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
The cloud era has reached the stage where it is no longer a question of whether a company should migrate, but when. Enterprises have embraced the outsourcing of where their various applications are stored and who manages them, saving significant investment along the way. Plus, the cloud has become a defining competitive edge. Companies that fail to successfully adapt risk failure. The media, of course, continues to extol the virtues of the cloud, including how easy it is to get there. Migrating...
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in Embedded and IoT solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and ...
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical...
18th Cloud Expo, taking place June 7-9, 2016, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some...
How will your company move to the cloud while ensuring a solid security posture? Organizations from small to large are increasingly adopting cloud solutions to deliver essential business services at a much lower cost. According to cyber security experts, the frequency and severity of cyber-attacks are on the rise, causing alarm to businesses and customers across a variety of industries. To defend against exploits like these, a company must adopt a comprehensive security defense strategy that is ...
@DevOpsSummit taking place June 7-9, 2016 at Javits Center, New York City, and Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 18th International @CloudExpo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world.
SYS-CON Events announced today that MangoApps will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MangoApps provides modern company intranets and team collaboration software, allowing workers to stay connected and productive from anywhere in the world and from any device. For more information, please visit https://www.mangoapps.com/.
SYS-CON Events announced today that Catchpoint Systems, Inc., a provider of innovative web and infrastructure monitoring solutions, has been named “Silver Sponsor” of SYS-CON's DevOps Summit at 18th Cloud Expo New York, which will take place June 7-9, 2016, at the Javits Center in New York City, NY. Catchpoint is a leading Digital Performance Analytics company that provides unparalleled insight into customer-critical services to help consistently deliver an amazing customer experience. Designed...
SYS-CON Events announced today that EastBanc Technologies will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. EastBanc Technologies has been working at the frontier of technology since 1999. Today, the firm provides full-lifecycle software development delivering flexible technology solutions that seamlessly integrate with existing systems – whether on premise or cloud. EastBanc Technologies partners with p...
SYS-CON Events announced today that IBM Cloud Data Services has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. IBM Cloud Data Services offers a portfolio of integrated, best-of-breed cloud data services for developers focused on mobile computing and analytics use cases.
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
We’ve been doing it for years, decades for some. How many websites have you created accounts on? Your bank, your credit card companies, social media sites, hotels and travel sites, online shopping sites, and that’s just the start. We do it often without even thinking about it, quickly entering our personal information, our data, in a plethora of systems. Sometimes we’re not even aware of the information we are providing. It could be very personal information (think of the security questions you ...
In today's enterprise, digital transformation represents organizational change even more so than technology change, as customer preferences and behavior drive end-to-end transformation across lines of business as well as IT. To capitalize on the ubiquitous disruption driving this transformation, companies must be able to innovate at an increasingly rapid pace. Traditional approaches for driving innovation are now woefully inadequate for keeping up with the breadth of disruption and change facin...
As machines are increasingly connected to the internet, it’s becoming easier to discover the numerous ways Industrial IoT (IIoT) is helping to shape the business world. This is exactly why we have decided to take a closer look at this pervasive movement and to examine the desire to connect more things! Now if you need a refresher on IIoT and how it is changing the world, take a moment and listen to Greg Gorbach with ARC Advisory Group. Gorbach believes, "IIoT will significantly change the worl...
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, will discuss the importance of WebRTC and how it enables companies to fo...