Correspondence 0001213900-23-049345 from Greenfire Resources Ltd. (GFR, GFRWF) (CIK 0001966287) (GFR)
Greenfire Resources Ltd. (GFR, GFRWF) (CIK 0001966287)
Date: June 15, 2023 · CIK: 0001966287 · Accession: 0001213900-23-049345
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File numbers found in text: 333-271381
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CORRESP
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28 Liberty Street, 41st Floor
New York, NY 10005
D / 212-238-8619
June 15, 2023
via hand delivery and edgar
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Energy & Transportation
100 F Street, NE
Washington, D.C. 20549
Attention:
Sardra Wall
John Hodgin
Jenifer O’Brien
Shannon Buskirk
Anuja A. Majmudar
Timothy Levenberg
Re: Greenfire Resources Ltd.
Registration Statement on Form F-4
Filed April 21, 2023
File No. 333-271381
Ladies and Gentlemen:
On behalf of our client, Greenfire
Resources Ltd. (“New Greenfire” or the “Company”), we are providing the Company’s responses
to the comments of the Staff (the “Staff”) of the Division of Corporation Finance (the “Division”)
of the U.S. Securities and Exchange Commission (the “SEC”) set forth in its letter, dated May 19, 2023, with respect
to the above-referenced Company’s registration statement on Form F-4 (the “Registration Statement/Proxy Statement”).
The Company is concurrently
filing via EDGAR this letter and Amendment No. 1 to the Registration Statement/Proxy Statement (the “Amended Registration Statement/Proxy
Statement”), which includes revisions made in response to the comments received from the Staff as well as certain additional
changes to update the disclosure contained in the Registration Statement/Proxy Statement. We are separately furnishing to the Staff courtesy
copies of the Amended Registration Statement/Proxy Statement marked to show the changes to the Registration Statement/Proxy Statement.
For the Staff’s convenience,
the text of the Staff’s comments is set forth below in bold, followed in each case by the Company’s response. Terms not otherwise
defined in this letter shall have the meanings set forth in the Amended Registration Statement/Proxy Statement. All references to page
numbers in the Company’s responses are to the pages of the Amended Registration Statement/Proxy Statement.
Form F-4 filed April 21, 2023 Certain Terms Defined,
page ix
1. Please expand your filing to include relevant definitions for oil and gas industry terms, including bitumen.
RESPONSE: In response to the Staff’s comment,
the Company has revised the disclosure on pages x, xi, xiv, xix, xx, and xxi of the Amended Registration Statement/Proxy Statement to
include the definitions of “bbl”, “bbls/d”, “bitumen”, “COGE Handbook”, “diluent”,
“in situ”, “NI 51-101”, “reservoir”, “WCS”, “WDB” and “WTD”.
Summary Term Sheet, page 1
2. Please add disclosure here, and where applicable, to explain why the tables on page 4 reflecting the No Redemptions and 50% Redemptions
scenarios result in the same number of shares and percent for the basic and fully diluted basis presentations. Supplementally, please
provide us with a reconciliation of the conversion of the 30,000,000 outstanding MBSC Class A common stock and the 7,500,000 Class B common
stock into the 9,900,990 and 5,000,000 shares held by current MBSC Public Stockholders and the MBSC Sponsor, respectively.
RESPONSE: In response to the Staff’s
comment, the Company has revised the disclosure on pages 6 and 113-114 of the Amended Registration Statement/Proxy Statement.
The reconciliation of the conversion of the 30,000,000 outstanding
MBSC Class A common stock and the 7,500,000 Class B common stock into the 9,900,990 and 5,000,000 shares held by current MBSC Public Stockholders
and the MBSC Sponsor, respectively, is as follows:
The current MBSC Public Stockholders hold 30,000,000 MBSC
Class A Common Shares in the aggregate. Pursuant to the Business Combination Agreement, in the event that an amount of cash greater than
$100,000,000 remains in the Trust Account after giving effect to the MBSC Stockholder Redemption, at the closing of the Business Combination
each MBSC Class A Common Share that has not been redeemed will be automatically converted into and exchanged for the right to receive
(i) a fraction of a new Greenfire Common Share equal to $100,000,000 divided by the amount in the Trust Account after giving effect to
the MBSC Stockholder Redemption, and (ii) an amount of cash determined by reference to the Business Combination Agreement. In all scenarios
where greater than $100,000,000 remains in the Trust Account after giving effect to the MBSC Stockholder Redemption (including both the
no redemption and 50% redemption scenarios), exactly 9,900,990 New Greenfire Common Shares will be issued to holders of MBSC Class A Common
Shares.
