Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Quote  |  Bullboard  |  News  |  Opinion  |  Profile  |  Peers  |  Filings  |  Financials  |  Options  |  Price History  |  Ratios  |  Ownership  |  Insiders  |  Valuation

Freehold Royalties Ltd T.FRU

Alternate Symbol(s):  FRHLF

Freehold Royalties Ltd. is a Canada-based royalty company. It manages non-government portfolios of oil and natural gas royalties in Canada with a sizeable land base in the United States. Its segments include Canada and the United States. Canada segment includes exploration and evaluation assets and the petroleum and natural gas interests in Western Canada. The United States segment includes petroleum and natural gas interests primarily held in the Permian (Midland and Delaware), Eagle Ford, Haynesville and Bakken basins largely located in the states of Texas, Louisiana, North Dakota and New Mexico. Its total land holdings encompass approximately 6.1 million gross acres in Canada and approximately 1.2 million gross drilling acres in the United States. The Company also have gross overriding royalty (GORR) and other interests in approximately five million acres. It has royalty interests in close to 21,000 producing wells and almost 500 units spanning five provinces and eight states.


TSX:FRU - Post by User

Post by savyinvestor333on Aug 11, 2021 7:55am
224 Views
Post# 33683709

From TD this morning

From TD this morning
Event
Q2/21 Results, Increases Dividend, Announces Asset Acquisitions
Impact: POSITIVE
 
Volumes Higher than TD Expected, CFPS Beat: Q2/21 production of 11.1 mBOE/
d was above TD (10.7 mBOE/d) and in line with consensus (11.0 mBOE/d). U.S.
production now represents 14% of volumes. CFPS of $0.31 exceeded TD/
consensus ($0.29).
$94mm in Post-Q2 Acquisitions: Subsequent to Q2/21, Freehold acquired new
positions in the Eagle Ford, Permian, and Canadian Clearwater in three deals.
Although a "current production" figure was not provided, Freehold expects the assets
to contribute 635 BOE/d in Q4/21 and grow 50% through 2022 (Exhibit 1).
Another Material Dividend Increase: Freehold is increasing the monthly dividend
to $0.05 (from $0.04). This is the fourth time the company has increased its dividend
since November 2020, when it was $0.015/share per month.
Our View: Given the series of recent DPS increases, combined with the recent
pullback in WTI <US$70/bbl, we believed that FRU would have paused the steady
dividend increases. That said, even at lower-than-current WTI prices (US$65/bbl),
we forecast that the new dividend will consume only 48% of 2022E FCF and FRU
could exit 2022 virtually debt-free (even after the aforenoted acquisitions). We
view this unexpected increase as a positive commitment to continued shareholder
returns and its long-standing payout strategy.
Third-party Wells Tracking Expectations, but Perhaps Timing/Productivity
Create Volume Tailwinds: 84 (2.1 net) wells were drilled on FRU's lands in Q2/21.
Only 0.05 net wells were drilled in the U.S., but given the comparatively high
productivity rates of the plays in the U.S. versus Canada, these figures are not directly
comparable from the perspective of production contribution. One trend we have
noticed across industry with Q2/21 results is increased production guidance (without
capex bumps); this should also result in incremental "free” production tailwinds for
FRU.
TD Investment Conclusion
We continue to recommend investors BUY Freehold, given its ability to generally
maintain (or grow) production at no incremental capital cost, while generating
material FCF to fund a higher-than-current dividend and continue to make tuck-in
acquisitions. It is trading at the highest FCF yield of its royalty peers.
<< Previous
Bullboard Posts
Next >>