Good morning, ladies and gentlemen. Welcome to the Greenfire Resources' Second Quarter 2025 Results Conference Call. As a reminder, all participants are in listening mode, and the conference is being recorded. After the presentation, there will be an opportunity for analysts to ask questions. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then zero. I will now turn the meeting over to Mr. Robert Loebach, Vice President of Commercial. Please go ahead, Robert.
Thank you, Operator. Good morning and welcome to Greenfire 's Conference Call for our Q2 2025 results. Please note that today's call includes forward-looking statements and references non-GAAP and other financial measures. We encourage you to review the associated risks detailed in our latest MD&A. Unless stated otherwise, all monetary figures discussed today are in Canadian dollars. Capital expenditures and production figures presented today are based on our working interest, net to Greenfire , unless noted otherwise. Joining us on today's call are key members of the Greenfire leadership team, including Adam Waterous, Executive Chairman, Colin Germaniuk, President, and Jonathan Kanderka, Chief Operating Officer. Upon conclusion of our prepared remarks, we'll open the floor to questions from analysts. I will now hand the call over to Colin.
Good morning and thank you, everyone, for joining Greenfire ' Q2 2025 Conference Call. On this morning's call, there are three topics I would like to discuss before opening the call up to questions from our analysts. First, I will provide an update on Greenfire 's current year operations. Second, I will provide a progress update on our longer-term development plans. Third, I'll provide some brief background on Greenfire 's new Vice President Finance, Travis Belak, who we are very excited about. As previously discussed last quarter, 2025 has been a challenging year for Greenfire operationally, which, to recap, is due to three reasons. One, in February, one of our four boilers at the expansion asset unexpectedly had to be taken offline for repairs, which has reduced our production by approximately 1,500 bbl- 2,300 bbl per day since that time.
Two, also in February, it was brought to the company's attention that Greenfire 's sulfur dioxide emissions may have risen above the maximum level permitted by the Alberta Energy Regulator. Three, Greenfire has historically underinvested in new well pairs, which has resulted in most of the existing production today being relatively mature and with relatively high recovery factors. Over the past few months, Greenfire has made considerable progress addressing each of these challenges, which I would like to briefly touch on. Regarding the boiler outage, the boiler repair remains on schedule, with full steam capacity available by year-end 2025. Regarding the sulfur emissions, Greenfire is currently procuring a sulfur removal unit to be installed at the expansion asset, which we expect to be operational by year-end 2025.
Regarding the historical underinvestment in new well pairs, Greenfire has considerably advanced our inaugural SAGD pad, Pad 7, which is expected to start drilling in Q4 2025. Finally, now that the Greenfire team has a better handle on the trajectory of current year operations, we are prepared to share our 2025 production and capital guidance. In 2025, we expect to produce between 15,000 bbl- 16,000 bbl per day of bitumen, and we expect to invest CND 130 million in capital expenditures. Greenfire 's planned 2025 capital program includes the acceleration of approximately CND 35 million of Pad 7 capital from 2026 into 2025, with the intention of potentially achieving first steam on Pad 7 at an earlier date. I would now like to move on to the second topic, that being the advancement of our longer-term development plans.
Over the past few months, the primary focus of our team has been on the development of Pad 7. Pad 7 is situated to the northeast of our expansion central processing facility and directly offsets existing production at Pad 6, giving us high confidence in the region's recoverable resource. The current plan is for the Pad 7 well pairs to include 13 well pairs at Pad 7, with lateral lengths ranging from 800 m- 1,400 m. Drilling is expected to start in the fourth quarter of this year, with first oil forecasted to be in Q4 2026. Furthermore, given the long cycle times associated with new SAGD pad development, Greenfire is also evaluating some shorter cycle drilling opportunities to be completed concurrently with Pad 7 in 2026, including the potential for infill wells at the expansion and redrill wells at the demo asset.
Lastly, moving to the third topic, it was announced in this morning's news release that Greenfire has hired a new VP of Finance, Travis Belak, who will replace Greenfire 's prior CFO and VP of Finance and become the most senior person in charge of Greenfire's finance team. Travis was most recently the Corporate Controller at HWN Energy and brings approximately 15 years of experience in upstream oil and gas financial reporting, corporate planning, tax, and treasury. Travis, together with the leadership of the Waterous Energy Fund team, leaves Greenfire in the hands of excellent financial stewards of capital. I'd finally like to thank Tony Kraljic for his contributions to Greenfire . His leadership and efforts have left a lasting positive impact on the company and are grateful for the role he played in helping shape our path forward.
