Freehold Royalties Ltd. (OTCPK:FRHLF) Q4 2023 Earnings Conference Call February 29, 2024 9:00 AM ET

Company Participants

David Spyker – President and CEO

David Hendry – CFO

Rob King – COO

Conference Call Participants

Travis Wood – National Bank Financial

Luke Davis – RBC

Patrick O’Rourke – ATB Capital Markets

Aaron Bilkoski – TD Cowen

Christopher Jones – Haywood Securities


Good morning, ladies and gentlemen. Welcome to the Fourth Quarter Results Conference Call.

I would like to turn the meeting over to Mr. David Spyker. Please go ahead.

David Spyker

Good morning, everyone, and thank you for joining us today. On the call with me with Freehold are Rob King, our COO; and Dave Hendry, our CFO.

2023 was a strong year for Freehold. It really showcased the strengths of our unique North American portfolio, which consists of robust production base in Canada and a growing oil-weighted position in the U.S. Total production of 14,714 BOE a day in 2023, was up 4% over the previous year, driven primarily by oil-weighted U.S. production growing 16% year-over-year to 5,102 BOE a day.

Growth in our U.S. assets was driven by the Midland Basin with volumes up 25% over 2022. Our Canadian portfolio had no decline in production year-over-year. 2023 production in Canada was 9,612 BOE a day driven by consistent operator activity. This was achieved in the absence of any material acquisitions and really highlights the quality of our Canadian asset base.

For 2024, we’re expecting production in the range of 14,700 to 15,700 BOE a day, implying approximately 3% growth at the midpoint over 2023. Revenue in 2023 was $315 million and funds from operations was $240 million, both in line with expectations, and funded our annual dividend of $163 million or $1.08 per share. This resulted in a payout ratio of 68% for the full year.

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