Freehold Investor Day December 3, 2024 FREEHOLDROYALTIES.COM TSX FRU
Todays Agenda 1 Opening Remarks David Spyker, President and Chief Executive Officer 2 Asset Book Summary Rob King, Chief Operating Officer 3 US Portfolio David Spyker 4 Canadian Portfolio David Spyker 5 Financial and Dividend…
Freeholds Strategy Income Growth and Durable Returns, Our Plan Creating Value Enhancing Value Delivering Value Increase exposure to the Maximize royalty value Target a dividend best plays, concentrated through a comprehensive payout…
Freeholds Strategy Income Growth and Durable Returns, Looking Back Creating Value Enhancing Value Delivering Value Successful expansion into Rationalized portfolio to 19% average return on the US, with 1.1 million solely focus on…
Freeholds Strategy Income Growth and Durable Returns, in Action Creating Value Enhancing Value Delivering Value Value added through US Audit & optimization value Last twelve months returns acquisition strategy added since 2021 to…
Freeholds Strategy Income Growth and Durable Returns, the Results Creating Value Enhancing Value Delivering Value Production per million Funds from operations, and Last 5 years total shares outstanding dividends per share…
DEEP BASIN CLEARWATER Freeholds Value Proposition North American Portfolio Overview MANNVILLE HEAVY OIL CARDIUM VIKING SE SASKATCHEWAN Exposure to major conventional and shale basins with 360 royalty counterparties N. DAKOTA…
Freeholds Value Proposition Resilient Cashflow Margins 2025E cashflow per boe1 Freehold realized pricing 2024 YTD (/boe) (/boe) 50 US US +19% premium oil 40 Canada Cdn. 70 80 90 100 110 30 US US +43% premium 20 boe…
Freeholds Value Proposition Aligned with Quality Operators Freehold payor qualities Key Freehold payors Greater than 10Bn 10 billion market Mktcap Cap Greater than 100 MBOE/d 100 mboe/d Production Less than < 1X1x…
What Freehold is Excited About The US Resource Advantage 2,100 7,000 The Permian is best in class in terms of thickness, 2,200 production and resource potential 7,500 2,300 2,400 8,000 Freehold has positioned into the thickest…
What Freehold is Excited About Multilateral Adoption in Canada New technology continues to Clearwater net royalty Mannville fairway net production heavy oil wells spud unlock substantial resource that (boe/d) may have been marginal…
What Freehold is Excited About Success Expanding Development Benches New benches continue to add Midland Basin oil growth since 2020 operator inventory, and deliver value 500% to Freehold that we didnt fully Emerging Benches…
What Freehold is Excited About A New Era of Shale Development 100 billion reasons to US100 billion in recent M&A transactions have love the Permian consolidated the Midland Basin under well capitalized and globally relevant…
What Freehold is Excited About Decades of Inventory Asset Book highlights Development inventory by region (years) 40 Canada United States 35 40 years 18,000 18,500 30 25 30 years development locations development locations…
Asset Book Summary FREEHOLDROYALTIES.COM TSX FRU
Asset Book Summary Appraising the Value of our Inventory Future Optionality Expansion of geologic zones, improved drilling and completion technologies, new/expansion of secondary and tertiary recovery schemes, new pool and play…
Asset Book Summary Sharing a Deeper Understanding of our Portfolio Purpose Key to Unlocking Value The Asset Book validates Supports our teams to better execute our acquisition and the multi-decade value optimization efforts…
Asset Book Summary Freeholds Canadian Portfolio Net Total Gross 2023 6.1 million acres, spanning Undiscounted Prospective Industry Western Canada, concentrated in Value ( billions) Inventory Spuds liquids-rich plays SE Saskatchewan…
Asset Book Summary Freeholds US Portfolio Net Total Gross 2023 1.1 million gross drilling acres in Undiscounted Prospective Industry oil weighted basins Value ( billions) Inventory Spuds Midland 2.5 12,425 2,850 0.5% average…
Asset Book Summary Robust Inventory Position Backstops Portfolio Duration Canadian inventory life US inventory life (years) (years) Canada Total 40 years1 US Total 30 years1 Heavy Oil Delaware SE Sask. Midland Deep Basin…
