53	10,209	3,726	9,543	2.56	3.12	24.7
2049	43	7,895	2,882	7,774	2.70	3.11	21.9
2050	35	5,539	2,022	5,915	2.93	3.11	24.9
2051	20	3,265	1,192	3,905	3.28	3.11	24.0
2052	14	1,980	723	2,828	3.91	3.11	17.8
2053	9	1,193	435	2,163	4.97	3.12	13.3
2054	9	855	312	1,677	5.38	3.12	13.3
2055	2	163	59	322	5.43	3.13	7.2			)		)	)	)	)	)	)		)	)	)	)	)
2056	-	-	-	-	-	3.13	-
2057	-	-	-	-	-	3.13	-			)		)	)	)	)	)	)		)	)	)	)	)
2058	-	-	-	-	-	3.13	-			)		)	)	)	)	)	)		)	)	)	)	)
2059	-	-	-	-	-	3.13	-
2060	-	-	-	-	-	3.13	-
2061	-	-	-	-	-	3.13	-
2062	-	-	-	-	-	3.13	-
2063	-	-	-	-	-	3.13	-
2064	-	-	-	-	-	3.13	-
2065	-	-	-	-	-	3.13	-
2066	-	-	-	-	-	3.13	-
2067	-	-	-	-	-	3.13	-
2068	-	-	-	-	-	3.13	-
2069	-	-	-	-	-	3.13	-
2070	-	-	-	-	-	3.13	-
2071	-	-	-	-	-	3.13	-
2072	-	-	-	-	-	3.13	-
2073	-	-	-	-	-	3.13	-			)		)	)	)	)	)	)		)	)	)	)	)
TOTALS			152,396	476,310		3.13	18.0

All values are in US Dollars.

Greenfire HS Consolidated Model - YE2023 SEC - 1P Only	2024-03-08
Prices: 23YE SEC Pricing <br><br>Eff. Date: December 31, 2023 <br><br>Currency: CAD	Greenfire Resources Ltd. Forecast of Volumes and Capital Costs SEC Prices as of December 31, 2023 Proved Undeveloped Reserves Hangingstone Consolidated - MCM EX	Table 2 - 11
---	---	---
****		****		VOLUMES FORECAST GROSS LEASE BASIS						CAPITAL COSTS GROSS LEASE BASIS													CAPITAL<br> COSTS<br> CO. SHARE BASIS
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Year		Project<br><br> Year		Producing<br><br> McM SAGD<br> Pairs<br> #		McM<br><br> Production<br> Rate<br> bopd		Project<br> <br> Capacity <br> Calendar Day <br> bopd		Drilled<br> <br> Delineation <br> Wells <br> #		Drilled<br> <br> SAGD <br> Pairs^1^#		Drilled<br> <br> Infill <br> Wells<br> #		Delineation<br> Wells M 2023	SAGD<br> Pairs M 2023	Infill<br> Wells M 2023	SAGD<br> Facilities M 2023	Maintenance<br> & Other Costs M 2023	Total<br> M 2023	Total<br> M Current	Total<br> M 2023	Total<br> M Current