By way of example, in the 50% redemption scenario, 15,000,000
MBSC Class A Common Shares will remain outstanding, and approximately $151,500,000 will remain in the Trust Account, after giving effect
to the MBSC Stockholder Redemption. At the Merger Effective Time, each such MBSC Class A Common Share would be automatically converted
into and exchanged for the right to receive a fraction of a new Greenfire Common Share equal to $100,000,000 divided by $151,500,000,
or approximately 0.660066, resulting in 9,900,990 New Greenfire Common Shares. Alternatively, in the no redemption scenario, 30,000,000
MBSC Class A Common Shares will remain outstanding, and approximately $303,000,000 will remain in the Trust Account, after giving effect
to the MBSC Stockholder Redemption. At the Merger Effective Time, Each such MBSC Class A Common Share would be automatically converted
into and exchanged for the right to receive a fraction of a new Greenfire Common Share equal to $100,000,000 divided by $303,000,000,
or approximately 0.3300330033, resulting in 9,900,990 New Greenfire Common Shares.
The MBSC Sponsor holds 7,500,000 MBSC Class B Common Shares.
Pursuant to the MBSC Sponsor Class B Share Forfeitures, in both the no redemption and 50% redemption scenarios, 2,500,000 MBSC Class B
Common Shares held by the MBSC Sponsor will be forfeited and cancelled for no consideration, resulting in 5,000,000 MBSC Class B Common
Shares. At the Merger Effective Time, each issued and outstanding MBSC Class B Common Share (after giving effect to the MBSC Sponsor Class
B Share Forfeitures and any other transfers of MBSC Class B Common Shares in connection with the Closing) will be automatically converted
into and exchanged for the right to receive (i) one New Greenfire Common Share and (ii) an amount of cash determined by reference to the
Business Combination Agreement, resulting in 5,000,000 New Greenfire Common Shares.
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Questions and Answers about the MBSC Stockholders’
Meeting and the Business Combination, page 6
3. Please revise your disclosure here and on page 203 to describe the extension of the time to complete the initial business combination
to July 26, 2023 and describe the payments from the sponsor made relating to each extension period.
RESPONSE: In response to the Staff’s comment,
the Company has revised the disclosure on pages 8-9, 210-211 and 217 of the Amended Registration Statement/Proxy Statement.
Q: What interests do the current officers and directors
have in the Business Combination?, page 13
4. Please quantify the aggregate dollar amount and describe the nature of what the sponsor and its affiliates have at risk that depends
on completion of a business combination. Include the current value of securities held, loans extended, fees due, and out-of-pocket expense
for which the sponsor and its affiliates are awaiting reimbursement. Provide similar disclosure for the company’s officers and directors,
if material.
RESPONSE: In response to the Staff’s comment,
the Company has revised the disclosure on pages 15-18, 45-47, 84-87, 91 and 151-154 of the Amended Registration Statement/Proxy Statement.
Risk Factors
Risks Related to Greenfire’s Operations and the Oil and
Gas Industry
The COVID-19 pandemic continues to cause disruptions in economic
activity in Canada ..., page 59
5. We note your risk factor indicating that inflation and disruptions to supply chain and transportation services have the potential
to disrupt Greenfire’s operations, projects and financial condition. Please update this risk factor if recent inflationary pressures
or supply chain disruptions, characterized as potential, have materially impacted your operations. In this regard, identify the types
of inflationary pressures and supply chain disruptions you are facing and how your business has been affected.
RESPONSE: In response to the Staff’s comment,
the Company has revised the disclosure on page 61 the Amended Registration Statement/Proxy Statement.
Risk Factors
Opposition by First Nations groups to the conduct
of Greenfire’s operations, development or exploratory activities may negatively impact, page 69
6. You disclose that 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 Greenfire’s assets
are located.” As circumstances warrant, please update this risk factor and provide additional details and updates under “Legal
Proceedings, Investigations and Other Regulatory Matters” at page 252. See also Item 14(c) of Form F-4.
RESPONSE: The Company acknowledges the Staff’s
comment and respectfully advises the Staff that there are no updates or additional details to disclose as of the date hereof.
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Risks
Related to MBSC and the Business Combination, page 80
7. Disclose the material risks to unaffiliated investors presented by taking the company public through a merger rather than an underwritten
offering. These risks could include the absence of due diligence conducted by an underwriter that would be subject to liability for any
material misstatements or omissions in a registration statement.
RESPONSE: In response to the Staff’s comment,
the Company has revised the disclosure on page 83 of the Amended Registration Statement/Proxy Statement.
