Greenfire Resources Ltd. (the “Company” or “Greenfire”) was incorporated under the laws of Alberta on December 9, 2022. Greenfire’s common shares are publicly traded on the Toronto Stock Exchange and the New York Stock Exchange under the symbol “GFR”. The Company’s corporate head office is located at 800, 350 7th Avenue SW, Calgary, AB T2P 3N9.

Greenfire is engaged in the exploration, development and operation of oil properties in the Athabasca oil sands region of Alberta. These condensed interim consolidated financial statements (the “financial statements”) are comprised of the accounts of Greenfire and its wholly owned subsidiary.

As at June 30, 2026, approximately 72.0% of the Company’s common shares were owned by certain limited partnerships comprising Waterous Energy Fund and its affiliates (collectively, “WEF”).

Preparation

These financial statements have been prepared in accordance with IAS 34: “Interim Financial Reporting”, using the same accounting policies as those set out in Note 3 of the audited annual consolidated financial statements for the year ended December 31, 2025, which were prepared in accordance with IFRS^® Accounting Standards as issued by the International Accounting Standards Board (“IASB”). Certain disclosures, which are normally required to be included in the notes to the annual consolidated financial statements, have been condensed or omitted. The financial statements should be read in conjunction with the Company’s annual consolidated financial statements and notes thereto for the year ended December 31, 2025.

The Company has adopted all published standards, interpretations or amendments to accounting standards issued by the IASB, that are effective for annual periods beginning on or after January 1, 2026. There was no material impact to the financial statements.

In these financial statements, all amounts are expressed in Canadian dollars (“$CAD”), unless otherwise indicated, which is the Company’s functional currency. These financial statements have been prepared on a historical cost basis, except for certain financial instruments which are measured at their fair value.

These financial statements were approved by Greenfire’s Board of Directors on August 5, 2026.

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Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2026 and 2025

All amounts expressed in thousands of Canadian dollars, unless otherwise noted (unaudited)

In May 2026, Greenfire entered into a definitive asset sale agreement with respect to the sale of certain non-producing assets to an arm's length party for cash proceeds of approximately $5.5 million, subject to customary closing adjustments. The transaction remains subject to customary regulatory approvals, with a regulatory decision expected during the third quarter of 2026. Accordingly, property, plant and equipment with a carrying amount of $3.9 million and associated decommissioning liabilities (note 5) of $2.9 million have been classified as held for sale.

Senior Credit Facility

Greenfire has a reserve-based credit facility (the “Senior Credit Facility”) comprised of a $30.0 million operating facility and a $245.0 million syndicated facility, providing total committed credit of $275.0 million (December 31, 2025 - $275.0 million). The Senior Credit Facility’s borrowing base is subject to a semi-annual review, occurring in May and November each year, and is established based on the lenders’ evaluation of the Company’s bitumen reserves, incorporating their prevailing commodity price assumptions.

During the second quarter of 2026, the Company completed its semi-annual review of the Senior Credit Facility. Following unanimous consent of lenders, the borrowing base remained unchanged, and the maturity date was extended from November 30, 2027, to May 31, 2028. Subsequent to June 30, 2026, the borrowing base of the Senior Credit Facility was increased to $1.0 billion and maturity was extended to August 5, 2028 (note 13).

The Senior Credit Facility is available on a revolving basis, may be drawn in Canadian or U.S. dollars, and bears interest at floating rates based on applicable Canadian or U.S. benchmark rates⁽¹⁾, plus applicable margins. The applicable margin is determined on a quarterly basis by reference to the Company’s trailing twelve-month Debt to EBITDA Ratio⁽²⁾. The undrawn portion of the Senior Credit Facility is subject to a standby fee.

The Senior Credit Facility is secured by a first-priority security interest over substantially all of the Company’s assets. The Senior Credit Facility contains customary restrictive covenants that limit the Company’s ability to, among other things, incur additional indebtedness, create or permit liens to exist, pay dividends, redeem stock, and sell assets. The Senior Credit Facility is not subject to any financial covenants.

