Freehold Royalties (FRU) Investor Day 2024 summary

Strategic direction and asset positioning

• Focused on building a North American royalty portfolio with high-quality assets in top oil and gas basins, emphasizing oil-weighted production and premium operators.

• Expanded U.S. presence with 1.1 million acres in the Permian and Eagle Ford, and 430,000 acres in Canada's Clearwater, shifting away from working interests to pure royalty assets.

• Canadian portfolio includes 6.1 million gross acres, with 70% of future inventory in oil-weighted plays and 40 years of drilling inventory.

• Portfolio rationalization has increased oil weighting and focused on high-margin, long-duration royalties.

• Strategic focus on aligning with leading operators (Exxon, ConocoPhillips, Diamondback) and targeting core, high-return areas for future growth.

Asset inventory, value, and development outlook

• Asset book details 36,500 gross prospective locations, supporting 30–40 years of inventory and $14–15 billion in undiscounted value.

• Canadian portfolio: $10 billion value, 18,000 locations, concentrated in four oil-weighted plays, implying 40 years of inventory.

• U.S. portfolio: $5 billion value, 18,500 locations, mainly in Midland (Permian) and Eagle Ford, with 30 years of inventory and higher per-location value.

• Ongoing focus on acquiring mineral rights in high-activity DSUs and optimizing exposure to emerging and second-generation benches in the Permian.

• Significant future optionality remains, with 10% of Canadian acreage not yet ascribed inventory and exposure to emerging resources such as lithium and helium.

Operational performance and financial discipline

• U.S. assets are 62% oil-weighted, generating over 90% of revenue from oil, with strong cash flow and premium pricing.

• Canadian assets are 45% oil-weighted, with key plays revitalized by multilateral drilling and enhanced oil recovery, supporting consistent production and cash flow.

• Multilateral well adoption and re-frac opportunities are driving productivity improvements and extending asset life in both Canada and the U.S.

• Conservative balance sheet maintained, with net debt to FFO below 1x and a sustainable dividend payout ratio averaging 60%.

• Audit, compliance, and optimization initiatives have added ~1,300 boe/d since 2021 and generated $56 million in value.