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Investor Presentation – Freehold Royalties Ltd.

Freehold Royalties Ltd. · Dec 1, 2014 · 41 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. Investor Presentation – Freehold Royalties Ltd. – slide 1
    Investor Presentation December, 2014
  2. Investor Presentation – Freehold Royalties Ltd. – slide 2
    Corporate Profile TSX : FRU focused on oil and gas royalties 2014e production(1) (74% royalty production) boe per day 9,100 Annual dividend (0.14 per month) per share 1.68 Current dividend yield(2) percent 8.6 Market…
  3. Investor Presentation – 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 26% ownership 4
  4. Investor Presentation – Freehold Royalties Ltd. – slide 4
    Investment Performance* TSX : FRU Cumulative dividends declared 28.79 per share 158 (1.3 billion in dividends) 37 34 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Freehold Royalties Ltd. S&P/TSX Oil and Gas…
  5. Investor Presentation – Freehold Royalties Ltd. – slide 5
    Transaction Activity TSX : FRU Freehold announced December 4th that they had entered into four separate transactions showcasing the companys flexibility. Transaction 1-Anderson Energy acquisition highlights: Freehold is…
  6. Investor Presentation – Freehold Royalties Ltd. – slide 6
    Royalty/Working Interest Transactions TSX : FRU Transaction 2 & 3 - RIFE Resources GORR highlights: Freehold purchases a 5% gross overriding royalty on Rifes Soda Lake and Lindbergh assets for total consideration of 10.3 million.…
  7. Investor Presentation – Freehold Royalties Ltd. – slide 7
    Accretive Acquisitions/Joint Ventures TSX : FRU Initial Production Cost Acquired Year Area ( millions) (boe/d) 1997 Alberta/Saskatchewan 22 700 2001 Southeast Saskatchewan 25 800 2005 Petrovera (CNRL) 352 3,800 2007…
  8. Investor Presentation – Freehold Royalties Ltd. – slide 8
    Annual Guidance* TSX : FRU Guidance Updated Annual Average Nov. 13 2014 Daily production boe/d 9,100 WTI oil price US/bbl 94.00 Western Canada Select (WCS) Cdn/bbl 83.00 AECO natural gas price Cdn/Mcf 4.25 Operating costs…
  9. Investor Presentation – Freehold Royalties Ltd. – slide 9
    2015 Outlook* TSX : FRU Guidance Updated Annual Average Dec. 2, 2014 Daily production boe/d 10,100 WTI oil price US/bbl 85.00 Western Canada Select (WCS) Cdn/bbl 77.00 AECO natural gas price Cdn/Mcf 3.75 Operating costs /boe…
  10. Investor Presentation – Freehold Royalties Ltd. – slide 10
    Why Own Freehold TSX : FRU Royalty Consistent focused strategy Focus 11
  11. Investor Presentation – Freehold Royalties Ltd. – slide 11
    Royalty-Focused Production TSX : FRU boe/d 74% 8,957 9,100 10,000 royalties 8,000 6,000 4,000 2,000 0 Royalty Interest Production Working Interest Production 12
  12. Investor Presentation – Freehold Royalties Ltd. – slide 12
    Top Royalty Payors/Operators* TSX : FRU * Top 30 payors account for over 80% of royalty revenue on a trailing 12 month basis. 13
  13. Investor Presentation – Freehold Royalties Ltd. – slide 13
    Board of Directors TSX : FRU Nolan Blades Harry Campbell Peter Harrison Art Korpach Sue Mackenzie Tom Mullane David Sandmeyer Rodger Tourigny Aidan Walsh 14
  14. Investor Presentation – Freehold Royalties Ltd. – slide 14
    Why Own Freehold TSX : FRU Royalty large royalty portfolio Focus 15
  15. Investor Presentation – Freehold Royalties Ltd. – slide 15
    Development Opportunities TSX : FRU 3.2 million gross acres Heavy North Saskatchewan River Cardium Oil Viking Royalty interests 95% Working interests 5% Oil resource plays Bakken, Mississippian * Acreage reflects May…
  16. Investor Presentation – Freehold Royalties Ltd. – slide 16
    5 Year Royalty Drilling Trends TSX : FRU Our diversified portfolio of assets enables exposure to a variety of established development plays within the Western Canadian Sedimentary Basin 17
  17. Investor Presentation – Freehold Royalties Ltd. – slide 17
    2014 F9 Royalty and WI Drilling By Play Type TSX : FRU 46 Mannville Heavy Oil wells similar to 2013 drill levels Increased activity levels in SE Sask. Cardium Hz drilling is Starting to see some drilling in steady (23 Hzs YTD)…
  18. Investor Presentation – Freehold Royalties Ltd. – slide 18
    Royalty Drilling Trends* TSX : FRU * Equivalent net wells drilled on Freeholds royalty land. 19
  19. Investor Presentation – Freehold Royalties Ltd. – slide 19
    Why Own Freehold TSX : FRU Royalty low costs Focus 20
  20. Investor Presentation – Freehold Royalties Ltd. – slide 20
    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…
  21. Investor Presentation – Freehold Royalties Ltd. – slide 21