This concludes our planned remarks for the Q2 conference call, and we'll now open it up to questions.
Thank you. We will now begin the question-and- answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speaker phone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. At this time, we will pause for a moment while callers join the queue. Our first question today will come from Jason Wangler of Imperial Capital. Please go ahead.
Good morning all. I wanted to just ask, obviously the production level at the demo asset really looked pretty strong. You mentioned there was some optimization. I am just curious if you could expand on kind of what you're seeing there. Is that something that, you know, can you continue, I guess, there as well, obviously, as you move to the expansion?
Yeah, it's Colin here. We drilled two wells earlier in Q1 that have been coming online and ramping up nicely. They're adding 800 bbl roughly each to really boost production there. We're looking at more options at the demo asset and the expansion similar to these wells.
Okay. Maybe it goes to that question you talked about a few minutes ago, looking at some shorter cycle things at expansion, as well as obviously the kind of the drilling that you're going to be doing in the next quarter. How do you look at 2026? I know it's early, obviously, but do you think that a CapEx run rate of kind of where you're looking this year is similar? Is it more? It's obviously a ways away, but just how do you guys look at what your thoughts are next year as you kind of continue to get everything where you want to operationally?
I'll tell you what, this is Adam Waterous. Jason, I'll take that call. We're not at a point yet where we can provide guidance for 2026. It may be, just to step back, sometimes it's easy to get kind of lost in all this, all the numbers. It's good to try and just understand if you're trying to predict 2026, you're trying to understand maybe where the transition of the company is coming from. I'd put it more simply: much of the past operational decisions of the company came from a, I'll just try to, you know, the old look ma, no hands. It was, this is a company that, look ma, no equity.
The company, when they bought the Jayco asset, were very proud of the fact that they put no equity in the business, and it was entirely debt financed, like that was some kind of trick, that was some kind of accomplishment. Over-leveraging the balance sheet, which is what the net result of that caused a lot of decisions operationally, which we are having to unwind. The first sort of impact on that led to a very highly, highly capital-constrained business. There were only short cycle wells drilled, which generally were fast declined. The second problem was a lot of basic maintenance was not done. Most obviously, there was not proper sulfur emissions infrastructure put in place. What that led to is the deterioration of at least one boiler on it. It was the, "Hey, you know what? We don't need to put oil in the engine.
We'll skip the regular oil changes." Now the engine got ruined on it. The third thing that happened is that the development plan was extremely ambitious in terms of very long wells that went through multiple different heights and turns, with the thought of, "Hey, we'll go super long wells and save money by doing that on a per meter basis." These were the double backflip with the full twist wells. What we have had to do is all three of those things change how the business is being operated. Number one, we're going to be drilling the first well pairs that Greenfire's actually ever drilled. The second is we're obviously putting in sulfur recovery units and repairing the boiler.
The third thing is on this Pad 7, this is going to be designed to be a much more conventional type of development pad and hopefully therefore considerably less execution risk. All that is in the context of the business still remains grossly over-levered. I mean, the original bonds that were put in place are still in place. That is causing a huge amount of interest to be paid, not only that, but also just restrictions on how the business is being operated, how much capital gets spent. I just gave that by way of background. Jason, your question is a very fair and reasonable one. It's, geez, hey, what do you think about next year, 2026? I would emphasize the very dramatic change in the operations that's been required as part of the turnaround on this.
Now, instead of that, we do expect to be able to provide, you know, at a later time more guidance for 2026, but we just can't at this time.
No, the answer is a lot better than the question was. Maybe just ask a different way for our understanding. How much of this year is that, I guess, unwinding of spend? Yeah. How much maybe more is next year, or are you predominantly done and then you kind of get to start how you want to run the programs as you get to 2026? Is that a fair way to look at it?
I do think it's fair to look at that we have unwound a lot of what has happened. You know, we are just at the very beginning stages of executing the development plan. You know, there's always a certain unwinding process, and then there is a move forward process. I would really emphasize your question is a reasonable one about 2026, but we're just not in a position to be able to provide specific guidance at this time.
No, I appreciate it. Thanks for the answers.
Again, if you would like to ask a question, please press star and then one. Ladies and gentlemen, at this time, we will be concluding the question -and- answer session. I'd like to turn the conference back over to Mr. Robert Loebach for any closing remarks.
Thank you, Operator. On behalf of Greenfire , we appreciate you joining us on our Q2 2025 Results Conference Call. Have a great day.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines.