Freehold Royalties reports Q2 FFO C$0.35 vs. C$0.56 last year

Reports Q2 revenue C$74M vs. C$109M last year. Average production of 14,667 boe/d; 179 gross wells drilled, 55 wells in Canada and 124 wells in the U.S.; record activity for the first half of 2023. The company said, “Freehold continues to see strong third-party development on the Company’s lands, with the quality of its North American royalty portfolio driving this performance. Production volumes for the second quarter showed continued strength at 14,667 boe/d, comparable quarter over quarter, notwithstanding wildfire impacts of approximately 225 boe/d. Canadian volumes were highlighted by growth in the Viking and Clearwater as well as a resurgence in activity in southeast Saskatchewan and Mannville heavy oil. Year to date record gross levels of drilling activity across our North American portfolio and near record leasing on our Canadian lands will provide continued momentum through the second half of 2023 and into 2024. In the U.S., volumes were consistent versus the previous quarter with the expectation that production will strengthen into the second half of 2023, delivering modest organic growth. We continue to realize a significant pricing premium associated with our U.S. production relative to Canada, with the difference almost 40% for the quarter. In addition, well type curves and reserve additions continue to perform in-line with expectations as the quality of the underlying resource and payors developing Freehold’s assets provide enhanced sustainability to future returns for our investors…Freehold’s payout remains well funded at current commodity prices, as well as at prices much lower than current strip pricing, with the diversification and quality of payors throughout our North American portfolio providing enhanced sustainability to Freehold’s return profile. Looking forward, we remain excited about the long-term outlook for Freehold. We continue to strengthen Freehold’s asset base, balance sheet and the long-term sustainability of our business.”