Freehold Royalties (FRU) investor relations material

Executive summary

• Achieved record annual production of 16,294 BOE/day in 2025, up 9% year-over-year, with liquids weighting increasing to 66% and contributing 90% of total revenue.

• U.S. assets accounted for 45% of production and 53% of revenue, with significant growth in the Permian and Midland basins; U.S. production rose 33% in 2025.

• Transitioned to a fully independent operating model after ending the management agreement with Rife Management.

• Integrated $378 million in U.S. acquisitions completed in late 2024, enhancing the portfolio and contributing to higher production and liquids yields.

• Pure play royalty model with no capital, operating, or abandonment costs, providing low-risk exposure to the oil and gas sector.

Financial highlights

• Generated total revenue of $313 million and funds from operations of CAD 235 million (CAD 1.43/share) in 2025, a 2% increase from 2024.

• Paid $177 million ($1.08/share) in dividends, reflecting a 75% payout ratio, and reduced long-term debt by $18 million to $283 million by year-end.

• Invested $38 million in oil-focused royalty assets in the Permian Basin and Canada.

• Lease bonus revenue rose to $8 million from $3 million year-over-year.

• Maintained a monthly dividend of $0.09 per share, yielding approximately 6%.

Outlook and guidance

• 2026 production expected to average 15,500–16,300 BOE/day, reflecting a slower first half and ramp-up in the second half, with pricing assumptions of US$65/bbl WTI and C$2.00/mcf AECO.

• Guidance reflects ongoing weakness in Canadian natural gas prices, production downtime from a U.S. winter storm, and muted commodity price outlook.

• US production projected to grow 5–7% through 2026, with Canadian volumes impacted by gas price weakness and expected to recover late in the year.

• Dividend is sustainable down to US$50/bbl WTI, supported by multi-decade drilling inventory.

• Guidance does not factor in potential impacts from recent Middle East geopolitical events.