	2024		1		7		2,345		4,000		5		-		7
	2025		2		25		8,785		12,388		5		-		18
	2026		3		39		16,533		17,831		-		9		4
	2027		4		41		20,434		21,884		-		3		-
	2028		5		45		20,151		24,967		-		4		-
	2029		6		48		20,616		24,555		2		5		1
	2030		7		49		22,140		25,307		-		5		3
	2031		8		53		24,183		26,141		2		4		7
	2032		9		58		24,195		26,313		-		4		2
	2033		10		66		24,825		26,597		2		6		4
	2034		11		70		25,300		26,555		-		4		5
	2035		12		75		25,080		26,369		2		4		5
	2036		13		76		24,554		26,240		-		6		4
	2037		14		74		24,835		26,184		2		6		4
	2038		15		77		25,010		26,114		-		4		6
	2039		16		80		25,118		26,088		-		6		4
	2040		17		77		25,001		26,068		-		5		4
	2041		18		81		25,072		26,053		-		7		6
	2042		19		84		25,177		26,000		-		6		6
	2043		20		84		24,457		26,000		-		6		4
	2044		21		80		21,858		26,000		-		-		6
	2045		22		77		18,584		26,000		-		-		5
	2046		23		74		16,579		26,000		-		-		7
	2047		24		74		15,144		26,000		-		-		6
	2048		25		70		13,612		26,000		-		-		6
	2049		26		57		10,527		26,000		-		-		-
	2050		27		46		7,385		10,000		-		-		-
	2051		28		27		4,353		5,000		-		-		-
	2052		29		18		2,640		5,000		-		-		-
	2053		30		12		1,590		2,500		-		-		-
	2054		31		12		1,140		2,500		-		-		-
	2055		32		2		217		2,500		-		-		-
	2056		33		-		-		-		-		-		-
	2057		34		-		-		-		-		-		-
	2058		35		-		-		-		-		-		-
	2059		36		-		-		-		-		-		-
	2060		37		-		-		-		-		-		-
	2061		38		-		-		-		-		-		-
	2062		39		-		-		-		-		-		-
	2063		40		-		-		-		-		-		-
	2064		41		-		-		-		-		-		-
	2065		42		-		-		-		-		-		-
	2066		43		-		-		-		-		-		-
	2067		44		-		-		-		-		-		-
	2068		45		-		-		-		-		-		-
	2069		46		-		-		-		-		-		-
	2070		47		-		-		-		-		-		-
	2071		48		-		-		-		-		-		-
	2072		49		-		-		-		-		-		-
	2073		50		-		-		-		-		-		-
	Total										20		94		124

