Canaccord reiterates $31 target priceQ3/24 results meet expectations while asset base continues to flex its muscles through strong activity levels Monday after market, TPZ reported Q3/24 results in line with expectations. Royalty production averaged 18,712 boe/d, in line with our 18,817 boe/d forecast and consensus at 18,650 boe/d. CFPS of $0.46 similarly met both our forecast and consensus at $0.46. Having closed its $278M royalty acquisition post-Q3 (see our note here for more details), we anticipate the new royalty lands will further augment its already strong presence in the basin. Underscoring its focus on acquiring royalty acreage in regions where counterparties are actively deploying capital, TPZ saw its undeveloped acreage make up ~17% of total WCSB activity last quarter, up from ~15% in Q2/24. We reiterate our BUY rating and $31.00 target on TPZ, which maps to a 2025E EV/DACF multiple of 14.6x. TPZ currently trades at 12.8x 2025E EV/DACF, compared to the royalty group average of 12.7x. Highlights from the release: Quarterly results. Q3/24 royalty production of 18,712 boe/d met expectations of 18,817 boe/d (CGe) and 18,650 boe/d (consensus) while CFPS of $0.46 was in line with CGe and the Street at $0.46. Net debt at the end of Q3/24 totalled $382M (1.4x D/CF, TTM), down 4% q/q and up 5% y/y. Operational update. Last quarter, 216 gross (7.9 net) wells were spud and one gross well was reactivated on TPZ lands, up 115% q/q. Wells spud in the quarter included 59 Clearwater, 46 NEBC Montney, 39 Deep Basin, 31 Peace River, 26 in Central Alberta, and 15 in SESK. TPZ notes that 49% of new wells drilled on its royalty acreage occurred in the NEBC Montney and Clearwater, representing 43% of all new wells drilled across the Clearwater area in Alberta, and 25% of all new wells drilled across the NEBC Montney. Heavy oil production increased 11% q/q. In the quarter, TPZ generated $21M of processing revenue/other income with its infrastructure assets at 100% utilization, increasing 15% q/q and y/y due to the Alberta Montney infrastructure acquisition completed in Q2/24. Outlook and estimate changes. TPZ maintained its 2024 royalty production guidance of 19,100-20,000 boe/d and processing revenue/other income of $75.5-78.0M with the release. On our updated estimates, we forecast 2024E cash flow of $275M on average royalty production of 19,410 boe/d, resulting in year-end 2024 net debt of $455M (1.7x D/CF, TTM). Next year, we forecast royalty production of 21,737 boe/d, generating cash flow of $304M on our CGe price deck, with the company exiting 2025 with net debt of $357M (1.2x D/CF, TTM). See Figure 2 for more details. Dividend. TPZ maintained its current $0.33/share quarterly dividend (which has been increased twice in 2024). On our updated estimates, we forecast TPZ's payout ratio at 68% in 2025, which sits towards the lower end of its long-term target of 60-90%. Additionally, we note that the company forecasts its dividend to be sustainable at commodity prices of $0.01/mcf AECO and US$55/bbl WTI. Conference call. The company will host a conference call on November 5, 2024 at 11:00AM ET (9:00AM MT). Interested parties can access the call by dialing 416-764-8659 or clicking here. Valuation and recommendation. We reiterate our BUY rating and target price on TPZ of $31.00, which is DCF-based and maps to a 2025E EV/DACF multiple of 14.6x. This compares to the 12.8x 2025E EV/DACF multiple TPZ currently trades at and the royalty peer group average of 12.7x.