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MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd.

Freehold Royalties Ltd. · May 4, 2015 · 40 slides

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Slides

  1. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 1
    Investor Presentation May 2015
  2. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 2
    Corporate Profile TSX : FRU focused on oil and gas royalties 2015e production(1) (71% royalty production) boe per day 10,800 2015e Annual dividend (0.09 per month) per share 1.08 Current dividend yield(2) percent 6.0 Market…
  3. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 3
    The Manager TSX : FRU CN P ENSION T RUST F UNDS Pension fund for employees of Canadian National Railway 100% ownership 100% ownership Manager of the assets 22%* ownership (1) Based on 98.0 million shares outstanding…
  4. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 4
    Investment Performance* TSX : FRU Cumulative dividends declared 29.20 per share 150 (1.4 billion in dividends) 38 32 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Freehold Royalties Ltd. S&P/TSX Oil and Gas…
  5. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 5
    Whats New TSX : FRU Freehold entered into definitive agreements to acquire two royalty packages totaling 318 million from Penn West Dodsland-Viking GORR: 8.5% GORR on Penn Wests core Viking property Existing royalties and mineral…
  6. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 6
    Acquisition Highlights TSX : FRU Expanded Royalty Footprint with Significant Long- Term Growth Potential Strong overlap with existing core areas- future upside of estimated 1,000 drilling locations across the packages GORR land…
  7. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 7
    Acquisition Highlights TSX : FRU Production- Adding 2015 royalty production of 1,537 boe/d through Marquee Energy and Penn West Transactions from closing dates (increasing guidance by 1,000 boe/d in 2015) Cash flow-2015 annualized…
  8. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 8
    Acquisition Highlights TSX : FRU Accretive acquisition with attractive acquisition multiples in current price environment Expected cash flow accretion of 6% annualized (2015) and expected to strengthen in future years (before…
  9. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 9
    2015 Outlook* TSX : FRU Guidance Updated Annual Average Apr. 14, Mar. 5, Jan. 14, Nov. 13, 2015 2015 2015 2014 Daily production boe/d 10,800 9,800 9,800 9,700 WTI oil price US/bbl 60.00 60.00 60.00 85.00 Western Canada Select…
  10. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 10
    Why Own Freehold TSX : FRU Royalty Premier Royalty Portfolio Focus 11
  11. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 11
    Acquired Assets TSX : FRU Viking 3.5 million gross acres Heavy Oil 90% royalty Cardium Bakken, Mississippian 12
  12. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 12
    5 Year Royalty Drilling Trends TSX : FRU Our diversified portfolio enables exposure to a number of development plays within Western Canada 13
  13. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 13
    2014 Royalty Drilling Highlights TSX : FRU Edson JV. Mannville Heavy Oil 13 Gross Wilrich drilling is up 37% over wells . 2013. Lloydminster 152 Gross Wells Alberta West 154 Gross Wells Viking HZ drilling by private…
  14. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 14
    Royalty Drilling Trends* TSX : FRU Freehold Royalty Net Drilling 20 53% Oil 57% Oil 44% Oil 58% Oil 85% Oil 92% Oil 83% Oil 90% Oil 35% Hz 32% Hz 30% Hz 37% Hz 57% Hz 66% Hz 70% Hz 70% Hz 18 16 14 12 Oil Hz Net…
  15. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 15
    Why Own Freehold TSX : FRU Royalty Opportunistic Acquirer Focus 16
  16. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 16
    Flexibility through Acquisitions TSX : FRU Freehold announced approximately 250 million in transactions in 2014, showcasing our flexibility. Mineral title transaction Freehold acquired royalty interests in certain producing and…
  17. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 17
    Accretive Acquisitions/Joint Ventures TSX : FRU Initial Production Cost Acquired Year Area ( millions) (boe/d) 2001 Southeast Saskatchewan 25 800 2005 Petrovera (CNRL) 352 3,800 2007 Alberta/Saskatchewan 90 700 2010 Alberta,…
  18. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 18
    Why Own Freehold TSX : FRU Royalty Consistent focused strategy Focus 19
  19. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 19
    Royalty-Focused Production TSX : FRU boe/d 71% 10,800 9,180 10,000 royalties 8,000 6,000 4,000 2,000 0 Royalty Interest Production Working Interest Production Based on 2015E production. 20
  20. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 20
