Freehold Royalties Ltd. (Freehold or the Company) is pleased to announce that it has completed its previously announced upsized bought-deal equity financing (the Equity Financing) of common shares, conducted by a syndicate of underwriters co-led by RBC Capital Markets, CIBC Capital Markets and TD Securities Inc. as joint bookrunners, including the full exercise of the over-allotment option granted to the underwriters.
Pursuant to the Equity Financing and the over-allotment option, Freehold issued approximately 13.3 million common shares at a price of $13.00 per common share for total gross proceeds of approximately $172.5 million.
On December 9, 2024, Freehold entered into a definitive agreement with a private seller to acquire mineral title and royalty interests in the core of the Midland Basin in Texas (the Acquisition and the Acquired Assets) for approximately $216 million, net of estimates for exchange rate, expenses and customary closing adjustments. As a result of the upsizing of the Equity Financing and exercise of the over-allotment option, Freehold has exercised its option with the seller and will acquire approximately $43 million of additional interest in the Acquired Assets, such that the total purchase price will be approximately $259 million, net of estimates for exchange rate, expenses and customary closing adjustments. Closing of the Acquisition is expected to occur later today (December 13, 2024).
As a result of the increased interest to be acquired in the Acquisition, Freehold estimates 2025E production from the Acquired Assets to be 1,500 – 1,600 boe/d (approximately 61% light oil, 20% natural gas liquids and 19% natural gas) representing approximately $37 million in 2025E net royalty revenue (net of production and ad valorem taxes) based on US$70/bbl WTI, with limited tax burden in the near term.
Freehold is uniquely positioned as a leading North American energy royalty company with approximately 6.1 million gross acres in Canada and approximately 1.1 million gross drilling acres in the United States. Freehold’s common shares trade on the Toronto Stock Exchange in Canada under the symbol FRU.
