Welcome!

News Feed Item

Freehold Royalties Ltd. Enters Into Agreement to Acquire Royalty Production and Mineral Title Lands

CALGARY, ALBERTA -- (Marketwired) -- 04/14/14 -- Freehold Royalties Ltd. (Freehold) (TSX:FRU) announced it has entered into a purchase and sale agreement to acquire royalty interests on certain producing and non-producing lands in southeast Saskatchewan and Manitoba for approximately $111 million, prior to normal closing adjustments. The effective date of the transaction is January 1, 2014, with closing expected to occur on or about May 2, 2014, subject to regulatory approval. Total proceeds associated with the purchase and sale agreement will be funded through Freehold's existing bank credit line. The acquisition further adds to Freehold's land position within southeast Saskatchewan while enhancing the company's near-term growth profile. Based on the outlined transaction price, the deal is accretive both on a debt and equity-adjusted basis.

In addition, as part of the proposed transaction, Canpar Holdings Ltd., a wholly-owned subsidiary of CN Pension Trust Funds, has also agreed to purchase from the Vendor certain undeveloped mineral title lands for approximately $30 million.

Acquisition Highlights:


--  2013 average production of 470 barrels of oil equivalent (boe) per day
    (99% oil weighted), from over 400 producing wells. Revenue is derived
    from a combination of Lessor Royalties and Non-Convertible Overriding
    Royalties, offering Freehold enhanced netbacks. 
--  2013 net operating income of $15.0 million. 
--  Increased land exposure comprised of 71,700 acres of Mineral Title
    Lands. This includes 15,200 acres of developed, 42,000 acres of unleased
    undeveloped and 29,300 acres of leased undeveloped currently not tied
    with production (acreage in certain lands may be included in both
    developed and undeveloped acreage counts due to zonal development with
    balance of rights being undeveloped). 
--  Proved plus probable reserves of approximately 1.5 million boe, based on
    an independent engineering report prepared by Trimble Engineering
    Associates Ltd. as of December 31, 2013. 
--  37 gross new wells drilled within the acquired acreage through 2013. 
--  The acquisition also provides Freehold exposure to: 
    --  A stable oil weighted revenue stream. 
    --  The ability to grow royalty volumes through future year drilling
        programs. 
    --  Increased percentage of mineral title ownership relative to
        Freehold's existing acreage.
--  Upon closing, Freehold estimates 2014 year-end net debt of approximately
    $140-$145 million (which would leave $65-$70 million in available
    capacity on our existing credit line), while implying approximately 1.0
    times debt to funds flow (based on guidance provided in our fourth
    quarter news release).

After completing the transaction, we expect to increase our production guidance for 2014 by 6% to 9,100 boe per day; all other operating assumptions (provided in our fourth quarter news release) remain unchanged. As we have in the past, we expect to update shareholders on 2014 guidance for other key operating assumptions when we release our first quarter results, after market May 14, 2014.

Cautionary Statement Regarding Forward-Looking Information - This news release offers our assessment of Freehold's future plans and operations as at April 14, 2014 and contains forward-looking information including, as to the expected completion of the acquisition and Freehold's expectations for reserves, production, year-end debt and future prospects on the acquired lands. This forward-looking information is provided to allow readers to better understand our business and prospects and may not be suitable for other purposes. By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond our control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, taxation, royalties, regulation, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility, and our ability to access sufficient capital from internal and external sources. Risks are described in more detail in Freehold's annual information form for the year ended December 31, 2013 which is available under Freehold's profile on SEDAR at www.sedar.com.

With respect to forward looking information contained in this news release, we have made assumptions regarding, among other things, future oil and natural gas prices; future capital expenditure levels; future production levels; future exchange rates; the costs of developing and producing our assets; our ability and the ability of our lessees to obtain equipment in a timely manner to carry out development activities; our expectation for industry drilling levels; and our ability to obtain financing on acceptable terms.

You are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking information. We can give no assurance that any of the events anticipated will transpire or occur, or if any of them do, what benefits we will derive from them. The forward-looking information contained herein is expressly qualified by this cautionary statement. Except as required by law, Freehold does not assume any obligation to publicly update or revise any forward-looking information to reflect new events or circumstances.

