Greenfire Resources Ltd. (NYSE: GFR) stock surged nearly 36% in Monday's premarket trading after Strathcona Resources Ltd. announced an agreement to acquire the Canadian oil sands producer.

The deal, announced Sunday, values Greenfire at approximately 2.7 billion to 2.9 billion Canadian dollars, including debt.

Greenfire Shareholders Offered 39% Cash Premium

Under the agreement, Greenfire shareholders can choose between 11 Canadian dollars in cash or 0.25 Strathcona shares for each Greenfire share.

The cash offer represents a 39% premium to Greenfire's Nov. 6 closing price and a 26% premium to its 30-day volume-weighted average price.

The stock option values each Greenfire share at 9.09 Canadian dollars, representing a 15% premium.

Shareholders can receive their chosen consideration in full, without proration.

Waterous Energy Fund, which owns 72% of Greenfire and 57% of Strathcona, has agreed to support the transaction and accept Strathcona shares.

Strathcona expects to issue 43 million to 60 million shares and pay up to 740 million Canadian dollars in cash.

Strathcona Expects $75 Million in Annual Savings

The acquisition will combine two Canadian heavy oil producers with approximately 3 billion barrels of proved and probable reserves.

The combined company would produce approximately 153,000 barrels per day, based on 2026 production figures.

Strathcona expects annual cost savings of approximately 75 million Canadian dollars within the first year of combined operations.

It also forecasts roughly 400 million Canadian dollars in cash tax savings over four years.

The company expects the acquisition to boost its net asset value per share by approximately 6%, including synergies.

Deal Expected to Close in Early 2027

Both companies' shareholders must approve the transaction, which also requires regulatory and court approvals.

Shareholder meetings are expected in January 2027, with closing anticipated shortly afterward.

Following the acquisition, Greenfire shares are expected to be delisted from the New York and Toronto stock exchanges.

GFR Price Action: Greenfire Resources shares were up 35.71% at $7.60 during premarket trading on Monday, according to market data.