Freehold Royalties Ltd. (Freehold or the Company) (TSX:FRU) announces third quarter results for the period ended September 30, 2024.
Third Quarter Summary
- $74 million in revenue;
- $56 million in funds from operations ($0.37/share)(1)(3);
- $41 million in dividends paid ($0.27/share)(2);
- 9,367 bbls/d of total liquids production;
- An increase of 3% from Q3-2023 and a 4% increase YTD 2024 compared to YTD 2023;
- Realized crude oil and NGL price averaged approximately $82/bbl in Q3-2024;
- 14,608 boe/d total production;
- U.S. production remained near record levels at 5,533 boe/d;
- 278 gross (6.3 net) wells drilled in the quarter;
- 37% increase from the 4.6 net wells drilled in Q3-2023; and
- $54.36/boe average realized price ($65.58/boe in the U.S. and $47.52/boe in Canada);
- 38% pricing premium on our U.S. production reflecting higher liquids weighting, higher quality crude oil and reduced transportation costs to get our product to market.
President’s Message
Despite the volatility in commodity prices making headlines this quarter, Freehold’s oil weighted portfolio, underpinned by premium operators in core basins across North America, continued to deliver significant value to the Company and our shareholders. Our total Q3-2024 production of 14,608 boe/d delivered strong netbacks(3)(4) of $47.78/boe, driving $55.7 million of funds from operations(3) in the quarter.
Liquids production increased by 3%, while gas volumes decreased by 4% compared to Q3-2023. Our U.S. production of 5,533 boe/d remained near last quarter’s record levels, despite declines from flush production from several high interest, multi-well pads in Midland (Permian) that came on-line in Q2-2024. Canadian production averaged 9,075 boe/d, down 6% compared to the prior quarter reflecting a slowdown in gas weighted drilling activity and voluntary shut-ins of about 250 boe/d as a result of the lowest AECO pricing in over 20 years in the quarter. In Canada, Q3-2024 gas volumes are 6% lower than Q3-2023 volumes, impacting top line production numbers but given the weak pricing, had a negligible impact on funds from operations in the current quarter.
We had robust U.S. drilling activity in Q3-2024 and exited the quarter with 503 gross wells (1.9 net wells) that were drilled and uncompleted, while third party operators permitted (licensed) 387 gross wells (1.7 net wells) on Freehold’s U.S. lands. In Canada, we had significant increases in drilling activity as operators focused on oil weighted prospects. Net drilling activity in Canada was up 41% compared to the same period last year.
We paid $41 million to our shareholders through dividends (73% of our funds from operations) and maintained our balance sheet strength with net debt(5)(6) reduced by approximately $12 million during the quarter to $187 million (0.8x trailing funds from operations(5)).
David M. Spyker, President and Chief Executive Officer
2024 Investor Day and Asset Book
Freehold will be hosting an Investor Day on December 3, 2024, beginning at 10:00am MST at the Calgary Petroleum Club in Calgary, Alberta. Due to limited capacity, in-person attendance is by invitation only. This event will include a presentation by Freehold’s management and technical team, highlighting the Company’s North American strategy and an overview of Freehold’s asset base. Attendance will be both in-person and through participation in the live webcast on www.freeholdroyalties.com. Freehold will also be releasing its 2024 Asset Book on December 3, 2024. A copy of the 2024 Investor Day presentation and the 2024 Asset Book will be made available on Freehold’s website at www.freeholdroyalties.com on the day of the event.