All values are in US Dollars.

Delineation Well Cost:	$	425,000	(2023 Dollars)
Individual Well Pair Cost (incl. Pads & Gathering System):	$	7,650,000	(2023 Dollars)
Infill Well Cost:	$	3,250,000	(2023 Dollars)
Initial Project Cost, expressed as $/bbl of daily bitumen capacity:	$	-	(2023 Dollars)
Total Project Cost, expressed as $/bbl of daily bitumen capacity:	$	52,659	(2023 Dollars)
Total Project Cost, expressed as $/bbl of recoverable bitumen:	$	9.19	(2023 Dollars)
1)	Well-Pairs are drilled, completed and tied-in in the yearprior to production. Capital costs associated with transportation pipelines are not included.
---	---
Greenfire HS Consolidated Model - YE2023 SEC - 1P Only	2024-03-08
---	---
Prices: 23YE SEC Pricing <br><br>Eff. Date: December 31, 2023 <br><br>Currency: CAD	Greenfire Resources Ltd. Forecast of Volumes and Capital Costs SEC Prices as of December 31, 2023 Proved Undeveloped Reserves Hangingstone Consolidated - MCM EX	Table 2 - 12
---	---	---

NOTE:ALL VALUES SHOWN AS COMPANY-SHARE

Reserves - Dilbit Pricing, Natural Gas as Fuel

Year
2024	51	23,226	8,478	27,719	3.27	3.27	7.2
2025	65	24,434	8,919	28,092	3.15	3.21	7.4
2026	76	26,507	9,675	32,034	3.31	3.24	9.8
2027	78	26,418	9,643	32,574	3.38	3.28	11.9
2028	81	23,562	8,600	30,966	3.60	3.34	11.2
2029	83	21,801	7,957	29,359	3.69	3.39	10.8
2030	82	21,202	7,739	28,232	3.65	3.43	10.0
2031	71	21,077	7,693	26,757	3.48	3.43	9.2
2032	69	20,137	7,350	25,327	3.45	3.43	8.7
2033	66	19,891	7,260	24,840	3.42	3.43	12.7
2034	60	19,610	7,158	23,439	3.27	3.42	22.5
2035	63	19,325	7,054	22,814	3.23	3.41	21.5
2036	60	18,546	6,769	21,794	3.22	3.39	21.3
2037	58	18,728	6,836	21,730	3.18	3.38	22.1
2038	58	18,786	6,857	21,169	3.09	3.36	21.8
2039	60	18,861	6,884	21,472	3.12	3.35	22.4
2040	58	18,767	6,850	21,104	3.08	3.34	20.8
2041	61	18,817	6,868	21,255	3.09	3.32	21.4
2042	63	18,883	6,892	21,054	3.05	3.31	22.0
2043	63	18,343	6,695	20,454	3.06	3.30	25.0
2044	60	16,394	5,984	17,493	2.92	3.29	24.9
2045	58	13,938	5,087	14,753	2.90	3.27	23.2
2046	56	12,434	4,538	12,682	2.79	3.26	22.9
2047	56	11,358	4,146	11,246	2.71	3.25	22.3
2048	53	10,209	3,726	9,543	2.56	3.23	24.7
2049	43	7,895	2,882	7,774	2.70	3.22	21.9
2050	35	5,539	2,022	5,915	2.93	3.22	24.9
2051	20	3,265	1,192	3,905	3.28	3.22	24.0
2052	14	1,980	723	2,828	3.91	3.22	17.8
2053	9	1,193	435	2,163	4.97	3.23	13.3
2054	9	855	312	1,677	5.38	3.23	13.3
2055	2	163	59	322	5.43	3.23	7.2	)	)	)	)	)	)	)	)	)	)	)	)
2056	-	-	-	-	-	3.23	-
2057	-	-	-	-	-	3.23	-	)	)	)	)	)	)	)	)	)	)	)	)
2058	-	-	-	-	-	3.23	-	)	)	)	)	)	)	)	)	)	)	)	)
2059	-	-	-	-	-	3.23	-
2060	-	-	-	-	-	3.23	-
2061	-	-	-	-	-	3.23	-
2062	-	-	-	-	-	3.23	-
2063	-	-	-	-	-	3.23	-
2064	-	-	-	-	-	3.23	-
2065	-	-	-	-	-	3.23	-
2066	-	-	-	-	-	3.23	-
2067	-	-	-	-	-	3.23	-
2068	-	-	-	-	-	3.23	-
2069	-	-	-	-	-	3.23	-
2070	-	-	-	-	-	3.23	-
2071	-	-	-	-	-	3.23	-
2072	-	-	-	-	-	3.23	-
2073	-	-	-	-	-	3.23	-	)	)	)	)	)	)	)	)	)	)	)	)
TOTALS			183,282	592,487		3.23	16.7

All values are in US Dollars.

