Q3 2024 Freehold Royalties Ltd Earnings Call Transcript
Key Points
- Freehold Royalties Ltd (FRHLF) reported a 3% increase in liquids production compared to Q3 2023, highlighting growth in their core operations.
- The company boasts an attractive dividend yield of just under 8%, supported by a strategic oil-focused portfolio.
- Realized pricing for their oil was significantly higher than Canadian peers, driven by their Texas production in the Permian and Eagle Ford basins.
- Freehold Royalties Ltd (FRHLF) reduced net debt by $12 million, maintaining a strong balance sheet with a net debt to funds from operations ratio of 0.8x.
- The company has a diversified exposure to pricing markets across North America, which supports strong netbacks and cash flows.
- Gas production in Canada was impacted by weak AECO pricing, leading to production curtailments and deferred drilling activity.
- Despite strong oil production, the weak gas prices had a negligible impact on cash flow, indicating a reliance on oil for financial performance.
- The U.S. drilling activity remained relatively flat, with some operators like Marathon being less active in Q3.
- The company faces potential challenges from M&A activity, which could temper growth as acquirers slow down target activity.
- Freehold Royalties Ltd (FRHLF) is cautious about future drilling activity, which is largely dependent on overall commodity pricing.
Good morning. Welcome to the Freehold Royalties Third Quarter Results Conference Call. Please be advised that certain statements on this call constitute forward-looking information. All statements other than those of historical facts may be forward-looking, and we caution the listeners. (Operator Instructions)
I would now like to turn the meeting over to Mr. David Spyker. Please go ahead.
Good morning, everyone, and thank you for joining us today. On the call from Freehold are Rob King, our COO; Dave Hendry, our CFO; and new to our team, Todd McBride as Manager, Investor Relations.
So on today's call, we will share with you our third quarter results as well as share our excitement around 2 big projects that we've been working on. One is our asset book, which will be an in-depth review of the extensive opportunity set in our portfolio. And second is an Investor Day where we can walk through this in detail and provide our shareholders with an update on our
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