Letter of Credit Facility

Greenfire maintains a separate $75.0 million letter of credit facility with a financial institution that is supported by Export Development Canada’s Account Performance Security Guarantee program (the “EDC APSG Facility”). During the second quarter of 2026, the EDC APSG Facility capacity was increased from $55.0 million to $75.0 million. The EDC APSG Facility is available on a demand basis. As at June 30, 2026, the Company had $54.0 million (December 31, 2025 - $54.0 million) in letters of credit outstanding under the EDC APSG Facility. Letters of credit issued under the EDC APSG Facility do not reduce Greenfire’s borrowing capacity under the Senior Credit Facility. The Company and its subsidiary have indemnified Export Development Canada for any payments made to the financial institution; however, the obligations under such indemnity are unsecured.

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Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2026 and 2025

All amounts expressed in thousands of Canadian dollars, unless otherwise noted (unaudited)

Senior Secured Notes

On September 20, 2023, Greenfire issued US$300 million of senior secured notes (the “2028 Notes”). The 2028 Notes bore interest at a fixed rate of 12.00%, were to mature on October 1, 2028, and were secured by a second-priority lien on the Company’s assets. On December 19, 2025, the outstanding 2028 Notes were voluntarily redeemed at 106% of their principal amount. All accrued interest on the 2028 Notes was settled concurrently.

The Company’s decommissioning liabilities relate to its net ownership interests in petroleum 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 $351.0 million (December 31, 2025 - $342.8 million). For the period ended June 30, 2026, a credit-adjusted discount rate of 10.0% (December 31, 2025 - 10.0%) and an inflation rate of 2.0% (December 31, 2025 - 2.0%) were used to calculate the decommissioning liabilities. A 1.0% change in the credit-adjusted discount rate would change the discounted value of the decommissioning liabilities by approximately $3.9 million with a corresponding adjustment to PP&E. The decommissioning liabilities are estimated to be settled through 2078, with the majority being incurred between 2047 and 2078.

On September 20, 2023, the Company issued approximately 7.5 million warrants. Each warrant is exercisable for 1.171 common shares of Greenfire at an exercise price of US$9.82 per share. The outstanding warrants expire on September 19, 2028, and contain a cashless exercise feature, permitting an exercise without the payment of the exercise price by the issuance of a net, lower number of common shares. The warrants are remeasured to their fair value at each reporting date with the change recognized through the statement of comprehensive income (loss). The following table summarizes the changes to the Company’s warrant liability.

A 10% increase in the share price would increase warrant liability by $2.4 million with a corresponding adjustment to the statement of comprehensive income (loss).

Share Capital

As at June 30, 2026, the Company’s authorized share capital consists of an unlimited number of common shares without a nominal or par value. The following table summarizes the changes to the Company’s common share capital:

Per Share Amounts

Outstanding Share Units

As at June 30, 2026, none of the outstanding share units were exercisable (December 31, 2025 – nil).

Fair Value of Financial Instruments

A number of the Company’s accounting policies and disclosures require the determination of fair value for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining the fair values is disclosed in the notes specific to that asset or liability.

The Company classifies the fair value of financial instruments according to the following hierarchy based on the amount of observable inputs used to value the instruments:

The carrying values of cash, accounts receivable, and accounts payable and accrued liabilities included on the condensed interim consolidated balance sheet approximate the fair values of the respective assets and liabilities due to the short-term nature of those instruments. The carrying value of the outstanding debt approximated fair value due to the use of floating interest rates.

The Company’s risk management contracts and warrant liability are classified as Level 2 in the fair value hierarchy. To estimate the fair value of these instruments, the Company used observable market data and/or other sources utilizing assumptions that market participants would use to determine fair value.

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Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2026 and 2025

All amounts expressed in thousands of Canadian dollars, unless otherwise noted (unaudited)

Market Risk

Market risk is the risk that changes in market conditions, such as commodity prices, foreign exchange rates and interest rates, will affect the Company’s cash flow, income, or the value of its financial instruments.

Commodity Price Risk

The Company’s risk management program is 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 program may include hedging instruments such as fixed price swaps and option structures, including costless collars on WTI, WCS differentials, condensate differential, natural gas and electricity. The Company does not use financial derivatives for speculative purposes.