    The Royalty Advantage: Peers TSX : FRU FRUs liquids weighting and low cost model drive top decile economics. 2014 Q3 2014 Q3 VET TBE FRU SGL CPG PWT LTS NBZ LEG ZAR PSK PGF TOG BNE NBZ TET BNE LRE WCP LEG SGY LTS PWT SGY ZAR TOG…
  22. Investor Presentation – Freehold Royalties Ltd. – slide 22
    Capex Requirements TSX : FRU Capital Expenditures as a Percentage of Funds from Operations 150% Sector average 109% 125% 100% 75% Freehold average 24% 50% 25% 0% 2010 2011 2012 2013 2014e Sector Average Freehold *…
  23. Investor Presentation – Freehold Royalties Ltd. – slide 23
    2015 Capital Allocation* TSX : FRU 47 (7.0 net) wells 30 million Cardium Light Oil 50% Southeast Saskatchewan 50% * Per guidance dated November 14th, 2014. 24
  24. Investor Presentation – Freehold Royalties Ltd. – slide 24
    Why Own Freehold TSX : FRU Royalty Attractive payout Focus 25
  25. Investor Presentation – Freehold Royalties Ltd. – slide 25
    Dividend History TSX : FRU Dividend (/share) 3.00 2.91 2.50 2.10 2.00 1.92 1.92 1.70 1.73 1.68 1.68 1.68 1.68 1.68 1.56 1.50 1.40 1.32 1.31 1.10 1.00 0.78 0.65 0.50 0.13 0.00 1996 1997 1998 1999 2000 2001…
  26. Investor Presentation – Freehold Royalties Ltd. – slide 26
    Strong Financial Position TSX : FRU Debt to Funds from Operations* (multiple) 3.0 70 million credit capacity- with ability to 2.5 increase (at November, 2014) 2.0 1.5 1.0 0.5 0.0 1997 1998 1999 2000 2001 2002 2003…
  27. Investor Presentation – Freehold Royalties Ltd. – slide 27
    FRU Stock Price Tracks Oil Price TSX : FRU WTI in US 150.00 62% 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…
  28. Investor Presentation – Freehold Royalties Ltd. – slide 28
    2014 Sensitivities TSX : FRU Estimated Change in Funds From Change Operations Variable (+/-) ( per share) WTI oil price US1.00/bbl 0.02 Canadian/U.S. dollar exchange rate US0.01 0.02 Edmonton Par/WCS differential Cdn1.00/bbl…
  29. Investor Presentation – Freehold Royalties Ltd. – slide 29
    Why Own Freehold TSX : FRU Royalty Performance Focus 30
  30. Investor Presentation – Freehold Royalties Ltd. – slide 30
    Total Return Since December 31, 2010 TSX : FRU 175 150 +29.1% 125 22.8% 100 75 -31.6% 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 November 30, 2014. 31
  31. Investor Presentation – Freehold Royalties Ltd. – slide 31
    2014 Relative Performance (div. adj.) TSX : FRU Perpetual 27.3% Advantage 10.6% S&P/TSX Composite 8.5% Peyto 6.8% Whitecap 0.8% PrairieSky 0.0% ARC -3.8% Freehold Freehold Freehold: -4.8% -4.8% Vermilion -11.4% Surge -17.7%…
  32. Investor Presentation – Freehold Royalties Ltd. – slide 32
    3-Year Relative Performance(div adj) TSX : FRU Whitecap 57% Peyto 51% Vermilion 29% Freehold Freehold: 29% 29% TSX Composite 22% ARC 21% Perpetual 16% Advantage 7% Crescent Point -18% Enerplus -29% Twin Butte -31% Baytex…
  33. Investor Presentation – Freehold Royalties Ltd. – slide 33
    5-Year Relative Performance(div adj) TSX : FRU Peyto 252% Vermilion 119% Freehold: 95% Freehold 95% Twin Butte 76% ARC 71% Trilogy 52% S&P/TSX Composite 29% Baytex 14% Crescent Point 5% Enerplus -11% Bonavista…
  34. Investor Presentation – Freehold Royalties Ltd. – slide 34
    Supplemental Information
  35. Investor Presentation – Freehold Royalties Ltd. – slide 35
    Land Holdings* TSX : FRU 3.1 million gross acres Land Profile 22% held in perpetuity (626,000 gross acres of mineral title and royalty assumption lands; 80% leased) 822,000 gross acres undeveloped Undeveloped land…
  36. Investor Presentation – Freehold Royalties Ltd. – slide 36
    Reserves Profile* TSX : FRU Net Proved Plus Probable Net Reserves Reserves 14.5 MMboe proved 59% oil and NGL 6.0 year RLI 23.1 MMboe P+P 61% oil and NGL 8.5 year RLI 94% Light and medium crude oil - 25% of our proved…
  37. Investor Presentation – Freehold Royalties Ltd. – slide 37
    Production Profile TSX : FRU 2013 average 2013 Production Profile 8,913 boe/d 70% royalty production 64% oil and NGL 2014 forecast* 9,100 boe/d 2015 forecast* 10,100 boe/d Our oil-weighted Light and medium crude oil -…
  38. Investor Presentation – Freehold Royalties Ltd. – slide 38
    Freehold Ownership TSX : FRU 74,285,713 shares outstanding (September 30, 2014) Insider holdings CN Pension Trust Funds 19,386,938 (26.1%) Rife: 4,711,338 (6.3%) (included in above number for CNID) Institutional (59%) Canadian…
  39. Investor Presentation – Freehold Royalties Ltd. – slide 39
    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…
  40. Investor Presentation – Freehold Royalties Ltd. – slide 40
    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…
  41. Investor Presentation – Freehold Royalties Ltd. – slide 41
    Investor Relations toll free. 888.257.1873 telephone. 403.221.0833 website. freeholdroyalties.com

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