Asset Book Summary Canada vs. US Observations Gross prospective locations Net royalty locations Prospective development value 18,000 (gross) 910 (net) 10.2 billion 18,500 (gross) 90 (net) 5.3 billion Despite larger land base…
US Portfolio FREEHOLDROYALTIES.COM TSX FRU
Freeholds US Portfolio Overview Freehold US asset map Production summary Basin summary (YTD 2024) (boe/d) Eagle Ford 2,400 Midland 2,050 Delaware 370 Other 600 0% 25% 50% 75% 100% Total 5,420 Oil NGLs Gas Revenue summary US…
US Deals Allowed Freehold to Improve our Business Creating Value Enhancing Value Delivering Value Freehold M&A cashflow 2024 YTD realized pricing Last twelve months return multiple comparison (/boe) on capital employed1 10x 80 16%…
Drilling Activity Led by Top Operators Net activity wells on Freeholds US lands Freeholds top US drillers (2023-2024 YTD) 1.6 1.4 60 other operators 1.2 25% 1.0 42% 0.8 7% 0.6 0.4 8% 8% 10% 0.2 - 1Q21 1Q22 1Q23 1Q24…
Why Freehold Likes the US Positioned In Front of the Drill Bit Midland Basin activity heatmap1 60% of basin activity is concentrated in the Midland, Martin and Howard counties, where the majority of Freeholds acreage is positioned…
Why Freehold Likes the US A&D Returns Substantially Above Cost of Capital Net US royalty production Cumulative US royalty revenue (boe/d) ( millions) 6,000 5,420 409 400 BOE/d million 4,000 YTD 2024 300 200 2,000 100 0 0…
Why Freehold Likes the US Our Midland Basin Operators are Focused on Excellence For us to be able to Weve built the logistic systems, The teams are say that combined, we the pipeline systems [and] we believe laser-focused on capital…
Why Freehold Likes the US Unlike Canada, its All For Sale Canadian unconventional mineral rights Texas mineral rights Midland Montney Delaware Eagle Ford Duvernay Private Mineral Rights Government Owned Land 50 miles 50…
Why Freehold Likes the US Competes with Canadas Best Average cumulative oil from wells on production since 2020 Freeholds Midland position (mbbls of oil/condensate) stacks up against any 250 repeatable resource play in Freehold…
Resource Expansion Midland Basin Bench Overview GR RES Gross Net Total Future Royalty Clearfork Prospective Undiscounted Volumes (mboe) Upper 7,000 Inventory Value ( billions) Spraberry Middle Clearfork Spraberry 7,500 zero…
Resource Expansion Midland Basin Bench Overview Clearfork 7,000 Significant running room Upper Spraberry in the 1st Generation and 7,500 Middle Spraberry 2nd Generation benches Jo Mill 8,000 Emerging benches are Lower Spraberry…
Resource Expansion Midland Basin Development Progress to Date Our existing cashflow engine, resilient Quantifiable immediate upside that Freeholds long-dated call on resource, down to low US40s WTI pricing and continues to see…
Resource Expansion What Were Excited About Around Freehold Lands Emerging Bench 2nd Generation Bench 1 4 Strong Recent Upper Highpeak Kallus 34-39 A Unit Spraberry results from Freehold Midland Basin map M 2H well targeting…
Resource Expansion Resource Expansion Pushing Play Boundaries 1st Generation Bench 1st Generation Bench 1 4 Diamondback step-outs SM Energy 6 well Dean bench targeting the Lower Freehold Midland Basin map delineation, oil IP90…
Resource Expansion Resource Expansion Seeing Success in the Dean 2nd Generation Bench 2nd Generation Bench 1 4 Hibernia 2 well Dean project, Midland Basin Dean well map OXY 4 well Dean project, average 245,000 bbls of oil averaging…
Resource Expansion Midland Production Evolution Emerging Benches Midland Basin oil production by bench generation 10,000 bbls/d from 380 wells (mmbbl/d of oil) 2.5 Second Generation Benches 2.0 600,000 bbls/d from 5,000 wells…
Resource Expansion A Decade of Consistency Midland lateral length has increased 60% Midland average cumulative oil from wells on production since 2015 over the last decade, now averaging more (mbbls of oil per 1,000ft) than 2…
Why Freehold Likes the US The DSU Development Advantage Diamondback Butte Unit DSU Butte Unit pad detail oil production by vintage (mbbls/d) 10 8 Frac shut-ins 6 average of 4,000bbls/d over 8 years 4 2 0 '16 '17 '18…
Why Freehold Likes the US The DSU Development Advantage Diamondback Butte Unit DSU greater Diamondback Butte Unit cumulative Midland Basin map DSU production through time 16 15,035,700 boe 12 11,177,800 barrels of oil over 8…
