CALGARY, Alberta, May 06, 2024 (GLOBE NEWSWIRE) -- Freehold Royalties Ltd. (Freehold or the Company) (TSX:FRU) announces first quarter results for the period ended March 31, 2024. President's Message $74 million in revenue; $54 million in funds from operations ($0.36/share) (1); $41 million in dividends paid ($0.27/share); 14,714 boe/d total production (63% oil and NGL and 37% natural gas); 9,593 boe/d in Canada (56% oil and NGL and 44% natural gas); 5,121 boe/d in the U.S. (78% oil and NGL and 22% natural gas); and $54.81/boe average realized price ($69.19/boe in the U.S. and $47.13/boe in Canada). Our North American portfolio continues to attract drilling activity with 300 gross (6.4 net) wells drilled on our royalty lands in Q1-2024, a 15% increase over the previous quarter. Leasing of our mineral title lands continues to be active with 20 new leases signed this quarter in Canada, continuing the momentum from the record 122 leases signed in 2023. With our oil weighted portfolio, and the premium pricing received on our U.S. assets ($69.19/boe in the U.S. compared to $47.13/boe in Canada), we achieved top tier realized pricing of $54.81/boe. Weaker natural gas pricing and wider Canadian light oil differentials resulted in 5% lower realized pricing than the previous quarter. Production for the quarter of 14,714 boe/d was impacted by severe weather-related events in Canada and in the Eagle Ford and Bakken basins in the U.S. Canadian production of 9,593 boe/d was relatively unchanged from Q4-2023 despite the outages associated with the extreme cold snap in January, as robust production additions from new drills contributed meaningful volumes in the quarter. In the U.S., Midland production was up 18% quarter-over-quarter and Delaware was up 59%, due in part to the previously announced acquisitions that contributed approximately 400 boe/d in the quarter, in-line with expectations. These production additions offset the volumes lost to severe weather in January. Our portfolio showed a strong recovery from these unplanned outages with the second half of the quarter above 15,000 boe/d. We reiterate our full year guidance of 14,700 – 15,700 boe/d. Following the closing of the Permian acquisitions in January, Freehold exited the quarter with net debt of $211 million or 0.9x trailing funds from operations. Our high margin, oil weighted portfolio enables us to provide consistent and sustainable returns to our shareholders while retaining optionality to fund future growth initiatives. David M. Spyker, President and Chief Executive Officer Operating and Financial Highlights     FINANCIAL ($ millions, except as noted) Q1-2024 Q4-2023 Q1-2023 West Texas Intermediate (US$/bbl) 76.96 78.32 76.13 AECO 7A Monthly Index (Cdn$/Mcf) 2.07 2.70 4.34 Royalty and other revenue 74.3 80.1 76.6 Funds from operations (3) 54.4 62.8 58.6 Funds from operations per share, basic & diluted ($) (1)(3) 0.36 0.42 0.39 Dividends paid per share ($) (2) 0.27 0.27 0.27 Dividend payout ratio (%) (3) 75% 65% 69% Long-term debt 223.6 123.0 159.1 Net debt (5) (6) 210.5 100.9 122.3 Net debt to trailing funds from operations (times) (5) 0.9x 0.4x 0.4x OPERATING       Total production (boe/d) (4) 14,714 14,863 14,724 Canadian production (boe/d)(4) 9,593 9,659 9,822 U.S. production (boe/d)(4) 5,121 5,204 4,902 Oil and NGL (%) 63% 63% 62% Petroleum and natural gas realized price ($/boe) (4) 54.81 57.94 56.99 Cash costs ($/boe) (3)(4) 7.19 4.73 5.82 Netback ($/boe) (3) (4) 46.62 52.59 50.79 ROYALTY INTEREST DRILLING (gross / net)       Canada 132/ 5.9 120/ 3.8 175/ 6.9 U.S. 168/ 0.5 142/ 0.7 174/ 0.8 (1) Weighted average number of shares outstanding during the period, basic (2) Based on the number of shares issued and outstanding at each record date (3) See Non-GAAP and Other Financial Measures (4) See Conversion of Natural Gas to Barrels of Oil Equivalent (boe) (5) Net debt and net debt to trailing funds from operations are capital management measures (6) The Q1-2023 and Q4-2023 balances have been restated due to the retrospective adoption of IAS 1 (see note 2 of March 31, 