Freehold Royalties Announces Second Quarter 2025 Results

Executive Summary

• Freehold Royalties Ltd. reported second quarter 2025 financial results, highlighting $78 million in revenue and $57 million in funds from operations (FFO), or $0.35 per share.
• Total production increased 2% quarter-over-quarter to 16,584 boe/d, driven by a 7% growth in U.S. assets, while Canadian production remained relatively flat.
• The company paid $44 million in dividends ($0.27/share) and announced a new monthly dividend of $0.09 per share for September 2025, maintaining a net debt to trailing FFO ratio of 1.1x.

Key Details

• Financial Performance:
  • Revenue: $78.3 million (down from $91.1 million in Q1 2025 and $84.5 million in Q2 2024).
  • Funds from Operations (FFO): $56.6 million ($0.35/share), compared to $68.1 million ($0.42/share) in Q1 2025 and $59.6 million ($0.40/share) in Q2 2024.
  • Net Income: $6.2 million ($0.04/share).
  • Cash Costs: $7.38/boe (up from $7.00/boe in Q1 2025 and $9.80/boe in Q2 2024).
  • Netback: $42.68/boe (down from $53.01/boe in Q1 2025 and $49.44/boe in Q2 2024).
  • Dividends Paid: $44.3 million ($0.27/share).
  • Dividend Payout Ratio: 78%.
  • Long-term Debt: $292.6 million.
  • Net Debt: $270.6 million (1.1x trailing FFO).
• Production Metrics:
  • Total Production: 16,584 boe/d (up 2% QoQ, up 9% YoY).
  • U.S. Production: 7,480 boe/d (up 7% QoQ, up 34% YoY).
  • Canadian Production: 9,104 boe/d (down 2% QoQ, down 5% YoY).
  • Liquids Weighting: 67% (up from 65% in Q1 2025 and 64% in Q2 2024).
  • Total Liquids Production: 11,047 bbls/d (up 4% QoQ, up 13% YoY).
  • Natural Gas Production: 33,220 Mcf/d.
• Pricing:
  • Average Realized Price: $50.36/boe ($57.83/boe in the U.S., $44.23/boe in Canada).
  • WTI Crude Oil Benchmark: $63.74/bbl (down from $71.42/bbl in Q1 2025 and $80.57/bbl in Q2 2024).
  • AECO 5A Monthly Index: $1.69/Mcf (up from $2.17/Mcf in Q1 2025, down from $1.18/Mcf in Q2 2024).
• Drilling Activity:
  • Gross Wells Drilled: 271 (45 in Canada, 226 in the U.S.).
  • Net Wells Drilled: 1.7 (1.1 in Canada, 0.6 in the U.S.).
  • U.S. Drilling Focus: 86% in Permian Basin, 13% in Eagle Ford Basin.
  • Canadian Drilling Focus: Clearwater (8 wells), southeast Saskatchewan (8 wells), Mannville heavy oil (6 wells).
  • Licensing: 22 wells licensed on Deep Basin/Montney lands in H1 2025 (up from 9 in H1 2024).
• Leasing and Acquisitions:
  • New Leases Signed: 40 total (34 in Canada, 6 in the U.S.).
  • Lease Bonus Revenue: $1.9 million in Q2 2025; $5.8 million in H1 2025 (a 50% increase from previous record levels).
  • Land Acquisitions: Approximately $12 million invested in undeveloped mineral title lands in the Midland and Delaware basins.
• Dividend Announcement:
  • Declared monthly dividend of $0.09 per share.
  • Payable on September 15, 2025, to shareholders of record on August 29, 2025.
  • Designated as an eligible dividend for Canadian income tax purposes.

Notable Quotes

• "Freehold’s second quarter production of 16,584 boe/d increased 2% compared to last quarter and 9% from the second quarter of 2024. Our U.S. assets delivered meaningful production growth of 7% over the first quarter of 2025." — David M. Spyker, President and CEO
• "Oil prices in the second quarter were at the lowest benchmark WTI oil price since the first quarter of 2021... this quarter we are 40% higher [in FFO per share than Q1 2021], confirming the impact that Freehold’s strategic focus on growing its high quality, liquids weighted assets has had over the past four years." — David M. Spyker, President and CEO
• "This $5.8 million [leasing revenue in H1 2025] represents a 50% increase from the Company’s previous record levels of lease bonus which occurred over the full year in 2018." — David M. Spyker, President and CEO