Why Freehold Likes the US Liquid A&D Market Allows Freehold to Build Scale Freehold has tripled its Freehold Midland Basin Midland Basin royalty industry activity capture rate market share market share of activity, production, and…
Resource Expansion 2nd Generation and Emerging Benches Compete 2nd Generation and Emerging benches Midland Basin cumulative production by bench from wells on production since 2023 are delivering results that are in-line (mbbls of…
Resource Expansion Additional Benches, What the Operators Have to Say Whats unique is that, were adding a lot of Probably, the most exciting [play] we Wolfcamp D, a lot of Upper Spraberry, more Jo Mill. have currently is the Middle…
Why Freehold Likes the US High Quality Payors Freeholds key Midland Basin royalty payors Key payor map FRU Land Investment Grade Public Private 10 miles 45 Source Bloomberg, Enverus
Resource Expansion Concentrated Footprint in the Core 20 years1 of prospective development inventory Lower Eagle Ford development since 2010 Freeholds inventory locations are split evenly between the Lower Eagle Ford, and upper…
Resource Expansion Additional Eagle Ford Benches 54% of Freeholds Karnes County average Upper Eagle Ford and Austin Chalk cumulative oil by bench development since 2010 royalty lands are (mbbls of oil per 1,000ft) in Karnes County…
Resource Expansion Freehold is in the Heart of the Oil Fairway Eagle Ford oil window productivity map Eagle Ford average cumulative oil by county (mbbls of oil/condensate normalized to 10,000ft) 350 300 Karnes (54% of net…
Resource Expansion Returning to the Most Resource Rich Parts of the Play Refracs and infills target economic Eagle Ford proppant intensity vs. productivity resource left behind during early 3,000 300 days of play development 2,500…
Resource Expansion Eagle Ford Refrac Success Redevelopment locations compete for Karnes County Lower Eagle Ford refrac cumulative oil (mbbls of oil) capital within operators portfolios 500 Any improvement to recoveries is a +170…
Resource Expansion Refracs, What the Operators Have to Say Weve been implementing We are pretty excited They're pretty exciting. new refrac techniques across our about what we're seeing We're seeing rates go from 15 existing Eagle…
Freeholds US Assets; Oil Weighted and in the Right Areas Creating Value Enhancing Value Delivering Value 685 million invested, with Light oil weighting, and Our US approach has more than 400 million of premium Gulf Coast pricing…
Canadian Portfolio FREEHOLDROYALTIES.COM TSX FRU
Freeholds Canadian Portfolio Overview Freehold Canadian asset map Production summary Basin summary (YTD 2024) (boe/d) Viking 1,300 SE Sask. 1,100 0% 25% 50% 75% 100% Cardium 1,100 Oil NGLs Gas Mannville 900 Revenue summary…
Clearwater Developments Robust Position Across Multiple Exploration Plays Net Clearwater royalty production Basin summary (boe/d) Peace River 500 Peavine 400 Nipisi 300 Marten Hills 200 West Marten & McLeod Lake 100…
Clearwater Developments Serious Exploration Potential Freehold Clearwater asset development stage Continuous size of circle denotes number of Nipisi evaluation of new 12 development locations Waterflood expansion Infill drilling…
Clearwater and Mannville Heavy Oil Developments Drilling Efficiencies Lead to Resilient Inventory, Growth Improved drilling economics Multilaterals Fishbone Sweeper translate directly into improved inventory quality, duration, and…
Canadian Resource Expansion Bespoke Heavy Oil Drilling Revitalization of Mannville stack revitalized multilateral development established production fairways through application of bespoke drilling and completions strategies…
Canadian Resource Expansion Southeast Saskatchewan Resurgence Dominant position with 525,000 gross acres of royalty SE Sask. net drilled wells lands (including 300,000 gross acres of mineral title land) 3.0 2.5 Operators have…
Canadian Resource Expansion Multilaterals, Not a One Trick Pony SE Sask. Spuds by type Viewfield Bakken average SE Sask. Viewfield Bakken cumulative oil production development map 100% by well type since 2020 (mbbls) 80% 35 30…
Canadian Resource Expansion Multilaterals, What the Operators Have to Say We've been implementing Having stacked multi-zone [our multilateral a new well design we call the development over much of our drilling has] reduced fan…