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 statements of financial position:

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Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2026 and 2025

All amounts expressed in thousands of Canadian dollars, unless otherwise noted (unaudited)

Foreign Currency Risk Management

The Company is exposed to foreign currency risk on any U.S. Dollar denominated cash, accounts receivable, risk management contracts, accounts payable and accrued liabilities, and debt. As at June 30, 2026, Greenfire’s net foreign exchange risk exposure was a US$8.7 million liability (December 31, 2025 – US$9.3 million asset), and a 10% change in the foreign exchange rate would result in a $1.2 million change in the foreign exchange gain or loss (December 31, 2025 - $1.3 million).

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. Any letters of credit issued are subject to fixed interest rates and are not exposed to changes in interest rates. A 1% change in the interest rate would result in a $0.1 million change in the interest expense for the six months ended June 30, 2026.

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 the 25th day of the month following production. Joint interest receivables are typically collected within one to three months of the invoice being issued. Accrued joint interest receivables represent the Company’s partners’ share of operating, and capital costs incurred or accrued at the reporting date that have not yet been invoiced. All risk management contracts are held with large financial institutions. The Company has not previously experienced any material credit losses on the collection of accounts receivable.

At June 30, 2026 and December 31, 2025 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 June 30, 2026, 94% was receivable from three companies (December 31, 2025 - 86% receivable from three companies). At June 30, 2026, 100% of the Company’s joint interest receivables and accrued joint interest receivables were held by a single company (December 31, 2025- 100% by a single company). Maximum exposure to credit risk is represented by the carrying amount of accounts receivable on the statements of financial position. Subsequent to June 30, 2026, the Company has received $5.1 million from its joint interest partner.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s objective in managing liquidity risk is to maintain sufficient available reserves to meet its financial obligations at any point in time. The Company expects to achieve this objective through prudent capital spending, an active commodity risk management program and through strategies such as continuously monitoring forecast and actual cash flows from operating, financing and investing activities, and available credit facilities. Management believes that future cash flows generated from these sources will be adequate to settle Greenfire’s financial liabilities.

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Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2026 and 2025

All amounts expressed in thousands of Canadian dollars, unless otherwise noted (unaudited)

The Company also has provisions as disclosed in Note 5 and commitments as disclosed in Note 11.

Acquisition of Connacher Oil and Gas Limited

On August 5, 2026, Greenfire completed the previously announced acquisition of all of Connacher Oil and Gas Limited’s (“Connacher”) issued and outstanding common shares, for aggregate purchase price of approximately $1.297 billion, inclusive of closing adjustments related to the assumption of Connacher’s net working capital surplus (the “Acquisition”). The purchase price for the Acquisition was financed with: (i) an approximately $722 million draw on the Senior Credit Facility (upsized from $275.0 million); and (ii) a $575.0 million underwritten bridge facility (the “Bridge Facility”), which is expected to be repaid with proceeds from an anticipated rights offering of Greenfire common shares. Waterous Energy Fund, which currently holds approximately 72% of the Company’s common shares, has committed to providing a standby commitment of at least $575.0 million for the rights offering.

The Company is in the process of completing the initial accounting for the Acquisition. As a result, Greenfire has not finalized certain financial statement disclosures, including the preliminary purchase price allocation or the financial impact of the acquisition on the Company’s financial position or results of operations.

Increased Revolving Credit Facility

On August 5, 2026, in connection with the Acquisition, Greenfire closed the upsize of its Senior Credit Facility from $275.0 million to $1.0 billion. The Senior Credit Facility now matures on August 5, 2028.

Rights Offering

The Company filed a preliminary short form prospectus related to a rights offering of subscription receipts on July 27, 2026, and has also filed a corresponding registration statement on Form F-10 with the U.S. Securities and Exchange Commission (the “SEC”). As a result of Greenfire closing the Acquisition, the Company intends to file an amended and restated preliminary short form prospectus, and a corresponding amendment to the registration statement on Form F-10, relating to a rights offering of common shares rather than subscription receipts. The Company will use the proceeds from the rights offering to repay the Bridge Facility.