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September 2015 Investor Presentation – Freehold Royalties Ltd.

Freehold Royalties Ltd. · Sep 1, 2015 · 33 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 1
    Investor Presentation September 2015
  2. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 2
    Corporate Profile TSX : FRU focused on oil and gas royalties 2015e production (75% royalty production) boe per day 10,400 2015e Annual dividend (0.07 per month) per share 0.84 Current dividend yield(1) percent 9.9 Market…
  3. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 3
    Why Own Freehold TSX : FRU Cash Flow Vehicle Despite weaker commodity prices we generate significant free cash flow relative to our capital obligations Capital expenditures represent approximately 20% of our cash flow Dividends…
  4. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 4
    Why Own Freehold TSX : FRU Long history of generating attractive returns Annual average return of 15% Delivered 29.47/share in dividends from an IPO of 10/share in 1996 Countercyclical acquirer Completed greater than 400…
  5. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 5
    Investment Performance* TSX : FRU Cumulative dividends declared 29.47 per share (1.4 billion in dividends) 137 37 30 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…
  6. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 6
    2015 Outlook** TSX : FRU Guidance Updated Annual Average Aug. 6, May 14, Mar. 5, Jan 14, 2015 2015 2015 2014 Daily production boe/d 10,400 10,800 9,800 9,800 WTI oil price US/bbl 51.00 60.00 60.00 60.00 Western Canada Select…
  7. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 7
    2015 Guidance Highlights TSX : FRU Continued negative momentum in the commodity environment. Reduced our WTI and WCS price assumptions for 2015 to US51.00/bbl and 48.00/bbl respectively (previously US60.00/bbl and 56.00/bbl)…
  8. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 8
    Why Own Freehold TSX : FRU Royalty Premier Royalty Portfolio Focus 9
  9. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 9
    Asset Overview TSX : FRU Viking 3.6 million gross acres Heavy Oil 90% royalty Cardium Bakken, Mississippian 10
  10. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 10
    2015 Q2 Royalty Drilling Activity TSX : FRU Q2 2015 Royalty Well Count Total Gross wells = 109 PennWest Bluesky Hz Total Net wells = 4.7 CNRL 5 Mannville HO Verticals + 2 GP HZs drilled by Marquee 1 Cardium Hz Viking HZ…
  11. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 11
    Dodsland GORR: 2015 Activity Update TSX : FRU Key Points 2015 PennWest development plan was 107 wells. YTD 51 gross (3.8 net) wells drilled (red), with 109 current licenses remaining to be drilled (blue). The new licenses and…
  12. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 12
    Q1+Q2 Royalty Drilling Trends TSX : FRU Q2 2015 Royalty Well Count Total Gross wells = 96 Total Net wells = 5.8 Gold= PennWest Viking Dodsland GORR acquisition. (51 Gross wells , 3.85 net wells) Q2 YTD without PennWest (45…
  13. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 13
    Why Own Freehold TSX : FRU Royalty Opportunistic Acquirer Focus 14
  14. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 14
    Flexibility through Acquisitions TSX : FRU Freehold announced 400 million in transactions YTD 2015. Anderson corporate acquisition Freehold acquired Anderson Energy for 35 million Transaction adds approximately 350 boe/d of low…
  15. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 15
    Accretive Acquisitions 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, Sask. and B.C. 38…
  16. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 16
    Why Own Freehold TSX : FRU Royalty Consistent focused strategy Focus 17
  17. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 17
    Royalty-Focused Production TSX : FRU boe/d 75% 10,400 9,180 10,000 royalties 8,000 6,000 4,000 2,000 0 Royalty Interest Production Working Interest Production Based on 2015E production. 18
  18. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 18
    Top Royalty Payors/Operators* TSX : FRU * Diversified group of payors: Top 30 account for over 80% of royalty revenue on a trailing 12 month basis. 19
  19. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 19
    Why Own Freehold TSX : FRU Royalty Low risk, low costs Focus 20
  20. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 20
    The Royalty Advantage: Netbacks TSX : FRU The royalty model offers a higher margin barrel then your typical E&P A Working Interest Barrel A Royalty Interest Barrel Operating netback* Operating netback* 60% of gross revenue 100%**…
  21. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 21
    The Royalty Advantage: Peers TSX : FRU FRUs liquids weighting and low cost model drive strong economics (Q2-2015). WCP PWT VET ZAR CPG NBZ TBE PGF BNE VET NBZ TBE FRU SGY PSK LRE ZAR CPG SGY BNE ARX TET PEY ERF PGF WCP ERF ARX LRE…
  22. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 22
    2015 Small Capital Program* TSX : FRU Capital Allocation 20 million Southeast Sask. Light Oil 65% Cardium Light Oil 29% Heavy Oil 6% * Per guidance dated August 6, 2015. 23
  23. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 23
    Why Own Freehold TSX : FRU Royalty Sustainable Dividend Focus 24
  24. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 24
    CFPS vs. Dividend TSX : FRU Dividend (/share) 3.50 We remain focused on preserving 3.00 the long-term sustainability of our Dividend 2.50 2.00 1.50 1.00 0.50 0.00 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005…
  25. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 25
    Strong Financial Position TSX : FRU Debt to Funds from Operations* (multiple) 100 million credit capacity 6.0 currently available 5.0 4.0 3.0 2.0 1.0 0.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008…
  26. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 26
    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 1.13 1.00 40 0.78 0.65 0.50 20 0.13…
  27. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 27
    Supplemental Information
  28. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 28
    2015 Sensitivities TSX : FRU Estimated Change in Funds From Change Operations Variable (+/-) ( per share) WTI oil price US1.00/bbl 0.03 Canadian/U.S. dollar exchange rate US0.01 0.01 Edmonton Par/WCS differential Cdn1.00/bbl…
  29. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 29
    FRU Stock Price Tracks Oil Price TSX : FRU WTI in US 150.00 61% 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…
  30. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 30
    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 million shares outstanding…
  31. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 31
    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…
  32. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 32
    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…
  33. September 2015 Investor Presentation – Freehold Royalties Ltd. – slide 33
    Investor Relations toll free. 888.257.1873 telephone. 403.221.0833 website. freeholdroyalties.com

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