The following is a summary of the Freehold Royalties Ltd. (FRHLF) Q4 2023 Earnings Call Transcript:
Financial Performance:
Freehold reported a total production of 14,714 BOE a day in 2023, a 4% increase from the previous year, led by a 16% boost in oil-weighted US production.
An annual revenue of $315 million was generated, which was fueled by funds from operations worth $240 million.
Freehold managed to disburse an annual dividend amounting to $163 million, or $1.08 per share, which resulted in a 68% payout ratio for 2023.
There was a decrease in net debt by 27% in 2023 due to the company's strategy of re-investing excess free cash flow above the dividend back into the business.
Business Progress:
Freehold saw a 25% hike in volumes from the Midland Basin, and succeeded in maintaining a stable production threshold in the Canadian portfolio.
For 2024, a production estimation between 14,700 to 15,700 BOE a day indicates a potential growth of 3% at the midpoint.
The acquisition of mineral title and royalty assets in Texas and New Mexico in December 2023 is projected to bolster Freehold's Permian production by approximately 30% and the US production by 12%.
The company also set a record by signing 122 leases in 2023; the momentum in drilling on these lands is expected to continue through 2024.
More details: FREEHOLD ROYALTIES LTD IR
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