Quarterly / Earnings Reports | Second Quarter (2Q) Update | Production Rates

PrairieSky Royalty 17 MBOEPD Q2 Production

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PrairieSky Royalty Ltd. has announced its second quarter operating and financial results for the period ended June 30, 2015.

2015 Second Quarter Highlights:

• Revenues of $71.8 Million
• Funds from Operations of $43.6 Million or $0.29 per share, basic and diluted
• Average production of 17,205 BOE per day
• Actively leased land for new and existing plays, collecting a record $24.8 Million in lease issuance bonus consideration
• Maintained a strong balance sheet with $22.6 Million of positive working capital and nil debt as of June 30, 2015, net of $38.0 Million cash spent on acquisitions during the quarter
• Subsequent to June 30, 2015 completed a bought deal prospectus offering of common shares for gross proceeds of $198 Million, and net proceeds, after underwriter fees, of approximately $190 Million, to fund future acquisition opportunities

President's Message

• PrairieSky marked its one year anniversary during the second quarter of 2015. Since inception, our key objectives have not changed. We remain committed to pursuing organic growth opportunities by leasing our extensive land base, ensuring accurate and timely collection of royalties, and adding to our high quality portfolio of royalty assets in a selective and disciplined manner.
• strong>Despite the challenging commodity price environment, PrairieSky continues to see strong demand for new leases and associated drilling commitments across a variety of new and existing plays. PrairieSky collected a record $24.8 million in lease issuance bonus consideration in the second quarter, significantly exceeding the previous quarterly high of $6.0 million in Q1 2015.
• Our compliance team continued to identify and collect historical royalty compliance issues, recovering $2.1 million in the second quarter and $6.1 million during the first half of 2015. Compliance recoveries will fluctuate but our continued focus in this area is expected to result in incremental collections in the second half of 2015.
• The current commodity price environment continues to present unique opportunities to selectively add royalty assets that are not only near-term accretive but also enhance the medium and long term value of the Company. During the second quarter, we completed $38.0 million in cash acquisitions and an additional $14.2 million of non-cash acquisitions. On July 7, 2015, PrairieSky announced the completion of a bought deal prospectus offering of common shares for gross proceeds of $198 million, and net proceeds, after underwriter fees, of approximately $190 million, to help fund future acquisition opportunities.

Financial and Operational Information

• The following table summarizes selected operational and financial information of the Company for the periods noted. All dollar amounts are stated in Canadian dollars unless otherwise noted.
• A full version of PrairieSky's Management's Discussion and Analysis ("MD&A") and unaudited interim condensed financial statements and notes thereto for the fiscal period ended June 30, 2015 is available on SEDAR at www.sedar.com and PrairieSky's website at www.prairiesky.com.