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 oil (boe). We use the industry-accepted standard conversion of six thousand cubic feet of natural gas to one barrel of oil (6 Mcf = 1 bbl). The 6:1 boe ratio is based on an energy equivalency conversion method primarily applicable at the burner tip. It does not represent a value equivalency at the wellhead and is not based on either energy content or current prices. While the boe ratio is useful for comparative measures and observing trends, it does not accurately reflect individual product values and might be misleading, particularly if used in isolation. As well, given that the value ratio, based on the current price of crude oil to natural gas, is significantly different from the 6:1 energy equivalency ratio, using a 6:1 conversion ratio may be misleading as an indication of value.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
"Avere Systems is a hybrid cloud solution provider. We have customers that want to use cloud storage and we have customers that want to take advantage of cloud compute," explained Rebecca Thompson, VP of Marketing at Avere Systems, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
SaaS companies can greatly expand revenue potential by pushing beyond their own borders. The challenge is how to do this without degrading service quality. In his session at 18th Cloud Expo, Adam Rogers, Managing Director at Anexia, discussed how IaaS providers with a global presence and both virtual and dedicated infrastructure can help companies expand their service footprint with low “go-to-market” costs.
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
IoT generates lots of temporal data. But how do you unlock its value? You need to discover patterns that are repeatable in vast quantities of data, understand their meaning, and implement scalable monitoring across multiple data streams in order to monetize the discoveries and insights. Motif discovery and deep learning platforms are emerging to visualize sensor data, to search for patterns and to build application that can monitor real time streams efficiently. In his session at @ThingsExpo, ...
Ovum, a leading technology analyst firm, has published an in-depth report, Ovum Decision Matrix: Selecting a DevOps Release Management Solution, 2016–17. The report focuses on the automation aspects of DevOps, Release Management and compares solutions from the leading vendors.
"This week we're really focusing on scalability, asset preservation and how do you back up to the cloud and in the cloud with object storage, which is really a new way of attacking dealing with your file, your blocked data, where you put it and how you access it," stated Jeff Greenwald, Senior Director of Market Development at HGST, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
When it comes to cloud computing, the ability to turn massive amounts of compute cores on and off on demand sounds attractive to IT staff, who need to manage peaks and valleys in user activity. With cloud bursting, the majority of the data can stay on premises while tapping into compute from public cloud providers, reducing risk and minimizing need to move large files. In his session at 18th Cloud Expo, Scott Jeschonek, Director of Product Management at Avere Systems, discussed the IT and busin...
There will be new vendors providing applications, middleware, and connected devices to support the thriving IoT ecosystem. This essentially means that electronic device manufacturers will also be in the software business. Many will be new to building embedded software or robust software. This creates an increased importance on software quality, particularly within the Industrial Internet of Things where business-critical applications are becoming dependent on products controlled by software. Qua...
Continuous testing helps bridge the gap between developing quickly and maintaining high quality products. But to implement continuous testing, CTOs must take a strategic approach to building a testing infrastructure and toolset that empowers their team to move fast. Download our guide to laying the groundwork for a scalable continuous testing strategy.
As companies gain momentum, the need to maintain high quality products can outstrip their development team’s bandwidth for QA. Building out a large QA team (whether in-house or outsourced) can slow down development and significantly increases costs. This eBook takes QA profiles from 5 companies who successfully scaled up production without building a large QA team and includes: What to consider when choosing CI/CD tools How culture and communication can make or break implementation
SYS-CON Events has announced today that Roger Strukhoff has been named conference chair of Cloud Expo and @ThingsExpo 2016 Silicon Valley. The 19th Cloud Expo and 6th @ThingsExpo will take place on November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. "The Internet of Things brings trillions of dollars of opportunity to developers and enterprise IT, no matter how you measure it," stated Roger Strukhoff. "More importantly, it leverages the power of devices and the Interne...
"We formed Formation several years ago to really address the need for bring complete modernization and software-defined storage to the more classic private cloud marketplace," stated Mark Lewis, Chairman and CEO of Formation Data Systems, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to imp...
Most organizations prioritize data security only after their data has already been compromised. Proactive prevention is important, but how can you accomplish that on a small budget? Learn how the cloud, combined with a defense and in-depth approach, creates efficiencies by transferring and assigning risk. Security requires a multi-defense approach, and an in-house team may only be able to cherry pick from the essential components. In his session at 19th Cloud Expo, Vlad Friedman, CEO/Founder o...
Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now.