Background of the Business Combination, page 119
8. You state that MSBC “entered into non-disclosure agreements with 12 ... potential business combination targets (including
Greenfire).” You also disclose that between November 2021 and August 2022, MBSC conducted preliminary due diligence on 13 companies
and based on this initial round of diligence, “MBSC and/or the relevant potential target determined that 10 of the potential business
combination targets. were… not attractive or feasible business combination opportunities....” Please expand your discussion
in this section to describe the process utilized to evaluate these companies. Please discuss the information gathered, how and by whom
it was evaluated, and any ensuing negotiations. Describe any alternative offers that were made or received. Confirm that MSBC did not
enter into a non-disclosure with the thirteenth company subject to its due diligence. In addition, disclose whether Brigade had any preexisting
relationships with any of these companies.
RESPONSE: In response to the Staff’s comment, the Company has revised the disclosure on page 122 of the Amended Registration
Statement/Proxy Statement.
9. At page 120, you state: “Persons affiliated with Brigade had preexisting relationships with Greenfire’s management
team and majority equity holders dating to 2021....” Revise to identify those with preexisting relationships. Also, disclose which
members of MBSC’s management team affiliated with Brigade were introduced to Julian McIntyre and provide the actual date(s) of introductions.
State what beneficial ownership of Greenfire securities Mr. McIntyre had at the specific date when a member of MBSC’s management
contacted Mr. McIntyre regarding a possible combination, and identify the member of management who communicated the interest.
RESPONSE: In response to the Staff’s comment, the Company has revised the disclosure on pages 121-122 of the Amended Registration
Statement/Proxy Statement.
10. Revise to clearly identify the representatives or members of management of MBSC and Greenfire who participated in the referenced
meetings, discussions and negotiations. As examples, we note your general references to “representatives of MBSC” and “representatives
of Greenfire.”
RESPONSE: In response to the Staff’s comment, the Company has revised the disclosure throughout the section entitled “The
Business Combination – Background of the Business Combination” of the Amended Registration Statement/Proxy Statement.
11. We note your disclosure that in early April 2022, MBSC submitted a non-binding high- level proposal which included a post-transaction
enterprise value for Greenfire of $701 million and a post-transaction equity value of $623 million. Please revise your disclosure to summarize
the basis for this offering including any analyses that were utilized to determine this initial valuation.
RESPONSE: In response to the Staff’s comment, the Company has revised the disclosure on pages 122-123 of the Amended Registration
Statement/Proxy Statement.
12. We note your disclosure that on November 23, 2022, Greenfire’s management was presenting revised projections to reflect their
updated view of the timing of realization of the benefits of Greenfire’s ongoing de-bottlenecking initiatives. Please revise to
clarify when projections were initially provided to MBSC and the extent to which such projections were relied upon by MBSC and Greenfire
throughout their negotiations.
RESPONSE: In response to the Staff’s comment, the Company has revised the disclosure on pages 122 and 128 of the Amended
Registration Statement/Proxy Statement.
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The Business Combination
Unaudited Prospective Financial and Operating Information,
page 133
13. You state that the Greenfire Management Projections were based on reasonable best estimates and assumptions with respect to the
expected future financial performance of Greenfire. Revise your disclosure to summarize the principal assumptions used by Greenfire management
in preparing the projected financial information.
RESPONSE: In response to the Staff’s comment, the Company has revised the disclosure on pages 137 of the Amended Registration
Statement/Proxy Statement.
14. With regard to the key elements of the Greenfire Management Projections that are summarized in the table on page 135, please disclose
whether the projections are in line with historic operating trends. If not, revise to disclose why the change in trends is appropriate
or assumptions are reasonable.
RESPONSE: In response to the Staff’s comment, the Company has revised the disclosure on page 137 of the Amended Registration
Statement/Proxy Statement.
The Business Combination
Greenfire Projected Financial and Operating Information
Reserve Report Projections, page 135
15. Please expand the discussion of the McDaniel Reserve Projections to clarify the following key elements and assumptions relating
to the estimates:
● The individual reserves producing status categories, e.g.
developed producing, developed non-producing and undeveloped reserves, that are represented in the “Total Proved Reserves”
and the “Total Proved Plus Probable Reserves.”
● The risk factors applied to each of the individual producing
status categories of proved and probable reserves. Alternatively, clarify that the net quantities of proved and probable reserves as
presented are unrisked and have not been adjusted for the differing levels of uncertainty as to their technical and commercial recovery.
● The escalation factor(s) applied to the forecast of future
operating expenses and capital costs. Alternatively, clarify that the costs have not be adjusted for future inflation.
● The discount rate(s) used to determine the net revenue
before tax.
RESPONSE: In response to the Staff’s comment,
the Company has revised the disclosure on pages 141-142 of the Amended Registration Statement/Proxy Statement.
16. We not