Greenfire HS Consolidated Model - YE2023 SEC - 1P Only	2024-03-08
Prices: 23YE SEC Pricing <br><br>Eff. Date: December 31, 2023 <br><br>Currency: CAD	Greenfire Resources Ltd. Forecast of Volumes and Capital Costs SEC Prices as of December 31, 2023 Total Proved Reserves Hangingstone Consolidated - MCM EX	Table 2 - 13
---	---	---
****	****		VOLUMES FORECAST GROSS LEASE BASIS						CAPITAL COSTS GROSS LEASE BASIS													CAPITAL<br> COSTS<br> CO. SHARE BASIS
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Year	Project<br><br> Year		Producing<br><br> McM SAGD<br> Pairs<br> #		McM<br><br> Production<br> Rate<br> bopd		Project<br> <br> Capacity <br> Calendar Day <br> bopd		Drilled<br> <br> Delineation <br> Wells <br> #		Drilled<br> <br> SAGD <br> Pairs^1^#		Drilled<br> <br> Infill <br> Wells<br> #		Delineation<br> Wells M 2023	SAGD<br> Pairs M 2023	Infill<br> Wells M 2023	SAGD<br> Facilities M 2023	Maintenance<br> & Other Costs M 2023	Total<br> M 2023	Total<br> M Current	Total<br> M 2023	Total<br> M Current
2024		1		60		29,345		34,000		5		-		7
2025		2		76		30,397		34,000		5		-		18
2026		3		90		32,702		34,000		-		9		4
2027		4		92		32,550		34,000		-		3		-
2028		5		96		29,184		34,000		-		4		-
2029		6		99		27,316		31,254		2		5		1
2030		7		98		26,910		30,077		-		5		3
2031		8		86		27,088		29,045		2		4		7
2032		9		85		26,108		28,226		-		4		2
2033		10		82		25,948		27,720		2		6		4
2034		11		76		25,797		27,051		-		4		5
2035		12		81		25,502		26,792		2		4		5
2036		13		78		24,624		26,310		-		6		4
2037		14		76		24,891		26,240		2		6		4
2038		15		77		25,010		26,114		-		4		6
2039		16		80		25,118		26,088		-		6		4
2040		17		77		25,001		26,068		-		5		4
2041		18		81		25,072		26,053		-		7		6
2042		19		84		25,177		26,000		-		6		6
2043		20		84		24,457		26,000		-		6		4
2044		21		80		21,858		26,000		-		-		6
2045		22		77		18,584		26,000		-		-		5
2046		23		74		16,579		26,000		-		-		7
2047		24		74		15,144		26,000		-		-		6
2048		25		70		13,612		26,000		-		-		6
2049		26		57		10,527		26,000		-		-		-
2050		27		46		7,385		10,000		-		-		-
2051		28		27		4,353		5,000		-		-		-
2052		29		18		2,640		5,000		-		-		-
2053		30		12		1,590		2,500		-		-		-
2054		31		12		1,140		2,500		-		-		-
2055		32		2		217		2,500		-		-		-
2056		33		-		-		-		-		-		-
2057		34		-		-		-		-		-		-
2058		35		-		-		-		-		-		-
2059		36		-		-		-		-		-		-
2060		37		-		-		-		-		-		-
2061		38		-		-		-		-		-		-
2062		39		-		-		-		-		-		-
2063		40		-		-		-		-		-		-
2064		41		-		-		-		-		-		-
2065		42		-		-		-		-		-		-
2066		43		-		-		-		-		-		-
2067		44		-		-		-		-		-		-
2068		45		-		-		-		-		-		-
2069		46		-		-		-		-		-		-
2070		47		-		-		-		-		-		-
2071		48		-		-		-		-		-		-
2072		49		-		-		-		-		-		-
2073		50		-		-		-		-		-		-
Total												20		94

All values are in US Dollars.

Delineation Well Cost:	$	425,000	(2023 Dollars)
Individual Well Pair Cost (incl. Pads & Gathering System):	$	7,650,000	(2023 Dollars)
Infill Well Cost:	$	3,250,000	(2023 Dollars)
Initial Project Cost, expressed as $/bbl of daily bitumen capacity:	$	-	(2023 Dollars)
Total Project Cost, expressed as $/bbl of daily bitumen capacity:	$	42,067	(2023 Dollars)
Total Project Cost, expressed as $/bbl of recoverable bitumen:	$	7.80	(2023 Dollars)
1)	Well-Pairs are drilled, completed and tied-in in the yearprior to production. Capital costs associated with transportation pipelines are not included.
---	---
Greenfire HS Consolidated Model - YE2023 SEC - 1P Only	2024-03-08
---	---

APPENDIX 3

Geological Mapping

Greenfire Resources Ltd.

Evaluation of Hangingstone Properties

As of December 31, 2023

Exhibit 15.4

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-275129 on Form F-1 and Registration Statement No. 333-277054 on Form S-8 of our report dated March 20, 2024, relating to the financial statements of Greenfire Resources Ltd. appearing in this Annual Report on Form 20-F for the year ended December 31, 2023.

We consent to the incorporation by reference in Registration Statement No. 333-275129 on Form F-1 and Registration Statement No. 333-277054 on Form S-8 of our report dated April 21, 2023, relating to the financial statements of Japan Canada Oilsands Limited appearing in this Annual Report on Form 20-F of Greenfire Resources Ltd. for the year ended December 31, 2023.

/s/ Deloitte LLP

Chartered Professional Accountants

Calgary, Canada

March 26, 2024

Exhibit 97.1

GREENFIRE RESOURCES LTD.