2024, unaudited condensed consolidated financial statements)     Dividend Announcement The Board of Directors of Freehold has declared a monthly dividend of $0.09 per share to be paid on June 17, 2024, to shareholders of record on May 31, 2024. The dividend is designated as an eligible dividend for Canadian income tax purposes. First Quarter Highlights Royalty and other revenue totalled $74.3 million, down 7% versus the previous quarter reflecting 23% lower natural gas prices and 8% lower Edmonton Light sweet crude pricing as differentials widened in Q1-2024. Freehold's corporate realized price was $54.81/boe. Freehold continues to benefit from leverage to crude oil and NGL (90% of first quarter revenue) and North American exposure with more favourable U.S. realized pricing of $69.19/boe, 47% higher than the realized price in Canada ($47.13/boe) for Q1-2024. Recorded a netback(1) of $46.62/boe during the period, down 11% versus the previous quarter reflecting higher interest costs from incremental borrowings for the U.S. acquisitions, along with share based compensation pay-outs to non-management directors and the payout of our short-term incentive program to employees which occurs in the first quarter. Funds from operations totalled $54.4 million ($0.36/share) (1). Dividends declared for Q1-2024 totaled $40.7 million ($0.27 per share). Freehold's dividend payout ratio(1) for Q1-2024 was 75%, reflecting lower natural gas and Canadian light oil prices and slightly higher cash costs. Freehold's dividend remains sustainable at oil and natural gas prices materially below current commodity price levels. Average production of 14,714 boe/d in Q1-2024 was relatively unchanged versus the previous quarter with oil and NGL production representing 63% of total corporate production. Freehold closed two transactions acquiring high quality Permian mineral title and royalty assets located in the Midland and Delaware basins in Texas and New Mexico for $116.2 million, after customary adjustments. Production associated with these acquisitions is forecast to average 600 boe/d in 2024, increasing Freehold's Permian production by 30% and the Company's U.S. production by 12%. Net debt(1)(2) of $210.5 million at the end of Q1-2024 increased by $109.6 million from the previous quarter and reflected 0.9 times trailing funds from operations during the period. The increase versus the previous quarter reflected acquisitions completed during the period. See Non-GAAP and Other Financial Measures The December 31, 2023 net debt balance has been restated due to the retrospective adoption of IAS 1 (see note 2 of March 31, 2024 unaudited condensed consolidated financial statements) (1) See Non-GAAP and Other Financial Measures (2) The December 31, 2023 net debt balance has been restated due to the retrospective adoption of IAS 1 (see note 2 of March 31, 2024 unaudited condensed consolidated financial statements)     Drilling and Leasing Activity In total, 300 gross wells were drilled on Freehold's royalty lands in Q1-2024, a 15% increase over the previous quarter. The increase quarter-over-quarter reflects strength in crude oil prices and the high-quality location of Freehold's acreage in the most active basins across North America. On a gross measure, 99% of prospects drilled during the quarter targeted oil. Approximately 44% of wells drilled in the quarter were in Canada (80% on Freehold's gross overriding lands and 20% targeted mineral title prospects); and 56% targeted Freehold's U.S. royalty acreage (67% drilled on mineral title lands).   Q1-2024 Q4-2023 Q1-2023   Gross Net (1) Gross Net (1) Gross Net (1) Canada 132 5.9 120 3.8 175 6.9 United States 168 0.5 142 0.7 174 0.9 Total 300 6.4 262 4.5 349 7.7 (1) Equivalent net wells are aggregate of the numbers obtained by multiplying each gross well by our royalty interest percentage     Canada During Q1-2024, 132 gross wells were drilled on Freehold's Canadian lands, a 10% increase over the previous quarter and a 55% increase on a net basis. Top focus areas were oil weighted plays in the Viking, Cardium, ...