WEF Funds Reduce Stake in Strathcona

Several limited partnerships comprising Waterous Energy Fund (WEF) have reduced their ownership in Strathcona Resources Ltd. from a collective 90.8 percent to around 79.6 percent.
As a result, Toronto-listed Strathcona’s common shares in public float have increased to over 20 percent.
The share pass-through transaction involved the disposition of over 24.01 million units of Strathcona, representing approximately 11.2 percent of the issued and outstanding common shares of the oil and gas producer, according to separate press releases by Strathcona and WEF.
The disposed shares had been held by Waterous Energy Fund Co-Investment (Canadian) LP and Waterous Energy Fund Co-Investment (International) LP, two of several limited partnerships comprising WEF. The two gave up the shares to their respective limited partners as part of their winding-up process, WEF said.
They were not owed any amount for the disposition, and the transaction did not require shareholder approval, according to the statements by WEF and Strathcona.
“The remaining WEF Funds hold the Common Shares [79.6 percent of Strathcona] for investment purposes”, Calgary, Canada-based WEF said.
Strathcona said, “The Transaction was comprised of a series of reorganizational steps and the number of issued and outstanding shares of Strathcona remains the same following completion of the Transaction”.
Greenfire Shake-Up
The winding-up of two of WEF’s limited partnerships comes after WEF raised its stake in oil sands producer Greenfire Resources Ltd. amid a disputed shake-up.
WEF had called for the replacement of the entirety of Greenfire’s board, after initially acquiring a 43.2 percent stake in the latter.
On November 20, 2024, Greenfire said WEF’s campaign to overthrow the board and install its own nominees was “an attempt to secure control of the company [Greenfire] without making an offer to all shareholders”.
“Greenfire’s board of directors has always sought to act in the best interests of company stakeholders and have taken decisive action to protect the interests of minority shareholders”, Greenfire said.
On November 21, 2024, WEF announced it had called a meeting of Greenfire shareholders seeking to bring about its proposed changes, saying the board was underperforming and in pursuit of “self-enrichment”.
On December 23, 2024, Greenfire said Jonathan Klesch, Robert Logan and Matthew Perkal agreed to resign while Derek Aylesworth has been allowed to remain on Greenfire’s board on the condition Aylesworth gives up re-election.
All six nominees put forward by WEF as replacements have been appointed to Greenfire’s board.
Concurrently WEF bought an aggregate of over 9.31 million common shares and more than 2.65 million common share purchase warrants of Greenfire from M3-Brigade Sponsor III and Brigade Capital Management LP. The total price of the purchases was over $81.85 million, WEF said separately on December 24, 2024.
WEF increased its ownership in Greenfire to about 56.5 percent, while Brigade gave up its entitlement to a nominee on Greenfire’s board as a result of the transaction.
To contact the author, email jov.onsat@rigzone.com
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