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CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd.

Freehold Royalties Ltd. · Dec 10, 2012 · 18 slides

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Slides

  1. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 1
    CAPP Investment Symposium December 10 to 12, 2012 Value beneath the surface
  2. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 2
    Corporate Profile TSX : FRU focused on oil and gas royalties FRU share price* per share 21.09 Annual dividend (0.14 per month) per share 1.68 Dividend yield* percent 8 Shares outstanding (Sept. 30) million 66 Market…
  3. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 3
    What Sets Us Apart TSX : FRU lower costs and large royalty capex than typical portfolio E&P company ROYALTY FOCUS high conservative dividend management, payout low risk profile 4
  4. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 4
    The Royalty Advantage: Netbacks TSX : FRU Working Interest Barrel Royalty Interest Barrel Operating netback* Operating netback* 60% of gross revenue 100%** of gross revenue A royalty interest offers the benefit of sharing in…
  5. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 5
    Total Return* TSX : FRU Cumulative dividends 149 25.57 per share 36 29 10 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 YTD Freehold Royalties Ltd. S&P/TSX Oil and Gas Exploration & Production Index S&P/TSX…
  6. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 6
    Top Royalty Payors/Operators* TSX : FRU SABRE Energy Ltd. Arruga Resources Ltd. * Top 30 payors account for over 85% of royalty revenue for 2012 YTD. 7
  7. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 7
    Royalty-Focused Production TSX : FRU boe/d 70% 10,000 8600 royalties 8,000 6,000 4,000 2,000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e Royalty Interest Production Working…
  8. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 8
    Harvesting Value from Royalties TSX : FRU 2.8 million gross acres* North Saskatchewan River Cardium Viking Royalty interests 93% Working interests 7% Oil resource plays Bakken, Mississippian Lower Shaunavon * Includes…
  9. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 9
    FRU Mirrors Industry Activity TSX : FRU Number of wells Number of gross wells drilled by industry drilled on Freeholds royalty lands at no cost to Freehold 30,000 1,000 25,000 800 20,000 600 15,000 400 10,000 5,000…
  10. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 10
    Royalty Drilling Trends TSX : FRU 20 53% Oil 57% Oil 44% Oil 58% Oil 85% Oil 88% Oil Equivalent 28% Hz 27% Hz 29% Hz 35% Hz 57% Hz 59% Hz Net Wells Drilled on Freeholds Royalty Land 15 10 Oil Hz Oil Vert Gas Hz 5 Gas Vert…
  11. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 11
    Capex Requirements TSX : FRU Capital Expenditures as a Percentage of Funds from Operations 150% 125% Sector average 104% 100% 75% 50% Freehold average 23% 25% 0% 2009 2010 2011 2012e 2013e Sector Average Freehold *…
  12. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 12
    Unleased Mineral Title Lands TSX : FRU 100,000 gross acres and growing We own the rights in perpetuity We can choose to drill or lease out 13
  13. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 13
    Investing Capital TSX : FRU 2013 budget 2013 Capital Allocation (33 million) 33 million 40 gross wells (13 net risked) Drilling on our title lands Southeast Saskatchewan Midale, Frobisher, Alida, Tilston and Bakken light oil…
  14. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 14
    Acquisition Strategy TSX : FRU Focused on Accretive Royalties Acquisitions Buy existing 650 million royalties since inception MTLs and GORRS 90% royalties Manufacture 8,300 boe/d initial royalties production Capital…
  15. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 15
    Conservative Capital Structure TSX : FRU Debt to Funds from Operations* 185 million (multiple) (WTI US/bbl) 3.0 120 available credit capacity 2.5 (at September 30, 2012) 100 2.0 80 1.5 60 1.0 40 0.5 20 0.0 0…
  16. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 16
    Stable, Attractive Dividend TSX : FRU Annual Dividend (/share) 2.00 1.68 1.68 1.68 1.68 1.40 1.50 1.00 0.50 0.00 2009 2010 2011 2012 2013e Eligible dividends for Canadian tax purposes. * See advisory regarding…
  17. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 17
    Annual Guidance* TSX : FRU Key Assumptions (as at November 8, 2012) 2012 2013 Daily production boe/d 8,600 8,400 WTI oil price US/bbl 95.00 95.00 Western Canada Select (WCS) Cdn/bbl 75.00 76.00 AECO natural gas price Cdn/Mcf 2.25…
  18. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS' 23RD ANNUAL INVESTMENT SYMPOSIUM – Freehold Royalties Ltd. – slide 18
    Solid Investment TSX : FRU Low risk profile The Royalty Sustainable Advantage asset base Stable dividend 19

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