Canadian Cashflow Machine Viking Light Oil The Viking has been a cornerstone Freehold Viking Dodsland asset map of Freeholds portfolio for over a decade, we expanded our presence in 2015, at the time believing there was 15 years…
Canadian Cashflow Machine The Mannville Cornerstone Mannville oil royalty Mannville fairway net Mannville Mannville land map volumes heavy oil wells spud ownership (bbls/d) stats 1,200 3 975,000 acres 1,100 1,825 heavy 2 oil…
Portfolio Optimization Deep Knowledge of our Land Base Drives Value Number of leases Production from leasing Leasing activity breakdown since 2020 issued per year activity since 2020 (boe/d) Privates Juniors Small Caps Mid Caps…
Portfolio Optimization Deep Knowledge of our Land Base Drives Value Capitalize on our extensive land base Optimization, Audit & Compliance revenue since 2021 ( millions) with royalty optimization 2021 2022 2023 20241 Total…
Portfolio Optimization Balance of Minerals Freeholds 1.1 million Potash (430,000 acres1) Other mineral acreage gross acres of mineral Lithium (400,000 acres1) in Western Canada Helium (580,000 acres1) ownership provides revenue…
Key Canadian Portfolio Themes Long Life, and Improving Gas Option Value Multilateral Capture Since 1996, Freehold has Cashflow upside should Evolving drilling built a strong cashflow Cdn. gas prices recover technologies in our key…
Finance and Dividend Strength FREEHOLDROYALTIES.COM TSX FRU
Returns Focused Strategy, Growing Over Time Over the last 5 years, Freehold has delivered significant returns to our shareholders while growing the business and strengthening our balance sheet 1.4 billion 1.1 billion 0.6 billion…
Finance and Dividend Strength Conservatively Balancing Dividends with Leverage Low cost structure provides Annual dividends paid Net debt to last robust funds from operations to ( millions) twelve months funds from operations…
Finance and Dividend Strength Invested Capital and Dividends Drive Returns Return on capital employed1 Dividend payout ratio (dividends paid/funds from operations) 20% 80% 15% 10% 60% 5% 0% 40% -5% -10% 20% -15% 2020…
Finance and Dividend Strength Returns Continue to Grow as Freehold Grows Freeholds dividend has Cumulative dividends paid ( millions) been a permanent feature through all 2,500 commodity price cycles 2.26 billion 2,000…
Finance and Dividend Strength Dividend Resiliency 2025E WTI breakeven pricing1 (US/bbl WTI) Blue bars denote peers with a 80 dividend yield above 5% 70 60 50 40 30 20 10 0 FRU Peers1 Peer 1 FRU 9 2 3 4…
Closing Remarks and Questions FREEHOLDROYALTIES.COM TSX FRU
DEEP BASIN CLEARWATER The Freehold Story CARDIUM VIKING Royalty ownership provides significant exposure to SE SASKATCHEWAN high margin assets with zero maintenance capital N. DAKOTA BAKKEN Positioned at the low-end of the North…
Advisories FREEHOLDROYALTIES.COM TSX FRU
Advisories Non-GAAP Measures Within this presentation, references are made to terms commonly used as key performance indicators in the oil and gas industry. We believe that net revenue, cash costs, netback, dividend payout ratio,…
Advisories Third Party Information and Public Information This presentation contains information regarding lands and interests from which Freehold Royalties Ltd. (Freehold, FRU, the Corporation, us, we or our) collects or may in the…
Advisories the future drilling locations and future development upside identified on our royalty lands; our expectation to achieve total payback on pre-2024 acquisitions in 2026; that our existing cashflow engine, resilient down to low…
Advisories future production levels; future exchange rates; future tax rates; future legislation; the cost of developing and expanding our assets; our ability and the ability of our industry partners and royalty payors to obtain…
Advisories Advisory Relating to Presentation of Oil and Natural Gas Reserves, Revenue and Production Information This presentation contains information relating to crude oil, natural gas and NGL reserves and other information prepared…
Advisories Conversion of Natural Gas to Barrels of Oil Equivalent (boe) To provide a single unit of production for analytical purposes, natural gas production and reserves volumes are converted mathematically to equivalent barrels of…
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