    Top Royalty Payors/Operators* TSX : FRU * Top 30 payors account for over 80% of royalty revenue on a trailing 12 month basis. 21
  21. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 21
    Board of Directors TSX : FRU Nolan Blades Harry Campbell Peter Harrison Art Korpach Sue Mackenzie Tom Mullane David Sandmeyer Rodger Tourigny Aidan Walsh 22
  22. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 22
    Why Own Freehold TSX : FRU Royalty Low risk, low costs Focus 23
  23. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 23
    The Royalty Advantage: Netbacks TSX : FRU A Working Interest Barrel A Royalty Interest Barrel Operating netback* Operating netback* 60% of gross revenue 100%** of gross revenue Royalties Paid Operating (15%) Netback…
  24. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 24
    The Royalty Advantage: Peers TSX : FRU FRUs liquids weighting and low cost model drive top decile economics (Q4-2014). VET TBE WCP PWT PSK NBZ CPG LTS TOG ZAR FRU SGY ZAR BNE BNE PGF NBZ TOG LTS LRE SGY CPG TBE VET TET WCP ARX ERF…
  25. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 25
    2015 Small Capital Program* TSX : FRU Capital Allocation 25 million Southeast Sask. Light Oil 65% Cardium Light Oil 29% Heavy Oil 6% * Per guidance dated March 5, 2015. 26
  26. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 26
    Why Own Freehold TSX : FRU Royalty Sustainable Dividend Focus 27
  27. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 27
    Dividend History TSX : FRU Dividend Selling Price (/share) (/boe) 3.00 2.91 120 2.50 100 2.10 2.00 1.92 1.92 80 1.70 1.73 1.68 1.681.68 1.68 1.68 1.56 1.50 1.40 60 1.32 1.31 1.10 1.08 1.00 40 0.78 0.65 0.50 20 0.13…
  28. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 28
    CFPS vs. Dividend TSX : FRU Dividend (/share) 3.50 We remain focused on preserving the long-term sustainability of our 3.00 Dividend 2.50 2.00 1.50 1.00 0.50 0.00 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005…
  29. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 29
    Strong Financial Position TSX : FRU Debt to Funds from Operations* (multiple) 120 million credit capacity 4.5 currently available 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1997 1998 1999 2000 2001 2002 2003 2004 2005…
  30. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 30
    FRU Stock Price Tracks Oil Price TSX : FRU WTI in US 150.00 63% FRU in C 30.00 oil and NGL 125.00 production 25.00 100.00 20.00 75.00 15.00 50.00 100% 10.00 25.00 unhedged 5.00 - - WTI Oil Price (US) FRU…
  31. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 31
    2015 Sensitivities TSX : FRU Estimated Change in Funds From Change Operations Variable (+/-) ( per share) WTI oil price US1.00/bbl 0.04 Canadian/U.S. dollar exchange rate US0.01 0.02 Edmonton Par/WCS differential Cdn1.00/bbl…
  32. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 32
    Why Own Freehold TSX : FRU Royalty Performance Focus 33
  33. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 33
    Total Return Since December 31, 2010 TSX : FRU 175 150 + 25.4% 125 +22.9% 100 75 -35.0% 50 Dec 2010 Dec 2011 Dec 2012 Dec 2013 Dec 2014 FRU S&P/TSX Composite S&P/TSX Oil & Gas E&P Year to date to March 31, 2015. 34
  34. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 34
    2015 Relative Performance (div. adj.) TSX : FRU Whitecap 25% Enerplus 14% Crescent Point 8% Baytex 3% Pengrowth 2% S&P/TSX Composite 1% Perpetual 0% PrairieSky -2% Peyto -2% Freehold: Freehold -2% -2% Vermilion -7% Twin…
  35. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 35
    3-Year Relative Performance(div adj) TSX : FRU Peyto 128% Whitecap 85% Perpetual 45% Vermilion 30% TSX Composite 20% Freehold: Freehold 16% 16% ARC 10% Crescent Point -17% Enerplus -28% Pengrowth -48% Baytex…
  36. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 36
    5-Year Relative Performance(div adj) TSX : FRU Peyto 206% Vermilion 90% Freehold: 60% Freehold 60% ARC 36% S&P/TSX Composite 24% Crescent Point 4% Trilogy -4% Enerplus -21% Twin Butte -22% Baytex -22% Pengrowth…
  37. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 37
    Supplemental Information
  38. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 38
    What is a Royalty TSX : FRU A payment based on a percentage of gross production Crown Royalty Mineral rights owned by the government (Crown) Leases auctioned at Crown land sales Royalty rates set by the Crown Held by the Crown in…
  39. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 39
    Proud Owner of Legacy Lands TSX : FRU Mineral titles are held in The 8s and 26s perpetuity Historic land grant to the Hudsons Bay Company (HBC) in 1670 by the King of England HBC surrendered land to Canada in 1870 in exchange…
  40. MAY 2015 INVESTOR PRESENTATION M – Freehold Royalties Ltd. – slide 40
    Investor Relations toll free. 888.257.1873 telephone. 403.221.0833 website. freeholdroyalties.com

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