Q4 2024 Freehold Royalties Ltd Earnings Call Transcript
Key Points
- Freehold Royalties Ltd (FRHLF) achieved a 15% year-over-year production growth in heavy oil, particularly in the Clearwater and Mannville Stack regions.
- The company strategically positioned 45% of its production into tariff-free US light oil basins, enhancing revenue potential.
- Acquisitions in the Midland Basin have significantly increased Freehold's exposure, allowing them to capture interest in one in every three wells drilled, compared to one in every 12 wells the previous year.
- Freehold's portfolio is balanced with an expected 50% revenue contribution from both Canadian and US assets, providing protection against tariff threats.
- The company reported a 10% increase in proved plus probable reserves per share, continuing a multi-year trend of reserves growth.
- The retirement of CFO David Hendry may lead to a transitional period as the company seeks a successor.
- Natural gas assets are not attracting as much capital due to current gas pricing, potentially impacting future growth in this segment.
- The company's debt level is above 1 times, prioritizing debt repayment over potential stock buybacks.
- The Eagle Ford assets are being maintained rather than expanded, which may limit growth in this area.
- The company faces challenges in maintaining a conservative leverage position while pursuing acquisitions, as indicated by a target leverage range of up to 1.5 times.
Good morning, ladies and gentlemen. Welcome to the fourth-quarter results conference call.
I would now like to turn the meeting over to Mr. David Spyker. Please go ahead.
Good morning, everyone, and thank you for joining us today. On the call from Freehold are Rob King, our COO; Dave Hendry, our CFO; and Todd McBride, our Manager of IR.
First off, I would like to acknowledge David Hendry's retirement that was announced yesterday. I want to say I'm very grateful to David for his strong leadership and partnership over the last six years and thank him for his significant contribution to our success. This will not be the last conference call you get with David. He will be continuing in his role until later this year as we identify and transition to his successor.
So before jumping into the results, I want to highlight that 2024 was another big step forward for Freehold. We strengthened our portfolio through our focus on liquids-weighted plays in both
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