INCENTIVE-BASEDCOMPENSATION RECOVERY POLICY

EFFECTIVE SEPTEMBER 20, 2023

1.	Policy Purpose. The purpose of this Greenfire Resources<br>Ltd. (the “Corporation”) Incentive-Based Compensation Recovery Policy (this “Policy”) is to enable<br>the Corporation to recover Erroneously Awarded Compensation in the event that the Corporation is required to prepare an Accounting Restatement.<br>This Policy is intended to comply with the requirements set forth in Section 303A.14 of the NYSE Listed Company Manual (the “Listing<br>Rule”) and shall be construed and interpreted in accordance with such intent. Unless otherwise defined in this Policy, capitalized<br>terms shall have the meaning ascribed to such terms in Section 7.
2.	Policy Administration. This Policy shall be administered<br>by the ESG and Compensation Committee of the Board (the “Committee”) unless the Board determines to administer this<br>Policy itself. The Committee has full and final authority to make all determinations under this Policy, in each case to the extent permitted<br>under the Listing Rule and in compliance with (or pursuant to an exemption from the application of) Section 409A of the Code. All determinations<br>and decisions made by the Committee pursuant to the provisions of this Policy shall be final, conclusive and binding on all persons,<br>including the Corporation, its affiliates, its stockholders and Executive Officers. Any action or inaction by the Committee with respect<br>to an Executive Officer under this Policy in no way limits the Committee’s actions or decisions not to act with respect to any other<br>Executive Officer under this Policy or under any similar policy, agreement or arrangement, nor shall any such action or inaction serve<br>as a waiver of any rights the Corporation may have against any Executive Officer other than as set forth in this Policy.
---	---
3.	Policy Application. This Policy applies to all Incentive-Based<br>Compensation received by a person: (a) after beginning service as an Executive Officer; (b) who served as an Executive Officer at any<br>time during the performance period for such Incentive-Based Compensation; (c) while the Corporation had a class of securities listed<br>on a national securities exchange or a national securities association; and (d) during the three completed fiscal years immediately preceding<br>the Accounting Restatement Date. In addition to such last three completed fiscal years, the immediately preceding clause (d) includes<br>any transition period that results from a change in the Corporation’s fiscal year within or immediately following such three completed<br>fiscal years; provided, however, that a transition period between the last day of the Corporation’s previous fiscal year<br>end and the first day of its new fiscal year that comprises a period of nine to twelve months shall be deemed a completed fiscal year.<br>For purposes of this Section 3, Incentive-Based Compensation is deemed received in the Corporation’s fiscal period during which<br>the Financial Reporting Measure specified in the Incentive-Based Compensation award is attained, even if the payment or grant of the<br>Incentive-Based Compensation occurs after the end of that period. For the avoidance of doubt, Incentive-Based Compensation that is subject<br>to both a Financial Reporting Measure vesting condition and a service-based vesting condition shall be considered received when the relevant<br>Financial Reporting Measure is achieved, even if the Incentive-Based Compensation continues to be subject to the service-based vesting<br>condition.
---	---
4.	Policy Recovery Requirement. In the event of an Accounting<br>Restatement, the Corporation must recover, reasonably promptly, Erroneously Awarded Compensation, in amounts determined pursuant to this<br>Policy. The Corporation’s obligation to recover Erroneously Awarded Compensation is not dependent on if or when the Corporation files<br>restated financial statements. Recovery under this Policy with respect to an Executive Officer shall not require the finding of any misconduct<br>by such Executive Officer or such Executive Officer being found responsible for the accounting error leading to an Accounting Restatement.<br>In the event of an Accounting Restatement, the Corporation shall satisfy the Corporation’s obligations under this Policy to recover any<br>amount owed from any applicable Executive Officer by exercising its sole and absolute discretion in how to accomplish such recovery,<br>to the extent permitted under the Listing Rule and in compliance with (or pursuant to an exemption from the application of) Section 409A<br>of the Code. The Corporation’s recovery obligation pursuant to this Section 4 shall not apply to the extent that the Committee,<br>or in the absence of the Committee, a majority of the independent directors serving on the Board, determines that such recovery would<br>be impracticable and:
---	---
