Freehold Royalties Boosts Its Investment Strategy
CALGARY, Alberta — Freehold Royalties Ltd. (TSX:FRU) recently announced a successful completion of a significant upsized bought-deal equity financing, marking a pivotal moment for the company. This endeavor was facilitated by a team of reputable underwriters, including RBC Capital Markets, CIBC Capital Markets, and TD Securities Inc. Their efforts have led to the issuance of approximately 13.3 million common shares, each priced at $13.00, yielding total gross proceeds of about $172.5 million.
A Groundbreaking Acquisition in Midland Basin
In tandem with the financing, Freehold also entered into an agreement to acquire mineral title and royalty interests located in the heart of the Midland Basin in Texas. This acquisition is being executed for an estimated $216 million, after adjusting for exchange rates and customary closing costs. The equity financing enables Freehold to seize an additional $43 million interest in these assets, culminating in a total purchase price of approximately $259 million.
Future Production Expectations
Looking forward, Freehold forecasts a promising production outlook for 2025, estimating that the newly acquired assets will yield between 1,500 and 1,600 barrels of oil equivalent per day (boe/d). The anticipated production mix will predominantly feature 61% light oil, with 20% comprising natural gas liquids, and the remainder being natural gas. These assets are projected to generate about $37 million in net royalty revenue for 2025, based on market estimates of $70 per barrel for West Texas Intermediate (WTI) crude oil.
Positioning in North American Energy Sector
Freehold Royalties is strategically positioned within the North American energy landscape. With around 6.1 million gross acres in Canada and an additional 1.1 million gross drilling acres in the United States, the company is poised to expand its influence and operational capacity significantly.
Investor Relations Contact Information
For those seeking further insights or details regarding Freehold's activities, please reach out to:
Freehold Royalties Ltd.
Todd McBride, CPA, CMA - Investor Relations
Phone: 403.221.0833
Email: tmcbride@freeholdroyalties.com
Nick Thomson, CFA - Investor Relations
Phone: 403.221.0874
Email: nthomson@freeholdroyalties.com
Website: www.freeholdroyalties.com
Frequently Asked Questions
What is the purpose of Freehold's recent equity financing?
The equity financing aims to raise funds for acquiring mineral titles and royalty interests in the Midland Basin, enhancing the company's asset portfolio.
How much did Freehold raise through the recent financing?
Freehold raised a total of approximately $172.5 million through the issuance of around 13.3 million common shares.
What are the projected production levels from the acquired assets?
Freehold expects the new assets to generate between 1,500 and 1,600 boe/d in production for the year 2025.
Who are Freehold's underwriters in the recent financing?
The financing was managed by a syndicate of underwriters, co-led by RBC Capital Markets, CIBC Capital Markets, and TD Securities Inc.
What is the anticipated impact of the acquisition on net royalty revenue?
Freehold estimates the acquisition will bring in approximately $37 million in net royalty revenue for 2025.
