A Risky Bet on Oil: Woodbridge and Greenflame’s High-Stakes Deal

In the ever-shifting landscape of energy investments, Woodbridge Ventures II Inc. (TSXV: WOOD.P), a capital pool company with no operational assets beyond its cash reserves, has placed its chips on a high-stakes gamble with Greenflame Resources Inc., an Alberta-based enhanced oil recovery (EOR) firm. The non-binding letter of intent (LOI) between the two entities, announced on May 6, 2025, outlines a transaction that could reshape both companies—or unravel under the weight of its many uncertainties.

The deal, if finalized, would see Woodbridge merge with Greenflame to form a new entity focused on EOR operations in Trinidad’s Parrylands Field. For Woodbridge, this is a critical step: its survival hinges on completing a Qualifying Transaction under TSX Venture Exchange (TSXV) rules by August 31, 2025, or risk delisting. But the path forward is fraught with risks, from regulatory hurdles to the speculative valuation of Greenflame’s reserves.

The Structure of the Deal: A Shell’s Gamble

Woodbridge, listed on the TSXV since 2021, is effectively a shell company. Its only asset is cash, and its shares have been halted since the LOI’s announcement. Greenflame, by contrast, operates a project in Trinidad with 110 wells drilled across 300 acres of its 744-acre property. According to the LOI, Greenflame holds proved (1P), probable (2P), and possible (3P) reserves of 7,994 MSTB, 14,361 MSTB, and 21,736 MSTB, respectively—numbers that, if validated, could underpin its projected $60–80 million valuation post-transaction.

But the math is stark: Woodbridge’s current valuation is just $1.5 million, a figure that reflects its status as a capital pool company. The gap between the two valuations suggests investors are betting not just on Greenflame’s reserves but on its ability to secure financing and navigate regulatory approvals.

The Non-Arm’s Length Cloud

A red flag looms over the transaction: its non-arm’s length nature. Raphael Danon, Woodbridge’s CEO, also serves as Greenflame’s COO, CFO, and director—a conflict of interest that could raise eyebrows among regulators and investors. Such dual roles often invite scrutiny over potential conflicts, particularly in a deal requiring shareholder approvals from both companies.

The timeline adds further pressure. The parties must finalize a definitive agreement by July 31, 2025, and close by August 31. Failure to meet these deadlines could sink the deal, leaving Woodbridge with few alternatives.

Financing and the “Concurrent Equity Offering”

Central to Greenflame’s valuation is its ability to secure a concurrent equity offering, which could raise funds via subscription receipts or similar securities. The LOI states this offering must comply with TSXV requirements or exemptions, but the exact terms remain undefined. Investors will need to see not just the size of the offering but also the price at which Greenflame can attract capital—a challenge in volatile oil markets.

This data could reveal whether investors already discounted the risks, or if the halt has created uncertainty.

Risks: A Delicate Balancing Act

The risks here are manifold. Regulatory delays, particularly from the TSXV, could scupper the transaction, as could Greenflame’s ability to secure financing. The company’s operations in Trinidad are also exposed to geopolitical risks, including regional instability and inflationary pressures that could eat into margins.

Moreover, the speculative nature of EOR projects—reliant on advanced techniques like steam injection or chemical flooding—adds another layer of uncertainty. While Greenflame’s current production-sharing agreement with New Horizon Trinidad and Tobago ULTD ensures it retains 75% of revenue net of royalties, scaling up operations demands flawless execution.

The Bottom Line: A High-Reward, High-Risk Play

For investors considering Woodbridge’s shares, the calculus is clear: the potential upside hinges on Greenflame’s success in securing financing, regulatory approval, and operational growth. The reserves data is compelling, but the execution risks are immense.

The valuation gap—$1.5 million versus $60–80 million—suggests Woodbridge shareholders are being asked to bet on Greenflame’s future, not its present. If the equity offering meets expectations and the transaction closes on time, Woodbridge’s shares could surge. But if any link in this chain snaps—whether due to delayed approvals, financing shortfalls, or geopolitical shocks—the deal could collapse, leaving shareholders with little.

This data could contextualize Greenflame’s valuation assumptions against market cycles.

Conclusion: A Roll of the Dice

In the end, Woodbridge and Greenflame’s deal is a classic “all-in” bet. The numbers are tantalizing: Greenflame’s reserves, if fully developed, could justify its valuation, and Woodbridge’s shell structure offers a low-cost entry point for investors. But the timeline is razor-thin, the leadership overlap raises questions, and the energy market’s volatility adds another layer of risk.

Investors should proceed with caution. While the potential rewards are high, the path to realization is narrow. Those willing to take the risk must closely monitor the July 31 deadline for the definitive agreement and the concurrent equity offering’s success. For now, this deal is as much about faith in Greenflame’s management as it is in the oil beneath Trinidad’s soil.

The stakes couldn’t be higher—and the clock is ticking.