a.	The direct expense paid to a third party to assist in enforcing<br>this Policy would exceed the amount to be recovered. Before concluding that it would be impracticable to recover any amount of Erroneously<br>Awarded Compensation based on expense of enforcement, the Corporation must make a reasonable attempt to recover such Erroneously Awarded<br>Compensation, document such reasonable attempt(s) to recover, and provide that documentation to the Stock Exchange;
---	---
b.	Recovery would violate applicable Canadian federal or provincial<br>law where that law was adopted prior to November 28, 2022. Before concluding that it would be impracticable to recover any amount of<br>Erroneously Awarded Compensation based on violation of Canadian/Alberta law, the Corporation must obtain an opinion of Canadian counsel,<br>acceptable to the Stock Exchange, that recovery would result in such a violation, and must provide such opinion to the Stock Exchange;<br>or
---	---
c.	Recovery would likely cause an otherwise tax-qualified retirement<br>plan, under which benefits are broadly available to employees of the registrant, to fail to meet the requirements of Section 401(a)(13)<br>or Section 411(a) of the Code.
---	---
5.	Policy Prohibition on Indemnification and Insurance Reimbursement.<br>The Corporation is prohibited from indemnifying any Executive Officer or former Executive Officer against the loss of Erroneously Awarded<br>Compensation. Further, the Corporation is prohibited from paying or reimbursing an Executive Officer for purchasing insurance to cover<br>any such loss.
---	---
6.	Required Policy-Related Filings. The Corporation shall<br>file all disclosures with respect to this Policy in accordance with the requirements of the federal securities laws, including disclosures<br>required by U.S. Securities and Exchange Commission filings.
---	---
7.	Definitions.
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a.	“Accounting Restatement” means an accounting restatement due to<br>the material noncompliance of the Corporation with any financial reporting requirement under the securities laws, including any required<br>accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial<br>statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the<br>current period.
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b.	“Accounting Restatement Date” means the earlier to occur of: (i)<br>the date the Board, a committee of the Board, or the officer or officers of the Corporation authorized to take such action if the Board<br>action is not required, concludes, or reasonably should have concluded, that the Corporation is required to prepare an Accounting Restatement;<br>and (ii) the date a court, regulator, or other legally authorized body directs the Corporation to prepare an Accounting Restatement.
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c.	“Board” means the board of directors of the Corporation.
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d.	“Code” means the U.S. Internal Revenue Code of 1986, as amended.<br>Any reference to a section of the Code or regulation thereunder includes such section or regulation, any valid regulation or other official<br>guidance promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing,<br>or superseding such section or regulation.
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e.	“Erroneously<br>Awarded Compensation” means, in the event of an Accounting Restatement, the amount of Incentive-Based Compensation previously<br>received that exceeds the amount of Incentive-Based Compensation that otherwise would have been received had it been determined based<br>on the restated amounts in such Accounting Restatement, and must be computed without regard to any taxes paid by the relevant Executive<br>Officer; provided, however, that for Incentive- Based Compensation based on stock price or total stockholder return, where<br>the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in an Accounting<br>Restatement: (i) the amount of Erroneously Awarded Compensation must be based on a reasonable estimate of the effect of the Accounting<br>Restatement on the stock price or total stockholder return upon which the Incentive-Based Compensation was received; and (ii) the Corporation<br>must maintain documentation of the determination of that reasonable estimate and provide such documentation to the Stock Exchange.
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f.	“Executive Officer” means the Corporation’s president, principal<br>financial officer, principal accounting officer (or if there is no such accounting officer, the controller), any vice-president of the<br>Corporation in charge of a principal business unit, division, or function (such as sales, administration, or finance), any other officer<br>who performs a policy-making function, or any other person who performs similar policy-making functions for the Corporation. An executive<br>officer of the Corporation’s parent or subsidiary is deemed an “Executive Officer” if the executive officer performs such policy<br>making functions for the Corporation.
