Freehold Royalties 2024 Financial Summary and 2025 Outlook
Freehold Royalties Reports Strong 2024 Performance and Future Growth Prospects
Freehold Royalties Ltd. (TSX:FRU) recently published its noteworthy financial performance for the year ending December 31, 2024. Navigating through a dynamic energy market, Freehold displayed remarkable resilience and growth, setting a solid foundation for continued expansion into 2025.
Key Highlights from 2024
Impressive Financial Metrics
The company reported total revenue of $309 million in 2024. This reflects a minor decline of 2% from the previous year. The funds from operations also reached an impressive $231 million, translating to $1.53 per share. Dividends paid were substantial as well, amounting to $163 million, or $1.08 per share, emphasizing Freehold's commitment to returning value to its shareholders.
Production and Reserves Growth
In terms of production, Freehold averaged 14,962 barrels of oil equivalent per day (boe/d) throughout 2024, with 64% of production weighted towards oil and natural gas liquids. Notably, the company drilled 1,140 gross wells, marking a 15% increase compared to 2023. By year-end, Freehold boasted proved and probable reserves totaling 65 million barrels of oil equivalent, a 10% increase per share year-over-year, with proved developed producing reserves increasing to 30 million boe.
Quarterly Insights
Fourth Quarter Performance
The fourth quarter of 2024 was especially strong for Freehold, with revenue hitting $77 million. Funds from operations reached $61 million, resulting in a healthy average of $0.40 per share. The company’s liquids production also surged to 9,878 bbls/d, a 5% quarter-over-quarter increase, driven by robust operational performance and the contributions from recent acquisitions.
Highlights of Acquisitions
During the period, Freehold completed key acquisitions, most notably the $261 million acquisition of mineral title and royalty assets located in the Midland basin of the Permian, which is anticipated to add 1,500 to 1,600 boe/d of oil-weighted production in 2025. Throughout 2024, Freehold finalized $412 million in acquisitions to further expand its portfolio.
Strategic Focus Going into 2025
As Freehold gears up for 2025, it aims for production to average between 15,800 and 17,000 boe/d, reflecting an estimated 10% growth at midpoint compared to 2024. The company anticipates an increase in liquids weighting to 66% from 64% in 2024, which should positively influence funds from operations by over 3% year-over-year.
Dividend Announcements
The board of directors has declared a monthly dividend of $0.09 per share scheduled for payment on April 15, 2025. This dividend reflects Freehold’s ongoing strategy of prioritizing return on investment for shareholders during periods of both stability and fluctuations in commodity prices.
Operational Metrics and Performance
Freehold’s operational efficiency is evident in its cash costs, averaging $5.93 per boe, which remains competitive within the industry. In 2024, Freehold maintained a strong balance sheet with net debt recorded at $282 million. This accounted for a ratio of 1.2 times trailing funds from operations, illustrating a sustainable financial position to capitalize on further growth opportunities.
Drilling and Leasing Activity Overview
In 2024, Freehold recorded a drilling activity of 1,140 gross wells, with a substantial emphasis on oil targets, reflecting investor confidence and capital commitment to high-potential areas. The company also engaged in securing 74 new leases, predominantly focused on the high-yield Mannville Stack and Clearwater plays.
Looking Ahead: Freehold’s Path Forward
Freehold’s strategy for 2025 includes a recognizable focus on maintaining its balance between Canadian and U.S. operations while enhancing shareholder value. The planned increase in oil production and the Maintenance of its sustainable dividend strategy position Freehold for a robust year ahead.
Frequently Asked Questions
What were Freehold's total revenues for 2024?
Freehold’s total revenue for 2024 was $309 million.
How much did Freehold pay in dividends in 2024?
The company paid $163 million in dividends, which translates to $1.08 per share.
What growth is expected in Freehold's production for 2025?
Freehold aims for production to average between 15,800 and 17,000 boe/d in 2025, representing a growth of approximately 10% over 2024.
What was the average realized price per boe for Freehold in 2024?
The average realized price for 2024 was $55.68 per boe.
What is Freehold's dividend strategy moving forward?
Freehold plans to maintain its dividend while prioritizing investment and reducing net debt in 2025.
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