g.	“Financial Reporting Measure” means any measure that is determined<br>and presented in accordance with the accounting principles used in preparing the Corporation’s financial statements, and any measure that<br>is derived wholly or in part from such measure; provided, however, that a Financial Reporting Measure is not required to<br>be presented within the Corporation’s financial statements or included in a filing with the U.S. Securities and Exchange Commission to<br>qualify as a “Financial Reporting Measure.” For purposes of this Policy, “Financial Reporting Measure” includes, but<br>is not limited to, stock price and total stockholder return.
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h.	“Incentive-Based Compensation” means any compensation that is granted,<br>earned, or vested based wholly or in part upon the attainment of a Financial Reporting Measure.
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i.	“Stock Exchange” means the U.S. national stock exchange on which<br>the Corporation’s Common Shares are listed (e.g., NYSE).
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8.	Acknowledgement. Each Executive Officer shall sign<br>and return to the Corporation, within 30 calendar days following the later of (i) the effective date of this Policy first set forth above<br>or (ii) the date the individual becomes an Executive Officer, the Acknowledgement Form attached hereto as Exhibit A, pursuant<br>to which the Executive Officer agrees to be bound by, and to comply with, the terms and conditions of this Policy.
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9.	Severability. The provisions in this Policy are intended<br>to be applied to the fullest extent of the law. To the extent that any provision of this Policy is found to be unenforceable or invalid<br>under any applicable law, such provision shall be applied to the maximum extent permitted, and shall automatically be deemed amended<br>in a manner consistent with its objectives to the extent necessary to conform to any limitations required under applicable law.
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10.	Amendment; Termination. The Board may amend this Policy<br>from time to time in its sole and absolute discretion and shall amend this Policy as it deems necessary to reflect the Listing Rule,<br>to comply with (or maintain an exemption from the application of) Section 409A of the Code. The Board may terminate this Policy at any<br>time.
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11.	Other Recovery Obligations; General Rights. To the<br>extent that the application of this Policy would provide for recovery of Incentive-Based Compensation that the Corporation recovers pursuant<br>to Section 304 of the Sarbanes-Oxley Act or other recovery obligations, the amount the relevant Executive Officer has already reimbursed<br>the Corporation will be credited to the required recovery under this Policy. This Policy shall not limit the rights of the Corporation<br>to take any other actions or pursue other remedies that the Corporation may deem appropriate under the circumstances and under applicable<br>law, in each case to the extent permitted under the Listing Rule and in compliance with (or pursuant to an exemption from the application<br>of) Section 409A of the Code. Nothing contained in this Policy shall limit the Corporation’s ability to seek recoupment, in appropriate<br>circumstances (including circumstances beyond the scope of this Policy) and as permitted by applicable law, of any amounts from any individual,<br>in each case to the extent permitted under the Listing Rule and in compliance with (or pursuant to an exemption from the application<br>of) Section 409A of the Code.
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12.	Successors. This Policy is binding and enforceable<br>against all Executive Officers and their beneficiaries, heirs, executors, administrators or other legal representatives.
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EXHIBIT A

GREENFIRE RESOURCES LTD.

INCENTIVE-BASEDCOMPENSATION RECOVERY POLICY

ACKNOWLEDGEMENT FORM

By signing below, the undersigned acknowledges and confirms that the undersigned has received and reviewed a copy of Greenfire Resources Ltd. (the “Corporation”) Incentive-Based Compensation Recovery Policy (the “Policy”).

By signing this Acknowledgement Form, the undersigned acknowledges and agrees that the undersigned is and will continue to be subject to the Policy and that the Policy will apply both during and after the undersigned’s employment with the Corporation. Further, by signing below, the undersigned agrees to abide by the terms of the Policy, including, without limitation, by returning any Erroneously Awarded Compensation (as defined in the Policy) to the Corporation to the extent required by, and in a manner consistent with, the Policy.

EXECUTIVE OFFICER
Signature
Print Name
Date